Mongols Nation Finds No Xanadu In Lancaster

In July 2009, the Mongols Nation Motorcycle Club, Inc. planned to hold its annual convention in Lancaster, California.  Allegedly, the mayor was not pleased with the prospect of hosting a social and fraternal organization with an emphasis on riding motorcycles.  Mongols Nation responded by filing a lawsuit against the city, the mayor and various members of the city council.  The lawsuit alleged state and federal civil rights violations, intentional infliction of emotional distress, libel and slander.

The defendants demurred to the complaint and filed a special motion to strike pursuant to Section 425.16 of the California Code of Civil Procedure (aka the Anti-SLAPP statute).  The trial court denied the defendants’ motion and they appealed.  Then, Mongols Nation filed a certificate of dissolution with the California Secretary of State.  For the Mongols Nation this filing worked out about as well as the battle of Ain Jalut did for the historical Mongols. Relying on Corporations Code Section 2010(a) & (b), Mongols Nation argued that its corporate dissolution had no impact on the litigation because a dissolved corporation continues to exist for the purpose of winding up its affairs, and no action or proceeding to which a corporation is a party abates by reason of its dissolution.  However, the Court of Appeal found that the continued pursuit of litigation by Mongols Nation could not be part of its winding up process because its certificate of dissolution stated that it was at all times devoid of assets, debts or liabilities.  Mongols Nation Motorcycle Club, Inc. v. City of Lancaster, 2012 Cal. App. LEXIS 856 (Aug. 2, 2012).

The take away from this case is to be careful about filing a certificate of dissolution with the California Secretary when litigation is pending. According to the Court of Appeal, a premature filing may moot your appeal.