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New Jersey Section 2C:41-4 – Civil remedies

New Jersey Section 2C:41-4 – Civil Remedies

Section 2C:41-4 of the New Jersey Code of Criminal Justice provides civil remedies for victims of racketeering activity. This section allows victims to sue for treble damages and attorneys fees when they have been injured by violations of the racketeering statute (N.J.S.A. 2C:41-2).

Overview of Civil Remedies under 2C:41-4

Under 2C:41-4, any person damaged in their business or property by reason of a violation of N.J.S.A. 2C:41-2 may sue for threefold damages plus reasonable attorneys fees and costs of investigation and litigation.

To bring a civil RICO claim under 2C:41-4, the plaintiff must prove:

• The defendant engaged in racketeering activity as defined by N.J.S.A. 2C:41-1
• The racketeering activity directly damaged the plaintiff’s business or property
• The plaintiff suffered a concrete financial loss proximately caused by the racketeering activity

The racketeering activity must involve at least two incidents of racketeering conduct that have the same or similar purpose, results, participants, victims, or methods of commission. At least one of the incidents must have occurred after the effective date of the racketeering statute on June 9, 1981.

Treble Damages Provision

The most powerful remedy under 2C:41-4 is the mandatory treble damages provision. If the plaintiff proves their civil RICO claim, the court must award three times the actual damages sustained by the plaintiff.

For example, if the plaintiff proves $100,000 in actual losses from the defendant’s racketeering activity, the court would enter judgment for $300,000 in treble damages. This allows victims to recover significant damages beyond their actual losses.

The treble damages apply only to damages proximately caused by violations of the racketeering statute. Plaintiffs cannot recover treble damages for injuries caused by other related offenses.

Attorneys Fees and Costs

In addition to treble damages, successful RICO plaintiffs under 2C:41-4 can recover reasonable attorneys fees and costs of investigation and litigation. This fee-shifting provision is intended to encourage civil enforcement by defraying the costs of complex racketeering litigation.

Plaintiffs must provide adequate documentation to support the reasonableness of the attorneys fees and costs requested. The court will review the hourly rates, time spent, and total fees incurred to ensure they are appropriate.

Injunctive Relief

Section 2C:41-4 also authorizes courts to enter restraining orders, prohibitions, and other forms of injunctive relief. This allows the court to stop ongoing racketeering activities or prevent future violations.

Injunctive relief can be awarded in conjunction with or independent of money damages. Courts have broad discretion to craft injunctive remedies tailored to the specific racketeering activity at issue.

Statute of Limitations

Civil RICO claims under 2C:41-4 must be brought within five years of the plaintiff’s discovery of the injury. The clock starts running when the plaintiff knew or should have known of their injury, even if the criminal racketeering activity is still ongoing.

This statute of limitations is longer than for most civil actions in New Jersey, which generally must be filed within two years. The extended limitations period accounts for the complexity of racketeering schemes.

Burden of Proof

Plaintiffs in civil RICO cases have a relatively low burden of proof compared to criminal prosecutions. 2C:41-4 only requires proving racketeering activity by a preponderance of the evidence rather than beyond a reasonable doubt.

However, plaintiffs still face challenges meeting the full evidentiary standard given RICO’s complexity. Claimants need experienced attorneys to develop facts showing a pattern of related racketeering acts caused concrete financial loss.

Typical RICO Plaintiffs and Defendants

Civil RICO claims under 2C:41-4 have been brought by a wide range of plaintiffs in both business and consumer contexts. Typical plaintiffs include:

• Competitors injured by racketeering schemes
• Consumers defrauded by racketeering enterprises
• Whistleblowers retaliated against for reporting racketeering
• Government entities suing to recover costs from racketeering

On the defense side, civil RICO cases often involve individuals and corrupt organizations including:

• Organized crime groups
• Gangs
• Fraudulent businesses
• Corrupt public officials
• Dishonest lawyers or professionals

But 2C:41-4 can apply to any person or enterprise that engages in a pattern of racketeering activity. Civil liability is not limited to traditional organized crime.

Advantages of Civil RICO Claims

There are several key advantages that make civil RICO under 2C:41-4 an appealing option for victims:

• Treble damages – Chance to recover up to three times actual losses
• Attorneys fees – Litigation costs are covered if plaintiff prevails
• Preponderance standard – Lower burden than criminal prosecution
• Injunctive relief – Halts ongoing racketeering harm
• Longer limitations period – Five years to discover and file claim

Bringing a civil case also does not prevent law enforcement from pursuing criminal RICO charges for the same conduct. The remedies are intended to complement each other.

Limits on Civil RICO Claims

However, there are also some significant limitations on civil RICO that plaintiffs should consider:

• Complex pleading standard – Specific facts must be alleged to show racketeering pattern
• Proof challenges – Racketeering schemes involve sophisticated evidence
• Costly litigation – Extensive discovery and expert testimony often needed
• Motions to dismiss – High dismissal rate at early stages of RICO lawsuits
• Establishing damages – Harm must be concrete and directly caused by racketeering

Claimants need an experienced attorney to successfully navigate a RICO case from investigation through trial. The pitfalls of civil RICO litigation prevent many valid claims from reaching a favorable outcome.

Recent Trends and Cases

Civil RICO filings under 2C:41-4 surged in the 1980s and early 1990s as plaintiffs took advantage of the new remedies. But stricter pleading standards established by courts have caused a decline in RICO cases in recent decades.

However, 2C:41-4 remains an important tool, especially against business racketeering. Recent RICO verdicts and settlements in New Jersey have involved:

• Construction bid-rigging schemes
• Securities fraud by investment advisors
• Predatory lending and debt collection practices
• Government corruption and pay-to-play schemes
• Labor racketeering in waste hauling industry

For example, in Rumbauskas v. Cantor, a 1993 case, the New Jersey Superior Court allowed a RICO claim against an attorney alleged to have helped clients engage in real estate fraud.

And in a 2015 unpublished case, the Appellate Division upheld a $1 million RICO verdict against a chiropractic practice that defrauded insurers through excessive billing.

These and other cases illustrate that 2C:41-4 remains a viable option for victims of racketeering, despite increased pleading burdens. Experienced RICO attorneys can help claimants navigate the litigation process to hold racketeers accountable.

Conclusion

New Jersey’s civil RICO statute, 2C:41-4, provides treble damages and other remedies for victims injured by racketeering schemes involving at least two predicate acts. RICO claims allow plaintiffs to disrupt corrupt enterprises and recover significant damages beyond their actual losses. However, proper pleading and proof of a racketeering pattern are essential to succeed in complex RICO litigation. Experienced attorneys can help victims maximize their potential recovery under 2C:41-4. While challenging, RICO remains an important tool for both businesses and consumers to combat racketeering in its many forms.