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House Passes Limit on Racketeer Law

October 08, 1986|Associated Press

WASHINGTON — A bill to limit private lawsuits under the federal Racketeer Influenced and Corrupt Organizations Act was passed Tuesday by the House and sent to the Senate.

Supporters of the bill said the 16-year-old RICO law, which also has criminal provisions, has been misused by plaintiffs in commercial disputes seeking triple damages from legitimate businesses.

Under the bill, plaintiffs could recover triple damages only if the defendant in the civil suit was convicted of a RICO crime.

Victims of consumer fraud could seek punitive damages if the defendant acted in wanton disregard or if the purchaser suffered injury as a result of the transaction.

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