Delacruz v. The State Bar of California

Background

Daniel Delacruz sued the State Bar of California, Steven James Moawad, the City of Fresno, the Fresno Police Department, Steven Card, Cathy Sherman, and Ferguson, Praet, & Sherman APC. The suit concerned the denial of Delacruz’s law license and alleged two violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). Claim One alleged that all defendants used mail, telephone, and internet communications to commit mail fraud and wire fraud as part of a long-running scheme. Claim Two alleged that Sherman and Ferguson, Praet, & Sherman APC violated RICO by emailing a police report containing Delacruz’s Social Security number to 24 email addresses during earlier litigation.

Motions to dismiss

The court granted the Fresno Defendants’ motion to dismiss and the State Bar Defendants’ motion to dismiss.

The court ruled that the Eleventh Amendment’s sovereign immunity barred all claims against the State Bar of California. It also ruled that sovereign immunity barred Delacruz’s claim for monetary damages against Moawad. Those claims were dismissed without leave to amend. The court concluded that claims seeking prospective injunctive relief against Moawad in his official capacity could fall within an exception to sovereign immunity, but dismissed those claims on other grounds.

The court dismissed Claim Two in its entirety with prejudice because the email sharing the police report during discovery was protected by the Noerr-Pennington doctrine, which generally protects government-petitioning activity from liability. The court also found that amendment would be futile because the alleged conduct was protected litigation-related activity and did not fall within the exception for sham litigation.

The court dismissed Claim One in its entirety with prejudice because it was filed after RICO’s four-year limitations period. The court determined that Delacruz knew of the injury underlying the claim—the denial of his law license—when he filed an earlier federal case in December 2014, so he had until December 2018 at the latest to bring the RICO claim. The court found no new and independent injury that would make the claim timely. The court also held, as an additional ground, that neither claim plausibly alleged a RICO violation. Claim One did not identify the time, place, manner, or role of each defendant in the alleged fraud, and Claim Two did not identify a RICO predicate act because unspecified civil-rights violations are not RICO racketeering activity.

Other motions and sanctions

Because the complaint was dismissed with prejudice in its entirety, the court denied Delacruz’s request for a preliminary injunction as moot.

The court denied Delacruz’s motion for sanctions. It found that his request for sanctions under Rule 11 was procedurally defective because he did not serve the motion before filing it, and that his request under 28 U.S.C. § 1927 lacked merit.

Judge Lucy H. Koh granted in part the State Bar Defendants’ motion for Rule 11 sanctions. The court declined to impose a prefiling restriction at that time but ordered Delacruz to pay a $1,000 fine to the Clerk of Court within 30 days. The court stated that additional sanctions, including a prefiling order, would likely be justified if Delacruz filed another federal lawsuit seeking to relitigate his disputes with the State Bar.