Uthe Technology Corp. v. Aetrium, Inc.
2015 U.S. App. LEXIS 21437
9th Cir.2015Background
- Uthe Technology alleged a long-running conspiracy by Aetrium and Harry Allen (Defendants) together with foreign co-conspirators (Foreign Defendants) to divert customers and depress the value of Uthe’s Singapore subsidiary, causing Uthe to sell its shares at a depressed price in 1992.
- The Purchase Agreement for that sale contained a binding arbitration clause selecting Singapore law; Uthe’s claims against the Foreign Defendants were compelled to arbitration in Singapore, and the federal court stayed claims against the non- signatory Defendants pending the arbitration.
- The Singapore arbitration (1994–2012) found the Foreign Defendants liable and awarded Uthe ~12.3 million Singapore dollars (~$9.18M); that award has been paid in full and stated it was without prejudice to Uthe’s U.S. action.
- After the arbitration concluded, Uthe reopened its federal RICO action seeking treble damages against Aetrium and Allen; the district court granted summary judgment for defendants, concluding the one satisfaction rule barred further recovery because Uthe had been fully compensated by the arbitration award.
- The Ninth Circuit reversed and remanded, holding that the arbitral award did not fully satisfy Uthe’s pre-existing federal RICO claim because Singapore law did not provide treble damages and the arbitral forum lacked jurisdiction over the U.S. defendants; thus Uthe may pursue treble RICO damages subject to an offset for sums already recovered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the one satisfaction rule bars Uthe from seeking treble damages under RICO after receiving the Singapore arbitral award | The arbitration did not and could not provide RICO treble damages under Singapore law; thus Uthe’s RICO claim is not fully satisfied and remains viable | The arbitration award compensated Uthe’s losses in full, so one satisfaction extinguishes any further RICO recovery (zero × 3 = 0) | Reversed: one satisfaction does not extinguish RICO treble damages here; Uthe may seek treble damages but must receive an offset for amounts paid in arbitration. |
| Whether an arbitral award under foreign law can produce “full satisfaction” of a federal treble-damages claim | Arbitral relief under Singapore law was narrower and lacked treble damages, so it cannot supply full satisfaction of federal RICO remedies | Arbitration that fully compensates actual losses should bar further recovery regardless of forum | Held for Uthe: remedies must be substantially identical; arbitral award under Singapore law did not equal RICO’s treble remedy, so no full satisfaction. |
| Whether payments by one coconspirator reduce or extinguish RICO claims against remaining coconspirators | Payments are credits/offsets against full treble recovery but do not automatically extinguish the treble claim | Payments fully satisfied the injury so remaining defendants owe nothing further | Held: prior payments operate as offsets to avoid double recovery but do not eliminate the right to pursue treble damages absent identical remedies/satisfaction. |
| Whether the district court should have decided RICO continuity at summary judgment after resolving one satisfaction | Uthe argued the one satisfaction issue should be decided first; continuity unresolved by district court prevented alternative ground for affirmance | Defendants argued continuity bars RICO liability and alternative affirmance possible | Court remanded continuity issue to district court to decide in first instance (district court did not reach it originally). |
Key Cases Cited
- H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229 (continuity requirement for RICO pattern of racketeering)
- Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (RICO construed liberally; private treble-damage remedy)
- Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (one satisfaction rule prevents double recovery)
- Seymour v. Summa Vista Cinema, Inc., 809 F.2d 1385 (one satisfaction rule and crediting payments by coconspirators)
- Singer v. Olympia Brewing Co., 878 F.2d 596 (federal law governs credits against federal claims; offset for prior recovery)
- Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143 (purpose of private RICO remedies to supplement enforcement)
- In re Nat’l Mortg. Equity Corp. Mortg. Pool, 636 F. Supp. 1138 (treble-damages full satisfaction means three times proven actual damages)