Leaser v. Prime Ascot, L.P., 2:20-cv-02502

Background

Plaintiffs (tenants at Blue Rock Village in Vallejo and Park LaBrea in Los Angeles) brought a putative class action alleging systematic overcharges (improper late fees, early termination fees, improper rent charges), improper retention/handling of security deposits under Cal. Civ. Code § 1950.5, habitability failures (vermin), and related claims including negligence, breach of contract, and UCL violations.
The First Amended Complaint (FAC) asserts eight causes of action and targets numerous related corporate defendants (some were the tenants’ actual landlords; others are titleholders/management entities, collectively referred to as the “Standing Defendants”).
Defendants removed under CAFA and filed two motions to dismiss and a motion to stay discovery. The motions raised standing/traceability, pleading sufficiency for secondary-liability theories (aiding-and-abetting, conspiracy, alter-ego), Rule 12(f)/class-allegations challenges, UCL unfairness, and which entities qualify as “landlord” under § 1950.5.
The Court treated the standing challenges under Rule 12(b)(1) and considered the FAC and extrinsic evidence where appropriate; it denied premature attacks on class allegations.
Rulings: the Court denied dismissal of claims against the Standing Defendants (finding aiding-and-abetting allegations adequate), denied strike of conspiracy/alter-ego allegations, denied dismissal of the UCL “unfair” prong, granted dismissal of the § 1950.5 security-deposit claim as to non-landlord entities (but granted leave to amend as to Prime Administration), denied the second motion to dismiss, and denied the discovery stay as moot.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing of non-landlord/Standing Defendants (traceability)	Plaintiffs allege aiding-and-abetting, conspiracy, and interrelated corporate control tying Standing Defendants to the unlawful policies; traceability satisfied.	Standing Defendants contend plaintiffs lack any lease/contact with them so plaintiffs cannot trace injuries to those entities; juridical-links not applicable.	Denied dismissal — court finds FAC pleads sufficient aiding-and-abetting/concerted-scheme allegations to plausibly trace injuries to Standing Defendants.
Secondary-liability theories: conspiracy, aiding-and-abetting, alter-ego	Plaintiffs say these theories are plausibly pleaded and discovery may further show corporate relationships and communications.	Defendants argue these theories are conclusory, should be stricken under Rule 12(f).	Denied motion to strike; aiding-and-abetting and related allegations survive at pleading stage.
UCL — unfair prong sufficiency	Plaintiffs point to repeated allegations of improper late fees, early termination fees, withheld security deposits, and consumer injury to plead an “unfair” practice.	Defendants contend allegations are conclusory and fail to state an unfair business practice.	Denied dismissal — court holds factual allegations are sufficient under the balancing/public-policy tests to state an unfair-prong UCL claim.
§ 1950.5 security-deposit claim — which entities are "landlord"	Plaintiffs assert various entities, including Prime Administration, corresponded about deposits and inspections and thus can be liable under § 1950.5.	Defendants argue § 1950.5 obligations attach only to the actual landlord(s) with whom tenants contracted (Prime Ascot and Prime/Park LaBrea Titleholder).	Grant in part — claim dismissed as to entities not alleged to be tenants’ landlords; dismissal without prejudice and leave to amend as to Prime Administration if plaintiffs can plead landlord-level involvement.

Key Cases Cited

Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (identifies Article III standing elements: concrete injury, traceability, redressability)
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) (court must dismiss if it lacks subject-matter jurisdiction)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (plaintiff bears burden to establish standing at successive litigation stages)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual content permitting plausible inference of liability)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard and notice pleading)
La Mar v. H&B Novelty & Loan Co., 489 F.2d 461 (9th Cir. 1973) (describes juridical-links doctrine applicable in some class contexts)
Lierboe v. State Farm Mut. Auto. Ins. Co., 350 F.3d 1018 (9th Cir. 2003) (named class representatives must personally allege and show injury)
Drum v. San Fernando Valley Bar Ass’n, 182 Cal. App. 4th 247 (2010) (sets out tests for UCL “unfair” prong)
Schmier v. U.S. Court of Appeals for Ninth Circuit, 279 F.3d 817 (9th Cir. 2002) (injury must be actual or imminent for standing)
Lopez v. Smith, 203 F.3d 1122 (9th Cir. 2000) (leave to amend should be granted unless amendment cannot cure defects)