Desoto v. Condon, 032410 FED9, 08-56832
|Party Name:||TOMMY DESOTO, an individual; GEORGE KOSTY, an individual; STEVE TERRILL, an individual; ANTOINETTE CARDENAS, an individual; DOUGLAS LOVISON, an individual; KATHY FERRIN, an individual, Plaintiffs-Appellants, v. CHRISTOPHER CONDON, an individual; RICHARD CONDON, an individual; TRAGO LP, a British Virgin Islands limited partnership; FX HOLDINGS INTER|
|Judge Panel:||Before: RYMER, WARDLAW and N.R. SMITH, Circuit Judges.|
|Case Date:||March 24, 2010|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
NOT FOR PUBLICATION
Argued and Submitted March 4, 2010 Pasadena, California
Appeal from the United States District Court No. 8:08-cv-00514-AHS-MLG for the Central District of California Alicemarie H. Stotler, Senior District Judge, Presiding
Tommy Desoto and others who are limited partners of Trago LP, shareholders of Trago International, or creditors of Trago LP (collectively, Desoto) appeal the district court's order dismissing with prejudice their Racketeer Influenced and Corrupt Organizations Act (RICO) claims against Christopher Condon and others (collectively, Condon) for stealing the assets of Trago LP. We affirm.
We review a district court's dismissal for failure to state a claim de novo. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). "We review the district court's denial of leave to amend the complaint for abuse of discretion." Gardner v. Martino, 563 F.3d 981, 990 (9th Cir. 2009).
The district court properly concluded that Desoto lacks RICO standing. Shareholders and limited partners typically lack standing to assert RICO claims where their harm is derivative of their corporation or partnership's harm. See Sparling v. Hoffman Constr. Co., 864 F.2d 635, 640-41 (9th Cir. 1988). Such plaintiffs can establish standing only by showing an injury "distinct from that to other shareholders" or a special duty between the shareholder and the defendant. Id. at 640-41. The gravamen of...
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