Reves v. Ernst & Young, 507 U.S. 170, 16 (1993)

Page:   Index   Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Cite as: 507 U. S. 170 (1993)

Opinion of the Court

its the liability of "outsiders" who have no official position within the enterprise. Brief for United States as Amicus Curiae 12 and 15. The United States correctly points out that RICO's major purpose was to attack the "infiltration of organized crime and racketeering into legitimate organizations," S. Rep. No. 91-617, at 76, but its argument fails on several counts. First, it ignores the fact that § 1962 has four subsections. Infiltration of legitimate organizations by "outsiders" is clearly addressed in subsections (a) and (b), and the "operation or management" test that applies under subsection (c) in no way limits the application of subsections (a) and (b) to "outsiders." 10 Second, § 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. Third, § 1962(c) cannot be interpreted to reach complete "outsiders" because liability depends on showing that the defendants conducted or participated in the conduct of the "enterprise's affairs," not just their own affairs. Of course, "outsiders" may be liable under § 1962(c) if they are "associated with" an enterprise and participate in the conduct of its affairs—that is, participate in the operation or management of the enterprise itself—but it would be consistent with neither the language nor the legislative history of § 1962(c) to interpret it as broadly as petitioners and the United States urge.

In sum, we hold that "to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs," § 1962(c), one must participate in the operation or management of the enterprise itself.

VI

Both the District Court and the Court of Appeals applied the standard we adopt today to the facts of this case, and both found that respondent was entitled to summary judg-10 Subsection (d) makes it unlawful to conspire to violate any of the other three subsections.

185

Page:   Index   Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: October 4, 2007