Arbitrating RICO: Ten Years After McMahon

Wednesday, January 1st, 1997 at 12:00 am by Ronald J. Offenkrantz
Ronald J. Offenkrantz, Arbitrating RICO: Ten Years After McMahon, 1997 Colum. Bus. L. Rev. 45

This article argues that until the Supreme Court revisits McMahon and concludes, as it should, that RICO is simply not appropriate for arbitration, much ought to be done at the prenuptial stage in contract relations to prepare for, recognize, and deal with the pitfalls and problems of arbitrating complex cases such as RICO and thereby avoid, or at least minimize, the “Antarctica” syndrome either during or at the conclusion of the relationship. Considering that in today’s world RICO will often accompany a claim based on fraud or deception and can arise out of agreements containing arbitration clauses normally found in sales distributorship agreements, design/construction agreements, agency relationships, securities transactions, bills of lading, joint venture/partnership relationships, distributor/franchise agreements, and the like, where trust and confidence are reposed, both of short and long duration, neither contracting party can afford benign acceptance of a generalized referral of disputes to arbitration. It is critical to give thought to how the dispute resolution mechanism can be expected to function in a multi-million dollar RICO dispute which ultimately may have a preclusive effect on individuals — arguably non-dischargeable in bankruptcy — found to be in privity with those against whom an award is entered.

Author Information

The author is a senior litigation partner of Spitzer & Feldman, P.C.