Private parties, as we’ve said before, have no right of action under the FCPA. Only the Department of Justice and the Securities and Exchange Commission can enforce this law. Yet private rights of action under federal statutes aren’t that rare. They’re found in RICO, as we’ve mentioned, and most famously in the SEC’s Rule 10b-5, which outlaws fraud as part of the Securities Exchange Act of 1934. The False Claims Act brings into U.S. law qui tam suits, whereby private parties can act for the king — or in this case, for Uncle Sam. The Clayton Act creates a private right of action for antitrust enforcement, the Jones Act for injured maritime employees, the Migrant and Seasonal Agricultural Worker Protection Act for farm workers, and our favorite, the Employee Polygraph Protection Act — for everyone who wants to avoid submitting to needless lie detector tests at work. That certainly includes us and everyone we’ve ever known. And there are many more examples.
So what happened to the FCPA’s private right of action? Well, it was never there to begin with. The leading case on the subject is Lamb v. Philip Morris, Inc. (6th Cir. 1990) 915 F.2d 1024, cert. den. (1991) 498 U.S. 1086. The plaintiffs were two tobacco growers named Billy Lamb and Carmon Willis. They sued Philip Morris and B.A.T. Industries, PLC under the FCPA and U.S. antitrust laws, alleging that PM and BAT contributed to charities in Venezuela, Argentina, Brazil, Costa Rica, Mexico, and Nicaragua for the corrupt purpose of locking in price controls, all in violation of the FCPA.
But the court couldn’t find anything in the FCPA giving private parties the right to enforce the law. “The availability of a private right of action,” the court said, “apparently was never resolved (or perhaps even raised) at the conference that ultimately produced the compromise bill passed by both houses and signed into law; neither the FCPA as enacted nor the conference report mentions such a cause of action. . . . Because the conference report accompanying the final legislative compromise makes no mention of a private right of action, we infer that Congress intended no such result. ” (footnotes omitted)
Game over, at least for now. Which is why Alba the smelter — and Alba the actress, for that matter — cannot sue Alcoa under the Foreign Corrupt Practices Act. Instead, the Albas and all private litigants have to pin their hopes on RICO, or on common law fraud, or some other legal theory, even though Alcoa’s alleged behavior might fit the description of an FCPA bribery offense exactly.
Our post here sets out Lamb v. Philip Morris in full.
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