Yegiazaryan v. Smagin ( 2023 )

(Slip Opinion) OCTOBER TERM, 2022 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
YEGIAZARYAN, AKA EGIAZARYAN v. SMAGIN ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
No. 22–381. Argued April 25, 2023—Decided June 22, 2023*
Respondent Vitaly Smagin won a multimillion dollar arbitration award
in 2014 against petitioner Ashot Yegiazaryan stemming from the mis-
appropriation of investment funds in a joint real estate venture in Mos-
cow. Because Yegiazaryan has lived in California since 2010, Smagin,
who lives in Russia, filed suit to confirm and enforce the award in the
Central District of California pursuant to the Convention on the Recog-
nition and Enforcement of Foreign Arbitral Awards. The District
Court initially froze Yegiazaryan’s California assets before finally en-
tering judgment against him. The District Court also entered several
postjudgment orders barring Yegiazaryan and those acting at his di-
rection from preventing collection on the judgment. While the action
was ongoing, Yegiazaryan himself was awarded a multimillion dollar
arbitration award in an unrelated matter and sought to avoid the Dis-
trict Court’s asset freeze by concealing the funds, which were ulti-
mately transferred to a bank account with petitioner CMB Monaco.
In 2020, Smagin filed this civil suit under the Racketeer Influenced
and Corrupt Organizations Act (RICO), which provides a private right
of action to “[a]ny person injured in his business or property by reason
of a violation of” RICO’s substantive provisions. 18 U. S. C. §1964(c).
As relevant, Smagin alleges Yegiazaryan and others worked together
to frustrate Smagin’s collection on the California judgment through a
pattern of wire fraud and other RICO predicate racketeering acts, in-
cluding witness tampering and obstruction of justice. The District
Court dismissed the complaint on the ground that Smagin had failed
——————
* Together with No. 22–383, CMB Monaco, fka Compagnie Monegasque
de Banque v. Smagin et al., also on certiorari to the same court.
2 YEGIAZARYAN v. SMAGIN
Syllabus
to plead a “domestic injury” as required by RJR Nabisco, Inc. v. Euro-
pean Community, 579 U. S. 325, 346. Smagin’s Russian residency
weighed heavily in the District Court’s decision. The Ninth Circuit
reversed. Rejecting the District Court’s rigid, residency-based ap-
proach to the domestic-injury inquiry, the Ninth Circuit instead ap-
plied a context-specific approach and concluded that Smagin had
pleaded a domestic injury because he had alleged that his efforts to
execute on a California judgment in California against a California
resident were foiled by a pattern of racketeering activity that largely
occurred in California and was designed to subvert enforcement of the
judgment there.
Held: A plaintiff alleges a domestic injury for purposes of §1964(c) when
the circumstances surrounding the injury indicate it arose in the
United States. Pp. 5–14.
(a) The “domestic-injury” requirement for private civil RICO suits
stems from RJR Nabisco, a case in which the Court was asked whether
RICO applies extraterritorially. To answer the question, the Court
applied the presumption against extraterritoriality, a canon of con-
struction that provides “[a]bsent clearly expressed congressional in-
tent to the contrary, federal laws will be construed to have only domes-
tic application.” 579 U. S., at 335. Guided by concerns of international
comity and the reasonable discernment of congressional intent, the
Court distilled the presumption against extraterritoriality into two
steps. The first asks “whether the statute gives a clear, affirmative
indication that it applies extraterritorially.” Id., at 337. If the answer
is “yes,” the presumption is rebutted, and the test ends. If the answer
is “no,” the inquiry proceeds and step two asks whether the case in-
volves a domestic application of the statute, which is assessed “by look-
ing to the statute’s ‘focus.’ ” Ibid. Applying this framework, the Court
assessed the extraterritoriality of RICO’s private right of action,
§1964(c), and determined that it does not overcome the presumption
at step one. Proceeding to step two, the Court held that “[a] private
RICO plaintiff . . . must allege and prove a domestic injury to its busi-
ness or property.” Id., at 346. Because the RJR Nabisco plaintiffs
were not seeking redress for domestic injuries, the Court did not have
occasion to explain what constitutes a “domestic injury.” Pp. 5–7.
(b) The parties advance competing approaches to the domestic-in-
jury inquiry. Petitioners urge a bright-line rule that locates a plain-
tiff’s injury at the plaintiff’s residence. They argue that because a pri-
vate RICO action remedies only economic injuries and a plaintiff
necessarily suffers that injury at its residence where the economic in-
jury is felt, any cognizable §1964(c) injury is necessarily suffered at the
plaintiff’s residence. Alternatively, petitioners argue that at least
when intangible property is concerned, common-law principles locate
Cite as: 599 U. S. ____ (2023) 3
Syllabus
the intangible property at the plaintiff’s residence, such that the injury
is also located there. Smagin defends a contextual approach that con-
siders all case-specific facts bearing on where the injury arises. Pp. 7–
8.
(c) The Court agrees with Smagin and the Ninth Circuit that the
domestic-injury inquiry is context specific and turns largely on the
facts alleged in the complaint. Specifically, courts should look to the
circumstances surrounding the alleged injury to assess whether it
arose in the United States. Here, that means looking to the nature of
the alleged injury, the racketeering activity that directly caused it, and
the injurious aims and effects of that activity.
The context-specific approach is most consistent with RJR Nabisco.
The Court’s statements in RJR Nabisco that the domestic-injury re-
quirement “does not mean that foreign plaintiffs may not sue under
RICO,” 579 U. S., at 353, n. 12, and that “application of [the] rule in
any given case will not always be self-evident,” point toward a case-
specific inquiry that considers the particular facts surrounding the al-
leged injury, id., at 354. That approach also better reflects the require-
ment’s origin in step two, which assesses whether there is a domestic
application of a statute by looking to the statute’s focus. RJR Nabisco
implied that §1964(c)’s focus is injuries in “business or property by rea-
son of a violation of” RICO’s substantive provisions. So understood,
§1964(c)’s focus is not on the isolated injury but on the injury as a prod-
uct of racketeering activity. This requires courts to look to the circum-
stances surrounding the injury to see if those circumstances suffi-
ciently ground the injury in the United States. Pp. 8–10.
(d) The circumstances surrounding Smagin’s injury make clear that
the injury arose in the United States. Smagin’s alleged injury is his
inability to collect his judgment. Much of the alleged racketeering ac-
tivity that caused that injury occurred in the United States. And while
some of Yegiazaryan’s scheme to avoid collection occurred abroad, the
scheme was directed toward frustrating the California judgment. Fur-
ther, the injurious effects of the racketeering activity largely mani-
fested in California. Smagin obtained a judgment in California where
Yegiazaryan lives, and the rights provided by that judgment exist only
in California. The alleged RICO scheme thwarted those rights,
thereby undercutting the orders of the California District Court and
Smagin’s efforts to collect on Yegiazaryan’s assets in California. Un-
der a contextual approach, Smagin’s allegations suffice to state a do-
mestic injury. Pp. 10–11.
(e) Petitioners argue that a contextual approach is inconsistent with
certain common-law principles governing “the situs” of injuries to in-
tangible property. Specifically, petitioners point to the Restatement
(First) of Conflict of Laws—under which fraud is typically deemed felt
4 YEGIAZARYAN v. SMAGIN
Syllabus
at the plaintiff’s residence—and to the principle of mobilia sequuntur
personam—which generally locates intangible property at the domicile
of its owner—and argue that both principles locate Smagin’s alleged
injury at his residence. Petitioners fail both to explain the relevance
of these principles and to show that they were principles settled at
common law at the time of RICO’s enactment. The core problem with
petitioners’ reliance on legal fictions concerning the situs of injuries in
other areas of the law is that the justifications of that approach do not
necessarily translate to the presumption against extraterritoriality,
with its distinctive concerns for comity and discerning congressional
meaning. Indeed, petitioners’ approach generates results counter to
comity and far afield from any reasonable interpretation of what qual-
ifies as a domestic application of §1964(c). Consider two U. S. busi-
nesses targeted by racketeering activity, one owned by a U. S. resident
and one owned by someone living abroad. There is no evidence that
Congress intended that only the former business owner can bring a
§1964(c) suit, especially since doing so runs the risk of generating in-
ternational discord. Finally, petitioners argue that a contextual ap-
proach is unworkable because it does not provide a bright-line rule.
Such concerns about a fact-intensive test cannot displace congres-
sional policy choices, where a more nuanced test is true to the statute’s
meaning. Pp. 11–14.
37 F. 4th 562, affirmed and remanded.
SOTOMAYOR, J., delivered the opinion of the Court, in which ROB-
ERTS,C. J., and KAGAN, KAVANAUGH, BARRETT, and JACKSON, JJ., joined.
ALITO, J., filed a dissenting opinion, in which THOMAS, J., joined, and in
which GORSUCH, J., joined as to Part I.
Cite as: 599 U. S. ____ (2023) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
United States Reports. Readers are requested to notify the Reporter of
Decisions, Supreme Court of the United States, Washington, D. C. 20543,
pio@supremecourt.gov, of any typographical or other formal errors.
SUPREME COURT OF THE UNITED STATES
_________________
Nos. 22–381 and 22–383
_________________
ASHOT YEGIAZARYAN, AKA ASHOT EGIAZARYAN,
PETITIONER
22–381 v.
VITALY IVANOVICH SMAGIN, ET AL.
CMB MONACO, FKA COMPAGNIE MONEGASQUE DE
BANQUE, PETITIONER
22–383 v.
VITALY IVANOVICH SMAGIN, ET AL.
ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 22, 2023]
JUSTICE SOTOMAYOR delivered the opinion of the Court.
Respondent Vitaly Smagin holds a multimillion dollar
California judgment against petitioner Ashot Yegiazaryan,
who lives in California. Smagin, who resides in Russia,
filed suit in the Central District of California alleging that
Yegiazaryan, with the assistance of petitioner CMB Monaco
(formerly Compagnie Monégasque de Banque), engaged in
a pattern of criminal activity, predominantly in and tar-
geted at California, to prevent him from collecting on his
California judgment, in violation of the Racketeer Influ-
enced and Corrupt Organizations Act (RICO), 18 U. S. C.
§§1961–1968. The District Court dismissed the complaint
after concluding that Smagin had failed to allege a “domes-
tic injury,” as required by RJR Nabisco, Inc. v. European
2 YEGIAZARYAN v. SMAGIN
Opinion of the Court
Community, 579 U. S. 325, 334 (2016). The Ninth Circuit
reversed, concluding that Smagin had alleged a domestic
injury. This Court agrees with the Ninth Circuit.
I
A
The essential facts as alleged by Smagin are as follows.
From 2003 to 2009, Yegiazaryan committed fraud against
Smagin, stealing his shares in a joint real estate venture in
Moscow. To avoid a Russian criminal indictment for that
fraud, Yegiazaryan fled to a mansion in Beverly Hills in
2010, where he has lived ever since. In 2014, Smagin, who
lives in Russia, won an arbitration award in London against
Yegiazaryan for the misappropriation of his real estate in-
vestment (London Award). Yegiazaryan refused to pay that
award, which is over $84 million.
Seeking to collect, Smagin filed an enforcement action in
the Central District of California to confirm and enforce the
London Award under the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, June 10,
1958, 21 U. S. T. 2517, T. I. A. S. No. 6997, as implemented
by 9 U. S. C. §§201–208. The District Court issued a tem-
porary protective order, followed by a preliminary injunc-
tion, freezing Yegiazaryan’s California assets.
In his application for injunctive relief, Smagin informed
the District Court that Yegiazaryan had been granted a
substantial arbitration award in an unrelated proceeding
involving Yegiazaryan and yet another Russian business-
man, Suleymon Kerimov (Kerimov Award). At the time, no
funds had yet been paid to Yegiazaryan in satisfaction of
that award, but Smagin was concerned that when they
were paid, Yegiazaryan would take steps to transfer the
money out of Smagin’s reach.
Smagin’s concerns were justified. In May 2015,
Yegiazaryan received a $198 million settlement in satisfac-
tion of the Kerimov Award. To avoid the District Court’s
Cite as: 599 U. S. ____ (2023) 3
Opinion of the Court
asset freeze, Yegiazaryan accepted the money through the
London office of an American law firm headquartered in
Los Angeles. Yegiazaryan then created “a complex web of
offshore entities to conceal the funds,” App. 56a, and ulti-
mately transferred the funds to a bank account with peti-
tioner CMB Monaco. Yegiazaryan also directed those in his
inner circle to file fraudulent claims against him in foreign
jurisdictions, which he would not oppose, in an attempt to
obtain sham judgments that would encumber the $198 mil-
lion, thereby blocking Smagin’s access to it.
Around the same time, Yegiazaryan was hiding his assets
in the United States through a system of “shell companies”
owned by family members. Id., at 61a. This included a Ne-
vada company, which was owned by his brother and created
“for the purpose of sheltering [Yegiazaryan’s] U. S. assets
from his creditors,” including Smagin. Id., at 44a.
Smagin did not learn about the $198 million settlement,
Yegiazaryan’s efforts to hide it, or the U. S. shell companies
until February 2016, when Smagin was granted leave to in-
tervene in Yegiazaryan’s California divorce proceedings.
The next month, the California District Court in the Lon-
don Award enforcement action granted Smagin’s motion for
summary judgment on his petition for confirmation of the
Award and entered judgment against Yegiazaryan for $92
million, including interest. The court also issued several
postjudgment orders barring Yegiazaryan and those acting
at his direction from preventing collection on the judgment.
For failing to comply with those orders, the District Court
subsequently found Yegiazaryan in contempt of court. To
avoid having to comply with the contempt order, however,
Yegiazaryan falsely claimed he was too ill, and submitted a
forged doctor’s note to the District Court. When Smagin
notified Yegiazaryan that he would be seeking to depose the
doctor in question, who resides in California, Yegiazaryan
used “intimidation, threats, or corrupt persuasion,” id., at
82a, to get the doctor to avoid service of the subpoena.
4 YEGIAZARYAN v. SMAGIN
Opinion of the Court
B
At issue here is a civil RICO suit that Smagin brought in
2020 based on the allegations just described. RICO pro-
vides a private right of action to “[a]ny person injured in his
business or property by reason of a violation of ” RICO’s sub-
stantive provisions. 18 U. S. C. §1964(c). Invoking that
cause of action, Smagin sued Yegiazaryan and CMB Bank
(the two petitioners here), as well as 10 other defendants,
in the Central District of California. 1 The complaint asserts
two claims against each: a substantive RICO violation,
§1962(c), and a RICO conspiracy claim, §1962(d). The
thrust of Smagin’s allegations is that the defendants
worked together under Yegiazaryan’s direction to frustrate
Smagin’s collection on the California judgment through a
pattern of wire fraud and other RICO predicate racketeer-
ing acts, including witness tampering and obstruction of
justice. For these violations, Smagin seeks not only actual
damages “no less than $130 million,” App. 100a, but also
attorney’s fees and treble damages as authorized under
RICO. See §1964(c).
The District Court dismissed the complaint on the ground
that Smagin had “fail[ed] to adequately plead a domestic
injury,” id., at 31a, as required by this Court’s decision in
RJR Nabisco. See 579 U. S., at 346 (“A private RICO plain-
tiff therefore must allege and prove a domestic injury to its
business or property”). The District Court “place[d] great
weight on the fact that Smagin is a resident and citizen of
——————
1 Only Yegiazaryan and CMB Bank petitioned for this Court’s review.
The other defendants include three family members (Suren Yegiazaryan,
Artem Yegiazaryan, and Stephan Yegiazaryan); an alleged Russian ac-
complice (Vitaly Gogokhia); French, Russian, and Luxembourger indi-
viduals who have been administrators of the trust holding the $198 mil-
lion (Natalia Dozortseva, Murielle Jouniaux, and Alexis Gaston Thielen);
an allegedly corrupt Russian bankruptcy officer (Ratnikov Evgeny Niko-
laevich); and a registered company hired by Yegiazaryan (Prestige Trust
Company, Ltd.) and its U. S. lawyer (H. Edward Ryals).
Cite as: 599 U. S. ____ (2023) 5
Opinion of the Court
Russia and therefore experiences the loss from his inability
to collect on his judgment in Russia.” App. 27a (internal
quotation marks and alterations omitted).
The Ninth Circuit reversed. It rejected petitioners’ invi-
tation to follow the domestic-injury approach of the Seventh
Circuit, “which has adopted a rigid, residency-based test for
domestic injuries involving intangible property,” such as a
judgment. 37 F. 4th 562, 568, 570 (2022) (citing Armada
(Sing.) PTE Ltd. v. Amcol Int’l Corp., 885 F. 3d 1090(2018)). Under the Seventh Circuit’s rule, which locates an
injury to intangible property at the plaintiff ’s residence,
Smagin could not allege a domestic injury because he re-
sides in Russia. See Armada, 885 F. 3d, at 1094. The Ninth
Circuit instead adopted a “context-specific” approach to the
domestic-injury inquiry, which it found consistent with the
approaches of the Second and Third Circuits. 37 F. 4th, at
568–570; see Bascuñán v. Elsaca, 874 F. 3d 806, 809 (CA2
2017); Humphrey v. GlaxoSmithKline PLC, 905 F. 3d 694,
696 (CA3 2018). Applying that approach, the Ninth Circuit
concluded that Smagin had pleaded a domestic injury be-
cause he had alleged that his efforts to execute on a Califor-
nia judgment in California against a California resident
were foiled by a pattern of racketeering activity that largely
“occurred in, or was targeted at, California” and was “de-
signed to subvert” enforcement of the judgment in Califor-
nia. 37 F. 4th, at 567–568.
This Court granted certiorari to resolve the Circuit split.
598 U. S. ___ (2023). Because a context-specific inquiry is
most consistent with this Court’s decision in RJR Nabisco,
and because the context here makes clear Smagin has al-
leged a domestic injury, the Court affirms.
II
A
The “domestic-injury” requirement for private civil RICO
suits stems from this Court’s decision in RJR Nabisco.
6 YEGIAZARYAN v. SMAGIN
Opinion of the Court
There, the question before the Court was whether RICO ap-
plies extraterritorially. To answer that question, the Court
employed the presumption against extraterritoriality,
which “represents a canon of construction, or a presumption
about a statute’s meaning, rather than a limit upon Con-
gress’s power to legislate.” Morrison v. National Australia
Bank Ltd., 561 U. S. 247, 255 (2010). The presumption pro-
vides that “[a]bsent clearly expressed congressional intent
to the contrary, federal laws will be construed to have only
domestic application.” RJR Nabisco, 579 U. S., at 335.
Dual rationales support the presumption against extra-
territoriality. On the one hand, it reflects concerns of inter-
national comity insofar as it “ ‘serves to protect against un-
intended clashes between our laws and those of other
nations which could result in international discord.’ ” Ki-
obel v. Royal Dutch Petroleum Co., 569 U. S. 108, 115 (2013)
(quoting EEOC v. Arabian American Oil Co., 499 U. S. 244,
248 (1991)). On the other hand, the presumption is in-
formed by “the commonsense notion that Congress gener-
ally legislates with domestic concerns in mind.” Smith v.
United States, 507 U. S. 197, 204, n. 5 (1993). In fact, con-
sistent application of the presumption “preserv[es] a stable
background against which Congress can legislate with pre-
dictable effects.” Morrison, 561 U. S., at 261.
RJR Nabisco distilled the presumption against extrater-
ritoriality into two steps. The first asks “whether the stat-
ute gives a clear, affirmative indication that it applies ex-
traterritorially.” 579 U. S., at 337. If the answer is “yes,”
then the presumption is rebutted, obviating any need to
proceed to step two. If the presumption is not rebutted,
however, then step two asks whether the case involves a
domestic application of the statute, which is assessed “by
looking to the statute’s ‘focus.’ ” Ibid. 2
——————
2 “While ‘it will usually be preferable’ to begin with step one, courts
Cite as: 599 U. S. ____ (2023) 7
Opinion of the Court
Applying this framework, the Court assessed the extra-
territoriality of two of RICO’s substantive provisions and,
as relevant here, its private cause of action. As to the sub-
stantive provisions, the Court held at step one that they ap-
ply extraterritorially to the same extent that RICO’s predi-
cates do, making it unnecessary to proceed to step two. Id.,
at 340. Regarding RICO’s private right of action, §1964(c),
however, the Court’s conclusion was different. The Court
determined that §1964(c) does not overcome the presump-
tion at step one because there is no “clear indication that
Congress intended to create a private right of action for in-
juries suffered outside of the United States.” Id., at 349. “If
anything,” the Court reasoned, by “cabining” the private
cause of action to “injur[ies] to ‘business or property,’ ” “Con-
gress signaled that the civil remedy is not coextensive with
§1962’s substantive prohibitions.” Id., at 350. Accordingly,
in reference to step two, the Court held that “[a] private
RICO plaintiff . . . must allege and prove a domestic injury
to its business or property.” Id., at 346.
In announcing this “domestic-injury” requirement, the
Court did not have occasion to explain what constitutes a
“domestic-injury,” because the plaintiffs in RJR Nabisco
had stipulated that they were not seeking redress for do-
mestic injuries. Id., at 354. The question now before the
Court is whether Smagin has alleged a domestic injury.
B
The parties advance competing approaches to the domes-
tic injury inquiry. Petitioners urge the Court to adopt a
bright-line rule, akin to the Seventh Circuit’s, that locates
a plaintiff ’s injury at the plaintiff ’s residence. Petitioners
advance two different versions of this rule.
——————
have the discretion to begin at step two ‘in appropriate cases.’ ” Western-
Geco LLC v. ION Geophysical Corp., 585 U. S. ___, ___ (2018) (slip op., at
5) (citing RJR Nabisco, 579 U. S., at 338, n. 5).
8 YEGIAZARYAN v. SMAGIN
Opinion of the Court
As their primary position, petitioners argue that any in-
jury cognizable under §1964(c) is necessarily suffered at the
plaintiff ’s residence because “the private cause of action
remedies only economic injuries, and a plaintiff necessarily
suffers that injury at its residence” where the economic in-
jury is felt. Brief for Petitioners 2. In the alternative, peti-
tioners argue that, at least when the alleged injury involves
intangible property, such as the judgment here, relevant
common-law principles locate the intangible property at the
plaintiff ’s place of residence, such that the injury is also lo-
cated there. Id., at 2–3, 43–44. On either version of peti-
tioners’ rule, Smagin cannot allege a domestic injury be-
cause he lives in Russia.
Smagin, in contrast, defends a contextual approach that
considers all case-specific facts bearing on where the injury
“arises,” not just where it is “felt.” Brief for Respondent 9.
In the context of this suit, Smagin argues that he has stated
a domestic injury because he has alleged that he was in-
jured in his ability to enforce a California judgment, against
a California resident, through racketeering acts that were
largely “designed and carried out in California” and were
“targeted at California.” Id., at 3, 21.
C
The Court agrees with Smagin and the Ninth Circuit that
“determining whether a plaintiff has alleged a domestic in-
jury [for purposes of RICO] is a context-specific inquiry that
turns largely on the particular facts alleged in a complaint.”
37 F. 4th, at 570. Specifically, courts should look to the cir-
cumstances surrounding the alleged injury to assess
whether it arose in the United States. In this suit, that
means looking to the nature of the alleged injury, the rack-
eteering activity that directly caused it, 3 and the injurious
——————
3 The alleged RICO violation must have proximately caused the injury
in order for the plaintiff to be able to sue under §1964(c). See Holmes v.
Securities Investor Protection Corporation, 503 U. S. 258, 268 (1992);
Cite as: 599 U. S. ____ (2023) 9
Opinion of the Court
aims and effects of that activity.
This approach to the domestic-injury requirement is most
consistent with RJR Nabisco. There, the Court clarified
that its domestic-injury requirement “does not mean that
foreign plaintiffs may not sue under RICO.” 579 U. S., at
353, n. 12. Similarly, the Court explained that “application
of [the domestic-injury] rule in any given case will not al-
ways be self-evident, as disputes may arise as to whether a
particular alleged injury is ‘foreign’ or ‘domestic.’ ” Id., at
354. These remarks point toward a case-specific inquiry
that considers the particular facts surrounding the alleged
injury. Petitioners’ bright-line rule, in contrast, dispenses
with any such subtlety. It makes the location of the plain-
tiff ’s residence determinative, thus barring all foreign
plaintiffs, exactly as RJR Nabisco said it was not doing.
A contextual approach to the domestic-injury require-
ment also better reflects the requirement’s origin in step
two of the extraterritoriality framework, which assesses
whether there is a domestic application of a statute by look-
ing to the statute’s focus. RJR Nabisco implied that the
focus of §1964(c) is injuries in “business or property by rea-
son of a violation of [RICO’s substantive provisions].”
§1964(c). This focus makes sense because, in the context of
RICO, “the compensable injury necessarily is the harm
caused by predicate acts sufficiently related to constitute a
pattern, for the essence of the violation is the commission
of those acts in connection with the conduct of an enter-
prise.” Sedima, S. P. R. L. v. Imrex Co., 473 U. S. 479, 497
(1985). So understood, §1964(c)’s focus is on the injury, not
in isolation, but as the product of racketeering activity.
Thus, in assessing whether there is a domestic injury,
courts should engage in a case-specific analysis that looks
——————
Anza v. Ideal Steel Supply Corp., 547 U. S. 451, 457–458 (2006) (describ-
ing the proximate causation requirement as a “directness require-
men[t]”).
10 YEGIAZARYAN v. SMAGIN
Opinion of the Court
to the circumstances surrounding the injury. If those cir-
cumstances sufficiently ground the injury in the United
States, such that it is clear the injury arose domestically,
then the plaintiff has alleged a domestic injury.
Because of the contextual nature of the inquiry, no set of
factors can capture the relevant considerations for all cases.
RICO covers a wide range of predicate acts and is notori-
ously “expansive” in scope. Id., at 498–499. Thus, depend-
ing on the allegations, what is relevant in one case to as-
sessing where the injury arose may not be pertinent in
another. While a bright-line rule would no doubt be easier
to apply, fealty to the statute’s focus requires a more nu-
anced approach.
D
This suit illustrates well why the domestic-injury inquiry
must account for the facts of the case, rather than rely on a
residency-based rule. While it may be true, in some sense,
that Smagin has felt his economic injury in Russia, focusing
solely on that fact would miss central features of the alleged
injury. Zooming out, the circumstances surrounding
Smagin’s injury make clear it arose in the United States.
Smagin alleges that he “has been injured in his inability
to collect [his] massive judgment.” App. 38a. Much of the
alleged racketeering activity that caused the injury oc-
curred in the United States. Yegiazaryan took domestic ac-
tions to avoid collection, including allegedly creating U. S.
shell companies to hide his U. S. assets, submitting a forged
doctor’s note to a California District Court, and intimidat-
ing a U. S.-based witness. It is true that other components
of the scheme occurred abroad. As Smagin alleges, how-
ever, even those “wrongful acts and plans were devised, in-
itiated, and carried out . . . through acts and communica-
tions initiated in and directed towards Los Angeles County,
California,” with the “central purpose of frustrating en-
forcement of [the] California judgment.” Id., at 45a–46a.
Cite as: 599 U. S. ____ (2023) 11
Opinion of the Court
Further, the injurious effects of the racketeering activity
largely manifested in California. Smagin obtained a judg-
ment in California because that is where Yegiazaryan lives,
and where Smagin had thus hoped to collect. The rights
that the California judgment provides to Smagin exist only
in California, including the right to obtain postjudgment
discovery, the right to seize assets in California, and the
right to seek other appropriate relief from the California
District Court. The alleged RICO scheme thwarted those
rights, thereby undercutting the orders of the California
District Court and Smagin’s efforts to collect on
Yegiazaryan’s assets in California.
In sum, Smagin’s interests in his California judgment
against Yegiazaryan, a California resident, were directly
injured by racketeering activity either taken in California
or directed from California, with the aim and effect of sub-
verting Smagin’s rights to execute on that judgment in Cal-
ifornia. On the Court’s contextual approach, those allega-
tions suffice to state a domestic injury in this suit.
III
Petitioners argue that a contextual approach is incon-
sistent with certain common-law principles, which instead
favor their bright-line rule. According to petitioners, be-
cause Smagin has alleged an “economic injury” or an “injury
in intangible property,” Brief in Opposition 15–16, courts
should look to common-law principles governing “the situs”
of such injuries, when determining whether those injuries
are foreign or domestic. Specifically, as to economic inju-
ries, petitioners point to the Restatement (First) of Conflict
of Laws §377 (1934), from which they discern the principle
that “a fraud plaintiff suffers an economic loss at the plain-
tiff ’s domicile.” Brief for Petitioners 36; see also Sack v.
Low, 478 F. 2d 360, 366 (CA2 1973) (Under the First Re-
statement, “loss from fraud is deemed to be suffered where
12 YEGIAZARYAN v. SMAGIN
Opinion of the Court
its economic impact is felt, normally the plaintiff ’s resi-
dence”). As to intangible injuries, petitioners further rely
on the principle of mobilia sequuntur personam, which they
claim “generally locat[es] intangible property at the domi-
cile of its owner.” Brief for Petitioners 44. Both principles,
they argue, locate Smagin’s alleged injury at his residence.
Petitioners fall short, however, when explaining the rele-
vance of these principles. They do not clearly explain why
choice-of-law principles are germane here, let alone why the
First Restatement dictates those principles. 4 Meanwhile, it
is far from clear that petitioners’ gloss on the principle of
mobilia sequuntur personam was as well established or as
wide sweeping as petitioners take it to be, in light of the
many twists and turns in the doctrine across a range of con-
texts. See A. Simowitz, Siting Intangibles, 48 N. Y. U. J.
Int’l L. & Pol. 259, 270–292 (2015). In short, at the time of
RICO’s enactment, both principles were hardly “settled . . .
at common law.” Beck v. Prupis, 529 U. S. 494, 500 (2000).
The core problem with petitioners’ approach is that it is
unmoored from the presumption against extraterritoriality.
While legal fictions regarding the situs of economic injuries
and intangible property have their justifications in other
areas of law, those justifications do not necessarily trans-
late to the presumption against extraterritoriality, with its
distinctive concerns for comity and discerning congres-
sional meaning.
——————
4 Although the First Restatement was in effect in 1970, when RICO
was enacted, numerous jurisdictions had by then moved away from the
First Restatement’s methodology and toward a “ ‘most significant rela-
tionship’ ” test, which resembles “the kind of ‘multi-factor’ analysis the
Court of Appeals conducted here.” Brief for George A. Bermann as Ami-
cus Curiae 15. This shift was reflected in §145 of the Restatement (Sec-
ond) of Conflict of Laws, which superseded the First Restatement the
following year in 1971. Thus, even assuming choice-of-law principles are
relevant, petitioners’ identification and application of those principles is
questionable.
Cite as: 599 U. S. ____ (2023) 13
Opinion of the Court
Indeed, it is because petitioners’ view invokes these fic-
tions that it generates results so counter to comity and so
far afield from any reasonable interpretation of what qual-
ifies as a domestic application of §1964(c). On petitioners’
primary view, a business owner who resides abroad but
owns a brick-and-mortar business in the United States can-
not bring a §1964(c) suit even if an American RICO organi-
zation burns down her storefront. Perhaps aware of how
odd this seems, petitioners offer a fallback rule for intangi-
ble property. That rule fares no better. It provides that if
racketeering activity targets the intangible business inter-
ests of two U. S. businesses, one owned by a U. S. resident
and one owned by someone living abroad, only the former
business owner can bring a §1964(c) suit. There is no evi-
dence Congress intended to impose such a double standard,
especially because doing so runs its own risks of generating
international discord. These implausible consequences are
strong evidence that petitioners have gone astray in as-
sessing the focus of §1964(c) and, thus, the meaning of “do-
mestic injury” as contemplated by RJR Nabisco.
Finally, petitioners, as well as the dissent, post, at 5
(opinion of ALITO, J.), argue that a contextual approach is
unworkable because it does not provide a bright-line rule.
Reply Brief 17–18. An approach is not unworkable, how-
ever, merely because it directs courts to consider the case-
specific circumstances surrounding an injury when as-
sessing where it arises. While “the ease with which [peti-
tioners’] bright-line rule can be applied gives it some sur-
face appeal,” Humphrey, 905 F. 3d, at 709, a look beneath
the surface quickly reveals that the test is inconsistent with
RJR Nabisco, the presumption against extraterritoriality,
and the thrust of §1964(c) itself. Concerns about a fact-in-
tensive test cannot displace congressional policy choices,
where a more nuanced test is true to the statute’s meaning.
14 YEGIAZARYAN v. SMAGIN
Opinion of the Court
* * *
A plaintiff has alleged a domestic injury for purposes of
§1964(c) when the circumstances surrounding the injury in-
dicate it arose in the United States. Smagin alleges that he
was injured in California because his ability to enforce a
California judgment in California against a California resi-
dent was impaired by racketeering activity that largely oc-
curred in or was directed from and targeted at California.
Those allegations state a domestic injury. The judgment of
the Ninth Circuit is affirmed, and the cases are remanded
for further proceedings consistent with this opinion.
It is so ordered.
Cite as: 599 U. S. ____ (2023) 1
ALITO, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
Nos. 22–381 and 22–383
_________________
ASHOT YEGIAZARYAN, AKA ASHOT EGIAZARYAN,
PETITIONER
22–381 v.
VITALY IVANOVICH SMAGIN, ET AL.
CMB MONACO, FKA COMPAGNIE MONEGASQUE DE
BANQUE, PETITIONER
22–383 v.
VITALY IVANOVICH SMAGIN, ET AL.
ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 22, 2023]
JUSTICE ALITO, with whom JUSTICE THOMAS joins, and
with whom JUSTICE GORSUCH joins as to Part I, dissenting.
These are the first cases in which we have been required
to decide when injury to intangible property that a civil
plaintiff attributes to a violation of the Racketeer Influ-
enced and Corrupt Organizations Act (RICO) qualifies as a
“domestic injury” and may therefore provide the basis for
recovery under 18 U. S. C. §1964(c). See RJR Nabisco, Inc.
v. European Community, 579 U. S. 325, 346–354 (2016).
This question has divided the lower courts, but the Court’s
decision resolves very little. It holds only that ascertaining
the site of intangible injuries for purposes of civil RICO re-
quires a court to consult a variety of factors and that two
factors it identifies show that respondent has suffered a do-
mestic injury. This analysis offers virtually no guidance to
lower courts, and it risks sowing confusion in our extrater-
ritoriality precedents. Rather than take this unhelpful
2 YEGIAZARYAN v. SMAGIN
ALITO, J., dissenting
step, I would dismiss the writ of certiorari as improvidently
granted.
I
We granted certiorari “to resolve [a] Circuit split” be-
tween, on the one hand, the Third and Ninth Circuits,
which embrace a totality-based inquiry like the one the
Court adopts here, and, on the other hand, the Seventh Cir-
cuit, which has held that RICO injuries to intangible prop-
erty are sited at the plaintiff ’s residence. Ante, at 5; com-
pare Humphrey v. GlaxoSmithKline PLC, 905 F. 3d 694,
706–707 (CA3 2018), and 37 F. 4th 562, 567–568 (CA9
2022) (case below), with Armada (Sing.) PTE Ltd. v. Amcol
Int’l Corp., 885 F. 3d 1090, 1094–1095 (CA7 2018).* The
Seventh Circuit’s decision, however, contains little analysis
and simply declares that “[i]t is well understood that a
party experiences or sustains injuries to its intangible prop-
erty at its residence.” Id., at 1094; see also Czyzewski v.
Jevic Holding Corp., 580 U. S. 451, 471 (2017) (THOMAS, J.,
dissenting) (referring to a dearth of “reasoned opinions . . .
from the courts of appeals” regarding “a novel and im-
portant question”). The Third and Ninth Circuits, for their
parts, did not coalesce around any common set of factors to
guide the civil RICO domestic-injury inquiry for intangible-
property claims. See Humphrey, 905 F. 3d, at 706–707; 37
F. 4th, at 567–568. And no court of appeals has even
broached the possibility that different categorical rules
might be available for different types of intangible property
(e.g., perhaps there could be a rule that injuries to trade-
mark rights should be sited in the country that provided the
trademark). “[W]e would greatly benefit from the views of
——————
*The Second Circuit has adopted a bright-line rule that RICO injuries
to tangible property are sited at the location of the property. Bascuñán
v. Elsaca, 874 F. 3d 806, 818–824 (2017). The Second Circuit’s holding
is not implicated in this split, nor did that court offer any analysis of
intangible property relevant to these cases.
Cite as: 599 U. S. ____ (2023) 3
ALITO, J., dissenting
additional courts of appeals on this question.” Czyzewski,
580 U. S., at 472 (THOMAS, J., dissenting).
Bringing clarity to this area of the law is not an easy task,
and I must conclude that the Court falls short. It cites pe-
titioners’ domestic racketeering conduct and the California
rights conferred by the California judgment Smagin has ob-
tained to enforce his London arbitral award, but it gives no
indication of the relative import of each of these factors.
Ante, at 10–11. And while the Court appears to envision a
long list of factors that might be relevant to this inquiry,
see ante, at 10, it mentions none other than these two. Nor
does it say anything about the circumstances that would
call for consideration of additional factors, when such fac-
tors might outweigh one or both of the ones it mentions, or
what these other factors might be.
Of course, under the majority’s all-factors-considered ap-
proach, many other features of this very suit could be rele-
vant, such as the history and location of the underlying dis-
pute, where any relevant business relationships were
formed, Smagin’s residence, and the existence of the Lon-
don arbitral award. Are future courts to infer that these
matters have no import? It is difficult to come to any other
conclusion given that the Court pays them no heed in un-
dertaking what is ostensibly an examination of all relevant
“contex[t].” Ante, at 8–10. But it is equally difficult to see
why they are irrelevant (especially in light of the Court’s
unexplored acknowledgment that “in some sense, . . .
Smagin has felt his economic injury in Russia,” ante, at 10),
or what room the Court is leaving for additional factors to
be identified if none of these counts. And because the Court
sets aside the factors that would favor petitioners, it also
provides no guidance on how to weigh competing consider-
ations that do not all point toward the same result.
One might additionally think that the nature of the in-
tangible property itself could be relevant under the major-
ity’s approach, such as whether the property is a debt, a
4 YEGIAZARYAN v. SMAGIN
ALITO, J., dissenting
stock, a trademark, etc. In these cases, however, the rela-
tionship between the California judgment Smagin has ob-
tained and the underlying arbitral award that that judg-
ment confirmed is uncertain, so the precise property at
issue is another aspect of this suit that is shrouded in con-
fusion. Smagin acknowledged at oral argument that even
though he has obtained multiple judgments confirming the
arbitral award, he can collect on only one. See Tr. of Oral
Arg. 49. There is thus at least some relevant relationship
between the California judgment and the London arbitral
award—the latter of which is not “domestic” in any way—
but the Court does not address this point, either.
Even with respect to the two factors it focuses on, the
Court engenders confusion. It offers no hint which of the
two might be more important (should they point in different
directions), whether either or both are necessary, or
whether either is sufficient. And the Court acknowledges
that there was also substantial foreign conduct in these
cases, but writes that off because it was “ ‘initiated in and
directed towards’ ” the United States. Ante, at 10. Once
more, I am unsure of the origin or scope of this rule. If do-
mestic conduct is “initiated in” a foreign nation, does that
make it foreign? What exactly does it mean to direct con-
duct “towards” the United States? All in all, were I a lower-
court judge, I would struggle to apply today’s decision to
any set of facts other than the precise combination present
here. In my view, it is not worth our deciding a case when
we provoke so many more questions than we provide an-
swers. That is especially so now that the lower courts must
additionally decide whether and how today’s cryptic deci-
sion binds them, rather than continuing to think through
unencumbered when intangible-property injuries are the
basis of a domestic application of civil RICO.
II
It is not just that we are contributing little by deciding
Cite as: 599 U. S. ____ (2023) 5
ALITO, J., dissenting
these cases, however; we are also risking significant harm,
particularly to the uniformity of our case law. A thrust of
our international-comity jurisprudence is that we should
not lightly give foreign plaintiffs access to U. S. remedial
schemes that are far more generous than those available in
their home nations. See RJR Nabisco, 579 U. S., at 347–
348; F. Hoffmann-La Roche Ltd v. Empagran S. A., 542
U. S. 155, 166–167 (2004). In light of RICO’s unusually
plaintiff-friendly remedies, that concern applies in spades
here. See RJR Nabisco, 579 U. S., at 348. But in today’s
decision, the Court countenances that the plaintiff ’s resi-
dence may play no role at all in the civil RICO extraterrito-
riality inquiry. The Court justifies this result with the as-
sertion that favoring U. S. plaintiffs’ access to American
courts over that of foreign plaintiffs “runs its own risks of
generating international discord,” ante, at 13, a concern
that the Court directly rejected in RJR Nabisco, see 579
U. S., at 361 (Ginsburg, J., dissenting in relevant part).
Additionally, we have placed a premium on workability
in our extraterritorial-application cases. The Court
acknowledges that a bright-line rule would be preferable
here, but essentially shrugs: RICO is too “nuanced” for that.
Ante, at 10, 13. Our cases do not let us off the hook so easily.
Compare Morrison v. National Australia Bank Ltd., 561
U. S. 247, 258–259 (2010) (“There is no more damning in-
dictment of the [Second Circuit’s] ‘conduct’ and ‘effects’
tests than the Second Circuit’s own declaration that ‘the
presence or absence of any single factor which was consid-
ered significant in other cases . . . is not necessarily dispos-
itive in future cases’ ”), with ante, at 10 (“[N]o set of factors
can capture the relevant considerations for all cases”).
Perhaps there is a reason why RICO justifies these de-
partures from our customary rules, but I have no confidence
in reaching that conclusion now (let alone sub silentio).
RJR Nabisco was relatively recent, and there have been
6 YEGIAZARYAN v. SMAGIN
ALITO, J., dissenting
only a small number of court of appeals decisions imple-
menting it, and even fewer with respect to intangible prop-
erty. Moreover, unlike in our typical extraterritoriality
case, we have received no input here from the sovereign
states our rules will affect, including the U. S. Government.
RJR Nabisco, 579 U. S., at 348; Morrison, 561 U. S., at 269;
F. Hoffmann-La Roche, 542 U. S., at 167–168.
* * *
The only rule of law that the Court announces today is
that there is no rule, and despite offering such minimal
guidance regarding how to site a RICO injury, the Court
nonetheless manages to sow confusion regarding our
broader law of extraterritoriality. Respectfully, the most
we could contribute to this issue at this juncture is to stay
away from it. I would dismiss the writ of certiorari as im-
providently granted.