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RICO Claims Required Minimum Contacts Analysis

by Mark Engstrom, Legal Editor, RICO BUSINESS DISPUTES GUIDE

Personal jurisdiction over nonresident defendants could be asserted in a civil RICO action only if minimum contacts were first established for at least one defendant, the federal district court in Sioux City, Iowa, has ruled.

The U.S. Court of Appeals for the Eighth Circuit had not yet addressed the effect of RICO's nationwide service of process provision on the establishment of personal jurisdiction over nonresident defendants, but the district court agreed with the majority of federal appellate courts that had. According to that majority, when all parts of RICO section 1965 were read "in a way that render[ed] a coherent whole," the nationwide service of process provision conferred personal jurisdiction over nonresident defendants, but only when personal jurisdiction based on minimum contacts was established for one of them.

In this case, the principal defendant became incorporated in Iowa, maintained its principal place of business in Iowa, and solicited investment funds from its corporate offices in Iowa. The court concluded that these activities provided sufficient minimum contacts to confer jurisdiction—over all defendants—to the federal district court in northern Iowa. Defendants' motion to dismiss for lack of personal jurisdiction was therefore denied.


Armstrong, ND Iowa, ¶11,771
 

(The above feature is selected from the newsletter published monthly along with full text documents and other materials provided to subscribers of the CCH RICO Business Disputes Guide.)  

     
  
 

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