Anderson v. Janovich

• Decision Date: 20 April 1982
• Docket Number: No. C79,283TR,C79-284TR.,C79
• Citation: 543 F. Supp. 1124
• Parties: E. Norman ANDERSON, Lyle Olson, Bernice Olson and The Back Forty, Inc., a Washington corporation, Plaintiffs, v. George JANOVICH, Sheriff of Pierce County, Washington, et al., Defendants. Melvin R. JOURNEY, Phyllis Journey, on her own behalf and as guardian ad litem for Ami A. Journey, a minor, Plaintiffs, v. George R. JANOVICH Sheriff of Pierce County, Washington, et al., Defendants.
• Court: U.S. District Court — Western District of Washington

543 F. Supp. 1124

E. Norman ANDERSON, Lyle Olson, Bernice Olson and The Back Forty, Inc., a Washington corporation, Plaintiffs, v. George JANOVICH, Sheriff of Pierce County, Washington, et al., Defendants.

Melvin R. JOURNEY, Phyllis Journey, on her own behalf and as guardian ad litem for Ami A. Journey, a minor, Plaintiffs, v. George R. JANOVICH Sheriff of Pierce County, Washington, et al., Defendants.

Nos. C79, 283TR, C79-284TR.

United States District Court, W. D. Washington.

April 20, 1982.

COPYRIGHT MATERIAL OMITTED

Joe R. McCray, San Francisco, Carl D. Teitge, Tacoma, Wash., for plaintiffs.

Ramon M. Escure, Tacoma, Wash., for defendant John J. Carbone.

Petrich, Hester & Robson, by Monte E. Hester, Tacoma, Wash., for defendant Janovich.

Robert S. Bryan, Seattle, Wash., for defendant Mazzuca.

Kempton, Savage & Gossard by Anthony Savage, Seattle, Wash., for defendant Ronald Williams.

John S. Abolofia, Tacoma, Wash., for defendant Susan Williams.

Lawrence M. Ross, Tacoma, Wash., for defendant Joseph M. Carbone.

Bradford M. Gierke, Burgess, Kennedy & Fitzer by John Kennedy, Tacoma, Wash., for defendant Pierce County.

MEMORANDUM AND ORDER

ROTHSTEIN, District Judge.

This matter comes before the court on plaintiffs' motion for partial summary judgment on the issue of certain defendants' liability under 18 U.S.C. § 1964(c) and 42 U.S.C. § 1983 (1976). Plaintiffs are E. Norman Anderson, The Back Forty, Inc., Melvin R. Journey, and Phyllis Journey, on her own behalf and as guardian ad litem for Ami Journey. Defendants in this motion are John Joseph Carbone, George V. Janovich, Richard Francis Caliguri, Frank Julius Mazzuca, Lamont Arnold Zemek, Ronald John Williams, and Joseph M. Carbone.

On February 27, 1979 a superseding indictment was returned against the defendants charging them and several others with various racketeering offenses. After a jury trial, judgments of conviction were entered on July 17, 1979. Each of the defendants was convicted under Count I of the indictment, which charged a conspiracy to violate 18 U.S.C. § 1962(c), in violation of 18 U.S.C. § 1962(d). The conspiracy sought to control the tavern business in Pierce County, Washington, through a pattern of racketeering activity consisting of acts and threats of murder, arson and bribery, gambling, mail fraud, extortion and obstructing justice. The targets of the conspiracy included the Back Forty Tavern and its manager and owners, plaintiffs Anderson and Olson, and plaintiff Melvin Journey, a Washington State Liquor Control Board officer. The defendants were also found guilty as charged under many of the other counts.¹ Their convictions were affirmed. United States v. Carbone, No. CR78-97T (W.D.Wash.1979), aff'd sub nom. United States v. Zemek, 634 F.2d 1159 (9th Cir. 1980), cert. denied, 450 U.S. 916, 985, 101 S.Ct. 1359, 1525, 67 L.Ed.2d 341, 821 (1981).

Plaintiffs brought this action to recover damages allegedly caused by defendants' criminal conduct. The instant motion directly raises the question to what extent the judgments of conviction may be given collateral estoppel effect in this action. Defendants argue that plaintiffs are not entitled to judgment as a matter of law because collateral estoppel is not available to a private plaintiff suing under 18 U.S.C. § 1964(c), and because, even if available in connection with claims under 18 U.S.C. § 1964(c) and 42 U.S.C. § 1983, use of collateral estoppel in this case would be unfair.²

Title IX of the Organized Crime Control Act of 1970 (Act), Pub.L.No. 91-452, 84 Stat. 941, 18 U.S.C. § 1962(c), makes it unlawful

for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of an unlawful debt.

In addition to criminal penalties imposed for violations of section 1962, civil remedies are available. The government may seek dissolution, divestment, and injunctions, and private plaintiffs may obtain damages. 18 U.S.C. § 1964. The private damages provision permitting plaintiffs to recover "threefold the damages" they sustain is patterned after antitrust laws, S.Rep.No. 617, 91st Cong., 1st Sess. 81 (1969), and is silent concerning the availability of collateral estoppel. 18 U.S.C. § 1964(c). The following subsection provides for collateral estoppel in civil suits "brought by the United States." Id. § 1964(d). Finally, section 904 of the Act, which is not codified, provides a rule of construction and a savings clause for existing criminal and civil remedies.

I. Collateral Estoppel Is Available In a Suit By a Private Plaintiff Under Section 901(a) of the Organized Crime Control Act of 1970, 18 U.S.C. § 1964(c)

Pointing to the disparity between subsections (c) and (d) of section 1964, defendants argue that Congress clearly knew how to provide for collateral estoppel and deliberately chose not to so provide in suits by private plaintiffs. Defendants conclude that collateral estoppel is simply not available in suits by private plaintiffs under section 1964(c).³ Section 901(a) of the Act, 18 U.S.C. § 1964(c), provides:

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 district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee.

Section 904(b) of the Act augments section 901(a) by providing that "Nothing in this title shall supercede any provision of Federal, State, or other law imposing criminal penalties or affording civil remedies in addition to those provided for in this title."⁴ Collateral estoppel is without doubt a civil remedy of historical standing. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326-28, 99 S.Ct. 645, 649-50, 58 L.Ed.2d 552 (1979); Emich Motors Corp. v. General Motors Corp., 340 U.S. 558, 568, 71 S.Ct. 408, 413, 95 L.Ed. 534 (1951) ("well established"); Irving Nat'l Bank v. Law, 10 F.2d 721, 724 (2d Cir. 1926) (L. Hand, J.). Therefore section 1964(c), although it does not expressly provide for collateral estoppel, cannot be read to limit the availability of that remedy to private plaintiffs. To do so would be to create a conflict between section 1964(c) and section 904(b), both of which are part of title IX of the Act. The court cannot ascribe that intent to Congress.⁵Rockbridge v. Lincoln, 449 F.2d 567, 571 (9th Cir. 1971). Moreover, the abrogation of a traditional remedy such as collateral estoppel requires a clearer expression than mere silence.

Likewise, the fact that section 5 of the Clayton Act, 15 U.S.C. § 16, makes any civil or criminal antitrust judgment rendered in favor of the United States prima facie evidence against the losing defendant in subsequent actions by any party, together with the fact that RICO's civil remedies are patterned after the antitrust laws,⁶ does not indicate that Congress wished to deny private plaintiffs the benefits of collateral estoppel. The interpretation of one statute by reference to an analogous but unrelated statute is an unreliable means of discerning legislative intent. 2A Sands, Sutherland on Statutory Construction, supra, § 53.05, at 349. Rather, it is reasonable to conclude that the insertion of section 904 was intended to afford private plaintiffs all existing remedies in addition to treble damages, and to make clear to federal and state governments that RICO does not preempt other criminal provisions.

The purpose and policy of RICO favor a liberal construction of sections 901(a) and 904(b). Congress stated that the Act's purpose is "to seek the eradication of organized crime in the United States ... by providing enhanced sanctions and new remedies ...." Pub.L.No. 91-452, 84 Stat. 922 (1970). And the usual rule that penal statutes be narrowly construed was specifically overridden by the Act's command that the provisions of RICO be "liberally construed to effectuate those remedial purposes." Id. § 904(a). The Supreme Court relied in part on section 904(a) in holding that RICO "enterprises" include both legitimate and illegitimate enterprises. United States v. Turkette, 452 U.S. 576, 587, 101 S.Ct. 2524, 2530, 69 L.Ed.2d 246 (1981). See generally Note, Civil RICO: The Temptation and Impropriety of Judicial Restrictions, 95 Harv. L.Rev. 1101, 1102 (1982). It is inconceivable to this court that, in light of these strong admonitions, Congress intended to deprive private plaintiffs of the use of a procedural remedy of historical standing. On the contrary, it is evident that the specific remedies provided were not to supersede "any provision" of existing remedial law. § 904(b).

II. Defendants are Estopped To Deny That They Violated Section 1962 of Title 18, United States Code

Having determined that collateral estoppel is not unavailable to private suitors under 18 U.S.C. § 1964(c), the court must decide whether it is properly employed in this case. The doctrine of collateral estoppel provides that a judgment in a prior suit precludes relitigation in a subsequent action of issues actually litigated and necessary to the outcome of the first action. 1B Moore's Federal Practice ¶ 0.4412, at 3777 (2d ed. 1980); Parklane Hosiery Co. v. Shore, supra, 439 U.S. at 326 n.5, 99 S.Ct. at 649 n.5. In order to use such a judgment offensively, however, the party in whose favor it will operate must have been unable practically to join the prior action, and the use of the judgment must not be unfair to his opponent. Id. at 331, 99 S.Ct. at 651-52. The Court in Parklane considered three factors to determine whether the offensive use of collateral estoppel would be unfair to the defendant. First, it analyzed the defendant's incentive to litigate vigorously in the prior action. Second, it determined whether the judgment relied on was inconsistent with any...