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Legal case analysis - Essay Example

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Two rival professional boxing promotion corporations were locked in a legal battle concerning unethical and criminal activities perpetrated by one with the intent of gaining a solid foothold in the business and an unfair advantage over the other. Petitioner Cedric Kushner Promotions, Ltd., a corporation based in New York City, filed a civil complaint before the Federal District Court against respondent Don King, the sole proprietor and president of Don King Productions, Inc…
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1 LEGAL CASE STUDY: KUSHNER V KING FACTS OF THE CASE Two rival professional boxing promotion corporations were locked in a legal battle concerning unethical and criminal activities perpetrated by one with the intent of gaining a solid foothold in the business and an unfair advantage over the other. Petitioner Cedric Kushner Promotions, Ltd., a corporation based in New York City, filed a civil complaint before the Federal District Court against respondent Don King, the sole proprietor and president of Don King Productions, Inc. and an employee and officer of its successor-in-interest DKP Corporation, both Florida-based. Petitioner alleged that respondent substantially violated Sec. 1962c of RICO (Racketeer Influenced and Corrupt Organization Act) when respondent interfered with petitioner's contracts to represent boxers Hasim Rahmen and Louis del Valle, made acts of fraud and misrepresentation and fraudulently refused to pay petitioner $300,000,which is due the respondent under a contract between the parties. Furthermore, respondent allegedly violated Sec. 1962d of RICO by conspiring against petitioner .
The District Court dismissed petitioner's complaint. Thus, the case was brought to the Court of Appeals, which upheld the decision of the lower court. Petitioner then elevated the case to the Supreme Court on a writ of certiorari.
1. Whether or not respondent , who as president/employee of an enterprise allegedly acted within the scope of his corporate duties, be held liable under RICO Act.
2. Whether or not respondent's personality can be sufficiently distinguished or set apart from his own corporation and thus can be held liable under Sec 1962 of RICO Act.
Complaint of petitioner is dismissed.
Decision of the Federal District Court is affirmed.
Decision of the Court of Appeals is reversed and case is remanded for further proceedings.
A. Both the District Court and the Court of Appeals are one in saying that Sec. 1962c of RICO Act doesn't apply in the case at bar since respondent , being officer and employee of the corporation and acting within the scope of his corporate authority when he perpetrated the criminal acts, cannot be legally separated from the RICO corporation and also because petitioner failed to prove the existence of two different and separate entities i.e. a distinct person and a distinct enterprise.
B. The Supreme Court, speaking through Justice Stephen Breyer, held that "the requisite distinctness between respondent and his corporation was established since they were legally different entities. The formal legal distinction between respondent and his corporation was sufficient to apply RICO to respondent's conduct and it made no difference whether respondent was acting within the scope of his corporate employment when he allegedly engaged in the criminal activities".
The CA and DC decision was to my mind repulsive to peace -loving citizens. Both courts were so engrossed with the 'distinctness' issue that they failed to realize that the RICO came to being to "protect the public and the legitimate corporations from people " who would
wantonly commit fraud and criminal acts "using the corporation as vehicle to perpetrate their
illegal activities".
When the Supreme Court took a stand to allow the spirit of RICO Act to color its decision and when it stated with finality that it is not material that respondent acted within the scope of his corporate authority or even above it, a torrent of implications poured in. First, it is no longer possible to commit dastardly acts and escape liability with the lame excuse that it was done within the scope of their corporate authority. They have to personally pay the price for their crimes. Second, with this decision, the Supreme Court , in cases where the corporation is used to perpetrate crime and illegalities or to protect fraud and felonies, practically allowed that the "veil of corporate entity " be pierced and the separate identity of the corporation be disregarded and its officers, employees or shareholders be made liable for the crimes of the corporation.
Cedric Kushner Promotions, Ltd v Don King, et al. Supreme Court of the USA. 533 US 158;
121 SCt. 2087, 150 L.Ed. Read More
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