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Ninth Circuit Allows Gang Convicted Under RICO to Retain Ownership of Its Logos
Government Had Sought Forfeiture
By a MetNews Staff Writer
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Above are logos of
what Ninth U.S. Circuit Court of Appeals Judge Holly Thomas in an opinion
filed Friday terms “a violent, drug trafficking organization.” Her opinion
says that a District Court judge properly denied the government’s motion for forfeiture
of the marks. |
The Ninth U.S. Circuit Court of Appeals on Friday rejected the government’s contention that a judge erred in declining to extinguish, pursuant to forfeiture provisions of the Racketeer Influenced and Corrupt Organizations Act, a gang’s rights to three trademarks.
Circuit Judge Holly A. Thomas wrote for a three-judge panel in responding to the government’s cross appeal from the determination by District Court Judge David O. Carter that the group’s right to its logos cannot be snatched from it. The opinion also upholds the Dec. 13, 2018 conviction of the Mongol Nation—which Thomas described as “a violent, drug trafficking organization”— for RICO violations and conspiracy to violate RICO.
The logos, used on patches and directly on clothing, are comprised of the word “Mongols” in stylized type, a sketch of what Carter described as “a Genghis Khan-type character with sunglasses and a ponytail, riding a motorcycle,” and a combined logo.
While Carter declared in a Feb. 28, 2019 order that “[t]he First Amendment and Eighth Amendment permanently prohibit the Government’s request to forfeit the rights associated with the collective symbols,” Thomas did not reach the constitutional issues, finding that forfeiture was not permissible where, as in the present case, assumption by the government of ownership of the property was, in the end, not sought.
Change of Position
Initially, the government did seek a transfer of ownership. However, it changed its approach after Carter said in his Feb. 28, 2019 order:
“For more than a decade the United States has expended resources seeking forfeiture of the Mongol Nation’s collective membership marks. Why? It is beyond question that the Government has a legitimate interest in attacking the economic roots of a criminal organization like the Mongol Nation.” But what does the United States accomplish by seizing control of the intellectual property rights associated with a motorcycle club’s associative symbols?”
He went on to say:
“Because the forced transfer of symbols to the United States immediately chills the Mongol Nation’s and its members’ continued rights to display or otherwise use the collective membership marks without fear of legal retaliation or payment of a licensing fee at any point following forfeiture, the forced transfer of the collective membership marks to the United States violates the First Amendment.
“The Government’s request also violates the Eighth Amendment’s Excessive Fines Clause and must be denied on this basis alone….The forfeiture of the rights associated with a symbol that has been in continuous use by an organization since 1969 is unjustified and grossly disproportionate to this offense.”
New Application
In response, the government on April 25, 2019, filed an amended application for a forfeiture, explaining:
“The proposed order limits the forfeiture of Defendant’s rights and interests in the Marks to the very specific statutory and common law rights that grant Defendant the ability to exercise and enforce exclusive use of and control over the Marks.”
It said its new proposed Preliminary Order of Forfeiture (“POF”) “places no restraints or limitations on the display or use of the Marks by Defendant or its individual members” and would “simply extinguish Defendant’s statutory and common law rights to prevent others from using or displaying the Marks through legal process.”
Carter on May 17, 2019, imposed a $500,000 fine on the organization, placed it on probation for five years, and, as to the renewed bid for a forfeiture, said simply:
“The Second Application for Order for Forfeiture against defendant Mongol Nation is DENIED.”
Thomas’s Opinion
In Friday’s opinion, Thomas said:
“In trying to mitigate the constitutional problems the district court raised in addressing the first POF, the Government has created a new problem: the method of forfeiture contemplated by the second POF is precluded by the plain language of RICO’s forfeiture provision. The RICO statute provides that ‘all right, title, and interest in property [forfeitable under RICO] vests in the United States upon the commission of the act giving rise to forfeiture under this section.’ 18 U.S.C. § 1963(c) (emphasis added). But…the entire premise of the second POF is that it ‘expressly would not vest title to the forfeited marks in the government.’…The second POF is thus facially inconsistent with RICO’s forfeiture provision: RICO provides no mechanism for forfeiture to occur without a transfer of title to the Government. Denial of the POF was therefore warranted on these grounds.”
She added:
“When confronted with this conflict between the text of RICO’s forfeiture provision and its second proposed POF at oral argument, the Government responded that we should remand to the district court with directions to enter the first POF if vestiture of title to the Marks is statutorily required under RICO. The Government, however, never appealed the district court’s denial of its first POF. choosing instead to propose the second POF at issue here. We therefore decline to reach any issues regarding the propriety of entry of the first POF.”
Mongol Nation’s Appeal
In contesting its conviction of RICO violations and conspiracy to violate RICO, Mongol Nation argued that it is not an indictable “person.” Thomas responded:
“It is undisputed that Mongol Nation never raised this argument in the district court. We conclude that this unpreserved argument is non-jurisdictional, and that Mongol Nation has not established that the district court plainly erred by not dismissing the indictment.”
Mongol Nation—also known as Mongols Motorcycle Club—has an estimated 2,000 “full patch” members and has a presence internationally. Thomas explained in a footnote:
“The phrase ‘full patch’ refers to the Mongols Gang’s practice of issuing incentives, such as tattoos and patches, to reward its members for, among other things, their commission of violent acts.”
She also noted:
“Of the 79 gang members originally indicted, 77 pleaded guilty, one died before the disposition of any charges, and one was found not competent to stand trial.”
The group originated in Montebello in 1969 and is headquartered in Southern California.
The case is United States v. Mongol Nation, 19-50176.
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