Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_01-cv-03884/USCOURTS-cand-4_01-cv-03884-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

STEPHEN TURNER, M.D., SUSANA TURNER,

on behalf of themselves and as

Guardian ad Litem for minor children

DAVID TURNER, DANIEL TURNER, DEBORAH

TURNER; and WESTERN PARAMEDICAL

SERVICES LLC,

 Plaintiffs,

 v.

DAVID J. COOK, ESQ.; COOK, PERKISS &

LEW, a professional law corporation;

AH BENG YEO; E.A. MARTINI; and DOES 1

THROUGH X AND EACH OF THEM INCLUSIVE,

 Defendants.

 /

No. C 01-3884 CW

ORDER GRANTING

DEFENDANTS’

MOTION TO DISMISS 

Defendants move to dismiss Plaintiffs’ five causes of action

for failure to state a claim on which relief can be granted.

Plaintiffs oppose the motion. The matter was heard on March 15,

2002. Having considered all of the papers filed by the parties and

oral argument on the motion, the Court GRANTS the motion (Docket

#25).

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1

Plaintiff Western Paramedical Services, LLC does not join in

this cause of action. Complaint ¶ 17.

2The cause of action for invasion of privacy is only alleged

against Defendants Cook and Cook, Perkiss, & Lew. Complaint ¶ 62. 

2

BACKGROUND

On August 21, 1998 Defendants Yeo and Martini obtained a

judgment against Plaintiff Stephen Turner in excess of $1,000,000. 

Complaint, Ex. A. The judgment resulted from a jury verdict after

trial in which Plaintiff Stephen Turner was found to have committed

“various business interference torts” against Defendants Yeo and

Martini. Complaint ¶ 12. Defendants Yeo and Martini hired

Defendant Cook and his law firm Cook, Perkiss & Lew to assist in

collection of the judgment. Plaintiffs allege that the means used

by Defendants to collect on the judgment violated the Fair Debt

Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et. seq.,1 the 

Racketeer Influenced and Corrupt Organizations Act (RICO), 18

U.S.C. § 1961 et seq., and the California Unfair Business Practices

Act, Cal. Bus. & Prof. Code § 17200 et. seq. Plaintiffs also

allege that Defendants’ collection activities were undertaken with

the intent to inflict emotional distress, and constituted an

invasion of privacy.2

The alleged conduct that forms the basis of these claims is as

follows. 

On October 29, 1999, Defendants Yeo and Martini, represented

by Defendant Cook, Perkiss & Lew, filed a complaint against

Plaintiff Stephen Turner alleging that Turner had fraudulently

conveyed his real and personal property with the intent to prevent

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Yeo and Martini from collecting the money owed on the prior

judgment. Complaint, Ex. I. 

In their complaint, Yeo and Martini alleged that Plaintiff

Stephen Turner previously had been convicted of harassing Yeo and

Martini in violation of California Penal Code § 415. Id. at 3.

Although the complaint sought to set aside the conveyance of a

property located in Alameda, California, the complaint was filed in

the Superior Court of California, County of Contra Costa. 

Id. at 1. 

Plaintiffs allege that Defendants’ court filings in the Contra

Costa fraudulent conveyance action contained “false, deceptive and

improper statements.” Specifically, Plaintiff Stephen Turner

objects to references to his prior misdemeanor criminal conviction

and objects to a disparaging characterization of his family trust

suggesting it was created to assist him to hide his assets. 

Complaint ¶ 41.

Plaintiffs allege that, in addition to filing the fraudulent

conveyance action, Defendants sent out hundreds of letters

informing third parties that Defendants Yeo and Martini obtained a

judgment and an order of assignment against Plaintiff Stephen

Turner. Complaint, Ex. B. The letters stated that “any monies

which you may owe to Dr. Turner, or any designee, nominee, or other

named entity, now constitute the property of [Yeo and Martini].” 

Id. Plaintiffs allege that these letters falsely stated that the

assignment order applied to Western Paramedical Services (WPS)

when, in fact, the judgment against Plaintiff Stephen Turner may

not be recouped from Plaintiff WPS. Complaint ¶¶ 24, 27. 

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Plaintiffs allege that Defendants made these same false

representations in telephone conversations with third parties who

do business with Plaintiff Stephen Turner and/or Plaintiff WPS. Id.

¶ 31. 

Plaintiffs also allege that Defendants engaged in other

conduct to “harass, oppress or abuse” them. This conduct included:

serving excessive copies of court papers on Plaintiffs, Complaint 

¶ 38; improperly serving Plaintiffs with documents intended for

other parties, Complaint ¶ 39; making false statements in an

August, 2001 court filing regarding the sale of Plaintiffs’

residence, Complaint ¶ 43; stating to Plaintiff Stephen Turner,

“You dirty Jew, I’ll take everything away from you.” Complaint 

¶ 37.

LEGAL STANDARD

A motion to dismiss for failure to state a claim will be

denied unless it appears that the plaintiff can prove no set of

facts which would entitle it to relief. See Conley v. Gibson, 355

U.S. 41, 45-46 (1957); see also Fidelity Fin. Corp. v. Fed. Home

Loan Bank of S.F., 792 F.2d 1432, 1435 (9th Cir. 1986), cert.

denied, 479 U.S. 1064 (1987). All material allegations in the

complaint will be taken as true and construed in the light most

favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792

F.2d 896, 898 (9th Cir. 1986). Although the court is generally

confined to consideration of the allegations in the pleadings, when

the complaint is accompanied by attached documents, such documents

are deemed part of the complaint and may be considered in

evaluating the merits of a Rule 12(b)(6) motion. See Durning v.

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First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987), cert.

denied, 484 U.S. 944 (1987).

Dismissal of a complaint can be based on either the lack of a

cognizable legal theory or the lack of sufficient facts alleged

under a cognizable legal theory. See Balistreri v. Pacifica Police

Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).

When granting a motion to dismiss, a court is generally

required to grant a plaintiff leave to amend, even if no request to

amend the pleading was made, unless amendment would be futile. 

See Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv. Inc.,

911 F.2d 242, 246-47 (9th Cir. 1990). In determining whether

amendment would be futile, a court examines whether the complaint

could be amended to cure the defect requiring dismissal "without

contradicting any of the allegations of [the] original complaint." 

Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990). 

Leave to amend should be liberally granted, but an amended

complaint cannot allege facts inconsistent with the challenged

pleading. See id. at 296-97. 

DISCUSSION

A. FDCPA, 15 U.S.C. § 1692

Plaintiffs contend that Defendants’ efforts to collect the

judgment owed by Plaintiff Stephen Turner exceeded the limitations

imposed by the FDCPA. They allege that Defendants made “false

deceptive or misleading representations” and used “unfair or

unconscionable means to collect or attempt to collect any debt” in

violation of 15 U.S.C. §§ 1692e, 1692f. Complaint ¶¶ 32, 35. 

The prohibitions of sections 1692e and 1692f do not apply to

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all collection procedures. Rather, the FDCPA regulates the

collection of a specific type of debt defined in the statute. The

FDCPA defines a “debt” as “any obligation or alleged obligation of

a consumer to pay money arising out of a transaction in which the

money, property, insurance, or services which are the subject of

the transaction are primarily for personal, family or household

purposes . . . .” 15 U.S.C. § 1692a(5). As an initial matter,

therefore, the Court must determine whether Plaintiff Stephen

Turner’s obligation to Defendants is a “debt” within the meaning of

the statute. If not, the prohibitions of the FDCPA do not apply to

this action. Slenk v. Transworld Systems, Inc., 236 F.3d 1072,

1075 (9th Cir. 2001) (threshold question in suit under FDCPA is

whether the dispute involves a “consumer debt as that phrase is

defined by the FDCPA”).

In order to qualify as a debt within the meaning of the

statute, the obligation must arise “out of a transaction” and the

obligation must be incurred “primarily for personal, family, or

household purposes.” Plaintiffs concede that the tort judgment

entered against Plaintiff Stephen Turner is not a “debt” within the

meaning of the act. See Hawthorne v. Mac Adjustment, Inc., 140

F.3d 1367 (11th Cir. 1998) (obligation arising from tort is not a

transaction and tortfeasor is not a consumer within the meaning of

the FDCPA). 

Plaintiffs argue, however, that the action to set aside the

fraudulent conveyance of Stephen Turner’s property falls within the

FDCPA because it is an action to recover a personal residence. 

This fact does not convert Defendants’ efforts to collect a tort

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3RICO defines racketeering activity as "any act or threat

involving" specified State law crimes, any "act" indictable under

various specified federal statutes, and certain federal "offenses"

("predicate acts"). 18 U.S.C. § 1961(1). Predicate acts include,

inter alia, mail fraud, 18 U.S.C. § 1341, wire fraud, 18 U.S.C. 

§ 1343, and "any offense involving . . . fraud in the sale of

securities . . . " 18 U.S.C. § 1961 (1)(B) & (D).

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judgment into an effort to collect a consumer debt. There is but

one “debt” at issue here: a judgment in excess of $1,000,000 owed

by Plaintiff Stephen Turner to Defendants Yeo and Martini. 

Defendants’ actions were an effort to effectuate that judgment. 

The judgment, as noted, is not a consumer debt such that the

proscriptions of the FDCPA would apply. 

Because the FDCPA does not apply to actions taken to collect a

tort judgment and because no additional allegations can convert the

tort judgment at issue here into a consumer debt to which the FDCPA

would apply, Plaintiffs’ first claim for relief for violations of

the Fair Debt Collection Practices Act is dismissed without leave

to amend. 

B. RICO, 18 U.S.C. § 1961

To state a claim under RICO, Plaintiffs must allege a “pattern

of racketeering activity.” 18 U.S.C. § 1961. A “pattern or

racketeering activity” is a term of art meaning at least two acts

of racketeering activity (predicate acts) within ten years of each

other.3 Id. at § 1961(5). The plaintiff must allege that these

predicate acts are related (relatedness requirement), "and that

they amount to or pose a threat of continued criminal activity"

(continuity requirement). H.J., Inc. v. Northwestern Bell Tel.

Co., 492 U.S. 229, 239 (1989) (emphasis in original).

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A plaintiff may satisfy the continuity requirement by alleging

either "closed-ended" or "open-ended" continuity. Closed-ended

continuity involves "a series of related predicates extending over

a substantial period of time." H.J., 492 U.S. at 242; see also

Religious Technology Center v. Wollersheim, 971 F.2d 364, 366-67

(9th Cir. 1992). Open-ended continuity involves "a specific threat

of repetition extending indefinitely into the future," or predicate

acts that "are part of an ongoing entity's regular way of doing

business." H.J., 492 U.S. at 242; Ticor Title Ins. Co. v. Florida,

937 F.2d 447, 450 (9th Cir. 1991).

Where the predicate acts were designed to bring about a single

event or injury to a single plaintiff, continuity is not

sufficiently plead. See, e.g., Medallion Television Enterprises,

Inc. v. SelecTV of California, Inc., 833 F.2d 1360 (9th Cir. 1987),

cert. denied, 492 U.S. 917 (1989) (two predicate acts aimed at

fraudulent inducement to enter a contract); Religious Technology

Center v. Wollersheim, 971 F.2d 364 (9th Cir. 1992) (only goal of

defendants was successful prosecution of their State lawsuit);

Sever v. Alaska Pulp Corp., 978 F.2d 1529 (9th Cir. 1992)

(defendants' acts served single purpose of impoverishing

plaintiff). 

In Sever, the plaintiff brought suit against his former

employers alleging that the defendants had fired him, blacklisted

him, and induced a subsequent employer to fire him after he wrote

articles criticizing the defendants and testified before Congress

to their economic detriment. The plaintiff's RICO claim alleged

that the defendants engaged in a pattern of racketeering activity

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that damaged his ability to obtain employment. The lower court

dismissed the plaintiff's fourth amended complaint for failure to

state a claim under RICO, on grounds, inter alia, that he had

failed to allege a pattern of racketeering. 978 F.2d at 1533. The

Ninth Circuit affirmed, holding that the allegations did not

satisfy the continuity requirement set out in H.J. The Ninth

Circuit specifically noted that there was no suggestion that the

defendants would have harmed any other Congressional witnesses or

that the alleged practices had become a regular way of conducting

business. Id.

Similarly, in this case, Plaintiffs allege that “the many

letters and follow up telephone calls and faxes, constitute a

pattern of racketeering conduct.” Complaint ¶ 56. However, the

sole alleged purpose of this conduct is to redirect to Defendants

sums owed to Plaintiff WPS in order to collect the outstanding

judgment owed by Plaintiff Stephen Turner. Id. ¶ 52. There is no

allegation of a continuing threat of unlawful activity once that

judgment is collected. See Religious Technology Center, 971 F.2d

at 366 (because the goal of allegedly fraudulent activity was

prosecution of State court tort suit, “there was no threat of

activity continuing beyond the conclusion of that suit”); Medallion

Television Enter., 833 F.2d at 1364 (where fraud was a joint

venture to obtain broadcast rights, once the rights were obtained

the threat ended). 

In fact, just the opposite is alleged. Plaintiffs

specifically note that the activity complained of was solely

directed towards collecting the judgment owed by Plaintiff Stephen

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4In addition, for separate reasons, Plaintiffs have not stated

a claim against Defendant Cook, Perkiss, & Lew under RICO. “For

the purposes of section 1962, RICO plaintiffs must allege a

defendant--the "person" or "persons"--who is distinct from the

"enterprise" whose business the defendant is conducting.” Sever, 978 F.2d at 1533. Plaintiffs specifically plead that Defendant

Cook, Perkiss, & Lew is the “enterprise that carried on these

predicate acts.” Complaint ¶ 57. Because one entity cannot be

both the corrupt enterprise and the persons conducting that

enterprise, the RICO claim against Defendant Cook, Perkiss & Lew

must be dismissed.

Moreover, Plaintiffs Stephen Turner, Susanna Turner, and their

minor children have no standing to pursue a RICO claim against

Defendants. Title 18 U.S.C. § 1964 confers standing on “any person

injured in his business or property” by reason of a RICO violation.

According to the complaint, the allegedly fraudulent acts resulted

in the misdirection to Defendants of monies owed to Plaintiff WPS. 

Plaintiff Stephen Turner declares that his only connection to

Plaintiff WPS is as an employee and former independent contractor. 

Declaration of Stephen Turner ¶ 6. Plaintiff Susanna Turner

declares that she is a manager for Plaintiff WPS. Declaration of

Susanna Turner ¶ 1. Plaintiffs contend that they have suffered a

cognizable injury because “had these funds been paid over to

Western Paramedical Services, LLC, they would have become available

to pay wages and salaries over to Plaintiffs.” Complaint ¶ 58. 

This speculative, indirect injury is not cognizable as a RICO

injury. 

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Turner. See Complaint ¶ 57 (alleged racketeering activities were

“motivated by a desire to collect on a judgment against Stephen

Turner in favor of Yeo and Martini”). Consequently, the

“continuity requirement” necessary to state a claim under RICO is

not satisfied.4

Because Plaintiffs have not alleged conduct that satisfies the

continuity requirement for a RICO claim, that claim is dismissed

with leave to amend. If Plaintiffs choose to file an Amended

Complaint alleging a RICO violation, Plaintiffs, concurrent with

their Amended Complaint, are ordered to file a RICO case statement

in the format provided in the attached Order.

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C. State Law Claims

Plaintiffs also bring three causes of action pursuant to State

law. Title 28 U.S.C. § 1367(a) gives this Court supplemental

jurisdiction over such claims. Defendants contend that the conduct

that forms the basis of Plaintiffs’ complaint is privileged

pursuant to California Civil Code § 47(b)(2) (litigation privilege)

and, therefore, cannot form the basis of liability for either the

common law or the statutory causes of action alleged. 

 In O’Keefe v. Kompa, 100 Cal. Rptr. 2d 602 (Ct. App. 2000),

the California Court of Appeal applied the litigation privilege in

a situation analogous to the one now before the Court. In that

case, the plaintiff had lost a prior suit against defendants and

been ordered to pay the defendants attorneys’ fees. In an effort

to collect the attorneys’ fees, the defendants filed a levy on the

plaintiff’s bank account and engaged in other collection

activities. The plaintiff then sued the defendants based on these

collection efforts. 

The court applied a four part test to see if the conduct at

issue was subject to the litigation privilege. “To be privileged a

statement must (1) be made in a judicial proceeding, (2) by

litigants or other authorized participants, (3) aim to achieve the

litigation’s objects, and (4) have some logical connection or

relation to the proceeding.” Id. at 604-05 (citing Silberg v.

Anderson, 266 Cal. Rptr. 638 (1990)). “Further, [the litigation

privilege] applies to any publication required or permitted by law

in the course of a judicial proceeding to achieve the objects of

the litigation, even though the publication is made outside the 

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5

Plaintiffs also rely on Kinnamon v. Staitman & Snyder, 66

Cal. App. 3d 893 (1977) and Barbary Coast Furniture v. Sjolie, 167

Cal. App. 3d 319 (1985). Both of these cases were explicitly

overruled by the California Supreme Court. See Silberg, 266 Cal.

Rptr. at 646. 

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courtroom and no function of the court or its officers is

involved.” Silberg, 266 Cal. Rptr. at 642 (citations omitted). In

O’Keefe, the court concluded that section 47(b)(2) applied to the

defendants’ collection activities and dismissed the complaint. 

Plaintiffs here raise three arguments as to why the conduct

and statements of Defendants do not fall within the litigation

privilege. First, Plaintiffs argue that the statements included by

Defendants in letters to third parties were knowingly false. 

Plaintiffs contend that the making of knowingly false

representations in this context amounts to obstruction of justice

and attorney deceit and that such conduct is not subject to the

litigation privilege. In support of this proposition, Plaintiffs

rely on Carney v. Rotkin, Schmerin & McIntyre, 206 Cal. App. 3d

1513 (1988).5 In that case, the court held that an attorney’s

false statement to an opposing party that a bench warrant had been

issued for her arrest was not privileged because the statement as

alleged was proscribed by the Code of Professional Conduct. The

court concluded that this unethical conduct was not intended to

achieve the litigation’s objectives and therefore did not satisfy

the third criteria for a privileged statement. Id. at 1520. 

However, subsequent to the California Court of Appeals

decision in Carney, the California Supreme Court decided Silberg,

supra. In Silberg, the court reaffirmed that the litigation

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privilege should be construed broadly to protect statements

associated with an ongoing judicial proceeding. The court

specifically noted that attorney liability for fraudulent

communications, perjured testimony, and abuse of process were all

precluded by the litigation privilege. 266 Cal. Rptr. at 646;

O’Keefe, 100 Cal. Rptr. 2d at 604-05. Each of these torts requires

allegations of unethical or criminal conduct, yet the court found

that such allegations were not a bar to satisfaction of the four

part test noted above. Therefore, the litigation privilege applies

equally to malicious or fraudulent conduct and statements. 

Plaintiffs’ argument that the litigation privilege does not apply

where unethical conduct is alleged is therefore contrary to

controlling authority from the California Supreme Court and must be

rejected. 

Plaintiffs next argue that statements to third parties not

involved in the litigation are not privileged. Plaintiffs rely on

Susan A. v. County of Sonoma, 3 Cal. Rptr. 2d 27 (Ct. App. 1991)

for this proposition. The Susan A. court held that statements to

the press were not privileged because the communications were made

“to persons in no way connected with the proceeding.” 3 Cal. Rptr.

at 31. In O’Keefe, by contrast, the court held that levying on a

bank account was “clearly privileged” because that effort was “an

extension of [the] judicial process.” 100 Cal. Rptr. 2d at 605. 

In this case, the letters sent to third parties notifying them of

the order of assignment against Stephen Turner were privileged

because those letters were an attempt to enforce a prior judgment

and, therefore, an extension of that process. “We conclude that

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defendants’ actions were logically and legally related to the

realization of a litigation objective–-that is, collection of a

judgment.” Id.

Lastly, Plaintiffs argue that Defendants acted outside the

litigation privilege when they attached a police report involving

Plaintiff Stephen Turner to their fraudulent conveyance complaint. 

Plaintiffs rely on Ngyen v. Proton Technology Corp., 81 Cal. Rptr.

2d 392 (Ct. App. 1999), where the California Court of Appeal held

that a demand letter’s reference to appellant’s criminal record was

outside the litigation privilege. In Ngyen, the court noted that

the connection between appellant’s criminal record and the

substance of the instant litigation was “to be charitable about it,

tenuous.” 81 Cal. Rptr. 2d at 398. Here, however, Plaintiff

Stephen Turner’s criminal record is directly related to the action

which resulted in the judgment against him and, consequently,

relevant to the attempts to collect the judgment through the

fraudulent conveyance action. 

The parties have a long and contentious history. Defendants

contend that in 1995, prior to the civil litigation that resulted

in the $1,000,000 judgment, Plaintiff Stephen Turner harassed

Defendants Yeo and Martini and that this harassment led to criminal

proceedings against Dr. Turner. In their fraudulent conveyance

complaint, Defendants included this fact to show the length and

severity of the enmity between the parties, and Dr. Turner’s

motivation to hide his assets. The police report “had some logical

connection to the proceeding” and is therefore privileged. 

O’Keefe, 100 Cal. Rptr. 2d at 605.

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Because the conduct at issue is privileged, Defendants cannot

be held liable on any of Plaintiffs’ State law claims, including

their third claim for relief for unfair business practices. 

See Cal. Bus. & Prof. Code § 17200; Rubin v. Green, 847 P.2d 1044,

1053 (Cal. 1993) (“To permit the same communicative acts [that are

immune from civil tort liability pursuant to section 47(b)] to be

the subject of an injunctive relief proceeding brought by this same

plaintiff under the unfair competition statute undermines that

immunity.”). 

The statement alleged to have been made by Defendant Cook to

Plaintiff Stephen Turner (“you dirty jew, I’ll take everything away

from you”) is not privileged. However, this statement is not

relevant to either the invasion of privacy or the unfair

competition claims, which are based on other alleged conduct. The

statement, alone, is not sufficient to state a claim for

intentional infliction of emotional distress. To state such a

claim, the conduct at issue “must be so extreme as to exceed all

bounds of that usually tolerated in a civilized society.” Trerice

v. Blue Cross of California, 257 Cal. Rptr. 338, 340 (Cal. 1989).

CONCLUSION

For the foregoing reasons, Defendants’ motion to dismiss is

GRANTED (Docket #25). The debt in question here is not subject to

the FDCPA, Plaintiffs have failed to plead predicate acts that may

form the basis of a RICO cause of action, and Defendants are immune

from liability on Plaintiffs’ State law causes of action pursuant

to California Civil Code § 47(b)(2). 

The Court grants Plaintiffs leave to file an amended complaint

Case 4:01-cv-03884-CW Document 76 Filed 03/22/02 Page 15 of 16
United States District Court

For the Northern District of California

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6Plaintiffs object to Defendants’ request for judicial notice

of the judgment of the California Superior Court in The Travelers

Ins. Co. v. Ah Beng Yeo and E.A. Martini, Western Paramedical

Services, LLC., No. C00-04505. In granting Defendants’ motion to

dismiss, the Court did not rely on this document. Therefore,

Plaintiffs’ objection is denied as moot (Docket #33).

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in which, consistent with the requirements of Rule 11, they may

state a RICO claim, alleging conduct by Defendants that satisfies

RICO’s continuity requirement.6 If Plaintiffs file an amended

complaint alleging a RICO claim, they must also file a RICO

statement, as described in the Order Requiring Filing of Rico

Statement filed today. 

They may also re-allege their supplemental State law claims,

if they can do so without alleging conduct that is subject to the

litigation privilege. The amended complaint must be filed within

thirty days of the date of this order. If it is not, this case

will be dismissed without prejudice to refiling the State claims in

State court. 

Dated: 3/22/02 

CLAUDIA WILKEN

United States District Judge

Case 4:01-cv-03884-CW Document 76 Filed 03/22/02 Page 16 of 16