United States District Court, Northern District of Illinois, E.D
December 17, 1981
NSC INTERNATIONAL CORPORATION, PLAINTIFF,
ADDISON HAYES RYAN, DEFENDANT.
The opinion of the court was delivered by: Marshall, District Judge.
Plaintiff filed the instant action seeking treble damages
under 18 U.S.C. § 1964(c) (1976). That statute creates a
civil remedy for persons injured by violations of the Racketeer
Influenced and Corrupt Organization (RICO) statute, 18 U.S.C. § 1962
(1976). Section 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 United
States District Court and shall recover threefold
the damages he sustains and the cost of the
suit, including a reasonable attorney's fee.
Defendant has moved to strike plaintiff's timely jury demand
on the ground that actions under § 1964(c) are equitable in
nature and therefore give rise to no right to a jury trial. In
order to rule on the motion, this court must resolve the
question of whether the seventh amendment grants the right to
a jury trial in actions under § 1964(c). This issue
apparently has never been decided in any reported decision.
The seventh amendment states, "In Suits at common law, where
the value in controversy exceeds twenty dollars, the right to
trial by jury shall be preserved . . . ." The Supreme Court has
held that the amendment applies not only to actions at common
law which existed when the amendment was adopted in 1791, but
also to legal rights subsequently created by statute. "The
Seventh Amendment does apply to actions enforcing statutory
rights, and requires a jury trial on demand, if the statute
creates legal rights and remedies, enforceable in an action for
damages in the ordinary courts of law." Curtis v.
Loether, 415 U.S. 189, 194, 94 S.Ct. 1005, 1008, 39
L.Ed.2d 260 (1974). Thus, we must determine if § 1964(c)
creates "legal rights and remedies.
The test to be used in this case is whether the closest
historical analogy to the rights created by § 1964(c) was
a legal or an equitable action. See Pernell v. Southall
Realty, 416 U.S. 363, 374-80, 94 S.Ct. 1723, 1729-32, 40
L.Ed.2d 198 (1974); Ross v. Bernhard, 396 U.S. 531,
534 n. 1, 90 S.Ct. 733, 735 n. 1, 24 L.Ed.2d 729 (1970)
(Stewart, J., dissenting); Patzig v. O'Neil,
577 F.2d 841, 848 (3d Cir. 1978); 9 C. Wright & A. Miller, Federal
Practice and Procedure § 2302 (1971). In this case, the
closest analogy is to an action in tort. RICO prohibits persons
engaged in racketeering activity from acquiring an interest in
any enterprise engaged in interstate commerce, see
18 U.S.C. § 1962(a), (b) (1976), and prohibits persons
associated with such enterprises from engaging in racketeering
activity, see 18 id. § 1962(c). Congress
enacted RICO in order to halt the pernicious infiltration of
organized crime into business enterprises. See House
Rep. No. 92-1549, 91st Cong., 2d Sess. 57 (1970); Sen.Rep. No.
91-617, 91st Cong., 1st Sess. 76 (1969); United States v.
Turkette, 452 U.S. 576, 591, 101 S.Ct. 2524, 2532, 69
L.Ed.2d 246 (1981) ("[T]he legislative history forcefully
supports the view that the major purpose of [RICO] is to
address the infiltration of legitimate business by organized
crime."). This most closely resembles an action for tortious
interference with economic relations, a tort which was
recognized at common law. See W. Prosser, Handbook of
the Law of Torts §§ 128-30 (4th ed. 1971). Actions sounding
in tort were considered legal and therefore tried to juries at
common law. Curtis v. Loether, 415 U.S. at 195, 94
S.Ct. at 1009. Thus, the historical test indicates that actions
under § 1964(c) are legal, and must be tried to a jury.
This conclusion is reinforced by the type of relief that the
statute authorizes. Section 1964(c) provides for money damages
for injuries to business or property. Monetary damages for
injury to property have traditionally been considered a legal
remedy for purposes of the seventh amendment. See id.
at 196, 94 S.Ct. at 1009. Finally, the statutory language
provides no indication that the relief sought is equitable,
which is yet another factor indicating that the seventh
amendment applies to the statute. See Lorillard v.
Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 872, 55 L.Ed.2d 40
(1978); Curtis v. Loether, 415 U.S. at 196-97, 94
S.Ct. at 1009-10. To the contrary, the statute strongly
suggests that § 1964(c) provides for legal relief, since it
follows § 1964(a), which authorizes only equitable
The juxtaposition of subsections (a) and (c) implies that
Congress intended to create legal and equitable actions,
putting each into a different subsection.*fn2 Any remaining
doubt is resolved by the strong federal policy favoring jury
trials in civil cases. See Byrd v. Blue Ridge Rural
Electrical Cooperative, 356 U.S. 525, 538-39, 78 S.Ct.
893, 901, 2 L.Ed.2d 1375 (1958).
Defendant relies exclusively on one sentence from United
States v. Capetto, 502 F.2d 1351, 1357 (7th Cir. 1974), in
which the court stated, "Section 1964 provides for a civil
action in which only equitable relief can be granted."
Id. at 1357. Defendant ignores the context in which
this statement was made. In Capetto, plaintiff sought
no money damages. The complaint sought only injunctive relief
under § 1964(a). Thus, the court's statement applied only
to subsection (a), and not the subsection involved in the
instant action. Moreover, this statement from Capetto
was not addressed to the question at hand, but rather to the
question of whether § 1964 was essentially a criminal
statute entitling defendants to the array of constitutional
rights afforded defendants in criminal proceedings.
The motion to strike plaintiff's jury demand is denied. This
case will be tried to a jury.