Doering v. National Health Insurance Company

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] James M ichael Doering, ) No. CV-21-02198-PHX-SPL ) [9] ) 10 Plaintiff, ) ORDER vs. ) ) [11] ) National Health Insurance Company, et ) [12] al., ) 13 ) ) 14 Defendants. ) 15 Before the Court are Defendant LIFE’s 12(b)(6) Motion to Dismiss RICO Counts 16 1 and 2 (Doc. 31) and Defendants National Health Insurance Company’s and National 17 General Holdings Corporation’s Motion to Dismiss (Doc. 38). For the reasons that 18 follow, the Motions will be granted.1 19 I. BACKGROUND 20 On December 23, 2021, Justin W. Fontaine filed a Complaint initiating this matter. 21 (Doc. 1). Mr. Fontaine has since passed away, and the named Plaintiff is now James 22 Michael Doering, acting in his capacity as the personal representative of Mr. Fontaine’s 23 estate. (Doc. 58). Defendant National Health Insurance Company (“National Health”) is a 24 subsidiary of National General Holdings Corporation (“National General”) and offers 25 health insurance throughout the country. (Doc. 1 at 4–5). Defendant Joseph Holm is a [26] 27 1 Because it would not assist in resolution of the instant issues, the Court finds the pending motions are suitable for decision without oral argument. See LRCiv. 7.2(f); Fed. [28] R. Civ. P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). 1 licensed insurance agent in Arizona who sells National Health policies. (Doc. 1 at 5). He 2 is also the sole member of Defendant Health Insurance Advocates LLC. (Doc. 1 at 5). On 3 August 1, 2019, National Health issued a group Short-Term Limited Duration (“STLD”) 4 health policy to Defendant LIFE Association, Inc., a nonprofit organization that offers 5 various purported benefits to dues-paying members. (Doc. 1 at 5, 18). STLD policies are 6 regulated by the states, as they fall outside the protections of the federal Affordable Care 7 Act (“ACA”). (Doc. 1 at 15). 8 LIFE’s application for the National Health group STLD policy listed its city as 9 Birmingham, Alabama, and so the policy was issued in Alabama and governed by 10 Alabama law. (Doc. 1 at 24). In fact, the Alabama address listed on LIFE’s website, 11 communications, and filings submitted to various state insurance departments is a “virtual 12 office,” from which it has its mail and calls forwarded to its actual Texas office. (Doc. 1 13 at 24–26). Moreover, Plaintiff alleges that a group STLD policy can only be issued to an 14 association if it is maintained for a purpose other than obtaining insurance, but that LIFE 15 is in fact maintained for the purpose of obtaining insurance despite its contrary 16 representations to state regulators. (Doc. 1 at 17, 26). Plaintiff alleges that these 17 misrepresentations to state regulators have allowed Defendants to “evade state 18 regulation,” “forum shop for the most insurer-friendly state law,” and “price their 19 products well below those offered on the ACA’s exchanges.” (Doc. 1 at 3). 20 On December 15, 2020, Mr. Holm completed an application for National’s STLD 21 policy on behalf of Mr. Fontaine and his then-wife, Kelly Fontaine, through a phone call 22 with Ms. Fontaine. (Doc. 1 at 6–7). In response to a question about whether the applicant 23 has received medical care for drug or alcohol abuse in the last five years, Mr. Holm 24 marked “No.” (Doc. 1 at 9). Plaintiff alleges that that Mr. Holm never actually asked Ms. 25 Fontaine that and other questions, as Ms. Fontaine would have answered “Yes” due to 26 Mr. Fontaine’s prior treatment for alcohol abuse. (Doc. 1 at 9). The application was 27 approved and the Fontaines were insured under the group STLD policy beginning 28 January 1, 2021. (Doc. 1 at 10). 1 On February 20, 2021, Mr. Fontaine was in a severe motorcycle accident and was 2 transported to a hospital by air ambulance for treatment for multiple serious injuries. 3 (Doc. 1 at 11). He timely submitted insurance claims for the resulting medical expenses, 4 and National Health pre-approved his medical care related to the accident. (Doc. 1 at 11). 5 National Health then requested Mr. Fontaine’s past medical records and began a 6 comprehensive investigation of his medical history. (Doc. 1 at 12). On May 12, 2021, 7 National Health denied Mr. Fontaine’s claims and rescinded his STLD policy retroactive 8 to its effective date. (Doc. 1 at 12). National Health explained that based on his medical 9 records, the question on the application about alcohol abuse should have been answered 10 “Yes,” which would have made him ineligible for coverage. (Doc. 1 at 12). As a result, 11 Plaintiff incurred more than $600,000 in medical expenses. (Doc. 1 at 35). 12 Plaintiff’s Complaint alleges six counts: (1) violation of 18 U.S.C. § 1962 (c) of the 13 Racketeer Influenced and Corrupt Organizations Act (“RICO”) against Defendants 14 National Health, National General, and LIFE; (2) violation of 18 U.S.C. § 1962 (d) of 15 RICO against National Health, National General, and LIFE; (3) breach of the duty of 16 good faith and fair dealing against National Health and National General; (4) insurance 17 fraud pursuant to A.R.S. § 20-443 against National Health, National General, Mr. Holm, 18 and Health Insurance Advocates LLC; (5) violation of the Arizona Consumer Fraud Act 19 against National Health, National General, Mr. Holm, and Health Insurance Advocates 20 LLC; and (6) insurance agent negligence against Mr. Holm and Health Insurance 21 Advocates LLC. (Doc. 1). Mr. Holm and Health Insurance Advocates LLC have 22 answered the Complaint (Doc. 29), but National Health, National General, and LIFE now 23 move to dismiss the claims against them pursuant to Federal Rule of Civil Procedure 24 (“Rule”) 12(b)(6). (Docs. 31, 38). 25 II. LEGAL STANDARD 26 To survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain sufficient 27 factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” 28 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 1 544, 570 (2007)). A claim is facially plausible when it contains “factual content that 2 allows the court to draw the reasonable inference” that the moving party is liable. Id. 3 Factual allegations in the complaint should be assumed true, and a court should then 4 “determine whether they plausibly give rise to an entitlement to relief.” Id. at 679. Facts 5 should be viewed “in the light most favorable to the non-moving party.” Faulkner v. ADT 6 Sec. Servs., Inc., 706 F.3d 1017, 1019 (9th Cir. 2013). 7 Moreover, under Rule 9(b), “[i]n alleging fraud or mistake, a party must state with 8 particularity the circumstances constituting fraud or mistake.” Such allegations must be 9 “specific enough to give defendants notice of the particular misconduct which is alleged 10 to constitute the fraud charged so that they can defend against the charge and not just 11 deny that they have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9th 12 Cir. 1985). 13 III. DISCUSSION 14 a. RICO (Counts I and II) 15 Defendants argue that Plaintiff’s RICO claims should be dismissed for two 16 reasons: (1) they are barred by the McCarran-Ferguson Act, 15 U.S.C. § 1012 (b); and 17 (2) the Complaint falls short of the applicable pleading standard. These arguments will be 18 addressed in turn. 19 i. McCarran-Ferguson Act 20 Initially, Defendants allege that argue that Plaintiff’s RICO claims are reverse 21 preempted by the McCarran-Ferguson Act (the “Act”). The Act provides that “[n]o Act 22 of Congress shall be construed to invalidate, impair, or supersede any law enacted by any 23 State for the purpose of regulating the business of insurance, or which imposes a fee or 24 tax upon such business, unless such Act specifically relates to the business of insurance.” [25] 15 U.S.C. § 1012 (b). Thus, under the Act, “[s]tate law preempts a federal statute if (1) the 26 federal law does not specifically relate to insurance; (2) the state law is enacted for the 27 purpose of regulating insurance; and (3) the application of federal law to the case might 28 invalidate, impair, or supersede the state law.” Ojo v. Farmers Grp., Inc., 600 F.3d 1205 , 1 1208–09 (9th Cir. 2010). The first element is satisfied, as RICO undisputedly does not 2 specifically relate to insurance. See Merchs. Home Delivery Serv., Inc. v. Frank B. Hall 3 & Co., Inc., 50 F.3d 1486 , 1489 (9th Cir. 1995). The question, then, is whether 4 application of RICO in this case might invalidate, impair, or supersede state insurance 5 regulations. 6 “When federal law does not directly conflict with state regulation, and when 7 application of the federal law would not frustrate any declared state policy or interfere 8 with a State’s administrative regime,” the Act does not preclude application of the federal 9 statute. Humana Inc. v. Forsyth, 525 U.S. 299, 310 (1999) (interpreting the meaning of 10 “invalidate, impair, or supersede” under the Act). Defendants argue that application of 11 RICO would directly conflict with both Arizona and Alabama insurance regulations 12 because the states expressly allow the type of group STLD health insurance policies that 13 form the basis of Plaintiff’s RICO claims. But this argument takes far too broad a view of 14 Plaintiff’s claims. Plaintiff does not allege that RICO prohibits group STLD insurance 15 policies generally, but rather that Defendants defrauded state regulators and consumers in 16 violation of RICO in order to obtain a group STLD insurance policy and sell policies to 17 consumers. Defendants do not identify any state regulation that would expressly allow 18 such conduct, so there is no direct conflict with Plaintiff’s RICO claims. See id. at 308 . 19 The Court thus turns to whether application of RICO in this case would frustrate 20 state insurance policy or administration. At least with respect to Defendant LIFE, 21 Plaintiff concedes that Arizona’s insurance code does not provide a private right of action 22 for the conduct at issue. (Doc. 42 at 6). There is a circuit split as to whether a state 23 insurance code’s lack of a private right of action is dispositive in favor of reverse 24 preemption, but the Ninth Circuit has yet to weigh in. See Negrete v. Allianz Life Ins. Co. 25 of N. Am., 927 F. Supp. 2d 870 , 876–77 (C.D. Cal. 2013). District courts in the Ninth 26 Circuit have also split on the issue. Compare, e.g., Pearson v. Provident Life & Accident 27 Ins. Co., 834 F. Supp. 2d 1199, 1204 (D. Or. 2004) with Negrete, 927 F. Supp. 2d at 877 . 28 This Court agrees in full with Negrete’s reasoning and conclusion that “the better view” 1 is that “the absence of a private right of action under state insurance law is not 2 dispositive” as to application of the Act because under the Supreme Court’s holding in 3 Humana, “federal law may provide for a claim ‘in aid or enhancement of state regulation’ 4 even in those situations where a state does not provide for a private right of action.” 5 Negrete, 927 F. Supp. 2d at 877 (quoting Humana, 525 U.S. at 303 ). 6 Instead, this Court considers the lack of a private right of action under Arizona’s 7 insurance statutes as just one factor in the analysis of whether the application of RICO in 8 this case might invalidate, impair, or supersede state insurance law. The Third Circuit has 9 enumerated a “non-exclusive list of factors” that the Supreme Court considered in 10 Humana: 11 (1) the availability of a private right of action under state statute; (2) the availability of a common law right of action; [12] (3) the possibility that other state laws provided grounds for 13 suit; (4) the availability of punitive damages; (5) the fact that the damages available . . . could exceed the amount 14 recoverable under RICO, even taking into account RICO’s 15 treble damages provision; (6) the absence of a position by the State as to any interest in any state policy or their 16 administrative regime; and (7) the fact that insurers have relied on RICO to eradicate insurance fraud. [17] Weiss v. First Unum Life Ins. Co., 482 F.3d 254 (3d Cir. 2007); see Negrete, 927 F. Supp. 18 2d 870, 876 n.3 (finding that the Weiss factors “may be useful indicia of the proper [19] outcome under the [Act]”). [20] Here, the Court finds the fact that Arizona has its own civil RICO statute, [21] “patterned after the federal RICO act,” to be determinative. Rosier v. First Fin. Cap. [22] Corp., 889 P.2d 11 , 13–14 (Ariz. Ct. App. 1994); see A.R.S. § 13-2314.04(A). In fact, the [23] Arizona Court of Appeals has stated that “the Arizona racketeering statute is broader than [24] its federal counterpart.” Hannosh v. Segal, 328 P.3d 1049, 1054 (Ariz. Ct. App. 2014). [25] Courts have repeatedly allowed plaintiffs to advance Arizona RICO claims against [26] insurers in cases involving alleged insurance fraud. See, e.g., AAA Full Transp. Sys. v. [27] Hollis, No. 1 CA-CV 10-0646, 2011 WL 2936355 (Ariz. Ct. App. July 21, 2011); AAA [28] 1 Full Transp. Sys. v. Patterson, No. 1 CA-CV 09-0204, 2010 WL 1640976 (Ariz. Ct. App. 2 Apr. 22, 2010); Torres v. Allstate Prop. & Cas. Ins., No. CV-09-335-TUC-DCB, 2009 3 WL 10673974 (D. Ariz. Sept. 25, 2009); see also McClure Enters., Inc. v. Gen. Ins. Co. 4 of Am., No. CV 05-3491-PHX-SMM, 2009 WL 73677 , at *10 (D. Ariz. Jan. 9, 2009). 5 Because the Arizona legislature has itself provided a private right of action for 6 racketeering that applies to allegations against insurers, it is clear that application of its 7 narrower federal counterpart would “not frustrate any declared state policy or interfere 8 with [Arizona’s] administrative regime.” Humana Inc., 525 U.S. at 310 . To the extent 9 Defendants argue that Plaintiff does not have a valid state-law RICO claim based on the 10 facts alleged, given that the federal statute is more limited than the state statute, the Court 11 addresses that issue by considering whether Plaintiff has stated a federal RICO claim. 12 ii. Pleading Standard 13 To state a federal civil RICO claim under 18 U.S.C. § 1962 (c), a plaintiff must 14 allege “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity 15 (known as ‘predicate acts’) (5) causing injury to plaintiff’s ‘business or property.’” Living 16 Designs, Inc. v. E.I. Dupont de Nemours & Co., 431 F.3d 353 , 361 (9th Cir. 2005) 17 (internal quotation marks omitted). Moreover, the Rule 9(b) pleading standard applies to 18 civil RICO fraud claims such as this one. See Edwards v. Marin Park, Inc., 356 F.3d 19 1058 , 1065–66 (9th Cir. 2004). Defendants focus their arguments on the final three 20 elements.2 The Court will first address the alleged pattern of racketeering activity before 21 addressing causation. 22 Pattern of Racketeering Activity. “‘Racketeering activity’ is any act indictable 23 under several provisions of Title 18 of the United States Code,” including wire fraud, 24 which Plaintiff alleges as the racketeering activity in this case. Turner v. Cook, 362 F.3d 25 2 National’s Motion to Dismiss also argues that Plaintiff has failed to plead the 26 second element, but National’s Reply does not meaningfully rebut Plaintiff’s argument that the Complaint pleads an associated-in-fact enterprise, which the Court finds well 27 taken. See In re Katz Interactive Call Processing Pat. Litig., Nos. 07-ml-01816-B RGK (FFMX), CV 07-2134 RGK (FFMx), 2009 WL 8636055 , at *1–2 (C.D. Cal. Oct. 26, 28 2009). 1 1219, 1229 (9th Cir. 2004). To plead wire fraud as a predicate act, a plaintiff must allege 2 “(A) the formation of a scheme to defraud, (B) the use of . . . wires in furtherance of that 3 scheme, and (C) the specific intent to defraud.” Eclectic Props. E., LLC v. Marcus & 4 Millichap Co., 751 F.3d 990, 997 (9th Cir. 2014). A wire communication “in is 5 furtherance of a fraudulent scheme if it is ‘incident to the execution of the scheme,’ 6 meaning that it ‘need not be an essential element of the scheme, just a step in the plot.’” 7 Comm. To Protect Our Agric. Water v. Occidental Oil & Gas Corp., 235 F. Supp. 3d 8 1132, 1176 (E.D. Cal. 2017) (quoting United State v. Garlick, 240 F.3d 789, 795 (9th Cir. 9 2001)). As noted, Rule 9(b) requires particularity when alleging fraud, but “the only 10 aspects of wire fraud that require particularized allegations are the factual circumstances 11 of the fraud itself.” Odom v. Microsoft Corp., 486 F.3d 541, 554 (9th Cir. 2007). “The 12 pleader must state the time, place, and specific content of the false representations as well 13 as the identities of the parties to the misrepresentation.” Id. at 553 . 14 Plaintiff’s Complaint begins by broadly alleging that “Defendants have concocted 15 an elaborate scheme to evade consumer protection laws for insureds in Arizona and other 16 states in order to maximize sales of Short-Term, Limited Duration Insurance policies . . . 17 and to maximize denials and rescissions of these policies in the event of large claims.” 18 (Doc. 1 at 2). Under the “Predicate Acts” heading of the Complaint, Plaintiff alleges that 19 Defendants used wires to transmit misrepresentations and omissions to state insurance 20 departments; to collect information for Mr. Fontaine’s application; to collect LIFE 21 membership fees and National Health premiums; and to send and receive an authorization 22 form containing allegedly misleading statements from Mr. Fontaine allowing National 23 Health to obtain his medical records. (Doc. 1 at 31–32). None of these instances, 24 however, are pled with the requisite particularity. Elsewhere in the Complaint, Plaintiff 25 alleges the date and contents of various submissions to specific state regulatory bodies, 26 but it does not specify how any given document was filed, and the Court cannot simply 27 assume the use of wires. (See Doc. 1 at 25–27). As to the rest of the alleged predicate 28 acts, the Complaint fails to set forth any details as to the circumstances, including the 1 time, the means of communication, and how they furthered the alleged scheme to 2 defraud. See Odom, 486 F.3d at 553–54. Accordingly, Plaintiff has failed to plead 3 predicate acts of racketeering activity in accordance with Rule 9(b). As such, Plaintiff has 4 also failed to plead a pattern of racketeering activity. 5 Causation. A civil RICO claim requires both but-for and proximate causation. 6 Harmoni Int’l Spice, Inc. v. Hume, 914 F.3d 648, 651 (9th Cir. 2019). Here, Defendants 7 dispute only proximate causation. “When a court evaluates a RICO claim for proximate 8 causation, the central question it must ask is whether the alleged violation led directly to 9 the plaintiff’s injuries.” Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 461 (2006). 10 Three “practical considerations” guide the Court’s analysis: 11 (1) “the less direct an injury is, the more difficult it becomes to ascertain the amount of a plaintiff’s damages [12] attributable to the [RICO] violation, as distinct from other, 13 independent, factors”; (2) “directly injured victims can generally be counted on to [14] vindicate the law,” rendering unnecessary recognition of a 15 cause of action for those only indirectly injured; and 16 (3) allowing recovery by indirectly injured plaintiffs “would force courts to adopt complicated rules apportioning [17] damages among plaintiffs removed at different levels of 18 injury . . . to obviate the risk of multiple recoveries.” 19 Club One Casino, Inc. v. Perry, 837 F. App’x 459 , 460–61 (9th Cir. 2020) (quoting 20 Holmes v. Sec. Inv. Prot. Corp., 503 U.S. 258 , 269–70 (1992)).3 Still, proximate cause “is 21 a flexible concept that does not lend itself to a black-letter rule that will dictate the result [22] 23 3 Plaintiff largely relies on these considerations to argue that proximate causation is satisfied, referring to them as a “three-factor proximate cause test for RICO,” but that 24 is a mischaracterization. (Doc. 42 at 17). Rather, the Supreme Court has been exceedingly clear that there is no black-letter rule for proximate cause but rather that it is 25 a flexible tool “to limit a person’s responsibility for the consequences of that person’s own acts, with a particular emphasis on the demand for some direct relation between the 26 injury asserted and the injurious conduct alleged.” Bridge v. Phx. Bond & Indem. Co, 553 U.S. 639, 654 (2008) (internal quotation marks and citation omitted); see also Holmes, 27 503 U.S. at 269 (setting forth the three considerations as reasons why a direct relationship between the injury and the injurious conduct is one of the central elements of proximate 28 causation). 1 in every case.” Bridge v. Phx. Bond & Indem. Co., 553 U.S. 639, 654 (2008). 2 In this case, it cannot be said that Plaintiff’s injury—his incursion of uncovered 3 medical expenses—is the direct result of Defendants’ scheme to provide insurance under 4 an Alabama group STLD policy allegedly issued under false pretenses. Anza is 5 instructive. There, the plaintiff sued the owners of its principal competitor under RICO. 6 Anza, 547 U.S. at 453–54. The plaintiff alleged that the defendants had failed to charge 7 the requisite state sales tax to certain customers, allowing them to charge lower prices 8 without affecting profits. Id. at 454. To conceal the scheme, the defendants allegedly 9 submitted fraudulent tax returns to state regulators, which was the basis for the RICO 10 claims. Id. The Supreme Court held that the alleged RICO violation, however, was not 11 the proximate cause of the plaintiff’s alleged injury. Id. at 461. The Court reasoned that 12 the cause of the plaintiff’s harm was “a set of actions (offering lower prices) entirely 13 distinct from the alleged RICO violation (defrauding the state).” Id. at 458. The Court 14 explained that the defendants could have lowered their prices for “any number of reasons 15 unconnected to the asserted pattern of fraud,” and that “the fact that a company commits 16 tax fraud does not mean the company will lower its prices.” Id. at 458–59. 17 Likewise, here, the cause of Plaintiff’s asserted injury was the rescission of 18 Plaintiff’s policy and denial of coverage following his motorcycle accident, as Plaintiff 19 alleges for his state-law claims. (Doc. 1 at 11–15). Those actions are entirely distinct 20 from the alleged RICO violation of making misrepresentations to state insurance 21 regulators. Although Plaintiff alleges that National Health had a “[f]raudulent [r]ecission 22 and [d]enial [o]peration,” it is not in any way clear how that alleged operation is directly 23 related to the alleged regulatory misrepresentations. Rather, analogous to the 24 circumstances in Anza, Defendants could have rescinded Plaintiff’s policy and denied 25 coverage for a variety of reasons unconnected to the alleged wire fraud, and the fact that 26 LIFE fraudulently represented its location and purpose, if true, does not mean that 27 Defendants would necessarily, or even likely, rescind the policy and deny coverage. 28 To be sure, Plaintiff was a consumer of Defendants’ services, whereas the plaintiff 1 in Anza was the defendant’s competitor. But had the plaintiff in Anza been a consumer 2 who decided to purchase the defendant’s product based on the lower price and was then 3 injured by the product, the same result would surely follow: the plaintiff may not have 4 purchased the product but for the lower price made possible by the defendant’s tax fraud, 5 but the tax fraud would not be the proximate cause of the plaintiff’s injuries. Similarly, 6 here, Plaintiff alleges that Defendants were able to offer insurance at a lower price by 7 fraudulently issuing a group STLD policy in Alabama. (Doc. 1 at 29–30). But that 8 alleged fraud is not the proximate cause of Plaintiff’s incursion of medical expenses 9 based on the later rescission of the policy he purchased. Accordingly, Plaintiff has failed 10 to state a RICO claim under § 1962(c). 11 Plaintiff also alleges a RICO conspiracy claim under § 1962(d), which provides 12 that “[i]t shall be unlawful for any person to conspire to violate any of the provisions of 13 subsection (a), (b), or (c) of this section.” 18 U.S.C. § 1962 (d). “Plaintiffs cannot claim 14 that a conspiracy to violate RICO existed if they do not adequately plead a substantive 15 violation of RICO.” Howard v. Am. Online Inc., 208 F.3d 741, 751 (9th Cir. 2000); see 16 also Comm. To Protect Our Agric. Water, 235 F. Supp. 3d at 1180 (“Because plaintiffs 17 have failed to adequately allege a § 1962(c) RICO claim, they cannot plausibly allege a 18 RICO conspiracy under § 1962(d).”). Thus, having failed to state a § 1962(c) RICO 19 claim, Plaintiff has also failed to state a § 1962(d) RICO conspiracy claim. 20 b. State-Law Claims 21 Subject matter jurisdiction in this case is predicated on the federal question raised 22 by the RICO claims.4 (Doc. 1 at 4). Because those claims will be dismissed for failure to 23 state a claim, the Court declines to exercise supplemental jurisdiction over the remaining 24 state-law claims. See 28 U.S.C. § 1367 (c)(3). Thus, the Complaint will be dismissed in its 25 entirety. 26 /// [27] 4 The Court lacks diversity jurisdiction as, at minimum, Plaintiff and Defendant 28 Holm are both citizens of Arizona. See 28 U.S.C. § 1332 (a); (Doc. 1 at 4–5). 1| IV. CONCLUSION 2 Leave to amend a deficient complaint should be freely given “when justice so requires.” Fed. R. Civ. P. 15(a)(2). When dismissing for failure to state a claim, “a district 4) court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of 6| other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (internal quotation 7 | marks omitted). Here, the deficiencies in Plaintiff's Complaint may be curable, so leave 8 | to amend will be granted. See Harmoni Int'l Spice, Inc., 914 F.3d at 654 . Accordingly, 9 IT IS ORDERED: 10 1. That Defendant LIFE’s 12(b)(6) Motion to Dismiss RICO Counts | and 2 11 (Doc. 31) is granted; 12 2. That Defendants National Health Insurance Company’s and National General 13 Holdings Corporation’s Motion to Dismiss (Doc. 38) is granted; 14 3. That the Complaint (Doc. 1) is dismissed without prejudice; 15 4. That Plaintiff shall have until September 9, 2022 to file an Amended 16 Complaint; and 17 5. That if Plaintiff does not file an Amended Complaint by September 9, 2022, 18 the Clerk of Court must terminate this action. 19 Dated this 19th day of August, 2022. [20] 7 United States District Judge