Tracy Anderson Mind and Body, LLC et al v. Megan Roup et al

Filing 20

ORDER RE MOTION TO DISMISS AND MOTION TO STRIKE by Judge Ronald S.W. Lew: The Court GRANTS Defendants' Motion to Dismiss Plaintiffs' Lanham Act and UCL claims with leave to amend and DENIES Defendant's Motion to Dismiss Plaintiffs' copyright and breach of contract claims #15 . The Court will defer its final ruling on Defendants' anti-SLAPP request until after Plaintiffs have amended their complaint in light of this Order. (gk)

'O'

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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CV 22-4735-RSWL-Ex

TRACY ANDERSON MIND AND
BODY, LLC, et al.,

ORDER re: MOTION TO
DISMISS AND MOTION TO
STRIKE [15]

Plaintiffs,
v.
MEGAN ROUP, et al.,
Defendants.

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Plaintiffs Tracy Anderson Mind and Body, LLC

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(“Plaintiff TAMB”) and Studio New York LLC (“Plaintiff

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TANY”) (collectively, “Plaintiffs”) brought the instant

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Action against Defendants Megan Roup (“Defendant Roup”)

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and The Sculpt Society (“Defendant TSS”) (collectively,

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“Defendants”) alleging copyright infringement, violation

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of the Lanham Act, breach of contract, and violation of

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unfair competition law.

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Defendants’ Motion to Dismiss [15].

Currently before the Court is

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Having reviewed all papers submitted pertaining to

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this Motion, the Court NOW FINDS AND RULES AS FOLLOWS:

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the Court GRANTS Defendants’ Motion to Dismiss

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Plaintiffs’ Lanham Act and UCL claims with leave to

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amend and DENIES Defendant’s Motion to Dismiss

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Plaintiffs’ copyright and breach of contract claims.
I.

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BACKGROUND

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A.

Factual Background

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Plaintiffs allege the following in their Complaint:

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Tracy Anderson (“Anderson”) developed the Tracy

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Anderson Method (“TA Method”)—routines combining

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choreography, fitness, and cardiovascular movement—after

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decades of research, development, testing, and

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investment.

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Anderson is the founder and CEO of Plaintiff TAMB, which

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offers choreography-based fitness and mat movement

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classes.

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of registered copyrights to various media, including

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DVDs created by and featuring Anderson, that express,

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relate to, or are based on, the TA Method.

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First Am. Compl. (“FAC”) ¶ 1, ECF No. 12.

Id. ¶ 2.

In turn, Plaintiff TAMB is the owner

Id.

In 2011, Plaintiff TANY, a subsidiary under

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Plaintiff TAMB, which is also owned by Anderson,

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employed Defendant Roup as a trainer.

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Defendant Roup was required to sign a Trainer Agreement

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upon employment.

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trainers from using or disclosing the company’s

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confidential information, which includes “nonpublic

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business and operation information, training materials

Id.

Id. ¶ 3.

The Trainer Agreement prohibits

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and manuals, and transcribed methods . . . including

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those comprising the TA Method’s proprietary

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choreography movements.”

Id.

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During Defendant Roup’s six-year employment with

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Plaintiff TANY, Defendant Roup learned and had access to

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significant confidential information, including

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“(i) training materials, choreography transcriptions,

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and custom write-ups related to the performance and

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teaching of the TA Method, and (ii) business

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information, customer lists, and operating procedures.”

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Id. ¶ 4.
Later, in or around February 2017, Defendant Roup

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terminated her employment with Plaintiff TANY and

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founded Defendant TSS the next month.

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Defendant TSS also offers “choreography-based fitness

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and mat movement classes that directly compete with

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Plaintiffs[’ classes].”

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Defendant TSS, Defendant Roup neither references her

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association with Plaintiffs, nor credits Plaintiffs for

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training, teaching, or developing Defendant Roup.

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7.

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damages and injunctive relief for copyright

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infringement, breach of contract, violation of the

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Lanham Act, and unfair competition.

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B.

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Id.

Id. ¶ 5.

In creating and operating

Id. ¶

Plaintiffs thus filed the current Action seeking

Id. ¶ 10.

Procedural Background
Plaintiffs filed their First Amended Complaint [12]

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on September 13, 2022.

Defendants then filed the

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instant Motion [15] on September 27, 2022.
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Plaintiffs

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opposed [17] the Motion on October 11, 2022, and

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Defendants replied [18] on October 18, 2022.

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II.

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A.

DISCUSSION

Legal Standard

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1.

Motion to Dismiss

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Rule 12(b)(6) of the Federal Rules of Civil

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Procedure allows a party to move for dismissal of one or

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more claims if the pleading fails to state a claim upon

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which relief can be granted.

A complaint must “contain

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sufficient factual matter, accepted as true, to state a

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claim to relief that is plausible on its face.”

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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation

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omitted).

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cognizable legal theory or the absence of sufficient

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facts alleged under a cognizable legal theory.”

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Balistreri v. Pacifica Police Dep’t, 902 F.2d 696, 699

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(9th Cir. 1988) (citation omitted).

Dismissal is warranted for a “lack of a

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In ruling on a 12(b)(6) motion, a court may

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generally consider only allegations contained in the

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pleadings, exhibits attached to the complaint, and

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matters properly subject to judicial notice.

Swartz v.

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KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007).

A court

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must presume all factual allegations of the complaint to

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be true and draw all reasonable inferences in favor of

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the non-moving party.

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F.2d 583, 585 (9th Cir. 1991).

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whether the plaintiff will ultimately prevail, but

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whether the plaintiff is entitled to present evidence to

Klarfeld v. United States, 944

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The question is not

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support its claims.

Jackson v. Birmingham Bd. of Educ.,

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544 U.S. 167, 184 (2005) (quoting Scheuer v. Rhodes, 416

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U.S. 232, 236 (1974)).

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contain detailed factual allegations, a plaintiff must

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provide more than “labels and conclusions” or “a

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formulaic recitation of the elements of a cause of

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action.”

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(2007).

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even if it strikes a savvy judge that actual proof of

While a complaint need not

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
However, “a well-pleaded complaint may proceed

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those facts is improbable, and ‘that a recovery is very

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remote and unlikely.’”

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Rhodes, 416 U.S. 232, 236 (1974)).

Id. at 556 (quoting Scheuer v.

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2.

Motion to Strike

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California’s anti-Strategic Lawsuit Against Public

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Participation (“anti-SLAPP”) statute provides for a

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special motion to strike state law claims brought

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“primarily to chill the valid exercise of the

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constitutional rights of freedom of speech and petition

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for the redress of grievances.”

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§ 425.16(a).

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under the anti-SLAPP statute must engage in a two-part

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inquiry.”

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1110 (9th Cir. 2003).

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initial prima facie showing that the plaintiff’s suit

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arises from an act in furtherance of the defendant’s

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rights of petition or free speech.”

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quotation marks and citation omitted).

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the defendant has made a prima facie showing, the burden

Cal. Civ. Proc. Code

“A court considering a motion to strike

Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097,
“First, a defendant must make an

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Id. (internal
“Second, once

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shifts to the plaintiff to demonstrate the probability

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of prevailing on the challenged claims.”

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quotation marks and citation omitted).

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B.

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Analysis
1.

Rule 12(b)(6) Motion
a.

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Id. (internal

Copyright Infringement

Plaintiffs bring a claim against Defendant for

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copyright infringement.

FAC ¶¶ 50-56.

“To establish

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infringement, two elements must be proven: (1) ownership

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of a valid copyright, and (2) copying of constituent

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elements of the work that are original.”

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Publ’ns., Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S.

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340, 361 (1991).

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facie evidence of the validity of the copyright and the

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facts stated in the certificate.”

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While an “accused infringer can rebut [the] presumption

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of validity” conferred by a copyright registration,

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“such a presumption is strong in a motion to dismiss

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since the court must assume all factual allegations are

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true.”

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Inc., 888 F. Supp. 112, 115 (N.D. Cal. 1995).

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copying, a plaintiff can rely on circumstantial evidence

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that the defendant had access to the copyrighted work

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and that there is substantial similarity between

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defendant’s work and copyrighted work.

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Carey, 376 F.3d 841, 844 (9th Cir. 2004).

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Feist

A copyright registration is “prima
17 U.S.C. § 410(c).

Datastorm Techs., Inc. v. Excalibur Commc’ns,
To show

Swirsky v.

Here, Plaintiffs adequately pled a prima facie case
of copyright infringement.

First, Plaintiffs provided a
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list of copyright registrations for nineteen “Motion

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Picture[s]” for which Plaintiff TAMB is the sole

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copyright claimant.

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Next, Plaintiffs alleged that Defendants have published

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videos that “infringe on [Plaintiff TAMB’s] copyrights

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by copying the choreography movements, sequences, and

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routines depicted in the [copyrighted works];

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organizational structure and format of the [copyrighted

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works]; and aesthetic elements depicted in the

FAC, Attachment A, ECF No. 12-1.

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[copyrighted works].”

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contend that Defendants had access to the copyrighted

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works through Defendant Roup’s employment with

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Plaintiffs and specify that at least three of Defendant’

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videos are substantially similar to Plaintiff’s

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copyrighted works. 1

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FAC ¶ 47.

Moreover, Plaintiffs

Id. ¶¶ 3-4, 48-49.

Therefore,

Under certain circumstances, a court ruling on a motion to
dismiss may independently assess whether works are not
substantially similar. See Christianson v. West Pub. Co., 149
F.2d 202, 203 (9th Cir. 1945) (“There is ample authority for
holding that when the copyrighted work and the alleged
infringement are both before the court, capable of examination
and comparison, non-infringement can be determined on a motion to
dismiss.”). Here, however, the Court cannot properly examine and
compare the works to determine non-infringement. Plaintiffs have
provided three examples broadly describing how Defendants’
“choreography movement, sequences, and routines are substantially
similar” to those depicted in Plaintiffs’ copyrighted works. FAC
¶ 48. But Plaintiffs did not submit the referenced videos with
their FAC. See generally FAC. Moreover, Plaintiffs state that
“[b]ecause Defendants’ videos are published behind a paywall,”
Plaintiffs are “unable to review and compare every one of
Defendants’ videos” with their own, and therefore, “the full
extent of Defendants’ infringement . . . cannot be assessed until
Defendants produce the videos to Plaintiffs in discovery.” Id.
¶ 49. Consequently, the Court is unable to determine noninfringement at this stage of litigation.
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Plaintiffs have pled a prima facie case of copyright

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infringement.

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Inc., 119 F. Supp. 3d 944, 952 (D. Ariz. 2015) (finding

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that plaintiff pled a plausible infringement claim by

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presenting its copyright registration and alleging that

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defendants published plaintiff’s copyrighted work

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online).

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See Wake Up & Ball LLC v. Sony Music Ent.

Defendants, however, argue that Plaintiffs have not
pled a prima facie case of copyright infringement

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because “functional exercise movements are not

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copyrightable.”

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14., ECF No. 15.

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copyrighted work qualifies for copyright protection is a

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factual inquiry not appropriate for determination on a

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motion to dismiss, and (2) regardless, Plaintiffs’

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choreographic work is copyrightable.

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(“Opp’n”) 5:21-21, 8:6-8.

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inquiry into the copyrightability of Plaintiffs’ works

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is not appropriate at this stage of litigation.

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Defs.’ Mot. to Dismiss (“Mot.”) 7:12Plaintiffs counter that (1) whether a

Plfs.’ Opp’n

The Court agrees that an

As explained, when assessing a motion to dismiss,

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the Court “must assume all factual allegations [in the

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Complaint] are true.”

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Supp. at 115.

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that copyrighted works do not qualify for copyright

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protection based on a “detailed factual analysis” of the

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works are “inappropriate . . . as the Court must accept

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all material factual allegations as true.”

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HMC Grp., No. CV1303273DMGVBKX, 2014 WL 12589312 at *3

Datastorm Techs., Inc., 888 F.

Accordingly, motion to dismiss arguments

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Thomson v.

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(C.D. Cal. Feb. 18, 2014) (holding that motion to

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dismiss arguments regarding copyrightability are

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premature and such arguments should instead be asserted

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at summary judgment); see also P & P Imports, LLC v.

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Festival Trading, Inc., No. CV171541DOCJCGX, 2018 WL

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5099723 at *6 (C.D. Cal. May 15, 2018) (declining to

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assess copyrightability of a copyrighted work on a

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motion to dismiss); E. W. Sounds, Inc. v. Phoenix,

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No. CV 12-6143 CAS AJWX, 2012 WL 4003047 at *3

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(C.D. Cal. Sept. 10, 2012) (same).

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In Thomson, the defendant asserted that the

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copyrighted works did not qualify for copyright

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protection because they were “functional” designs that

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amounted to “[mere] ideas and concepts.”

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2014 WL 12589312 at *3.

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determining whether the copyrighted works fell into the

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specified categories would require “a detailed factual

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analysis” inappropriate for a motion to dismiss.

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Similarly, here, Defendants contend that Plaintiffs’

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copyrighted works are not copyrightable because they are

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“functional exercise movements” that are ultimately

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“unprotectable ‘ideas’ or ‘processes.’”

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As in Thomson, determining the protectability of

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Plaintiffs’ copyrighted works would require the Court to

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conduct a detailed factual analysis unfit for ruling on

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a motion to dismiss.

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and Plaintiffs have met their burden of pleading

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copyright infringement.

Thomson,

There, the court held that

Id.

Mot. 7:12-24.

Thus, Defendants’ argument fails,
See Ashcroft, 556 U.S. 662
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at 678 (holding that a complaint must contain enough

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factual sufficiency to be plausible on its face to

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survive a motion to dismiss for failure to plead a

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claim); see also Lee v. City of Los Angeles, 250 F.3d

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668, 688 (9th Cir. 2001) (“[F]actual challenges to a

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plaintiff’s complaint have no bearing on the legal

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sufficiency of the allegations under Rule 12(b)(6).”).

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Accordingly, the Court DENIES Defendants’ Motion to

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Dismiss Plaintiffs’ copyright infringement claim.

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b.

Advertising

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Violation of the Lanham Act – False

To succeed on a Lanham Act claim for false

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advertising, a plaintiff must establish: (1) a false

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statement of fact by the defendant in a commercial

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advertisement about its own or another’s product;

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(2) the statement actually deceived or has the tendency

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to deceive a substantial segment of its audience;

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(3) the deception is material, in that it is likely to

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influence the purchasing decision; (4) the defendant

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caused its false statement to enter interstate commerce;

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and (5) the plaintiff has been or is likely to be

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injured as a result of the false statement, either by

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direct diversion of sales from itself to defendant or by

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a lessening of the goodwill associated with its

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products.

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See 15 U.S.C. § 1125.

Importantly, district courts in the Ninth Circuit

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apply a heightened pleading standard for false

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advertising claims.

See, e.g., EcoDisc Tech. AG v. DVD
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Format/Logo Licensing Corp., 711 F. Supp. 2d 1074, 1085

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(C.D. Cal. 2010) (“Although the Ninth Circuit has not

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concluded that Rule 9(b) applies to Lanham Act claims,

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many district courts have applied this heightened

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pleading standard to claims that are grounded in fraud,

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such as misrepresentation claims.”).

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Rule 9(b), Plaintiff must state the time, place, and

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specific content of the false representations as well as

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the identities of the parties to the misrepresentation.”

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EcoDisc Tech., 711 F. Supp. 2d at 1085 (citing Schreiber

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Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393,

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1401 (9th Cir. 1986)).

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what is false and misleading about the statement and why

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it is false.

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317 F.3d 1097, 1106 (9th Cir.2003)).

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“To satisfy

Plaintiffs must also set forth

Id. (citing Vess v. Ciba–Geigy Corp. USA,

Plaintiffs alleged all elements of a Lanham Act

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violation with sufficient particularity, specifically

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listing the following “false and/or misleading”

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statements from Defendant Roup’s biography on

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Defendants’ website: “I knew that there was something

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missing from the boutique fitness community, so I

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combined my passion for dance and love for fitness to

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create The Sculpt Society.

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fitness and developing The Sculpt Society method before

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launching in 2017.”

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these statements “misrepresent the nature,

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characteristics, and qualities of Defendants’ services”

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because they “imply” that (1) Defendant Roup developed

I spent years teaching

FAC ¶ 58.

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Plaintiffs assert that

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the “TSS Method” over a period of multiple years, when

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she did not; (2) the “TSS Method” was created through

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years of science-based research, development, data

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collection, analysis, and trial and error, when it was

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not; and (3) the “TSS Method” is significantly different

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from Plaintiffs’ “TA Method,” when it is not.

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59.

Id. ¶ 58,

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Defendants counter that these statements are

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“facially non-actionable” because, amongst other

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reasons, (1) they are “classic examples of non-

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actionable opinions or puffery which are both

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nonmaterial and unlikely to induce consumer reliance,”

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and (2) they are non-material because a reasonable

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consumer would not rely on the statements when making

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purchasing decisions.

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Mot. 12:22–17:25.

The Court’s analysis therefore centers on whether

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Plaintiff has plausibly alleged a false statement of

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fact.

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i.

False Statement of Fact

“To demonstrate falsity within the meaning of the

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Lanham Act, a plaintiff may show that the statement was

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literally false, either on its face or by necessary

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implication, or that the statement was literally true

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but likely to mislead or confuse consumers.”

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Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139

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(9th Cir. 1997).

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examined in the full context of the advertising or

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promotional materials in which the statement was made.

Southland

The allegedly false statement must be

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Id.
Importantly, an advertising statement may be non-

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actionable if it constitutes “puffery,” which is defined

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as “exaggerated advertising, blustering, and boasting

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upon which no reasonable buyer would rely.”

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1145.

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[in]capable of being proved false,” statements that are

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not “specific and measurable,” or statements that

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otherwise cannot be “reasonably interpreted as a

Id. at

Puffery includes “statement[s] of fact

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statement of objective fact.”

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Inc. v. First Am. Title Ins. Co., 173 F.3d 725, 731 (9th

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Cir. 1999); see also Glen Holly Ent., Inc. v. Tektronix

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Inc., 343 F.3d 1000, 1015 (9th Cir. 2003) (establishing

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that “generalized, vague, or unspecific assertions”

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constitute unactionable puffery); Cook, Perkiss & Liehe,

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Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242,

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246 (9th Cir. 1990) (“[Puffery] has been described by

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most courts as involving outrageous generalized

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statements, not making specific claims, that are so

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exaggerated as to preclude reliance by consumers.”).

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Coastal Abstract Serv.,

A statement is also considered puffery if the claim

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is extremely unlikely to induce consumer reliance.

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Newcal Indus., Inc. v. Ikon Off. Sol., 513 F.3d 1038,

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1054 (9th Cir. 2008).

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between a statement of fact and mere puffery rests in

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the specificity or generality of the claim.

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Perkiss & Liehe, Inc., 911 F.2d at 246.

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theme that seems to run through cases considering

Ultimately, the difference

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Cook,

“The common

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puffery in a variety of contexts is that consumer

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reliance will be induced by specific rather than general

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assertions.”

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quantifiable, that makes a claim as to the “specific or

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absolute characteristics of a product,” may be an

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actionable statement of fact while a general, subjective

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claim about a product is non-actionable puffery.

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Id.

Thus, a statement that is

Id.

Courts may determine at the motion to dismiss stage
whether an alleged misrepresentation is a statement of

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fact or mere puffery as a matter of law.

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Inc., 513 F.3d at 1053.

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Defendants’ statements are “false and/or misleading,”

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the Court assesses whether the claims are literally

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false or true but misleading.

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A.

Newcal Indus.,

Since Plaintiffs assert that

FAC ¶ 58.

Literally False

To be literally false, a statement must “expressly

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or impliedly assert a fact that is susceptible to being

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proved false,” and must be able to reasonably be

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“interpreted as stating actual facts.”

20

American Broad. Cos., 283 Cal. Rptr. 644, 650 (1991).

21

Claims that a defendant invented a product to fill a gap

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in the market, and the resulting implications regarding

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the innovativeness of a defendant’s product, constitute

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puffery rather than an assertion of fact.

25

Soilworks, LLC v. Midwest Indus. Supply, Inc., 575 F.

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Supp. 2d 1118, 1133 (D. Ariz. 2008) (holding that claims

27

that a company was the “innovator” of a product and that

28

the product was the result of “revolutionary state-of14

Weller v.

See

1

the-art innovation” constituted puffery because those

2

claims are general, vague, and unmeasurable.); Williams

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& Lake LLC v. Genesis Systems LLC, No. CV-17-00117-TUC-

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CKJ, 2017 WL 6418937 at *6-8 (D. Ariz. Sept. 13, 2017)

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(establishing that “inventorship is not a cause of

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action” for false advertising under the Lanham Act, and

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that claims attacking defendant’s statements about

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inventorship do not challenge the nature of the

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defendant’s product even if the statements create a

10

perception that the plaintiff’s product is inferior).

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Here, Defendant Roup’s statements constitute non-

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actionable puffery.

First, her statement that “[she]

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knew something was missing from the boutique fitness

14

community, so [she] combined [her] passion for dance and

15

love for fitness to create The Sculpt Society” conveys a

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general, vague, and unmeasurable assertion regarding

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inventorship and the innovativeness of Defendants’

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products.

19

Williams & Lake LLC, 2017 WL 6418937 at *6-8.

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Defendant Roup’s statement that she “spent years

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teaching fitness and developing The Sculpt Society

22

method before launching in 2017” is another general and

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vague assertion of inventorship.

24

appear to primarily take issue with Defendant Roup’s

25

statement about her development of The Sculpt Society

26

method, it is worth noting that Plaintiffs offer

27

evidence proving the truth of Defendant Roup’s claim

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that she “spent years teaching fitness.”

See Soilworks, LLC, 575 F. Supp. 2d at 1133;

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Next,

While Plaintiffs

FAC ¶¶ 58-59;

1

Id. ¶ 3 (“[Plaintiff] TANY employed [Defendant] Roup as

2

a trainer from 2011 to 2017.”).

3

unlikely a reasonable consumer would rely on these

4

statements as an objective, measurable statement of

5

fact.

6

CV-09147-SVW-AS, 2019 WL 4390564 at * 11 (C.D. Cal.

7

May 1, 2019) (holding that a CEO’s representations that

8

she invented a product and that it filled a “white

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space” in the market were puffery that would not induce

10

See R & A Synergy LLC v. Spanx, Inc., No. 2:17-

consumer reliance).
B.

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12

Moreover, it is

True But Misleading

If an advertising claim is not literally false, a

13

plaintiff may still satisfy the first element of a

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Lanham Act false advertising claim by establishing that

15

the representations of fact in advertising statements

16

were literally true but otherwise misled, confused, or

17

deceived the public.

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A plaintiff generally relies on consumer surveys to

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assess whether consumers were misled.

20

Southland Sod, 108 F.3d at 1140.
Id.

Plaintiffs argue that Defendant Roup’s statements

21

may mislead the public to wrongly believe that

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(1) Defendant Roup developed the “TSS Method” over a

23

period of multiple years, when she did not; (2) the “TSS

24

Method” was created through years of science-based

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research, development, data collection, analysis, and

26

trial and error, when it was not; and (3) the “TSS

27

Method” is significantly different from Plaintiffs’ “TA

28

Method,” when it is not.

FAC ¶ 58, 59.
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As explained

1

above, Defendant Roup’s statements are non-actionable

2

puffery, meaning that reasonable consumers are unlikely

3

to rely on these statements to make purchasing decisions

4

regardless of whether the statements may be misleading.

5

Thus, Defendant Roup’s statements cannot be considered

6

true but misleading as a matter of law.

7

Therefore, Plaintiffs have not adequately pled that

8

Defendants have made a false statement of fact and the

9

Court GRANTS Defendants’ Motion to Dismiss Plaintiff’s

10

Lanham Act claim.

11

Since the Court resolves Defendants’ Motion to

12

Dismiss Plaintiff’s Lanham Act claim on these grounds,

13

it need not address the remaining false advertising

14

factors or parties’ arguments.
c.

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16

Breach of Contract

Plaintiff TANY alleges that Defendant Roup breached

17

her employment contract with Plaintiff TANY.

18

To plead a cause of action for breach of contract, a

19

plaintiff must show (1) the existence of a contract;

20

(2) plaintiff’s performance or excuse for

21

nonperformance; (3) defendant’s breach; and (4) that

22

plaintiff sustained damages resulting from the breach.

23

See Zamora v. Solar, No. 2:16-CV-01260-ODW-KS, 2016 WL

24

3512439, at *3 (C.D. Cal. June 27, 2016) (citing CDF

25

Firefighters v. Maldonado, 70 Cal. Rptr. 3d 667, 680

26

(2008)).

27
28

FAC ¶ 65.

Plaintiff TANY has sufficiently alleged a breach of
contract claim.

Plaintiff TANY states that it entered
17

1

into and performed its obligations under a “Trainer

2

Agreement” with Defendant Roup.

3

The Trainer Agreement prohibited trainers, including

4

Defendant Roup, from “using or disclosing company

5

‘Confidential Information,’ which includes its nonpublic

6

business and operational information, training materials

7

and manuals, and the transcribed methods taught to

8

trainers, including those comprising the TA Method’s

9

proprietary choreography movements, sequences, and

FAC ¶¶ 3, 29, 65-66.

10

routines” during and after their employment with

11

Plaintiff TANY.

12

Id. ¶ 3, 29.

Next, Plaintiff TANY contends Defendant Roup

13

breached the Trainer Agreement by “using and disclosing

14

to [third parties] the Confidential Information after

15

the termination of her employment [with Plaintiff]

16

TANY.”

17

that Defendant Roup (1) used the Confidential

18

Information “with developing the TSS Method and with

19

planning, recording, and publishing videos on the TSS

20

app and website”; (2) used the Confidential Information

21

“related to customers, operations, program structure,

22

customer intake methods, and employees”; and

23

(3) “disclosed the Confidential Information to third

24

parties, including employees, affiliates, and/or

25

customers of TSS.”

26

contends that as a result of Defendant Roup’s alleged

27

breach, Plaintiff TANY “has suffered, and will continue

28

to suffer, substantial monetary damages in an amount to

Id. ¶ 68.

Specifically, Plaintiff TANY asserts

Id.

Finally, Plaintiff TANY

18

1

be determined at trial.”

2

TANY has alleged a plausible breach of contract claim.

3

The Court therefore DENIES Defendants’ Motion to Dismiss

4

Plaintiffs’ breach of contract claim.
d.

5

Id. ¶ 69.

Thus, Plaintiff

Violations of California Unfair Competition
Law

6

Plaintiffs argue that Defendants violated

7
8

California’s Unfair Competition Law (“UCL” or “section

9

17200”) because they engaged in unfair and/or fraudulent

10

business acts and practices including: (1) taking,

11

using, and continuing to use Plaintiffs’ confidential

12

information to form and operate TSS, which competes with

13

Plaintiffs, and (2) making false and/or misleading

14

descriptions or representations of fact by setting forth

15

the statements addressed in Plaintiffs’ false

16

advertisement claim.

FAC ¶ 71.

California’s UCL prohibits “any unlawful, unfair or

17
18

fraudulent business act or practice and unfair,

19

deceptive, untrue or misleading advertising.”

20

& Prof. Code § 17200.

21

and fraudulent—provides a separate and distinct theory

22

of liability.

23

504 F.3d 718, 731 (9th Cir. 2007).

Cal. Bus.

Each UCL prong—unlawful, unfair,

Lozano v. AT&T Wireless Servs., Inc.,

Since Plaintiffs alleged Defendants participated in

24
25

“unfair and/or fraudulent business acts,” they are

26

required to plead their claims under the unfair and

27

fraud prongs of the UCL.

28

///

See Lozano, 504 F.3d at 731.

19

1
2
3

///
i.

“Unfair” Prong

The “unfair” prong of the UCL prohibits a business

4

practice that “violates established public policy

5

or . . . is immoral, unethical, oppressive or

6

unscrupulous and causes injury to consumers which

7

outweighs its benefits.”

8

49 Cal. Rptr. 3d 227, 240 (2006).

9

Supreme Court has held that “[w]hen a plaintiff who

McKell v. Wash. Mut., Inc.,
The California

10

claims to have suffered injury from a direct

11

competitor's ‘unfair’ act or practice invokes

12

section 17200, the word ‘unfair’ in that section means

13

conduct that threatens an incipient violation of an

14

antitrust law, or violates the policy or spirit of one

15

of those laws because its effects are comparable to or

16

the same as a violation of the law, or otherwise

17

significantly threatens or harms competition.”

18

Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.

19

4th 163, 187 (1999).

20

Cel-Tech

Although Plaintiffs allege that Defendants are

21

competitors, Plaintiffs do not argue that Defendants’

22

alleged misconduct threatens an incipient violation of

23

an antitrust law or has effects comparable to a

24

violation of an antitrust law.

25

Accordingly, Plaintiffs have not sufficiently alleged a

26

plausible claim for relief under the UCL’s unfair prong.

27
28

See generally FAC.

ii. “Fraud” Prong
“To state a claim under the ‘fraud’ prong of
20

1

[section] 17200, a plaintiff must allege facts showing

2

that members of the public are likely to be deceived by

3

the alleged fraudulent business practice.”

4

Uber Techs., Inc., No. 3:15-cv-1175-LB, 2015 WL 6123054,

5

at *6 (N.D. Cal. Oct. 19, 2015).

6

fraud prong of the UCL are subject to the particularity

7

requirements of Federal Rule of Civil Procedure 9(b).”

8

In re Anthem, Inc. Data Breach Litig., No. 15-MD-2617-

9

LHK, 2016 WL 3029783, at *34 (N.D. Cal. May 27, 2016);

Antman v.

“Claims under the

10

see also Kearns v. Ford Motor Co., 567 F.3d 1120, 1122,

11

1126-27 (9th Cir. 2009) (“[If] the [UCL] claim is said

12

to be ‘grounded in fraud’ . . . the pleading of that

13

claim as a whole must satisfy the particularity

14

requirement of Rule 9(b).”).

15

must plead the time, place, and contents of the false

16

representations, as well as the identity of the person

17

making the misrepresentation and what that person

18

obtained thereby.

A plaintiff, therefore,

See Fed. R. Civ. P. 9(b).

19

To have standing under the UCL’s fraud prong, a

20

claim must plead “actual reliance by the [party] seeking

21

relief under [the statute].”

22

Servs., Inc., 177 Cal. App. 4th 1235, 1235 (2009).

23

California state court has addressed whether “competitor

24

plaintiffs must plead their own reliance or whether

25

pleading consumer reliance is sufficient for fraudulent

26

business practice claims brought by competitors.”

27

23andMe, Inc. v. Ancestry.com DNA, LLC, 356 F. Supp. 3d

28

889, 911 (N.D. Cal. 2018).

Morgan v. AT&T Wireless

As a result, there is a
21

No

1

split of authority in the California district courts

2

with a majority view that a plaintiff must allege its

3

own reliance and not the reliance of third parties.

4

Id.; see also ConsumerDirect, Inc. v. Pentius, LLC, No.

5

821CV01968JVSADSX, 2022 WL 16949657 at *8 (C.D. Cal.

6

Aug. 25, 2022) (adopting the majority approach that a

7

plaintiff must allege its own reliance).

8

Jerome’s Furniture Warehouse v. Ashley Furniture Indus.,

9

Inc., No. 20CV1765-GPC(BGS), 2021 WL 1541649 at *7-8

But see

10

(S.D. Cal. Apr. 20, 2021) (adopting the minority

11

approach based on some courts’ perception that the

12

“broad, sweeping language” of the UCL indicates

13

California legislative intent that the substantive reach

14

of UCL claims be “expansive”) (internal quotations and

15

citations omitted).

16

Plaintiffs fail to plead with specificity that they

17

actually relied upon Defendant Roup’s alleged

18

misrepresentations.

19

a UCL claim under the fraud prong.

20

Therefore, Plaintiffs fail to state

Since Plaintiffs have not sufficiently alleged a

21

UCL claim under either relevant prong, the Court GRANTS

22

Defendants’ Motion to Dismiss Plaintiffs’ UCL claim.

23
24

e.

Leave to Amend

“Where a motion to dismiss is granted, a district

25

court must decide whether to grant leave to amend.”

26

Winebarger v. Pennsylvania Higher Educ. Assistance

27

Agency, 411 F. Supp. 3d 1070, 1082 (C.D. Cal. 2019).

28

“The court should give leave [to amend] freely when
22

1

justice so requires.”

2

Ninth Circuit, “Rule 15’s policy of favoring amendments

3

to pleadings should be applied with ‘extreme

4

liberality.’”

5

(9th Cir. 1981).

6

standard, the Court may consider “the presence of any of

7

four factors: bad faith, undue delay, prejudice to the

8

opposing party, and/or futility.”

9

Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir.

10
11

Fed. R. Civ. P. 15(a)(2).

In the

United States v. Webb, 655 F.2d 977, 979
Against this extremely liberal

Owens v. Kaiser

2001).
Here, leave to amend Plaintiffs’ claims should be

12

granted because Plaintiffs can cure their Complaint by

13

pleading additional facts that support their claims.

14

There is no evidence of bad faith or undue delay by

15

Plaintiff, or potential prejudice to Defendant by

16

allowing amendment.

17

Defendants’ Motion to Dismiss Plaintiff’s Lanham Act and

18

UCL claims with leave to amend.

The Court therefore GRANTS

19

2.

Motion to Strike

20

Defendants move to strike the portion of

21

Plaintiffs’ UCL claim asserting that Defendants engaged

22

in unfair and/or fraudulent business acts and practices

23

by making false or misleading statements in advertising.

24

See Mot. 23:1-24:21; White v. Lieberman, 103 Cal. App.

25

4th 210, 220 (2002) (holding that the trial court erred

26

as a matter of law when it denied the defendant's anti–

27

SLAPP motion to strike as moot because it granted the

28

defendant’s demurrer on the same claim); Thornbrough v.
23

1

West Placer Unified Sch. Dist., 2010 WL 2179917, at *11

2

(E.D. Cal. May 27, 2010) (“Since a defendant who

3

prevails on an anti–SLAPP motion is entitled to recover

4

mandatory attorney’s fees, the dismissal of Plaintiff’s

5

claims against [defendant] does not moot [defendant’s]

6

anti–SLAPP motion.”).
As described, a court considering whether claims

7
8

are barred by the “anti-SLAPP statute must engage in a

9

two-part inquiry.”

Vess v. Ciba-Geigy Corp. USA,

10

317 F.3d 1097, 1110 (9th Cir. 2003).

11

defendant must make an initial prima facie showing that

12

the plaintiff’s suit arises from an act in furtherance

13

of the defendant’s right of petition or free speech.”

14

Id. (internal quotation marks omitted).

15

SLAPP statute, free speech includes “‘any written or

16

oral statement or writing made in a place open to the

17

public or a public forum in connection with an issue of

18

public interest,’ and ‘any other conduct in furtherance

19

of the exercise of the constitutional right of petition

20

or the constitutional right of free speech in connection

21

with a public issue or an issue of public interest.’”

22

Id.

23

“First, a

Under the anti-

Generally, if a defendant makes an initial prima

24

facie showing, “the burden shifts to the plaintiff to

25

demonstrate a probability of prevailing on the

26

challenged claims.”

27

to strike challenges only the legal sufficiency of a

28

claim,” as here, a court considers instead “whether a

Id.

But “when an anti-SLAPP motion

24

1

claim is properly stated.”

2

Am., Inc. v. Ctr. for Med. Progress, 890 F.3d 828, 834

3

(9th Cir.), amended, 897 F.3d 1224 (9th Cir. 2018); see

4

also Day v. California Lutheran Univ., No.

5

821CV01286JLSDFM, 2022 WL 17037433 at *12 (C.D. Cal.

6

Aug. 30, 2022) (assessing whether defendants made a

7

prima facie showing that the activities at issue in

8

their anti-SLAPP motion were protected conduct).

9

Planned Parenthood Fed’n of

As to the first part of the anti-SLAPP inquiry, the

10

Court finds that the Defendants have sufficiently made a

11

prima facie showing that the activities at issue are

12

protected conduct.

13

written statements are publicly available on a website,

14

and that they regard an issue of public interest because

15

of Defendant Roup’s public persona.

16

Defendants pled that the challenged

Mot.

23:1-24:21.

The California appellate courts have developed

17

multiple tests to determine whether a defendant’s

18

activity is in connection with a public issue.

19

v. Hallmark Cards, 599 F.3d 894 906 (9th Cir. 2010).

20

Relevant here is the Rivero test, where the Court of

21

Appeal for the First District of California surveyed the

22

appellate cases and established three categories of

23

public issues: (1) statements “concern[ing] a person or

24

entity in the public eye”; (2) “conduct that could

25

directly affect a large number of people beyond the

26

direct participants”; (3) “or a topic of widespread,

27

public interest.”

28

State, County, & Municipal Employees, 130 Cal. Rptr. 2d

Hilton

Rivero v. American Federation of

25

1
2

81, 89-90 (2003).
Here, Defendants have adequately pled that

3

Defendant Roup is person or entity in the public eye by

4

stating that she is a “celebrity fitness trainer and

5

influencer” with a substantial number of customers and a

6

significant social media following.

7

Further, Defendants contend that Defendant Roup’s

8

statements are biographical, and therefore Defendants

9

have shown that the statements concern a person or

10
11

entity in the public eye.

Mot. 23:21-24:5.

Id. 24:6-10.

As to the second part of the analysis, Defendants

12

argue that “Plaintiffs cannot carry their burden to show

13

a likelihood of prevailing on the portion of their UCL

14

claim” based on Defendant Roup’s biographical

15

statements.

16

established that Plaintiffs have not pled a plausible

17

UCL claim.

18

motion to strike a plaintiff’s [] complaint without

19

granting the plaintiff leave to amend would directly

20

collide with Fed. R. Civ. P. 15(a)’s policy favoring

21

liberal amendment.”

22

Commc’ns Co., 377 F.3d 1081, 1091 (9th Cir. 2004); see

23

also Day, 2022 WL 17037433 at *12 (granting plaintiffs’

24

leave to amend their first amended complaint despite

25

defendants’ anti-SLAPP motion).

Id. 24:12-16.

And the Court has already

But “granting a defendant’s anti-SLAPP

Verizon Delaware, Inc. v. Covad

26

The purpose of the anti-SLAPP statute would still

27

be served if Plaintiffs eliminate meritless claims or

28

plead them adequately.

See id.
26

If, after amendment,

1

the Complaint still contains legally insufficient

2

claims, Defendants continue to have anti-SLAPP remedies

3

available to them.

4

(declining to rule on defendants’ anti-SLAPP motion

5

since the court dismissed plaintiffs’ claims with leave

6

to amend and defendants could reassert the motion once

7

plaintiffs filed an amended complaint).

8

the Court will defer its final ruling on Defendants'

9

anti-SLAPP request until after Plaintiffs have amended

10

Accordingly,

their complaint in light of this Order.
III.

11
12

See Day, 2022 WL 17037433 at *12

CONCLUSION

Based on the foregoing, the Court GRANTS

13

Defendants’ Motion to Dismiss Plaintiffs’ Lanham Act and

14

UCL claims with leave to amend and DENIES Defendant’s

15

Motion to Dismiss Plaintiffs’ copyright and breach of

16

contract claims.

17
18

IT IS SO ORDERED.

19
20
21

DATED: December 12, 2022

_____________________________
/S/ RONALD S.W. LEW
HONORABLE RONALD S.W. LEW
Senior U.S. District Judge

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