Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-02707/USCOURTS-caed-2_06-cv-02707-7/pdf.json

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

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

PATRICIA A. MCCOLM,

Plaintiff, No. CIV S-06-2707 MCE EFB PS

vs.

ORDER AND FINDINGS AND 

RESTORATION GROUP, INC., et al., RECOMMENDATIONS

Defendants. 

 /

This action, in which plaintiff is proceeding in propria persona, was referred to the

undersigned under Local Rule 72-302(c)(21), pursuant to 28 U.S.C. § 636(b)(1). Having ruled

on plaintiff’s motion to disqualify the undersigned, the court now issues the following findings

and recommendations regarding defendant Sandra Johnson’s motion to dismiss, in which all

other defendants have joined. That motion, and plaintiff’s opposition thereto, was heard by the

undersigned on March 14, 2007. 

I. BACKGROUND

This action is proceeding on plaintiff’s complaint, filed November 29, 2006. Plaintiff’s

twenty-six page complaint alleges eight “counts,” or causes of action, against defendants. 

Plaintiff’s first cause of action is for “possession of personal property or its value and damages

for its wrongful detention [Cal. Civ. Code sections 667, 3379, 3380, 1712; CCP section 667].” 

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 Plaintiff also names “Purofirst Disaster and Reconstruction” as a defendant. The

attorney representing Purofirst and Robert and Michele Cronic – Mark D. Norcross – avers that

“Purofirst Disaster and Reconstruction” has not existed since 2001, long prior to the incidents

alleged in the complaint. See Response to Plaintiff’s Ex Parte Motion for Order Requiring Clerk

to Enter Default per Prior Application, at 1:21-24. It appears that plaintiff’s naming of this

allegedly non-existent defendant has no bearing on her claims or the court’s analysis thereof,

since she has also named as defendants the existing Purofirst entities and the individuals

associated with them, both of which have appeared in this action. In any event, as set forth

herein, the court finds that plaintiff has failed to state a federal cause of action against any

defendant. 

2

Counts two through four are for “civil conspiracy, fraud, deceit, breach of agreement [California

Civil Code section 1709, 1710, 330, 3333, 3249].” Plaintiff styles count five as “civil conspiracy

with client, Cal. Civil Code 1714.10(c).” Lastly, counts six through eight allege violations of the

Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961, et seq., the

Hobbs Act, 18 U.S.C. § 1951, and Cal. Penal Code §§ 518, et seq. (extortion and attempted

extortion). 

A. Factual Background

Plaintiff names as defendants Sandra Johnson, Robert M. Cronic, Michele Cronic,

Restoration Group, Inc., and Restoration Group Inc. dba Purofirst Disaster and Reconstruction

(the latter two referred to collectively herein as “Purofirst”).1

 Plaintiff claims that these

defendants constitute an enterprise within the meaning of RICO and that they conspired to take

plaintiff’s personal property and charge her in excess of the originally agreed upon service fees. 

Her claims arise from events related to an agreement to clean and restore certain personal

property following a fire at plaintiff’s father’s residence in Redding, California. Plaintiff alleges

that on November 23, 2003, a fire occurred at the home of her father, George L. McColm, over

whom she has durable power of attorney. See Compl., at ¶¶ 10, 13. Plaintiff alleges that various

items of her property were at her father’s house when the fire occurred, and that Purofirst –

through its owner, defendant Robert M. Cronic (“Cronic”) – induced her to enter into an

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2

 It appears that the agreement also authorized certain repairs to the fire-damaged home

of plaintiff’s father, as well as the “pack out” and cleaning of various items of his personal

property. See Memorandum of Points and Authorities in Support of Motion to Dismiss

Complaint (“Defendant’s Brief”), at 1:7-9; 3:1-5; Compl., at ¶¶ 10, 69.

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agreement to remove and clean her personal property so as to prevent fire damage.2 Id., at ¶¶ 10,

17, 80. Plaintiff characterizes the agreement that she signed as “fraudulent” and “void,” id., at 

¶¶ 75, 80, while at the same time claiming that Purofirst failed to honor various terms

thereunder, including plaintiff’s alleged right to immediate return of her property upon demand. 

Id., at ¶ 80. She also argues that certain storage fees for which she was later billed were not

authorized under the terms of the agreement. Id., at ¶¶ 89, 90. Plaintiff makes numerous other

allegations regarding her dissatisfaction with Purofirst’s services, including defendant Cronic’s

alleged failure to provide estimates, his allegedly incorrect representation that plaintiff’s

insurance would pay for Purofirst’s services, and his alleged misrepresentations regarding the

cost of such services. Id., at ¶¶ 19, 21, 27, 32. 

Plaintiff alleges that after she received an estimate of costs on December 30, 2003, she

“rejected the estimate and canceled the service authorization in its entirety. . . .” Id., at ¶ 33. She

further alleges that she received invoices from Purofirst (although issued under a slightly

different name), in February, March and April of 2004, which she refused to pay. Id., at ¶ 38. 

Plaintiff characterizes defendant Cronic’s attempts to collect payment for Purofirst’s services as

“extortion” in violation of the Hobbs Act and California Penal Code §§ 518, et seq. Id., at ¶ 99;

12:4-5. Apparently undaunted by defendant’s alleged acts of extortion, plaintiff went to the

Purofirst facility in June 2004 with the intent of retrieving her personal property. However,

plaintiff alleges that defendant Cronic, on advice of counsel (i.e., defendant Sandra Johnson),

refused to release the property to plaintiff until she paid the outstanding invoices. Id., at ¶¶ 55-

57. 

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4

Eventually, defendant Cronic caused a mechanic’s lien, which plaintiff characterizes in

the complaint as “fraudulent,” to be recorded against plaintiff’s father’s house. Id., at ¶ 46. 

Through his attorney, Sandra Johnson, defendant Cronic then filed a lien foreclosure action

against George McColm, which is apparently still pending in Shasta County Superior Court. See

Defendant’s Brief, at 1:14-15. Plaintiff alleges that defendant Johnson’s communications with

plaintiff and her father prior to initiating the foreclosure action were “harassing” and undertaken

solely for Ms. Johnson’s “personal financial gain.” Compl., at ¶¶ 50-52. More specifically,

plaintiff alleges that the demand letters sent by defendant Johnson on behalf of Purofirst inflated

the amount allegedly owed by “unlawfully claiming storage costs not authorized in the

documents signed by plaintiff.” Id., at ¶¶ 89-90. Indeed, plaintiff characterizes Ms. Johnson’s

communications on behalf of her client as extortion, and describes the foreclosure action

instituted by Johnson in July of 2004 as “frivolous” and an “abuse of the judicial system.” Id., at

¶¶ 53, 62. 

Plaintiff characterizes this chain of events as a “scheme” and a “conspiracy” which she

alleges is “continuing” by virtue of defendant Purofirst’s continued retention of plaintiff’s

personal property. Id., at ¶¶ 75, 77, 78. Plaintiff characterizes the service authorization form she

signed as “erroneous” and alleges that Purofirst was operating with an “expired contractor’s

license name and number.” Id., at ¶ 79. She claims that defendants’ “refusal to return the

personal property absent plaintiff’s payment of money . . . is not only a conversion, it is a

criminal act of extortion in furtherance of the RICO scheme involved in this complaint . . . .” Id.,

at ¶ 92. Plaintiff further describes defendant Johnson’s initiation of the foreclosure proceedings

as “part of the attorney-client scheme to manipulate and misuse the legal system by filing

frivolous causes [sic] to extort monies from her clients’ victims, the elderly, disabled home

owners being bilked by the unscrupulous so-called contractors.” Id., at ¶ 94. 

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B. Procedural Background

Before the court was able to reach the merits of defendant’s motion to dismiss, it first had

to address various requests and filings by plaintiff, including a motion to disqualify the

undersigned, filed on March 14, 2007. The court also delayed hearing on the motion to dismiss

by granting plaintiff additional time to file an opposition. 

The motion to dismiss addressed herein was filed by defendant Sandra Johnson on

January 25, 2007, pursuant to Rule 12(b)(6) and 12(b)(1) of the Federal Rules of Civil

Procedure. The other defendants have joined in the motion.

As a threshold matter, the Rule 12(b)(6) motion must be construed as a motion for

judgment on the pleadings under Rule 12(c). Although a Rule 12(b)(6) motion filed after an

answer is technically untimely, Rule 12(h)(2) preserves the defense of failure to state a claim

through the time of trial on the merits, and further provides that such a defense may be raised by

a motion for judgment on the pleadings-- i.e., pursuant to Rule 12(c). See Delta Truck & Tractor

v. Navistar Int'l Transportation Corp., 833 F. Supp. 587, 588 (W.D. La. 1993) (citing 5A

Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (1990)). Since

Rule 12(c) serves in such instances merely as a vehicle to allow the procedural defense of failure

to state a claim to be raised after the pleadings, the same legal standard applied under Rule

12(b)(6) is applied to Rule 12(c) motions. Delta Truck, 833 F. Supp. at 588. On the other hand,

where the defense offered under Rule 12(b) previously had been included in the answer, a

number of courts have treated a post-answer motion under Rule 12(b)(6) as timely. See e.g.,

Gerakaris v. Champagne, 913 F. Supp. 646, 650-51 (D. Mass. 1996) (defendants preserved Rule

12(b) motion by stating it in answer as an affirmative defense); Doolittle v. Ruffo, 882 F. Supp.

1247, 1257 n. 9 (N.D.N.Y. 1994). In any event, the timing requirement customarily has been

treated as a mere technicality. 5C Charles A. Wright & Arthur R. Miller, Federal Practice and

Procedure § 1367 (3d ed. 2004), at 221. Moreover, “a trial court may act on its own initiative to

note the inadequacy of a complaint and dismiss it for failure to state a claim.” Wong v. Bell, 642

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F.2d 359, 361 (9th Cir. 1981). Because defendants have filed answers to the complaint, the court

construes defendant’s Rule 12(b)(6) motion as one for judgment on the pleadings made pursuant

to Fed. R. Civ. P. 12(c).

As discussed herein, plaintiff’s complaint fails to state a federal cause of action, and

because no other basis for federal jurisdiction appears in the complaint, the court recommends

against exercising supplemental jurisdiction over plaintiff’s remaining state law claims. 28

U.S.C. § 1367(c)(3); United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966); Schneider v.

TRW, Inc., 938 F.2d 986, 993-94 (9th Cir. 1991). 

C. Defendant’s Request for Judicial Notice

In support of defendant Johnson’s motion to dismiss, her attorney, Philip S. Ward, has

submitted a declaration in which he has asked the court to take judicial notice of a number of

items, including a copy of the file-endorsed lien foreclosure complaint filed in Shasta County

Superior Court, and what appears to be several items related to plaintiff’s litigation history in

cases other than this one. 

The party requesting judicial notice bears the burden of persuading the court that the

particular fact is not reasonably subject to dispute and is capable of immediate and accurate

determination by resort to a source whose accuracy cannot reasonably be questioned and

supplying the court with the source material needed to determine whether the request is justified. 

In re Tyrone F. Conner Corp., Inc., 140 B.R. 771, 781-82 (E.D. Cal. 1992); Fed. R. Evid.

201(b). 

Defendant Johnson has attached some seventy-plus pages related to plaintiff’s purported

status as a vexatious litigant in other courts. While it appears that this defendant seeks to use this

information to discount plaintiff’s claims and her invocation of federal jurisdiction, the court

finds such information immaterial to the Rule 12 motion currently before it. Accordingly, the

court declines to take judicial notice of the documents submitted by defendant Johnson, and does

not and has not considered them in making these findings and recommendations.

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II. ANALYSIS

A. Rule 12(b)(6) Standard

Pursuant to Fed. R. Civ. P. 12(b)(6), a complaint should only be dismissed for failure to

state a claim upon which relief may be granted if it appears beyond doubt that the plaintiff can

prove no set of facts in support of the claim or claims that would entitle him to relief. Hishon v.

Spalding, 467 U.S. 69, 74 (1984) (citing Conley v. Gibson, 355 U.S. 41 (1957)); Palmer v.

Roosevelt Lake Log Owners Ass’n, 651 F.2d 1289, 1294 (9th Cir. 1981). Dismissal may be

based either on the lack of cognizable legal theories or the lack of pleading sufficient facts to

support cognizable legal theories. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th

Cir. 1990). In reviewing a complaint under this standard, the court must accept as true the

allegations of the complaint. Hosp. Bldg. Co. v. Rex. Hosp. Trs., 425 U.S. 738, 740 (1976);

Church of Scientology of California v. Flynn, 744 F.2d 694 (9th Cir. 1984). The court construes

the pleading in the light most favorable to plaintiff and resolves all doubts in plaintiff’s favor.

Parks School of Business, Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). In a case

where plaintiff is proceeding pro se, the court has an obligation to construe the pleadings

liberally. Bretz v. Kelman, 773 F.2d 1026, 1027 n.1 (9th Cir. 1985) (en banc). However, the

court’s liberal interpretation of a pro se complaint may not supply essential elements of a claim

that are not plead. Pena v. Gardner, 976 F.2d 469, 471 (9th Cir. 1992); Ivey v. Bd. of Regents of

Univ. of Alaska, 673 F.2d 266, 268 (9th Cir. 1982). Furthermore, “[t]he court is not required to

accept legal conclusions cast in the form of factual allegations if those conclusions cannot

reasonably be drawn from the facts alleged.” Clegg v. Cult Awareness Network, 18 F.3d 752,

754-55 (9th Cir. 1994). Neither need the court accept unreasonable inferences, or unwarranted

deductions of fact. Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). 

B. Plaintiff’s Federal Claims and Jurisdiction

Plaintiff alleges that this case is properly before the court on federal question jurisdiction

pursuant to 28 U.S.C. § 1331. Federal question jurisdiction requires that the complaint (1) arise

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 As discussed herein, the court finds that plaintiff has failed to state a federal cause of

action and therefore recommends against exercising supplemental jurisdiction over the

remaining state law claims. This recommendation is premised on 28 U.S.C. § 1367(c), rather

than Rule 12(b)(1). 

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under a federal law or the U. S. Constitution, (2) allege a “case or controversy” within the

meaning of Article III, § 2 of the U. S. Constitution, or (3) be authorized by a federal statute that

both regulates a specific subject matter and confers federal jurisdiction. Baker v. Carr, 369 U.S.

186, 198 (1962). 

Plaintiff premises her invocation of federal question jurisdiction on two federal statutes:

(1) the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961, et

seq., and (2) the Hobbs Act, 18 U.S.C. § 1951. See Compl., ¶¶ 97-105. The Hobbs Act is a

criminal statute and does not create a private right of action. WSB Electric Co. v. Rank & File

Committee to Stop 2-Gate System, 103 F.R.D. 417, 419 (N.D. Cal. 1984); Wisdom v First

Midwest Bank, 167 F.3d 402, 408-09 (8th Cir. 1999). Rather, plaintiff relies on that statute to

allege the “predicate acts” element of her RICO claim. 

To state a civil claim for violation of RICO, a plaintiff must allege (1) conduct (2) of an

enterprise (3) through a pattern (4) of racketeering activity (5) causing injury to plaintiff’s

business or property. Chaset v. Fleer/Skybox Int’l, 300 F.3d 1083, 1086 (9th Cir. 2002). 

Defendants urge dismissal of plaintiff’s RICO claim based on plaintiff’s inability to

allege these necessary elements. Defendants further request dismissal of the entire action

pursuant to Rule 12(b)(1), because absent the RICO claim, no federal cause of action exists, and

only state law claims remain.3

 

Indeed, after careful review of the complaint, the court concludes that plaintiff has

attempted, unsuccessfully, to conflate simple state law contract and fraud claims involving

California residents into a federal RICO action. More specifically, plaintiff has failed to allege

criminal “predicate acts” and “continuity” required to establish a “pattern of racketeering

activity.”

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 Plaintiff alleges that defendants violated Cal. Bus. & Prof. Code §§ 7110 (disregard or

violation of statutes by contractors); 7115.5 (failure to comply with rules and regulations

applicable to contractors); 7117.5 (acting as a contractor under a suspended license); and 7159

(requirements for home improvement contracts). See Compl., at ¶¶14-27;12:14-17. None of

these statutes provides for criminal liability within the meaning of RICO. 

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A “pattern of racketeering activity” requires the commission of at least two acts of

racketeering (i.e., predicate acts) within a ten year period. H.J. Inc. v. Northwestern Bell

Telephone Co., 492 U.S. 229, 232 (1989). “Racketeering activity” is defined under the RICO

Act to mean “any act or threat involving” specified state-law crimes, any “act” indictable under

various specified federal statutes, and certain federal “offenses.” Id. at 232 (quoting 18 U.S.C. 

§ 1961(1)).

More specifically, section 1961(1) defines “racketeering activity” as “any act or threat

involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene

matter, or dealing in a controlled substance or listed chemical, which is chargeable under State

law and punishable by imprisonment for more than one year; [or] any act which is indictable

under any of the following provisions of title 18, United States Code.” 18 U.S.C. § 1961(1). 

Here, plaintiff has alleged that defendants violated the Hobbs Act, 18 U.S.C. § 1951,

which prohibits interference with interstate commerce by threats of violence, including extortion.

While section 1961(1) includes violations of the Hobbs Act in its definition of “racketeering

activity,” plaintiff has failed to allege any other separate and distinct criminal, predicate act on

the part of defendants, nor can she. The factual allegations detailed in the complaint clearly

demonstrate that his claim consists of a contract dispute over repairs which plaintiff is seeking to

characterize as a RICO claim. Plaintiff’s allegations regarding defendants’ alleged violations of

the California Business and Professions Code do not constitute criminal violations covered under

section 1961.4

 The same is true with regard to plaintiff’s allegations regarding various violations

of the California Civil Code. Plaintiff does invoke provisions of the California Penal Code

relating to extortion – Cal. Pen. Code § 518 (definition of extortion), § 519 (use of fear to extort),

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 It is apparent from the face of the complaint that plaintiff simply disputes the

defendants’ resort to state law and procedures regarding contractor liens. Making a conclusory

allegation that this process is “theft” does not turn this state law dispute into a federal RICO

case.

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and § 524 (attempts to extort, punishable for not more than a year) – but these appear to relate to

the very same acts of extortion covered by plaintiff’s Hobbs Act allegations (i.e., defendants’

demands for payment of services). 

 Finally, plaintiff’s vague and conclusory allegations that defendants committed mail

and/or wire fraud are entirely unsupported by any factual allegation. Likewise, plaintiff makes

vague and conclusory allegations regarding defendants’ “theft” of her property (i.e., retention

thereof pending payment). However, vague and conclusory allegations are insufficient to state a

claim under RICO.5

 Howard v. America Online, Inc., 208 F.3d 741, 750 (9th Cir. 2000)

(dismissing RICO claims for plaintiff’s failure to demonstrate continuity). 

Even assuming plaintiff’s allegations regarding defendants’ extortion were sufficient to

establish the requisite “predicate acts” for a RICO claim, plaintiff has failed to establish the

requisite “pattern,” or continuity, required under the Act. While two predicate acts are required

under the Act, they are not necessarily sufficient to establish a “pattern.” Turner v. Cook, 362

F.3d 1219, 1229 (9th Cir. 2004) (citing Northwestern Bell Telephone, 492 U.S. at 237). 

“[T]o show a pattern of racketeering activity, a RICO plaintiff must ‘show that the

racketeering predicates are related, and that they amount to or pose a threat of continued criminal

activity.’” Sever v. Alaska Pulp Corp., 978 F.2d 1529, 1535 (9th Cir. 1992) (quoting

Northwestern Bell Telephone, 492 U.S. at 239)). “Predicates are related if they have the same or

similar purposes, results, participants, victims, or methods of commission, or otherwise are

interrelated by distinguishing characteristics and are not isolated.” Id., at 1535 (internal

quotations omitted). “Continuity is demonstrated if the illegal conduct poses a threat of

continued criminal activity, such as when the illegal conduct is ‘a regular way of conducting [a]

defendant’s ongoing legitimate business.’” Id. (quoting Northwestern Bell Telephone, 492 U.S.

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at 239 at 243). Predicate acts extending over a few weeks or months and threatening no future

criminal conduct do not satisfy this requirement. Turner v. Cook, 362 F.3d 1219, 1230 (9th Cir.

2004). 

The events plaintiff complains of can be summarized in two parts: first, plaintiff alleges

that in November 2003, defendant Cronic preyed on plaintiff’s fears regarding fire damage to her

property and used deceit to induce her to sign the service agreement; second, plaintiff alleges

that defendants’ efforts to enforce the contract and collect payment from plaintiff (starting

around February 2004 and culminating in the commencement of the July 2004 foreclosure

action) constituted “extortion” in violation of the Hobbs Act and California Penal Code §§ 518,

et seq. 

Plaintiff does not clarify what occurred between the filing of the foreclosure action in

state court and her filing of this action on November 29, 2006. The only continuity plaintiff

alleges is defendants’ “continued wrongful possession of plaintiff’s personal property.” Compl.,

at ¶ 78. 

The allegations are insufficient to support a claim under RICO. Even assuming that

plaintiff’s allegations regarding “extortion” qualify as the two requisite predicate acts, plaintiff

has made no allegation that such “illegal conduct poses a threat of continued criminal activity.” 

Sever, 978 F.2d at 1535. Plaintiff’s allegations concern a single contract, executed in Redding,

California, between California residents, and identify only plaintiff, and arguably her father, as

victims. Nothing in the complaint indicates that defendants’ allegedly criminal conduct with

regard to that isolated contract is likely to continue into the future. Indeed, the Ninth Circuit has

held that RICO should not “apply to a single, isolated transaction” such as this. Medallion

Television Enters. v. SelecTV of Cal., 833 F.2d 1360, 1365 (9th Cir. 1987) (plaintiff could not

maintain a RICO action where, although two predicate acts were alleged, the allegations

concerned a single fraudulent inducement to enter a contract; once the parties entered into the

contract, the fraud, if indeed it was fraud, was complete). 

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Here, plaintiff’s allegations concern events arising from a single contract, and plaintiff’s

dissatisfaction with defendants’ services performed (or not) thereunder. These events occurred

over an eight to nine month period, and culminated in defendants’ filing of a foreclosure action

in state court. Although the outcome of those state court proceedings is not entirely clear,

Purofirst’s resort to judicial process does not constitute the kind of wrongful use of force or

threats contemplated under RICO. See Royce Int’l Broadcasting Corp. v. Field, 2000 U.S. Dist.

LEXIS 2369, at * 14 (N.D. Cal. Feb. 22, 2000) (“[R]esort to the judicial process to resolve a

contractual dispute does not constitute the kind of wrongful use of force or threats contemplated

by the federal RICO statute.”) (citing Eastern Railroad Presidents Conference v. Noerr Motor

Freight, Inc., 365 U.S. 127 (1961)). Indeed, defendants’ resort to judicial process undermines,

rather than supports, any alleged continuation of the “criminal activity.”

Moreover, “predicate acts designed to bring about a single event” pose no threat of

continuity. Sever, 978 F.2d at 1536; see also Medallion Television Enters., 833 F.2d at 1364.

“When . . . a complaint explicitly presents a distinct and non-reoccurring scheme with a built-in

termination point and provides no indication that the perpetrators have engaged or will engage in

similar misconduct, the complaint does not sufficiently allege continuity for § 1962(c) purposes

even if the purported scheme takes several years to unfold, involves a variety of criminal acts,

and targets more than one victim.” Gamboa v. Velez, 457 F.3d 703, 709-710 (7th Cir. 2006). 

Here, plaintiff makes no allegation that defendants have engaged or will engage in

misconduct similar to that alleged with regard to her contract. Further, the “predicate acts” of

alleged “extortion” were aimed at bringing about a single event – i.e., achieving plaintiff’s

payment of the money allegedly owed under the contract. Indeed, the alleged events took place

over a short period of time and involved very few people, i.e., those involved with the execution

and enforcement of the contract. Even assuming these actions constituted a scheme to defraud

plaintiff and her father, they have a natural and “built-in termination point.” Indeed, any number

of natural conclusions to this dispute can be contemplated: plaintiff could pay the money

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allegedly owed; she could pay a compromised settlement portion thereof; she could sue for fraud

and breach of contract in state court; defendants could do likewise; etc. Plaintiff has made no

allegation showing that this simple contract dispute poses a threat of continued criminal activity. 

In accordance with the foregoing, the undersigned finds that plaintiff has failed to state a

claim under RICO and that only state law claims remain in her complaint. The court also finds

that amendment would be futile. Lopez v. Smith, 203 F.3d 1122, 1128 (9th Cir. 2000) (dismissal

of a pro se complaint for failure to state a claim is proper where amendment would be futile). 

Accordingly, the court recommends that plaintiff’s RICO claim be dismissed pursuant to Rule

12(b)(6), and that the remaining state law claims be dismissed. 28 U.S.C. § 1367(c)(3); United

Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966); Schneider v. TRW, Inc., 938 F.2d 986, 993-94

(9th Cir. 1991). 

III. PLAINTIFF’S PENDING REQUESTS

On February 28, 2006, plaintiff filed a document styled, “Request for Leave to Amend,

Conduct Discovery, for Additional Time and for Evidentiary Hearing.” In that document

plaintiff makes various requests, including “additional time to respond to any extrinsic evidence,

should the court not sustain the objection that the defendants [sic] motion is untimely and

considers any extrinsic evidence construing the motion in some alternative manner” as well as a

request for an evidentiary hearing. By this request, it appears that plaintiff intends to interpose

an additional objection to the timeliness of defendant’s motion to dismiss. It also appears that

plaintiff wishes leave to conduct discovery in order to allege additional jurisdictional bases for

maintaining this action in federal court. 

“To maintain an action in federal court, an actual case or controversy must exist, and

discovery may not be used to conduct a fishing expedition in hopes that some fact supporting an

allegation will be uncovered.” Inst. for Wildlife Prot. v. Notrton, 337 F. Supp. 2d 1223, 1226 (D.

Wash. 2004) (citing Rivera v. NIBCO, Inc., 364 F.3d 2057, 1072 (9th Cir. 2004)). Further,

federal subject matter jurisdiction must exist at the time the action is commenced and must be

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disclosed in the complaint. Otherwise the court has no power but to dismiss the action. 

Morongo Band of Mission Indians v. California State Bd. of Equalization, 858 F.2d 1376, 1380

(9th Cir. 1988).

 For the reasons set forth above, plaintiff’s February 28, 2006, request is denied. 

IV. CONCLUSION

In accordance with the foregoing, IT IS ORDERED that: 

1. Plaintiff’s February 28, 2007, “Request for Leave to Amend, Conduct Discovery, for

Additional Time and for Evidentiary Hearing” is denied; and

2. Defendant’s Request for Judicial Notice is denied. 

Further, IT IS RECOMMENDED that: 

1. Defendant’s motion to dismiss be granted as to all defendants; and 

2. The Clerk be directed to close this case. 

These findings and recommendations are submitted to the United States District

Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within ten days

after being served with these findings and recommendations, plaintiff may file written objections

with the court. Such a document should be captioned “Objections to Magistrate Judge’s

Findings and Recommendations.” Any reply to the objections shall be served and filed within

ten (10) days after service of the objections. Failure to file objections within the specified time

may waive the right to appeal the District Court’s order. Turner v. Duncan, 158 F.3d 449, 455

(9th Cir. 1998); Martinez v. Ylst, 951 F.2d 1153, 1157 (9th Cir. 1991).

DATED: May 18, 2007.

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