Lopez v. Booz Allen Hamilton, Inc. ( 2020 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 JOSEPH LOPEZ, JOSHUA SARRIS, No. 2:20-cv-01310-JAM-JDP CODY DANTE, and SHANE PECK, 11 ORDER GRANTING DEFENDANT’S Plaintiffs, MOTION TO DISMISS 12 v. 13 BOOZ ALLEN HAMILTON, INC., and DOES 1 through 20, 14 inclusive, 15 Defendants. 16 This matter is before the Court on Booz Allen Hamilton’s 17 (“Defendant”) Motion to Dismiss for failure to plead allegations 18 of fraud with specificity and for failure to state a claim upon 19 which relief can be granted. Mot., ECF No. 6. Joseph Lopez, 20 Joshua Sarris, Cody Dante, and Shane Peck (“Plaintiffs”) filed 21 an opposition to Defendant’s motion. Opp’n, ECF No. 8. 22 Defendant replied. Def.’s Reply, ECF No. 9. After 23 consideration of the parties’ briefing on the motion and 24 relevant legal authority, the Court GRANTS Defendant’s Motion to 25 Dismiss.1 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled 28 for October 27, 2020. 1 I. BACKGROUND 2 In 2018, Defendant Booz Allen Hamilton (“BAH”) entered into 3 a contract with the U.S. Department of the Air Force (“DAF”) to 4 provide IT services at the Beale Air Force base in Yuba County, 5 California. See Compl. ¶¶ 6-8, ECF No. 1. The contract 6 (“Mission Planning Cell”) required Defendant to recruit IT 7 professionals to assist the DAF with processing and analysis of 8 reconnaissance information from the DAF’s 99th Squadron. Compl. 9 ¶ 7. The IT work was to be performed on-site at the Beale Air 10 Force base. Id. 11 Plaintiffs are four IT professionals who were recruited to 12 work on Mission Planning Cell by either Defendant or one of the 13 IT employment agencies Defendant used for the contract. Compl. 14 ¶¶ 8,11. Plaintiffs all resigned from their prior jobs and 15 relocated for the job at Beale. Compl. ¶¶ 14, 20. 16 Specifically, in November 2018, Joshua Sarris relocated from 17 Santa Clara, California, where he was doing IT work for a 18 medical provider. Compl. ¶ 21. Joseph Lopez left a job in 19 Sacramento, California with another defense contractor. Compl. 20 ¶ 22. Cody Dante relocated from Hawaii and took a large pay cut 21 from his prior job. Compl. ¶ 23. Finally, Shane Peck relocated 22 in September 2018 from Colorado Springs, Colorado, where he was 23 doing IT work in cybersecurity. Compl. ¶ 24. 24 Based on Defendant’s representations, Plaintiffs expected 25 they would be doing “very technical IT work with other senior IT 26 engineers.” Compl. ¶¶ 14-16. However, “as soon as the 27 plaintiffs reported to Beale and began work, they learned the 28 positions were not as advertised.” Compl. ¶ 17. The complaint 1 paints a vivid picture of what the job was actually like day-to- 2 day, ranging from coworkers’ pranks like hiding Mr. Saris’s golf 3 clubs around the building to a “Cybersecurity Lead” who freely 4 admitted to knowing nothing about computers. See Compl. 5 ¶ 17(a)-(ii). Each of the Plaintiffs complained to their BAH 6 supervisors. Compl. ¶ 27. Mr. Saris, Mr. Lopez, and Mr. Dante 7 were constructively terminated in April 2019. Compl. ¶¶ 21-23. 8 Mr. Peck was fired in June 2019. Compl. ¶ 24. 9 On June 30, 2020, Plaintiffs filed this lawsuit against 10 Defendant seeking monetary relief. See Compl. Plaintiffs bring 11 the following claims against Defendant: (1) pre-employment 12 fraud, (2) violation of California Labor Code Section 970, and 13 (3) termination in violation of public policy. Compl. ¶¶ 28-43. 14 Mr. Sarris brings an additional claim for rescission of 15 contract. Id. at ¶¶ 44-49. Defendant has moved to dismiss the 16 first claim for pre-employment fraud, the second claim for 17 violation of Labor Code Section 970 and exemplary damages for 18 that claim, and the fourth claim for rescission. See Mot. at 1. 19 20 II. OPINION 21 A. Judicial Notice 22 Rule 201 of the Federal Rules of Evidence allows a court to 23 take judicial notice of an adjudicative fact that is “not 24 subject to reasonable dispute,” because it (1) “is generally 25 known within the trial court’s territorial jurisdiction”; or 26 (2) “can be accurately and readily determined from sources whose 27 accuracy cannot reasonably be questioned.” Fed. R. Evid. 28 201(a)–(b). A court may take judicial notice of matters of 1 public record. United States ex rel. Lee v. Corinthian 2 Colleges, 655 F.3d 984, 999 (9th Cir. 2011). Matters of public 3 record include “government documents available from reliable 4 sources on the internet.” Cal. River Watch v. City of 5 Vacaville, No. 2:17-cv-00524-KJM-KJN, 2017 WL 3840265, at *2 n.1 6 (E.D. Cal. Sept. 1, 2017). 7 Defendant requests the Court take judicial notice of two 8 exhibits. See Def.’s Req. for Jud. Notice (“RJN”) ECF No. 6-3. 9 The two exhibits are: (1) the California Judicial Council’s April 10 6, 2020, Emergency Rules Related to COVID-19, and (2) the 11 California Judicial Council’s May 29, 2020, Order. Id. 12 Plaintiffs do not oppose Defendant’s request. The Court finds 13 the two exhibits to be matters of public record, and, therefore, 14 proper subjects of judicial notice. 15 Accordingly, the Court GRANTS Defendant’s Request for 16 Judicial Notice. In doing so, the Court judicially notices “the 17 contents of the documents, not the truth of those contents.” 18 Gish v. Newsom, No. EDCV 20-755-JGB(KKx), at *2 (C.D. Cal. April 19 23, 2020). 20 B. Legal Standard 21 A Rule 12(b)(6) motion attacks the complaint as not 22 alleging sufficient facts to state a claim for relief. Fed. R. 23 Civ. Proc. 12(b)(6). “To survive a motion to dismiss [under 24 12(b)(6)], a complaint must contain sufficient factual matter, 25 accepted as true, to state a claim to relief that is plausible 26 on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 27 /// 28 /// 1 (internal quotation marks and citation omitted).2 While 2 “detailed factual allegations” are unnecessary, the complaint 3 must allege more than “[t]hreadbare recitals of the elements of 4 a cause of action, supported by mere conclusory statements.” 5 Id. 6 Moreover, fraud-based claims are subject to the heightened 7 pleading standard of Rule 9(b). Fed. R. Civ. Proc. 9(b). Rule 8 9(b) requires a party to “state with particularity the 9 circumstances constituting fraud or mistake.” Id. The “who, 10 what, when, where and how of the misconduct charged” must be 11 stated with particularity. Ebeid ex rel. U.S. v. Lungwitz, 616 12 F.3d 993, 998 (9th Cir. 2010) (internal quotation marks and 13 citation omitted).3 When a party averring fraud fails to meet 14 the heightened pleading standard of Rule 9(b), dismissal of the 15 claim is proper. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 16 1107 (9th Cir. 2003) (“A motion to dismiss a complaint or claim 17 ‘grounded in fraud’ under Rule 9(b) for failure to plead with 18 particularity is the functional equivalent of a motion to 19 dismiss under Rule 12(b)(6) for failure to state a claim.”). 20 /// 21 22 2 Plaintiffs cite to Conley v. Gibson, 335 U.S. 41 (1957) as providing the relevant legal standard for a 12(b)(6) motion. 23 Opp’n at 5. However, Conley was overruled and replaced by the plausibility standard set forth in Bell Atlantic Corp. v. 24 Twombly, 550 U.S. 544 (2007). See also Ashcroft, 556 U.S. at 679(2009). 25 3 Plaintiffs again cite to inapposite authority. See Opp’n at 8- 11 (citing Stansfield v. Starkey, 220 Cal. App. 3rd 59 (1990), 26 Lazar v. Superior Court, 12 Cal. App. 4th 631 (1996), and Lenk v. 27 Total Western Inc., 89 Cal. App. 4th 959 (2001)). The cases cited by Plaintiff are not federal Rule 9(b) pleading cases and 28 do not provide the relevant standard. 1 C. Analysis 2 1. Rule 9(b) 3 The parties agree that Plaintiffs’ first, second, and 4 fourth claims are based on predicate allegations of fraud and 5 therefore must satisfy the heightened pleading standard of Rule 6 9(b). See Opp’n at 8; Def.’s Reply at 1. However, the parties 7 disagree about whether the complaint provides the requisite 8 “who, what, when, where, and how.” Ebeid, 616 F.3d at 998. 9 Plaintiffs insist their complaint provides the specifics of the 10 fraud. See Opp’n at 8-11. Defendant contends Plaintiffs have 11 not set out facts sufficient to satisfy the 9(b) standard, and 12 asks the Court to dismiss Plaintiffs’ fraud-based claims. See 13 Def.’s Reply at 2-5. As explained below, the Court agrees with 14 Defendant that the complaint fails to satisfy Rule 9(b). 15 While the complaint provides significant detail about 16 Plaintiffs’ employment at Beale, it does not clearly set forth 17 the pre-employment representations Defendant made to Plaintiffs. 18 To be sure, the complaint is not completely devoid of 19 allegations regarding Defendant’s pre-employment 20 representations; Plaintiffs have set forth general allegations 21 about “misrepresentations made in late 2018 by BAH in its job 22 advertisements and the BAH recruiters for the job.” Opp’n at 23 11. However, these general allegations are incomplete in that 24 they fail to provide all the necessary “who, what, when, where, 25 and how” details. For example, the complaint states: “Joseph 26 Lopez specifically asked before taking this job on the BAH 27 contract if night or weekend work would be required. He was 28 assured it would not be, but on his first day at work this 1 proved to be untrue. The set hours of 9-5 were a reason he took 2 this position.” Compl. ¶ 17(gg). Who assured Mr. Lopez the 3 hours would be 9-5? When and where was this assurance made? 4 How was the assurance knowingly false when made? Without 5 providing the “who,” “when,” “where,” and “how,” Plaintiffs do 6 not satisfy Rule 9(b). 7 The examples Plaintiffs highlight in their opposition brief 8 are likewise incomplete. For instance, Plaintiffs point to 9 eight pre-employment misrepresentations arising from a job 10 advertisement set forth in Paragraph 12 of the complaint. Opp’n 11 at 8-9. Yet, the complaint does not indicate which of the four 12 Plaintiffs received this job advertisement, or when, where, or 13 by what means each received the advertisement. Id. Lacking 14 these specific allegations, the complaint fails to provide 15 Defendant with sufficient detail to be put on notice “of the 16 particular misconduct which is alleged to constitute the fraud 17 charge so that [he] can defend against the charge and not just 18 deny that [he has] done anything wrong.” United States ex rel. 19 Swoben v. United Healthcare Ins. Co., 848 F.3d 1161, 1180 (9th 20 Cir. 2016) (internal quotation marks and citation omitted). 21 Because Plaintiffs have not clearly and specifically set 22 forth what representations Defendant made to them as required 23 under Rule 9(b), their first, second, and fourth causes of 24 action based on fraud are DISMISSED. 25 2. Section 970 Claim 26 Defendant additionally requests the Court dismiss 27 Plaintiffs’ Section 970 claim with prejudice because Plaintiffs 28 failed to file suit within the applicable one-year statute of 1 limitations. Mot. at 9. The parties dispute the applicable 2 statute of limitations period for a Section 970 claim: Defendant 3 contends the limitations period is one-year and begins to run 4 when the plaintiff discovers or has reason to discover the 5 fraud, see Mot. at 9-14, while Plaintiffs argue the one-year 6 clock begins to run upon plaintiff’s termination, see Opp’n at 7 12-13. 8 On November 4, 2020, the Ninth Circuit issued a memorandum 9 in Keenan v. Cox Communications California, LLC, 2020 WL 6482390 10 (9th Cir. 2020), resolving the dispute in favor of Defendant’s 11 position. This memorandum clarified: 1) a section 970 claim is 12 subject to a one-year statute of limitations period, and 2) the 13 claim “accrues when the plaintiff discovers, or has reason to 14 discover, the cause of action.” Id. at *1. The panel reasoned 15 that because a Section 970 claim is subject to mandatory double 16 damages, the California Supreme Court would likely find it 17 imposes a penalty, and thus apply California’s one-year 18 limitations period for actions involving a penalty under Cal. 19 Code Civ. Pro. Section 340(a). Id. The panel further explained: 20 “when a plaintiff reasonably should have discovered facts for 21 purposes of the accrual of a cause of action or application of 22 the delayed discovery rule is generally a question of fact, 23 properly decided as a matter of law only if the evidence . . . 24 can support only one reasonable conclusion.” Id. (omitting 25 internal quotes). Thus, Keenan supports Defendant’s position 26 that the discovery of the fraud sets the anchor date for when the 27 one-year limitations period begins to run. 28 Pointing out Keenan is unpublished and therefore not binding 1 on this Court, Plaintiffs ask the Court to find the one-year 2 clock begins to run at termination not discovery of the fraud. 3 See Pls.’ Supplemental Br., ECF No. 14. In support of their 4 position, Plaintiffs rely on Aguilera v. Pirelli Armstrong Tire 5 Corp, 223 F.3d 1010 (9th Cir. 2000). In Aguilera, plaintiff- 6 employees alleged the defendant-employer fraudulently promised 7 them permanent employment. 223 F.3d at 1013. Significantly, 8 because the Aguilera plaintiffs could not have discovered that 9 defendant’s representations about the permanency of their 10 employment were fraudulent until they were actually terminated, 11 the date of discovery of the fraud and the date of termination 12 were the same in that case. Thus, Aguilera itself can be read as 13 a discovery rule case, consistent with Keenan. Def.’s 14 Supplemental Br., ECF No. 15 at 2. 15 Finding Keenan persuasive, this Court adopts its conclusion 16 that the applicable limitations period for a Section 970 claim is 17 one-year and begins to accrue when the plaintiff discovers or has 18 reason to discover the fraud. 2020 WL 6482390 at *1. 19 Applying Keenan here, the Court finds Plaintiffs’ Section 20 970 claim is time-barred. The complaint alleges “as soon as the 21 plaintiffs reported to Beale and began work, they learned the 22 positions were not as advertised.” Compl. ¶ 17. Thus, 23 Plaintiffs admit to discovering the fraud, or at least reason to 24 suspect the fraud, as soon as they started working. The 25 complaint further states each Plaintiff “resigned their prior 26 positions and went to work at Beale… in late 2018.” Compl. ¶ 31. 27 Taking these allegations as true and drawing inferences in 28 Plaintiffs’ favor, the Court finds that “late 2018” could mean 1 Plaintiffs’ work at Beale began as late as December 31, 2018. 2 Given Plaintiffs discovered the “positions were not as 3 advertised” “as soon as they reported to Beale,” it follows the 4 one-year clock began to run by December 31, 2018. In fact, for 5 Mr. Sarris and Mr. Peck’s claims, the clock started running 6 before then: Mr. Sarris started working in November 2018 and Mr. 7 Peck started in October 2018. Compl. ¶¶ 21, 24. 8 The face of the complaint therefore supports only one 9 conclusion: the one-year limitations period for all Plaintiffs 10 ran by the end of 2019. Yet, Plaintiffs did not file this 11 lawsuit until June 30, 2020. See Compl. Thus, Plaintiffs’ 12 Section 970 claim is time-barred. 13 The California Judicial Council’s emergency COVID-19 tolling 14 orders do not change this analysis. See California Judicial 15 Council’s April 6, 2020, Order and May 29, 2020, Order, Ex. A and 16 Ex. B to Def.’s RJN. These orders provide only for tolling “from 17 April 6, 2020” forward, and do not revive claims that had already 18 expired prior to April 6, 2020, as Plaintiffs’ Section 970 claim 19 had here. See Mot. at 13; Ex. A and B. to Def.’s RJN. 20 In sum, the Court finds Plaintiffs’ Section 970 claim time- 21 barred on the face of the complaint. Further, in opposition, 22 Plaintiffs made purely legal arguments and did not proffer any 23 facts that might lead the Court to believe Plaintiffs could add 24 allegations to avoid dismissal on statute of limitation grounds. 25 Accordingly, the Court finds amendment would be futile and 26 DISMISSES this claim with prejudice. 27 /// 28 /// em REE ROSIN OS I III EEE II RO RIED OIE USI IED eee 1 D. Leave to Amend 2 Plaintiffs have requested leave to amend. Opp’n at 14. 3 Because Plaintiffs have not had the opportunity to amend their 4 complaint and the Court finds that amendment would not be futile 5 | with respect to the first and fourth causes of action, the Court 6 grants leave for those claims. See Deveraturda v. Globe Aviation 7 Sec. Servs., 454 F.3d 1043, 1049 (9th Cir. 2006). However, leave 8 to amend is denied as to Plaintiffs’ Section 970 claim, because 9 as explained above, the Court finds amendment would be futile. 10 11 IIl. ORDER 12 For the reasons set forth above, the Court GRANTS 13 Defendant’s Motion to Dismiss. Plaintiffs’ Section 970 claim is 14 DISMISSED WITH PREJUDICE. Plaintiffs shall file their Amended 15 Complaint within twenty days of the date of this Order. 16 Defendant’s responsive pleading is due within twenty days 17 thereafter. 18 IT IS SO ORDERED. 19 Dated: December 14, 2020 20 kA 2 teiren staves odermacr 7008 22 23 24 25 26 27 28 11