Court Opinion

ID: 8972290
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:42:39.037986+00
Date Added: 2024-06-11T17:10:28.812512
License: Public Domain

SLOVITER, Circuit Judge,
dissenting in part, concurring in part, and concurring in judgment.
I concur in Parts I, II-A, II-B, II-D, and III of the majority opinion. Although I believe the issue is close and the majority’s position is supported by respectable authority, I believe that federal courts have exclusive jurisdiction over civil claims under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1964 (1982 & Supp. V 1987). Therefore, I dissent from Part II-C of the majority opinion and would hold that the dismissal with prejudice of plaintiffs’ prior suit in state court does not bar assertion of the federal RICO claims. I would, however, find plaintiffs’ RICO claims to be barred by the applicable statute of limitations period and therefore concur in the judgment of the majority affirming the district court’s dismissal of the complaint.
I.
Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 478, 101 S.Ct. 2870, 2875, 69 L.Ed.2d 784 (1981), instructs courts to begin the inquiry as to whether concurrent state and federal jurisdiction exists over a federal law claim “with the presumption that state courts enjoy concurrent jurisdic*206tion.”1 The presumption of concurrent jurisdiction may be rebutted in any of three ways: “by an explicit statutory directive, by unmistakable implication from legislative history, or by a clear incompatibility between state-court jurisdiction and federal interests.” Id.
Gulf Offshore explains, “Congress ... may confine jurisdiction to the federal courts either explicitly or implicitly.” Id. 453 U.S. at 478, 101 S.Ct. at 2875 (emphasis added). An examination of the legislative history of RICO leads me to conclude that Congress implicitly confined jurisdiction over civil RICO to the federal courts, a conclusion supported by the incompatibility between state court jurisdiction and several important federal interests at stake.
Looking first to the statutory language, it appears that the jurisdictional provision of civil RICO does not explicitly provide for exclusive jurisdiction in the federal courts. The relevant section reads:
Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.
18 U.S.C. § 1964(c) (1982). While the section does not refer to a plaintiff filing a federal RICO suit in state court, analogous language providing that a plaintiff may sue “in any district court of the United States” has been interpreted to allow concurrent jurisdiction in the context of other federal laws. See Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962) (state and federal courts have concurrent jurisdiction under Labor Management Relations Act); see also Gulf Offshore, 453 U.S. at 478-79, 101 S.Ct. at 2875-76 (concurrent jurisdiction over Outer Continental Shelf Lands Act).
However, in the case of RICO section 1964(c), the language was taken from the Clayton Act,2 which had been consistently interpreted as providing for exclusive federal jurisdiction over antitrust claims. See, e.g., Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 379-80, 105 S.Ct. 1327, 1331-32, 84 L.Ed.2d 274 (1985); General Inv. Co. v. Lake Shore & M.S. Ry., 260 U.S. 261, 287, 43 S.Ct. 106, 117, 67 L.Ed. 244 (1922).
Therefore, we must examine whether the explicit borrowing of language from a statute granting exclusive jurisdiction to the federal courts provides the requisite “unmistakable implication” in the legislative history of RICO to rebut the presumption of concurrent jurisdiction.
II.
The fact that Congress modeled the enforcement procedures of civil RICO closely after those of the Clayton Act is unmistakably clear in the legislative history of RICO. See Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 107 S.Ct. 2759, 2764, 97 L.Ed.2d 121 (1987) (“The ‘clearest current’ in the legislative history of RICO ‘is the reliance on the Clayton Act model.’ ”) (quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 489, 105 S.Ct. 3275, 3281, 87 L.Ed.2d 346 (1985)). RICO represented Congress’ effort to adapt the “time tested machinery of the antitrust laws” to the problem of organized crime. See Agen*207cy Holding Corp., 107 S.Ct. at 2764 (quoting from Report of American Bar Association’s Antitrust Section, reprinted at 115 Cong.Ree. 6994, 6995 (1969)). The influential ABA Report presented to Congress during hearings on the development of an anti-racketeering statute proposed that the Clayton Act’s provisions authorizing treble damage suits by private parties for antitrust violations be incorporated in an independent statute aimed at combatting organized crime. See 115 Cong.Ree. at 6995. This suggestion immediately won support in Congress and the final version of the statute enacted into law contained precisely such a provision in the form of 18 U.S.C. § 1964(c).
Prof. G. Robert Blakey, principal architect of RICO in his then-position as chief counsel of the Senate Subcommittee on Criminal Laws and Procedures, is reported to have stated that Congress never focused its attention on the question of whether jurisdiction over civil RICO should be exclusively federal or concurrent with state courts, but that “ ‘courts can infer from the statute that if Congress had thought about it, they would have made [jurisdiction] exclusive ... [since] the antitrust law is an exclusive-jurisdiction statute.’ ” Flaherty, Two States Lay Claim to RICO, Nat’l L.J., May 7, 1984, at 3, col. 1, quoted in Greenview Trading Co. v. Hershman & Leicher, 108 A.D.2d 468, 470, 489 N.Y.S.2d 502, 505 (1985).
In Agency Holding Corp., the Supreme Court found the “clear legislative intent to pattern RICO’s civil enforcement provision on the Clayton Act” to “strongly counsel[ ] in favor” of applying the statute of limitations period specified in the Clayton Act to civil RICO claims despite the lack of an express intent by Congress to so incorporate the Clayton Act’s statute of limitations provision. 107 S.Ct. at 2765. The same reasoning counsels applying the interpretation of the Clayton Act giving federal courts exclusive jurisdiction to the interpretation of the similar language in civil RICO. Because there is no indication that Congress intended any change in this respect, the language should be given the same effect as it had in the prior statute. See, e.g., Albemarle Paper Co. v. Moody, 422 U.S. 405, 419-20 & n. 19, 95 S.Ct. 2362, 2374-75 & n. 19, 45 L.Ed.2d 280 (1975) (where Congress modeled backpay provision of Title VII on that of National Labor Relations Act (NLRA), Court would assume that Congress was aware of judicial interpretation given NLRA provision and would give same interpretation to Title VII).
The Court’s reliance on the Clayton Act in interpreting RICO has not been limited to the statute of limitations context. In its earlier decision in Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985), the Court looked to the Clayton Act to interpret the term “violation” in section 1964(c). It rejected the argument that plaintiffs in a civil RICO suit must demonstrate that defendants had been convicted of the predicate offenses alleged, noting that the Clayton Act, upon which RICO was based, did not require prior conviction in a government prosecution as a prerequisite for bringing a civil suit. Id. at 489, 105 S.Ct. at 3281. The Court stated that changes in the relevant language of the Clayton Act made by the drafters of the civil RICO provision did not manifest a difference in congressional intent where the Congressman who proposed the wording “nowhere indicated a desire to depart from the antitrust model.” Id. at n. 8.
We recognize that the Sedima Court refused to impose a requirement that civil RICO plaintiffs prove a distinct “racketeering injury,” even though plaintiffs under the Clayton Act are required to show an “antitrust injury.” Id. at 495-99, 105 S.Ct. at 3284-87. The Court explained that to interpret RICO otherwise would “create[] exactly the problems Congress sought to avoid by placing RICO outside the antitrust laws.” Id. at 499, 105 S.Ct. at 3286. Sedi-ma thus suggests that interpretation of RICO by way of reference to the Clayton Act is not appropriate where the two statutes differ with respect to their underlying goals, but is appropriate and efficacious where there is no indication that Congress had any intent other than to incorporate *208the civil enforcement provisions of the Clayton Act without modification. The grant of original jurisdiction in the federal district courts appears to involve precisely such wholesale borrowing from the Clayton Act, and I would therefore interpret the identical words of the two acts as possessing the same meaning.
III.
With respect to the third of the factors enumerated in Gulf Offshore which may rebut the presumption against exclusive federal jurisdiction over a federal law, i.e., incompatibility of state court jurisdiction and federal interests, the Gulf Offshore Court listed several potential sources of such incompatibility, including “the desirability of uniform interpretation, the expertise of federal judges in federal law, and the assumed greater hospitality of federal courts to peculiarly federal claims.” 453 U.S. at 483-84, 101 S.Ct. at 2878 (footnote omitted). Examination of each of these factors enforces my conclusion that jurisdiction over civil RICO should be exclusively federal.
The first factor strongly counseling in favor of exclusive federal jurisdiction is the desirability of uniform construction of this federal statute whose wide-ranging applicability and open-ended terminology have repeatedly taxed the interpretative powers of the courts. See Sedima, 473 U.S. at 500, 105 S.Ct. at 3287 (invalidating Second Circuit’s attempt to read certain narrowing constructions into the provisions of civil RICO but expressing sympathy with that court’s “doubts” as to the direction in which interpretation of the statute has evolved). Imposition of jurisdiction over civil RICO claims on the state courts will only compound the problem of burgeoning and inconsistent interpretations of the statute.
The “expertise of federal judges in federal law, and the assumed greater hospitality of federal courts to peculiarly federal claims,” Gulf Offshore, 453 U.S. at 484, 101 S.Ct. at 2878, also counsels in favor of vesting jurisdiction over civil RICO exclusively in the federal courts. Although a handful of the predicate acts defined as racketeering activity in 18 U.S.C. § 1961 are state law offenses, see 18 U.S.C. § 1961(1)(A), a much larger portion of the predicate acts are federal crimes, see id. at (B), (C) & (D), often involving “highly specialized areas” of federal law. Chivas Prods. Ltd. v. Owen, 864 F.2d 1280, 1285 (6th Cir.1988). The state courts’ experience with the large majority of the statutes constituting RICO predicate offenses will have been limited to those occasions on which issues under these statutes arose collaterally. See Hathorn v. Lovorn, 457 U.S. 255, 268, 102 S.Ct. 2421, 2429, 72 L.Ed.2d 824 (1982).
It is also significant that at least twenty-five states have passed their own anti-racketeering statutes, many of which contain provisions for private civil suits patterned after federal RICO. See, e.g., Del.Code Ann. tit. 11 § 1505(c) (1987); N.J.Stat.Ann. § 2C:41-4(c) (1982); see generally RICO Bus.Disputes Guide (CCH) HIT 4000-4490 (1985) (reprinting state statutes). These state statutes reflect the states’ decisions on the nature and extent of the resources of their judicial systems which they wish to devote to anti-racketeering measures in much the same way that states have legislated in the fields of securities and antitrust regulation where they saw fit. In this situation of flourishing state experimentation in the development of anti-racketeering initiatives, it seems to me that the “diversities and conflicts” which are a beneficial aspect of our federal system and its general rule of concurrent jurisdiction, Charles Dowd, 368 U.S. at 514, 82 S.Ct. at 526, are best promoted by leaving the state courts free to focus on the interpretation and application of their own anti-racketeering laws and confining jurisdiction over the federal statute to the federal courts in keeping with the clear implications in RICO’s legislative history.
Because I agree with the majority that Pennsylvania, like almost all states, would not bar a party from asserting in a subsequent suit those claims which could not have been entertained by a court in hearing a prior suit because it lacked subject mat*209ter jurisdiction over such claims, I would hold that plaintiffs’ subsequent assertion of their federal RICO claims in their federal court suit was not barred by res judica-ta principles.
IV.
I concur in the judgment, however, because under the applicable statute of limitations period, see Agency Holding Corp., 107 S.Ct. at 2767 (Clayton Act’s four-year statute of limitations applies to civil RICO claims), plaintiffs’ claims under RICO, predicated on allegedly fraudulent transactions occurring in 1981, see maj. op. at 201-02, are time-barred. Cf. maj. op. at 205 (plaintiffs’ state securities law claims time barred under applicable four-year statute of limitations). I would therefore affirm the district court’s dismissal of plaintiffs’ complaint, but for different reasons than those stated in Part II-C of the majority’s opinion, from which I respectfully dissent.

. Although, as the majority notes, this court must look to the law of Pennsylvania to determine the res judicata effect of prior judgments of the courts of the Commonwealth, see Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 380-83, 105 S.Ct. 1327, 1331-33, 84 L.Ed.2d 274 (1985), this court does not owe deference to opinions of the courts of the Commonwealth in interpreting the jurisdictional provisions of a federal statute, a question that is obviously one of federal law.

. The jurisdictional provision of the Clayton Act states:
[A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.
15 U.S.C. § 15(a) (1982) (emphasis added).