132 F. Supp. 3d 1207
C.D. Cal.2015Background
- Mongol Nation (an unincorporated association of “full patched” Mongols members) was indicted under RICO § 1962(c) and § 1962(d) for conducting the affairs of the Mongols Outlaw Motorcycle Gang through a pattern of racketeering, and the Government sought forfeiture of trademarked membership marks (Word Image and Rider Image).
- The marks were registered with the USPTO; ownership and prior assignments (including disputes involving Cavazos and a corporation) feature in the record; related proceedings include a prior criminal case against individual members (CR08-1201) and a civil suit (Rivera) in which seizure of the marks was held improper pretrial.
- The Indictment alleges the enterprise consists of full patched members, prospective/probationary members, and associates; Mongol Nation is alleged to be an association of full patched members that controlled the marks and participated in violent and drug-trafficking predicates.
- Mongol Nation moved to dismiss, arguing (1) forfeiture theory is legally and constitutionally defective/estopped by Rivera; (2) the §1962(c) count fails because the charged “person” is not distinct from the alleged “enterprise”; and (3) the association cannot legally commit certain violent predicate acts; it also sought sanctions against the Government.
- The Court held that challenges to forfeiture were premature and not properly resolved on a pretrial Rule 12 motion, but granted dismissal because the indictment failed the RICO distinctness requirement (the person and enterprise are not meaningfully distinct). Sanctions were denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Forfeitability / estoppel from Rivera | Government maintains forfeiture allegation valid and prosecutable against the indicted entity | Mongol Nation argues forfeiture and regulation of the collective mark already decided in Rivera and/or unconstitutional, so indictment or forfeiture claim must be dismissed | Court: Forfeiture challenges premature on Rule 12; collateral estoppel fails because issues differ; forfeiture argument not resolved now |
| Distinctness under §1962(c) (person v. enterprise) | Government contends Mongol Nation is distinct because it holds legal control of marks and enterprise includes non-member associates | Mongol Nation contends it is the same entity as the enterprise (the Gang consists of the association’s members/affiliates), so the indictment fails the non-identity requirement | Court: Dismissed indictment — person and enterprise are not meaningfully distinct; charging Mongol Nation as both violates §1962(c) distinctness requirement |
| Ability of the entity to commit predicate violent acts | Government alleges the association committed predicate acts (murder, attempted murder, drug distribution) through members | Mongol Nation argues an unincorporated association cannot itself commit certain violent predicates and indictment improperly imputes individual crimes to the entity | Court: Declined to decide because the indictment was dismissed on distinctness grounds (not reached) |
| Sanctions (28 U.S.C. §1927, Hyde Amendment, EAJA) | Government implicitly argues prosecution was lawful and not vexatious | Mongol Nation argues prosecution was frivolous, vindictive, or result of judge-shopping and seeks fees/costs | Court: Denied sanctions — no showing of bad faith, vexatiousness, or procedural entitlement; EAJA inapplicable to criminal case |
Key Cases Cited
- United States v. Turkette, 452 U.S. 576 (1981) (RICO enterprise/pattern framework)
- Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) (requires distinct person and enterprise under §1962(c))
- Living Designs, Inc. v. E.I. Dupont de Nemours & Co., 431 F.3d 353 (9th Cir. 2005) (enterprise indistinct when it merely reframes defendant and its employees)
- Yellow Bus Lines, Inc. v. Drivers, Chauffeurs & Helpers Local Union 639, 883 F.2d 132 (D.C. Cir. 1989) (organization cannot form an enterprise by associating with its own members)
- In re ClassicStar Mare Lease Litig., 727 F.3d 473 (6th Cir. 2013) (guidance on functional separateness and distinctness under RICO)