Abiola v. HVM, LLC et al

Filing 70

ORDER by Judge Joseph C. Spero granting in part and denying in part 62 Motion to Dismiss Third Amended Complaint with Leave to Amend Claims Two, Seven, Eleven and Twelve Within Thirty Days and vacating March 14, 2014 motion hearing; Case Management Conference set for March 14, 2014 at 9:30 a.m. is moved to 2:00 pm on the same date (jcslc1, COURT STAFF) (Filed on 3/3/2014)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
Case No. 13-cv-03496-JCS

7
MOSES OLADELE ABIOLA,

8

Plaintiff,
9
v.
10
ESA MANAGEMENT, LLC,

11
United States District Court
Northern District of California

Defendant.
12

ORDER GRANTING IN PART AND
DENYING IN PART ESH
MANAGEMENT, LLC’S MOTION TO
DISMISS THE THIRD, FOURTH,
SIXTH, SEVENTH, EIGHTH, NINTH,
TENTH, ELEVENTH, AND TWELFTH
CAUSES OF ACTION IN PLAINTIFF’S
THIRD AMENDED COMPLAINT
Re: Dkt. No. 62

13
14

I.

INTRODUCTION
Plaintiff Moses Abiola, proceeding in pro se, asserts claims against Defendant ESA

15

Management LLC (“ESA”) based on his employment as a hotel manager for HVM, LLC (dba

16
Extended Stay America). ESA brings a Motion to Dismiss the Third, Fourth, Sixth, Seventh,
17
18

Eighth, Ninth, Tenth, Eleventh, and Twelfth Causes of Action in Plaintiff‟s Third Amended
Complaint (“Motion”). The Court finds that the Motion is suitable for determination without oral

19
argument and therefore vacates the hearing set for Friday, March 14, 2014 at 9:30 a.m. pursuant to
20
Civil Local Rule 7-1(b). The Case Management Conference set for the same date and time will be
21
moved from 9:30 a.m. to 2:00 p.m. on March 14, 2014. For the reasons stated below, the

22

Motion is GRANTED in part and DENIED in part.1

23
24

II.

BACKGROUND
A. Procedural Background

25

Plaintiff filed the original complaint in this action in Santa Clara County Superior Court on
26
27
1

28

The parties have consented to the jurisdiction of the undersigned magistrate judge pursuant to 28
U.S.C. § 636(c).

1

May 24, 2013 naming as defendant “ESH Strategies Branding, LLC, dba Extended Stay Hotels.”

2

Notice of Removal at 2. On July 29, 2013, HVM, LLC dba Extended Stay America (“HVM”),

3

believing it was the intended defendant in this action, removed the case to federal district court.
At the January 17, 2014 Case Management conference, ESA Management LLC was

4
5

identified as the corporate entity that employed Plaintiff. Plaintiff subsequently filed a Third

6

Amended Complaint naming that entity as a defendant in this action.2 The Third Amended

7

Complaint asserts the following twelve purported claims: (1) Violation of the Employee

8

Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001; (2) False Advertising; (3) and (4)

9

Violation of California Civil Code § 3294; (5) Violation of California Labor Code § 203; (6)
Violation of California Labor Code § 1198.5; (7) Intentional Infliction of Emotional Distress; (8)

11
United States District Court
Northern District of California

10

Negligent Infliction of Emotional Distress; (9) Violation of California Business and Professions

12

Code § 17500; (10) Violation of California Business and Professions Code § 14202; (11)

13

Wrongful Termination; and (12) “Calumny, (Defamation).” Id., Ex. 1.

14

B. The Motion

15

Defendant asks the Court to dismiss Claims Three, Four, Six, Seven, Eight, Nine, Ten,

16

Eleven and Twelve for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil

17

Procedure. Motion at 1-2. Defendant also asks the Court to dismiss or strike Plaintiff‟s request

18

for damages on Claims Two, Six and Nine. Id. at 1. Defendant contends Plaintiff‟s claims are

19

deficient for the following reasons:


20

Claims Three and Four (violation of California Civil Code §3294): Defendant asserts

21

these claims fail on the pleadings because California Civil Code §3294, which provides for

22

punitive damages, does not apply to actions for breach of contract and Plaintiff specifically

23

pleads that these claims are based upon a breach of contract. Id. at 5-6.


24

Claim Six (violation of California Labor Code §1198.5): Defendant contends the Court
should dismiss or strike Plaintiff‟s request for damages on this claim (set forth in the

25
26
2

27
28

The only other defendants named in Plaintiff‟s Third Amended Complaint are “Does 1-14.”
While Doe pleading is generally disfavored in federal court, Defendant has not asked the Court to
dismiss the Doe defendants and therefore the Court does not decide whether they should be
dismissed.
2

1

Prayer at the end of Plaintiff‟s Third Amended Complaint) because the types of damages

2

Plaintiff seeks – compensatory damages, pain and suffering, exemplary damages and

3

interest – are not available under Labor Code § 1198.5, which provides only for a penalty

4

of $750 for a violation. Id. at 6-7.

5



Claim Seven (Intentional Infliction of Emotional Distress (“IIED”)): Defendant

6

contends Plaintiff has not alleged any facts showing that Defendant engaged in extreme

7

and outrageous conduct and therefore that Plaintiff fails to state a claim for IIED. Id. at 7-

8

8.

9



Claim Eight (Negligent Infliction of Emotional Distress): Defendant seeks dismissal of
Plaintiff‟s claim for Negligent Infliction of Emotional Distress on the basis that it is barred

11
United States District Court
Northern District of California

10

by the exclusivity provisions of California‟s Workers‟ Compensation Act. Id. at 8-9.

12



Claim Nine (violation of California Business and Professions Code §17500):

13

Defendant asserts Plaintiff‟s claim for false advertising in violation of § 17500 based on

14

the alleged changing of the customer service greeting without changing the name of the

15

hotel on the outside sign fails as a matter of law because Plaintiff does not have standing

16

to assert the claim. In particular, Plaintiff does not allege he was a customer or purchased

17

services from Defendant or that he suffered injury as a result of the alleged false

18

advertising. Id. at 9-10.

19



Claims Two and Nine: Defendant challenges Claims Two and Nine, brought under Cal.

20

Bus. and Prof. Code § 17500, on the ground that only injunctive relief and restitution are

21

available on such claims and Plaintiff requests damages in his Prayer. Defendant further

22

asserts that Plaintiff is not entitled to injunction relief to the extent that he is no longer

23

employed by Defendant. Therefore, Defendant asks the Court to dismiss or strike

24

Plaintiff‟s request for damages on these claims. Id. at 10-11.

25



Claim Ten (violation of California Business and Professions Code §14202(2)(i)(1)):

26

Defendant contends this claim fails because § 14202(2)(i)(1) is simply a definitional

27

section of California‟s Model State Trademark Law and gives rise to no private right of

28

action. Defendant further asserts that to the extent Plaintiff may be attempting to assert a
3

1

claim for alleged operation of a business using an expired fictitious trademark in violation

2

of Cal. Bus. & Prof. Code §§ 14245-14254 (providing remedies for violation of the Model

3

State Trademark Law), the claim fails because Plaintiff does not allege he is the owner of

4

any trademark that is at issue in this case and therefore he does not have standing to assert

5

such a claim. Id. at 10-11.


6

Claim Eleven (Wrongful Termination): Defendant argues this claim fails because it

7

requires that Plaintiff establish that he was terminated in violation of a fundamental public

8

policy and Plaintiff has not identified any such public policy in this case. Id. at 12-13.


9

Claim Twelve (Calumny/ Defamation): Defendant seeks dismissal of this claim on the
basis that there is no claim for calumny under California law. Defendant further asserts

11
United States District Court
Northern District of California

10

that to the extent Plaintiff is asserting a claim for defamation based on the allegation that

12

Plaintiff was identified as ineligible for rehire after his termination, the claim fails because

13

Plaintiff has not alleged that the statement was false or made to a third party. In addition,

14

to the extent there is a privilege under Cal. Civ. Code § 47(c) for statements made without

15

malice by one interested party to another, Plaintiff has alleged no facts showing the

16

statement was not privileged, Defendant contends. Id. at 13-14.
In his Opposition brief, Plaintiff appears to argue that the Motion should be denied because the

17
18

Court may not make factual findings on a Rule 12(b)(6) motion but rather, must assume the facts

19

alleged in the complaint to be true. Opposition at 3-5.3 According to Plaintiff, the Court may not

20

dismiss his claims unless the Defendant demonstrates “„beyond doubt that the Plaintiff can prove

21

no set of facts in support of his claim that would entitle him to relief.‟” Id. at 3 (quoting Flood v.

22

New Hanover County, 125 F.3d 249, 251 (4th Cir. 1977)). Plaintiff also argues that the Motion

23

should be denied because: 1) he has a constitutional right to equal protection of the laws; 2) he has

24

a constitutional right to petition the government for redress of grievances; and 3) he has a legal

25

right under Cal. Bus. & Prof. Code § 17500 to bring an “action for loss of revenue, (due to loss of

26

wages) under adverse termination of employment.” Id. at 8. Plaintiff does not address any of the

27
3

28

Because Plaintiff did not include page numbers in his brief, the Court uses the numbers assigned
by the Electronic Court Filing system (“ECF”).
4

1

specific arguments raised in the Motion.
In its Reply brief, Defendant points out that Plaintiff has not addressed any of the specific legal

2
3

arguments asserted in the Motion. Reply at 1. Defendant rejects Plaintiff‟s assertion that it is

4

challenging the factual allegations of Plaintiff‟s complaint, arguing that its Motion assumes

5

Plaintiff‟s factual allegations to be true, consistent with the requirements of Rule 12(b)(6) of the

6

Federal Rules of Civil Procedure. Id. at 1. Applying that standard, Defendant contends,

7

Plaintiff‟s claims fail for the reasons set forth in the Motion. Id. at 2-4.

8

III.

9

ANALYSIS
A. Legal Standard under Rule 12(b)(6)
A complaint may be dismissed for failure to state a claim for which relief can be granted

10

United States District Court
Northern District of California

11

under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 12(b)(6). “The

12

purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal sufficiency of the

13

complaint.” N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). Generally, a

14

plaintiff‟s burden at the pleading stage is relatively light. Rule 8(a) of the Federal Rules of Civil

15

Procedure states that “[a] pleading which sets forth a claim for relief . . . shall contain . . . a short

16

and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.

17

8(a).

18

In ruling on a motion to dismiss under Rule 12, the court analyzes the complaint and takes

19

“all allegations of material fact as true and construe[s] them in the light most favorable to the non-

20

moving party.” Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Dismissal

21

may be based on a lack of a cognizable legal theory or on the absence of facts that would support a

22

valid theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). A complaint

23

must “contain either direct or inferential allegations respecting all the material elements necessary

24

to sustain recovery under some viable legal theory.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,

25

562 (2007) (citing Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984)).

26

“A pleading that offers „labels and conclusions‟ or „a formulaic recitation of the elements of a

27

cause of action will not do.‟” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550

28

U.S. at 555). “Nor does a complaint suffice if it tenders „naked assertion[s]‟ devoid of „further
5

1

factual enhancement.‟” Id. (quoting Twombly, 550 U.S. at 557). However, where the complaint

2

has been filed by a pro se plaintiff, courts must “construe the pleadings liberally and [] afford the

3

petitioner the benefit of any doubt.” Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010) (citation

4

omitted).

5

B. Claims Three and Four (California Civil Code §3294)

6

Plaintiff asserts Claims Three and Four under Cal. Civ. Code § 3294, which provides in

7
8
9
10

relevant part, as follows:
In an action for the breach of an obligation not arising from
contract, where it is proven by clear and convincing evidence that
the defendant has been guilty of oppression, fraud, or malice, the
plaintiff, in addition to the actual damages, may recover damages for
the sake of example and by way of punishing the defendant.

United States District Court
Northern District of California

11

Cal. Civ. Code § 3294 (emphasis added). These claims fail, however, because they are based on

12

alleged breaches of an implied contract. See Complaint ¶¶ 31, 32 & Ex. C (Employment Notice).

13

In particular, Plaintiff alleges in support of Claim Three that the Employment Notice contains

14

“terms [that] were agreed upon through the Plaintiff and Defendant‟s representative‟s signature,

15

that creates an implied contractual obligations [sic] and policy, and such obligations was breached

16

by the Defendant . . . .” Id. ¶ 31. Similarly, Claim Four is based on the alleged “[b]reach of (the

17

implied) contract that was reached and agreed upon accordingly under the captioned “Other

18

Compensation” as listed on the „Employment Notice‟ signed that becomes implied-in-fact

19

contractual obligation.” Id. ¶ 32. Because § 3294 does not apply to claims arising from contract,

20

these claims fail, as a matter of law, and cannot be cured by amendment. Accordingly, the Motion

21

is GRANTED as to these claims, which are dismissed with prejudice.

22

C. Claim Six (California Labor Code §1198.5)

23

In Claim Six, Plaintiff asserts that Defendant has violated California Labor Code § 1198.5,

24

which provides, in relevant part, that “[e]very current and former employee, or his or her

25

representative, has the right to inspect and receive a copy of the personnel records that the

26

employer maintains relating to the employee's performance or to any grievance concerning the

27

employee.” Where the employer violates this provision, the Labor Commissioner or a current or

28

former employee may “recover a penalty of seven hundred fifty dollars ($750) from the
6

1

employer.”
While Plaintiff does not identify the specific damages he seeks on this claim, at the end of

2
3

his complaint he requests compensatory damages, pain and suffering, exemplary damages,

4

prejudgment interest, and attorneys‟ fees in the total amount of $1,068,320. Claim Six fails to

5

state a claim under Rule 12(b)(6) to the extent Plaintiff seeks these specific damages as they are

6

not available under § 1198.5.4 The claim survives, however, to the extent Plaintiff requests “relief

7

. . . as justifiably reasoned by the Court.” Construing Plaintiff‟s complaint liberally, the Court

8

finds that it is sufficient to state a claim for violation of § 1198.5 to the extent it seeks recovery of

9

the $750 penalty permitted under the Labor Code.
D. Claim Seven (IIED)

11
United States District Court
Northern District of California

10

Plaintiff asserts a claim for Intentional Infliction of Emotional Distress based on the

12

following allegations:
Defendant‟s conduct that lead to the Plaintiff‟s emotional distress
was that the Defendant‟s [sic] engaged in malicious act by
intentionally providing wrong code combination to operate the save
[sic] vault as well as terminating the Plaintiff without following its
internal policies, as well as lack of disclosure of employee benefit,
and intentionally fails to write declaration on the employee notice.
Oppression - by denying the Plaintiff access to view his employment
file; and for terminating the Plaintiff with falsified information; as
well as disregard to Plaintiff‟s Medical condition are all outrageous
acts that have cause injuries to Plaintiff. . . . .

13
14
15
16
17
18
19

Complaint ¶ 35. Elsewhere in the Complaint, Plaintiff alleges that his manager intentionally

20

provided him with the wrong safe combination and ridiculed him in front of subordinates for his

21

inability to open the safe, id., ¶ 27, that Defendant failed to provide the 7-day written notice of

22

intention to terminate that is required under its internal policies, id., ¶ 23(c), that Defendant did not

23

provide him with a copy of the Employment Notice, id., ¶ 23(a), and that Defendant did not

24

provide him with a written copy of its bonus plan. Id., ¶ 23(e). With respect to Plaintiff‟s medical

25

condition, he alleges that he informed his employer of his “use of prescribed medicine, that causes

26
4

27
28

In Whittlestone, Inc. v. Handi-Craft Co., the Ninth Circuit clarified that “Rule 12(f) does not
authorize a district court to strike a claim for damages on the ground that such damages are
precluded as a matter of law.” 618 F.3d 970, 971 (9th Cir. 2010). Rather, such challenges should
be addressed under Rule 12(b)(6) for failure to state a claim. Id.
7

1

certain condition as disclosed on the medication label” and that “lengthy exposure to the sunlight

2

at the direct order of the Defendant during the renovation work makes the matter worsen.” Id. ¶

3

39(e).

4

To prevail on a claim for intentional infliction of emotional distress a plaintiff must
establish: “1) outrageous conduct by the defendant, 2) intention to cause or reckless disregard of

6

the probability of causing emotional distress, 3) severe emotional suffering and 4) actual and

7

proximate causation of the emotional distress.” Cole v. Fair Oaks Fire Protection Dist., 43 Cal.3d

8

148, 155 n.7 (1987). Liability for intentional infliction of emotional distress generally “„does not

9

extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities,‟ but

10

only to conduct so extreme and outrageous „as to go beyond all possible bonds of decency, and to

11
United States District Court
Northern District of California

5

be regarded as atrocious, and utterly intolerable in a civilized community.‟” Alcorn v. Anbro

12

Engineering, Inc., 2 Cal.3d 493, 499 (quoting Rest. 2d Torts, § 46, com. d). Further, “[m]anaging

13

personnel is not outrageous conduct beyond the bounds of human decency, but rather conduct

14

essential to the welfare and prosperity of society.” Janken v. GM Hughes Electronics, 46

15

Cal.App.4th 55, 80 (1996). Therefore, “[a] simple pleading of personnel management activity is

16

insufficient to support a claim of intentional infliction of emotional distress, even if improper

17

motivation is alleged.” Id.

18

Plaintiff has not alleged any facts that would establish that Defendant‟s conduct was

19

extreme and outrageous. The bulk of Plaintiff‟s allegations relate to personnel management

20

activities and therefore are not outrageous. Janken, 46 Cal. App. 4th at 80. The allegation that

21

Plaintiff was given the wrong number for the safe may be an annoyance or a petty oppression but

22

it does not constitute conduct that is “atrocious, and utterly intolerable in a civilized community.”

23

Alcorn, 2 Cal. 3d at 499. Finally, the allegation that Defendant disregarded an unidentified

24

medical condition is too vague and conclusory to give rise to a reasonable inference that

25

Defendant engaged in outrageous conduct. Twombly, 550 U.S. at 545. Therefore, Plaintiff fails

26

to state a claim for Intentional Infliction of Emotional Distress. This claim is dismissed with leave

27

to amend.

28
8

1

E. Claim Eight (Negligent Infliction of Emotional Distress)

2

In Claim Eight, for Negligent Infliction of Emotional Distress, Plaintiff alleges Defendant

3

knew or should have known that its acts would “cause injuries and pain to the Plaintiff.”

4

Complaint ¶ 6. Plaintiff‟s claim is barred by California‟s Workers‟ Compensation Act, which

5

provides the exclusive remedy for injuries occurring within the course of employment.

6

Robomatic, Inc., v. Vetco Offshore, 225 Cal.App.3d 270, 274 (citing Cal. Labor Code §§ 3600,

7

3602; Pichon v. Pacific Gas & Electric Co., 212 Cal.App.3d 488, 496 (1989)). The California

8

Supreme Court has explained that the exclusivity provision of the Workers‟ Compensation law

9

may preclude a tort action for an injury that is purely emotional even if no compensation is

10

United States District Court
Northern District of California

11
12
13
14

available under the Workers‟ Compensation law, explaining:
where the employee suffers annoyance or upset on account of the
employer‟s conduct but is not disabled, does not require medical
care, and the employer‟s conduct neither contravenes fundamental
public policy nor exceeds the inherent risks of the employment, the
injury will simply not have resulted in any occupational impairment
compensable under the workers‟ compensation law or remediable by
way of a civil action.

15

Livitsanos v. Superior Court, 2 Cal.4th 744, 755 (1992). Further, workers‟ compensation is an

16

employee‟s exclusive remedy for negligent infliction of emotional distress resulting from

17

dismissal of employment. Robomatic, 225 Cal. App. 3d at 272. As Plaintiff‟s claim is based on

18

conduct that occurred within the scope of his employment, it is barred by the Workers‟

19

Compensation Act. Accordingly, the claim is dismissed with prejudice.

20

F. Claims Two and Nine (California Business and Professions Code §17500)

21

Plaintiff asserts two claims for false advertising under Cal. Bus. & Prof. Code § 17500 in

22

his Complaint. In Claim Two, Plaintiff alleges Defendant engaged in false advertising “[b]y

23

making promise of bonus benefit in an advertisement on the internet, and concealing the matrix to

24

the consumer „Job Applicant‟ (herein Plaintiff).” Complaint ¶ 30. In Claim Nine, Plaintiff asserts

25

Defendant engaged in false advertising “by advertising a high standard of Brand on the internet

26

and upon purchasing such, consumers arrived at the property only to be provided with service of

27

less standard.” Id. ¶ 37. Elsewhere in the Complaint, Plaintiff alleges that he was instructed to

28

use new “greetings, etiquettes and services” when the hotel was rebranded as “eExtended Stay
9

1

Hotels” even though the “insignia mounted on the property continued to identify the hotel as

2

being a “Homestead Studio Suites Hotel[].” Id. ¶ 24.

3
4
5
6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17

Section 17500 provides as follows:
It is unlawful for any person, firm, corporation or association, or any
employee thereof with intent directly or indirectly to dispose of real
or personal property or to perform services, professional or
otherwise, or anything of any nature whatsoever or to induce the
public to enter into any obligation relating thereto, to make or
disseminate or cause to be made or disseminated before the public in
this state, or to make or disseminate or cause to be made or
disseminated from this state before the public in any state, in any
newspaper or other publication, or any advertising device, or by
public outcry or proclamation, or in any other manner or means
whatever, including over the Internet, any statement, concerning that
real or personal property or those services, professional or
otherwise, or concerning any circumstance or matter of fact
connected with the proposed performance or disposition thereof,
which is untrue or misleading, and which is known, or which by the
exercise of reasonable care should be known, to be untrue or
misleading, or for any person, firm, or corporation to so make or
disseminate or cause to be so made or disseminated any such
statement as part of a plan or scheme with the intent not to sell that
personal property or those services, professional or otherwise, so
advertised at the price stated therein, or as so advertised. Any
violation of the provisions of this section is a misdemeanor
punishable by imprisonment in the county jail not exceeding six
months, or by a fine not exceeding two thousand five hundred
dollars ($2,500), or by both that imprisonment and fine.
Cal. Bus. & Prof. Code § 17500.

18

While § 17500 provides only for criminal penalties, private individuals may assert a claim

19

for violations of § 17500 through Cal. Bus. & Prof. Code § 17200, which provides that a violation

20

of the false advertising law is also, by definition, a violation of California‟s unfair competition

21

law. A private individual pursuing such a claim is limited to seeking injunctive relief, however.

22

Chern v. Bank of America, 15 Cal.3d 866, 875, (1976) (“The applicable statutes do not authorize

23

recovery of damages by private individuals. Private relief is limited to the filing of actions for an

24

injunction [under Cal. Bus. & Prof. Code § 17535]; and civil penalties are recoverable only by

25

specified public officers [under Cal. Bus. & Prof. Code §§ 17535.5, 17536]”). In addition, Cal.

26

Bus. & Prof. Code § 17535 provides that a claim for injunctive relief may only be pursued by an

27

individual who meets the standing requirements of “this section,” including the requirements set

28

forth in Cal. Bus. & Prof. Code § 17204. That section, in turn, allows private individuals to seek
10

1

injunctive relief only if the “person . . . has suffered injury in fact and has lost money or property

2

as a result of the unfair competition.” Cal. Bus. & Prof. Code § 17204.
In light of the requirements set forth above, the Court concludes that both Claims Two and

3
4

Nine fail under Rule 12(b)(6) because Plaintiff seeks only monetary damages whereas the only

5

remedy available to an individual bringing a false advertising claim under § 17500 is injunctive

6

relief. In addition, as to claim Nine, Plaintiff has not alleged any facts showing that he lost any

7

money or property as a result of the alleged unfair competition, that is, the failure to change the

8

insignia on the hotel when it was “rebranded” and the greetings were changed. Accordingly, the

9

Court dismisses Claims Two and Nine for failure to state a claim under Rule 12(b)(6). Plaintiff‟s
lack of standing on Claim Nine cannot be remedied by amendment. Therefore, that Claim is

11
United States District Court
Northern District of California

10

dismissed with prejudice. Plaintiff shall be permitted to amend Claim Two, if he can, to seek

12

injunctive relief. 5

13

G. Claim Ten (California Business and Professions Code §14202(2)(i)(1))

14

In Claim Ten, asserts Defendant has violated California‟s Model State Trademark Law by

15

using “an expired trademark for advertising.” Complaint ¶ 38. Plaintiff cites Cal. Bus. & Prof.

16

Code § 14202(2)(i)(1) in support of this claim. Id. In addition, Plaintiff alleges elsewhere in the

17

Complaint that Defendant violated the Federal Lanham Act “by use of its „bait-and-switch‟ selling

18

tactics, unauthorized substitution of one brand for another with less value, that result in false

19

representation of services provided to the public in the state of California. Id. ¶ 23(j). In support

20

of this allegation, Plaintiff cites 15 U.S.C. § 1127. Id. Under both state and federal trademark

21

law, remedies for violation of a trademark are available only to the owner of the trademark. See

22

Cal. Bus. & Prof. Code §§ 14245-14254; 15 U.S.C. § 1114. Because Plaintiff does not allege that

23

he owns the trademarks that are the basis for his claims, Plaintiff‟s trademark claims, under both

24

state and federal law, fail to state a claim. Further, because it is clear from the allegations in the

25

complaint that Plaintiff does not, in fact, own these trademarks, the Court dismisses these claims

26
5

27
28

Defendant asserts in a footnote that Plaintiff cannot pursue a claim for injunctive relief because
he is no longer employed by Defendant. Motion at 10 n. 1 (citing Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2451, 2559-2560 (2011)). As Plaintiff has not yet asserted a claim for injunctive relief
(and may not choose to do so) consideration of this issue is premature.
11

1

with prejudice.

2

H. Claim Eleven (Wrongful Termination)

3

In Claim Eleven, Plaintiff asserts a claim for wrongful termination. Complaint ¶ 39. In
support of the claim, he alleges Defendant‟s conduct was outrageous for a variety of reasons,

5

including: 1) Defendant subjected Plaintiff to “lengthy exposure to the sunlight” even though

6

Plaintiff had informed his employer that he was on a prescription medication that had certain side-

7

effects;6 2) Defendant was designated as ineligible for rehire based on false entries in his

8

employment file regarding his performance, including “false safe box issue”; 3) Plaintiff was not

9

given access to his employment file to “learn firsthand of any wrongdoing that may, or might have

10

existed;” and 4) Defendant did not give Plaintiff the required 7-day notice of its intent to terminate

11
United States District Court
Northern District of California

4

Plaintiff. Id.
To prevail on a claim for wrongful discharge in violation of fundamental public policy,

12
13

Plaintiff must prove that his dismissal violated a policy that is (1) fundamental, (2) beneficial for

14

the public, and (3) embodied in a statute or constitutional provision. Turner v. Anheuser-Busch,

15

Inc., 7 Cal.4th 1238, 1256 (1994). Further, Plaintiff must establish that Defendant‟s conduct “was

16

motivated by impermissible considerations under a „but for‟ standard of causation.” General

17

Dynamics Corp. v. Superior Court, 7 Cal.4th 1164, 1191 (1994). The four alleged grounds for

18

Plaintiff‟s wrongful termination claim fail to state a claim because even assuming Plaintiff‟s

19

allegations to be true, they do not establish that any of the alleged conduct was related to

20

Plaintiff‟s termination. Consequently, Plaintiff has failed to allege any facts that would establish

21

causation. The Court therefore dismisses Plaintiff‟s claim with leave to amend.

22

I. Claim Twelve (Calumny/ Defamation)
Plaintiff asserts a claim for “Calumny, (Defamation)” in Claim Twelve.7 Complaint ¶ 40.

23
24

In support of this claim, Plaintiff alleges that Defendant classified Plaintiff as “non-eligible for

25

rehiring” based on “false entries of invalid performance data, and such has become a platform for

26
6

27
28

Exhibit L to Plaintiff‟s Complaint lists the potential side-effects of Plaintiff‟s medication.
Sensitivity to sunlight and/or the need to avoid direct sunlight is not mentioned in the list.
7
The Court construes Plaintiff‟s claim as one for defamation as there is no independent claim for
“calumny” under California law.
12

1
2

continuous slander through negative references to general public.” Id.
Under California law, the tort of defamation may be libel or slander. See Cal. Civ. Code

3

§§ 45-46. “The tort [of defamation] involves the intentional publication of a statement of fact that

4

is false, unprivileged, and has a natural tendency to injure or which causes special damage.” Smith

5

v. Maldonado, 72 Cal.App.4th 637, 645 (1999) (citing Cal. Civ. Code, §§ 45, 46; 5 Witkin,

6

Summary of Cal. Law (9th ed. 1988) Torts § 471, pp. 557-558). “Publication means

7

communication to some third person who understands the defamatory meaning of the statement

8

and its application to the person to whom reference is made.” Id.

9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17

California Civil Code § 47(c) creates a qualified privilege for a publication that is made:
In communication, without malice, to a person interested therein,
(1) by one who is also interested, or (2) by one who stands in such a
relation to the person interested as to afford a reasonable ground for
supposing the motive for the communication to be innocent, or (3)
who is requested by the person interested to give the information.
This subdivision applies to and includes a communication
concerning the job performance or qualifications of an applicant for
employment, based upon credible evidence, made without malice,
by a current or former employer of the applicant to, and upon
request of, one whom the employer reasonably believes is a
prospective employer of the applicant. This subdivision authorizes a
current or former employer, or the employer's agent, to answer
whether or not the employer would rehire a current or former
employee.

18

Cal. Civ. Code § 47(c). This qualified privilege may be applied to communications by one

19

employee of the defendant to another employee of the defendant where the statement is made

20

without malice. Kelly v. General Telephone Co., 136 Cal.App.3d 278, 284 (1982); see also King

21

v. United Parcel Service, Inc., 152 Cal.App.4th 426, 440 (2007) (“an employer‟s statements to

22

employees regarding the reasons for termination of another employee generally are privileged”).

23

It also applies to statements made without malice by a former employer to a prospective employer.

24

Lesperance v. North Am. Aviation, Inc., 217 Cal.App.2d 336 (341).

25

Plaintiff‟s allegations suggest that his defamation claim is being asserted on the basis of

26

statements made by Defendant to prospective employers. Thus, the Court finds that Plaintiff has

27

adequately alleged publication. To state a claim for defamation, however, Plaintiff must allege

28

facts sufficient to support a reasonable inference that the statements that were published were false
13

1

and that they were not privileged because they were made with malice. Because Plaintiff does not

2

include allegations sufficient to show falsity or malice, he fails to state a claim for defamation

3

under Rule 12(b)(6). Accordingly, Claim Twelve is dismissed with leave to amend.

4

IV.

CONCLUSION
The Motions is GRANTED in part and DENIED in part. In particular, the Motion is

5
6

DENIED as to Claim Six to the extent that Plaintiff‟s Complaint can be construed as seeking the

7

penalty that is set forth in Cal. Labor Code § 1198.5. The Motion is GRANTED as to Claim Six

8

to the extent Plaintiff seeks money damages on that claim. The Court also GRANTS the Motion

9

as to Claims Two, Three, Four, Seven, Eight, Nine, Ten, Eleven and Twelve, which are dismissed
for failure to state a claim under Rule 12(b)(6). The Court finds that Claims Three, Four, Eight,

11
United States District Court
Northern District of California

10

Nine and Ten cannot be cured by amendment and therefore those claims are dismissed with

12

prejudice. Plaintiff shall have leave to amend as to Claims Two, Seven, Eleven and Twelve to

13

address the deficiencies identified in this Order. Plaintiff may file an amended complaint within

14

thirty (30) days of this Order. In that amended complaint, Plaintiff may only amend Claims Two,

15

Seven, Eleven and Twelve. He may only amend those claims to address the deficiencies identified

16

above.

17

IT IS SO ORDERED.

18
19

Dated: March 3, 2014

20
21

22

______________________________________
JOSEPH C. SPERO
United States Magistrate Judge

23
24
25
26
27
28
14