McClintic et al v. United States Postal Service et al

Filing 58

ORDER to SHOW CAUSE Re Subject Matter Jurisdiction, signed by District Judge Lawrence J. O'Neill on 12/19/2013. (Plaintiff is ORDERED TO SHOW CAUSE in writing on or before 1/10/2014 why the two federal claims should not be dismissed and the refore why the entire FAC should not be dismissed for lack of subject matter jurisdiction. The hearing on the pending motion to dismiss, Doc. 41, currently set for 2/6/2014, is VACATED and all deadlines in connection with that motion are suspended pending the outcome of this Order to Show Cause.) (Gaumnitz, R)

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UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF CALIFORNIA

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JOSEPH ROBERT MCCLINTIC, an
individual, by and through his Guardian ad
Litem, MARLENE A. HUBBEL; and
MARLENE A. HUBBELL in her capacity as
co-trustee of the Joseph Robert Mcclintic
Living Trust,

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Plaintiff,

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CASE NO. 1:13-CV-00439-LJO-GSA
ORDER TO SHOW CAUSE RE
SUBJECT MATTER JURISDICTION

v.

UNITED STATES POSTAL SERVICE;
BERTHA CERVANTES, individually and in
her official capacity; and DOES 1 through 50,
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inclusive,
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Defendants.

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This case concerns the alleged financial elder abuse of Plaintiff Joseph Robert McClintic by
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Defendant Bertha Cervantes. Among other things, the First Amended Complaint (“FAC”) alleges that
Defendant Cervantes engaged in a “sweetheart swindle scam,” by which she ingratiated herself to Mr.

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McClintic, with the ultimate goal of obtaining valuable items and money from Mr. McClintic. See Doc.
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34, FAC, at ¶ 22. At the time of the alleged scam, Mr. McClintic was in his late 70s; Ms. Cervantes was
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thirty-two (32) years his junior. Id. at ¶¶ 19-10.
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The FAC contains nine state law causes of action for Financial Elder Abuse, Cal. Welf. & Inst.
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Code, §§ 15600-15675; fraud, deceit, and concealment; misrepresentation; negligence; negligence per
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se; conversion; trespass to chattels, constructive trust, and common law unjust enrichment. See generally
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Doc. 34. Defendant Cervantes filed a motion to dismiss all of the state law claims on statute of
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limitations grounds. Doc. 41.
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The First Cause of Action, is captioned “For Violation of 18 U.S.C. § 201, 5 CFR § 2635.202

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and § 2635.204.” However, 18 U.S.C. § 201, which prohibits public official bribery, graft, and conflicts
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of interest, is a criminal statute for which there is no private cause of action. Likewise, there is no private

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right of action to enforce directly 5 C.F.R. §§ 2635.202 and 2635.204, which set forth standards for the

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ethical conduct of employees of the executive branch. The First Cause of Action, therefore, does not

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appear to support federal subject matter jurisdiction.

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The Tenth Cause of Action is a civil claim brought under the Racketeer Influenced and Corrupt

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Organizations Act (“RICO”), 18 U.S.C. §§ 1961, et seq. FAC at ¶ 1. Defendant Cervantes’ motion to

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dismiss does not address this cause of action, but the Court may raise the question of subject matter

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jurisdiction sua sponte. See Fed. R. Civ. P. 12(h)(3); Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir.

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2002). Having preliminarily reviewed the FAC, the Court has serious concerns about whether the FAC

10 “contain[s] either direct or inferential allegations respecting all the material elements necessary to
11 sustain recovery” sufficient to state a plausible RICO claim. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
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The elements of a civil RICO claim are: “(1) conduct (2) of an enterprise (3) through a pattern

14 (4) of racketeering activity (known as ‘predicate acts’) (5) causing injury to plaintiff's business or
15 property.” Living Designs, Inc. v. E.I. Dupont de Nemours and Co, 431 F.3d 353, 361 (9th Cir. 2005). It
16 is unclear whether the facts plausibly could support a finding that Defendant(s) made use of an
17 “enterprise.” An “enterprise” is “any individual, partnership, corporation, association, or other legal
18 entity, and any union or group of individuals associated in fact although not a legal entity.” 18 U.S.C. §
19 1961(4); Odom v. Microsoft Corp., 486 F.3d 541, 548 (9th Cir. 2007). However, a RICO “enterprise”
20 must constitute an entity distinct from the RICO “person.” Living Designs, 431 F.3d at 361; River City
21 Markets, Inc. v. Fleming Foods W., Inc., 960 F.2d 1458, 1461 (9th Cir. 1992) (stating that “a single
22 individual or entity cannot be both the RICO enterprise and an individual RICO defendant”).
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Here, the FAC alleges that Defendant Cervantes engaged in numerous unlawful acts and

24 suggests that she may have interacted with other individuals and entities during the course of engaging
25 in these unlawful acts. To the extent Plaintiff attempts to identify Defendant Cervantes as the
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“enterprise,” this is impermissible if Defendant Cervantes is also the RICO defendant. Alternatively,

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Plaintiff may be attempting to describe an “association-in-fact enterprise,” which is “a group of persons

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associated together for a common purpose of engaging in a course of conduct.” United States v.

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Turkette, 452 U.S. 576, 583 (1981). While the FAC mentions that Cervantes interacted with numerous

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other individuals, it does not obviously allege how they associated together for a common purpose.1

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Accordingly, Plaintiff is ORDERED TO SHOW CAUSE in writing on or before January 10,

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2014 why the two federal claims should not be dismissed and therefore why the entire FAC should not

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be dismissed for lack of subject matter jurisdiction.

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The hearing on the pending motion to dismiss, Doc. 41, currently set for February 6, 2014, is

10 VACATED and all deadlines in connection with that motion are suspended pending the outcome of this
11 Order to Show Cause.
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IT IS SO ORDERED.
Dated:

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/s/ Lawrence J. O’Neill

December 19, 2013

UNITED STATES DISTRICT JUDGE
DEAC_Signature-END:

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b2e55c0d

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The Court also is concerned that many, if not all, of the potential racketeering predicate acts set forth in the FAC may not

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