Valentina Riffel v. University of Southern California

• Court: District Court, N.D. California
• Decided: August 17, 2021
• Docket: 5:19-cv-08466
• Status: Unknown

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 SAN JOSE DIVISION 9 VALENTINA RIFFEL, 10 Case No. 5:19-cv-08466-EJD Plaintiff, 11 ORDER DISMISSING WITHOUT v. LEAVE TO AMEND PLAINTIFF’S 12 COMPLAINT FOR LACK OF UNIVERSITY OF SOUTHERN STANDING 13 CALIFORNIA, et al., Re: Dkt. No. 55 14 Defendants.

15 This case stems from the “Varsity Blues” college admissions scandal involving William 16 “Rick” Singer and parents of college applicants conspiring to bribe athletic coaches and 17 administrators to get their children admitted to various universities through fraud. Defendant 18 University of Southern California (“USC”) has filed a motion to dismiss pursuant to Rule 12(b)(1) 19 of the Federal Rules of Civil Procedure. The Court took this motion under submission without 20 oral argument pursuant to Civil Local Rule 7-1(b). For reasons stated below, the Court holds that 21 Plaintiff Valentina Riffel (“Riffel”) lacks standing to pursue her claims. The Court thus lacks 22 jurisdiction and must DISMISS Riffel’s claims. 23 I. BACKGROUND 24 A. Factual Background 25 The Court previously detailed the facts related to the “Varsity Blues” college admissions 26 scandal in Tamboura v. Singer; Bendis v. Singer (“Tamboura”), No. 5:19-cv-03411-EJD, 2020 27 Case No.: 5:19-cv-08466-EJD 1 WL 2793371 (N.D. Cal. May 29, 2020).1 Therefore, the Court reviews allegations relevant to 2 Riffel’s action and USC’s motion to dismiss below. 3 Riffel asserts claims on behalf of herself and all individuals “who paid, or reimbursed the 4 payment of, an admission application fee” to USC. First Amended Complaint (“FAC”) ¶ 1, Dkt. 5 No. 27. Riffel claims that through its website, USC represented that it would consider prospective 6 applicants for admission to the university based on their individual merits. Id. ¶ 22. Specifically, 7 she focuses on the following statement (the “Representation”) found on the admissions page of 8 USC’s website:

9 “Like many highly selective universities, we conduct a comprehensive, holistic review of your application to consider 10 academic and personal characteristics. We will review your performance in school, the rigor of your program, writing skills and 11 test scores. We also consider personal qualities, as revealed in community involvement, leadership and achievements.” 12 13 Id. According to Riffel, USC made the Representation though its website “with the intent to 14 induce would-be applicants . . . to rely upon the Representation and pay, or reimburse, an 15 application fee in connection with an application for admission to USC.” Id. ¶ 24. But she 16 contends the Representation was untrue because USC failed to inform prospective applicants that 17 in exchange for payment, USC would designate applicants as student-athlete recruits and “thereby 18 afford them a higher likelihood of admission than applicants who are not designated as student- 19 athlete recruits.” Id. ¶ 23. Relatedly, Riffel alleges she was not aware that an applicant could pay 20 money to have her application considered under the “more lenient standard.” Id. ¶ 27. Riffel 21 alleges she relied upon the truth of the Representation and that “but for the Representation” she 22 “would not have paid or reimbursed the payment of[] an application fee.” Id. ¶¶ 24, 39. Finally, 23 she contends that as a result of their reliance, she along with each member of the putative class 24

25 1 Although Riffel’s complaint does not reference “Varsity Blues” or the college admissions 26 scandal generally, the Court finds that Riffel’s allegations relate directly to William “Rick” Singer’s scheme to conspire with the parents of college applicants to bribe officials to have their 27 children admitted to various universities through fraud. Case No.: 5:19-cv-08466-EJD 1 suffered a loss of property in the form of fees the class members paid or reimbursed in connection 2 with an application for admission to USC. See id. ¶¶ 24, 29. 3 B. Procedural Background 4 On May 29, 2020, the Court dismissed the Bendis and Tamboura actions after the plaintiffs 5 were unable to plead an adequate cognizable injury-in-fact, and therefore, lacked standing to 6 pursue their claims. Tamboura, 2020 WL 2793371, at *4. Following the dismissal, the Court held 7 a status conference to see how Riffel and USC wanted to proceed in light of the Court’s ruling. 8 After the parties were unable to reach a resolution, USC filed a motion to dismiss Riffel’s First 9 Amended Complaint for lack of standing. (“Mot.”), Dkt. No. 55. In response, Riffel filed an 10 opposition to the motion to dismiss (“Opp’n”), see Dkt. No. 58, to which USC filed a reply 11 (“Reply iso Mot.”). See Dkt. No. 59. 12 II. LEGAL STANDARD 13 Federal courts are courts of limited jurisdiction; they are authorized only to exercise 14 jurisdiction pursuant to Article III of the U.S. Constitution and federal laws enacted thereunder. 15 Gregory Vill. Partners, L.P. v. Chevron U.S.A., Inc., 805 F. Supp. 2d 888, 896 (N.D. Cal. 2011); 16 see also Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2011) (“[F]ederal courts 17 have an independent obligation to ensure that they do not exceed the scope of their jurisdiction, 18 and therefore they must raise and decide jurisdictional questions that the parties either overlook or 19 elect not to press.”). Hence, an Article III federal court must ask whether a plaintiff has suffered 20 sufficient injury to satisfy the “case or controversy” requirement of Article III of the U.S. 21 Constitution. In re LinkedIn User Priv. Litig., 932 F. Supp. 2d 1089, 1092 (N.D. Cal. 2013). 22 To satisfy Article III standing, a plaintiff must allege: (1) an injury-in-fact that is concrete 23 and particularized, as well as actual or imminent; (2) that the injury is fairly traceable to the 24 challenged action of the defendant; and (3) that it is likely (not merely speculative) that injury will 25 be redressed by a favorable decision. Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), 26 Inc., 528 U.S. 167, 180–81 (2000); Lujan v. Defs. of Wildlife, 504 U.S. 555, 561–62 (1992). To 27 Case No.: 5:19-cv-08466-EJD 1 establish an injury-in-fact, a plaintiff must show that he or she suffered “an invasion of a legally 2 protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or 3 hypothetical.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016) (quotation marks and citation 4 omitted). To establish a traceable injury, there must be “a causal connection between the injury 5 and the conduct complained of—the injury has to be fairly traceable to the challenged action of the 6 defendant, and not the result of the independent action of some third party not before the court.” 7 Lujan, 504 U.S. at 560 (quotation marks and citation omitted) (alteration omitted). It must also be 8 “likely” as opposed to merely “speculative” that the injury will be “redressed by a favorable 9 decision.” Id. at 561 (quotation marks and citation omitted). And if a plaintiff is seeking 10 injunctive or declaratory relief, the plaintiff must demonstrate “a sufficient likelihood that [they] 11 will again be wronged in a similar way.” City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983). 12 If a plaintiff cannot allege Article III standing, then the federal court lacks jurisdiction over 13 the case and must dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(1). 14 Spencer Enterprises, Inc. v. United States, 345 F.3d 683, 687 (9th Cir. 2003); Steel Co. v. Citizens 15 for a Better Env’t, 523 U.S. 83, 101, 109-10 (1998). Indeed, “[a]t the pleading stage, the plaintiff 16 must clearly allege facts demonstrating each element.” In re Apple Processor Litig., 366 F. Supp. 17 3d 1103, 1107 (N.D. Cal. 2019) (quoting Spokeo, 136 S. Ct. at 1547). “When ‘[s]peculative 18 inferences’ are necessary . . . to establish either injury or the connection between the alleged injury 19 and the act challenged, standing will not be found.” Johnson v. Weinberger, 851 F.2d 233, 235 20 (9th Cir. 1988) (quoting Simon v. E. Kentucky Welfare Rts. Org., 426 U.S. 26, 45 (1976)). 21 III. REQUEST FOR JUDICIAL NOTICE 22 Under Federal Rule of Evidence 201, the Court may take judicial notice of facts that are 23 not subject to reasonable dispute because they are either “generally known” or “can be accurately 24 and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. 25 Evid. 201(b). Although the Court may take judicial notice of the existence of court documents, 26 the Court may not take judicial notice of disputed facts within those records. Lee v. City of Los 27 Case No.: 5:19-cv-08466-EJD 1 Angeles, 250 F.3d 668, 689-90 (9th Cir. 2001) (“[W]hen a court takes judicial notice of another 2 court’s opinion, it may do so ‘not for the truth of the facts recited therein, but for the existence of 3 the opinion, which is not subject to reasonable dispute over its authenticity.’”) (citation omitted). 4 Further, the Court may deny a request to judicially notice facts which are not relevant to the 5 disposition of the issues before the Court. See Ruiz v. City of Santa Maria, 160 F.3d 543, 548 n. 6 13 (9th Cir. 1998). 7 Without opposition from Plaintiff, USC requests judicial notice over three exhibits: (A) 8 this Court’s order dismissing amended complaints for lack of standing in related actions Bendis, et 9 al. v. Singer, et al., Case No. 5:19-cv-01405-EJD and Tamboura et al. v. Singer et al., Case No. 10 5:19-cv-03411, (B) the operative complaint in Bendis, et al. v. Singer, et al., Case No. 5:19-cv- 11 01405-EJD, and (C) the plea agreement in United States v. William Rick Singer, Case No. 19-cr- 12 10078 (Dkt. No. 2), filed in the United States District Court for the District of Massachusetts on 13 March 5, 2019. Request for Judicial Notice (“RJN”), Exs. A-C, Dkt. No. 56. The Court will 14 GRANT USC’s request for judicial notice. In the case of Exhibits B and C, both are judicially 15 noticeable because the Court may take judicial notice of “court filings and other matters of public 16 record.” See Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n. 6 (9th Cir. 2006). 17 A court may also take judicial notice of its own records in other cases. United States v. Wilson, 18 631 F.2d 118, 119 (9th Cir. 1980). Accordingly, the Court will also take judicial notice of Exhibit 19 A. 20 IV. DISCUSSION 21 USC contends that Riffel’s alleged harm is identical to the economic loss harm plead in 22 Tamboura and Bendis, which the Court found was insufficient to establish Article III standing. In 23 Tamboura and Bendis, the argument raised by the plaintiffs was compared to a “bargain-for- 24 exchange” scenario. Tamboura, 2020 WL 2793371, at * 3. The plaintiffs stated that when 25 students applied for admission to the defendant universities, they applied based on the 26 universities’ alleged misrepresentations and omissions about the equity of their merits-based 27 Case No.: 5:19-cv-08466-EJD 1 admissions process. They argued that the admissions process was neither fair nor objective 2 because of the universities’ involvement in the college admissions scandal. The plaintiffs also 3 believed they had suffered the economic harm of not receiving what they agreed to pay for. Id. 4 Despite the parallels, Riffel does not attempt to differentiate her alleged harm from the economic 5 harm at issue in Tamboura and Bendis. See generally Opp’n. But given the similarities between 6 the actions, the Court finds no reason to conclude that Riffel has plead a concrete, particularized 7 economic injury sufficient to establish Article III standing. 8 In Tamboura and Bendis, the alleged economic harm could not form the basis for Article 9 III standing. Like Riffel, the plaintiffs in Tamboura and Bendis did not allege that they applied 10 for, were being considered for, or were denied an athletic spot. See Tamboura, 2020 WL 11 2793371, at *3. Therefore, they could not show they were “particularly” affected by the college 12 admissions scandal. Id. (emphasis in original). This Court explained that an injury-in-fact cannot 13 just be based on some morally irreprehensible act. Id. (discussing Allen v. Wright, 468 U.S. 737, 14 739-40 (1984), abrogated on other grounds by Lexmark Int’l, Inc. v. Static Control Components, 15 Inc., 572 U.S. 118 (2014)). Some link between the bad act and the plaintiff is needed. Id. 16 Although the Bendis and Tamboura plaintiffs argued that they had plead an injury-in-fact because 17 they alleged they would not have applied to the universities had they known about the ongoing 18 fraud, the Court explained that this was “no different than the type of generalized grievance that 19 courts have routinely rejected.” Id. at *4 (citing Birdsong v, Apple, Inc., 590 F.3d 955, 960-61 20 (9th Cir. 2009) (“At most, the plaintiffs plead a potential risk of hearing loss not to themselves, but 21 to other unidentified iPod users who might choose to use their iPods in an unsafe manner. The risk 22 of injury the plaintiffs allege is not concrete and particularized as to themselves.”); Lujan, 504 23 U.S. at 563–67 (holding that the plaintiffs fear of harm to endangered species, without some 24 showing of particular injury, was insufficient)). 25 Here, Riffel’s alleged economic harm is foundationally no different from the economic 26 harm alleged in Tamboura and Bendis. Riffel contends that had she been aware that USC had a 27 Case No.: 5:19-cv-08466-EJD 1 system by which prospective applicants could pay a sum certain of money to receive preferential 2 treatment in USC’s admissions process, she would never have applied or paid USC’s application 3 fee for admission to the university. Opp’n at 5-7. She argues that she has plead an injury-in-fact 4 because USC, through its “advertising,” misled and failed to disclose material information “which 5 in turn caused [Riffel] to rely on the misrepresentation or material omissions which resulted in 6 [Riffel] spending her money and submitting an application for admission.” Opp’n at 5-6 (citing 7 Pirozzi v. Apple Inc., 913 F. Supp. 2d 840, 847 (N.D. Cal. 2012)). Like the plaintiffs in Tamboura 8 and Bendis, Riffel does not allege that she sought admission as a student athlete or that the college 9 admissions scandal prevented her application from being evaluated on its merits. Thus, without 10 some link between her application and USC’s alleged bad acts, Riffel has simply plead the type of 11 generalized grievance routinely disallowed by courts and already rejected in Tamboura and 12 Bendis. 13 Riffel’s reliance on cases such as Maya v. Centex Corp., 658 F.3d 1060 (9th Cir. 2011) and 14 Chavez v. Blue Sky Nat. Beverage Co., 340 F. App’x. 359 (9th Cir. 2009) to support her economic 15 harm argument is also misplaced. In each of those cases, unlike in the present matter, the 16 plaintiffs alleged individual economic harm directly created by the defendants’ representations 17 that the property at issue had features or value that the property ultimately did not have. And 18 therefore, the plaintiffs did not receive the benefit of their bargain. See Maya, 658 F.3d at 1069 19 (explaining that plaintiffs’ “claim that, as a result of defendants’ actions, they paid more for their 20 homes than the homes were worth at the time of sale,” and “claim that they would not have 21 purchased their homes had defendants made the disclosures allegedly required by law” constituted 22 “a quintessential injury-in-fact”); Chavez, 340 F. App’x. at 360-61 (finding that plaintiff “lost the 23 purchase price” of the beverage because “he did not know the geographic origin of the products” 24 and consequently “lost money . . . in that he did not receive what he had paid for.”). 25 Riffel fails to allege how the college admissions scandal affected her personally or how the 26 alleged misrepresentations and omissions caused her to not receive what she bargained for when 27 Case No.: 5:19-cv-08466-EJD 1 she paid her admissions application fee. She has not plausibly alleged that she was “deprived of 2 an agreed-upon benefit” which USC represented but did not deliver. McGee v. S-L Snacks Nat., 3 982 F.3d 700, 705–06 (9th Cir. 2020) (quoting Birdsong, 590 F.3d at 961). Instead, Riffel asserts 4 only the conclusory allegation that she “would not have paid, or reimbursed the payment of, an 5 application fee.” FAC ¶ 39. Without more, the Court must reject Riffel’s economic harm 6 argument. See In re Apple Processor Litigation, 366 F. Supp. 3d at 1110.2 7 In sum, Riffel has failed to establish that she suffered from an injury-in-fact.3 Because 8 Riffel cannot show a judicially cognizable harm, she lacks standing and the Court therefore 9 GRANTS USC’s motion to dismiss on jurisdictional grounds. 10 V. LEAVE TO AMEND 11 In determining whether leave to amend is appropriate, the district court considers “the 12 presence of any of four factors: bad faith, undue delay, prejudice to the opposing party, and/or 13 futility.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) (noting 14 amendments should be granted with “extreme liberality”); Fed. R. Civ. Pro. 15(a)(2) (court should 15 freely allow amendment when “justice so requires”). If leave to amend would be futile, however, 16 the court may deny leave. See Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990) (“It 17 is not an abuse of discretion to deny leave to amend when any proposed amendment would be 18 futile.”). 19 Here, the Court finds that leave to amend would be futile. Similar to the plaintiffs in 20

21 2 The Court also finds that Riffel lacks standing to seek injunctive relief for the separate and independent reason that she has not alleged any future harm to herself that an injunction would 22 redress. “To have Article III standing to seek injunctive relief in a federal court, a plaintiff must demonstrate ‘a sufficient likelihood that [s]he will again be wronged in a similar way.’” Letizia v. 23 Facebook Inc., 267 F. Supp. 3d 1235, 1247-48 (N.D. Cal. 2017). Because the underlying basis for her alleged “harm”—the college admissions scandal—has ceased, Riffel is not able to show there 24 is a sufficient likelihood that she would be wronged in a similar way. See RJN, Ex. C.

25 3 Riffel asserts a claim under California’s Unfair Competition Law (“UCL”). But to have standing under California’s UCL, a plaintiff must establish in part that they (1) suffered an injury-in-fact 26 and (2) lost money or property as a result of the unfair competition. See Birdsong, 590 F.3d at 959 (citations omitted). Because Riffel has not alleged the requisite injury-in-fact, the Court also 27 concludes that she lacks standing to bring her California UCL claim. Case No.: 5:19-cv-08466-EJD 1 Tamboura and Bendis, Riffel would have to show some connection between the college 2 admissions scandal and her admissions review. For the reasons discussed above and in Tamboura, 3 the Court does not believe that Riffel will be able to plead facts connecting the scheme to defraud 4 || to USC’s general admissions process. Accordingly, the Court determines that amendment would 5 be futile. 6 VI. CONCLUSION 7 For the foregoing reasons, USC’s motion to dismiss is GRANTED on jurisdictional 8 || grounds without leave to amend. 9 IT IS SO ORDERED. 10 || Dated: August 17, 2021 11 EDWARD J. DAVILA %L United States District Judge

15 16

= 17

Z 18 19 20 21 22 23 24 25 26 27 Case No.: 5:19-cv-08466-EJD 2g || ORDER DISMISSING WITHOUT LEAVE TO AMEND PLAINTIFF’S COMPLAINT FOR LACK OF STANDING