Tafflin v. Levitt

by Sandra Day O'Connor

United States Supreme Court

493 U.S. 455

Tafflin  v.  Levitt

No. 88-1650  Argued: Nov. 27, 1989. --- Decided: Jan 22, 1990

Leave to File Second Petition for rehearing denied April 23, 1990.

     See 495 U.S. 915, 110 S.Ct. 1942.
     

Syllabus

Petitioners, nonresidents of Maryland who are holders of unpaid certificates of deposit issued by a failed Maryland savings and loan association, filed a civil action in the Federal District Court against respondents, former association officers and directors and others, alleging claims under, inter alia, the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968. The court dismissed the action, concluding, among other things, that federal abstention was appropriate as to the civil RICO claims, which had been raised in pending litigation in state court, since state courts have concurrent jurisdiction over such claims. The Court of Appeals affirmed.

Held:

State courts have concurrent jurisdiction over civil RICO claims. The presumption in favor of such jurisdiction has not been rebutted by any of the factors identified in Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 478, 101 S.Ct. 2870, 2875, 69 L.Ed.2d 784. Pp. 458-467.

(a) As petitioners concede, there is nothing in RICO's explicit language to suggest that Congress has, by affirmative enactment, divested state courts of civil RICO jurisdiction. To the contrary, § 1964(c)'s grant of federal jurisdiction over civil RICO claims is plainly permissive and thus does not operate to oust state courts from concurrent jurisdiction. Pp. 460-461.

(b) RICO's legislative history reveals no evidence that Congress even considered the question of concurrent jurisdiction, much less any suggestion that Congress affirmatively intended to confer exclusive jurisdiction over civil RICO claims on the federal courts. Petitioners' argument that, because Congress modeled § 1964(c) after § 4 of the Clayton Act-which confers exclusive jurisdiction on the federal courts-it intended, by implication, to grant exclusive federal jurisdiction over § 1964(c) claims is rejected. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 105 S.Ct. 3275, 87 L.Ed.2d 346, and Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121, are distinguished, since those cases looked to the Clayton Act in interpreting RICO without the benefit of a background juridical presumption of the type presented here. Pp. 461-463.

(c) No "clear incompatibility" exists between state court jurisdiction and federal interests. The interest in uniform interpretation of federal criminal laws, see 18 U.S.C. § 3231, is not inconsistent with such jurisdiction merely because state courts would be required to construe the federal crimes that constitute RICO predicate acts. Section 1964(c) claims are not "offenses against the laws of the United States," § 3231, and do not result in the imposition of criminal sanctions. There is also no significant danger of inconsistent application of federal criminal law, since federal courts would not be bound by state court interpretations of predicate acts, since state courts would be guided by federal court interpretations of federal criminal law, and since any state court judgments misinterpreting federal criminal law would be subject to direct review by this Court. Moreover, state courts have the ability to handle the complexities of civil RICO actions. Many cases involve asserted violations of state law, over which state courts presumably have greater expertise, and it would seem anomalous to rule that they are incompetent to adjudicate civil RICO claims when such claims are subject to adjudication by arbitration, see Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 239, 107 S.Ct. 2332, 2344, 96 L.Ed.2d 185. Further, although the fact that RICO's procedural mechanisms are applicable only in federal court may tend to suggest that Congress intended exclusive federal jurisdiction, it does not by itself suffice to create a "clear incompatibility" with federal interests. And, to the extent that Congress intended RICO to serve broad remedial purposes, concurrent jurisdiction will advance rather than jeopardize federal policies underlying the statute. Pp. 464-467.

865 F.2d 595 (CA4 1989), affirmed.

O'CONNOR, J., delivered the opinion for a unanimous Court. WHITE, J., filed a concurring opinion, post, p. 467. SCALIA, J., filed a concurring opinion, in which KENNEDY, J., joined, post, p. 469.

M. Norman Goldberger, Philadelphia, Pa., for petitioners.

Andrew H. Marks, Washington, D.C., for respondents.

Justice O'CONNOR delivered the opinion of the Court.

Notes