Ritchie Capital Management v. JP Morgan Chase & Co., No. 18-1130 (8th Cir. 2020)
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The Ritchie entities filed suit seeking to recover millions of dollars they loaned Tom Petters, a convicted fraudster, and two of his companies. The Ritchie entities alleged that defendants helped conceal the fraud so that they could recover millions they had tied up with Petters' companies. The district court dismissed the claims as time-barred.
The Eighth Circuit first held that the district court had subject matter jurisdiction under the Edge Act, and the court need not decide whether the district court also had subject matter jurisdiction under 28 U.S.C. 1334(b). Furthermore, the district court was correct to apply New York choice-of-law principles to determine that Illinois law applied to the question of whether the action was time-barred.
The court also held that the district court erred in concluding that Illinois's statute of limitations applied to three of the plaintiffs because the pleadings do not definitively establish their claims accrued in Illinois. The district court did not err in finding that the remaining claims were untimely under Illinois law and that the doctrines of discovery rule, equitable estoppel, and equitable tolling did not apply. The court also held that the district court did not abuse its discretion by failing to grant the Ritchie entities leave to amend their complaint yet again because the Ritchie entities failed to submit a motion to amend or indicate what a proposed amended pleading would have stated. Finally, the court reversed the dismissal of the Ritchie Cayman entities' claims against JP Morgan Europe in order for the district court to permit jurisdictional discovery if it deems necessary to determine whether it has personal jurisdiction over JP Morgan Europe.
Court Description: [Grasz,Author, with Shepherd and Kobes, Circuit Judges] Civil case - Fraud. The district court did not err in finding it had jurisdiction over these fraud claims under the Edge Act, 12 U.S.C. Sec. 632, as this civil suit arose out of a transaction involving international or foreign banking; the district court did not err in applying New York choice-of-law principles to determine Illinois law applied to the question of whether the action was time-barred; the district court's conclusion that Illinois' statute of limitations applied to claims made by three plaintiffs (the Cayman plaintiffs) was premature because the pleadings do not definitively establish their claims accrued in Illinois, and the court erred in dismissing the claims under Rule 12(b)(6); with respect to the remaining claims, the court did not err in finding that they were untimely under Illinois law and that the doctrines of discovery rule, equitable estoppel or equitable tolling did not apply; the district court did not err in failing to grant plaintiffs leave to amend their complaint yer again because they failed to submit a motion to amend or indicate what a proposed amended pleading would have stated; the dismissal of the Cayman entities' claims against JP Morgan Europe is reversed in order for the district court to permit jurisdictional discovery if it deems necessary to determine whether personal jurisdiction exists. Judge Shepherd, concurring.
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