Court Opinion

ID: 4185241
Source: CourtListenerOpinion
Date Created: 2017-07-11 20:01:28.342545+00
Date Added: 2024-06-11T07:47:21.002328
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                           JUL 11 2017
                    UNITED STATES COURT OF APPEALS                     MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                        No. 15-50442

              Plaintiff-Appellant,               D.C. No. 2:13-cr-00106-DOC-1

 v.
                                                 MEMORANDUM*
MONGOL NATION, an unincorporated
association,

              Defendant-Appellee.

                   Appeal from the United States District Court
                      for the Central District of California
                    David O. Carter, District Judge, Presiding

                        Argued and Submitted June 6, 2017
                               Pasadena, California

Before: GRABER, SACK,** and MURGUIA, Circuit Judges.

      *
       This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
       The Honorable Robert D. Sack, United States Circuit Judge for the Court
of Appeals for the Second Circuit, sitting by designation.
      This appeal arises from an order granting the Defendant Mongol Nation’s

motion to dismiss an indictment charging it with two criminal violations of the

Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.

§ 1962(c), (d). United States v. Mongol Nation, 132 F. Supp. 3d 1207, 1221–23

(C.D. Cal. 2015). The district court granted the motion to dismiss the indictment

on the ground that “there is no meaningful distinction between the association

Mongol Nation and the enterprise of the Mongols Gang.” Id. at 1220; see also

Sever v. Alaska Pulp Corp., 978 F.2d 1529, 1533 (9th Cir. 1992) (stating that the

RICO “person” must be “distinct from the ‘enterprise’ whose business the [RICO

person] is conducting”). We review the dismissal of an indictment on legal

grounds de novo, United States v. Gomez-Rodriguez, 96 F.3d 1262, 1264 (9th Cir.

1996) (en banc), accepting as true the allegations in the indictment, United States v.

Lyle, 742 F.3d 434, 436 (9th Cir. 2014).

      1. The district court erred in concluding that Mongol Nation and the

Mongols Gang are not sufficiently distinct. “[T]o establish liability under [RICO]

one must allege and prove the existence of two distinct entities: (1) a ‘person’; and

(2) an ‘enterprise’ that is not simply the same ‘person’ referred to by a different

name.” Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 (2001). The

indictment charged Mongol Nation, an unincorporated association comprised of

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“official” or “full-patch” members of the Mongols Gang, as a RICO “person.” The

alleged RICO “enterprise,” the Mongols Gang, is comprised of both Mongol

Nation, i.e., the Mongols Gang’s official or full-patch members, and various

associates. Although a RICO claim might fail on distinctiveness grounds where

the “[entity] was the ‘person’ and the [entity], together with all its employees and

agents, were the ‘enterprise,’” id. at 164 (citing Riverwoods Chappaqua Corp. v.

Marine Midland Bank, N.A., 30 F.3d 339, 344 (2d Cir. 1994)), that does not

describe this case. Rather, Mongol Nation is a subset of the alleged enterprise,

which consists of legally distinct and separate persons in addition to the Defendant.

When reviewing whether these entities are distinct, “the only important thing is

that [the enterprise] be either formally . . . or practically . . . separable from the

individual” RICO person. Sever, 978 F.2d at 1534 (brackets in original) (quoting

United States v. Benny, 786 F.2d 1410, 1416 (9th Cir. 1986)). That is the case

where, as here, the RICO “person” is part of the “enterprise” whole. Moreover, we

have previously rejected the argument that “there is no distinction between the

officers, agents and employees who operate [a] corporation and the corporation

itself,” id. (internal quotation marks omitted), because “a corporate officer can be a

person distinct from the corporate enterprise,” Living Designs, Inc. v. E.I. Dupont

de Nemours & Co., 431 F.3d 353, 362 (9th Cir. 2005). Accordingly, because

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Mongol Nation was alleged to be part of a larger whole, the Mongols Gang, which

is comprised of additional individuals who together form the alleged enterprise, the

district court erred by dismissing the indictment on distinctiveness grounds.

      2. The Defendant’s argument that remand will prove “futile” because the

government cannot obtain forfeiture of trademarks registered to Mongol Nation is

unpersuasive. It would be premature to address whether the government will

ultimately be able to secure forfeiture under 18 U.S.C. § 1963 as part of the

sentence in the event that the Defendant is convicted under 18 U.S.C. § 1962. See

Libretti v. United States, 516 U.S. 29, 39 (1995). Similarly, the Defendant’s

constitutional challenge is not ripe for review. See Thomas v. Anchorage Equal

Rights Comm’n, 220 F.3d 1134, 1138 (9th Cir. 2000) (en banc).

      3. Having dismissed the indictment on other grounds, the district court

declined to “reach Defendant’s arguments concerning whether it is proper to

premise liability on predicate acts an unincorporated association is not legally

capable of committing itself.” Mongol Nation, 132 F. Supp. 3d at 1223. Because

some predicate criminal acts can be committed by entities similar to an

unincorporated association, see United States v. A & P Trucking Co., 358 U.S. 121,

125–26 (1958), it would not be futile to remand the indictment for further

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proceedings. We leave this issue to the district court’s consideration in the first

instance on remand.

      REVERSED AND REMANDED.

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