Lucero v. IRA Services, Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division 11 LUIS HURTADO LUCERO, Case No. 18-cv-05395-LB 12 Plaintiff, ORDER FOR PLAINTIFF TO SHOW 13 v. CAUSE WHY HIS RICO CLAIMS SHOULD NOT BE DISMISSED 14 IRA SERVICES, INC., et al., Re: ECF No. 90 15 Defendants. 16 17 Plaintiff Luis Hurtado Lucero invested $350,000 in retirement savings into a self-directed 18 individual retirement account (“IRA”) called the “Lazzaro & Associates five-year trading 19 portfolio” (the “Program”).1 The Program allegedly turned out to be an illegal Ponzi scheme.2 His 20 claims include violations of the federal Racketeer Influenced Corrupt Organizations Act 21 (“RICO”).3 Certain defendants (who administered the IRA) moved to dismiss the RICO claims, 22 and the court granted their motion and dismissed the RICO claims with prejudice on the ground 23 that the Private Securities Litigation Reform Act of 1995 (“PSLRA”) barred them.4 The same 24 25 1 Second Am. Compl. (“SAC”) − ECF No. 90 at 2 (¶ 1), 7 (¶ 26). Citations refer to the Electronic Case 26 File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of documents. 2 Id. at 2 (¶ 1). 27 3 Id. at 10–13 (¶¶ 45−59). ] analysis applies to the RICO claims against the non-moving defendant here. A court may dismiss 2 || aplaintiff’s claims on its own initiative where the plaintiff does not state a valid, legally 3 cognizable claim. Reed v. Lieurance, 863 F.3d 1196, 1207 (9th Cir. 2017). The court thus issues 4 || this order to the plaintiff to show cause why the PSLRA does not bar the RICO claims. 5 The court asks the parties to confer by February 7, 2020. Thereafter, by February 13, 2020, the 6 || parties may file a joint statement with their respective views, or, if the defendant does not want to 7 || file a statement, the plaintiff must file a statement of up to five pages showing cause why the court 8 should not dismiss the RICO claims. Alternatively, the plaintiff might agree that dismissal of the 9 || RICO claims is procedurally appropriate. Given the case’s procedural posture (and absent the 10 || input of the parties supporting a different approach), the court does not think remand of the state- 11 law claims at this juncture is the right approach. 12 The court can discuss the issues at the upcoming case-management conference now set for E 13 February 20, 2020 at 9:30 a.m. IT IS SO ORDERED. 3 15 Dated: February 3, 2020 LAE 16 SO eee LAUREL BEELER 17 United States Magistrate Judge 18 19 20 21 22 23 24 25 26 27 28