Congress has long resisted pleas from federal courts to circumscribe civil RICO to preclude a remedy for so-called “garden variety” business disputes. These courts, including the U.S. Court of Appeals for the Third Circuit, thought RICO should be unavailable in cases arising from contractual disputes between sophisticated business entities, but historically permitted such claims to proceed, believing they were bound to do so by the language of RICO and its statutorily mandated “broad application.”
However, the Third Circuit’s holding in Kolar v. Preferred Real Estate Investments, 2010 WL 104500, at *5 (3d Cir. 21010) (“not precedential”), may signal that going forward, it will take matters into its own hands and preclude, without congressional imprimatur, application of RICO to garden-variety business contract disputes, even where the technical elements of a RICO claim are satisfied. Interestingly, Kolar applied principles similar to Pennsylvania’s “gist of the action” doctrine to RICO, although the application of this doctrine to RICO had been rejected previously.
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