Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-02476/USCOURTS-casd-3_16-cv-02476-0/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1964 Civil Remedies: Racketeering (RICO) Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CARLA HILL,

Plaintiff,

v.

PETERSON, BURNELL, GLUSASER & 

ALLRED, a Professional Corporation, 

RICHARD PETERSON, as an individual,

DOES 1-10.

Defendants.

Case No.: 3:16-cv-2476-GPC-AGS

ORDER:

1) GRANTING MOTION TO 

PROCEED IN FORMA PAUPERIS

[Dkt. No. 2]

2) DISMISSING RICO CLAIM 

PURSUANT TO SUA SPONTE 

SCREENING REQUIRED BY 28 

U.S.C. §§ 1915(e)(2)(B)(ii) and 

DECLINING TO EXERCISE 

SUPPLEMENTAL JURISDICTION

[Dkt. No. 1]

3) DENYING PLAINTIFF’S 

REQUEST FOR APPOINTMENT OF 

COUNSEL 

[Dkt. No. 3]

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Plaintiff Carla Hill, proceeding pro se, has filed a complaint for damages under the 

federal Racketeering Influenced and Corrupt Organizations Act (“RICO”) and for 

conversion, breach of fiduciary duty, and conspiracy under California law. Dkt. No. 1. 

Plaintiff did not prepay the civil filing fee required by 28 U.S.C. § 1914(a) at the time of 

filing, but instead filed a Motion to Proceed In Forma Pauperis (“IFP”) pursuant to 28 

U.S.C. § 1915. For the following reasons, the Court GRANTS Plaintiff’s motion to 

proceed IFP, sua sponte DISMISSES her federal RICO cause of action for failure to state 

a claim, and DECLINES to exercise supplemental jurisdiction over Plaintiff’s remaining 

state law claims. 

I. Motion to Proceed In Forma Pauperis

All parties instituting any civil action, suit, or proceeding in a district court of the 

United States, except an application for writ of habeas corpus, must pay a filing fee of 

$400. See 28 U.S.C. § 1914(a). An action may proceed despite a plaintiff’s failure to 

prepay the entire fee only if he is granted leave to proceed IFP pursuant to 28 U.S.C. 

§ 1915(a). See Andrews v. Cervantes, 493 F.3d 1047, 1051 (9th Cir. 2007); Rodriguez v. 

Cook, 169 F.3d 1176, 1177 (9th Cir. 1999). A court may authorize the commencement of 

a suit without prepayment of fees if the plaintiff submits an affidavit, including a 

statement of all of his or her assets, showing that he or she is unable to pay the fees. See 

28 U.S.C. §1915(a). Such an affidavit must include a complete statement of the 

plaintiff’s assets. See id. 

An IFP action is subject to dismissal if the court determines that the complaint is 

frivolous or malicious, or fails to state a claim upon which relief may be granted. 28 

U.S.C. § 1915(e)(2). When a plaintiff moves to proceed IFP, the court first “grants or 

denies IFP status based on the plaintiff's financial resources alone and then independently 

determines whether to dismiss the complaint” pursuant to § 1915(e)(2). Franklin v. 

Murphy, 745 F.2d 1221, 1226 n.5 (9th Cir. 1984). 

In her declaration, Plaintiff states that she expects to receive $500 from her 

employment, $450 from self-employment, and $143 in dividends, for a total monthly 

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income of $1,093.00. Dkt. No. 2 at 1-2. She adds that she currently has just $100.00 in 

one checking account and that she is owed $5,400.00 in child support payments that are 

currently in arrears. Id. at 2-3. Plaintiff’s total monthly expenses, accounting for 

amounts owed on her motor vehicle and on credit cards total $1,947.00. Id. at 5. 

Plaintiff also owes $89,000 in attorney bills owed in conjunction with this lawsuit. See 

id. (“but attorney bills I did not list above of currently 89,000 left.”). 

Because Plaintiff’s monthly expenses far outweigh her monthly income, the Court 

GRANTS Plaintiff’s Motion to Proceed IFP and declines to “exact” any initial filing fee 

because she has no means to pay it. 

II. Screening Pursuant to 28 U.S.C. §§ 1915(e)(2)(B)(ii)

Because Plaintiff is proceeding IFP, her complaint requires a pre-answer screening 

pursuant to 28 U.S.C. § 1915(e)(2). Under this statute, a court must sua sponte dismiss 

an IFP complaint, or any portion of it, which is frivolous, malicious, fails to state a claim, 

or seeks damages from defendants who are immune. See Lopez v. Smith, 203 F.3d 1122, 

1126-27 (9th Cir. 2000) (en banc) (discussing 28 U.S.C. § 1915(e)(2) and explaining that 

it applies equally to prisoner and non-prisoner claimants). A pro se complaint should, 

moreover, be construed liberally and afford the plaintiff any benefit of the doubt. See 

Karim-Panahi v. Los Angeles Police Dep’t, 839 F.2d 621, 623 (9th Cir. 1988). 

“The standard for determining whether a plaintiff has failed to state a claim upon 

which relief can be granted under § 1915(e)(2)(B)(ii) is the same as the Federal Rule of 

Civil Procedure 12(b)(6) standard for failure to state a claim.” Watison v. Carter, 668 

F.3d 1108, 1112 (9th Cir. 2012). Federal Rule of Civil Procedure 12(b)(6) requires that a 

complaint “contain sufficient factual matter, accepted as true, to state a claim to relief that 

is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation 

marks omitted). Detailed factual allegations are not required, but “[t]hreadbare recitals of 

the elements of a cause of action, supported by mere conclusory statements, do not 

suffice.” Id. “Determining whether a complaint states a plausible claim for relief [is] . . . 

a context-specific task that requires the reviewing court to draw on its judicial experience 

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and common sense.” Id. The “mere possibility of misconduct” or “unadorned, the 

defendant-unlawfully-harmed me accusation[s]” fall short of meeting this plausibility 

standard. Id.; see also Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009).

A. RICO Violation 

The complaint avers that the Defendants and Ron Hill, her former husband, 

violated RICO by defrauding Plaintiff of money and property through a conspiracy aimed 

at getting her to sign a marital dissolution agreement to her financial detriment. See 

Compl. ¶¶ 6-8. More specifically, she alleges that the Defendants “devised a scheme and 

artifice with husband Ron Hill to defraud Plaintiff of property and money due under 

[California Law] . . . by convincing Plaintiff to enter a mediated Agreement by a Special 

Master, for the purpose of allowing Defendant to create attorney fees for themselves 

decried from plaintiff’s community property.” Id. ¶ 17. In order to carry out their 

fraudulent scheme, Plaintiff alleges that Defendants, among other misconduct, denied her 

the opportunity to make an informed decision about whether to accept a $50,000 

settlement from her husband, lied about appointing a “special master” to mediate the 

divorce, and advanced money to the alleged special master as a “bribe or kickback to 

remain complicate [sic] as part of a common scheme to defraud Wife-Plaintiff of her 

property.” Id. ¶ 8. 

To state a claim under § 1962 of RICO, a plaintiff must allege the “(1) conduct (2) 

of an enterprise (3) through a pattern (4) of racketeering activity (known as ‘predicate 

acts’” (5) causing injury to plaintiff’s ‘business or property.’” Living Designs, Inc. v. E.I. 

Dupont de Nemours & Co., 431 F.3d 353, 361 (9th Cir. 2005) (citations omitted); see 

also Richmond v. Nationwide Cassel L.P., 52 F.3d 640, 644 (9th Cir. 1995). A plaintiff 

establishes a pattern of racketeering activity by pleading at least two related and 

continuous predicate acts that amount to or pose a threat of continued criminal activity.

See Allwaste, Inc. v. Hecht, 65 F.3d 1523, 1527 (9th Cir. 1995); see also H.J. Inc. v. Nw. 

Bell Tel. Co., 492 U.S. 229, 240 (1989). 

In H.J. Inc., the Supreme Court described the “continuity” requirement as both a 

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“closed- and open-ended concept, referring either to a closed period of repeated conduct, 

or to past conduct that by its nature projects into the future with a threat of repetition.” 

492 U.S. at 241. “A party alleging a RICO violation may demonstrate continuity over a 

closed period by proving a series of related predicates extending over a substantial period 

of time.” Id. at 242. “Open-ended continuity is the threat that criminal conduct will 

continue into the future. It is established by showing either that the predicate acts include 

a specific threat of repetition extending indefinitely into the future or that the predicate 

acts were part of an ongoing entity’s regular way of doing business.” Allwaste, 65 F.3d 

at 1527 (citations omitted). 

Plaintiff argues that the Defendants committed the following predicate acts: 

bribery pursuant to § 1961(1)(a), mail fraud in violation of 18 U.S.C. § 1341, wire fraud 

under 18 U.S.C. § 1342, and interstate transfer of stolen property in violation of 18 

U.S.C. § 2314. Compl. ¶¶ 21, 37, Prayer for Relief. Assuming arguendo that Plaintiff 

has established two, related predicate acts, she has nonetheless failed to satisfy the H.J. 

Inc. continuity requirement because the facts she alleges do not amount to or pose a threat 

of continued criminal activity. 

For one, Plaintiff’s complaint is devoid of any allegations from which the Court 

can reasonably conclude or infer that any predicate acts occurred over a “substantial 

period of time,” as is required for closed-concept continuity. See Allwaste, 65 F.3d at 

1528 (noting that the plaintiff should have, but did not, specify the dates of the first and 

last alleged predicate acts in order to satisfy the “substantial period of time” requirement). 

In Allwaste, the Ninth Circuit provided some guidance as to what constitutes a 

“substantial period of time” when it observed that “a pattern of activity lasting only a few 

months does not reflect the long term criminal conduct to which RICO was intended to 

apply” and that, generally speaking, the requirement will not “be satisfied by a pattern of 

activity lasting less than year.” Id. (internal quotations omitted). Here, Plaintiff has not 

provided the Court with the dates of the first and last predicate acts. There are also no 

facts in the complaint that suggest that Defendants’ conduct occurred over a prolonged 

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period of time. As such, Plaintiff has failed to demonstrate that the criminal activity she 

complains of occurred over a “substantial period of time.” 

Plaintiff also cannot show open-ended continuity because the alleged predicate acts 

do not pose a threat of continuing criminal activity. The misconduct that Plaintiff 

complains of all pertain to the dissolution of her marriage to her husband, Ron Hill. 

There is, therefore, no threat that Defendants will continue to engage in similar predicate 

acts moving forward because the alleged fraudulent acts pertained only, and specifically, 

to the dissolution of Plaintiff’s marriage. See Sun Sav. & Loan Ass’n v. Dierdorff, 825 

F.2d 187, 194 (9th Cir. 1987) (concluding that predicate acts do not pose a threat of 

continuing activity when they further a single diversion and when defendants have no 

more need to commit predicate acts once the diversion is completed). Thus, absent any 

allegations demonstrating that Defendants’ alleged racketeering activities extend beyond 

the context of Plaintiff’s divorce, Plaintiff has not satisfied the requirement that the 

predicate acts pose a threat of continued criminal activity. 

III. Pendent Jurisdiction 

Pursuant to 28 U.S.C. § 1367(a), “in any civil action of which the district courts 

have original jurisdiction, the district courts shall have supplemental jurisdiction over all 

other claims that are so related to claims in the action within such original jurisdiction 

that they form part of the same case or controversy under Article III of the United States 

Constitution.” Yet even “once judicial power exists under § 1367(a), retention of 

supplemental jurisdiction over state law claims under 1367(c) is discretionary.” Acri v. 

Varian Assoc., Inc., 114 F.3d 999, 1000 (9th Cir. 1997). “The district court may decline 

to exercise supplemental jurisdiction over a claim under subsection (a) if . . . the district 

court has dismissed all claims over which it has original jurisdiction.” 28 U.S.C. 

§ 1367(c)(3). The Supreme Court has cautioned that “if the federal claims are dismissed 

before trial, . . . the state claims should be dismissed as well.” United Mine Workers of 

Am. v. Gibbs, 383 U.S. 715, 726 (1966); see also Townsend v. Columbia Operations, 667 

F.2d 844, 850 (9th Cir. 1982). In the event that all federal law claims are eliminated 

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before trial, a district court must weigh the following factors before declining or choosing 

to exercise pendent jurisdiction: judicial economy, comity, convenience, and fairness. 

See Bryant v. Adventist Health System/W., 289 F.3d 1162, 1169 (9th Cir. 2002) (quoting 

Carnegie—Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7, 108 S. Ct. 614, 98 L. ED. 2d 

720 (1988)). 

Because the Court has dismissed the only federal cause of action apparent in the 

complaint, the Court declines to exercise supplemental jurisdiction over Plaintiff’s 

remaining state law claims. The remaining claims are state tort claims governed by 

California law and have no nexus to questions of federal policy. Thus, there is no federal 

interest served by proceeding with the state law causes of action in federal court, and the 

interest of comity would be served by permitting the state court to decide issues relating 

to the remaining state law claims and defenses. As for convenience to the litigants and 

fairness, the Court concludes that neither factor weighs against declining to exercise 

supplemental jurisdiction as the case is in its infancy, and no answer has yet been filed. 

CONCLUSION

For the foregoing reasons the Court GRANTS Plaintiff’s IFP motion, 

DISMISSES Plaintiff’s RICO cause of action for failure to state a claim on which relief 

can be granted, and DECLINES to exercise supplemental jurisdiction over the remaining 

state law claims. As such, the Court also DENIES Plaintiff’s pending request for 

appointment of counsel as moot. The Plaintiff may refile her California causes of action 

in state court. 

IT IS SO ORDERED. 

Dated: January 4, 2017

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