Civil RICO: A Manual for Federal Attorneys

2. An Injunction May Apply to Non-Parties in Various Circumstances 172 D. Removal Orders and Prohibition of Future Activities May Implicate Property Rights Protected By Due Process 177 E. Court-Appointed Officers in General 186 viii PAGE 1. Courts Have Inherent Authority to Appoint Officers to Assist Them in Executing Their Duties 186 2. Court-Appointed Officers Perform Varied Functions 190 a. Devising Remedies 190 b. Administering Operations 192 c. Monitoring Compliance and Adjudicatory Functions 192 3. Article III Considerations 193 F. Contempt 198 1. Determining Whether Contempt is Civil or Criminal in Nature 198 a. The Bagwell Decision 199 b. Decisions Following Bagwell 202 2. Different Elements and Procedures Apply to Criminal and Civil Contempt 205 a. Principles Governing Criminal Contempt 206 b. Principles Governing Civil Contempt 207 3. A Jury Trial for Criminal Contempt is Required When the Sanction Involves A “Serious Fine” or Imprisonment of More Than Six Months 211 VIII. GOVERNMENT CIVIL RICO CASES INVOLVING LABOR UNIONS 213 A. Overview of Government Civil RICO Cases Involving Labor Unions 213 1. Overview of Labor Racketeering 213 2. Congress Designed Civil RICO to Combat the LCN’s Corrupt Influence Over Labor Unions 216 3. The United States Department of Justice Adopted A Strategy to Eliminate the LCN’s Corrupt Influence Over Labor Unions 217 ix PAGE 4. Overview of Essential Relief 219 B. Specific Relief Obtained in Government Civil RICO Cases Involving Labor Unions 221 1. Injunctions 221 2. Dissolution, Divestiture and Reorganization 223 3. Court-Appointed Officers 224 (a) Officers to Administer the Affairs of a Union 224 (b) Adjudication Officers 228 (i) General Powers 228 (ii) Review Authority 229 (iii) Disciplinary Powers 229 4. Imposition of Ethical Practices Codes and Disciplinary Procedures 231 a. Disciplinary Procedures 231 b. Due Process and Article III Considerations 234 5. Election Reform 238 6. Removal of Persons From Union Office and Membership, and Prohibitions on Holding Union Office or Membership 240 7. Disgorgement 242 8. Relief Against Non-Parties 243 C. Relief Obtained In Contested Civil RICO Cases Involving Labor Unions 245 1. The IBT Local 560 Case 245 2. The Local 30, Roofers Union Case 247 3. The ILA Local 1804-1 Case 250 4. The IBT Local 295 Case 251 x PAGE 5. The IBT Local 282 Case 253 6. The Mason Tenders District Council of LIUNA Case 256 7. The Private Sanitation Industry Ass’n Case 258 8. The LIUNA Local 6A Case 261 D. Union Officials and Entities As Nominal Defendants 262 1. Evidence of Wrongdoing is Not Required to Obtain Relief Against a Nominal Defendant 262 2. Nominal Defendants in Government Civil RICO Cases Involving Labor Unions 264 E. Specific Issues in Government Civil RICO Cases Involving Labor Unions 267 1. State Action and Due Process Considerations 267 2. First Amendment Issues 270 3. Equitable Relief in Government Civil RICO Cases Does Not Violate, And Is Not-Pre-empted By, The NLRA, The LMRDA or Other Labor Laws 272 a. General Procedures 272 b. The NLRA Does Not Pre-empt Government Civil RICO Lawsuits 274 c. The LMRDA Does Not Pre-empt Government Civil RICO Lawsuits 277 d. Other Labor Laws Do Not Pre-empt Government Civil RICO Lawsuits 281 F. Extortion Of Union Members’ Rights To Free Speech and To Participate In Internal Union Democracy Guaranteed By The LMRDA 282 1. Union Members’ Rights Under the LMRDA Constitute Intangible Property Within The Meaning of the Hobbs Act 282 xi PAGE 2. A Defendant “Obtains” or Seeks to “Obtain” Intangible Property Rights From A Victim Within The Scope of the Hobbs Act When He Uses Extortionate Means In Order to Exercise Those Rights For Himself or a Third Party in a Way That Would Profit Them Financially 290 IX. GOVERNMENT CIVIL RICO CASES NOT INVOLVING LABOR UNIONS 299 X. MISCELLANEOUS ISSUES 308 A. Prior or Parallel Criminal Proceeding 308 B. Use of Court-Ordered Electronic Surveillance 309 C. Federal Rule of Criminal Procedure 6(e) 313 1. A Government Attorney May Not Disclose “A Matter Occurring Before the Grand Jury” Unless It Falls Within An Exception Set Forth in Rule 6(e)(3) 313 2. A Government Attorney Who Has Had Lawful Access to a Matter Occurring Before a Grand Jury May Use Such Matter in Handling a Civil RICO Action, But May Not Disclose Such Matter, Without a Court-Disclosure Order, to Another Person to Assist in Handling a Civil Action 315 3. A District Court May Order Disclosure of a Grand Jury Matter Preliminary to or in Connection With a Judicial Proceeding 321 APPENDICES A. United States Attorneys’ Manual Sections on Review and Approval B. Summary of Each Government Civil RICO Case Involving Labor Unions i PREFACE This manual is intended to assist federal attorneys in the preparation and litigation of cases involving the civil provisions of the Racketeer Influenced & Corrupt Organization Act, 18 U.S.C. §§ 1961-1968. Federal attorneys are encouraged to contact the Organized Crime and Racketeering Section of the United States Department of Justice (“OCRS”) early in the preparation of their case for advice and assistance. All Government civil RICO complaints, RICO Civil Investigative Demands and all proposed settlements of Government civil RICO suits must be submitted, with a supporting prosecution memorandum, to OCRS for review and approval before being issued or filed with the court. The submission should be approved by the Government attorney’s office before being submitted to OCRS. Due to the volume of submissions received by OCRS, Government attorneys should submit the proposal three weeks prior to the date final approval is needed. Government attorneys should contact OCRS regarding the status of pending submissions and must refrain from finalizing any settlement agreement concerning a proposed civil RICO lawsuit before final approval has been obtained from OCRS. The policies and procedures set forth in this manual and elsewhere relating to 18 U.S.C. §§ 1961-1968 are internal Department of Justice policies and guidance only. They are not intended to, do not, and may not be relied upon to, create any right, substantive or procedural, enforceable at law by any party in any matter civil or criminal. Nor are any limitations hereby placed on otherwise lawful litigative prerogatives of the Department of Justice. Pub. L. No. 91-452, 84 Stat. 941 (1970).1 1 I INTRODUCTION AND APPROVAL PROCESS A. Introduction 1. Overview RICO was enacted October 15, 1970, as Title IX of the Organized Crime Control Act of 1970 and is codified at 18 U.S.C. §§ 1961-1968. RICO provides for both criminal and civil1 remedies. RICO’s civil remedies are set forth in 18 U.S.C. § 1964(a), (b) and (c), which provide as follows: (a) The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons. (b) The Attorney General may institute proceedings under this section. Pending final determination thereof, the court may at any time enter such restraining order or prohibitions, or take such other actions, including the acceptance of satisfactory performance bonds, as it shall deem proper. (c) Any person injured in his business or property by reason of a violation of Section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee, except that no person may rely upon any conduct that would have been actionable as fraud in the purchase or sale of securities to establish a violation of section 1962. The To obtain relief under Section 1964(c), a plaintiff must establish that a defendant2 committed a violation of the RICO statute, and that such RICO violation was the proximate cause of injury to the plaintiff’s business or property. See, e.g., Anza v. Ideal Steel Supply Corp., 547 U.S. ____, _____, 126 S.Ct. 1991, 1996 (2006); Beck v. Prupis, 529 U.S. 494, 496-503 (2000); Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268 (1992). 2 exception contained in the preceding sentence does not apply to an action against any person that is criminally convicted in connection with the fraud, in which case the statute of limitations shall start to run on the date on which the conviction becomes final. Section 1964(a) vests the Attorney General of the United States with the exclusive authority to sue for equitable relief, whereas Section 1964(c) vests private litigants, but not the United States, with authority to sue for treble damages for injury to their business or property. See Section II (D) below. Because the United States may not sue for treble damages under Section 1964(c), this Manual does not address such suits for treble damages.2 To obtain civil equitable relief under 18 U.S.C. § 1964(a), the United States must prove by a preponderance of the evidence that: (1) a defendant committed or intended to commit a RICO violation by establishing the same elements as in a criminal RICO case, except that criminal intent is not required; and (2) that there is a reasonable likelihood that the defendant will commit a violation in the future. See Section III (A) below. However, this Manual does not address the elements of a criminal RICO violation or the substantial body of law interpreting criminal RICO because those matters are addressed in the Organized Crime and Racketeering Section (“OCRS”) manual entitled: Racketeer Influenced and Corrupt Organizations: A Manual for Federal Prosecutors (4 Ed. Julyth (Available at3 www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/rico.pdf). 3 2000) (“Criminal RICO Manual”). Therefore, Government attorneys handling civil3 RICO lawsuits should consult OCRS’ Criminal RICO Manual in addition to this Manual. This Manual first discusses the origins and general nature of courts’ equitable authority and then addresses the specific equitable relief Congress intended civil RICO to authorize. This Manual also includes an analysis of: (1) the elements of Government civil RICO lawsuits; (2) principles of liability and certain defenses; (3) various procedural and discovery issues that are likely to arise in Government civil RICO lawsuits; and (4) analysis of the law governing judgments, consent decrees, enforcement, injunctions, contempt and the authority of court-appointed officers. This Manual also includes detailed analyses of the Government’s civil RICO lawsuits involving labor unions and issues likely to arise in such lawsuits as well as other matters. 2. Guidelines for Bringing Civil RICO Lawsuits Civil RICO, 18 U.S.C. § 1964(a), authorizes potentially intrusive remedies, including injunctive relief, reasonable restrictions on defendants’ future activities, disgorgement of unlawful proceeds, divestiture, dissolution, reorganization, removal from positions in an entity, and appointment of court officers to administer and supervise the affairs and operations of defendants’ entities and to assist courts in monitoring compliance with courts’ orders and in imposing sanctions for violations of courts’ orders. See Sections II (C), VII (C), (D) and (E), and VIII (A), (B), and (C) below. Because such civil RICO remedies may be powerful and intrusive, the Government should bring a civil RICO lawsuit only when the totality of the circumstances clearly justify imposition of 4 such remedies, and not in a routine case where there has been a RICO violation. Moreover, Government civil RICO lawsuits typically are brought against defendants that are collective entities such as corporations and labor unions, and hence such suits may affect innocent third parties such as union members and corporate shareholders. See Sections III(A)(2) and (B)(2) and (3) below. Therefore, the Government should consider the adverse effects, if any, of a civil RICO lawsuit upon innocent third parties. Generally, Government attorneys should apply the same factors in determining whether to bring a civil RICO lawsuit against a collective entity as they do with respect to individual defendants. Thus, Government attorneys must weigh the sufficiency of the evidence, the likelihood of success at trial and the consequences of a finding of liability. In addition, Government attorneys should consider the following factors, among others, in determining whether to bring a civil RICO lawsuit against an individual and/or a collective entity: (1) the nature and seriousness of the predicate racketeering offenses; (2) whether the predicate racketeering offenses were committed over a substantial period of time, and/or pose a threat of continuing unlawful activity; (3) whether an organized crime group participated in any of the predicate racketeering offenses or exercised corrupt influence over any proposed enterprise, defendant or related entity; (4) whether there is a reasonable likelihood that the defendant will commit unlawful activity in the future; (5) the pervasiveness of wrongdoing within a collective entity that is a proposed defendant, including the complicity in, or condonation of, the wrongdoing by the collective entity’s officers and management; The factors listed are similar to the factors to be considered in determining whether to4 bring criminal charges against a corporation. See Department of Justice Memorandum from Paul J. McNulty, Deputy Attorney General on Principles of Federal Prosecution of Business Organizations (December 12, 2006). 5 (6) the defendant’s history of similar unlawful conduct, including prior criminal, civil or regulatory enforcement actions against it; (7) whether the defendant has derived unlawful proceeds from his RICO violation that are subject to disgorgement; (8) the defendant’s timely and voluntary disclosure of wrongdoing and his/her or its willingness to cooperate with the authorities to eliminate corruption involving the defendant or related entities; (9) the existence and adequacy of a collective entity’s compliance program and other remedial actions; (10) collateral consequences, including harm, if any, to innocent third parties, including a collective entity’s shareholders, employees, or union members; (11) whether and to what extent the sought remedies are likely to be effective; and (12) the availability and adequacy of other remedies.4 No single factor is dispositive. Rather, these factors must be considered under the totality of the circumstances. Moreover, the factors listed are intended to be illustrative of those that should be considered and not a complete or exhaustive list. For example, it may be especially appropriate to bring a Government civil RICO lawsuit where injunctive relief and structural reform is necessary to eliminate extensive and prolonged corruption in an entity and to cure its ill effects, such as in the cases involving Government civil RICO lawsuits against labor unions. In these labor union- related civil RICO cases, La Cosa Nostra figures and corrupt union officials had exercised corrupt control and influence over the labor unions involved for many years, and 6 successful criminal prosecution of many of those wrongdoers was not sufficient to eliminate such systemic corruption from those unions. In such circumstances, civil RICO’s equitable remedies, especially injunctive relief, removal of corrupt union officers and members from the unions, and appointment of court officers to administer and oversee aspects of the unions’ operations, achieved substantial success in eliminating and reducing such corruption within the unions involved and related businesses. See Section VIII below. B. Prior Approval by the Organized Crime and Racketeering Section of All Government Civil RICO Lawsuits is Required 1. Approval Authority and Process The Code of Federal Regulations, 28 C.F.R. § 0.55, provides, in relevant part, as follows: § 0.55 General Function The following functions are assigned to and shall be conducted, handled or supervised by, the Assistant Attorney General, Criminal Division . . . (d) Civil or criminal forfeiture or civil penalty actions (including petitions for remission or mitigation of forfeiture and civil penalties, offers in compromise, and related proceedings under the . . . Organized Crime Control Act of 1970 . . . [i.e., RICO, 18 U.S.C. § 1961 et. seq.]. . . . (g) Coordination of enforcement activities directed against organized crime and racketeering. Pursuant to USAM § 9-110.010, such authority has been delegated to the Organized Crime and Racketeering Section of the Criminal Division. Accordingly, the following procedures must be followed in all civil RICO lawsuits brought by or against 7 the United States: (1) No civil RICO complaint shall be filed, and no RICO investigative demand shall be issued, without the prior approval of OCRS. (2) No civil RICO complaint shall be settled or dismissed, in whole or in part, without prior approval of OCRS. (3) No remedy in any civil RICO lawsuit brought by the United States shall be sought without prior approval by OCRS. (4) In any civil RICO lawsuit brought by, or against, the United States, any adverse decision on an issue involving an interpretation of the RICO statute from any District Court or any Circuit Court of Appeals shall be timely reported to OCRS, in addition to reporting to the Solicitor General’s Office and the appropriate Appellate Section of the Civil or Criminal Divisions, to enable OCRS to submit a recommendation to the Solicitor General’s Office whether to seek further review of the decision. (5) In any civil RICO lawsuit brought by, or against, the United States, any brief submitted in any appeal to any Circuit Court of Appeals involving an issue of an interpretation of the RICO statute must be timely submitted to OCRS for review prior to filing the brief in the Court of Appeals. These requirements are necessary to enable OCRS to carry out its supervisory authority over all Government uses of the RICO statute and to promote consistent, uniform interpretations of the RICO statute. See, e.g., USAM § 110.300 “RICO Guidelines Policy”, which provides that “[i]t is the purpose of these guidelines to centralize the RICO review and policy implementation functions in the section of the 8 Criminal Division having supervisory responsibility for this statute,” i.e., OCRS. The review process for authorization of all Government civil and criminal suits pursuant to the RICO statute is set forth in the United States Attorneys Manual. See USAM §§ 9-110.010 -- 9-110.400, which provisions are attached as Appendix A. To commence the formal review process, submit a final draft of the proposed complaint, including the remedies sought, and a detailed prosecution memorandum to OCRS. The prosecution memorandum should be similar, in organization and types of information provided, to a RICO criminal prosecution memorandum, which is described in the Criminal Resource Manual at section 2071 et seq. The prosecution memorandum should also address the factors to be considered in determining whether to bring a civil RICO lawsuit set forth in Section I (A)(2) above. Before the formal review process begins, Government attorneys are encouraged to consult with OCRS in order to obtain preliminary guidance and suggestions. The review process can be time-consuming, especially in light of the complexity of Government civil RICO lawsuits and the sensitive remedies involved; and also because of the likelihood that modifications will be made to the complaint, and the heavy workload of the reviewing attorneys. Therefore, unless extraordinary circumstances justify a shorter time frame, a period of at least 15 working days must be allowed for the review process. 2. Post-Complaint Duties Once a civil RICO complaint has been approved and filed, it is the duty of the Government’s attorney handling the matter to submit to OCRS a copy of the complaint, 9 including all attachments, bearing the seal of the clerk of the district court. In addition, the Government’s attorney should send OCRS copies of the Government’s filings for pre- trial motions and should keep OCRS informed of adverse decisions as noted above and legal problems that arise in the course of the case to enable OCRS to provide assistance and carry out its supervisory functions. 10 II OVERVIEW OF EQUITABLE RELIEF, CIVIL RICO, AND ITS LEGISLATIVE HISTORY A. Origins and General Nature of Courts’ Equitable Authority 1. Origins of Courts’ Equitable Authority Article III, Section 2 of the United States Constitution provides, in relevant part, that A[t]he judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties Made, or which shall be made, under their Authority.@ A[E]quity is that portion of the law which was developed by the English and American courts of chancery to remedy defects in the common law.@ Howard L. Oleck, Historical Nature of Equity Jurisprudence, 20 FORDHAM L. REV. 23, 24 (1951) (AEquity Jurisprudence@). At the time the United States Constitution was adopted and continuing for a considerable period thereafter, various states had separate equity courts, and federal courts recognized separate causes of action for equity that were distinguished from suits at common law. See generally Parsons v. Bedford, 28 U.S. 433, 446 (1830); Equity Jurisprudence, 20 FORDHAM L. REV. at 23-26, 40-43; Leonard J. Emmerglick, J. Emmerglick, A Century of the New Equity, 23 Tex. L. Rev. 244 (1944-45) (AThe New Equity@). However, commencing in 1845, states began to abandon their separate equity courts, and in 1938, federal courts adopted new Federal Rules of Civil Procedure for all civil matters, wherein a single form of civil action is provided for all civil suits. See Equity Jurisprudence, 20 FORDHAM L. REV. at 41-43; The New Equity, 23 Tex. L. Rev. at 244-250. See, e.g., Mertens v. Hewitt Assocs., 508 U.S. 248, 255 (1993); Tull, 481 U.S. at 423;5 (continued...) 11 Classification of a cause of action as to whether it seeks a remedy Aat law@ or Ain equity@ remains important for several reasons of general significance: (1) Aequitable remedies are generally enforceable by contempt while legal remedies are not”; (2) generally, litigants do not have a right to a jury trial to obtain equitable relief, whereas in many cases a right to a jury trial attaches to the suits Aat law”; and (3) Aequitable relief is discretionary.@ DAN B. DOBBS, DOBBS LAW OF REMEDIES, Vol. One at 11-12, 56-57 (West Publ’g Co. 2d ed. 1993) (ADOBBS@). However, determining whether a particular cause of action seeks remedies Aat law@ or Ain equity@ is not an easy task. As one commentator perceptively observed, A[t]he description of equity as that law which was administered by the old English Courts of Chancery, of course, is hardly a definition.@ Equity Jurisprudence, 20 FORDHAM L. REV. at 24. To determine Awhether [a cause of] action is more similar to suits tried in courts of law,” the Supreme Court examines Aboth the nature of the action and of the remedy sought.@ Tull v. United States, 412 U.S. 412, 417 (1987). First, the Court compares the action at issue Ato 18 Century actions brought in the courts of England prior to theth merger of the courts of equity,@ and second, the Court examines Athe remedy sought and determine[s] whether it is legal or equitable in nature.@ Tull, 481 U.S. at 417-418. See also Section V (C) below, which addresses whether an action is equitable, and hence does not carry a right to a jury trial. Under these principles, courts have ruled that a wide variety of causes of actions constitute actions for equitable relief, including injunctions, disgorgement of5 (...continued)5 Mitchell v. Robert De Mario Jewelry, Inc., 361 U.S. 288, 291-92 (1960); United Steelworkers of America v. United States, 361 U.S. 39, 40-41 (1959); Porter v. Warner Holding Co., 328 U.S. 395, 399 (1946); Barton v. Barbour, 104 U.S. 126, 133-34 (1881). See, e.g., Harris Trust & Savings Bank v. Salomon Smith Barney, Inc., 530 U.S. 238,6 250 (2000); Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 352 (1998); Teamsters Local No. 391 v. Terry, 494 U.S. 558, 570 (1990); Tull, 481 U.S. at 424; FTC v. Gem Merchandising Corp., 87 F.3d 464, 468-70 (11th Cir. 1996); SEC v. Rind, 991 F.2d 1486, 1493 (9th Cir. 1993); SEC v. Tome, 833 F.2d 1086, 1096 & n. 7 (2d Cir. 1987); SEC v. Commonwealth Chem. Securities, 574 F.2d 90, 94-96 (2d Cir. 1978); Bradford v. SEC, 278 F.2d 566, 567 (9th Cir. 1960); United States v. Philip Morris, 273 F. Supp. 2d 3, 8 (D.D.C. 2002); SEC v. Asset Mgmt. Corp., 456 F. Supp. 998, 999-1000 (S.D. Ind. 1978); SEC v. Petrofunds, Inc., 420 F. Supp. 958, 959 (S.D.N.Y. 1976); SEC v. Associated Minerals, Inc., 75 F.R.D. 724, 726 (E.D. Mich. 1977). Cf. SEC v. Blavin, 760 F.2d 706, 713 (6th Cir. 1985) (“the district court possesses the equitable power to grant disgorgement”); SEC v. Williams, 884 F. Supp. 28, 30-31 (D. Mass. 1995). See, e.g., Porter v. Warner Holding Co., 328 U.S. 399, 402 (1946).7 See, e.g., California v. American Stores Co., 495 U.S. 271, 281-95 (1990); United8 States v. E.I. DuPont de Nemours & Co., 366 U.S. 316, 326-27 (1961); Schine Chain Theatres v. United States, 334 U.S. 110, 128 (1948). See Gordon v. Washington, 295 U.S. 30, 37 (1935). See also cases cited in Sections9 VII (E) and VIII (B)(3) below. See DOBBS, Vol. One at 157.10 12 wrongdoers= ill-gotten gains, restitution of illegally obtained profits, divestiture or6 7 dissolution, appointment of a receiver and others to assist the court in executing its8 duties, and constructive trusts.9 10 Moreover, “[g]enerally, an action for money damages@ is a remedy Aat law.” Teamsters Local No. 391 v. Terry, 494 U.S. 558, 570 (1990). However, an award of monetary relief is not necessarily legal relief. Id. at 570. The Supreme Court has Acharacterized damages as equitable where they are restitutionary, such as in >actions for For a comprehensive discussion of equitable remedies, see DOBBS, Vol. One at 55-81,11 148-275, 586-655. 13 disgorgement of improper profits.’” or when Aa monetary award [is] >incidental to or intertwined with injunctive relief.=@ Id. at 570-71 (citations omitted). Generally speaking, Aa claim could be deemed equitable if it sought a coercive remedy like injunction,” or Aif the plaintiff sought to enforce a right that was originally created in the equity courts, or a right that was traditionally decided according to equitable principles.@ DOBBS, Vol. One at 155.11 2. Courts Are Vested With Broad Equitable Powers To Remedy Unlawful Conduct, Including Ordering Intrusive, Structural Changes in Wrongdoers’ Entities and Practices The Supreme Court has repeatedly emphasized that courts are vested with extensive equitable powers to fashion appropriate remedies to redress unlawful conduct. For example, in Swann v. Charlotte-Mecklenburg Bd. of Educ., 402 U.S. 1 (1971), the Supreme Court stated: Once a right and a violation have been shown, the scope of a district court’s equitable powers to remedy past wrongs is broad, for breadth and flexibility are inherent in equitable remedies. “The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it. The qualities of mercy and practicality have made equity the instrument for nice adjustment and reconciliation between the public interest and private needs as well as between competing private claims.” Hecht Co. v. Bowles, 321 U.S. 321, 329-330 (1944). See also Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 291-92 (1960)12 (“When Congress entrusts to an equity court the enforcement of prohibitions contained in a regulatory enactment, it must be taken to have acted cognizant of the historic power of equity to provide complete relief in light of the statutory purpose. As this Court has long ago recognized, ‘there is inherent in the Courts of Equity a jurisdiction to. . . give effect to the policy of legislature.’ Clark v. Smith, 38 U.S. (13 Pet. ) 195, 203, 10 L. Ed. 123.”). See generally DOBBS, Vol. Two at 349-353 (“Some civil rights injunctions. . . [seek] to13 halt a group of wrongful practices by restructuring a social institution such as a mental hospital, school or prison. Structural injunctions are not limited to civil rights cases; one might restructure a private corporation in an effort [to] make its compliance with legal rules more likely.”) (id. at 349). See also Special Project: The Remedial Process in Institutional Reform Litigation, 78 COLUM. L. REV. 784 (1978) (hereinafter “Special Project”); William Fletcher The Discretionary Constitution: Institutional Remedies and Judicial Legitimacy, 91 YALE L.J. 635 (1982). 14 Swann, 402 U.S. at 15. Accord California v. American Stores, Co., 495 U.S. 271, 284 (1990). Moreover, the Supreme Court has pointedly ruled that where “the public interest is involved. . . those equitable powers assume an even broader and more flexible character than when only a private controversy is at stake.” Porter v. Warner Holding, Co., 328 U.S. 395, 398 (1946). Accord Virginian Ry. Co. v. Sys. Fed’n. No. 40, 300 U.S. 515, 552 (1937) (“Courts of equity may, and frequently do, go much farther both to give and withhold relief in furtherance of the public interest than they are accustomed to go when only private interests are involved.”) (collecting cases); Golden State Bottling Co. v. NLRB, 414 U.S. 168, 179-80 (1973) (same).12 In accordance with these principles, courts have imposed a wide variety of highly intrusive equitable remedies in institutional reform litigation to remedy constitutional violations and to foster paramount public interests, including various structural reforms.13 Typically in such cases, the equitable relief afforded exceeds an injunction enjoining the 15 proscribed conduct, and also encompasses compelled changes in practices, structural changes and prolonged court-supervision over implementation of the equitable relief. See generally, DOBBS, Vol. Two at 348-353. For example, in Brown v. Bd. of Educ., 349 U.S. 294, 300-01 (1955), the Supreme Court ruled that courts had very broad equitable powers to order structural changes in school systems to desegregate schools, including “ordering the immediate admission of plaintiffs to schools previously attended only by white children.” Similarly, in Swann, 402 U.S. at 9-10, 18-32, the Supreme Court upheld a district court’s equitable authority to order a school district to implement a comprehensive plan to desegregate a school system, including various structural changes such as re-zoning, busing of students, and re-assignment of teachers to different schools. Moreover, in Milliken v. Bradley, 433 U.S. 267, 279-91 (1977), the Supreme Court upheld the equitable powers of a district court, as part of a desegregation decree, to “order compensatory or remedial educational programs for schoolchildren who have been subjected to past acts of de jure segregation.” Id. at 267. Similarly, in Local 28 of the Sheet Metal Worker’s Int’l Assoc. v. EEOC, 478 U.S. 421 (1986), the district court found that Union Local 28 discriminated against non- white workers in recruitment, selection, training and admission to the union. The Supreme Court upheld the district court’s imposition of an affirmative action program requiring Local 28 to adopt various changes its practices and policies, including requiring Local 28 “to offer annual, nondiscriminatory journeyman and apprentice examinations, select members according to a white-non-white ratio to be negotiated by the parties, Courts have upheld similar intrusive equitable relief in other cases to remedy racial14 discrimination in schools and other institutions and entities. See, e.g., EEOC v. Local 638, 565 F.2d 31, 33-35 (2d Cir. 1977); Evans v. Buchanan, 555 F.2d 373, 378-82 (3d Cir. 1977); Morgan v. McDonough, 540 F.2d 527, 533-35 (1st Cir. 1976); EEOC v. Local 638, 532 F.2d 821, 829-31 (2d Cir. 1976); Hart v. Cmty. School Bd. of Ed., N.Y. Sch. Dist. #21, 512 F.2d 37, 52-55 (2d Cir. 1975). For similar expansive equitable relief in cases involving unconstitutional prison15 conditions, see Miller v. Carson, 563 F.2d 741, 748-52 (5th Cir. 1977); Rhem v. Malcom, 507 F.2d 333, 340-41 (2d Cir. 1974) (collecting cases); Gates v. Collier, 501 F.2d 1291, 1303-05, 1309-10 (5th Cir. 1974); Hamilton v. Landrieu, 351 F. Supp. 549 (E.D.La. 1972); Jones v. Wittenberg, 330 F. Supp. 707 (N.D. Oh. 1971), aff’d, 456 F.2d 854 (6th Cir. 1972). See, e.g., Sharp v. Weston, 233 F.3d 1166, 1173-74 (9th Cir. 2000); New York State16 Ass’n for Retarded Children, Inc. v. Carey, 706 F.2d 956, 962-66 (2d Cir. 1983); Davis v. Watkins, 384 F. Supp. 1196 (N.D. Ohio 1974). 16 conduct extensive recruitment and publicity campaigns aimed at minorities, secure the [court-appointed] administrator’s consent before issuing temporary work permits, and maintain detailed membership records.” Id. at 432-33.14 The Supreme Court has, likewise, recognized courts’ expansive equitable authority to order structural changes and other intrusive remedies to redress unconstitutional prison conditions. See, e.g., Hutto v. Finney, 437 U.S. 678, 683 (1978) (describing district court’s orders to change various prisons practices and policies to remedy constitutional violations). Courts, likewise, have afforded similar equitable15 relief to compel changes in conditions and policies to remedy unconstitutional treatment of mental patients.16 B. Congressional Findings and Purposes Regarding Civil RICO Congress found that organized crime, particularly La Cosa Nostra (ALCN@), had extensively infiltrated and exercised corrupt influence over numerous legitimate businesses and labor unions throughout the United States, and hence posed Aa new threat 17 to the American economic system.” See S. REP. NO. 617, 91st Cong., 1 Sess. at 76-78st (1969) (“S. REP. NO. 91-617”); see also Organized Crime Control Act of 1970, Congressional Statement of Findings and Purpose, Section 904(a) of PUB. L. NO. 91-452, 84 Stat. 922, 947. The Senate Report regarding RICO further found that existing remedies Aare inadequate to remove criminal influences from legitimate endeavor organizations.@ S. REP. NO. 91-617 at 78. In that respect, the Senate Report stated: The arrest, conviction, and imprisonment of a Mafia lieutenant can curtail operations, but does not put the syndicate out of business. As long as the property of organized crime remains, new leaders will step forward to take the place of those we jail. S. REP. NO. 91-617 at 78 (quoting H.R. Doc. No. 91-105, at 6; the President’s message on “Organized Crime” (1969)). Accordingly, the Senate Report concluded that: What is needed here. . . are new approaches that will deal not only with individuals, but also with the economic base through which those individuals constitute such a serious threat to the economic well-being of the Nation. In short, an attack must be made on their source of economic power itself, and the attack must take place on all available fronts. . . . What is ultimately at stake is not only the security of individuals and their property, but also the viability of our free enterprise system itself. The committee feels, therefore, that much can be accomplished here by adopting the civil remedies developed in the antitrust field to the problem of organized crime. S. REP. NO. 91-617 at 79, 80-81. See United States v. Cappetto, 502 F.2d 1351, 1357 (7th Cir. 1974) (ASection 196417 provides for a civil action in which only equitable relief can be granted. The relief authorized by the section is remedial not punitive and is of a type traditionally granted by courts of equity.”); NSC Int’l Corp. v. Ryan, 531 F. Supp. 362, 363 (N. D. Ill. 1981) (“§ 1964 (a) . . . authorizes only equitable relief.”). 18 C. Congress Designed 18 U.S.C. § 1964 (a) To Authorize Courts To Impose the Full Panoply of Equitable Relief In accordance with the above-referenced legislative history regarding civil RICO, 18 U.S.C. ' 1964 vests district courts with authority to impose extensive equitable relief and provides, in relevant part, as follows: (a) The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons. (b) The Attorney General may institute proceedings under this section. Pending final determination thereof, the court may at any time enter such restraining order or prohibitions, or take such other actions, including the acceptance of satisfactory performance bonds, as it shall deem proper. (emphasis added).17 Thus, to remedy a civil RICO violation, the plain language of ' 1964(a) explicitly authorizes district courts to impose intrusive, structural reforms including, but not limited to, divestiture, Adissolution or reorganization of any enterprise,@ Areasonable restrictions on the future activities or investments of any person” and Aprohibiting any person from engaging in RICO, 18 U.S.C. ' 1961(3), provides that “‘person’ includes any individual or entity18 capable of holding a legal or beneficial interest in property,” which includes a corporation, union, partnership and a sole proprietorship. See, e.g., United States v. Goldin Indus., Inc., 219 F.3d 1268, 1270-71 (11th Cir. 2000) (en banc); 219 F.3d 1271, 1275-77 (11th Cir. 2000); Living Designs, Inc. v. E.I. DuPont De Nemours & Co., 431 F.3d 353, 362-62 (9th Cir. 2005); Nat’l Elec. Benefit Fund v. Heary Bros. Lightning Prot. Co. Inc., 931 F. Supp. 169, 186-87 (W.D.N.Y. 1965); C& W Constr. Co. v. Bhd. of Carpenters and Joiners of America, Local 745, 687 F. Supp. 1453, 1466 (D. Hawaii 1988). Moreover, RICO=s definition of Aenterprise@ (18 U.S.C. ' 1961(4)) Aincludes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” 19 the same type of endeavor as the enterprise engaged in.”(emphasis added).18 Indeed, the Senate Committee Report regarding RICO emphasized the expansive and flexible nature of the equitable relief authorized under ' 1964(a), stating: The use of such remedies as prohibitory injunctions and the issuing of orders of divestment or dissolution is explicitly authorized. Nevertheless, it must be emphasized that these remedies are not exclusive, and that [RICO] seeks essentially an economic, not a punitive goal. However remedies may be fashioned, it is necessary to free the channels of commerce from predatory activities, but there is no intent to visit punishment on any individual; the purpose is civil. . . . Although certain remedies are set out, the list is not exhaustive, and the only limit on remedies is that they accomplish the aim set out of removing the corrupting influence and make due provisions for the rights of innocent persons. S. REP. NO. 91-617 at 81 and 160. Accord H.R. REP. No. 1549, 91st Cong., 2d Sess. at 57(1970). Moreover, the Senate Committee Report noted that to achieve RICO=s remedial purposes, courts would need broad equitable powers: Where an organization is acquired or run by defined racketeering methods, then the persons involved can be legally separated from the organization, either by the criminal law approach . . . or through a civil law approach of equitable relief broad enough to do all that is necessary to free the channels of commerce from illicit In accordance with this legislative history, the Supreme Court has repeatedly stated19 that RICO’s civil remedies provision, 18 U.S.C. § 1964, was patterned after the equitable relief provisions of the antitrust laws. See e.g., Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997); Holmes v. Sec. Investor Prot. Corp, 503 U.S. 258, 267-68 (1992); Agency Holding Corp. v. Malley-Duff & Assoc., 483 U.S. 143, 150-52 (1987); Sedima, S.P.R.L. v. Imrex, 473 U.S. 479, 486-90 (1985). 20 activity. S. REP. NO. 91-617 at 79. The Senate Report regarding RICO also quoted approvingly the Department of Justice=s view that Athese equitable remedies would also seem to have a greater potential than that of the penal sanctions for actually removing the criminal figure from a particular organization and enjoining him from engaging in similar activity,@ and that Athese remedies are flexible, allowing of several alternate courses of action for dealing with a particular type of predatory activity, and they may also be effectively monitored by the court to insure that its decrees are not violated.@ S. REP. NO. 91-617 at 82-83. The Senate Report further stated that civil RICO was patterned after the equitable relief available under the antitrust laws, and hence “brings to bear. . . the full panoply of civil remedies . . . now available in the antitrust arena.” S. REP. NO. 91-617 at 81.19 Moreover, as noted above, Congress stated that the purpose of RICO=s remedial provisions was to afford Aenhanced sanctions and new remedies,” and accordingly mandated that RICO Ashall be liberally construed to effectuate its remedial purposes.@ Section 904(a) of PUB. L. NO. 91-452, 84 Stat. 922, 923, 947. The Supreme Court has similarly characterized Section 1964 as a Afar-reaching civil enforcement scheme,” Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 483 (1985), and has explained that Aif Congress= liberal-construction mandate is to be applied anywhere, it is in ' 1964, where RICO=s remedial purposes are most evident.@ Id. at 491 n.10. See also Russello v. United States, 464 U.S. 16, 27 (1983); United States v. Turkette, 452 U.S. 21 576, 587 & n. 10 (1981). Thus, Section 1964 ’s legislative history demonstrates that Congress intended Section 1964(a) to vest district courts with powerful new weapons to eliminate and prevent corruption in organizations, and accordingly authorized district courts to impose the full panoply of equitable relief, including, but not limited to, the intrusive remedies discussed below: 1. Injunctions - An injunction is the quintiessential equitable order designed “to prevent and restrain” violations of law under 18 U.S.C. § 1964(a). An injunction is a “coercive remedy” whereby the “defendant is enjoined by a prohibitory injunction to refrain from doing specific acts; or he is commanded by a mandatory injunction to carry out specified acts.” DOBBS, Vol. One at 59; see also id. at 223-277. See Section VIII(B)(1) below, which discusses injunctions obtained in civil RICO cases involving labor unions. 2. Divestiture, Dissolution and Reorganization - Section 1964(a) explicitly includes the equitable remedies of divestiture, dissolution and “reorganization of any enterprise.” “‘[D]issolution’ refers to a . . . judgment which dissolves or terminates an illegal combination or association - putting it out of business, so to speak. ‘Divestiture’ is used to refer to situations where the defendants are required to divest or dispossess themselves of specified property in physical facilities, securities, or other assets.” California v. American Stores Co., 495 U.S. 271, 290 n.16 (1990). Divestiture “deprives a defendant of the gains from his wrongful conduct” and “is an equitable remedy designed in the public interest to undo what could have been prevented had the defendants not outdistanced the government in their unlawful project.” Schine Chain Theaters v. United States, 334 U.S. 110, 128 (1948). Both dissolution and divestiture serve to put “an end to the [unlawful] combination or conspiracy” and to “deprive . . . defendants of the “Divestiture has been called the most important of antitrust remedies.” United States20 v. E.I. DuPont DeNemours & Co., 366 U.S. 316, 330-31 (1961). Accord SEC v. Bilzerian, 29 F.3d 689, 697 (D.C. Cir. 1994) (“The primary purpose of21 disgorgement is not to refund others for losses suffered but rather ‘to deprive the wrongdoer of his ill-gotten gain.’” (citation omitted)); SEC v. Banner Fund Int’l, 211 F.3d 602, 617 (D.C. Cir. 2000); SEC v. First Pacific Bancorp, 142 F.3d 1186, 1191 (9th Cir. 1998); SEC v. Palmisano, 135 F.3d 860, 865-66 (2d Cir. 1998); SEC v. Hughes Capital Corp., 124 F.3d 449, 455 (3d Cir. 1997); SEC v. First Jersey Sec., Inc., 101 F.3d 1450, 1475 (2d Cir. 1996); FTC v. Gem Merch. Corp., 87 F.3d 466, 470 (11th Cir. 1996); SEC v. Tome, 833 F.2d 1086, 1096 (2d Cir. 1987); SEC v. Blavin, 760 F.2d 706, 713 (6th Cir. 1985); CFTC v. Hunt, 591 F.2d 1211, 1222 (7th Cir. 1979); SEC v. Blatt, 583 F.2d 1325, 1335 (5th Cir. 1978); SEC v. Manor Nursing Ctr., Inc., 458 F.2d 1082, 1104 (2d Cir. 1972); SEC v. Texas Gulf Sulphur Co., 446 F.2d 1301, 1308 (2d Cir. 1971). 22 benefits of their conspiracy.” Id. at 129.20 The Government has obtained divestiture, dissolution and reorganization of an enterprise in various civil RICO cases involving labor unions. See Sections VIII (B) (2) and (5) below. See also United States v. Cappetto, 502 F.2d 1351, 1358-59 (7th Cir. 1974) (noting that divestiture under 18 U.S.C. § 1964 is an equitable remedy); United States v. Ianniello, 646 F. Supp. 1289, 1297-1300 (S.D.N.Y. 1986) (appointing a receiver for a restaurant that was subject to divestiture for a violation of civil RICO). 3. Disgorgement - Although “disgorgement” is not explicitly listed in the remedies set forth in 18 U.S.C. § 1964, it is well established that “disgorgement” is a traditional equitable remedy. See Sections II(A)(1) above and V(C) below. In particular, disgorgement requires a wrongdoer to yield the proceeds derived from his unlawful conduct, and “is an equitable remedy designed to deprive a wrongdoer of his unjust enrichment and to deter others from violating the . . . laws.” SEC v. First City Financial Corp., 890 F.2d 1215, 1230 (D.C. Cir. 1989).21 Moreover, because “[r]ules for calculating disgorgement must recognize that22 separating legal from illegal profits exactly may at times be a near-impossible task . . . disgorgement need only be a reasonable approximation of profits causally connected to the violation,” and that once the plaintiff establishes such a “reasonable approximation,” the burden shifts to the defendants “clearly to demonstrate that the disgorgement figure was not a reasonable approximation.” First City Fin. Corp., 890 F.2d at 1231-32. Accord SEC v. Bilzerian, 29 F.3d 689, 697 (D.C. Cir. 1994) (“Calculations of [the causal nexus] are often imprecise – it is impossible to say with certainty what portion of [the defendant’s] profits is attributable to his securities violations. [The Defendant], however, bears the burden of establishing” that the approximation of his unlawful profits was not reasonable.). See also SEC v. First Jersey Sec., 101 F.3d 1450, 1475 (2d Cir. 1996); United States Dep’t of Housing & Urban Dev. v. Cost Control Mktg. & Sales Mgt. of Va., Inc., 64 F.3d 920, 927 (4th Cir. 1995); SEC v. Patel, 61 F.3d 137, 140 (2d Cir. 1995); SEC v. Kenton Capital, Ltd., 69 F. Supp. 2d 1, 16 (D.D.C. 1998). Moreover, “the causal connection required is between the amount by which the defendant was unjustly enriched and the amount he can be required to disgorge,” not merely the actual money that he wrongfully obtained. SEC v. Banner Fund Int’l, 211 F.3d 602, 617 (D.C. Cir. 2000). Furthermore, “the risk of uncertainty should fall on the wrongdoer whose illegal conduct created that uncertainty.” First City Fin. Corp., 890 F.2d at 1232. Accord SEC v. Hughes Capital Corp., 124 F.3d 449, 455 (3d Cir. 1997); First Jersey Sec., 101 F.3d at 1475; SEC v. Lorin, 76 F.3d 458, 462 (2d Cir. 1996); Patel, 61 F.3d at 140. See also Bigelow v. RKO Radio Pictures, 327 U.S. 251, 265 (1946) (“The most elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of the uncertainty which his own wrong has created.”). 23 Because disgorgement of unlawful proceeds merely requires the wrongdoer to “give up only his ill-gotten gains” to which he has no right, such disgorgement is entirely remedial and “is not punishment.” Bilzerian, 29 F.3d at 696. Accord First City Financial Corp., 890 F.2d at 1230-31; SEC v. Tome, 833 F.2d 1086, 1096 (2d Cir. 1987); CFTC v. Hunt, 591 F.2d 1211, 1222 (7th Cir. 1979); see also Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 293 (1960)(equitable remedy of restitution of lost wages for violation of statute is not “punitive”).22 As of this writing, there is a conflict among the circuits as to whether disgorgement is a remedy available under 18 U.S.C. § 1964. In United States v. Carson, 52 F.3d 1173, 1181 (2d Cir. 1995), the Second Circuit held that “disgorgement is among the equitable powers available See Section VIII(B)(7) below, which discusses disgorgement in Government civil23 RICO cases involving labor unions. The Government’s petition for a writ of certiorari is available at24 http://www.supremecourtus.gov/opinions/opinions.html In its petition for a writ of certiorari, the Government argued, among other matters, that the limitations imposed upon RICO disgorgement in Carson, supra, and the majority decision in Philip Morris, supra, were inconsistent with: (1) decisions of the Supreme Court and other courts of appeals holding that when a statute confers equitable jurisdiction upon district courts, as does 18 U.S.C. § 1964, it is presumed that all inherent equitable powers of the district courts are granted, unless otherwise provided by statute; (2) decisions of the Supreme Court and lower courts holding that disgorgement serves a crucial (continued...) 24 to the district court by virtue of 18 U.S.C. § 1964.” However, the Second Circuit also held that since § 1964(a) authorizes district courts “to prevent and restrain violations” of RICO, it creates remedies that are “forward looking, and calculated to prevent RICO violations in the future.” Therefore, the Second Circuit concluded that disgorgement must be limited to the amount designed “solely to ‘prevent and restrain’ future RICO violations,” and hence must be limited to unlawful proceeds that “are being used to fund or promote the illegal conduct, or constitute capital available for that purpose.” Id. at 1182.23 In United States v. Philip Morris USA Inc., 396 F.3d 1190 (D.C. Cir. 2005), the panel majority ruled that RICO’s grant of judicial authority under 18 U.S.C. § 1964 (a) to “prevent and restrain” statutory violations does not include the power to order equitable disgorgement. Philip Morris, 396 F.3d at 1197-1202. The majority opinion declared that “[t]his language indicates that the jurisdiction is limited to forward looking remedies that are aimed at future violations,” whereas disgorgement, in the majority’s view, “is a quintessentially backward-looking remedy focused on remedying the effects of past conduct to restore the status quo.” Id. at 1198. The United States filed an interlocutory petition for a writ of certiorari, which was denied. See United States v. Philip Morris USA Inc., 126 S. Ct. 478 (2005). Subsequently, the United24 (...continued)24 deterrent, and hence forward-looking, function; and (3) the text of Section 1964 (a) and its legislative history establishing that Section 1964 (a) is not limited to the relief explicitly listed therein. 25 States District Court for the District of Columbia found defendants liable for RICO violations after a nine-month bench trial. See United States v. Philip Morris USA Inc., 449 F. Supp. 2d 1, 851-52, 867-73, 901-07 (D.D.C. 2006). See also Section IX below. As of this writing, that decision is pending appeals to the District of Columbia Circuit. See United States v. Philip Morris USA Inc., Appeal Nos. 06-5267-5272. 4. Limitations on Future Activities and Removal From Positions In An Entity - 18 U.S.C. § 1964 (a) explicitly authorizes district courts to impose “reasonable restrictions on the future activities. . . of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in.” Courts have held that this provision empowers courts to remove persons found liable for RICO violations or for violating courts’ judgment orders in Government civil RICO cases from positions in an entity and to prohibit them from holding such positions in the future. See Sections VII (D) and VIII(B)(6) below. Section 1964 (a)’s legislative history confirms that Congress intended Section 1964 (a) to authorize district courts to impose such relief. For example, the Senate Report regarding civil RICO states: Where an organization is acquired or run by defined racketeering methods, then the persons involved can be legally separated from the organization, either by the criminal law approach of fine, imprisonment and forfeiture, or through a civil law approach of equitable relief broad enough to do all that is necessary to free the channels of commerce from all illicit activity. . . . 26 Through this new approach, it should be possible to remove the leaders of organized crime from their sources of economic power. S. REP. NO. 91-617 at 79-80. The Senate Report also quoted with approval the Department of Justice’s statement that: The relief offered by these equitable remedies would also seem to have a greater potential than that of the penal sanctions for actually removing the criminal figure from a particular organization and enjoining him from engaging in similar activity. S. REP. No. 91-617 at 82. 5. Appointment of Court Officers - Courts have long had the inherent authority to appoint non-judicial persons to assist them in the performance of their judicial duties. Accordingly, in Government civil RICO cases involving labor unions, courts have appointed “officers” to, among other matters, administer the affairs and operations of corrupted unions and related entities, and assist the courts in monitoring compliance with the courts’ orders and in imposing sanctions for violations of the courts’ orders. See Sections VII(E) and VIII(B), (3), (4), (5), and (6) below. D. Civil RICO, 18 U.S.C. § 1964, is Patterned After Antitrust Laws, and Hence Vests the Attorney General of the United States with the Exclusive Authority to Obtain Equitable Relief, and Vests Private Litigants, But Not the United States, With the Authority to Sue For Treble Damages RICO’s civil remedies provision, 18 U.S.C. § 1964, authorizes two causes of action: a public enforcement action for equitable relief by the Attorney General and a treble damages action by private parties. The Attorney General’s right to sue for equitable relief derives from Sections 1964(a) and (b), and those provisions, in combination, make the Attorney General’s right exclusive. 27 Section 1964(a) grants district courts “jurisdiction to prevent and restrain violations” of RICO by issuing the full range of “appropriate orders” available to courts of equity, 18 U.S.C. § 1964(a). Section 1964(a) does not identify who can seek such relief, but Section 1964(b) does. That provision states that “[t]he Attorney General may institute proceedings under this section” and that, “[p]ending final determination thereof,” the court may enter interim restraining orders or take such other actions as it shall deem proper. 18 U.S.C. § 1964(b). By empowering the Attorney General to institute proceedings “under this section,” Congress signaled its intent that the district court’s equitable jurisdiction under Section § 1964(a) must be invoked by the Attorney General. Congress further manifested its intent that the Attorney General alone may seek equitable relief by providing in subsection (b) that temporary equitable relief may be awarded “[p]ending final determination” of a proceeding instituted by the Attorney General for permanent equitable relief. There is no corresponding provision that authorizes a private party to institute proceedings “under this section” or to seek temporary equitable relief pending final disposition of a claim. Under Sections 1964(a) and (b), therefore, the sole power to seek final and interim equitable relief against racketeering activities and enterprises is reposed in the Attorney General. Rather than authorize private civil RICO plaintiffs to seek equitable remedies, Congress in Section 1964(c) granted private parties the right to bring suit to recover treble damages and attorney’s fees. Section 1964(c) provides that “(a)ny person injured in his business or property by reason of a [RICO] violation . . . may sue . . . and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.” 18 U.S.C. § 1964(c). That provision has been construed to authorize private parties, and not the Government, to seek See, e.g., Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 267-68 (1992); Klehr v.25 A.O. Smith Corp., 521 U.S. 179, 189 (1997); Agency Holding Corp. v. Malley-Duff & Assocs. Inc., 483 U.S. 143, 150-152 (1987); Sedima, S.P.R.L. v. Imrex, 473 U.S. 479, 486-90 (1985). See also S. REP. No. 91-617 at 81 (RICO’s Section 1964 “brings to bear. . . the full panoply of civil remedies . . . now available in the antitrust area.”). 28 treble damages. See United States v. Bonnano, 879 F.2d 20, 22-24 (2d Cir. 1989) (reasoning that the United States is not a “person” under Section 1964(c), and therefore may not sue for treble damages); see also Sedima, S.P.R.L. v. Imrex Co. Inc., 473 U.S. 479, 487 (1985) (observing that Section 1964(c) creates “a private treble-damages action”). Section 1964’s “inclusion of a single statutory reference to private plaintiffs, and the identification of a damages and fees remedy for such plaintiffs in [Section 1964(c)], logically carries the negative implication that no other remedy was intended to be conferred on private plaintiffs.” Religious Tech. Ctr. v. Wollersheim, 796 F.2d 1076, 1083 (9th Cir. 1986), cert. denied, 479 U.S. 1103 (1987). Coupled with the fact that Congress in Section 1964(b) explicitly authorized the Attorney General to initiate proceedings to obtain equitable relief under Section 1964(a), but did not similarly grant private parties that right, the statute makes it clear that Congress did not authorize private parties to bring actions for equitable relief. 2. Section 1964 ’s legislative history confirms that it vests the Attorney General of the United States with the exclusive authority to bring suits for equitable relief, and authorizes private litigants to bring suits for treble damages. The Supreme Court has repeatedly observed that RICO’s civil remedies provision, 18 U.S.C. § 1964, was patterned after virtually identical provisions of the antitrust laws. In that regard, at a time when Congress had provided no25 express authority for private antitrust plaintiffs to seek equitable relief, the antitrust laws were construed to preclude such relief. The parallels between the antitrust laws at that time and the Section 7 of the Sherman Act provided that “(a)ny person who shall be injured in his26 business or property . . . by reason of anything forbidden or declared to be unlawful by this act may sue therefor . . . and shall recover three fold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.” 26 Stat. 210. Section 4 of the Sherman Act provided:27 The several circuit courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney-General, to institute proceedings in equity to prevent and restrain such violations. . . . (P)ending [a] petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises.” 26 Stat. 209-10. See General Inv. Co. v. Lake Shore & Mich. S. Ry. Co., 260 U.S. 261, 286 (1922);28 Geddes v. Anaconda Copper Mining Co., 254 U.S. 590, 593 (1921); Paine Lumber Co. v. Neal, 244 U.S. 459, 471 (1917); D.R. Wilder Mfg. Co. v. Corn Prods. Ref. Co., 236 U.S. 165, 174 (1915); Minnesota v. Northern Sec. Co., 194 U.S. 48, 70-71 (1904). 29 language of RICO support the same conclusion for RICO — particularly since RICO lacks the explicit provision for private injunctive relief that Congress added to the antitrust laws. As the Supreme Court has explained, “[a] treble-damages remedy for persons injured by antitrust violations was first provided in § 7 of the Sherman Act and was re-enacted in 1914 without substantial change as § 4 of the Clayton Act.” Pfizer, Inc. v. India, 434 U.S. 308, 311 (1978); accord Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 267 n.13 (1992); Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 644 n.16 (1981). Section 4 of the26 Sherman Act also authorized courts to issue equitable relief in actions brought by the United States. 26 Stat. 209-10. The Supreme Court repeatedly recognized that those provisions of the27 Sherman Act did not authorize private parties to bring suit for injunctive relief. Private parties28 30 were not authorized to seek injunctive relief for violations of the antitrust laws until Congress passed Section 16 of the Clayton Act (15 U.S.C. § 26) explicitly authorizing such a right. California v. American Stores Co., 495 U.S. 271, 287 (1990) (“§ 4 of the Sherman Act, which authorizes equitable relief in actions brought by the United States, was reenacted as § 15 of the Clayton Act, while § 16 filled a gap in the Sherman Act by authorizing equitable relief in private actions.”); accord General Inv. Co. v. Lake Shore & Mich. S. Ry., 260 U.S. 261, 287 (1922). The Sherman Act thus “envisaged two classes of actions,— those made available only to the Government, . . . and, in addition, a right of action for treble damages granted to redress private injury.” United States v. Cooper Corp., 312 U.S. 600, 608 (1941) (holding that the United States may not recover treble damages under the Sherman Act). The Court reached that conclusion despite the fact “that there are no words of express exclusion of the right of individuals to act in the enforcement of the statute, or of courts generally to entertain complaints on that subject.” D.R. Wilder Mfg. Co. v. Corn Prods. Ref. Co., 236 U.S. 165, 174 (1915). The Court explained that “such exclusion must be implied . . . because of the familiar doctrine that ‘where a statute creates a new offense and denounces the penalty, or gives a new right and declares the remedy, the punishment or the remedy can be only that which that statute prescribes.’” Id. at 174-75 (quoting Farmers’ & Mechs. Nat’l Bank v. Dearing, 91 U.S. 29, 35 (1875)). Although the Sherman Act authorizes suits in equity in one paragraph (Section 4), while RICO does so in two paragraphs (Section 1964(a) and (b)), the statutes are parallel in the critical respects here. First, both confer on courts “jurisdiction” to prevent and restrain violations through permanent and preliminary equitable relief, but expressly authorize only the Attorney 31 General to seek such relief. Second, both provide private parties a separate right to recover treble damages and attorney’s fees, but no other forms of relief. In light of the Supreme Court’s precedents construing the Sherman Act, Congress is presumed to be aware when it enacted RICO that, absent inclusion of an express private right to obtain injunctive relief, the language it selected would be construed to exclude such a right. Holmes, 503 U.S. at 268 (construing the term “by reason of ” in Section 1964(c) and observing that the Court “may fairly credit the 91st Congress, which enacted RICO, with knowing the interpretation federal courts had given the words earlier Congresses had used first in § 7 of the Sherman Act, and later in the Clayton Act’s § 4”). Indeed, to authorize private antitrust plaintiffs to seek equitable relief, Congress enacted a separate section of the Clayton Act, Section 16. RICO, however, lacks any provision comparable to Section 16 of the Clayton Act. Section 16 expressly provides that private persons “shall be entitled to sue for and have injunctive relief.” 15 U.S.C. § 26. Juxtaposed with Congress’s explicit modeling of RICO’s private treble damages provision “on the civil-action provision of the federal antitrust laws, § 4 of the Clayton Act,” Holmes, 503 U.S. at 267, the absence of a counterpart to Section 16 makes clear that Congress did not intend to create a private right to equitable relief under RICO. 3. The legislative history of RICO confirms that Congress made a deliberate choice in omitting authority for a private injunctive action. “The civil remedies in the bill passed by the Senate, S.30, were limited to injunctive actions by the United States and became §§ 1964(a), (b), and (d).” Sedima, 473 U.S. at 486-487; Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 152 (1987) (same). “During hearings on S. 30 before the House Judiciary 32 Committee, Representative Steiger proposed the addition of a private-treble damages action” that was modeled after Section 4 of the Clayton Act. Sedima, 473 U.S. at 487. That Amendment also would have authorized private parties to seek injunctive relief and the government to seek damages, as well as making other procedural changes. 116 CONG. REC. 27,739 (1970). When the Judiciary Committee responded by passing only the private treble damages provision, Representative Steiger complained that the bill did “not do the whole job,” since it “fail[ed] to provide . . . two important substantive remedies included in the Clayton Act: compensatory damages to the United States when it is injured in its business or property, and equitable relief in suits brought by private citizens.” Id. at 35,227, 35,228 (emphasis added). Representative Steiger subsequently offered another amendment, again to authorize a private injunctive action and a public damages action. Sedima, 473 U.S. at 487; 116 CONG. REC. 35,228; 35,346 (1970). Concerned about “the potential consequences that this new remedy might have,” Representative Poff asked Representative Steiger to withdraw the amendment for further study by the Judiciary Committee, and Representative Steiger agreed. Agency Holding Corp., 483 U.S. at 154-55 (citing 116 CONG. REC. at 35,346). Shortly after RICO was enacted, Senators Hruska and McClellan, RICO’s sponsors, introduced S. 16, a bill that again would have authorized damage actions by the United States and injunctive actions by private persons. Agency Holding Corp., 483 U.S. at 155 (“[T]he purpose of [S. 16] was to broaden even further the remedies available under RICO. In particular, . . . it would have further permitted private actions for injunctive relief.”). The Senate, but not the House, passed S. 16, and therefore it never became law. Wollersheim, 796 F.2d at 1086. As of this writing, there is a conflict among the circuit courts of appeals as to whether29 18 U.S.C. § 1964 vests the Attorney General of the United States with the exclusive authority to seek equitable relief. The majority of courts to decide this issue have held that private parties may not obtain equitable relief under 18 U.S.C. § 1964. See Conkling v. Turner, 18 F.3d 1285, 1296 (5th Cir. 1994) (collecting cases); Lincoln House, Inc. v. Dupre, 903 F.2d 845, 848 (1st Cir. 1990); Religious Tech. Ctr. v. Wollersheim, 796 F.2d 1076, 1080-89 (9th Cir. 1986), cert. denied, 479 U.S. 1103 (1987); Sterling Suffolk Racecourse v. Burrillville Racing Ass’n, 802 F. Supp. 662, 671 (D.R.I. 1992), aff’d, 989 F.2d 1266 (1st Cir.), cert. denied, 510 U.S. 1024 (1993); Vietnam Veterans of America v. Guerdon Indus., 644 F. Supp. 951, 960-61 (D. Del. 1986); Volkmann v. Edwards, 642 F. Supp. 109, 115 (N.D. Cal. 1986). Cf. Tran Co. v. O’Connor Secs., 718 F.2d 26, 28-29 (2d Cir. 1983); Dan River, Inc. v. Icahn, 701 F.2d 278, 290 (4th Cir. 1983); Kaushal v. State Bank of India, 556 F. Supp. 576, 583 (N.D. Ill. 1983). In Nat. Org. for Women, Inc. v. Scheidler, 267 F.3d 687 (7th Cir. 2001), reversed on other grounds, 537 U.S. 393 (2003), the Seventh Circuit held that Section 1964 authorizes private litigants to sue for equitable relief. In the course of the Scheidler litigation, the United States filed two Amicus Curiae briefs, before the United States Supreme Court, arguing that private litigants lacked such authority and that Section 1964 vests the Attorney General with the exclusive authority to obtain equitable relief. On both occasions, the Supreme Court explicitly refused to decide that issue, and instead reversed the decisions of the Seventh Circuit on other grounds. See Scheidler v. Nat. Org. for Women, Inc., 547 U.S. 9, 16 (2006); Scheidler v. Nat. Org. for Women, Inc., 537 U.S. 393, 411 (2003). The foregoing analysis is derived from the Government’s Amicus briefs in the Scheidler litigation. 33 Congress thus passed RICO without authorizing private injunctive actions despite repeated attempts to do so, and despite Congress’s explicit grant of such a right in Section 16 of the Clayton Act. Congress shortly thereafter rejected an amendment to RICO that would have added such a right. The clear conclusion to be drawn from the legislative history is that, consistent with RICO’s text, Congress intended to create a private right of action only for treble damages.29 E. Equitable Relief Available Under Civil RICO is at Least As Broad as Equitable Relief Under the Antitrust Laws, If Not Broader It is clear that civil RICO, 18 U.S.C. § 1964, was patterned after the equitable relief provisions under the antitrust laws. See Section II (C), fn. 19 and Section II (D) above. Indeed, Compare Section 4 of the Sherman Act as originally enacted -- “Courts are hereby30 invested with jurisdiction to prevent and restrain violations of this act.” (see Section II (D), fn. 27, above) with Section 1964(a) - - courts “shall have jurisdiction to prevent and restrain violations of Section 1962.” (see Section II (C) above). 34 the “prevent and restrain” language under the antitrust laws is virtually identical to the “prevent and restrain” language under RICO’s Section 1964(a). As the Supreme Court has observed,30 when Congress has used the same words in RICO’s Section 1964 as in the corresponding relief provision of the Sherman Act that later was enacted in the Clayton Act, “we can only assume it intended them to have the same meaning that courts had already given them.” Holmes, 503 U.S. at 268. Therefore, the scope of a district court’s equitable authority under RICO is at least as broad as the scope of its equitable authority under the antitrust laws. Indeed, Congress indicated that it intended the scope of RICO’s equitable relief to be even broader than that available under the antitrust laws. In that respect, Senator McClellan, RICO’s principal sponsor, stressed that the references to antitrust precedents were not meant to “limit the remedies available [under RICO] to those which have already been established. The ability of our chancery courts to formulate a remedy to fit the wrong is one of the great benefits of our system of justice. This ability is not hindered by the bill.” 115 CONG. REC. 9567 (1969). The Supreme Court and lower courts have repeatedly interpreted the “prevent and restrain” language of the antitrust laws to not only authorize injunctions, dissolution and divestiture, but also to broadly encompass orders designed to ameliorate ongoing and future ill effects of defendants’ past violations. For example, in United States v. United States Gypsum Co., 340 U.S. 76 (1950), the Supreme Court ruled that: A trial court upon a finding of a conspiracy in restraint of trade and a monopoly has the duty to compel action by the conspirators that will, so far as practicable, cure the ill effects See also United States v. Glaxo Group Ltd., 410 U.S. 52, 64 (1973) (“The purpose of31 relief in an antitrust case is ‘so far as practicable, [to] cure the ill effects of the illegal conduct, and assure the public freedom from its continuance’”) (citation omitted); Ford Motor Co. v. United States, 405 U.S. 562, 573 n.8 (1972) (“The suggestion that antitrust ‘violators may not be required to do more than return the market to the status quo ante.’. . . is not a correct statement of the law. . . Rather, the relief must be directed to that which is ‘necessary and appropriate in the public interest to eliminate the effects of the acquisitions offensive to the statute.’”) (citation omitted); United States v. Ward Baking Co., 376 U.S. 327, 331-34 (1964) (holding that the Government should not be foreclosed from offering evidence at trial justifying its request for relief to “cure the ill effects of the illegal conduct” that violated antitrust laws where the sought relief was “‘connected’ with and ‘related’ to practices which the companies may in the past have followed.”); United States v. E.I. du Pont de Nemours & Co., 366 U.S. 316, 326, 334 (1961) (“courts are. . . required to decree relief effective to redress the [antitrust] violations, whatever the adverse effect of such a decree on private interests,” and may include “complete divestiture.”); Int’l Boxing Club v. United States, 358 U.S. 242, 262 (1959) (holding that antitrust “relief to be effective, must go beyond the narrow limits of the proven violations” and hence may prohibit certain contracts “until the effects of the conspiracy are fully dissipated”) (citation omitted); United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586, 607 (1957) (antitrust relief must “eliminate the effects” of the unlawful acquisition); United States v. United Liquors Corp., 352 U.S. 126 (1956) (“The defendants have been found to have violated the antitrust laws and the decree has been framed by the judge of the trial court to correct the evils which resulted from the acts found unlawful.”); Schine Chain Theatres v. United States, 334 U.S. 110, 128 (1948) (Divestiture and dissolution “deprives the antitrust defendants of the benefits of their conspiracy”); United States v. Crescent Amusement Co., 323 U.S. 173, 188-89 (1944) (“the Government should not be confined to an injunction against further violations”, and accordingly (continued...) 35 of the illegal conduct, and assure the public freedom from its continuance. Such action is not limited to prohibition of the proven means by which the evil was accomplished, but may range broadly through practices connected with acts actually found to be illegal. Acts entirely proper when viewed alone may be prohibited. The conspirators should, so far as practicable, be denied future benefits from their forbidden conduct. Id. at 88-89 (emphasis added) (footnote omitted). Accordingly, in that case the Supreme Court sanctioned a variety of equitable relief that went “beyond the narrow limits of the proven violation,” including ordering the defendants to undertake actions in the future that would cure the ill effects arising from the defendants’ past proven violations. Consistent with the Supreme Court’s decisions in this area, the Eighth31 (...continued)31 the court ordered “each corporate exhibitor to divest itself of the ownership of any stock or other interest in any other corporate defendant or affiliated corporation.”); United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 724, 726 (1944) (“Equity has power to eradicate the evils of a condemned scheme by prohibition of the use of admittedly valid parts of an invalid whole. . . [this Court’s precedents] ‘uphold equity’s authority to use quite drastic measures to achieve freedom from the influence of the unlawful restraint of trade. . . . The test is whether or not the required action reasonably tends to dissipate the restraints and prevent evasions. Doubts are to ‘be resolved in favor of the government and against the conspirators.’”) (citations omitted). See also Wilk v. American Med. Ass’n, 895 F.2d 352, 367-70 (7th Cir. 1990)32 (affirming district court’s grant of injunction against antitrust defendant on several grounds, including “lingering effects” of unlawful conduct); In re Multidistrict Vehicle Air Pollution, 538 F.2d 231, 236 (9th Cir. 1976) (“affirmative equitable remedies may be granted to eliminate the harmful residual effects of past [antitrust] violations . . . .”); United States v. Coca-Cola Bottling Co. of Los Angeles, 575 F.2d 222, 229, 231 (9th Cir. 1978). 36 Circuit has stated: Upon finding an antitrust defendant guilty of a violation of the Sherman Act, a district court is “empowered to fashion appropriate restraints on [the defendant’s] future activities both to avoid a recurrence of the violation and to eliminate its consequences.” National Soc. of Professional Engineers v. United States, 435 U.S. 679, 697 (1978). In fashioning a remedy, a district court should endeavor to ensure that the conspirators “so far as practicable, be denied future benefits from their forbidden conduct” [quoting Gypsum]. Thus, the district court may consider both the “continuing effects of past illegal conduct,” [citation omitted], and the possibility of “lingering efforts” by the conspirators to capitalize on the benefits of their past illegal conduct. [citation omitted]. ES Dev., Inc. v. RWM Enters., 939 F.2d 547, 557 (8th Cir. 1991) (emphasis added).32 The foregoing antitrust cases establish that equitable relief to prevent and restrain future violations is not limited to relief prohibiting future conduct, but also broadly encompasses relief designed to cure the ill effects of violators’ past and/or ongoing misconduct and to deprive them of the fruits of their misconduct. For the reasons stated above, RICO’s equitable relief must be interpreted to be at least as broad as antitrust equitable relief. Moreover, it is important to bear in 37 mind that the Supreme Court has admonished that “once the Government” has established a violation of law, “all doubts as to the remedy are to be resolved in its favor.” United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, 334 (1961). Accord United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 726 (1944). See United States v. Local 560 of Int’l Bhd. of Teamsters, 780 F.2d 267, 279 n.12 (3d33 Cir. 1985); United States v. Philip Morris USA, Inc., 449 F. Supp. 2d at 851; United States Local 1804-1, Int’l Longshoremen’s Ass’n, 812 F. Supp. 1303, 1311-12 (S.D.N.Y. 1993); United States v. Local 295 of Int’l Bhd. of Teamsters, 784 F. Supp. 15, 19 (E.D.N.Y. 1992); United States v. Local 359, 705 F. Supp. 894, 897 (S.D.N.Y.), aff’d in part and rev’d in part, 899 F.2d 1232 (2d Cir. 1989); United States v. Local 30, United Slate, Tile, etc., 686 F. Supp. 1139, 1165 (E.D. Pa. 1988), aff’d, 871 F. 2d 401 (3d Cir.), cert. denied, 493 U.S. 953 (1989); United States v. Local 560, Int’l Bhd. of Teamsters, 581 F. Supp. 279, 329-30 (D.N.J. 1984) (collecting cases). See also S. Rep. No. 91-617 at 82. Cf., Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 491 (1985) (stating that under Section 1964, “[t]here is no indication that Congress sought to depart from [the] general principle” that the “preponderance standard” applies to civil suits). See cases cited n. 33 above and notes 35 and 36 below.34 38 III ELEMENTS OF GOVERNMENT CIVIL RICO LAWSUITS AND DEFENSES A. Standards For Obtaining Equitable Relief 1. The Government Must Establish a Reasonable Likelihood of Future Violations By a Preponderance of the Evidence In Government civil RICO suits to obtain equitable relief, the United States need only prove the same elements as in a RICO criminal case, except that criminal intent is not required. See, e.g., United States v. Local 560, Int’l Bhd. of Teamsters, 780 F. 2d 267, 284 (3d Cir. 1985); United States v. Local 1804-1, Int’l Longshoremen’s Ass’n, 812 F. Supp. 1303, 1309 (S.D.N.Y. 1993), modified on other grounds, 831 F. Supp. 167 (S.D.N.Y. 1993), aff’d sub nom. United States v. Carson, 52 F.3d 1173 (2d Cir. 1995). Moreover, the burden of proof in Government civil RICO lawsuits for equitable relief is a preponderance of the evidence. Therefore, to obtain33 equitable relief, the United States must establish by a preponderance of the evidence that unless relief is granted there is a reasonable likelihood of a future violation by the defendant.34 Typically, the Government has carried its burden in that regard by, inter alia, proving a pattern of past violations, although such proof of past violations is not necessarily required. Thus, federal SEC v. First City Financial Corp., Ltd., 890 F.2d 1215, 1228-29 (D.C. Cir. 1989).35 Accord SEC v. Bilzerian, 29 F.3d 689, 695 (D.C. Cir. 1994); SEC v. Gruenberg, 989 F.2d 977, 978 (8th Cir. 1993); CFTC v. Hunt, 591 F.2d 1211, 1220-21 (7th Cir. 1979); SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1168 (D.C. Cir. 1978); SEC v. Commonwealth Chemical Securities Inc., 574 F.2d 90, 98-100 (2d Cir. 1978); SEC v. Management Dyn. Inc., 515 F.2d 801, 807-08 (2d Cir. 1975); SEC v. Advance Growth Capital Corp., 470 F.2d 40, 53 (7th Cir. 1972); SEC v.Manor Nursing Ctrs., Inc., 458 F.2d 1082, 1100-01 (2d Cir. 1972); Pullum v. Greene, 396 F.2d 251, 256-57 (5th Cir. 1968); United States v. Philip Morris USA, Inc., 449 F. Supp. 2d at 909-10; United States v. Philip Morris USA, 316 F. Supp. 2d 6, 10 n. 3 (D.C. Cir. 2004) (collecting cases); United States v. Philip Morris, Inc., 116 F. Supp. 2d 131, 148-49 (D.D.C. 2000). Hecht Co. Bowles, 321 U.S. 327 (1944); SEC v. Management Dyn., Inc., 515 F.2d36 801, 807-08 (2d Cir. 1975). Accord City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283, 289 and n.10 (1982); United States v. Parke, Davis & Co., 362 U.S. 29, 47-49 (1960); United States v. Odessa Union Warehouse Co-Op., 833 F.2d 172, 176 (9th Cir. 1987); Campbell v. McGruder, 580 F.2d 521, 540 (D.C. Cir. 1978); SEC v. Commonwealth Chem. Sec., Inc., 574 F.2d 90, 98-99 (2d Cir. 1978); Pullum v. Greene, 396 F.2d 251, 256-57 (5th Cir. 1968). 39 courts have held that evidence of past violations may establish the requisite reasonable likelihood of future violations in view of the totality of the circumstances, particularly where the defendant’s past violations were: (1) “part of a pattern” and not isolated; (2) were “deliberate” and not “merely technical in nature”; and (3) “the defendant’s business will present opportunities to violate the law in the future.”35 The Supreme Court and other federal courts also have emphasized that mere “cessation of violations. . . is no bar to the issuance of an injunction” because past violations are “highly suggestive of the likelihood of future violations.”36 In accordance with these principles, courts have granted the United States injunctive and other equitable relief in many civil RICO cases based on past violations and have rejected arguments that injunctive relief was not necessary because the unlawful activity had supposedly ceased. In these cases, courts ordered injunctive relief even though many of the wrongdoers had been convicted of crimes and were not in a position to continue their unlawful conduct because See United States v. Carson, 52 F.3d 1173, 1183-85 (2d Cir. 1995); United States v.37 Private Sanitation Indus. Ass’n, 995 F.2d 373, 377-78 (2d Cir. 1993); United States Local 30, United Slate, Tile, 871 F.2d 401, 405-09 (3d Cir. 1989); United States v. Local 295 of Int’l Bhd. of Teamsters, 784 F. Supp. 15, 18, 21-22 (E.D.N.Y. 1992); United States v. Local 30, United Slate, Tile, et al., 686 F. Supp. 1239, 1262-74 (E.D. Pa. 1988), aff’d, 871 F.2d 401 (3d Cir. 1989); United States v. Ianniello, 646 F. Supp. 1289, 1299-1300 (S.D.N.Y. 1986); United States v. Local 560, Int’l Bhd. of Teamsters, 581 F. Supp. 279, 319-26 (D.N.J. 1984), aff’d, 780 F.2d 269, 292-94 (3d Cir. 1986); United States v. Mason Tenders Dist.Council, 1995 WL 679245, at * 7-13 (S.D.N.Y. Nov. 15, 1995). 40 they were imprisoned or removed from office in the corrupt enterprise. Many of these courts37 found it particularly significant that these cases involved the corrupt influence of organized crime because the threat of future violations “may virtually be presumed” from such organized crime involvement. See United States v. Local 1804-1, Int’l Longshoremen’s Ass’n, 812 F. Supp. 1303, 1316 (S.D.N.Y. 1993) (citing cases). Moreover, where the United States seeks equitable relief to protect the public against wrongdoing, as is the case in Government civil RICO suits for equitable relief, the United States need not show an inadequate remedy at law, irreparable injury, or that the harm suffered in the absence of injunctive relief outweighs the harm the defendant will suffer if the injunction is granted, as is required for a private litigant to obtain equitable relief. The Seventh Circuit explained in United States v. Cappetto, 502 F.2d 1351 (7th Cir. 1974), cert. denied, 429 U.S. 925 (1975): It was plainly the intention of Congress in adopting Section 1964 to provide for injunctive relief against violations of Section 1962 without any requirement of a showing of irreparable injury other than that injury to the public which Congress found to be inherent in the conduct made unlawful by Section 1962. It is also obvious that Congress did not intend to require a showing of inadequacy of the remedy at law. If as defendants contend the existence of the criminal remedy at law under Section 1963 would defeat an action in equity under Section 1964, the latter Section would be a nullity. . . . It is well established that different standards than apply to private litigants’ request for38 injunctive relief govern the Government’s request for injunctive relief to enforce laws to protect the public’s interests, and that accordingly the Government is entitled to injunctive relief when it demonstrates a reasonable likelihood that the defendants and/or their cohorts will commit wrongful acts in the future, without any showing of an inadequate remedy at law or of irreparable injury beyond the injury inherent in the unlawful conduct. See generally United States v. City of San Francisco, 310 U.S. 16, 30-31 (1940); Hunt, 591 F.2d at 1220; United States v. Fed. Deposit Ins. Corp., 881 F.2d 207, 210 (5th Cir. 1989); United States v. Odessa Union Warehouse Co-op, 833 F.2d 172, 175-76 (9th Cir. 1987); Gov. of V.1., Dept. of Conservation v. V.1. Paving, 714 F.2d 283, 286 (3d Cir. 1983) (and cases cited thereat); United States V. Siemens Corp., 621 F.2d 499, 505-06 (2d Cir. 1980); SEC v. Management Dyn., Inc., 515 F.2d 801, 808 (2d Cir. 1975); United States v. Diapulse Corp. of America, 457 F.2d 25, 27-28 (2d Cir. 1972); Shafer v. United States, 229 F.2d 124, 128 (4th Cir.), cert. denied, 351 U.S. 931 (1956); SEC v. Stratton Oakmont, Inc., 878 F. Supp. 250, 255 (D.D.C. 1998); F.T.C. v. Virginia Homes Mfg. Corp., 509 F. Supp. 51, 59 (D. Md. 1981); United States v. Ingersoll-Rand Co., 218 F. Supp. 530, 544-45 (W.D. Pa.), aff’d, 320 F.2d 509 (3d Cir. 1963). 41 [Therefore] whether equitable relief is appropriate depends, as it does in other cases in equity, on whether a preponderance of the evidence shows a likelihood that the defendants will commit wrongful acts in the future, a likelihood which is frequently established by inferences drawn from past conduct. Id. at 1358-59. Also, there is no requirement that before a civil RICO action can be brought,38 the defendant must have been previously convicted of a RICO violation or a RICO predicate act. Sedima, 479 U.S. at 488-93. 2. Making Due Provision for the Rights of Innocent Persons Section 1964(a) of RICO provides, in relevant part, that “district courts of the United States shall have jurisdiction” to impose various equitable remedies “making due provision for the rights of innocent persons.” The legislative history to RICO’s Section 1964(a) contains only a passing reference that “due provision for the rights of innocent persons be made.” See S. REP. No. 91-617 at 160; H.R. Rep. No. 91-1549, at 2 (1970). This provision has not been the subject The forfeiture provision under RICO’s Section 1963(c), which was enacted at the same39 time as § 1964(a), similarly provided that “[t]he United States shall dispose of all [forfeited] property as soon as commercially feasible, making due provision for the rights of innocent persons.” See S. REP. NO. 91-617, at 23-24 (emphasis added). Under interpretations of the original Section 1963(c), the Attorney General had the exclusive authority to make “due provision for the rights of innocent persons” and provide relief, if any, in a petition for remission or mitigation. However, in 1984, RICO’s Section 1963, but not Section 1964(a), was amended to authorize the district court to make due provision for the rights of innocent persons in ancillary proceedings. See United States v. Gilbert, 244 F.3d 888, 909 (11th Cir. 2001); United States v. BCCI Holdings (Luxembourg), S.A. (Petition of Chawla), 46 F.3d 1185, 1190 (D.C. Cir. 1995); S. Rep. No. 98-225 at 205-09 (1990), reprinted in 1984 U.S.C.C.A.N. 3182, 3388-92. Therefore, it may be that under § 1964(a) the Attorney General retains the authority to make “due provision for the rights of innocent persons” via a petition for remission or mitigation. See also Ashland Oil, Inc. v. Gleave, 540 F. Supp. 81, 85 (W.D.N.Y. 1982) (holding40 (continued...) 42 of extensive litigation, and therefore courts have not fully explicated its meaning.39 For example, in United States v. Sasso, 215 F.3d 283, 291-92 (2d Cir. 2000), the Second Circuit ruled that requiring a corrupt former union official to contribute toward the cost of a court-authorized monitorship of the union to rid it of corruption was within the district court’s discretion under Section 1964(a), because, inter alia, it reduced the cost of monitorship to be borne by “innocent” union members. Similarly, in United States v. Local 560 (I.B.T.), 974 F.2d 315, 347-48 (3d Cir. 1992), the Third Circuit held that removing a corrupt union official from a union, and preventing him from associating with union members, made “due provision for the rights of innocent” union members because such relief would help eliminate corruption within the union. Accord United States v. Local 30, United Slate Tile, 871 F.2d 401, 407-08 (3d Cir. 1989) (rejecting the argument that the district court’s removal of 13 union officers and members found to have violated RICO did not protect the rights of innocent third parties because it stripped control of the union from its members, because such relief was necessary to eliminate corruption within the union).40 (...continued)40 that the “concern expressed for the rights of innocent persons cannot be stretched to include” a private litigant’s right to sue for an order of attachment under section 1964(a) since section 1964(a) confers a right only on the Attorney General to bring actions for equitable relief, not private litigants.). See, e.g., United States v. Coon, 187 F.3d 888, 896 (8th Cir. 1999); United States v.41 Shifman, 124 F.3d 31, 36-37 (1st Cir. 1997); United States v. Darden, 70 F.3d 1507, 1526 (8th Cir. 1995); United States v. Pungitore, 910 F.2d 1084, 1131-32 (3d Cir. 1990); United States v. Hobson, 893 F.2d 1267, 1269 (11th Cir. 1990); United States v. Hogan, 886 F.2d 1497, 1501-02 (7th Cir. 1989); United States v. Rastelli, 870 F.2d 822, 832 (2d Cir. 1989); United States v. Wyatt, 807 F.2d 1480, 1482-83 (9th Cir. 1987); United States v. Qaoud, 777 F.2d 1105, 1117-18 (6th Cir. 1985); United States v. Cauble, 706 F.2d 1322, 1339-40 (5th Cir. 1983); United States v. Phillips, 664 F.2d 971, 1039 (5th Cir. 1981). See, e.g., Aetna Cas. Sur. Co. v. P & B Autobody, 43 F.3d 1546, 1560 (1st Cir. 1994);42 Cox v. Admin. U.S. Steel & Carnegie, 17 F.3d 1386, 1410 (11th Cir. 1994); McLaughlin v. Anderson, 962 F.2d 187, 192-93 (2d Cir. 1992); Petro-Tech, Inc. v. Western Co. of N. Am., 824 F.2d 1349, 1356-57 (3d Cir. 1987); Armco Indus. Credit Corp. v. SLT Warehouse Co., 782 F.2d 475, 485 (5th Cir. 1986); Local 560, 780 F.2d at 283-86. See also Baumer v. Pachl, 8 F.3d 1341, 1347 (9th Cir. 1993); In re