FAN 200 (First Amendment News) Laura Handman & Lisa Zycherman, “Retaliatory RICO: A Corporate Assault on Speech”
Ms. Handman ia partner at DWT and is the co-chair of the firm’s appellate practice and divides her time between the New York and D.C. offices. For thirty-five years she has provided pre-publication counseling and litigation services from complaint through trial and appeal to U.S. and foreign broadcasters, film studios, and book, magazine, newspaper and Internet publishers and non-profits.
Ms. Zycherman is counsel at DWT. She represents and counsels clients on a wide range of issues in First Amendment, media, and intellectual property law, including libel, copyright, trademark, right of publicity, privacy, and newsgathering matters. Lisa also advises newspaper, magazine, website, television, film, and book-publishing clients on pre-publication and pre-broadcast legal issues.
SLAPP suits – strategic lawsuits against public participation, a longtime part of the corporate playbook – are evolving. The latest evolution involves the Racketeer Influenced and Corrupt Organizations Act, better known as RICO, the famed set of laws designed to take down crime groups like the Mafia.
When we talk about censorship, we often focus on government actors. But increasingly serious threats to advocacy and free expression are also being brought by corporations. SLAPP lawsuits are a tool used by corporations to silence critics and First Amendment-protected speech. They are often filed not because the plaintiff thinks they can win, but to harass and bleed the defendant of funds, and hopefully make them think twice about public criticism in the future.
A string of recent cases raise the question whether a company that is being targeted by protests and public criticism can respond using RICO laws. Congress passed the RICO statute in 1970 to help with some of the difficulty the government traditionally had prosecuting large organized crime rings. RICO was designed as a way to describe, legally, the whole criminal enterprise based on some of its illegal acts, prosecute the people who supported it, and take its assets. In this manner, a RICO claim is really just an elaborate conspiracy claim – but one that provides for treble damages, attorneys’ fees, and, perhaps most tantalizing of all, the ability to brand the defendant a racketeer.
Lately, the statute has been weaponized to establish a cause of action against activists in the form of a SLAPP suit, coupled with defamation claims, and alleging, most commonly, that an activist has participated in an enterprise, partnership, association, or group and committed at least two acts of “racketeering activity.” The law itself lists several activities that qualify as a racketeering act, but typically activists will be alleged to have committed some type of fraud. It is also likely that activists, having been charged with the commission of these activities, will be additionally charged with conspiring to commit these racketeering activities. RICO is a heavy-weight – in the words of one court, “the litigation equivalent of a thermonuclear device” – and consequently imposes a significant chill on otherwise protected speech. We know because we are representing defendants in three such suits.
In May 2016, Resolute Forest Products, a Canadian logging company, filed suit against Greenpeace, Stand.earth, and individual activists in the United States under the RICO statute. Resolute accuses Greenpeace of “fraudulently” inducing people all over the world “to donate millions of dollars based on materially false and misleading claims about its purported environmental purpose and its ‘campaigns’ against targeted companies.” The so-called “false statements” are also the subject of libel claims. Resolute argues that “soliciting money, not saving the environment, is Greenpeace’s primary objective, it has demonstrated time and time again that it will do anything to drive donations, including fabricating evidence.” And, the company alleges Greenpeace is extorting the plaintiff’s customers by urging them to do business with more sustainable timber companies. In this manner, the suit essentially argues that allegedly false speech is a criminal predicate act under RICO.
Greenpeace argued in a motion to dismiss that the case was a SLAPP and “an effort to muzzle protected speech.” Judge Jon S. Tigar agreed, granting Greenpeace’s motion to dismiss the case. He found that Resolute failed to prove any of its claims of true harm, racketeering, or other specific misconduct, but granted leave to amend, which Resolute did. The Amended Complaint is now awaiting a decision on Greenpeace’s second motion to dismiss.
Resolute is not alone. In 2016, Leonid Goldstein, a computer engineer in Texas filed a civil RICO complaint against what he called “the climate alarmism bodies,” which included 40 organizations such as Greenpeace, Sierra Club, Climate Action Network, Ceres, and foundations that fund their work, and accused them of engaging in a “long-term criminal scheme” that humans have caused global warming. A Texas court dismissed the case.
A more serious RICO suit was filed in August 2017 by Energy Transfer Partners ‒ the firm behind the Dakota Access Pipeline ‒ against Greenpeace and other environmental groups seeking $900 million dollars plus legal fees in an effort to not just sensor but destroy the company’s critics. The complaint echoes Resolute’s claims: a broad conspiracy by advocacy groups running an illegal racketeering “enterprise” to further their own interests while damaging the company, Energy Transfer Partners. It even alleges support for eco-terrorism, a violation of the Patriot Act, and drug trafficking. RICO was designed to capture Mafia bosses who have others doing their dirty work. Law firms that are using the statute can target organizations that aren’t directly involved with any criminal behavior. Dozens of organizations, American Indian tribes, and countless individuals were involved in the protests against the Dakota Access Pipeline. (BankTrack, a small nonprofit that tracks the funding of controversial projects, was never even on the ground in the Dakota Access Pipeline protests. It was sending letters to the pipeline’s investors and lenders from the Netherlands.) By suing a handful and citing multiple named and unnamed co-conspirators, the suit may cause anyone with any ties to the movement to think twice before sending the next campaign email or launching a new effort.
The district court has already found serious deficiencies in Energy Transfer’s pleadings, dismissing two defendants and requiring it to replead its “hyperbolic” claims against Greenpeace.
There’s at least one obvious connection between the Resolute and Energy Transfer cases. The same law firm represents each plaintiff and, according to a Bloomberg report, their counsel claims to be “in touch with other companies thinking of filing their own racketeering suits.” As this lawyer told Bloomberg, he was aware of others considering impending Greenpeace lawsuits “and would be shocked if there are not many more.”
Climate change denier groups and right-wing websites have heralded these lawsuits against Greenpeace. But there is a double standard here: when environmentalists floated a federal RICO investigation into ExxonMobil regarding its years of funding groups that rejected the scientific consensus on climate change, the same conservatives argued that the lawsuits (which were never filed) violated climate skeptics’ free speech. “May free speech reign and scientific inquiry prevail,” printed Breitbart News in 2016.
Abusing a law intended to target organized crime syndicates such as the Mafia, these RICO suits paint a sinister looking-glass version of precisely the expansive democratic mobilization that the Supreme Court has so often embraced as core First Amendment rights. These suits underscore the need for a uniform federal anti-SLAPP act, which has enjoyed bipartisan support in the past, particularly from trial bar-adverse members of Congress.
Retaliatory RICO SLAPP suits are a blatant attack on First Amendment rights, aiming to disrupt the normal operations of activists and advocacy organizations. But if these well-financed corporate efforts successfully mobilize RICO against the exercise of core political speech and the rights of association of advocates, there is a deep concern that freedom of the press could be the next target.
At least so far, the effort to turn RICO against news organizations has been strongly rebuffed. In one suit, an attorney alleged that in connection with reporting on the 2016 United States presidential election, seven television and print news organizations and 17 journalists associated with them acted as an “enterprise” in promoting and disseminating “false and misleading news reports” or commentary concerning Donald Trump’s candidacy for President. Each false and misleading news report, the plaintiff claimed, was a predicate act of wire fraud supporting a claim of racketeering. The suit was rejected by Judge Paul A. Engelmayer, however, who found “that dismissal is mandatory because the news reporting that [the plaintiff] assails as wire fraud is speech protected by the First Amendment of the United States Constitution for which civil damages to an offended audience are not available.” The Second Circuit affirmed. Hopefully, corporate efforts to annihilate advocacy groups who criticize them will be similarly rejected.