Yegiazaryan v. Smagin
The Facts
Vitaly Smagin, a Russian citizen, obtained a $93 million arbitration award in England against Russian businessman Ashot Yegiazaryan. Yegiazaryan fled to California; Smagin sought to collect the award from California assets. Smagin sued under civil RICO, alleging Yegiazaryan orchestrated a scheme to conceal and move California assets to frustrate collection. Yegiazaryan argued RICO does not reach foreign plaintiffs alleging injury abroad. The Ninth Circuit found a domestic injury based on the California asset scheme.
The Application
Applying RJR Nabisco's domestic injury standard, the Court found that Smagin's injury occurred in the United States, not abroad, because the harmful economic effect (the impairment of his property right to collect from California assets) took place through Yegiazaryan's U.S.-based scheme to conceal and move those assets. Although Smagin was a foreign plaintiff suing over a foreign arbitration award, his ability to recover from U.S. property was directly threatened by domestic conduct, making the locus of injury domestic rather than foreign. The Court rejected Yegiazaryan's argument that RICO does not apply to foreign plaintiffs alleging injury abroad, holding that citizenship and the judgment's origin are irrelevant, only the location where the plaintiff suffered the economic harm matters. This application resolved a circuit split by clarifying that foreign judgment-creditors can state civil RICO claims when U.S.-based asset-concealment schemes impair their collection rights in American property.
The Conclusion
Decided June 22, 2023. The 8-1 ruling (Sotomayor writing) held Smagin adequately alleged a domestic injury: his property right to collect from U.S. assets was impaired by a U.S.-based scheme. The decision expands civil RICO's reach for foreign judgment-creditors seeking to enforce foreign awards against U.S.-based asset-concealment schemes.
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Case Analysis
Overview
Yegiazaryan v. Smagin (2023) held 8-1 that the Racketeer Influenced and Corrupt Organizations Act (RICO) applies to foreign nationals injured abroad when their injury was felt in the United States. Specifically when the victim's property rights in U.S.-based assets were violated. The ruling resolves a circuit split on the domestic injury requirement for civil RICO claims brought by foreign plaintiffs.
Facts
Vitaly Smagin, a Russian citizen, obtained a $93 million arbitration award in England against Russian businessman Ashot Yegiazaryan. Yegiazaryan fled to California; Smagin sought to collect the award from California assets. Smagin sued under civil RICO, alleging Yegiazaryan orchestrated a scheme to conceal and move California assets to frustrate collection. Yegiazaryan argued RICO does not reach foreign plaintiffs alleging injury abroad. The Ninth Circuit found a domestic injury based on the California asset scheme.
Issue
Whether a foreign plaintiff alleging that a domestic RICO scheme caused injury to its ability to collect a judgment from U.S. assets has suffered a 'domestic injury' sufficient to state a civil RICO claim under 18 U.S.C. § 1964(c).
Rule
18 U.S.C. § 1964(c) creates a private right of action for persons 'injured in their business or property' by RICO violations. RJR Nabisco Inc. v. European Community (2016) held RICO does not apply extraterritorially and requires a domestic injury. The location of a RICO injury depends on where the plaintiff suffered the harmful economic effect, not where the scheme was orchestrated.
Analysis
Applying RJR Nabisco's domestic injury standard, the Court found that Smagin's injury occurred in the United States, not abroad, because the harmful economic effect, the impairment of his property right to collect from California assets, took place through Yegiazaryan's U.S.-based scheme to conceal and move those assets. Although Smagin was a foreign plaintiff suing over a foreign arbitration award, his ability to recover from U.S. Property was directly threatened by domestic conduct, making the locus of injury domestic rather than foreign. The Court rejected Yegiazaryan's argument that RICO does not apply to foreign plaintiffs alleging injury abroad, holding that citizenship and the judgment's origin are irrelevant. Only the location where the plaintiff suffered the economic harm matters. This application resolved a circuit split by clarifying that foreign judgment-creditors can state civil RICO claims when U.S.-based asset-concealment schemes impair their collection rights in American property.
Conclusion
**Decided June 22, 2023. The 8-1 ruling (Sotomayor writing) held Smagin adequately alleged a domestic injury. His property right to collect from U.S. Assets was impaired by a U.S.-based scheme.** The decision expands civil RICO's reach for foreign judgment-creditors seeking to enforce foreign awards against U.S.-based asset-concealment schemes.
Notes
OT2022. Added via SCOTUS bulk import 2026-05-14
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