The rival gunsel was a gangster who was part of the gang that was the rival to the gang run by Arnie "Eggs" Benedict in Chicago, Illinois in 1927. He was fired upon in an alley with a tommy gun by a Benedict mob gunsel, with Marty and Doc caught in the middle.
After Marty and Doc talked to Arnie "Eggs" Benedict, they learned that the two gangs were in a feud with each other. Benedict hired Marty to help his gang, as Doc had told him that Marty was the head of another gang from the east coast.