Facts
- Nonresident holders of unpaid certificates of deposit issued by a failed Maryland savings and loan sued the institution’s former president and other officers, directors, and related parties.
- The suit asserted state-law claims and federal claims under the Securities Exchange Act of 1934 and the civil cause of action under RICO, 18 U.S.C. § 1964(c).
- Parallel litigation involving related matters was pending in Maryland state court.
Issues
- Whether state courts have concurrent jurisdiction over civil actions under RICO, 18 U.S.C. § 1964(c), or whether such jurisdiction is exclusive to federal courts.
Decision
- The Supreme Court unanimously held that state courts have concurrent jurisdiction over civil RICO claims.
- Applying the presumption favoring concurrent jurisdiction, the Court found no statutory text, legislative history, or incompatibility with federal interests sufficient to make jurisdiction exclusive in federal court.
- The Court affirmed the Fourth Circuit’s judgment.
Legal Principles
- State courts are presumed competent to adjudicate federal causes of action unless Congress rebutted that presumption by: (1) explicit statutory directive of exclusivity; (2) implicit exclusivity shown by statutory structure or legislative history; or (3) a federal right clearly incompatible with state-court jurisdiction.
- RICO’s § 1964(c) confers federal jurisdiction in permissive terms and does not expressly divest state courts of authority to hear civil RICO actions.
- The fact that civil RICO requires construing federal criminal statutes as predicate acts does not convert civil claims into “offenses against the laws of the United States” or require exclusive federal jurisdiction.
- Similarity between RICO’s civil remedies and the Clayton Act’s treble-damages provision does not, without clearer evidence, imply congressional intent to make civil RICO jurisdiction exclusive.
Conclusion
The Court held that civil RICO claims under 18 U.S.C. § 1964(c) may be brought in state courts because Congress did not clearly assign exclusive jurisdiction to federal courts, and no federal interest made state-court adjudication incompatible with the statute.