“The dismissal has nothing to do with the issue of trademark forfeiture at all.”
An amazingly positive thing happened this week when the government’s RICO case and attached trademark seizure were dismissed in Federal District Court by Judge David O. Carter. Many anticipated this dismissal after Judge Carter was assigned to the case following Judge Wright’s recusal. It was thought that Judge Carter was more protective of the 1st Amendment. But, as it turns out, the dismissal has nothing to do with the issue of trademark forfeiture at all. In fact, the idea of a RICO dismissal based on disputes over forfeiture were rejected by Judge Carter as premature. The reason the case was dismissed against the Mongols was entirely related to the prosecutions failure to properly conform to RICO requirements.
THE BASIC STORY
The case against the Mongols was a RICO indictment where the Mongols Motorcycle Club as an entity was named as the defendant, as opposed to individuals as is normally the case. As part of the proposed sentence the government requested ownership of the Mongols trademark, including their name and center patch.
The defendants made three arguments:
First, the “Defendant asserts that the forfeiture sought is impermissible under trademark law and is unconstitutional under the First, Fifth, and Eighth Amendments of the United States Constitution. Therefore, it argues, the Indictment should be dismissed or, in the alternative, the forfeiture allegation should be stricken.”
Second, “Defendant is of the opinion that because the Government previously sought forfeiture of the marks, and the Court in Rivera determined that the preliminary order of forfeiture was improper under the First Amendment, the Government cannot now seek forfeiture of the marks in this case.”
Third, that the prosecution was improperly applying RICO statutes by failing to differentiate between a “person” and an “enterprise”. RICO requires that a “person” be involved in a criminal “enterprise” as a precondition to prosecution. “Person” and “enterprise” must be differentiated and cannot be the same entity. In this case, the government argued that the Mongols Motorcycle Club was the “person” engaged in a criminal “enterprise” called the Mongols Motorcycle Gang.
ARGUMENTS AGAINST TRADEMARK FORFEITURE REJECTED
Judge Carter did not consider the issue of trademark forfeiture in his dismissal at all. Carter explains, “In general, the Court finds that Defendant’s arguments regarding the forfeiture are premature, do not go to the sufficiency of the Indictment, and should not be considered at this stage. In any event, the Court finds that the Indictment fails for independent reasons.”
Basically, forfeiture is a sentencing issue. The RICO indictment must first be resolved successfully before moving to sentencing issues. Asking for a dismissal of RICO charges based on a sentencing request is illogical. Similarly, it is not possible to dismiss a murder charge because the prosecution has made it clear that they are going for the death penalty before the defendant has even been found guilty. Arguments over sentencing happen after guilt is established.
Judge Carter writes, “a pretrial motion to dismiss is not the appropriate time to determine the viability of a potential forfeiture of property after a potential conviction of Defendant Mongol Nation. Defendant has not provided any legal support for the proposition that dismissal of the Indictment or striking the request is the appropriate remedy for a flawed criminal forfeiture allegation. Further, there are many possible outcomes in the course of trial, conviction, and enforcement of any potential forfeiture, such that any adjudication of the constitutional issues would essentially constitute an advisory opinion.”
Defendants estoppel arguments were also rejected. In Rivera it was determined that seizing property from an un-indicted individual was a violation of the 1st Amendment. Defendants argued that this bars the prosecution from proceeding. But Judge Carter disagreed.
“Defendant’s “estoppel” arguments are without merit…. The issues presented to the Court in the Rivera proceeding did not involve the issues alleged in the Indictment. Namely, much of the reasoning in Rivera was centered around the fact that Mongol Nation owned the marks at issue, not the individual Cavasos defendants, such that the marks could not be forfeited upon the indictment of the individual club members…. The issues are dissimilar. The estoppel arguments fail for this reason alone.”
WHY THE MONGOLS CASE WAS DISMISSED.
Although all arguments against trademark seizure were rejected and disregarded, Judge Carter argued that, “More compelling are Defendant’s arguments predicated on the RICO statute itself. Defendant asserts that the Indictment fails to specify any entity that is distinct from the RICO person being charged with the crime.”
RICO statutes require that a person be indicted for participating in a criminal enterprise. The person and the enterprise must be distinct. “Here, the Government is charging the person Mongol Nation, an unincorporated association composed of full patched members of the Mongols Gang criminal enterprise, alleging that it participated in the affairs of the enterprise the Mongols Gang, an enterprise composed of its full patched members, prospective and probationary members, and associates.” Carter concludes, “[T]here is no meaningful distinction between the association Mongol Nation and the enterprise of the Mongols Gang. The indictment therefore fails.”
MALICIOUS PROSECUTION CLAIMS ALSO REJECTED
The defendants argued that the government should be sanctioned for improper conduct and malicious prosecution. Defendants point to repeated prosecutions and what appears to be judge shopping. Although Judge Carter agreed that the prosecution was deficient due to other reasons, the claim that the government acted in bad faith was based on insufficient proof. Judge Carter states:
“There is insufficient evidence on the record to establish that there has been improper conduct by the Government attorneys in this case simply because of the existence of the separate Cavazos action.”
“Here, Defendant has not met its burden in establishing that the Government’s position was vexatious, frivolous, or in bad faith. The only concrete basis for this request is that this case is similar to prior actions and that the Government engaged in “judge shopping.” This action is materially different from the Cavazos action in that it indicts a separate person. While the indictment is legally deficient for the reasons explained above, this does not demonstrate that the action is vexatious, meaning that the Government acted with “ill intent.”Manchester, 315 F.3d at 1182. Nor has Defendant demonstrated that the Government engaged in “judge shopping.” This action was properly assigned to Judge Wright, and subsequently reassigned to this Court.”
CONCLUSIONS- WHAT DOES THIS DECISION MEAN GOING FORWARD?
It’s important to understand that this decision was not based on Constitutional grounds or even a rejection of the strategy of trademark seizure. This was based on failure to meet the RICO requirement to identify a person and an enterprise.
The government failed to seize the Mongols trademark last time around because the court determined that individual indictments don’t justify the seizure of a collective mark owned by a club. So the government switched strategies and named the club itself as a defendant. But this strategy has been rejected as well.
What does this mean for the Devils Diciples? The fact in the Diciples case more closely match Rivera. The government is indicting individual persons, naming the club as the enterprise, and requesting seizure of the clubs trademark as part of sentencing. Although the Diciples case is being decided in the 6th Circuit and the Mongols case the 9th, it seems reasonable that the outcome will be similar to Rivera.
An appeal in the Mongols case is still possible, although how certain is hard to determine. Regardless, this should be viewed as a victory for the Mongols and all motorcyclists that participated in the movement to “Save The Patch” proving unification can work.
Citation for Dismissal: (U.S. v. Mongol Nation, UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION, ORDER RE: RENEWED MOTION TO DISMISS THE INDICTMENT AND FOR SANCTIONS , Case No.: CR 13-0106-DOC, September 16, 2015)