Stephen Yagman v. Paul Gabbert
684 F. App'x 625
| 9th Cir. | 2017Background
- Plaintiff Stephen Yagman sued alleging civil RICO and state-law claims based on alleged wrongful acts by attorney Gabbert stretching over a decade.
- Yagman amended his complaint once; the district court dismissed the RICO claim with prejudice (no further leave to amend) and dismissed remaining state-law claims without prejudice for lack of subject-matter jurisdiction.
- The district court found Yagman had not pleaded a plausible RICO pattern: allegations were vague, based largely “on information and belief,” and lacked factual detail or a threat of continued wrongdoing.
- The court concluded a RICO conspiracy claim failed because no substantive RICO violation was adequately pleaded.
- The district court determined it lacked diversity jurisdiction because Yagman was domiciled in California, not New York, when he filed suit, based on objective indicia (residence, driver’s license, bank account, professional ties).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint pleaded a RICO pattern of racketeering activity | Yagman asserted multiple predicate acts over 10 years and alleged enterprise conduct (allegations "on information and belief") | Gabbert argued allegations were conclusory, nonspecific, and failed to show the continuity or relatedness needed for a RICO pattern | Court: Dismissal affirmed — allegations insufficient to plausibly plead a RICO pattern or threat of continued activity |
| Whether RICO conspiracy survives absent a substantive RICO violation | Conspiracy claim stood on alleged agreement and predicate acts | Defendant: Conspiracy fails if substantive RICO claims fail | Court: Conspiracy claim fails because plaintiff did not plausibly allege a substantive RICO violation |
| Whether district court abused discretion in denying further leave to amend RICO claim | Yagman sought additional opportunity to amend after one amendment | Gabbert: Plaintiff already had chance to amend; further amendment would be futile | Court: No abuse — district court properly denied further leave because amendment would be futile |
| Whether diversity jurisdiction existed at filing | Yagman claimed New York domicile | Gabbert argued Yagman was domiciled in California based on residence and objective ties | Court: No diversity — Yagman domiciled in California when suit filed; state-law claims dismissed without prejudice |
Key Cases Cited
- Eclectic Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 990 (9th Cir.) (standards for pleading RICO pattern)
- Steam Press Holdings, Inc. v. Hawaii Teamsters, Allied Workers Union, Local 996, 302 F.3d 998 (9th Cir.) (continuity requirement for RICO pattern)
- Woods v. U.S. Bank N.A., 831 F.3d 1159 (9th Cir.) (RICO pleading principles)
- Sanford v. MemberWorks, Inc., 625 F.3d 550 (9th Cir.) (RICO pleading and dismissal of related claims)
- Salameh v. Tarsadia Hotel, 726 F.3d 1124 (9th Cir.) (denial of leave to amend where prior amendment made)
- Lew v. Moss, 797 F.2d 747 (9th Cir.) (test for domicile for diversity jurisdiction)
- Gaudin v. Remis, 379 F.3d 631 (9th Cir.) (subjective and objective components of domicile)
- Kroske v. U.S. Bank Corp., 432 F.3d 976 (9th Cir.) (standard of review for factual determinations in diversity inquiries)
- Mondragon v. Capital One Auto Fin., 736 F.3d 880 (9th Cir.) (party bearing burden to show change of domicile)
- Robinson v. United States, 586 F.3d 683 (9th Cir.) (domicile is a judge, not jury, question)
- Sinclair v. Spatocco, 452 F.2d 1213 (9th Cir.) (same)