Antitrust Law Daily Wrap Up, RICO—MDTenn: Car Dealership’s Continuing Refusal to Return Debited Funds Was Only Single Predicate Act for RICO Purposes, (Mar 7, 2013)

By Tobias J. Gillett, J.D., LLM.

A vehicle purchaser who alleged that her debit card was charged $1500 by a car dealership for holding a vehicle rather than the $100 to which she had agreed was unable to state Racketeer Influenced and Corrupt Organizations (RICO) Act claims against the dealership because she alleged only a single predicate act, despite the dealership’s continued refusals to return the money, the federal district court in Nashville has ruled (League v. Olds, March 6, 2013, Sharp, K.).

According to the complaint, on December 21, 2012 the vehicle purchaser sought to acquire a vehicle from Trinity/Thrifty Automotive Car Sales (“Trinity”). The purchaser was informed that she would have to leave a $100 deposit to hold the vehicle until the next day. The purchaser provided a debit card, but Trinity allegedly debited $1500 from the card rather than the expected $100. Although Trinity claimed the money would be returned to the account by December 28, 2012, the dealership never refunded the money.

The purchaser brought suit in federal court against the owner of the dealership and several of its employees, asserting claims for violation of the RICO Act, among other claims. The defendants moved to dismiss.

The court explained that to state a claim for violation of the RICO Act, a plaintiff must plead the defendant’s “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” The “pattern of racketeering activity” requires at least two predicate acts committed within ten years of each other.

The court concluded that the purchaser had failed to establish the necessary “pattern of racketeering activity.” The purchaser had alleged only a single predicate act, the unauthorized debiting of the $1500. Even if that single act continued beyond the initial debiting through the dealership’s refusal to return the money, the purchaser had still only alleged a single predicate act. Therefore, the court dismissed her RICO claim.

The court also dismissed claims under 42 U.S.C. § 1983 and the federal Truth in Lending Act, and, since it had dismissed all of the purchaser’s federal claims, declined to exercise its supplemental jurisdiction over the purchaser’s state law claims.

The case is No. 3:13-cv-177.

Companies: Trinity/Thrifty Automotive Car Sales.

Cases: RICO TennesseeNews