F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
November 8, 2006
UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
B ILL J. C OR Y,
Plaintiff-Appellant,
v. No. 06-3051
AZTEC STEEL BUILDIN G, IN C.;
U N IV ERSA L STEEL B UILD INGS
CORPORATION, a Pennsylvania
corporation; GARY J. BONACCI;
SHAW N DAVIS; ARN OLD DAVIS;
STEEL FA CTO RY CO RPO RA TION,
Defendants-Appellees.
A PPE AL FR OM T HE UNITED STATES DISTRICT COURT
FOR T HE DISTRICT OF KANSAS
(D .C . No. 03-CV-4193-RDR)
Submitted on the briefs: *
Bill J. Cory, pro se, Appellant.
James C. M orrow, M orrow, W illnauer and Klosterman, L.L.C., Kansas City,
M issouri, for Appellees.
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
Before O’BRIEN, PO RFILIO, and A ND ER SO N, Circuit Judges.
A ND ER SO N, Circuit Judge.
In this pro se appeal, appellant Bill J. Cory challenges district court orders
that dismissed various defendants for lack of personal jurisdiction and granted the
remaining defendants summary judgment on Cory’s racketeering, consumer-
protection, and product-liability claims. W e exercise jurisdiction under 28 U.S.C.
§ 1291, and we affirm.
B ACKGROUND
In 1993, Cory, a Kansas farmer, executed a purchase order for five
Quonset-style buildings from M idwest Steel Span, which is located in Overland
Park, Kansas. Apparently, M idw est then either sold or transferred the purchase
order to Universal Steel Factory of Kansas City, M issouri, which placed the order
with defendant Steel Factory Corporation (SFC ) in Pennsylvania. Cory received
the building materials and paid defendant Universal Steel Buildings Corporation
(USBC), which is also located in Pennsylvania. Cory erected the buildings.
In 1995, after one of the buildings collapsed in the wind, Cory ordered
replacement parts. Defendant Aztec Steel Building, Inc. (ASB), another
corporation located in Pennsylvania, shipped the parts to Cory. In 1996, Cory
ordered more replacement parts and finished repairing the building.
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In June 1999, another building collapsed in high winds. And in 2001, the
building that Cory had repaired in 1996 collapsed again in the w ind. Cory
complained to Defendant Gary Bonacci, SFC ’s plant manager, and then to the
Kansas Attorney General’s consumer protection division. Bonacci had the
buildings inspected by an engineer, who concluded that “the mode of failure in
both buildings appears to be from a lack of resistance to foundation rotation. The
buildings should have had a concrete slab . . . as described in the foundation
manual.” 1 Record on Appeal (ROA), Doc. 81, Ex. M at 3. Cory retained an
engineer, who simply opined that “the steel arch framing of both of these
structures failed from forces exerted on them from w ind.” Id., Doc. 48 at 5. In
M arch 2003, the Attorney General’s office concluded that there had been no
violation of the Kansas Consumer Protection Act.
In August 2003, Cory, aided by counsel, sued ASB and USBC in Kansas
state court. The defendants removed the case to the United States D istrict Court
in Kansas, where Cory filed an amended complaint, naming, as additional
defendants, SFC, Bonacci, and Arnold and Shawn Davis, officers of the corporate
defendants. The complaint asserted violations of 18 U.S.C. §§ 1961-1968 (the
Racketeer Influenced and Corrupt Organizations A ct (RICO)), in addition to
Kansas’s consumer-protection and product-liability laws. The district court first
dismissed SFC, Bonacci, and the Davises for lack of personal jurisdiction,
explaining that neither RICO nor the Kansas long-arm statute conferred
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jurisdiction. Then, the district court granted ASB and USBC summary judgment,
ruling that Cory’s RICO claims were time-barred to the extent they alleged injury
from the 1995 and 1999 incidents, that the remaining RICO claims failed to show
a pattern of racketeering activity, and that Cory’s state-law claims were time-
barred.
Cory appeals.
D ISCUSSION
I. Personal Jurisdiction
“W e review de novo the district court’s dismissal for lack of personal
jurisdiction.” Benton v. Cameco Corp., 375 F.3d 1070, 1074 (10th Cir. 2004).
W here, as here, a dismissal is entered without an evidentiary hearing, the plaintiff
need only make a prima facie showing of personal jurisdiction. Id. W e resolve
any factual disputes in the plaintiff’s favor in determining whether that burden
has been met. Id. at 1075.
Service of a summons is a means of establishing a court’s jurisdiction over
a defendant. 1 James W m. M oore et al., M oore’s Federal Practice § 4.03[1] (3d
ed. 2006). This case requires that w e assess the territorial limits of such service.
Consequently, we consider first the federal, and then the state statutory bases that
would allow the federal district court in Kansas to reach into Pennsylvania to
acquire jurisdiction over SFC, Bonacci, and the D avises.
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A. RICO
Cory argues that the district court should have followed the Fourth and
Eleventh Circuits and ruled that RICO provides a statutory basis for personal
jurisdiction over “any person in any judicial district in w hich such person resides,
is found, has an agent, or transacts his affairs.” 18 U.S.C. § 1965(d). The
defendants counter that the district court followed the better reasoned decisions of
the Second, Seventh, and Ninth Circuits, which hold that RICO, when raised in
the proper venue, extends personal jurisdiction into “any judicial district of the
United States” if necessary to satisfy “the ends of justice.” Id. § 1965(b). For the
reasons expressed below, we join the Second, Seventh, and Ninth Circuits and
hold that subsection (b) of § 1965, rather than subsection (d), gives RICO its
nationwide jurisdictional reach.
W here Congress has statutorily authorized nationwide service of process,
such service establishes personal jurisdiction, provided that the federal court’s
exercise of jurisdiction comports with Fifth Amendment due process. See Peay v.
BellSouth M ed. Assistance Plan, 205 F.3d 1206, 1209 (10th Cir. 2000). Our
initial inquiry, then, is whether RICO’s service of process provision, § 1965,
potentially confers jurisdiction by authorizing service of process. In relevant
part, the statute provides:
(a) Any civil action or proceeding under this chapter against
any person may be instituted in the district court of the United States
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for any district in which such person resides, is found, has an agent,
or transacts his affairs.
(b) In any action under section 1964 of this chapter in any
district court of the United States in which it is shown that the ends
of justice require that other parties residing in any other district be
brought before the court, the court may cause such parties to be
summoned, and process for that purpose may be served in any
judicial district of the United States . . . .
(c) In any civil or criminal action or proceeding instituted by
the United States under this chapter in the district court of the United
States for any judicial district, subpenas [sic] issued by such court to
compel the attendance of witnesses may be served in any other
judicial district . . . .
(d) All other process in any action or proceeding under this
chapter may be served on any person in any judicial district in which
such person resides, is found, has an agent, or transacts his affairs.
18 U.S.C. § 1965.
In 1986, the Ninth Circuit identified subsection (b) as providing for service
of process upon, and the conferral of personal jurisdiction over, defendants
residing beyond the federal court’s district. Butcher’s Union Local No. 498 v.
SDC Inv., Inc., 788 F.2d 535, 538 (9th Cir. 1986). The court did not, however,
address subsection (d)’s service provision. The following year, the Seventh
Circuit followed the Ninth, stating that subsection “(b) creates personal
jurisdiction by authorizing service.” Lisak v. M ercantile Bancorp, Inc., 834 F.2d
668, 671 (7th Cir. 1987). But it too did not mention subsection (d). That
subsection did not rise to circuit-court prominence until ten years later, when the
Eleventh Circuit identified subsection (d) as projecting personal jurisdiction
nationwide. Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d
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935, 942 (11th Cir. 1997). But that court did “not pause long over the . . .
question,” and oddly, it cited Lizak for support. BCCI Holdings, 119 F.3d at 942.
The Fourth Circuit soon joined the fray, settling on subsection (d). ESAB Group,
Inc. v. Centricut, Inc., 126 F.3d 617, 627 (4th Cir. 1997). But the court did not
observe the contrary position of the Seventh and Ninth Circuits, and it only
mentioned subsection (b) in passing, characterizing it as a venue provision. Id.
The first federal appellate court to actually analyze § 1965’s full text and
offer reasoning for its choice of subsections was the Second Circuit. In PT
United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65 (2d Cir. 1998), the court
conducted a comprehensive and sequential reading of the statute, concluding that
subsection (b) is the correct jurisdictional provision. The court based its
conclusion on three points. First, subsection (a) sets venue in “any district in
which [a defendant] resides, is found, has an agent, or transacts his affairs,” 18
U.S.C. § 1965(a), thereby suggesting that an “action can only be brought in a
district court where personal jurisdiction based on minimum contacts is
established as to at least one defendant,” PT U nited, 138 F.3d at 71. Second,
subsection (b) authorizes service of a summons on “‘other parties’” residing
beyond the venued district if necessary to further the “‘ends of justice.’” Id.
(quoting 18 U.S.C. § 1965(b)). By imposing the quoted limitations, Congress
expressed a preference that defendants not be unnecessarily haled into unexpected
forums. Id. at 72. And third, subsection (d)’s reference to “‘[a]ll other process’”
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must mean process different than a summons or a government subpoena, both of
which are dealt w ith in previous subsections. Id. at 72 (quoting 18 U.S.C.
§ 1965(d)).
W e find this reasoning persuasive and consistent with congressional intent. 1
In its report on the Organized Crime Control Act of 1970, which gave birth to
RICO, the House Judiciary Committee declared that “[s]ubsection (b) provides
nationwide service of process . . . in actions under section 1964 [providing civil
remedies for RICO violations],” and that “[s]ubsection (d) provides . . . all other
process in actions under the [entire RICO] chapter.” H.R. Rep. No. 91-1549
(1970), reprinted in 1970 U.S.C.C.A.N. 4007, 4034 (emphasis added). Further,
the committee stated that § 1965 is “modeled on present antitrust legislation.” Id.
Justice Jackson summarized the venue and jurisdictional contours of antitrust
legislation in United States v. National City Lines:
The scheme of the [antitrust] statutes [2] . . . is that the Attorney
1
W hen a statute is ambiguous, we may examine legislative history to
ascertain the statute’s meaning. State Ins. Fund v. S. Star Foods, Inc. (In re
S. Star Foods, Inc.), 144 F.3d 712, 715 (10th Cir. 1998) (commenting that a “split
in the circuits is, in itself, evidence of . . . ambiguity” when a statute’s “meaning
is not evident based on the plain language”).
2
For instance, Section 12 of the Clayton Act provides:
Any suit, action, or proceeding under the antitrust laws against
a corporation may be brought not only in the judicial district whereof
it is an inhabitant, but also in any district wherein it may be found or
transacts business; and all process in such cases may be served in the
(continued...)
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General may lay the venue in any district where he may properly
serve one or more of his defendants. He may go ahead with his
action against them, whether he is allowed to bring in others or not.
Before he can bring in other parties than those properly served in the
district, i.e., those ‘inhabitant,’ ‘transacting business,’ or ‘found’
there, it must be made to appear to the court that the ends of justice
require that they be brought before the court, in which case they may
be summoned from any district.
334 U.S. 573, 598 (1948) (Jackson, J., concurring) (quoting 15 U.S.C. § 22). This
explanation coincides with our reading of § 1965, subsections (a) and (b): W hen
a civil RICO action is brought in a district court where personal jurisdiction can
be established over at least one defendant, summonses can be served nationwide
on other defendants if required by the ends of justice.
Next, we turn to whether § 1965, as interpreted above, actually conferred
personal jurisdiction over SFC, Bonacci, and the Davises. The district court did
2
(...continued)
district of which it is an inhabitant, or wherever it may be found.
15 U.S.C. § 22. And Section 15 of the Clayton Act provides:
The several district courts of the United States are invested
with jurisdiction to prevent and restrain violations of this A ct, and it
shall be the duty of the several United States attorneys, in their
respective districts, under the direction of the Attorney General, to
institute proceedings in equity to prevent and restrain such
violations. . . . W henever it shall appear to the court before which
any such proceeding may be pending that the ends of justice require
that other parties should be brought before the court, the court may
cause them to be summoned whether they reside in the district in
which the court is held or not, and subpoenas to that end may be
served in any district by the marshal thereof.
15 U.S.C. § 25. Accord id. §§ 4 & 5 (Sherman Act), 9 & 10 (W ilson Tariff Act).
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not determine whether there was jurisdiction over at least one defendant so that
other defendants could be served nationwide to further the ends of justice.
Instead, the district court proceeded directly to the “ends of justice” requirement
and ruled that it was not met simply because all of the defendants w ere subject to
suit in Pennsylvania. W e disagree with the district court’s interpretation of the
“ends of justice,” as it comports w ith neither the congressional directive to
“liberally construe[ ] [RICO] to effectuate its remedial purposes,” H.R. Rep. No.
91-1549 (1970), reprinted in 1970 U.S.C.C.A.N. 4007, 4036, nor the antitrust
legislation on which RICO was modeled, see id. at 4034. 3
RICO was intended as a means to eradicate organized crime. See
Organized Crime Control Act of 1970, Pub. L. No. 91-452, 84 Stat. 922, 923.
That purpose is not furthered by withholding nationwide service of process
whenever all of the RICO defendants could be haled into one court for a single
trial. W hile the district court’s construction of the “ends of justice” might
promote judicial economy, it might also mean that some RICO violations w ould
go unpunished whenever organized criminals operate within the same locale and
cause harm in a distant state. Insulating such a criminal enterprise from liability,
when, for instance, the victim is unable to finance long-distance litigation, is not
3
The district court’s failure to resolve whether it had personal jurisdiction
over at least one defendant does not require remand because, while we disagree
w ith the district court’s construction of the “ends of justice” standard, we
conclude infra that the standard is not met in this case.
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consistent with RICO’s purpose.
The district court’s construction is also not in accord with antitrust
legislation. As noted above, the Clayton, Sherman, and W ilson Tariff Acts all
prescribe an “ends of justice” analysis for allowing “other parties” to be
summoned before the court, “w hether they reside in the district in which the court
is held or not.” 15 U.S.C. §§ 5 (Sherman Act), 10 (W ilson Tariff Act), & 22
(Clayton Act). The Supreme Court has rejected the notion that a confluence of
defendants within a single judicial district controls the “ends of justice” analysis.
See Standard Oil Co. of N.J. v. United States, 221 U.S. 1, 46 (1911) (stating that
personal jurisdiction had properly been acquired over nonresident defendants
under the Sherman Act’s “ends of justice” provision, as one of the many
defendants w as present within the district); see also United States v. Standard Oil
Co. of N.J., 152 F. 290, 296 (C.C.E.D. M o. 1907) (providing further background
on the personal jurisdiction issue decided in Standard Oil, 221 U.S. at 46, by
rejecting the nonresident defendants’ argument that “the ends of justice” would be
better served if they were summoned into court “in the district of the inhabitancy
of a larger number of the defendants”).
Accordingly, we conclude that the “ends of justice” analysis is not
controlled by the fact that all defendants may be amenable to suit in one forum.
In so holding, we disagree with the N inth Circuit, which reached the contrary
conclusion by inadequately considering the congressional intent underlying RICO
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and by ignoring federal antitrust legislation. See Butcher’s Union, 788 F.2d at
539 (stating, without elaboration, that the lower court had properly considered
RICO’s purpose “and the phrase’s location in the section providing for
nationwide service of process”). W e need not, however, offer a competing
definition, as the “ends of justice” is a flexible concept uniquely tailored to the
facts of each case. And in the current case, we have Cory’s assertion that the
ends of justice require nationwide service simply because he has sustained
damages and litigation costs in Kansas. 4 W e conclude, as a matter of law, that
such facts, standing alone, do not satisfy the “ends of justice” standard. W ithout
federal statutory authorization for nationwide service, we need not proceed to the
Fifth-Amendment inquiry.
B. The K ansas Long-Arm Statute
In the absence of federal authorization for nationwide service, the district
court turned to state law. See Fed. R. Civ. P. 4(k) (listing, as an alternative to
nationwide service under a federal statute, service under a state’s long-arm
statute). The court first presumed that the Kansas long-arm statute, K an. Stat.
Ann. § 60-308(b), authorized service, and then proceeded directly to the due-
process inquiry. W e do the same.
Because “sovereignty defines the scope of the due process test,” Busch v.
Buchman, Buchman & O’Brien, Law Firm, 11 F.3d 1255, 1258 (5th Cir. 1994),
4
Cory does not claim a financial impediment to suit in Pennsylvania.
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the Fourteenth Amendment governs application of a state’s long-arm statute, Ten
M ile Indus. Park v. W. Plains Serv. Corp., 810 F.2d 1518, 1524 (10th Cir. 1987).
The Fourteenth A mendment’s “D ue Process C lause protects an individual’s
liberty interest in not being subject to the binding judgments of a forum with
which he has established no meaningful contacts, ties, or relations.” OM I
Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1090 (10th Cir. 1998)
(quotations omitted). Thus, a nonresident defendant is subject to a court’s
personal jurisdiction only if there are “minimum contacts between the defendant
and the forum state.” Id. (quotations omitted). This standard is satisfied if the
nonresident defendant has “purposefully directed his activities at residents of the
forum, and the litigation results from alleged injuries that arise out of or relate to
those activities.” Id. at 1090-91 (quotations omitted). Otherwise, the nonresident
defendant must have “continuous and systematic general business contacts” with
the forum state. Id. at 1091 (quotations omitted).
The district court first observed that, instead of offering any evidence or
argument concerning SFC ’s direct contacts with Kansas, Cory claimed that
M idwest Steel Span acted as SFC ’s agent in Kansas. The district court rejected
that claim for lack of evidence, stating that Cory failed to show that SFC had any
ow nership interest in M idw est Steel or any control over M idw est Steel’s business
affairs. On appeal, Cory makes no agency argument. Consequently, our
consideration of the matter ends. See Fed. R. App. P. 28(a)(9)(A) (stating that an
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appellant’s argument must contain “contentions and the reasons for them, with
citations to the authorities and parts of the record on which the appellant relies”).
Regarding the Davises’ and Bonacci’s contacts with Kansas, the district
court observed that Cory only offered evidence that Bonacci had responded to an
inquiry from the K ansas A ttorney General about Cory’s claims. The district court
ruled that this limited contact was insufficient to confer jurisdiction. On appeal,
Cory does not argue otherw ise, and we do not consider the matter further. See id.
W e conclude that the district court did not err in dismissing SFC , the
Davises, and Bonacci for lack of personal jurisdiction.
II. Statutes of Lim itations
W e review de novo the district court’s grant of summary judgment to ASB
and USBC on statute-of-limitations grounds. Tiberi v. Cigna Corp., 89 F.3d
1423, 1428 (10th Cir. 1996). Summary judgment on such grounds is warranted
when there is no genuine issue of material fact and the moving party is entitled to
judgment as a matter of law . Fed. R. Civ. P. 56(c).
A. RICO
The statute of limitations for a RICO action is four years. Rotella v. Wood,
528 U.S. 549, 552 (2000). W hile the Supreme Court has not settled upon a
definitive rule for w hen the limitations clock starts running, it has announced tw o
possibilities: either w hen the plaintiff knew or should have known of his injury
(the injury-discovery rule); or when the plaintiff was injured, whether he was
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aware of the injury or not (the injury-occurrence rule). Id. at 553 & 554 n.2. 5 W e
need not choose between these rules today because the result is the same no
matter which rule is applied.
The crux of Cory’s RICO claims is that the defendants sold “defective
buildings to take his money.” Aplt. Br. at 16. Cory testified at deposition that he
“realized [he] had a problem w hen two buildings had blown down.” 1 ROA, Doc.
#81, Ex. A (Dep. at 124). Consequently, Cory was injured in 1993, 1995, and
1996 when he purchased the building materials and replacement parts, see
Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 495 (1985) (stating that a civil
RICO “injury” means “harm from the predicate acts” that constitute racketeering),
and he was aware of his injury no later than June 1999, when the second building
collapsed. Yet he failed to initiate litigation within four years of any of these
dates. Therefore, all of the RICO claims were untimely under either the injury-
discovery or injury-occurrence rules.
The district court determined, however, that Cory had timely asserted a
RICO claim as to the building that collapsed in 2001. This determination evinces
a misunderstanding of the nature of this case. Cory’s injury was complete when
5
In Rotella, 528 U.S. at 554, the Supreme Court rejected the “injury and
pattern discovery rule,” which this court had adopted in Bath v. Bushkin, Gaims,
Gaines & Jonas, 913 F.2d 817, 820 (10th Cir. 1990) (holding that “a civil RICO
cause of action begins to accrue as soon as the plaintiff discovers, or reasonably
should have discovered, both the existence and source of his injury and that the
injury is part of a pattern” (quotation omitted)).
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he purchased the allegedly defective buildings and parts. The defendants’
purported racketeering activities caused that injury and the wind revealed it by
collapsing the buildings.
B . The State-Law Claim s
In Kansas, there is a three-year statute-of-limitations period for consumer
protection claims, Roy v. Young, 93 P.3d 712, 715 (K an. 2004) (citing Kan. Stat.
Ann. § 60-512(2)), and a two-year period for product liability claims, Fennesy v.
LBI M gmt., Inc., 847 P.2d 1350, 1355 (K an. Ct. App. 1993) (citing Kan. Stat.
Ann. § 60-513). The limitations periods for both claims generally begin running
when the plaintiff discovers his injury, see Roy, 93 P.3d at 715; Kan. Stat. Ann.
§ 60-513(b).
The district court ruled that Cory’s state-law claims were untimely because
they had accrued by June 2001 and Cory sued in August 2003. But under this
analysis, Cory’s consumer-protection claim would have been timely, as it was
brought within three years of accrual. Nevertheless, as w e concluded above, Cory
discovered his injury by June 1999, which is more than four years before he filed
suit. Accordingly, both of Cory’s state law claims are time-barred.
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C ONCLUSION
Following the Second, Seventh, and Ninth Circuits, we conclude that
§ 1965(b) gives RICO its nationwide jurisdictional reach. But we disagree with
the Ninth Circuit and the district court’s construction of the “ends of justice”
standard, which must be met in order to effectuate nationwide service.
Nevertheless, because the standard is not met under the facts of this case, and
because there is no state statutory conferral of personal jurisdiction, we affirm the
district court’s order dismissing SFC, the D avises, and Bonacci. W e also affirm
the district court’s order granting summary judgment to ASB and USBC. But w e
do so entirely on the basis of the statutes of limitations. 6
6
W e grant Cory’s motion to file a late reply brief, and we direct the Clerk of
the Court to file the brief. W e deny Defendants-Appellees’ request for costs and
attorney fees under Fed. R. App. P. 38.
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