United States v. Mongol Nation

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NOT FOR PUBLICATION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