Cory v. Aztec Steel Building, Inc.

Decision Date08 November 2006
Docket NumberNo. 06-3051.,06-3051.
Citation468 F.3d 1226
PartiesBill J. CORY, Plaintiff-Appellant, v. AZTEC STEEL BUILDING, INC.; Universal Steel Buildings Corporation, a Pennsylvania corporation; Gary J. Bonacci; Shawn Davis; Arnold Davis; Steel Factory Corporation, Defendants-Appellees.
CourtU.S. Court of Appeals — Tenth Circuit

Bill J. Cory, pro se, Appellant.

James C. Morrow, Morrow, Willnauer and Klosterman, L.L.C., Kansas City, MO, for Appellees.

Before O'BRIEN, PORFILIO, and ANDERSON, Circuit Judges.

ANDERSON, 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. We exercise jurisdiction under 28 U.S.C. § 1291, and we affirm.

BACKGROUND

In 1993, Cory, a Kansas farmer, executed a purchase order for five Quonset-style buildings from Midwest Steel Span, which is located in Overland Park, Kansas. Apparently, Midwest then either sold or transferred the purchase order to Universal Steel Factory of Kansas City, Missouri, 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.

In June 1999, another building collapsed in high winds. And in 2001, the building that Cory had repaired in 1996 collapsed again in the wind. 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 wind." Id., Doc. 48 at 5. In March 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 District 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 Act (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 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.

DISCUSSION
I. Personal Jurisdiction

"We 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). Where, as here, a dismissal is entered without an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction. Id. We 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 Wm. Moore et al., Moore's Federal Practice § 4.03[1] (3d ed.2006). This case requires that we 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 Davises.

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 which 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.

Where 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 Med. 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 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. Mercantile 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 935, 942 (11th Cir.1997). But that court did "not pause long over the . . . question," and oddly, it cited Lisak 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 United, 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'" must mean process different than a summons or a government subpoena, both of which are dealt with in previous subsections. Id. at 72 (quoting 18 U.S.C. § 1965(d)).

We 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...

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