Uy v. Van

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA [3] JOCELYNE R. UY, WESTLEY U. 4 VALLNUEVA, Case No.: 2:24-cv-00599-GMN-DJA 5 Plaintiffs, vs. ORDER [6] 7 SANDY VAN, et al., 8 Defendants. [9] 10 Pending before the Court is a Motion to Dismiss, (ECF No. 12), filed by Defendants 11 JML Holdings, LLC, JML Surgical Center, LLC, and Ngan Van Le (collectively “Le 12 Defendants”). Plaintiffs Jocelyn R. Uy and Westley U. Villanueva filed a Response, (ECF No. 13 19), to which the Le Defendants filed a Reply, (ECF No. 25). 14 Further pending before the Court is a Motion to Dismiss, (ECF No. 14), filed by Sandy 15 Van, Sandy Van, LLC dba Van Law Firm, and Van and Associates Law Firm, PLLC 16 (collectively “Van Defendants”). Plaintiffs filed a Response, (ECF No. 17), to which the Van 17 Defendants filed a Reply, (ECF No. 23). 18 Also pending before the Court is a Motion to Strike, (ECF No. 15), filed by the Van 19 Defendants. Plaintiffs filed a Response, (ECF No. 18), to which the Van Defendants filed a 20 Reply, (ECF No. 24). 21 For the reasons discussed below, the Court GRANTS the Le Defendants’ Motion to 22 Dismiss and GRANTS in part, and DENIES in part, the Van Defendants’ Motion to 23 Dismiss. The Court also DENIES the Van Defendant’s Motion to Strike. [25] 1 I. BACKGROUND 2 This case arises out of the alleged wrongful termination of two employees of a law firm 3 after they raised concerns about unethical practices within the firm. (See generally First Am. 4 Compl. (“FAC”), ECF No. 1-2). 5 Plaintiffs Jocelyn Uy and Westley Villanueva are both licensed attorneys in Nevada. (Id. 6 ¶¶ 30, 31). Shortly after beginning their employment at Van Law, Plaintiffs reported issues 7 with client files and staff supervision to Ms. Van, who in turn assured them of the firm’s 8 restructuring plans. (Id. ¶¶ 38–41). Despite Ms. Van’s assurances, Van Law Firm allegedly 9 continued to operate in a way that was unprofessional and violated Nevada’s Rules of 10 Professional Conduct. (Id. ¶¶ 42, 43). 11 A few months after starting her employment at Van Law, Plaintff Ms. Uy was on a 12 conference call with Mr. Le, a non-attorney associated with the firm. (Id. ¶ 44). During the 13 call, Mr. Le allegedly attempted to direct the way that Ms. Uy performed her job and suggested 14 unethical practices to increase settlement amounts. (Id. ¶¶ 44, 45). Ms. Uy opposed these 15 suggestions on the call and suggested a meeting among all attorneys and management to clarify 16 the way business at Van Law Firm should be conducted. (Id. ¶ 47). Mr. Le then allegedly 17 directed Ms. Van to terminate Ms. Uy because she was unwilling to “follow the program.” (Id. 18 ¶ 48). About a week after the conference call, the Human Resources manager at Van Law Firm 19 notified Ms. Uy that she was not the right fit and was being terminated. (Id. ¶ 49). The same 20 day, Mr. Le called Mr. Villanueva and informed him that Ms. Uy was no longer at the firm 21 because she was causing too many problems. (Id. ¶ 53). Mr. Le also told Mr. Villanueva that if 22 he followed “the program,” he would make a lot of money. (Id. ¶ 50). 23 Ms. Uy called the State Bar of Nevada to inquire about whether she had an ethical 24 obligation to file a complaint against Ms. Van. (Id. ¶ 51). She then called Mr. Villanueva to 25 discuss the conversation she had with the State Bar of Nevada. (Id. ¶ 52). Because he was 1 unwilling to “follow the program” which he believed to be illegal, Mr. Villanueva was 2 constructively discharged from Van Law Firm four days later. (Id. ¶ 54). On the same day, Ms. 3 Van asked Mr. Villanueva about whether he was aware that he had received a merit pay 4 increase of $10,000, and Mr. Villanueva responded that he did not know about the pay increase. 5 (Id. ¶ 55). Mr. Villanueva filed an unemployment claim wherein he alleged that there were 6 unsafe or illegal working conditions. (Id. ¶ 56). Mr. Villanueva later received a notice that Van 7 Law Firm rejected his unemployment claim and he filed an appeal. (Id. ¶ 57). 8 Plaintiffs originally filed their Complaint and First Amended Complaint against the Van 9 and Le Defendants in the Eighth Judicial District Court in Clark County. (Pet. Removal ¶ 1, 10 ECF No. 1-1). Defendants removed the case to federal court. (See generally id.). Defendants 11 then filed the instant Motions to Dismiss seeking dismissal of many of Plaintiffs’ claims for 12 failure to state a claim, and the Motion to Strike portions of the FAC as immaterial and 13 impertinent. 14 II. LEGAL STANDARD 15 Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon 16 which relief can be granted. Fed. R. Civ. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544 , 17 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on 18 which it rests, and although a court must take all factual allegations as true, legal conclusions 19 couched as factual allegations are insufficient. Twombly, 550 U.S. at 555 . Accordingly, Rule 20 12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements 21 of a cause of action will not do.” Id. “To survive a motion to dismiss, a complaint must contain 22 sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its 23 face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570 ). “A 24 claim has facial plausibility when the plaintiff pleads factual content that allows the court to [25] 1 draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This 2 standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. 3 If the court grants a motion to dismiss for failure to state a claim, leave to amend should 4 be granted unless it is clear that the deficiencies of the complaint cannot be cured by 5 amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant 6 to Rule 15(a), the court should “freely” give leave to amend “when justice so requires,” and in 7 the absence of a reason such as “undue delay, bad faith or dilatory motive on the part of the 8 movant, repeated failure to cure deficiencies by amendments previously allowed, undue 9 prejudice to the opposing party by virtue of allowance of the amendment, futility of 10 amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962). 11 III. DISCUSSION 12 The Le Defendants and the Van Defendants both move to dismiss Plaintiffs’ claims 13 against them. The Court examines each of Defendant’s Motions to Dismiss in turn. 14 A. Motion to Dismiss by Le Defendants 15 The Le Defendants move to dismiss all the claims that Plaintiffs assert against them: (1) 16 tortious interference with business relations, (2) civil RICO,1 and (3) civil conspiracy. (See 17 generally Mot. Dismiss of Le Defendants (“Le MTD”), ECF No. 12). The Court begins with 18 the tortious interference with business relations claim. 19 i. Tortious Interference with Business Relations 20 The Le Defendants first seek dismissal of Plaintiffs’ tortious interference with business 21 relations claim. (Le MTD 5:12–9:13). They first argue that, as Van Law’s alleged agent, Mr. 22 Le cannot tortiously interfere with Van Law’s employment contracts. (Id. 6:1–7:10). [24] 25 1 Nevada’s racketeering statutes are patterned after the federal Racketeer Influenced and Corrupt Organizations, of “RICO,” statutes. Hale v. Burkhardt, 764 P.2d 866, 867 (1988). The Court will refer to Plaintiffs’ Nevada racketeering claim as the civil RICO claim. 1 The Supreme Court of Nevada has held that defendants cannot tortiously interfere with 2 their own contracts. Bartsas Realty, Inc. v. Nash, 402 P.2d 650, 651 (Nev. 1965). Nevada 3 courts have yet to apply this principle to an agent-principal relationship. But courts in this 4 district have held that “agents acting within the scope of their employment, i.e. the principal’s 5 interest, do not constitute intervening third parties, and therefore cannot tortiously interfere 6 with a contract to which the principal is a party.” Blanck v. Hager, 360 F. Supp. 2d 1137 , 1154 7 (D. Nev. 2005) (collecting cases), aff’d, 220 F. App’x 697 (9th Cir. 2007). 8 Plaintiffs’ FAC alleges that “Mr. Le managed, operated, and/or controlled Defendants, 9 Ms. Van and Van Law Firm, acting or failing to act within the scope, course, and authority of 10 his duties and responsibilities.” (FAC ¶ 19) (emphasis added). This statement appears to assert 11 that Mr. Le could have been acting within or outside of the scope of his duties, which could be 12 interpreted as not alleging either. But even if the Court found that this statement was an 13 allegation that Mr. Le was acting outside of the scope of his employment, it would not be 14 sufficient to meet the pleading standard. See Twombly, 550 U.S. at 555 (explaining that Rule 15 12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements 16 of a cause of action will not do”). Plaintiffs did not plead sufficient factual context to allow the 17 Court to draw a reasonable inference that Mr. Le was not acting within the scope of 18 employment. See Iqbal, 556 U.S. at 678 . Accordingly, the Court DISMISSES Plaintiffs’ 19 tortious interference with business relations claim against the Le Defendants and grants leave to 20 amend because the identified deficiencies are capable of correction. 21 ii. Civil RICO 22 The Le Defendants next seek dismissal of Plaintiffs’ three RICO claims. Defendants 23 first assert that the RICO claim should be dismissed because Plaintiffs lack standing to bring 24 this claim. (Le MTD 10:15–13:8). They explain that Plaintiffs lack standing because their 25 alleged injuries, primarily lost wages due to wrongful termination, do not result from a RICO 1 predicate act. (Id.). In response, Plaintiffs argue that they have standing because their damages 2 are distinct from their termination and are cognizable under RICO. 3 To survive a motion to dismiss, a civil complaint under Nevada’s RICO act must 4 plausibly allege three elements: “(1) the plaintiff’s injury must flow from the defendant’s 5 violation of a predicate Nevada RICO act; (2) the injury must be proximately caused by the 6 defendant’s violation of the predicate act; and (3) the plaintiff must not have participated in the 7 commission of the predicate act.” Allum v. Valley Bank of Nev., 849 P.2d 297, 283 (Nev. 1993). 8 A person engages in a pattern of racketeering activity by committing at least two enumerated 9 predicate criminal acts within a specified timeframe. NRS §§ 207.360, .390. But to recover 10 civilly for a RICO violation, a plaintiff must establish that he has statutory standing by 11 demonstrating “(1) that his alleged harm qualifies as injury to his business or property; and (2) 12 that his harm was ‘by reason of’ the RICO violation, which requires the plaintiff to establish 13 proximate causation.” Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969, 972 (9th Cir. 14 2008) (quoting Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268 , 112 S.Ct. 1311 , 117 15 L.Ed.2d 532 (1992)); see also Allum, 849 P.2d at 299 . 16 The only allegation Plaintiffs include regarding the harms that resulted from the alleged 17 racketeering activity is the following statement: “Defendants have caused Plaintiffs harm in an 18 amount to be determined at trial, as a result of their racketeering activities.” (FAC ¶ 181). This 19 is not sufficient to satisfy the pleading standard, which requires Plaintiffs to plead sufficient 20 factual matter to state a plausible claim for relief. See Iqbal, 556 U.S. at 678 . Though Plaintiffs 21 argue in their Reply that they will demonstrate that their professional and personal reputations 22 were harmed by the Le Defendants’ predicate acts, that allegation is not included in the FAC. 23 (Resp. 9:3–12); (See generally FAC). The allegations in the FAC at best give rise to an 24 assumption that Plaintiffs are suing over the harms they experienced due to their alleged 25 wrongful termination and constructive discharge, since Plaintiffs do not include allegations 1 regarding other harms under the civil RICO claim. (See FAC ¶¶ 147–182). The RICO claim 2 could not succeed under such a theory because wrongful termination is not a predicate Nevada 3 RICO act, and thus Plaintiffs cannot recover from an injury that was proximately caused by a 4 wrongful termination. Allum, 849 P.2d at 300 . Without factual allegations of other harms that 5 were proximately caused by Defendants’ alleged RICO acts, the Court DISMISSES the RICO 6 claim. Because Plaintiffs could allege that they experienced other harms caused by 7 Defendants’ RICO acts, the Court grants leave to amend the RICO claim against all 8 Defendants. 9 iii. Civil Conspiracy 10 Lastly, the Le Defendants seeks dismissal of Plaintiffs’ civil conspiracy claim. They 11 first argue that the intercorporate conspiracy doctrine bars Plaintiffs’ claim because a 12 corporation’s agents cannot conspire with the corporation as a matter of law. (Le MTD 20:10– 13 20). 14 Under Nevada law, a civil conspiracy is a “combination of two or more persons who, by 15 some concerted action, intend to accomplish some unlawful objective for the purpose of 16 harming another which results in damage.” Collins v. Union Federal Sav. & Loan Ass’n., 662 17 P.2d 610, 622 (Nev. 1983). However, under the intercorporate conspiracy doctrine, “agents 18 and employees of a corporation cannot conspire with their corporate principal or employer 19 where they act in their official capacities on behalf of the corporation and not as individuals for 20 their individual advantage.” Id. This limitation prevents a finding of liability for conspiracy for 21 a company’s agent unless there is a showing that the employee was acting as an individual and 22 for their individual advantage. Id. 23 Here, Plaintiff has alleged that Mr. Le is an agent of Van Law but has not alleged that 24 Mr. Le was acting in his individual capacity and for his individual advantage in the conspiracy. 25 (See generally FAC). Because the FAC does not allege that Mr. Le was acting in his individual 1 capacity, the intercorporate conspiracy doctrine bars Plaintiffs’ civil conspiracy claim against 2 Mr. Le. See Collins, 662 P.2d at 622. Thus, the Court DISMISSES the civil conspiracy claim 3 against Mr. Le, but grants leave to amend since the deficiencies in the complaint are capable of 4 correction. 5 B. Motion to Dismiss by Van Defendants 6 The Van Defendants move to dismiss six of the claims that Plaintiffs brought against 7 them: (1) wrongful termination in violation of public policy, (2) negligent hiring, negligent 8 training and supervision, (3) negligent retention, (4) fraudulent misrepresentation, (5) civil 9 racketeer influenced and corrupt organizations under NRS 207.400, and (6) civil conspiracy. 10 (Mot. Dismiss by Van Defendants (“Van MTD”) 2:20–27, ECF No. 14). 11 i. Wrongful Termination in Violation of Public Policy 12 The Van Defendants first seek dismissal of Plaintiffs’ wrongful termination claim, 13 asserting that the allegations do not fit into one of the categories of possible claims for 14 wrongful termination under Nevada law. 15 Under Nevada law, an employer may generally terminate an at-will employee for any 16 reason without being subject to liability for wrongful discharge. Smith v. Cladianos, 752 P.2d 17 233, 234 (Nev. 1988). However, Nevada recognizes a narrow exception to this rule where an 18 employer discharges an employee for a reason which violates a strong public policy of the 19 state. D’Angela v. Gardner, 819 P.2d 206, 216 (Nev 1991). To prevail on a tortious discharge 20 claim in Nevada, a plaintiff must establish that she: (1) was terminated by her employer for 21 reasons that “violate[ ] strong and compelling public policy”; and (2) is without “an adequate, 22 comprehensive, statutory remedy.” Ozawa v. Vision Airlines, Inc., 216 P.3d 788, 791 (Nev. 23 2009). A claim for tortious discharge is “available to an employee who was terminated for 24 refusing to engage in conduct that [she], in good faith, believed to be illegal. Any other 25 conclusion. . . would encourage unlawful conduct by employers and force employees to either 1 consent and participate in violation of the law or risk termination.” Allum v. Valley Bank of 2 Nev., 970 P.2d 1062, 1068 (Nev. 1998) (internal quotation marks omitted). 3 The Court finds that Plaintiffs have adequately pled a claim for tortious discharge. 4 Plaintiffs allege that Ms. Uy was terminated because she was unwilling to follow Mr. Le’s 5 instructions because she believed what he was asking her to do was illegal. (Compl. ¶¶ 47–53). 6 They further allege that Mr. Villanueva was constructively discharged for refusing to take 7 actions that he believed to be illegal. (Id. ¶¶ 54). The factual allegations in the FAC are 8 sufficient to “allow[] the court to draw the reasonable inference that the defendant” could be 9 liable for terminating these employees because they refused to engage in conduct they believed 10 to be illegal. Iqbal, 556 U.S. at 678 . Accordingly, the Court DENIES the Van Defendant’s 11 Motion to Dismiss as to the wrongful termination claim. 12 ii. Negligent Hiring, Negligent Training and Supervision 13 Defendants next move to dismiss Plaintiffs’ “Negligent Hiring, Negligent Training, and 14 Supervision” claim. Nevada courts recognize two separate torts: one for negligent hiring, and 15 another for negligent training, supervision, and retention. “The tort of negligent hiring imposes 16 a general duty on the employer to conduct a reasonable background check on a potential 17 employee to ensure that the employee is fit for the position.” Hall v. SSF, Inc., 930 P.2d 94 , 98 18 (Nev. 1996) (quoting Burnett v. C.B.A. Sec. Serv., 820 P.2d 750, 752 (Nev. 1991)). “An 19 employer breaches this duty when it hires an employee even though the employer knew, or 20 should have known, of that employee’s dangerous propensities.” 21 Plaintiffs do not allege any of the required elements of a negligent hiring claim. They 22 fail to allege that Van Law knew or should have known that their employees had certain 23 propensities. They also do not allege that Van Law failed to conduct a background check to 24 ensure that the employees were fit for the position. Plaintiffs only include the bare allegations 25 that Van Law “negligently hired” each employee “to perform services in connection with the 1 practice of law,” and that the failure to use reasonable care in hiring “caused Plaintiffs to suffer 2 economic and noneconomic damages.” (FAC ¶¶ 81, 83, 85, 87, 89, 92, 94, 95). These 3 statements, without additional factual allegations, are not sufficient to state a claim of negligent 4 hiring. See Hall, 930 P.2d 98 ; Twombly, 550 U.S. at 555 . 5 The record is similarly devoid of facts to support the remaining negligence-based 6 theories. In Nevada, the elements of a claim for negligent training, supervision, or retention 7 are: “(1) a general duty on the employer to use reasonable care in the training, supervision, and 8 retention of employees to ensure that they are fit for their positions, (2) breach, (3) injury, and 9 (4) causation.” Lambey v. Nev. ex rel. Dep’t of Health and Hum. Servs., 2008 WL 2704191 , at 10 *4 (D. Nev. July 3, 2008) (citing Hall, 930 P.2d at 98 , for duty and breach elements 11 and Jespersen v. Harrah’s Operating Co., 280 F. Supp. 2d 1189, 1195 (D. Nev. 2002), for 12 elements of injury and causation). 13 Plaintiffs’ general assertion that Ms. Van “failed to use reasonable care in the training, 14 supervision, and retention of employees to ensure they are fit for their position” is merely a 15 legal conclusion couched as a factual allegation. (FAC ¶ 78). It is therefore insufficient to meet 16 the 12(b)(6) pleading standard. See Twombly, 550 U.S. at 555 . Plaintiffs do not allege any 17 other facts that specifically indicate how the Van Defendants violated their duty to use 18 reasonable care in the training, supervision, and retention of employee. For each employee, 19 Plaintiffs only allege that “Ms. Van knew or should have known that [employee] continuously 20 violated Nevada law when [they] continuously engaged in the unlawful practice of law.” (FAC 21 ¶¶ 82, 84, 86, 88, 91, 93). But the simple allegation that an employee acted wrongfully does 22 not in and of itself support a claim for negligent training, supervision, or retention, without 23 additional factual allegations to support a finding that the employer violated its duty. See 24 Hall, 930 P.2d at 98. Therefore, the Court DISMISSES Plaintiffs claims for negligent hiring [25] 1 and negligent training, supervision, and retention. The Court also grants leave to amend these 2 claims, since it is not clear that amendment would be futile. 3 iii. Fraudulent Misrepresentation 4 The Van Defendants next move to dismiss Plaintiffs’ fraudulent misrepresentation 5 claim, asserting that Plaintiffs’ allegations are conclusory and not pled with particularity. (Van 6 MTD 8:14–9:10). Plaintiffs respond that their claim was pled with sufficient particularity and 7 that Defendants have been properly notified of the claim made against them. 8 To state a claim for fraudulent misrepresentation in Nevada, a plaintiff must allege that 9 (1) defendant made a false representation; (2) defendant knew or believed the representation to 10 be false; (3) defendant intended to induce plaintiff to rely on the misrepresentation; and (4) 11 plaintiff suffered damages as a result of his reliance. Barmettler v. Reno Air, Inc., 956 P.2d 12 1382, 1386 (1998). In addition, Rule 9 requires a party to “state with particularity the 13 circumstances constituting fraud.” Fed. R. Civ. P. 9(b). This particularity requires “an account 14 of the time, place, and specific content of the false representations as well as the identities of 15 the parties to the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir.2007); 16 see also Morris v. Bank of Nev., 886 P.2d 454 , 456 n. 1 (Nev. 1994). 17 Plaintiffs’ claim for misrepresentation fails because it was not pled with specificity as 18 required by Rule 9(b). Plaintiffs do not include allegations about who made the fraudulent 19 statements, when the statements were made, or where they were made. They also fail to allege 20 the specific content of the fraudulent statements. Moreover, Plaintiffs’ allegations are 21 essentially a “formulaic recitation of the elements of a cause of action” that includes only legal 22 conclusions and no factual allegations to support those conclusions. Twombly, 550 U.S. at 555 . 23 As such, Plaintiffs have not met the 12(b)(6) pleading standard, let alone the heightened 24 pleading requirements for fraud. See id. Thus, the Court DISMISSES Plaintiffs’ fraudulent [25] 1 misrepresentation claim. Because it is possible to correct the deficiencies identified above, the 2 Court grants Plaintiffs leave to amend this claim. 3 iv. Civil RICO 4 The Van Defendants also seek dismissal of the civil RICO claims asserted against them. 5 (Van MTD 9:12–11:1). Because the Court’s prior discussion of Plaintiffs’ civil RICO claim 6 was not specific to the Le Defendants, the Court also DISSMISSES the civil RICO claim 7 against the Van Defendants for the same reasons with leave to amend. 8 v. Civil Conspiracy 9 The Van Defendants lastly move to dismiss Plaintiffs’ civil conspiracy claim against 10 them. They first argue that Plaintiffs claim fails because they do not identify a specific tort 11 associated with the claim, which they assert is required for a civil conspiracy claim. (Van MTD 12 11:15–16). But under Nevada Law, an actionable civil conspiracy “consists of a combination 13 of two or more persons who, by some concerted action, intend to accomplish an unlawful 14 objective for the purpose of harming another, and damage results from the act or acts.” 15 Consolidated Generator-Nevada, Inc. v Cummins Engine Co., Inc., 971 P.2d 1251, 1256 (1998) 16 (quoting Hilton Hotels v. Butch Lewis Productions, 862 P.2d 1207, 1210 (1993)). Thus, 17 Plaintiff need not identify a specific tort associated with the claim. 18 The Van Defendants next argue that a heightened pleading standard applies to Plaintiffs’ 19 claim because it is a claim for civil conspiracy to defraud. (Van MTD 11:6–12). Plaintiffs’ 20 response does not address this argument. (See generally Resp. Van MTD). However, because 21 of the lack of factual allegations, it is not clear whether Plaintiffs’ claim is in fact one for civil 22 conspiracy to defraud. Plaintiffs title the claim “Civil Conspiracy” and do not include 23 allegations related to fraud under the claim, so the Court declines to apply the heightened 24 pleading standard for fraud to the civil conspiracy claim at this stage. [25] 1 Regardless, the factual allegations in Plaintiffs’ FAC are not sufficient to state a civil 2 conspiracy claim. Each of the three statements that Plaintiffs included under their civil 3 conspiracy claim are legal conclusions that do not contain “sufficient factual matter, accepted 4 as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting 5 Twombly, 550 U.S. at 570 ). The Court therefore dismisses the civil conspiracy claim against 6 the Van Defendants with leave to amend. 7 vi. Conclusion on Motions to Dismiss 8 In sum, the Court grants the Le Defendants’ Motion to Dismiss as to Plaintiffs’ Tortious 9 Interference with Business Relations claim, civil RICO claims, and civil conspiracy claim. The 10 Court also grants the Van Defendants’ Motion to Dismiss as to Plaintiffs’ negligent hiring 11 claim, negligent training, retention, and supervision claim, fraudulent misrepresentation claim, 12 civil RICO claim, and civil conspiracy claim, and denies the Van Defendants’ Motion to 13 Dismiss as to Plaintiffs’ wrongful discharge claim. Because it is not clear that amendment 14 would be futile for any of the claims, the Court grants Plaintiffs leave to amend on all 15 dismissed claims. 16 C. Motion to Strike 17 The Van Defendants also move to strike (1) the names of certain employees and (2) the 18 request for punitive damages from the FAC. (Mot. Strike 11:24–12:2, ECF No. 15). Rule 12(f) 19 of the Federal Rules of Civil Procedure states that a district court “may strike from a pleading 20 an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” “The 21 function of a 12(f) motion to strike is to avoid the expenditure of time and money that must 22 arise from litigating spurious issues by dispensing with those issues prior to trial. . . .” Fantasy, 23 Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir.1993) (quotation marks, citation, and first 24 alteration omitted), rev’d on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994). [25] 1 Motions to strike are disfavored even when brought for their prescribed purpose. Whittlestone, 2 Inc. v. Handi-Craft Co., 618 F.3d 970, 974 (9th Cir. 2010). 3 i. Employee Names 4 Defendants first argue that the non-defendant employee names that are included in the 5 FAC should be struck because there is no reason that they should be mentioned. (Mot. Strike 6 12:4–12). The Van Defendants do not cite any case law to support their arguments. Plaintiffs 7 respond that the names are properly included because the employees are material to the instant 8 case as an “intrinsic part” of the criminal schemes giving rise to Plaintiffs’ claims. (Resp. Mot. 9 Strike 16:1–11, ECF No. 18). In light of the fact that the Court granted the Motion to Dismiss 10 on the claims that included the names of the non-defendant employees at issue, the Court 11 DENIES the Van Defendant’s Motion to Strike the non-defendant employee names as moot 12 and takes no position as to whether the names should be included in a subsequent amended 13 complaint. 14 ii. Punitive Damages 15 Next, Defendants contend that the Court should strike Plaintiffs’ request for punitive 16 damages. (Mot. Strike 12:13–14:11). But the Ninth Circuit has made clear that Rule 12(f) of 17 the Federal Rules of Civil Procedure does not authorize a district court to dismiss a claim for 18 damages on the basis it is precluded as a matter of law. Whittlestone, 618 F.3d at 974–75. 19 Defendants make no argument as to why Whittlestone should not apply here, and therefore have 20 not met their burden. The Court therefore DENIES the Motion to Strike Plaintiffs’ request for 21 punitive damages. 22 /// 23 /// 24 /// 25 /// 1 CONCLUSION 2 IT IS HEREBY ORDERED that the Le Defendants’ Motion to Dismiss, (ECF No. 12), 3 ||1s GRANTED, with leave to amend. 4 IT IS FURTHER ORDERED that the Van Defendants’ Motion to Dismiss, (ECF No. 5 || 14), is GRANTED, in part, and DENIED, in part. Plaintiffs’ negligent hiring claim, 6 negligent training, retention, and supervision claim, fraudulent misrepresentation claim, civil 7 ||RICO claim, and civil conspiracy claim are dismissed with leave to amend. Plaintiffs’ g || wrongful termination claim is not dismissed. 9 IT IS FURTHER ORDERED that Plaintiff has 21 days from the date of this Order to 10 || file an amended complaint. The amended complaint should remedy the deficiencies identified 11 ||in this order and may not add new claims or defendants. Failure to file an amended complaint 12 || by the required date will result in the Court dismissing Plaintiffs’ claims with prejudice. 13 IT IS FURTHER ORDERED that the Van Defendants’ Motion to Strike, (ECF No. 14 || 15), is DENIED. 15 DATED this _29 _ day of January, 2025. [17] ig GloriaAM} Navarro, District Judge UNI STATES DISTRICT COURT [25] Page 15 of 15