WILLIAM ANDREOLI, Plaintiff, v. YOUNGEVITY INTERNATIONAL, INC., et al., Defendants.
Case No.: 16-cv-02922-BTM-JLB
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
March 23, 2018
Barry Ted Moskowitz, Chief Judge
ORDER DENYING IN PART AND GRANTING IN PART DEFENDANTS’ MOTION TO DISMISS [ECF NO. 12.]
I. BACKGROUND
In August 2011, Youngevity purchased a series of companies, FDI entities1, from
In 2014, while Plaintiff remained employed by Youngevity, Defendants allegedly coerced Plaintiff into signing the First Amendment to the Amended Purchase Agreement2, which changed the previous acquisition purchase price and payment terms from $20,000,000 to $6,000,000. (Id. ¶¶ 36-43.) Plaintiff also claims that Defendants refused to close on the FDIR transaction and only paid rent and related expenses until December 2015, leaving Plaintiff with the burden and cost of running the FDIR operation. (Id. ¶ 58.) Additionally, Plaintiff alleges that Defendants coerced him into resigning on November 30, 2015. (Id. ¶ 67.) Since February 2016, Defendants have defaulted on their obligations under the Amended Purchase Agreements, as well as
In March 2016, Youngevity and Dr. Joel D. Wallach, founder of Youngevity, filed an action against numerous individuals, including Plaintiff, who left Youngevity to form a competing multi-level marketing corporation, Wakaya Perfection, LLC. That action, Youngevity, et al. v. Smith, et al., No. 16-cv-704-BTM-JLB (“Youngevity action“), remains before the Court. Before an answer was due in the Youngevity action, Plaintiff initiated this action on November 30, 2016. Plaintiff alleges the following causes of action: (1) breach of contract; (2) breach of employment contract; (3) breach of the implied covenant of good faith and fair dealing; (4) unjust enrichment/ restitution; (5) wrongful termination; (6) fraud; (7) civil conspiracy; (8) breach of fiduciary duty; (9) conversion; and (1) violations of California‘s Unfair Competition Laws (“UCL“).
II. DISCUSSION
A. First to File
Defendants argue that Plaintiff‘s complaint should be dismissed under the first-to-file rule because the Youngevity action was filed before Plaintiff initiated this action.
The first-to-file rule is recognized as a doctrine of federal comity, which allows a district court to decline jurisdiction over an action when a complaint involving the same parties and issues has already been filed in another district. Church of Scientology of California v. United States Dep‘t of the Army, 611 F.2d 738, 749 (9th Cir. 1979). The first-to-file rule is meant to “serve[] the purpose of promoting efficiency well and should not be disregarded lightly.” Id. at 750. While it generally applies to actions that are filed in separate district, courts have applied it to actions filed within the same district. See Wallerstein v. Dole Dresh Vegetables, Inc., 967 F. Supp. 2d 1289, 1294 (N.D. Cal. 2013); see also Keen v. Omni Limousine, No. 16-cv-01903-JCM-GWF, 2016 WL 6828199, at *2 (D. Nev. Nov. 18, 2016.) This case was originally filed before Judge Anthony J. Battaglia, but it was transferred to this Court pursuant to this district‘s low-number rule. Thus, the same concerns of judicial efficiency and uniformity are not present. The Court,
Defendants also argue that the claims should be dismissed because they would have been compulsory counterclaims in the Youngevity action but for Plaintiff filing this action before filing a responsive pleading.
B. California Code of Civil Procedure § 425.16, Anti-SLAPP Motion
Alternatively, Defendants move to strike count ten under California‘s Anti-SLAPP
(b)(1) A cause of action against a person arising from any act of that person in furtherance of the person‘s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.
(2) In making its determination, the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.
Courts apply a two-part test to determine whether an action is subject to an anti-SLAPP special motion to strike. Navellier v. Sletten, 29 Cal.4th 82, 88 (2002). First, the defendant must establish that “the challenged cause of action is one arising from protected activity.” Id. Once a defendant makes a threshold showing that the act in question is protected, the burden shifts to the plaintiff. Id. To resist the special motion to strike, the plaintiff must establish “a probability of prevailing on the claim.” Id. In federal court, “the claim should be dismissed if the plaintiff presents an insufficient legal basis for it, or if, on the basis of the facts shown by the plaintiff, ‘no reasonable jury could find for the plaintiff.‘” Makaeff v. Trump Univ., LLC, 715 F.3d 254, 261 (9th Cir. 2013) (citing Metabolife Int‘l, Inc. v. Wornick, 264 F.3d 832, 840 (9th Cir. 2001)). For a “mixed cause of action,” a court may rule on a plaintiff‘s specific allegations of protected activity “rather than reward artful pleading by ignoring such claims if they are mixed with assertions of unprotected activity.” Baral v. Schnitt, 1 Cal.5th 376, 393 (2016).
1. Step One: “Arising From” Requirement
First, Defendants must demonstrate that the challenged cause of action “‘arise[s]
(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.
“A claim arises from protected activity when that activity underlies or forms the basis for the claim.” Park, 2 Cal.5th at 1062 (emphasis added). Courts ruling on anti-SLAPP motions must determine “what the defendant‘s activity is that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.” Id. at 1063 (citations omitted). The mere fact that an action was triggered by protected activity does not mean that it “arose from that activity for the purposes of the anti-SLAPP statute.” Id. at 1063; see City of Cotati v. Cashman, 29 Cal.4th 69, 78 (2002) (“[A] claim filed in response to, or in retaliation for, threatened or actual litigation is not subject to the anti-SLAPP statute simply because it may be viewed as an oppressive litigation tactic.“). Thus, the only means by which a defendant can meet its burden under the anti-SLAPP statute is by demonstrating “that the defendant‘s conduct by which plaintiff claims to have been injured falls within one of the four categories described in [
Here, Defendants argue that count ten, at least in part, arises from a protected activity because it is based on the filing of the Youngevity lawsuit. Apart from incorporating by reference the preceding allegations, Plaintiff‘s tenth cause of action
2. Step Two: Possibility of Success on the Merits
Having determined that Plaintiff‘s tenth cause of action is based in part on protected activity, the Court next turns to Plaintiff‘s probability of prevailing on the merits. As the Supreme Court of California has held, a plaintiff cannot defeat an anti-SLAPP motion by merely establishing a probability of prevailing on any part of a pleaded cause of action. Baral, 1 Cal.5th at 392. Instead, “the plaintiff must make the requisite showing as to each challenged claim that is based on allegations of protected activity.” Id. Though how a plaintiff meets this standard varies with every case, “when the defendant seeks to strike particular claims supported by allegations of protected activity that appear alongside other claims within a single cause of action, the motion cannot be defeated by showing a likelihood of success on the claims arising from unprotected activity.” Id. Because count ten is based on both protected and unprotected activity, the Court focuses on the sufficiency of the claims arising from protected activity.
Defendants argue that Plaintiff cannot prevail on his UCL claim on this ground because it is barred by California‘s litigation privilege under
3. Attorneys’ Fees Award
Both parties move for attorneys’ fees related to the filing and defense of the anti-SLAPP motion.
Under the anti-SLAPP statute, “a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney‘s fees and costs.”
Here, Defendants moved to strike count ten in its entirety. The Court only grants Defendants’ motion in part because as a “mixed” cause of action, only certain allegations are subject to the anti-SLAPP statute. California courts have broadly interpreted the phrase “prevailing party” to favor an award of attorney fees to a partially successful defendant. See Mann v. Quality Old Time Serv., Inc., 139 Cal. App. 4th 328, 339 (2006)
Defendants “bear the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates.” ComputerXpress, Inc., 93 Cal. App. 4th at 1020 (citing Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)). Defendants have not met their burden. Thus, the Court denies without prejudice their request for attorneys’ fees. In renewing their motion, Defendants are directed to produce records sufficient to provide a proper basis for determining how much time was spent on the special motion to strike. Id.
C. Motion to Compel Arbitration
The Federal Arbitration Act (“FAA“) permits “[a] party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration [to] petition any United States district court . . . for an order directing that . . . arbitration proceed in the manner provided for in [the arbitration] agreement.
Defendants move the Court to compel Plaintiff to arbitrate count one of his FAC because it is allegedly subject to arbitration. In count one, Plaintiff claims that
In the event of a dispute with the Company, Distributor and the Company agree to participate in mediation in an earnest attempt to resolve the dispute prior to submitting it to binding arbitration pursuant to the Commercial Arbitration Rules then in effect of the American Arbitration Association, provided, however, that injunctive relief sought by the Company against any party shall be excluded from this clause. Such Arbitration shall occur in San Diego, California. Louisiana Distributors, however, may arbitration in New Orleans, Louisiana.
(Def.s’ MTD, Ex. C, § J9.)
While there is a strong policy favoring arbitration, “[a]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Norcia v. Samsung Telcoms. Am. LLC, 845 F.3d 1279, 1283 (9th Cir. 2017) (quoting AT&T Techs., Inc. v. Commc‘ns Workers of Am., 475 U.S. 643, 648 (1986)). Here, because Defendants seek to compel arbitration, they bear “the burden of proving the existence of an agreement to arbitrate by a preponderance of the evidence.” Id. (citations omitted). When determining the validity of an agreement to arbitrate a court should apply “ordinary state-law principles that govern the formation of contracts to decide whether the parties agreed to arbitrate a certain matter.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Under California law, “mutual assent is a required element of contract formation.” Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 565 (9th Cir. 2014). Here, the parties dispute whether Plaintiff is bound by an arbitration provision. Defendants have submitted no evidence that Plaintiff or the four distributors signed a distributor agreement or an independent arbitration agreement with Youngevity. Instead, Defendants have merely submitted a blank distributor agreement with no signatures or names of the parties that are allegedly bound by the agreement and
Accordingly, Defendants’ motion is denied without prejudice. Defendants are free to raise the issue in a motion for summary judgment and submit authenticated agreements.
D. Motion to Dismiss
Defendants also move to dismiss Plaintiff‘s FAC pursuant to Federal Rules of Civil Procedure 12(b)(6), 8(a), and 9(b). The Court addresses each cause of action below.
1. Count 1—Breach of Contract
Plaintiff pleads three separate claims under his breach of contract cause of action. First, he alleges that Defendants breached their duties under the Amended Purchase Agreements by “failing to pay [him] the full amount of the required monthly payments for January 2016 and February 2016,” and by failing to make any further payments for each month thereafter. (FAC ¶ 126.) Defendants argue that Plaintiff has failed to sufficiently state a breach of contract claim on this ground because he does not identify what specific terms of the Amended Purchase Agreements they allegedly breached. However, Plaintiff incorporates by reference preceding allegations in which he identifies specific terms of the Amended Purchase Agreements. (Id. ¶¶ 70-82.) He alleges that Defendants breached the contract because they failed to pay him in accordance with the Right of Exit procedures detailed in section 1.3(e) of the Amended Purchase Agreements. (Id. ¶¶ 76-80.) Therefore, Plaintiff has sufficiently stated a breach of contract claim on this ground.
Second, Plaintiff alleges that Defendants breached the Amended Purchase Agreements because they failed to complete the FDIR closing. Defendants argue that the
The provision in the Amended Purchase Agreements states that “the Equity Interests of FDIR under this Agreement (“the FDIR Closing“) shall be effective at 12:01 a.m. on or before December 31, 2011, or such other date mutually agreed by Purchaser and Seller, in such manner and at such place as determined by the parties hereto (the “FDIR Closing Date“).” (FAC, Ex. A, 6.) Plaintiff argues that the statute of limitations does not bar his claim because the original deadline was extended by the parties’ subsequent communications and actions. Plaintiff alleges that “Defendants intentionally dragged their feet, ignored the steps completed by [Plaintiff], and intentionally re-started the process from the beginning at each of [Plaintiff‘s] repeated attempts to conclude this aspect of the acquisition of the FDI Entities.” (FAC ¶ 52.) Defendants, as late as 2015, submitted documents to the SEC stating that they had “assumed mortgage guarantee obligations made by FDI . . . .” (Id. ¶ 26.) Under California law, it is well established that a defendant may be estopped from asserting the statute of limitations as a defense where he has improperly induced the plaintiff to delay the filing of a lawsuit. Adam v. Cal. Mut. Bldg & Loan Ass‘n, 18 Cal.2d 487, 488-89 (1941). Here, Plaintiff‘s allegations are sufficient to withstand a motion to dismiss based on the statute of limitations.
Alternatively, Defendants argue that Plaintiff cannot maintain an action for
The parties acknowledge and agree and that the failure to Close the purchase and sale of the Equity Interests shall not cause or result in any Damages (as defined in Section 7.2) to any party, and no party shall have any recourse or cause of action against another party for not Closing the transaction.
(FAC, Ex. A, 6.)
Section 7.2 of the Amended Purchase Agreement discusses each parties’ indemnification obligations. While a district court may resolve a contractual claim on a motion to dismiss when the terms of the contract are unambiguous, if there is doubt as to what the parties intended, the motion should be denied. Leghorn v. Wells Fargo, N.A., 950 F. Supp. 2d 1093, 1117 (N.D. Cal. 2013). Because the parties dispute whether the contract precludes recovery on this claim, the Court denies Defendants’ motion on this ground.
2. Count 2—Breach of Employment Contract
Defendants move to dismiss Plaintiff‘s breach of employment contract claim arguing that he has not sufficiently pled a constructive discharge. To plead a constructive discharge, a plaintiff must plead and prove “that the employer either intentionally created or knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee‘s resignation that a reasonable employer would realize that a reasonable person in the employee‘s position would be compelled to resign.” Turner v. Anheuser-Busch, Inc., 7 Cal.4th 1238, 1251 (1994).
“In order to amount to a constructive discharge, adverse working conditions must be unusually ‘aggravated’ or amount to a ‘continuous pattern’ before the situation will be deemed intolerable.” Id. at 1247. Here, Plaintiff alleges that Defendants substantially interfered with his ability to perform his job and subjected him to oppressive and debilitating employment conditions. (FAC ¶¶ 68, 152.) He alleges that Defendants embarrassed him in front of co-workers and potential
3. Count 3—Breach of the Implied Covenant of Good Faith and Fair Dealing
Defendants move to dismiss Plaintiff‘s third claim for a breach of the implied covenant of good faith and fair dealing, arguing that it cannot be sustained as a separate cause of action from his breach of contract claims.
“A breach of the implied covenant of good faith and fair dealing involves something beyond breach of the contractual duty itself.” Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1394 (1990). “If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated.” Id. at 1295. Here, Plaintiff alleges that Defendants violated the implied covenant “by failing to pay the amounts due under the Amended Purchase Agreements after receiving the FDI Entities, failing to complete the necessary steps to close on the acquisition of FDIR, failing to pay the Right of Exit amounts under the Amended Purchase Agreements, failing to pay the commissions due to the Four Distributorships, failing to terminate [Plaintiff] only for cause and failing to pay termination compensation.” (FAC ¶ 164.) These alleged acts are the same as those underlying Plaintiff‘s breach of contract claims. Thus, this claim is superfluous and Defendants’ motion to dismiss this cause of action is granted with leave to amend.
4. Count 4—Unjust Enrichment
Defendants move to dismiss Plaintiff‘s unjust enrichment claim because it is not a cognizable cause of action under California law. California case law remains unsettled as to whether a plaintiff may state a cause of action for unjust enrichment. ESG Capital Partners, LP v. Stratos, 828 F.3d 1023, 1038 (9th Cir. 2016). The Ninth Circuit,
While Plaintiff is free to plead an alternative theory of liability and allege that the Amended Purchase Agreements are either void or were rescinded because they were obtained through coercion, he clearly asserts his rights under the agreements. See Klein v. Chevron U.S.A., Inc., 202 Cal. App. 4th 1342, 1389 (2012).
Accordingly, Defendants’ motion to dismiss Plaintiff‘s unjust enrichment claim is granted. However, in the event that Plaintiff wishes to plead an alternative theory, he is granted leave to amend.
5. Count 5—Wrongful Termination in Violation of Public Policy
To support a claim for wrongful discharge in violation of public policy, a plaintiff must prove that his “dismissal violated policy that is (1) fundamental, (2) beneficial for the public, and (3) embodied in a statute or constitutional provision.” Turner v. Anheuser-Busch, Inc., 7 Cal.4th 1238, 1256 (1994). Defendants argue that Plaintiff has insufficiently pled this claim. The Court agrees.
While Plaintiff alleges that Defendants shipped unregistered products into Mexico without the proper licensing and registration and received funds from Mexican distributors without paying Mexico the required sales tax, among other things, he does not identify which statutory or constitutional provisions Defendants violated in doing so. (FAC ¶ 109.) Moreover, he has not alleged that he opposed such conduct and that Defendants forced him to resign because of his opposition or unwillingness to engage in these illegal activities. Indeed, he claims that they engaged in such illegal activities
Accordingly, Defendants’ motion to dismiss this claim is granted with leave to amend.
6. Count 6—Fraud
Defendants seek to dismiss Plaintiff‘s sixth claim, arguing that he has failed to sufficiently plead fraud.
To state a claim for fraudulent misrepresentation, a plaintiff must allege: (1) a misrepresentation; (2) knowledge of falsity; (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) resulting damage. Lazar v. Superior Court, 12 Cal.4th 631, 368 (1996). When pleading fraud,
7. Count 7—Civil Conspiracy
As to Plaintiff‘s seventh claim for civil conspiracy, Defendants argue that it should be dismissed because it cannot stand as a separate cause of action.
Under California law, civil conspiracy is not a separate and distinct cause of action. Entm‘t Research Group, Inc. v. Genesis Creative Group, Inc., 122 F.3d 1211, 1228 (9th Cir. 1997). However, it is “a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in perpetration.” Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503, 510-11 (1994). Because a civil conspiracy depends on the
Here, the Court dismisses Plaintiff‘s civil conspiracy cause of action for two reasons. First, it is unclear for which underlying torts Plaintiff is alleging a civil conspiracy. Second, Plaintiff alleges that Defendants Steve Wallach, Michelle Wallach, and Briskie “furthered the conspiracy by making corporate decisions for Youngevity or lent aid and encouragement to Youngevity or ratified and adopted the acts of Defendant Youngevity, (“the Conspirators“) and are responsible for the harm because they were part of a conspiracy to commit those acts.” (FAC ¶ 206.) As discussed above, “[w]hen a corporate employee acts in the course of his or her employment, on behalf of the corporation, there is no entity apart from the employee with whom the employee can conspire.” Black, 30 Cal. App. at 6. While Plaintiff can allege conspiracies between the individual Defendants if they acted beyond the scope of their employment, he has not done so here. See Wyatt v. Union Mortgage Co., 24 Cal.3d 773, 785 (1979) (“Directors and officers of a corporation are not rendered personally liable for its torts merely because of their official positions, but may become liable if they directly ordered, authorized or participated in the tortious conduct.“). As such, Defendants’ motion to dismiss Plaintiff‘s seventh cause of action is granted. Plaintiff is granted leave to amend his civil conspiracy allegations, but if he chooses to do so, he should incorporate the allegations into each underlying wrong.
8. Count 8—Breach of Fiduciary Duty
A plaintiff alleging breach of fiduciary duty by corporate officers and directors
In his FAC, Plaintiff alleges that Defendants Briski, Steve Wallach, and Michelle Wallach breached fiduciary duties owed to him as both Youngevity‘s president and a shareholder. In his opposition, however, he appears to abandon the claim that Defendants owed him a duty as president and instead focuses on the duty owed to him as a shareholder. Because Plaintiff is not asserting a derivative action, Plaintiff must establish his case as a direct action.
Under California law, “a direct action is one filed by the shareholder individually (or on behalf of a class of shareholders to which he or she belongs) for injury to his or her interest as a shareholder.” Oakland Raiders, 131 Cal. App. 4th at 650 (internal citations omitted). “Examples of direct shareholder actions include suits brought to compel the declaration of a dividend, or the payment of lawfully declared or mandatory dividends, or to enjoin a threatened ultra vires act or enforce a shareholder voting rights.” Schuster v. Gardner, 127 Cal. App. 4th 305, 313 (2005). Here, Plaintiff alleges that Defendants “breached their fiduciary duty to [him] by, among other things, de-legitimizing his role as president and undermining his authority for that position, breaching contracts that were owed to him, reducing monies that were owed to him, engaging in illegal business behind his back, as well as other unlawful conduct that has been addressed in this complaint.” (FAC ¶ 212.) Plaintiff does not appear to be claiming an injury to his interests as a shareholder, but is instead claiming injury to his interests as Youngevity‘s former president and as a party to the employment contract and Amended Purchase Agreements. Therefore, Plaintiff fails to adequately plead a breach of fiduciary duty and Defendants’ motion to dismiss this claim is granted with leave to amend.
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Defendants seek to dismiss Plaintiff‘s ninth cause of action for conversion. Under California law, “[c]onversion is the wrongful exercise of dominion over the property of another.” Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590, 601 (9th Cir. 2010). To establish conversion, a plaintiff must demonstrate: “(1) [his or her] ownership or right to possession of the property at the time of the conversion; (2) the defendant‘s conversion by a wrongful act or disposition of property rights; and (3) damages.” Id. “Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved . . . .” PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLC, 150 Cal. App. 4th 384, 395 (2007). However, it is unnecessary that “each coin or bill be earmarked.” Fischer v. Machado, 50 Cal. App. 4th 1069, 1072 (1996). At the pleading stage in federal court, it is only necessary for a plaintiff to allege an amount of money that is “capable of identification,” rather than specifically identify the sum that would be required to prove the claim in a motion for summary judgment. Natomas Gardens Inv. Group v. Sinadinos, 710 F. Supp. 2d 1008, 1019-20 (E.D. Cal. 2010).
Here, Plaintiff alleges that Defendants converted personal belongings and money owed to him under his distributorships and other agreements. (FAC ¶ 217.) Plaintiff‘s claim for conversion of personal belongings is insufficiently pled because he does not state what “specific property” was taken from him. See Fremont Indem. Co. v. Fremont Gen. Corp., 148 Cal. App. 4th 97, 123 (2007). Nonetheless, the conversion claim stands as to money allegedly owed to him under his distributorships. Plaintiff alleges that Defendants wrongfully terminated his four distributorships and withheld all commission payments associated with those distributorships. (FAC ¶ 217, Ex. D.) Therefore, Defendants’ motion to dismiss Plaintiff‘s conversion claim is denied.
10. Count 10—Unfair Competition Law
Lastly, Defendants move to dismiss Plaintiff‘s UCL claim because it is legally insufficient.
Plaintiff‘s claim fails as to his second and third theories. First, he has no standing to assert a claim for Defendants’ alleged fraudulent accounting practices and violations of security laws. Standing under the UCL is substantially narrower than federal standing under
Second, as to the allegations that Defendants breached the Amended Purchase Agreements, he has failed to demonstrate that this conduct falls within the UCL‘s interpretation of an unlawful, unfair or fraudulent business practice. The UCL prohibits
Nonetheless, Plaintiff‘s UCL claim survives as to Youngevity‘s alleged unlawful restraints on lawful business. Plaintiff alleges that Youngevity‘s Policies and Procedures violate the express terms of
Defendants also argue that Plaintiff cannot recover under the UCL. The UCL allows courts to order restitution and/or “the disgorgement of money that has been wrongfully obtained or, in the language of the statute, an order ‘restoring money which may have been acquired by means of unfair competition.‘” Bank of the West v. Superior Court, 2 Cal.4th 1254, 1266 (1992) (quoting
Plaintiff claims that Defendants’ enforcement of Youngevity‘s unlawful Policies and Procedures led it to withhold commission payments associated with the four distributorships. As such, Plaintiff has properly alleged a claim for restitution. Conversely, Plaintiff does not sufficiently plead a claim for injunctive relief because he has not alleged that he is likely to face a similar future harm. See L.A. v. Lyons, 461 U.S. 95, 111 (1983).
Accordingly, Defendants’ motion to dismiss Plaintiff‘s UCL claim is denied.
E. Motion to Consolidate
To the extent that any causes of action survive this motion, Defendants seek to consolidate this matter with the underlying Youngevity action. Plaintiff opposes
At this juncture, the Court finds that consolidation is not appropriate. The parties in the underlying Youngevity case have already submitted their motions for summary judgment. While there is some overlap in factual and legal issues, this case primarily depends on the alleged breaches of Plaintiff‘s employment contract and the Amended Purchase Agreements. Accordingly, the Court denies Defendants’ motion to consolidate without prejudice. The parties may raise the issue at the time of the Youngevity action‘s pretrial conference.
III. CONCLUSION
For the reasons discussed above, Defendants’ Anti-SLAPP motion is GRANTED. The Court strikes paragraphs 225 and 228 from Plaintiff‘s FAC. Defendants’ motion to compel arbitration is DENIED without prejudice. Defendants’ 12(b)(6) motion is GRANTED IN PART and DENIED IN PART. Defendants’ motion to dismiss is granted as to claims three through eight with leave to amend.
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IT IS SO ORDERED.
Dated: March 23, 2018
Barry Ted Moskowitz, Chief Judge
United States District Court