Tafflin v. Levitt

1990-03-19

Headline: RICO civil suits can be brought in state courts — the Court held state courts have concurrent jurisdiction, letting plaintiffs file racketeering claims in state court while federal courts retain criminal authority.

Holding: The Court held that state courts retain concurrent jurisdiction over civil RICO claims because nothing in RICO’s text, legislative history, or structure shows Congress intended exclusive federal jurisdiction.

Real World Impact:

Allows plaintiffs to file civil RICO suits in state court.
State judges may decide many racketeering-related civil disputes.
May change where defendants face RICO litigation and venue choices.

Topics: racketeering lawsuits, state court power, where to sue, federal criminal law interpretation

Summary

Background

Nonresident holders of unpaid certificates of deposit sued former officers, directors, and related entities after a Maryland savings-and-loan collapse. They brought state-law claims, Securities Exchange Act claims, and civil claims under RICO. The lower courts dismissed the Exchange Act claims and, because related suits were pending in state court, applied federal abstention for the other claims. The Fourth Circuit affirmed, and the Supreme Court agreed to decide whether state courts may hear civil RICO cases.

Reasoning

The Court started from the presumption that state courts can hear federal claims unless Congress clearly says otherwise. It applied a three-part test drawn from prior cases: exclusive federal jurisdiction must appear in the statute’s text, in unmistakable legislative history, or from a clear conflict with federal interests. The Court found none of those here. Section 1964(c) uses permissive language (“may” bring suits in federal court), the legislative history is silent on exclusivity, and analogies to other statutes (like the Clayton Act) do not show Congress intended exclusive federal control. Concerns that state courts would disrupt uniform interpretation of federal criminal laws were rejected because civil RICO is remedial, federal criminal courts retain primary authority, and state courts would be guided by federal precedent.

Real world impact

As a result, people and businesses may bring civil RICO claims in state court as well as in federal court. State judges can decide racketeering-related civil disputes, and litigants will consider state forums when choosing where to sue. Federal courts keep responsibility for criminal enforcement and final interpretations of federal crimes, but state decisions remain part of the national body of RICO case law.

Dissents or concurrances

Two concurring opinions stressed caution: one warned about uniformity concerns in interpreting federal criminal statutes, and the other urged stricter requirements before concluding Congress ousted state-court jurisdiction.