Kamath v. Itria Ventures LLC

• Court: District Court, N.D. California
• Decided: February 13, 2024
• Docket: 5:23-cv-05153
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RESHMA KAMATH, Case No. 23-cv-05153-SVK

8 Plaintiff, ORDER GRANTING MOTION TO 9 v. DISMISS WITH LEAVE TO AMEND

10 ITRIA VENTURES, LLC, et al., Re: Dkt. No. 9 11 Defendants.

12 Pro se Plaintiff Reshma Kamath agreed to sell her business’s receivables to Defendants in 13 exchange for funding for her business. As is common in asset sales, Plaintiff authorized 14 Defendants to file a financing statement recording Defendants’ potential interest in the 15 receivables, and Defendants conditioned their obligation to provide funding on a due-diligence 16 review of the business’s finances. Defendants accordingly filed a financing statement with the 17 California Secretary of State, and following their review of the business’s finances, offered 18 Plaintiff less money than contemplated by their agreement. 19 Frustrated by Defendants’ conduct, Plaintiff commenced this action. See Dkt. 1 (the 20 “Complaint”). Defendants filed a motion to dismiss. See Dkt. 9 (the “Motion”). Plaintiff filed an 21 opposition. See Dkt. 13 (the “Opposition”). Defendants filed a reply. See Dkt. 18. All necessary 22 Parties—Plaintiff and named Defendants—have consented to the jurisdiction of a magistrate 23 judge.1 See Dkts. 7, 11. The Court has determined that the Motion is suitable for resolution 24

25 1 In addition to named Defendants, Plaintiff also sued 10 Doe defendants. See Complaint ¶ 8. 26 These Doe defendants are not “parties” for purposes of assessing whether there is complete consent to magistrate-judge jurisdiction. See Williams v. King, 875 F.3d 500, 502-505 (9th Cir. 27 2017) (magistrate-judge jurisdiction vests only after all named parties, whether served or unserved, consent); RingCentral, Inc. v. Nextiva, Inc., No. 19-cv-02626-NC, 2020 WL 978667, at 1 without oral argument. See Civil Local Rule 7-1(b). After considering the Parties’ briefing, 2 relevant law and the record in this action, and for the reasons that follow, the Court GRANTS the 3 Motion and DISMISSES all of Plaintiff’s claims WITH LEAVE TO AMEND. 4 I. BACKGROUND 5 The following discussion of background facts is based on the allegations contained in the 6 Complaint, the truth of which the Court accepts for purposes of resolving the Motion. See Boquist 7 v. Courtney, 32 F.4th 764, 772 (9th Cir. 2022). Plaintiff practices law in California through the 8 Law Office of Reshma Kamath, a sole proprietorship. See Complaint ¶ 2. In May 2023, she 9 reached out to Defendant Biz2Credit, Inc. (“Biz2Credit”) about obtaining funding for her business 10 after viewing Biz2Credit’s advertisements on television. See id. ¶¶ 10-11. She subsequently 11 entered into a Receivables Sale Agreement with Defendant Itria Ventures, LLC (“Itria”), an 12 affiliate of Biz2Credit. See id. ¶¶ 5, 12; Dkt. 9-2 (the “RSA”). 13 Under the RSA, Plaintiff agreed to sell her business’s receivables to Itria in exchange for 14 about $50,000 in funding for her business. See RSA at 1; id. § 1. Plaintiff also agreed that Itria’s 15 “obligation to fund [her business wa]s subject to due diligence review of [Plaintiff] or [her] 16 business, at [Itria’s] sole discretion.” See id. § 1. Lastly, Plaintiff “authorize[d Itria] to make any 17 UCC filing and/or recording relating to th[e RSA] (including filing a UCC-1 financing statement) 18 at any time with any governmental agency and/or office (including the office of the Secretary of 19 State), including without limitation to perfect [Itria’s] rights and interests in the” receivables. See 20 id. § 9(a). 21 After Plaintiff and Itria executed the RSA, Plaintiff, at Biz2Credit’s request and as 22 contemplated under the RSA, shared certain financial information with Biz2Credit. See 23 Complaint ¶ 21. Biz2Credit then informed Plaintiff that it could offer her only $20,000 or $30,000 24 in funding and not the $50,000 referenced in the RSA. See id. ¶ 19. Plaintiff did not accept this 25 smaller amount of funding. See id. ¶ 20. 26 A few weeks passed by without any communication between the Parties until, on August 27 30, 2023, Plaintiff discovered “that a false UCC lien [had been] filed against her name and that of 1 Defendants, informed them that she declined to accept any funding from Itria or Biz2Credit and 2 requested that Defendants terminate the “UCC lien.” See id. ¶¶ 24-34. Defendants complied. See 3 id. ¶ 35; Dkt. 9-3 (the “UCC-3 Statement”). About a month later, Plaintiff commenced this action 4 to recover for Defendants’ failure to provide her with $50,000 in funding and Defendants’ filing of 5 the “UCC lien,” as well as Defendants’ alleged fraud and false advertising that led her to enter into 6 the RSA. See id. ¶¶ 47-147. 7 II. LEGAL STANDARD 8 Under Federal Rule of Civil Procedure 12(b)(6), a court must dismiss a complaint if it 9 “fail[s] to state a claim upon which relief can be granted.” To survive a Rule 12(b)(6) motion, a 10 plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. 11 Corp. v. Twombly, 550 U.S. 544, 570 (2007). This facial-plausibility standard requires a plaintiff 12 to allege facts resulting in “more than a sheer possibility that a defendant has acted unlawfully.” 13 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). 14 Where a plaintiff alleges fraud, Rule 9(b) requires that they “must state with particularity 15 the circumstances constituting fraud.” To satisfy this heightened pleading standard, a plaintiff 16 must allege facts “specific enough to [notify the defendants] of the particular misconduct 17 [constituting fraud] so that they can defend against the charge and not just deny that they have 18 done anything wrong.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (citation 19 omitted). Thus, claims sounding in fraud must allege “an account of the ‘time, place, and specific 20 content of the false representations as well as the identities of the parties to the 21 misrepresentations.’” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (citation omitted). 22 In other words, “[a]verments of fraud must be accompanied by ‘the who, what, when, where, and 23 how’ of the misconduct charged.” Kearns, 567 F.3d at 1124 (citation omitted). A plaintiff “must 24 [also] set forth what is false or misleading about a statement, and why it is false.” Ebeid ex rel. 25 United States v. Lungwitz, 616 F.3d 993, 998 (9th Cir. 2010) (citation omitted). 26 In ruling on a motion to dismiss, a court may consider only “the complaint, materials 27 incorporated into the complaint by reference, and matters [subject to] judicial notice.” UFCW 1 must also presume the truth of a plaintiff’s allegations and draw all reasonable inferences in their 2 favor. See Boquist, 32 F.4th at 773. However, a court need not accept as true “allegations that are 3 merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Khoja v. 4 Orexigen Therapeutics, Inc., 899 F.3d 988, 1008 (9th Cir. 2018) (citation omitted). 5 If a court grants a motion to dismiss, it may exercise discretion to grant or deny leave to 6 amend the complaint, and it “acts within its discretion to deny leave to amend when amendment 7 would be futile, when it would cause undue prejudice to the defendant, or when it is sought in bad 8 faith.” Nat’l Funding, Inc. v. Com. Credit Counseling Servs., Inc., 817 F. App’x 380, 383 (9th 9 Cir. 2020) (citation omitted). 10 III. DISCUSSION 11 Plaintiff asserts six causes of action in the complaint: 12  Breach of the RSA. 13  Fraud. 14  False and misleading advertising. 15  Breach of fiduciary duty. 16  Filing a fraudulent lien and UCC filing. 17  Defamation. 18 None of these claims survives scrutiny under Rules 12(b)(6) or 9(b). 19 A. Preliminary Matters 20 Before the Court begins its analysis of Plaintiff’s claims, it must address two preliminary 21 matters presented by the Parties: (1) Defendants’ request for judicial notice and (2) Plaintiff’s 22 requests to file a sur-reply. 23 /// 24 /// 25 /// 26 /// 27 /// 1. The Court Will Consider The RSA In Its Analysis 1 Defendants request that the Court consider in its evaluation of the Motion two documents 2 not appended to Plaintiff’s Complaint: the RSA and the UCC-3 Statement terminating 3 Defendants’ financing statement. See Dkt. 9-1. Although courts generally may not consider 4 materials outside a complaint in evaluating a motion to dismiss, “[t]here are two exceptions to this 5 rule: the incorporation-by-reference doctrine, and judicial notice under Federal Rule of Evidence 6 201.” Khoja, 899 F.3d at 998. The doctrine of incorporation by reference “permits [courts] to 7 take into account documents ‘whose contents are alleged in a complaint and whose authenticity no 8 party questions, but which are not physically attached to the [plaintiff’s] pleading.’” Knievel v. 9 ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (citation omitted). That is because courts are “not 10 required to accept as true conclusory allegations which are contradicted by documents referred to 11 in the complaint.” Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295-96 (9th Cir. 1998) 12 (citation omitted). “Once a document is deemed incorporated by reference, the entire document is 13 assumed to be true for purposes of a motion to dismiss, and both parties—and the Court—are free 14 to refer to any of its contents.” City of Roseville Emps.’ Ret. Sys. v. Sterling Fin. Corp., 963 F. 15 Supp. 2d 1092, 1107 (E.D. Wash. 2013) (citation omitted), aff’d, 691 F. App’x 393 (9th Cir. 16 2017); accord In re NVIDIA Corp. Sec. Litig., 768 F.3d 1046, 1058 n.10 (9th Cir. 2014). 17 Plaintiff incorporates into the Complaint by reference the RSA—Plaintiff expressly refers 18 to a contract governing the terms of Itria’s agreement to fund her business and brings a claim for 19 breach of that contract. See Complaint ¶¶ 12, 47-54; see United States v. Ritchie, 342 F.3d 903, 20 908 (9th Cir. 2003) (“Even if a document is not attached to a complaint, it may be incorporated by 21 reference into a complaint if the plaintiff refers extensively to the document or the document 22 forms the basis of the plaintiff’s claim.” (citations omitted)); see, e.g., Cohen v. CBR Sys., Inc., 23 625 F. Supp. 3d 997, 1000 & n.3 (N.D. Cal. 2022) (contract incorporated by reference into 24 complaint where contract “forms the basis” of breach of contract claim). Notably, Plaintiff does 25 not dispute the authenticity of the RSA and does not oppose Defendants’ request that the Court 26 consider the RSA. See, e.g., Doe v. FullStory, Inc., No. 23-cv-00059-WHO, 2024 WL 188101, at 27 *1 n.3 (N.D. Cal. Jan. 17, 2024) (judicially noticing document in light of plaintiff’s non- 1 opposition). 2 With respect to the UCC-3 Statement, however, the Court concludes that its resolution of 3 the Motion would not change even if it considered that document in its analysis. The Court 4 therefore declines to judicially notice that document or determine whether Plaintiff incorporated 5 that document into the Complaint by reference. See, e.g., Sylabs, Inc. v. Rose, No. 23-cv-00849- 6 SVK, 2023 WL 8813517, at *4 (N.D. Cal. Dec. 19, 2023) (denying as moot request for judicial 7 notice where court’s analysis “would not change even if it . . . considered the documents in 8 question”). 9 2. Plaintiff May Not File A Sur-Reply 10 After the Parties finished briefing the Motion, Plaintiff filed two requests to file a sur- 11 reply. See Dkts. 19, 21. In her first request, Plaintiff seeks leave to file a sur-reply to address 12 statements Defendants made in their reply brief that are allegedly baseless and privileged and to 13 address an exhibit that Defendants appended to their reply brief. See Dkt. 19 at 3-7. But the Court 14 does not base its decision in this Order on the statements in question or the exhibit appended to 15 Defendants’ reply brief. In her second request, Plaintiff seeks leave to file a sur-reply to 16 “elaborate further” on certain legal and factual issues. See Dkt. 21 at 2-4. But these legal and 17 factual issues do not concern any legal arguments or factual assertions raised for the first time in 18 Defendant’s reply brief. Thus, Plaintiff could have included such additional discussion in her 19 Opposition. The Court therefore DENIES Plaintiff’s requests to file a sur-reply. 20 B. Plaintiff Does Not Sufficiently Allege That Defendants Breached The RSA 21 New York law governs the RSA. See RSA § 15(a). Under New York law, “the elements 22 of a breach of contract claim [are] . . . the existence of a contract, the plaintiff’s performance 23 thereunder, the defendant’s breach thereof, and resulting damages.” Park v. Kim, 205 A.D.3d 429, 24 430 (N.Y. 1st Dep’t 2022) (citation omitted). Plaintiff alleges Defendants breached the RSA by 25 (1) failing to loan her $50,000 and (2) filing a “false lien.” See Complaint ¶¶ 48-51.2 But neither 26

27 2 Plaintiff does not explain why her breach-of-contract claim should apply to all Defendants even though only Plaintiff and Itria entered into the RSA. Because the Court concludes that Plaintiff 1 of these acts constitutes a breach of the RSA. 2 The RSA did not obligate Defendants to provide $50,000 in funding to Plaintiff, as it 3 expressly conditioned funding on a due-diligence review at Itria’s “sole discretion.” See RSA § 1. 4 Under these terms, Itria could decline to fund Plaintiff’s business $50,000 without violating the 5 RSA, and that is exactly what occurred.3 Likewise, the RSA expressly permitted Itria to file a 6 financing statement—what Plaintiff refers to throughout her Complaint as a “UCC lien.” See id. § 7 9(a). Any amended pleading will not survive scrutiny under Rule 12(b)(6) unless Plaintiff 8 identifies an obligation imposed on Defendants in the RSA with which Defendants failed to 9 comply. 10 C. Plaintiff Does Not Sufficiently Allege That Defendants Engaged In Fraud 11 “The elements of a cause of action for fraud in California are: ‘(a) misrepresentation (false 12 representation, concealment, or nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent 13 to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’” Kearns, 14 567 F.3d at 1126 (citation omitted). Plaintiff alleges that she “was fraudulently induced by 15 Defendants” and that she “justifiably relied on Defendants’ misrepresentations.” See Complaint 16 ¶¶ 56, 96. But she offers no allegations describing Defendants’ misrepresentations, knowledge or 17 intent and only conclusory allegations regarding her justifiable reliance and damages. Further, in 18 the section of her Complaint devoted to her fraud cause of action, she largely repeats her prior 19 recitation of facts without highlighting any specific facts supporting her claim of fraud. Compare 20 id. ¶¶ 10-45, with id. ¶¶ 57-95. This lack of detail falls well short of Rule 9(b)’s heightened 21 pleading standard. 22 /// 23 /// 24 /// 25

26 3 Curiously, Plaintiff argues that she “voided and nullified” the RSA by rejecting any funding from Defendants before Defendants offered her $20,000 or $30,000 in funding. See Opposition at 27 15; Complaint ¶¶ 18-19. If Plaintiff terminated the RSA before Defendants offered her less than $50,000 in funding, then Defendants necessarily did not breach the RSA in making that offer D. Plaintiff Does Not Sufficiently Allege That 1 Defendants Engaged In False And Misleading Advertising 2 Plaintiff alleges that Defendants violated three statutes in connection with their false and 3 misleading advertising: the Lanham Act, the California False Advertising Law (the “FAL”) and 4 the California Consumer Legal Remedies Act (the “CLRA”).4 A false-advertising claim under the 5 Lanham Act has five elements: 6 (1) a false statement of fact by the defendant in a commercial advertisement about 7 its own or another’s product; (2) the statement actually deceived or has the 8 tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant 9 caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct 10 diversion of sales from itself to defendant or by a lessening of the goodwill associated with its products. 11

12 Skydive Ariz. v. Quattrocchi, 673 F.3d 1105, 1110 (9th Cir. 2012) (citations omitted). The FAL 13 prohibits disseminating untrue or misleading statements in connection with selling goods and 14 services. See Cal. Bus. & Prof. Code § 17500. The CLRA prohibits engaging in certain 15 enumerated categories of “unfair methods of competition and unfair or deceptive acts or practices” 16 in connection with selling goods and services. See Cal. Civ. Code § 1770. 17 Plaintiff fails to state a claim for violations of any of these statutes. To support her claim, 18 she offers only conclusory allegations. See, e.g., Complaint ¶¶ 102 (“Defendants made several 19 false and misleading statements . . . .”), 103(“Defendants made a farce to gather bank account 20 information and personal data from Plaintiff . . . .”), 104 (“Defendants only intended to file a false 21 and fraudulent UCC filing [which] . . . was in the guise and pretense of Defendants lending to her . 22 . . .”), 105 (“Defendants misled that they would lend to law firms based on their false and 23 misleading advertising.”). She does not describe any advertisements or representations that she 24 25

26 4 Plaintiff also refers to Section 17536 of the California Business and Professions Code in the section of her Complaint devoted to her allegations of false and misleading advertising, but that 27 Section merely describes the penalties a court may assess in connection with violations of the FAL and does not itself create a cause of action. See People ex rel. Feuer v. Superior Ct. (Cahuenga’s 1 viewed, and she does not explain why these advertisements and representations were false or 2 misleading. Plaintiff must include such descriptions and explanations in her amended pleading. 3 E. Plaintiff Does Not Sufficiently Allege That Defendants Breached A Fiduciary Duty 4 “The elements of a cause of action for breach of fiduciary duty are: 1) the existence of a 5 fiduciary duty; 2) a breach of the fiduciary duty; and 3) resulting damage.” Pellegrini v. Weiss, 6 165 Cal. App. 4th 515, 524 (6th Dist. 2008) (citation omitted). Plaintiff’s breach-of-fiduciary- 7 duty claim fails because she does not sufficiently allege the existence of a fiduciary duty or a 8 breach of such duty. She claims Defendants owed her a fiduciary duty “[a]s a financial credit 9 institution” that “agreed to lend a sum of over $50,000 business loan for working capital” and that 10 Defendants breached that duty by failing to pay her $50,000 and filing a “falsified and fraudulent 11 lien.” See Complaint ¶¶ 110-13. But “[i]t is well-settled that parties to a contract do not by 12 necessary implication become fiduciaries.” McGehee v. Coe Newnes/McGehee ULC, No. 03-cv- 13 05145-MJJ, 2004 WL 2496127, at *4 (N.D. Cal. Nov. 4, 2004) (citation omitted). What elevates 14 an ordinary contractual relationship to a fiduciary relationship “is the duty of undivided loyalty the 15 fiduciary owes to its beneficiary, imposing on the fiduciary obligations far more stringent than 16 those required of ordinary contractors.” See Wolf v. Superior Ct., 107 Cal. App. 4th 25, 30 (2d 17 Dist. Div. 7 2003). 18 Nothing about Plaintiff’s contractual relationship with Itria—a mere buyer-seller 19 relationship—indicates that Defendants owed Plaintiff a duty of undivided loyalty. Indeed, 20 “California law is clear that an arm’s length commercial transaction does not give rise to a 21 fiduciary relationship.” Arena Rest. & Lounge LLC v. S. Glazer’s Wine & Spirits, LLC, No. 17- 22 cv-03805-LHK, 2018 WL 1805516, at *12 (N.D. Cal. Apr. 16, 2018) (citations omitted). Even if 23 Defendants owed Plaintiff a fiduciary duty, Plaintiff has not alleged a breach of that duty; as 24 discussed above, no breach of the RSA occurred. If Plaintiff believes in good faith that the 25 circumstances of her transaction with Defendants imposed a duty on Defendants beyond that 26 imposed in an ordinary commercial relationship, and if Plaintiff believes Defendants’ actions 27 constituted a breach of that duty, she must include allegations to that effect in her amended 1 pleading. 2 F. Plaintiff Does Not Sufficiently Allege That Defendants Filed A Fraudulent Lien Or UCC Filing 3 Plaintiff alleges that, by filing the financing statement, Defendants filed a fraudulent lien 4 and UCC filing in violation of Sections 9518 and 9625 of the California Commercial Code.5 As a 5 preliminary matter, Section 9518 does not create a cause of action and does not prohibit fraudulent 6 filings. Rather, that Section permits an individual to file an information statement indicating that 7 the individual believes a filed record “is inaccurate or was wrongfully filed.” See Cal. Com. Code 8 § 9518(a). In contrast, Section 9625 does create a cause of action for failing to comply with the 9 filing requirements of the Commercial Code, but Plaintiff does not identify which requirement 10 Defendants allegedly violated. Further, the Court does not agree that the financing statement 11 Defendants filed constituted a “fraudulent lien.” Plaintiff does not clearly explain why she 12 believes the filing was fraudulent, but it appears she believes Defendants filed the financing 13 statement without authority to do so. See Complaint ¶¶ 120-22 (describing “false lien” as a filing 14 “which has no legal basis, and/or which is based upon false, fictitious, or fraudulent statements 15 and/or representations,” noting that “[t]here was no monetary exchange between” the Parties and 16 claiming Defendants “maliciously filed” the lien). However, Defendants did act with authority— 17 in the RSA, Plaintiff agreed that Itria could file a financing statement. Thus, Plaintiff’s amended 18 pleading will not survive unless, in good faith, she bases an alleged violation of the California 19 Commercial Code on something other than Defendants’ filing of the financing statement. 20 G. Plaintiff Does Not Sufficiently Allege That Defendants Defamed Her 21 “The tort of defamation ‘involves (a) a publication that is (b) false, (c) defamatory, and (d) 22 unprivileged, and that (e) has a natural tendency to injure or that causes special damage.’” Taus v. 23 Loftus, 40 Cal. 4th 683, 720 (2007) (citation omitted). Plaintiff alleges that Defendants defamed 24 her by filing the financing statement. Specifically, she asserts that “Defendants’ UCC filing is 25 false, i.e., it is not true. It is bogus.” Complaint ¶ 143. But Plaintiff does not describe any 26

27 5 Plaintiff also refers to parallel provisions of the Delaware Commercial Code. Compare Cal. 1 language in the financing statement or explain why such language was untrue and instead offers 2 only a conclusory assertion of falsity. That will not do. To the extent Plaintiff claims that the 3 mere filing of the financing statement constitutes defamation because Defendants did not maintain 4 an actual or potential security interest in the underlying assets, the RSA disproves that assertion. 5 Again, Plaintiff agreed in the RSA that Itria could file a financing statement concerning its interest 6 in the receivables of Plaintiff’s business. See also Lyons v. Hall Ambulance Serv. Inc., 172 F.3d 7 57, 1999 WL 71366, at *1 (9th Cir. 1999) (substantial truth is a defense to defamation under 8 California law). A defamation claim will therefore not survive in an amended pleading unless, in 9 good faith, Plaintiff bases that claim on a publication other than the financing statement. 10 H. The Court Will Not Sanction Defendants’ Counsel 11 In her Opposition, Plaintiff requests that the Court sanction Defendants’ counsel under 12 Federal Rule of Civil Procedure 11 and award her over $10,000 in legal costs for three reasons: 13 (1) counsel failed to investigate Plaintiff’s claim before filing the Motion; (2) counsel baselessly 14 characterized her as “angry” and “indignant” in the Motion; and (3) counsel noticed the Motion 15 for a January 23, 2023 hearing date (i.e., a date that passed 11 months before Defendants filed the 16 Motion). See Opposition at 22-23. 17 As an initial matter, Plaintiff did not submit her request for sanctions in the form of a 18 standalone motion, which Rule 11 expressly requires. See Fed. R. Civ. P. 11(c)(2) (“A motion for 19 sanctions must be made separately from any other motion . . . .”); see also id. advisory 20 committee’s note to 1993 amendment (“The rule provides that requests for sanctions must be 21 made as a separate motion, i.e., not simply included as an additional prayer for relief contained in 22 another motion.”). Plaintiff also does not satisfy the Rule 11 standard for sanctions. Under Rule 23 11, a court may sanction an attorney for signing a filing containing, inter alia, “factual contentions 24 [that do not] have evidentiary support.” See id. 11(b)-(c).6 The Court does not find that the 25 6 Under Rule 11, a court may also sanction attorneys for signing filings that (1) they file for an 26 improper purpose, (2) contain frivolous legal contentions or (3) lack an evidentiary or reasonable basis for denying factual contentions. See Fed. R. Civ. P. 11(b)-(c). It does not appear that any of 27 these three bases for sanctions could apply to Plaintiff’s request for sanctions, and Plaintiff does ] assertions of fact in the Motion lack evidentiary support. 2 With respect to Reason (1), the Court disagrees that Defendants’ counsel did not 3 sufficiently investigate Plaintiff's claim prior to filing the Motion. Indeed, in this Order the Court 4 || grants the Motion. 5 With respect to Reason (2), Defendants’ descriptions of Plaintiff as “apparently 6 || indignant” and “apparently still angry” do not constitute “factual contentions” that may or may not 7 || lack evidentiary support. See Motion at 7. Rather, the Court views these statements as 8 descriptions of Plaintiff representing Defendants’ perceptions of Plaintiff's state of mind, which 9 || do not implicate the merits of this action or Defendants’ Motion. See also Fed. R. Civ. P. 11 10 || advisory committee’s note to 1993 amendment (“Rule 11 motions should not be made or 11 threatened for minor, inconsequential violations ... .”). 12 With respect to Reason (3), counsel obviously meant to notice the Motion for a hearing 13 scheduled for 2024 and not 2023. The error was harmless, and Plaintiffs attempt to make judicial 14 || hay (and recover legal costs) for the error is appropriately characterized as frivolous. 2 15 || Iv. CONCLUSION A 16 For the foregoing reasons, the Court GRANTS the Motion and DISMISSES all of i 17 || Plaintiffs clams WITH LEAVE TO AMEND. Plaintiff must file an amended complaint by Z 18 || March 5, 2024. The Court will dismiss this action if Plaintiff fails to file an amended complaint 19 || by the deadline. 20 SO ORDERED. 21 Dated: February 13, 2024 22 Sesto Yl SUSAN VAN KEULEN 24 United States Magistrate Judge 25 26 a which appears to be the only basis under Rule 11 that could apply to Plaintiff's request for 28 sanctions.