Lightner v. Tremont Auto Auction, Inc., 82 C 20080.

• Decision Date: 22 April 1983
• Docket Number: No. 82 C 20080.,82 C 20080.
• Citation: 564 F. Supp. 1112
• Parties: John T. LIGHTNER, d/b/a Lightner Auto Sales, Third-Party Plaintiff, v. TREMONT AUTO AUCTION, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

564 F. Supp. 1112

John T. LIGHTNER, d/b/a Lightner Auto Sales, Third-Party Plaintiff, v. TREMONT AUTO AUCTION, INC., et al., Defendants.

No. 82 C 20080.

United States District Court, N.D. Illinois, W.D.

April 22, 1983.

John A. Dienner, III, Pierce, Lydon, Griffin & Montana, Chicago, Ill., for third-party Plaintiff.

Cordell Siegel, St. Louis, Mo., D. Peter DeBruyne, Rockford, Ill., Dan Murray, Asst. U.S. Atty., Chicago, Ill., L. Kent Sezer, Asst. Atty. Gen., Springfield, Ill., for defendant.

ORDER

ROSZKOWSKI, District Judge.

John T. Lightner ("Lightner"), doing business as Lightner Auto Sales, initiated the instant third-party complaint.¹ The complaint stems from an undercover F.B.I. investigation of interstate theft of automobiles and trucks. Attorney General William French Smith ("Smith"), Assistant U.S. Attorney Bruce White ("White"), and St. Louis F.B.I. Agent Barry Jones ("Jones"), (together referred to as "federal defendants"), have filed the instant motion for dismissal of the claims against them. Counts III thru VII of plaintiff Lightner's complaint deal with these federal defendants. Briefly, Count III is for deprivation of property without due process of law in violation of the Fourteenth Amendment; Count IV is for violation of 42 U.S.C. § 1983; Count V is for malicious interference with business; Count VI is for an invasion of privacy; and, Count VII is for violation of the Organized Crime Control Act of 1970, specifically the Racketeer Influenced and Corrupt Organizations ("RICO") provisions of 18 U.S.C. § 1961 et seq. As an alternative to dismissal, the federal defendants move for a transfer of venue to the United States District Court for the Eastern District of Missouri.

For the reasons set forth below, the motion to dismiss is granted with respect to Smith. As for the federal defendants, their motion for dismissal is denied with respect to all Counts. Additionally, their motion for a change of venue is denied.

I. FACTS

The facts as alleged in Lightner's complaint are as follows. Agent Jones initiated a plan whereby David Locke ("Locke"), a "part-time agent of and informant for the F.B.I." (not a party to the instant motion), would purchase certain stolen automobiles and trucks and, by resale, enter these vehicles into the stream of commerce. To disguise the identity of stolen vehicles, Locke, who had obtained certificates of title and matching Vehicle Identification Number ("VIN") tags from wrecked and scrapped vehicles, was to replace the stolen vehicles' VIN tags with those of the wrecked and scrapped vehicles of similar description. The certificates of title for the wrecked and scrapped vehicles would thereby correspond to the VIN tags on the stolen vehicles. Thus, purchasers of the vehicles would be unaware that they were stolen. The plan was allegedly approved by federal defendants Smith and White.

Locke, after retagging some vehicles, successfully launched the plan by selling these vehicles to G.T.O. Auto Brokers, Inc. ("G.T. O."), a Missouri corporation. G.T.O. then sold or consigned the vehicles to Tremont Auto Auction, Inc. ("Tremont"), a Peoria, Illinois corporation, for the purpose of selling them to the highest bidder at auction. Lightner visited Tremont and purchased eight of these stolen vehicles. He was given the certificates of title to the vehicles — which of course matched the vehicles' VIN tags — and registered these with the State of Illinois. Finding nothing amiss, the State issued new Illinois certificates of title to Lightner.

On May 4, 1981, William Killian ("Killian"), a Dixon, Illinois Police Officer, visited Lightner Auto Sales to inspect a 1979 Trans Am which Lightner had purchased from Tremont. After inspection, Killian informed Lightner that the vehicle appeared to be stolen. In order that the State Police could make a more thorough check, Killian told Lightner to hold the Trans Am. The now suspicious Lightner requested that Killian also run a check on the other vehicles purchased at Tremont.

Within a few days, Officer Killian returned to Lightner Auto Sales with Jean Hutson ("Hutson") an Illinois State Police Officer. Trooper Hutson, in front of one of Lightner's customers, echoed the earlier proclamation of Officer Killian that the car appeared to be stolen. Hutson told Lightner that the car would have to be removed to a garage for further inspection — a proposition to which Lightner readily agreed — and the Trans Am was taken away.

Within a few days, the Trans Am was returned to Lightner's lot. Trooper Hutson telephoned to inform Lightner that the car was not stolen. He also told Lightner that the other vehicles which he had purchased from Tremont were "OK" and he was free to sell them.

Unknown to Lightner, however, the vehicles in question had actually checked out as stolen. While the vehicles were under inspection, F.B.I. Agent Jones had allegedly telephoned Officer Killian and Lieutenant William Ostergrant, also a Dixon Police Officer. Ostergrant and Killian were told of the ongoing F.B.I. undercover scheme. Based on a request by Agent Jones, the officers ended their investigation of the cars in question. Lightner was not told of this scheme; he merely received the call from Trooper Hutson which cleared the vehicles.

In addition to this incident at Lightner's lot, the complaint alleges another Illinois incident in which certain of these scheme vehicles were almost removed from commerce, but instead resulted in Lightner once again unwittingly dealing in stolen vehicles. Apparently, Byron Svendson, another Illinois State Police Officer, had visited Tremont Auto Auction in Peoria on June 10, 1981, and impounded two cars as stolen. One of these cars was subsequently released and sold to Lightner. While the complaint alleges no reason for this release, documents filed with Lightner's brief in the instant motion, if true, show that Trooper Svendson knew that the car was stolen when he released it and that the release was at the request of St. Louis FBI Agent Jones.

Approximately five months passed before Lightner discovered the true nature of the vehicles he had sold. Trooper Hutson presented Lightner with a list of VIN's belonging to vehicles Lightner had sold — among which were the VIN's of the above mentioned vehicles — and directed Lightner to call in these vehicles. Lightner was told to provide loaner cars to the purchasers and, if the vehicles proved to be stolen, purchase the cars from the insurance companies who had paid claims on them and then return them to the customers. When Lightner refused to comply with Hutson's directive, Hutson allegedly threatened retaliation.

Hutson told Lightner that unless he cooperated, certain undesirable "police tactics" would be employed: marked police cars and uniformed officers would be used to seize the vehicles from Lightner's customers and the cars would be forcefully taken from the customers' residences or places of business. Such a procedure is alleged to have taken place with respect to two of the vehicles Lightner had sold.

It is based on these facts that Lightner brings this action. While these "facts" are at present mere allegations, it is hornbook law that the defendant admits the allegations of the complaint for purposes of a motion to dismiss. City of Milwaukee v. Saxbe, 546 F.2d 693, 704 (7th Cir.1976). See also Mescall v. Burrus, 603 F.2d 1266 (7th Cir.1979).

II. JURISDICTION

Before rendering any decision concerning a cause of action, a federal court must have both subject matter and personal jurisdiction over the claim and its parties. Lightner's complaint against the federal defendants arises under the Constitution and laws of the United States and as such is properly within the subject matter jurisdiction of this court. 28 U.S.C. § 1331. The federal defendants, however, contend that this court lacks in personam jurisdiction over them.²

The Supreme Court has frequently inquired into the limits of in personam jurisdiction under the due process clause. See, e.g., World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The constitutional standard set forth initially in International Shoe, supra, requires that a defendant "have certain minimum contacts with the forum State such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" 326 U.S. at 316, 66 S.Ct. at 158 (citation omitted). An essential criterion in each case is that the "quality and nature" of the defendant's activity be such that it is "reasonable" and "fair" to require him to conduct his defense in that State. Kulko v. California Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978).

In the instant case, the allegations against the federal defendants show sufficient contact with Illinois to make it reasonable and fair to require them to present their defense here. Considering the close proximity of St. Louis to Chicago, the likelihood that their scheme would flow over into Illinois was great. Indeed, a document submitted by Lightner for purposes of the instant motion indicates that at least a portion of their scheme was specifically targeted at Illinois. Regardless of any original intentions, once scheme vehicles were identified in Illinois and the local law enforcement personnel were contacted to keep these vehicles in the stream of commerce, the federal defendants from that point on clearly were running an Illinois investigation. All this was done with the knowledge that these disguised stolen vehicles might injure innocent Illinois consumers.

So, here we have more than the unacceptable situation where long-arm jurisdiction is exercised merely because some of the vehicles "happened" into Illinois; more than a situation where "amenability to suit would...