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Gasoline Sales, Inc. v. Aero Oil Co.

filed: November 1, 1994.

GASOLINE SALES, INC. APPELLANT
v.
AERO OIL COMPANY; GETTY PETROLEUM CORPORATION; JERRY T. LANK; ALVIN SMITH; RECO PETROLEUM, INC.



On Appeal From the United States District Court For the Middle District of Pennsylvania. (D.C. Civil Action No. 92-01771).

Before: Stapleton and Scirica, Circuit Judges, and Smith, District Judge*fn*

Author: Stapleton

Opinion OF THE COURT

STAPLETON, Circuit Judge... :

Gasoline Sales, Inc. ("Gas Sales") sued three related corporations and officers of two of the corporations. Gas Sales alleged that the defendants injured Gas Sales in the course of violating the Racketeer Influenced and Corrupt Organizations ("RICO") chapter of the Organized Crime Control Act of 1970, 18 U.S.C. §§ 1961-68. The district court dismissed Gas Sales' second amended complaint pursuant to Fed. R. Civ. Pro. 12(b)(6) for failure to state a claim upon which relief could be granted. Gas Sales appeals from this dismissal. It also appeals from the district court's ruling refusing to grant it leave to file a third amended complaint. The primary question raised on appeal is whether Gas Sales has satisfied the "person/enterprise" pleading requirement which we have held applies in RICO suits premised on 18 U.S.C. § 1962(c). See B.F. Hirsch v. Enright Refining Co., 751 F.2d 628 (3d Cir. 1984). We hold that Gas Sales has failed to satisfy this requirement, and we will therefore affirm the judgment of the district court.

I.

A.

Because the district court dismissed Gas Sales' second amended complaint at the pleading stage pursuant to Rule 12(b)(6), we must consider whether relief could be granted to Gas Sales "under any set of facts that could be proved consistent with the allegations" in its complaint. National Organization For Women, Inc. v. Scheidler, ___ U.S. ___, 114 S. Ct. 798, 803 (1994) quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984). The relevant allegations are as follows.

The defendants are a corporation, Getty Petroleum Corp. ("Getty"); Getty's two wholly-owned subsidiaries, Aero Oil Company ("Aero"), and Reco Petroleum, Inc. ("Reco"); Getty's senior vice-president, Alvin Smith; and Aero's general manager, Jerry T. Lank. Getty, Aero, and Reco are engaged in the leasing of retail gasoline stations and the sale of petroleum products. Getty acquired Aero in 1986, and acquired Reco on June 30, 1989.

Getty originally was incorporated under the name of Power Test Corporation ("Power Test"), but changed its name in 1985. Between 1982 and 1985, Getty -- then called Power Test -violated New York State statutes by defrauding 182 New York gasoline-station lessees. In 1986, the New York Attorney General filed a civil suit against Getty on behalf of the 182 lessees. Getty settled the suit for a large monetary payment.

In 1990, in the District Court for the Eastern District of New York, a Getty subdivision named Getty Terminals Corp. (which is not a party to this lawsuit) was convicted of tax evasion and conspiracy to defraud the United States.

From 1986 to 1991, in Pennsylvania and Maryland, the defendants have engaged in a widespread fraudulent scheme, through the use of both mail and wire communications, to induce the plaintiff Gas Sales and at least twenty others to enter into retail-gasoline-station lease-agreements with the defendants. Once the lessees entered into the contracts, the defendants would embark on a course of fraudulent conduct designed to render the retail gasoline-stations unprofitable and thereby "squeeze" the lessees out of business.

B.

The district court had jurisdiction over Gas Sales' complaint pursuant to RICO, 18 U.S.C. ยง 1964(c). We have jurisdiction over this ...


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