Pedrina v. Chun, s. 95-16477
| Decision Date | 10 October 1996 |
| Docket Number | 95-16782,Nos. 95-16477,s. 95-16477 |
| Parties | RICO Bus.Disp.Guide 9137, 96 Cal. Daily Op. Serv. 7558, 96 Daily Journal D.A.R. 12,417 Raymond PEDRINA, Luz Pedrina, Jupiterrex Uraniumrhi and Rosita Uraniumrhi, Plaintiffs, Leonard Wong and Cheryl Wong; Isidro Dilay; Margaret S. Dilay; Lorraine Dilay; Nicanor Amit; Alejandro Coloyan and Ofelia Coloyan; Raphael Kamai and Lynda Augustus; Alfredo Aurio, Sr. and Benita Aurio; Jennie Olinger; James Jones and Loretta Jones; Sebastian Igarta and Estrella Igarta; Wilfredo M. Bolo and Josefina V. Bolo; Cristita Bolo; Francisco Pedrina and Adoracion Pedrina; Frances C. Miguel; William Sullivan and Jocelyn Sullivan; Violeta Dumadag; John Batalona; Cipriano Manuel; Severo Duque; Milnor Lum; Peter Barcia and Julie Barcia, Plaintiffs-Appellants/Cross-Appellees, v. Han Kuk CHUN; Tetsuo Yasuda; Y.Y. Valley Corporation, Defendants-Appellees/Cross-Appellants, and Masanori Kobayashi; Yoshinori "Ken" Hayashida; City and County of Honolulu and Mayor Frank F. Fasi; Robert Carter; Eugene Lum and Norma Lum; Ernest Souza; Hiroshi Kobayashi, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Anthony P. Locricchio, Kailua, Hawaii; David Behling, Kailua, Hawaii, for plaintiffs-appellants/cross-appellees.
Paul Alston and Mei Nakamoto, Alston Hunt Floyd & Ing, Honolulu, Hawaii; Archie T. Ikehara, Honolulu, Hawaii; Ward F.N. Fujimoto, Fujiyama, Duffy & Fujiyama, Honolulu, Hawaii; Mervyn M. Kotake, Matsubara, Lee & Kotake, Honolulu, Hawaii; Lono J. Lee, Honolulu, Hawaii, for defendants-appellees/cross-appellants.
Appeal from the United States District Court for the District of Hawaii, Alan C. Kay, District Judge, Presiding. D.C. No. CV-89-00439-ACK.
Before: FLETCHER, D.W. NELSON and CANBY, Circuit Judges.
OVERVIEW
Plaintiffs Leonard Wong, et al., brought this action against Defendants Han Kuk Chun, Tetsuo Yasuda, Masanori Kobayashi, Yoshinori Hayashida, Y.Y. Valley Corporation ("YYVC"), Hiroshi Kobayashi, Eugene Lum, Norma Lum, and former Mayor Frank Fasi under the Racketeering Influenced and Corrupt Organizations Act (RICO). 18 U.S.C. §§ 1961-68. Plaintiffs allege that the defendants violated § 1962(c), which prohibits any person from conducting an enterprise through a pattern of racketeering activity and § 1962(d), which prohibits any person from conspiring to violate any of the provisions of subsections (a), (b) or (c) of § 1962. The district court granted summary judgment for the defendants, and we affirm.
In 1986, the Royal Hawaiian Country Club, Inc. ("RHCC"), a subsidiary of YYVC, was granted a conditional use permit ("CUP") by the City and County of Honolulu allowing RHCC to develop a golf course on YYVC's property. The CUP required RHCC to provide agricultural tenants who were then living on the property the opportunity to relocate. YYVC subsequently devised a relocation plan for the tenants which In November 1988, before the current action was filed in federal court, a number of the tenants filed an action against defendants Han Kuk Chun and YYVC in the Circuit Court of the First Circuit for the state of Hawaii. The tenants argued that in obtaining the CUP and attempting to evict them, the defendants were guilty of defamation, slander, violation of contract, intentional infliction of mental and physical duress, and wrongful conversion. The tenants further maintained that they were third party beneficiaries of the CUP, and that the defendants attempted to relocate them in violation of the CUP's provisions. They contended that as a result of complying with the defendants' allegedly improper demands, they suffered severe economic and physical damages.
was approved by the city, but which was rejected by all of the tenants who lived in the project site area. The tenants who rejected the plan were served with eviction notices and summary possession actions were brought against them.
Subsequently, plaintiffs brought this action against Han Kuk Chun, Tetsuo Yasuda, Masanori Kobayashi, Yoshinori Hayashida, YYVC, Hiroshi Kobayashi, Eugene Lum, Norma Lum and former mayor Frank F. Fasi under RICO. 18 U.S.C. §§ 1961-1968. The plaintiffs alleged claims that the defendants' activities resulted in the loss of home/farm leases, farming and rental income, crops and improvements, and that their rights as adverse possessors were injured. The plaintiffs also asserted that the defendants engaged in predicate acts of bribery, robbery, state and federal extortion, or that they aided and abetted in the commission of those activities, or both. They further alleged that the defendants obtained approval of the CUP by bribing Mayor Fasi and other city officials.
Also among the plaintiffs' claims were allegations that the defendants engaged in acts of mail fraud. The mail fraud claims were premised on the notion that the defendants misrepresented the nature of campaign contributions sent to Mayor Fasi, and that they sent the plaintiffs a number of eviction letters which did not inform them of their rights under the CUP. The complaint also alleged that Mayor Fasi aided, abetted, and conspired to aid and abet the mail fraud scheme by accepting the payments from YYVC and by permitting the tenants to be evicted.
On June 22, 1989, the state court entered an order to show cause why the plaintiffs' state court action should not be dismissed for want of prosecution. Plaintiffs responded that they were considering incorporating the state action into the federal RICO action. The state court then withdrew its order of dismissal, but entered another order of proposed dismissal on November 10, 1989. Plaintiffs responded that for purposes of judicial economy, they were considering joining the state court and the federal actions. The state court then withdrew its notice of proposed dismissal. Approximately a year and a half after the plaintiffs filed their pre-trial statement in the state court action, the state court issued yet another order of dismissal. When the plaintiffs failed to object, the court issued a final order of dismissal on August 22, 1991.
In June 1990, while the current action was pending in federal court, YYVC brought 23 summary possession actions in the District Court for the First Circuit Court of the State of Hawaii against most of the plaintiffs in the current action. The actions were subsequently consolidated and the tenants filed six counterclaims in response. In their counterclaims, the tenants argued that YYVC had conditionally promised them renewable leases on the property, that YYVC had attempted to relocate them in a manner inconsistent with the CUP, that they had title to the property under the law of adverse possession, that YYVC had breached an implied covenant of quiet enjoyment, that YYVC concealed from them certain of their rights under the CUP, and that YYVC was liable to them for violations of the state RICO statute. The court dismissed all of these counterclaims. Default judgments were entered against a number of plaintiffs who failed to appear for scheduled depositions, and YYVC prevailed against the remaining tenants at trial. The appeals of six of these tenants are still pending.
The district court dismissed the claims against the city on the grounds that a municipality could not be held liable under RICO. Moreover, in a comprehensive and well-reasoned discussion, the court also held that because the plaintiffs' state court action, and a number of their counterclaims in the summary possession action, were dismissed with prejudice, the current action was barred by res judicata. Additionally, the court held that Mayor Fasi could not be held liable under RICO as he had never participated in the operation or management of the alleged enterprise. The plaintiffs now appeal, and we affirm.
We review a grant of summary judgment de novo. Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1261, 134 L.Ed.2d 209 (1996). The appellate court viewing the evidence must determine, in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the substantive law. 58 F.3d at 441.
We summarily reject the tenants' RICO claims against the city. In Lancaster Community Hosp. v. Antelope Valley Hosp., 940 F.2d 397, 404 (9th Cir.1991), cert. denied, 502 U.S. 1094, 112 S.Ct. 1168, 117 L.Ed.2d 414 (1992), we held that "government entities are incapable of forming [the] malicious intent" necessary to support a RICO action. Accordingly, we affirm the district court's dismissal of the city from this action.
The issue of Mayor Fasi's RICO liability, however, may not be disposed of so easily. 18 U.S.C. § 1962(c) makes it unlawful for "any person employed by or associated with any enterprise ... to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity." In Reves v. Ernst & Young, 507 U.S. 170, 185, 113 S.Ct. 1163, 1173, 122 L.Ed.2d 525 (1993), a RICO action against an accountant, the Supreme Court interpreted this provision as requiring some degree of participation "in the operation or management of the enterprise itself." In accordance with this standard, we held in Baumer v. Pachl, 8 F.3d 1341, 1344 (9th Cir.1993), that a lawyer who merely executed his professional duties and who had no managerial role in the alleged enterprise, should be exonerated of liability under RICO. The Reves court further noted that the requisite managerial role might be played by individuals who were " 'associated with' the enterprise" and "who exert control over it as, for example, by bribery." 507 U.S. at 184, 113 S.Ct. at 1173.
In the case before us, the district...
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