3:16-cv-02922
S.D. Cal.Mar 23, 2018Background
- In 2011 Andreoli sold his ownership interests in a group of FDI entities to Youngevity under an Amended and Restated Equity Purchase Agreement and was appointed Youngevity president until Nov. 30, 2015.
- Andreoli alleges defendants coerced a 2014 amendment reducing the purchase price, refused to close on a separate real‑property (FDIR) closing while Youngevity paid rent, stopped commission payments, and coerced his resignation; he sued in Nov. 2016 asserting contract, employment, fraud, UCL and related claims.
- Youngevity had earlier filed a separate lawsuit (the "Youngevity action") naming Andreoli and others as defendants; that action and this case are pending in the same district but not before the same initial judge.
- Defendants moved to dismiss/strike: invoking the first‑to‑file rule and compulsory counterclaims, California’s Anti‑SLAPP statute as to the UCL claim, to compel arbitration of contract claims, and to dismiss multiple causes of action under Rules 8/9(b)/12(b)(6).
- The court (March 23, 2018) denied dismissal under the first‑to‑file/compulsory‑counterclaim theory, granted Anti‑SLAPP in part (striking specific UCL allegations), denied the arbitration motion without prejudice, granted in part and denied in part the Rule 12 motions, and denied consolidation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| First‑to‑file / compulsory counterclaims | Andreoli filed before a responsive pleading was required; his claims are independent | Defendants: Andreoli’s claims are duplicative and should be dismissed as first‑filed or compulsory counterclaims | Court declined to apply first‑to‑file where cases are before same district judge; Rule 13(a) inapplicable because defendants had not served a responsive pleading — motion denied on this ground |
| Anti‑SLAPP attack on UCL claim | UCL claim alleges multiple bases (including non‑protected conduct) | Defendants: UCL as pleaded arises from protected petitioning (filing the Youngevity suit) and is subject to §425.16 | Court found parts of UCL arise from protected activity; litigation privilege bars allegations that the filing was a "sham" — paragraphs 225 and 228 struck; remainder survives as to alleged unlawful restraints (Cal. Bus. & Prof. Code §16600) |
| Motion to compel arbitration of breach claim | Andreoli: no signed distributor arbitration agreements executed by him or the four distributors | Defendants: distributorship agreements contain arbitration clauses covering disputes | Defendants failed to prove by preponderance that Andreoli (or distributors) agreed to arbitration; motion denied without prejudice (may renew with authenticated agreements) |
| Rule 12(b)(6) challenges to claims | Andreoli: pleads breach of the Amended Purchase Agreements, employment claims, conversion, UCL, etc. | Defendants: various deficiencies—statute of limitations, failure to plead fraud with particularity, claims barred or duplicative, corporate‑agent conspiracy, lack of standing for some UCL theories | Court: denied dismissal of breach of contract (count 1), breach of employment (count 2), conversion (count 9), and UCL insofar as it alleges unlawful restraints; granted dismissal (with leave to amend) of counts 3–8 (implied covenant, unjust enrichment, wrongful termination public policy, fraud, civil conspiracy, breach of fiduciary duty) |
Key Cases Cited
- Church of Scientology of California v. United States Dep’t of the Army, 611 F.2d 738 (9th Cir. 1979) (first‑to‑file doctrine promotes judicial efficiency)
- Navellier v. Sletten, 29 Cal.4th 82 (Cal. 2002) (two‑step anti‑SLAPP burden shifting and analysis)
- Rusheen v. Cohen, 37 Cal.4th 1048 (Cal. 2006) (filing a lawsuit is protected petitioning activity under anti‑SLAPP)
- Baral v. Schnitt, 1 Cal.5th 376 (Cal. 2016) (requirement to show probability of prevailing on each claim based on protected activity; partial striking of mixed claims)
- Makaeff v. Trump Univ., LLC, 715 F.3d 254 (9th Cir. 2013) (anti‑SLAPP evaluation in federal court; standard whether reasonable jury could find for plaintiff)
- Action Apartment Ass’n Inc. v. City of Santa Monica, 41 Cal.4th 1232 (Cal. 2007) (litigation privilege protects communications made in judicial proceedings)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (U.S. 1985) (FAA compels district courts to direct arbitration where a valid arbitration agreement covers the dispute)
- Norcia v. Samsung Telecomms. Am. LLC, 845 F.3d 1279 (9th Cir. 2017) (party seeking to compel arbitration bears burden to prove agreement by preponderance)
- Cox v. Ocean View Hotel Corp., 533 F.3d 1114 (9th Cir. 2008) (court must determine existence and scope of arbitration agreement)
- Careau & Co. v. Security Pacific Business Credit, Inc., 222 Cal. App. 3d 1371 (Cal. Ct. App. 1990) (implied covenant claim cannot duplicate contract breach alone)