CEDRIC KUSHNER PROMOTIONS, LTD. v. KING et al.

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158 OCTOBER TERM, 2000
Syllabus
CEDRIC KUSHNER PROMOTIONS, LTD. v. KING
et al.
certiorari to the united states court of appeals for
the second circuit
No. 00–549. Argued April 18, 2001—Decided June 11, 2001
Petitioner, a corporate promoter of boxing matches, sued Don King, the
president and sole shareholder of a rival corporation, alleging that King
had conducted his corporation’s affairs in violation of the Racketeer In-
fluenced and Corrupt Organizations Act (RICO), which makes it “unlaw-
ful for any person employed by or associated with any enterprise . . . to
conduct or participate . . . in the conduct of such enterprise’s affairs
through a pattern of racketeering activity,” 18 U. S. C. § 1962(c). The
District Court, citing Circuit precedent, dismissed the complaint. In
affirming, the Second Circuit expressed its view that § 1962(c) applies
only where a plaintiff shows the existence of two separate entities, a
“person” and a distinct “enterprise,” the affairs of which that “person”
improperly conducts. In this instance, the court noted, it was undis-
puted that King was an employee of his corporation and also acting
within the scope of his authority. Under the court’s analysis, King, in
a legal sense, was part of the corporation, not a “person,” distinct from
the “enterprise,” who allegedly improperly conducted the “enterprise’s
affairs.”
Held: In the circumstances of this case, § 1962(c) requires no more than
the formal legal distinction between “person” and “enterprise” (namely,
incorporation); hence, the provision applies when a corporate employee
unlawfully conducts the affairs of the corporation of which he is the sole
owner—whether he conducts those affairs within the scope, or beyond
the scope, of corporate authority. This Court does not quarrel with the
basic principle that to establish liability under § 1962(c) one must allege
and prove the existence of two distinct entities: (1) a “person”; and (2)
an “enterprise” that is not simply the same “person” referred to by a
different name. Nonetheless, the Court disagrees with the appellate
court’s application of that “distinctness” principle to the present circum-
stances, in which a corporate employee, acting within the scope of
his authority, allegedly conducts the corporation’s affairs in a RICO-
forbidden way. The corporate owner/employee, a natural person, is dis-
tinct from the corporation itself, a legally different entity with different
rights and responsibilities due to its different legal status. The Court
can find nothing in RICO that requires more “separateness” than that.

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Syllabus
Linguistically speaking, an employee who conducts his corporation’s af-
fairs through illegal acts comes within § 1962(c)’s terms forbidding any
“person” unlawfully to conduct an “enterprise,” particularly when RICO
explicitly defines “person” to include “any individual . . . capable of hold-
ing a legal or beneficial interest in property,” and defines “enterprise”
to include a “corporation,” §§ 1961(3), (4). And, linguistically speaking,
the employee and the corporation are different “persons,” even where
the employee is the corporation’s sole owner. Incorporation’s basic pur-
pose is to create a legal entity distinct from those natural individuals
who created the corporation, who own it, or whom it employs. See,
e. g., United States v. Bestfoods, 524 U. S. 51, 61–62. The precedent on
which the Second Circuit relied involved significantly different circum-
stances from those here at issue. Further, to apply RICO in these cir-
cumstances is consistent with the statute’s basic purposes of protecting
both a legitimate “enterprise” from those who would use unlawful acts
to victimize it, United States v. Turkette, 452 U. S. 576, 591, and the
public from those who would unlawfully use an “enterprise” (whether
legitimate or illegitimate) as a “vehicle” through which unlawful activity
is committed, National Organization for Women, Inc. v. Scheidler, 510
U. S. 249, 259. Conversely, the appellate court’s critical legal distinc-
tion—between employees acting within and without the scope of corpo-
rate authority—would immunize from RICO liability many of those at
whom this Court has said RICO directly aims, e. g., high-ranking indi-
viduals in an illegitimate criminal enterprise, who, seeking to further
the enterprise’s purposes, act within the scope of their authority,
cf. Turkette, supra, at 581. Finally, nothing in the statute’s history sig-
nificantly favors an alternative interpretation. This Court’s rule is no
less consistent than is the lower court’s rule with the following princi-
ples cited by King: (1) the principle that a corporation acts only through
its directors, officers, and agents; (2) the principle that a corporation
should not be liable for its employees’ criminal acts where Congress
so intends; and (3) antitrust law’s intracorporate conspiracy doctrine.
Pp. 161–166.
219 F. 3d 115, reversed and remanded.
Breyer, J., delivered the opinion for a unanimous Court.
Richard A. Edlin argued the cause for petitioner. With
him on the briefs was Ronald D. Lefton.
Austin C. Schlick argued the cause for the United States
as amicus curiae urging reversal. With him on the brief
were Acting Solicitor General Underwood, Acting Assist-

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160 CEDRIC KUSHNER PROMOTIONS, LTD. v. KING
Opinion of the Court
ant Attorney General Keeney, Deputy Solicitor General
Dreeben, Deborah Watson, and Frank J. Marine.
Peter E. Fleming, Jr., argued the cause for respondents.
With him on the brief was Michael C. Quinn.*
Justice Breyer delivered the opinion of the Court.
The Racketeer Influenced and Corrupt Organizations Act
(RICO or Act), 18 U. S. C. § 1961 et seq., makes it “unlaw-
ful for any person employed by or associated with any
enterprise . . . to conduct or participate . . . in the conduct of
such enterprise’s affairs” through the commission of two or
more statutorily defined crimes—which RICO calls “a pat-
tern of racketeering activity.” § 1962(c). The language
suggests, and lower courts have held, that this provision
foresees two separate entities, a “person” and a distinct
“enterprise.”
This case focuses upon a person who is the president and
sole shareholder of a closely held corporation. The plaintiff
claims that the president has conducted the corporation’s
affairs through the forbidden “pattern,” though for present
purposes it is conceded that, in doing so, he acted within the
scope of his authority as the corporation’s employee. In
these circumstances, are there two entities, a “person” and
a separate “enterprise”? Assuming, as we must given the
posture of this case, that the allegations in the complaint are
true, we conclude that the “person” and “enterprise” here
are distinct and that the RICO provision applies.
Petitioner, Cedric Kushner Promotions, Ltd., is a corpora-
tion that promotes boxing matches. Petitioner sued Don
King, the president and sole shareholder of Don King Pro-
ductions, a corporation, claiming that King had conducted
the boxing-related affairs of Don King Productions in part
through a RICO “pattern,” i. e., through the alleged commis-
sion of at least two instances of fraud and other RICO predi-
*Kevin P. Roddy and G. Robert Blakey filed a brief for the National
Association of Securities and Commercial Law Attorneys as amicus
curiae urging reversal.

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cate crimes. The District Court, citing Court of Appeals
precedent, dismissed the complaint. Civ. No. 98–6859, 1999
WL 771366, *3–4 (SDNY, Sept. 28, 1999). And the Court of
Appeals affirmed that dismissal. 219 F. 3d 115 (CA2 2000)
(per curiam). In the appellate court’s view, § 1962(c) applies
only where a plaintiff shows the existence of two separate
entities, a “person” and a distinct “enterprise,” the affairs of
which that “person” improperly conducts. Id., at 116. In
this instance, “it is undisputed that King was an employee”
of the corporation Don King Productions and also “acting
within the scope of his authority.” Id., at 117. Under the
Court of Appeals’ analysis, King, in a legal sense, was part
of, not separate from, the corporation. There was no “per-
son,” distinct from the “enterprise,” who improperly con-
ducted the “enterprise’s affairs.” And thus § 1962(c) did not
apply. Ibid.
Other Circuits, applying § 1962(c) in roughly similar cir-
cumstances, have reached a contrary conclusion. See, e. g.,
Brannon v. Boatmen’s First Nat. Bank of Okla., 153 F. 3d
1144, 1148, n. 4 (CA10 1998); Richmond v. Nationwide Cassel
L. P., 52 F. 3d 640, 647 (CA7 1995); Jaguar Cars, Inc. v. Royal
Oaks Motor Car Co., 46 F. 3d 258, 265, 269 (CA3 1995); Sever
v. Alaska Pulp Corp., 978 F. 2d 1529, 1534 (CA9 1992). We
granted certiorari to resolve the conflict. We now agree
with these Circuits and hold that the Second Circuit’s inter-
pretation of § 1962(c) is erroneous.
We do not quarrel with the basic principle that to establish
liability under § 1962(c) one must allege and prove the exist-
ence of two distinct entities: (1) a “person”; and (2) an “enter-
prise” that is not simply the same “person” referred to by
a different name. The statute’s language, read as ordinary
English, suggests that principle. The Act says that it
applies to “person[s]” who are “employed by or associated
with” the “enterprise.” § 1962(c). In ordinary English one
speaks of employing, being employed by, or associating with
others, not oneself. See Webster’s Third New International
Dictionary 132 (1993) (defining “associate”); id., at 743 (defin-

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ing “employ”). In addition, the Act’s purposes are consist-
ent with that principle. Whether the Act seeks to prevent
a person from victimizing, say, a small business, S. Rep.
No. 91–617, p. 77 (1969), or to prevent a person from using a
corporation for criminal purposes, National Organization
for Women, Inc. v. Scheidler, 510 U. S. 249, 259 (1994), the
person and the victim, or the person and the tool, are differ-
ent entities, not the same.
The Government reads § 1962(c) “to require some distinct-
ness between the RICO defendant and the RICO enter-
prise.” Brief for United States as Amicus Curiae 11. And
it says that this requirement is “legally sound and work-
able.” Ibid. We agree with its assessment, particularly
in light of the fact that 12 Courts of Appeals have inter-
preted the statute as embodying some such distinctness re-
quirement without creating discernible mischief in the ad-
ministration of RICO. See St. Paul Mercury Ins. Co. v.
Williamson, 224 F. 3d 425, 445 (CA5 2000); United States v.
Goldin Industries, Inc., 219 F. 3d 1268, 1270 (CA11) (en
banc), cert. denied, 531 U. S. 1102 (2000); Begala v. PNC
Bank, 214 F. 3d 776, 781 (CA6 2000), cert. denied, 531 U. S.
1145 (2001); Doyle v. Hasbro, Inc., 103 F. 3d 186, 190 (CA1
1996); Richmond, supra, at 646–647; Gasoline Sales, Inc. v.
Aero Oil Co., 39 F. 3d 70, 72–73 (CA3 1994); Confederate
Memorial Assn., Inc. v. Hines, 995 F. 2d 295, 299–300
(CADC 1993); Board of Cty. Comm’rs, San Juan Cty. v. Lib-
erty Group, 965 F. 2d 879, 885 (CA10), cert. denied, 506 U. S.
918 (1992); River City Markets, Inc. v. Fleming Foods West,
Inc., 960 F. 2d 1458, 1461 (CA9 1992); Busby v. Crown Sup-
ply, Inc., 896 F. 2d 833, 840 (CA4 1990); Atlas Pile Driving
Co. v. DiCon Financial Co., 886 F. 2d 986, 995 (CA8 1989);
Bennett v. United States Trust Co. of New York, 770 F. 2d
308, 315, and n. 2 (CA2 1985), cert. denied, 474 U. S. 1058
(1986); see also Semiconductor Energy Laboratory Co. v.
Samsung Electronics Co., 204 F. 3d 1368, 1383, n. 7 (CA Fed.
2000) (approving of distinctness requirement in dicta), cert.

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denied, 531 U. S. 1050 (2001). Indeed, this Court previously
has said that liability “depends on showing that the defend-
ants conducted or participated in the conduct of the ‘enter-
prise’s affairs,’ not just their own affairs.” Reves v. Ernst &
Young, 507 U. S. 170, 185 (1993).
While accepting the “distinctness” principle, we nonethe-
less disagree with the appellate court’s application of that
principle to the present circumstances—circumstances in
which a corporate employee, “acting within the scope of
his authority,” 219 F. 3d, at 117, allegedly conducts the cor-
poration’s affairs in a RICO-forbidden way. The corporate
owner/employee, a natural person, is distinct from the corpo-
ration itself, a legally different entity with different rights
and responsibilities due to its different legal status. And
we can find nothing in the statute that requires more “sepa-
rateness” than that. Cf. McCullough v. Suter, 757 F. 2d 142,
144 (CA7 1985) (finding either formal or practical separate-
ness sufficient to be distinct under § 1962(c)).
Linguistically speaking, an employee who conducts the af-
fairs of a corporation through illegal acts comes within the
terms of a statute that forbids any “person” unlawfully to
conduct an “enterprise,” particularly when the statute ex-
plicitly defines “person” to include “any individual . . . capa-
ble of holding a legal or beneficial interest in property,” and
defines “enterprise” to include a “corporation.” 18 U. S. C.
§§ 1961(3), (4). And, linguistically speaking, the employee
and the corporation are different “persons,” even where the
employee is the corporation’s sole owner. After all, incorpo-
ration’s basic purpose is to create a distinct legal entity, with
legal rights, obligations, powers, and privileges different
from those of the natural individuals who created it, who own
it, or whom it employs. See United States v. Bestfoods, 524
U. S. 51, 61–62 (1998); Burnet v. Clark, 287 U. S. 410, 415
(1932); 1 W. Fletcher, Cyclopedia of the Law of Private Cor-
porations §§ 7, 14 (rev. ed. 1999).

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We note that the Second Circuit relied on earlier Circuit
precedent for its decision. But that precedent involved
quite different circumstances which are not presented here.
This case concerns a claim that a corporate employee is the
“person” and the corporation is the “enterprise.” It is natu-
ral to speak of a corporate employee as a “person employed
by” the corporation. § 1962(c). The earlier Second Circuit
precedent concerned a claim that a corporation was the “per-
son” and the corporation, together with all its employees and
agents, were the “enterprise.” See Riverwoods Chappaqua
Corp. v. Marine Midland Bank, N. A., 30 F. 3d 339, 344
(1994) (affirming dismissal of complaint). It is less natural
to speak of a corporation as “employed by” or “associated
with” this latter oddly constructed entity. And the Second
Circuit’s other precedent also involved significantly different
allegations compared with the instant case. See Anatian
v. Coutts Bank (Switzerland) Ltd., 193 F. 3d 85, 89 (1999)
(affirming dismissal where plaintiff alleged that same bank
was both “person” and “enterprise”), cert. denied, 528 U. S.
1188 (2000); Discon, Inc. v. NYNEX Corp., 93 F. 3d 1055,
1064 (1996) (involving complaint alleging that corporate sub-
sidiaries were “persons” and subsidiaries, taken together as
parent, were “enterprise”), vacated on other grounds, 525
U. S. 128 (1998); Bennett, supra, at 315, and n. 2 (same as
Anatian). We do not here consider the merits of these
cases, and note only their distinction from the instant case.
Further, to apply the RICO statute in present circum-
stances is consistent with the statute’s basic purposes as this
Court has defined them. The Court has held that RICO
both protects a legitimate “enterprise” from those who
would use unlawful acts to victimize it, United States v. Tur-
kette, 452 U. S. 576, 591 (1981), and also protects the public
from those who would unlawfully use an “enterprise”
(whether legitimate or illegitimate) as a “vehicle” through
which “unlawful . . . activity is committed,” National
Organization for Women, Inc., supra, at 259. A corporate

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employee who conducts the corporation’s affairs through an
unlawful RICO “pattern . . . of activity,” § 1962(c), uses that
corporation as a “vehicle” whether he is, or is not, its sole
owner.
Conversely, the appellate court’s critical legal distinction—
between employees acting within the scope of corporate au-
thority and those acting outside that authority—is inconsist-
ent with a basic statutory purpose. Cf. Reves, supra, at 184
(stating that an enterprise is “ ‘operated,’ ” within § 1962(c)’s
meaning, “not just by upper management but also by lower
rung participants in the enterprise who are under the direc-
tion of upper management” (emphasis added)). It would
immunize from RICO liability many of those at whom this
Court has said RICO directly aims—e. g., high-ranking indi-
viduals in an illegitimate criminal enterprise, who, seeking
to further the purposes of that enterprise, act within the
scope of their authority. Cf. Turkette, supra, at 581 (Con-
gress “did nothing to indicate that an enterprise consisting
of a group of individuals was not covered by RICO if the
purpose of the enterprise was exclusively criminal”).
Finally, we have found nothing in the statute’s history that
significantly favors an alternative interpretation. That his-
tory not only refers frequently to the importance of under-
mining organized crime’s influence upon legitimate busi-
nesses but also refers to the need to protect the public from
those who would run “organization[s] in a manner detrimen-
tal to the public interest.” S. Rep. No. 91–617, at 82. This
latter purpose, as we have said, invites the legal principle we
endorse, namely, that in present circumstances the statute
requires no more than the formal legal distinction between
“person” and “enterprise” (namely, incorporation) that is
present here.
In reply, King argues that the lower court’s rule is consist-
ent with (1) the principle that a corporation acts only
through its directors, officers, and agents, 1 Fletcher, supra,
§ 30, (2) the principle that a corporation should not be liable

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for the criminal acts of its employees where Congress so in-
tends, Brief for Respondents 20–21, and (3) the Sherman Act
principle limiting liability under 15 U. S. C. § 1 by excluding
“from unlawful combinations or conspiracies the activities
of a single firm,” Copperweld Corp. v. Independence Tube
Corp., 467 U. S. 752, 769–770, n. 15 (1984). The alternative
that we endorse, however, is no less consistent with these
principles. It does not deny that a corporation acts through
its employees; it says only that the corporation and its em-
ployees are not legally identical. It does not assert that
ordinary respondeat superior principles make a corporation
legally liable under RICO for the criminal acts of its employ-
ees; that is a matter of congressional intent not before us.
See, e. g., Gasoline Sales, Inc., 39 F. 3d, at 73 (holding that
corporation cannot be “vicariously liable” for § 1962(c) viola-
tions committed by its vice president). Neither is it incon-
sistent with antitrust law’s intracorporate conspiracy doc-
trine; that doctrine turns on specific antitrust objectives.
See Copperweld Corp., supra, at 770–771. Rather, we hold
simply that the need for two distinct entities is satisfied;
hence, the RICO provision before us applies when a corpo-
rate employee unlawfully conducts the affairs of the corpora-
tion of which he is the sole owner—whether he conducts
those affairs within the scope, or beyond the scope, of corpo-
rate authority.
For these reasons, the Court of Appeals’ judgment is re-
versed, and the case is remanded for further proceedings
consistent with this opinion.
It is so ordered.