Bio Trust Nutrition LLC v. Bill Silverstein

Filing 35

ORDER DISMISSING CASE FOR LACK OF SUBJECT MATTER JURISDICTION. Defendants motion to dismiss and motion to strike are vacated as moot 7 , 8 by Judge Dean D. Pregerson. (Made JS-6. Case Terminated.). (lc). Modified on 12/17/2013 (lc).

1
2

O

3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA

10
11
12

BIO TRUST NUTRITION LLC, a
Texas limited liability
company,

13
14
15

Plaintiff,
v.
BILL SILVERSTEIN, an
individual,

16
Defendant.
17

)
)
)
)
)
)
)
)
)
)
)
)
)

Case No. CV 13-05828 DDP (Ex)
ORDER DISMISSING CASE FOR LACK OF
SUBJECT MATTER JURISDICTION
[DKT Nos. 7, 18, 24]

___________________________
18
19

The court ordered the parties in this suit to show cause why

20

this action should not be dismissed for lack of subject matter

21

jurisdiction. (DKT No. 24.) Because such cause has not been shown,

22

the court dismisses the case.

23

Plaintiff Bio Trust Nutrition LLC (“Bio Trust”) asks this

24

court to enter a Declaratory Judgment that certain emails allegedly

25

sent by Bio Trust to Defendant Bill Silverstein did not violate

26

California’s anti-spam statute, Business & Professions Code §

27

17529.5. (See DKT No. 1. (“Bio Trust Complaint”.) In cases in which

28

a litigant is seeking federal declaratory relief, district courts

1

have the discretion to determine whether to exercise their

2

jurisdiction to entertain such actions. See Wilton v. Seven Falls

3

Co., 515 U.S. 277, 286-87 (1995) (“We have repeatedly characterized

4

the Declaratory Judgment Act as an enabling Act, which confers a

5

discretion on the courts rather than an absolute right upon the

6

litigant.”) (internal question marks and citation omitted). In

7

considering whether to exercise jurisdiction, there is a

8

presumption against maintaining a federal declaratory action when

9

parallel proceedings are pending in state court. See Chamberlain v.

10

Allstate Ins. Co., 931 F.2d 1361, 1366-67 (9th Cir. 1991) (“[W]hen

11

a party requests declaratory relief in federal court and a suit is

12

pending in state court presenting the same state law issues, there

13

exists a presumption that the entire suit should be heard in state

14

court.”).

15

This court ordered the parties to explain why this court

16

should exercise subject matter jurisdiction in light of Judge

17

Klauser’s October 17, 2013 order remanding Silverstein v. Bio Trust

18

Nutrition LLC, et al. (Case No. 13-7343 (“Silverstein Complaint”))

19

to California Superior Court. That action, like the present one,

20

centers on a set of emails allegedly sent by Bio Trust to

21

Silverstein between November 1, 2012 and February 6, 2013 and, like

22

the present case, concerns Bio Trust’s liability under California

23

Business and Professions Code § 17529.5 in relation to those

24

emails. (Compare Case No. 13-05828, DKT No. 1 (Bio Trust Complaint)

25

with Case No. 13-7343, DKT No. 1 (Silverstein Complaint).)

26

Plaintiff Bio Trust argues that the instant action is not

27

duplicative of pending state proceedings on the ground that, on

28

October 31, following this court’s Order to Show Cause, Bio Trust
2

1

removed Silverstein v. Bio Trust Nutrition LLC, et al. for a second

2

time to federal court. (See Case No. 13-8041, DKT No. 1.; Response

3

at 5-6.) However, on November 20, 2013, Judge Klausner, su sponte,

4

remanded the case back to California Superior Court. (See Case No.

5

13-8041, DKT No. 16.) The case is thus again proceeding in state

6

court.

7

Plaintiff Bio Trust also argues that the two cases are not in

8

fact parallel. In particular, it argues that “the crux of

9

Silverstein’s complaint is an alleged conspiracy between the

10

defendants to hire a convicted felon–Persaud–to send emails on

11

their behalf.” (Bio Trust’s Response to Order to Show Cause at 2-

12

3.) To the contrary, the court finds that both cases focus on the

13

same issue-–whether Bio Trust is liable under California Business

14

and Professions Code § 17529.5 for sending the aforementioned

15

emails. (See Silverstein Complaint §§ 59-83 (alleging violation of

16

Cal. Bus. & Prof. Code 17529.5 by Bio Trust in relation to emails);

17

Bio Trust Complaint §§ 22-29 (seeking, as its sole cause of action,

18

declaratory judgement that Bio Trust is not liable under § 17529.5

19

in relation to emails).) Although the Silverstein Complaint names

20

defendants in addition to Bio Trust, all of the factual and legal

21

issues raised in the Bio Trust Complaint are contained within or

22

may be raised as a defense to the Silverstein Complaint.

23

In particular, Bio Trust is free to raise its argument that

24

Silverstein’s claim is preempted by the federal CAN-SPAM act as a

25

defense in the state court proceeding. (Response at 4-5; Opposition

26

to Motion to Strike at 11-15.) While federal courts are not bound

27

by a state court’s interpretation of a federal law, a state court

28

is nevertheless capable of determining whether preemption is a
3

1

valid defense in this case. See Takeda v. Nw. Nat. Life Ins. Co.,

2

765 F.2d 815, 822 n. 10 (9th Cir. 1985), citing Franchise Tax Board

3

v. Construction Laborers Vacation Trust, 463 U.S. 1, 21 (1983) (“We

4

note, however, that the state court to which we remand this case is

5

fully capable to decide issues of preemption if defendants continue

6

to assert them.”) There is a body of federal case law on the

7

preemption question at issue here which the state court hearing the

8

parallel suit may consider. See, e.g., Gordon v. Virtumundo, Inc.,

9

575 F.3d 1040, 1060 (9th Cir. 2009) (construing CAN-SPAM to preempt

10

state claims that are not based on traditional tort theories of

11

falsity and deception and requiring that false or deceptive

12

information be material and that the falsity either be intended or

13

tend to mislead.); Tagged, Inc. v. Does 1 through 10, 2010 WL

14

370331 (N.D. Cal. Jan. 25, 2010) *6-7 (applying Gordon to claim

15

under Cal. Bus. & Prof. Code 17529.5); Asis Internet Servs. v.

16

Member Source Media, LLC, 2010 WL 1610066 *2-4 (N.D. Cal. Apr. 20,

17

2010) (same); Asis Internet Servs. v. Subscriberbase Inc., 2010 WL

18

1267763 *9-12 (N.D. Cal. Apr. 1, 2010) (same).

19

In sum, in light of the parallel ongoing proceeding in state

20

court, the court finds that the interests of “judicial

21

administration, comity, and fairness to the litigants” weigh

22

against exercising jurisdiction over the present case. Chamberlain,

23

931 F.2d at 1367. Accordingly, the suit is dismissed for lack of

24
25
26

///

27

///

28

///
4

1

subject matter jurisdiction. Defendant’s motion to dismiss and

2

motion to strike are vacated as moot. (DKT Nos. 7, 18.)

3
IT IS SO ORDERED.
4
5

Dated: December 16, 2013
DEAN D. PREGERSON
United States District Judge

6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5