Flynn v. Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor LLP et al

Filing 71

ORDER Granting 8 Motion to Dismiss and Granting in Part and Denying in Part 9 Motion to Strike. Amended Complaint deadline: 11/16/2010. Signed by Judge Philip M. Pro on 10/15/10. (Copies have been distributed pursuant to the NEF - ASB)

Flynn v. Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor LLP et al

Doc. 71

1 2 3 UNITED STATES DISTRICT COURT 4 D IS T R IC T OF NEVADA 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 The Court may take judicial notice of matters of public record without converting a motion to dismiss into one for summary judgment. U.S. v. 14.02 Acres of Land More or Less in Fresno County, 547 F.3d 943, 955 (9th Cir. 2008). The Court also may consider documents not attached to the complaint, but the contents of which the plaintiff alleges in the complaint or documents upon which the plaintiff's claim depends, where the parties do not challenge the documents' authenticity. Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
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*** ) M IC H A E L J. FLYNN, ) ) P la in tif f , ) ) v. ) ) L IN E R GRODE STEIN YANKELEVITZ ) S U N S H IN E REGENSTREIF & TAYLOR ) L L P , DEBORAH A. KLAR, and TERI ) PH A M , ) ) Defendants. ) )

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ORDER

P re se n tly before the Court is Defendant Liner Firm's Motion to Dismiss (Doc. # 8 ) and request for judicial notice (Doc. #10),1 filed on September 11, 2009. Plaintiff M ic h a e l Flynn filed an Opposition (Doc. #19) on October 13, 2009. Defendant filed a R e p ly (Doc. #25) on October 27, 2009. Defendants Deborah Klar and Teri Pham filed a J o in d e r in Motion to Dismiss Filed on Behalf of the Liner Firm (Doc. #27) on October 28, 2009. A ls o before the Court is Defendant Liner Firm's Motion to Strike (Doc. #9), filed o n September 11, 2009. Plaintiff filed an Opposition (Doc. #21) on October 13, 2009. Defendant filed a Reply (Doc. #24) on October 27, 2009. This action was reassigned to the

Dockets.Justia.com

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u n d e rs ig n e d on July 7, 2010. I. BACKGROUND P la in tif f Michael Flynn ("Flynn") is an attorney licensed in Massachusetts who a p p e a re d pro hac vice in this Court in the case of Dennis Montgomery v. eTreppid T e c h n o lo g ie s, 3:06-CV-00056-PMP-VPC ("eTreppid case"). (Compl. (Doc. #1) at 2.) Defendant Liner, Grode, Stein, Yankelevitz, Sunshine, Regenstreif & Taylor, LLP ("Liner F irm " ) is a law firm based in Los Angeles, California. (Id.) Defendants Deborah Klar (" K la r" ) and Teri Pham ("Pham") are attorneys who previously were partners in the Liner F irm . (Id.) Pham and Klar also appeared pro hac vice in the eTreppid case, representing D e n n is Montgomery ("Montgomery") following Flynn's withdrawal as Montgomery's a tto rn e y. (Id.) Flynn alleges that Klar, Pham, and the Liner Firm initiated several state court and a d m in is tra tiv e proceedings against him in an effort to force him to turn over Montgomery's c lie n t file without Montgomery having to pay attorney's fees he owed Flynn or having to p o s t a bond for such fees. (Id. at 3.) Specifically, Flynn alleges Defendants initiated an a c tio n in California superior court, filed to applications for writ of possession in the C a lif o rn ia superior court action, filed a fee arbitration petition in San Diego, filed a bar c o m p la in t with the Massachusetts state bar, filed a perjurious declaration in the California a n d Nevada proceedings, and filed other "pleadings" in the California and Nevada actions in bad faith. (Id. at 3-4.) Flynn alleges Defendants did so in an abusive manner, relying on a perjured affidavit by Montgomery, thus knowing that no basis existed for pursuing the a c tio n s in California. (Id. at 3-5.) Flynn further alleges Defendants engaged in these a c tiv itie s in a concerted effort to circumvent Nevada law which permits Flynn to exercise a re ta in in g lien over the client file, to avoid this Court's jurisdiction to enforce the retaining lie n , and to evade this Court's supervision of state secrets contained within Montgomery's c lie n t file. (Id.) 2

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B a s e d on this conduct, Flynn brings claims for abuse of process under Nevada la w (count one), malicious prosecution under California law (count two), intentional in f lic tio n of emotional distress (count four), negligent infliction of emotional distress (count f iv e ), violation of rules and statutes (count six), negligence (count eight), and conspiracy (c o u n t nine). Flynn further asserts that Defendants aided and abetted Montgomery hacking in to Flynn's computer and using the information obtained in the fee dispute proceedings. (Id. at 6-7.) Flynn brings claims for aiding and abetting violations of 18 U.S.C. § 1030 (c o u n t three) and invasion of privacy (count seven) based on these allegations. D e f e n d a n t Liner Firm now moves to dismiss, arguing Plaintiff fails to state a c la im on each count of the Complaint for various reasons. Defendants Klar and Pham join in Defendant Liner Firm's arguments. Plaintiff opposes the motion. I I . LEGAL STANDARD In considering a motion to dismiss, "all well-pleaded allegations of material fact a re taken as true and construed in a light most favorable to the non-moving party." Wyler S u m m it P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998) (citation o m itte d ). However, the Court does not necessarily assume the truth of legal conclusions m e re ly because they are cast in the form of factual allegations in the plaintiff's complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). There is a s tro n g presumption against dismissing an action for failure to state a claim. Ileto v. Glock In c ., 349 F.3d 1191, 1200 (9th Cir. 2003). A plaintiff must make sufficient factual a lle g a tio n s to establish a plausible entitlement to relief. Bell Atl. Corp. v Twombly, 550 U .S . 544, 556 (2007). Such allegations must amount to "more than labels and conclusions, [ o r] a formulaic recitation of the elements of a cause of action." Id. at 555. /// /// /// 3

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I I I . DEFENDANT LINER FIRM'S MOTION TO DISMISS (Doc. #8) A . Abuse of Process D e f e n d a n t Liner Firm argues that although Flynn asserts this claim under Nevada la w , California law actually governs the claim. Defendant Liner Firm further argues that u n d e r California law, the litigation privilege bars an abuse of process claim. Finally, D e f e n d a n t Liner Firm argues that Plaintiff has not alleged an improper purpose, as each a c tio n was filed for the purpose for which it was designed, i.e., to compel Flynn to turn over th e client file to Montgomery. Plaintiff responds that Nevada law applies and he adequately has alleged an a b u s e of process claim, and the Court's sanctions order in the eTreppid case sets forth the f a c ts demonstrating Defendant Liner Firm acted with an ulterior purpose and not in the re g u la r conduct of the proceedings. Plaintiff also argues he adequately states a claim for a b u s e of process because every court that heard Defendant Liner Firm's claims that Plaintiff w a s a California lawyer rejected that position. Additionally, Plaintiff argues this Court's o rd e r imposing sanctions on Defendants in the eTreppid case found Defendant Liner Firm in itia te d the other actions for the improper purpose of harassing Plaintiff. Plaintiff contends th e litigation privilege does not apply to this type of claim. 1 . Choice of Law T h e Court applies "state substantive law to state law claims, including the forum s ta te 's choice of law rules." Love v. Assoc. Newspapers, Ltd. 611 F.3d 601, 610 (9th Cir. 2 0 1 0 ). Nevada applies the "most significant relationship test" from the Restatement (S e c o n d ) of Conflict of Laws § 145 to decide choice-of-law issues in tort actions "unless a n o th e r, more specific section of the Second Restatement applies to the particular tort." Gen. Motors Corp. v. Eighth Judicial Dist. Ct. of State of Nev. ex rel. County of Clark, 134 P .3 d 111, 116 (Nev. 2006). /// 4

1 2 3 4 5 6 § 155,

T h e Second Restatement has a section specific to abuse of process claims. Under

[t]he rights and liabilities of the parties for malicious prosecution or a b u s e of process are determined by the local law of the state where the p ro c e e d in g complained of occurred, unless, with respect to the p a rtic u la r issue, some other state has a more significant relationship u n d e r the principles stated in § 6 to the occurrence and the parties, in w h ic h event the local law of the other state will be applied. Pursuant to § 6,

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 (1) A court, subject to constitutional restrictions, will follow a statutory d ire c tiv e of its own state on choice of law. (2 ) When there is no such directive, the factors relevant to the choice o f the applicable rule of law include (a ) the needs of the interstate and international systems, (b ) the relevant policies of the forum, (c ) the relevant policies of other interested states and the re la tiv e interests of those states in the determination of the particular is s u e , (d ) the protection of justified expectations, (e ) the basic policies underlying the particular field of law, (f ) certainty, predictability and uniformity of result, and (g ) ease in the determination and application of the law to be a p p lie d . R e sta te m e n t (Second) of Conflict of Laws, § 6. "These principles are not intended to be e x c lu s iv e and no one principle is weighed more heavily than another." Gen. Motors Corp., 1 3 4 P.3d at 117. "The law selected by application of the rule of § 145 determines whether a p e rs o n is excused from liability by reason of the fact that his action was required or p riv ile g e d by the local law of the state where he acted." Restatement (Second) of Conflict o f Laws § 163. Nevada does not have a statutory directive regarding choice of law in an abuse of p ro c e s s case. The needs of the interstate and international systems do not favor California o r Nevada law in this instance. Nevada courts have an interest in ensuring litigants do not re s o rt to abusing process in other jurisdictions to evade Nevada court orders or Nevada c o u rt jurisdiction over matters properly brought before Nevada courts. However, other s ta te s have an interest in ensuring their own judicial processes are not used for improper 5

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p u rp o s e s . Restatement (Second) of Conflict of Laws § 155 cmt. b ("The state where the p ro c e e d in g complained of occurred has a natural interest in determining the extent to which re s o rt to its legal processes is to be inhibited by the possibility that a person making use of th e s e processes will be held liable for malicious prosecution or abuse of process."). The protection of justified expectations weighs in favor of applying California law because a party would expect the court from which the challenged process issued to v in d ic a te any abuse of the court's authority. Flynn alleges Defendants issued process by in itia tin g the California state court proceeding. Flynn does not allege any issue of process in a Nevada court proceeding. Rather, Flynn alleges Defendants filed a perjured declaration a n d filed other "pleadings" in bad faith. California law thus should control because the only a lle g e d process was issued in California. Because an abuse of process claim depends on process issued from a court which e x e rc ise s its power in the forum in which it is located, the basic policies underlying the p a rtic u la r field of law also weigh in favor of applying California law. Additionally, c e rta in ty, predictability, and uniformity of result support applying California law in this in s ta n c e , as it is certain, predictable, and supports uniformity to apply the law of the forum f ro m which the process issued and where the alleged abuse of process occurred, even if the a lle g e d abuse of process had impact elsewhere. Finally, California's law regarding abuse of p ro c e s s is easily determined and applied. The Court therefore concludes that under N e v a d a 's choice of law rules, Nevada would apply California law to Flynn's abuse of p ro c e s s claim. 2 . Privilege U n d e r California law, a publication made in any judicial proceeding is privileged. Cal. Civ. Code § 47(b). Although the privilege originally applied only to defamation c la im s , the privilege now applies to "all torts except malicious prosecution." Rusheen v. C o h e n , 128 P.3d 713, 718 (Cal. 2006). "The [p]leadings and process in a case are generally 6

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v ie w e d as privileged communications." Id. at 719 (quotation omitted). Additionally, the p riv ile g e "has been applied specifically in the context of abuse of process claims alleging th e filing of false or perjurious testimony or declarations." Id. Here, Flynn alleges Defendants abused process by initiating the California state a c tio n based on Montgomery's perjurious declaration. Both the pleadings and the use of the p e rju re d declaration fall within California's litigation privilege. The Court therefore will d is m is s with prejudice Flynn's abuse of process claim against Defendants Liner Firm, Klar, a n d Pham. 3 . Process by a State Bar F lyn n also alleges abuse of process arising from Defendants filing a M a s s a c h u s e tts bar complaint against Flynn. Under the same analysis articulated above, to th e extent Flynn's abuse of process claim arises out of the Massachusetts bar complaint, M a s s a c h u s e tts law controls. In Massachusetts, to state an abuse of process claim the plaintiff must allege the d e f e n d a n t used process for an ulterior or illegitimate purpose resulting in damage to the p la in tif f . Keystone Freight Corp. v. Bartlett Consol., Inc., 930 N.E.2d 744, 751 (Mass. A p p . Ct. 2010). The term "process" means "causing papers to be issued by a court to bring a party or property within its jurisdiction." Vittands v. Sudduth, 730 N.E.2d 325, 332 n.9 (M a s s. App. Ct. 2000) (quotation omitted). Abuse of process cases in Massachusetts g e n e ra lly have been limited to the issuance of writs of attachment, the process used to in s titu te a civil action, and, the process used to institute criminal charges. Jones v. B ro c k to n Public Markets, Inc., 340 N.E.2d 484, 486 (Mass. 1975). A third party's complaint to a state bar is not "process" within the meaning of M a s s a c h u s e tts abuse of process law. It is neither issued by a court, nor does it bring a party w ith in a court's jurisdiction. The Court therefore will dismiss with prejudice Flynn's abuse o f process claim to the extent it rests on the Massachusetts state bar complaint. 7

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B. Malicious Prosecution D e f e n d a n t Liner Firm contends that Plaintiff fails to state a malicious prosecution c la im because the application for writ of possession is merely a remedy, and does not c o n s titu te an independent proceeding. Additionally, Defendant Liner Firm contends the bar p ro c e e d in g s cannot support the malicious prosecution claim because the bar complaints led o n ly to investigations, not formal proceedings. Finally, Defendant Liner Firm argues P la in tif f failed to allege favorable termination on the merits. P la in tif f responds that administrative proceedings may form the basis of a m a lic io u s prosecution claim. Plaintiff contends each action may support the malicious p ro s e c u tio n claim, as Defendant Liner Firm pursued the proceedings in violation of three c o u rt orders for the improper purpose of harassing Plaintiff. Flynn brings this claim under California law, and for the same reasons as a rtic u la te d above with respect to abuse of process, the Court agrees with Flynn that C a lif o rn ia law applies to this claim, except for the alleged malicious prosecution of the M a s s a c h u s e tts bar complaint, to which Massachusetts law applies.2 California's litigation p riv ile g e does not apply to malicious prosecution claims. Rusheen, 128 P.3d at 718. 1. California T o state a malicious prosecution claim under California law, the plaintiff must a lle g e : (1) the defendant commenced or continued a lawsuit; (2) without probable cause; (3) th e lawsuit terminated in the plaintiff's favor; and (4) the prior lawsuit was initiated with m a lic e . Daniels v. Robbins, 105 Cal. Rptr. 3d 683, 693 (Cal. App. Ct. 2010); Zamos v. S tro u d , 87 P.3d 802, 810 (Cal. 2004). A favorable termination does not necessarily mean a tria l on the merits. Other types of successful results, such as a voluntary dismissal, d is m is s a l for failure to prosecute, or some dismissals for discovery violations, such as Nevada does not recognize a claim for malicious prosecution of a civil action. See LaMantia v. Redisi, 38 P.3d 877, 880 (Nev. 2002). 8
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w h e re the losing party refused to sit for his own deposition, may constitute favorable te rm in a tio n to support a malicious prosecution action. Daniels, 105 Cal. Rptr. 3d at 693-94. The rationale for treating these as favorable terminations is that it is a fair assumption that a p la in tif f would not fail to prosecute, voluntarily dismiss, or refuse to participate in d is c o v e ry in an action that had merit. Id. " T h e tort of malicious prosecution requires the initiation of a full-blown action . . .; subsidiary procedural actions within a lawsuit such as an application for a restraining o rd e r or for a lien will not support a claim of malicious prosecution." Adams v. Superior C t., 2 Cal. App. 4th 521, 528 (Cal. App. Ct. 1992); Zamos, 87 P.3d at 809 n.8. California a d o p ts this rule because permitting a malicious prosecution claim based on subsidiary a c tio n s within a lawsuit "would disrupt the ongoing lawsuit by injecting tort claims against th e parties' lawyers and because the appropriate remedy for actions taken within a lawsuit lie s in the invocation of the court's broad powers to control judicial proceedings." Adams, 2 Cal. App. 4th at 528. Further, "[i]nvestigations which do not lead to initiation of p ro c e e d in g s before an official body or administrative board having the power to take action a d v e rs e ly affecting legally protected interests of the accused are not a sufficient basis upon w h ic h to found an action for malicious prosecution." Lebbos v. State Bar, 165 Cal. App. 3d 6 5 6 , 670 (Cal. App. Ct. 1985). T h e two motions for writ of possession filed in the California superior court c a n n o t, in and of themselves, support a malicious prosecution claim because they were s u b s id ia ry procedural actions taken within the California superior court lawsuit, not full b lo w n actions. Additionally, the fee arbitration petition did not proceed past the in v e s tig a to ry stage and did not lead to initiation of formal proceedings. Consequently, it a ls o cannot form the basis of a malicious prosecution claim. W ith respect to the California superior court action, Flynn has not alleged that a c tio n terminated on the merits in his favor nor could he. The California action sought to 9

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c o m p e l Flynn to return to Montgomery the client file and to prevent Flynn from disclosing c o n f id e n tia l attorney-client communications. (Def. Liner Firm's Mot. to Dismiss (Doc. #8), E x . A.) The California superior court action did not rule on either of this issues. Rather, th e California superior court action resulted in dismissal for lack of proof of service and on f o ru m non conveniens grounds. (Def. Liner Firm's Request for Judicial Notice (Doc. #10), E x . 1.) While Flynn succeeded in keeping the file dispute in Nevada for resolution, he did n o t succeed on a merits-based ruling in the California action that he was entitled to keep the f ile and/or should not be enjoined from making certain disclosures.3 Flynn therefore has not a n d cannot state a claim for malicious prosecution in relation to the California superior c o u rt action. The Court therefore will grant Defendants' motion to dismiss this claim to the e x te n t it is based on any of the California conduct. 2 . Massachusetts In Massachusetts, "[t]o prevail on a claim for malicious prosecution, a plaintiff m u s t establish that he was damaged because the defendant commenced the original action w ith o u t probable cause and with malice, and that the original action terminated in his f a v o r." Chervin v. Travelers Ins. Co., 858 N.E.2d 746, 753 (Mass. 2006). As with the C a lif o rn ia superior court proceeding, Flynn has not and cannot allege favorable termination in his favor. The Massachusetts state bar dismissed the complaint because this Court had e n te re d orders concerning the surrender of the files, and the Massachusetts state bar d e te rm in e d that this Court was "the more appropriate forum to determine the procedures a n d restrictions with respect to transfer of the file in these circumstances . . . ." (Def. Liner F irm 's Request for Judicial Notice, Ex. 3.) In fact, the Massachusetts state bar suggested th a t it would reach a result unfavorable to Flynn if it were to resolve the issue itself. (Id.) The Court therefore will dismiss with prejudice Flynn's malicious prosecution claim to the The fee arbitration petition likewise was not terminated on the merits, but was dismissed for lack of jurisdiction. (Def. Liner Firm's Request for Judicial Notice, Ex. 2.) 10
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e x te n t it is based on the Massachusetts bar complaint. C. Aiding and Abetting 18 U.S.C. § 1030 Violation D e f e n d a n t Liner Firm argues Flynn's claim under 18 U.S.C. § 1030 fails because th e Complaint fails to allege the computer which Montgomery allegedly hacked into was u s e d in interstate commerce, or that Plaintiff suffered economic damage or loss as defined u n d e r the applicable statute. Plaintiff responds that he has alleged the interstate commerce p ro n g because he alleged he was a Massachusetts attorney representing a California resident in a Nevada civil action. Plaintiff contends he also alleged personal injury and loss s u p p o rtin g his damages. T itle 18 U.S.C. § 1030(a)(2)(C) prohibits a person from intentionally accessing a c o m p u te r without authorization or exceeding authorized access, and thereby obtaining " in f o rm a tio n from any protected computer." A "protected computer" means a computer " w h ic h is used in or affecting interstate or foreign commerce or communication . . . ." 18 U .S .C . § 1030(e)(2)(B). Section 1030(g) provides a civil action for "[a]ny person who suffers damage or lo s s by reason of a violation of this section." An aggrieved person may obtain c o m p e n s a to ry damages as well as injunctive or other equitable relief. Id. § 1030(g). However, a plaintiff may bring a civil action under § 1030(g) "only if the conduct involves 1 of the factors set forth in subclauses (I), (II), (III), (IV), or (V) of subsection (c)(4)(A)(i)." Id. Additionally, "[d]amages for a violation involving only conduct described in subsection (c )(4 )(A )(i)(I) are limited to economic damages." Id. The factors in subsection (c)(4)(A)(i) a re : (I) loss to 1 or more persons during any 1-year period (and, for p u rp o s e s of an investigation, prosecution, or other proceeding brought b y the United States only, loss resulting from a related course of c o n d u c t affecting 1 or more other protected computers) aggregating at le a s t $5,000 in value; (II) the modification or impairment, or potential modification or im p a irm e n t, of the medical examination, diagnosis, treatment, or care 11

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o f 1 or more individuals; (III) physical injury to any person; (IV) a threat to public health or safety; (V) damage affecting a computer used by or for an entity of the United S ta te s Government in furtherance of the administration of justice, n a tio n a l defense, or national security . . . . Consequently, a plaintiff must allege one of these factors to state a claim under § 1030(g). 1 . Interstate Commerce V ie w in g the facts alleged in the Complaint and the reasonable inferences th e re f ro m in the light most favorable to Plaintiff, the Complaint adequately alleges the c o m p u te r is a protected computer used in interstate commerce or communication. Flynn a lle g e s he is a Massachusetts attorney who represented Montgomery on a pro hac vice s ta tu s in a civil action in Nevada. As Flynn does not allege he lived or had an office in N e v a d a , a reasonable inference is that he used his computer either in Massachusetts or at his te m p o ra ry residence in California to prepare documents for his representation of M o n tg o m e ry in the Nevada action, for which he expected to be compensated. The Court th e re f o re will deny Defendants' motion to dismiss the claim on this basis. 2 . Subsection (c)(4)(A)(i) Factors To state a § 1030(g) claim, Flynn must allege facts supporting one of the factors s e t forth in subsection (c)(4)(A)(i). Factors II, IV, and V of subsection (c)(4)(A)(i) do not a p p ly, as Flynn does not allege anything related to medical records or a threat to public h e a lth or safety, and Flynn does not allege his computer was used by or for an entity of the U n ite d States Government. Flynn contends that he alleges physical injury under factor III. However, Flynn's allegation of physical injury is not set forth in his claim under § 1030 and d o e s not allege how the computer hacking caused him physical injury. Even where Flynn a lle g e s physical injury in his emotional distress claim, it is a conclusory allegation devoid of f a c ts . /// 12

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A d d itio n a lly, Flynn contends he alleged loss under factor I. Damages under f a c to r I are limited to economic damages for a "loss." Loss is defined as-a n y reasonable cost to any victim, including the cost of responding to a n offense, conducting a damage assessment, and restoring the data, p ro g ra m , system, or information to its condition prior to the offense, a n d any revenue lost, cost incurred, or other consequential damages in c u rre d because of interruption of service. 1 8 U.S.C. § 1030(e)(11). Flynn alleges he lost over $600,000 in attorney's fees and in c u rre d over $400,000 in costs defending against Defendants' conduct. However, he does n o t allege any costs incurred by responding to the hacking itself, conducting a damage a s s e s sm e n t, restoring data, or other consequential damages incurred because of an in te rru p tio n in service. While Flynn cites to cases which permit a plaintiff to recover for th e cost of discovering the identity of the individual who has accessed protected in f o rm a tio n , Flynn does not allege in his Complaint that he suffered any such costs. Flynn th e re f o re has failed to allege facts supporting a plausible entitlement to relief on this claim. The Court therefore will dismiss this claim without prejudice. D . Negligent and Intentional Infliction of Emotional Distress D e f e n d a n t Liner Firm argues Plaintiff fails to state a claim because Plaintiff fails to plead emotional distress or physical injury, and the conduct of filing judicial and a d m in is tra tiv e filings does not amount to outrageous conduct, nor is it foreseeable that such f ilin g s would cause Plaintiff emotional distress. Plaintiff responds that whether he has a lle g e d outrageous conduct is a jury question, and courts have found outrageous conduct on le s s compelling facts than those pled by Plaintiff. Plaintiff also asserts he pled physical in ju ry. As to negligent infliction of emotional distress, Plaintiff argues that Defendant L in e r Firm had duties under the Nevada Rules of Professional Conduct, and Defendant L in e r Firm breached the standard of care as set forth in the Rules, causing Plaintiff harm. U n d e r the most significant relationship test from the Restatement (Second) of C o n f lic t of Laws § 145(1), the Court should apply the law of the state "which, with respect 13

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to that issue, has the most significant relationship to the occurrence and the parties under the p rin c ip le s stated in § 6." In applying § 6, the Court should consider contacts such as: (a ) the place where the injury occurred, (b ) the place where the conduct causing the injury occurred, (c ) the domicil, residence, nationality, place of incorporation and place o f business of the parties, and (d ) the place where the relationship, if any, between the parties is c e n te re d . R e sta te m e n t (Second) of Conflicts of Laws § 145(2). Nevada does not have a statutory directive regarding choice of law in emotional d is tre s s cases. The Second Restatement also does not have a particular section devoted to e m o tio n a l distress torts, although it provides that for personal injury actions, the law of the s ta te where the injury occurred controls unless some other state has a more significant re la tio n s h ip under the principles stated in § 6. Id. § 146. H e re , it is unclear where Flynn's emotional distress occurred. Flynn would suffer e m o tio n a l distress where he is physically located. Although he asserts he suffered e m o tio n a l distress in Nevada, Flynn does not reside in Nevada and made only sporadic a p p e a ra n c e s at court hearings in the state. Flynn's domicile is Massachusetts, and he also h a s a temporary residence in California. Thus, the injury occurred either in Massachusetts o r California, but not Nevada. Because the location of injury is unclear, the Court will examine the factors under § 6. The needs of the interstate and international systems are not affected by whether the C o u rt applies California, Massachusetts, or Nevada law to Flynn's emotional distress c la im s . Nor do Nevada's relevant policies suggest the application of one state's law over a n o th e r's in these circumstances. California, Nevada, and Massachusetts have an interest in these matters because th e conduct causing the injury occurred in each of these states. Flynn alleges Defendants in itia te d baseless actions in California and Massachusetts, filed a perjured declaration in 14

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C a lif o rn ia and Nevada, and filed papers in California and Nevada in bad faith. The parties' relationship is not "centered" in any particular location. The parties d o not have a direct relationship. Rather, they are attorneys who successively represented th e same client. Their "relationship" consists of a series of court and administrative p ro c e e d in g s in which Defendants represented Montgomery in his effort to obtain his client f ile from Flynn. Those proceedings were in all three states, but two of the four proceedings w e re filed in California. Defendants are California residents and most of their conduct o c c u rre d in California. Because a majority of Defendants' alleged misconduct occurred in C a lif o rn ia , this factor tips slightly in favor of applying California law. T h e protection of justified expectations likewise slightly favors California law. A person would expect her alleged tortious conduct to be governed either by the law of the p la c e where the injury occurred or the place where the tortious conduct occurred. As d is c u s se d , it is unclear where the injury occurred, and the tortious conduct occurred in all th re e states, though slightly more conduct occurred in California than in Nevada or M a s s a c h u s e tts. T h e basic policies underlying the particular field of law are not served by a p p lyin g any particular state's law. Because the Complaint here alleges no clear location of in ju ry and alleges tortious conduct occurring in several states, certainty, predictability and u n if o rm ity of result do not strongly favor any particular state. Each state's law on e m o tio n a l distress is capable of easy determination and application, and this factor therefore d o e s not weigh in favor of any particular state. D e te rm in in g which state's law applies to Flynn's emotional distress claims is a c lo s e call under these circumstances, but the Court concludes California law applies. Because Flynn temporarily resided in California during the relevant period, he suffered at le a s t some of the injury there. Flynn did not reside in Nevada and thus he did not suffer e m o tio n a l distress in Nevada. Further, a majority of Defendants' alleged misconduct 15

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o c c u rre d in California, not Nevada. California law therefore applies to Flynn's emotional d is tre s s claims. A s discussed above with respect to Flynn's abuse of process claim, California's litig a tio n privilege applies to "all torts except malicious prosecution." Rusheen, 128 P.3d at 7 1 8 . The Court therefore will dismiss with prejudice Flynn's infliction of emotional d is tre s s claims. E. Violations of Rules and Statutes D e f e n d a n t Liner Firm argues that no cause of action exists under 28 U.S.C. § 1927, Rule 11 of the Federal Rules of Civil Procedure, or the Nevada Rules of P ro f e s s io n a l Conduct. Defendant Liner Firm also notes that Plaintiff did not comply with R u le 11 to support sanctions. Plaintiff responds that although violations of the Nevada R u le s of Professional conduct generally do not give rise to a cause of action, such violations s u p p o rt his other claims such as abuse of process, negligence, and intentional infliction of e m o tio n a l distress. Plaintiff concedes he has no claim under Federal Rule of Civil Procedure 11. See L iv in g Designs, Inc. v. E.I. Dupont de Nemours & Co., 431 F.3d 353, 372 (9th Cir. 2005). Plaintiff does not respond to Defendants' argument that no private cause of action exists u n d e r 28 U.S.C. § 1927. Flynn's failure to respond to these arguments constitutes consent to granting the motion. LR 7-2(d). Section 1927 does not contain an explicit right of a c tio n . Moreover, § 1927's plain text suggests Congress did not intend to imply a private rig h t of action. Northstar Fin. Advisors, Inc. v. Schwab Investments, 615 F.3d 1106, 1115 (9 th Cir. 2010) (stating that inquiry into whether statute creates a private right of action b e g in s with statutory text and seeks to determine congressional intent). Pursuant to § 1927, a n attorney who unreasonably and vexatiously multiplies the proceedings "may be required b y the court" to pay resulting costs, expenses, and attorneys' fees. Consequently, § 1927 c o n te m p la te s a court, not a private litigant, will enforce it. Indeed, whether to award 16

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s a n c tio n s under § 1927 lies within the Court's discretion. See In re Keegan Mgmt. Co., S e c . Litig., 78 F.3d 431, 435 (9th Cir. 1996). Flynn therefore has not met his burden of e s ta b lis h in g a private right of action exists under § 1927. Northstar Fin. Advisors, Inc., 615 F .3 d at 1115 (party seeking to imply private right of action bears burden of demonstrating it e x is ts ). T h e Nevada Rules of Professional Conduct likewise do not support a private c a u s e of action. Mainor v. Nault, 101 P.3d 308, 321 (Nev. 2004) (affirming district court's d is m is s a l of claims based on violations of ethical rules "because the rules were not meant to c re a te a cause of action for civil damages"). Although the ethical rules are evidence of the s ta n d a rd of care in appropriate cases, no direct cause of action arises under the rules. Id. Consequently, the Court will dismiss with prejudice Flynn's claim for violations of rules a n d statutes. F . Invasion of Privacy D e f e n d a n t Liner Firm argues Plaintiff fails to state a plausible entitlement to re lie f because the claim consists entirely of legal conclusions and unsupported conclusory a lle g a tio n s . Plaintiff responds that he adequately alleged an expectation of privacy in the c o n te n ts of his computer, that Montgomery hacked into his computer, and Defendant Liner F irm used the information Montgomery obtained against Plaintiff. Plaintiff has failed to allege facts in support of his invasion of privacy claim. Plaintiff does not identify when Montgomery hacked into his computer, what information h e obtained, what acts Defendants undertook that invaded Plaintiff's privacy, or how D e f e n d a n ts used the information Montgomery obtained. Plaintiff therefore has not alleged f a c ts suggesting a plausible entitlement to relief. The Court will dismiss this claim without p re ju d ic e . /// /// 17

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G . Negligence D e f e n d a n t Liner Firm argues California's litigation privilege bars the claim, D e f e n d a n t owed no duty to Plaintiff, and Plaintiff cannot dress his claims under § 1927 and R u le 11 as negligence claims. Plaintiff responds that he adequately has alleged negligence b a s e d on the duty Defendant Liner Firm owes to follow the Rules of Professional Conduct, D e f e n d a n t breached that duty, and Plaintiff was harmed as a result. As this Court already ru le d with respect to Defendants Klar and Pham, Defendant Liner Firm owed no duty to F lyn n under either California or Nevada law supporting a negligence claim. The Court th e re f o re will dismiss Plaintiff's negligence claim with prejudice. H . Conspiracy Defendant Liner Firm argues Plaintiff fails to plead an agreement to commit a w ro n g f u l act, the object of the conspiracy, or the overt acts taken in furtherance of the c o n s p ira c y. Defendant Liner Firm also argues Plaintiff fails to plead the conspiracy for e a c h substantive cause of action, and Plaintiff fails to plead any viable claim for relief. Plaintiff responds that his conspiracy claim incorporates by reference all of the allegations in the Complaint, that he alleges Defendants acted together to achieve the unlawful object o f precluding Plaintiff from recovering his fees and costs, and took predicate acts such as u s in g Montgomery's perjured affidavit to support the various court and state bar p ro c e e d in g s . Under California law, conspiracy "is not a cause of action, but a legal doctrine th a t imposes liability on persons who, although not actually committing a tort themselves, s h a re with the immediate tortfeasors a common plan or design in its perpetration." Applied E q u ip . Corp. v. Litton Saudi Arabia Ltd., 869 P.2d 454, 457 (Cal. 1994). "By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other c o c o n s p ira to rs within the ambit of the conspiracy." Id. Consequently, a civil conspiracy " d o e s not give rise to a cause of action unless a civil wrong has been committed resulting in 18

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d a m a g e ." Id. (quotation omitted). Nevada law is in accord. Jordan v. State ex rel. Dep't of M o to r Vehicles & Pub. Safety, 110 P.3d 30, 51 (Nev. 2005) (per curiam) (stating that "an u n d e rlyin g cause of action for fraud is a necessary predicate to a cause of action for c o n s p ira c y to defraud"), abrogated on other grounds by Buzz Stew, LLC v. City of N. Las V e g a s , 181 P.3d 670, 672 n.6 (Nev. 2008). B e c a u s e Plaintiff has failed to allege an underlying tort at this stage of the p ro c e e d in g s , the Court also will dismiss the conspiracy claim. To the extent Plaintiff may a m e n d his Complaint to state a valid underlying tort claim, Plaintiff may attempt to plead a c o rre sp o n d in g civil conspiracy claim. However, Plaintiff should be mindful of this Court's ru lin g on Defendants Klar's and Pham's motion to dismiss that an attorney cannot conspire w ith his clients. Additionally, Plaintiff must adequately allege facts supporting a civil c o n s p ira c y claim, and not simply make conclusory allegations of agreement. I . Amendment If the Court grants a motion to dismiss, it then must decide whether to grant leave to amend the complaint. Federal Rule of Civil Procedure 15(a) counsels that courts should g ra n t leave to amend "freely." See also Foman v. Davis, 371 U.S. 178, 182 (1962). Accordingly, "[i]f a complaint is dismissed for failure to state a claim, leave to amend s h o u ld be granted unless the court determines that the allegation of other facts consistent w ith the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v . Serv-Well Furniture Co., Inc., 806 F.2d 1393, 1401 (9th Cir. 1986). T o the extent the Court has dismissed any of Plaintiff's claims without prejudice, P la in tif f may be able to cure the deficiencies. The Court therefore will grant Plaintiff leave to amend to cure the deficiencies identified in this Order. Plaintiff shall file an amended c o m p la in t on or before November 16, 2010. /// /// 19

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I V . DEFENDANT LINER FIRM'S MOTION TO STRIKE (Doc. #9) D e f e n d a n t Liner Firm moves to strike certain allegations in the Complaint on the g ro u n d that the damages pled are not recoverable as a matter of law. Defendant Liner Firm c o n te n d s that Plaintiff's allegations that Defendant Liner Firm's conduct caused Plaintiff to lo s e over $600,000 in attorney's fees should be stricken for lack of proximate cause. Defendant Liner Firm argues that the Complaint fails to allege how Defendant's conduct c a u s e d Plaintiff to lose legal fees and costs Montgomery owes Plaintiff. Defendant notes th a t Plaintiff has obtained a judgment on the fees after all of Defendant's alleged m isc o n d u c t was completed. Consequently, Defendant's conduct could not have caused P la in tif f to lose the fees, as he has obtained a judgment thereon. Defendant argues the fees a re not "lost" due to Defendant's alleged conduct, rather the fees are simply uncollectable b e c a u s e Montgomery has filed for bankruptcy. Defendant Liner Firm also moves to strike an allegation that the Firm " d e f ra u d e d " Plaintiff, as Plaintiff has not pled fraud. Defendant Liner Firm further moves to strike Plaintiff's request for damages for injury to his reputation, humiliation, e m b a rra ss m e n t, mental suffering, inconvenience, anxiety, or emotional distress in relation to his claim under 18 U.S.C. § 1030. Liner Firm argues only economic losses are re c o v e ra b le under the statute. Finally, Liner Firm moves to strike any claimed damages u n d e r Rule 11, as Plaintiff did not follow Rule 11's requirements in the underlying litig a tio n . P la in tif f responds that Defendant's motion to strike really is a motion to dismiss f o r failure to state a claim. Plaintiff further contends that none of the matters which D e f e n d a n t seeks to strike are redundant, immaterial, impertinent, or scandalous, and th e re f o re the Court should deny the motion to strike. Alternatively, Plaintiff requests leave to amend. /// 20

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F e d e ra l Rule of Civil Procedure 12(f) provides that the Court may strike "any re d u n d a n t, immaterial, impertinent, or scandalous matter." A motion to strike properly may b e directed at damages which are not recoverable as a matter of law, as such allegations w o u ld be immaterial to the action. Wilkerson v. Butler, 229 F.R.D. 166, 170, 172 (E.D. C a l. 2005); Bureerong v. Uvawas, 922 F. Supp. 1450, 1479 & n.34 (C.D. Cal. 1996). However, when the defendant challenges the sufficiency of the factual allegations s u p p o rtin g damages, the motion should be made pursuant to Federal Rule of Civil P ro c e d u re 12(b)(6), rather than Rule 12(f). Paul v. Gomez, 190 F.R.D. 402, 404 (W.D. Va. 2 0 0 0 ). T h e Court will grant Defendant's motion to strike Plaintiff's request for damages in the form of "lost" attorney's fees. Flynn prevailed on his motion for attorney's fees in th e eTreppid case and was awarded over $600,000 in attorney's fees. Consequently, D e f e n d a n t's alleged misconduct did not cause Flynn to lose the attorney's fees. Flynn has o b ta in e d a Judgment on the attorney's fee award. (3:06-CV-00056-PMP-PAL, Doc. #902.) Montgomery since has filed for bankruptcy. (3:06-CV-00056-PMP-PAL, Doc. #1104.) However, Defendant's alleged conduct did not cause Flynn to "lose" fees for which he re c e iv e d a Judgment which since has become uncollectible through Montgomery's b a n k ru p tc y. Flynn cannot allege causation as a matter of law. Whether treated as a motion to strike or a motion to dismiss for failure to state a claim, Defendant Liner Firm is entitled to the relief sought. The Court therefore will strike the allegations regarding "lost" a tto rn e y's fees. T h e Court also will grant Defendant Liner Firm's motion to strike any allegations th a t the Firm "defrauded" Plaintiff. If Plaintiff wants to plead fraud, he must do so with the re q u isite particularity under Federal Rule of Civil Procedure 9(b). Otherwise, extraneous a lle g a tio n s that Defendant defrauded Plaintiff are immaterial. /// 21

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T h e Court will deny as moot Defendant Liner Firm's motion to strike Plaintiff's re q u e s t for damages for injury to his reputation, humiliation, embarrassment, mental s u f f e rin g , inconvenience, anxiety, or emotional distress in relation to his claim under 18 U .S .C . § 1030. Plaintiff has not adequately alleged a claim under § 1030, and asserts he is b rin g in g his claim under a provision of the statute that would not limit his claim solely to e c o n o m ic damages. Because the Court will grant Plaintiff leave to amend this claim, s trik in g the requested damages would be premature. The Court also will deny as moot D e f e n d a n t Liner Firm's motion to strike damages claimed under Rule 11. Plaintiff c o n c e d e s he cannot bring an independent claim under Rule 11 and the Court already has d is m is s e d with prejudice any such claim. V . CONCLUSION IT IS THEREFORE ORDERED that Defendant Liner Firm's Motion to Dismiss (D o c . #8) is hereby GRANTED. Plaintiff's claims for abuse of process, malicious p ro s e c u tio n , intentional and negligent infliction of emotional distress, violations of rules a n d statutes, and negligence are dismissed with prejudice. Plaintiff's claims for aiding and a b e ttin g a violation under 18 U.S.C. § 1030, invasion of privacy, and civil conspiracy c la im s are dismissed without prejudice. IT IS FURTHER ORDERED that Defendant Liner Firm's Motion to Strike (Doc. # 9 ) is hereby GRANTED in part and DENIED in part. The motion is granted with respect to allegations regarding damages arising out of "lost" attorney's fees and allegations that D e f e n d a n ts "defrauded" Plaintiff. The motion is denied in all other respects. IT IS FURTHER ORDERED that Plaintiff Michael Flynn shall have to and in c lu d in g November 16, 2010 to file an amended complaint correcting the deficiencies id e n tif ie d in this Order. D A T E D : October 15, 2010 _______________________________ PHILIP M. PRO United States District Judge 22