enforcement efforts have failed to adequately deter." Significantly, the 1978 Act made violations of Sections

2341-2346 predicate offenses under RICO, subject to its

Id.

criminal and civil sanctions. The lower figures today are the

result of the deterrent impact of the 1978 Act and its

vigorous enforcement.

Cigarette Tax Evasion: A Second Look:

A.C.I.R., 2-4 (1985). No action should be taken that would undermine that deterrent impact--criminal or civil.

Estimates place the loss of gasoline sales tax at $3 billion a year--$1 billion federal and $2 billion state. Newsday, Monday, Sept. 8, 1986, p. 7, co. 1. Heavy organized crime involvement is also present. Id. (Colombo, Luchese,

and Geneovese crime families active). See also The Public Report of the Sixth Statewide Grand Jury of Florida, 5-12 (1985) ("organized scam to steal fuel tax money"); Florida Sun Sentinal, Jan. 24, 1986.

taxes in 16 month period).

(Colombo family $40 million in gas

Systemic sales tax evasion, too,

is not limited to organized crime. It is part of an equally troublesome white collar crime phenomon. 20 See, e.g., New

20. White collar fraud is put in the $200 billion range, Annual Report of the U. S. Attorney General 42 (1985), a figure that is similar in dimension to drugs. See Statement of Congressman Hughes, Hearings before Subcommittee on Crime Committee for the Judiciary, House of Representatives, 99th Cong. 2nd Sess 1 (1986) ($110 billion spent annually; lost productivity, etc., $60 billion). For instance, it has been estimated by the American Insurance Association that 15 to 20% of all claims are fraudulent and that such claims cost policyholders $13.75 billion dollars in extra premiums to make up the difference. N.Y. Times, July 6, 1980, at 17, col. 1. Indeed, the "insurance crisis" that is leading legislators to rewrite our liability laws to curtail litigation might be better dealt with by enforcing vigorously our laws against fraud. See generally N.Y. Times, March 2, 1986, at 20, col 1 (industry said to lose $5.5 billion or make $1.7 billion);

footnote 20 continued

The Explosion in Liability Lawsuits is Nothing But a Myth,
Bus. Wk., April 21, 1986, at 24, col. 1.

While RICO was aimed at organized crime, its use "as a weapon against 'white collar crime' is not contrary to the intent of Congress but is in fact one of the 'benefits' Congress saw the Act as providing." Papai v. Cremosnik, 635 F.Supp. 1402, 1411 (N.D. Ill 1986). Writing in 1967, the President's Crime Commission observed:

[w]hite-collar crime [is]--[a term] now commonly
used to designate those occupational crimes com-
mitted in the course of their work by persons of
high status and social repute [that]. are only
rarely dealt with through the full force of crim-
inal sanctions.

...

During the last few centuries economic life has
become vastly more complex. Individual families
or groups of families are not self-sufficient;
they rely for the basic necessities of life on
thousands or even millions of different people,
each with a specialized function, many of whom
live hundreds or thousands of miles away.

Serious erosion of morals accompanies [the white
collar offender's] violation. [Those who so]
flout the law set an example for other business
and influence individuals particularly young
people, to commit other kinds of crime on the
ground that everybody is taking what he can get.

The Challenge of Crime in a Free Society, 47-48 (1967).
The Commission also commented,

"Fraud is

...

[an] offense whose impact is not well conveyed by police statistics.

Fraud is especially vicious when it attacks, as it
so often does, the poor or those who live on the
margin of poverty. Expensive nostrums for incur-
able diseases, home improvement frauds, frauds in-
volving the sale or repair of cars and other crim-
inal schemes create losses which are not only siz-
able in gross but are also significant and pos-
sibly devastating for individual victims." Id. at
33-34.

York Times, Jan. 9, 1987, p. 21, col. 1, (Van Cleef & Arpels, Inc., jeweler on Fifth Ave. $5 million in sales tax evasion in scam including such prominent people as Leona Helmsley); id. Dec. 16, 1986, p. 1, col. 4 (Bulgari, operator of Pierre Hotel of Fifth Ave., $1.5 million in sales tax evasion; Cartier, jeweler on Fifth Ave., similar conviction). A misplaced concern over crowded dockets ought not result in a judicial rewritting of RICO. 21 Allegations of civil RICO abuse may, if necessary, be dealt with by a vigorous enforcement of

Id. at

21. Previously, no separate statistics on RICO litigation were kept by the Administrative Office of the United States Courts. See generally, Annual Report of the Director of the Administrative Office of the United States Courts (1983). Approximately 250,000 civil cases are, however, filed each year. Id. at 122. Approximately 35,000 criminal prosecutions are brought. Id. at 164. Slightly more than 95,000 of the civil cases involve the United States as plaintiff or defendant; private litigation embraces approximately 145,000 filings, of which 60% is federal question and 40% is diversity litigation. Id. at 121. The principal areas of litigation are recovery of overpayments and enforcement of judgments (41,000), prisoner petitions (26,000), social security (20,000), civil rights (20,000), and labor (11,000). 122. Antitrust includes 1,200 civil filings, id., and 74 criminal cases. Id. at 164. All forms of extortion, racketeering and threat prosecutions amount to 478. Id. at 320. Securities commodities and exchange related civil filing make up 3,000, id. at 164, and 26 criminal cases. Id. at 245. Accordingly, if most securities and fraud-related cases were also RICO cases, RICO filing would not exceed 5,000, not more than 2% of all federal filings. A study by the Department of Justice, in fact, indicated that of the approximately 500 civil RICO cases brought before July 1985, 65% of them had an independent basis for federal jurisdiction. Trott at 127. More recently, data from the Administrative Office indicates that from September 1985 until June 30, 1986, only 614 civil RICO cases were filed and that 85 had been terminated. In addition, as of June 30, 1986, only 530 were pending. On the so-called litigation explosion generally, see Galanter, Reading the Landscape of Disputes: What We Know and Don't Know (and Think We Know) About Our Allegedly Contentious and Litigious Society, 31 UCLA L. Rev. 4 (1983).

existing remedies for general litigation misconduct.22

CONCLUSION

For these reasons, Amici urge this Court to reverse the order of the district court dismissing the complaint.

...

22. See Goldsmith, Civil RICO Abuse: The Allegations in Context, 1986 B.Y.U. L. Rev 55, 103 ("Upon review RICO abuse is not a serious problem for our legal system so long as counsel and courts appreciate the utility of existing remedial procedures. Accordingly, the courts should recognize that abuse arguments are more likely motivated by hostility to the RICO remedy.") As such, it is neither necessary nor constitutional for courts to redraft the legislation. As noted above, Congress, too, is being pressed both to retain and to circumscribe civil RICO. No indication exists that Congress is unable to fulfill its constitutional role. See generally, Note Congress Responds to Sedima: Is There a Contract Out on Civil RICO, 19 Loy. L.A.L. 851 (1986) ("While RICO's private right of action has been something less than a lethal weapon in the war against organized crime, the measure may prove a hero in the war against fraud.") for a comprehensive review of the various arguments and proposals.

Re: ACBA Federal Courts Section-Special Report on the Judiciary Dear Ros:

At our recent committee meeting I briefly commented on some thoughts I have about the overall approach we should take in making our report to Judge Weis. Essentially, it is my strong feeling that committees such as ours have gotten off on the wrong track by starting with the erroneous assumption that the current high utilization of the courts by the people (and the lawyers who represent them) is somehow wrong or improper. Thus the focus of reports I have read has been on mechanisms by which we can decrease utilization of our judicial system. In other words, how can we keep people and their problems out of the courts?

It is my position that the ever burgeoning use of the judicial system is evidence not of societal illness, but of our increasing civility as a nation. Secondly, the monumental increase in the number of cases filed civilly and administratively do not necessarily reflect an overly litigious nature of the people, but rather, the fact that since the founding of the nation we have consciously and deliberately expanded remedies. I take it as a given that in a democratic society it is beneficial to continuously re-examine the rights and interests of citizens as related to their fellow citizens, employers, powerful conglomerations of power and most especially, their government. In engaging in such re-examinations over the years, both the legislatures and the courts have determined it to be in the best interests of the nation to expand the original circle of rights from those which existed at the beginning of the republic which were essentially those embodied in the common law and the Constitution.