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Federal Deception Law: 8.6.2.3 Injury Under Section 1962(c)

Under section 1962(c), a consumer who is injured by the predicate offenses themselves can seek treble damages because the consumer was injured by reason of the violation, in contrast to sections 1962(a) and (b), which require an injury from the specific, prohibited relationship between the defendant and the enterprise.354 Section 1962(c) prohibits a person employed or associated with an enterprise to conduct or participate in the conduct of that enterprise through a pattern of racketeering activity or collection of an unlawful debt

Federal Deception Law: 8.6.2.4 Injury Under Section 1962(d)

As for section 1962(d)—the conspiracy subsection—a plaintiff must show that the injury was caused by an overt act that is an act of racketeering, or otherwise wrongful under RICO, and not just injury from an act that furthered the conspiracy.356 The Supreme Court in Beck v.

Federal Deception Law: 8.6.4 Type of Injury Required for a RICO Claim

The term “business or property” in section 1964(c) limits compensable injuries to those that are proprietary in nature.376 Personal injury and mental suffering do not confer RICO standing.377 Courts have even held that pecuniary losses caused by personal injuries, such as medical expenses and lost wages, are not actionable injuries.378 The Sixth Circuit has held that corrupt denial of workers compensation benefits does not qualify as a RICO i

Federal Deception Law: 8.7.1 Local Requirements for Case Statements

Prior to filing any RICO claim, be sure to check to see if the relevant court has issued a standing order or a local court rule that requires a plaintiff to file a RICO case statement. The popularity and complexity of RICO claims have led many courts to institute special procedures specific to cases involving RICO counts.

Federal Deception Law: 8.7.3 Avoiding Rule 11 Claims

Careful drafting, an understanding of the RICO statute and its elements, and knowledge of local requirements will all help protect against a Rule 11 claim.455 So long as a claim has not been established as clearly non-viable, courts in RICO cases have been reluctant to impose Rule 11 sanctions against lawyers using RICO in novel ways.456

Federal Deception Law: 8.8.1 Service of Process, Venue, and Jurisdiction

Most courts have construed RICO as having a nationwide service of process provision,465 so that suit can be brought in a convenient forum without concern for whether the defendant has minimum contacts with the state.466 However, circuit decisions are split as to whether the nationwide service of process provision itself provides a sufficient basis for personal jurisdiction,467 or whether a plaintiff must first establish personal jurisdiction

Federal Deception Law: 8.8.2 RICO Statute of Limitations

The Supreme Court has ruled that the statute of limitations in RICO cases is four years.478 When the statute of limitations begins to run remains a question answered differently in different jurisdictions.

The first issue to determine is whether the claim is yet in existence. The Second Circuit holds that when a separate bankruptcy proceeding is pending in which the plaintiff stands to recover all or some of their damages, a RICO claim has yet to accrue.479

Federal Deception Law: 8.8.3 RICO Standard of Proof

Since civil RICO claims are essentially fraud claims, at least one commentator has suggested they should be proven by clear and convincing evidence, the traditional standard of proof in fraud cases.519 However, federal courts have ruled with near universal agreement that civil RICO claims, even those based on mail and wire fraud, need only be established by a preponderance of the evidence.520 These courts have found support in Sedima, in which the Supreme Court, while refusing to de

Federal Deception Law: 2.3.1 General Overview

An important precedent dealing with unfair remedies used by creditors when enforcing consumer credit contracts is the FTC’s trade regulation rule concerning credit practices74 (“the Credit Practices Rule”). This rule has been upheld by the District of Columbia Circuit.75

Federal Deception Law: 2.3.3 FTC Staff Letters As Precedent

FTC staff letters interpret the Credit Practices Rule very narrowly. For example, while the Credit Practices Rule restricts security interests in “household goods,”90 the FTC staff has tried to limit the number of items treated as “household goods,” excluding such common household items as books, encyclopedias, rugs, luggage, and children’s car seats.

Federal Deception Law: 2.3.4 Confession of Judgment Provisions

The Credit Practices Rule prohibits confessions of judgment, cognivits, and other waivers of the right to notice and opportunity to be heard in the event of suit.92 There is an exception for executory process in Louisiana.93 These protections cannot be waived by the consumer.94

Federal Deception Law: 2.3.5 Waiver of Exemption Clauses

The Credit Practices Rule prohibits contract clauses that waive or limit exemptions from attachment, execution, or other process on the debtor’s real or personal property.117 The prohibition applies not only to property owned by the consumer but also to property held by or “due” to the consumer, thus covering wages or other debts owed to the consumer.118 There is an exception for property subject to a security interest executed in connection with the transaction.

Federal Deception Law: 2.3.6 Wage Assignments

The Credit Practices Rule prohibits wage assignments,120 with certain exceptions. The FTC found that “consumers suffer substantial injury when wage assignments are used as a collection device.”121 The FTC found that:

Federal Deception Law: 2.3.7 Household Goods Security Interests

The Credit Practices Rule prohibits non-purchase money and non-possessory security interests in household goods.145 The rule defines household goods as clothing, furniture, appliances, one radio, one television, linens, china, crockery, kitchenware, and personal effects, including wedding rings.146 The FTC staff considers “personal effects” to be limited to items that an individual would ordinarily carry about on their person and possessions of a uniquely personal nature, such as family photogra

Federal Deception Law: 2.3.8 Pyramiding Late Charges

The Credit Practices Rule prohibits pyramiding of late charges—that is, assessing more than one delinquency charge for one late payment.199 Pyramiding is accomplished by attributing a borrower’s current payments first to outstanding late charges or overdue amounts and only second to the installment that is currently due.

Federal Deception Law: 2.3.9 Co-Signer Warning Notice

The rule requires a notice to co-signers, warning them of their potential obligations.206 The notice must be in the form prescribed by the FTC.207 However, references to creditor remedies that are not allowed under the laws of a particular state may be deleted in order to make the notice accurate.208 The creditor may add a summary identifying information such as the date, account number, name, address, and loan amount

Federal Deception Law: 8.9.1 Actual Damages

Although the Supreme Court has not established a measure of damages available in RICO claims,534 it has stated that “the compensable injury necessarily is the harm caused by predicate offenses sufficiently related to constitute a pattern.”535 Accordingly, a court should consider any reasonable basis for assessing the injury.