Volume 87, Number 1

April 2012

How Does One Operate or Manage an Enterprise? Insights from Boyle v. United States

Michael Levi Thomas

The Racketeer Influenced and Corrupt Organizations Act (RICO) is an innovative criminal and civil statute drafted by Congress to combat whole criminal organizations. Section 1962(c) of RICO, its most used provision, prohibits an individual from conducting or participating in the conduct of an enterprise’s affairs through a pattern of racketeering activity. In Reves v. Ernst & Young, the Supreme Court sought to resolve a circuit split over the interpretation of this section and ultimately held that the “operation or management” test would determine liability under § 1962(c). However, the Reves Court did not fully define the operation or management test, nor have the lower courts applied it in a consistent manner. Recently, Justice Stevens, dissenting in Boyle v. United States, alleged that the Court’s interpretation of RICO’s associated-in-fact enterprise element conflicted with Reves and the operation or management test. Justice Alito, writing for the majority, denied such a conflict. This Note continues that conversation by examining whether a conflict exists between the operation or management test and the Court’s interpretation of RICO’s associated-in-fact enterprise element. Finding that a strict conception of the operation or management test does conflict with the Court’s recent interpretation of associated-in-fact enterprise in Boyle, this Note proposes a less restrictive interpretation of § 1962(c), and thus a more flexible application of the Reves operation or management test, that more consistently interacts with a broad understanding of enterprise as defined in Boyle. Simply put, this Note argues that courts can hardly require that a RICO defendant play a role in the leadership of an enterprise itself, while readily applying RICO to enterprises that have no real leadership structure.