Birch v. Family First Life, LLC

District Court, S.D. California·Decided December 14, 2023·No. 3:22-cv-00815·Unknown

Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 MICHAEL BORISH, individually and on Case No. 22-cv-815-MMA (SBC) behalf of all others similarly situated, 13 et al., ORDER GRANTING MOTION TO 14 DISMISS THIRD AMENDED Plaintiffs, COMPLAINT 15 v. 16 [Doc. No. 47] FAMILY FIRST LIFE, LLC, 17 Defendant. 18 19 20 21 Pending before the Court is Defendant Family First Life, LLC’s (“Defendant” or 22 “FFL”) motion to dismiss Plaintiffs Michael Borish, Kevin Vega, and Ramon Fazah’s 23 (“Plaintiffs”) Third Amended Complaint. Doc. No. 47. Plaintiffs filed an opposition, 24 Doc. No. 50, to which Defendant replied, Doc. No. 52. The Court found this matter 25 suitable for determination on the papers and without oral argument pursuant to Federal 26 Rule of Civil Procedure 78(b) and Civil Local Rule 7.1.d.1. See Doc. No. 53. For the 27 reasons set forth below, the Court GRANTS Defendant’s motion to dismiss without 28 leave to amend. 1 I. BACKGROUND 2 A. Procedural Background 3 Plaintiffs initiated this action on June 3, 2022. Doc. No. 1. Thereafter, Plaintiffs 4 amended their complaint twice: once as a matter of course, Doc. No. 3, and shortly after, 5 a second time with leave of Court, Doc. No. 7 (Second Amended Complaint, the “SAC”). 6 In its April 13, 2023 Order, the Court dismissed Plaintiffs’ SAC with leave to amend. 7 Doc. No. 45. Notably, the Court held Plaintiffs did not allege facts to support personal 8 jurisdiction over FFL in California. Id. at 9–15. The Court also held Plaintiffs did not 9 plead any cause of action. Id. at 17–21. First, in response to FFL’s motion to dismiss, 10 Plaintiffs conceded they did not state a claim as to two of their causes of action— 11 violation of California Penal Code § 496 and of Florida Statute § 817.06—and they 12 abandoned their two breach of contract causes of action. Id. at 17–18. Second, the Court 13 held Plaintiffs did not plead fraud with particularity under Federal Rule of Civil 14 Procedure 9(b), which applied to each of the causes of action at issue, because they relied 15 on “vague,” “broad,” and generalized allegations that did not plead “with particularity a 16 single specific advertisement or representation made by [FFL].” Id. at 20–21. The Court 17 then granted Plaintiffs leave to amend because it had not previously “ruled on the 18 pleading sufficiency of Plaintiffs’ claims.” Id. at 21 n.11. 19 In response to the Court’s Order, Plaintiffs filed their Third Amended Complaint 20 on May 4, 2023. Doc. No. 46 (Third Amended Complaint, the “TAC”). In that pleading, 21 Plaintiffs replaced two of the original plaintiffs—Greg Birch and David Doehring—with 22 Plaintiffs Vega and Fazah. TAC ¶¶ 6–7. However, Plaintiffs—on behalf of themselves 23 and as representatives of all those similarly situated—assert the same claims for relief 24 against Defendant as in their SAC, including: (1) Violation of California’s False 25 26 27 1 Reviewing Defendant’s motion to dismiss, the Court accepts as true all facts alleged in the TAC and construes them in the light most favorable to Plaintiffs. See Snyder & Assocs. Acquisitions LLC v. 28 1 Advertising Law, Cal. Bus. & Prof. Code § 17500 et seq.; (2) Violation of California’s 2 Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; (3) Violation of 3 California Penal Code § 496; (4) Violation of Texas’s Deceptive Trade Practices Act, 4 Tex. Bus. & Com. Code § 17.46; (5) Violation of Florida’s Deceptive and Unfair Trade 5 Practices Act, Fla. Stat. § 501.204; (6) Violation of Florida Statute § 817.06; (7) Breach 6 of Written Contract; and (8) Breach of Oral Contract. See generally TAC. 7 In the instant motion, Defendant again moves to dismiss Plaintiffs’ TAC in its 8 entirety pursuant to Federal Rules of Civil Procedure 9(b), 12(b)(1), 12(b)(2), and 9 12(b)(6). Doc. No. 47 at 2. As stated above, Defendant’s motion to dismiss is fully 10 briefed and ripe for decision. 11 B. Factual Background 12 This putative class action centers around the insurance industry and one of its 13 common features: independent marketing organizations (“IMOs”). TAC ¶¶ 9–11. 14 Defendant FFL is an IMO that distributes life insurance products to the public through a 15 network of independent contractors known as “agents.” Id. ¶ 11. Plaintiffs allege they 16 relied on false representations made by Defendant in purchasing low-quality insurance 17 “leads” while working as agents for FFL. Id. ¶¶ 18, 41–43. As many of Plaintiffs’ 18 allegations in the TAC remain unchanged, the Court incorporates by reference its 19 background discussion from its April 13, 2023 Order. Doc. No. 45; see also Birch v. 20 Fam. First Life, LLC, No. 22-CV-815-MMA (NLS), 2023 WL 2940020, at *1 (S.D. Cal. 21 Apr. 13, 2023). 22 Because, as detailed below, the Court is dismissing this action for lack of personal 23 jurisdiction over Defendant, the Court only elaborates on facts relevant to that issue here. 24 To that end, Plaintiffs allege in the TAC that Defendant “is a Connecticut limited liability 25 company with its principal place of business” in Connecticut. TAC ¶ 8. However, 26 Plaintiffs now allege that Defendant “maintains fourteen (14) offices within the state of 27 California” and that “authorized representatives of [FFL] . . . as well as several FFL 28 websites, made representations to California residents, that form the basis of the[ir] 1 claims” in the TAC. Id. ¶¶ 2–3. Further, Plaintiffs allege that Defendant “has held and 2 continues to hold several corporate events in California, which are intended to promote 3 [Defendant]’s business and its leads to the public, which include California residents.” 4 Id. ¶ 4. 5 II. LEGAL STANDARD 6 Plaintiffs “bear[] the burden” of establishing personal jurisdiction exists. In re 7 Boon Global Ltd., 923 F.3d 643, 650 (9th Cir. 2019). “Where, as here, the defendant’s 8 motion is based on written materials rather than an evidentiary hearing, ‘the plaintiff need 9 only make a prima facie showing of jurisdictional facts to withstand the motion to 10 dismiss.’” Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (quoting 11 CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011)). The 12 Court may consider declarations and other evidence outside the pleadings to determine 13 whether it has personal jurisdiction. See Boon Global, 923 F.3d at 650. 14 “[U]ncontroverted allegations in [Plaintiffs’] complaint must be taken as true,” but courts 15 “may not assume the truth of allegations in a pleading which are controverted by 16 affidavit.” Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) 17 (cleaned up). Any “factual disputes” must be “resolve[d] . . . in [Plaintiffs’] favor.” Id. 18 When there is no applicable federal statute governing personal jurisdiction, as is 19 the case here, the law of the forum state determines personal jurisdiction. 20 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).

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