Tanner v. Kaiser Foundation Health Plan Inc. et al

Northern District of California, cand-4:2015-cv-02763

ORDER by Saundra Brown Armstrong granting {{37}} Defendants' Motion to Dismiss Plaintiff's Amended Complaint without leave to amend; and granting Defendants' Request for Judicial Notice {{38}}.

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5 1 2 3 4 UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 OAKLAND DIVISION 7 8 DR. SCOTT TANNER, an individual, Case No: C 15-02763-SBA 9 Plaintiff, ORDER GRANTING MOTION TO DISMISS 10 v. 11 KAISER FOUNDATION HEALTH PLAN, INC., a California corporation, KAISER 12 FOUNDATION HOSPITALS, a California corporation, NORTHERN CALIFORNIA 13 PERMANENTE MEDICAL GROUP, INC., a California corporation, and DOES 1-50, 14 Defendants. 15 16 Plaintiff Scott Tanner ("Plaintiff") filed the instant pro se action against his former 17 employers Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and The 18 Permanente Medical Group, Inc. ("TPMG," erroneously sued as Northern California 19 Permanente Medical Group, Inc.) (collectively, "Kaiser" or "Defendants"). Plaintiff seeks 20 to rescind his employment separation agreement with Kaiser, including the comprehensive 21 release of claims contained therein. Upon rescinding the same, Plaintiff further seeks to 22 prosecute claims for wrongful termination, discrimination, and retaliation. 23 The parties are presently before the Court on Defendants' Motion to Dismiss 24 Plaintiff's Amended Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6). 25 Dkt. 37. Having read and considered the papers filed in connection with this matter and 26 being fully informed, the Court hereby GRANTS Defendants' motion, for the reasons 27 stated below. The Court, in its discretion, finds this matter suitable for resolution without 28 oral argument. See Fed. R. Civ. P. 78(b); N.D. Cal. Civ. R. 7-1(b). 5 1 I. BACKGROUND 2 A. FACTUAL SUMMARY 3 In 2000, Plaintiff began working for the Kaiser Permanente Outpatient Pharmacy 4 Department. First Am. Compl. ("FAC") ¶ 14, Dkt. 33. Plaintiff served as a staff 5 pharmacist, a lead pharmacist, a pharmacist supervisor, and finally, in late 2010, as 6 Pharmacist-In-Charge at Kaiser's Manteca location. Id. 7 The allegations of Plaintiff's 56-page FAC (like his 69-page original complaint) are 8 profuse and discursive. In brief, between 2010 and 2012, Plaintiff was allegedly subject to 9 harassment, discrimination, and retaliation at work. FAC ¶¶ 14-66. Plaintiff is a white 10 male, over the age of 40, with an undisclosed "physiological serious health 11 condition/physical disability." Id. ¶¶ 88, 94, 103. During the relevant period, Kaiser's 12 pharmacy staff in Manteca was 85-90% Asian, female, and under the age of forty. Id. 13 ¶ 103. According to Plaintiff, he suffered adverse employment consequences based on his 14 color, gender, and age, as well as his disability, for which Defendants allegedly failed to 15 provide adequate accommodation. Id. ¶¶ 90, 94-95, 103-104, 115-116. 16 In addition, Plaintiff asserts that he suffered harassment and retaliation based on the 17 aforementioned factors (i.e., his color, gender, age, and disability), as well as for "[his] 18 complaints about [other employees'] misconduct affecting patient safety and care." FAC 19 ¶ 123. Among other allegations of misconduct, Plaintiff claims that Defendants failed to 20 respond to reports of unlawful drug diversion (i.e., theft) and drug furnishing irregularities 21 (i.e., pharmacist errors). Id. ¶ 125. Plaintiff also alleges that Defendants failed to take all 22 reasonable steps to prevent further discrimination and harassment. Id. ¶¶ 133, 135. 23 Finally, Plaintiff alleges that Kaiser engages in unlawful business practices. FAC 24 ¶ 151. According to Plaintiff, Defendants: (1) did not adequately compensate him and 25 others like him; (2) did not allocate sufficient funds for "community benefit expenditures"; 26 and (3) earned profits through 501(c)(3) tax-exempt entities, and then funneled said profits 27 to its related for-profit entities, such as TPMG. Id. ¶¶ 141-157. 28 -2- 5 1 On November 15, 2012, after a purported two-year campaign against Plaintiff by his 2 co-workers, which allegedly included verbal abuse, interference with his work 3 performance, and exacerbation of his health condition, FAC ¶¶ 26-32, Kaiser suspended 4 Plaintiff from work, id. ¶¶ 33-35. Kaiser stated that the suspension "was [a] non-punitive 5 investigation," and reduced Plaintiff's salary by 50%. Id. Plaintiff alleges that Kaiser did 6 not inform him of the reason for the suspension. Id. 7 While suspended, Plaintiff received materials regarding the 2012 Employee Choice 8 Program ("ECP"). FAC ¶ 37. ECP was a "voluntary separation incentive program" that 9 Kaiser offered to various employees in Northern California. Request for Jud. Not. ("RJN"), 10 Ex. 1(A) at p. 2, Dkt. 38. ECP offered eligible employees an opportunity to terminate their 11 employment voluntarily in exchange for severance pay and medical/dental coverage. Id. 12 On December 23, 2012, Plaintiff executed a Separation Agreement and General Release 13 (the "Separation Agreement") to take advantage of ECP. FAC ¶ 38; RJN, Ex. 1 at p. 1, 7.1 14 The Separation Agreement includes a provision entitled "Complete Release of 15 Claims," which released Defendants from all claims of any kind arising out of or related to 16 Plaintiff's employment and/or termination. RJN, Ex. 1 at p. 3. The release 17 includes, but is not limited to, all claims based in tort or contract, or under any federal, state, or local statute, ordinance, or common law, including, but 18 not limited to, the Age Discrimination in Employment Act ["ADEA"], Title 19 VII of the Civil Rights Act ["Title VII"], the Americans with Disabilities Act ["ADA"], the California Fair Employment and Housing Act ["FEHA"], or 20 any claim of discrimination, harassment, breach of contract or public policy, 21 wrongful or retaliatory discharge and all claims for compensation, vacation, attorney's fees, wrongful denial of insurance and employee benefits. 22 Id. Plaintiff's employment terminated effective February 11, 2013, and he received 16 23 weeks of severance pay totaling $45,558.78, plus other benefits. Id. at p. 1-2. 24 25 1 Defendants request that the Court take judicial notice of the Separation Agreement and ECP materials, which are referenced in, but not attached to, the FAC. Plaintiff does not 26 oppose the request. Moreover, although Plaintiff advocates for rescission of the Separation Agreement, he does not dispute its authenticity. Thus, the Court GRANTS Defendants' 27 request for judicial notice. See Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007) (a court may consider a writing referenced in a complaint, but not explicitly incorporated 28 therein, if the complaint relies on the document and its authenticity is unquestioned). -3- 5 1 Plaintiff now alleges that he executed the Separation Agreement under duress, 2 menace, and/or undue influence, and therefore, that he is entitled to rescind the agreement. 3 FAC ¶¶ 67-86. With regard to duress, Plaintiff alleges that several factors--Kaiser's refusal 4 to accommodate his health condition, his suspension (with 50% reduction in pay), and the 5 risk of termination--induced him to sign the Separation Agreement. Id. ¶¶ 69-74. With 6 regard to menace, Plaintiff further alleges that he signed the Separation Agreement "to 7 escape" ongoing harassment and threats that he endured at work and/or from his coworkers. 8 Id. ¶¶ 75-82. Finally, with regard to undue influence, Plaintiff alleges that, because of his 9 health condition and the aforementioned hostile work environment, he suffered a weakness 10 of spirit that rendered him unable to exercise independent judgment when executing the 11 Separation Agreement. Id. ¶¶ 83-86. 12 B. PROCEDURAL HISTORY 13 On April 21, 2015, Plaintiff filed suit against Defendants in state court, alleging 14 claims for: (1) Unlawful Attainment of Invalid Separation Agreement; (2) Age 15 Discrimination in Violation of ADEA and FEHA; (3) Disability Discrimination in 16 Violation of ADA and FEHA; (4) Race, Color, Gender, and National Origin Discrimination 17 in Violation of Title VII and FEHA; (5) Failure to Accommodate Disability; 18 (6) Retaliation; (7) Failure to Prevent Discrimination, Harassment or Retaliation; 19 (8) Unlawful Business Practices; and (9) Constructive Discharge in Violation of Public 20 Policy. Dkt. 1. Defendants removed the instant action to this Court based on federal- 21 question jurisdiction. Id. 22 On June 26, 2015, Defendants filed a motion to dismiss the Complaint, arguing that 23 Plaintiff: (1) failed to allege facts sufficient to support a claim for rescission of the 24 Severance Agreement, and (2) had released all remaining claims under that agreement. 25 Dkt. 6. On December 3, 2015, the Court granted Defendant's motion. Order, Dkt. 32. The 26 Court found that Plaintiff failed to state facts sufficient to support a claim for rescission of 27 the Separation Agreement, which, in turn, barred any cause of action arising out of his 28 employment and termination. The Court further held that, with the exception of the eighth -4- 5 1 cause of action for unlawful business practices, Plaintiff's claims arose entirely out of his 2 employment and termination. With regard to the eighth cause of action, Plaintiff appeared 3 to predicate the claim on violations of both the California Labor Code ("CLC") and the 4 Internal Revenue Code ("IRC"). The Court found that (1) the Separation Agreement served 5 as a bar to Plaintiff's claim insofar as it arose out of alleged CLC violations, and 6 (2) Plaintiff lacked standing to raise the claim insofar as it arose out of alleged IRC 7 violations. The Court granted Plaintiff leave to amend his claims, except for the ninth 8 cause of action for constructive discharge, which is time-barred. 9 On December 16, 2015, Plaintiff filed the operative First Amended Complaint, re- 10 alleging the first through eighth causes of action. Dkt. 33. Thereafter, Defendants filed the 11 instant Motion to Dismiss Plaintiff's Amended Complaint. Dkt. 37. The motion is fully 12 briefed and ripe for adjudication. 13 II. LEGAL STANDARD 14 Rule 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 15 729, 732 (9th Cir. 2001). "Dismissal under Rule 12(b)(6) is proper when the complaint 16 either (1) lacks a cognizable legal theory or (2) fails to allege sufficient facts to support a 17 cognizable legal theory." Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). "Rule 18 12(b)(6) is read in conjunction with Rule 8(a), which requires not only 'fair notice of the 19 nature of the claim, but also grounds on which the claim rests.'" Zixiang Li v. Kerry, 710 20 F.3d 995, 998-99 (9th Cir. 2013) (quoting in part Bell Atl. Corp. v. Twombly, 550 U.S. 21 544, 556 n.3 (2007)). "To survive a motion to dismiss, a complaint must contain sufficient 22 factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" 23 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). 24 In assessing the sufficiency of the pleadings, "courts must consider the complaint in 25 its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) 26 motions to dismiss, in particular, documents incorporated into the complaint by reference, 27 and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & 28 Rights, Ltd., 551 U.S. 308, 322 (2007). The court is to "accept all factual allegations in the -5- 5 1 complaint as true and construe the pleadings in the light most favorable to the nonmoving 2 party." Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 899-900 (9th Cir. 3 2007). Where a complaint or claim is subject to dismissal, the court generally grants leave 4 to amend, unless further amendment would be futile. Cervantes v. Countrywide Home 5 Loans, Inc., 656 F.3d 1034, 1041 (9th Cir. 2011). 6 III. DISCUSSION 7 A. RESCISSION CLAIM 8 A party to a contract may rescind the same if his or her consent was "obtained 9 through duress, menace, fraud, or undue influence." Cal. Civ. Code § 1689(b)(1). In the 10 original complaint, Plaintiff sought to rescind the Separation Agreement based solely on 11 economic duress. In the FAC, Plaintiff premises his rescission claim on duress, menace, 12 and undue influence. Despite Plaintiff's amendments to the original complaint, Defendants 13 argue that he still fails to allege facts sufficient to establish a basis for rescission. 14 Defendants further argue that Plaintiff cannot rescind the Separation Agreement without 15 tendering everything of value that he received thereunder--$45,588.78 in severance pay and 16 the value of all other benefits received. 17 1. Duress 18 Early statutory and judicial expressions of duress required an unlawful act in the 19 nature of a tort or a crime. Rich & Whillock, Inc. v. Ashton Dev., Inc., 157 Cal. App. 3d 20 1154, 1158 (1984) (citing Cal. Civ. Code § 1569). Under modern California law, however, 21 economic duress can serve as a basis for rescinding a settlement agreement or release. 22 Johnson v. Int'l Bus. Machines Corp., 891 F. Supp. 522, 528 (N.D. Cal. 1995); Lanigan v. 23 City of Los Angeles, 199 Cal. App. 4th 1020, 1034 (2011). "Economic duress is an 24 equitable doctrine which 'come[s] into play upon the doing of a wrongful act which is 25 sufficiently coercive to cause a reasonably prudent person faced with no reasonable 26 alternative to succumb to the perpetrator's pressure.'" Johnson, 891 F. Supp. at 528-29 27 (quoting Rich & Whillock, 157 Cal. App. 3d at 1158-59). 28 -6- 5 1 The elements of economic duress are: (1) a sufficiently coercive wrongful act on the 2 part of the defendant; (2) no reasonable alternative on the part of the plaintiff; 3 (3) knowledge of the plaintiff's economic vulnerability; and (4) actual inducement to 4 contract. Johnson, 891 F. Supp. at 529. "'The assertion of a claim known to be false or a 5 bad faith threat to breach a contract or to withhold a payment may constitute a wrongful act 6 for purposes of the economic duress doctrine. Further, a reasonably prudent person subject 7 to such an act may have no reasonable alternative but to succumb when the only other 8 alternative is bankruptcy or financial ruin.'" Chan v. Lund, 188 Cal. App. 4th 1159, 1173- 9 74 (quoting Rich & Whillock, 157 Cal. App. 3d at 1159, 1173-74). 10 Here, Plaintiff fails to allege the necessary elements of economic duress. First, 11 Plaintiff fails to allege facts showing that he had "no 'reasonable alternative'" to 12 participating in ECP. Lanigan, 199 Cal. App. 4th at 1034. Although Plaintiff alleges that 13 termination was "imminent" in light of his suspension, see FAC ¶ 71, termination "was not 14 a certainty" and Plaintiff had the option to await resolution of his suspension and return to 15 work. Lanigan, 199 Cal. App. 4th at 1034. Alternatively, Plaintiff alleges that he could not 16 return to work due to Kaiser's "refusal to accommodate [his] physician certified medical 17 health conditions/disabilities or leave request." Id. Assuming Kaiser failed to 18 accommodate Plaintiff's disability, however, Plaintiff had the option to continue his 19 employment and seek assistance (internally or externally) to resolve that issue. 20 In any event, even if Plaintiff would have suffered a termination or could not 21 otherwise have reasonably returned to work, he fails to allege facts establishing dire 22 economic conditions such as "imminent bankruptcy or financial ruin." Johnson, 891 F. 23 Supp. at 529 (quoting Rich & Whillock, 157 Cal. App. 3d at 1154). Although Plaintiff 24 alleges that he faced "imminent financial ruin" due to the 50% reduction in his salary while 25 suspended and his imminent termination, FAC ¶ 70, the mere fact that Plaintiff might have 26 lost his job and "needed the money offered under the agreement. . . does not equate to 27 economic duress." Perez v. Uline, Inc., 157 Cal. App. 4th 953, 960 (2007). "The same 28 could be said of almost any case where an employee is discharged [or faced discharge] and -7- 5 1 offered severance pay." Id. Absent evidence of imminent financial ruin, the Court finds 2 that Plaintiff could have preserved his claims and pursued legal action against Defendants, 3 as an alternative to executing the Separation Agreement and its comprehensive release.2 4 Finally, and most significantly, Plaintiff fails to identify any coercive act on the part 5 of Defendants that would have caused or induced him to sign the Separation Agreement. 6 Such a causal relationship between Kaiser's acts and Plaintiff's execution of the contract is 7 required. See Johnson, 891 F. Supp. at 530 (the defendant's act must induce the assent of 8 the coerced party). Plaintiff does not allege that Kaiser committed a wrongful act that 9 actually induced him to sign the Separation Agreement. Instead, he alleges that his 10 suspension and imminent termination "caus[ed] a fear based coercive inducement to sign 11 the ECP agreement." FAC ¶ 73. "Merely being put to a voluntary choice of perfectly 12 legitimate alternatives is the antithesis of duress," even if that choice is made under less 13 than ideal circumstances. In re Executive Life Ins. Co., 32 Cal. App. 4th 344, 390-91 14 (1995). Thus, the fact that Plaintiff was "forced to elect whether to opt in or opt out" of the 15 Separation Agreement is insufficient to establish duress. Id. This is true even if ECP was 16 "made more attractive" to Plaintiff because of fears regarding his job security. Id. 17 2. Menace 18 Menace and duress are "often used interchangeably," "but in California menace is 19 technically a threat of duress or a threat of injury to the person, property, or character of 20 another." Ordorizzi v. Bloomfield Sch. Dist., 246 Cal. App. 2d 123, 128 (1966) (citing Cal. 21 Civ. Code § 1570). Neither duress nor menace is established "when the voluntary action of 22 the apprehensive party is induced by his speculation upon or anticipation of a future event 23 suggested to him by the defendant but not threatened to induce his conduct." Goldstein v. 24 Enoch, 248 Cal. App. 2d 891, 894 (1967). "The issue in each instance is whether the 25 26 2 In support of the claim that he faced financial ruin, Plaintiff also alleges that he applied for, and was denied, "over fifty" other positions in Kaiser's Outpatient Pharmacy 27 Department. FAC ¶¶ 64, 73. He does not allege that he applied for a position with any other employer. As discussed above, the inability to remain at Kaiser is insufficient to 28 establish imminent financial ruin. -8- 5 1 defendant intentionally exerted an unlawful pressure on the injured party to deprive him of 2 contractual volition and induce him to act to his own detriment." Id. at 894-95. 3 For reasons similar to those discussed above regarding duress, Plaintiff fails to 4 allege the necessary elements of menace. Plaintiff alleges that certain Kaiser employees 5 (1) "verbally attacked" him; (2) targeted him with harassing telephone calls; (3) forced him 6 to initial a log posted upon his office door every time he exited to use the restroom; and 7 (4) engaged in "assaultive behavior and actions toward him and other non-Asian staff." 8 FAC ¶¶ 77-80. Although the acts alleged are wrongful, and perhaps even deplorable if 9 proven true, Plaintiff fails to allege that Kaiser undertook any of these actions in order to 10 deprive him of contractual volition and induce him to sign the Separation Agreement. 11 In fact, Plaintiff fails to allege any connection between Kaiser's purportedly 12 wrongful acts (or the acts of its employees) and its decision to make ECP available. 13 According to Plaintiff, the bulk of these wrongful acts occurred before Kaiser extended 14 ECP to its employees in December 2012. See, e.g., FAC ¶ 80 (alleging that a Kaiser 15 employee engaged in assaultive behavior toward Plaintiff on or about July 12, 2012, and 16 August 1, 2012). Such acts could not have served as a threat to induce Plaintiff to sign the 17 Separation Agreement when Kaiser had yet to present Plaintiff with that agreement. 18 Additionally, Kaiser offered ECP to many of its area employees, not just Plaintiff. 19 Although Plaintiff's apprehension regarding workplace conditions may have influenced his 20 decision to participate in ECP, this does not establish menace. See Goldstein, 248 Cal. 21 App. 2d at 895 (absent a threat, individual apprehension is insufficient to establish menace, 22 "even when the deplorable conduct of [another] generates the condition"). 23 3. Undue Influence 24 Under California law, undue influence may consist of "taking an unfair advantage of 25 another's weakness of mind" or "taking a grossly oppressive and unfair advantage of 26 another's necessities or distress." Cal. Civ. Code § 1575. "Undue influence. . . is a 27 shorthand legal phrase used to describe persuasion which tends to be coercive in nature, 28 persuasion which overcomes the will without convincing the judgment." Ordorizzi, 246 -9- 5 1 Cal. App. 2d at 130. A party seeking to invoke the doctrine of undue influence must 2 establish: (1) undue susceptibility, i.e., a weakness of mind that results in a lessened 3 capacity to make a free contract; and (2) excessive pressure, i.e, the application of 4 excessive strength to secure an agreement. Olam v. Cong. Mortgage Co., 68 F. Supp. 2d 5 1110, 1041 (N.D. Cal. 1999) (citing Odorizzi, 246 Cal. App. 2d at 131-32). "'In 6 combination, the elements of undue susceptibility in the servient person and excessive 7 pressure by the dominating person make the latter's influence undue.'" Id. (quoting 8 Odorizzi, 246 Cal. App. 2d at 131). 9 Plaintiff argues that he suffered undue susceptibility because he was "physically, 10 mentally, [and] emotionally exhausted and weak from sleeplessness, severe headaches, 11 [and] GI distress." Opp'n at 14. Such "weakness of spirit" may constitute undue 12 susceptibility. See Johnson, 891 F. Supp. at 531 (such "weakness" need not be long lasting 13 or wholly incapacitating, but may be merely a lack of full vigor due to age, physical 14 condition, emotional anguish, or some combination thereof). Nevertheless, even assuming 15 that Plaintiff suffered undue susceptibility, he fails to satisfy "the second, essential 16 element" of undue influence, i.e., excessive pressure. Olam, 68 F. Supp. 2d at 1150; see 17 also Johnson, 891 F. Supp. at 531 (weakness of spirit is legally insufficient to establish 18 undue influence if it is "not accompanied by the actual exercise of overpersuasion"). 19 Excessive pressure is generally accompanied by certain characteristics that tend to 20 create a pattern, including: (1) discussion of the transaction at an unusual or inappropriate 21 time; (2) consummation of the transaction in an unusual place; (3) insistent demand that the 22 business be finished at once; (4) extreme emphasis on untoward consequences of delay; 23 (5) the use of multiple persuaders by the dominant side against a single servient party; 24 (6) absence of third-party advisors to the servient party; and (7) statements that there is no 25 time to consult financial advisers or attorneys. Johnson, 891 F. Supp. at 531 (citing 26 Odorizzi, 246 Cal. App. 2d at 133). "'If a number of these elements are simultaneously 27 present, the persuasion may be characterized as excessive.'" Id. (quoting Odorizzi, 246 28 Cal. App. 2d at 133). - 10 - 5 1 Here, not one of the indicia of overpersuasion is present. Plaintiff fails to allege any 2 facts showing that discussion of the Separation Agreement occurred at an unusual or 3 inappropriate time, or that execution of the agreement occurred in an unusual place. Like 4 the other employees invited to participate in ECP, Plaintiff received the plan materials in 5 the mail. See FAC ¶ 37. Consequently, he was able to review and execute the Separation 6 Agreement at a time and place of his choosing, free from the influence of any third party. 7 Plaintiff asserts that the execution of the Separation Agreement was ill-timed and 8 out-of-place because he was on a suspension. See FAC ¶ 85. Given that separation 9 agreements often arise under such circumstances, however, the Court finds nothing 10 inherently unusual or inappropriate regarding the time and place of the Separation 11 Agreement's execution. See, e.g., Johnson, 891 F. Supp. at 525 (no undue influence where 12 the plaintiff signed a separation agreement after receiving notice of his impending 13 termination). In fact, because the voluntary ECP initiative was wholly unrelated to 14 Plaintiff's suspension, any claim of undue influence here is attenuated. Cf. id. (where the 15 plaintiff had already been designated a "surplus employee" under an "involuntary 16 reduction-in-force program"). 17 Plaintiff also does not allege that Kaiser demanded execution of the Separation 18 Agreement at once or emphasized the untoward consequences of delay. Nor does he allege 19 any facts suggesting that Kaiser exerted such pressures. Kaiser afforded Plaintiff 45 days 20 to review and execute the Separation Agreement, as well as another 7 days to revoke the 21 same.3 As acknowledged by Plaintiff, the only consequence of delay was "loss of 22 eligibility for ECP." FAC ¶ 85. Given that ECP was a voluntary incentive separation 23 program, Kaiser was free to put its employees to a choice regarding their participation. 24 Moreover, even if Plaintiff faced the possibility of termination if he remained at Kaiser, the 25 26 3 Although Plaintiff alleges that he received the ECP materials in early December "with a December 13, 2012 deadline pressuring imminent decision," FAC ¶ 85, the 27 December 13 deadline corresponds to the application period, not the decision period. See RJN, Ex 1(A) at p. 17. Plaintiff had until February 1, 2013, to decide whether to participate 28 in ECP. Id. He executed the Separation Agreement on December 23, 2012. - 11 - 5 1 choice presented--participate in ECP or risk termination--was "an accurate summation of 2 [his] situation," and not necessarily coercive. Robison v. City of Manteca, 78 Cal. App. 4th 3 452, 458 (2000) (no undue influence where an employee-organization representative 4 "strongly advised" the plaintiff to execute a substance abuse "recovery agreement" or face 5 immediate termination). 6 Finally, Plaintiff fails to allege any facts establishing the use of multiple persuaders 7 by Kaiser or the absence of third-party advisors for himself. Plaintiff does not allege that 8 "anything prevented him from reviewing the agreement. . . or consulting with an attorney." 9 Robison, 78 Cal. App. 4th at 458. Nor does he allege that any Kaiser representative made a 10 statement or effort to persuade him to participate in ECP. This, coupled with the assertion 11 that Plaintiff communicated only in writing with "faceless and unknown" ECP 12 representatives, FAC ¶ 85, undercuts any claim of overpersuasion. 13 4. Conclusion 14 In view of the foregoing, Plaintiff fails to allege facts amounting to duress, menace, 15 or undue influence. Accordingly, the Court GRANTS Defendants' motion to dismiss 16 Plaintiff's first cause of action for rescission of the Separation Agreement. 17 B. REMAINING CLAIMS 18 Defendants contend that the Separation Agreement bars all causes of action arising 19 out of Plaintiff's employment and/or termination. Defs.' Mot. at 7. Pursuant to the 20 Separation Agreement, Plaintiff waived "any and all claims of any kind, known or 21 unknown, arising out of or related to [his] employment with [Kaiser] or the termination of 22 [his] employment." RJN, Ex. 1 at p. 3. Plaintiff does not dispute that the Separation 23 Agreement, if enforceable, bars his claims; he argues only that the Separation Agreement is 24 subject to rescission. See Pl.'s Opp'n at 6-17. Because Plaintiff fails to state a claim for 25 rescission, all claims covered by the Separation Agreement's comprehensive release are 26 barred. The Court finds that the release therefore bars the second, third, fourth, fifth, sixth 27 and seventh causes of action, without the need for further discussion. See also Order at 7. 28 - 12 - 5 1 A brief further discussion is required as to the eighth cause of action for unlawful 2 business practices. The eighth cause of action arises under California's Unfair Competition 3 Law (the "UCL"), which makes actionable any "unlawful, unfair or fraudulent business act 4 or practice." Cal. Bus. & Prof. Code § 17200. With respect to the unlawful prong, the 5 UCL incorporates other laws and treats violations of those laws as unlawful business 6 practices independently actionable under state law. Chabner v. United Omaha Life Ins. 7 Co., 225 F.3d 1042, 1048 (9th Cir. 2000). Plaintiff predicates his UCL claim upon 8 violations of the CLC and the IRC. As previously held by this Court, insofar as Plaintiff's 9 UCL claim arises out of alleged CLC violations for unpaid wages, it relates to his 10 employment and is subject to the comprehensive release. See Order at 7; see also 11 Separation Agreement, RJN, Ex. 1 at p. 3 (releasing "all claims for compensation"). 12 Insofar as the UCL claim arises out of alleged IRC violations, it is not immediately 13 clear whether it relates to Plaintiff's employment. Even if not, Plaintiff nonetheless fails to 14 state a claim under the UCL. "To have standing under California's UCL, as amended by 15 California's Proposition 64, plaintiffs must establish that they (1) suffered an injury in fact 16 and (2) lost money or property as a result of the unfair competition." Birdsong v. Apple, 17 Inc., 590 F.3d 955, 960 (9th Cir. 2009). "To satisfy the narrower standing requirements 18 imposed by Proposition 64, a party must now (1) establish a loss or deprivation of money 19 or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that the 20 economic injury was the result of, i.e., caused by, the unfair business practice. . . that is the 21 gravamen of the claim." Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 322 (2011); see 22 also Rubio v. Capital One Bank, 613 F.3d 1195, 1203-04 (9th Cir. 2010). 23 Plaintiff fails to allege that he suffered economic injury caused by the unfair 24 business practice that is the gravamen of his claim. According to Plaintiff, a tax-exempt 25 organization, such as Kaiser, "must be organized and operated exclusively for exempt 26 purposes set forth in [28 U.S.C. § 501(c)(3)], and none of its earnings may inure to any 27 private shareholder or individual." FAC ¶ 145. Plaintiff alleges that Defendants acted 28 unlawfully by funneling profits to TPMG, and that such profits then inured to the benefit of - 13 - 5 1 private individuals--the TPMG physicians. Id. ¶ 151. Plaintiff does not allege that he 2 suffered any economic injury as a result of these purported violations, however. 3 Plaintiff's alleged economic injury arises out of Defendants' failure to pay wages, 4 i.e., forced overtime, a variable pay award, and equal pay. Id. ¶ 154. The alleged injury 5 fails in two respects. First, Plaintiff alleges no facts establishing a causal connection 6 between Defendants' purported IRC violations (i.e., siphoning profits to private entities) 7 and his economic injury (i.e., unpaid compensation). Thus, he lacks standing to prosecute 8 this claim. Second, to the extent that Plaintiff's economic injury takes the form of unpaid 9 compensation, it arises out of his employment, whether predicated upon violations of the 10 CLC or the IRC. The Court finds that the entirety of the eighth cause of action is therefore 11 subject to the comprehensive release. 12 Accordingly, the Court GRANTS Defendants' motion to dismiss Plaintiff's second, 13 third, fourth, fifth, sixth, seventh, and eighth causes of action. 14 C. LEAVE TO AMEND 15 If a complaint is subject to dismissal for failure to state a claim, the court has 16 discretion whether to grant leave to amend. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 17 2000) (en banc). Leave to amend may be denied if (1) prior amendments have failed to 18 cure the deficiencies, and/or (2) further amendment would be futile, i.e., the "allegation of 19 other facts consistent with the challenged pleading could not possibly cure the 20 deficienc[ies]." Abigninin v. AMVAC Chem. Corp., 545 F.3d 733, 742 (9th Cir. 2008). 21 Here, the Court previously granted Plaintiff leave to amend and provided a detailed 22 analysis of the deficiencies in his pleading. Plaintiff failed to cure the same. Additionally, 23 the Court finds that amendment would be futile. The theory advanced by Plaintiff--that he 24 executed the Separation Agreement under coercion because of his workplace conditions 25 and suspension--simply fails to establish any basis for rescission. Instead of trying to 26 establish a valid basis for rescission after the dismissal of his original complaint, Plaintiff 27 simply repackaged the facts already alleged in an effort to advance the same flawed theory 28 - 14 - 5 1 in the FAC. Plaintiff cannot allege additional facts consistent with the FAC that would 2 support a claim for rescission.4 Accordingly, leave to amend is DENIED. 3 IV. CONCLUSION 4 For the reasons stated above, 5 IT IS HEREBY ORDERED THAT: 6 1. Defendants' Request for Judicial Notice, Dkt. 38, is GRANTED. 7 2. Defendants' Motion to Dismiss Plaintiff's Amended Complaint, Dkt. 37, is 8 GRANTED without leave to amend. 9 3. The Clerk shall close the file and terminate any pending matters. 10 IT IS SO ORDERED. 11 Dated: 8/1/16 ______________________________ SAUNDRA BROWN ARMSTRONG 12 Senior United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 4 Indeed, the Court questioned Plaintiff's ability to allege facts that would have supported a claim for rescission upon dismissal of the original complaint, but nonetheless 28 granted leave to amend in order to give Plaintiff that opportunity. See Order at 9, 11. - 15 -