Matthew Enterprise, Inc. v. Chrysler Group LLC

Filing 106

ORDER (1) GRANTING Plaintiff's Motion for Reconsideration; (2) MODIFYING the Court's prior dismissal of Plaintiff's Section 2(a) claims under the Robinson-Patman Act to be without prejudice. Signed by Judge Beth Labson Freeman on 5/21/2015. (blflc3S, COURT STAFF) (Filed on 5/21/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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MATTHEW ENTERPRISE, INC.,

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Case No. 13-cv-04236-BLF

Plaintiff,
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v.

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ORDER (1) GRANTING PLAINTIFF’S
MOTION FOR RECONSIDERATION;
(2) MODIFYING COURT’S PRIOR
ORDER ON DEFENDANT’S MOTION
TO DISMISS TO GRANT PLAINTIFF
LEAVE TO AMEND

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[Re: ECF 89]

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CHRYSLER GROUP LLC,

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United States District Court
Northern District of California

Defendant.

“[A] trial court has the inherent power to reconsider, set aside, or amend interlocutory

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orders at any time prior to entry of a final judgment.” Meas v. City & Cnty. of San Francisco, 681

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F. Supp. 2d 1128, 1143 (N.D. Cal. 2010).
Plaintiff has moved this Court to reconsider its January 12, 2015 Order granting with

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prejudice Defendant’s motion to dismiss Plaintiff’s rent discrimination claims under Section 2(a)

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of the Robinson-Patman Act (“RPA”), 15 U.S.C. § 13. See Order, ECF 85. Defendant opposes.

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For the reasons stated on the record at the May 21, 2015 hearing on the motion, and further

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discussed below, the Court GRANTS the motion for reconsideration. The Court further

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MODIFIES its dismissal of Plaintiff’s RPA Section 2(a) rent discrimination claims to be without

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prejudice.1
Plaintiff’s FAC alleged that Defendant violated Section 2(a) of the RPA by providing

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competing car dealerships with certain payments that were labeled as “rent assistance,” but which

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actually served as disguised vehicle price reductions used either to decrease the purchase price of

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In its Dismissal Order, ECF 85, the Court noted in three places that its dismissal of Plaintiff’s
Section 2(a) claims was with prejudice: page 1 line 25, page 11 lines 4-5, and page 12 lines 23-24.
This Order MODIFIES AND SUPERSEDES those portions of the Court’s prior Dismissal Order.

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vehicles or as compensation for promotional services or facilities. It alleged specifically that a

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competing dealer, San Leandro CJDR, owned by an entity called Ytransport LLC/York Capital,

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received one such disguised vehicle price reduction. In its motion to dismiss, Defendant asked the

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Court to look to the plain language of the Framework Agreement entered into between York

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Capital and Chrysler, which it contended offered rent assistance, but not vehicle price reductions,

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to York Capital.

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In support of its motion, Defendant made several representations to the Court that rent
assistance was only offered to York Capital on land directly leased from Chrysler Realty, see, e.g.,

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Mot. at 14, and that dealers who operated on land that was not leased by Chrysler earned no such

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incentives. See, e.g., Reply at 10. Plaintiff now moves for reconsideration on the ground that it has

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United States District Court
Northern District of California

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discovered, through documents produced in a related state court action, that Defendant’s

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representations were untrue, and that these rent incentive payments were offered to at least one

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other York Capital-owned dealership that did not lease its property from Chrysler Realty. See Mot.

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at 5; see also Norman Decl., 89-6 Exhs. A-C.

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In this circuit, when a plaintiff and defendant propose two alternative explanations for a

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course of action, the Court may dismiss Plaintiff’s complaint when “defendant’s plausible

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alternative explanation is so convincing that plaintiff’s explanation is implausible.” Starr v. Baca,

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652 F.3d 1202, 1216 (9th Cir. 2011). In engaging in this Starr v. Baca analysis in its Dismissal

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Order, the Court relied on Defendant’s representations that rent incentives were only offered to

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dealerships that leased Chrysler-owned land. With this assurance, the Court interpreted the plain

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language of the Framework Agreement and found that the rent incentives included in that

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Agreement were directly related to the provision of realty, rendering Plaintiff’s alternative

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explanation – that the payments were disguised price discounts – implausible. See Order at 8-11.

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The Court stated specifically that it was granting the motion with prejudice due to the “dearth of

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factual allegations from Plaintiff to contest the plain language of that Agreement.” Id. at 11.

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Plaintiff’s new evidence does not change the Court’s determination as to its Dismissal

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Order except that the Court finds it prudent to amend its dismissal of Plaintiff’s Section 2(a)

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claims to allow Plaintiff leave to amend to incorporate this new evidence. The prior Dismissal
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Order, ECF 85, is otherwise unchanged because the Court had neither this evidence nor any

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factual pleading regarding this evidence before it when it decided the motion. The Court cannot

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yet determine whether Plaintiff can sufficiently allege facts regarding this new evidence to survive

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a motion to dismiss as to its Section 2(a) claims. But, given the Court’s reliance on Defendant’s

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representations in Defendant’s motion papers and before the Court in oral argument, as well as the

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new evidence that Plaintiff has set forth, Plaintiff must be given the opportunity to amend.

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The Court therefore GRANTS Plaintiff’s motion for reconsideration, and HEREBY

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ORDERS that its dismissal of Plaintiff’s RPA Section 2(a) rent discrimination claims is without

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prejudice. The Court makes no other changes to its January 12, 2015 Dismissal Order.

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Plaintiff shall have until June 12, 2015 to file a second amended complaint. If Defendant

United States District Court
Northern District of California

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again moves to dismiss Plaintiff’s Section 2(a) claims, the motion and opposition shall be limited

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to ten (10) pages, while the reply will be limited to five (5) pages.

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IT IS SO ORDERED.
Dated: May 21, 2015
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BETH LABSON FREEMAN
United States District Judge

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