Lucero v. IRA Services, Inc.
- Laurel Beeler
- 3:18-cv-05395
- U.S. District Court · Northern District of California
- 2
In Lucero v. IRA Services, Judge Beeler ordered Lucero to explain why the PSLRA should not bar his RICO claims.
Luis Hurtado Lucero must explain why his RICO claims against the non-moving defendant should not be dismissed; the order also addresses the state-law claims without remanding them at that time.
What happened
In Lucero v. IRA Services, Inc., Luis Hurtado Lucero alleged that he invested $350,000 in a self-directed retirement account connected to a five-year trading program that turned out to be an illegal Ponzi scheme. He asserted claims under the federal Racketeer Influenced and Corrupt Organizations Act, or RICO.
The court said it had already dismissed the RICO claims against certain defendants who administered the retirement account because the Private Securities Litigation Reform Act barred those claims. The court said the same reasoning may apply to the RICO claims against a defendant that had not moved to dismiss them.
Judge Laurel Beeler ordered Lucero to show why the RICO claims against that defendant should not be dismissed. The parties were ordered to confer, and Lucero could file a statement explaining his position or agree that dismissal was proper. The court did not remand the state-law claims at that point.
The detailed version
- Lucero v. IRA Services, Inc. · No. 3:18-cv-05395
- Laurel Beeler
- Feb. 3, 2020
Background
Luis Hurtado Lucero alleged that he invested $350,000 in retirement savings in a self-directed individual retirement account connected to the “Lazzaro & Associates five-year trading portfolio.” He alleged that the program was an illegal Ponzi scheme. His claims included violations of the federal Racketeer Influenced and Corrupt Organizations Act (RICO).
Prior RICO ruling
Certain defendants who administered the retirement account moved to dismiss the RICO claims. The court had granted that motion and dismissed those RICO claims with prejudice, meaning the court stated that those claims could not be brought again, because the Private Securities Litigation Reform Act of 1995 (PSLRA) barred them.
Order to show cause
The court stated that the same PSLRA analysis applied to the RICO claims against a defendant that had not moved to dismiss them. The court said it could dismiss claims on its own initiative when a plaintiff had not stated a legally valid claim. Instead of immediately dismissing those claims, the court ordered Lucero to show cause—meaning to explain—why the PSLRA did not bar them.
The parties were directed to confer by February 7, 2020. By February 13, 2020, they could file a joint statement presenting their positions. If the defendant did not want to file a statement, Lucero was required to file a statement of up to five pages explaining why the RICO claims should not be dismissed. Lucero could alternatively agree that dismissal of the RICO claims was procedurally appropriate.
The court also stated that, given the case’s procedural posture and without input supporting a different approach, it did not consider remanding the state-law claims to be appropriate at that time. The court noted that the issues could be discussed at the case-management conference scheduled for February 20, 2020.
Disposition
The order did not itself dismiss the RICO claims against the non-moving defendant. It ordered Lucero to show cause why those claims should not be dismissed. The order was signed by Laurel Beeler, United States Magistrate Judge.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.