Tafflin v. Levitt

Supreme Court of the United States · 1990 · Federal Courts

493 U.S. 455 (1990)

Updated August 1, 2026

Federal Courtsconcurrent jurisdiction presumptionconcurrent jurisdictionstate courtsfederal claimsRICOpresumptionexclusive jurisdiction

Facts

Petitioners were nonresidents of Maryland who held unpaid certificates of deposit issued by Old Court Savings & Loan, a failed Maryland savings and loan association. They sued former officers and directors of Old Court and MSSIC, Old Court's law and accounting firms, and a state-created successor to MSSIC, alleging state-law claims, Exchange Act claims, and civil RICO claims. The federal courts below concluded that the Exchange Act claims failed and that state courts could hear civil RICO claims, so abstention was proper as to the remaining causes of action already involved in pending state litigation. The Supreme Court considered only whether state courts have concurrent jurisdiction over civil RICO actions.

Issue

Do state courts have concurrent jurisdiction over civil actions brought under RICO, or did Congress make federal jurisdiction exclusive? Specifically, was the presumption of concurrent jurisdiction rebutted by statutory text, legislative history, or incompatibility between state-court jurisdiction and federal interests?

Rule

State courts are presumptively competent to adjudicate claims arising under federal law. That presumption is rebutted only if Congress affirmatively ousts state courts by an explicit statutory directive, by unmistakable implication from legislative history, or by a clear incompatibility between state-court jurisdiction and federal interests.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Columbus, Ohio, Nora Patel sued Great Basin Recovery Group in Ohio state court under a newly enacted federal statute creating a treble-damages civil action for victims of coordinated billing fraud. The statute provides that an injured person "may bring a civil action in any appropriate United States district court," but says nothing about state courts.

Great Basin moves to dismiss for lack of subject-matter jurisdiction, arguing that the statute's reference to federal district court makes federal jurisdiction exclusive. How should the state court rule?

Explanation. The majority rule begins with a presumption that state courts have concurrent jurisdiction over federal causes of action. That presumption is not rebutted merely because Congress said a plaintiff "may" sue in federal district court. A grant of federal jurisdiction in permissive terms does not, by itself, make that jurisdiction exclusive.