Dean v. Kaiser Found. Health Plan, Inc.
| Decision Date | 29 March 2022 |
| Docket Number | Case No. 5:22-cv-00278-MCS-KK |
| Citation | 562 F.Supp.3d 928 |
| Parties | Stephan DEAN et al., Plaintiff, v. KAISER FOUNDATION HEALTH PLAN, INC., et al., Defendants. |
| Court | U.S. District Court — Central District of California |
Alan R. Jampol, Jampol Law APC, Los Angeles, CA, for Plaintiff.
John F. Burns, Sheppard Mullin Richter and Hampton LLP, San Diego, CA, Jill M. Pietrini, Paul A. Bost, Sheppard Mullin Richter and Hampton LLP, Los Angeles, CA, for Defendants Kaiser Foundation Health Plan Inc., Kaiser Foundation Hospitals.
Defendants Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals move to dismiss the Complaint of Plaintiffs Stephan Dean and Liza Dean, individually and doing business as SureFile Filing Systems. (MTD, ECF No. 10-1; Compl., ECF No. 1-1.) Defendants also move to strike the state law claims in the Complaint under California's anti-SLAPP statute. (MTS, ECF No. 11-1.) Plaintiffs filed briefs opposing the motions, and Defendants filed replies. (MTD Opp'n, ECF No. 19; MTD Reply, ECF No. 23; MTS Opp'n, ECF No. 20; MTS Reply, ECF No. 24.) The Court heard oral argument on the motions on March 28, 2022.
The parties submitted requests for judicial notice of certain records. (RJN ISO MTD, ECF No. 10-2; RJN ISO MTD Opp'n, ECF No. 19-1; RJN ISO MTS, ECF No. 11-2; RJN ISO MTS Opp'n, ECF No 20-1.) The Court considers a December 27, 2021 arbitration decision concerning a domain name dispute between the parties, (RJN ISO MTD Ex. E), which is incorporated by reference into the Complaint. See Marder v. Lopez , 450 F.3d 445, 448 (9th Cir. 2006). The Court need not review any other documents subject to the parties' requests to resolve the motions and denies the rest of the requests on that basis.
Defendants submitted evidentiary objections to the declaration Stephan Dean submitted in support of Plaintiffs' opposition to the motion to strike, and Plaintiffs responded to the objections. (Objs., ECF No. 25; Resp. to Objs., ECF No. 28; see Dean Decl., ECF No. 21-1.) The objections are overruled as unnecessary because the Court cannot consider the declaration in deciding the motion to strike. Compare Planned Parenthood Fed'n of Am. v. Ctr. for Med. Progress , 890 F.3d 828, 834 (9th Cir. 2018) (), with Lee v. City of Los Angeles , 250 F.3d 668, 688 (9th Cir. 2001) .
After Defendants filed the motions, Plaintiffs purported to dismiss some of their claims without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A)(i). (Notice of Voluntary Dismissal, ECF No. 14.) Plaintiffs invoked the incorrect rule; dismissal of claims is governed by Rule 15, not Rule 41. See Hells Canyon Pres. Council v. U.S. Forest Serv. , 403 F.3d 683, 687–88 (9th Cir. 2005). Nonetheless, the Court declines Defendants' invitation to deem the notice of voluntary dismissal wholly ineffective merely because Plaintiffs cited the wrong rule. (MTD Reply 9–10; MTS Reply 2–3.) Plaintiffs had not previously exercised their opportunity to amend their pleading once as a matter of course, so the Court construes Plaintiffs' filing as having effected a voluntary amendment of the Complaint to withdraw the "dismissed" claims from their pleading. See Fed. R. Civ. P. 15(a)(1)(B).
Only the claim for declaratory relief remains. This does not divest the Court of subject-matter jurisdiction, as Plaintiffs contend. (MTD Opp'n 5–6.) The case upon which Plaintiffs rely for their argument, Stock West, Inc. v. Confederated Tribes of Colville Reservation , 873 F.2d 1221 (9th Cir. 1989), is distinguishable from the case at bar. There, the plaintiffs invoked federal question jurisdiction based on the Declaratory Judgment Act itself—not some independent source of federal law. Id. at 1225. Here, in their notice of removal, Defendants submitted that the Court has jurisdiction under 28 U.S.C. §§ 1331 and 1338 because the claim for declaratory relief depends on substantial questions of federal cybersquatting and trademark law. (Notice of Removal ¶¶ 7–11, ECF No. 1.) The Court agrees with Defendants: the declaratory relief Plaintiffs seek would require an adjudication of the parties' rights under federal law. (E.g. , Compl. ¶ 34 ().) The Court has jurisdiction to decide a claim for declaratory relief arising under federal law independent of the Declaratory Judgment Act.
The constructive amendment moots the motion to dismiss the withdrawn claims. See Ramirez v. County of San Bernardino , 806 F.3d 1002, 1008 (9th Cir. 2015). However, the amendment does not moot the motion to strike the withdrawn breach and interference claims because the Court still must decide whether Defendants are entitled to fees. Pfeiffer Venice Props. v. Bernard , 101 Cal. App. 4th 211, 218, 123 Cal.Rptr.2d 647 (2002) ; see also Chambers v. Miller , 140 Cal. App. 4th 821, 826, 44 Cal.Rptr.3d 777 (2006) .
Plaintiffs filed their opposition briefs a day late. See C.D. Cal. R. 7-9. In the interests of justice and judicial economy, the Court considers the briefs. Any further untimely submissions will be stricken.
Plaintiffs provide medical record scanning and storage services. Between 2008 and 2010, Defendants contracted Plaintiffs to scan and store Defendants' patients' private medical records. (Id. ¶¶ 6–7.) Defendants terminated the contracts in 2010. (Id. ¶ 8.) Disagreements arose concerning the parties' rights after termination, resulting in a settlement agreement and subsequent lawsuit in state court. (Id. ¶¶ 9–16 & Ex. 1.)
In 2020, Plaintiffs planned to sell data they retained concerning Defendants' patients. Plaintiffs registered a domain name, kphealthconnectusa.com, and informed Defendants of their plans. (Id. ¶¶ 17–18.) On October 15, 2021, Defendants submitted a complaint against Plaintiffs to the Internet Corporation for Assigned Names and Numbers ("ICANN") under the Uniform Domain-Name Dispute-Resolution Policy ("UDRP"), alleging Plaintiffs wrongfully used Defendants' trademarked name and logo on their website. (Id. ¶¶ 19–20.) A three-person arbitration panel issued a decision on December 7, 2021, finding that Plaintiffs "wrongfully and in bad faith created a domain that infringed [Defendants'] rights and ordered that the domain name kphealthconnectusa.com be transferred to [Defendants]." (Id. ¶ 22; see generally RJN ISO MTD Ex. E.) Plaintiffs contend the arbitration panel lacked jurisdiction to render the decision. (Compl. ¶¶ 22–24.)
In the Complaint, Plaintiffs brought four claims: (1) breach of contract, (2) declaratory relief, (3) permanent injunction, and (4) interference with prospective business advantage. (Id. ¶¶ 26–47.) Through their constructive amendment of the Complaint, Plaintiffs have withdrawn all but the claim for declaratory relief. (See Notice of Voluntary Dismissal.)
California Code of Civil Procedure section 425.16 permits a special motion to strike a strategic lawsuit against public participation ("SLAPP"). Such a motion allows courts to dismiss at an early stage unmeritorious litigation that challenges various kinds of protected speech. See Cal. Civ. Proc. Code § 425.16(b)(1) ; Kashian v. Harriman , 98 Cal. App. 4th 892, 905, 120 Cal.Rptr.2d 576 (2002). Federal courts give full effect to the anti-SLAPP statute. See United States ex rel. Newsham v. Lockheed Missiles & Space Co., Inc. , 190 F.3d 963, 973 (9th Cir. 1999).
Anti-SLAPP motions are subject to a two-step analysis with shifting burdens. First, the movant must make a threshold showing that the challenged claim arises from an "act ... in furtherance of [the movant's] right of petition or free speech" within the meaning of California Civil Procedure Code section 425.16(e). Sarver v. Chartier , 813 F.3d 891, 901 (9th Cir. 2016) (internal quotation marks omitted). If the movant satisfies this threshold showing, the burden shifts to the claimant to establish a reasonable probability of prevailing by demonstrating that the challenged claim is "both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited." Id. (internal quotation marks omitted). If the motion "challenges only the legal sufficiency of a claim, a district court should apply the Federal Rule of Civil Procedure 12(b)(6) standard and consider whether a claim is properly stated." Planned Parenthood , 890 F.3d at 834.
Federal Rule of Civil Procedure 12(b)(6) allows an attack on the pleadings for "failure to state a claim upon which relief can be granted." "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S....
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