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MEINEKE DISCOUNT MUFFLER SHOPS v. NOTO

August 16, 1982

MEINEKE DISCOUNT MUFFLER SHOPS, INC., Plaintiff,
v.
PATSY NOTO and JOPAT AUTO CENTER, INC., Defendants



The opinion of the court was delivered by: MCLAUGHLIN

MEMORANDUM AND ORDER

 McLAUGHLIN, District Judge:

 This is a motion under Fed. R. Civ. P. 15 for leave to file an amended complaint. Some background is required to put the motion in context.

 Plaintiff, Meineke Discount Muffler Shops, Inc. ("Meineke"), a Texas corporation, is a well known operator and franchisor of retail discount muffler shops. Defendant, Patsy Noto, a New York resident, is the operator and franchisee of a Meineke shop in Staten Island. Defendant, Jopat Auto Center, Inc. (the "Center"), a New York corporation allegedly owned and controlled by Noto, is either the transferee of the Meineke license granted to Noto, or the co-licensee of Noto. See Complaint, 82 Civ. 15 (E.D.N.Y. filed January 5, 1982).

 On December 29, 1981, the plaintiff filed a complaint in the United States District Court for the Southern District of Texas ("the Texas action") alleging claims for common-law fraud, violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Section 1961, et. seq., breach of contract, trademark infringement and unfair competition. The nub of these claims is that the defendants devised schemes to defraud the plaintiff of a portion of defendants' gross receipts to which plaintiff was entitled under the franchise contract.

 One week later, the plaintiff commenced a second action in this Court. No claims or causes of action were alleged in the complaint. Instead, plaintiff declared that the object of the action was to obtain an Order of Attachment, pursuant to Fed. R. Civ. P. 64 and CPLR 6201, to secure funds to satisfy any money judgment that might eventually be awarded in the Texas action. To that end, on the same day, plaintiff filed, and the Court granted, an ex parte motion for an Order of Attachment. This Order was confirmed on notice and after a hearing on January 29, 1982.

 Meanwhile, the defendants moved to dismiss the Texas action. On March 29, 1982, the Texas District Court granted the defendants' motion with respect to the RICO allegations on the ground of improper venue, but denied the motion with respect to all other claims. Meineke then sought an Order from the Texas Court reinstating the RICO counts and transferring the entire action to this Court where venue for all the causes of action would be proper. The motion was denied in Texas.

 Plaintiff now seeks to amend its complaint for provisional relief in this Court to allege the RICO claims. The defendants oppose and, in the alternative, if the motion to amend be granted, the defendants move to dismiss the RICO claims.

 DISCUSSION

 A. The Motion to Amend

 It should be remembered that the Texas dismissal on the ground of improper venue is without prejudice. Fed. R. Civ. P. 41(b). Accordingly, plaintiff may commence an action on its RICO claims in the appropriate forum. It is also axiomatic that leave to amend a pleading "shall be freely given when justice so requires." Fed. R. Civ. P. 15(a).

 The only question, then, is whether the plaintiff should be permitted to amend its complaint for provisional relief or whether it should be required to commence a new action. Because a new suit would inevitably be assigned to this Court as a related case, it makes little sense to require plaintiff to start afresh. Accordingly, plaintiff is granted leave to file its proposed amended complaint.

 B. The Motion to Dismiss

 Defendants' motion makes three arguments: (1) the amended complaint fails to state a RICO claim; (2) plaintiff is contractually bound to sue defendants only in Texas; and (3) the interest of justice dictates ...


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