170
OCTOBER TERM, 1992
Syllabus
certiorari to the united states court of appeals for the eighth circuit
No. 91-886. Argued October 13, 1992—Decided March 3, 1993
A provision of the Racketeer Influenced and Corrupt Organizations Act
(RICO), 18 U. S. C. § 1962(c), makes it unlawful "for any person employed by or associated with [an interstate] enterprise . . . to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity . . . ." After respondent's predecessor, the accounting firm of Arthur Young and Company, engaged in certain activities relating to valuation of a gasohol plant on the yearly audits and financial statements of a farming cooperative, the cooperative filed for bankruptcy, and the bankruptcy trustee brought suit, alleging, inter alia, that the activities in question rendered Arthur Young civilly liable under § 1962(c) to petitioner holders of certain of the cooperative's notes. Among other things, the District Court applied Circuit precedent requiring, in order for such liability to attach, "some participation in the operation or management of the enterprise itself"; ruled that Arthur Young's activities failed to satisfy this test; and granted summary judgment in its favor on the RICO claim. Agreeing with the lower court's analysis, the Court of Appeals affirmed in this regard.
Held: One must participate in the operation or management of the enterprise itself in order to be subject to § 1962(c) liability. Pp. 177-186. (a) Examination of the statutory language in the light of pertinent dictionary definitions and the context of § 1962(c) brings the section's meaning unambiguously into focus. Once it is understood that the word "conduct" requires some degree of direction, and that the word "participate" requires some part in that direction, it is clear that one must have some part in directing an enterprise's affairs in order to "participate, directly or indirectly, in the conduct of such . . . affairs." The "operation or management" test expresses this requirement in a formulation that is easy to apply. Pp. 177-179. (b) The "operation or management" test finds further support in § 1962's legislative history. Pp. 179-183. (c) RICO's "liberal construction" clause—which specifies that the "provisions of this title shall be liberally construed to effectuate its remedial purposes"—does not require rejection of the "operation or management" test. The clause obviously seeks to ensure that Congress'
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