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Personal Jurisdiction under RICO — Agency, “Transacts His Affairs,” Conspiracy

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From Pincione v. D’Alfonso, 2011 U.S. Dist. LEXIS 103944 (S.D.N.Y. Sept. 13, 2011):

II. Personal Jurisdiction Under the Federal RICO Statute

RICO provides that "[a]ny civil action or proceeding under this chapter against any person may be instituted in the district court of the United States for any district in which such person resides, is found, has an agent, or transacts his affairs." 18 U.S.C. § 1965(a). None of the Defendants resides or can be found in New York. RICO jurisdiction must be based on Defendants having an agent or transacting their affairs in the state.

Agency is a fiduciary relationship under which the principal agrees that the agent will act on the principal's behalf, subject to the principal's control, and the agent consents to do so. See, e.g., Restatement (Third) of Agency § 1.01 (2006).

Courts have interpreted the statute's "transacts his affairs" language to be synonymous with the Clayton Act's, 15 U.S.C. § 22, requirement that a party "transact[] business" in the venue. Gates v. Wilkinson, No. 01 Civ. 3145(GBD), 2003 U.S. Dist. LEXIS 9417, at *3 (S.D.N.Y. June 4, 2003). Under this definition, the business must be substantial in character, so that there is "some amount of business continuity and certainly more than a few isolated and peripheral contacts with the particular judicial district." Id. at *4 (internal quotations omitted). Accordingly, "[o]ccasional acts such as telephoning or mailing letters into the district" do not satisfy this definition of transacting business. Now Plastics, Inc., v. HPT Plastics, Inc., No. 89 Civ. 6938(PNL), 1990 U.S. Dist. LEXIS 3942, at *11 (S.D.N.Y. Apr. 10, 1990). The Court should consider whether the defendant owns property, pays taxes, work, or has offices in the state, in deciding whether he transacts his affairs there. See Lock v. Scheuer, No. 84 Civ. 7469(JFK), 1986 U.S. Dist. LEXIS 24083, at *9-10 (S.D.N.Y. June 17, 1986).

a. Pincione Has Not Shown that Any Defendant Has an Agent in New York

Pincione claims that when Naddeo first contacted him, Naddeo was working on behalf of defendant Renzetti and, "upon information and belief, in conspiracy with" the remaining defendants. (Am. Compl. ¶ 32.) The only time that Pincione claims Naddeo was in New York was when they met on December 24, 2006. (See id. ¶¶ 33-83.) The jurisdictional requirements of § 1965(a), however, are time sensitive: It is not sufficient that a defendant had, at some point in time, an agent in the forum; rather, he must have an agent in the jurisdiction on the day the complaint is filed. See Gates, 2003 U.S. Dist. LEXIS 9417, at *5-6. Accordingly, even assuming that Naddeo was working on behalf of Renzetti at the time of this meeting, Pincione cannot sue in New York based on this relationship because he has not alleged that Naddea was in New York on May 3, 2010.

Pincione also argues that Naddeo was working "in conspiracy with" the Defendants at the time of the December 24th meeting. For RICO purposes, this argument fails for the same reasons as the agency argument: Pincione does not allege Naddeo was here in New York when the complaint was filed. It also fails because Pincione alleges no facts supporting the existence of a conspiratorial relationship between Naddeo and the Defendants.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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