Guthrey v. Alta CA Regional Center

• Court: District Court, E.D. California
• Decided: May 1, 2025
• Docket: 2:18-cv-01087
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 ALETA GUTHREY, et al., No. 2:18-cv-01087-DC-JDP 12 Plaintiffs, 13 v. ORDER GRANTING DEFENDANT ON MY OWN INDEPENDENT LIVING SERVICES, 14 ALTA CALIFORNIA REGIONAL INC.’S MOTION TO DISMISS CENTER, et al., 15 (Doc. No. 136) Defendants. 16 17 This matter is before the court on the motion to dismiss filed by Defendant On My Own 18 Independent Living Services, Inc. (“OMO”) on February 4, 2025. (Doc. No. 136.) Pursuant to 19 Local Rule 230(g), the court declines to set the motion for a hearing and will instead decide 20 Defendant OMO’s motion on the papers. (See Doc. No. 131.) For the reasons explained below, 21 the court will grant Defendant OMO’s motion to dismiss. 22 BACKGROUND 23 A. Factual Background 24 In this disability discrimination action, Plaintiffs Aleta Guthrey, a conserved adult through 25 her conservator Areta Guthrey, and Areta Guthrey allege the following in their operative second 26 amended complaint.1 (Doc. No. 69.) 27 1 Areta Guthrey is the mother of Aleta Guthrey. To avoid confusion, the court will refer to the 28 Plaintiffs using their first names, Areta and Aleta. 1 Plaintiff Aleta is a young woman with developmental disabilities due to microcephaly, a 2 physical and intellectual impairment that substantially limits all her major life activities. (Id. at 3 ¶¶ 3, 37.) She does not speak, write, or eat by mouth, and she takes nutrition by way of a 4 gastrostomy tube. (Id. at ¶ 3.) Plaintiff Aleta allegedly qualifies as an individual with a disability 5 under all applicable state and federal laws. (Id.) 6 Plaintiff Areta is a single mother of three children, including Plaintiff Aleta, who have 7 developmental disabilities. (Id. at ¶¶ 4, 38.) She has served as Plaintiff Aleta’s conservator since 8 Plaintiff Aleta turned eighteen years old, and until May 1, 2020, she cared for Plaintiff Aleta on a 9 full-time basis. (Id. at ¶ 4.) Because she suffers from both arthritis and bipolar disorder, Plaintiff 10 Areta tires easily and is unable to keep pace with Plaintiff Aleta’s needs, which is also physically 11 exhausting. (Id. at ¶¶ 39–41.) 12 Plaintiffs live in Sacramento County, California. (Id. at ¶ 4.) 13 In California, a comprehensive statutory scheme created by the Lanterman Developmental 14 Disabilities Act set up a system of twenty-one regional centers to provide services and support to 15 individuals with developmental disabilities and minimize the institutionalization and dislocation 16 of those individuals from their communities. (Id. at ¶¶ 14–15.) Pursuant to that scheme, the 17 California Department of Developmental Services (“DDS”) contracts with the regional centers, 18 which provide direct services to consumers and their families and caregivers, including case 19 management and assistance in securing services and supports for consumers. (Id. at ¶¶ 16, 24.) 20 The regional centers also contract with DDS-approved vendors for the provision of supported 21 living services (“SLS”). (Id. at ¶¶ 17–20, 22.) Those SLS vendors provide confidential, private, 22 and specialized direct services to consumers by recruiting, hiring, training, and paying the 23 caregivers who are essential to the consumer’s safety and well-being. (Id. at ¶ 21.) They also help 24 consumers choose a home, prepare meals, and assist with financial matters. (Id.) 25 Due to Plaintiff Aleta’s developmental disabilities, she was referred to the regional center 26 system in 1995 before leaving the hospital after her birth. (Id. at ¶ 37.) 27 In 2014, Plaintiff Aleta’s family moved to Citrus Heights, California. (Id. at ¶ 43.) At that 28 time, Plaintiff Aleta became a client of the Defendant Alta California Regional Center (“Alta”), 1 and Plaintiff Areta began discussions with the Alta service coordinator to provide SLS for Aleta 2 in her own home. (Id. at ¶ 43.) According to Plaintiffs, living with her mother made Plaintiff 3 Aleta ineligible for SLS, so Plaintiffs discussed with Alta their request to secure other housing for 4 Plaintiff Aleta and thus be eligible for SLS in her own home. (Id. at ¶ 44.) Plaintiffs also allege 5 that “people with feeding tubes are not eligible for certain types of respite or personal attendant 6 care,” and Plaintiff “Aleta has been at risk of institutionalization due to her gastrostomy tube.” 7 (Id.) 8 In 2016, at the Alta offices, Plaintiff Areta was introduced to Mary McGlade,2 a 9 representative of Defendant OMO. (Id. at ¶ 46.) Defendant OMO is a private, for-profit 10 corporation that is a DDS-approved vendor of regional center services. (Id. at ¶¶ 10–11.) 11 Plaintiff Areta signed numerous documents, including a contract for Defendant OMO to 12 provide supported living services, such as locating a home and hiring personal caregivers for 13 Plaintiff Aleta, through Alta. (Id. at ¶ 47.) 14 In April 2017, McGlade told Plaintiff Areta that a roommate had been found for Plaintiff 15 Aleta, and McGlade arranged for that roommate and Plaintiff Aleta to meet and for Plaintiff Areta 16 to tour and approve the apartment, which she did. (Id. at ¶ 48.) Plaintiff Aleta then began 17 preparing to move Plaintiff Areta into her own apartment with a roommate, both of whom would 18 be supported by Defendant OMO. (Id. at ¶ 49.) A few days later, McGlade told Plaintiff Aleta 19 that the old roommate (whose room Plaintiff Areta would be taking) was refusing to leave the 20 apartment, so McGlade suggested Plaintiff Aleta and the other roommate find a new place and 21 move in together. (Id. at ¶ 50.) Plaintiff Areta searched for housing and sent several suggestions 22 to Defendant OMO, but that correspondence went unanswered. (Id.) Defendant Alta’s service 23 coordinator told Plaintiff Areta that she wanted to include a third young woman in the housing 24 arrangement, which delayed the process. (Id. at ¶ 51) Suddenly, at the end of April 2017, 25 McGlade told Plaintiff Areta that Defendant OMO “was pushing everything back by two weeks 26

27 2 Plaintiffs named Mary McGlade as a defendant in this action, but the court dismissed Plaintiffs’ claims brought against her, and she was terminated from this action on November 23, 2021. (Doc. 28 No. 68.) 1 to accommodate a woman who had just come into the process.” (Id. at ¶ 53.) Defendant OMO 2 then scheduled a meeting between the other two prospective roommates and excluded Plaintiffs 3 from this meeting. (Id.) On April 30, 2017, Plaintiff Areta expressed her disappointment for 4 having been left out of that meeting and for receiving no response to her texts and emails 5 recommending potential housing. (Id. at ¶ 54.) On May 1, 2017, McGlade allegedly notified 6 Plaintiff Areta “[i]n an immediate and terse note,” that OMO “was terminating services for Aleta 7 in retaliation for [Areta’s] advocacy on Aleta’s behalf.” (Id. at ¶ 45.) 8 According to Plaintiffs, no one at OMO, including McGlade, had expressed any difficulty 9 or issues with Plaintiff Areta. (Id. at ¶ 56.) When Plaintiff Areta contacted Alta, the Alta service 10 coordinator told her in writing that the vendors have an absolute right to discriminate and 11 determine who their clients will be. (Id. at ¶ 57.) 12 In their SAC, Plaintiffs allege a similar experience with another SLS vendor, Defendant 13 S.T.E.P., Inc. (“STEP”), in the summer and fall of 2017, which culminated in Plaintiff Areta 14 being informed by the Alta service coordinator that Defendant STEP was refusing to provide 15 services for Plaintiff Aleta because of Plaintiff Areta’s “advocacy and ‘philosophy’” and Plaintiff 16 Aleta’s care needs.3 (Id. at ¶¶ 58–70.) Ultimately, Defendant Alta and another SLS vendor 17 secured housing for Plaintiff Aleta, and on May 1, 2020, she moved into her own home in the 18 community with two caregivers. (Doc. No. 69 at ¶¶ 74–75.) 19 B. Procedural Background 20 On May 1, 2018, Plaintiffs filed the complaint initiating this disability discrimination 21 action. (Doc. No. 1.) On June 15, 2020, the court granted Defendants’ motions to dismiss that 22 complaint, with leave to amend, because the complaint was poorly organized with no numbered 23 paragraphs and did not specify which claims were brought against which defendant. (Doc. No. 24 46.) On July 5, 2020, Plaintiffs filed the first amended complaint. (Doc. No. 47.) On November 25 23, 2021, the court granted Defendants’ motions to dismiss the first amended complaint (with 26

27 3 Because the pending motion is brought only by Defendant OMO, the court does not recount the details of Plaintiffs’ allegations regarding their experience with Defendant STEP and their 28 subsequent experiences with Defendant Alta in the factual background section of this order. 1 leave to amend only as to certain claims and defendants, and without leave to amend as to others) 2 because Plaintiffs’ allegations failed to sufficiently state cognizable claims. (Doc. No. 68.) 3 On December 13, 2021, Plaintiffs filed the operative SAC against Defendants Alta, OMO, 4 and STEP. (Doc. No. 69.) Therein, Plaintiffs bring disability discrimination claims under Title III 5 of the Americans with Disabilities Act (“ADA”), California’s Unruh Act, and Section 504 of the 6 Rehabilitation Act, as well as claims for tortious breach of contract. (Id.) 7 On February 1, 2023, the court granted Defendants’ motions to dismiss all claims brought 8 in the SAC without further leave to amend because “this is Plaintiffs’ third iteration of the 9 complaint and despite being given multiple opportunities by the court, Plaintiffs have failed to 10 adequately allege a viable [] claim against Defendants.” (Doc. No. 102 at 8.) In that February 1, 11 2023 order, the court directed that this case be closed, and judgment was entered on that same 12 day. (Doc. Nos. 102, 103.) 13 On March 1, 2023, Plaintiffs filed separate motions for reconsideration, which the court 14 denied in an order signed on June 28, 2023. (Doc. No. 119.) 15 On July 28, 2023, Plaintiffs filed a notice of appeal of the court’s February 1, 2023 order 16 dismissing their claims and the June 28, 2023 order denying reconsideration of that order. (Doc. 17 No. 120.) On appeal, Plaintiffs challenged only the dismissal of their claims brought under ADA 18 Title III and Section 504 of the Rehabilitation Act; Plaintiffs did not challenge the court’s 19 dismissal of their Unruh Act and tortious breach of contract claims. (See Doc. No. 129 at 3.) 20 On August 30, 2024, the Ninth Circuit issued a memorandum decision affirming in part, 21 reversing in part, and remanding the action back to this court for further proceedings. (Doc. No. 22 123.) The Ninth Circuit’s mandate issued on September 23, 2024. (Doc. No. 124.) 23 As for the ADA Title III claims, the Ninth Circuit panel found that this court did not err in 24 dismissing Plaintiffs’ ADA Title III claim brought against Defendant OMO because Plaintiffs did 25 not sufficiently allege that Defendant OMO owns or operates a place of public accommodation, 26 as is required for ADA Title III claim. (Id. at 3–4.) But the Ninth Circuit panel found that the 27 district court erred in dismissing Plaintiffs’ ADA Title III claim brought against Defendants Alta 28 and STEP, because Plaintiffs had sufficiently alleged the requisite nexus to a physical place of 1 accommodation for those Defendants. (Id. at 4–5.) The panel declined to reach Defendants Alta 2 and STEP’s additional argument that the ADA Title III claims fail due to Plaintiffs having not 3 sufficiently alleged any discriminatory conduct because those arguments were not considered by 4 the district court, and thus would be for the district court to consider in the first instance on 5 remand. (Id. at 5–6.) 6 As for the Rehabilitation Act claims, the Ninth Circuit panel found that “[t]he district 7 court erred in holding that Plaintiffs failed to state a claim under Section 504 of the Rehabilitation 8 Act because Defendants are not places of public accommodation under Title III of the ADA.” (Id. 9 at 6.) The panel explained that “[u]nder Section 504, there is no requirement that the defendant 10 own or operate a place of public accommodation, as is required under ADA Title III,” and “[t]he 11 cases cited by Defendants and the district court equating the substantive standard of liability 12 under Section 504 and the ADA were discussing Title II of the ADA, not Title III.” (Id. at 6–7.) 13 Thus, the panel “remand[ed] for the district court to consider Defendants’ alternate challenges to 14 Plaintiffs’ Section 504 claim in the first instance.” (Id. at 7.) 15 Lastly, the Ninth Circuit panel concluded that the district court properly denied Plaintiffs’ 16 motions for reconsideration and did not abuse its discretion in denying Plaintiffs leave to file a 17 third amended complaint given that “Plaintiffs were afforded multiple opportunities to amend 18 their complaint to correct any deficiencies.” (Id. at 7–8.) In support of that conclusion, the panel 19 emphasized that “Plaintiff Areta Guthrey, who drafted each iteration of the complaint before 20 substitution of counsel, is an attorney licensed to practice both in the State of California and 21 before the district court (Eastern District of California),” and “after the substitution of counsel, 22 new counsel was allowed to file a sur-reply to Defendants’ motions to dismiss.” (Id. at 8–9.) 23 On October 30, 2024, this court scheduled a status conference and directed the parties to 24 file a joint status report regarding how this case should proceed on remand.4 (Doc. No. 126.) 25 Defendants filed a status report setting forth their position and Defendant Aleta’s position, as 26 expressed by her counsel of record, and noting that Defendant Areta did not respond or otherwise 27 4 This action was reassigned to the undersigned district judge on October 30, 2024. (Doc. No. 28 125.) 1 participate in the preparation of that status report. (Doc. No. 129.) At the status conference held 2 on December 6, 2024, counsel for Defendants appeared but no appearance was made for either 3 Plaintiff Areta or Plaintiff Aleta.5 (Doc. No. 132.) The court nonetheless heard from Defendants 4 on how they wished to proceed and set a briefing schedule for Defendant OMO to file a renewed 5 motion to dismiss the sole claim remaining against it in this action. (Id.) Defendants Alta and 6 STEP, on the other hand, expressed optimism that they may be able to reach a settlement with 7 Plaintiffs via a private mediation and avoid the need to file renewed motions to dismiss the claims 8 brought against them. (Id.) Thus, the court also set a deadline for the parties to file a joint status 9 report regarding the status of those mediation efforts. (Id.) 10 On February 4, 2025, Defendant OMO filed the pending motion to dismiss Plaintiffs’ 11 remaining claims brought against it, alleging disability discrimination under Section 504 of the 12 Rehabilitation Act. (Doc. No. 136.) On February 18, 2025, Plaintiff Aleta filed an opposition 13 thereto. (Doc. No. 137.) Several hours later that same day, Plaintiff Areta filed a copy of the filed 14 version of Plaintiff Aleta’s opposition as her own opposition brief, albeit with a modification to 15 the document title and the attorney information on the caption page to list her contact information 16 rather than the information of Plaintiff Aleta’s counsel. (Doc. No. 138.) On February 28, 2025, 17 Defendant OMO filed a reply in support of the pending motion. (Doc. No. 139.) 18 LEGAL STANDARD 19 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) asks a court to 20 dismiss a plaintiff’s complaint for failure to state a claim upon which relief can be granted. 21 Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A claim may be dismissed for lack of a 22 cognizable legal theory or the absence of sufficient facts to support a cognizable legal 23 theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990) (citing Robertson v. 24 Dean Witter Reynolds, Inc., 749 F.2d 530, 533–34 (9th Cir. 1984)). 25 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 26 5 On December 9, 2024, the court issued an order to Plaintiffs to show cause why this case 27 should not be dismissed due to their failure to prosecute and failure to comply with a court order. (Doc. No. 132.) Plaintiffs each filed a response, and the court discharged the order to show cause 28 on December 17, 2024. (Doc. No. 135.) 1 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 2 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see 3 also Fed. R. Civ. P. 8(a)(2) (a complaint must contain a short and plain statement of the claim 4 showing that the pleader is entitled to relief). A complaint satisfies the plausibility requirement if 5 it contains sufficient facts for the court to “draw [a] reasonable inference that the defendant is 6 liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555). For 7 purposes of a motion to dismiss, “[a]ll allegations of material fact are taken as true and construed 8 in the light most favorable to the nonmoving party.” Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 9 337–38 (9th Cir. 1996). If a court dismisses certain claims, “[l]eave to amend should be granted 10 unless the district court ‘determines that the pleading could not possibly be cured by the 11 allegation of other facts.’” Knappenberger v. City of Phoenix, 566 F.3d 936, 942 (9th Cir. 2009) 12 (quoting Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc)). 13 ANALYSIS 14 The Rehabilitation Act “prohibits a program receiving federal financial assistance from 15 discriminating based on disability.” Fraihat v. U.S. Immigr. & Customs Enf't, 16 F.4th 613, 650 16 (9th Cir. 2021) (citing 29 U.S.C. § 794). As the Ninth Circuit reiterated in its order remanding 17 this case, in order to state a cognizable claim under Section 504 of the Rehabilitation Act, a 18 plaintiff must sufficiently allege that: “(1) [s]he is an individual with a disability; (2) [s]he is 19 otherwise qualified to receive the benefit [of a program]; (3) [s]he was denied the benefits of the 20 program solely by reason of [her] disability; and (4) the program receives federal financial 21 assistance.” (Doc. No. 124 at 6) (quoting Updike v. Multnomah Cnty., 870 F.3d 939, 949 (9th Cir. 22 2017) (citation omitted)). 23 As to Plaintiff Areta, Defendant OMO emphasizes in its motion that there are simply no 24 allegations in the SAC that Defendant OMO denied any services to Plaintiff Areta. (Doc. No. 25 136-1 at 4, 7.) Rather, the SAC alleges that OMO denied services only to Plaintiff Aleta. (Id.) 26 Defendant OMO therefore argues that Plaintiff Areta’s Section 504 claim is insufficiently alleged 27 and should be dismissed. (Id.) Plaintiff Areta does not address, let alone rebut, this argument in 28 her opposition brief. In its reply brief, Defendant OMO urges the court to dismiss Plaintiff Areta’s 1 claim without leave to amend, noting that “neither Plaintiff has opposed [its] argument that the 2 SAC fails to allege a [Section 504 claim] on behalf of Areta.” (Doc. No. 139 at 4–5.) The court 3 agrees with Defendant OMO that Plaintiff Areta has not alleged any facts in the SAC to support 4 her Section 504 claim against Defendant OMO. It is also telling that neither Plaintiff responded to 5 Defendant OMO’s arguments as to Plaintiff Areta’s claim. Accordingly, because the court finds 6 Plaintiff Areta has not alleged a cognizable Section 504 claim, Defendant OMO’s motion to 7 dismiss Plaintiff Areta’s claim will be granted, without leave to amend. 8 As to Plaintiff Aleta, Defendant OMO argues that, even assuming the first two elements 9 of the Section 504 claim are sufficiently alleged (i.e., that Plaintiff Aleta is an individual with 10 disabilities and is otherwise qualified to receive benefits), Plaintiff Aleta fails to allege facts to 11 satisfy the third and fourth elements. (Doc. No. 136-1 at 7.) That is, according to Defendant 12 OMO, Plaintiff Aleta’s “claim necessarily fails because Aleta has not alleged that she was denied 13 benefits solely by reason of her disability,” and Plaintiff Aleta fails to plead sufficient facts to 14 demonstrate OMO receives federal financial assistance. (Id.) The court will address the parties’ 15 arguments as to each of these challenged elements in turn. 16 A. Denial of Benefits Solely by Reason of Disability 17 Section 504 of the Rehabilitation Act provides as follows: “No otherwise qualified 18 individual with a disability in the United States, . . . , shall, solely by reason of her or his 19 disability, be excluded from the participation in, be denied the benefits of, or be subjected to 20 discrimination under any program or activity receiving Federal financial assistance.” 29 U.S.C. 21 § 794(a) (emphasis added). 22 In the SAC, under the heading for Plaintiffs’ Rehabilitation Act claim against Defendant 23 OMO, Plaintiffs allege that Defendant OMO “denied Aleta access the [sic] array of community 24 services she needs and have excluded her from participation in, denied her the benefits of, and 25 otherwise subjected her to discrimination under programs and activities receiving federal 26 financial assistance, in violation of section 504 and its implementing regulations.” (Doc. No. 69 at 27 ¶ 272.) Plaintiffs also allege that “[f]ailing to provide the community and Supported Living 28 Services resulted in unnecessary isolation and risk of out of home placement of Aleta which 1 constitutes discrimination under section 504.” (Id. at ¶ 273.) Further, Plaintiffs allege 2 “Defendant’s policies and practices precluded the availability of provision of integrated, stable 3 and equally available community living for Aleta.” (Id. at ¶ 274.) But noticeably absent from 4 Plaintiffs’ Rehabilitation Act allegations is any assertion or supporting facts to show that Plaintiff 5 Aleta was denied OMO’s services based solely on her disability—an essential element for her 6 Section 504 claim. Rather, as noted above and as Defendant OMO correctly points out in their 7 motion and reply brief (Doc. Nos. 136-1 at 8; 139 at 8), Plaintiffs’ only factual allegation 8 regarding why Defendant OMO terminated services for Aleta is as follows: “McGlade notified 9 [Plaintiff Areta] that On My Own was terminating services for Aleta in retaliation for [Plaintiff 10 Areta’s] advocacy on Aleta’s behalf . . .” (Doc. No. 69 at ¶ 55.) Notably, this allegation does not 11 mention Plaintiff Aleta’s disability as a reason for the denial of services, let alone the sole 12 reason. By contrast, in their allegations against Defendant STEP, Plaintiffs allege that Plaintiff 13 Aleta’s disability was one of several reasons, specifically alleging that Defendant STEP informed 14 Defendant Alta that “Aleta was being denied services because of [Plaintiff Areta’s] advocacy and 15 ‘philosophy,’ and because of Aleta’s care needs.” (Id. at ¶ 68.) 16 Thus, the court finds that Plaintiff has not sufficiently alleged that any denial of services 17 by Defendant OMO was based solely on her disability, as required for a Section 504 claim. While 18 this finding is sufficient to grant Defendant OMO’s motion to dismiss, the court will nevertheless 19 briefly address the fourth essential element—receipt of federal financial assistance. 20 B. Receipt of Federal Financial Assistance 21 “Broad allegations that all Defendants received public funding, without more, cannot 22 support a cause of action under Section 504.” McElroy ex rel. McElroy v. Tracy Unified Sch. 23 Dist., No. 2:07-cv-00086-MCE-EFB, 2008 WL 4754831, at *5 (E.D. Cal. Oct. 29, 2008). 24 “Although a complaint need not contain detailed factual allegations, it does have to do more than 25 formulaically recite, in conclusory fashion, the elements of a cause of action under § 504.” (Id.) 26 With regard to this fourth element, “Congress intended to strictly limit the scope of the 27 [Rehabilitation Act] solely ‘to those who actually “receive” federal financial assistance.’” Castle 28 v. Eurofresh, Inc., 731 F.3d 901, 908 (9th Cir. 2013) (quoting U.S. Dep’t of Transp. v. Paralyzed 1 Veterans of Am., 477 U.S. 597, 605 (1986)). “Consequently, while those who affirmatively 2 choose to receive federal aid may be held liable under the [Rehabilitation Act], liability will ‘not 3 extend as far as those who benefit from it,’ because application of § 504 to all who benefit 4 economically from federal assistance would yield almost ‘limitless coverage.’” Castle, 731 F.3d 5 at 908–09 (quoting Paralyzed Veterans, 477 U.S. at 607–08). 6 “[T]he Rehabilitation Act covers only the recipients of federal financial assistance and not 7 the recipients of compensatory payments for services.” Logan v. United States, 103 F.3d 139, at 8 *2 (9th Cir. 1996) (citing Jacobson v. Delta Airlines, Inc., 742 F.2d 1202, 1209–10 (9th Cir. 9 1984) (explaining that “purely compensatory payments” do not constitute “Federal financial 10 assistance”)). However, “payments that include a subsidy constitute ‘Federal financial assistance’ 11 within the meaning of the Rehabilitation Act.” Jacobson, 742 F.2d at 1209. 12 Here, Plaintiffs allege in conclusory fashion that “[a]t all relevant times [Defendant OMO] 13 has received state and federal funds.” (Doc. No. 69 at ¶ 10.) Plaintiffs also allege in conclusory 14 fashion that Defendant OMO is “a recipient of federal financial assistance within the meaning of 15 29 U.S.C. Section 794(b), including federal Medicaid (Medi-Cal) funds and targeted case 16 management funds under Title XIX of the Social Security Act.” (Doc. No. ¶ 271.) This allegation 17 is not specific to Defendant OMO and lacks any supporting facts. Notably, this same allegation is 18 included verbatim in the sections of the SAC alleging Rehabilitation Act claims against 19 Defendants Alta and STEP. (Id. at ¶¶ 263, 279.) In addition, in opposing the pending motion, 20 Plaintiffs contend that Defendant OMO’s receipt of federal financial assistance can be inferred 21 from their allegations that Defendant Alta received state and federal funding and made payments 22 to their vendors, including Defendant OMO. (Doc. No. 137 at 9) (citing Doc. No. 68 at ¶¶ 26–27). 23 But Plaintiffs’ contention is simply not supported by applicable law. Critically, Plaintiffs do not 24 allege any facts to show the payments Defendant OMO received from Defendant Alta were 25 payments that included subsidies, rather than compensatory payments for services. Thus, 26 Plaintiffs have not sufficiently alleged the requisite fourth element of their Section 504 claim. See 27 Est. of Mejia v. Archambeault, No. 20-cv-2454-MMA-KSC, 2021 WL 4428990, at *9 (S.D. Cal. 28 Sept. 27, 2021) (“To constitute ‘federal financial assistance’ for the purposes of the Rehabilitation 1 Act, payments to [Defendant] CoreCivic must involve a subsidy,” and “Plaintiffs allege only that 2 ‘Defendant CoreCivic is a program that received federal financial assistance as defined in 29 3 U.S.C. § 794(b),” [] but provide no facts raising an inference that CoreCivic receives a subsidy.) 4 For these reasons, the court finds that Plaintiffs have failed to sufficiently allege facts to 5 satisfy two essential elements of their Section 504 claim. Accordingly, the court will grant 6 Defendant OMO’s motion to dismiss. 7 The only remaining question is whether the court should also grant Plaintiffs leave to file 8 a third amended complaint. The court recognizes that leave to amend should be granted “freely” 9 when justice so requires. Fed. R. Civ. P. 15(a). Further, the Ninth Circuit maintains a policy of 10 “extreme liberality generally in favoring amendments to pleadings.” Rosenberg Bros. & Co. v. 11 Arnold, 283 F.2d 406, 406 (9th Cir. 1960). Here, however, the Ninth Circuit has already weighed 12 in on this court’s decision to deny Plaintiffs an opportunity to file a third amended complaint and 13 found the court did not abuse its discretion in denying Plaintiffs further leave to amend. (Doc. No. 14 124 at 8.) In addition, in their opposition to Defendant OMO’s motion to dismiss, Plaintiffs do 15 not request that further leave to amend be granted nor proffer any additional allegations that they 16 would include in a third amended complaint. Finally, given that Plaintiffs allege in their SAC that 17 the reason Defendant OMO denied benefits to Plaintiff Aleta was in retaliation for Plaintiff 18 Areta’s advocacy, Plaintiffs would not be able to cure that pleading deficiency by alleging—in 19 good faith—that Plaintiff Aleta’s disability was the sole reason Defendant OMO denied her 20 benefits. Thus, granting further leave to amend would also be futile. Consequently, the court will 21 grant Defendant OMO’s motion to dismiss, without leave to amend, and will dismiss Defendant 22 OMO from this action. 23 CONCLUSION 24 For the reasons explained above: 25 1. Defendant On My Own Independent Living Services, Inc.’s motion to dismiss 26 Plaintiff Areta Guthrey’s Section 504 claim brought against it (Doc. No. 136) is 27 GRANTED, without leave to amend; 28 2. Defendant On My Own Independent Living Services, Inc.’s motion to dismiss 1 Plaintiff Aleta Guthrey’s Section 504 claim brought against it (Doc. No. 136) is 2 GRANTED, without leave to amend; 3 3. Because all claims brought against Defendant OMO have been dismissed without 4 leave to amend, Defendant On My Own Independent Living Services, Inc. is 5 DISMISSED from this action; and 6 4. The Clerk of the Court is directed to update the docket to reflect that Defendant On 7 My Own Independent Living Services, Inc. has been terminated from this action. 8 9 10 IT IS SO ORDERED. □ 11 | Dated: _ May 1, 2025 os Dena Coggins 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13