Depu v. Yahoo! Inc., 306 F. Supp. 3d 181

Background

Seven Chinese political activists and one spouse (Plaintiffs) allege they were imprisoned for online speech and are beneficiaries of a charitable fund created by Yahoo's 2007 settlement (the Wang Settlement) with imprisoned activists.
The Wang Settlement paid plaintiffs and directed $17.3 million to the Laogai Research Foundation (LRF) to establish the Yahoo Human Rights Fund (YHRF) to provide humanitarian and legal assistance and to resolve related claims. The settlement disclaimed third-party beneficiaries.
In 2009 the settlement was amended, creating the Yahoo Irrevocable Human Rights Trust 2009 (YIHRT) and transferring portions of the funds to the Laogai Human Rights Organization (LHRO); plaintiffs do not sue under the 2009 trust.
Plaintiffs allege mismanagement and depletion of the fund by Harry Wu, the LRF, LHRO, YHRF, Yahoo and certain executives, asserting trust claims, breach of settlement and unjust enrichment (Yu), and civil conspiracy. Yu had previously sued Wu/LRF in 2011 and released claims in a settlement dismissing that case with prejudice.
Defendants moved to dismiss; the court evaluated (1) whether the Wang Settlement created a charitable trust; (2) beneficiary standing under trust law and Article III; (3) whether Yu’s claims were released or insufficiently pleaded; and (4) viability of the civil conspiracy claim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did the 2007 Wang Settlement create a charitable trust?	Settlement and transfers to LRF/YHRF show a trust created to benefit imprisoned dissidents.	The settlement is a contract, contains no trust-creation language, disclaims third-party beneficiaries, and "in trust" label is insufficient.	No. Plaintiffs failed to plausibly allege intent to create a charitable trust; trust-based claims dismissed.
Do alleged beneficiaries have standing under trust law to enforce a charitable trust?	Plaintiffs are beneficiaries harmed by termination/depletion of the trust's humanitarian purpose.	Only public officers (e.g., state AG) ordinarily may enforce charitable trusts; private plaintiffs lack standing absent a special or small, distinct class.	No. Beneficiaries are part of a broad, indeterminate class; no special-interest exception; trust-enforcement standing denied.
Does Plaintiff Yu's breach-of-settlement and unjust enrichment claims survive (given her 2011 release)?	Yu disclaims prior conduct pre-2011 and alleges post-2011 misconduct; claims are different legal theories.	Yu executed a broad 2011 release covering claims arising out of prior dealings; breach claim lacks identification of specific contractual provisions; unjust enrichment is inconsistent with an existing contract.	Yu's claims are barred by the 2011 release and, independently, fail for insufficient pleading (no contract provision identified) and unjust enrichment untenable given the express contract.
Is civil conspiracy an independent actionable claim?	Plaintiffs allege a concerted scheme to misappropriate trust/settlement assets.	Civil conspiracy requires an underlying tort; plaintiffs pleaded no viable torts.	No. Conspiracy claim depends on other torts; with all substantive claims dismissed, conspiracy claim fails.

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plaintiff must plead facts that make entitlement to relief plausible)
Ashcroft v. Iqbal, 556 U.S. 662 (conclusory legal statements insufficient to survive motion to dismiss)
Duggan v. Keto, 554 A.2d 1126 (D.C. 1989) (elements required to establish a trust)
Family Fed’n for World Peace v. Hyun Jin Moon, 129 A.3d 234 (D.C. 2015) (standing to enforce charitable trusts typically reserved to public officers; limited exceptions)
Hooker v. Edes Home, 579 A.2d 608 (D.C. 1990) (exceptional beneficiary standing for small/distinct classes or special interest)
Halberstam v. Welch, 705 F.2d 472 (D.C. Cir. 1983) (civil conspiracy requires underlying tort)
Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (U.S.) (Article III standing requires concrete, particularized injury)