County of Marin v. Deloitte Consulting LLP
836 F. Supp. 2d 1030
N.D. Cal.2011Background
- Marin County sued Deloitte, SAP America, Inc., and SAP Public Services (SAP) over an ERP implementation under the ISA/SLA.
- Marin alleged misrepresentation, improper performance, and concealment related to Deloitte's capability to implement SAP software.
- A second RICO-related action was filed, alleging fraud, conspiracy, fiduciary breach, Government Code 1090 violations, and related claims.
- Defendants removed the action to federal court; Marin Amended Complaint (AC) is challenged as to sufficiency.
- The court grants in part and denies in part SAP’s and Culver’s motions to dismiss, with leave to amend where merited.
- Key issues focus on whether Marin pleaded viable RICO/predicate acts, aiding/abetting, conspiracy, 1090 claims, and immunity defenses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RICO viability against SAP | Marin pleads predicate acts (mail/wire/bribery) and a RICO enterprise. | Allegations are insufficient, with puffery and lack of plausibility for predicate acts and pattern. | RICO claims dismissed as to SAP; leave to amend. |
| Aiding and abetting Culver’s fraud/breach of fiduciary duty | SAP aided Culver by fostering employment discussions to secure funds. | Lacks sufficient basis to claim aiding and abetting. | Aiding/abetting claim adequately alleged; survives dismissal. |
| Common law conspiracy | Marin asserts civil conspiracy with SAP. | No viable underlying wrongful conduct proven. | Conspiracy claim dismissed with leave to amend. |
| Government Code 1090 claims against SAP | Culver’s financial interests and contract influence render 1090 liability plausible. | Alleged interests insufficient or improperly tied to contracts. | 1090 claims against SAP survive in part; relation to Culver not yet resolved. |
| Culver immunity and scope of liability | Culver is not immune; acted in non-policy, operational capacity. | Section 820.2/821.2 immunities shield discretionary/permit-like acts. | Culver not immune; some fraud/breach claims allowed to proceed at pleading stage. |
Key Cases Cited
- Sanford v. MemberWorks, Inc., 625 F.3d 550 (9th Cir. 2010) (elements and pleading standards for mail/wire fraud under Rule 9(b))
- Moore v. Kayport Package Express, Inc., 885 F.2d 531 (9th Cir. 1989) (pleading time/place/content for fraud claims under Rule 9(b))
- Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038 (9th Cir. 2008) (quantifiable vs. puffery and customer reliance standards)
- Williams v. Aztar Indiana Gaming Corp., 351 F.3d 294 (7th Cir. 2003) (sales puffery vs. actionable misrepresentation)
- Byrne v. Nezhat, 261 F.3d 1075 (11th Cir. 2001) (limits of actionable misrepresentations in fraud claims)
- Forsyth v. Humana, Inc., 114 F.3d 1467 (9th Cir. 1997) (merchant/employee misrepresentations and damages)
- Cal. Gov't Code § 1090 context, Klistoff v. Superior Court (Cal. Ct. App. 2007) (only government officials liable under 1090)