U.S. Appellate Court Affirms Dismissal of RICO Action by 3 Countries for Tax Claims

On August 14, 2003, the United States Court of Appeals for the Eleventh Circuit upheld a district court?s dismissal of three countries? claims of violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). The Republics of Belize, Honduras and Ecuador all alleged that a group of Philip Morris companies engaged in various schemes to avoid paying high taxes on cigarette sales, their countries? manner of deterring smoking. The appellate court agreed with the district court?s order dismissing allegations based on the common law rule, which they justified out of respect for sovereignty and the separation of powers.