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Supreme Court rules city lacks standing to bring suit against 'tax-free' cigarette website

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] The US Supreme Court on Monday ruled 5-3 in Hemi Group, LLC v. City of New York that the city government lacks standing under the Racketeer Influenced and Corrupt Organizations Act (RICO) to bring a suit against Hemi Group, which operates websites offering cigarettes for sale "tax-free." The US Court of Appeals for the Second Circuit ruled that the city of New York had standing to bring the RICO suit. In reversing the lower court, Chief Justice John Roberts wrote: It bears remembering what this case is about. It is about the RICO liability of a company for lost taxes it had no obligation to collect, remit, or pay, which harmed a party to whom it owed no duty. It is about imposing such liability to substitute for or complement a governing body's uncertain ability or desire to collect taxes directly from those who owe them. And it is about the fact that the liability comes with treble damages and attorney's fees attached. This Court has interpreted RICO broadly, consistent with its terms, but we have also held that its reach is limited by the "requirement of a direct causal connection" between the predicate wrong and the harm. The City's injuries here were not caused directly by the alleged fraud, and thus were not caused "by reason of" it. The City, therefore, has no RICO claim.Justice Ruth Bader Ginsburg filed a separate opinion, concurring in part and concurring in the judgment. Justice Stephen Breyer filed a dissenting opinion, joined by Justices John Paul Stevens and Anthony Kennedy. Justice Sonia Sotomayor was a member of the three-judge panel on the Second Circuit and took no part in the decision.Also Monday, the Court released its opinion in Briscoe v. Virginia, in which the Court was asked to decide whether a state violates the Confrontation Clause of the Sixth Amendment by allowing a prosecutor to introduce a certificate of a forensic laboratory analysis without presenting the testimony of the analyst who prepared the certificate. The Supreme Court of Virginia ruled that there was no Confrontation Clause violation because the accused has a right to call the analyst as his own witness. The entire text of the Court's per curiam opinion read:We vacate the judgment of the Supreme Court of Virginia and remand the case for further proceedings not inconsistent with the opinion in Melendez-Diaz v. MassachusettsJust last term, the Court ruled 5-4 in Melendez-Diaz v. Massachusetts that a forensic analyst's laboratory report is testimonial evidence under the Confrontation Clause, giving criminal defendants a right to cross-examine the analysts.

Full post as published by JURIST - The Paper Chase on January 25, 2010 (boomark / email).