Tan v. Quick Box, LLC

• Court: District Court, S.D. California
• Decided: June 16, 2021
• Docket: 3:20-cv-01082
• Status: Unknown

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 LEANNE TAN, an individual, on behalf Case No.: 3:20-cv-01082-H-DEB of herself and all persons similarly 11 situated, ORDER: 12 Plaintiff, (1) SUBMITTING MOTION TO 13 v. DISMISS AND VACATING 14 HEARING; AND QUICK BOX, LLC, et al.,

15 (2) DENYING IN PART AND Defendants. 16 GRANTING IN PART THE LA PURA DEFENDANTS’ MOTION TO 17 DISMISS 18 [Doc. No. 151.] 19

20 On April 21, 2021, Defendants Konnektive LLC, Konnektive Corporation, 21 Konnektive Rewards, LLC, Matthew Martorano, and Kathryn Martorano (collectively, the 22 “Konnektive Defendants”) each filed crossclaims against Defendants Beautiful Skin and 23 Health SL, Inc., Coastal Beauty Care KV, Inc., Coastal Health & Body TML, Inc., Coastal 24 Skin Care DC, Inc., Complete Beautiful Skin DT, Inc., Complete Dietary Health DT, Inc., 25 DL Group, Inc., Diet and Beauty Enterprise JB, Inc., Dietary 8 Leaves TL, Inc., Dietary 26 Care Group MK, Inc., Dietary Health DL, Inc., Dietary Health Management SL, Inc., 27 Dietary Health Supplements ADN, Inc., Dietary Mind & Body AR, Inc., Dietary Pills TTH, 28 1 Inc., Dietary Supplements 8 Leaves TL, Inc., Dietary Supplements NS, Inc., EM Strength 2 & Wellness Products, Inc., EW Ideal Health Store, Inc., EW Radiant Skin Store, Inc., Fit 3 Body Forever KZ, Inc., Fit Lifestyle Enterprise JD, Inc., Fit and Slim Body Olo, Inc., 4 Fitness & Health Supplements PKL, Inc., Flawless Beauty Forever MC, Inc., Forever 5 Beautiful Products KZ, Inc., Forever Beauty and Balance JL, Inc., Health & Body Care 6 TN, Inc., Health & Skin Nutrition JLN, Inc., Health & Wellness Products EM, Inc., Health 7 Enterprise AR, Inc., Health Enterprise LT, Inc., Health Skin and Beauty MAYA, Inc., 8 Health Skin and Body JB, Inc., Health and Diet Products ISA, Inc., Health and Fitness 9 Lifestyle JL, Inc., Healthy Beautiful Skin JD, Inc., Healthy Body & Balance CD, Inc., 10 Healthy Fit Lifestyle DC, Inc., Healthy Leaves TL, Inc., Healthy Lifestyle Diet JL, Inc., 11 Healthy Skin Group TQH, Inc., Healthy Skin Lifestyle JB, Inc., Healthy Supplements 12 MAYA, Inc., Healthy and Slim TT, Inc., Ideal Skin & Health Care NA, Inc., Lasting 13 Fitness & Beauty JLN, Inc., PKL Everlasting Beauty, Inc., Radiant Skin & Body Shop 14 ATN, Inc., Remarkable Beauty TN, Inc., Remarkable Health Supply PO, Inc., Skin Beauty 15 & Health JN, Inc., Skin Beauty Products ISA, Inc., Skin Beauty and Balance CD, Inc., Skin 16 Care Enterprise TTH, Inc., Skin Care Group MK, Inc., Skin Products Rubio, Inc., Skin and 17 Beauty NS, Inc., Strength & Fitness Lifestyle LT, Inc., Total Fitness & Health MC, Inc., 18 Total Health Supply TUA, Inc., and Vibrant Face & Beauty Shop ATN, Inc. (collectively, 19 the “La Pura Defendants”).1 (Doc. Nos. 137–141.) On April 22, 2021, Defendants Chad 20 Biggins, James Martell, Stephen Adelé, and Quick Box, LLC (collectively, the “Quick Box 21 Defendants”) each filed crossclaims against the La Pura Defendants. (Doc. Nos. 145, 147– 22 23

24 1 The Konnektive Defendants and the Quick Box Defendants also included entities Beauty and Balance LV, Inc., Diet Focus MG, Inc., Select Skin Products MV, Inc., and Skin Beauty Enterprise MG, 25 Inc. as part of the “La Pura Defendants” in their crossclaims. (Doc. Nos. 137–141, 145, 147–49.) These entities have not yet appeared in the action, and counsel for the moving La Pura Defendants represents 26 they do not represent the entities. (Doc. No. 151 at 2 n.1.) On November 9, 2020, Plaintiff filed a motion for entry of default against them for their failure to respond to the original complaint, (Doc. No. 61), and 27 on November 12, 2020, the Clerk entered default against them, (Doc. No. 62). In this Order, references to 28 the “La Pura Defendants” exclude Beauty and Balance LV, Inc., Diet Focus MG, Inc., Select Skin 1 49.) On May 12, 2021, the La Pura Defendants filed a motion to dismiss the crossclaims 2 filed by the Konnektive Defendants and the Quick Box Defendants. (Doc. No. 151.) On 3 May 28, 2021, the Konnektive Defendants and the Quick Box Defendants filed their 4 oppositions to the La Pura Defendants’ motion to dismiss. (Doc. Nos. 154, 155.) On June 1, 5 2021, Plaintiff LeAnne Tan filed a notice of partial joinder of the La Pura Defendants’ 6 motion to dismiss. (Doc. No. 156.) On June 7, 2021, the La Pura Defendants filed their 7 reply. (Doc. No. 162.) On June 7, 2021, the Konnektive Defendants filed an objection to 8 Plaintiff’s notice of partial joinder, and the Quick Box Defendants joined the objection. 9 (Doc. Nos. 160, 161.) 10 A hearing on the matter is currently scheduled for June 21, 2021 at 10:30 a.m. The 11 Court, pursuant to its discretion under the Local Rule 7.1(d)(1), determines the matter is 12 appropriate for resolution without oral argument, submits the motion on the parties’ papers, 13 and vacates the hearing. For the following reasons, the Court denies in part and grants in 14 part the La Pura Defendants’ motion to dismiss. 15 Background 16 The factual background underlying this action has been previously laid out in detail 17 in the Court’s prior orders. (Doc. Nos. 88, 130.) Briefly, this lawsuit involves an alleged 18 fraudulent scheme in which Defendants allegedly use fake celebrity endorsements and 19 reviews and misrepresentations about price and limited availability to induce consumers 20 into purchasing beauty and skincare products. (Doc. No. 89 ¶¶ 8–12.) In the operative 21 complaint, Plaintiff’s First Amended Complaint (“FAC”), Plaintiff asserts five causes of 22 action: (1) violation of California’s Consumer Legal Remedies Act (“CLRA”); (2) 23 violation of California’s False Advertising Law (“FAL”); (3) violation of the unfair and 24 fraudulent prongs of California’s Unfair Competition Law (“UCL”); (4) violation of the 25 unlawful prong of California’s Unfair Competition Law; and (5) civil Racketeer Influenced 26 and Corrupt Organizations (“RICO”) Act violations. (Id. ¶¶ 363–908.) On April 7, 2021, 27 the Court denied in part and granted in part the La Pura Defendants, the Konnektive 28 Defendants, and the Quick Box Defendants’ motions to dismiss Plaintiff’s FAC. (Doc. No. 1 130.) Subsequently, the Konnektive Defendants and the Quick Box Defendants filed their 2 answers to Plaintiff’s FAC, as well as crossclaims pursuant to Federal Rule of Civil 3 Procedure 13(g)2 against the La Pura Defendants for (1) equitable indemnity, and 4 (2) common law contribution. (Doc. Nos. 137 ¶¶ 5–13; 145 ¶¶ 11–19.)3 The Konnektive 5 Defendants and the Quick Box Defendants deny the allegations set forth in Plaintiff’s FAC 6 but allege that should they be found jointly and severally liable for any judgment, they are 7 entitled to indemnity and/or contribution from the La Pura Defendants. (Doc. Nos. 137 ¶ 1; 8 145 ¶ 2.) By the present motion, the La Pura Defendants seek to dismiss the Konnektive 9 Defendants and the Quick Box Defendants’ crossclaims for failure to state a claim upon 10 which relief can be granted. (Doc. No. 151.) 11 Discussion 12 I. Legal Standards 13 Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and 14 plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 15 8(a)(2). A defendant may move to dismiss a complaint for failing to state a claim upon 16 which relief can be granted under Rule 12(b)(6). “Dismissal under Rule 12(b)(6) is 17 appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to 18 support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 19 1097, 1104 (9th Cir. 2008). To survive a 12(b)(6) motion, a plaintiff must plead “enough 20 facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 21 U.S. 544, 570 (2007). A claim is facially plausible when a plaintiff pleads “factual content 22 23

24 2 In their pleadings, the Konnektive Defendants and the Quick Box Defendants incorrectly state that their crossclaims are brought pursuant to Federal Rule of Civil Procedure 13(a), which provides for 25 pleading compulsory counterclaims. (Doc. Nos. 137 at 134; 145 at 130.) In their oppositions, the Konnektive Defendants and the Quick Box Defendants clarify that their crossclaims are brought pursuant 26 to Rule 13(g). (Doc. Nos. 154 at 8; 155 at 5, 9.)

27 3 The crossclaims filed by the Konnektive Defendants and the Quick Box Defendants are nearly 28 identical. (See Doc. Nos. 137–41, 145, 147–49.) As a result, throughout its Order the Court will cite to 1 that allows the court to draw the reasonable inference that the defendant is liable for the 2 misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 3 In reviewing the plausibility of a complaint, courts “accept factual allegations in the 4 complaint as true and construe the pleadings in the light most favorable to the nonmoving 5 party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008); 6 see Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 245 (9th 7 Cir. 1990) (“It is well-established that questions of fact cannot be resolved or determined 8 on a motion to dismiss for failure to state a claim upon which relief can be granted.”). “The 9 factual allegations of the complaint need only ‘plausibly suggest an entitlement to relief.’” 10 Starr v. Baca, 652 F.3d 1202, 1216–17 (9th Cir. 2011) (citing Iqbal, 556 U.S. at 681). 11 Nonetheless, courts do not “accept as true allegations that are merely conclusory, 12 unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 13 536 F.3d 1049, 1055 (9th Cir. 2008) (quoting Sprewell v. Golden State Warriors, 266 F.3d 14 979, 988 (9th Cir. 2001)). 15 II. Analysis 16 A. Whether the Konnektive Defendants and the Quick Box Defendants Have Stated Crossclaims for Equitable Indemnity 17 The La Pura Defendants argue that the Konnektive Defendants and the Quick Box 18 Defendants’ crossclaims for equitable indemnity should be dismissed; they assert there is 19 no right to equitable indemnity for claims based on intentional torts where the party denies 20 jointly participating in the tort. (Doc. No. 151 at 3.) They argue the Konnektive Defendants 21 and the Quick Box Defendants stated in their crossclaims that Plaintiff’s alleged injuries 22 were “caused wholly” by the acts of the La Pura Defendants, (Doc. No. 145 ¶ 2), and 23 contend this counts as a judicial admission that they are not joint intentional tortfeasors, 24 (Doc. No. 151 at 3–4.) 25 “The common law equitable indemnity doctrine relates to the allocation of loss 26 among multiple tortfeasors.” Fireman’s Fund Ins. Co. v. Haslam, 35 Cal. Rptr. 2d 135, 139 27 (Cal. Ct. App. 1994). The doctrine of equitable indemnity “permit[s] a concurrent 28 1 tortfeasor to obtain partial indemnity from other concurrent tortfeasors on a comparative 2 fault basis.” Underwriters at Lloyd’s Subscribing to Cover Note B1526MACAR1800089 3 v. Abaxis, Inc., 491 F. Supp. 3d 506, 516 (N.D. Cal. 2020) (quoting Am. Motorcycle Ass’n 4 v. Superior Ct., 578 P.2d 899, 912 (Cal. 1978)). “The doctrine applies only among 5 defendants who are jointly and severally liable to the plaintiff.” BFGC Architects Planners, 6 Inc. v. Forcum/Mackey Constr., Inc., 14 Cal. Rptr. 3d 721, 723 (Cal. Ct. App. 2004); see 7 also Miller v. Sec. Life of Denver Ins. Co., No. C 11-1175 PJH, 2012 WL 1029279, at *5 8 (N.D. Cal. Mar. 26, 2012) (“A claim for equitable indemnity requires a tort claim asserted 9 by the original plaintiff against the proposed indemnitee on which to base joint and several 10 liability, between the proposed indemnitor and indemnitee.”). Equitable indemnity need 11 not be premised on identical claims alleged against joint and several tortfeasors; rather, 12 “[t]he claims must relate to the same legal injury, but do not have to be identical claims.” 13 Employers Ins. of Wausau v. Musick, Peeler, & Garrett, 948 F. Supp. 942, 944 (S.D. Cal. 14 1995); see In re First All. Mortg. Co., 471 F.3d 977, 1005 (9th Cir. 2006) (noting that 15 “[j]oint tortfeasors may act in concert or independently of one another,” and the focus of 16 the inquiry is on “the interrelated nature of the harm done.”) (citations omitted). While 17 equitable indemnity is generally not available to intentional tortfeasors who would shift 18 responsibility onto negligent tortfeasors, California law “allow[s] for comparative 19 equitable indemnification among joint intentional tortfeasors.” In re First All. Mortg., 471 20 F.3d at 1004–05 (citing Baird v. Jones, 27 Cal. Rptr. 2d 232 (Cal. Ct. App. 1993)). 21 The Konnektive Defendants and the Quick Box Defendants have sufficiently stated 22 crossclaims for equitable indemnity against the La Pura Defendants. They have alleged 23 that the La Pura Defendants “are jointly and severally liable,” (Doc. Nos. 137 ¶ 6; 145 24 ¶ 12)4; that their liability is “vicarious, constructive, derivative, or secondary” of the La 25 26

4 The Konnektive Defendants and the Quick Box Defendants also note that Plaintiff’s FAC seeks 27 relief against all defendants jointly and severally, as Plaintiff’s prayer for relief is made against all 28 “Defendants” without differentiation. (Doc. No. 154 at 5 (citing Doc. No. 89 at 332–33).) 1 Pura Defendants’ liability, (Doc. Nos. 137 ¶ 7; 145 ¶ 13); that if they are found “liable, in 2 whole or in part,” they will be “exposed to liability and damages in excess of any actual 3 fault,” (Doc. Nos. 137 ¶ 8; 145 ¶ 14); and that they are entitled to “complete or partial 4 indemnity from [the La Pura Defendants], jointly and severally,” (Doc. Nos. 137 ¶ 9; 145 5 ¶ 15). To the extent the claims in the FAC constitute intentional torts,5 the La Pura 6 Defendants’ contention that the Konnektive Defendants and the Quick Box Defendants 7 have “judicially admitted” that they are not joint intentional tortfeasors is unpersuasive. 8 Under Federal Rule of Civil Procedure 8, “[a] party may state as many separate claims or 9 defenses as it has, regardless of consistency.” Fed. R. Civ. P. 8(d)(3). “‘In light of the liberal 10 pleading policy embodied in [Federal Rule of Civil Procedure 8(e)], . . . a pleading should 11 not be construed as an admission against another alternative or inconsistent pleading in the 12 same case,’ at least at the ‘initial pleading stage.’” Anderson v. Edward D. Jones & Co., 13 L.P., 990 F.3d 692, 700–01 (9th Cir. 2021) (quoting Molsbergen v. United States, 757 F.2d 14 1016, 1019 & n.4 (9th Cir. 1985)). At this stage in the proceeding, the Konnektive 15 Defendants and the Quick Box Defendants are permitted to entirely deny liability, and 16 direct blame toward the La Pura Defendants, while simultaneously maintaining 17 crossclaims for full or partial equitable indemnity against the La Pura Defendants should 18 they be found jointly and severally liable. Accordingly, the Court denies the La Pura 19 Defendants’ motion to dismiss the Konnektive Defendants and the Quick Box Defendants’ 20 crossclaims for equitable indemnity. 21

22 5 In her notice of partial joinder, Plaintiff notes that the Konnektive Defendants and the Quick Box Defendants have pled affirmative defenses involving comparative fault principles. (Doc. No. 156 at 1–3.) 23 Plaintiff seeks for the Court to hold that all of the state law torts pled in the FAC constitute intentional 24 torts, claiming that such a holding would preclude the subsequent application of those principles to Plaintiff’s claims under the caselaw. (Id.) The Konnektive Defendants and the Quick Box Defendants 25 object that Plaintiff’s joinder motion was untimely, as it was filed only thirteen days before the original hearing scheduled for the La Pura Defendants’ motion to dismiss. (Doc. Nos. 160, 161.) They also contend 26 that Plaintiff lacks standing to challenge their crossclaims. (Id.) These objections are valid. It is improper for Plaintiff to raise arguments regarding comparative fault principles by joining a motion that seeks to 27 dismiss crossclaims that do not involve her. Defendants’ affirmative defenses, and the potential 28 applicability of comparative fault principles, are not issues that are fully briefed or presently before the 1 B. Whether the Konnektive Defendants and the Quick Box Defendants Have Stated Crossclaims for Contribution 2 Next, the La Pura Defendants contend that the Konnektive Defendants and the Quick 3 Box Defendants’ crossclaims for contribution must be dismissed because the Konnektive 4 Defendants and the Quick Box Defendants have not alleged the existence of a joint 5 obligation between or money judgment jointly rendered against them and the La Pura 6 Defendants, purportedly making the crossclaims premature. (Doc. No. 151 at 5.)6 The 7 Konnektive Defendants and the Quick Box Defendants contend that their contribution 8 crossclaim is properly brought in the same proceeding that will determine the parties’ 9 liabilities, if any. (Doc. Nos. 154 at 7–9; 155 at 8–9.) The Court agrees with the Konnektive 10 Defendants and the Quick Box Defendants. 11 Under Rule 13(g), a crossclaim for indemnification or contribution need not be 12 mature at the time of pleading. See Wada v. Aloha King, LLC, 154 F. Supp. 3d 981, 1003 13 (D. Haw. 2015); U.S. Bank, N.A. for Certificateholders of LXS 2007-16N Tr. v. Mar-A- 14 Lago Homeowners Ass’n, No. 2:16-cv-00565-GMN-NJK, 2018 WL 3865375, at *4 (D. 15 Nev. Aug. 13, 2018). Rather, “[a] crossclaim can be contingent upon the ultimate 16 adjudication of the crossclaimant’s liability to plaintiff.” Wada, 154 F. Supp. 3d at 1003 17 (citing Glens Falls Indem. Co. v. U.S. ex rel. and to use of Westinghouse Elec. Supply Co., 18 229 F.2d 370, 372–74 (9th Cir. 1955) (“Rules 13 and 14 . . . authorize the assertion of 19 crossclaims and third-party claims contingent upon ultimate adjudication of claimant’s 20 liability to plaintiff.”)); see State Comp. Ins. Fund v. Drobot, No. SACV 13-0956 AG 21 (CWx), 2015 WL 12712320, at *2 (C.D. Cal. Dec. 18, 2015) (“Rule 13(g) explicitly allows 22 Defendants to bring contingent claims against their co-defendants.”). The Tenth Circuit 23 has explained: 24 25

26 6 The La Pura Defendants also note that the Konnektive Defendants and the Quick Box Defendants’ second crossclaim is for “common law” contribution and argue that California does not recognize a 27 common law claim for contribution. (Doc. No. 151 at 4–5.) But as the La Pura Defendants acknowledge, 28 California Code of Civil Procedure §§ 875 and 1432 do provide for statutory rights of contribution, and 1 [Rule 13(g)] empowers a party litigant to plead as a crossclaim any claim against a co-party arising out of the transaction or occurrence or relating to 2 the property that is the subject matter of the original action; and it expressly 3 authorizes the inclusion in such crossclaim a claim that the party against whom it is asserted “is or may be liable to the crossclaimant for all or part of 4 a claim asserted in the action against the crossclaimant.” The rule is not 5 limited by text or purpose to definite or matured claims or causes of action. It is broad enough to include a claim of a contingent nature, the ultimate 6 outcome of which depends upon the determination of other features or issues 7 in the case. 8 Providential Dev. Co. v. U.S. Steel Co., 236 F.2d 277, 281 (10th Cir. 1956); see also Am. 9 Rivers, Inc. v. Nooa Fisheries, No. CV-04-0061-RE, 2006 WL 435580, at *1 (D. Or. Feb. 10 21, 2006) (“‘Rule 13(g) was intended to promote the expeditious and economical 11 adjudication of an entire subject matter arising from the same set of facts within a single 12 action.’”). Thus, although the Konnektive Defendants and the Quick Box Defendants’ 13 crossclaims are contingent upon the ultimate adjudication of the parties’ liabilities to 14 Plaintiff in this action, that fact is not a proper basis for dismissal of a crossclaim. See 15 Glens Falls Indem., 229 F.2d at 372–74; Wada, 154 F. Supp. 3d at 1003; Drobot, 2015 WL 16 12712320, at *2. 17 The La Pura Defendants argue that California courts have held that a claim for 18 contribution may not be asserted absent the existence of a joint obligation or money 19 judgment. (Doc. No. 162 at 4.) But the Ninth Circuit has clearly held that “a claim for 20 equitable indemnity or contribution can be properly made in the same proceeding that 21 initially determines liability.” Hoffman v. May, 313 Fed. Appx. 955, 958 (9th Cir. 2009) 22 (affirming dismissal of contribution claim only because “liability was previously 23 determined in a separate arbitration proceeding” and “[t]here [was] no such judgment 24 against Salke”); see also Kormylo v. Forever Resorts, LLC, No. 13-cv-511, 2015 WL 25 106379, at *4 (S.D. Cal. Jan. 6, 2015) (holding that a defendant may seek contribution from 26 a third-party “even though the defendant’s claim is purely inchoate—i.e., has not yet 27 accrued under the governing substantive law”); NuCal Foods, Inc. v. Quality Egg LLC, 28 918 F. Supp. 2d 1037, 1042 (E.D. Cal. 2013) (noting that “California courts in fact 1 countenance cross-complaints containing such claims when the underlying action is still 2 pending”); Wells Fargo Bank, N.A. v. Renz, No. C 08-02561-SBA, 2011 WL 97649, at 3 *11 (N.D. Cal. Jan. 12, 2011) (denying motion to dismiss crossclaims for indemnity, 4 contribution, and declaratory relief because “they are predicated upon a finding that [the 5 crossclaimant] is liable to Plaintiff under Plaintiff’s claims”). The cases cited by the La 6 Pura Defendants do not involve crossclaims brought under Rule 13(g) or are otherwise 7 distinguishable. (Doc. Nos. 151 at 4–5; 162 at 4–5.)7 The Konnektive Defendants and the 8 Quick Box Defendants have sufficiently alleged that should a judgment be rendered jointly 9 against them and the La Pura Defendants in this proceeding, they allegedly will be entitled 10 to contribution from the La Pura Defendants for a portion of that judgment. (Doc. Nos. 137 11 ¶¶ 10–13; 145 ¶¶ 16–19.) In sum, the Court denies the La Pura Defendants’ motion to 12 dismiss the Konnektive Defendants and the Quick Box Defendants’ crossclaims for 13 contribution. 14 C. Whether Indemnity or Contribution Claims Are Available Under RICO 15 Finally, the La Pura Defendants argue that equitable indemnity and contribution are 16 not available to defendants in civil RICO actions. (Doc. No. 151 at 5.) “A defendant held 17 liable under a federal statute has a right to contribution or indemnification from another 18 who has also violated the statute only if such right arises (1) through the affirmative 19 creation of a right of action by Congress, either expressly or implicitly, or (2) via the power 20 of the courts to formulate common law.” Mortgs., Inc. v. U.S. Dist. Ct. for Dist. of Nev. 21 (Las Vegas), 934 F.2d 209, 212 (9th Cir. 1991) (citing Tex. Indus., Inc. v. Radcliff 22 Materials, 451 U.S. 630, 638 (1981)). The parties do not dispute that Congress has not 23 created an express right to contribution or indemnification for RICO claims. The 24 Konnektive Defendants and the Quick Box Defendants have not provided the Court with 25

26 7 For example, in Wimbeldon Fund, SPC (Class TT) v. Graybox, LLC, in dismissing the claim for contribution, the district court found that there was no joint judgment between the third-party plaintiffs 27 and defendants, and significantly, that there never could be a judgment because of a settlement and the 28 fact that the original lawsuit had been dismissed. No. 2:15-cv-6633-CAS (SSx), 2019 WL 2413023, at *8 1 any authority for their contention that indemnity and contribution claims are available 2 under RICO. The case they cite, Regence Group v. Tig Specialty Insurance Company, 3 involved contractual indemnification pursuant to an insurance policy, not whether RICO 4 provides a right to contribution or indemnity. 903 F. Supp. 2d 1152, 1161 (D. Or. 2012). 5 On the other hand, there are ample federal court decisions holding or otherwise 6 acknowledging that contribution and indemnification are not available under RICO. 7 Dwyer v. Bicoy, No. SACV 09-0064 -JVS(RNBx), 2009 WL 10698198, at *2 (C.D. Cal. 8 Dec. 16, 2009) (“Indemnity is unavailable for a RICO claim.”); Daniels v. Bursey, 329 F. 9 Supp. 2d 975, 982 (N.D. Ill. 2004) (“[D]efendants in civil RICO actions are not entitled to 10 seek either contribution or indemnification from third parties.”); Friedman v. Hartmann, 11 787 F. Supp. 411, 415 (S.D.N.Y. 1992) (“The text of the RICO statute does not explicitly 12 permit defendants in civil RICO actions to obtain either contribution or indemnity from 13 third parties, and courts have consistently held that no such right exists.”); Nelson v. 14 Bennett, 662 F. Supp. 1324, 1339, n.23 (E.D. Cal. 1987) (“[N]o rights of contribution are 15 available to defendants under RICO.”); Seminole Elec. Co-op., Inc. v. Tanner, 635 F. Supp. 16 582, 584 (M.D. Fla. 1986) (finding there is no right to contribution or indemnification in a 17 civil RICO action, and that the court is without the authority to fashion a federal common 18 law of such rights); cf. Riverhead Sav. Bank v. Nat’l Mortg. Equity Corp., 893 F.2d 1109, 19 1117 (9th Cir. 1990) (noting that while “courts have held that there is no right to 20 indemnification or contribution . . . neither the 9th Circuit nor the Supreme Court have 21 disposed of the issue” and thus refusing to impose Rule 11 sanctions for arguing to the 22 contrary). To the extent that the Konnektive Defendants and the Quick Box Defendants are 23 asking this Court to break with this extensive line of cases and hold that contribution and 24 indemnification claims are allowed under RICO, the Court rejects this request. In sum, the 25 Court grants the La Pura Defendants’ motion to dismiss the Konnektive Defendants and 26 the Quick Box Defendants’ crossclaims to the extent that they seek contribution or 27 indemnification for any damages awarded to Plaintiff and/or the putative class under the 28 FAC’s fifth cause of action. 1 In the alternative, the Konnektive Defendants and the Quick Box Defendants ask for 2 || leave to amend their crossclaims to include allegations pertaining to a theory of contractual 3 |}indemnification for Plaintiff's RICO claims against the La Pura Defendants. (Doc. Nos. 4 || 154 at 15—17; 155 at 14-17.) Under Rule 15(a), leave to amend “shall be freely given when 5 ||justice so requires.” Fed. R. Civ. P. 15(a). “But a district court need not grant leave to 6 |}amend where the amendment: (1) prejudices the opposing party; (2) is sought in bad faith; 7 ||(3) produces an undue delay in litigation; or (4) is futile.” AmerisourceBergen Corp. v. 8 || Dialysist W., Inc., 465 F.3d 946, 951 (9th Cir. 2006) (citing Bowles v. Reade, 198 F.3d 9 758 (9th Cir. 1999). The Court has reviewed Konnektive Defendants and the Quick 10 Defendants’ request and concludes that amendment cannot cure the deficiencies in 11 crossclaims. Accordingly, the Court denies the Konnektive Defendants and the Quick 12 || Box Defendants’ request for leave to amend. 13 Conclusion 14 For the reasons stated above, the Court: (1) denies the La Pura Defendants’ motion 15 ||/to dismiss the Konnektive Defendants and the Quick Box Defendants’ crossclaims for 16 || equitable indemnity and contribution; and (2) grants the La Pura Defendants’ motion to 17 || dismiss the Konnektive Defendants and the Quick Box Defendants’ crossclaims to the 18 |} extent that they seek contribution or indemnification under RICO. 19 IT IS SO ORDERED. 20 || DATED: June 16, 2021 -

MARILYN N. HUFF, Distric ge UNITED STATES DISTRICT COURT 23 24 25 26 27 28