Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-00538/USCOURTS-caed-2_15-cv-00538-20/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1961 Racketeering (RICO) Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

PASKENTA BAND OF NOMLAKI 

INDIANS; and PASKENTA 

ENTERPRISES CORPORATION,

Plaintiffs,

v.

INES CROSBY; et al.,

Defendants.

)

INES CROSBY; JOHN CROSBY; 

LESLIE LOHSE; and LARRY LOHSE,

Third-Party Plaintiffs,

v.

ANDREW FREEMAN, BRUCE 

THOMAS, and CHUCK GALFORD, 

and DOES 1-10,

Third-Party 

Defendants.

No. 2:15-cv-00538-MCE-CMK

ORDER GRANTING THIRD-PARTY 

DEFENDANTS’ MOTION TO DISMISS

Third-Party Defendants Andrew Freeman, Bruce Thomas and Chuck Galford

(collectively, “Third-Party Defendants”) move to dismiss (ECF No. 173) Third-Party 

Plaintiffs Ines Crosby, John Crosby and Leslie Lohse’s (collectively, “Third-Party 

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Plaintiffs”) Third-Party Complaint (ECF No. 156) under Federal Rule of Civil Procedure 

(“Rule”) 12(b)(6).1 For the reasons that follow, Third-Party Defendants’ motion is 

GRANTED.

PROCEDURAL BACKGROUND

On March 10, 2015, Plaintiffs Paskenta Enterprises Corporation (“PEC”) and 

Paskenta Band of Nomlaki Indians (“Tribe”) (collectively, “Plaintiffs”) filed their complaint 

against RICO Defendants alleging, inter alia, claims of racketeering, aiding and abetting, 

fraud, conspiracy, and violations of fiduciary duties owed to the tribe. (ECF No. 1.) 

Subsequently, Plaintiffs amended their complaint and filed a First Amended Complaint 

(“FAC”, ECF No. 30) on April 17, 2015. Multiple motions to dismiss Plaintiffs’ FAC 

followed. (ECF Nos. 44, 46, 40, 51, 53, & 54.) On August 14, 2015, the Court GRANTED 

in part and DENIED in part these motions and gave Plaintiffs leave to file a Second 

Amended Complaint (“SAC”) addressing the deficiencies in their FAC. (ECF No. 101.) 

On September 25, 2015, Plaintiffs filed their SAC (ECF No. 132) which was again 

followed by a round of motions to dismiss (ECF Nos. 139, 141, 143. & 145). On April 20, 

2016, the Court GRANTED in PART and DENIED in part these motions and gave 

Plaintiffs partial leave to file a Third Amended Complaint (“TAC”) addressing the 

deficiencies in their SAC.

On November 16, 2015, Third-Party Plaintiffs filed their Third-Party Complaint 

against Third-Party Defendants (ECF No. 156), which Third-Party Defendants now seek 

to dismiss in its entirety. (ECF No. 173.)

///

///

///

 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 

230(g). The hearing was scheduled for March 7, 2016.

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FACTUAL ALLEGATIONS2

Third-Party Plaintiffs allege that to the extent they are held liable to the Tribe 

and/or PEC for any alleged wrongdoing, such liability can only be derivative from and/or 

concurrent with the acts and liability of Third-Party Defendants. Third-Party Plaintiffs 

allege that the tribe, led by Andrew Freeman as Chairperson of the Tribal Council, 

targeted and removed Third-Party Plaintiffs from the tribe in order to reduce the Tribe’s 

membership so as to allow the remaining tribal members to both claim a bigger share of 

the Tribe’s new wealth and allow Mr. Freeman and his allies to take complete control of 

the Tribe itself. According to Third-Party Plaintiffs, Mr. Freeman was materially assisted 

in his tribal coup by Bruce Thomas, CEO of the Tribe’s casino and CEO of a tribal 

business called MD Barnmaster, and Chuck Galford, a member of PEC’s Board of 

Directors, and a vice-president of a tribal business called Tepa LLC. Third-Party Plaintiffs 

assert the following claims for relief: (1) equitable indemnity against all Third-Party

Defendants; (2) contribution against all Third-Party Defendants; and (3) declaratory relief 

against all Third-Party Defendants.

STANDARD

On a motion to dismiss for failure to state a claim under Federal Rule of Civil 

Procedure 12(b)(6), all allegations of material fact must be accepted as true and 

construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. 

Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) “requires only ‘a short and plain 

statement of the claim showing that the pleader is entitled to relief’ in order to ‘give the 

defendant fair notice of what the . . . claim is and the grounds upon which it rests.’” Bell 

Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 

 2 Unless otherwise noted, the allegations in this section are drawn directly, and in some cases 

verbatim, from the allegations of Third-Party Plaintiffs’ Third-Party Complaint.

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47 (1957)). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require 

detailed factual allegations. However, “a plaintiff's obligation to provide the grounds of 

his entitlement to relief requires more than labels and conclusions, and a formulaic 

recitation of the elements of a cause of action will not do.” Id. (internal citations and 

quotations omitted). A court is not required to accept as true a “legal conclusion 

couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting 

Twombly, 550 U.S. at 555). “Factual allegations must be enough to raise a right to relief 

above the speculative level.” Twombly, 550 U.S. at 555 (citing 5 Charles Alan Wright & 

Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) (stating that the 

pleading must contain something more than “a statement of facts that merely creates a 

suspicion [of] a legally cognizable right of action”)).

Furthermore, “Rule 8(a)(2) . . . requires a showing, rather than a blanket 

assertion, of entitlement to relief.” Twombly, 550 U.S. at 555 n.3 (internal citations and 

quotations omitted). Thus, “[w]ithout some factual allegation in the complaint, it is hard 

to see how a claimant could satisfy the requirements of providing not only ‘fair notice’ of 

the nature of the claim, but also ‘grounds' on which the claim rests.” Id. (citing Wright & 

Miller, supra, at 94, 95). A pleading must contain “only enough facts to state a claim to 

relief that is plausible on its face.” Id. at 570. If the “plaintiffs . . . have not nudged their 

claims across the line from conceivable to plausible, their complaint must be dismissed.” 

Id. However, “[a] well-pleaded complaint may proceed even if it strikes a savvy judge 

that actual proof of those facts is improbable, and ‘that a recovery is very remote and 

unlikely.’” Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

A court granting a motion to dismiss a complaint must then decide whether to 

grant leave to amend. Leave to amend should be “freely given” where there is no 

“undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice 

to the opposing party by virtue of allowance of the amendment, [or] futility of the 

amendment . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. 

Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to 

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be considered when deciding whether to grant leave to amend). Not all of these factors 

merit equal weight. Rather, “the consideration of prejudice to the opposing party . . . 

carries the greatest weight.” Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 

185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that 

“the complaint could not be saved by any amendment.” Intri-Plex Techs. v. Crest Group, 

Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 

1013 (9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 

1989) (“Leave need not be granted where the amendment of the complaint . . . 

constitutes an exercise in futility . . . .”)).

ANALYSIS

A. Equitable Indemnity or Contribution for Statutory Violations

Third-Party Defendants argue that there is no right to contribution or indemnity 

under the statutory claims asserted by the SAC’s First through Eighth Claims for Relief, 

(Mot. at 8:23-25.). Although Third-Party Plaintiffs counter that they do not seek to hold 

Third-Party Defendants liable for statutory violations, the Third-Party Complaint does not 

clearly reflect this contention. Indeed, the Third-Party Complaint simply states that to the 

extent Third-Party Plaintiffs are held liable for any causes of action in the SAC, ThirdParty Defendants are likewise liable for damages allegedly sustained by the Tribe. 

Third-Party Plaintiffs therefore claim they are entitled to indemnification from Third-Party 

Defendants, to the extent permitted by the facts or the law. (SAC ¶ 110.). Based on 

Third-Party Plaintiffs’ apparent retraction of any such indemnification rights as to the 

SAC’s statutory claims, however, they appear to be waiving any claim for indemnity or 

contribution based upon the first eight claims of the SAC. Nonetheless, for the reasons 

that follow, Third-Party Plaintiffs have no right to indemnity as a matter of law in any 

event as to the SAC’s statutory claims.

///

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“A defendant held liable under a federal statute has a right to contribution or 

indemnification from another who has also violated the statute only if such right arises 

(1) through the affirmative creation of a right of action by Congress, either expressly or 

implicitly, or (2) via the power of the courts to formulate common law.” Mortgs., Inc. v. 

U.S. Dist. Ct. for Dist. of Nev. (Las Vegas), 934 F.2d 209, 212 (9th Cir. 1991) (citing Tex. 

Indus., Inc. v. Radcliff Materials, 451 U.S. 630, 638 (1981)).

1. RICO Violations (SAC Claims 1-6)

“[N]o rights of contribution are available to defendants under RICO.” Nelson v. 

Bennett, 662 F. Supp. 1324, 1339, n. 23 (E.D. Cal. 1987). Therefore, Third-Party 

Plaintiffs’ claims for indemnification or contribution from potential RICO liability are 

dismissed with prejudice.

2. Violations of the Federal Computer Fraud and Abuse Act (SAC 

Claim 7)

Third-Party Defendants argue that the Third-Party Plaintiffs cannot seek or obtain 

indemnity or contribution from the Third-Party Defendants for violation of the Federal 

Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030(a)(3), both because that 

statute does not provide for contribution or indemnity and because it is akin to an 

intentional tort.

“[C]laims based on the [CFAA], to the extent they can be construed as tort claims, 

require proof of intentional conduct[,]” rendering contribution unavailable to defendants.” 

Axis Surplus Ins. Co. v. Mitsubishi Caterpillar Forklift Am. Inc., No. CIV.A. H-11-3745, 

2011 WL 6780908, at *3 (S.D. Tex. Dec. 27, 2011); see also Riverhead Sav. Bank v. 

Nat’l Mortg. Equity Corp., 893 F.2d 1109, 1116 (9th Cir. 1990) (holding there is no right 

of indemnification for intentional torts).

The CFAA requires a defendant to engage in intentional misconduct to be held 

liable. See e.g., 18 U.S.C. § 1030(a)(2) (assigning liability to whoever “intentionally 

accesses a computer without authorization or exceeds authorized access”); 18 U.S.C. 

§ 1030(a)(5) (assigning liability to whoever “knowingly causes the transmission of a 

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program, information, code, or command, and as a result of such conduct, intentionally 

causes damages without authorization, to a protected computer”). Therefore there is no 

statutory or common law right of indemnification for the CFAA. Accordingly, Third-Party

Plaintiffs’ claims for indemnification or contribution based upon Third-Party Plaintiffs’ 

potential liability under the CFAA are dismissed with prejudice.

3. Violations of California’s Data Access Fraud Statute (SAC Claim 8)

Similar to the CFAA, liability under California’s Data Access Fraud Statute, 

Cal. Penal Code § 502(a), requires the person to act “knowingly” and “without 

permission” in committing computer-related crimes. Further, unlike other California 

statutes providing an express right to indemnity, California Penal Code § 502 provides 

no right to indemnity or contribution. See e.g., Cal. Civ. Code § 2847; Cal. Corp. Code 

§ 317; Cal. Gov’t Code §§ 825-825.6, 844.6; Cal. Lab. Code § 2802(a); Cal. Veh. Code 

§ 11713.13. Therefore, there is no statutory or common law right to contribution or 

indemnity for violation of Cal. Penal Code § 502(a). Accordingly, Third-Party Plaintiffs’ 

claims for contribution or indemnity based on violations of § 502 are dismissed with 

prejudice.

B. Equitable Indemnity/Contribution for Intentional Torts (SAC Claims 9-17)

Under California law “[t]here shall be no right of contribution in favor of any 

tortfeasor who has intentionally injured the injured person.” Cal. Civ. Proc. Code 

§ 875(d); see also Riverhead Sav. Bank, 893 F.2d at 1116 (holding there is no “right of 

indemnification for intentional torts”) (citing Allen v. Sundean, 137 Cal. App. 3d 216 

(1982)). However, the Ninth Circuit has stated “California law does allow for comparative 

equitable indemni[ty] among joint intentional tortfeasors.” In re First Alliance Mortg. Co., 

471 F.3d 977, 1005 (9th Cir. 2006). 

In their Third-Party Complaint, Third-Party Plaintiffs fail to plausibly allege that 

Third-Party Defendants are joint intentional tortfeasors; instead, Third-Party Plaintiffs 

argue only that Third-Party Defendants engaged in other actions that might lead to 

liability. For example, Third-Party Plaintiffs allege that Third-Party Defendant Freeman 

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engaged in separate wrongful acts by improperly converting different funds for himself. 

Similarly, Third-Party Plaintiffs allege that Third-Party Defendants Galford and Thomas 

engaged in separate and distinct wrongdoing. Therefore, the ability to assign joint 

tortfeasor liability announced in In re First Alliance Mortg. Co., supra, does not apply to 

Third-Party Plaintiffs’ equitable claims.

Looking to the allegations that are made within the SAC, Claims Nine through 

Seventeen allege Conversion, Fraudulent Concealment, Fraudulent Misrepresentation, 

Intentional Interference with Prospective Economic Advantage, Breach of Fiduciary Duty 

(Loyalty), Breach of Fiduciary Duty (Care), Common Counts, Civil Conspiracy, and 

Aiding and Abetting each other’s Conversion and Breaches of Fiduciary Duty. Each of

the aforementioned claims is an intentional tort. Cal. Civ. Proc. Code § 875(d).

Therefore, Third-Party Plaintiffs have no statutory or common law right for contribution or 

indemnity. Accordingly, Third-Party Plaintiffs’ claims for contribution or indemnity based 

on the aforementioned intentional torts (SAC Claims 9-17) are dismissed with prejudice.

C. Equitable Indemnity or Contribution for Separately Stated Remedies 

(SAC Claims 29-31)

Claims Twenty-Nine through Thirty-One in the SAC make requests for restitution, 

a constructive trust and accounting. Because these claims are separately stated 

remedies contingent upon Plaintiffs’ substantive claims for relief, which provide no right 

for contribution or indemnity, these claims similarly fail and should be dismissed with 

prejudice.

D. Request for Declaratory Relief

Since Third-Party Plaintiffs’ request for declaratory relief is entirely duplicative of 

the rest of Third-Party Plaintiffs’ claims, it should be dismissed. “A claim for declaratory 

relief is duplicative and unnecessary when it is commensurate with the relief sought 

through other causes of action.” Vogan v. Wells Fargo Bank, N.A., No. 2:11-CV-02098-

JAM, 2011 WL 5826016, at *8 (E.D. Cal. Nov. 17, 2011). Therefore, Third-Party 

Plaintiffs’ request for declaratory relief is dismissed with prejudice.

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CONCLUSION

For the reasons stated above, Third-Party Defendants’ Motion to Dismiss ThirdParty Complaint (ECF No. 173) is GRANTED in its entirety. Because the claims made in 

the Third-Party Complaint fail as a matter of law, the Court concludes that any further 

leave to amend would be futile. Therefore, the Third-Party Complaint (ECF No. 156) is 

dismissed, with no leave to amend.

IT IS SO ORDERED.

Dated: July 15, 2016

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