Flatten v. Smith

Background

The plaintiffs—Ezekial Flatten, William Knight, Ann Marie Borges, and Chris Gurr—filed the lawsuit against Bruce Smith and Steven White. The original complaint asserted one claim under the Racketeer Influenced and Corrupt Organizations Act (RICO), alleging a conspiracy involving law-enforcement officers in Mendocino County and surrounding jurisdictions.

The alleged conduct included pretextual traffic stops, extortion, searches and seizures of marijuana and guns, alleged theft and resale of seized marijuana, money laundering, tax evasion, and efforts to conceal wrongdoing. The first amended complaint added allegations about a county marijuana “zip-tie” program, a district attorney’s restitution program, searches and seizures, and alleged misconduct involving other law-enforcement officers.

The court had previously dismissed the original complaint but allowed the plaintiffs to amend. It directed them to add specific, nonconclusory facts showing a RICO enterprise, explaining how the alleged conduct was connected, and supporting the allegation that Smith participated in Flatten’s traffic stop. The plaintiffs filed the first amended complaint on January 3, 2022. Smith and White then moved to dismiss it for failure to state a claim.

Parties’ Positions

The defendants argued that the amended complaint still did not plausibly allege an association-in-fact enterprise—a group of people or entities working together for a common purpose—or a pattern of racketeering activity. They characterized most of the alleged conduct as facially legitimate law enforcement, including conduct carried out under search warrants, a county ordinance, or state law. They also argued that the complaint offered no factual support for the allegation that Smith participated in Flatten’s stop or that Smith and White sold seized marijuana.

The plaintiffs largely repeated the allegations in their amended complaint. They argued that the complaint adequately pleaded the elements of a RICO claim and that extorting and selling seized marijuana could not be considered legitimate law-enforcement activity.

Court’s Analysis

The court held that the first amended complaint failed to state a RICO claim under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not allege enough facts to make a claim legally plausible. The court found that many allegations were conclusory or speculative and therefore could not be treated as established facts at the motion-to-dismiss stage.

The court specifically found that the amended complaint did not provide facts supporting the allegation that Smith and White sold seized marijuana on the black market. The complaint relied on the lack of documentation about when, where, how, or by whom marijuana was destroyed, but did not allege specific illicit sales, investigations, witness statements, or violations of state or local documentation requirements. The court also found insufficient factual support for the allegation that District Attorney Eyster prosecuted Knight to intimidate him.

The court concluded that the allegations concerning the zip-tie program, restitution program, searches, seizures, and destruction of marijuana did not provide enough factual detail to plausibly show criminal conduct. The court noted that the zip-tie program was authorized by a Mendocino County ordinance, the restitution program was authorized by state law, and several searches and seizures were conducted under warrants. The complaint did not allege that funds from the programs were improperly diverted or that anyone actually engaged in money laundering through them.

The court also rejected the allegation that Smith participated in Flatten’s traffic stop because the amended complaint supplied no facts explaining why Flatten believed the second person involved was Smith. The court noted that the plaintiffs were represented by counsel and had previously been directed to provide those facts. It therefore gave no weight to the unsupported assertion.

Because the complaint did not plausibly allege criminal activity by either defendant, the court found that it also failed to allege the pattern of racketeering activity required for a RICO claim. The court further held that the alleged association-in-fact enterprise was not adequately pleaded because the complaint did not provide specific facts showing that the defendants shared a criminal purpose or functioned as a continuing unit. The court dismissed the RICO conspiracy allegations as well.

Disposition

Judge Susan Illston granted the defendants’ motions to dismiss the first amended complaint and denied leave to amend. The court concluded that further amendment would be futile because the amended complaint remained far short of stating a RICO claim despite the deficiencies identified in the earlier proceedings. The court also granted the defendants’ request for judicial notice of the existence of certain documents, without drawing inferences about disputed facts from those documents.