Chen Fang, et al. v. CMB Export Infrastructure Investment Group, et al.

• Court: District Court, E.D. California
• Decided: March 31, 2026
• Docket: 2:24-cv-01618
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 CHEN FANG, et al., No. 2:24-cv-01618-DJC-SCR 12 Plaintiffs, 13 v. ORDER 14 CMB EXPORT INFRASTRUCTURE 15 INVESTMENT GROUP, et al., 16 Defendants. 17

18 Plaintiffs Chen Fang and Yu Lin brought the present action on behalf of 19 themselves and others similarly situated. Plaintiffs claim that they were induced to 20 invest in a limited partnership by Defendants’ misrepresentations and that their 21 investment was lost due to Defendants’ mismanagement of the limited partnership. 22 This case is presently before the Court on Defendants’ second Motion to Dismiss (ECF 23 No. 62). 24 For the reasons stated below, the Court grants in part and denies in part 25 Defendants’ Motion to Dismiss. 26 BACKGROUND 27 The Court provided a summary of the factual background of this case in its 28 order resolving the prior motion to dismiss. (ECF No. 48.) Given the prior summary 1 and that the facts are well known to the Court and parties, the Court will not repeat 2 them here. 3 The Court previously granted Defendants’ first Motion to Dismiss, except as to 4 Plaintiffs’ unjust enrichment claim and Plaintiffs’ claims against Patrick Hogan 5 generally. (Id. at 24.) Plaintiffs were granted leave to amend as to all claims with the 6 exception of Plaintiffs’ cause of action for imposition of a constructive trust. (Id.) On 7 April 28, 2025, Plaintiffs filed a Second Amended Complaint (“SAC”) that is the 8 present operative complaint. (SAC (ECF No. 50).) 9 Defendants’ Motion to Dismiss is fully briefed. (Mot. (ECF No. 62); Opp’n (ECF 10 No. 68); Reply (ECF No. 69).) The Court took this matter under submission without 11 oral argument pursuant to Local Rule 230(g). (ECF No. 71.) 12 MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION 13 I. Legal Standard 14 A. Personal Jurisdiction Generally 15 Rule 12(b)(2) allows a party to assert a lack of personal jurisdiction as a defense 16 and request dismissal of the suit. Fed. R. Civ. P. 12(b)(2). “Although the defendant is 17 the moving party on a motion to dismiss [for lack of personal jurisdiction], the plaintiff 18 bears the burden of establishing that jurisdiction exists.” Rio Props., Inc. v. Rio Int'l 19 Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002). “[I]n the absence of an evidentiary 20 hearing, the plaintiff need only make ’a prima facie showing of jurisdictional facts to 21 withstand the motion to dismiss.’” Brayton Purcell LLP v. Recordon & Recordon, 606 22 F.3d 1124, 1127 (9th Cir. 2010) (quoting Pebble Beach Co. v. Caddy, 453 F.3d 1151, 23 1154 (9th Cir. 2006)). “The court may consider evidence presented in affidavits to 24 assist it in its determination and may order discovery on the jurisdictional issues.” Doe 25 v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001), abrogated on other grounds by 26 Daimler AG v. Bauman, 571 U.S. 117, 126 (2014) (citing Data Disc, Inc. v. Sys. Tech. 27 Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977)). Facts presented by the plaintiff are 28 taken as true for the purposes of a 12(b)(2) motion to dismiss, except where 1 contradicted by an affidavit, and any “conflicts between the facts contained in the 2 parties' affidavits must be resolved in [plaintiff's] favor for purposes of deciding 3 whether a prima facie case for personal jurisdiction exists.” AT&T v. Compagnie 4 Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) (citations omitted); see Mavrix 5 Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (“We may not 6 assume the truth of allegations in a pleading which are contradicted by affidavit, but 7 we resolve factual disputes in the plaintiff's favor.” (citations and internal quotations 8 removed)). 9 “In exercising personal jurisdiction, a federal district court is constrained by the 10 Fourteenth Amendment's Due Process Clause and the long-arm statute of the state in 11 which it sits.” Impossible Foods Inc. v. Impossible X LLC, 80 F.4th 1079, 1086 (9th Cir. 12 2023). California’s long-arm statute allows the exercise of personal jurisdiction to the 13 extent allowed by the United States Constitution. See Cal. Code Civ. Proc. § 410.10. 14 Accordingly, the Court need only assess whether the exercise of jurisdiction in this 15 case comports with due process. 16 B. General and Specific Jurisdiction 17 “The Due Process Clause permits the exercise of personal jurisdiction if the 18 defendant has sufficient minimum contacts with the forum state such that the 19 maintenance of the suit does not offend traditional notions of fair play and substantial 20 justice.” Impossible Foods, 80 F.4th at 1086. Courts may have general or specific 21 jurisdiction over an entity depending on the nature and extent of that entity’s contact 22 with the forum state. A court may exercise general jurisdiction over a corporation in a 23 state where the corporation is “at home,” which is the case when its “affiliations . . . are 24 so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.” 25 Daimler, 571 U.S. at 119 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 26 564 U.S. 915, 919 (2011)). This is generally where the corporation is incorporated and 27 where it maintains its principal place of business. Id. Here, it is uncontested by 28 Plaintiffs that the Court lacks general jurisdiction over Defendant Noreen Hogan. (See 1 Opp’n at 5–9 (arguing only that the Court has specific jurisdiction over Defendant 2 Noreen Hogan).) 3 Where general jurisdiction is lacking, courts may have specific jurisdiction over 4 corporations if there is sufficient contact with the forum state and the claims arise out 5 of that contact. Bristol-Myers Squibb Co. v. Superior Court, 582 U.S. 255, 262 (2017) 6 (“[T]here must be ‘an affiliation between the forum and the underlying controversy, 7 principally, [an] activity or an occurrence that takes place in the forum State and is 8 therefore subject to the State's regulation.’” (quoting Goodyear, 564 U.S. at 919)). In 9 the Ninth Circuit, specific jurisdiction is determined by a three-prong test: “(1) the 10 defendant must either ‘purposefully direct his activities’ toward the forum or 11 ‘purposefully avail[ ] himself of the privileges of conducting activities in the forum’; (2) 12 ‘the claim must be one which arises out of or relates to the defendant's forum-related 13 activities’; and (3) ‘the exercise of jurisdiction must comport with fair play and 14 substantial justice, i.e. it must be reasonable.’” Axiom Foods, Inc. v. Acerchem Int'l, 15 Inc., 874 F.3d 1064, 1068 (9th Cir. 2017) (quoting Dole Food Co., Inc. v. Watts, 16 303 F.3d 1104, 1111 (9th Cir. 2002)). “The plaintiff bears the burden of satisfying the 17 first two prongs of the test” while the burden of the third prong shifts to the 18 defendant. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 19 2004). 20 1. Purposeful Availment 21 While the first prong of the specific jurisdiction test is often called the 22 “purposeful availment” prong, courts situationally apply either a purposeful availment 23 or purposeful direction analysis. See Yahoo! Inc. v. La Ligue Contre Le Racisme Et 24 L'Antisemitisme, 433 F.3d 1199, 1210 (9th Cir. 2006). The question of whether to 25 apply a purposeful direction or purposeful availment analysis “turns on the nature of 26 the underlying claims.” Impossible Foods, 80 F.4th at 1088 (citing Ayla, LLC v. Alya 27 Skin Pty. Ltd., 11 F.4th 972, 979 (9th Cir. 2021)). While there is no “rigid dividing line 28 between purposeful availment and purposeful direction[,]” purposeful direction is 1 generally preferred when analyzing tort claims, as these claims typically involve fact 2 patterns where “a defendant's conduct primarily occurs outside the forum state.” Id. 3 at 1088–89. 4 “To have purposefully availed itself of the privilege of doing business in the 5 forum, a defendant must have performed some type of affirmative conduct which 6 allows or promotes the transaction of business within the forum state.” Boschetto v. 7 Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008) (citations and internal quotations 8 removed). “A showing that a defendant purposefully availed himself of the privilege 9 of doing business in a forum state typically consists of evidence of the defendant's 10 actions in the forum, such as executing or performing a contract there.” 11 Schwarzenegger, 374 F.3d at 802. Likewise, purposeful direction involves intentional 12 contact with the forum state. It is “the defendant's contacts with the forum State itself, 13 not the defendant's contacts with persons who reside there” that are relevant to the 14 inquiry. Walden v. Fiore, 571 U.S. 277, 285 (2014). The defendant’s mere knowledge 15 that the plaintiff resides in the forum state “will not, on its own, support the exercise of 16 specific jurisdiction.” Axiom Foods, 874 F.3d at 1070. However, “a defendant's 17 contacts with the forum State may be intertwined with his transactions or interactions 18 with the plaintiff . . . .” Walden, 571 U.S. at 286. Only purposeful contacts, and not 19 random, fortuitous, or attenuated contacts will give rise to personal jurisdiction. Id. 20 2. Relation of Claim to Forum Activities 21 The claims brought by the plaintiff must arise out of or relate to the defendant’s 22 contacts with the forum in order for the court to exercise jurisdiction. Ford Motor Co. 23 v. Montana Eighth Jud. Dist. Ct., 592 U.S. 351, 361–62 (2021). However, a strict causal 24 relationship is not required to satisfy the relation prong. Id. Rather, there need only 25 be a “connection” between the forum-related activity and the injury claimed. Id. The 26 Ninth Circuit employs a “but for” test to determine whether a plaintiff’s claims arise out 27 of the defendant’s forum-related activities. Menken v. Emm, 503 F.3d 1050, 1058 (9th 28 Cir. 2007). 1 3. Reasonableness 2 The final prong of the personal jurisdiction analysis examines whether the court 3 exercising jurisdiction would be reasonable. Menken, 503 F.3d at 1058. This 4 determination requires consideration of seven factors: “(1) the extent of the 5 defendants' purposeful interjection into the forum state's affairs; (2) the burden on the 6 defendant of defending in the forum; (3) the extent of conflict with the sovereignty of 7 the defendants' state; (4) the forum state's interest in adjudicating the dispute; (5) the 8 most efficient judicial resolution of the controversy; (6) the importance of the forum to 9 the plaintiff's interest in convenient and effective relief; and (7) the existence of an 10 alternative forum.” Id. 11 II. Analysis 12 The Court previously dismissed Plaintiffs’ claims against Noreen Hogan on the 13 basis that the First Amended Complaint included only minimal allegations related to 14 Noreen Hogan. Defendants contend that Plaintiffs’ additions in the SAC do not 15 remedy this issue and assert a facial challenge to the Court’s personal jurisdiction of 16 Noreen Hogan. 17 The majority of the allegations in the SAC related to Noreen Hogan can be 18 summarized as follows: 19 1. Noreen Hogan is President of CMB Regional Centers and has been since 20 2017. (SAC ¶¶ 16, 18, 83.) 21 2. As President of CMB Regional Centers, Noreen Hogan “manages the 22 day-to-day operations of the Company as well as implementing strategic 23 initiatives for CMB.” This included “selling, marketing, and development 24 of various CMB projects in California, including arranging financial and 25 development deals throughout California.” (Id. ¶ 18.) 26 3. Noreen Hogan is “the listed manager of at least two LLCs expressly 27 targeting CMB’s interests in California.” (Id.) 28 1 4. Noreen Hogan is one of two principals of NHK Capital Partners. (Id. 2 ¶ 16.) 3 5. “Noreen Hogan personally supervised, controlled, dominated, and 4 operated each of the entity Defendants as their own business and alter 5 ego[,]” there was a unity of interest between the entity defendants and 6 Noreen Hogan, and Noreen Hogan was able to dictate and control their 7 management and day-to-day operations for her own interest. (Id. ¶¶ 26, 8 28.) 9 As this list illustrates, the allegations as to Noreen Hogan in the SAC remain 10 minimal and largely conclusory. Plaintiffs have not identified any specific actions 11 taken by Noreen Hogan. Instead, Plaintiffs seemingly rest their argument for personal 12 jurisdiction almost entirely on a theory of alter ego liability. The facts alleged do not 13 support the application of such a theory to Noreen Hogan, as they are almost entirely 14 conclusory. Particularly illustrative here are the allegations against Patrick Hogan in 15 the SAC. Plaintiffs allege clear facts about Patrick Hogan’s actions and involvement 16 that support an assertion of alter ego liability. (See id. ¶¶ 26–28, 49, 65–72, 74.) By 17 comparison, the SAC is bereft of any specific allegations regarding Noreen Hogan’s 18 control over the corporate entities and her involvement with the conduct at issue. 19 Instead, Plaintiffs exclusively rely on conclusory allegations about Noreen Hogan’s 20 control over corporate entities.1 These assertions are insufficient to establish an alter 21 ego theory of liability that might be sufficient to confer personal jurisdiction. 22 Plaintiffs’ sole allegation of personal conduct by Noreen Hogan was a letter she 23 wrote to Plaintiffs’ denying their request to withdraw from the partnership. (SAC ¶ 82.) 24 This allegation might support personal jurisdiction over Noreen Hogan if there was a 25 connection between that forum activity and Plaintiffs’ claims. See Ford Motor Co. v.

26 1 In their Opposition, Plaintiffs argue that Defendants’ statement that CMB Regional Centers is a “trade 27 name” is dispositive proof that it is simply Noreen Hogan acting under a corporate name. (Opp’n at 5.) This appears to misconstrue Defendants’ statement, which is an assertion that CMB Regional Centers is 28 a trade name for other corporate entities. 1 Montana Eighth Jud. Dist. Ct., 592 U.S. 351, 361–62 (2021). But Plaintiffs’ request to 2 withdraw was based on the fact that Plaintiffs obtained immigration status, making 3 their investment moot. Noreen Hogan’s letter denying that request thus bears no 4 connection to the claims at issue. As such, this is also insufficient to establish personal 5 jurisdiction. See id. 6 Accordingly, Defendants’ Motion is granted, and Plaintiffs’ claims against 7 Noreen Hogan are dismissed for lack of personal jurisdiction. 8 MOTION TO DISMISS PLAINTIFF YU LIN FOR LACK OF STANDING 9 Defendant moves to dismiss Plaintiff Yu Lin for lack of standing. (Mot. at 9.) 10 Plaintiffs do not raise any opposition to this portion of Defendant’s Motion to Dismiss. 11 (See Opp’n.) Defendant is correct that the SAC fails to establish Plaintiff Lin’s standing 12 to proceed on the claims in this action. The sole statement with regard to Plaintiff Lin 13 in the SAC is that “Plaintiff Fang became a member of Group 48 on behalf of Plaintiff 14 Lin.” (SAC ¶ 12.) Beyond this conclusory allegation, which lacks any further factual 15 support, no other relevant factual allegations regarding Plaintiff Lin are included in the 16 SAC. Thus, based on Plaintiffs’ non-opposition and the lack of support establishing 17 Plaintiff Lin’s standing, the Court grants Defendants’ Motion on this basis. 18 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM 19 Given that the Court previously addressed many of the arguments related to 20 Plaintiffs’ claims, the Court’s discussion of these claims below does not repeat many of 21 the factual and legal discussions provided in the Court’s prior order. Instead, the 22 Court focuses on new factual or legal issues that are not resolved by that order.2 23 I. Legal Standard 24 A party may move to dismiss for “failure to state a claim upon which relief can 25 be granted.” Fed. R. Civ. P. 12(b)(6). The motion may be granted only if the complaint 26

27 2 This includes the choice of law analysis conducted in the prior order. As these issues are not directly raised in connection with the present motion, the Court does not provide any further discussion or 28 analysis of which state’s law is applicable. 1 lacks a “cognizable legal theory or sufficient facts to support a cognizable legal 2 theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). 3 The court assumes all factual allegations are true and construes “them in the light 4 most favorable to the nonmoving party.” Steinle v. City & County of San Francisco, 919 5 F.3d 1154, 1160 (9th Cir. 2019). However, if the complaint's allegations do not 6 “plausibly give rise to an entitlement to relief” the motion must be granted. Ashcroft v. 7 Iqbal, 556 U.S. 662, 679 (2009). A complaint need contain only a “short and plain 8 statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 9 8(a)(2), not “detailed factual allegations,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 10 (2007). However, this rule demands more than unadorned accusations; “sufficient 11 factual matter” must make the claim at least plausible. Iqbal, 556 U.S. at 678. In the 12 same vein, conclusory or formulaic recitations of elements do not alone suffice. Id. “A 13 claim has facial plausibility when the plaintiff pleads factual content that allows the 14 court to draw the reasonable inference that the defendant is liable for the misconduct 15 alleged.” Id. 16 II. Inclusion of Group 48 and CMB Regional Centers as Defendants 17 Before addressing the individual claims, the Court addresses Defendants’ 18 argument that Group 48 and CMB Regional Centers should be dismissed as 19 Defendants. Plaintiffs do not raise an opposition to the Court dismissing Group 48 20 and CMB Regional Centers as defendants. Based on the representations made in the 21 Motion and Reply, dismissal of these Defendants appears appropriate at this stage. 22 As Defendants note, the SAC does not contain any factual allegations that the 23 Partnership (Group 48) committed any action that would render them liable. 24 Defendants also represent that CMB Regional Centers is a trade name and not a 25 separate entity.3 Accordingly, Defendants’ Motion is granted as to Group 48 and CMB 26 Regional Centers. 27

28 3 While Plaintiffs do not oppose dismissal of CMB Regional Centers, Plaintiffs express some doubt in a 1 III. Fraudulent Inducement and Gross Negligence 2 Defendants argue that both Plaintiffs’ Fraudulent Inducement and Gross 3 Negligence claims are untimely. As an important threshold issue, Defendants first 4 contend that Plaintiffs’ claims do not relate back to the initial complaint. Whether the 5 relation back doctrine applies to Plaintiffs’ claims has a significant impact on their 6 timeliness. 7 Plaintiffs have filed three complaints in this action. The initial complaint was 8 filed on August 10, 2022 (ECF No. 46-2), the First Amended Complaint was filed on 9 May 7, 2024 (ECF No. 46-135), and the current SAC was filed April 28, 2025 (ECF No. 10 50). Given the nearly 21-month gap between the filing of the initial complaint and the 11 First Amended Complaint, if Plaintiffs’ claims relate back only to the First Amended 12 Complaint, not the initial complaint, there is a substantial temporal difference that 13 affects the application of the relevant statutes of limitation. 14 Under the Federal Rules of Civil Procedure, an amendment to a pleading 15 relates back to the date of the original pleading when “the amendment asserts a claim 16 or defense that arose out of the conduct, transaction, or occurrence set out—or 17 attempted to be set out—in the original pleading” or where “the law that provides the 18 applicable statute of limitations allows relation back.” Fed. R. Civ. P. 15(c)(1)(A), (B). 19 Thus, “if an amendment relates back under the state law that provides the applicable 20 statute of limitations, that amendment relates back under Rule 15(c)(1) even if the 21 amendment would not otherwise relate back under the federal rules.” Butler v. Nat'l 22 Cmty. Renaissance of Cal., 766 F.3d 1191, 1200 (9th Cir. 2014). Under California law, 23 an amended claim relates back if it (1) rests on the same general set of facts, (2) 24 involves the same injury, and (3) refers to the same instrumentality as alleged in the 25 original complaint. Norgart v. Upjohn Co., 21 Cal. 4th 383, 408–09 (1999). “Under 26 Delaware law, a court may grant leave to amend a complaint that adds a new party

27 later information suggests the existence of CMB Regional Centers, they may seek to amend to include 28 claims against them as a defendant. 1 and allow those claims to relate back to the date of the original filing if: (1) the claims 2 asserted in the amended pleading arises from the conduct, transaction, or occurrence 3 advanced in the original pleading; (2) the new party in the amended pleading 4 received adequate notice of the action so as not to be prejudiced in maintaining a 5 defense on the merits; (3) the new party knew or should have known that the action 6 would have been brought against it but for a mistake; and (4) the notice and 7 knowledge factors were satisfied within the period prescribed for service of process.” 8 Blattman v. Siebel, No. 15-cv-00530-GMS, 2017 WL 1217209, *5 (D. Del. Mar. 31, 9 2017). 10 It is clear that Plaintiffs’ fraudulent inducement and gross negligence claims do 11 not relate back to Plaintiffs’ initial complaint. The original complaint, filed in Los 12 Angeles County Superior Court, exclusively addresses Plaintiffs’ attempts to recover 13 their investment on the basis that Defendants had denied Plaintiffs a refund despite 14 Plaintiffs obtaining immigration status without the need for the EB-5 investment. (See 15 ECF No. 46-135.) That complaint is only seven pages long, and the core factual 16 allegations are reproduced here: 17 10. In June 2015, Plaintiff Fang, on behalf of Plaintiffs, executed a Limited Partnership Agreement (“LPA,” Exhibit) 18 with Defendant Group 48 LP. Defendant CMB Export and 19 Defendant NK are general partners of the limited partnership, controlled by Defendant Hogan. 20 11. The purpose of the agreement under the LPA is “[T]he 21 investor seeks to apply for a green card (permanent 22 residenc[y]) under the EB-5 Immigrant Investor Program[,] and does not require an economic profit on his/her 23 investment” (pg.1). Plaintiffs transmitted $550,000 to Defendant Group 48 LP in July 2015. 24 25 12. Defendants then made a loan for the construction, renovation and operation of “The Century Plaza Hotel,” 26 currently known as “Fairmont Century Plaza” located at 2025 Avenue of the Stars in Los Angeles, California. 27 28 1 13. In May 2022, Plaintiff Lin became a permanent resident. Plaintiff Fang also has been adjusting status to become a 2 permanent resident. 3 14. In May and June 2022, Plaintiffs notified Defendants of 4 Plaintiffs’ new status, and requested refund. Plaintiffs sent the third email in July 2022. 5 15. Defendants denied Plaintiffs’ request in June and July 6 2022, that Defendants want to see a “denial of [Plaintiffs’] 7 conditional residency and provide notice of such denial to the Partnership…”, and that “In addition, even if [Plaintiffs] 8 were eligible to withdraw from the Partnership…the Partnership at this time is under no obligation to return 9 [Plaintiffs’] capital.” 10 (ECF No. 46-1 ¶¶ 10–15.) 11 Nowhere in the initial complaint do Plaintiffs assert Defendants had engaged in 12 fraud, misrepresentation, negligence, or any other misconduct, besides the failure to 13 provide a refund after Plaintiffs obtained immigration status separately. The initial 14 complaint also does not discuss or even reference the events that led to Plaintiffs’ 15 investment beyond stating the alleged purpose of the agreement under the LPA and 16 that “Plaintiffs transmitted $550,000 to Defendant Group 48 LP in July 2015.” (ECF 17 No. 46-1 ¶ 11.) That complaint is connected only to the present claims in that it also 18 concerns Plaintiffs’ investment in the Partnership. Plaintiffs’ present claims of 19 fraudulent misrepresentation and gross negligence thus do not relate back to this 20 initial complaint, regardless of what relation back rules are applied. Instead, these 21 claims and relevant factual allegations first appear in Plaintiffs’ First Amended 22 Complaint, which was filed on May 7, 2024. (See ECF No. 46-135.) 23 Plaintiffs assert that the present claims relate back to the initial complaint as that 24 complaint was “based on the same transactions and facts that occurred here, giving 25 Defendants all the notice they needed regarding the transactions on which the lawsuit 26 was based.” (Opp’n at 13.) While the relation back doctrine “is to be liberally 27 applied[,]” Clipper Exxpress v. Rocky Mtn. Motor Tariff Bureau, Inc., 690 F.2d 1240, 28 1 1260 n.29 (9th Cir. 1982), Plaintiffs’ argument still greatly overstates this rule. It is true 2 that, in the broadest possible sense, there is commonality in the most fundamental 3 factual details of the complaints as both concern Plaintiffs’ investment in Group 48. 4 But the fact that there is a high-level connection does not establish “the existence of a 5 common ‘core of operative facts’ uniting the original and newly asserted claims.” 6 Mayle v. Felix, 545 U.S. 644, 659 (2005). The common core of operative facts must be 7 sufficient “so that the adverse party has fair notice of the transaction, occurrence, or 8 conduct called into question.” Asarco, LLC v. Union Pac. R. Co., 765 F.3d 999, 1004 9 (9th Cir. 2014) (internal citations and quotations omitted). The Supreme Court has 10 rejected such boundless readings of the relation back doctrine to permit claims to 11 relate back so long as they are roughly connected to some broader event. See Mayle, 12 545 U.S. at 660–63 (rejecting argument that habeas claims related back to a prior 13 habeas petition so long as they concerned events at the same trial). Plaintiffs cannot 14 reasonably assert that their initial complaint — which exclusively focused on the denial 15 of a refund on an entirely unrelated basis to the claims here — could have put 16 Defendants on fair notice that Plaintiffs were calling into question the events 17 surrounding Plaintiffs’ initial investment in the Partnership and Defendants’ conduct in 18 obtaining that investment. 19 The Court thus finds that Plaintiffs’ fraudulent inducement and gross negligence 20 claims do not relate back to the initial complaint.4 As such, the Court uses the date the 21 First Amended Complaint was filed, May 7, 2024, in determining whether these claims 22 are timely. 23 In addressing the timeliness of these claims, Plaintiffs also assert that the 24 delayed discovery rule should apply. Specifically, Plaintiffs assert that they could not 25 have discovered Defendants’ alleged misrepresentations in inducing Plaintiffs’ 26 investment until August 14, 2020, “when it was revealed for the first time that Mr.

27 4 As is addressed further below, other claims in the SAC do not relate back to the initial complaint for 28 the same reasons. 1 Hogan had waited six months to report to Limited Partners that J.P. Morgan had 2 declared the construction loan ‘out of balance.’” (SAC ¶ 84; see Opp’n at 28 (“The 3 SAC alleges that . . . Plaintiffs had no reason to discover the fraud until August 4 2020[.]”).) Ultimately though, the application of the delayed discovery rule is 5 irrelevant. 6 Both claims are subject to, at a maximum, a three-year statute of limitations, 7 regardless of whether California or Delaware law applies. See Kline v. Turner, 87 Cal. 8 App. 4th 1369, 1373 (2001); see 10 Del. C. § 8106; Krahmer v. Christie’s Inc., 903 A.2d 9 773, 778 (Del. Ch. 2006) (“the applicable statute of limitations is 10 Del. C. § 8106, 10 which imposes a three-year period for claims of negligent misrepresentation”); see 11 also Cal. Civ. Proc. Code section 338(d); Ventura Cnty. Nat. Bank v. Macker, 49 Cal. 12 App. 4th 1528, 1531 (1996) (applying a two or three-year state of limitations 13 depending on whether a negligent misrepresentation claim more closely resembled 14 fraud or negligence). Thus, even accepting Plaintiffs’ claims of delayed discovery, the 15 SAC does not establish that these claims are timely, as the discovery occurred over 16 three years prior to the First Amended Complaint being filed. 17 Accordingly, Defendants’ Motion is granted as to these causes of action, which 18 shall be dismissed without leave to amend.5 19 IV. Breach of Fiduciary Duty 20 For the same reasons discussed above as to the timeliness of Plaintiffs’ 21 fraudulent inducement and gross negligence claims, see supra Motion to Dismiss for 22 Failure to State a Claim, III, the Court also finds that, as a whole, Plaintiffs’ breach of 23 fiduciary duty claim is untimely. As with those claims, the factual allegation and claims 24 in Plaintiffs’ initial complaint are unrelated to any assertion that the General Partners 25 breached their fiduciary duty to the Limited Partners. This claim was instead first 26

27 5 To the extent that Plaintiffs raise negligence claims regarding Defendants’ management of the partnership, the Court does not address that portion of the negligence claim as it was previously 28 dismissed with prejudice in the prior order based on application of the economic loss rule. 1 raised in the First Amended Complaint filed on May 7, 2024. (See ECF No. 46-135.) 2 While Plaintiffs again seek to invoke the discovery rule, the factual allegations in the 3 SAC only support application of that rule until August 2020. As such, these claims are 4 untimely as the First Amended Complaint, which first raised these claims, was filed 5 beyond Delaware’s three-year statute of limitations for such claims. Accordingly, 6 Plaintiffs’ breach of fiduciary duty claim shall be dismissed as untimely. 7 V. Breach of Contract 8 The Court previously dismissed Plaintiffs’ breach of contract claim based in part 9 on Plaintiffs’ failure to identify specific provisions of the contract allegedly breached by 10 Defendants. In the SAC, Plaintiffs identify three provisions of the LPA that Defendants 11 allegedly breached: Limited Partnership Agreement (“LPA”) §§ IV.C.3, VI.A.3, and 12 VI.G. Defendants challenge the sufficiency of Plaintiffs’ breach of contract claims as to 13 each of these provisions. 14 Article IV, section C.3 of the LPA states: 15 Investments. The Partnership shall use commercially reasonable efforts to advance and accomplish the 16 Partnership’s business and purpose as set forth in Article III 17 of this Agreement. The Partnership intends to limit its initial investment activities to investments in a private business 18 located within the geographical jurisdiction of the Regional 19 Center as approved by the USCIS in order to assist in job creation within the areas comprising the current 20 geographic scope of the Regional Center. Nothing contained in this Section shall be construed to limit the 21 General Partner’s ability to reinvest the Cash Flow from 22 Return of Investment in another investment, even if such reinvestment is outside of the geographical jurisdiction of 23 the Regional Center, if such reinvestment is consistent with the business and purpose of the Partnership as stated in 24 Article III. 25 (LPA (SAC, Ex. G) § IV.C.3.) Article VI, section A.3 grants the General Partner the 26 power “to use commercially reasonable efforts to meet the objectives of the 27 Partnership,” along with specific provisions elucidating what this power permitted. 28 1 (LPA § VI.A.3.) The SAC asserts Defendants breached these provisions through a 2 variety of acts and omissions including “commencing the project without securing the 3 alleged Deutsche Bank financing, restructuring the construction financing multiple 4 times in commercially unreasonable ways (while collecting a fee for doing so), 5 borrowing money from Reuben Brothers while granting it the right to extinguish the 6 rights of Group 48 members, and permitting the project to fall into default and 7 foreclosure.” (SAC ¶¶ 118–19.) Finally, Article VI, section G imposes a broad good 8 faith duty on the General Partner, stating in relevant part: 9 The General Partner shall perform its duties in good faith, in a manner it reasonably believes to be in the best interests 10 of the Partnership and its Partners, and with such care, 11 including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar 12 circumstances. 13 (LPA § VI.G.) 14 Defendants correctly note that article VI, section A.3 of the LPA only grants 15 powers to the General Partners. Similarly, standing alone, article IV, section C.3 does 16 not directly impose a duty on the General Partners. That section is express in 17 imposing obligations on the Partnership to use commercially reasonable efforts, not 18 the General Partner. Plaintiffs argue that this would effectively mean that these 19 provisions do not have any binding standalone effect. This may be true, but Plaintiff 20 does not provide a specific basis to read these provisions of the LPA any other way. 21 However, article VI, section G of that article does create a duty on the General 22 Partner to “perform its duties in good faith” and in a manner “it reasonably believes to 23 be in the best interests of the Partnership and its Partners[.]” (LPA § VI.G.) This 24 imposes an obligation on the General Partner to act in the best interest of the 25 Partnership. As noted above, article IV, section C.3 of the LPA states that “[t]he 26 Partnership shall use commercially reasonable efforts to advance and accomplish the 27 Partnership’s business and purpose as set forth in Article III of this Agreement.” The 28 1 requirement for the General Partner to act in the best interests of the Partnership 2 article VI, section G, could incorporate the provisions of article IV, section C.3 given 3 that it arguably defines what is in the best interest of the Partnership. Thus, while 4 standing alone, article IV, section C.3 does not impose any duties on the General 5 Partner, via article VI, section G, Plaintiffs’ claims under both sections are adequately 6 alleged. 7 Defendants do not contest that article VI, section G imposes a duty on the 8 General Partner. They instead argue that some of Plaintiffs’ claims of breach as to that 9 specific section are untimely for largely the same reasons discussed above. See supra 10 Motion to Dismiss for Failure to State a Claim, III. Specifically, Defendants argue that 11 Plaintiffs’ claims that Defendants breached the LPA by (1) “taking on the job of general 12 partner without the experience and skill necessary to handle the project[,]” (2) “taking 13 on the role of general partner in dozens of other partnerships,” (3) “failing to monitor 14 the affairs of the Partnership,” and allegedly taking (4) “fees each time the construction 15 loans were restructured.” (Mot. at 23.) 16 These claims do not relate back to the initial complaint for the same reasons 17 Plaintiffs’ fraudulent inducement and gross negligence claims do not relate back. See 18 supra Motion to Dismiss for Failure to State a Claim, III. As such, the first and last of 19 these claims are untimely. The decision to take on the job of general partner 20 necessarily occurred at the start of the partnership. The last restructuring noted in the 21 SAC was also raised well beyond the three-year statute of limitations for this claim. 22 (SAC ¶¶ 67, 69.) As with the above, the delayed discovery asserted by Plaintiffs does 23 not save these claims. Plaintiffs’ allegation that Defendants breached their duty by 24 becoming the general partner in “dozens of other partnerships” is also untimely. This 25 allegation appears to reference an earlier allegation in the SAC wherein Plaintiffs 26 assert that “[t]he Group 48 Limited Partnership was closed and funded by September 27 25, 2015. At the time Defendants took on this project, the General Partner was 28 already responsible for the management of dozens of limited partnership projects.” 1 (SAC ¶ 44.) It seems unlikely that these claims would be subject to delayed discovery 2 on the basis that Plaintiffs assert in the SAC. (See SAC ¶¶ 84–88.) But even if they 3 were, for the same reasons discussed previously, these claims would still be untimely 4 as they do not relate back to the initial complaint, and the time between delayed 5 discovery and filing of the First Amended Complaint is greater than three years. 6 Finally, Defendants assert that Plaintiffs’ claim that Defendants “failed to 7 monitor the affairs of the partnership” is also barred by the statute of limitations. 8 However, it is not immediately clear that this portion of the claim is untimely. Unlike 9 the claims addressed above, Plaintiffs’ claim that Defendants failed to monitor the 10 affairs of the partnership is not temporally bound to the beginning of the Partnership. 11 Instead, this is a more general claim that, during the course of the Partnership, 12 Defendants failed to appropriately monitor the Partnership’s affairs. Certainly, with 13 the benefit of discovery, it may become apparent that some or all of this claim accrued 14 and run before the complaints were filed. But, as alleged, this claim presently appears 15 timely.6 Accordingly, Defendants’ Motion to Dismiss is denied in part as to Plaintiffs’ 16 claim that Defendants breached article VI, section G of the LPA by failing to monitor 17 the affairs of the partnership and breached article IV, section C.3 of the PLA. 18 VI. Implied Covenant of Good Faith and Fair Dealing 19 The Court will permit Plaintiffs’ claim based on breach of the implied covenant 20 of good faith and fair dealing to proceed at this stage. Defendants argue that 21 Plaintiffs’ implied covenant claim is covered by the terms of the LPA, and thus cannot 22 be asserted.7 Defendants first rest on the powers and discretion granted by article VI, 23 section A of the LPA. But it is not readily apparent that this grant of discretion 24 precludes any claim that Defendants breached an obligation to not self-deal.

25 6 Some or all of Plaintiffs’ breach of contract claim under article IV, section C.3 may also be untimely, but 26 this issue is not presently before the Court. 27 7 Defendants also argue that this claim is impermissibly vague. The Court is unpersuaded on this point. At the present pleading stage, the SAC is sufficiently clear that Plaintiffs assert Defendants violated the 28 covenant by prioritizing their self-interests to the detriment of the limited partners and the partnership. 1 Defendant also argues this claim is duplicative of Plaintiffs’ breach of contract claim 2 based on article VI, section G of the LPA, which provides that the General Partner shall 3 perform its duties in good faith. However, as Plaintiffs note, this provision only 4 imputes a good faith obligation on the Defendants. It does not mandate that the 5 General Partner act fairly “consistent[] with the terms of the parties’ agreement and its 6 purpose.” ArchKey Intermediate Holdings, Inc. v. Mona, 302 A.3d 975, 1003 (Del. Ch. 7 2023). It is possible that this claim is ultimately duplicative, but at this stage, this does 8 not appear to be the case. Accordingly, Defendants’ Motion to Dismiss is denied as to 9 the implied covenant claim. 10 VII. Unjust Enrichment 11 Defendants’ motion to dismiss Plaintiffs’ unjust enrichment claim is granted. 12 Plaintiffs made clear in their Opposition that their unjust enrichment claim is 13 predicated on claims that Defendants fraudulently induced the contract. (See Opp’n 14 at 26 (“Where, as here, the unjust benefit received is the contract itself . . .”).) Thus, 15 this claim, which is subject to a three-year statute of limitations, is untimely on the 16 same basis as Plaintiffs’ fraudulent inducement claims for the reasons discussed 17 above. See supra Motion to Dismiss for Failure to State a Claim, III. 18 VIII. UCL Claim 19 Defendants’ Motion to Dismiss is denied as to Plaintiffs’ UCL claim. Plaintiffs’ 20 UCL claim is predicated on similar allegations that Defendants induced Plaintiffs’ 21 investment via fraud, which the Court found to be untimely above. However, unlike 22 those claims, California imposes a four-year statute of limitations. As such, based on 23 Plaintiffs’ asserted delayed discovery until August 2020, these claims were brought 24 within the limitation period based on their inclusion in the First Amended Complaint. 25 While Defendants argue that an earlier date of delayed discovery should apply based 26 on “prior correspondence” from Defendants, that is an issue that must be addressed 27 at the summary judgment, as it relies on factual issues that cannot be resolved at this 28 1 stage. As alleged, Plaintiffs’ claim accrued in August 2020, making them timely. 2 Defendants’ Motion as to this claim is thus denied. 3 JURY TRIAL DEMAND 4 Defendants argue that Plaintiffs’ jury trial demand should be stricken as no such 5 claim demand was made in the initial complaint or the later First Amended Complaint. 6 Plaintiffs do not contest that their prior complaints failed to raise a jury trial demand. 7 Instead, they argue that the Court should exercise its discretion under Federal Rule of 8 Civil Procedure Rule 39(b), to order a jury trial. (Opp’n at 28.) Given the apparent 9 concession that a jury trial demand was not properly made in the initial complaint or 10 the FAC, Plaintiffs have waived their right to a jury trial. See Fed. R. Civ. P. 38(b)(1), (d). 11 Plaintiffs may bring a properly noticed motion arguing for the Court to permit a jury 12 trial under Rule 39(b), but this issue is not properly before the Court at this time. 13 Accordingly, Defendants’ request to strike Plaintiffs’ jury trial demand is granted. 14 CONCLUSION 15 Accordingly and for the reasons stated above, IT IS HEREBY ORDERED that: 16 1. Defendants’ Motion to Dismiss (ECF No. 62) is GRANTED IN PART and 17 DENIED IN PART as follows: 18 a. Defendants’ Motion is granted as to Plaintiffs’ claims against 19 Noreen Hogan, Group 48, and CMB Regional Centers, which are 20 dismissed from this action without leave to amend. 21 b. Defendants’ Motion is granted as to Plaintiff Yu Lin, and Plaintiff Yu 22 Lin’s claims are dismissed for lack of standing. 23 c. Defendants’ Motion is granted as to Plaintiffs’ claims for fraudulent 24 inducement, gross negligence, breach of fiduciary duty, and 25 unjust enrichment, which are dismissed as untimely without leave 26 to amend. 27 d. Defendants’ Motion is also granted as to Plaintiffs’ breach of 28 contract claim, except as to Plaintiffs’ claim that Defendants “failed 1 to monitor the affairs of the partnership” for which Defendants’ 2 Motion is denied and Plaintiffs’ claim that Defendants breached 3 article IV, section C.3 of the LPA. The rest of Plaintiffs’ breach of 4 contract claim is otherwise dismissed without leave to amend. 5 e. Defendants’ Motion is denied as to Plaintiffs’ implied covenant 6 and California UCL claims. 7 2. Defendants’ Motion to Strike Plaintiffs’ Jury Trial Demand (ECF No. 62) is 8 also GRANTED. 9 3. Defendants’ Request for Judicial Notice (ECF No. 70) is DENIED AS 10 MOOT. 11 12 IT IS SO ORDERED. 13 | Dated: _March 31, 2026 Donal J CoD bra Hon. Daniel alabretta 14 UNITED STATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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