W. v. Providence Health Plan

• Court: District Court, N.D. California
• Decided: August 10, 2021
• Docket: 3:20-cv-04491
• Status: Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 4 CHRIS W., et al., Case No. 20-cv-04491-JD

5 Plaintiffs, ORDER RE MOTION TO DISMISS v. 6 Re: Dkt. No. 45 7 PROVIDENCE HEALTH PLAN, et al., Defendants. 8

9 The Court granted defendant Providence Health Plan’s (PHP) motion to dismiss for lack of 10 personal jurisdiction, with leave to amend. Dkt. No. 36. Plaintiff Chris W. field an amended 11 complaint, Dkt. No. 39, that PHP asks again to dismiss for failing to plausibly allege that it did 12 anything claim-related within California or this District that might establish personal jurisdiction, 13 Dkt. No. 45. The parties’ familiarity with record is assumed, and the governing standards stated in 14 the prior dismissal order are incorporated here. PHP is dismissed as a defendant, without 15 prejudice. 16 Although not crystal clear in the amended complaint, Chris W.’s main argument for 17 personal jurisdiction is that he has now alleged that PHP is “part of and controlled by a larger 18 entity” that is headquartered in California. See Dkt. No. 50 at 1; see also Dkt. No. 39 ¶¶ 12-13 19 (alleging PHP is affiliated with defendant Providence Health & Services (PHS), which has 20 headquarters in Irvine, California). Even accepting these rather conclusory allegations as true for 21 present purposes, they fall well short of establishing jurisdiction over PHP. “The existence of a 22 parent-subsidiary relationship is insufficient, on its own, to justify imputing one entity’s contacts 23 with a forum state to another for the purpose of establishing personal jurisdiction.” Ranza v. Nike, 24 Inc., 793 F.3d 1059, 1070 (9th Cir. 2015); see also Foster v. United Cont’l Holdings, Inc., Case 25 No. 3:19-cv-02530-JD, 2021 WL 2633400, at *1 (N.D. Cal. June 25, 2021). 26 To the extent Chris W. proposes an alter ego theory as a basis of jurisdiction, which again 27 is not at all clear in the complaint, the effort is misdirected. “To plausibly allege an alter ego 1 ownership that the individuality, or separateness, of the said person and corporation has ceased, 2 and (2) an adherence to the fiction of the separate existence of the corporation . .. would sanction 3 a fraud or promote injustice.’” Foster, 2021 WL 2633400, at *1 (quoting Perfect 10, Inc. v. 4 Giganews, Inc., 847 F.3d 657, 677 (9th Cir. 2017) (cleaned up; ellipses in original)); see also 5 Mesler v. Bragg Mgmt. Co., 39 Cal. 3d 290, 300 (1985) (same tests under California state law). 6 The amended complaint does not allege facts establishing these elements. Assuming again 7 for discussion’s sake that Chris W. has plausibly alleged that PHP is wholly owned by PHS, the 8 || “mere fact of sole ownership and control does not eviscerate the separate corporate identity that is 9 || the foundation of corporate law.” Jd. (quoting Katzir’s Floor & Home Design, Inc. v. M- 10 || MLS.com, 394 F.3d 1143, 1149 (9th Cir. 2004)). The unity of interests test requires facts showing 11 a “pervasive control over the subsidiary, such as when a parent corporation dictates every facet of 12 || the subsidiary’s business -- from broad policy decisions to routine matters of day-to-day 5 13 operation.” Ranza, 793 F.3d at 1071 (internal quotations and citation omitted). The amended 14 || complaint offers nothing that demonstrates this level of control. 3 15 Chris W. also has not established that dismissing PHP would work an injustice or sanction 16 || fraud. “‘The injustice that allows a corporate veil to be pierced is not a general notion of injustice; 3 17 rather, it is the injustice that results only when corporate separateness is illusory.’” Foster, 2021 18 || WL 2633400, at *2 (quoting Katzir’s Floor & Home Design, 394 F.3d at 1149). 19 Because this is a second amended complaint, the Court finds leave to amend is not 20 warranted. See Chodos v. W. Publ’g Co., 292 F.3d 992, 1003 (9th Cir. 2002). PHP is dismissed 21 without prejudice. If facts developed during discovery give rise to a good-faith basis for seeking 22 || to assert alter ego liability with respect to PHP, Chris W. may file a request to amend under 23 Federal Rule of Civil Procedure 15. 24 IT IS SO ORDERED. 25 Dated: August 10, 2021 26 27 JAMES/PONATO 28 United Btates District Judge