Beck v. Prupis

LOCATION: Nebraska General Assembly

DOCKET NO.: 98-1480
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Eleventh Circuit

CITATION: 529 US 494 (2000)
ARGUED: Nov 03, 1999
DECIDED: Apr 26, 2000

Jay Starkman - Argued the cause for the petitioner
Michael M. Rosenbaum - Argued the cause for the respondents

Facts of the case

Robert A. Beck, II, of Southeastern Insurance Group (SIG), alleged that after he discovered former senior officer and director Ronald M. Prupis' unlawful conduct and contacted regulators, Prupis enacted a scheme to remove him from SIG. Beck sued Prupis under the Racketeer Influenced and Corrupt Organizations Act (RICO). Beck alleged that his injury, the loss of his employment, served to further Prupis' conspiracy and therefore provided a cause of action under RICO. The District Court dismissed Beck's RICO conspiracy claim. The court agreed with Prupis that employees who are terminated for refusing to participate in RICO activities, or who threaten to report RICO activities, do not have standing to sue under RICO for damages from their loss of employment. In affirming, the Court of Appeals held that because the act causing Beck's injury was not an act of racketeering, it could not support a RICO cause of action.


May a person injured by an action furthering a conspiracy sue under the Racketeer Influenced and Corrupt Organizations Act even if the action itself was not an act of racketeering?

Media for Beck v. Prupis

Audio Transcription for Oral Argument - November 03, 1999 in Beck v. Prupis

William H. Rehnquist:

We'll hear argument first this morning in Number 98-1480, Robert A. Beck v. Ronald Prupis.

Mr. Starkman.

Jay Starkman:

Mr. Chief Justice, and may it please the Court:

This case, like many cases previously before this Court, begins and ends with the language that Congress chose to use in RICO.

Section 1964(c) does not provide a civil remedy only for predicate acts as defined in section 1961.

Congress also did not draft section 1964(c) to provide civil remedies only for violations of 1962(a), (b), and (c), or, for that matter, only for violations of 1962(c).

Congress drafted section 1964(c) in plain and unambiguous terms to provide a civil remedy for all four of the subsections of section 1962, and that includes 1962(d), conspiracies to violate RICO.

The petitioner here, Robert Beck, was injured by reason of a violation of section 1962(b), a conspiracy to violate RICO, and under the plain and unambiguous terms of that statute, that is all that is required to provide him with a civil remedy.

Anthony M. Kennedy:

Well, he wasn't injured by the formation of the agreement, and that was the conspiracy.

Jay Starkman:

Yes, that's correct, he's not injured...

Anthony M. Kennedy:

And that's all the conspiracy was.

Jay Starkman:

The conspiracy itself, though, has several objects.

l One of the objects... well, the objects are obviously to violate the substantive sections of that statute, but overall the conspiracy was, let's shake down contractors, let's commit fraud, and let's hide it all, get money, invest it in the enterprise.

As that conspiracy develops, though, as with all conspiracies, the object has to expand, and it has to include getting rid of Beck, who stood in the way of that conspiracy continually.

He was a threat to the very existence of the conspiracy.

He actually was more important than one of the victims of the 100 of predicate acts.

I mean, one contractor who's shaken down, he could sue through RICO, but which is more vital to the continuance of the conspiracy, that person, or Beck, a person who could have brought the entire conspiracy down.

Anthony M. Kennedy:

Well, let's say that we rule against you on this point.

Predicate acts still are committed sometimes in concert with others, in joint participation.

The standard law of torts would give recovery for that in most instances, so you wouldn't really need the conspiracy section for vicarious liability, or for joint liability.

Jay Starkman:

But here, the way that the statute was drafted, Justice Kennedy, the statute itself created four separate causes of action, and this Court in Salinas defined the words, to conspire, which only appear in the statute once, as being this criminal animal.

William H. Rehnquist:

Well, that was a criminal case, was it not, Salinas?

Jay Starkman:

Yes, sir, but just because those words are defined in a criminal context, they shouldn't have a different meaning in another section when that other section refers to them.

Anthony M. Kennedy:

Well, you say it creates four separate causes of action, but that's the issue, does it?

Jay Starkman:

It is the... well, it's the way the statute's written, though.

The plain language of the statute provides a forbidden activities, or prohibited activities in (a), (b), (c), and (d), and all of these were new causes of action that had to be created.

In Commonwealth, for example, there was no civil action for investment of proceeds from racketeering activity to acquire control in an entity.

Anthony M. Kennedy:

Well, all of those were criminal acts.

The question here is whether they were all causes of action.

Jay Starkman:

The question here...