King v. Shou-Kung Wang
663 F. App'x 12
2d Cir.2016Background
- Kenneth and Yien-Koo King sued Shou-Kung Wang, Andrew Wang, Jian Bao Gallery, Bao Wu Tang, and others alleging RICO and related claims arising from alleged misappropriation and sale of the Kings’ artwork beginning around 2003.
- Plaintiffs allege multiple predicate acts (fraud, theft, auctions of unlawfully acquired paintings) continuing through at least June 3, 2010.
- Defendants invoked the probate exception, arguing federal courts lack subject-matter jurisdiction over claims intertwined with probate/estate administration.
- The district court dismissed the complaint for failure to plead closed-ended RICO continuity and found some plaintiffs lacked standing because certain disputed paintings were owned by corporations the Kings owned.
- Plaintiffs appealed dismissal; defendants cross-appealed claiming lack of federal jurisdiction under the probate exception. The Second Circuit affirmed in part, vacated in part, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the probate exception bars federal jurisdiction over the RICO claims | Kings: federal courts may hear RICO claims that do not require probating a will or administering an estate | Wangs: probate exception prevents federal jurisdiction because claims implicate estate/probate matters | Court: probate exception construed narrowly; RICO claims do not fall within it here and jurisdiction is proper |
| Whether plaintiffs sufficiently pled closed-ended RICO continuity | Kings: alleged predicate acts spanning 2003–2010 establish a closed-ended pattern over a substantial period | Defendants: acts are too few/isolated to show a pattern or substantial duration | Court: pleadings adequately allege closed-ended continuity (comparable to prior cases) |
| Standing/real-party-in-interest for certain paintings | Kings: plaintiffs can cure by adding corporate owners as plaintiffs | Defendants: some claims fail because the Kings do not own certain paintings | Court: lack of ownership is curable; district court must permit amendment to add real parties in interest |
| Whether state-law claims should proceed on remand given probate concerns | Kings: seek leave to replead state claims if needed | Defendants: state claims may be barred by probate exception | Court: directed district court to consider probate-exception limits when addressing any repleaded state-law claims |
Key Cases Cited
- Marshall v. Marshall, 547 U.S. 293 (2006) (narrows and explains scope of the probate exception)
- Lefkowitz v. Bank of N.Y., 528 F.3d 102 (2d Cir. 2007) (applies Marshall; probate exception is narrow)
- GICC Capital Corp. v. Tech. Fin. Group, Inc., 67 F.3d 463 (2d Cir. 1995) (RICO continuity and pattern analysis; open- vs closed-ended continuity)
- Jacobson v. Cooper, 882 F.2d 717 (2d Cir. 1989) (found closed-ended continuity where related predicates extended over years)