Gisselle Barnhart v. Points Development US Ltd. et al

Filing 15

MINUTES (IN CHAMBERS) by Judge Christina A. Snyder RE: Defendant's Motion to Dismiss Complaint 9 . Plaintiffs' complaint is hereby DISMISSED in its entirety WITHOUT PREJUDICE. Plaintiff shall have 21 days from the date of this order to file an amended complaint addressing the deficiencies identified herein. Failure to do so may result in dismissal of this action with prejudice. Court Reporter: Not Present. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:16-cv-02516-CAS(Ex)

Title

GISSELLE BARNHART v. POINTS DEVELOPMENT US LTD., ET
AL.

Present: The Honorable

Date

May 25, 2016

CHRISTINA A. SNYDER

Catherine Jeang
Deputy Clerk

Not Present
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

I.

(IN CHAMBERS) - DEFENDANT’S MOTION TO DISMISS
COMPLAINT (Dkt. 9, filed April 19, 2016)

INTRODUCTION

On February 24, 2016, plaintiff Gisselle Barnhart (“plaintiff”) filed the instant
action in the Los Angeles County Superior Court against defendant Points Development
US Ltd. (“Points Development US”) or (“defendat”), and does 1 through 48, inclusive.1
See Dkt. 1, Ex. A (Complaint). Plaintiff’s complaint asserts the following four claims:
(1) breach of contract; (2) “Discrimination on the Basis of Age in violation of the Civil
Rights Act of 1991 42 U.S.C. § 1981, et seq.”; (3) “Retaliation” under 42 U.S. C. § 1983,
et seq.; and (4) intentional infliction of emotional distress. See Complaint. On April 12,
2016, defendant timely removed this action to federal court, asserting both federal
question jurisdiction and diversity jurisdiction. Dkt. 1 (Notice of Removal).
On April 19, 2016, defendant filed the instant motion to dismiss pursuant to
Federal Rule of Civil Procedure 12(b)(6), dkt. 9 (“Motion”), as well as a request for
judicial notice, dkt. 10 (“RJN”). On May 2, 2016, plaintiff filed an opposition to
defendant’s motion. Dkt. 11 (“Opp’n”). On May 6, 2016, defendant filed a reply. Dkt.
13 (“Reply”). Having carefully considered the parties’ arguments, the Court finds and
concludes as follows.

1

More specifically, plaintiff asserts her claims against “Points Development US
Inc., d.b.a. Points International.” See Complaint, Caption Page.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

2:16-cv-02516-CAS(Ex)

Title

GISSELLE BARNHART v. POINTS DEVELOPMENT US LTD., ET
AL.

II.

Date

‘O’

May 25, 2016

BACKGROUND

Plaintiff, who “is and at all times relevant hereto has been a resident of [Tarrant
County in] the State of Texas,” alleges that she was first employed by “Points
International” on about July 21, 2003. See Complaint at ¶¶ 1, 6-10. According to the
complaint, “Points International . . . has been an entity that has its second largest office in
California and conducts business throughout the State of California.” Id. at ¶ 3. Plaintiff
avers that on or about March 2014, she noticed that management at Points International
“began to criticize the work of persons over 40 years of age,” and that between March
2014 and January 2016, at least ten employees at Points International were either
“demoted or forced to resign.” Id. at ¶ 9.
In the instant action, plaintiff alleges that her termination from “Points
International” on August 25, 2015 was discriminatory on the basis of age, and further that
defendant failed to fulfill certain severance pay obligations upon terminating plaintiff.
See id. at ¶¶ 10-14. Based upon these allegations, the operative complaint asserts claims
against defendant “Points Development US Ltd.” (and not Points International (U.S.)
Ltd.) for breach of contract, violation of 42 U.S.C. § 1981, violation of 42 U.S.C. § 1983,
and intentional infliction of emotional distress.
III.

LEGAL STANDARD
A.

Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6)

A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal
sufficiency of the claims asserted in a complaint. Under this Rule, a district court
properly dismisses a claim if “there is a ‘lack of a cognizable legal theory or the absence
of sufficient facts alleged under a cognizable legal theory.’” Conservation Force v.
Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balisteri v. Pacifica Police Dep’t,
901 F.2d 696, 699 (9th Cir. 1988)). “While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:16-cv-02516-CAS(Ex)

May 25, 2016

Title

GISSELLE BARNHART v. POINTS DEVELOPMENT US LTD., ET
AL.

“Factual allegations must be enough to raise a right to relief above the speculative level.”
Id. (internal citations omitted).
In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all
material allegations in the complaint, as well as all reasonable inferences to be drawn
from them. Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be
read in the light most favorable to the nonmoving party. Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001). However, “a court considering a motion to
dismiss can choose to begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth. While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.”
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); see Moss v. United States Secret Service,
572 F.3d 962, 969 (9th Cir. 2009) (“[F]or a complaint to survive a motion to dismiss, the
non-conclusory ‘factual content,’ and reasonable inferences from that content, must be
plausibly suggestive of a claim entitling the plaintiff to relief.”). Ultimately,
“[d]etermining whether a complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw on its judicial experience
and common sense.” Iqbal, 556 U.S. at 679.
Unless a court converts a Rule 12(b)(6) motion into a motion for summary
judgment, a court cannot consider material outside of the complaint (e.g., facts presented
in briefs, affidavits, or discovery materials). In re American Cont’l Corp./Lincoln Sav. &
Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other grounds sub nom
Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). A court
may, however, consider exhibits submitted with or alleged in the complaint and matters
that may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon
Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999); Lee v. City of Los Angeles,
250 F.3d 668, 689 (9th Cir. 2001).
As a general rule, leave to amend a complaint which has been dismissed should be
freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when “the
court determines that the allegation of other facts consistent with the challenged pleading
could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture
Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see Lopez v. Smith, 203 F.3d 1122, 1127 (9th
Cir. 2000).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

2:16-cv-02516-CAS(Ex)

Title

GISSELLE BARNHART v. POINTS DEVELOPMENT US LTD., ET
AL.

IV.

Date

‘O’

May 25, 2016

DISCUSSION

In the instant motion, defendant Points Development US Ltd. argues that it is a
California-based sister subsidiary of plaintiff’s former employer, Points International
(U.S.) Ltd., which––according to defendant––is not subject to jurisdiction in California.2
Accordingly, defendant asserts that it has been wrongfully sued in this action for breach
of a contract to which it was not a party. Although plaintiff does not attach to her
complaint a copy of the employment agreement that forms the basis of her claims,
defendant Points Development US Ltd. provides the Court with a copy of the agreement.
See Request for Judicial Notice, Ex. A. Documents that are “central” to a plaintiff’s
claim, or “documents whose contents are alleged in a complaint and whose authenticity
no party questions, but which are not physically attached to the pleading, may be
considered in ruling on a Rule 12(b)(6) motion to dismiss.” Branch v. Tunnell, 14 F. 3d
449,454 (9th Cir. 1994), overruled in part on other grounds by Galbraith v. County of
Santa Clara, 307 F.3d 1119 (9th Cir. 2002) (“[A] document is not ‘outside’ the complaint
if the complaint specifically refers to the document and if its authenticity is not
questioned”; a court may properly consider such document in ruling on a motion to
dismiss).
The relevant employment agreement (1) is on “Points International Ltd.”
letterhead, (2) appears to be signed by Points International Ltd.’s Senior Vice President
of the Partner Group, (3) indicates that plaintiff was offered full-time employment with
“Points International Ltd.” in Dallas/Ft. Worth, Texas, and (4) states that plaintiff was
“assigned to [Points International Ltd.’s] US organization.” See RJN, Ex. A. The
agreement does not mention “Points Development US Ltd.,” the sole named defendant in
this action. Indeed, the complaint itself states that plaintiff “is and at all times relevant
hereto has been a resident of the State of Texas” and that she was employed by (nonparty) “Points International,” not defendant Points Development US Ltd. See Complaint
at ¶¶ 1, 3. Ultimately, therefore, defendant contends that plaintiff’s employment with
Points International (U.S.) Ltd. in Texas cannot subject defendant “to this

2

Defendant Points Development US Ltd. States in its Notice of Removal that it is
Delaware corporation with its principal place of business in San Francisco, California.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:16-cv-02516-CAS(Ex)

May 25, 2016

Title

GISSELLE BARNHART v. POINTS DEVELOPMENT US LTD., ET
AL.

forum-shopping lawsuit in California, under ‘alter ego’ (which was neither pleaded in her
Complaint nor properly alleged here) or any other theory.” Reply at 2.
While the parties dispute whether Texas or California law governs the instant
action, under both Texas and California law, a plaintiff cannot maintain a breach of
contract claim against an entity who is not a party to the contract.3 See Lea-Stokes v.
Hunt Cty. Mental Health & Mental Retardation Ctr., No.04-cv-0748, 2005 WL 1875442,
at *2 (N.D. Tex. Aug. 5, 2005) (granting doctor’s motion to dismiss contract claim
against him because doctor was not a party to the contract at issue); Iqbal v. Bank of Am.,
N.A., No. 12-938, 2012 WL 11955635, at *4 (W.D. Tex. Dec. 18, 2012) (stating that
plaintiffs “cannot maintain a breach of contract claim against an entity not a party to the
contract they claim was breached”); C & A Investments, Inc. v. Bonnet Res. Corp., 959
S.W.2d 258, 262 (Tex. App. 1997) (affirming trial court’s grant of summary judgment on
plaintiffs breach of contract claim because defendant was not a party to the contract and
“as a matter of law, [plaintiff] cannot maintain a breach of contract action against an
entity not a party to the contract”), writ denied (Dec. 11, 1997); Conder v. Home Savings
of Am., 680 F. Supp. 2d 1168, 1174 (C.D. Cal. 2010) (applying California law and
granting defendant’s motion to dismiss breach of contract claim against someone who is
not a party to the contract). Accordingly, defendant Points Development US Ltd.
contends that all of plaintiff’s claims must fail because “Points Development US Ltd.” is
not a party to the employment agreement that gives rise to the instant suit, and in fact
“did not exist [as an entity] until nine years after [p]laintiff signed the [relevant
employment] agreement” with (non-party) Points International (U.S.) Ltd. Motion at 1.
In opposition to the instant motion, plaintiff appears to concede that she was not
employed by––and therefore did not enter a contract with––defendant Points
Development US Ltd, such that defendant would only be liable under an alter ego theory
of liability. Plaintiff attempts to advance an alter ego theory of liability in her opposition,
asserting that she “is confident that through discovery[] [she] would be able to provide
additional evidence that [1] all the [relevant] entities act as one,” that [2] the named

3

Defendant maintains that Texas law must be applied here because plaintiff was at
all relevant times a resident of Texas and employed by (non-party) Points International
(U.S.) Ltd. in Texas.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:16-cv-02516-CAS(Ex)

May 25, 2016

Title

GISSELLE BARNHART v. POINTS DEVELOPMENT US LTD., ET
AL.

defendant is merely a California-based agent or alter ego of non-party Points
International (U.S.) Ltd., and that [3] “plaintiff’s filing is proper and not forum shopping
as alleged.” Opp’n at 3.
“The alter ego doctrine arises when a plaintiff comes into court claiming that an
opposing party is using the corporate form unjustly and in derogation of the plaintiff's
interests . . . The purpose of the doctrine is to bypass the corporate entity for the purpose
of avoiding injustice.” Neilson v. Union Bank of California, N.A., 290 F. Supp. 2d 1101,
1115 (C.D. Cal. 2003) (Morrow, J.) (citation and internal quotation marks omitted).
However, “the existence of a parent-subsidiary or mere sister-sister entity relationship ‘is
not sufficient to establish personal jurisdiction over the parent [or sister entity] on the
basis of the subsidiaries’minimum contacts with the forum.’ ” Stewart v. Screen
Gems-EMI Music, Inc., 81 F. Supp. 3d 938, 954 (N.D. Cal. 2015) (quoting Doe v.
Unocal Corp., 248 F.3d 915, 925 (9th Cir. 2001)); see also Ranza v. Nike, Inc., 793 F.3d
1059, 1070 (9th Cir. 2015) (“As a general principle, corporate separateness insulates a
parent corporation from liability created by its subsidiary, notwithstanding the parent's
ownership of the subsidiary.”). Furthermore,“[c]onclusory allegations of ‘alter ego’
status are insufficient to state a claim. Rather, a plaintiff must allege specific facts
supporting . . . the necessary elements.” Gerritsen v. Warner Bros. Entm’t Inc., 116 F.
Supp. 3d 1104, 1136 (C.D. Cal. 2015).4

4

Under California law, two elements must be alleged before the doctrine can be
invoked: “First, there must be such a unity of interest and ownership between the
corporation and its equitable owner that the separate personalities of the corporation and
the shareholder do not in reality exist. Second, there must be an inequitable result if the
acts in question are treated as those of the corporation alone.” Sonora Diamond Corp. v.
Superior Court, 83 Cal.App.4th 523, 526 (2000). Under Texas law, “the limitation on
liability that the corporate structure affords can be ignored ‘when the corporate form has
been used as part of a basically unfair device to achieve an inequitable result.’ ” Spring
St. Partners-IV, L.P. v. Lam, 730 F.3d 427, 443 (5th Cir. 2013) (noting additional factors
necessary to establish alter ego liability under Texas law) (citing Castleberry v.
Branscum, 721 S.W.2d 270, 271-73 (Tex. 1986), superseded on other grounds by former
Bus. Corp. Act art. 2.21, re-codified at Tex. Bus. Orgs. Code § 21.223 (citations
omitted)).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:16-cv-02516-CAS(Ex)

May 25, 2016

Title

GISSELLE BARNHART v. POINTS DEVELOPMENT US LTD., ET
AL.

Here, plaintiff’s complaint alleges no facts whatsoever regarding alter ego liability,
and her opposition offers only conclusory assertions in that regard. Again, even if these
assertions had been pleaded in the complaint, such “[c]onclusory allegations of ‘alter ego’
status are insufficient to state a claim,” as plaintiff “must allege specifically . . . the
elements of alter ego liability, as well as facts supporting [these elements].” Neilson, 290
F. Supp. 2d at 1116; see also Sandoval v. Ali, 34 F. Supp. 3d 1031, 1040 (N.D. Cal.
2014) (plaintiffs did not “adequately” allege an inequitable result by stating “conclusorily
that ‘an inequity would result if the corporations were not viewed as alter egos of each
other and the [defendants]’”). Plaintiff asserts, however, that she is “willing to file an
amended pleading providing more facts that the entities . . . [at issue here] act as one.”
Opp’n at 3. Accordingly, the Court dismisses plaintiff’s complaint without prejudice and
with leave to amend in order to address the deficiencies identified herein.5

5

The Court also notes that plaintiff’s two federal claims are also properly
dismissed on independent grounds. First, plaintiff’s claim under 42 U.S.C. § 1981 for
“Discrimination on the Basis of Age” fails because section 1981, by its plain language,
applies to discrimination on the basis of race, and the operative complaint contains no
allegations of any discrimination on these grounds. See Parks Sch. of Bus., Inc. v.
Symington, 51 F.3d 1480, 1487 (9th Cir. 1995) (“In order to withstand a motion to
dismiss for failure to state a claim, a § 1981 cause of action need only allege ‘that
plaintiff suffered discrimination . . . on the basis of race.’ ”) (citation omitted); Rhodes v.
Place Cnty., No. 2:09-cv-00489, 2011 WL 1302264, at *8 (E.D. Cal. Mar. 31, 2011)
(granting defendant’s motion to dismiss plaintiff’s section 1981 claim because plaintiff
did not plead her race or ethnicity and plaintiff “never intimated that any of the alleged
events were the result of racial discrimination”). Second, plaintiff’s claim under 42
U.S.C. § 1983 fails because section 1983 applies to defendants acting under color of state
law, and the complaint here lacks any allegation that defendant was acting under color of
state law in its employment or termination of plaintiff. Furthermore, plaintiff here “treats
[her] § 1983 claim as an independent, substantive claim.” Cholla Ready Mix, Inc. v.
Civish, 382 F.3d 969, 978 (9th Cir. 2004). However, “one cannot go into court[, as
plaintiff has done here,] and claim a ‘violation of § 1983’—for § 1983 by itself does not
protect anyone against anything.” Chapman v. Houston Welfare Rights Org., 441 U.S.
600, 617 (1979). “Section 1983 does not create any substantive rights; rather it is the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

2:16-cv-02516-CAS(Ex)

Title

GISSELLE BARNHART v. POINTS DEVELOPMENT US LTD., ET
AL.

V.

Date

‘O’

May 25, 2016

CONCLUSION

In accordance with the foregoing, plaintiffs’ complaint is hereby DISMISSED in
its entirety WITHOUT PREJUDICE.
Plaintiff shall have twenty-one (21) days from the date of this order to file an
amended complaint addressing the deficiencies identified herein. Failure to do so may
result in dismissal of this action with prejudice.
IT IS SO ORDERED.
00
Initials of Preparer

:

00

CMJ

vehicle whereby plaintiffs can challenge actions by governmental officials.” Henderson
v. City of Simi Valley, 305 F.3d 1052, 1056 (9th Cir. 2002). Accordingly, plaintiff here
“has no cause of action under § 1983 because [she] has not stated a viable claim that
defendant[] violated [her] federal rights.” Cholla Ready Mix, 382 F.3d at 978.
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