NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CERVANTES ORCHARDS & 

VINEYARDS, LLC, a Washington limited 

liability corporation; et al., 

Plaintiffs-Appellants, 

 v. 

DEERE & COMPANY, a corporation; et al., 

Defendants-Appellees.

No. 15-35675 

D.C. No. 1:14-cv-03125-RMP 

MEMORANDUM*

CERVANTES ORCHARDS & 

VINEYARDS, LLC, a Washington limited 

liability corporation; et al., 

Plaintiffs-Appellants, 

DEAN BROWNING WEBB and SCOTT 

ERIK STAFNE, 

Appellants, 

 v. 

DEERE & COMPANY, a corporation; et al., 

Defendants-Appellees.

No. 16-35220 

D.C. No. 1:14-cv-03125-RMP 

 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

FILED

DEC 15 2017

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
1 

Appeal from the United States District Court

for the Eastern District of Washington

Rosanna Malouf Peterson, District Judge, Presiding

Submitted December 5, 2017**

Seattle, Washington

Before: HAWKINS, McKEOWN, and CHRISTEN, Circuit Judges.

Cervantes Orchards and Vineyards, along with Cervantes Nurseries, 

Cervantes Packing & Storage, Manchego Real, Jose G. Cervantes, and Cynthia C. 

Cervantes, (collectively “Cervantes”),

1

appeals the district court’s dismissal of its

RICO and civil rights claims against Deere & Company, Deere Credit, John Deere 

Capital Corporation, John Deere Financial, FKA FPC Financial, and Deere Credit 

Services (“Deere”), American West Bank, T-16 Management Company (“T-16”),

Gary and Linda Johnson (“the Johnsons”), Robert and Michelle Wyles (“the 

Wyles”), Northwest Management & Realty Services (“NWFM”), and SKBHC 

Holdings, (collectively “defendants”). Dean Webb and Scott Stafne appeal the 

district court’s order sanctioning them under Federal Rule of Civil Procedure 11

and assessing attorney’s fees. Because the parties are familiar with the facts, we 

do not recite them here. We have jurisdiction under 28 U.S.C. § 1291. We affirm

 

** The panel unanimously concludes this case is suitable for decision 

without oral argument. See Fed. R. App. P. 34(a)(2).

1 For simplicity’s sake, we refer to these collective entities in the singular as 

“Cervantes.” 
2 

in part, vacate in part, and remand to the district court for further findings.

1. Dismissal of RICO and civil rights claims

Cervantes argues that the district court erred in dismissing its claims of 

racketeering, extortion, and bankruptcy fraud in violation of the Racketeer 

Influenced and Corrupt Organizations Act (“RICO”), and for civil rights violations

based on racial discrimination. See 18 U.S.C. §§ 1961, 1962; 42 U.S.C. §§ 1981, 

1982, and 1985(3). 

“We review de novo the district court’s decision to grant [a] motion to 

dismiss under Federal Rule of Civil Procedure 12(b)(6).” Manzarek v. St. Paul 

Fire & Marine Ins. Co., 519 F.3d 1025, 1030 (9th Cir. 2008). We review for abuse 

of discretion a district court’s decision to dismiss with prejudice. Okwu v. McKim, 

682 F.3d 841, 844 (9th Cir. 2012).

The district court did not err in dismissing Cervantes’ extortion-based RICO 

claims. Cervantes failed to allege specific facts to support its extortion allegations. 

See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The defendants did not acquire 

Cervantes’ property through fear, threatened force, or coercion, but foreclosed after 

Cervantes missed payment deadlines. See United Bhd. of Carpenters & Joiners of 

Am. v. Bldg. & Const. Trades Dep’t, AFL-CIO, 770 F.3d 834, 838 (9th Cir. 2014)

(“Courts must . . . differentiate between legitimate use of economic fear – hard 

bargaining – and wrongful use of such fear – extortion.”). The defendants 
3 

complied with a bankruptcy plan that Cervantes itself proposed, and provided 

forbearance opportunities to Cervantes before foreclosing.

2

Nor did the district court err in dismissing Cervantes’ fraud-based RICO

claims. RICO predicate fraud claims must satisfy the heightened pleading 

standards of Federal Rule of Civil Procedure 9(b). See Moore v. Kayport Package 

Exp, Inc., 885 F.2d 531, 541 (9th Cir. 1989). Cervantes failed to allege specific 

facts that would support its allegations that the defendants committed bankruptcy 

fraud. Cervantes claimed that defendant NWFM “filed a false sworn declaration in 

the bankruptcy proceeding,” but Cervantes failed to specify the contents of the 

declaration, or explain in what way the declaration was false. Cervantes’

implausible theory that the defendants conspired to conceal from the bankruptcy 

court a settlement agreement that would have revealed a plan to decrease the value 

of the defendants’ own collateral was similarly unsupported by specifics.

The district court did not err in dismissing Cervantes’ discrimination claims.

Cervantes alleged “no facts supporting [its] conclusion that the [defendants’] 

actions were driven by discrimination.” In “the face of [the defendants’] obvious 

 

2 That the defendants informed Cervantes that it would face “immediate 

problems,” if it did not pay its debts was not extortion but a demand for lawful 

payment of an overdue obligation. “Threats of economic harm made to obtain 

property from another, are not generally considered ‘wrongful,’” as required to 

establish RICO liability, “where the alleged extortioner has a legitimate claim to 

the property obtained.” Levitt v. Yelp! Inc., 765 F.3d 1123, 1130 (9th Cir. 2014) 

(citation and internal quotation marks omitted).
4 

explanations for their actions in attempting to collect payment from [Cervantes] for 

outstanding debts, [Cervantes] offered only conclusory allegations [of 

discrimination].”

2. Judicial bias

Cervantes’ claims of judicial bias are unavailing. Cervantes fails to offer 

evidence that the district judge’s “impartiality might reasonably be questioned.” 

Pau v. Yosemite Park and Curry Co., 928 F.2d 880, 884 (9th Cir. 1991). 

Cervantes also failed to move for disqualification below. See E & J Gallo Winery 

v. Gallo Cattle Co., 967 F.2d 1280, 1295 (9th Cir. 1992). Indeed, Cervantes

appears to rely entirely on the judge’s adverse rulings in claiming bias, and we 

have held that judicial rulings alone “almost never constitute valid basis for a bias 

or partiality motion.” United States v. Hernandez, 109 F.3d 1450, 1454 (9th Cir. 

1997) (citation omitted).

3. Rule 11 sanctions

We review for abuse of discretion the district court’s decision to impose

Rule 11 sanctions. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990). 

Rule 11 prohibits attorneys from filing complaints for “any improper purpose, such 

as to harass, cause unnecessary delay, or needlessly increase the cost of litigation.” 

Fed. R. Civ. P. 11(b)(1). “The district court is best acquainted with the local bar’s 

litigation practices and thus best situated to determine when a sanction is warranted 
5 

to serve Rule 11’s goal of specific and general deterrence.” Cooter, 496 U.S. at 

404.

The district court did not abuse its discretion in ordering sanctions “to deter 

[Webb and Stafne] from again filing such a baseless lawsuit.” Webb and Stafne

began this lawsuit in district court by filing a 337-page complaint asserting 60 

claims for relief against over 30 defendants. Webb and Stafne filed nearly 1000 

pages of complaint papers in total, including a 143-page First Amended Complaint 

accompanied by a 469-page RICO case statement. The district court described the 

original complaint as a “quagmire of wordy and repetitious verbiage.”

Webb and Stafne’s filings were “both baseless and made without a 

reasonable and competent inquiry.” Townsend v. Holman Consulting Corp., 929 

F.2d 1358, 1362 (9th Cir. 1990) (en banc). Webb and Stafne have been litigating 

on behalf of Cervantes against the defendants for over a decade in the bankruptcy 

and district courts, and in this litigation have consistently failed to support their 

claims with specific facts. The defendants have spent “hundreds of thousands of 

dollars in legal fees” defending against Webb and Stafne’s allegations. The Wyles 

and Deere defendants complied with Rule 11’s safe harbor requirements. And the

district court notified Webb and Stafne in December, 2014 that “they may be held 

liable for unreasonably and vexatiously multiplying the proceedings of this case.” 
6 

Webb and Stafne subsequently asserted claims in their Second Amended 

Complaint that were plainly barred by applicable statutes of limitations.3

Webb and Stafne claim that the district court abused its discretion in limiting

their Second Amended Complaint to thirty pages, but fail to identify facts that they 

would have alleged to support their allegations had they been given more space.

4

 

Even in 30 pages, they should have been able to state the key predicate facts to 

support their RICO claims, and their prior prolix complaints lacked such facts. 

Webb and Stafne were warned repeatedly that they could face sanctions if they 

failed to allege specific facts to support their claims, and they failed to furnish such 

specifics in nearly 1000 pages of complaint papers.

4. Conduct beyond the Second Amended Complaint and amount of fees

We review for abuse of discretion the district court’s decision to award 

attorney’s fees as part of a Rule 11 sanction. Cooter, 496 U.S. at 405. “Generally, 

a district court’s order on attorney’s fees may be set aside if the court fails to state 

reasons for its decision.” Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 

815 (9th Cir. 2003). And “Rule 11 sanctions are limited to ‘paper[s]’ signed in 

 

3 We deny the Wyles’ request to sanction Webb and Stafne again on appeal.

4 Webb and Stafne’s argument that they were “not afforded due process before the 

imposition of sanctions . . . itself borders on the frivolous.” Buster v. Greisen, 104 

F.3d 1186, 1190 (9th Cir. 1997). Webb and Stafne received “notice that the court 

[was] considering sanctions and [had] an opportunity to be heard in opposition.” 

Id. Due process required no more. Pan-Pacific and Low Ball Cable Television 

Co. v. Pacific Union Co., 987 F.2d 594, 597 (9th Cir. 1993).
7 

violation of the rule. Conduct in depositions, discovery meetings of counsel, oral 

representations at hearings, and behavior in prior proceedings do not fall within the 

ambit of Rule 11.” See Christian v. Mattel, Inc., 286 F.3d 1118, 1131 (9th Cir. 

2002).

Here, the district court failed to adequately explain its reasons for awarding 

$18,744.00 to the Wyles defendants, and $111,771.53 to the Deere defendants.

The record does not illuminate why these amounts were appropriate; notably, the 

sanctions award includes fees incurred prior to the filing of the Second Amended 

Complaint, and incurred for issues on which Cervantes prevailed. Because the 

district court awarded fees that did not result from the Second Amended Complaint 

and did not explain why the sanction it awarded was “limited to what suffices to 

deter” frivolous filings in the future, Fed. R. Civ. P. 11(c)(4), we must vacate the 

district court’s attorney’s fees award. Id. We remand for further explanation

regarding the basis, amount, and reasonableness of the attorney’s fees.

AFFIRMED in part, VACATED in part, and REMANDED. Each party 

shall bear its own costs and fees on appeal.