Adobe Systems Incorporated v. Shamcy Alghazzy

Filing 54

ORDER GRANTING 48 MOTION TO DISMISS AND STRIKE. Signed by Judge Beth Labson Freeman.(blflc2S, COURT STAFF) (Filed on 5/16/2016)

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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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ADOBE SYSTEMS INCORPORATED,

Case No. 15-cv-01443-BLF

Plaintiff,
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v.

ORDER GRANTING MOTION TO
DISMISS AND STRIKE

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SHAMCY ALGHAZZY,

[Re: ECF 48]

Defendant.

United States District Court
Northern District of California

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Defendant asserts four counterclaims against Plaintiff in this action: violation of

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California’s Unfair Competition Law (“UCL”), promissory estoppel, and two requests for

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declaratory relief that Defendant does not infringe Plaintiff’s trademarks or copyrights. ECF 47

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(“Counterclaims”). Plaintiff has moved to dismiss the first two claims and to strike the claims for

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declaratory relief. Mot., ECF 48. The Court heard argument on this motion on May 12, 2016. For

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the reasons stated on the record and below, the Court GRANTS Plaintiff’s motion with leave to

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amend.

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To survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual

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matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,

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556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

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When considering a motion to dismiss, the Court “accept[s] factual allegations in the complaint as

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true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek

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v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The Court “need not,

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however, accept as true allegations that contradict matters properly subject to judicial notice or by

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exhibit.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

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Plaintiff raises serious problems with Defendant’s claims. First, Plaintiff challenges the

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UCL claim for failure to plead any injury. See Reply at 3-5, ECF 51. “[O]nly plaintiffs who have

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suffered actual damage may pursue a private UCL action.” Peterson v. Cellco P'ship, 164 Cal.

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App. 4th 1583, 1590 (2008) (citing Cal. Bus. & Prof. § 17204). “A private plaintiff must make a

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twofold showing: he or she must demonstrate injury in fact and a loss of money or property caused

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by unfair competition.” Id.

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Here, Plaintiff is correct that Defendant fails to plead either element. Defendant alleges

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that he sold a product to Plaintiff’s agent because the agent misrepresented his identity, see

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Counterclaims ¶¶ 20-28, 32, but Defendant fails to identify a resulting injury, such as lost money

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or property, much less a causal link between an injury and Plaintiff’s alleged misconduct.

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Accordingly, the Court GRANTS Plaintiff’s Motion to Dismiss the UCL claim.

United States District Court
Northern District of California

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Plaintiff next argues that Defendant similarly fails to plead a central element of his

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promissory estoppel claim, which requires allegations of: “(1) a promise clear and unambiguous in

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its terms; (2) reliance by the party to whom the promise is made; (3) his reliance must be both

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reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his

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reliance.” Rockridge Trust v. Wells Fargo, N.A., 985 F. Supp. 2d 1110, 1159 (N.D. Cal. 2013)

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(citing Laks v. Coast Fed. Sav. & Loan Ass’n, 60 Cal. App. 3d 885, 890 (1976)).

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Plaintiff correctly notes that Defendant fails to sufficiently plead the first element. Mot. at

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12-15. While Defendant alleges that Plaintiff “clearly and unambiguously promised . . . that

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[Defendant] could re-sell Adobe products,” Counterclaims ¶ 35, the exhibits he attaches to his

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Counterclaims—three exchanges that he represents as examples of Plaintiff’s promises, see id. ¶¶

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14, 15, 19; see also id. Exhs. 1, 2, and 4, ECF 47-1, 47-2, 47-4—belie this allegation. In the

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November 2008 exchange, for example, an Adobe representative writes, “I can only give approval

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for the items whose images I was able to view. I can’t give a blanket approval for all products

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based on the representative sample.” Id. Exh. 1 at 11. Similarly, in 2009, Adobe writes, “Please

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note that Adobe has verified the authenticity of the above software only and is only authorizing

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you to relist the product(s) specified above. More specifically, [this] should not be construed as a

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blanket authorization for all of your eBay auction listings.” Id. Exh. 2. At 2. In light of these

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express limitations on the alleged permission, the Court GRANTS Plaintiff’s Motion to Dismiss
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the promissory estoppel claim.
Finally, Plaintiff seeks to strike Defendant’s claims for declaratory relief as redundant.

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Mot. at 17-19. “The court may strike from a pleading . . . any redundant, immaterial, impertinent,

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or scandalous matter.” Fed. R. Civ. P. 12(f). Finding that Defendant’s claims for declaratory relief

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are mirror images of Plaintiff’s affirmative claims and that they seek the same relief as

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Defendant’s affirmative defenses, the Court GRANTS Plaintiff’s Motion to Strike.

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Notwithstanding the Court’s serious reservations about Defendant’s ability to cure the

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deficiencies identified above, the Court GRANTS Defendant leave to amend each of his claims

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because he has not yet had such an opportunity. Plaintiff shall file his amended counterclaims by

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no later than June 2, 2016.

United States District Court
Northern District of California

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IT IS SO ORDERED.

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Dated: May 16, 2016
______________________________________
BETH LABSON FREEMAN
United States District Judge

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