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United States District Court, Northern District of Illinois, E.D

July 21, 1982


The opinion of the court was delivered by: Shadur, District Judge.


Edward Fields ("Fields") sues The National Republic Bank of Chicago ("Bank") under the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1961-68 (all citations to Title 18 in this opinion will read simply "Section —"). For the reasons stated in this memorandum opinion and order, Bank's motion to dismiss the Amended Complaint (the "Complaint") for lack of jurisdiction over the subject matter is granted.


In June 1978 Fields, the owner of the beneficial interest in land trusts holding title to several parcels of Chicago real estate, assigned the beneficial interests to the Bank as security for a $250,000 note. When Fields later paid the note in full, Bank had the duty to reassign the beneficial interests but did not do so.

In November 1979 Fields borrowed the same amount "without security required or tendered." Nonetheless the note he signed recited security of "A/B/I."*fn2 At some unspecified later date the note was re-presented to Fields, with the interest rate changed from 10 1/2% to 18% without his knowledge or consent.

In June 1980 Bank presented to Fields a $6,500 promissory note dated May 18, 1979. As to that note Fields has alternative theories. One is that he never received the money and his signature on the note was a forgery. Alternatively, if the note were not a forgery he says its interest rate was also fraudulently increased from 10 1/2% to 18%.

Fields relied on Bank's representations and paid interest on both the May 1979 and the November 1979 notes at the 18% rate. Fields has been damaged by the excessive payment of interest and the non-reassignment of the beneficial interests.

To invoke RICO Fields claims that Bank used the mail for three June 13, 1980 letters in furtherance of its scheme to defraud Fields. Its activities in charging the higher interest rates, in forging the $6,500 note and in refusing to reassign the beneficial interests are said to be "fraudulent activities, corrupt activities and racketeering activities" under the RICO sections.

Nonapplicability of RICO

Fields has a perfectly good state law cause of action.*fn3 But like the myth of the lemming drawn to the sea, he follows the unfortunately all-too-prevalent trend of seeking to reshape the claim into one that can be wrapped in the RICO mantle.

There are a number of respects in which that effort is fatally flawed, but it is only necessary to discuss one to dispose of the present motion. This Court need not plow old furrows for that purpose, for its analysis in Parnes v. Heinold Commodities, Inc., 539 F. Supp. 199 (N.D.Ill. 1982)*fn4 demonstrates why Fields cannot succeed here. Consistently with, but without repeating, the Parnes analysis, the Court determines that under the Complaint:

    (1) If Bank is considered the "enterprise" for
  Section 1962(c) purposes, Fields has failed to
  identify any "person" employed with or associated
  with that "enterprise" in participating "in the
  conduct of [Bank] affairs through a pattern of
  racketeering activity or collection of unlawful
  debt." That failure in turn causes Fields' RICO claim
  to fail entirely.*fn5

    (2) If Fields is viewed as the "enterprise" for
  Section 1962(c) purposes, Bank might be considered as
  the "person" that so participated in the conduct of
  Fields' affairs. But there is no allegation that the
  Fields "enterprise" (if any) was engaged in, or that
  its activities affected, interstate commerce.*fn6 Again
  the RICO claim must fail.

As in Parnes, analysis confirms the illegitimacy of trying to force a common law fraud claim into the RICO mold. Because there is no other predicate for federal jurisdiction over Fields' claim, dismissal of the Complaint must occasion dismissal of this action as well.


This Court lacks subject matter jurisdiction over the Complaint and Fields' action. Accordingly this action is dismissed for want of such jurisdiction.

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