Defendant Maclean's Motion To Dismiss Complaint

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page1 of 18
1 ROBERT R. MOORE (BAR NO. 113818)

MICHAEL J. BETZ (BAR NO. 196228)
2 ALEXANDER J. DOHERTY (BAR NO. 261552)
ALLEN MATKINS LECK GAMBLE
MALLORY & NATSIS LLP
3
Three Embarcadero Center, 12th Floor
4 San Francisco, CA 94111-4074
Phone: (415) 837-1515
5 Fax: (415) 837-1516
E-Mail: rmoore@allenmatkins.com
mbetz@allenmatkins.com
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adoherty@allenmatkins.com
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Attorneys for Defendant
8 ROBERT MACLEAN
9
UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
11
SAN JOSE
12 STEPHEN COLLINS,
Plaintiff,
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14
Case No. 5:14-CV-2715-LHK-HRL

Hearing Date: March 26, 2015
Hearing Time: 1:30 p.m.
vs.
15 COUNTY OF MONTEREY, CURTIS

WEEKS, CHARLES MCKEE, IRV GRANT,
16 LOUIS R. CALCAGNO, DAVID POTTER,
ROBERT MACLEAN, CALIFORNIA17 AMERICAN WATER, and DOES 1-50,
Defendants.
18
DEFENDANT ROBERT MACLEAN'S NOTICE OF

MOTION AND MOTION TO DISMISS COMPLAINT
PURSUANT TO FED. R. CIV. P. 12(b)(1) AND
12(b)(6); MEMORANDUM OF POINTS AND
AUTHORITIES
Judge:
Complaint Filed:
Lucy H. Koh
June 11, 2014
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Allen Matkins Leck Gamble

Mallory & Natsis LLP
947421.03/SF
DEFENDANT ROBERT MACLEAN'S MOTION TO

DISMISS
NOTICE OF MOTION
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2
TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE THAT on March 26, 2015 at 1:30 p.m., or as soon thereafter
4 as this matter may be heard, in the United States District Court for the Northern District of
5 California, located at 280 South 1st Street, San Jose, CA 95113, 4th Floor, Courtroom 8, before
6 the Honorable Lucy H. Koh, Defendant Robert MacLean will and hereby does make this Motion
7 to Dismiss the Complaint Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6).
8
MacLean respectfully requests that the Court grant his motion on the grounds that Plaintiff
9 lacks standing to sue MacLean under Article III of the U.S. Constitution, Plaintiff's fraud claim is
10 time-barred, the Complaint fails to state a fraud claim against MacLean pursuant to Rule 8 of the
11 Federal Rules of Civil Procedure, and the Complaint is not pled with the particularity required by
12 Rule 9 of the Federal Rules of Civil Procedure. Because these deficiencies cannot be cured by
13 amendment, MacLean also respectfully requests that the Court enter an order dismissing the fraud
14 claim as against MacLean without leave to amend.
15
This motion is based on this Notice of Motion, the accompanying Memorandum of Points
16 and Authorities, any documents filed in reply, the papers and pleadings on file in this action, and
17 such other oral and/or documentary evidence or argument as may be presented at the time of the
18 hearing on this matter.
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20 Dated: December 22, 2014
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ROBERT R. MOORE
MICHAEL J. BETZ
ALEXANDER J. DOHERTY
By: /s/ Robert R. Moore
ROBERT R. MOORE
Attorneys for Defendant Robert MacLean
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TABLE OF CONTENTS
Page
3 INTRODUCTION ................................................................................................................................. 1
4 ISSUES TO BE DECIDED ..................................................................................................................... 3
5 ARGUMENT ...................................................................................................................................... 4
6 I.
Plaintiff Lacks Article III Standing to Sue MacLean .......................................................... 4
7 II.
Plaintiff's Fraud Claim is Time-Barred ............................................................................... 5
8 III.
Plaintiff Fails to State a Plausible Fraud Claim .................................................................. 7
A.
Plaintiff Fails to Plausibly Allege Any Misconduct by MacLean .......................... 8
10
B.
Any Purported Misrepresentation by MacLean Was a NonActionable Expression of Opinion .......................................................................... 8
C.
Plaintiff Could Not Have Justifiably Relied On the Legal Advice of

a Layman ............................................................................................................... 10
11
12
13 IV.
The Fraud Claim is Not Pled with Particularity as Required by Rule 9(b) of
the Federal Rules of Civil Procedure ................................................................................ 11
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CONCLUSION .................................................................................................................................. 12
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TABLE OF AUTHORITIES
Page(s)
3 Cases
4 Ashcroft v. Iqbal,
556 U.S. 662 (2009) ........................................................................................................ 4, 7
5
Bell Atlantic Corp. v. Twombly,
6
550 U.S. 544 (2007) .................................................................................................... 4, 7, 8
7 Briosos v. Wells Fargo Bank,
No. C 10-02834, 2011 U.S. Dist. LEXIS 48569 (N.D. Cal. May 5, 2011)......................... 7
8
Cal. Pharm. Mgmt., LLC v. Redwood & Cas. Ins. Co.,
9
SACV 09-141, 2009 U.S. Dist. LEXIS 126982 (C.D. Cal. July 29, 2009) ...................... 10
10 Chie v. Reed Elsevier, Inc.,
No. C-11-1784, 2011 U.S. Dist. LEXIS 99153 (N.D. Cal. Sept. 2, 2011) ....................... 10
11
Cooper v. Pickett,
12
137 F.3d 616 (9th Cir. 1997) ....................................................................................... 11, 12
13 Dena' Nena' Henash, Inc. v. Oracle Corp.,
No. C 07-633, 2007 U.S. Dist. LEXIS 39611 (N.D. Cal. May 16, 2007)........................... 9
14
Fox v. Ethicon Endo-Surgery, Inc.,
15
35 Cal.4th 797 (2005).......................................................................................................... 6
16 Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.,
528 U.S. 167 (2000) ............................................................................................................ 4
17
Golden W. Baseball Co. v. Talley,
18
232 Cal.App.3d 1294 (1999) ............................................................................................. 11
19 Hamilton Materials Inc. v. Dow Chem. Corp.,
494 F.3d 1203 (9th Cir. 2007) ............................................................................................. 6
20
In re Actimmune Mktg. Litig.,
21
No. C 08-02376, 2009 U.S. Dist. LEXIS 103408 (N.D. Cal. Nov. 6, 2009) .................... 12
22 Kent v. Microsoft Corp.,
SACV13-0091, 2013 U.S. Dist. LEXIS 93932 (C.D. Cal. July 1, 2013) ......................... 13
23
Labrie v. UPS Supply Chain Solutions, Inc.,
24
No. C 08-3182, 2008 U.S. Dist. LEXIS 77637 (N.D. Cal. Oct. 3, 2008) ................... 10, 12
25 Lancaster Cmty. Hosp. v. Antelope Valley Hosp. Dist.,
940 F.2d 397 (9th Cir. 1991) ............................................................................................. 11
26
Ledesma v. Jack Stewart Produce, Inc.,
27
816 F.2d 482 (9th Cir. 1987) ............................................................................................... 5
28 Lexin v. Superior Court,
47 Cal.4th 1050 (2010)........................................................................................................ 1
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Page(s)
2 Miller v. Yokohama Tire Corp.,

358 F.3d 616 (9th Cir. 2004) ......................................................................................... 9, 10
3
Moreland v. Las Vegas Metropolitan Police Dept.,
4
159 F.3d 365 (9th Cir. 1998) ............................................................................................... 4
5 Neubronner v. Milken,
6 F.3d 666 (9th Cir. 1993) ................................................................................................. 12
6
Norgart v. Upjohn Co.,
7
21 Cal.4th 383 (1999).......................................................................................................... 6
8 People v. Chacon,
40 Cal.4th 558 (2007).......................................................................................................... 2
9
Perez v. Nidek Co.,
10
711 F.3d 1109 (9th Cir. 2013) ............................................................................................. 4
11 Platt Elec. Supply, Inc. v. EOFF Elec., Inc.,
522 F.3d 1049 (9th Cir. 2008) ............................................................................................. 6
12
Rosal v. First Fed. Bank of Cal.,
13
671 F.Supp.2d 1111 (N.D. Cal. 2009) ........................................................................ 6, 7, 8
14 Savage v. Pacific Gas & Electric Co.,
21 Cal.App.4th 434 (1993) ................................................................................................ 10
15
Schmier v. U.S. Court of Appeals for Ninth Circuit,
16
279 F.3d 817 (9th Cir. 2002) ........................................................................................... 4, 5
17 Sosa v. DIRECTV, Inc.,
437 F.3d 923 (9th Cir. 2006) ............................................................................................... 9
18
Swartz v. KPMG LLP,
19
476 F.3d 756 (9th Cir. 2007) ....................................................................................... 11, 12
20 Vess v. Ciba-Geigy Corp. USA,
317 F.3d 1097 (9th Cir. 2003) ........................................................................................... 11
21
White v. Lee,
22
227 F.3d 1214 (9th Cir. 2000) ............................................................................................. 4
23 Statutes
24 Cal. Code Civ. Proc. 338(d) ......................................................................................................... 5
25 Rules
26 Fed. R. Civ. P. 9(b)........................................................................................................................ 12
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(iii)

DISMISS
INTRODUCTION
As the Complaint indicates, see Compl. 41-42, Plaintiff Stephen Collins is a convicted
3 felon. In March 2014, the Monterey County Superior Court convicted Collins of a felony count of
4 conflict of interest in violation of section 1090 of the California Government Code
5 ("Section 1090").1 Section 1090 prohibits government officials from being "financially interested
6 in any contract made by them in their official capacity, or by any body or board of which they are
7 members." The statute's purpose is to prevent officials from having a personal financial interest
8 that might impair them "from discharging their fiduciary duties with undivided loyalty and
9 allegiance to the public entities they are obligated to serve." Lexin v. Superior Court, 47 Cal.4th
10 1050, 1073 (2010). In 2010, Collins was a member of the Board of Directors of the Monterey
11 County Water Resources Agency.
In his official capacity, Collins worked on the Regional
12 Desalination Project ("RDP"), a plan to construct a desalination facility to provide fresh water to
13 the citizens of Monterey County. Collins violated Section 1090 because, while he worked on the
14 RDP, Collins was collecting $160,000 in "consulting" fees from a private entity retained to ensure
15 the RDP succeeded. Having committed an egregious betrayal of the public trust by exploiting his
16 public position for personal gain, Collins is barred from ever again holding public office in
17 California.2
In the criminal case, Collins tried to escape prosecution by blaming counsel for Monterey
18
19 County for his own criminal conduct. Specifically, Collins maintained that he had been entrapped
20 by virtue of legal advice purportedly provided by attorneys for Monterey County that Collins'
21 conduct was lawful and did not constitute a prohibited conflict of interest. The criminal court
22 rejected Collins' "entrapment by estoppel" defense based on well-settled authority providing that
23 no such defense applies to violations of Section 1090. See People v. Chacon, 40 Cal. 4th 558,
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1
2
See People v. Collins, Case No. SS112146A (Monterey County Superior Court).
Collins was also convicted of a felony count of grand theft and a misdemeanor count of
receiving payment for an official act. Collins' felony count for grand theft arose from his
stealing some $89,000 over a three-year period from his consulting client and prior employer,
artichoke grower Ocean Mist Farms, by billing for services that he did not perform. Collins
was also convicted of a misdemeanor violation of section 70(a) of the Penal Code, which
prohibits public officials from receiving unauthorized payment for performing an official act.

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1 570-71 (2007) ("Recognizing entrapment by estoppel in such circumstances is antithetical to the

2 strong public policy of strict enforcement of conflict of interest statutes and the attendant personal
3 responsibility demanded of our officials.").
In the present lawsuit, Collins resurrects his theory that others are truly to blame for his
5 own criminal conduct this time in the hope of obtaining civil damages. In this case, however,
6 Collins blames not only Monterey County officials and counsel but also, for the first time,
7 California American Water Company ("Cal-Am") and its President Robert MacLean. Cal-Am, a
8 California corporation and water utility regulated by the California Public Utilities Commission
9 ("CPUC"), provides water to thousands of customers on the Monterey Peninsula. Cal-Am along
10 with the Monterey County Water Resources Agency of which Collins was a Director and the
11 Marina Coast Water District was a participant in the RDP, until the CPUC granted Cal-Am's
12 request to withdraw from the project in 2012.
As the Complaint's specious allegations demonstrate, Collins should fare no better here
13
14 than he did in his criminal action.
The Complaint asserts a single claim for fraud against
15 MacLean.3 Collins pleads that MacLean committed fraud because MacLean attended a meeting at
16 which someone else, i.e., Defendant Curtis Weeks (who was not a Cal-Am employee), made a
17 statement that "the conflict of interest issue had been addressed and did not present a problem."
18 Compl. 30.
Such allegations provide no basis for relief against MacLean for several independent
19
20 reasons. Most fundamentally, Collins lacks Article III standing to sue MacLean. Collins purports
21 to assert a fraudulent misrepresentation claim against MacLean without alleging that MacLean
22 made any representations at all, much less that any such representations caused Collins any harm.
23 Whatever his accusations against Defendant Weeks, Collins has alleged no conduct by MacLean
24 that plausibly caused him any injury.
Second, Collins' fraud claim is time-barred, as the face of the Complaint makes clear. The
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26 allegedly false representation identified in the Complaint occurred on January 14, 2010, which is
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Collins' civil rights claim pursuant to 42 U.S.C. 1983 is not asserted against MacLean.

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DISMISS
1 beyond the applicable three-year limitations period. Further, even assuming Collins had pled
2 sufficient facts to invoke the delayed discovery rule which, as more fully detailed below, he has
3 not his claim accrued, at the very latest, as of April 2011 when Collins resigned from his Board
4 of Directors position with the Monterey County Water Resources Agency. By that point, Collins
5 had to have known the alleged representations giving rise to his claim were false and that he really
6 might have a conflict of interest, given that his resignation represented his attempt to remedy any
7 such conflict. In short, even if the discovery rule applies, Collins' claim is still untimely.
8
Third, Collins' fraud claim is not actionable. As noted above, Collins does not and cannot
9 allege any misrepresentations made by MacLean. Indeed, in all his years of legal wrangling,
10 Collins never said MacLean represented or misrepresented any conflict of interest. In addition,
11 any hypothetical representation by anyone that Collins did not have a conflict of interest
12 constitutes a non-actionable opinion on an issue of law.
13
Further, even if MacLean did make a representation that Collins did not have a conflict of
14 interest which he did not Collins provides no explanation for why his reliance on the purported
15 legal advice of a layman like MacLean was justifiable. Any such purported reliance would not be
16 plausible, given that Collins, as alleged in the Complaint, had 16 years of government experience
17 and was sophisticated enough to have spotted and raised the potential conflict of interest issue
18 from the very beginning.
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Finally, Collins completely ignores the particularity mandated by Rule 9(b) of the Federal
20 Rules of Civil Procedure. Rule 9(b) requires Collins to plead the "who, what, when, where, and
21 how" of the purported fraud, and, with respect to MacLean, Collins has not and cannot plead any
22 of these facts.
23
For all of these reasons, more fully detailed below, the fraud claim against MacLean
24 should be dismissed without leave to amend.

ISSUES TO BE DECIDED
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This Motion raises the following issues:
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whether Collins has Article III standing to sue MacLean for fraud, given that the
Complaint fails to allege any conduct by MacLean that caused Collins any harm;
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DISMISS
whether the fraud claim is time-barred, given that the allegedly fraudulent
misrepresentations at issue were made over three years before the Complaint was
filed and thus outside the applicable limitations period;
whether the fraud claim plausibly alleges a basis for relief against MacLean
pursuant to Rule 8 of the Federal Rules of Civil Procedure, in light of the fact that
Collins fails to allege any misrepresentations made by MacLean, any potential
representation constituted a non-actionable opinion, and there was no justifiable
reliance;
whether the fraud claim is pled with particularity as required by Rule 9(b).
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ARGUMENT
7
8 I.
PLAINTIFF LACKS ARTICLE III STANDING TO SUE MACLEAN
As an initial matter, Collins lacks constitutional standing to sue MacLean. Moreland v.
10 Las Vegas Metropolitan Police Dept., 159 F.3d 365, 369 (9th Cir. 1998) ("Because the question of
11 whether a particular party has standing to pursue a claim naturally precedes the question of
12 whether that party has successfully stated a claim, address this question first."). Accordingly, the
13 fraud claim should be dismissed pursuant to Rule 12(b)(1). See White v. Lee, 227 F.3d 1214, 1242
14 (9th Cir. 2000).
15
To have standing to sue under Article III, "a plaintiff must show (1) it has suffered an
16 'injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or
17 hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is
18 likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision."
19 Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-181 (2000).
20 "The party seeking to invoke the jurisdiction of the federal courts has the burden of alleging
21 specific facts sufficient to satisfy these three elements." Schmier v. U.S. Court of Appeals for
22 Ninth Circuit, 279 F.3d 817, 821 (9th Cir. 2002). The standards set forth in Bell Atlantic Corp. v.
23 Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), apply in equal force to
24 Article III standing when it is being challenged on the face of the complaint. See Perez v. Nidek
25 Co., 711 F.3d 1109, 1113 (9th Cir. 2013) (affirming that "conclusory and bare bones words and
26 phrases without any factual content" are "insufficient to establish standing or to survive a motion
27 to dismiss").
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DISMISS
Whatever his purported injuries, Collins fails to allege specific facts regarding how those
2 injuries are "fairly traceable" to any conduct by MacLean. Indeed, the Complaint hardly mentions
3 MacLean at all. Collins alleges that MacLean along with certain other defendants and third
4 parties was "present" at a meeting at which Defendant Curtis Weeks "advised the group that the
5 conflict of interest issue had been addressed and did not present a problem." Compl. 30. But the
6 Complaint nowhere alleges that MacLean made any representation to Collins or took any action
7 with respect to him whatsoever much less took action that caused Collins harm.4
Collins' attempt to conflate all of the defendants through generic references to
9 "DEFENDANTS' representations," see Compl. 65, does not change the analysis. Such generic
10 and conclusory allegations lack the requisite specific factual content and should be disregarded.
11 See Schmier, 279 F.3d at 821.5
12 II.
PLAINTIFF'S FRAUD CLAIM IS TIME-BARRED
13
A.
14
The fraud claim should also be dismissed because it is time-barred. See Ledesma v. Jack
The Misrepresentation Was Allegedly Made in January 2010
15 Stewart Produce, Inc., 816 F.2d 482, 484 n.1 (9th Cir. 1987) (statute of limitations defense is
16 properly raised in a motion to dismiss "if the running of the statute is apparent from the face of the
17 complaint"). Collins' claim is timely only if it accrued on or after June 11, 2011, which is three
18 years before the Complaint was filed. See Cal. Code Civ. Proc. 338(d) (three-year limitations
19 period applies to fraud claims). But, according to the Complaint, the representation giving rise to
20 Collins' fraud claim against MacLean was allegedly made during a meeting that took place on
21 January 14, 2010. Compl. 30.
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Indeed, Collins cannot truthfully allege that MacLean was involved in any such discussion or
made any such representations regarding whether Collins had a conflict of interest because
MacLean never did anything of the sort.
In addition, the Complaint provides no factual or legal basis for imposing liability on
MacLean for the conduct of the other defendants through an agency or any other theory. The
Complaint contends only that the Doe Defendants are agents of Monterey County. And the
Complaint tellingly omits MacLean in alleging that only Defendants Monterey County, Weeks,
McKee, Grant, Calcagno, and Potter "act[ed] jointly" with each other. Compl. 18.

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B.
The Delayed Discovery Rule Does Not Save Collins' Claim
Based on the fact the Complaint was filed on June 11, 2014, Collins' claim is timely only if
3 the delayed discovery rule codified in section 338(d) of the California Code of Civil Procedure
4 applies to delay the accrual of his claim until sometime after June 11, 2011. Rosal v. First Fed.
5 Bank of Cal., 671 F.Supp.2d 1111, 1132 (N.D. Cal. 2009) ("Because the intentional
6 misrepresentations that plaintiff complains of occurred outside the three years prior to the filing of
7 the complaint, plaintiff bears the burden of specifically pleading facts showing the time and
8 manner of discovery and his inability to have made earlier discovery despite reasonable
9 diligence.").6 But the discovery rule does not save Collins' claim.
Importantly, the discovery rule "only delays accrual until the plaintiff has, or should have,
10
11 inquiry notice of the cause of action." Rosal, 671 F.Supp.2d at 1131 (quoting Fox v. Ethicon
12 Endo-Surgery, Inc., 35 Cal.4th 797, 807 (2005)). Inquiry notice with respect to a fraud claim is
13 present, as the Ninth Circuit affirmed, when a plaintiff "learns, or at least is put on notice, that a
14 representation is false." Platt Elec. Supply, Inc. v. EOFF Elec., Inc., 522 F.3d 1049, 1058 (9th Cir.
15 2008) (internal quotation marks omitted); see also Rosal, 671 F.Supp.2d at 1131 (fraud claim
16 accrues for purposes of section 338(d) when a party "'has reason at least to suspect the factual
17 basis for its elements'" (quoting Fox at 807)). In short, "[a]ll that is relevant is that a reasonable
18 person . . . would have been on notice of a potential misrepresentation. This is the date that the
19 complaining party learns, or at least is put on notice, that a representation is false." Platt Elec.
20 Supply, Inc. at 1057 (quoting Hamilton Materials Inc. v. Dow Chem. Corp., 494 F.3d 1203, 120621 07 (9th Cir. 2007)); see also Hamilton Materials Inc. at 1207 ("It is clear that Appellant, a
22 knowledgeable and sophisticated manufacturer of asbestos products and a defendant in hundreds
23 of lawsuits relating to these exact issues, knew enough about the controversy to be suspicious that
24 the position taken by Appellees was false.").
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Section 338(d) provides that "[a]n action for relief on the ground of fraud or mistake . . . is not
deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting
the fraud or mistake." As such, section 338(d) "effectively codifies the delayed discovery rule
in connection with actions for fraud." Platt Elec. Supply, Inc. v. EOFF Elec., Inc., 522 F.3d
1049, 1057 (9th Cir. 2008) (quoting Norgart v. Upjohn Co., 21 Cal.4th 383 (1999)).

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DISMISS
Collins was on notice of the potential falsity of the relevant representations, at the very
2 latest, by April 11, 2011. On that date, he resigned from his public position in a belated attempt to
3 eliminate his conflict of interest. Compl. 38, 51. Indeed, by that point, Collins not only was on
4 inquiry notice that the representation was false (according to his version of the events) but also
5 actually knew it was allegedly false. And recognizing as such, Collins took the corrective action
6 that he did. In sum, even if the discovery rule applies, Collins' claim is still time-barred because
7 the rule would delay the claim's accrual only until April 11, 2011, which still falls outside the
8 limitations period.
Collins attempts to plead around the untimeliness of his claims, but he fails. Collins
10 alleges that he "discovered he was damaged sometime after September 2011 and he has suffered
11 monetary damages therefrom." Compl. 57. As an initial matter, such a conclusory assertion is
12 legally insufficient to avoid dismissal. Rosal, 671 F.Supp.2d at 1132 ("In assessing the sufficiency
13 of the allegations of delayed discovery, plaintiff bears the burden to show diligence; conclusory
14 allegations will not withstand a motion to dismiss.").
But more importantly, when Collins "discovered he was damaged" is immaterial. See
15
16 Briosos v. Wells Fargo Bank, No. C 10-02834, 2011 U.S. Dist. LEXIS 48569, at *14-15 (N.D.
17 Cal. May 5, 2011) ("to the extent Briosos rehashes a variation of his reliance theory (i.e., he could
18 become aware of the fraud only after he relied upon the fraudulent statement and suffered the
19 injury), the court already has rejected this argument because this theory defeats the purposes of a
20 statute of limitations"). Instead, as detailed above, Collins' claim accrues when he "learns, or at
21 least is put on notice, that a representation is false." And that event occurred, at the latest, on
22 April 11, 2011. Collins' time-barred fraud claim should be dismissed.
23 III.
PLAINTIFF FAILS TO STATE A PLAUSIBLE FRAUD CLAIM
24
A Rule 12(b)(6) motion to dismiss should be granted if the complaint does not contain
25 "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly,
26 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual
27 content that allows the court to draw the reasonable inference that the defendant is liable for the
28 misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint that offers only
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1 "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not
2 do." Twombly at 555. "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of
3 'further factual enhancement.'" Iqbal at 678 (quoting Twombly at 557). A plaintiff's factual
4 allegations must be sufficient "to raise a right to relief above the speculative level." Twombly at
5 555.
"[W]here the well-pleaded facts do not permit the court to infer more than the mere
6 possibility of misconduct," the complaint fails to establish a plausible entitlement to relief. Iqbal
7 at 679.
The Complaint's generic and conclusory allegations do not even come close to satisfying
9 Rule 8 and the Twombly standard. The Complaint does little more than recite the elements of a
10 fraud claim and generically allege that "Defendants" fraudulently represented that Collins' "actions
11 as described herein were lawful." Compl. 60. Because essential elements of a fraud claim are
12 not plausibly alleged, Collins' fraud claim should be dismissed.
13
A.
Plaintiff Fails to Plausibly Allege Any Misconduct by MacLean
14
The Complaint fails to plausibly allege even the most basic element of a fraud claim, i.e.,
15 that MacLean made any representation to Collins regarding his conflict of interest. See Rosal, 671
16 F.Supp.2d at 1131 ("Under California law, the elements of common law fraud are
17 misrepresentation, knowledge of its falsity, intent to defraud, justifiable reliance, and resulting
18 damages." (quotation marks omitted)). The Complaint identifies several instances when purported
19 misrepresentations were made to Collins regarding whether he had a conflict of interest. But all of
20 these instances involve defendants other than MacLean or third parties not named in the
21 Complaint.7 With respect to MacLean, Collins can muster only the most conclusory assertion that
22
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See Compl. 3 ("COUNTY intentionally misrepresented to COLLINS that he had no conflict

of interest"); id. 27 ("WEEKS contacts COLLINS and advises that he has discussed the
conflict of interest issue with both county counsel and CALCAGNO and both state that
COLLINS does not have a conflict of interest problem"); id. 28 ("CALCAGNO . . . assures
COLLINS that there is 'no conflict. . . .'"); id. 30 ("WEEKS advised the group that the
conflict of interest issue had been addressed and did not present a problem"); id. 33
("GRANT, Dan Carroll and[,] Mark Fogelman (counsel for Marina Coast Water District)
[advised Plaintiff] that he does not have a conflict of interest problem"); id. 44
("DEFENDANTS WEEKS, MCKEE, GRANT, CALCAGNO, AND POTTER actively
assured PLAINTIFF, from January 11, 2010 through March 2010 that his conduct in
connection with receiving money from RMC while simultaneously being a member of
ADVISORY BOARD was lawful.") (emphases added).

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DISMISS
1 "DEFENDANTS" represented "that his actions as described herein were lawful." Compl. 60.
2 But without specific facts to support this conclusory assertion, the Complaint fails to state a fraud
3 claim against MacLean.
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B.
Any Purported Misrepresentation by MacLean Was a Non-Actionable

Expression of Opinion
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As detailed above, the Complaint fails to allege that MacLean ever misrepresented
7 anything to Collins and purports to premise a fraud claim against MacLean based merely on his
8 alleged presence at a meeting. Even if one ignores this glaring and fatal defect, however, the
9 claim still fails because it is hornbook law that opinions and, more specifically, opinions as to
10 legal matters, provide no basis for a fraud claim as a matter of law. Accordingly, Collins' fraud
11 claim should be dismissed because any representation that Collins' conduct was "lawful"
12 constitutes a non-actionable opinion. See Dena' Nena' Henash, Inc. v. Oracle Corp., No. C 0713 633, 2007 U.S. Dist. LEXIS 39611, at *11 (N.D. Cal. May 16, 2007) (granting motion to dismiss
14 because "all of the statements that Plaintiff alleges are fraudulent are representations of opinion,
15 are too vague, or are incapable of being proven false when made, and therefore cannot support a
16 claim of fraud").
17
"It is . . . well settled, as a general rule, that fraud cannot be predicated upon
18 misrepresentations of law or misrepresentations as to matters of law. Statements of domestic law

19 are normally regarded as expressions of opinion which are generally not actionable in fraud even
20 if they are false." Miller v. Yokohama Tire Corp., 358 F.3d 616, 621 (9th Cir. 2004) (internal
21 citation and quotation marks omitted).
The Miller plaintiffs' claim was premised on false
22 representations by an employer to its employees that they were not entitled to overtime pay
23 because they were salaried. Id. at 618. The Ninth Circuit affirmed that such a representation was
24 an opinion regarding the employees' legal status and therefore was not actionable as a matter of
25 law. Id. at 621 (affirming grant of motion to dismiss); see also Sosa v. DIRECTV, Inc., 437 F.3d
26 923, 940 (9th Cir. 2006) (legal contentions in presuit demand letters not actionable as fraud
27 "because statements of the law are considered merely opinions and may not be relied upon absent
28 special circumstances not present here"); Cal. Pharm. Mgmt., LLC v. Redwood & Cas. Ins. Co.,
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-9-

DISMISS
1 SACV 09-141, 2009 U.S. Dist. LEXIS 126982, at *29 (C.D. Cal. July 29, 2009) ("Defendants'
2 interpretation of the requirements of California law" not actionable); Labrie v. UPS Supply Chain
3 Solutions, Inc., No. C 08-3182, 2008 U.S. Dist. LEXIS 77637, at *2 (N.D. Cal. Oct. 3, 2008)
4 (misrepresentations regarding plaintiffs' classification as independent contractors constituted non5 actionable misrepresentation of law).8
The alleged misrepresentation on which Collins premises his fraud claim is no different
7 than the misrepresentations of law at issue in the foregoing cases. Collins claims that Defendants
8 "intentionally misrepresented to [him] that he had no conflict of interest in connection with being a
9 member of the [advisory board appointed by the County]" and that "his actions as described herein
10 were lawful." Compl. 3, 60 (emphasis added). But even if such a statement respecting the
11 legality of Collins holding potentially conflicting positions were made (which it was not), such a
12 statement is an opinion "as to matters of law" and therefore not actionable. Miller, 358 F.3d at
13 621; cf. Savage v. Pacific Gas & Electric Co., 21 Cal.App.4th 434, 445 (1993) (affirming, for
14 purposes of libel claim, that the representation that a party had a conflict of interest constituted an
15 "expression of opinion" as a matter of law, since the "determination of a conflict of interest
16 involves . . . an application of an ethical standard to facts, reflecting the exercise of judgment").
17
For this reason too, the fraud claim fails as a matter of law.
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C.
19
Collins' allegation of justifiable reliance is also legally deficient. The Complaint fails to
Plaintiff Could Not Have Justifiably Relied On the Legal Advice of a Layman
20 provide any specific facts explaining how Collins could have justifiably relied on a non-lawyer's
21 alleged representations that Collins did not have a conflict of interest. The Complaint simply
22 concludes as such.
Compl. 65 ("PLAINTIFF reasonably relied on DEFENDANTS'
23 representations.").
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LAW OFFICES
In certain narrow circumstances, an opinion may be actionable. See Miller, 358 F.3d at 621.
Here, however, Collins pleads not a single fact to support the application of any of these
narrow exceptions to the general rule. See, e.g., Chie v. Reed Elsevier, Inc., No. C-11-1784,
2011 U.S. Dist. LEXIS 99153, at *13 n.3 (N.D. Cal. Sept. 2, 2011) ("There are no allegations
in the complaint to suggest that Ms. Owens held herself out as an expert. . . . Moreover, the
mere fact that she worked in human resources did not necessarily place her in a position of
trust and confidence vis-a-vis Plaintiffs.").

947421.03/SF
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DISMISS
But Collins' reliance was not justifiable. It was not reasonable for Collins to rely on
2 advice relating to a serious legal matter i.e., whether his public and private roles placed him in a
3 conflict of interest within the meaning of section 1090 of the Government Code from anyone
4 other than a lawyer. See Golden W. Baseball Co. v. Talley, 232 Cal.App.3d 1294, 1307 (1999)
5 ("we can confidently say that an organization such as Golden West could not, as a matter of law,
6 reasonably rely on the legal opinion of a layman under these circumstances"). But the Complaint
7 merely describes MacLean as Cal-Am's President, Compl. 14, and not an attorney (much less
8 Collins' attorney).
Nor is it plausible that Collins did so rely. Collins was no naf. He was a public official on
10 the Board of Directors of the Monterey County Water Resources Agency for 16 years. Compl.
11 1. Indeed, as Collins himself alleges, he was sophisticated enough to have spotted and raised the
12 potential conflict of interest issue from the very beginning. Id. 26. It is not plausible that
13 someone with Collins' level of experience in public service would rely on the legal advice of a
14 layman.
The Complaint's allegations of justifiable reliance are deficient as a matter of law. For this
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16 reason too, the fraud claim fails.

17 IV.
THE FRAUD CLAIM IS NOT PLED WITH PARTICULARITY AS REQUIRED BY RULE 9(b) OF
THE FEDERAL RULES OF CIVIL PROCEDURE
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The Complaint is also not pled with the particularity required by Rule 9(b) of the Federal
20 Rules of Civil Procedure. Rule 9(b) requires a plaintiff alleging fraud to "detail with particularity
21 the time, place, and manner of each act of fraud, plus the role of each defendant in each scheme."
22 Lancaster Cmty. Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397, 405 (9th Cir. 1991); see also
23 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) ("Averments of fraud must be
24 accompanied by 'the who, what, when, where, and how' of the misconduct charged." (quoting
25 Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997))). Further, a plaintiff alleging fraudulent
26 misrepresentations must allege the "'time, place, and specific content of the false representations.'"
27 Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007).
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DISMISS
The Complaint fails to allege with particularity any of the circumstances constituting
2 MacLean's purported fraud. The Complaint does not allege any conduct by MacLean constituting
3 fraud, averring instead that all of the "Defendants" made misrepresentations.
Compl. 60.
4 Lumping defendants together in this way is not allowed under Rule 9(b). Swartz, 476 F.3d at 7645 65 ("Rule 9(b) does not allow a complaint to merely lump multiple defendants together but
6 require[s] plaintiffs to differentiate their allegations when suing more than one defendant . . . and
7 inform each defendant separately of the allegations surrounding his alleged participation in the
8 fraud." (citations and quotation marks omitted)).
9
Nor does the Complaint identify what MacLean specifically said, alleging only that
10 Defendants "represented to PLAINTIFF that his actions as described herein were lawful." Compl.
11 60. Such generic allegations fall well short of the Rule 9(b) standard. Labrie, 2008 U.S. Dist.
12 LEXIS 77637, at *3 (dismissing fraud claim pursuant to Rule 9(b) because the complaint
13 "detail[ed] the nature of defendant's misrepresentations in only the most general terms, and fail[ed]
14 to reference specific agreements, misrepresentations, individuals involved, etc."). Collins also
15 does not identify when, where, or how MacLean made these alleged misrepresentations. In short,
16 MacLean is left to guess the details of Collins' charges and deny generally that he has done
17 anything wrong which is exactly the scenario that Rule 9(b) is designed to prevent.
See
18 Neubronner v. Milken, 6 F.3d 666, 671 (9th Cir. 1993) (allegations must be "specific enough to
19 give defendants notice of the particular misconduct which is alleged to constitute the fraud
20 charged so that they can defend against the charge and not just deny that they have done anything
21 wrong" (internal quotation marks omitted)).
22
Collins' allegation of fraudulent intent likewise does not meet the Rule 9(b) standard.
23 Allegations of scienter "may be alleged generally." Fed. R. Civ. P. 9(b). "Nonetheless, nothing in
24 the Federal Rules of Civil Procedure relieves a plaintiff of the obligation to 'set forth facts from
25 which an inference of scienter could be drawn.'" In re Actimmune Mktg. Litig., No. C 08-02376,
26 2009 U.S. Dist. LEXIS 103408, at *19 (N.D. Cal. Nov. 6, 2009) (quoting Cooper v. Pickett, 137
27 F.3d 616, 628 (9th Cir. 1997)). Collins' conclusory allegation that "DEFENDANTS intended that
28 PLAINTIFF rely on their representations" is not specific enough to satisfy Rule 9(b). Compl.
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947421.03/SF
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DISMISS
1 63. Further, Collins has alleged no other specific facts from which one might reasonably infer
2 fraudulent intent on the part of MacLean. See Kent v. Microsoft Corp., SACV13-0091, 2013 U.S.
3 Dist. LEXIS 93932, at *15 (C.D. Cal. July 1, 2013) (allegations that Microsoft acted "with
4 premeditated knowledge, malice, and forethought" did not "provide the level of detail necessary in
5 order to reasonably infer that Defendant had the state of mind required for a finding of fraud.").
CONCLUSION
6
7
For all the foregoing reasons, Collins' fraud claim against Defendant MacLean should be
8 dismissed. Because the defects in the Complaint cannot be cured by amendment, the dismissal
9 should be without leave to amend.
10
Dated: December 22, 2014
Respectfully submitted,
11
ROBERT R. MOORE
MICHAEL J. BETZ
ALEXANDER J. DOHERTY
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By: /s/ Robert R. Moore

ROBERT R. MOORE
Attorneys for Defendant Robert MacLean
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DISMISS
Case5:14-cv-02715-LHK Document18-1 Filed12/22/14 Page1 of 2
1 ROBERT R. MOORE (BAR NO. 113818)

MICHAEL J. BETZ (BAR NO. 196228)
2 ALEXANDER J. DOHERTY (BAR NO. 261552)
3
Three Embarcadero Center, 12th Floor
4 San Francisco, CA 94111-4074
Phone: (415) 837-1515
5 Fax: (415) 837-1516
E-Mail: rmoore@allenmatkins.com
mbetz@allenmatkins.com
6
adoherty@allenmatkins.com
7
Attorneys for Defendant
8 ROBERT MACLEAN
9
UNITED STATES DISTRICT COURT
10
NORTHERN DISTRICT OF CALIFORNIA
11
SAN JOSE
12 STEPHEN COLLINS,
Plaintiff,
13
14
vs.
15 COUNTY OF MONTEREY, CURTIS

WEEKS, CHARLES MCKEE, IRV GRANT,
16 LOUIS R. CALCAGNO, DAVID POTTER,
ROBERT MACLEAN, CALIFORNIA17 AMERICAN WATER, and DOES 1-50,

[PROPOSED] ORDER GRANTING DEFENDANT
ROBERT MACLEAN'S MOTION TO DISMISS
COMPLAINT PURSUANT TO FED. R. CIV. P.
12(b)(1) AND 12(b)(6)
Judge:
Complaint Filed:
Lucy H. Koh
June 11, 2014
Defendants.
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949123.01/SF
[PROPOSED] ORDER GRANTING MOTION TO

DISMISS
Case5:14-cv-02715-LHK Document18-1 Filed12/22/14 Page2 of 2
The Court, having considered Defendant Robert MacLean's Motion to Dismiss the
2 Complaint Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), hereby orders as follows:
For good cause shown, Defendant MacLean's Motion to Dismiss is GRANTED. Because
4 Plaintiff has failed to show that the Complaint's defects can be remedied, the Court denies leave to
5 amend. The fraud claim against Defendant MacLean is hereby dismissed with prejudice.
6
IT IS SO ORDERED.
7
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9 Dated:
Honorable Lucy H. Koh

United States District Court Judge
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949123.01/SF
[PROPOSED] ORDER GRANTING MOTION TO

DISMISS

Defendant Maclean's Motion To Dismiss Complaint

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Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page1 of 18

1 ROBERT R. MOORE (BAR NO. 113818)

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

Case No. 5:14-CV-2715-LHK-HRL

15 COUNTY OF MONTEREY, CURTIS

DEFENDANT ROBERT MACLEAN'S NOTICE OF

Allen Matkins Leck Gamble

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page2 of 18

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

ALLEN MATKINS LECK GAMBLE

Allen Matkins Leck Gamble

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page3 of 18

Plaintiff Lacks Article III Standing to Sue MacLean .......................................................... 4

Plaintiff's Fraud Claim is Time-Barred ............................................................................... 5

Plaintiff Fails to State a Plausible Fraud Claim .................................................................. 7

Plaintiff Fails to Plausibly Allege Any Misconduct by MacLean .......................... 8

Any Purported Misrepresentation by MacLean Was a NonActionable Expression of Opinion .......................................................................... 8

Plaintiff Could Not Have Justifiably Relied On the Legal Advice of

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page4 of 18

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page5 of 18

2 Miller v. Yokohama Tire Corp.,

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page6 of 18

In his official capacity, Collins worked on the Regional

Allen Matkins Leck Gamble

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page7 of 18

1 570-71 (2007) ("Recognizing entrapment by estoppel in such circumstances is antithetical to the

14 than he did in his criminal action.

The Complaint asserts a single claim for fraud against

Allen Matkins Leck Gamble

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page8 of 18

24 should be dismissed without leave to amend.

This Motion raises the following issues:

Allen Matkins Leck Gamble

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page9 of 18

PLAINTIFF LACKS ARTICLE III STANDING TO SUE MACLEAN

As an initial matter, Collins lacks constitutional standing to sue MacLean. Moreland v.

Allen Matkins Leck Gamble

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page10 of 18

PLAINTIFF'S FRAUD CLAIM IS TIME-BARRED

The Misrepresentation Was Allegedly Made in January 2010

Allen Matkins Leck Gamble

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page11 of 18

The Delayed Discovery Rule Does Not Save Collins' Claim

Allen Matkins Leck Gamble

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page12 of 18

PLAINTIFF FAILS TO STATE A PLAUSIBLE FRAUD CLAIM

Allen Matkins Leck Gamble

DEFENDANT ROBERT MACLEAN'S MOTION TO

Case5:14-cv-02715-LHK Document18 Filed12/22/14 Page13 of 18

Plaintiff Fails to Plausibly Allege Any Misconduct by MacLean

See Compl. 3 ("COUNTY intentionally misrepresented to COLLINS that he had no conflict