United States v. Mongol Nation ( 2017 )


Menu:
  •                                                                           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    NOT FOR PUBLICATION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
    2
    “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
    3
    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
    4
    proceedings. We leave this issue to the district court’s consideration in the first
    instance on remand.
    REVERSED AND REMANDED.
    5