The US Supreme Court [official website] ruled [opinion, PDF] 4-3 Monday in RJR Nabisco, Inc. v. The European Community [SCOTUSblog materials] for RJ Reynolds [corporate website] in a challenge by EU countries accusing the company of a money laundering scheme. The court found that the Racketeer Influenced and Corrupt Organizations Act (RICO) [text] does not apply extraterritorially. Justice Samuel Alito delivered the opinion of the court, while Justice Ruth Bader Ginsburg filed an opinion concurring in part but dissenting from the judgment, joined by Justices Stephen Breyer and Elena Kagan. Breyer also filed an opinion concurring in part and dissenting from the judgment. Justice Sonia Sotomayor took no part in the case.

The European Community (EC) and 26 of its member states brought this suit claiming that Russian and Colombian organized crime rings smuggled drugs into Europe, then laundered the profits into a scheme that included the sale of RJR Nabisco cigarettes. RJR executives allegedly bribed border agents in South America and wired the cigarette payments into accounts in the US. The EC suffered injury in this scheme in the form of lost tax revenue and lost profits from state-owned tobacco businesses. The US Court of Appeals for the Second Circuit reversed [opinion, PDF] the district court’s decision to dismiss the suit. The Supreme Court granted certiorari in October and heard oral arguments [JURIST reports] in March.