Lerma v. NTT McKee Retail Center, LLC et al

Filing 27

Order by Hon. Lucy H. Koh granting in part and denying in part 23 Motion to Dismiss for Lack of Jurisdiction.(lhklc3, COURT STAFF) (Filed on 10/18/2011)

1
2
3
4
5
6
7
UNITED STATES DISTRICT COURT

8

NORTHERN DISTRICT OF CALIFORNIA

9

SAN JOSE DIVISION

United States District Court
For the Northern District of California

10
11
12
13
14
15
16
17
18

ANTHONY LERMA,

)
)
Plaintiff,
)
v.
)
)
NTT MCKEE RETAIL CENTER, LLC;
)
WELLS FARGO BANK, N.A., TRUSTEE OF )
THE ROBERT AND HELEN REEL TRUSTS; )
RAVINDER N. SHARMA dba STOP N SAVE; )
DANA N. PHAN dba TAPIOCA EXPRESS,
)
)
Defendants.
)
)

Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND
DENYING IN PART MOTION TO
DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

Plaintiff Anthony Lerma (“Lerma”) brings this action against various defendants under the

19

Americans with Disabilities Act of 1990, 42 U.S.C. § 1201 et seq. (“ADA”), and related California

20

statutes, seeking damages, declaratory and injunctive relief, attorneys’ fees, and costs. Defendant

21

Wells Fargo Bank, N.A., as trustee for the Robert Ellis Reel Trust dated April 20, 1964 (the

22

“Trust”), erroneously sued herein as Wells Fargo Bank, N.A., Trustee of the Robert and Helen Reel

23

Trusts, moves to dismiss for lack of subject matter jurisdiction over Lerma’s claims as to the Trust.

24

See Fed. R. Civ. P. 12(b)(1). Pursuant to Local Civil Rule 7-1(b), the Court finds this motion

25

appropriate for determination without oral argument and hereby VACATES the motion hearing

26

scheduled for October 20, 2011. Having considered the parties’ submissions and the relevant law,

27

the Court dismisses Plaintiff’s ADA claim against the Trust for lack of subject matter jurisdiction

28

1
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

1

but exercises supplemental jurisdiction over Plaintiff’s remaining state law claims against the

2

Trust. Accordingly, the motion to dismiss is GRANTED in part and DENIED in part.

3

I.

4

BACKGROUND
The following factual allegations from Plaintiff’s First Amended Complaint (“FAC”) are

5

accepted as true for purposes of ruling on this motion to dismiss. See Outdoor Media Group, Inc.

6

v. City of Beaumont, 506 F.3d 895, 899-900 (9th Cir. 2007).

7

Plaintiff Anthony Lerma’s mobility is limited due to chronic non-healing diabetic ulcers on

8

his legs, radiculopathy, and degenerative disc disease on his back, and he requires use of a

9

wheelchair. FAC ¶ 10. Plaintiff alleges that he encountered various access barriers during a visit

United States District Court
For the Northern District of California

10

to Stop N Save, located at 2297 McKee Road, San Jose, California, and to Tapioca Express,

11

located at 2285 McKee Road, San Jose, California. Both retail stores are located in the same

12

shopping center known as the NTT McKee Retail Facility, located at 2285-2299 McKee Road, San

13

Jose, California (“McKee Retail Facility”), whose common areas also presented multiple access

14

barriers. Among other allegations, Plaintiff asserts that the McKeeRetail Facility, Stop N Save,

15

and Tapioca Express all suffer from missing and/or incorrect warning signage in their parking

16

facilities, improperly configured accessible parking spaces, impermissibly steep access ramps, and

17

improperly configured access routes between buildings and other facilities. FAC ¶¶ 15-16, 19-20,

18

23-24.

19

On May 2, 2011, Plaintiff initiated this action against NTT McKee Retail Center LLC

20

(“NTT”), Wells Fargo Bank, N.A., Trustee of the Robert and Helen Reel Trust (the “Trust”),

21

Ravinder N. Sharma dba Stop N Save (“Stop N Save”), and Dana N. Phan dba Tapioca Express

22

(“Tapioca Express”), all of whom are alleged to own, operate, and/or lease the retail facilities in

23

question. FAC ¶¶ 2, 7-9, 11-13. Plaintiff filed a First Amended Complaint on June 21, 2011,

24

alleging four causes of action: (1) violation of the Americans with Disabilities Act (“ADA”), 42

25

U.S.C. § 12101 et seq.; (2) violation of the California Disabled Persons Act (“DPA”), Cal. Civ.

26

Code § 54 et seq.; (3) violation of the California Unruh Civil Rights Act (“Unruh Act”), Cal. Civ.

27

Code § 51 et seq.; and (4) violation of California Health and Safety Code § 19955.

28

2
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

1

The ADA provides that “[n]o individual shall be discriminated against on the basis of

2

disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages,

3

or accommodations of any place of public accommodation by any person who owns, leases (or

4

leases to), or operates a place of public accommodation.” 42 U.S.C. § 12182(a). Plaintiff alleges

5

that Defendants violated various provisions of the ADA by failing to design and construct

6

accessible facilities, remove architectural barriers, make an altered facility accessible, or modify

7

existing policies and practices necessary to make the facilities accessible. See id. §§ 12182(b),

8

12183(a). Plaintiff seeks declaratory and injunctive relief, attorneys’ fees, and costs pursuant to 42

9

U.S.C. § 12205. FAC ¶ 42-43.

United States District Court
For the Northern District of California

10

The DPA incorporates by reference an individual’s rights under the ADA. See Cal. Civ.

11

Code §§ 54(c), 54.1(d). The DPA provides that a plaintiff whose ADA rights are violated may

12

seek treble damages against “[a]ny person or persons, firm or corporation who denies or interferes

13

with admittance to or enjoyment of the public facilities . . . or otherwise interferes with the rights of

14

an individual with a disability,” and provides for a statutory minimum recovery of $1,000 for each

15

offense. Id. § 54.3(a); see id. §§ 54(c), 54.1(d). In addition to declaratory and injunctive relief,

16

Plaintiff seeks actual damages, both general and special, pursuant to § 54.3(a). See FAC ¶¶ 50-51.

17

The Unruh Act also incorporates by reference an individual’s rights under the ADA and

18

provides for the recovery of statutory damages upon proof that an individual’s rights under the

19

ADA have been violated. Cal. Civ. Code §§ 51(f), 52(a).

20

damages of $4,000 for each offense, as provided for under the Unruh Act. See id. § 52(a); FAC ¶

21

58.

22
23

Plaintiff seeks statutory minimum

Finally, Plaintiff seeks injunctive relief and attorneys’ fees pursuant to California Health
and Safety Code § 19953.

24

In resolving a factual attack on jurisdiction on a Rule 12(b)(1) motion to dismiss, the Court

25

may review evidence beyond the complaint without converting the motion to dismiss into a motion

26

for summary judgment. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)

27

(citing Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003)). The Court

28

3
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

1

therefore takes notice of the following additional factual allegations submitted by Plaintiff and

2

Defendant in the course of briefing this motion, solely for purposes of resolving the instant motion.

3

The Trust owned the McKee Retail Center that is the subject of this action until January 24,

4

2011, at which time ownership transferred to NTT McKee Retail Center LLC, the present owner.

5

See Br., Ex. A. ECF No. 19-2. Plaintiff does not object to or dispute this fact. See Reply Br. at 3.

6

Plaintiff alleges that he visited Tapioca Express on April 22, 2010, Stop N Save on April 24, 2010,

7

and Tapioca Express again on March 21, 2011, Opp’n Br., Lerma Decl., ECF No. 24-2, and

8

appears to concede that the Trust no longer owned the property in question by the time of his third

9

visit in March 2011, see Opp’n Br. at 3.

United States District Court
For the Northern District of California

10

II.

11

LEGAL STANDARD
Rule 12(b)(1) of the Federal Rules of Civil Procedure requires dismissal of a complaint if

12

the court lacks subject matter jurisdiction. On a motion to dismiss for lack of subject matter

13

jurisdiction pursuant to Rule 12(b)(1), the party asserting jurisdiction has the burden of establishing

14

that subject matter jurisdiction is proper. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377

15

(1994).

16

III.

ANALYSIS

17

The only remedy available to a private litigant under Title III is injunctive relief. 42 U.S.C.

18

§ 12188(a); see Wander v. Kaus, 304 F.3d 856, 858 (9th Cir. 2002) (“Damages are not recoverable

19

under Title III of the ADA—only injunctive relief is available for violations of Title III.”).

20

Defendant argues that because the Trust no longer has ownership or control over the McKee Retail

21

Facility, Plaintiff cannot seek an injunction against the Trust and thereby lacks standing to assert

22

his ADA claim against it. Defendant argues that the Court therefore lacks subject matter

23

jurisdiction over Plaintiff’s ADA claims against the Trust and should dismiss Plaintiff’s remaining

24

state law claims against it. Br. at 3; see also Wander, 304 F.3d at 858 (holding that there is no

25

federal-question jurisdiction over a lawsuit for damages brought solely under California’s Disabled

26

Persons Act, even though violation of the federal ADA is an element of the state-law claim).

27

Plaintiff concedes that he has no justiciable federal claim against the Trust but asks the Court to

28

4
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

1

exercise supplemental jurisdiction over his state law claims, which provide for recovery of money

2

damages. Opp’n Br. at 3; see Cal. Civ. Code §§ 52(a), 54.3(a). Accordingly, the Court GRANTS

3

Defendant’s motion to dismiss Plaintiff’s first cause of action under the ADA against the Trust

4

without further discussion and turns now to the question of supplemental jurisdiction over

5

Plaintiff’s remaining state law claims against the Trust.

6

A. Same Case or Controversy

7

Where a federal court has original jurisdiction over a claim, the court has supplemental

8

jurisdiction over “all other claims that are so related to claims in the action within [the court’s]

9

original jurisdiction that they form part of the same case or controversy under Article III of the

United States District Court
For the Northern District of California

10

United States Constitution.” 28 U.S.C. § 1367(a); see also Trs. of the Constr. Indus. and Laborers

11

Health and Welfare Trust v. Desert Valley Landscape & Maint., Inc., 333 F.3d 923, 925 (9th Cir.

12

2003) (upholding the constitutionality of supplemental jurisdiction). Nonfederal claims are part of

13

the same “case” as federal claims when they “‘derive from a common nucleus of operative fact’

14

and are such that a plaintiff ‘would ordinarily be expected to try them in one judicial proceeding.’”

15

Finley v. United States, 490 U.S. 545, 549 (1989) (quoting United Mine Workers of Am. v. Gibbs,

16

383 U.S. 715, 725 (1966)); accord Trs. of the Constr. Indus., 333 F.3d at 925; Mendoza v. Zirkle

17

Fruit Co., 301 F.3d 1163, 1174 (9th Cir. 2002); Hoeck v. City of Portland, 57 F.3d 781, 785 (9th

18

Cir. 1995). The Court’s supplemental jurisdiction under 28 U.S.C. § 12367(a) “shall include

19

claims that involve the joinder or intervention of additional parties.” 28 U.S.C. § 1367(a); see also

20

Mendoza, 301 F.3d at 1173-74 (upholding the constitutionality of pendent party jurisdiction, so

21

long as the claims form “but one constitutional case” and “derive from a common nucleus of

22

operative fact” (internal quotation marks omitted)).

23

Plaintiff has clearly stated a claim arising under federal law against Defendants NTT, Stop

24

N Save, and Tapioca Express, and the Trust does not challenge the Court’s original jurisdiction

25

over Plaintiff’s ADA claims with respect to these defendants. Because it is undisputed that the

26

Court has original jurisdiction over at least one of Plaintiff’s claims, the sole question presented

27
28

5
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

1

here is whether Plaintiff’s ADA and state-law claims derive from a common nucleus of operative

2

fact.

3

Defendant argues that “Plaintiff’s ADA claims against NTT truly have very little to do with

4

his damage claims against the Trust. . . . Plaintiff’s claims against NTT [] involve the present

5

condition of the Subject Property and what injunctive relief requiring disabled access remediation

6

is appropriate—Plaintiff’s claims against the Trust, on the other hand, are premised on whether the

7

Plaintiff encountered disabled access barriers at the Subject Property more than a year ago.” Reply

8

Br. at 2-3. Defendant argues that, because Plaintiff will have to prove different facts to support

9

each of its claims and will be subject to different defenses, Plaintiff’s ADA and state-law claims do

United States District Court
For the Northern District of California

10
11

not derive from a common nucleus of operative fact.
The Court is not persuaded. Plaintiff’s state-law claims against all defendants are closely

12

intertwined with its ADA claims. Indeed, Plaintiff seeks a declaration from this Court that

13

Defendants violated the ADA as a predicate basis for seeking damages under the Unruh Act and

14

the DPA. See FAC ¶ 43; see also FAC ¶¶ 49, 57. Regardless of the possibility that Plaintiff may

15

have to make an additional showing, if defendants raise a mootness challenge to his claim for

16

injunction, that the conditions he experienced during his past visits to the retail facilities in question

17

continue to persist, it is undisputed that Lerma’s April 2010 visits to the McKee Retail Facility

18

form the basis for his First Amended Complaint and for all allegations therein. Plaintiff’s ADA

19

and state-law claims therefore all clearly arise from the same common nucleus of operative facts.

20

Defendant’s logic would impose a rule precluding federal courts from ever being able to

21

exercise supplemental jurisdiction over a plaintiff’s state law claim for damages related to a

22

properly pled ADA claim, even if the federal and state claims were asserted against the same party,

23

because the state law claim would necessarily be retrospective while injunctive relief would

24

invariably be prospective. Such a rule would serve neither the interests of judicial economy nor

25

convenience and fairness to litigants that motivate 28 U.S.C. § 1367. See Gibbs, 383 U.S. at 726

26

(explaining that these factors justify supplemental jurisdiction). Numerous courts have already

27

found the exercise of supplemental jurisdiction over state law claims related to an ADA claim

28

6
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

1

proper, emphasizing that the burdens of proof and standards of liability are identical for ADA and

2

Unruh Act claims. See, e.g., Chapman v. Pier 1 Imports (U.S.), Inc., 2011 WL 3667510 at *8

3

(E.D. Cal. Aug. 22, 2011); Johnson v. United Rental Nw., Inc., No. 2:11-cv-00204-JAM-EFB,

4

2011 WL 2746110 at *4 (E.D. Cal. July 13, 2011); Johnson v. Makinen, No. 2:09-cv-796-FCD-

5

KJM, 2009 WL 2137130 at *3 (E.D. Cal. July 15, 2009); cf. Lentini v. Cal. Center for the Arts,

6

Escondido, 370 F.3d 837 (9th Cir. 2004) (upholding district court’s award under the Unruh Act

7

without discussion of subject matter jurisdiction). This Court agrees. The state law claims asserted

8

here arise from the same common nucleus of operative facts and are so related to Plaintiff’s ADA

9

claim as to form part of the same constitutional case. See Gibbs, 383 U.S. at 725. The Court

United States District Court
For the Northern District of California

10
11
12

therefore may exercise supplemental jurisdiction over Plaintiff’s state-law claims against the Trust.
B. Discretionary Factors
Although the Court concludes that it may constitutionally exercise pendent party

13

jurisdiction over Plaintiff’s state law claims against the Trust, the Court may, in its discretion,

14

decline to exercise supplemental jurisdiction where: (1) the claim raises a novel or complex issue

15

of state law; (2) the claim substantially predominates over the claim or claims over which the Court

16

has original jurisdiction; (3) the Court has dismissed all claims over which it has original

17

jurisdiction; or (4) “in exceptional circumstances, there are other compelling reasons for declining

18

jurisdiction.” 28 U.S.C. § 1367(c).

19

None of these exceptions applies here. Plaintiff’s DPA and Unruh Acts do not raise a novel

20

or complex issue. To the contrary, they directly incorporate the federal ADA by reference.

21

Although there was a period of time when it was unclear whether a claim for damages under the

22

Unruh Act required as an additional element proof of intentional discrimination, see Munson v.

23

Del. Daco, Inc., 522 F.3d 997 (9th Cir. 2008) (certifying question to the California Supreme

24

Court); cf. Paulick v. Bavarian Lion Vineyard Dev., LLC, 2009 WL 691123 at *2-3 (N.D. Cal.

25

Mar. 10, 2009) (Wilken, J.) (acknowledging conflicting authority but exercising supplemental

26

jurisdiction over plaintiff’s Unruh Act claims nonetheless in the interest of judicial economy,

27

convenience, fairness, and comity), the California Supreme Court has since clarified that “[a]

28

7
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

1

plaintiff who establishes a violation of the ADA . . . need not prove intentional discrimination in

2

order to obtain damages under [California Civil Code § 52],” Munson v. Del Taco, Inc., 46 Cal. 4th

3

661, 665 (2009). Thus, the burdens of proof are identical for Plaintiff’s ADA, DPA, and Unruh

4

Act claims.

5

Nor do Plaintiff’s DPA and Unruh Act claims for damages “substantially predominate[]”

6

over his ADA claim for injunctive relief. As previously noted, both the DPA and the Unruh Act

7

provide that “violation of the right of an individual under the [ADA]” constitutes a violation of

8

state law. See Cal. Civ. Code §§ 54(c), 54.1(d) (DPA); id. § 51(f) (Unruh Act). As pleaded in the

9

FAC, Plaintiff’s claims for relief under these state provisions are predicated, in part, on the Court

United States District Court
For the Northern District of California

10

finding that Defendants violated his rights under the ADA. See FAC ¶¶ 43, 49, 57. The Court

11

therefore finds that Plaintiff’s ADA claims dominate.

12

Finally, the Court does not find that declining to exercise its supplemental jurisdiction

13

would serve “the objectives of judicial economy, convenience and fairness to the parties, and

14

comity.” Trs. of the Constr. Indus., 333 F.3d at 925 (citing Exec. Software N. Am., Inc. v. United

15

States Dist. Court, 24 F.3d 1545, 1557 (9th Cir. 1994), overruled on other grounds by Cal. Dep’t of

16

Water Res. v. Powerex Corp., 533 F.3d 1087 (9th Cir. 2008)). Plaintiff argues that the interests of

17

judicial economy, convenience, and fairness to the parties all favor retaining jurisdiction over the

18

state law claims because the Trust is a necessary party. A party is necessary if, “(A) in that

19

person’s absence, the court cannot accord complete relief among existing parties; or (B) that person

20

claims an interest relating to the subject of the action and is so situated that disposing of the action

21

in the person’s absence may: (i) as a practical matter impair or impede the person’s ability to

22

protect the interest; or (ii) leave an existing party subject to a substantial risk of incurring double,

23

multiple, or otherwise inconsistent obligations because of the interest.” Fed. R. Civ. P. 19(a).

24

Plaintiff argues that the Court cannot accord complete relief as to his damages claims for the visits

25

he made to the McKee Retail Facility in April 2010 unless the Trust remains a party to this suit

26

because the Trust may have discoverable information regarding the liability terms of the purchase

27

and sale of the property, which could affect claims for contribution and indemnification among the

28

8
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

1

various defendants. Plaintiff further argues that, if he prevails and the Trust is not party to this suit,

2

the remaining defendants could be exposed to substantial risk of incurring inconsistent obligations,

3

contrary to the objectives of Rule 19.

4

For essentially the same reasons it believes the Court lacks supplemental jurisdiction over

5

Lerma’s state law claims altogether, Defendant argues the Court should decline to exercise any

6

supplemental jurisdiction it may have because retaining jurisdiction over the Trust would not be

7

efficient and would be unduly prejudicial. The Court again rejects Defendant’s arguments and

8

agrees with Plaintiff that retaining jurisdiction over the Trust may be necessary to ensure fair and

9

adequate resolution of ultimate liability issues among all the named defendants. Furthermore,

United States District Court
For the Northern District of California

10

because Plaintiff’s state law claims against the other three defendants, over which the Court has

11

uncontested supplemental jurisdiction, involve the same nucleus of operative facts as Plaintiff’s

12

state law claims against the Trust, it would be inefficient and a waste of judicial resources to force

13

Plaintiff to bring a separate, nearly identical case in state court alleging the same facts against the

14

Trust as sole defendant. The Court therefore concludes that, in light of its exercise of supplemental

15

jurisdiction over Plaintiff’s state law claims against Defendants NTT, Stop N Save, and Tapioca

16

Express, it is in the interests of judicial economy, convenience, and fairness to all parties to retain

17

jurisdiction over Plaintiff’s state law claims against the Trust as well.

18
19

IV.

CONCLUSION
For the foregoing reasons, the Court concludes that the federal and state claims here derive

20

from a common nucleus of operative facts and that it is in the interest of economy, convenience,

21

and fairness for Plaintiff’s state and federal claims as to all Defendants to remain in federal court.

22

Accordingly, the Court will exercise supplemental jurisdiction under 28 U.S.C. § 1367 over

23

Plaintiff’s state law claims against the Trust. The motion to dismiss Plaintiff’s state law claims

24

against the Trust is DENIED. The motion to dismiss Plaintiff’s ADA claim against the Trust is

25

GRANTED.

26
27
28

9
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION

1

IT IS SO ORDERED.

2
3

Dated: October 18, 2011

_________________________________
LUCY H. KOH
United States District Judge

4
5
6
7
8
9
United States District Court
For the Northern District of California

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

10
Case No.: 5:11-CV-02161-LHK
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION