Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-01383/USCOURTS-caed-1_06-cv-01383-3/pdf.json

Parties Involved:
Anthony Balakian
Defendant
Leo Balakian
Defendant
Vince Balakian
Defendant
Jose Hernandez
Petitioner

Document Text:

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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

JOSE HERNANDEZ, individually )

and on behalf of others )

similarly situated, )

)

)

)

Plaintiff, )

)

vs. )

)

)

LEO BALAKIAN, ANTHONY )

BALAKIAN, and VINCE )

BALAKIAN, )

)

)

Defendant. )

)

)

No. CV-F-06-1383 OWW/DLB

ORDER DENYING IN PART AND

GRANTING IN PART DEFENDANTS'

MOTION TO DISMISS (Doc. 17)

AND DENYING PLAINTIFF'S

MOTION FOR SANCTIONS (Doc.

25)

Plaintiff Jose Hernandez has filed a class action Complaint

against defendants Leo Balakian, Anthony Balakian, and Vince

Balakian, owners of Fruit Patch, Inc. The Complaint alleges that

“Leo Balakian and his sons, Anthony and Vince Balakian ... have

conspired to operate Fruit Patch Inc. and other agricultural

growing businesses they own or operate (hereinafter ‘the other

entities’) through a pattern of racketeering activity, the

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Illegal Immigrant Hiring Scheme.” ¶ 4 The Complaint is brought

on behalf of all legal hourly-paid workers who have been employed

by an entity owned or operated by the Defendants. Plaintiff

alleges that Defendants "have depressed his wages as an

agricultural worker at Fruit Patch, Inc. by knowingly employing

vast numbers of illegal immigrants there for the express purpose

of depressing the market price for unskilled labor." Plaintiff

refers to this as "the Illegal Immigrant Hiring Scheme" or "the

Scheme". The Complaint alleges:

2. The Illegal Immigrant Hiring Scheme

violates the Racketeer Influenced and Corrupt

Organizations Act (RICO), 18 U.S.C. § 1961 et

seq. It is perpetrated every day, as an

integral part of the Balakian's regular

manner of staffing their orchards, and will

continue unabated, victimizing every legal

worker, until halted by judicial

intervention.

The Complaint further alleges:

14. The Illegal Immigrant Hiring Scheme

saves Fruit Patch Inc. and the other entities

millions of dollars per year in labor costs. 

This is so because illegal immigrants will

work for starvation wages and in deplorable

working conditions, a form of modern-day

indentured servitude. Such hiring practices

are in direct violation of the Immigration

and Nationality Act and RICO, which makes the

employment of illegal immigrants a predicate 

offense. Thus, if the Balakians were not

hiring large numbers of illegal immigrants,

their businesses would have to pay the

Plaintiff Class significantly higher wages,

and their profits would be sharply reduced.

15. All three of the Balakians have approved

the following hiring criteria for Fruit Patch

Inc. and the other entities. These criteria

subvert the law against hiring illegal

immigrants and effectively turn a blind eye

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to factors which any reasonable employer

would know indicate job applicants are

unauthorized for employment in the U.S.: 1) 

hiring workers who cannot speak English while

claiming to be U.S. Citizens or Lawful

Permanent Residents; 2) hiring workers who do

not have housing and are recent arrivals to

the U.S. and claim to be U.S Citizens or

Lawful Permanent Residents; 3) hiring workers

who present authorization documents which are

invalid on their face because the pictures

are of a different person, are upside down,

are on poor quality paper, etc.; 4) hiring

workers who are personally known to them and

their co-conspirators to be in the U.S.

illegally and are using false documents; and

5) hiring workers who have previously been 

employed under different identities. A

majority of the hourly workforce of Fruit

Patch Inc. and the other entities fall into

one of more of these categories.

16. Additionally, Fruit Patch Inc. and the

other entities are often informed that large

numbers of their workers are using false

social security numbers by the Social

Security Administration. Most of these

workers then simply assume new identities and

continue to be employed, pursuant to policies

set by the Balakians.

...

17. The Balakians have personally approved

the hiring procedures detailed above. They

have also directed their hiring personnel,

including Robero Olivarez, who has hired

hundreds of illegal immigrants for Fruit

Patch Inc. to follow these procedures, i.e.,

in ways that ensure the employment of a

largely illegal workforce.

18. In addition, the Balakians facilitate

the hiring of many of these illegal

immigrants by directing their hiringpersonnel [sic] to obtain housing for them,

which Roberto Olivarez, among others, has

done for illegal workers at Fruit Patch Inc.

19. Therefore, Mr. Hernandez alleges that

the Balakians and their co-conspirators have

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Defendants assert that no such provision exists and that 1

Plaintiff intended to allege violations of 8 U.S.C. §

1324(a)(3)(A).

4

facilitated the Illegal Immigrant Hiring

Scheme, thereby causing Fruit Patch Inc. and

the other entities they operate to hire more

than 100 illegal workers per year during the

last four years.

The Complaint alleges that the Balakian’s Illegal Immigrant

Hiring Scheme violates the Immigration and Nationality Act, 8

U.S.C. § 1324(a)(1)(B)(3)(A), as they have conspired "to employ 1

more than 10 undocumented, illegal aliens in each of the last

four years, knowing each was smuggled into the country and/or

harbored once they arrived here." ¶ 21. [Emphasis added] The

Complaint alleges that "by knowingly employing illegal immigrants

and ... conspiring to provide them with housing, the Balakians

have conspired to violate 8 U.S.C. § 1324(a)(1)(A)(iii), which

makes it a federal crime for anyone who 'knowing, or in reckless

disregard of the fact that an alien has come to, entered, or

remains in the United States in violation of law, conceals,

harbors, or shields from detection, or attempts to conceal,

harbor, or shield from detection, such alien in any place,

including any building or any means of transportation.’” ¶ 22.

[Emphasis added]. 

The Complaint alleges that “[t]hese are provisions of § 274

of the Immigration and Nationality Act, which is a RICO predicate

offense” pursuant to 18 U.S.C. § 1961(1)(F); that Fruit Patch

Inc. is a corporation affecting interstate commerce and is

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therefore a RICO enterprise pursuant to 18 U.S.C. § 1961(4); that

the other entities are each RICO enterprises affecting interstate

commerce; and that all three of the Balakians operate and manage

each of these enterprises and have implemented the Illegal

Immigrant Hiring Scheme at each by virtue of their roles as

managers, officers and owners. The Complaint alleges:

25. The conspiracy to perpetrate the Scheme

is a violation of 18 U.S.C. § 1962(d), an

agreement among the Balakians and coconspirators to violate § 1962(c), by

participating in the affairs of Fruit Patch

Inc. and the other entities through a pattern

of racketeering activity. The Scheme is ongoing, open-ended, and has been perpetrated

continuously for the last four years. It

will not stop without judicial intervention.

...

26. The Balakians’ Illegal Immigrant Hiring

Scheme, by itself, was a substantial factor

in causing the depressed wages about which

Hernandez and the Class complain. No other

party has been damaged by the Scheme.

27. Each defendant is subject to joint and

several liability for all of the damage

caused by all the racketeering acts committed

by any of the conspirators.

Defendants move to dismiss the Complaint for failure to

state a claim upon which relief can be granted pursuant to Rules

8 and 12(b)(6), Federal Rules of Civil Procedure. 

In addition to opposing the Motion to Dismiss, Plaintiff has

filed a Motion for Sanctions pursuant to Rule 11, Federal Rules

of Civil Procedure, against Defendants and their counsel, Monte

B. Lake, because of the failure to cite Mendoza v. Zirkle Fruit

Co., 301 F.3d 1163 (9 Cir.2002), in the Motion to Dismiss. The th

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Motion for Sanctions seeks an order striking Defendants’ Motion

to Dismiss and an award of attorneys’ fees incurred by Plaintiff

in opposing the Motion to Dismiss and for preparing the Motion

for Sanctions. 

A. Defendants’ Motion to Dismiss.

In moving to dismiss, Defendants contend that the Complaint

fails to adequately plead the necessary elements of a RICO

predicate Act under 18 U.S.C. § 1962(c) and underlying crimes

defined by the Immigration and Nationality Act; that Plaintiff’s

failure to state a Section 1962(c) claim results in the failure

to state a claim under Section 1962(d); and that Plaintiff fails

to adequately plead the necessary elements of a RICO conspiracy

under Section 1962(d).

1. Governing Standards.

A motion to dismiss under Rule 12(b)(6) tests the

sufficiency of the complaint. Novarro v. Black, 250 F.3d 729,

732 (9 Cir.2001). Dismissal of a claim under Rule 12(b)(6) is th

appropriate only where “it appears beyond doubt that the

plaintiff can prove no set of facts in support of his claim which

would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-

46 (1957). Dismissal is warranted under Rule 12(b)(6) where the

complaint lacks a cognizable legal theory or where the complaint

presents a cognizable legal theory yet fails to plead essential

facts under that theory. Robertson v. Dean Witter Reynolds,

Inc., 749 F.2d 530, 534 (9 Cir.1984). In reviewing a motion to th

dismiss under Rule 12(b)(6), the court must assume the truth of

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all factual allegations and must construe all inferences from

them in the light most favorable to the nonmoving party. 

Thompson v. Davis, 295 F.3d 890, 895 (9 Cir.2002). However, th

legal conclusions need not be taken as true merely because they

are cast in the form of factual allegations. Ileto v. Glock,

Inc., 349 F.3d 1191, 1200 (9 Cir.2003). When ruling on a th

motion to dismiss, the court may consider the facts alleged in

the complaint, documents attached to the complaint, documents

relied upon but not attached to the complaint when authenticity

is not contested, and matters of which the court takes judicial

notice. Parrino v. FHP, Inc., 146 F.3d 699, 705-706 (9th

Cir.1988).

2. Failure to Plead Racketeering Activity.

“A civil RICO complaint must at least allege: ‘(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.”’” Flores v. Emerich & Fike,

416 F.Supp.2d 885, 911 (E.D.Cal.2006). Defendants do not

challenge the sufficiency of the Complaint as to the conduct,

enterprise, pattern, or causation and injury elements of a RICO

charge. 

RICO prohibits engaging in a pattern of “racketeering

activity,” defined in 18 U.S.C. § 1961(1) as violating certain

laws. Included as racketeering activity is “any Act which is

indictable under the Immigration and Nationality Act, section 274

(relating to bringing in or harboring certain aliens) ....” 18

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U.S.C. § 1961(1)(F). A “pattern of racketeering activity” is

defined in 18 U.S.C. § 1961(5) as “at least two acts of

racketeering activity” within a ten year period.

a. 8 U.S.C. § 1324(a)(3). 

Defendants argue that the Plaintiff has not and cannot plead

a pattern of racketeering activity because Plaintiff fails to

plead sufficient facts to allege a violation of Section 274 of

the Immigration and Nationality Act.

8 U.S.C. § 1324(a)(3) provides in pertinent part:

(A) Any person who, during any 12-month

period, knowingly hires for employment at

least 10 individuals with actual knowledge

that the individuals are aliens described in

subparagraph (B) shall be fined under Title

18 or imprisoned for not more than five

years, or both.

(B) An alien described in this subparagraph

is an alien who -

(i) is an unauthorized alien (as 

defined in section 1324a(h)(3) of this

title), and

(ii) has been brought into the 

United States in violation of this title.

8 U.S.C. § 1324a(h)(3) defines an “unauthorized alien” by stating

that the term means “with respect to the employment of an alien

at a particular time, that the alien is not at that time either

(A) an alien lawfully admitted for permanent residence, or (B)

authorized to be so employed by this chapter or by the Attorney

General.” 

Defendants argue that the Complaint’s allegations that

Defendants violated this provision are “wholly conclusory”. 

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Defendants contend that the Complaint merely uses the terms

“knowingly” and “knowing”, which allegations do not satisfy the

“actual knowledge” requirement of Section 1324(a)(3)(A). Because

the Complaint does not allege that Defendants brought illegal

aliens into the United States with actual knowledge that they

were illegal aliens to employ them, Defendants further argue that

the Complaint fails to allege facts satisfying Section

1324(a)(3)(B). 

Defendants rely on System Management, Inc. v. Loiselle, 91

F.Supp.2d 401 (D.Mass.2000), rev’d on other grounds, 303 F.3d 100

(1 Cir.2002). In Loiselle, the Complaint alleged the repeated st

and knowing hiring of at least ten unauthorized aliens per year

since such hiring activity became racketeering activity. In

dismissing the claim, the district court held in pertinent part:

The statute also requires the defendant,

however, to have actual knowledge that the

aliens have ‘been brought into the country in

violation of [§ 1324(a)(3)].’ 8 U.S.C. §

1324(a)(3)(B)(ii). This clause is selfreferential and thus difficult to interpret,

but in this case it seems to require, in

order for liability to attach, that the

aliens have been brought into the country by

an employer for the purpose of illegal

employment. Thus, to state a civil RICO

claim on the basis of a violation of this

subsection of Title 8, the Plaintiffs must

allege that Loiselle had knowledge of how the

aliens had been brought into the United

States and that they were brought into the

United States in violation of this employment

provision. Although the Plaintiffs have

alleged that Loiselle had knowledge of the

aliens’ illegal status, they have not set

forth any factual allegation as to how the

aliens entered the country or whether

Loiselle had any knowledge of the purpose for

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which they entered. The text of 8 U.S.C. §

1324(a)(3) therefore compels the conclusion

that the RICO claim brought on the ground of

employment of aliens must be dismissed.

This conclusion is supported by other

indicia. Section 1324 (Section 274 of the

Immigration and Nationality Act) bears the

title ‘Bringing in and harboring certain

aliens.’ It thus seems targeted against

individuals who smuggle, conceal, or

transport illegal aliens into the United

States. In contrast, Section 274A of the

Immigration and Nationality Act, which is

distinct from 274, is entitled ‘Unlawful

employment of aliens’ and contains a variety

of prohibitions on employment of illegal

aliens in the United States. See 8 U.S.C. §

1324a. Indeed, Section 274A, codified as 8

U.S.C. § 1324a, provides that it is unlawful

for a person or other entity ‘to hire, or to

recruit or refer for a fee, for employment in

the United States an alien knowing the alien

is an unauthorized alien ... with respect to

such employment.’ 8 U.S.C. § 1324a(a)(1)(A). 

This is the appropriate statute to capture

Loiselle’s alleged conduct, but the

Plaintiffs are unable to use it because a

violation of § 1324a is not listed as a

predicate Act of ‘racketeering activity’

under RICO. See 18 U.S.C. § 1961(1)(F). The

original Complaint ... appears to use Section

274A as a predicate Act for the RICO claim. 

The Plaintiffs perhaps realized their

inability to use Section 274A as a predicate

Act when they filed the Amended Complaint,

and changed their count to one under Section

274, trying improperly to fit the alleged

employment activity into a statute related to

bringing in and harboring aliens. The RICO

claim premised on racketeering activity

defined at 18 U.S.C. § 1961(1)(F) must

therefore be dismissed.

91 F.Supp.2d at 408-409.

Defendants argue that the Complaint fails to allege that

Defendants had actual knowledge of whether the aliens were

“brought” into the United States, fails to allege any facts

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evidencing that Defendants had actual knowledge of the purpose

for which the aliens entered the United States, and fails to

allege any facts as to the individual Defendants’ violations of

Section 1324(a)(3). Defendants assert that the “scant facts

alleged in the Complaint all relate to hiring:

Assuming, arguendo, that the allegations

regarding the hiring of undocumented workers

are true and plead with sufficient factual

specificity, the Complaint fails to allege

sufficient facts to satisfy the requirements

of Section 1324(a)(3)(B).

Plaintiff responds that Defendants’ reliance on Loiselle is

misplaced, referring to the allegations in Paragraph 21 that

Defendants knew that each alien “was smuggled into the country

and/or harbored once they arrived here.” Plaintiff argues that

the requirement that a Complaint allege that defendants brought

the aliens into the United States finds no support from any

court. Plaintiff cites Williams v. Mohawk Industries, Inc., 314

F.Supp.2d 1333, 1345-1346 (N.D.Ga.2004), aff’d in relevant part,

411 F.3d 1252 (11 Cir.2005). In Williams, the defendant, th

relying on Loiselle, argued that the Complaint must allege that

defendant itself brought the illegal aliens into the United

States. In rejecting this argument, Williams concluded:

... Loiselle holds that simple allegations

that the defendant knowingly hired

undocumented aliens are insufficient to state

a claim under § 1324(a)(3); rather, a

plaintiff must additionally allege that the

defendant knew that the aliens were brought

into the United States for the purpose of

illegal employment. Loiselle, however, did

not hold that the employer itself must have

brought the aliens into the United States for

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a claim to arise under § 1324(a)(3). 

Accordingly, the Court concludes that for a

plaintiff to plead a violation of §

1324(a)(3) adequately, the plaintiff must

simply allege that the aliens were brought

into the United States in violation of

subsection (a), but there is no requirement

that the employer must have brought the

aliens into this country. 

Plaintiff further argues that the Complaint adequately

pleads that Defendants violated Section 1324(a)(3) and that

Defendants’ assertion that the allegations are “conclusory” are

unsupported by any authority. Plaintiff relies on Mendoza v.

Zirkle Fruit Co., supra, 301 F.3d 1163.

At issue in Mendoza was the standing of legally documented

workers to sue their employers under RICO, whom they alleged

depressed their salaries by conspiring to hire undocumented

workers and the constitutionality of supplemental subject matter

jurisdiction involving a party over whom there is no independent

basis for federal court jurisdiction. 301 F.3d at 1166. 

However, before discussing the substantive merits of these

issues, the Ninth Circuit, noting that the district court

dismissed the action on the pleadings on the basis of RICO

standing and supplemental jurisdiction, addressed “one proffered

alternative ground for affirming the dismissal for failure to

state a claim”:

... In the RICO context, ‘[a]t the pleading

stage, general factual allegations of injury

resulting from the defendant’s conduct may

suffice, for on a motion to dismiss we

presume that general allegations embrace

those specific facts that are necessary to

support a claim.’ NOW v. Scheidler, 510 U.S.

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249, 256 ... (1994)(quoting Lujan v.

Defenders of Wildlife, 504 U.S. 555, 561 ...

(1992)). 

... The district court held that the ‘Illegal

Immigrant Hiring Scheme’ as pleaded involved

a predicate RICO Act, knowingly hiring

undocumented workers in violation of

Immigration and Naturalization Act § 274, 8

U.S.C. § 1324. We are unpersuaded by the

growers’ argument that the district erred in

this respect. Their argument rests on a

hypertechnical reading of the complaint

inconsistent with the general notice pleading

requirement. See Swierkiewicz, 122 S.Ct. at

999. The complaint alleges that the

defendants had knowledge of illegal harboring

‘and/or’ smuggling. Even if knowledge of

smuggling were required by the statute, an

issue about which we express no opinion, the

complaint easily contains this allegation. 

We affirm the district court’s analysis and

reasoning on this issue ....

301 F.3d at 1168. 

Although the above-quoted language in Mendoza is dicta, it

does suggest that the Ninth Circuit will not require the specific

pleading mandated by Loiselle with regard to pleading the

predicate act set forth in Section 1324(a)(3). Combining

Mendoza’s dicta with the requirements of notice pleading,

Defendants’ motion to dismiss on this ground is DENIED. 

Defendants further argue that the allegations in the

Complaint described in Paragraph 15 do not constitute violations

of Section 1324(a)(3). Defendants contend that these facts, if

established, at best state violations under the amendments to the

Immigration and Nationality Act by the Immigration Reform and

Control Act of 1986, 8 U.S.C. § 1324a, which violations are not

listed as “racketeering activity” for purposes of RICO.

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8 U.S.C. § 1324a makes employment or continued employment of

unauthorized aliens unlawful.

However, United States v. Zheng, 306 F.3d 1080, 1085 (11th

Cir.2002) and United States v. Kim, 193 F.3d 567, 573 (2nd

Cir.1999), establish that proof of the practices alleged in

paragraph 15 may also demonstrate a violation of Section

1324(a)(3) even if they also are violations of Section 1324a,

because the same facts may establish more than one violation of

law. Defendants’ contentions are germane to proof rather than to

the adequacy of the pleading. 

It is arguable that the allegations in paragraphs 15 and 16

of the Complaint, if proven, may be sufficient circumstantial

evidence to show that Defendants had actual knowledge for

purposes of Section 1324(a)(3). See United States v. Mills, 597

F.2d 693, 697 (9 Cir.1979)(jury can infer actual knowledge from th

circumstantial evidence); see also Mester Mfg. Co. v. INS, 879

F.2d 561, 562-563 (9 Cir.1989). As to the requirement of th

knowledge, Defendants know exactly what alleged violations of

Section 274 are charged.

Plaintiff rejoins that the allegations in paragraph 15 can

be inferred to allege constructive knowledge by Defendants that

the persons were illegal aliens for purposes of 8 U.S.C. §

1324(a)(3). 

In so arguing, Plaintiff refers to McAllister, a criminal

prosecution for violation of 8 U.S.C. § 1324 for transportation

of aliens who had illegally entered the United States. To

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establish the violation, the United States had to prove that

McAllister transported an alien “knowing that he [was] in the

United States in violation of law, and knowing or having

reasonable grounds to believe that his last entry in the United

States occurred less than three years prior thereto.” 747 F.2d

at 1275. The United States proposed to carry its burden of proof

by showing that McAllister made a conscious effort to avoid

acquiring the knowledge and requested a jury instruction based on

United States v. Jewell, 532 F.2d 697 (9 Cir.), cert. denied,

th

426 U.S. 951 (1976). Over McAllister’s objection, the district

court read to the jury the proposed Jewell instruction. On

appeal, McAllister argued that there was insufficient evidence to

give the Jewell instruction. The Ninth Circuit disagreed with

McAllister:

A Jewell instruction is properly given only

when a defendant claims a lack of guilty

knowledge and there are facts in evidence

that support an inference of deliberate

ignorance ... As we emphasized in MuriettaBejarano, the cases in which the facts point

to deliberate ignorance are comparatively

rare, and they must be carefully

distinguished from instances where the

defendant was merely negligent. The

Government may not carry its burden by

demonstrating that the defendant was

mistaken, recklessly disregarded the truth,

or was negligent in failing to inquire ...

Instead, the facts must support the inference

that the defendant was aware of a high

probability of the existence of the fact in

question .... An instruction given without

an adequate factual basis may improperly lead

the jury to infer guilty knowledge without

proof of conscious avoidance of the truth

....

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Plaintiff cites United States v. Shannon, 127 F.3d 1112, 2

1117-1118 (9 Cir.1998), which acknowledged that a Jewell th

instruction is improper if the evidence demonstrates no knowledge

or actual knowledge, but affirmed the giving of the instruction

because the evidence was in dispute.

16

The evidence in this case was sufficient to

support the inference of deliberate

ignorance. Several factors suggested a high

probability that McAllister knew he was

engaged in transporting aliens who had

illegally entered within the last three

years. These included the suddenness of the

trip, the fact that it was made at 2:00 a.m.,

the lack of a specific destination, and the

fact that Danny was traveling to Los Angeles

also, but would not accompany the truck. 

McAllister testified he neither looked in the

back of the truck nor asked what it

contained. He stated he did not know or

attempt to learn Danny’s last name. He did

not ask where he was going in Los Angeles or

how he would return to San Diego. McAllister

drove through the truck scales area that was

closed, which avoided passing the normal

border check-point where any aliens who had

illegally entered could be discovered. His

testimony concerning his reason for doing so

was inconsistent and implausible and

justified a reasonable inference that he did

so because he believed illegal aliens were in

the truck. These facts all indicate ‘the

defendant tried to close his eyes or ears to

what was happening.’ ... The inference is

strengthened by the agents’ observation that

McAllister did not appear surprised to see

the aliens when the back of the truck was

opened. The use of the Jewell instruction

thus was not error.

747 F.2d at 1275-1276.2

In their reply brief, Defendants assert that Plaintiff’s

reliance on McAllister is misplaced, in contending that the

allegations in paragraph 15 suffice to establish Defendants’

constructive knowledge that the persons being hired were illegal

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No opinion is expressed whether the willful blindness 3

standard will be applicable to satisfy the actual knowledge element

of the predicate act.

17

aliens. Reiterating that Section 1324(a)(3)(A) requires “actual

knowledge that the individuals are aliens”, Defendants argue that

Plaintiff cites no case stating that “so-called willful blindness

meets the ‘actual knowledge’ standard of [Section 1324(a)(3)].” 

Defendants contend:

Violations of Section 274 were added

predicate acts under the RICO statute (18

U.S.C. § 1961(a)) in 1996, nearly ten years

after the enactment of Section 274A, the

administratively enforced employer sanctions

provision of IRCA, P.L. 104-132, section 433.

At the time Congress added section 274(a)(3)

with an actual knowledge standard, it knew

that section 274A existed with a lesser

‘knowing’ standard. See P.L. 104-208, § 202;

see also Miles v. Apex Marine Corp., 498 U.S.

19, 32 (1990)(‘we assume the Congress is

aware of existing law when it passes

legislation.’); United States v. GonzalezMendez, 150 F.3d 1058, 1060 (9th

Cir.1998)(‘we presume that Congress enacts

statutes with full knowledge of existing 

law.’).

Defendants’ argument goes to the adequacy and extent of

proof of knowledge, not the adequacy of pleading. Whether or not

Plaintiff will be able to produce evidence to satisfy the actual

knowledge requirement for the predicate act is an issue for

summary judgment or trial. Whether or not Plaintiff will be

entitled to rely on the Jewell standard of proof will depend on

the development of the facts and presents an issue that it is

premature to resolve on a Rule 12(b)(6) motion. No more is 3

required to meet Defendants’ objection than to insert the word

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“actual” or “actually” before the words “knowledge” or “knowing”

in the Complaint. 

Defendants go on to argue that the allegations in Paragraph

15 do not constitute illegal conduct. Defendants contend: 

Implicit in the allegation in paragraph 15 of

the Complaint is that persons who provide

documents indicating that they are U.S.

citizens or permanent residents at the time

of hire must speak English to have attained

either status.

Defendants assert that “such conclusory profiling” has been

rejected by the Ninth Circuit, citing United States v. CamachoDavalos, 468 F.2d 1382 (9 Cir.1972). th

In Camacho-Davalos, defendants were convicted for conspiracy

to smuggle and transport aliens into the United States in

violation of 18 U.S.C. § 371 and 8 U.S.C. § 1324, and for

transporting three aliens in violation of 8 U.S.C. § 1324(a)(2). 

In reversing these convictions, the Ninth Circuit held:

The Government did not prove that any of the

three persons named in the indictment as

those whom Appellant transported were aliens. 

None of the alleged aliens were called as a

witness. The evidence that bears on the

issue was the testimony of Agent Ainscoe that

all of the people in the truck were ‘Mexican

appearing,’ spoke Spanish, and did not

produce immigration papers on request. The

description fits thousands of American

citizens. The failure to prove alienage

defeated the Government’s case on the three

substantive counts. 

468 F.2d at 1383. This addresses proof of alienage, not the

charge that the individuals transported were aliens. Defendants

mistakenly contend, had they imposed an English-speaking job

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Whether the inability to speak English alone is an issue of 4

proof, not an issue which must be resolved at this stage of the

case.

19

criterion on applicants for employment to validate their work

authorization status, they would have run the risk of violating

the national origin discrimination provisions of Title VII.

The Ninth Circuit has specifically held that the inability

to speak English is a factor, among others, which may be

considered in determining a defendant’s knowledge that a person

is in the United States illegally. See United States v. Holley,

493 F.2d 581, 582-583 (9 Cir.), cert. denied, 419 U.S. 861 th

(1974). An inability to speak English, if combined with other 4

evidence, may allow the inference that Defendants had knowledge

that an applicant was an illegal alien. Furthermore, Plaintiff

cites, Robison Fruit Ranch, Inc. v. United States, 147 F.3d 798,

799 (9 Cir.1998), which notes that the general anti- th

discrimination provision in Section 1324b(a)(1) “prohibits

discrimination on the basis of national origin or citizenship

status, except, of course, against an alien who is not authorized

to work.” 

Defendants further argue that the allegation in Paragraph 15

that hiring workers who do not have housing indicates that the

workers are illegal aliens “is absurd on its face and without any

legal foundation, regardless of whether the workers claimed U.S.

citizen or permanent resident or some other legal status.”

Because actual knowledge may be proved by circumstantial

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20

evidence, the provision of housing may, if combined with other

proof, support the inference that Defendants had actual

knowledge. This is a matter of proof, not pleading.

Defendants argue that the allegation in paragraph 15 that

they have approved hiring criteria allowing “hiring of workers

who present authorization documents which are invalid on their

face because the pictures are of a different person, are upside

down, are on poor quality paper, etc.” does not suffice to

allege “illegal conduct”. Defendants contend that by asking for

more or different work authorization documents or by refusing to

accept the documents proffered by applicants that appeared to be

facially genuine, they would have violated the “unfairimmigration employment practice provisions of IRCA”, citing 8

U.S.C. § 1324b(b)(6). 8 U.S.C. § 1324a(b)(1)(A) provides that 5

an employer satisfies its verification obligation by examining a

document which “reasonably appears on its face to be genuine. 

See Collins Foods Intern., Inc. v. U.S.I.N.S., 948 F.2d 549, 553

(9 Cir.1991). th

Defendants’ argument with regard to this allegation is

without merit as it quibbles about evidentiary facts that the law

does not require to be pleaded.. The allegation in paragraph 15

is that the documents are invalid on their face. Whether or not

this was true and to what extent is a matter of proof, not a

pleading requirement. 

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With regard to the allegations in paragraph 15 that

Defendants hire persons whose documents are invalid on their

face; that Defendants hire persons personally known to them to be

in the United States illegally and using false documents; and

that Defendants hire persons who have previously been employed

under different identities, Defendants contend that these actions

represent violations of Section 1324a and do not serve as a basis

for violation of the predicate Act of racketeering specified in

RICO. 

Defendants’ contention again is an argument of the efficacy

of evidentiary facts, not pleading. See United States v. Zheng,

supra; United States v. Kim, supra.

Finally, with regard to the allegation in paragraph 16, that

Defendants “are often informed that large numbers of their

workers are using false social security numbers by the Social

Security Administration” but that “[m]ost of these workers then

simply assume new identities and continue to be employed,

pursuant to policies set by the Balakians”, Defendants seek

dismissal because the allegations are “conclusory and

unsubstantiated” and, furthermore, can only be argued to be

evidence of knowledge of employment of undocumented workers in

violation of Section 1323a(a).

The allegation in Paragraph 16 satisfies the notice pleading

requirements of Rule 8. It provides factual detail to infer how

Defendants actually knew their employees are illegal aliens. The

facts, if established proved, may suffice to constitute “actual

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knowledge”. Again, Defendants’ argument goes to proof, not

pleading. 

Defendants’ motion to dismiss on the ground that the

Complaint fails to adequately allege violation of the predicate

act, Section 1324(a)(3) is DENIED. 

b. 8 U.S.C. § 1324(a)(1)(A)(iii).

Defendants further argue that the Complaint does not

adequately plead the predicate Act of violating 8 U.S.C. §

1324(a)(1)(A)(iii).

Section 1324(a)(1)(A)(iii) imposes criminal penalties on any

person who:

knowingly or in reckless disregard of the

fact that an alien has come to, entered, or

remains in the United States in violation of

law, conceals, harbors, or shields from

detection, or attempts to conceal, harbor, or

shield from detection, such alien in any

place, including any building or any means of

transportation ....

Defendants argue that the Complaint fails to allege that

they knew that aliens came to, entered or remained in the United

States in violation of law, fails to plead any facts from which

it may be inferred that Defendants knew or demonstrated reckless

disregard of facts related to the illegal entry or presence of

undocumented aliens in the United States, and fails to adequately

plead facts as to the individual defendants’ violations of

Section 1324(a)(1)(A)(iii).

Defendants further argue the allegations in paragraphs 18

that “the Balakians facilitate the hiring of many of these

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illegal immigrants by directing their hiring-personnel [sic] to

obtain housing for them” and in paragraph 22 that Defendants

“conspir[ed] to provide them with housing” do not suffice to

state a claim of harboring under Section 1324(a)(1)(A)(iii).

Defendants cite Zavala v. Wal-Mart Stores, Inc., 393

F.Supp.2d 295, 306-307 (D.N.J.2005):

Where, as here, the statute does not define

certain of its terms, courts rely on the

ordinary definitions of those terms ... Thus,

to ‘harbor’ is to ‘give shelter or refuge to’

or ‘to be the home or habitat of’; to

‘conceal’ is ‘to prevent disclosure or

recognition of’ or ‘to place out of sight’;

and to ‘shield’ is to ‘protect with or as if

with a shield’ or ‘provide with a protective

cover or shelter’ or ‘to cut off from

observation’ or ‘hide.’ See Merriam-Webster

On-Line Dictionary ... None of the

allegations sufficiently allege these acts.

It is difficult to determine which

allegations address concealment or shielding. 

The relevant allegations concerning

harboring, however, relate to the facts

surrounding the conviction of a former WalMart contractor ... and to Plaintiff Kunc,

who was ‘lodged’ and then ‘put to work’ by

another Wal-Mart contractor ....

These allegations are insufficient. For

example, providing housing and employment may

constitute ‘harboring’ for ‘financial gain,’

but this is not what has been alleged against

Wal-Mart. Zheng, 306 F.3d at 1083 (involving

undocumented aliens who lived in the

defendant’s house, without paying rent, and

worked at the defendant’s restaurant six days

a week, twelve hours a day). Harboring also

might be alleged where, in addition to

employing undocumented aliens, a store owner,

for example, also provides a back room of the

store as a residence. See United States v.

Singh, 261 F.3d 530, 533 (5 Cir.2001). th

Here, however, Plaintiffs allege that WalMart hired, and continued to employ, Kunc,

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despite its knowledge that Kunc was not

authorized to work in the United States, not

that Wal-Mart harbored illegal aliens. A

contractor’s ‘lodging’ of an undocumented

worker and ‘putting him to work’ falls short

of alleging that Wal-Mart sheltered

undocumented aliens for the purpose of

concealing them and avoiding their detection

by immigration authorities. While this Court

might infer from the allegations in the

complaint that Wal-Mart recklessly

disregarded the illegal status of Plaintiffs

when it employed them as janitorial or

maintenance workers at their various retail

locations, it is unclear what alleged conduct

by Wal-Mart might constitute the concealing,

harboring or shielding of illegal aliens from

detection.

Defendants argue from Zavala that the allegations that Defendants

conspired to provide housing to illegal aliens and directed their

hiring personnel to obtain such housing does not suffice to

allege violation of the predicate Act set forth in Section

1324(a)(1)(A)(iii). Defendants assert that there must be

allegations that the housing was provided to illegal aliens to

conceal them and avoid their detection by immigration

authorities. In so arguing, Defendants cite United States v.

Belevin-Ramales, 458 F.Supp.2d 409 (E.D.Ky.2006)(rejecting United

States’ jury instruction for a violation of Section

1324(a)(1)(A)(iii) that the government does not have to prove

that the Defendant harbored the alien with the intent to assist

the alien’s attempt to evade or avoid detection by law

enforcement) and United States v. Kim, supra, 193 F.3d at 574 

(evidence at trial was sufficient to establish that Kim knew or

recklessly disregarded Farfan’s status as an illegal alien and

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Not relevant to resolution of the motion to dismiss is the 6

Ninth Circuit’s discussion in Aguilar concerning defendants’

conviction of smuggling in violation of 8 U.S.C. §

1324(a)(2)(B)(iii). That aspect of the Aguilar decision has been

superseded by statute. See United States v. Gonzalez-Torres, 309

F.3d 594 (9 Cir.2002), cert. denied, 538 U.S. 969 (2003). th

25

took steps designed to help her remain in his employ).

Zavala does not support dismissal of this claim because of

the allegation that Defendants directed their hiring personnel to

obtain housing for them, something that is not alleged in Zavala.

Furthermore, Ninth Circuit precedent in United States v. Aguilar,

883 F.2d 662, 689 (9 Cir.1989), cert. denied, 498 U.S. 1046 th

(1991) negates Defendants’ argument. In Aguilar, the district 6

court instructed the jury that acts of concealing or shielding

consisted of conduct “tending to directly or substantially

facilitate an alien’s remaining in the United States unlawfully

with the intent to prevent detection by the Immigration and

Naturalization Service” and while harboring included “conduct

tending to directly or substantially facilitate the alien’s

remaining in the United States in violation of law”. However, the

district court did not require an intent to aid the unlawful

alien for the purpose of evading INS detection. On appeal, the

defendants contended that it was reversible error to strip

“harboring” of an intent to evade detection. Id. at 689. The

Ninth Circuit held in pertinent part:

In United States v. Acosta de Evans, 531 F.2d

428 (9 Cir.), cert. denied, 429 U.S. 836 th

... (1976), this court rejected the very

claim that appellants are making in this

case. The court examined the legislative

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history of section 1324(a) and case law from

other circuits that already had addressed

this issue, concluding that the word ‘harbor’

means ‘to afford shelter to’ and does not

require an intent to avoid detection. Id. at

430. Appellants enumerate several reasons

why we should ‘reconsider’ Acosta de Evans.

Id. at 690. After noting that a panel not sitting en banc has no

authority to overturn Ninth Circuit precedent, the Ninth Circuit

concluded that even if Acosta de Evans were incorrectly decided,

the evidence established that the defendants intended to help the

two aliens in question to avoid INS detection. Id.

Defendants’ contention that Aguilar is not controlling

because it was not a pleading case and further argument that the

term “housing” does not fall within the ordinary definition of

“harbor”, again relying on Zavala, is without merit. Aguilar is

controlling because the alleged racketeering predicate acts for

purposes of RICO is “any Act which is indictable under the

Immigration and Nationality Act, section 274 (relating to

bringing in or harboring certain aliens) ....” If an element is

not required for the criminal prosecution, it cannot be required

as an element for a racketeering act under RICO.

Defendants’ motion to dismiss on the ground that the

Complaint does not adequately plead the predicate act of

violating 8 U.S.C. § 1324(a)(1)(A)(iii) is DENIED.

3. Failure to Adequately Plead Elements of RICO

Conspiracy.

Defendants contend that the elements of a RICO conspiracy

under 18 U.S.C. § 1962(d) are not adequately plead. In

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addition, Defendants appear to argue that the allegations

concerning the alleged RICO enterprise are also deficiently

pleaded. 

In Baumer v. Pachl, 8 F.3d 1341 (9 Cir.1993), the Ninth th

Circuit affirmed the dismissal for failure to state a claim of an

alleged RICO conspiracy. Although the Ninth Circuit specifically

was addressing whether an allegation of aiding and abetting

sufficed to state a claim for conspiracy under Section 1962(d), 

id. at 1347, the Ninth Circuit cited with approval cases holding

an agreement is vital to a RICO conspiracy claim and that a RICO

conspiracy requires the assent of each defendant, although it is

not necessary that each conspirator know all of the details of

the conspiracy. Id. at 1346-1347. The illegal agreement need

not be express as long as its existence can be inferred from the

words, actions, or interdependence of activities and persons

involved. Oki Semiconductor Co. v. Wells Fargo Bank, 298 F.3d

768, 775 (9 Cir.2002). In Salinas v. United States, 522 U.S. th

52 (1997), the Supreme Court, reviewing a criminal RICO

conviction, rejected the contention that there can be no

conspiracy offense unless the defendant himself committed or

agreed to commit the two predicate acts requisite for a

substantive RICO offense under Section 1962(c), holding in

pertinent part:

A conspirator must intend to further an

endeavor which, if completed, would satisfy

all of the elements of a substantive criminal

offense, but it suffices that he adopt the

goal of furthering or facilitating the

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criminal endeavor. He may do so in any

number of ways short of agreeing to undertake

all of the acts necessary for the crime’s

completion. One can be a conspirator by

agreeing to facilitate only some of the acts

leading to the substantive offense. It is

elementary that a conspiracy may exist and be

punished whether or not the substantive crime

ensues, for the conspiracy is a distinct

evil, dangerous to the public, and so

punishable in itself ....

It makes no difference that the substantive

offense under § 1962(c) requires two or more

predicate acts. The interplay between

subsections (c) and (d) does not permit us to

excuse from the reach of the conspiracy

provision an actor who does not himself

commit or agree to commit the two or more

predicate acts requisite to the underlying

offense. True, though an ‘enterprise’ under

§ 1962(c) can exist only with one actor to

conduct it, in most instances it will be

conducted by more than one person or entity;

and this in turn may make it somewhat

difficult to determine just where the

enterprise ends and the conspiracy begins,

or, on the other hand, whether the two crimes

are coincident in their factual

circumstances. In some cases the connection

the defendant had to the alleged enterprise

or to the conspiracy to further it may be

tenuous enough so that his own commission of

two predicate acts may become an important

part of the Government’s case. Perhaps these

were the considerations leading some of the

Circuits to require in conspiracy cases that

each conspirator himself commit two or more

predicate acts. Nevertheless, that

proposition cannot be sustained as definition

of the conspiracy offense, for it is contrary

to the principles we have discussed.

522 U.S. at 65-66. In Howard v. America Online, Inc., 208 F.3d

741, 751 (9 Cir.), cert. denied, 531 U.S. 828 (2000), the Ninth th

Circuit applied Salinas to review of a Rule 12(b)(6) dismissal of

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Defendants contend that Salinas is inapplicable because it 7

involved a challenge to jury instructions in a criminal case, not

the pleading requirements for a civil RICO Section 1962(d)

conspiracy. However, Ninth Circuit authority applies Salinas to

civil RICO conspiracies. 

29

a civil RICO conspiracy claim:7

‘A conspirator must intend to further an

endeavor which, if completed, would satisfy

all of the elements of a substantive criminal

offense, but it suffices that he adopt the

goal of furthering or facilitating the

criminal endeavor.’ Salinas v. United

States, 522 U.S. 52, 65 ... (1997). A

defendant must also have been ‘aware of the

essential nature and scope of the enterprise

and intended to participate in it. Baumer v.

Pachl, 8 F.3d 1341, 1346 (9 Cir.1993) ... th

To establish a violation of section 1962(d),

Plaintiffs must allege either an agreement

that is a substantive violation of RICO or

that the defendants agreed to commit, or

participated in, a violation of two predicate

offenses. ... 

In United States v. Fernandez, 388 F.3d 1199 (9 Cir.2004), the th

Ninth Circuit followed the rationale in Smith v. Berg, 247 F.3d

532 (3 Cir.2001): rd

We adopt the Third Circuit’s Smith test,

which retains Reves’ operation or management

test in its definition of the underlying

substantive § 1962(c) violation, but removes

any requirement that the defendant have

actually conspired to operate or manage the

enterprise itself. Under this test, a

defendant is guilty of conspiracy to violate

§ 1962(c) if the evidence showed that she

‘knowingly agree[d] to facilitate a scheme

which includes the operation or management of

a RICO enterprise.’ Smith, 247 F.3d at 538.

388 F.3d at 1230. 

In moving for dismissal, Defendants contend that the

Complaint’s allegations of conspiracy are conclusory and preclude

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Plaintiff, citing Norfolk Monument Co., Inc. v. Woodlawn Mem. 8

Gardens, Inc., 394 U.S. 700, 704 (1969), contends that “[i]n RICO

and antitrust cases, conspiracies are typically proven not by

direct evidence of agreement, which seldom exists, but of

‘[b]usiness behavior ....’.” 

In Norfolk, the Supreme Court reversed summary judgment for

defendants in an antitrust case, holding in pertinent part:

Nor do the other findings of the District

Court necessarily dispel the inferences which

the jury would be asked by the petitioner to

draw. The District Court found, for example,

that there was “a wide divergence of prices”

charged for installation “which would

completely negative any systematic scheming or

conscious parallelism.” ... The petitioner’s

complaint, however, was not that the

respondent cemeteries were charging uniform

fees but that they were charging deliberately

“excessive and unreasonable” fees for the

purpose of injuring the petitioner. The fact

that the District Court appeared to consider

dispositive of the conspiracy allegations was

that the petitioner’s principal officer

30

them from knowing who the conspirators are, what conduct they

carried out as part of the alleged conspiracy, and whether there

was a common economic purpose or benefit derived.

Plaintiff responds that the Complaint adequately alleges a

Section 1962(d) conspiracy. Plaintiff points to the allegation

that the Balakians “have personally approved the hiring

procedures” alleged in paragraphs 15-16, which are alleged to

ensure the employment of “vast numbers” of illegal aliens and 

that the Balakians have carried out the Illegal Immigrant Hiring

Scheme for the last four years. Plaintiff contends that these

allegations adequately allege an agreement among the Balakians to

commit well over two predicate acts of hiring and harboring

illegal aliens. 

8

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“admitted that he has no letters, agreements,

correspondence, or any other testimonials to a

conspiracy among the several defendants ...”

... But it is settled that “[n]o formal

agreement is necessary to constitute an

unlawful conspiracy,” ... and that “business

behavior is admissible circumstantial evidence

from which the fact finder may infer

agreement.” ....

394 U.S. at 703-704. 

Plaintiff’s citation to Norfolk is not relevant to the

determine the adequacy of pleading the agreement for purposes of a

Section 1962(d) conspiracy under RICO. Norfolk involved antitrust,

not RICO. Although Plaintiff asserts that Norfolk’s holding

applies to RICO cases, he cites no specific authority supporting

that position.

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Plaintiff also refers to the allegations at paragraphs 24-25

that the “agreement was further to commit these racketeering acts

through the Fruit Patch enterprise (and other unnamed entities

the Balakians own and operate in the same manner).” With regard

to Defendants’ assertion that the Complaint fails to allege the

identities of the conspirators or how Defendants and the alleged

conspirators participated the alleged conspiracy, Plaintiff

contends:

The Complaint ... describes in as much detail

as Plaintiffs have prior to discovery, about

how the Balakians carry out the Illegal

Immigrant Hiring Scheme. The names of all

co-conspirators need not be pled, nor must

the Complaint spell out what each conspirator

‘did to participate in the conspiracy,’ as

the Salinas court specifically held. All

that is required is that the Complaint

alleges each conspirator ‘know about and

facilitate the scheme,’ which is plainly

alleged.

The Complaint does not adequately allege a conspiracy under

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Defendants, citing Chang v. Chen, 80 F.3d 1293 (9 Cir.1996), 9 th

contend that it is impossible to determine if the alleged RICO

enterprise has an ascertainable structure separate and apart from

the structure inherent in the conduct of the pattern of

racketeering activity when no facts are provided regarding the coconspirators. Chang v. Chen, addressed “the minimum requirements

for an associated-in-fact enterprise.” Id. at 1297. As Plaintiff

notes, an “association-in-fact” enterprise is not alleged in the

Complaint. Fruit Patch, Inc. and the other unnamed Balakian owned

and operated entities are alleged to be the enterprise(s).

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Section 1962(d). Although the allegations concerning the alleged

conspiracy by the Balakians and Roberto Olivarez in connection

with Fruit Patch Inc. suffice to withstand Rule 12(b)(6)

dismissal given the requirements of notice pleading, the

allegations of conspiracy with unnamed entities and unnamed

conspirators involved with those unnamed entities does not comply

with notice pleading and essentially allows Plaintiff to conduct

a fishing expedition to substantiate these allegations. A

conspiracy is an agreement to commit an unlawful act, coupled

with an overt act in furtherance of the conspiracy. 

Therefore, to the extent that the Complaint purports to

allege a RICO conspiracy by unnamed entities and unnamed

conspirators involved with those entities, Defendants’ motion to

dismiss is GRANTED with leave to amend.9

B. Plaintiff’s Motion for Sanctions.

Plaintiff moves for sanctions against Defendants and their

counsel, Monte B. Lake, pursuant to Rule 11(b)(2), Federal Rules

of Civil Procedure, for filing the Motion to Dismiss without

citing Mendoza v. Zirkle Fruit Co., supra, 301 F.3d 1163. The

Motion for Sanctions seeks an order striking Defendants’ Motion

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to Dismiss and an award of attorneys’ fees incurred by Plaintiff

in opposing the Motion to Dismiss and for preparing the Motion

for Sanctions.

Rule 11(b)(2) provides in pertinent part:

By presenting to the court (whether by

signing, filing, submitting, or later

advocating) a ... written motion ..., an

attorney ... is certifying that to the best

of the person’s knowledge, information, and

belief, formed after an inquiry reasonable

under the circumstances,-

...

(2) the claims, defenses, and other 

legal contentions therein are warranted by

existing law or by a nonfrivolous argument

for the extension, modification, or reversal

of existing law or the establishment of new

law ....

Rule 11(c) provides in pertinent part:

If ... the court determines that subdivision

(b) has been violated, the court may, subject

to the conditions stated below, impose an

appropriate sanction upon the attorneys, law

firms, or parties that have violated

subdivision (b) or are responsible for the

violation.

In United States v. Stringfellow, 911 F.2d 225, 226 (9th

Cir.1990), the Ninth Circuit held:

The failure to cite relevant authority,

whether it be case law or statutory

provisions, does not alone justify the

imposition of sanctions. ‘[N]either Rule 11

nor any other rule imposes a requirement that

the lawyer, in addition to advocating the

cause of his client, step first into the

shoes of opposing counsel to find all

potentially contrary authority, and finally

into the robes of the judge to decide whether

the authority is indeed contrary or whether

it is distinguishable.’ Golden Eagle

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Distrib. Corp. v. Burroughs Corp., 801 F.2d

1531, 1542 (9 Cir.1986). th

However, if the omitted case law and

statutory provisions would render the

attorney’s argument frivolous, he or she

‘should not be able to proceed with impunity

in real or feigned ignorance of [them],’ id.,

and sanctions should be upheld. An argument

contained in a motion is frivolous under Rule

11 if it is unreasonable when viewed from the

perspective of ‘a competent attorney admitted

to practice before the district court.’ 

Zaldiver v. City of Los Angeles, 780 F.2d

823, 830 (9 Cir.1986); see also Eastway th

Constr. Corp. v. City of New York, 762 F.2d

243, 254 (2 Cir.1985)(‘[W]here it is nd

patently clear that a claim has absolutely no

chance of success under the existing

precedents, and where no reasonable argument

can be advanced to extend, modify, or reverse

the law as it stands, Rule 11 has been

violated.’).

Plaintiff argues that the Complaint in this action “makes

precisely the same allegations as were made in Mendoza; that the

defendants knowingly employ large numbers of illegal immigrants

in violation of sec. 274 of the Immigration and Nationality Act

which is a RICO predicate offense” and that no reasonable lawyer

could assert that the Complaint fails to state a claim and omit

citing Mendoza. Plaintiff contends that Mendoza directly applies

and has not been modified by any other Ninth Circuit authority.

Plaintiff’s motion is DENIED. Defendants have not violated

have not violated Rule 11 as interpreted by Stringfellow by

omitting to cite Mendoza in their opening brief. There are

substantial differences between the Complaint at issue in Mendoza

and the Complaint in this action. The basis of Defendants’

motion to dismiss includes that Plaintiff has not and cannot

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plead the necessary elements of the RICO predicate acts upon

which he intends to rely and because Plaintiff provides

insufficient factual notice to Defendants of the basis for these

claims. Finally, the issues before the Ninth Circuit in Mendoza

involved standing, an issue not raised in this action.

C. Conclusion.

For the reasons set forth above:

1. Defendants’ motion to dismiss is GRANTED IN PART WITH

LEAVE TO AMEND AND DENIED IN PART. 

2. Plaintiff shall file a First Amended Complaint in

compliance with this Order within 30 days of the filing date of

this Order.

3. Plaintiff’s motion for sanctions is DENIED.

IT IS SO ORDERED.

Dated: March 23, 2007 /s/ Oliver W. Wanger 

668554 UNITED STATES DISTRICT JUDGE

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