Gerrans v. Gunday

Background

Lawrence J. Gerrans, an inmate representing himself, filed an approximately 80-page complaint asserting one claim under the Racketeer Influenced and Corrupt Organizations Act, commonly called RICO. He sued Erhan Gunday, ES Medical LLC, Lloyd Yarbrough, Kevin Brown, Charles N. Wang, Alex Hsia, Lon Chu, Diana Ta, Dennis Meyer, Christoper M. Gerrans, Whitney Gerrans, Phuc Main, Jerry Katzman, Steve Barney, and Assistant United States Attorney Robin Harris.

Gerrans alleged four RICO phases involving the alleged theft of intellectual property and customers; corruption of Sanovas’s records and finances; alleged theft and counterfeiting of corporate checks, bank fraud, and embezzlement; and an alleged effort to use the Department of Justice, a criminal prosecution, and a private lawsuit to take his money, property, businesses, and intellectual property.

The opinion states that Gerrans was convicted of wire fraud, money laundering, making false statements to the Federal Bureau of Investigation, contempt, and witness tampering. His convictions were affirmed, and the Supreme Court denied his petition for review.

Screening and Legal Standards

Although Gerrans paid the filing fee, the court screened the complaint under 28 U.S.C. § 1915A because it named at least one government employee. That statute requires early review of a prisoner’s complaint seeking relief from a government entity or employee and permits dismissal of claims that are frivolous, malicious, fail to state a claim, or seek money from an immune defendant.

The court applied the rule from Heck v. Humphrey. Under that rule, a civil claim cannot proceed when winning it would necessarily show that the plaintiff’s criminal conviction or sentence was unlawful, unless the conviction has been overturned or otherwise invalidated. The court concluded that this rule can also bar civil RICO claims.

Claim Against Robin Harris

Gerrans alleged that Harris, a prosecutor involved in his criminal case, participated in an enterprise that manufactured evidence and testimony, pursued an unlawful prosecution, and contributed to his conviction and incarceration.

The court held that the claim against Harris was barred by the Heck rule because Gerrans sought damages on the theory that his conviction was wrongly obtained. The court stated that he could pursue that damages claim only if his conviction were overturned, which had not occurred.

The court also held that Harris had absolute immunity for at least some of the challenged conduct. Prosecutors have this immunity for evaluating evidence, preparing evidence for trial or a grand jury, and presenting evidence to the court and jury. The court rejected Gerrans’s allegation that a conflict of interest removed the Heck bar, explaining that, given the existing conviction, he could not show that the charges were baseless unless and until the conviction was overturned.

The court dismissed the RICO claim against Harris without prejudice and without leave to amend. The dismissal was without prejudice because the opinion states that the claim could potentially be pursued if Gerrans’s conviction were later overturned.

Claims Against the Other Defendants

The court concluded that the allegations against the remaining defendants also referred extensively to matters connected to Gerrans’s criminal trial, including alleged false evidence, false testimony, and false narratives. The court therefore dismissed those claims as at least partly barred by Heck. Because it could not determine from the complaint which portions might not be barred, the court dismissed the claims against the remaining defendants without prejudice and with leave to amend.

Gerrans was permitted to file an amended complaint by February 7, 2025, attempting to plead a claim against the remaining defendants that was not barred by Heck. The order prohibited adding new claims or defendants and required the amended complaint to use the specified case caption and case number and to state “COURT-ORDERED FIRST AMENDED COMPLAINT” on its first page. The order also stated that the amended complaint would replace the original complaint and could not incorporate the original complaint by reference.

Other Motions and Order

The court denied the motion to appoint the United States Marshal to serve the summonses and complaint because Gerrans had paid the filing fee and would be responsible for service if he filed an amended complaint. It denied the application to proceed without paying fees as moot because Gerrans had already paid the filing fee.

The order warned that failure to file an amended complaint by the deadline would result in dismissal of the RICO claim against all defendants without prejudice as barred by Heck. Judge Jacquelyn Scott Corley signed the order.