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Baker v. Patterson

United States District Court, D. Idaho

October 28, 2016

SUZETTE BAKER; CAMILLE ADAMS; DONJUA MOSELEY; JENALI GRAHAM; CHERYL STONE; GLORIA PRIETO; FALLON MATTHEWS; PENNY DALTON; CHARISSE STEVENSON; KODI TWISS; TRINA SMITH; DORETTA LOPEZ; ELIZABETH CARDINET; CRISTINA MASCCORRO; CARLA WEAVER; and HEIDI SKAGGS, Plaintiffs,
v.
TEMP R. PATTERSON, M.D.; TEMP R. PATTERSON, M.D., P.A.; AMBULATORY SURGERY CENTER OF BURLEY, L.L.C.; JOSEPH R. PETERSEN, M.D., and JOHN DOES 1 THROUGH 10, Defendants.

          MEMORANDUM OPINION AND ORDER REGARDING MOTIONS TO DISMISS AND TO STAY

          MARK W. BENNETT U.S. DISTRICT COURT JUDGE

         TABLE OF CONTENTS

         I. THE MOTION TO STAY ................................................................. 3

         II. THE MOTIONS TO DISMISS ........................................................... 7

         A. The Sufficiency Of The Pleading Of The RICO Claims .................... 7

         B. Leave To Amend .................................................................. 13

         III. CONCLUSION ............................................................................ 14

         This action, involving civil claims pursuant to the federal Racketeering Influenced and Corrupt Organization Act (RICO), and various state law claims, arises from a doctor's alleged importation and use of Chinese manufactured counterfeit Botox and Chinese manufactured breast implants, which were not approved by the Federal Drug Administration (FDA), on various patients of the doctor's practice in Burley, Idaho. Two of the named defendants are the doctor and his professional association (the Patterson Defendants). Two other named defendants are a surgery center, where the doctor performed his breast implants, and another doctor, who operated that surgery center and leased office space to the doctor (the Petersen Defendants). This case is now before me on the following motions: (1) the Patterson Defendants' June 15, 2016, Motion To Dismiss Pursuant To F.R.C.P. 12(b)(1) And 12(b)(6) (docket no. 17); (2) the Petersen Defendants' June 16, 2016, Motion To Dismiss (docket no. 20); and (3) the Patterson Defendants' July 11, 2016, Motion To Stay Civil Proceedings (docket no. 27).[1] Pursuant to a Stipulation To Stay Proceedings (docket no. 29), filed by the parties on July 18, 2016, briefing on these motions was completed on August 11, 2016. I find it appropriate to consider these motions on the parties' written submissions, without oral arguments.

         I. THE MOTION TO STAY

         Although it is the last motion filed, I will consider, first, the Patterson Defendants' July 11, 2016, Motion To Stay Civil Proceedings (docket no. 27), because it challenges the propriety of further proceedings in this action while individual defendant Temp R. Patterson is under investigation by the FDA, which may result in criminal charges and proceedings. Patterson argues the FDA's investigation has already involved the confiscation of the breast implants removed from one of the plaintiffs and the execution of a search warrant by six federal agents and additional law enforcement officers at his home and office, resulting in the seizure of records, computers, and other items. He argues that, under these circumstances, this civil action, involving alleged predicate offenses of mail fraud and wire fraud, should be stayed. Patterson argues that, in the absence of a stay, he faces the dilemma of asserting his Fifth Amendment right against self-incrimination or adequately defending this action. The plaintiffs counter that there is, as yet, no criminal indictment against Patterson, so that a criminal prosecution is speculative. They also argue that this case can be adequately prosecuted and defended on the basis of information available from sources other than Patterson, so that it is appropriate to proceed with their claims in light of Patterson's wrongful conduct toward them.

         As the Ninth Circuit Court of Appeals has explained,

The Constitution does not ordinarily require a stay of civil proceedings pending the outcome of criminal proceedings. Federal Sav. & Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir.1989); Securities & Exchange Comm'n v. Dresser Indus., 628 F.2d 1368, 1375 (D.C. Cir.), cert. denied, 449 U.S. 993, 101 S.Ct. 529, 66 L.Ed.2d 289 (1980). “In the absence of substantial prejudice to the rights of the parties involved, [simultaneous] parallel [civil and criminal] proceedings are unobjectionable under our jurisprudence.” Dresser, 628 F.2d at 1374. “Nevertheless, a court may decide in its discretion to stay civil proceedings ... ‘when the interests of justice seem [ ] to require such action.'” Id. at 1375 (quoting United States v. Kordel, 397 U.S. 1, 12 n. 27, 90 S.Ct. 763, 769 n. 27, 25 L.Ed.2d 1 (1970)).
The decision whether to stay civil proceedings in the face of a parallel criminal proceeding should be made “in light of the particular circumstances and competing interests involved in the case.” Molinaro, 889 F.2d at 902. This means the decisionmaker should consider “the extent to which the defendant's fifth amendment rights are implicated.” Id. In addition, the decisionmaker should generally consider the following factors: (1) the interest of the plaintiffs in proceeding expeditiously with this litigation or any particular aspect of it, and the potential prejudice to plaintiffs of a delay; (2) the burden which any particular aspect of the proceedings may impose on defendants; (3) the convenience of the court in the management of its cases, and the efficient use of judicial resources; (4) the interests of persons not parties to the civil litigation; and (5) the interest of the public in the pending civil and criminal litigation. Id. at 903.

Keating v. Office of Thrift Supervision, 45 F.3d 322, 324-25 (9th Cir. 1995).

         In Keating, the court rejected the civil defendant's assertion, like Patterson's, here, that a stay was required in light of the potential implication of his Fifth Amendment rights. Id. at 326. The court explained:

A defendant has no absolute right not to be forced to choose between testifying in a civil matter and asserting his Fifth Amendment privilege. Not only is it permissible to conduct a civil proceeding at the same time as a related criminal proceeding, even if that necessitates invocation of the Fifth Amendment privilege, but it is even permissible for the trier of fact to draw adverse inferences from the invocation of the Fifth Amendment in a civil proceeding. Baxter v. Palmigiano, 425 U.S. 308, 318, 96 S.Ct. 1551, 1557, 47 L.Ed.2d 810 (1976).
In deciding whether to proceed with the hearing, the extent to which the defendant's Fifth Amendment rights are implicated is a significant factor for the [civil judge] to consider, but it is only one consideration to be weighed against others. Molinaro, 889 F.2d at 902.

Keating, 45 F.3d at 326. In that case, the court found that the civil defendant had adequate time to prepare for both proceedings, while the public's interest in speedy resolution of the civil proceedings would have been unnecessarily impaired by a stay, and the civil defendant's due ...


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