Hemi Group, LLC v. City of New York

Hemi Group, LLC v. City of New York
Supreme Court of the United States
Decided January 25, 2010
Full case name	Hemi Group, LLC v. City of New York
Citations	559 U.S. 1 ( more )
Holding
The Racketeer Influenced and Corrupt Organizations Act cannot be used by a city to collect damages against out-of-state internet vendors who fail to pay city cigarette taxes.
Court membership
Chief Justice John Roberts Associate Justices John P. Stevens  · Antonin Scalia Anthony Kennedy  · Clarence Thomas Ruth Bader Ginsburg  · Stephen Breyer Samuel Alito  · Sonia Sotomayor
Case opinions
Majority	Roberts, joined by Scalia, Thomas, Alito; Ginsberg (in part)
Concurrence	Ginsburg (in judgment)
Dissent	Breyer, joined by Stevens, Kennedy
Sotomayor took no part in the consideration or decision of the case.
Laws applied
Racketeer Influenced and Corrupt Organizations Act

Hemi Group, LLC v. City of New York, 559 U.S. 1(2010), was a United States Supreme Court case in which the court held that the Racketeer Influenced and Corrupt Organizations Act cannot be used by a city to collect damages against out-of-state internet vendors who fail to pay city cigarette taxes. ^{[1] [2]}

Background

New York City taxes the possession of cigarettes. Hemi Group, based in New Mexico, sells cigarettes online to residents of the City. Neither state nor city law required out-of-state sellers such as Hemi to charge, collect, or remit the City's tax; instead, the City recovered its tax on out-of-state sales directly from the purchasers. However, the federal PACT Act requires out-of-state sellers to submit customer information to the states into which they ship cigarettes, and New York State agreed to forward that information to the City. That information helped the City track down cigarette purchasers who did not pay their taxes. Against that backdrop, the City filed a lawsuit under the Racketeer Influenced and Corrupt Organizations Act (RICO), alleging that Hemi's failure to file the Jenkins Act reports with the State constituted mail and wire fraud, which are defined as "racketeering activit[ies]" subject to enforcement under civil RICO. The federal District Court dismissed the claims, but the Second Circuit Court of Appeals vacated the judgment and remanded. Among other things, the Court of Appeals held that the City's asserted injury—lost tax revenue—came about "by reason of" the predicate mail and wire frauds. It accordingly determined that the City had stated a valid RICO claim. ^[1]

Opinion of the court

The Supreme Court issued an opinion on January 25, 2010. The court reversed, saying the RICO claim was not valid. ^[1]

References

1. Hemi Group, LLC v. City of New York, 559 U.S. 1 (2010).
2. Goldman, Brian (January 26, 2010). "No RICO liability for out-of-state vendors". SCOTUSblog. Retrieved December 16, 2025.

External links

• Text of Hemi Group, LLC v. City of New York, 559 U.S. 1(2010) is available from: Justia

This article incorporates written opinion of a United States federal court. As a work of the U.S. federal government, the text is in the public domain .