Antitrust Law Daily Wrap Up, RICO—9thCir: Federal RICO, California Unfair Competition Law Claims Barred by Earlier Action, (Oct 22, 2012)

A 2008 federal action alleging federal civil RICO and California Unfair Competition Law claims was properly barred by res judicata for having the same factual basis as a 2004 federal court action, according to a not-for-publication opinion of the U.S. Court of Appeals in San Francisco (Subramanian v. St. Paul Fire & Marine Insurance, October 19, 2012, Per Curiam).

The civil RICO claims in the 2008 complaint arose from the “same transactional nucleus of facts” as the claims in the 2004 complaint. Although the second complaint named additional defendants, the alleged wrongful conduct of the new defendants was limited to their direction or control of the earlier-named defendants or their participation in the conduct of the defendants identified in the 2004 action, the appeals court found. Accordingly, the 2007 judgment in the first action barred the federal RICO claims in the 2008 complaint.

The state law claims of fraud and violation of the California Unfair Competition Law also were barred by the judgment in the first action. In both the 2004 and 2008 actions, the plaintiffs alleged fraud and unfair competition arising from the same mediation and settlement.

A claim that the district court judge should have recused himself—based on the defendants’ employment of the judge’s former law clerk—was rejected by the Ninth Circuit.

The district court’s order declaring plaintiff Subramanian a vexatious litigant and imposing prefiling restrictions was not an abuse of discretion because the court gave Subramanian notice and the opportunity to oppose the order, created a record adequate for review, made substantive findings of frivolousness, and tailored the order narrowly to prevent—or at least try to curb—the abusive conduct, the appeals court held.

The case is Nos. 08-17413 and 08-17414.

Mani Subramanian (Pro Se). James Steven Greenan (Greenan Peffer Sallender & Lally LLP) for St. Paul Fire & Marine Insurance Co.

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