Tuesday, September 16, 2014

Elkhart County commissioner seeks dismissal of suit on procedural grounds

Elkhart County Commissioner Terry Rodino is asking that a federal suit filed against him by a pair of estranged business partners be dismissed.
Posted on April 8, 2013 at 1:00 a.m. | Updated on April 8, 2013 at 6:13 p.m.

Elkhart County CommissionerTerry Rodino is seeking dismissal of a federal suit filed against him by a pair of estranged business partners, arguing in part that the plaintiffs don’t have grounds to seek action in federal court.

Amit Shah and Tim Dugle filed suit against Rodino in U.S. District Court in South Bend in February, charging, among other things, that Rodino improperly runs a group of businesses the three jointly own. The two plaintiffs allege they’ve been cheated out of company revenue and accuse Rodino of violating the federal Racketeer Influenced and Corrupt Organizations Act, or RICO, in part by using his post as county commissioner to help secure a business deal with a Chinese firm.

Rodino, majority stakeholder in the companies — involved in pallet-making and called the Duro Entities — argues in his response that Shah and Dugle, as shareholders, can’t seek a claim under RICO. His filing, dated last Wednesday, cites a 1966 court ruling that states that the standard is meant “to prevent individuals from securing double recovery” — as individuals and as shareholders.

Rodino — through attorneys Robert Palmer, Spencer Walton and Georgianne Walker of the Mishawaka law firm May Oberfell Lorber — continues.

Under Indiana law “individual shareholders do not have standing to individually pursue claims on behalf of a corporation if creditors might be prejudiced or if the complaint names third parties as defendants,” Rodino says. Because Dugle and Shah “lack standing in the present case, this court lacks subject matter jurisdiction over plaintiffs’ RICO claims alleging damages to the corporation.”

In seeking dismissal, Rodino also notes that the charges in the federal suit mirror allegations in a LaGrange Circuit Court case. Shah and Dugle are also behind that suit.

The charges levied by Shah and Dugle in the LaGrange and federal suits are wide-ranging, dealing mainly with their allegations of mismanagement of the Duro Entities, headquartered in Elkhart County. But the federal suit, filed Feb. 14, delves into allegations that extend to the public sphere. Rodino, the two plaintiffs charge, used his post as county commissioner to help engineer the sale of five recreational vehicles made by Forest River in Elkhart County to a Chinese company, earning around $100,000, maybe more.

In his response, Rodino doesn’t directly address that charge or other allegations about mismanagement of the Duro Entities. In prior cases, he’s disputed the allegations against him, though. And in the wake of the federal lawsuit, other county officials have rebuffed suggestions that Rodino improperly used his elected position to profit in the RV deal.

Rodino has served as Elkhart County’s unofficial ambassador to China and traveled there at least three times as county commissioner to promote cultural and economic ties with Jinhua, an industrial region there. Rodino always traveled to China at his own expense, officials say. Elkhart County Commissioner Mike Yoder has noted that it was always understood that Rodino was mindful of business opportunities when traveling there.

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