Jacques vs. Bank of America Corporation, et al.

Filing 122

ORDER ADOPTING 119 FINDINGS AND RECOMMENDATIONS IN FULL and ORDER GRANTING 107 Defendant Early Warning's Motion to Dismiss signed by District Judge Lawrence J. O'Neill on 1/15/2015. (Jessen, A)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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TROY JACQUES,
Plaintiff,

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Case No. 1:12-cv-00821-LJO-SAB
ORDER ADOPTING FINDINGS AND
RECOMMENDATIONS

v.
ECF NO. 107, 119

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BANK OF AMERICA CORPORATION, et
al.,

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Defendants.
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On December 18, 2014, the magistrate judge assigned to this action issued a Findings and

19 Recommendations recommending that Defendant Early Warning Services, LLC’s (“Early
20 Warning”) motion to dismiss be granted. (ECF No. 119.) The Findings and Recommendations
21 contained notice that any objections were to be filed within fourteen (14) days. On December
22 31, 2014, Plaintiff Troy Jacques (“Plaintiff”) filed objections to the Findings and
23 Recommendations.
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In accordance with the provisions of 28 U.S.C. § 636(b)(1)(C), this Court has conducted

25 a de novo review of the case.
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The Findings and Recommendations identified three grounds to dismiss Plaintiff’s claims

27 against Early Warning. First, the Court found that Plaintiff’s claims against Early Warning were
28 barred by Federal Rule of Civil Procedure 41(a)(1)(B). Second, the Court found that Plaintiff’s

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1 claims against Early Warning were barred by the statute of limitations. Third, the Court found
2 that Plaintiff’s blacklisting claim (Cal. Labor Code § 1050, et seq.), defamation claim, negligent
3 infliction of emotional distress claim, tortious interference with contract claim, and Fair Credit
4 Reporting Act claim failed to state a claim. Finally, the Court found that Plaintiff was not
5 entitled to leave to amend.
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For the reasons set forth below, the magistrate judge’s Findings and Recommendations

7 are supported by the record and by proper analysis.
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A.

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As set forth in more detail in the Findings and Recommendations, Federal Rule of Civil

Federal Rule of Civil Procedure 41(a)(1)(B)

10 Procedure 41(a)(1)(B) states that, if a plaintiff voluntarily dismisses the same claim against a
11 defendant twice, the second voluntary dismissal operates as an adjudication upon the merits. See
12 Commercial Space Management Co., Inc. v. Boeing Co., Inc., 193 F.3d 1074, 1080 (9th Cir.
13 1999). The magistrate judge noted that Plaintiff previously dismissed his claims against Early
14 Warning twice, first on October 26, 2012 and then again on November 28, 2012. (See ECF Nos.
15 32, 33, 40.)
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Plaintiff argues that there was only one voluntary dismissal because the second voluntary

17 dismissal was not actually a dismissal, it was simply “a voluntary dismissal of the same claim
18 made to make clear that Early Warning was not intended to be a party although named in the
19 continuing caption.”

Plaintiff’s attempt to rewrite history is unpersuasive.

The Second

20 Amended Complaint clearly reasserted claims against Early Warning and named Early Warning
21 as a defendant. Plaintiff’s November 28, 2012 filing was clearly labeled a “Notice of Voluntary
22 Dismissal Early Warning Services, LLC and First Advantage Background Services Corp. Only.”
23 (ECF No. 40.) Nowhere in that filing did Plaintiff indicate that the inclusion of Early Warning in
24 the Second Amended Complaint was unintended.
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Plaintiff also contends that, although Early Warning was named as a defendant in the

26 Second Amended Complaint filed on November 21, 2012, that claim was invalid because the
27 Second Amended Complaint had no “legal effect” because Plaintiff did not obtain leave of court
28 or consent of the other parties to file the Second Amended Complaint. Plaintiff’s argument is

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1 factually incorrect, as the Court granted Plaintiff leave to file a Second Amended Complaint on
2 November 7, 2012. (See ECF No. 38.)
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Alternatively, Plaintiff argues that the claims brought against Early Warning in the Fifth

4 Amended Complaint are new claims unrelated to the claims that were voluntarily dismissed.
5 Plaintiff’s argument is unpersuasive. Rule 41(a)(1)(B) operates as an adjudication upon the
6 merits of the defamation claim raised in the Second Amended Complaint. The defamation claim
7 and related claims in the Fifth Amended Complaint are “based on” the same facts alleged in the
8 Second Amended Complaint. Accordingly, those claims are barred.
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B.

Statute of Limitations

The magistrate judge found that Plaintiff’s claims against Early Warning would be barred

11 by the statute of limitations because the conduct at issue took place in April 2011, the Fifth
12 Amended Complaint was filed on September 3, 2014, and the relevant statute of limitations for
13 Plaintiff’s claims are either one or two years long.
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Plaintiff argues that the magistrate judge erred because the relation back doctrine applies

15 to save Plaintiff’s claims against Early Warning. Plaintiff argues that Early Warning was named
16 as a Doe defendant in the original complaint and, under California law, the complaint may be
17 amended to substitute the Doe defendant’s true name if Plaintiff was ignorant of the facts giving
18 rise to a cause of action against that defendant. See Parker v. Robert E. McKee, Inc., 3 Cal. App.
19 4th 512, 516 (1992).
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However, the magistrate judge properly concluded that relation back did not apply

21 because Plaintiff was not ignorant of the facts giving rise to a cause of action against Early
22 Warning because Plaintiff actually raised a cause of action against Early Warning in the original
23 complaint. Plaintiff argues that the cause of action raised against Early Warning in the prior
24 complaints are distinguishable from the cause of action raised in the Fifth Amended Complaint
25 because the prior claims were premised on Early Warning acting as a republisher of defamatory
26 statements whereas the “new” claims are premised on Early Warning acting as an “originator” of
27 defamatory statements. Again, Plaintiff’s attempt to re-write history in his favor is unpersuasive.
28 In the First Cause of Action in the original complaint, Plaintiff clearly alleged that “Early

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1 Warning Services caused to be published and/or republished such false and defamatory
2 statements about Plaintiff....” (Compl. ¶ 14 (emphasis added).) Thus, the claim raised in the
3 Fifth Amended Complaint is the same claim raised in the original complaint.
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Plaintiff also argues that Early Warning did not meet its burden of proving Plaintiff’s

5 actual knowledge of the relevant facts. The Court disagrees, as the allegations in the prior
6 pleadings are sufficient to establish Plaintiff’s knowledge of Early Warning’s part in the
7 allegedly defamatory acts.
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Finally, Plaintiff argues that the “single publication rule” does not apply, meaning that

9 Early Warning’s defamatory actions which occurred in 2014 could form the basis of a new claim
10 asserted in the Fifth Amended Complaint.

Plaintiff’s theory fails because Plaintiff’s Fifth

11 Amended Complaint treated Early Warning’s report as a single publication and made no attempt
12 to distinguish between publications which occurred during Plaintiff’s employment at Bank of
13 America and later publications by Early Warning in 2014. The Fifth Amended Complaint raised
14 a single cause of action for defamation for Early Warning’s report. Accordingly, the Fifth
15 Amended Complaint does not raise a defamation claim based upon Plaintiff’s theory that
16 publications in 2014 are separate and distinct from the publications which Early Warning issued
17 earlier.
Plaintiff’s Claims

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C.

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Plaintiff argues that the magistrate judge erred in finding that the Fifth Amended

20 Complaint failed to state a blacklisting claim (Cal. Labor Code § 1050, et seq.), defamation
21 claim, negligent infliction of emotional distress claim, tortious interference with contract claim,
22 and Fair Credit Reporting Act claim.
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1.

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Plaintiff contends that the magistrate judge erred in concluding that Plaintiff’s

Blacklisting Claim

25 blacklisting claim under California Labor Code § 1050 failed to state a claim. Specifically,
26 Plaintiff disputes the magistrate judge’s finding that Section 1050 only applies to blacklisting
27 committed by an employer against a former employee.
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Section 1050 states:

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Any person, or agent or officer thereof, who, after having
discharged an employee from the service of such person or after an
employee has voluntarily left such service, by any
misrepresentation prevents or attempts to prevent the former
employee from obtaining employment, is guilty of a misdemeanor.

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4 Cal. Labor Code § 1050.
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Plaintiff argues that Section 1050 authorizes a plaintiff to sue a non-employer for

6 blacklisting. Plaintiff’s argument has no merit. Section 1050 may apply to Early Warning, but,
7 by its plain terms, it does not apply to the conduct alleged in Plaintiff’s complaint. Plaintiff was
8 not an employee discharged from Early Warning’s service.

Plaintiff was an employee

9 discharged from Bank of America’s service.
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Plaintiff argues that the reference to “such service” could be interpreted to apply to “such

11 service” of “any person,” somehow expanding the scope of Section 1050 to apply to scenarios
12 involving non-employers. Plaintiff’s strained reading has no merit as it is utterly incompatible
13 with a plain reading of Section 1050. The phrase “such service” clearly refers to the service
14 referred to earlier in the statute, namely the employment relationship between the “any person”
15 and the plaintiff. Since there was never any employment relationship between Early Warning
16 and Plaintiff, the statute does not apply.
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Moreover, even accepting Plaintiff’s interpretation, the phrase “such service” appears in

18 context of the clause regarding “an employee [who] has voluntarily left such service.” Plaintiff’s
19 interpretation still would not apply to the facts alleged in the Fifth Amended Complaint because
20 the Fifth Amended Complaint does not allege that Plaintiff voluntarily left any service—Plaintiff
21 was fired from employment with Bank of America. Accordingly, Plaintiff fails to state any
22 cognizable claims under Section 1050 against Early Warning.
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2.

Defamation Claim

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Plaintiff contends the magistrate judge erred in concluding that Plaintiff’s defamation

25 claim failed to state a claim. Specifically, Plaintiff argues that he alleged sufficient facts to
26 support the conclusion that Early Warning published the defamatory reports and Early Warning’s
27 communications were not privileged.
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The magistrate judge noted that the Fifth Amended Complaint fails to allege who, if

2 anyone, received Early Warning’s report. Since the Fifth Amended Complaint failed to identify
3 any recipient of the allegedly defamatory report, the complaint failed to establish the two
4 elements of a defamation claim, publication and unprivileged communication.

Notably,

5 Plaintiff’s objections do not identify any recipient of Early Warning’s communications.
6 Accordingly, neither the complaint nor the objections identify facts which show publication or an
7 unprivileged communication.
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Moreover, the magistrate judge noted that the Fifth Amended Complaint was vague as to

9 the precise content of any report from Early Warning. The Court noted that this was particularly
10 significant in light of the fact that Bank of America accused Plaintiff of committing fraudulent
11 activities. If Early Warning’s report merely stated that Plaintiff had been accused of fraudulent
12 activities by Bank of America, Early Warning’s report was not defamatory because that
13 statement was true. Nothing in the complaint supports the conclusion that Early Warning knew
14 or had reason to know that Bank of America’s reports were false. The Court notes that this
15 lawsuit has been ongoing for two and a half years, and Plaintiff’s Fifth Amended Complaint is
16 still devoid of facts regarding what, exactly, Early Warning stated in their allegedly defamatory
17 report. Plaintiff fails to state any cognizable claims for defamation against Early Warning.
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3.

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Plaintiff contends the magistrate judge erred in dismissing his claim for negligent

Negligent Infliction of Emotional Distress Claim

20 infliction of emotional distress. Plaintiff’s objections cite no case which recognizes the existence
21 of a legal duty pertaining to the conduct at issue separate and distinct from the duty to not
22 commit defamation. Accordingly, Plaintiff’s negligence claim fails.
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4.

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Plaintiff contends the magistrate judge erred in dismissing his claim for tortious

Tortious Interference with Contract Claim

25 interference with contract.

Plaintiff’s argument is premised upon his argument that the

26 complaint states a cognizable claim for defamation. Since the Court finds that the complaint
27 does not state a cognizable claim for defamation, Plaintiff’s claim for tortious interference with
28 contract also fails.

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Fair Credit Reporting Act Claim

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Plaintiff contends the magistrate judge erred in dismissing his claim under the Fair Credit

3 Reporting Act (“FCRA”). The magistrate judge dismissed this claim because the Fifth Amended
4 Complaint does not include allegations which support the conclusion that Early Warning was a
5 “furnisher” of information within the meaning of the FCRA. The complaint merely alleged that
6 Early Warning was involved in the publication of a security report regarding Plaintiff. Notably,
7 nothing in the complaint suggested that Early Warning’s reports regarding Plaintiff included any
8 credit information or that the reports were furnished to any credit reporting agencies. Nothing in
9 the objections filed by Plaintiff challenges this finding. Accordingly, the Court finds that
10 Plaintiff failed to state a claim under the FCRA.
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D.

Dismissal Without Leave to Amend

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Plaintiff challenges the magistrate judge’s finding that Plaintiff’s claims against Early

13 Warning should be dismissed without leave to amend. The magistrate judge found that leave to
14 amend would be futile since the claims against Early Warning are barred by Federal Rule of
15 Civil Procedure 41(a) and the statute of limitations. As discussed above, the Court agrees that
16 leave to amend would be futile.
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Accordingly, it is HEREBY ORDERED that:

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Defendant Early Warning’s motion to dismiss is GRANTED; and

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Plaintiff’s claims against Early Warning are DISMISSED, without leave to
amend.

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IT IS SO ORDERED.
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Dated:

/s/ Lawrence J. O’Neill

January 15, 2015

UNITED STATES DISTRICT JUDGE

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