No. 00-549 

In the Supreme Court of the United States 

CEDRIC KUSHNER PROMOTIONS, LTD., PETITIONER 

v. 

DON KING, ET AL. 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE SECOND CIRCUIT 

BRIEF FOR THE UNITED STATES 
AS AMICUS CURIAE SUPPORTING PETITIONER 

BARBARA D. UNDERWOOD 

Acting Solicitor General 

Counsel of Record 

JOHN C. KEENEY 

Acting Assistant Attorney 

General 

MICHAEL R. DREEBEN 

Deputy Solicitor General 

AUSTIN C. SCHLICK 

Assistant to the Solicitor 

General 

DEBORAH WATSON 
FRANK J. MARINE 

Attorneys 

Department of Justice 
Washington, D.C. 20530-0001 
(202) 514-2217 

QUESTION PRESENTED 

The Racketeer Influenced and Corrupt Organizations 
Act (RICO) makes it “unlawful for any person 
employed by or associated with any enterprise engaged 
in, or the activities of which affect, interstate or foreign 
commerce, to conduct or participate * * * in the 
conduct of such enterprise’s affairs through a pattern of 
racketeering activity or collection of unlawful debt.” 18 
U.S.C. 1962(c). The question in this case is whether a 
claim may be maintained under that provision when the 
alleged RICO “enterprise” is a corporation and the 
“person” charged with the violation is an officer and 
employee of the corporation acting within the scope of 
his corporate duties. 

(I) 

TABLE OF CONTENTS 

Page 

Interest of the United States ...................................................... 
1 

Statutory provisions involved ..................................................... 
2 

Summary of argument .................................................................. 
6 

Argument: 

Corporate officers and employees who conduct 

a pattern of racketeering activity through their 

corporation are subject to RICO liability under 

Section 1962(c) ........................................................................ 

7 

A. The defendant in an action under Section 1962(c) 

must be distinct from the alleged racketeering 

enterprise ......................................................................... 7 

B. The distinctness requirement is satisfied 

where the defendant is an employee of a 

corporation that is the RICO enterprise .................... 
11 

C. The distinctness requirement is satisfied 

when the RICO person and the RICO 

enterprise are either legally or practically 

separable ........................................................................... 21 

Conclusion ....................................................................................... 28 

Appendix ......................................................................................... 1a 

TABLE OF AUTHORITIES 

Cases: 

Anderson v. Abbott, 321 U.S. 349 (1944) ........................... 

27 

Bessette v. Avco Fin. Servs., Inc., 230 F.3d 

439 (1st Cir. 2000) .................................................................. 

6 

Brady v. Dairy Fresh Prods. Co., 974 F.2d 1149 

(9th Cir. 1992) ......................................................................... 

21 

Brittingham v. Mobil Corp., 943 F.2d 297 (3d Cir. 

1991) ..................................................................................... 

10, 17 

Burnet v. Clark, 287 U.S. 410 (1932) .................................. 

24 

Burzynski, In re, 989 F.2d 733 (5th Cir. 1993) ................... 10 

(III) 

IV 

Cases–Continued: Page 

Busby v. Crown Supply, Inc., 896 F.2d 833 (4th 

Cir. 1990) ................................................................................. 

10 

Copperweld Corp. v. Independence Tube Corp., 

467 U.S. 752 (1984) ............................................................ 

19, 24 

Cullen v. Margiotta, 811 F.2d 698 (2d Cir. 1987) ............. 

10 

Davis v. Mutual Life Ins. Co., 6 F.3d 367 (6th Cir. 

1993), cert. denied, 510 U.S. 1193 (1994) ........................... 

21 

Discon, Inc. v. NYNEX Corp., 93 F.3d 1055 (2d. 

Cir. 1996), vacated on other grounds, 525 U.S. 128 

(1998) ......................................................................... 

3-4, 5, 17, 18 

Faragher v. City of Boca Raton, 524 U.S. 775 

(1998) .................................................................................... 

20, 21 

Genty v. Resolution Trust Corp., 937 F.2d 899 

(3d Cir. 1991) .......................................................................... 

10 

Guidry v. Bank of LaPlace, 954 F.2d 278 (5th Cir. 

1992) ..................................................................................... 

22, 27 

H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 

229 (1989) ................................................................................. 

14 

Haroco v. American Nat’l Bank & Trust Co., 

747 F.2d 384 (7th Cir. 1984), aff ’d per curiam on 

other grounds, 473 U.S. 606 (1985) ..................................... 

19 

Jaguar Cars, Inc. v. Royal Oaks Motor Car Co., 

46 F.3d 258 (3d Cir. 1995) ..................................................... 

22 

Khurana v. Innovative Health Care Sys., Inc., 130 

F.3d 143 (5th Cir. 1997) ........................................................ 

6 

LeBoeuf, Lamb, Greene & Macrae, L.L.P. v. 

Worsham, 185 F.3d 61 (2d Cir. 1999) ................................ 

24 

McCullough v. Suter, 757 F.2d 142 (7th Cir. 

1985) ......................................................... 

7, 8, 22, 23, 24, 25, 27 

Moline Props., Inc. v. Commissioner, 319 U.S. 

436 (1943) ............................................................................. 

25, 27 

NLRB v. Deena Artware, Inc., 361 U.S. 398 (1960) ........ 

24 

New Beckley Mining Corp. v. United Mine Workers 

of Am., 18 F.3d 1161 (4th Cir. 1994) .................................. 10 

V 

Cases–Continued: Page 

New Colonial Ice Co. v. Helvering, 292 U.S. 435 

(1934) .................................................................................... 

24, 26 

Reves v. Ernst & Young, 507 U.S. 170 (1993) ............... 

11, 12, 

14, 15 

Richmond v. Nationwide Cassel L.P., 52 F.3d 640 
(7th Cir. 1995) ....................................................................... 

22 

Riverwoods Chappaqua Corp. v. Marine Midland 

Bank, N.A., 30 F.3d 339 (2d Cir. 1994) .............. 

4, 5, 10, 16 

Russello v. United States, 464 U.S. 16 (1983) ............. 

7, 8, 13 

Salinas v. United States, 522 U.S. 52 (1997) .................... 

13 

Schreiber Distrib. Co. v. Serv-Well Furniture 

Co., 806 F.2d 1393 (9th Cir. 1986) ...................................... 

10 

Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 

256 (2d Cir. 1995), cert. denied, 516 U.S. 1114 

(1996) ........................................................................................ 10 

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 

(1985) ........................................................................... 

3, 8, 13, 22 

Sever v. Alaska Pulp Corp., 978 F.2d 1529 (9th Cir. 

1992) ......................................................................................... 25 

United States v. Ames Sintering Co., 927 F.2d 232 

(6th Cir. 1990) ......................................................................... 

20 

United States v. Benny, 786 F.2d 1410 (9th Cir.), 

cert. denied, 479 U.S. 1017 (1986) ................................... 

22, 27 

United States v. Bestfoods, 524 U.S. 51 (1998) ................. 

26 

United States v. District Council of United Bhd. of 

Carpenters, 778 F. Supp. 738 (S.D.N.Y. 1991) ................. 

23 

United States v. Fairchild, 189 F.3d 769 (8th Cir. 

1999) ......................................................................................... 10 

United States v. Fidelity Capital Corp., 920 F.2d 

827 (11th Cir. 1991) ................................................................ 

26 

United States v. Goldin Indus., Inc.: 

219 F.3d 1268 (11th Cir. 2000) ............................................. 

7, 9 

219 F.3d 1271 (11th Cir.), cert. denied, 121 S. Ct. 

573 (2000) .................................................................. 9, 10, 22 

VI 

Cases–Continued: Page 

United States v. Gonzales, 520 U.S. 1 (1997) .................... 

13 

United States v. Hartley, 678 F.2d 961 (11th Cir. 

1982), cert. denied, 459 U.S. 1170 (1983) ................... 

8, 9, 20 

United States v. Horak, 833 F.2d 1235 (7th Cir. 

1987) ......................................................................................... 14 

United States v. Huber, 603 F.2d 387 (2d Cir. 1979), 

cert. denied, 445 U.S. 927 (1980) ......................................... 

14 

United States v. Hugh Chalmers Chevrolet-Toyota, 

Inc., 800 F.2d 737 (8th Cir. 1986) ....................................... 

20 

United States v. Kravitz, 738 F.2d 102 (3d Cir. 

1984), cert. denied, 470 U.S. 1052 (1985) ........................... 

14 

United States v. Local 560 of Int’l Bhd. of Teamsters, 

780 F.2d 267 (3d Cir. 1985), cert. denied, 476 U.S. 

1140 (1986) ............................................................................... 

23 

United States v. Local 30, United Slate, Tile & 

Composition Roofers, 871 F.2d 401 (3d Cir.), 

cert. denied, 493 U.S. 953 (1989) ......................................... 

23 

United States v. Local 6A, Cement & Concrete 

Workers, 663 F. Supp. 192 (S.D.N.Y. 1986) ..................... 

23 

United States v. London, 66 F.3d 1227 (1st Cir. 

1995), cert. denied, 517 U.S. 1155 (1996) ..................... 

10, 27 

United States v. Perholtz, 842 F.2d 343 (D.C. Cir.), 

cert. denied, 488 U.S. 821 (1988) ......................................... 

23 

United States v. Peters, 732 F.2d 1004 (1st Cir. 

1984) ......................................................................................... 20 

United States v. Sain, 141 F.3d 463 (3d Cir.), cert. 

denied, 525 U.S. 908 (1998) ........................................ 

20, 25-26 

United States v. Turkette, 452 U.S. 576 (1981) ......... 

9, 12, 14 

United States v. United Continental Tuna Corp., 

425 U.S. 164 (1976) .............................................................. 

16-17 

United States v. Weinberg, 852 F.2d 681 (2d Cir. 

1988) ......................................................................................... 27 

United States v. Wise, 370 U.S. 405 (1962) .................... 

18, 20 

VanDenBroeck v. Commonpoint Mortgage Co., 

210 F.3d 696 (6th Cir. 2000) ................................................. 25 

VII 

Cases–Continued: Page 

Yellow Bus Lines, Inc. v. Drivers Local Union 

639, 883 F.2d 132 (1989), rev’d in part on other 

grounds, 913 F.2d 948 (D.C. Cir. 1990), cert. 

denied, 501 U.S. 1222 (1991) .............................................. 

8, 10 

Statutes and rule: 

Organized Crime Control Act of 1970, Pub. L. 

No. 91-452, § 904(a), 84 Stat. 947 (18 U.S.C. 

1961 note) ................................................................................ 

13 

Racketeer Influenced and Corrupt Organizations 

Act, 18 U.S.C. 1961 et seq. .................................................... 

1 

18 U.S.C. 1961 (1994 & Supp. IV 1998) .................... 

18, 1a 

18 U.S.C. 1961(1) (1994 & Supp. IV 1998) .................. 

3, 1a 

18 U.S.C. 1961(3) ............................................. 

2, 12, 18, 4a 

18 U.S.C. 1961(4) .................................. 

2, 12, 14, 18, 25, 4a 

18 U.S.C. 1962 ................................................................. 

2, 4a 

18 U.S.C. 1962(a) .......................................................... 

10, 4a 

18 U.S.C. 1962(b) .......................................................... 

10, 5a 

18 U.S.C. 1962(c) ....................................................... 

passim 

18 U.S.C. 1962(d) ...................................................... 

2, 4, 5a 

Sherman Act, 15 U.S.C. 1 et seq.: 

15 U.S.C. 1 ............................................................................... 

19 

15 U.S.C. 2 ............................................................................... 

19 

18 U.S.C. 1341 ........................................................................... 

3 

18 U.S.C. 1343 ........................................................................... 

3 

Fed. R. Civ. P. 12(b)(6) ............................................................ 

3 

Miscellaneous: 

1 William M. Fletcher, Fletcher Cyclopedia of the 

Law of Private Corporations (1999 ed.) ........................ 

24, 26 

Harry G. Henn & John R. Alexander, Laws of 

Corporations (3d ed. 1983) ................................................... 

26 

Restatement (Third) of the Law of Agency 
(Tentative Draft No. 1, 2000) .............................................. 
20 

S. Rep. No. 617, 91st Cong., 1st Sess. (1969) ....................... 24 

In the Supreme Court of the United States 

No. 00-549 

CEDRIC KUSHNER PROMOTIONS, LTD., PETITIONER 

v. 

DON KING, ET AL. 

ON WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE SECOND CIRCUIT 

BRIEF FOR THE UNITED STATES 
AS AMICUS CURIAE SUPPORTING PETITIONER 

INTEREST OF THE UNITED STATES 

The Racketeer Influenced and Corrupt Organizations 
Act (RICO), 18 U.S.C. 1961 et seq., imposes criminal 
and civil liability for specified forms of racketeering 
activity by a “person” in connection with an “enter- 
prise.” The United States brings both criminal prose- 
cutions and civil suits for violations of 18 U.S.C. 1962(c), 
the provision of RICO specifically at issue in this case. 
The court of appeals’ holding—that a corporate em- 
ployee acting within the scope of his employment may 
not be held liable under Section 1962(c) when the 
corporation is the named RICO enterprise—threatens 
to impede proper enforcement of the RICO statute in 
both criminal prosecutions and civil suits. Accordingly, 

(1) 

2 

the United States has a significant interest in the 
Court’s resolution of this case. 

STATUTORY PROVISIONS INVOLVED 

The pertinent provisions of the RICO statute, 18 
U.S.C. 1961(3) and (4) and 18 U.S.C. 1962, are set forth 
in an appendix to this brief. App., infra, 1a-5a. 

STATEMENT 

1. As alleged in the complaint, petitioner is a corpo- 
ration that competes with respondents, an individual 
and a corporation of which he is an employee, in the 
business of promoting professional boxing matches. 
See Pet. App. 5a, 7a. Petitioner filed a civil complaint 
against respondents, in which petitioner alleged sub- 
stantive violations of RICO under 18 U.S.C. 1962(c) and 
conspiracy violations of RICO under 18 U.S.C. 1962(d). 
The complaint also alleged common-law fraud and 
tortious interference with contract, in violation of New 
York law. Id. at 2a-3a, 7a. 

According to the complaint, respondents interfered 
with petitioner’s contracts to represent two boxers 
named Hasim Rahman and Louis DelValle. Pet. App. 
7a-9a; Compl. ¶¶ 3-6, 18-33. The complaint also alleges 
that respondents made various misrepresentations 
relating to a canceled Light Heavyweight fight be- 
tween DelValle and Darrio Mattione, and fraudulently 
failed to pay petitioner $300,000 due under a contract 
between petitioner and Don King Productions, Inc. in 
connection with that fight. Pet. App. 9a; Compl. ¶¶ 34- 

37. Respondent King additionally is accused of falsely 
claiming to represent DelValle in the course of King’s 
efforts to block another fight that petitioner had 
arranged for DelValle. Compl. ¶¶ 38-39. The complaint 
contains other allegations concerning respondents’ 
allegedly fraudulent dealings in connection with their 

3 

representation of boxers Mike Tyson and Julio Cesar 
Chavez (id. ¶¶ 40-72, 84), although these activities are 
not alleged to have injured petitioner. Pet. App. 9a-10a. 

Petitioner brought a substantive RICO claim under 
Section 1962(c) naming King as the RICO “person” and 
Don King Productions, Inc. and its successor-in-inter- 
est, DKP Corporation (collectively DKP) as the RICO 
“enterprise.” Pet. App. 2a-3a, 8a n.2, 12a; see Compl. 
¶¶ 74-75. The complaint states upon information and 
belief that Don King Productions, Inc. is a Florida cor- 
poration with its principal place of business in Florida, 
and that DKP Corporation is a New York corporation. 
Compl. ¶¶ 11, 12. King is alleged to be an employee of, 
“and otherwise associated with,” DKP. Id. ¶ 75. King 
is an officer of DKP. Pet. App. 13a.1 It was not dis- 
puted below that, with respect to the conduct alleged in 
the complaint, King acted within the scope of his 
authority as an employee of DKP. Id. at 5a. 

The pattern of racketeering activity alleged in the 
complaint consists of King’s and DKP’s fraudulent 
interference with petitioner’s contracts and includes 
multiple alleged acts of mail fraud (18 U.S.C. 1341), 
wire fraud (18 U.S.C. 1343), and bribery. Compl. ¶¶ 77, 
79-84; see generally Sedima, S.P.R.L. v. Imrex Co., 473 
U.S. 479, 495 (1985) (“racketeering activity” under 
RICO consists of commission of a predicate act listed in 
18 U.S.C. 1961(1) (1994 & Supp. IV 1998)). 

2. The district court dismissed the complaint pur- 
suant to Federal Rule of Civil Procedure 12(b)(6). Pet. 
App. 15a. The district court first held that under Dis- 
con, Inc. v. NYNEX Corp., 93 F.3d 1055, 1063 (2d Cir. 

1 Respondents have advised the Court, without citation to the 
record, that King is DKP’s sole shareholder and president. Br. in 
Opp. 1. 

4 

1996), vacated on other grounds, 525 U.S. 128 (1998), 
the RICO enterprise named in an action under Section 
1962(c) and the persons conducting the affairs of the 
enterprise must be distinct. Pet. App. 11a. That dis- 
tinctness requirement is not satisfied when the enter- 
prise “consists merely of a corporate defendant 
associated with its own employees or agents carrying 
on the regular affairs of the defendant[.]” Ibid. (quoting 
Riverwoods Chappagua Corp. v. Marine Midland 
Bank, N.A., 30 F.3d 339, 344 (2d Cir. 1994)). In this 
case, the court concluded, the alleged RICO enterprise 
(DKP) was not distinct from the RICO defendants 
(DKP and King) as required by Discon and Riverwoods. 
Id. at 11a-12a. 

The district court further held that petitioner’s 
request to amend the complaint by eliminating RICO 
claims against DKP (thereby making King the only 
RICO defendant) was futile. That “cosmetic adjust- 
ment” would be insufficient because the complaint did 
not allege, and petitioner did not otherwise suggest, 
that King acted outside the scope of his duties as an 
officer of DKP. Pet. App. 12a-13a. Because a “sub- 
stantial” “overlap between the named RICO person and 
the alleged corporate enterprise” would remain after 
such an amendment, the distinctness requirement could 
not be met. Id. at 13a. 

The district court concluded that petitioner’s failure 
to plead a substantive RICO violation required dis- 
missal of petitioner’s conspiracy claim under Section 
1962(d) as well. Pet. App. 13a-14a. Finally, having dis- 
missed the federal RICO claims, the district court 
dismissed petitioner’s remaining state-law fraud and 
tortious interference claims for lack of subject matter 
jurisdiction. Id. at 15a. 

5 

3. The court of appeals affirmed in a per curiam 
opinion. Pet. App. 1a-5a. Petitioner challenged on 
appeal only the district court’s dismissal of the sub- 
stantive RICO claim under 18 U.S.C. 1962(c). Pet. App. 
3a. Furthermore, the parties agreed for purposes of 
the appeal that the RICO claims against DKP had been 
dropped in the district court, leaving King as the sole 
RICO defendant. Id. at 5a. 

The court of appeals relied upon the undisputed fact 
that King was an employee acting within the scope of 
his authority at DKP to hold that Riverwoods and 
Discon precluded a finding of distinctness between 
King as the RICO person-defendant and DKP as the 
RICO enterprise. Pet. App. 3a-5a. Quoting River- 
woods, the court of appeals held that because a corpora- 
tion functions through its employees and agents, 
employees of a corporation who “associate together to 
commit a pattern of predicate acts in the course of their 
employment and on behalf of the corporation * * * do 
not form an enterprise distinct from the corporation.” 
Id. at 3a-4a (quoting 30 F.3d at 344). Moreover, under 
Discon, the requirement of distinctness between the 
defendant and the RICO enterprise is not satisfied 
when the alleged RICO enterprise is a parent corpora- 
tion and the RICO defendants are incorporated 
subsidiaries. Id. at 4a (quoting Discon, 93 F.3d at 1064). 
Based on those holdings of Riverwoods and Discon, the 
court of appeals concluded that King, as an employee of 
DKP, is not sufficiently distinct from DKP to support a 
claim under Section 1962(c). Id. at 5a. 

The court of appeals recognized that its decision was 
“in tension, if not conflict, with the decisions of other 
Courts of Appeals.” Pet. App. 5a n.4. Indeed, it ac- 
knowledged that (by a conservative count) the Third, 
Sixth, Seventh, Ninth, and Tenth Circuits had all ruled 

6 

that sufficient distinctness exists between the RICO 
enterprise and the RICO defendant when a corporation 
is the alleged enterprise and the defendant is an owner, 
officer, or employee of the corporation. Ibid. (citing 
cases).2 

SUMMARY OF ARGUMENT 

1. The court of appeals correctly held that petitioner 
was required to name in its claim under 18 U.S.C. 
1962(c) a “person” who is distinct from the alleged 
RICO “enterprise.” The courts of appeals have 
uniformly adopted that construction of Section 1962(c), 
and it is consistent with the text and structure of the 
law. As generally applied by the courts of appeals, the 
requirement of distinctness between the RICO person 
and the RICO enterprise does not impede effective 
enforcement of the RICO statute by the government. 

2. The court of appeals erred, however, in holding 
that a corporate employee is not sufficiently distinct 
from the corporation to satisfy the distinctness require- 
ment. The plain language of Section 1962(c)—which 
extends liability to “any person employed by * * * any 
enterprise,” when the person conducts the affairs of the 
enterprise through a pattern of racketeering activity 
—establishes that a corporate employee, such as re- 

2 The Fifth Circuit likewise disagrees with the Second Circuit. 
Khurana v. Innovative Health Care Sys., Inc., 130 F.3d 143, 156 
(5th Cir. 1997) (“Section 1962(c) may impose liability on individual 
corporate officers and employees who conduct the corporate 
enterprise which employs them through a pattern of racketeering 
activity.”). But see Bessette v. Avco Fin. Servs., Inc., 230 F.3d 439, 
449-450 (1st Cir. 2000) (relying on Riverwoods to hold that “em- 
ployees acting solely in the interest of their employer, carrying on 
the regular affairs of the corporate enterprise, are not distinct 
from that enterprise”). 

7 

spondent King, is a proper defendant when the alleged 
racketeering enterprise is the corporation. Any other 
reading of the law, moreover, would be inconsistent 
with Congress’s direction that RICO should be applied 
broadly, and would create loopholes that legislators did 
not intend. 

3. The appropriate test for whether an individual 
defendant under Section 1962(c) is sufficiently distinct 
from the alleged RICO enterprise is whether the 
defendant and the enterprise are “either formally 

* * * or practically * * * separable.” McCullough v. 
Suter, 757 F.2d 142, 144 (7th Cir. 1985). That test has 
been adopted by several circuits and provides a work- 
able standard that is consistent with Congress’s intent 
to “remove the profit from organized crime by separat- 
ing the racketeer from his dishonest gains.” Russello v. 
United States, 464 U.S. 16, 28 (1983). 

ARGUMENT 

CORPORATE OFFICERS AND EMPLOYEES WHO 
CONDUCT A PATTERN OF RACKETEERING ACTIV- 
ITY THROUGH THEIR CORPORATION ARE SUB- 
JECT TO RICO LIABILITY UNDER SECTION 
1962(c) 

A. The Defendant In An Action Under Section 1962(c) 

Must Be Distinct From The Alleged Racketeering 

Enterprise 

The courts of appeals have uniformly held that a 
criminal indictment or civil complaint under Section 
1962(c) must name a defendant who is “separate and 
distinct from” the alleged RICO enterprise. See United 
States v. Goldin Indus., Inc., 219 F.3d 1268, 1270 (11th 
Cir. 2000) (en banc) (Goldin Indus. I) (collecting cases); 
see also, e.g., cases cited at Pet. App. 4a-5a & n.4, and 
note 2, supra. In so holding, the lower courts have 

8 

relied primarily upon Section 1962(c)’s specification 
that the “person” liable for a violation of Section 1962(c) 
must be “employed by or associated with” the RICO 
enterprise. That language, the courts of appeals have 
held, demonstrates Congress’s understanding that the 
defendant will be distinct from the enterprise. See, e.g., 
Yellow Bus Lines, Inc. v. Drivers Local Union 639, 883 
F.2d 132, 139-141 (1989) (“Logic alone dictates that one 
entity may not serve as the enterprise and the person 
associated with it because * * * ‘you cannot associate 
with yourself.’ ”) (quoting McCullough, 757 F.2d at 144), 
rev’d in part on other grounds, 913 F.2d 948 (D.C. Cir. 
1990) (en banc), cert. denied, 501 U.S. 1222 (1991). The 
courts of appeals also have cited Congress’s desire to 
target through RICO “criminal activity of a particular 
kind—the exploitation and appropriation of legitimate 
business by corrupt individuals”—as support for a 
requirement that the defendant be distinct from the 
enterprise through which racketeering activity is 
conducted. Id. at 139.3 

Until its recent en banc decision in Goldin Industries 
I, supra, the Eleventh Circuit had held, to the contrary, 
that a single corporation “may be simultaneously both a 
defendant and the enterprise under RICO.” United 
States v. Hartley, 678 F.2d 961, 988 (1982), cert. denied, 
459 U.S. 1170, 1183 (1983). The Hartley decision relied 
upon RICO’s expansive definitions of “person” and 
“enterprise” (discussed below), as well as this Court’s 

3 As this Court recognized in Russello, supra, “Congress’ con- 
cerns were not limited to infiltration” of legitimate businesses. 464 
U.S. at 28; see also Sedima, 473 U.S. at 499 (same). But Congress’s 
“major purpose” in enacting RICO was “to address the infiltration 
of legitimate businesses by organized crime.” United States v. 
Turkette, 452 U.S. 576, 591 (1981). 

9 

decision in United States v. Turkette, 452 U.S. 576, 580 
(1981), and the broad remedial purpose of the RICO 
statute. See 678 F.2d at 988-991. 

During the litigation of Goldin Industries I, we 
concluded that Hartley was wrongly decided (see 219 
F.3d at 1271), and we adhere to that conclusion today.4 
The distinctness requirement, as generally applied by 
the courts of appeals under Section 1962(c), does not 
impede effective enforcement of RICO by the gov- 
ernment. Critically, most courts of appeals have held 
that the requisite distinctness between the person and 
the enterprise is lacking only when there is complete 
identity between a particular defendant and the enter- 
prise. As the Eleventh Circuit stated after overruling 
Hartley, “a defendant can clearly be a person under 
[Section 1962(c)] and also be part of the enterprise. The 
prohibition against the unity of person and enterprise 
applies only when the singular person or entity is 
defined as both the person and the only entity com- 
prising the enterprise.” United States v. Goldin Indus., 
Inc., 219 F.3d 1271, 1275-1276 (11th Cir.) (Goldin Indus. 

II) (collecting cases), cert. denied, 121 S. Ct. 573 (2000). 
Accordingly, courts have concluded in a variety of 
circumstances that individual RICO defendants are 
distinct from an enterprise that is broader than any 
single defendant, notwithstanding that the defendants 

4 Ten years ago, in responding to this Court’s invitation to ex- 
press views on a petition for a writ of certiorari in the Yellow Bus 
case, the United States took the position that Hartley represented 
the better interpretation of Section 1962(c). U.S. Amicus Br. 10, 
Yellow Bus, supra (No. 90-872). We noted, however, that the 
distinctness requirement then applied by a majority of circuits had 
not hampered the government’s enforcement of RICO. Ibid. 

10 

may collectively comprise the enterprise and may have 
close relationships among themselves.5 

The requirement of distinctness arises from the 
language and structure of Section 1962(c), and, as the 
courts of appeals have held, does not apply to claims 
brought under 18 U.S.C. 1962(a) or (b).6 Whereas Sec- 
tion 1962(c) prohibits certain conduct by a person “em- 
ployed by or associated with any enterprise,” no similar 
phrase appears in Section 1962(a), which makes it 
illegal to invest the proceeds of racketeering activity in 
an enterprise that affects interstate commerce, or in 
Section 1962(b), which makes it unlawful to acquire or 
maintain an interest in an enterprise that is engaged in 

5 See, e.g., United States v. Fairchild, 189 F.3d 769, 776-777 
(8th Cir. 1999) (requirement satisfied where individual defendants 
collectively form the enterprise); United States v. London, 66 F.3d 
1227, 1243-1245 (1st Cir. 1995) (requirement satisfied where the 
enterprise consists of defendant’s sole proprietorship and a closely 
held corporation), cert. denied, 517 U.S. 1155 (1996); Securitron 
Magnalock Corp. v. Schnabolk, 65 F.3d 256, 258, 262-263 (2d Cir. 
1995) (officer, agent, and owner of two corporations is distinct from 
RICO enterprise consisting of that individual and the corpora- 
tions), cert. denied, 516 U.S. 1114 (1996). That rule has been 
applied in the context of corporate defendants, as well as natural 
persons. See, e.g., Goldin Indus. II, 219 F.3d at 1273, 1275-1276 
(distinctness requirement satisfied where enterprise consists of 
four natural persons and three corporations, all of whom were also 
defendants); Cullen v. Margiotta, 811 F.2d 698, 703, 729-730 (2d 
Cir. 1987). 

6 See, e.g., Riverwoods, 30 F.3d at 345; New Beckley Mining 
Corp. v. United Mine Workers of Am., 18 F.3d 1161, 1163 (4th Cir. 
1994); In re Burzynski, 989 F.2d 733, 743 (5th Cir. 1993) Britting- 
ham v. Mobil Corp., 943 F.2d 297, 303 (3d Cir. 1991); Genty v. 
Resolution Trust Corp., 937 F.2d 899, 907 (3d Cir. 1991); Busby v. 
Crown Supply, Inc., 896 F.2d 833, 840-841 & n.9 (4th Cir. 1990) (en 
banc); Yellow Bus, 883 F.2d at 140; Schreiber Distrib. Co. v. Serv- 
Well Furniture Co., 806 F.2d 1393, 1396-1398 (9th Cir. 1986). 

11 

or affects interstate commerce, through a pattern of 
racketeering or collection of unlawful debt. See gener- 
ally Reves v. Ernst & Young, 507 U.S. 170, 185 (1993) 
(“[Section] 1962(c) is limited to persons ‘employed by or 
associated with’ an enterprise, suggesting a more 
limited reach than subsections (a) and (b), which do not 
contain such a restriction.”). A corporation or other 
business organization that has devoted itself to 
racketeering often can be held accountable under those 
provisions. 

Construing Section 1962(c) to require some distinct- 
ness between the RICO defendant and the RICO enter- 
prise produces a legally sound and workable reading of 
the RICO statute. Accordingly, the court of appeals in 
this case correctly held that “the alleged RICO ‘person’ 
and RICO ‘enterprise’ must be distinct.” Pet. App. 3a 
(footnotes omitted).7 

B. The Distinctness Requirement Is Satisfied Where The 

Defendant Is An Employee Of A Corporation That Is 

The RICO Enterprise 

While the court of appeals did not err in requiring 
distinctness between the RICO person and the RICO 
defendant under Section 1962(c), its holding that “an 
employee acting within the scope of his authority” 

7 The decision of the court of appeals might be read as turning 
upon petitioner’s failure specifically to “assert [in the complaint] 
that King and DKP are distinct.” Pet. App. 5a. We read the opin- 
ion to state a legal conclusion regarding the scope of Section 
1962(c) and not merely a formal pleading requirement. On either 
reading, however, the judgment should be reversed. As explained 
below, a corporation and its employee are sufficiently distinct to 
satisfy Section 1962(c) as a matter of law, and the complaint in this 
case alleged the corporate status of DKP and that King is an 
employee of DKP. Compl. ¶¶ 11-13, 75. 

12 

cannot be sufficiently distinct from the corporate em- 
ployer (Pet. App. 5a) is incorrect. Section 1962(c) spe- 
cifically indicates that an employee of the alleged RICO 
enterprise may properly be named as the RICO person. 
That construction of Section 1962(c) is confirmed by this 
Court’s decisions, as well as by the history and underly- 
ing policy of RICO. 

1. Where the language of RICO “is unambiguous, in 
the absence of a clearly expressed legislative intent to 
the contrary, that language must ordinarily be re- 
garded as conclusive.” Reves, 507 U.S. at 177 (quoting 
Turkette, 452 U.S. at 580) (internal quotation marks 
omitted). In relevant part, Section 1962(c) makes it 
“unlawful for any person employed by or associated 
with any enterprise * * * to conduct or participate 

* * * in the conduct of such enterprise’s affairs 
through a pattern of racketeering activity or collection 
of unlawful debt.” 18 U.S.C. 1962(c) (emphasis added). 
The underscored language establishes on its face that a 
RICO “person” may be “employed by” the entity that is 
named as the RICO enterprise. 
RICO’s definitional provisions confirm that under- 
standing. Section 1961(3) provides, without limitation, 
that the term “ ‘person’ includes any individual or entity 
capable of holding a legal or beneficial interest in 
property.” 18 U.S.C. 1961(3). Section 1961(4) defines 
the term “enterprise” to “include[] any individual, part- 
nership, corporation, association, or other legal entity, 
and any union or group of individuals associated in fact 
although not a legal entity.” 18 U.S.C. 1961(4). Accord- 
ingly, a natural person such as King is a permissible 
“person” for purposes of Section 1962(c) and a corpora- 
tion such as DKP may be named as the RICO enter- 
prise. Moreover, by making “any person employed by 
or associated with any enterprise” potentially liable (18 

13 

U.S.C. 1962(c) (emphasis added)), Congress affirma- 
tively signaled its intent that the courts would construe 
broadly the range of persons and enterprises who are 
within the reach of Section 1962(c). See Salinas v. 
United States, 522 U.S. 52, 57 (1997) (“The word ‘any’ 

* * * undercuts the attempt to impose [a] narrowing 
construction.”); United States v. Gonzales, 520 U.S. 1, 5 
(1997) (same). 

Congress’s clearly expressed intent in drafting the 
critical language of Section 1962(c) is reinforced by 
Congress’s general intent in enacting RICO. Congress 
directed that RICO “shall be liberally construed to 
effectuate its remedial purposes.” Pub. L. No. 91-452, 
§ 904(a), 84 Stat. 947 (reprinted in 18 U.S.C. 1961 note); 
see Russello, 464 U.S. at 27. Legislators wanted to 
create “new weapons of unprecedented scope”— such 
as private rights of action in favor of those injured by 
racketeering activity—“for an assault upon organized 
crime and its economic roots.” Russello, 464 U.S. at 26; 
Sedima, 473 U.S. at 498. In light of “Congress’ self- 
consciously expansive language and overall approach,” 
“RICO is to be read broadly.” Sedima, 473 U.S. at 497- 
498. The court of appeals’ inference that Congress did 
not intend employees of RICO enterprises to be liable 
for racketeering activity undertaken within the course 
of their employment lacks textual support and defies 
that congressional mandate. 

The rule adopted by the court of appeals would frus- 
trate the application of RICO in a variety of important 
settings. For example, if a corporation’s president 
authorized corporate managers to bribe public officials 
to secure government contracts for the corporation, or 
to defraud the government in the corporation’s busi- 
ness, then under the decision below the managers could 
not be charged with a violation of Section 1962(c) if the 

14 

corporation were named as the enterprise, because the 
managers would be acting within the scope of their 
corporate authority. Yet such a case would entail cor- 
ruption of the channels of commerce and of the 
corporation-enterprise through a pattern of racketeer- 
ing activity, and fall squarely within RICO’s intended 
scope.8 Cf. Turkette, 452 U.S. at 589 (refusing to 
exclude wholly illegitimate enterprises from the scope 
of Section 1961(4) because such a reading would place 
“[w]hole areas of organized criminal activity * * * 
beyond the substantive reach of the enactment”). 

The court of appeals’ restrictive approach also is at 
odds with this Court’s construction of Section 1962(c) in 
Reves, supra. Reves interpreted the requirement that 
the RICO person must “conduct or participate, directly 
or indirectly, in the conduct of [the] enterprise’s 
affairs.” 18 U.S.C. 1962(c). The Court held that the 
outside auditor of an agricultural cooperative that was 
an alleged RICO enterprise could not be held liable for 
a violation of Section 1962(c) under that language, 
because the auditor did not “participate in the opera- 
tion or management of the enterprise itself,” 507 U.S. at 
185, but only prepared and explained the enterprise’s 
financial statements, id. at 186. 

8 See Reves, 507 U.S. at 182 (Section 1962(c) “prohibit[s] the 
operation of an enterprise though a pattern of racketeering 
activity.”); H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 
248 (1989) (RICO “responds to a new situation in which persons 
engaged in long-term criminal activity often operate wholly within 
legitimate enterprises.”); Turkette, 452 U.S. at 579 (RICO liability 
extends to persons who take part in directing the affairs of the 
enterprise); see also, e.g., United States v. Horak, 833 F.2d 1235 
(7th Cir. 1987); United States v. Kravitz, 738 F.2d 102 (3d Cir. 
1984), cert. denied, 470 U.S. 1052 (1985); United States v. Huber, 
603 F.2d 387 (2d Cir. 1979), cert. denied, 445 U.S. 927 (1980). 

15 

The Reves Court rejected the argument that its 
“operation or management” test would allow only 
“upper management” to be held liable for violations of 
Section 1962(c). 507 U.S. at 184-185. The Court stated 
that although “complete ‘outsiders’ ” who do not partici- 
pate in conducting the RICO enterprise’s affairs would 
not be liable for racketeering activity carried out 
though the enterprise, the “operation and manage- 
ment” standard does not limit liability under Section 
1962(c) solely to upper management. The Court ex- 
plained that “[a]n enterprise is ‘operated’ not just by 
upper management but also by lower rung participants 
in the enterprise who are under the direction of upper 
management.” Ibid.9 Reves thus confirms that the 
officers and directors of a RICO enterprise, as well as 
employees under their direction who participate in 
conducting the enterprise’s affairs, are potentially 
subject to liability as RICO persons under Section 
1962(c). The court of appeals’ excision of those same 
upper managers and employees from the statute’s cov- 
erage cannot be reconciled with the reasoning of Reves. 

2. The court of appeals drew its bright-line rule 
against employee liability from Riverwoods and Discon. 
Pet. App. 4a-5a. But neither of those cases dealt with 
the situation of an employee as the “person” and a cor- 
poration as the “enterprise”—a prototypical situation 
contemplated by the drafters of the statute. 
Riverwoods addressed the issue of whether a cor- 
poration can be both the RICO “person” and— together 

9 The Court did not find it necessary to consider “whether low- 
level employees could be considered to have participated in the 
conduct of an enterprise’s affairs,” given that the accounting firm 
in Reves clearly was not acting under the direction of the co-op’s 
officers or board. 507 U.S. at 184 n.9. 

16 

with its employees—the RICO “enterprise.” Pet. App. 
4a-5a; see Riverwoods, 30 F.3d at 344. In Riverwoods, 
borrowers brought a claim under Section 1962(c) 
against a bank defendant, alleging that the RICO enter- 
prise was a “Restructuring Group” consisting of the 
bank and certain bank employees. 30 F.3d at 341, 343- 
345. The court’s concern in Riverwoods was that 
allowing such a claim to proceed would enable RICO 
plaintiffs to “circumvent[]” the distinctness require- 
ment of Section 1962(c) by superficially modifying a 
complaint that would ordinarily name the same cor- 
poration as both the RICO person and the RICO 
enterprise, so as to name the corporation alone as the 
defendant and the corporation together with “its own 
employees or agents carrying on the regular affairs of 
the defendant” as the RICO enterprise. Id. at 344. To 
avoid strategic pleading where the RICO defendant is a 
corporation, the Second Circuit held in Riverwoods—in 
language quoted in the decision below (Pet. App. 
4a)—that “where employees of a corporation associate 
together to commit a pattern of predicate acts in the 
course of their employment and on behalf of the 
corporation, the employees in association with the 
corporation do not form an enterprise distinct from the 
corporation.” 30 F.3d at 344. 

Once a distinctness requirement is recognized under 
Section 1962(c), the rule adopted in Riverwoods is jus- 
tifiable to protect against circumvention of this require- 
ment when a corporation is named as the RICO defen- 
dant. Absent such a rule, the prohibition on naming 
the same corporation as both the defendant and the 
RICO enterprise could be routinely evaded by listing 
corporate officers and employees as part of the enter- 
prise, without affecting the gravamen of the complaint. 
Cf. United States v. United Continental Tuna Corp., 

17 

425 U.S. 164, 169 (1976) (“We should * * * be as 
hesitant to infer that Congress intended to authorize 
evasion of a statute at will as we are to infer that 
Congress intended to narrow the scope of a statute.”). 
By contrast, the text of Section 1962(c) and the 
definitions of “person” and “enterprise” establish the 
permissibility of naming a natural person as the RICO 
defendant and a corporation as the RICO enterprise. 
Any rule that forbade such pleading would frustrate, 
rather than effectuate, the distinctness requirement 
established by Congress. Accord Brittingham v. Mobil 
Corp., 943 F.2d 297, 301-302 (3d Cir. 1991) (requiring an 
“examin[ation]” whether a corporation named as the 
RICO enterprise “is no more than an association of 
individuals or entities acting on behalf of a defendant 
corporation,” but noting that “distinctiveness concerns 
are generally not present” when a natural person is 
named as the person-defendant). 

Discon, on which the court of appeals secondarily 
relied, also dealt with a corporation and not an individ- 
ual as the RICO “person.” Discon held in relevant part 
that Section 1962(c)’s distinctness requirement was not 
satisfied where a holding company and two of its sub- 
sidiaries were named as both the RICO defendants and 
(together with unnamed agents acting within the scope 
of their agency) the RICO enterprise. 93 F.3d at 1057- 
1058, 1063-1064. The court of appeals found that the 
three corporations, although legally separate entities, 
were part of a unified corporate structure and were 
“guided by a single corporate consciousness.” Id. at 
1064. On those facts, the court of appeals determined 
that separate incorporation of the three entities was not 
dispositive, and the defendants (the three corporations, 
individually) each should be deemed identical to the 
alleged RICO enterprise (the three corporations and 

18 

their unnamed agents, collectively). Ibid. Once again, 
that holding does not justify the rule applied in this 
case—that a natural person employed by a corporation 
may not be sued under Section 1962(c) where the 
corporation is named as the RICO enterprise. 

3. General corporate law principles also do not 
support the rule applied by the court of appeals in this 
case. Underlying the holding below is the assumption 
that when King acted within the scope of his employ- 
ment with DKP, he was indistinguishable from DKP. 
See Pet. App. 5a (“As it is undisputed that King was an 
employee acting within the scope of his authority at 
DKP, [petitioner] does not assert that King and DKP 
are distinct.”). Whatever validity that assumption may 
have in other contexts, it has none in the context of a 
RICO claim under Section 1962(c). 

Most importantly, and as explained above, the con- 
trolling question here is one of statutory interpretation. 
Section 1962(c) and the definitions of Section 1961 do 
not deny corporate employees who act within the scope 
of their employment the status of being “persons.” Just 
the opposite is true. Natural persons are RICO “per- 
sons” under 18 U.S.C. 1961(3) who may be named as 
defendants; a corporation may be named as the “enter- 
prise” under 18 U.S.C. 1961(4); and the plain language 
of Section 1962(c), as well as this Court’s holding in 
Reves, establish that an employee of the named enter- 
prise may be held liable for conducting racketeering 
activity through the enterprise. See pp. 11-15, supra. 
Cf. United States v. Wise, 370 U.S. 405, 407 (1962) 
(finding “[n]o substantial support” in the language of “a 
seemingly clear statute” for the argument that the 
Sherman Act does not apply to corporate officers acting 

19 

in their representative capacity, and that the acts of 
such persons are chargeable only to the corporation). 

10 

The law of agency, moreover, addresses only “the 
legal consequences of consensual relationships in which 
one person (the ‘principal’) manifests consent that 
another person (the ‘agent’) shall have power to affect 

10 This Court’s rejection of the “intracorporate conspiracy doc- 
trine” in the context of Sherman Act antitrust claims is unrelated 
to whether a corporate employee can be held liable under Section 
1962(c) for conducting the affairs of the corporation-enterprise 
through a pattern of racketeering activity. See Copperweld Corp. 

v. Independence Tube Corp., 467 U.S. 752 (1984). Copperweld 
rested upon Congress’s distinction in the antitrust laws between 
concerted activity by previously separate economic actors, which is 
covered by 15 U.S.C. 1, and unilateral activity by a single economic 
actor, which is covered by 15 U.S.C. 2. In light of the very differ- 
ent regimes established by Sections 1 and 2 of the Sherman Act, 
see 467 U.S. at 767-769, the Court held that the “antitrust dangers 
that § 1 was designed to police” are not implicated when officers or 
employees of the same corporation act together, or a parent 
corporation acts with its wholly owned subsidiary, id. at 769-774. 
Such natural or corporate persons, although distinct and under 
some circumstances capable of conspiring with each other, “are not 
separate economic actors pursuing separate economic interests.” 
Id. at 769, 776. In particular, although a corporation and its 
officers are “persons” under the Sherman Act, liability based upon 
a conspiracy between the corporation and the officers is precluded 
by “the logic underlying Congress’ decision to exempt unilateral 
conduct from § 1 scrutiny.” Id. at 770 n.15, 776. Copperweld’s 
application of “the [Sherman] Act’s distinction between unilateral 
and concerted conduct” (id. at 775) therefore does not provide any 
guidance in determining when natural or legal persons are distinct 
for purposes of Section 1962(c). See Haroco v. American Nat’l 
Bank & Trust Co., 747 F.2d 384, 403 n.22 (7th Cir. 1984) (“The 
policy considerations discussed in Copperweld * * * do not apply 
to RICO, which is targeted primarily at the profits from patterns 
of racketeering activity.”), aff ’d per curiam on other grounds, 473 
U.S. 606 (1985). 

20 

the principal’s legal relations through the agent’s acts 
and on the principal’s behalf, and subject to the 
principal’s right of control.” Restatement (Third) of the 
Law of Agency 1 (Tentative Draft No. 1, 2000). Agency 
doctrines such as respondeat superior are legal devices 
that force corporations to assume financial responsibil- 
ity for costs associated with their business. Hartley, 
678 F.2d at 970; see Faragher v. City of Boca Raton, 
524 U.S. 775, 797 (1998). Those devices do not negate 
the actual distinctness of principal and agent. For 
example, a corporation and its officers and employees 
generally may be convicted of conspiring together to 
violate the criminal law, regardless of whether the 
officers and employees acted in a corporate capacity 
that would support a finding of agency. 

11 See United 
States v. Peters, 732 F.2d 1004, 1008 n.7 (1st Cir. 1984) 
(“There is a world of difference between invoking the 
fiction of corporate personality to subject a corporation 
to civil liability for acts of its agents and invoking it to 
shield a corporation or its agents from criminal liability 
where its agents acted on its behalf.”). The legal rules 
that render a corporation liable for the acts of its agents 
therefore provide no basis for immunizing an officer or 
employee from RICO liability where the officer or 

11 See, e.g., Wise, supra; United States v. Ames Sintering Co., 
927 F.2d 232, 236 (6th Cir. 1990) (“This court has held a number of 
times that a corporation may conspire with its officers and em- 
ployees.”); United States v. Hugh Chalmers Chevrolet-Toyota, 
Inc., 800 F.2d 737, 738 (8th Cir. 1986) (“[A] corporation may be re- 
sponsible when two or more high ranking or authoritative agents 
engage in a criminal conspiracy on its behalf.”); see also United 
States v. Sain, 141 F.3d 463, 473-475 (3d Cir.) (corporation may be 
a conspirator under respondeat superior theory where at least two 
natural persons have the required mental state to form a con- 
spiracy), cert. denied, 525 U.S. 908 (1998). 

21 

employee has committed crimes through the corpora- 
tion as enterprise. 

12 

4. Finally, determining whether an employee is 
acting within the scope of her employment is fraught 
with difficulty. Inconsistent holdings on this issue 
reflect not just differing facts, but “differing judgments 
about the desirability of holding an employer liable for 
his subordinates’ wayward behavior.” Faragher, 524 
U.S. at 796. As this Court recently concluded in the 
Title VII context, there is no “mechanical” test for 
whether an employee is acting within the scope of em- 
ployment. Id at 797. The scope-of-employment test 
proposed by the court of appeals in this case therefore 
would add an additional element of indefiniteness and 
judicial discretion in determining RICO liability under 
Section 1962(c). 

C. The Distinctness Requirement Is Satisfied When the 

RICO Person And The RICO Enterprise Are Either 

Legally Or Practically Separable 

Although the court of appeals plainly erred in holding 
that corporations and their employees (acting within 
the scope of their employment) are per se indistinct for 
purposes of Section 1962(c), there is a workable test for 
determining when a natural person named as the RICO 
person and a business named as the RICO enterprise 

12 It is not definitively resolved whether a corporate employer 
may be held vicariously liable for its agents’ violations of Section 
1962(c) in a civil case. See Davis v. Mutual Life Ins. Co., 6 F.3d 
367, 378-380 (6th Cir. 1993), cert. denied, 510 U.S. 1193 (1994); 
Brady v. Dairy Fresh Prods. Co., 974 F.2d 1149, 1154-1155 (9th 
Cir. 1992). That question, however, assumes that RICO liability 
has been established. Its resolution does not turn on whether the 
corporation and its agents are distinct for purposes of pleading a 
claim under Section 1962(c). 

22 

meet the distinctness requirement of Section 1962(c). 
The appropriate standard, we suggest, is the test 
articulated by Judge Posner in McCullough, supra, and 
applied by the Seventh Circuit and other courts for 
more than 15 years: the enterprise and the defendant 
must “be either formally * * * or practically * * * 
separable.” McCullough, 757 F.2d at 144; Richmond v. 
Nationwide Cassel L.P., 52 F.3d 640, 647 (7th Cir. 1995) 
(adopting McCullough test); United States v. Benny, 
786 F.2d 1410, 1415-1416 (9th Cir.) (same), cert. denied, 
479 U.S. 1017 (1986); see Jaguar Cars, Inc. v. Royal 
Oaks Motor Car Co., 46 F.3d 258, 269 (3d Cir. 1995) 
(relying upon McCullough); Guidry v. Bank of 
LaPlace, 954 F.2d 278, 283 (5th Cir. 1992) (same). That 
test looks first to whether there is legal distinctness 
between the person and enterprise (such as where the 
defendant is a natural person and the enterprise is the 
corporation that employs him); and, if there is not legal 
distinctness, to whether there nevertheless is a 
practical distinction (such as where the defendant oper- 
ates a sole proprietorship-enterprise that has employ- 
ees other than the owner). See McCullough, 757 F.2d 
at 144. That test is easily administered, and— unlike 
the rule applied by the court of appeals in this case—it 
responds to the underlying policies that Congress 
intended RICO to serve. See generally Sedima, 473 
U.S. at 497-498. 

For instance, even if all the officers, directors, and 
employees of a corporation were named individually as 
defendants, each individual defendant would be suffi- 
ciently distinct from the corporation to allow an action 
under Section 1962(c) where the corporation is named 
as the enterprise. Accord Goldin Indus. II, 219 F.3d at 
1275-1277 (citing cases); Jaguar Cars, 46 F.3d at 268- 
269. In that situation, the named individual defendants 

23 

are legally separate from the corporation, making it 
unnecessary to rely on the fact that they are practically 
separate as well, by virtue of being natural persons. It 
would be highly anomalous, moreover, if a group of 
racketeers could protect one or all of themselves from 
RICO liability merely by incorporating their 
activities. 

13 

The practical consequences of a rule that did not 
allow a Section 1962(c) action against corporate officers 
and employees to go forward in that situation would be 
severe. For example, the United States has brought a 
number of civil RICO lawsuits to eliminate organized 
crime’s influence and control over labor unions. The 
RICO enterprise in such cases typically consists of a 
labor union and its subordinate entities and the RICO 
defendants include multiple corrupt union officials. 

14 

Precluding such actions against union officials—on the 
theory that they are not “distinct” from their labor 
unions—would be inconsistent with a central purpose of 
RICO’s remedial provisions: removing from labor 
unions corrupt leaders who have conducted the affairs 

13 Cf. United States v. Perholtz, 842 F.2d 343, 353 (D.C. Cir.) 
(“This interpretation hardly accords with Congress’ remedial pur- 
poses: to design RICO as a weapon against the sophisticated rack- 
eteer as well as (and perhaps more than) the artless.”), cert. 
denied, 488 U.S. 821 (1988); McCullough, 757 F.2d at 143-144 
(“[W]e cannot believe that Congress would have wanted gangsters 
to be able to escape the clutches of section 1962(c) just by avoiding 
the corporate form.”). 

14 E.g., United States v. Local 30, United Slate, Tile & Com- 
position Roofers, 871 F.2d 401 (3d Cir.), cert. denied, 493 U.S. 953 
(1989); United States v. Local 560 of Int’l Bhd. of Teamsters, 780 
F.2d 267 (3d Cir. 1985), cert. denied, 476 U.S. 1140 (1986); United 
States v. District Council of United Bhd. of Carpenters, 778 F. 
Supp. 738 (S.D.N.Y. 1991); United States v. Local 6A, Cement & 
Concrete Workers, 663 F. Supp. 192 (S.D.N.Y. 1986). 

24 

of their union through a pattern of racketeering activ- 
ity. See S. Rep. No. 617, 91st Cong., 1st Sess. 78 (1969). 

The McCullough test likewise is satisfied when the 
defendant individual is the sole owner of a corporation 
that is the alleged RICO enterprise. 

15 In that circum- 
stance, the defendant’s choice to use the corporate form 
to carry out racketeering activity would establish legal 
distinctness. McCullough, 757 F.2d at 144; see gener- 
ally Burnet v. Clark, 287 U.S. 410, 415 (1932) (“A cor- 
poration and its stockholders are generally to be 
treated as separate entities.”); New Colonial Ice Co. v. 
Helvering, 292 U.S. 435, 442 & n.3 (1934) (same); see 
also 1 William M. Fletcher, Fletcher Cyclopedia of the 
Law of Private Corporations §§ 7, 25 (1999 ed.). As 
noted in McCullough, a natural person who utilizes the 
corporate form to pursue business interests “gets some 
legal protections * * * such as limited liability” as a 
result. 757 F.2d at 144; see Copperweld Corp. v. 
Independence Tube Corp., 467 U.S. 752, 772-773 & n.20 
(1984) (discussing benefits of separate incorporation); 
NLRB v. Deena Artware, Inc., 361 U.S. 398, 402-403 
(1960) (“The insulation of a stockholder from the debts 
and obligations of his corporation is the norm, not the 
exception.”); LeBoeuf, Lamb, Greene & MacRae, L.L.P. 

v. Worsham, 185 F.3d 61, 66 (2d Cir. 1999) (eliminating 
stockholders’ personal liability is “in many cases the 
major reason for” incorporation, and state law “also 
recognizes that officers and directors are, in general, 
not liable for the debts of the corporation”). A RICO 

15 Petitioner asserts that DKP is “closely held” and that its 
affairs are conducted by King. Pet. 5. Those assertions were not 
made in the complaint upon which the district court ruled, 
however, and they were not a basis for the lower courts’ rulings in 
this case. 

25 

defendant who invokes the corporate form to secure its 
benefits should not be heard to argue that the 
corporation’s separateness should be ignored when it 
becomes a liability. 

16 

Courts have rejected similar attempts to avoid liabil- 
ity in other contexts. For instance, this Court refused 
to disregard the corporate form in Moline Properties, 
Inc. v. Commissioner, 319 U.S. 436 (1943), a tax case, 
because incorporation “fills a useful purpose * * * 
[w]hether the purpose be to gain an advantage under 
the law of the state of incorporation or to avoid or to 
comply with the demands of creditors or to serve the 
creator’s personal or undisclosed convenience.” Id. at 
438-439 (footnotes omitted). The sole owner of a 
corporation likewise may be convicted of aiding and 
abetting the corporation in the commission of crimes. 
E.g., United States v. Sain, 141 F.3d 463, 473-475 (3d 
Cir.) (rejecting as “pure sophistry” the argument that a 
sole shareholder may invoke the corporate form to 
protect against personal liability, “without accepting 
the burden of assuming criminal responsibility when 
the individual causes the corporation to commit a 

16 See Sever v. Alaska Pulp Corp., 978 F.2d 1529, 1534 (9th Cir. 
1992) (“[T]he fact that there was but one stockholder [of a 
corporation-enterprise] would not shield that individual from suit 
because such a corporate ‘one-man’ band does receive some legal 
protections from the corporate form, and it is this sort of legal 
shield for illegal activity that Congress intended RICO to pierce.”) 
(internal quotation marks and citation omitted); McCullough, 757 
F.2d at 144 (same); VanDenBroeck v. Commonpoint Mortgage Co., 
210 F.3d 696, 701 (6th Cir. 2000) (sole shareholder is sufficiently 
distinct from corporation to support holding shareholder liable 
under RICO). RICO provides that a corporation may be named as 
an “enterprise,” 18 U.S.C. 1961(4), and makes no exception for 
closely-held or solely-owned corporations. 

26 

crime”), cert. denied, 525 U.S. 908 (1998). And a leading 
treatise endorses the rule “that a person who has 
voluntarily adopted the corporate form to engage in 
business is precluded from asking courts to disregard 
that form merely because the person is disadvantaged 
by its use.” 1 Fletcher, supra, § 41.71, at 686. 

The doctrine of “piercing the corporate veil” is not to 
the contrary. Under that doctrine, the separate iden- 
tity of a corporation may be disregarded—and share- 
holders may be held individually liable for the cor- 
poration’s conduct—“in exceptional situations where 
[the corporate form] otherwise would present an obsta- 
cle to the due protection or enforcement of public or 
private rights.” New Colonial Ice, 292 U.S. at 442; see 
United States v. Bestfoods, 524 U.S. 51, 62 (1998) 
(“[T]he corporate veil may be pierced and the share- 
holder held liable for the corporation’s conduct when, 
inter alia, the corporate form would otherwise be 
misused to accomplish certain wrongful purposes * * * 
on the shareholder’s behalf.”). 

17 Courts should “not 
disregard the corporate entity without a showing that 
the corporate form has been abused,” United States v. 
Fidelity Capital Corp., 920 F.2d 827, 837 (11th Cir. 
1991), and the doctrine has no application when the 
result would be to frustrate application of the law. See 
1 Fletcher, supra, § 41, at 563 (“as a general rule, the 
corporation will be viewed as a legal entity unless it is 
used to defeat public convenience or perpetrate or 
protect crime or fraud”). Thus, while the corporate veil 
may be pierced to effectuate legislative policies, see 

17 The doctrine is applied under many names. See Harry G. 
Henn & John R. Alexander, Laws of Corporations 344-345 n.2. (3d 
ed. 1983) (listing various “verbal characterizations, epithets, and 
metaphors” synonymous with piercing the corporate veil). 

27 

Moline Props., 319 U.S. at 439; Anderson v. Abbott, 321 
U.S. 349, 363 (1944), the corporate form is never 
disregarded under a proper application of this doctrine 
where doing so would frustrate enforcement of a 
statute. 

Finally, where the alleged RICO enterprise is an 
unincorporated sole proprietorship that is not legally 
separable from the individual defendant, McCullough’s 
“practically separable” standard would govern the 
determination of distinctness. In that context, factors 
such as the defendant’s employment of others to con- 
duct the enterprise would be sufficient to render 
the defendant distinct from the enterprise. See 
McCollough, 757 F.2d at 144; Benny, 786 F.2d at 1415- 
1416; United States v. London, 66 F.3d 1227, 1244 (1st 
Cir. 1995), cert. denied, 517 U.S. 1155 (1996); United 
States v. Weinberg, 852 F.2d 681, 684-685 (2d Cir. 1988); 
but see Guidry v. Bank of LaPlace, 954 F.2d at 283 
(unincorporated sole proprietorship that “is merely a 
name under which [the RICO ‘person’] did business for 
the purposes of carrying out his scheme” is not distinct 
from the person). But no such inquiry is required 
where, as here, the defendant is a natural person 
alleged to have conducted the affairs of his incorporated 
employer through a pattern of racketeering activity. 

18 

18 While “practical” distinctness is not necessary to maintain an 
action under Section 1962(c) when the enterprise is legally distinct 
from a natural person named as defendant, such distinctness is 
present on the face of the complaint in this case. Petitioner alleged 
that the RICO enterprise, DKP, had a controller and an insurance 
broker who were not named as defendants. Compl. ¶¶ 65, 66. That 
allegation provides additional support for a determination that 
DKP is sufficiently distinct from King to allow petitioner’s Section 
1962(c) claim to go forward at this preliminary stage of the pro- 

28 

CONCLUSION 

The judgment of the court of appeals should be 
reversed. 

Respectfully submitted. 

BARBARA D. UNDERWOOD 

Acting Solicitor General 

JOHN C. KEENEY 

Acting Assistant Attorney 

General 

MICHAEL R. DREEBEN 

Deputy Solicitor General 

AUSTIN C. SCHLICK 

Assistant to the Solicitor 

General 

DEBORAH WATSON 
FRANK J. MARINE 

Attorneys 

JANUARY 2001 

ceedings. The government, however, takes no position on the 
merits of any of petitioner’s claims. 

APPENDIX 

1. Section 1961 of Title 18 of the United States Code 
(1994 & Supp. IV 1998) provides, in pertinent part: 

Definitions 

As used in this chapter— 

(1) “racketeering activity” means (A) any act or 
threat involving murder, kidnapping, gambling, 
arson, robbery, bribery, extortion, dealing in ob- 
scene matter, or dealing in a controlled substance or 
listed chemical (as defined in section 102 of the 
Controlled Substances Act), which is chargeable 
under State law and punishable by imprisonment 
for more than one year; (B) any act which is indict- 
able under any of the following provisions of title 
18, United States Code: Section 201 (relating to 
bribery), section 224 (relating to sports bribery), 
sections 471, 472, and 473 (relating to counter- 
feiting), section 659 (relating to theft from inter- 
state shipment) if the act indictable under section 
659 is felonious, section 664 (relating to embezzle- 
ment from pension and welfare funds), sections 891- 
894 (relating to extortionate credit transactions), 
section 1028 (relating to fraud and related activity 
in connection with identification documents), section 
1029 (relating to fraud and related activity in 
connection with access devices), section 1084 
(relating to the transmission of gambling informa- 
tion), section 1341 (relating to mail fraud), section 
1343 (relating to wire fraud), section 1344 (relating 
to financial institution fraud), section 1425 (relating 
to the procurement of citizenship or nationalization 

(1a) 

2a 

unlawfully), section 1426 (relating to the reproduc- 
tion of naturalization or citizenship papers), section 
1427 (relating to the sale of naturalization or 
citizenship papers), sections 1461-1465 (relating to 
obscene matter), section 1503 (relating to ob- 
struction of justice), section 1510 (relating to 
obstruction of criminal investigations), section 1511 
(relating to the obstruction of State or local law 
enforcement), section 1512 (relating to tampering 
with a witness, victim, or an informant), section 
1513 (relating to retaliating against a witness, 
victim, or an informant), section 1542 (relating to 
false statement in application and use of passport), 
section 1543 (relating to forgery or false use of pass- 
port), section 1544 (relating to misuse of passport), 
section 1546 (relating to fraud and misuse of visas, 
permits, and other documents), sections 1581-1588 
(relating to peonage and slavery), section 1951 
(relating to interference with commerce, robbery, 
or extortion), section 1952 (relating to racketeer- 
ing), section 1953 (relating to interstate transporta- 
tion of wagering paraphernalia), section 1954 (relat- 
ing to unlawful welfare fund payments), section 
1955 (relating to the prohibition of illegal gambling 
businesses), section 1956 (relating to the laundering 
of monetary instruments), section 1957 (relating to 
engaging in monetary transactions in property 
derived from specified unlawful activity), section 
1958 (relating to use of interstate commerce facili- 
ties in the commission of murder-for-hire), sections 
2251, 2251A, 2252, and 2260 (relating to sexual 
exploitation of children), sections 2312 and 2313 
(relating to interstate transportation of stolen 
motor vehicles), sections 2314 and 2315 (relating to 
interstate transportation of stolen property), sec- 

3a 

tion 2318 (relating to trafficking in counterfeit 
labels for phonorecords, computer programs or 
computer program documentation or packaging and 
copies of motion pictures or other audiovisual 
works), section 2319 (relating to criminal infringe- 
ment of a copyright), section 2319A (relating to 
unauthorized fixation of and trafficking in sound 
recordings and music videos of live musical per- 
formances), section 2320 (relating to trafficking in 
goods or services bearing counterfeit marks), 
section 2321 (relating to trafficking in certain motor 
vehicles or motor vehicle parts), sections 2341-2346 
(relating to trafficking in contraband cigarettes), 
sections 2421-24 (relating to white slave traffic), (C) 
any act which is indictable under title 29, United 
States Code, section 186 (dealing with restrictions 
on payments and loans to labor organizations) or 
section 501(c) (relating to embezzlement from union 
funds), (D) any offense involving fraud connected 
with a case under title 11 (except a case under 
section 157 of this title), fraud in the sale of securi- 
ties, or the felonious manufacture, importation, re- 
ceiving, concealment, buying, selling, or otherwise 
dealing in a controlled substance or listed chemical 
(as defined in section 102 of the Controlled Sub- 
stances Act), punishable under any law of the 
United States, (E) any act which is indictable under 
the Currency and Foreign Transactions Reporting 
Act, or (F) any act which is indictable under 
the Immigration and Nationality Act, section 274 
(relating to bringing in and harboring certain 
aliens), section 277 (relating to aiding or assisting 
certain aliens to enter the United States), or section 
278 (relating to importation of alien for immoral 
purpose) if the act indictable under such section of 

4a 

such Act was committed for the purpose of financial 
gain. 

* * * * * 

(3) “person” includes any individual or entity 
capable of holding a legal or beneficial interest in 
property; 

(4) “enterprise” includes any individual, partner- 
ship, corporation, association, or other legal entity, 
and any union or group of individuals associated in 
fact although not a legal entity[.] 

* * * * * 

2. Section 1962 of Title 18 of the United States Code 
provides: 

Prohibited activities 

(a) It shall be unlawful for any person who has 
received any income derived, directly or indirectly, 
from a pattern of racketeering activity or through 
collection of an unlawful debt in which such person 
has participated as a principal within the meaning of 
section 2, title 18, United States Code, to use or in- 
vest, directly or indirectly, any part of such income, 
or the proceeds of such income, in acquisition of any 
interest in, or the establishment or operation of, any 
enterprise which is engaged in, or the activities of 
which affect, interstate or foreign commerce. A 
purchase of securities on the open market for pur- 
poses of investment, and without the intention of 
controlling or participating in the control of the 
issuer, or of assisting another to do so, shall not be 

5a 

unlawful under this subsection if the securities of 
the issuer held by the purchaser, the members of 
his immediate family, and his or their accomplices in 
any pattern or racketeering activity or the collec- 
tion of an unlawful debt after such purchase do not 
amount in the aggregate to one percent of the 
outstanding securities of any one class, and do not 
confer, either in law or in fact, the power to elect 
one or more directors of the issuer. 

(b) It shall be unlawful for any person through a 
pattern of racketeering activity or through collec- 
tion of an unlawful debt to acquire or maintain, 
directly or indirectly, any interest in or control of 
any enterprise which is engaged in, or the activities 
of which affect, interstate or foreign commerce. 

(c) It shall be unlawful for any person employed 
by or associated with any enterprise engaged in, or 
the activities of which affect, interstate or foreign 
commerce, to conduct or participate, directly or 
indirectly, in the conduct of such enterprise’s affairs 
through a pattern of racketeering activity or 
collection of unlawful debt. 

(d) It shall be unlawful for any person to conspire 
to violate any of the provisions of subsection (a), (b), 
or (c) of this section.