Kahre's Appeal Gets A Thumbs Down

[The Observer]

ROBERT KAHRE,
Plaintiff - Appellant,
v.
J. GREGORY DAMM; ET AL.,
Defendants - Appellees.

Release Date: JUNE 29, 2009


UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

MEMORANDUM/*/

Appeal from the United States District Court
for the District of Nevada
David A. Ezra, District Judge, Presiding

Argued and Submitted June 12, 2009
San Francisco, California

Before: HUG, B. FLETCHER and HAWKINS, Circuit Judges.

Robert Kahre appeals the district court's dismissal of his private Racketeer Influenced and Corrupt Organizations Act ("RICO") suit for failure to state a claim. We have jurisdiction pursuant to 28 U.S.C. section 1291 and we affirm.

Kahre claims that various officers of the Internal Revenue Service, the United States Attorney's Office, and the North Las Vegas Police Department engaged in a pattern of racketeering activity intended to injure his business or property. Kahre seeks to turn a legitimate law enforcement activity into a RICO enterprise with mere allegations, but he has failed to state a claim for either a state or federal RICO violation./1/

The essential elements of a federal RICO cause of action are: "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity (5) causing injury to plaintiffs' 'business or property.'" Ove v. Gwinn, 264 F.3d 817, 825 (9th Cir. 2001) (quoting 18 U.S.C. section 1964(c)). Kahre has failed to allege the conduct element, since the conduct he complains of is legitimate law enforcement activity carried out in the course of the officers' employment. In conducting the raid on Kahre's home and business, the officers acted pursuant to valid search and arrest warrants. In prosecuting Kahre for tax and wire fraud, the officers acted pursuant to grand jury indictments and in accordance with their duties under the law. See Sinclair v. Hawke, 314 F.3d 934, 943 (8th Cir. 2003) ("[Plaintiff] has cited no authority for the proposition that federal employees who take regulatory action consistent with their statutory powers engage in a 'pattern of racketeering activity' if those actions are adverse to a particular industry or business activity. In our view, the proposition is ludicrous on its face.").

Kahre has also failed to allege a RICO enterprise, as the cooperation between two federal agencies and local police in a tax fraud investigation is not a criminal enterprise. See Wilkie v. Robbins, 127 S. Ct. 2588, 2607 (2007) ("t is not reasonable to assume that the Hobbs Act (let alone RICO) was intended to expose all federal employees . . . to extortion charges whenever they stretch in trying to enforce Government property claims.")

Kahre's complaints are more appropriate for a Bivens suit. See Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971). Indeed, Kahre first filed a Bivens suit, but, unhappy with the results,/2/ he brought this RICO suit containing almost entirely duplicative claims./3/ This duplicity is another reason for affirming the case's dismissal. See Adams v. Cal. Dep't of Health Servs., 487 F.3d 684, 688 (9th Cir. 2007) ("Plaintiffs generally have no right to maintain two separate actions involving the same subject matter at the same time in the same court and against the same defendant." (internal quotations and citation omitted)), cert. denied, 128 S.Ct. 807 (2007).

The judgment of the district court is AFFIRMED.

All pending motions are DENIED as moot.

FOOTNOTES

/*/ This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.

/1/ Kahre alleged that defendants violated Nevada's RICO statute, Nev. Rev. Stat. sections 207.350 et seq. This claim fails for the same reasons as the federal RICO claim and does not merit separate analysis.

/2/ This case is stayed pending the outcome of Kahre's criminal trial.

/3/ Kahre argues that his witness tampering allegations could not have been included in the original Bivens suit because that conduct extended beyond the filing of the complaint. However, Kahre could have amended his complaint to include these claims; in fact, he has already requested leave from the district court to file a third amended complaint.

[Judge Roy Bean]

I wonder if people like Kahre realize the chance of a successful RICO action are about zero unless you have one or more of the alleged conspirators willing to testify.

[Arthur Rubin]

I wonder if people like Kahre realize the chance of a successful RICO action are about zero unless you have one or more of the alleged conspirators willing to testify.

It is true that a RICO case against a government agency or agencies is not frivolous per se, though.

[LegalEagleMan]

I just got done watching a movie about the Lucchese crime family on trial on 76 RICO counts in the 80s called Find Me Guilty, I think there were other charges as well on 20 defendants. I think the longest case in US criminal history I believe like 21 months. The main character is Giacomo "Jackie" DiNorscio who ends up saving the case for all his buddies. The jury falls in love with him. I guess they used real transcripts from the trial but it's more a comedy.

Way too much for a jury to handle, if he is suing over his raid than that is one basic action. If I were on any jury where I had to sit there for more than a few months and there are 80 page indictment or a civil action that has a freaking million controversies and a ton of defendants. Sorry there is no way justice can be serve in that case. Not guilty or not liable.

[Pottapaug1938]

If you are going to bring a RICO action, you also have to have a legitimate -- LEGITIMATE -- claim underlying your action. Just because you've come up with this cockeyed fantasy about how you really don't have to pay your taxes, and the government prosecutes you for your resulting actions, doesn't even come close to satisfying this requirement.

[Gregg]

I don't see any mention of sanctions, that's a VICTORY!

[LPC]

The essential elements of a federal RICO cause of action are: "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity (5) causing injury to plaintiffs' 'business or property.'" Ove v. Gwinn, 264 F.3d 817, 825 (9th Cir. 2001) (quoting 18 U.S.C. section 1964(c)). Kahre has failed to allege the conduct element, since the conduct he complains of is legitimate law enforcement activity carried out in the course of the officers' employment.

I would think that "legitimate law enforcement activity" would fail the "racketeering activity" element (#4), not the "conduct" element (#1). In fact, the case cited by the court says pretty much that same thing:

See Sinclair v. Hawke, 314 F.3d 934, 943 (8th Cir. 2003) ("[Plaintiff] has cited no authority for the proposition that federal employees who take regulatory action consistent with their statutory powers engage in a 'pattern of racketeering activity' if those actions are adverse to a particular industry or business activity. In our view, the proposition is ludicrous on its face.").

And then the court seems to make the same mistake a second time:

Kahre has also failed to allege a RICO enterprise, as the cooperation between two federal agencies and local police in a tax fraud investigation is not a criminal enterprise.

Whether something is an "enterprise" and whether it is "racketeering" are two separate questions. Cooperation between agencies could be considered an "enterprise," but it would be a legal enterprise and not an illegal one.

Frivolous pleadings do not justify sloppy reasoning.

[The Observer]

would think that "legitimate law enforcement activity" would fail the "racketeering activity" element (#4), not the "conduct" element (#1). In fact, the case cited by the court says pretty much that same thing...

What about employees who misbehave under color of authority? Would that not be covered by (1) as well as (4)?

[Number Six]

Clearly a tax evasion scheme could be a cabal or conspiracy and is often prosecuted as such.
R.I.C.O. is a more narrow category designed to target gangsters.

A question on possible conspiracy charges against public officials:

1)A piece of residential land is raided, seized and quarantined under false pretenses. There was the suspicion that the chemist, who had an on-site lab, could have been dumping chemicals down the drain, which would run into the sewage system and possibly contaminate the watershed. After extensive tests of the property, it is determined there was no such contamination and the D.E.P. action was performed under false pretenses. Would conspiracy charges require that officials that authorized the action had an ulterior or motive for personal enrichment?
2)A parcel of land is deeded to a town as a nature preserve. In violation of the legal deed the public official(s) determines to sell said land for the enrichment of the town. Would this qualify as "conspiracy", or simply as "fraud"?

[Judge Roy Bean]

Clearly a tax evasion scheme could be a cabal or conspiracy and is often prosecuted as such.
R.I.C.O. is a more narrow category designed to target gangsters.

A question on possible conspiracy charges against public officials:

1)A piece of residential land is raided, seized and quarantined under false pretenses. There was the suspicion that the chemist, who had an on-site lab, could have been dumping chemicals down the drain, which would run into the sewage system and possibly contaminate the watershed. After extensive tests of the property, it is determined there was no such contamination and the D.E.P. action was performed under false pretenses. Would conspiracy charges require that officials that authorized the action had an ulterior or motive for personal enrichment?

2)A parcel of land is deeded to a town as a nature preserve. In violation of the legal deed the public official(s) determines to sell said land for the enrichment of the town. Would this qualify as "conspiracy", or simply as "fraud"?

Civil or criminal?

[Number Six]

The first real example happened in the throes of the Anthrax scare. I regarded the action as a criminal violation of that family's rights. After quarantining the property, and doing numerous tests and samples of the property, the family was told they could go back on to the land. They were send a bill of around $70K even though environmental tests proved negative.

I am not a lawyer, but I would think the state action would have been a good basis for a civil lawsuit. I don't see any advantage to the property owner bringing a criminal lawsuit even though the firm that did the environmental tests was later caught up in an entirely different corruption scandal. This case was never brought to court, therefore many questions remained unanswered.

The second example would probably be criminal; I'm not savvy as to which particular legal charges would be proper. Unlawful conversion of intented charitable use for municipal financial gain?

[Famspear]

The first real example happened in the throes of the Anthrax scare. I regarded the action as a criminal violation of that family's rights. After quarantining the property, and doing numerous tests and samples of the property, the family was told they could go back on to the land. They were send a bill of around $70K even though environmental tests proved negative.

Just as an aside: In this example I would argue that the $70K bill is invalid. As the landowner, I would tell the government go to take a long walk off a short pier. In the absence of some common law contractual, quasi-contractual, or tort basis, or some statutory basis, I don't think that the argument "we thought there might be anthrax so we, the government, had to run all these expensive tests and therefore you should reimburse us" works as a legal theory in a court of law. I don't have all the facts (or law) in front of me, though.

[LPC]

The first real example happened in the throes of the Anthrax scare. I regarded the action as a criminal violation of that family's rights.

You're talking about this?

1)A piece of residential land is raided, seized and quarantined under false pretenses. There was the suspicion that the chemist, who had an on-site lab, could have been dumping chemicals down the drain, which would run into the sewage system and possibly contaminate the watershed. After extensive tests of the property, it is determined there was no such contamination and the D.E.P. action was performed under false pretenses.

What were the true pretenses? Why did the government officials make the claims that they did, and go through extensive tests, if they knew those claims were false? What were their true motives?

[Number Six]

A water company official claimed he was doing a "routine" examination of the watershed by traipsing up and down some streams feeding into the reservoir. There is serious doubt that the w.c. official had no tip-off based on the circumstances. He spied an open chemical container in an outdoor shed. The chemist had recently died from old age, only his daughter, a teacher, would have been able to give information about the history of the on-site lab that the P.h.D. chemist maintained. Instead, the matter quickly unravelled into an "emergency", with all sorts of emergency personel being called in to secure the property. This was a $$$ value property, partly in Connecticut, partly in New York. The family always paid their taxes and were law-abiding.

[LPC]

A water company official claimed he was doing a "routine" examination of the watershed by traipsing up and down some streams feeding into the reservoir. There is serious doubt that the w.c. official had no tip-off based on the circumstances. He spied an open chemical container in an outdoor shed. The chemist had recently died from old age, only his daughter, a teacher, would have been able to give information about the history of the on-site lab that the P.h.D. chemist maintained. Instead, the matter quickly unravelled into an "emergency", with all sorts of emergency personel being called in to secure the property. This was a $$$ value property, partly in Connecticut, partly in New York. The family always paid their taxes and were law-abiding.

And what were the true pretenses? Why did the government officials make the claims that they did, and go through extensive tests, if they knew those claims were false? What were their true motives?

Or do you not understand what is meant by "false pretenses"?

The statement that "There is serious doubt that the w.c. official had no tip-off based on the circumstances" is almost incoherent, and appears to be pure speculation expressed as a double negative.

[Number Six]

W.C. employee has a right and a duty to inspect on their own land and to alert of possible threat to water purity or reports of suspicion of same. The land owned by water companies can by extensive and there may be confusion by those who own land abutting reservoirs unless they look at a map of their property. In this case, the owner came home to find emergency personel taking possession of the property based upon the assumption that there was an imminent threat to the watershed or possibly illegal drugs. After the quarantine and tests lasting two months, no contamination was found, no illegal drugs, no toxic residue, etc.. Environmental officials, like game wardens have a lot of ability to come on to properties to do inspections. Shouldn't there be some downside risk based on abuse of this "authority"? The Supreme Court recently ruled in a 5-4 decision that there are limits on police to inspect vehicles at whim. I would think that in the case of a property where there was no proof of the watershed being contaminated, a jury would be sympathetic to such an outrageous abuse of 4th Amendment rights. Here in Connecticut, even the wealthy are reluctant to balk at government abuse of fundamental rights. The Kahre case, however, is an entirely different matter--of flagrant tax fraud and evasion. I don't think there are many residents here with the exception of Irwin Schiff's son Peter, who would side against the government in that case.

[LPC]

From reading your posts, it is now clear that:

1. There were no false pretenses. At worst, all that happened was that government employees were over-zealous or showed bad judgment.

2. The fact that you don't know the difference between "false pretenses" and "over zealous" shows that your representations are unreliable, and so you lack credibility.

[Number Six]

The case is probably too complex to use it as a test case for the original basis of the thread, and I'm sorry for that.

There are government "fishing expeditions" and there are good faith investigations based on verifiable complaints. In this case there was no search warrant signed by a judge who would be accountable to what followed by the police action.