Rajinder Malhotra v. Copa De Ora Realty, LLC, 673 F. App'x 666

Rajinder and Veena Malhotra sued defendants including Rakesh Malhotra and Copa de Ora Realty, LLC (CDO) asserting federal RICO and related state-law claims arising from transfers of Rajinder’s funds tied to a corporate restructuring.
A contract between Rajinder and CDO contained an arbitration clause covering disputes “arising from or connected with” that contract; Rakesh moved to compel arbitration of Rajinder’s claims.
The district court denied Rakesh’s motion to compel arbitration, granted summary judgment for Rakesh on the remaining federal RICO claim (18 U.S.C. § 1962(c)), and declined to exercise supplemental jurisdiction over the plaintiffs’ state-law claims.
On appeal, the Ninth Circuit affirmed denial of arbitration for Rajinder, affirmed summary judgment on the § 1962(c) claim (finding no RICO “pattern”), and affirmed the district court’s dismissal of state claims for lack of supplemental jurisdiction.
The court dismissed as moot the appeal concerning CDO’s alleged waiver of arbitration and dismissed an appeal of the district court’s denial of a stay as nonappealable.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Rajinder’s claims must be arbitrated under contract clause covering disputes “arising from or connected with” the contract	Rajinder’s claims relate to the corporate restructuring and thus fall within the clause	Clause applies only to disputes with a significant relationship or origin in the contract; Rajinder’s claims are separate torts	Denied — claims are incidental to the contract and not arbitrable under Simula test
Whether Veena is estopped from avoiding arbitration	Veena should be bound by equitable estoppel because of her relationship to the contract	Veena is not bound; her claims are not sufficiently tied to the contract	Not decided — court did not reach estoppel because no claim was arbitrable
Whether plaintiffs proved a RICO § 1962(c) pattern of racketeering activity	The predicate acts (fraud) between 2011–2012 establish a pattern and conspiracy	The acts form a single, short-lived scheme targeting only Rajinder — not a RICO pattern	Granted for defendant — evidence shows a single episode, not a long-term pattern, so summary judgment for Rakesh was proper
Whether district court should retain supplemental jurisdiction over state-law claims after federal claims were dismissed	Plaintiffs urged retention for judicial economy	Defendants urged dismissal for lack of federal claim	Affirmed — court properly declined to exercise supplemental jurisdiction and dismissed state claims

Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir. 1999) (tests when disputes are sufficiently related to a contract to compel arbitration)
Sever v. Alaska Pulp Corp., 978 F.2d 1529 (9th Cir. 1992) (single-episode fraud does not constitute a RICO pattern)
Medallion Television Enters., Inc. v. SelecTV of Cal., Inc., 833 F.2d 1360 (9th Cir. 1987) (RICO requires multiple victims/long-term conduct to show a pattern)
H.J., Inc. v. Nw. Bell. Tel. Co., 492 U.S. 229 (1989) (definition of RICO pattern focusing on relationship and continuity)
Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988) (factors for declining supplemental jurisdiction)
In re O’Brien, 312 F.3d 1135 (9th Cir. 2002) (appellate briefing technical violations do not automatically warrant dismissal)
Fed. Land Bank of Spokane v. L.R. Ranch Co., 926 F.2d 859 (9th Cir. 1991) (order denying stay pending arbitration appeal is not appealable)
Schultz v. Sundberg, 759 F.2d 714 (9th Cir. 1985) (considerations for declining supplemental jurisdiction)