Background
Plaintiffs Aaron Hall, Katherine Glod, and Jeffrey Binder filed a civil RICO suit in the Eastern District of Michigan against William Waller and nine Florida-based Trivest entities. The plaintiffs alleged fraud regarding solar panel systems sold in Michigan. The Trivest defendants moved to dismiss, arguing the Michigan court lacked personal jurisdiction over them. The district court denied the motion, citing convenience factors, and the Trivest defendants appealed.
The court’s reasoning
The court reviewed the interpretation of 18 U.S.C. Section 1965 subsection b. The statute allows a court to summon nonresident parties only when the ends of justice require it. The court held that the term require conveys a sense of necessity. The district court relied on factors like the length of pending litigation and the location of counsel, which the appellate court deemed insignificant compared to the due process principle of treating defendants fairly. Since the Trivest defendants had zero contacts with Michigan and could be sued in Florida, the ends of justice did not require litigation in Michigan.
The dissent
What it means going forward
The decision clarifies that convenience alone is insufficient to establish personal jurisdiction over nonresident RICO defendants under Section 1965 subsection b. It requires a showing of necessity, limiting the ability to haul defendants into distant forums when they have no contacts and can be sued elsewhere.