Metropolitan News-Enterprise


Friday, November 19, 2004


Page 1


Ninth Circuit Will Take Another Look at RICO Claim Filed by Yagman Against Police Department


By DAVID WATSON, Staff Writer


A lawsuit in which veteran civil rights lawyer Stephen Yagman claims racketeering in the Los Angles Police Department cost his client a job was revived yesterday by the Ninth U.S. Circuit Court of Appeals, which agreed to review the case en banc after a three-judge panel twice affirmed a ruling dismissing it.

Yagman told the MetNews he was “delighted” but “not surprised” by the order for en banc review, noting that the case already has an unusual history.

The three-judge panel unanimously ruled in January that Yagman’s client, David Diaz, could not state a cause of action under the Racketeer Influenced and Corrupt Organizations Act against the department and numerous officials. Judge Barry G. Silverman and Senior Judge Thomas G. Nelson joined Senior Judge Melvin Brunetti’s opinion for the court, which said Diaz’s claim that he lost employment or employment opportunities did not meet the requirement under RICO that a plaintiff have suffered an injury to “business or property.”

Diaz alleges in his suit that three officers involved in the Rampart scandal fabricated evidence to support a charge of assault with a deadly weapon against him and conspired to obtain a false conviction. The plaintiff is currently incarcerated, Yagman said.

His suit was dismissed by U.S. District Court Judge Gary A. Feess of the Central District of California based on failure to satisfy the “business or property” requirement. Yagman said yesterday that after that ruling was affirmed by the three-judge panel, he filed a petition for en banc review.

Instead, the panel issued an amended opinion in August in which Brunetti said the complaint failed to sufficiently allege that Diaz actually lost a job as a result of the police misconduct. At best, he said, it claimed Diaz missed out on job opportunities.

Yagman asserted yesterday that his client lost both a job and the chance to be hired for other jobs, and Silverman filed a dissent to the amended opinion in which he suggested, in a footnote, that the complaint adequately alleged just that.

The complaint stated that Diaz was injured in his “businesses and/or property” and that he “lost employment, employment opportunities, and the wages and other compensation associated with said business, employment and opportunities, in that [he] was rendered unable to pursue gainful employment while defending himself against unjust charges and while unjustly incarcerated.”

In any case, Silverman argued, the injuries alleged by Diaz were “at least as tangible as” those claimed in Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (2002), a case in which the Ninth Circuit ruled that documented farmworkers had RICO standing to complain that fruit growers had conspired to hire undocumented workers in order to depress wages.

“If lower wages caused by racketeering activity is a sufficient injury to property or business to withstand a motion to dismiss, why isn’t loss of wages?” Silverman asked. The dissenting judge pointed out that the Fifth Circuit and at least two district courts have found similar losses sufficient to withstand motions to dismiss RICO  claims.

In issuing its amended opinion in August, the panel also ordered that “[n]o subsequent petitions for rehearing and petitions for rehearing en banc may be filed in response to” the new ruling.

Asked how he managed to obtain the en banc order issued yesterday in view of that restriction, Yagman declared:

“I performed an act of magic.”

Magic, he pointed out, is no longer magic if the means by which its results are produced are revealed.

Yagman said it was highly unusual to persuade a panel member to change his or her opinion after the appeals court’s ruling has been issued. The attorney said Silverman’s dissent “really foretold” the court’s action yesterday in ordering further review.

“He hit the nail right on the head,” Yagman commented.

The veteran litigator called Brunetti’s effort to distinguish a lost job from a lost job opportunity “a distinction without a difference.” Neither Brunetti nor Nelson is eligible to serve on the 11-judge panel that will rehear the case en banc, Yagman noted, since both are senior judges.

In her order for an en banc rehearing, Chief Judge Mary M. Schroeder said a majority of the court’s unrecused regular active judges had voted in favor of taking another look at the case. She said two judges—Raymond C. Fisher and Diarmuid O’Scannlain—recused themselves.

Fisher, a former member of the Los Angeles Board of Police Commissioners, is named as a defendant in the case.

The case is Diaz v. Parks, 02-56818.


Copyright 2004, Metropolitan News Company