Guice v. Qua-Guice Pontiac, Inc.

537 N.E.2d 259, 42 Ohio Misc. 2d 9, 1988 Ohio Misc. LEXIS 11
Cuyahoga County Common Pleas Court·Decided June 9, 1988·No. No. 129504·Published·Cited by 1 cases

Opinion

James J. McMonagle, J.

The issues presented herein are framed by defendant General Motors Corporation’s motion to dismiss and plaintiff’s first amended complaint. This memorandum deals with plaintiff’s claim for relief arising under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), Section 1961 et seq., Title 18, U.S. Code.

Plaintiff’s first amended complaint claims that his employer, Qua-Guice Pontiac, Inc. (“Qua-Guice”), has breached plaintiff’s employment agreement. Testimony previously taken in the temporary restraining order hearing and as alleged in the first amended complaint demonstrates that plaintiff and defendants Stephen Qua and Gary Olin are the owners of Qua-Guice, an authorized General Motors dealership, and that plaintiff, Raleigh T. Guice, Sr., is the “dealer operator” of Qua-Guice. A “dealer operator” is required as essentially a standing contact, similar in utility to a statutory agent, in every dealer sales and service agreement between General Motors, Pontiac Division, and its dealers. Defendants Qua and Olin became financial investors in Qua-Guice approximately eighteen months after plaintiff purchased the dealership in partnership with Motors Holding Division. Qua-Guice then allegedly entered into certain agreements with plaintiff. Since that time, plaintiff claims, defendants Qua, Olin and Qua-Guice have breached those agreements and injured him in various other ways, including, among other things, by preventing him from functioning as dealer operator, making false statements about him, overstating Qua-Guice’s liabilities and terminating his employment.

Plaintiff’s claim against General Motors allegedly arises from the deal[10] ing between him and his employer because of General Motors’ contractual relationship with Qua-Guice, which is embodied in a Dealer Sales and Service Agreement (“DSSA”). Plaintiff alleges that the conduct of defendants Qua, Olin, and Qua-Guice has breached the DSSA between Qua-Guice and General Motors. General Motors is at fault, plaintiff asserts, because it has not taken adequate steps to restrain such breaches of its contract with Qua-Guice and of plaintiffs separate agreements with his employer.

Plaintiff’s factual allegations against General Motors are:

1. General Motors has violated the terms of the DSSA by dealing with defendants Qua and Olin in their capacity as corporate officers of Qua-Guice and by not requiring Qua-Guice to reinstate him.

2. General Motors has not required defendants Qua, Olin and Qua-Guice to live up to an employment agreement between plaintiff and Qua-Guice and a share purchase agreement among plaintiff, Qua and Olin. General Motors is not a party to that agreement.

3. General Motors, which owns no interest in Qua-Guice, has participated in a fraud by not affording plaintiff the opportunity to purchase Qua-Guice from defendants Qua and Olin and by giving defendants Qua and Olin some undefined form of preferred treatment.

4. General Motors has reviewed the financial statements of Qua-Guice.

In Counts V, VI and VII of the first amended complaint, plaintiff alleges violations of the federal RICO statutes, Section 1961 et seq., Title 18, U.S. Code. Defendant General Motors’ within motion raises the threshold question of whether the court has subject matter jurisdiction over federal RICO claims. The issue appears to be one of first impression in Ohio, but the clear answer is that this court lacks such jurisdiction because RICO claims pursued under federal law are within the exclusive province of the federal courts.1

Congress’s intention in drafting RICO legislation was to create “* * * an aggressive initiative to supplement old remedies and develop new methods for fighting crime.” Sedima, S.P.R.L. v. Imrex Co., Ine. (1985), 473 U.S. 479, 498. Although the generally used objective of this legislation is to combat corruption of legitimate businesses by organized crime, the statute is being used against all individuals and corporations who have posed a threat to legitimate businesses — at one end of the spectrum, mobsters and organized criminals and their “illegitimate enterprises,” and at the opposite pole, otherwise law-abiding businessmen and their “respected and legitimate enterprises.” Id. at 499.

States have a vested interest in protecting their citizens from unlawful corruption and the general rule is that state courts do have concurrent jurisdiction over a federal cause of action. However, this can be rebutted by an “* * * explicit statutory directive by unmistakable implication from legislative history or by a clear incompatibility between state-court jurisdiction and federal interests.” Gulf Offshore Co. v. Mobil Oil Corp. (1981), 453 U.S. 473, 478.

The provision of RICO on which plaintiff relies for the existence of a civil remedy for private litigants confers jurisdiction on the federal district courts:

“Any person injured in his busi[11] ness 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 the suit, including a reasonable attorney’s fee.” (Emphasis added.) Section 1964(c), Title 18, U.S. Code.

The RICO jurisdictional provision was drawn almost verbatim from the language of Section 15 of the Clayton Anti-Trust Act, Title 15, U.S. Code, Section 12 et seq., the statute conferring jurisdiction over federal antitrust •claims. See, e.g., Blumenstock Bros. Advertising Agency v. Curtis Publishing Co. (1920), 252 U.S. 436, 440.

The identity in language between Section 1964(c), Title 18, and Section 15, Title 15, U.S. Code, “* * * is not a mere happenstance; Congress consciously patterned the RICO section after the antitrust prototype.” Cook Cty. v. Midcon Corp. (N.D. Ill. 1983), 574 F. Supp. 902, 912, affirmed on other grounds (C.A. 7,1985), 773 F. 2d 892; see Agency Holding Corp. v. Malley-Duff & Assoc., Inc. (1987), 483 U.S---, 97 L. Ed. 121, 130, 107A S. Ct. 2759, 2764. Defendant General Motors claims that the legislative history of Section 1964(c) requires the conclusion that Congress intended federal jurisdiction over RICO claims to be exclusive:

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Guice v. Qua-Guice Pontiac, Inc., 537 N.E.2d 259, 42 Ohio Misc. 2d 9, 1988 Ohio Misc. LEXIS 11 (Ohio Super. Ct. 1988).

537 N.E.2d 259 (Guice v. Qua-Guice Pontiac, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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