691 F. App'x 389
9th Cir.
2017

BONA FIDE CONGLOMERATE, INC., Plaintiff-Appellant, v. SOURCEAMERICA; et al., Defendants-Appellees.

No. 15-55999

United States Court of Appeals, Ninth Circuit.

May 22, 2017

691 F. App‘x 389

Argued and Submitted May 12, 2017 Pasadena, California

strating otherwise. Martinez v. Asarco Inc., 918 F.2d 1467, 1471 n.4 (9th Cir. 1990) (emphasis omitted); see also Vestar, 249 F.3d at 960 (“[W]here there is no convincing evidence that the state supreme court would decide differently, a federal court is obligated to follow the decisions of the state’s intermediate appellate courts.” (citation omitted)). Accordingly, the district court correctly held that the abuse exclusion barred coverage here, because Moreno’s claims against the Verdugos were for bodily injury arising from physical abuse. Moreno’s claims “necessarily include[ ]” Medina’s abuse, and “cannot exist apart from” that excluded physical abuse. Behrens, 736 P.2d at 386.

The district court also correctly held that the abuse exclusion is not ambiguous, as it plainly and unambiguously bars coverage for bodily injury arising out of physical abuse.

2. This interpretation of the abuse exclusion, and its application to Moreno’s claims against the Verdugos, are not contrary to the Verdugos’s reasonable expectations of coverage. Arizona’s reasonable expectations doctrine can apply even where a term is unambiguous, but only “in a limited variety of situations.” Gordinier v. Aetna Cas. & Sur. Co., 154 Ariz. 266, 742 P.2d 277, 283 (1987) (emphasis omitted). Defendants fail to show that any of these limited circumstances exist here: (1) the contract terms would be understood by a reasonably intelligent customer, (2) the Verdugos received notice of the term, (3) no activity by American Family would create an objective impression of coverage, and (4) no activity by American Family induced the Verdugos in particular to believe that they had coverage. See id. at 283-84. Accordingly, the district court correctly held that application of the exclusion was not contrary to the Verdugos’s reasonable expectations of coverage.

AFFIRMED.

Daniel J. Cragg, Jared M. Reams, Eckland & Blando, Minneapolis, MN, Joseph T. Ergastolo, Andrew E. Schouten, Attorneys, John L’Estrange, Esquire, Wright, L’Estrange & Ergastolo, San Diego, CA, for Plaintiff-Appellant

Kevin Alexander, Senior Attorney, Joseph William Goodman, Gordon & Rees LLP, San Diego, CA, for Defendant-Appellee SourceAmerica

Michael A. Attanasio, Craig TenBroeck, Attorneys, Jon F. Cieslak, Cooley LLP, San Diego, CA, for Defendant-Appellee Pride Industries, Inc.

Dan Bacal, Attorney, Law Offices of Dan Bacal, El Cajon, CA, Charles E. Walton, Walton Law Group LLC, Fort Washington, MD, for Defendant-Appellee Kent, Campa & Kate, Inc.

Amanda Macy Lorenz, Cozen & O’Connor, San Diego, CA, for Defendants-Appellees ServiceSource, Inc., Lakeview Center, Inc.

Jonathan S. Dennis, Litigation Counsel, Dennis Law Group, PC, Irvine, CA, Ryan D. Saba, Rosen Saba, LLP, Beverly Hills, CA, for Defendant-Appellee Job Options, Inc.

Anne Beaumont, Perkins Coie LLP, San Diego, CA, Brian C. Lake, Perkins Coie LLP, Phoenix, AZ, Kathleen M. O’Sullivan, Esquire, Perkins Coie LLP, Seattle, WA, Charles Howard Samel, Attorney, Perkins Coie LLP, Los Angeles, CA, for Defendant-Appellee Goodwill Industries of Southern California

Alfred De La Cruz, Attorney, Manning & Kass, Ellrod, Ramirez, Trester LLP, San Diego, CA, Darin L. Wessel, Manning & Kass, Ellrod, Ramirez, Trester LLP, Los Angeles, CA, for Defendant-Appellee Corporate Source, Inc.

Robert Walter Thompson, Esquire, Attorney, Callahan, Thompson, Sherman & Caudill, LLP, Irvine, CA, for Defendant-Appellee CW Resources

Jeffrey Alan LeVee, Esquire, Kathleen P. Wallace, Jones Day, Los Angeles, CA for Defendant-Appellee National Council of SourceAmerica Employers

Bret S. Wacker, Cynthia M. Filipovich, Attorneys, Daniel J. Scully, Jr., Esquire, Clark Hill PLC, Detroit, MI, Roger Perkins, Attorney, Morris Polich & Purdy LLP, San Diego, CA, for Defendant-Appellee Opportunity Village, Inc.

Before: CHRISTEN and WATFORD, Circuit Judges, and SOTO,* District Judge.

MEMORANDUM**

1. The district court properly dismissed Bona Fide Conglomerate, Inc.’s claims under Section 1 of the Sherman Act, 15 U.S.C. § 1. To withstand a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), Bona Fide’s complaint had to answer “basic questions” such as “who, did what, to whom (or with whom), where, and when?” Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1048 (9th Cir. 2008). Considering the complaint’s allegations as a whole, Bona Fide failed to allege sufficient facts to answer those questions. Dismissal of Bona Fide’s Section 1 claims was therefore warranted.

For example, the allegations attributed to Jean Robinson, the former general counsel of SourceAmerica, fail to support the existence of a Section 1 conspiracy. Robinson alleged that the defendants are members of a “club” or “mafia” that controls the allocation of contracts under the AbilityOne Program and that several of the defendants’ executives are involved in the collusive activity. These allegations fail to explain where and when the alleged collusive activity among the defendants occurred, as needed to make out a plausible Section 1 claim. See id.

Robinson’s allegations identifying specific agreements between certain defendants fare no better. For example, Robinson alleged that one of the defendants, PRIDE, did not protest SourceAmerica’s allocation of a contract to another defendant, ServiceSource, because PRIDE knew that SourceAmerica would award it a more lucrative contract in the future. These allegations fail to explain where and when any such agreement was consummated, which again would be needed to make out a plausible Section 1 claim. See id.

Bona Fide’s other allegations of a Section 1 conspiracy fail to meet the Kendall standard as well. For example, Bona Fide alleges that the defendants’ employees have served as members of SourceAmerica’s board and on the Executive Committee of the National Council of SourceAmerica Employers. Bona Fide further alleges that those employees controlled SourceAmerica’s allocation process. But Bona Fide does not allege that the defendants ever comprised a majority of the membership of the SourceAmerica board or the NCSE Executive Committee, which would be necessary to establish that the defendants controlled SourceAmerica’s allocation of AbilityOne Program contracts. Bona Fide also alleges that SourceAmerica and Corporate Source agreed that SourceAmerica would allocate all of its contracts in the Caribbean to Corporate Source. These allegations are deficient because they fail to specify who was involved in reaching that arrangement or when the arrangement was reached. See id.

Bona Fide’s references to “plus factors” fail to save its Section 1 claims from dismissal. “Plus factors” are relevant only if the complaint adequately alleges parallel conduct among the defendants. See In re Musical Instruments and Equipment Antitrust Litigation, 798 F.3d 1186, 1193-94 (9th Cir. 2015). Bona Fide has not plausibly alleged any parallel conduct among the defendants. Bona Fide’s “plus factors” are therefore irrelevant to determining whether the complaint made out a viable Section 1 claim. Id.

2. The district court did not err by denying Job Options, Inc.’s and Opportunity Village, Inc.’s motions to dismiss under Federal Rule of Civil Procedure 12(b)(1). Bona Fide alleges that Job Options is a participant in an ongoing Section 1 conspiracy under which it will receive future AbilityOne Program contracts to Bona Fide’s detriment. These allegations are sufficient to satisfy Article III standing. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Contrary to Opportunity Village’s argument, Bona Fide’s claims are not subject to the exclusive jurisdiction of the United States Court of Federal Claims under the Tucker Act, 28 U.S.C. § 1491(a)(1). Bona Fide’s claims are not founded “upon any express or implied contract with the United States.” Id. Nor did Bona Fide name the United States as a party to this case. See United States v. Sherwood, 312 U.S. 584, 588, 61 S.Ct. 767, 85 L.Ed. 1058 (1941).

AFFIRMED.

Bona Fide’s motion for judicial notice is DENIED.

Notes

*
The Honorable James Alan Soto, United States District Judge for the District of Arizona, sitting by designation.
**
This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
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