Peters Broadcast Eng'g, Inc. v. 24 Capital, LLC ( 2022 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 22a0152p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
┐
PETERS BROADCAST ENGINEERING, INC.,
│
Plaintiff-Appellant, │
> No. 21-3849
│
v. │
│
24 CAPITAL, LLC; JASON SANKOV; JOHN DOES, │
Defendants-Appellees. │
┘
Appeal from the United States District Court for the Southern District of Ohio at Columbus.
No. 2:20-cv-03135—Kimberly A. Jolsen, Magistrate Judge.
Argued: June 9, 2022
Decided and Filed: July 13, 2022
Before: GIBBONS, COOK, and THAPAR, Circuit Judges.
_________________
COUNSEL
ARGUED: Percy Squire, PERCY SQUIRE COMPANY LLC, Columbus, Ohio, for Appellant.
Jared J. Lefevre, EASTMAN & SMITH LTD., Toledo, Ohio, for Appellees 24 Capital and Jason
Sankov. ON BRIEF: Percy Squire, PERCY SQUIRE COMPANY LLC, Columbus, Ohio, for
Appellant. Jared J. Lefevre, EASTMAN & SMITH LTD., Toledo, Ohio, for Appellees 24
Capital and Jason Sankov.
_________________
OPINION
_________________
JULIA SMITH GIBBONS, Circuit Judge. A federal court is empowered to adjudicate
the rights of the parties before it—with the salient constraint that it must have personal
jurisdiction over each party. After forming a contract, 24 Capital, LLC (“24 Capital”) believed
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 2
Peters Broadcast Engineering, Inc. (“Peters Broadcast”) breached their agreement. 24 Capital
received a judgment by confession in New York state court. Then Peters Broadcast brought this
suit in the Southern District of Ohio, alleging that 24 Capital and its Operations Manager, Jason
Sankov, engaged in a scheme in violation of the Racketeer Influenced and Corrupt Organizations
Act (“RICO”), 18 U.S.C. § 1962. The district court granted the defendants’ motion to dismiss
for lack of personal jurisdiction. Peters Broadcast appeals, arguing the district court erred in
interpreting the RICO provision authorizing nationwide exercise of personal jurisdiction in
certain circumstances. We affirm, holding that 18 U.S.C. § 1965(b) governs service over out-of-
district defendants and requires that at least one defendant has minimum contacts with the forum
state.
I
Peters Broadcast sued 24 Capital and Jason Sankov, alleging RICO violations and Ohio
state law claims. Peters Broadcast is an Indiana corporation with its principal place of business
is in Indiana. 24 Capital is a New York limited liability company with its principal place of
business in New York. Sankov resides in Florida.
On February 21, 2019, Peters Broadcast and 24 Capital entered a contract titled
“Merchant Agreement,” in which 24 Capital agreed to provide an advance to Peters Broadcast in
exchange for assuming interest in Peters Broadcast’s future receivables. However, the
relationship between the parties devolved in the next three months. Believing Peters Broadcast
breached their agreement, 24 Capital moved for judgment by confession in the Supreme Court of
New York for Putnam County, which was granted on May 21, 2019. Peters Broadcast moved to
vacate this judgment, but the motion was denied. Thereafter, Peters Broadcast initiated the
instant action, filing its first complaint on June 19, 2020, and a second amended complaint on
April 7, 2021.
In its second amended complaint, Peters Broadcast alleged that 24 Capital, Jason Sankov,
and other unnamed coconspirators engaged in a “conspiracy to steal, thieve and purloin from
unsuspecting merchants” by targeting small merchants and inducing them to borrow funds
against receivables. DE 25, Second Am. Compl., Page ID 356. Peters Broadcast alleged that
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 3
24 Capital misrepresented the terms of the Merchant Agreement by promising to recover
payment only in proportion to incoming receivables, while actually extracting daily payments
without regard to receivables; that 24 Capital promised additional funding to borrowers, only to
renege on the promised funds and confess judgment against the borrowers; and that this was not
an isolated event, but rather part of an ongoing scheme in which 24 Capital used “deceptive and
misleading communications and contracts” to force merchants “into cycles of debt in which they
were forced to incur new illegal loans in order to pay off their existing debt to [24 Capital].” Id.at 358–62. Peters Broadcast initiated this lawsuit with both individual and class-wide claims
against 24 Capital and Sankov.
The complaint characterizes the alleged scheme as racketeering activity in violation of
RICO, 18 U.S.C. §§ 1961–1968. Peters Broadcast asserts:
Defendants are subject to the personal jurisdiction of this court under Fed. R. Civ.
P. Rule 4(e) under the nationwide service of process provisions of the Racketeer
Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.A. § 1962. The
Southern District of Ohio is the most convenient venue. The conduct injuring
[Peters Broadcast] and continuing to injure it occurred in the Southern District of
Ohio. Defendant 24 Capital is not licensed to do business in the State of Ohio,
however it has transacted and continues to transact business in Ohio. The acts
complained of took place in the Southern District of Ohio. It is in the interests of
justice that the individual Defendant be made party to an action in this district
under 18 U.S.C.A. § 1965(b).
Id. at 357. For Peters Broadcast’s state-law claims, the asserted basis for personal jurisdiction is
pendent jurisdiction from the RICO claim. Peters Broadcast alleged that each of its claims is
appropriately brought as a class action, with the class defined as “All borrowers who received
merchant cash advances and were advised the repayment would be against receivables only.” Id.at 369–70.
Peters Broadcast filed an amended motion to certify a class on May 3, 2021. 24 Capital
and Sankov filed a motion to dismiss the second amended complaint on May 7, 2021, arguing
the case should be dismissed under Federal Rule of Civil Procedure 12(b)(2) for lack of personal
jurisdiction. The defendants also raised defenses under Federal Rules 12(b)(3) and 12(b)(6) of
improper venue and failure to state a claim upon which relief may be granted. The magistrate
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 4
judge1 granted 24 Capital and Sankov’s motion to dismiss and denied Peters Broadcast’s motion
to certify class as moot.
In the opinion and order, the magistrate judge closely analyzed RICO’s venue and
process provisions, 18 U.S.C. § 1965(a)–(d). The statute reads:
(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 by the marshal thereof.
(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, except that in any civil
action or proceeding no such subpena [sic] shall be issued for service upon
any individual who resides in another district at a place more than one
hundred miles from the place at which such court is held without approval
given by a judge of such court upon a showing of good cause.
(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.
The court noted a circuit split regarding how to interpret the statute, with a minority of
circuits holding that § 1965(d) governs service over out-of-district defendants and the majority of
circuits holding that § 1965(b) is the relevant provision. Acknowledging that the Sixth Circuit
has not yet resolved the issue, the court carefully evaluated the underlying reasoning of both
approaches and held the majority approach was the best reading of the statute. This holding
“considers all [of the statute’s] subsections in relation to one another.” DE 43, Op. and Order,
Page ID 671. The court applied this approach and found that no defendant had minimum
contacts with Ohio, and thus Peters Broadcast did not establish personal jurisdiction under
1
The parties consented to jurisdiction by the magistrate judge pursuant to 28 U.S.C. § 636(c).
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 5
RICO. Because Peters Broadcast did not assert sufficient facts to establish that the court had
personal jurisdiction over either defendant and did not specifically allege how the claims arose
from conduct within Ohio, the court held it lacked personal jurisdiction under RICO and pendent
jurisdiction for the state law claims.
On appeal, Peters Broadcast argues the district court erred in granting the motion to
dismiss, asserting that the court misconstrued 18 U.S.C. § 1965 and incorrectly held it lacked
personal jurisdiction over the defendants.
II
We review de novo a district court’s dismissal of a complaint for lack of personal
jurisdiction under Federal Rule of Civil Procedure 12(b)(2). See Ingram Barge Co., LLC v. Zen-
Noh Grain Corp., 3 F.4th 275, 278 (6th Cir. 2021). A motion to dismiss under Rule 12(b)(2)
involves burden shifting: after the plaintiff makes a prima facie case for personal jurisdiction,
which can be done “merely through the complaint,” the burden shifts to the defendant. Malone
v. Stanley Black & Decker, Inc., 965 F.3d 499, 504 (6th Cir. 2020). The defendant’s motion to
dismiss must be supported by evidence. Id. The burden then shifts back to the plaintiff, “who
may no longer ‘stand on his pleadings but must, by affidavit or otherwise, set forth specific facts
showing that the court has jurisdiction.’” Id. (quoting Theunissen v. Matthews, 935 F.2d 1454,
1458 (6th Cir. 1991)). We “must view the pleadings and affidavits in a light most favorable to
the plaintiff and not weigh ‘the controverting assertions of the party seeking dismissal.’” Ingram
Barge, 3 F.4th at 278 (citation omitted).
A
“As with every case, we begin with any jurisdictional issues.” Med. Mut. of Ohio v.
deSoto, 245 F.3d 561, 566 (6th Cir. 2001). Federal courts are both empowered and constrained
by personal jurisdiction, which establishes “the types of litigants the federal courts may bind
with their judgments, whether they be plaintiffs or defendants.” Canaday v. Anthem Cos., Inc.,
9 F.4th 392, 395 (6th Cir. 2021). Under Federal Rule of Civil Procedure 4(k)(1)(C), “[s]erving a
summons or filing a waiver of service establishes personal jurisdiction over a defendant . . .
when authorized by a federal statute.” Indeed, Congress can authorize nationwide service of
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 6
process in a regulatory statute permitting claimants to sue a defendant in any of the federal
district courts in the country. See Canaday, 9 F.4th at 395–96. This appeal implicates a question
of first impression for the Sixth Circuit, as we have not yet determined whether 18 U.S.C.
§ 1965(b) or (d) governs the exercise of personal jurisdiction over out-of-district defendants in
RICO cases.2
Over the past thirty years, a split has emerged as the circuits determined which RICO
venue and process subsection permits service of process on out-of-district defendants. The
minority approach, adopted by the Fourth and Eleventh Circuits, holds that § 1965(d) governs
service over out-of-district defendants. Subsection (d) broadly allows process “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(d). The Eleventh Circuit held that subsection (d) “provides for service in any
judicial district in which the defendant is found.” Republic of Pan. v. BCCI Holdings (Lux.) S.A.,
119 F.3d 935, 942 (11th Cir. 1997). The Fourth Circuit, citing Republic of Panama, reached the
same conclusion. See ESAB Grp., Inc. v. Centricut, Inc., 126 F.3d 617, 626 (4th Cir. 1997).
This “national contacts” approach considers “a defendant’s aggregate contacts with the nation as
a whole rather than his contacts with the forum state.” Republic of Pan., 119 F.3d at 942, 946–
47.
The majority approach holds that § 1965(b) governs service over out-of-district
defendants. Subsection (b) provides that if “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.” 18 U.S.C.
§ 1965(b). The Second, Third, Seventh, Ninth, Tenth, and D.C. Circuits have adopted this
2
While the Sixth Circuit has never considered this question directly, we have previously referenced RICO’s
provision of nationwide service and personal jurisdiction. In Canaday, a case concerning personal jurisdiction under
the Fair Labor Standards Act, the majority opinion twice points out that RICO provides nationwide service of
process. Canaday, 9 F.4th at 395–96, 398. Canaday cites to 18 U.S.C. § 1965(d) for the proposition that RICO
provides “personal jurisdiction over [defendants] in any federal district court in the country.” Id. at 398. However,
Canaday provided no reason for citing subsection (d) rather than (b). It did not squarely address the question now
before the court, and its citations to subsection (d) are passing references in a string citation. See Wright v.
Spaulding, 939 F.3d 695, 701–02 (6th Cir. 2019) (“For a court’s conclusion about an issue to be part of its holding[,]
. . . it must be clear that the court considered the issue and consciously reached a conclusion about it.”).
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 7
“forum state” approach.3 These circuits considered 18 U.S.C. § 1965 in its entirety to hold that
the statute “does not provide for nationwide personal jurisdiction over every defendant in every
civil RICO case, no matter where the defendant is found.” PT United Can Co. v. Crown Cork &
Seal Co., 138 F.3d 65, 71 (2d Cir. 1998). Rather, because Ҥ 1965(a) grants personal jurisdiction
over an initial defendant . . . to the district court for the district in which that person resides, has
an agent, or transacts his or her affairs,” nationwide jurisdiction hinges on whether at least one
defendant has minimum contacts with the forum state. Laurel Gardens, LLC v. Mckenna,
948 F.3d 105, 117–18 (3d Cir. 2020).
Peters Broadcast urges the court to adopt the minority approach, arguing that § 1965(d)
authorizes personal jurisdiction via nationwide service based on minimum contacts with the
United States. For the reasons expressed below, we join the Second, Third, Seventh, Ninth,
Tenth, and D.C. Circuits and hold that subsection (b) of § 1965, rather than subsection (d), gives
RICO its nationwide jurisdictional reach.
The Ninth Circuit was first to identify § 1965(b) as the subsection providing for service
of process, and the conferral of personal jurisdiction, upon defendants residing outside of the
federal court’s district. Butcher’s Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 538–39
(9th Cir. 1986). The court did not discuss subsection (d). The Seventh Circuit did the same in
Lisak v. Mercantile Bancorp Inc., stating that subsection “(b) creates personal jurisdiction by
authorizing service” without mentioning (d). 834 F.2d 668, 671 (7th Cir. 1987). Ten years later,
the Eleventh and Fourth Circuits addressed the issue, each identifying subsection (d) as allowing
for nationwide personal jurisdiction. See Republic of Pan., 119 F.3d at 942; ESAB Grp.,
126 F.3d at 626. But neither court fully explained why it opted for subsection (d).
“The first federal appellate court to actually analyze § 1965’s full text and offer reasoning
for its choice of subsections was the Second Circuit.” Cory v. Aztec Steel Bldg., Inc., 468 F.3d
1226, 1230 (10th Cir. 2006). The Second Circuit read the statute as a whole, detailing how each
3
See, e.g., PT United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65, 71–72 (2d Cir. 1998); Laurel
Gardens, LLC v. Mckenna, 948 F.3d 105, 117 (3d Cir. 2020); Lisak v. Mercantile Bancorp, Inc., 834 F.2d 668, 671
(7th Cir. 1987); Butcher’s Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 538–39 (9th Cir. 1986); Cory v.
Aztec Steel Bldg., Inc., 468 F.3d 1226, 1229–32 (10th Cir. 2006); FC Inv. Grp. LC v. IFX Mkts., Ltd., 529 F.3d
1087, 1098–1100 (D.C. Cir. 2008), overruled on other grounds by Erwin-Simpson v. AirAsia Berhad, 985 F.3d 883,
892 (D.C. Cir. 2021).
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 8
subsection contributes to a “single coherent framework for RICO actions.” Laurel Gardens,
948 F.3d at 117. Specifically, the court concluded that subsection (a) sets the appropriate venue
as “any district in which [a defendant] resides, is found, has an agent, or transacts his affairs.”
PT United, 138 F.3d at 71–72 (quoting 18 U.S.C. § 1965(a)). “In other words, a civil RICO
action can only be brought in a district court where personal jurisdiction based on minimum
contacts is established as to at least one defendant.” Id. at 71. The Court explained:
[Section] 1965(b) provides for nationwide service and jurisdiction over “other
parties” not residing in the district, who may be additional defendants of any kind,
including co-defendants, third-party defendants, or additional counter-claim
defendants. This jurisdiction is not automatic but requires a showing that the
“ends of justice” so require. This is an unsurprising limitation. There is no
impediment to prosecution of a civil RICO action in a court foreign to some
defendants if it is necessary, but the first preference, as set forth in § 1965(a), is to
bring the action where suits are normally expected to be brought. Congress has
expressed a preference in § 1965 to avoid, where possible, haling defendants into
far flung fora.
Id. at 71–72 (footnote omitted). Accordingly, reading § 1965(d) to allow service upon anyone
with “nationwide contacts” to sufficiently confer jurisdiction would render § 1965(b)
superfluous. The forum-state approach ensures that no subsection is redundant: it allows the
exercise of jurisdiction over nonresident defendants to the extent due process and “the ends of
justice” require only if there is another defendant with minimum contacts in the forum.
In Cory, the Tenth Circuit joined the majority approach, finding it “consistent with
congressional intent.” 468 F.3d at 1231. The House Judiciary Committee, in its precursor report
to RICO, declared “[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.” Id. (citing H. Rep. No. 91-
1549, at 4 (1970), as reprinted in 1970 U.S.C.C.A.N. 4007, 4010 (emphasis added)). This
legislative history comports with reading subsections (a) and (b) together: When a plaintiff
brings a civil RICO action in a district court where personal jurisdiction can be established over
at least one defendant, nationwide summonses can be served on other defendants if required by
the ends of justice. See id.No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 9
When the D.C. Circuit considered the matter, it sided squarely with the majority approach
and held that § 1965(b) governs nationwide service. FC Inv. Grp. LC v. IFX Markets, Ltd.,
529 F.3d 1087, 1098–1100 (D.C. Cir. 2008), overruled on other grounds by Erwin-Simpson v.
AirAsia Berhad, 985 F.3d 883, 892 (D.C. Cir. 2021). The Third Circuit is the most recent federal
appellate court to consider the issue. In opting for the majority approach, the court noted that
“the circuit courts adopting the minority approach did not offer a detailed explanation for their
selection of subsection (d).” Laurel Gardens, 948 F.3d at 118. In fact, the Eleventh Circuit cited
the Seventh Circuit’s opinion in Lisak, 834 F.2d at 671, for support, even though Lisak identified
subsection (b) as governing personal jurisdiction. Republic of Pan., 119 F.3d at 942. Stating in
conclusory terms that § 1965(d) provides for national service of process, without analyzing or
mentioning its relationship to § 1965(b), is unconvincing. See PT United, 138 F.3d at 70.
We find the reasoning of the forum-state approach persuasive, with a few clarifications to
ensure meaning is conferred upon each subsection of the statute. First, we make clear that
§ 1965(a) provides for venue, not jurisdiction. Because subsection (a) is not jurisdictional,
another rule—such as Federal Rule of Civil Procedure 4(k)(1)(A) and the relevant state’s long-
arm statute—is required to establish personal jurisdiction over an initial defendant. Then,
§ 1965(b) extends personal jurisdiction through nationwide service of process over “other parties
residing in any other district,” as long as venue is proper through (a) with that initial defendant
and the “ends of justice” require it.4 Section 1965(c) is not jurisdictional and simply describes
subpoena procedure. Similarly, § 1965(d) is not jurisdictional. Subsection (d) extends to “other
process” that differs from a summons or subpoena, such as notifying a party of an injunction or
an order committing a person for civil contempt of a decree.5
In urging us to adopt the minority approach, Peters Broadcast argues the forum-state
approach is wrong because it fails to consider that “RICO must ‘be liberally construed to
effectuate its remedial purposes.’” CA6 R. 14, Appellant Br., at 21 (citation and emphasis
4
We need not, and therefore do not, delve into the meaning of § 1965(b)’s “ends of justice” language
because there is no initial defendant that meets the requirements of § 1965(a).
5
Section 1965(d) is similar to Federal Rule of Civil Procedure 4.1, which specifies how to serve process
other than a summons under Rule 4 or a subpoena under Rule 45.
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 10
omitted). Although the majority approach does not provide for absolute, nationwide personal
jurisdiction over each defendant in every civil RICO case, it ensures that there will be at least
one federal forum for all defendants in a single civil RICO trial. We join the majority of our
sister circuits in adopting the forum-state approach and holding that § 1965(b) governs service
over out-of-district defendants.
B
Having adopted the forum-state approach, our next relevant inquiry is whether § 1965, as
interpreted above, conferred personal jurisdiction over 24 Capital and Sankov. This requires at
least one defendant with traditional forum state contacts (the defendant described by § 1965(a)
and reached by Rule 4(k)(1)(A)) such that any number of defendants from other districts may be
joined under § 1965(b). Peters Broadcast bears the initial burden to make a prima facie case for
personal jurisdiction by establishing that either 24 Capital or Sankov has minimum contacts with
Ohio. Malone, 965 F.3d at 502. For a nonresident defendant to be subject to personal
jurisdiction, this court requires the following three criteria be met:
First, the defendant must purposefully avail himself of the privilege of acting in
the forum state or causing a consequence in the forum state. Second, the cause of
action must arise from the defendant’s activities there. Finally, the acts of the
defendant or consequences caused by the defendant must have a substantial
enough connection with the forum state to make the exercise of jurisdiction over
the defendant reasonable.
AlixPartners, LLP v. Brewington, 836 F.3d 543, 549–50 (6th Cir. 2016) (emphasis omitted)
(quoting Air Prods. & Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 550 (6th Cir. 2007)).
In its second amended complaint, Peters Broadcast asserts that both defendants have
minimum contacts in Ohio. Peters Broadcast states: “The conduct injuring [Peters Broadcast]
and continuing to injure it occurred in the Southern District of Ohio. . . . The acts complained of
took place in the Southern District of Ohio.” DE 25, Second Am. Compl., Page ID 357. The
complaint also states “[t]he 24 Capital Enterprise has a history of involvement within Ohio,
Indiana, Florida, Washington, D.C., and throughout the United States.” Id. at 364. Viewing the
pleadings in the light most favorable to Peters Broadcast, these assertions are insufficient to
establish a prima facie showing that personal jurisdiction exists. Peters Broadcast has not set
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 11
forth “specific facts showing that the court has jurisdiction.” Malone, 965 F.3d at 504. While
the second amended complaint makes mention of general injurious conduct occurring in Ohio, it
provides no explanation of what acts or activities occurred in the state. Peters Broadcast did not
“establish with reasonable particularity sufficient ‘minimum contacts’” with Ohio such that the
exercise of jurisdiction over 24 Capital and Sankov “would not offend ‘traditional notions of fair
play and substantial justice.’” Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 889 (6th
Cir. 2002) (quoting Int’l Shoe v. Washington, 326 U.S. 310, 316 (1945)).
Further, even if Peters Broadcast had established a prima facie case of personal
jurisdiction under RICO, the burden then shifts to the defendants to support their motion to
dismiss with evidence. See Malone, 965 F.3d at 504. 24 Capital and Sankov did precisely this in
their motion to dismiss, noting:
24 Capital does not market or advertise its funding products in the State of Ohio
and does not transact business in the State of Ohio. The Merchant Agreement
was not entered into in the State of Ohio, 24 Capital is not located in Ohio, and
the Merchant Agreement provides for jurisdiction and venue in New York. There
is simply no reason why 24 Capital would anticipate being hailed [sic] into court
in Ohio.
Sankov does not reside in Ohio, has never transacted business in Ohio and has no
contacts with Ohio whatsoever. There is likewise simply no reason why Sankov
would anticipate being hailed [sic] into court in Ohio.
DE 31, Mot. to Dismiss, Page ID 487–88. Their motion is supported by declarations from Mark
Allayev, the Chief Executive Officer of 24 Capital, and Sankov, as well as New York state court
documents.
The burden therefore shifts back to Peters Broadcast, who must “by affidavit or
otherwise, set forth specific facts showing that the court has jurisdiction.” Malone, 965 F.3d at
504 (citation omitted). In its response to the defendants’ motion to dismiss, Peters Broadcast did
not specifically allege how 24 Capital or Sankov purposefully availed themselves of the privilege
of acting in Ohio. Nor did Peters Broadcast show that the racketeering activity arose from
defendants’ activities in Ohio or that there was any substantial connection with the forum state.
Peters Broadcast did include a certificate related to its own ability to transact business in Ohio,
but that has no bearing on whether the defendants transact business in the forum state.
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 12
Peters Broadcast contended that 24 Capital’s website is a basis for personal jurisdiction because
it provided “a virtual presence in the forum state.” DE 35, Resp. in Opp’n, Page ID 546–49.
The district court properly noted this assertion falls short, as it would settle only purposeful
availment of the forum state and neither of the other two requirements to establish minimum
contacts. See AlixPartners, 836 F.3d at 549–50.
Because Peters Broadcast did not specifically allege that 24 Capital or Jason Sankov has
minimum contacts with Ohio, the forum state, we affirm the district court’s decision to grant the
motion to dismiss. Absent jurisdiction over one defendant pursuant to 18 U.S.C. § 1965(a) and
Rule 4(k)(1)(A), no jurisdiction exists under § 1965(b). As the basis for Peters Broadcast’s
accompanying state law claims was pendent jurisdiction, the court necessarily lacks personal
jurisdiction over 24 Capital and Sankov for those claims.
C
Finally, Peters Broadcast argues for the first time in its reply brief that, in lieu of retaining
jurisdiction, the district court should have transferred the case to its “home district, the Northern
District of Indiana.” CA6 R. 24, Reply Br., at 2. Peters Broadcast cites 28 U.S.C. § 1406, “Cure
or waiver of defects” to argue the court should “transfer such case to any district or division in
which it could have been brought.” Id. As an initial matter, claims are forfeited when a party
“fail[s] to make the timely assertion.” Blanchet v. Charter Commc’ns, LLC, 27 F.4th 1221, 1227
(6th Cir. 2022) (citation omitted). Peters Broadcast did not contend transfer was appropriate in
any briefing before the district court, and we do “not ordinarily address new arguments raised for
the first time on appeal.” Ohio State Univ. v. Redbubble, Inc., 989 F.3d 435, 443 (6th Cir. 2021)
(citation omitted). Further, we have “consistently held . . . that arguments made to us for the first
time in a reply brief are waived.”6 Bormuth v. Cnty. of Jackson, 870 F.3d 494, 500 (6th Cir.
2017) (citation omitted).
6
“Though attorneys (and even courts) often use [the concepts of waiver and forfeiture] ‘interchangeably,’
they are distinct.” United States v. Petlechkov, 922 F.3d 762, 767 (6th Cir. 2019) (citation omitted). Forfeiture “is a
party’s ‘failure to make the timely assertion of a right,’” while waiver “is the intentional relinquishment or
abandonment of a known right.” Ohio State Univ., 989 F.3d at 443 (quoting Petlechkov, 922 F.3d at 767).
No. 21-3849 Peters Broadcast Engineering v. 24 Capital, LLC, et al. Page 13
Even if considered, Peters Broadcast’s argument that the district court should have
transferred the case to Indiana fails. Peters Broadcast did not provide any allegations that the
defendants, 24 Capital or Jason Sankov, have minimum contacts with Indiana. The Northern
District of Indiana is in the Seventh Circuit, which follows the forum-state approach. See Lisak,
834 F.2d at 671. Pursuant to the forum-state approach, Peters Broadcast may file its civil RICO
action “in a district court where personal jurisdiction can be established over at least one
defendant,” and then “summonses can be served nationwide on other defendants if required by
the ends of justice.” See Laurel Gardens, 948 F.3d at 120 (citation omitted).
III
We hold that 18 U.S.C. § 1965(b) governs service over out-of-district defendants. Under
this forum-state approach, Peters Broadcast did not establish personal jurisdiction for its RICO
claims or pendent state law claims. We therefore affirm the district court’s decision to grant
24 Capital and Sankov’s motion to dismiss and to deny Peters Broadcast’s motion to certify class
as moot.