Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_18-cv-05395/USCOURTS-cand-3_18-cv-05395-4/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1962 Racketeering (RICO) Act

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ORDER – No. 18-cv-05395-LB

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United States District Court 

Northern District of Californi

a

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

San Francisco Division 

LUIS HURTADO LUCERO, 

Plaintiff, 

v. 

IRA SERVICES, INC., et al., 

Defendants. 

Case No. 18-cv-05395-LB 

ORDER FOR PLAINTIFF TO SHOW 

CAUSE WHY HIS RICO CLAIMS 

SHOULD NOT BE DISMISSED 

Re: ECF No. 90 

Plaintiff Luis Hurtado Lucero invested $350,000 in retirement savings into a self-directed 

individual retirement account (“IRA”) called the “Lazzaro & Associates five-year trading 

portfolio” (the “Program”).1 The Program allegedly turned out to be an illegal Ponzi scheme.2 His 

claims include violations of the federal Racketeer Influenced Corrupt Organizations Act 

(“RICO”).3

 Certain defendants (who administered the IRA) moved to dismiss the RICO claims, 

and the court granted their motion and dismissed the RICO claims with prejudice on the ground 

that the Private Securities Litigation Reform Act of 1995 (“PSLRA”) barred them.4 The same 

1

 Second Am. Compl. (“SAC”) − ECF No. 90 at 2 (¶ 1), 7 (¶ 26). Citations refer to the Electronic Case 

File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of documents. 

2 Id. at 2 (¶ 1). 

3 Id. at 10–13 (¶¶ 45−59). 

4

 Order − ECF No. 89 at 11. 

Case 3:18-cv-05395-LB Document 104 Filed 02/03/20 Page 1 of 2
ORDER – No. 18-cv-05395-LB 2

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United States District Court 

Northern District of Californi

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analysis applies to the RICO claims against the non-moving defendant here. A court may dismiss 

a plaintiff’s claims on its own initiative where the plaintiff does not state a valid, legally 

cognizable claim. Reed v. Lieurance, 863 F.3d 1196, 1207 (9th Cir. 2017). The court thus issues 

this order to the plaintiff to show cause why the PSLRA does not bar the RICO claims. 

The court asks the parties to confer by February 7, 2020. Thereafter, by February 13, 2020, the 

parties may file a joint statement with their respective views, or, if the defendant does not want to 

file a statement, the plaintiff must file a statement of up to five pages showing cause why the court 

should not dismiss the RICO claims. Alternatively, the plaintiff might agree that dismissal of the 

RICO claims is procedurally appropriate. Given the case’s procedural posture (and absent the 

input of the parties supporting a different approach), the court does not think remand of the statelaw claims at this juncture is the right approach. 

The court can discuss the issues at the upcoming case-management conference now set for 

February 20, 2020 at 9:30 a.m. 

IT IS SO ORDERED. 

Dated: February 3, 2020 

______________________________________ 

LAUREL BEELER 

United States Magistrate Judge 

Case 3:18-cv-05395-LB Document 104 Filed 02/03/20 Page 2 of 2