Does defense from federal RICO apply to 'little RICO' statutes?

The civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO) have been called “the most misused statutes in the federal corpus of law.” W. 79th St. Corp. v. Congregation Kahl Minchas Chinuch, 2004 WL 2187069 (S.D.N.Y. Sept. 29, 2004). The passage of the federal RICO statute was followed by various state counterparts, known as “little RICO” statutes. Entranced by the remote prospect of treble damages, civil litigants continue to employ RICO as an “unusually potent weapon — the litigation equivalent of a thermonuclear device.” Katzman v. Victoria’s Secret Catalogue, 167 F.R.D. 649, 655 (S.D.N.Y. 1996). Often, the attempted invocation of RICO fails miserably: In a 2009 review of 145 appellate decisions nationwide, RICO plaintiffs achieved a final victory in only three cases. See Gross v. Waywell, 628 F. Supp. 2d 475, 479 (S.D.N.Y. 2009).

Among other things, the federal RICO statute makes it illegal for anyone “employed by or associated with any enterprise…to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” See 18 U.S.C. 1962(c). One of the most formidable federal civil RICO defenses is what the U.S. Supreme Court has coined the “operation or management” test. Reves v. Ernst & Young, 507 U.S. 170 (1993). This test attempted to clarify what the terms “to participate” and “to conduct” mean under § 1962(c).