Ninth Circuit sides with Mongol Nation, letting them keep trademark logo

(CN) — The Mongol Nation Motorcycle Club can keep their trademark logo, typically worn on jackets and vests by members, thanks to a Ninth Circuit ruling handed down Friday. But the three-judge panel also declined to overturn the 2018 criminal conviction of the organization on federal racketeering charges.

In a written statement, Stephen Stubbs, the Mongols general counsel, called the ruling "a victory not only for the Mongols Motorcycle Club, but for all motorcycle clubs, freedom, and America as a whole."

Headquartered in Southern California, the Mongols Motorcycle Club has been around since the late 1960s, and has roughly 2,000 members spread across different chapters around the world. Federal prosecutors have described the club as "a beehive of pernicious criminal activity," and "a group of violent motorcycle gang members who orchestrated the Mongol Gang’s commission of brutal crimes, including multiple murders, assaults, shootings, stabbings and drug trafficking."

After a decade-long prosecution, 77 members of the gang were convicted, as was the Mongols organization itself, under the Racketeer Influenced and Corrupt Organizations Act (RICO). A federal jury ordered the club be fined $500,000 and forced to forfeit a large stockpile of vests, guns and ammunition seized by federal agents in raids. The jury also decided the club should forfeit their trademarked patch — a cartoon depiction of a Mongol warrior riding a motorcycle — over to the government.

Months after the verdict, U.S. District Judge David Carter said the Mongols could keep their trademark, ruling that such a forfeiture would violate its First Amendment rights to free speech and association, and would also constitute an excessive fine prohibited by the Eighth Amendment.

Both parties appealed. The Mongols argued the organization wasn't an indictable "person" under the RICO statute. The federal government asked the Ninth Circuit to simply dissolve the Mongols' trademark, effectively allowing anyone to buy and sell products with the design.

During oral arguments held this past September, Mongol Nation attorney George Steele said that dissolving the trademark could lead to violence, since motorcycle gangs often use intimidation and force to make sure no non-members wear their logos. That drew a retort from Assistant U.S. Attorney Bram Alden.

"All we are asking for now is that Mongol Nation be precluded from using trademark law and weaponizing it against what they would call potential infringers of the mark," Alden told the panel. "I understand that may not be much, but that is the limited relief the government Is now seeking in order to accommodate the district court's concerns."

In a unanimous opinion, U.S. Circuit Judge Holly Thomas, a Joe Biden appointee, wrote that the RICO law's forfeiture provision only allows the government to seize property, not destroy it.

"The government effectively sought an order seizing and extinguishing the Mongols’ right to exclusive use of its marks without the government itself ever seizing title to the marks," Thomas wrote, adding that "RICO provides no mechanism for forfeiture without a transfer of title to the government."

Stubbs, the Mongols general counsel, applauded the appellate ruling. "Mongol Nation is thrilled to push back against government overreach and win this important freedom of speech battle, first in the federal district court, and then at the Ninth Circuit Court of Appeals," Stubbs said in the statement. "The Mongol patch is a symbol of the esteemed brotherhood of its members, and the Ninth circuit stood strong against the government’s unconstitutional attempt to ban and extinguish important symbolic free speech."

A spokesman for the U.S. Attorney's Office declined to comment on the ruling.

But the panel upheld the RICO conviction, rejecting the Mongols' argument that since the indictment filed against them described the club as existing for unlawful purposes only, it didn't qualify as a property-owning unincorporated association, and therefore couldn't prosecuted under RICO. Thomas found that argument mischaracterized the indictment, which alleged "the purposes of the Mongols Gang... included, but were not limited to" sacral unlawful purposes.

"The indictment expressly contemplated that the association may exist for other purposes — perhaps including lawful ones," Thomas wrote for the panel, which included U.S. Circuit Judges Sandra Ikuta, a George W. Bush appointee, and Danielle Forrest, a Donald Trump appointee.

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