Marketing agreement may be a RICO violation, Ninth Circuit holds

Courts must resist the impulse to narrowly interpret the standards for civil RICO liability.  That's the message an en banc panel of the Ninth Circuit sent on Friday, as it reinstated a case in which the plaintiffs claimed that a marketing agreement between Microsoft and Best Buy formed the basis for a RICO claim.  Odom v. Microsoft Corp. concerns allegations of a marketing arrangement under which Best Buy gave its customers CDs for trial subscriptions to the MSN service.  Plaintiffs alleged that customers were charged for the MSN subscriptions without their consent, and that because the activity involved wire fraud it constituted a civil violation of the Racketeer Influenced and Corrupt Organizations Act. 

Parsing the technical language of the RICO statute, the court held that, to state a viable claim, plaintiff need not plead that an "associated-in-fact enterprise" has an ascertainable structure separate from its "pattern of racketeering activity."  The court consequently reversed the lower court's dismissal of the complaint.  The court acknowledged a split among the circuits on this pleading issue, but asserted that it's bound by U.S. Supreme Court precedent to read the statute broadly in order "to effectuate its remedial purpose."

See other law blog coverage of the case at How Appealing, Legal Pad, and Blawgletter.