788 F.2d 535 (9th Cir. 1986), 85-1771, Butcher's Union Local No. 498, United Food and Commercial Workers v. SDC Inv., Inc.

Docket Nº:85-1771.
Citation:788 F.2d 535
Party Name:RICO Bus.Disp.Guide 6243 BUTCHER'S UNION LOCAL NO. 498, UNITED FOOD AND COMMERCIAL WORKERS; the United Food and Commercial Workers International Union, AFL-CIO; United Food and Commercial Workers International Union, Local 26, AFL-CIO; United Food and Commercial Workers International Union, Local 7; James Conley, et al., and Moses Esquivel, et al.,
Case Date:April 23, 1986
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 535

788 F.2d 535 (9th Cir. 1986)

RICO Bus.Disp.Guide 6243


WORKERS; the United Food and Commercial Workers

International Union, AFL-CIO; United Food and Commercial

Workers International Union, Local 26, AFL-CIO; United Food

and Commercial Workers International Union, Local 7; James

Conley, et al., and Moses Esquivel, et al., Plaintiffs-Appellants,


SDC INVESTMENT, INC. et al., Defendants,


Denver Lamb Company; Verner Averch; Montfort of Colorado,

Inc., Gene Meakins; and Ken Montfort, Defendants-Appellees.

No. 85-1771.

United States Court of Appeals, Ninth Circuit

April 23, 1986

Argued and Submitted Dec. 13, 1985.

Page 536

David Rosenfeld, Van Bourg, Weinberg, Roger, & Rosenfeld, San Francisco, Cal., for plaintiffs-appellants.

William B. Shubb, Diepenbrock, Wulff, Plant & Hannegan, Sacramento, Cal., Charles Sykes, Terry E. Schraeder, Bruckner & Sykes, Houston, Tex., for defendants-appellees.

Appeal from the United States District Court for the Eastern District of California.

Page 537

Before DUNIWAY and TANG, Circuit Judges, and HUPP, [*] District judge.

DUNIWAY, Circuit Judge:


The appellants are four labor unions and one individual union member. On April 4, 1983, they brought this civil action under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Secs. 1961-1968, in the district court for the Eastern District of California. The complaint charged eighteen defendants with "union-busting" activities. The defendants included four employers and an officer/manager of each, several attorneys, and agents of the National Maritime Union ("NMU"). Appellees here are two of the defendant employers, Denver Lamb and Montfort of Colorado, and their officers.

The complaint charged that on four occasions defendant lawyers arranged for the recognition of NMU, an alleged "sham" union, in order to prevent the appellant Unions from organizing the defendant employers' workers. The Unions allege that this created two levels of racketeering activity: (1) a nationwide conspiracy created and carried out by defendant lawyers with the four separate employers; and (2) four individual conspiracies between the defendant lawyers, a defendant employer, and NMU agents. The Unions concede that the defendant employers had no connection with each other beyond the use of the same lawyers and that each individual conspiracy was largely independent.

Only one of the four defendant employers, SDC Investment, has its principal place of business in California. The other three, Denver Lamb, Montfort, and Eastern Market Beef Processing Corporation, operate out of Denver, Colorado; Grand Island, Nebraska; and Detroit, Michigan, respectively. None of the three corporations was formed under California law. All of these nonresident employers filed motions for dismissal alleging lack of personal jurisdiction and improper venue. Eastern Market is no longer in the case.

The Unions responded with their First Amended Complaint, but they did not make specific allegations regarding personal jurisdiction over the nonresident employers. Their justification for venue in the Eastern District of California included the statement that

the claim arose in this district, and/or each defendant resides, is found, has an agent and/or transacts his affairs in this district. To the extent venue is not established under 28 U.S.C. sections 1391, 1392 or 18 U.S.C. Section 1965(a), venue would be appropriate as to the remaining defendants in the interests of justice under 18 U.S.C. Section 1965(b).

Beyond this general assertion, the Amended Complaint did not make any reference to Denver Lamb's or Montfort's contacts with the forum state, California.

At a status conference, the Unions sought discovery in order to support their jurisdictional allegations. The district court denied their motion. Instead, it asked for additional memoranda on the question of the court's personal jurisdiction over several defendants, including Denver Lamb and Montfort.

In the two memoranda of points and authorities the Unions submitted, they argued that the court's personal jurisdiction and venue concerns were met by 18 U.S.C. Sec. 1965(b). It reads:

In any action under section 1964 of this chapter [RICO] 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 by the marshal thereof.

(emphasis added). The Unions asserted that the ends of justice required nationwide

Page 538

service in this case because they had alleged a nationwide conspiracy that could only be challenged in one suit in which all defendants were present.

The Unions did not suggest any other means by which the court might obtain personal jurisdiction over the nonresident defendant employers. They did not allege that the nonresident employers had sufficient contacts with the forum state, California, to establish the court's jurisdiction on that ground. Only in their separate discussion of venue did they mention their belief that discovery would show Montfort having sales activity in the state. As to the other nonresident defendants, including Denver Lamb, the Unions stated only that they expected to show that each "conducted some business in the State of California." No more specific factual allegations were made.

On December 20, 1984, the district court granted Denver Lamb's and Montfort's motions to dismiss for lack of personal jurisdiction. The court held that the Unions had failed to allege a nationwide pattern of racketeering activity in which the four defendant employers were participants. It found instead that the Unions' allegations led "inexorably to the conclusion that this 'case' is in fact four separate cases each involving an independent conspiracy." It then concluded that it only had jurisdiction over the conspiracy centered around the California-based defendant employer. The court relied on section 1965(b)'s ends of justice provision to find jurisdiction over the nonresident lawyers and NMU agents who participated in the California conspiracy. The court did not consider any other possible bases for personal jurisdiction over Denver Lamb or Montfort.

II. Standard of Review and Jurisdictional Principles

The standard of review on appeal is de novo. Cubbage v. Merchent, 9 Cir., 1984, 744 F.2d 665, 667.

A federal court obtains personal jurisdiction over a defendant if it is able to serve process on him. See 2 Moore's Federal Practice p 4.02 at 4-44.17. In order to effect valid service of process, the federal court must meet two requirements: (1) some statute must authorize the service of process; and (2) the exercise of personal jurisdiction must not contravene any constitutionally protected right of the defendant. Wells Fargo & Co. v. Wells Fargo Express Co., 9 Cir., 1977, 556 F.2d 406, 413-14. If service is not authorized under a relevant federal statute, the federal court must rely on the jurisdictional statute of the state in which the federal court is...

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