Cianci v. Superior Court

710 P.2d 375, 40 Cal. 3d 903, 221 Cal. Rptr. 575, 1985 Cal. LEXIS 440
CourtCalifornia Supreme Court
DecidedDecember 31, 1985
DocketS.F. 24893
StatusPublished
Cited by135 cases

This text of 710 P.2d 375 (Cianci v. Superior Court) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cianci v. Superior Court, 710 P.2d 375, 40 Cal. 3d 903, 221 Cal. Rptr. 575, 1985 Cal. LEXIS 440 (Cal. 1985).

Opinions

Opinion

MOSK, J.

We granted review to resolve two important questions: (1) whether state courts have jurisdiction concurrently with federal courts over alleged violations of the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO) (18 U.S.C. § 1961 et seq.); and (2) whether the Cartwright Act (Bus. & Prof. Code, § 16700 et seq.) applies to the medical profession. We answer each question in the affirmative.

I.

The action underlying this proceeding arises, in brief, out of a dispute among several medical doctors over the establishment, funding, and operation of a hyperbaric medicine department at Brookside Hospital in San Pablo.1

Robert W. Burns, M. D., Joseph D. Sabella, M. D., Burton F. Simmons, M. D., William C. Lyon, M. D., Morris B. Aron, M. D., Stuart I. Gourlay, M. D., Robert H. Herrick, M. D., Carol W. Kassell, and Joseph R. Marriotti, M. D. (hereafter the Burns group) filed a complaint against Paul Cianci, M. D., John Poppingo, M. D., and Ventox, Inc., seeking dissolu[908]*908tion of a limited partnership, accounting, damages, and impressing of a constructive trust.

In response to the complaint, Cianci (petitioner here) answered and filed a cross-complaint against real parties in interest Poppingo, his attorneys Gary D. Berger, Berger & Taggart, Gary D. Berger Law Corporation, and William E. Taggart, Jr., Professional Corporation, and the Burns group. The cross-complaint alleges intentional and negligent interference, and conspiracy to interfere, with the right to practice hyperbaric medicine (the first through sixth causes of action); violation of, and conspiracy to violate, RICO (the seventh and eighth causes of action); and conspiracy to violate the Cartwright Act (the ninth cause of action). Real parties demurred to the seventh and eighth causes of action on the ground that federal courts have exclusive jurisdiction over RICO claims, and to the ninth cause of action on the ground that the Cartwright Act does not apply to the medical profession. The trial court sustained the demurrers on these grounds.

Petitioner now seeks to review these rulings by prerogative writ. We issued an alternative writ: the RICO issue is of first impression and of significant importance to the profession and the general public because of its impact on the interests of those whose businesses suffer injury through racketeering activity; the Cartwright Act issue is of similar importance because of its impact on the interests of the consumers of this state. (E.g., Daly v. Superior Court (1977) 19 Cal.3d 132, 140 [137 Cal.Rptr. 14, 560 P.2d 1193]; Babb v. Superior Court (1971) 3 Cal.3d 841, 851 [92 Cal.Rptr. 179, 479 P.2d 379].)2

II.

Although the question is not without difficulty, we conclude for the reasons given below that state courts have concurrent jurisdiction over RICO claims. In sustaining the demurrers of real parties to petitioner’s seventh and eighth causes of action on the ground state courts lack jurisdiction, the trial court erred.

The object of RICO, which is a part of the Organized Crime Control Act of 1970, is to prevent and punish “racketeering activity” broadly defined. [909]*909(See, e.g., Sedima, S.P.R.L. v. Imrex Co., Inc. (1985) — U.S. —, — [87 L.Ed.2d 346, 350, 105 S.Ct. 3275].) Although the sources from which it sprang took aim against the infiltration of legitimate businesses by organized crime, the statute as enacted is intended to ensure integrity in the marketplace and to that end strikes against all who would threaten it—at one end of the spectrum “mobsters and organized criminals” and their “ ‘illegitimate’ enterprises,” at the opposite pole otherwise law-abiding businessmen and their “ ‘respected and legitimate “enterprises.” ’ ” (Id. at pp.---[87 L.Ed.2d at pp. 352-361].) Indeed, “private civil actions under the statute are being brought almost solely against such [‘legitimate’] defendants, rather than against the archetypal, intimidating mobster.” (Id. at p. — [87 L.Ed.2d at p. 361].)

Under the statute, it is unlawful (1) to use income derived from a pattern of “racketeering activity” to acquire an interest in or to establish or operate an enterprise engaged in or affecting interstate commerce; (2) to acquire or maintain an interest in such an enterprise through a pattern of racketeering activity; (3) to conduct or participate in the conducting of such an enterprise through a pattern of racketeering activity; and (4) to conspire to do any of the foregoing proscribed acts. (18 U.S.C. § 1962.)

“Racketeering activity” is defined as any act in violation of several classes of state criminal laws or of several specified federal criminal provisions. {Id., § 1961(1).) Consonant with the statute’s underlying purpose, the effective scope of the term is broad: it includes not only the actions of mobsters but also the conduct of “legitimate” businessmen who engage in “garden variety” commercial fraud. (See Sedima, supra, — U.S. at pp. — — [87 L.Ed.2d at pp. 352-361].)

A criminal enforcement scheme, which includes imprisonment, fines, and forfeiture, is established. (18 U.S.C. § 1963.) Also established is a civil enforcement scheme (id., § 1964), which includes a private right of action: “Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of his suit, including a reasonable attorney’s fee.” (Id., § 1964 (c).) Implicit in the private right of action is a grant of jurisdiction to federal courts.

Our analysis of the question of jurisdiction proceeds from a well-defined doctrinal base fashioned by the United States Supreme Court in decisions stretching from the landmark case of Claflin v. Houseman (1876) 93 U.S. 130 [23 L.Ed. 833], through Dowd Box Co. v. Courtney (1962) 368 U.S. 502 [7 L.Ed.2d 483, 82 S.Ct. 519], to Gulf Offshore Co. v. Mobil Oil Corp. (1981) 453 U.S. 473 [69 L.Ed.2d 784, 101 S.Ct. 2870].

[910]*910“The general principle of state-court jurisdiction over cases arising under federal laws is straightforward: state courts may assume subject-matter jurisdiction over a federal cause of action absent provision by Congress to the contrary or disabling incompatibility between the federal claim and state-court adjudication.” (Gulf Offshore Co., supra, 453 U.S. at pp. 477-478 [69 L.Ed.2d at p. 791]; accord, Dowd Box Co., supra, 368 U.S. at pp. 507-508 [7 L.Ed.2d at p. 487]; Claflin, supra, 93 U.S. at p. 136 [23 L.Ed. at p. 838].) “This rule is premised on the relation between the States and the National Government within our federal system. [Citation.] The two exercise concurrent sovereignty ....

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Bluebook (online)
710 P.2d 375, 40 Cal. 3d 903, 221 Cal. Rptr. 575, 1985 Cal. LEXIS 440, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cianci-v-superior-court-cal-1985.