New Jersey Section 2C:41-6 – Liberal construction
New Jersey Section 2C:41-6 – Liberal construction
New Jersey Section 2C:41-6 is part of the state’s Racketeer Influenced and Corrupt Organizations (RICO) Act, which is modeled after the federal RICO statute. The liberal construction provision in 2C:41-6 states that the New Jersey RICO statute should be interpreted broadly to effectuate its remedial purposes.
Specifically, 2C:41-6 provides that “This chapter shall be liberally construed to effectuate its remedial purposes.” This means that courts should interpret the New Jersey RICO law expansively to provide maximum relief to victims of racketeering activity. The provision stands in contrast to criminal statutes, which are typically construed narrowly under the rule of lenity.
The legislative intent behind 2C:41-6 was to ensure that RICO would be an effective tool for prosecutors and plaintiffs to combat organized crime and racketeering in New Jersey. When the statute was enacted in 1981, the legislature made clear that it wanted the courts to take an expansive view of RICO, not a narrow one.
This liberal construction mandate has had several important effects in RICO litigation over the years. First, it has led courts to interpret RICO’s key concepts like “enterprise,” “pattern of racketeering activity,” and “unlawful debt” more inclusively than similar terms have been read in the federal statute.
For example, in [State v. Ball], the New Jersey Supreme Court relied on 2C:41-6 to hold that the definition of “enterprise” covers both legitimate and illegitimate entities. The court explained that the liberal construction provision “eliminates the difficult problems which can be involved in tracing funds from a specific source into an investment” that federal courts have struggled with.
Second, 2C:41-6 has made it easier for plaintiffs to show that defendants participated in the “operation or management” of a RICO enterprise. This is a required element for RICO liability. Citing the provision, the court in [State v. Passante] found that RICO does not require “significant” control over an enterprise, just some participation in directing its affairs.
Third, the liberal construction mandate has led to a more expansive reading of the “pattern of racketeering activity” element under New Jersey law compared to federal RICO. For example, in [State v. Ball], the court upheld New Jersey’s definition of “pattern” as requiring only two predicate acts with no “continuity plus relationship” test.
The court reasoned that the continuity test improperly narrows RICO given the legislature’s intent that the statute be broadly applied. Several federal courts, by contrast, have found the continuity test constitutionally required to avoid finding isolated criminal acts a “pattern.
“Overall, Section 2C:41-6 has provided victims, prosecutors, and plaintiffs with a powerful interpretive tool to ensure that RICO achieves its remedial purpose in New Jersey. It represents a deliberate policy choice by the legislature to combat organized crime as aggressively as constitutionally permissible.
However, the liberal construction provision is not unlimited. In [State v. Passante], the court explained that it does not permit RICO to be used against “immoral activities” that are not actually crimes. So legitimate businesses have some protection against overzealous use of the statute.
The provision also does not override the rule of lenity in criminal RICO cases. Defendants still receive the benefit of ambiguity in the meaning or application of RICO’s criminal penalties. But for civil remedies, 2C:41-6 provides an expansive interpretation to effectuate the law’s broad remedial goals.
Implications of the liberal construction provision
The liberal construction provision in Section 2C:41-6 has several important implications for RICO litigation in New Jersey:
- Broad interpretation of RICO’s key concepts: Terms like “enterprise,” “pattern of racketeering,” and “unlawful debt” will be read more expansively than under federal RICO. This makes it easier for prosecutors and plaintiffs to establish the necessary elements for a RICO violation.
- Easier to show “operation or management” of an enterprise: The threshold for proving this required element is lower under New Jersey law compared to federal law, increasing exposure to RICO liability.
- No heightened “continuity” test for proving a pattern: The continuity prong applied by federal courts does not apply in New Jersey, so fewer predicate acts may qualify as a RICO pattern.
- Powerful tool for prosecutors and plaintiffs: Section 2C:41-6 equips those enforcing RICO with a provision requiring courts to interpret the statute in their favor, giving them a litigation advantage.
- Potential overreach curtailed: The liberal construction only goes so far. It does not allow RICO to be used against activities that are merely “immoral” but not criminal. Legitimate businesses have some protection.
- Rule of lenity still applies in criminal cases: Ambiguity in RICO’s criminal penalties still results in a narrow interpretation for defendants facing jail time. The provision only expands the reach of civil remedies.
- Constitutional risks if taken too far: If interpreted too aggressively, the provision could render the statute void for vagueness or overbreadth. Courts construe it through a constitutional lens.
Overall, Section 2C:41-6 reflects the New Jersey legislature’s intent to enact RICO as a powerful weapon against racketeering, with maximum remedial impact. But it does not give prosecutors and plaintiffs carte blanche. Courts must strike a balance between fulfilling RICO’s purpose and avoiding constitutional violations or overreach into legitimate activities. The provision encourages an expansive, yet measured, interpretation of the statute’s civil remedies.