United States Court of Appeals

For the Eighth Circuit

___________________________

No. 18-1130

___________________________

Ritchie Capital Management, L.L.C.; Ritchie Special Credit Investments, Ltd.;

Rhone Holdings II, Ltd.; Yorkville Investment I, L.L.C.; Ritchie Capital

Management, SEZC, Ltd.

lllllllllllllllllllllPlaintiffs - Appellants

v.

JP Morgan Chase & Co.; JP Morgan Chase Bank, N.A.

lllllllllllllllllllllDefendants - Appellees

J.P. Morgan Private Bank

lllllllllllllllllllllDefendant

Wells Fargo & Co., as successor by merger to Wachovia Capital Finance (Central);

Wells Fargo Bank N.A.; Wachovia Capital Finance Corporation (Central); UBS

Loan Finance, L.L.C.; UBS AG; UBS AG Stamford Branch; Merrill Lynch

Business Financial Services, Inc.; Lasalle Business Credit, L.L.C.; Bank of America

Business Capital; Bank of America Corporation; The CIT Group Inc.; The CIT

Group/Business Credit, Inc.; PNC Bank, N.A.; Fifth Third Bank; Webster Business

Credit Corporation; Associated Commercial Finance, Inc.; Chase Lincoln First

Commercial Corporation; Richter Consulting, Inc.; J.P. Morgan Europe Ltd.

lllllllllllllllllllllDefendants - Appellees
Douglas A. Kelley, Trustee of the PCI Liquidating Trust; Randall L. Seaver, Trustee

of Petters Capital, LLC; John R. Stoebner, Trustee of Polaroid Corp, et al.

lllllllllllllllllllllIntervenors Below - Appellees

 ____________

Appeal from United States District Court 

for the District of Minnesota

 ____________

 Submitted: November 12, 2019

Filed: June 3, 2020

____________

Before SHEPHERD, GRASZ, and KOBES, Circuit Judges. 

____________

GRASZ, Circuit Judge.

The appellants — Ritchie Capital Management, L.L.C., Ritchie Special Credit

Investments, Ltd., Rhone Holdings II, Ltd., Yorkville Investment I L.L.C., and Ritchie

Capital Management, SEZC, Ltd. (collectively, the “Ritchie entities”) — sued a

collection of mostly banking institutions from which the Ritchie entities sought to

recover millions of dollars they loaned Tom Petters, a convicted fraudster, and two of

his companies. According to the Ritchie entities, the defendants helped conceal the

fraud so that they could recover millions they had tied up with Petters’s companies. 

The Ritchie lawsuit meandered through various courts before the district court

dismissed the claims as time-barred under Fed. R. Civ. P. 12(b)(6). On appeal, the

Ritchie entities launch numerous attacks on the district court’s opinion. While most fall

short, we agree that dismissing the claims brought by three Ritchie entities was

premature. We therefore reverse in part.

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I. Background

We are called once again to weigh in on a case involving the multibillion dollar

Ponzi scheme perpetrated by Tom Petters, a Minnesota businessman. See United

States v. Petters, 663 F.3d 375, 379 (8th Cir. 2011) (describing Petters’s criminal

scheme).1

 Petters owned and/or controlled numerous businesses, including Petters

Company, Inc. (“PCI”); Petters Group Worldwide, LLC (“PGW”); and Polaroid

Corporation (“Polaroid Corp.”). Id. at 379. Petters used PCI as the primary vehicle

through which he swindled investors with empty promises of buying electronics and

selling them to big-box stores at a profit. In 2008, government officials investigated

and arrested Petters. A federal jury ultimately convicted him of twenty crimes,

including wire fraud, mail fraud, and money laundering. 

In January of 2008, before Petters was arrested and his Ponzi scheme fell apart,

he sought out Thane Ritchie and solicited loans from the Ritchie entities. Between

February 1 and May 9, the Ritchie entities loaned Petters, PCI, and PGW

approximately $189 million. Most of these loans — ten loans for roughly $146 million

— were made to Petters and PGW in February 2008. Two loans totaling $31 million

were made to Petters and PCI in March 2008. And two final loans totaling $12 million

were made to Petters, PGW, and PCI in May 2008. The Ritchie entities only recovered

a small fraction of the amount loaned and claim they suffered damages in excess of

$150 million.

In this lawsuit, the Ritchie entities seek to recover their damages from various

entities, which can be separated into the following four groups: (1) JP Morgan Chase

1We have decided numerous appeals involving the Ritchie entities’ loans to

Petters. See Ritchie Capital Mgmt., LLC v. Stoebner, 779 F.3d 857, 858 (8th Cir.

2015); Ritchie Capital Mgmt., LLC v. Jeffries, 653 F.3d 755, 757 (8th Cir. 2011);

Ritchie Special Credit Invs., Ltd. v. U.S. Tr., 620 F.3d 847, 850 (8th Cir. 2010). 

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& Co. and JP Morgan Chase Bank, N.A. (collectively, “JP Morgan”); (2) JP Morgan

Europe Ltd. (“JP Morgan Europe”); (3) a collection of banks and lending institutions2

(collectively, the “Syndicate Lenders”); and (4) Richter Consulting, Inc. (“Richter

Consulting”). Greatly summarized, the Ritchie entities allege the defendants, led by

JP Morgan, were aware of Petters’s Ponzi scheme, but for their own financial benefit

wrongfully allowed and encouraged the Ritchie entities to loan money to PCI.

Although the details of the Ritchie entities’ theory of the case are not necessary

to resolve this appeal, a basic understanding of the theory is helpful. In July 2004, JP

Morgan became the indirect, majority owner of Polaroid Corp. PCI had a license

agreement that allowed it to use Polaroid’s brand name on electronic equipment. After

PCI fell behind in its royalty payments and went into default, JP Morgan purportedly

used this leverage to force PCI to purchase Polaroid Corp. In April 2005, through a

series of complex deals, PGW became the owner of Polaroid Holding Company, which

in turn owned Polaroid Corp. JP Morgan loaned $125 million to the Polaroid

companies as a term loan, and the Syndicate Lenders loaned $250 million to the

Polaroid companies as a revolving-credit agreement. JP Morgan served as the

administrative agent for the U.S.-based Syndicate Lenders and JP Morgan Europe

served in the same role for the Europe-based Syndicate Lenders. 

Pursuant to its loan agreements, the Polaroid companies were required to provide

audited financial statements to JP Morgan. Although the Polaroid companies failed to

provide such statements, JP Morgan initially did not strictly enforce the requirement. 

This changed, however, in 2007, when JP Morgan declared a default and forced

2Wells Fargo & Co.; Wells Fargo Bank, N.A.; UBS Loans Finance, L.L.C.; UBS

AG and its Stamford Branch; Merrill Lynch Business Financial Services, Inc.; LaSalle

Business Credit, L.L.C.; Bank of America Business Capital; Bank of America

Corporation; The CIT Group Inc.; The CIT Group/Business Credit, Inc.; PNC Bank

N.A.; Fifth Third Bank; Webster Business Credit Corporation; Associated Commercial

Finance, Inc.; and Chase Lincoln First Commercial.

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Polaroid Corp. and related companies to hire Richter Consulting as a consultant, which

would make reports to JP Morgan about Polaroid Corp.’s financial situation. The

Ritchie entities allege that JP Morgan definitively learned in January 2008 that Petters

was perpetrating a fraudulent-transfer scheme. Worried Petters would get caught and

become unable to repay the money owed to the Syndicate Lenders and itself, JP

Morgan demanded immediate payment. 

This allegedly caused Petters to seek out Thane Ritchie and criminally defraud

the Ritchie entities into loaning money in order to pay back JP Morgan and the

Syndicate Lenders. The Ritchie entities allege JP Morgan and Richter Consulting

enabled Petters to facilitate this fraud. For example, the Ritchie entities claim Richter

Consulting and JP Morgan knew that due diligence materials sent to the Ritchie entities

were inaccurate. The Ritchie entities also claim Petters, again with the knowledge of

JP Morgan, then laundered the proceeds of these loans through circuitous international

accounts, including JP Morgan Europe’s London branch, in order to obscure the source

of the funds. Petters thereby satisfied the debts owed to JP Morgan and the Syndicate

Lenders with the money lent by the Ritchie entities. 

After the Ponzi scheme collapsed and Petters was indicted, a number of his

companies declared bankruptcy, including Polaroid Corp., PCI, and Petters Capital,

LLC. Trustees were appointed to administer these estates (the “Trustees.”). 

In January 2014, the Ritchie entities brought suit against all of the defendants

except JP Morgan Europe in the New York Supreme Court for the County of New

York, New York.

A subset of the defendants removed the matter to the United States District Court

for the Southern District of New York. The Ritchie entities moved to remand the case

to state court, arguing the federal court lacked jurisdiction. In November 2014, the

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district court denied the Ritchie entities’ motion to remand, reasoning it had jurisdiction

under the Edge Act, 12 U.S.C. § 632, and as a civil case related to Chapter 11

bankruptcy proceeding under 28 U.S.C. § 1334(b). Recognizing that the bankruptcy

proceedings related to this action were in the District of Minnesota, the district court

transferred the case there.

The United States District Court for the District of Minnesota referred the case

to the bankruptcy court and permitted the Trustees to intervene. The Ritchie entities

eventually filed a second amended complaint, asserting twenty-two causes of action

against the various defendants, including aiding and abetting fraud, aiding and abetting

wrongful diversion of funds, aiding and abetting conversion, commercial bad faith,

aiding and abetting breach of fiduciary duties, negligence, breach of fiduciary duty,

unjust enrichment, and knowing and constructive fraudulent conveyance. 

The defendants filed motions to dismiss the second amended complaint. The 

bankruptcy court issued a report and recommendations (“R&R”), recommending

abstention regarding some claims, finding the Ritchie entities lacked standing to assert

their fraudulent transfer claims, and finding subject matter jurisdiction was lacking over

other claims. The parties objected to different aspects of the R&R. After a hearing,

the district court held all of the claims were untimely and that it lacked personal

jurisdiction over JP Morgan Europe. The Ritchie entities filed a timely notice of

appeal.

II. Analysis

On appeal, the Ritchie entities argue the district court lacked subject matter

jurisdiction and therefore its judgment must be reversed and the case dismissed and

remanded to the state court. The Ritchie entities also contend the district court was

wrong to find their claims untimely. And even if the district court was correct to decide

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the claims were untimely as pled, the Ritchie entities argue the district court should

have permitted them to again amend their complaint instead of dismissing the claims. 

They also urge us to reverse the district court’s conclusion that it lacked personal

jurisdiction over JP Morgan Europe. We address each argument in turn.

A. Subject Matter Jurisdiction

We first consider whether federal subject matter jurisdiction exists, which we

review de novo. See Cascades Dev. of Minn., LLC v. Nat’l Speciality Ins., 675 F.3d

1095, 1098 (8th Cir. 2012). If original jurisdiction was lacking at the time of removal,

then remand to state court is necessary. See id. 

The district court — at that time the United States District Court for the Southern

District of New York — found subject matter jurisdiction for two reasons. First, it

concluded jurisdiction was present under the Edge Act, 12 U.S.C. § 632, reasoning the

claims arose out of transactions involving international or foreign banking. The district

court also determined subject matter jurisdiction existed under 28 U.S.C. § 1334(b)

because the claims were related to bankruptcy jurisdiction. If the district court was

correct regarding either theory, then the Ritchie entities’ challenge to subject matter

jurisdiction fails.

 

We conclude the district court was correct in finding jurisdiction under the Edge

Act. The statute relevantly states:

[A]ll suits of a civil nature . . . to which any corporation organized under

the laws of the United States shall be a party, arising out of transactions

involving international or foreign banking, . . . or out of other international

or foreign financial operations, . . . shall be deemed to arise under the

laws of the United States, and the district courts of the United States shall

have original jurisdiction of all such suits; and any defendant in any such

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suit may, at any time before the trial thereof, remove such suits from a

State court into the district court of the United

 States for the proper district by following the procedure for the removal

of causes otherwise provided by law.

12 U.S.C. § 632.

Under the language of the statute, three elements must be met to establish

jurisdiction: (1) this must be a civil suit; (2) one of the parties to the suit must be a

corporation organized under the laws of the United States; and (3) the suit must arise

out of a transaction involving international or foreign banking (or international financial

operations). 12 U.S.C. § 632; see also Sollitt v. KeyCorp, 463 F. App’x 471, 473 (6th

Cir. 2012) (recognizing that the few courts which have interpreted the Edge Act

consistently have understood § 632 to include these three general elements).

 

Only the third element is in dispute — whether the civil suit arose out of a

transaction involving international or foreign banking. The Ritchie entities’ argument

that this element is not satisfied depends on two propositions. The first is that original

jurisdiction only exists where the suit arose from offshore banking or other foreign

financial transactions of the nationally-chartered bank that is party to the action. See

Am. Int’l Grp., Inc. v. Bank of Am. Corp., 712 F.3d 775, 784 (2d Cir. 2013)

(explaining that “in order for [the Edge Act’s] grant of federal jurisdiction and

removability to apply, the suit must have a federally chartered corporation as a party,

and the suit must arise out of an offshore banking or financial transaction of that

federally charted corporation”). The second proposition is that the Edge Act does not

confer subject matter jurisdiction over suits with only attenuated connections to

international banking. See Telecredit Serv. Ctr. v. First Nat’l Bank of the Fla. Keys,

679 F. Supp. 1101, 1103–04 (S.D. Fla. 1988) (explaining that courts have interpreted

the Edge Act “narrowly to encompass only those transactions characterized as

traditional banking activities, such as transactions involving mortgage foreclosures,

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letters of credit, letters of guaranty when the bank relied on the letter in granting a loan,

and transactions involving Federal Reserve Banks”).

Even if we accept these propositions, the Ritchie entities’ argument fails. Their

Second Amended Complaint alleges foreign banking transactions occurred involving

JP Morgan, a federally chartered bank, that are substantial and central to the Ritchie

entities’ case against JP Morgan. Straight away, in the first paragraph of their Second

Amended Complaint, the Ritchie entities alleged, “Petters sought out Thane Ritchie,

criminally defrauded him and his companies, then laundered the proceeds of the Ritchie

loans through a circuitous international chain of bank accounts, including at JP

Morgan’s London affiliate, to obscure the source of funds, and used the money to

further his frauds.” Later, in paragraphs 122 and 123, the Ritchie entities detail JP

Morgan’s dealings with Petters to structure transactions — foreign and domestic — in

violation of banking and tax-reporting obligations and ultimately to use foreign

accounts to “launder about $43 million from the proceeds of Ritchie’s loans to Petters.”

Courts continue to debate how broadly the Edge Act’s grant of federal

jurisdiction sweeps. Sollitt, 463 F. App’x at 473–74 (discussing competing views on

how broadly to interpret Edge Act jurisdiction). But whether we view Edge Act

jurisdiction restrictively or expansively, the allegations here suffice. The Ritchie

entities alleged foreign banking transactions involving JP Morgan as a core part of their

claims of wrongdoing. We therefore conclude the district court had subject matter

jurisdiction under the Edge Act, and we need not decide whether the district court also

had subject matter jurisdiction under 28 U.S.C. § 1334(b).

 

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B. Dismissal Based on the Statute of Limitations

We now turn to the district court’s dismissal of the Ritchie entities’ claims under

Fed. R. Civ. P. 12(b)(6). The district court found the claims were brought after

Illinois’s five-year statute of limitations expired. See 735 Ill. Comp. Stat. 5/13-205.

The district court began its analysis by determining New York’s choice-of-law

principles applied because the case was transferred from New York. See Ferens v.

John Deere Co., 494 U.S. 516, 523 (1990) (holding a transferee forum must “apply the

law of the transferor court, regardless of who initiates the transfer”). Consequently, the

district court applied New York’s borrowing statute, N.Y. C.P.L.R. § 202.3 The

borrowing statute applies when a nonresident sues on a cause of action that accrues

outside of New York. 2138747 Ontario, Inc. v. Samsung C & T Corp., 103 N.E.3d

774, 777 (N.Y. 2008). When implicated, the statute requires filing within the

limitations period of both the jurisdiction where the claim accrued and New York. Id.

Concluding the Ritchie entities were all non-residents and the claims accrued in Illinois,

the district court determined the relevant statute of limitations period on each claim

was, at most, five years. The district court then interpreted Illinois law to conclude all

of the claims were time barred because their injuries accrued between February and

3The statute provides: 

An action based upon a cause of action accruing without the state

cannot be commenced after the expiration of the time limited by the

laws of either the state or the place without the state where the

cause of action accrued, except that where the cause of action

accrued in favor of a resident of the state the time limited by the

laws of the state shall apply. 

N.Y. C.P.L.R. § 202. 

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May 2008, but they did not file their complaint until April 2014, outside of the five-year

time limit. 

The Ritchie entities attack nearly every step of the district court’s analysis. We

address their arguments sequentially, reviewing the dismissal de novo and recognizing

the general rule that a statute of limitations defense is only grounds for dismissal when

the defense is established by the complaint itself. See Joyce v. Armstrong Teasdale,

LLP, 635 F.3d 364, 367 (8th Cir. 2011) (providing the standard of review in reviewing

a dismissal under Rule 12(b)(6)); In re Dittmaier, 806 F.3d 987, 989 (8th Cir. 2015)

(standard of review for interpretations of state law); St. Paul Fire & Marine Ins. Co.

v. Bldg. Constr. Enters., Inc., 526 F.3d 1166, 1168 (8th Cir. 2008) (standard of review

for choice-of-law determinations); In re ADC Telecomms., Inc. Sec. Litig., 409 F.3d

974, 976 (8th Cir. 2005) (standard of review for statute-of-limitations determinations).

1. New York Choice of Law Principles

The Ritchie entities challenge the district court’s decision to use New York

choice-of-law principles. According to the Ritchie entities, because the Edge Act is the

basis for federal court subject matter jurisdiction, federal choice-of-law principles must

be used instead, and these principles dictate the choice-of-law principles from the state

which has the greatest connection to the dispute should apply. They suggest, but do

not directly argue on appeal, that Minnesota’s law should apply. 

We reject the Ritchie entities’ argument for two reasons. First, the Ritchie

entities did not directly advance this argument in their briefs before the district court. 

In fact, the only time another jurisdiction’s choice-of-law rules were mentioned to the

district court was during a hearing where counsel suggested the district court should use

the limitations statute from Minnesota, as the state with the most contacts. But counsel

never argued the district court should apply federal common law or provided any

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authority suggesting such an approach be used. Considering this record, the Ritchie

entities arguably waived their argument. See Joseph v. Allen, 712 F.3d 1222, 1226 (8th

Cir. 2013) (concluding an argument was waived when first raised on appeal).

Second, we are aware of only one circuit court decision where jurisdiction

existed under the Edge Act and a party suggested federal common law choice-of-law

principles should apply. See A.I. Trade Fin., Inc. v. Petra Int’l Banking Corp., 62 F.3d

1454, 1463–64 (D.C. Cir. 1995). There, our sister circuit rejected the argument and

required the district court to apply the local forum’s choice-of-law principles, as

opposed to federal common law choice-of-law principles, because the action was based

on substantive state law not addressed within the Edge Act. Id.; see also Loreley Fin.

(Jersey) No. 3 Ltd. v. Wells Fargo Secs., LLC, 797 F.3d 160, 170 & n.5 (2d Cir. 2015)

(applying New York choice-of-law principles in an Edge Act claim where no party

objected). We see no reason to disagree with this approach, particularly in light of the

Ritchie entities’ failure to develop this argument. We conclude that in light of this

record, the district court was correct to apply New York choice-of-law principles.

2. Residency of Ritchie Capital Management, L.L.C.

We next address whether the district court erred in concluding Ritchie Capital

Management, L.L.C., was exclusively an Illinois resident for purposes of New York’s

borrowing statute. Recall the borrowing statute is only applicable to non-resident

plaintiffs. The Ritchie entities contend Ritchie Capital Management, L.L.C., was both

a resident of Illinois and New York, and therefore the New York borrowing statute is

irrelevant.

“[T]he determination of whether a plaintiff is a New York resident, for purposes

of CPLR 202, turns on whether he has a significant connection with some locality in

the State as the result of living there for some length of time during the course of a

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year.” Antone v. Gen. Motors Corp., 473 N.E.2d 742, 746 (N.Y. 1984). But doing

business in New York at a New York office is not enough to make a company a New

York resident, at least for purposes of the borrowing statute. See Am. Lumbersmens

Mut. Cas. Co. of Ill. v. Cochrane, 129 N.Y.S.2d 489, 490–91 (N.Y. Sup. Ct. 1954)

(holding the plaintiff, which was incorporated in Illinois, was not a resident of New

York even though it legitimately did business in New York and had a New York

office). Rather a business qualifies as a resident of New York if its principal place of

business is in New York. See Woori Bank v. Merrill Lynch, 923 F. Supp. 2d 491, 495

(S.D.N.Y. 2013) (“Under the New York borrowing statute, a business’s principal place

of business constitutes the sole residency of that business entity.”); Allegaert v.

Warren, 480 F. Supp. 817, 820 (S.D.N.Y. 1979) (holding a business incorporated in

another state was a resident of New York for purposes of the borrowing statute when

its principal place of business was in New York). 

Thus, in order for Ritchie Capital Management, L.L.C, which was not organized

in New York, to be a New York resident for purposes of the borrowing statute, it must

ultimately show that its principal place of business is in New York. The Second

Amended Complaint alleges the company “is a limited liability company with dual

registration in Delaware and the Cayman Islands. At all relevant times, until 2015,

Ritchie Capital Management had offices in Illinois and New York.” These allegations

fail to show the company’s principal place of business was in New York.

 

We recognize that because the statute of limitations argument is an affirmative

defense, a plaintiff typically does not need to plead all facts necessary to prove which

state’s statute of limitations applies. See Braden v. Wal-Mart Stores, Inc., 588 F.3d

585, 601 & n.10 (8th Cir. 2009) (explaining “a plaintiff need not plead facts responsive

to an affirmative defense before it is raised”). But here, the district court was able to

fill in the gap and eliminate the possibility that Ritchie Capital Management, L.L.C.,

was a New York resident by taking judicial notice of a previous court filing where the

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company had represented that its principal office was in Illinois. See Compl. at ¶ 12,

Ritchie Capital Mgmt. L.L.C. v. Coleman, No. 12-cv-00270 (D. Minn. Feb. 2, 2012),

ECF No. 1. This was permissible. See Humphrey v. Eureka Gardens Pub. Facility

Bd., 891 F.3d 1079, 1081 (8th Cir. 2018) (explaining that when reviewing a motion to

dismiss under Rule 12(b)(6), it is permissible to consider matters of public record). 

Further, despite being aware of this statute of limitations argument, the Ritchie entities

never affirmatively asserted that the company’s principal place of business was in New

York. We therefore find no error in the district court’s conclusion that Ritchie Capital

Management, LLC, was not a New York resident for purposes of the borrowing statute,

but instead was a resident of Illinois.

3. The Cayman entities

The Ritchie entities next argue the district court erred in its conclusion that

Illinois’s statute of limitations applied to three of the plaintiffs — Ritchie Special Credit

Investments, Ltd., Rhone Holdings II, Ltd., and Ritchie Capital Management SEZC,

Ltd. (collectively, “the Cayman entities”). We agree with the Ritchie entities that this

conclusion was premature because the pleadings do not definitively establish their

claims accrued in Illinois.

“For purposes of the New York borrowing statute, a cause of action accrues

where the injury is sustained rather than where the defendant committed the wrongful

acts.” Gordon & Co. v. Ross, 63 F. Supp. 2d 405, 408 (S.D.N.Y. 1999). “When an

injury is purely economic, the place of injury for purposes of the borrowing statute is

where the economic impact of defendant’s conduct is felt, which is usually the

plaintiff’s place of residence.” Id. Under this rubric, New York courts have selected

a foreign company’s principal place of business over its place of incorporation for

determining the place of accrual for purposes of the borrowing statute. See

Interventure 77 Hudson LLC v. Falcon Real Estate Inv. Co., 101 N.Y.S.3d 326 (N.Y.

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App. Div. 2019) (explaining that “given [the] plaintiffs’ injury was purely economic,

the place of their injury for purposes of the borrowing statute is normally deemed their

residence, where the economic impact of defendants’ conduct is sustained”);

Brinckerhoff v. JAC Holding Corp., 692 N.Y.S.2d 381 (N.Y. App. Div. 1999)

(choosing as the place of accrual the state where the out-of-state company had its

principal place of business and where the monetary damages would be felt). New York

courts have found dismissal inappropriate when courts cannot determine a business’s

principal place of residency for purposes of the borrowing statute because factual

questions remain unresolved. See Oxbow Calcining USA Inc. v. Am. Indus. Partners,

948 N.Y.S.2d 24 (N.Y. App. Div. 2012) (reversing a dismissal based on the statute of

limitations because there was a factual dispute about the plaintiff’s principal place of

business at the time of the alleged breach). Contra Verizon Directories Corp. v.

Continuum Health Partners, Inc., No. 117782/05, 2009 WL 1116113 (N.Y. Sup. Ct.

April 21, 2009) (affirming dismissal based on statute of limitations where, despite

plaintiff’s assertion of New York residency, plaintiff never alleged that its principal

place of business was in New York and its allegations that it had extensive presence

and was authorized to do business in New York were insufficient to establish

residency), aff’d, 902 N.Y.S.2d 343 (N.Y. App. Div. 2010). 

The district court decided the Cayman entities’ claims accrued in Illinois because

it concluded they resided in Illinois and suffered the economic injury there. In reaching

that conclusion, the district court cited Cayman Islands Companies Law § 163, which

requires so-called “exempt companies” to predominately conduct their business outside

the Cayman Islands. So, the district court reasoned, the Cayman entities resided and

suffered their injury in Illinois, where their manager, Ritchie Capital Management,

L.L.C, was principally based. This conclusion was flawed.

The district court may have been generally correct that the Cayman entities, as

exempted companies, could not predominately carry out their business within the

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Cayman Islands. See Cayman Islands Companies Law § 163 (2018) (“Any proposed

company applying for registration under this Law, the objects of which are to be carried

out mainly outside the Islands, may apply to be registered as an exempt company.”). 

But we are aware of nothing in Cayman law that prevents a Cayman exempt company

from primarily suffering an injury’s economic impact in the Cayman Islands. A

Cayman exempt company could, for example, presumably keep its assets in the

Cayman Islands. See Cayman Islands Companies Law § 174 (2018) (“[N]othing in this

section shall be construed so as to prevent the exempted company effecting and

concluding contracts in the Islands and exercising in the Islands all of its powers

necessary for the carrying on of its business outside the Islands.”) And if that were

true, the company would plausibly have suffered its economic injury in the Cayman

Islands, making that the location where the claim accrued for purposes of New York’s

borrowing statute. And such an injury could potentially lengthen the limitations period.

 

The district court’s suspicion that the Cayman entities’ claims accrued in Illinois

may ultimately be correct. But for purposes of Rule 12(b)(6), we cannot conclude that

this was established by the pleadings or other information properly before the district

court.4 Therefore, we must reverse the dismissal of the claims brought by the Cayman

entities.

4The dissent contends we should take judicial notice that, in a federal court filing,

the Ritchie entities stated their injury occurred in Illinois. See Verified Compl. at ¶ 11,

Ritchie Captial Mgmt., L.L.C v. Jeffries, No. 09 CV 07228, 2009 WL 4074122 (N.D.

Ill. Nov. 18, 2009), ECF No. 1. This assertion was made to demonstrate venue was

proper in the Northern District of Illinois. We are unconvinced judicial notice of this

filing resolves the issue. After all, venue may be proper in multiple districts,

particularly when there are multiple plaintiffs. See Setco Ents. Corp. v. Robbins, 19

F.3d 1278, 1281 (8th Cir. 1994) (recognizing the venue analysis does not focus on the

“best” venue but whether or not the chosen district had a substantial connection to the

claim). Therefore, the fact the Ritchie entities collectively alleged they suffered injury

in Illinois does not necessarily mean the primary economic impact suffered by the

Cayman entities occurred in Illinois. 

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4. Illinois’s Statute of Limitations

Having concluded the dismissal of the Cayman entities’ claims was erroneous,

we must now consider the next step of the district court’s analysis for the remaining

plaintiffs; Ritchie Capital Management, L.L.C., and Yorkville Investment I, L.L.C. 

This requires us to review whether the district court correctly concluded that Illinois’s

five-year limitations period expired before the Ritchie entities filed their lawsuit.

The Ritchie entities commenced the underlying lawsuit against most of the

defendants on January 30, 2014. This means that in order for their claims to be timely,

they must have accrued no earlier than January 30, 2009.5 In Illinois, “[a] cause of

action ‘accrues’ when facts exist that authorize the bringing of a cause of action.” 

Khan v. Deutsche Bank AG, 978 N.E.2d 1020, 1028 (Ill. 2012). “Thus, a tort action

accrues when all its elements are present, i.e., duty, breach, and resulting injury or

damage.” Id. 

The district court determined the claims accrued when the loans took place,

between February and May 2008. And the Ritchie entities do not meaningfully attack

this determination. Instead, they argue they are entitled to application of the discovery

rule, equitable estoppel, or equitable tolling under Illinois law, which would make their

claims timely. We address each in turn, but ultimately conclude that, under Illinois law,

these doctrines are not applicable.

5The Ritchie entities do not challenge the district court’s determination that

“Illinois’s statute of limitations for tort injuries to property is five years,” 735 Ill.

Comp. Stat. 5/13-205, nor that the causes of action would not have a longer limitations

period under New York law. 

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a. Discovery Rule

The Illinois discovery rule exists “[t]o ameliorate the potentially harsh results”

that may be caused by “[a] mechanical application of the statute of limitations,”

resulting in the limitations period “expiring before a plaintiff even knows of [its] cause

of action.” Khan, 978 N.E.2d at 1028. The discovery rule works “to postpone the

start of the period of limitations until the injured party knows or reasonably should

know of the injury and knows or reasonably should know that the injury was

wrongfully caused.” Id. at 1028–29. Starting at that moment, “the burden is on the

injured person to inquire further as to the possible existence of a cause of action.” Id.

at 1029. 

“A person knows or reasonably should know an injury is ‘wrongfully caused’

when he or she possesses sufficient information concerning an injury and its cause to

put a reasonable person on inquiry to determine whether actionable conduct had

occurred.” Janousek v. Katten Muchin Rosenman LLP, 44 N.E.3d 501, 505 (Ill. App.

Ct. 2015). The plaintiff need not know or suspect who the wrongdoer actually is or

even that a cause of action exists in order to have sufficient information to be put on

inquiry. Id; accord Ritchie Capital Mgmt., L.L.C. v. Fredrickson & Byron, P.A., No.

1–4–2067, 2015 WL 1445681, at *10 (Ill. App. Ct. Mar. 27, 2015) (“Historically,

courts in Illinois have recognized that ‘the phrase wrongfully caused does not mean

knowledge of a specific defendant’s negligent conduct or knowledge of the existence

of a cause of action.’”) (quoting Castello v. Kalis, 816 N.E.2d 782, 789 (Ill. App. Ct.

2004) (cleaned up)).

The district court concluded that by the end of 2008, the Ritchie entities knew

or should have known they were injured by wrongful conduct. By that time, the district

court reasoned, the Ritchie entities knew the government had arrested Petters, and had

indicted him, PCI, and PGW. The indictment detailed the Ponzi scheme and sought

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forfeiture of assets traceable to the fraud. We agree with the district court’s

assessment. Even if the Ritchie entities did not know the various defendants were

involved in causing their injury or their exact cause of action by the end of 2008,

Illinois law says they were on notice and the burden was on them to inquire about a

possible cause of action. See Janousek, 44 N.E.3d at 505 Ritchie Capital Mgmt., 2015

WL 1445681, at *10. In other words, if they did not know, we believe they should

have known. Therefore, the Illinois discovery doctrine does not prevent the expiration

of the Ritchie entities’ claims by the end of 2013. 

b. Equitable Estoppel and Equitable Tolling

The Ritchie entities also contend their claims are timely under the doctrines of

equitable estoppel6 and equitable tolling. They argue they were unable to unravel

Petters’s fraudulent scheme because their lawsuit against Petters — in which they

intended to conduct discovery — had been stayed and enjoined. Further, the Ritchie

entities complain, JP Morgan fought discovery in other litigation to which it was not

a party through 2013, which prevented them from understanding JP Morgan’s alleged

role in the fraud. With these allegations, the Ritchie entities seek application of

equitable estoppel and equitable tolling. We hold neither is appropriate under Illinois

law.

To establish equitable estoppel under Illinois law, the Ritchie entities must

demonstrate six elements: (1) the defendants concealed or misrepresented material

facts; (2) the defendants knew the representations were untrue when they were made;

6

In their reply brief, the Ritchie entities argue this court should apply fraudulent 

concealment under 735 Ill. Comp. Stat. 5/13-215, which they maintain is similar to

equitable estoppel. Because they first mentioned this argument in their reply brief, we

do not consider it here. See United States v. Martinson, 419 F.3d 749, 753 (8th Cir.

2005). 

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(3) the Ritchie entities did not know the representations were untrue, both when the

defendants made them and when the Ritchie entities acted upon them; (4) the

defendants intended or reasonably expected the Ritchie entities to act upon the

representations; (5) the Ritchie entities reasonably relied upon the misrepresentations

in good faith and to their detriment; and (6) the Ritchie entities were prejudiced by their

reliance. See Parks v. Kownacki, 737 N.E.2d 287, 296 (Ill. 2000). “The gist of the

doctrine is that ‘one cannot justly or equitably lull his adversary into a false sense of

security, causing him to subject his claim to the bar of the statute, and then plead the

very delay caused by his course of his conduct.’” Anderson v. Holy See, 878 F. Supp.

2d 923, 935 (N.D. Ill. 2012) (quoting Beynon Bldg. Corp. v. Nat’l Guardian Life Ins.

Co., 455 N.E.2d 246, 252 (Ill. App. Ct. 1983)). 

The only specific allegation against any defendant that would potentially

implicate equitable estoppel is made against JP Morgan. According to the Ritchie

entities, JP Morgan thwarted their efforts in discovery to obtain information revealing

the defendants’ purported role in Petters’s scheme, by first not responding to a

subpoena duces tecum issued in May 2010 in a New York bankruptcy action, and later

by getting a protective order against such discovery. We fail to see how this apparently

routine discovery fight over documents lulled the Ritchie entities into a false sense of

security, causing them to delay bringing their claims. It would be one thing if JP

Morgan falsely represented to the Ritchie entities that it had turned over all relevant

documents and the Ritchie entities relied on that representation to conclude no cause

of action existed against JP Morgan. In such a scenario, all elements of equitable

estoppel may very well be met. But here, the Ritchie entities have failed to establish

that JP Morgan lulled them into delaying their lawsuit by lawfully resisting their efforts

to obtain documents through third-party discovery. We therefore agree with the district

court that the Ritchie entities have not met their burden of showing the doctrine of

equitable estoppel applies here.

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As for the doctrine of equitable tolling, Illinois law provides that the doctrine

“may be appropriate if the defendant has actively misled the plaintiff, or if the plaintiff

has been prevented from asserting his or her rights in some extraordinary way, or the

plaintiff has mistakenly asserted his or her rights in the wrong forum.” Clay v. Kuhl,

727 N.E.2d 217, 223 (Ill. 2000). However, “[w]hile equitable tolling is recognized in

Illinois, it is rarely applied.” Am. Family Mut. Ins. Co. v. Plunkett, 14 N.E.3d 676, 681

(Ill. App. Ct. 2014). The Ritchie entities have failed to point us to any Illinois case

supporting their contention that the doctrine should apply here. In fact, we are only

aware of two cases where Illinois courts have applied the doctrine. See Williams v. Bd.

of Review, 948 N.E.2d 561, 567–72 (Ill. 2011); Ralda-Sanden v. Sanden, 989 N.E.2d

1143, 1148–49 (Ill. App. Ct. 2013). Williams is not helpful to the Ritchie entities’

argument because the Illinois Supreme Court was applying federal law to determine

whether a federal statutory bar should be tolled. 948 N.E.2d at 567. The case thus

tells us nothing about Illinois law. And Ralda-Sanden involved factual circumstances

dramatically different and more extreme than those alleged by the Ritchie entities. 989

N.E.2d at 1148–49 (holding equitable tolling permitted a woman to bring a complaint

to establish the paternity of her father where her mother withheld information that the

father was alive due to threats to kill her and her family). We are thus unconvinced that

Illinois law permits us to apply this “rarely applied” doctrine here, where similarly

exceptional circumstances are lacking. 

In sum, we conclude neither equitable estoppel nor equitable tolling apply under

Illinois law.

C. Denial of Opportunity to Amend

The Ritchie entities next argue that even if they failed to state a claim under Rule

12(b)(6), the district court erred by refusing to give them opportunity to amend their

complaint. We disagree. 

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 The Ritchie entities never moved to amend their complaint, but instead simply

argued in their response to the motion to dismiss for the opportunity to amend if the

district court determined the complaint should be dismissed. We faced a similar

scenario in Glickert v. Loop Trolley Transportation Development District, 792 F.3d

876, 880 (8th Cir. 2015). 

In Glickert, certain plaintiffs opposed a motion to dismiss and asked the district

court for permission to amend should it find insufficiencies in their allegations. We

observed prior precedent holding that in order “to preserve the right to amend a

complaint a party must submit a proposed amendment along with its motion.” Id.

(quoting Wolgin v. Simon, 722 F.2d 389, 395 (8th Cir. 1983) and citing United States

v. Mask of Ka-Nefer-Nefer, 752 F.3d 737, 742 (8th Cir. 2014)). In light of this

precedent, we held in Glickert that the district court did not abuse its discretion by

failing to grant plaintiffs leave to amend their complaint because the plaintiffs “did not

submit a motion to amend or a proposed amendment, nor did they indicate what a

proposed amended pleading might have contained.” Id.

We reach the same conclusion here. The district court did not abuse its

discretion by failing to grant the Ritchie entities leave to amend their complaint yet

again because the Ritchie entities failed to submit a motion to amend or indicate what

a proposed amended pleading would have stated.

D. Alternative Grounds to Dismiss

Because we are reversing the dismissal of the claims brought by the Cayman

entities on statute of limitations grounds, we consider the defendants’ arguments on

appeal that there exists a variety of alternative reasons to dismiss the claims not ruled

upon by the district court. The defendants are correct that this court “may affirm the

district court’s judgment on any basis supported by the record.” Loftness Specialized

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Farm Equip., Inc. v. Twiestmeyer, 742 F.3d 845, 851 (8th Cir. 2014). But here we

believe it is prudent to refrain from such a fact-intensive analysis as it would be

beneficial for the district court to decide these issues involving the Cayman entities in

the first instance. See id. 

E. Personal Jurisdiction Over JP Morgan Europe

This leaves one final issue for our consideration. Recall the district court

dismissed the Ritchie entities’ claims against JP Morgan Europe because it determined

personal jurisdiction over the entity was lacking. The district court reasoned that

although it had statutory jurisdiction under New York’s long-arm statute, the Ritchie

entities failed to show the exercise of jurisdiction would comport with constitutional

due process. The Ritchie entities claim this decision was erroneous and ask us to

reverse it. 

Although we detect no error in the district court’s personal jurisdiction analysis,

we believe it is necessary to remand the issue based on the district court’s own

reasoning. When reaching its decision, the district court explained that it typically

“would stay dismissing [JP Morgan Europe] to allow the plaintiffs to conduct

jurisdictional discovery.” However, since the district court believed dismissal of the

claims against JP Morgan Europe was necessary because they were time barred, it

concluded discovery would be pointless. With the Ritchie Cayman entities’ claims

revived, the district court’s rationale for not allowing jurisdictional discovery is no

longer present.7 Therefore, we reverse the dismissal of the Ritchie Cayman entities’

claims against JP Morgan Europe in order for the district court to permit jurisdictional

7We express no opinion as to whether or not the district court was required

under the circumstances to offer plaintiffs the opportunity to conduct jurisdictional

discovery. 

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discovery if it deems necessary to determine whether it has personal jurisdiction over

JP Morgan Europe.8

III. Conclusion

For the foregoing reasons, we affirm the dismissal of the claims brought by

Ritchie Capital Management, L.L.C., and Yorkville Investment I, L.L.C. We reverse

the dismissal of the Cayman entities’ claims against all defendants, and remand for

further proceedings consistent with this opinion. 

 

SHEPHERD, Circuit Judge, concurring.

I agree with the majority’s conclusions and join in the opinion in full. However,

while I agree that the Ritchie entities waived their argument regarding the district

court’s use of New York choice-of-law principles by not raising it before the district

court, I would not be as equivocal as the majority in reaching this conclusion. One of

the fundamental limits to our review is that we may not consider arguments that the

parties did not raise before the district court, Eagle Tech. v. Expander Ams., Inc., 783

F.3d 1131, 1138 (8th Cir. 2015), as it deprives the opposing party of the opportunity

to present argument on that issue, deprives the district court of its authority to decide

issues in the first instance, and leaves us with no record upon which to examine the

argument. Although this Court departed from this rule in its recent en banc decision,

Calzone v. Summers, 942 F.3d 415, 420-21 (8th Cir. 2019) (en banc), I reiterate my

8Of course the district court may decide there exists an alternative ground to

dismiss JP Morgan Europe without permitting jurisdictional discovery. JP Morgan

Europe argues on appeal that the claims against it are time barred under any of the

possible states’ statutes of limitations since the Ritchie entities did not add JP Morgan

Europe as a party until February 2015, and there is no basis to conclude their claims

relate back to the original filing date. We offer no opinion as to the merit of this

argument. 

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view stated therein, id. at 435 (Shepherd, J., dissenting), that it is of critical importance

that we not allow parties to raise issues or present arguments not developed before the

district court. Any practice other than steadfastly holding parties to only those issues

and arguments they raised before the district court would undermine both the district

court’s authority and this Court’s role as a court of review. See Solomon v. Petray, 795

F.3d 777, 791 (8th Cir. 2015) (“We are not a court of first instance, and will not

consider arguments . . . not presented for consideration to the district court.”).

KOBES, Circuit Judge, concurring in part and dissenting in part.

I agree with the substance of the majority’s reasoning, but I would affirm the

district court on all issues and would not remand. As a result, I concur in all but Parts

II.B.3, II.D, and II.E of the opinion, and I respectfully dissent for the reasons below. 

The court reverses the district court’s finding that the Cayman entities “resided

in Illinois and suffered the economic injury there” because they could have “primarily

suffer[ed] an injury’s economic impact in the Cayman Islands” and the pleadings and

other information before the court do not establish that the claims accrued in Illinois. 

Maj. Op. 15. The majority is correct that Cayman law does not necessarily establish

that the Cayman entities resided in Illinois. The defendants, however, also argue that

the Cayman entities’ Illinois residency is “demonstrated by prior court filings”

including allegations that their “home forum” is Illinois. JP Morgan Br. 31–32 (citing

Ritchie Capital Mgmt., LLC v. Jeffries, No. 09 CV 07228, 2010 WL 768877, at *3

(N.D. Ill. Mar. 4, 2010)). I agree. 

In the Jeffries complaint, the Cayman entities (and the other Ritchie entities)

swore that Jeffries and her “co-conspirators purposely contacted Plaintiffs and

transacted business in Illinois, the contract was made in Illinois, Plaintiffs wired the

funds loaned to PGW from Illinois, and Plaintiffs’ injury occurred in Illinois.” No. 09

CV 07228, D. Ct. Dkt. 1 at ¶ 11, 2009 WL 4074122 (emphasis added). Just as we

hold that the district court properly judicially noticed Ritchie Capital Management

L.L.C.’s principal place of business, Maj. Op. 13, I would judicially notice where the
injury occurred. The Cayman entities should be held to their prior, sworn assertion that

their injuries occurred in Illinois. 

I would also not remand for jurisdictional discovery from JP Morgan Europe. 

The majority agrees with the district court that it lacked specific personal jurisdiction

over JP Morgan Europe because “none of [JP Morgan Europe’s] alleged contacts is

sufficient to allow the Court to exercise jurisdiction.” D. Ct. Dkt. 186 at 13. The court

notes that there is “no error in the district court’s personal jurisdiction analysis.” Maj.

Op. 22. This means that all four activities the Ritchie entities allege JP Morgan Europe

directed at New York, e.g., entering block agreements that swept money into a London

account, are not the kinds of activities that give rise to legally sufficient contacts—no

matter the number or frequency of those activities. Yet, the court finds that a remand

is necessary because the district court stated that it would have permitted jurisdictional

discovery had the Second Amended Complaint not been time barred. Id. at 22–23.

Even had the Ritchie entities requested jurisdictional discovery—and they did

not—I would not remand on that basis here. When claims against a defendant fail Rule

12(b)(2)’s standard, the claims do not “survive a motion to dismiss.” Dever v. Hentzen

Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004) (emphasis added). To award

jurisdictional discovery, plaintiffs need only plead allegations of jurisdiction that, if

true, would suffice to establish jurisdiction over the defendant. Universal Trading &

Inv. Co. v. Credit Suisse (Guernsey) Ltd., 560 F. App’x 52, 56 (2d Cir. 2014) (per

curiam). Without sufficient allegations, as here, the Ritchie entities can only speculate

as to what jurisdictional discovery would likely reveal, and that is not enough. See

Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 598 (8th

Cir. 2011). Jurisdictional discovery is not a tool to cure a deficient complaint.

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