NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 18 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
ROBERT OZERAN, an individual, No. 18-55675
Plaintiff-Appellant, D.C. No. 2:17-cv-07965-DOC-JDE
v. MEMORANDUM* ROBIN JACOBS, an individual, DBA The Law Offices of Robin Jacobs, Inc., a California Company; et al.,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California David O. Carter, District Judge, Presiding
Submitted November 15, 2019** Pasadena, California
Before: M. SMITH, MILLER, and COLLINS, Circuit Judges.
Robert Ozeran appeals the district court’s decision dismissing with prejudice
his claims under the Racketeer Influenced and Corrupt Organizations Act
(“RICO”) and California’s Unfair Competition Law (“UCL”) and dismissing
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes that this case is suitable for decision without oral argument. See FED. R. APP. P. 34(a)(2)(C). without prejudice his common-law negligence claim. “‘We review de novo the
district court’s grant of a motion to dismiss under Rule 12(b)(6), accepting all
factual allegations in the complaint as true and construing them in the light most
favorable to the nonmoving party.’” Ebner v. Fresh, Inc., 838 F.3d 958, 962 (9th
Cir. 2016). We affirm.
1. Ozeran’s RICO claim was based on the theory that, as a workers’
compensation attorney competing in the same geographic market as the attorney
Defendants, he was injured by Defendants’ operation of an unlawful referral
scheme under which they would pay “cappers” a monthly fee in exchange for the
referral of “an agreed upon minimum number of retained clients per month.” This
scheme, according to Ozeran, constituted an enterprise that, together with other
related enterprises, was operated by Defendants through a pattern of mail and wire
fraud. We conclude that the district court properly dismissed this claim on the
ground that, as a matter of law, Ozeran could not satisfy the proximate causation
standards for civil RICO claims.
In order to establish proximate causation, a civil RICO plaintiff must plead
and prove that there is “‘some direct relation between the injury asserted and the
injurious conduct alleged.’” Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 457
(2006) (emphasis added). In Anza, the Supreme Court addressed a comparable
RICO theory under which the plaintiff steel-supply company alleged that its
2 principal competitor obtained increased market share by failing to collect state
sales tax on cash transactions (thereby unfairly lowering its effective prices) and
then submitting false tax returns to the state. Id. at 454. The Court held that, as a
matter of law, this claim was too indirect to establish proximate causation. Id. at
456–61. As the Court explained, the state was the direct victim of the predicate
acts of mail and wire fraud, and the plaintiff competitor was injured only indirectly
by virtue of the collateral impact of the defendants’ sales-tax cheating on the steel-
supply market. Id. at 460–61. The fact that the defendant carried out the scheme
in order to injure the plaintiff did not cure the lack of a direct connection between
the alleged RICO violation and the plaintiff’s injuries: “A RICO plaintiff cannot
circumvent the proximate-cause requirement simply by claiming that the
defendant’s aim was to increase market share at a competitor’s expense.” Id. at
460.
Ozeran’s RICO claim fails as a matter of law under Anza. Ozeran does not,
and could not, contend that he was the direct victim of the alleged predicate acts of
mail and wire fraud on which his RICO claim is based; rather, the direct victims of
those fraudulent acts were the recruited clients and the insurance companies from
whom the capping scheme was hidden. Like the plaintiff in Anza, Ozeran cannot
avoid his inability to allege proximate causation by alleging that Defendants’ “aim
was to increase market share at a competitor’s expense.” Anza, 547 U.S. at 460.
3 2. The district court correctly dismissed Ozeran’s UCL claim with prejudice
on the ground that no relief could be granted to Ozeran under that statute as a
matter of law.
The only remedies available to a private plaintiff under California’s UCL are
the equitable remedies of injunction and restitution. CAL. BUS. & PROF. CODE
§ 17203; Zhang v. Superior Court, 304 P.3d 163, 167–68 (Cal. 2013). Here,
Ozeran did not request injunctive relief, and so the only question is whether he
stated a claim for restitution under the UCL. The monetary remedies sought in
Ozeran’s operative complaint were “disgorgement of all the illegally obtained
proceeds,” “general and compensatory damages,” “treble actual damages under
RICO,” and punitive damages. Neither compensatory nor punitive damages are
available under the UCL, see Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d
937, 946 (Cal. 2003), and disgorgement is permitted only if it is “restitutionary,”
id. at 947. To qualify as “restitutionary,” the proceeds Ozeran sought to have
disgorged must be “money . . . that was once in [his] possession” or money in
which he “has an ownership interest” or “vested interest.” Id. But the “proceeds”
Defendants obtained here came from their clients, not from Ozeran, and Ozeran
has no “ownership” or “vested” interest in such funds. Ozeran’s allegation that he
experienced a “drop in clients that otherwise would have been represented by
[him] absent Defendants’ misconduct” constitutes the sort of “contingent
4 expectancy of payment” that is not recoverable under the UCL as a matter of law.
Id. at 948.
Ozeran’s reliance on Law Offices of Mathew Higbee v. Expungement
Assistance Servs., 153 Cal. Rptr. 3d 865 (Cal. Ct. App. 2013), is unavailing. The
only issue in that appeal was whether the plaintiff met the UCL standing
requirements set forth in Business and Professions Code section 17204, see id. at
878–79, and “the standards for establishing standing under section 17204 and
eligibility for restitution under section 17203 are wholly distinct,” Kwikset Corp. v.
Superior Court, 246 P.3d 877, 894 (Cal. 2011) (citation omitted). Although
Ozeran had statutory standing to bring this UCL suit, he is not entitled to
restitution under the UCL as a matter of law. Because Ozeran does not argue in
this appeal that he is entitled to any other form of relief, the district court properly
dismissed the UCL claim with prejudice.
3. The district court did not err in dismissing Ozeran’s negligence claim
without prejudice and remanding that claim for repleading in state court.1
To establish a negligence claim, the plaintiff must allege (inter alia) that the
defendant owed a duty of care to the plaintiff, but under California law, the
“general rule” is that there is no duty of care to avoid causing “purely economic
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 18 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
ROBERT OZERAN, an individual, No. 18-55675
Plaintiff-Appellant, D.C. No. 2:17-cv-07965-DOC-JDE
v. MEMORANDUM* ROBIN JACOBS, an individual, DBA The Law Offices of Robin Jacobs, Inc., a California Company; et al.,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California David O. Carter, District Judge, Presiding
Submitted November 15, 2019** Pasadena, California
Before: M. SMITH, MILLER, and COLLINS, Circuit Judges.
Robert Ozeran appeals the district court’s decision dismissing with prejudice
his claims under the Racketeer Influenced and Corrupt Organizations Act
(“RICO”) and California’s Unfair Competition Law (“UCL”) and dismissing
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes that this case is suitable for decision without oral argument. See FED. R. APP. P. 34(a)(2)(C). without prejudice his common-law negligence claim. “‘We review de novo the
district court’s grant of a motion to dismiss under Rule 12(b)(6), accepting all
factual allegations in the complaint as true and construing them in the light most
favorable to the nonmoving party.’” Ebner v. Fresh, Inc., 838 F.3d 958, 962 (9th
Cir. 2016). We affirm.
1. Ozeran’s RICO claim was based on the theory that, as a workers’
compensation attorney competing in the same geographic market as the attorney
Defendants, he was injured by Defendants’ operation of an unlawful referral
scheme under which they would pay “cappers” a monthly fee in exchange for the
referral of “an agreed upon minimum number of retained clients per month.” This
scheme, according to Ozeran, constituted an enterprise that, together with other
related enterprises, was operated by Defendants through a pattern of mail and wire
fraud. We conclude that the district court properly dismissed this claim on the
ground that, as a matter of law, Ozeran could not satisfy the proximate causation
standards for civil RICO claims.
In order to establish proximate causation, a civil RICO plaintiff must plead
and prove that there is “‘some direct relation between the injury asserted and the
injurious conduct alleged.’” Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 457
(2006) (emphasis added). In Anza, the Supreme Court addressed a comparable
RICO theory under which the plaintiff steel-supply company alleged that its
2 principal competitor obtained increased market share by failing to collect state
sales tax on cash transactions (thereby unfairly lowering its effective prices) and
then submitting false tax returns to the state. Id. at 454. The Court held that, as a
matter of law, this claim was too indirect to establish proximate causation. Id. at
456–61. As the Court explained, the state was the direct victim of the predicate
acts of mail and wire fraud, and the plaintiff competitor was injured only indirectly
by virtue of the collateral impact of the defendants’ sales-tax cheating on the steel-
supply market. Id. at 460–61. The fact that the defendant carried out the scheme
in order to injure the plaintiff did not cure the lack of a direct connection between
the alleged RICO violation and the plaintiff’s injuries: “A RICO plaintiff cannot
circumvent the proximate-cause requirement simply by claiming that the
defendant’s aim was to increase market share at a competitor’s expense.” Id. at
460.
Ozeran’s RICO claim fails as a matter of law under Anza. Ozeran does not,
and could not, contend that he was the direct victim of the alleged predicate acts of
mail and wire fraud on which his RICO claim is based; rather, the direct victims of
those fraudulent acts were the recruited clients and the insurance companies from
whom the capping scheme was hidden. Like the plaintiff in Anza, Ozeran cannot
avoid his inability to allege proximate causation by alleging that Defendants’ “aim
was to increase market share at a competitor’s expense.” Anza, 547 U.S. at 460.
3 2. The district court correctly dismissed Ozeran’s UCL claim with prejudice
on the ground that no relief could be granted to Ozeran under that statute as a
matter of law.
The only remedies available to a private plaintiff under California’s UCL are
the equitable remedies of injunction and restitution. CAL. BUS. & PROF. CODE
§ 17203; Zhang v. Superior Court, 304 P.3d 163, 167–68 (Cal. 2013). Here,
Ozeran did not request injunctive relief, and so the only question is whether he
stated a claim for restitution under the UCL. The monetary remedies sought in
Ozeran’s operative complaint were “disgorgement of all the illegally obtained
proceeds,” “general and compensatory damages,” “treble actual damages under
RICO,” and punitive damages. Neither compensatory nor punitive damages are
available under the UCL, see Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d
937, 946 (Cal. 2003), and disgorgement is permitted only if it is “restitutionary,”
id. at 947. To qualify as “restitutionary,” the proceeds Ozeran sought to have
disgorged must be “money . . . that was once in [his] possession” or money in
which he “has an ownership interest” or “vested interest.” Id. But the “proceeds”
Defendants obtained here came from their clients, not from Ozeran, and Ozeran
has no “ownership” or “vested” interest in such funds. Ozeran’s allegation that he
experienced a “drop in clients that otherwise would have been represented by
[him] absent Defendants’ misconduct” constitutes the sort of “contingent
4 expectancy of payment” that is not recoverable under the UCL as a matter of law.
Id. at 948.
Ozeran’s reliance on Law Offices of Mathew Higbee v. Expungement
Assistance Servs., 153 Cal. Rptr. 3d 865 (Cal. Ct. App. 2013), is unavailing. The
only issue in that appeal was whether the plaintiff met the UCL standing
requirements set forth in Business and Professions Code section 17204, see id. at
878–79, and “the standards for establishing standing under section 17204 and
eligibility for restitution under section 17203 are wholly distinct,” Kwikset Corp. v.
Superior Court, 246 P.3d 877, 894 (Cal. 2011) (citation omitted). Although
Ozeran had statutory standing to bring this UCL suit, he is not entitled to
restitution under the UCL as a matter of law. Because Ozeran does not argue in
this appeal that he is entitled to any other form of relief, the district court properly
dismissed the UCL claim with prejudice.
3. The district court did not err in dismissing Ozeran’s negligence claim
without prejudice and remanding that claim for repleading in state court.1
To establish a negligence claim, the plaintiff must allege (inter alia) that the
defendant owed a duty of care to the plaintiff, but under California law, the
“general rule” is that there is no duty of care to avoid causing “purely economic
1 Certain Appellees have filed a motion to take judicial notice of documents related to the proceedings that occurred in the state court after remand, but in view of our disposition of this case, we deny that motion as moot.
5 losses” to third parties. Southern Cal. Gas Leak Cases, 441 P.3d 881, 886–87
(Cal. 2019). California courts have recognized an exception to that general rule
based on a consideration of the six-factor duty test set forth in Biakanja v. Irving,
320 P.2d 16, 19 (Cal. 1958). See Southern Cal. Gas Leak Cases, 441 P.3d at 887;
see also Centinela Freeman Emergency Med. Assocs. v. Health Net of Cal., Inc.,
382 P.3d 1116, 1128–31 (Cal. 2016) (applying the Biakanja factors). But Ozeran
does not rest his negligence claim on any such Biakanja theory. Instead, he asserts
that the statutory prohibitions against capping and improper solicitation gave rise
to a duty of care towards other attorneys (such as Ozeran). See, e.g., CAL. BUS. &
PROF. CODE § 6152; CAL. INS. CODE § 750. The district court generously construed
Ozeran’s complaint as asserting a claim for negligence per se, and the court then
correctly dismissed that claim as inadequately pleaded.
To succeed under a theory of negligence per se, a plaintiff must show, inter
alia, that he or she is a member “of the class of persons for whose protection the
[allegedly violated] statute, ordinance, or regulation was adopted.” CAL. EVID.
CODE § 669(a)(4); see also Elsner v. Uveges, 102 P.3d 915, 927 (Cal. 2004) (§ 669
“codifies the common law doctrine of negligence per se, pursuant to which statutes
and regulations may be used to establish duties and standards of care in negligence
actions”); Resolution Trust Corp. v. Rossmoor Corp., 40 Cal. Rptr. 2d 328, 335
(Cal. Ct. App. 1995) (“statute or regulation creates duty only as [to] those it was
6 intended to protect”) (citing Haft v. Lone Palm Hotel, 478 P.2d 465, 468 (Cal.
1970)). The anti-capping and anti-solicitation statutes invoked by Ozeran focus on
the improper recruitment of clients and on the use of improper schemes in the
presentation of “claims under policies of insurance” to insurers. CAL. INS. CODE
§ 750; see also, e.g., CAL. BUS. & PROF. CODE § 6152. Even if such statutes can
also be said to rest on the broader interest in avoiding “debasing the legal
profession,” cf. Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 461 (1978), the
persons that these statutes aim to protect from such debasement are the directly
affected clients or insurers. To the extent that Ozeran contends that a duty should
extend beyond the direct victims of these practices to others that suffer economic
effects from such conduct, any such broader argument would have to be evaluated
under Biakanja, but no such Biakanja-based duty has been asserted here. The
district court did not err in dismissing this claim without prejudice.2
The judgment of the district court is AFFIRMED.
2 Because we conclude that Ozeran did not adequately allege a duty, we do not address the further issue of whether, if he had alleged such a duty owed to him, a breach of such a duty could be said to have proximately caused his alleged injuries.