U.S. court revives Europe money laundering case vs R.J. Reynolds

NEW YORK, April 23 Wed Apr 23, 2014 11:07am EDT

NEW YORK, April 23 (Reuters) - A U.S. appeals court has revived a lawsuit by 26 European countries that accused R.J. Reynolds Tobacco and related entities of running a global money-laundering scheme with organized crime groups.

The 2nd U.S. Circuit Court of Appeals in New York said a lower court judge erred in concluding that a U.S. anti-racketeering law, the Racketeer Influenced and Corrupt Organizations (RICO) statute, cannot apply to foreign enterprises or to conduct outside the United States.

"With respect to a number of offenses that constitute predicates for RICO liability and are alleged in this case, Congress has clearly manifested an intent that they apply extraterritorially," Circuit Judge Pierre Leval wrote for a unanimous three-judge panel. "As to the other alleged offenses, the complaint alleges sufficiently important domestic activity to come within RICO's coverage."

Several defendants were named, including R.J. Reynolds Tobacco's parent Reynolds American Inc. The 2nd Circuit sent the case back to the lower court for further proceedings.

Lawyers for the European countries did not immediately respond to requests for comment. Reynolds American and lawyers for the defendants did not immediately respond to similar requests.

The case is European Community v. RJR Nabisco Inc et al, 2nd U.S. Circuit Court of Appeals, No. 11-2475. (Reporting by Jonathan Stempel in New York; Editing by Andrea Ricci)

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