The opinion of the court was delivered by: JOHN HOUSTON, Magistrate Judge
ORDER DENYING IN PART AND GRANTING IN PART DEFENDANTS' MOTION TO
DISMISS [DOC. NO. 25]
Now before the Court is Defendants' Tamelah Carew, David
Herrick, Kristin Stafford, the Medical Board of California, Dave
Thornton, Patricia Stillwell, Nancy M. Edwards, Mark A. Kalish,
M.D., Joseph F. Kennedy, M.D. and Ronald L. Moy, M.D.
(collectively "State Defendants") motion to dismiss. Based upon a
careful review of the pleadings and all relevant exhibits
submitted by the parties, and for the reasons set forth below,
this Court DENIES IN PART and GRANTS IN PART State Defendants'
motion to dismiss.
Plaintiff Robert Sterner ("Plaintiff") is a licensed physician
practicing medicine in the State of California since 1984.
Plaintiff maintains two medical offices in El Cajon and San
Diego. In 2001, Dr. Sterner began to issue recommendations for
medical marijuana to some of his patients. Plaintiff is the former employer of Defendants
Carew, Herrick and Stafford. Defendant Stafford left her office
manager position in March 2003. Defendants Carew and Herrick were
terminated in May 2003.
On or about May 23, 2003, Defendant Carew approached Defendant
DEA Agent Brasich with information regarding Plaintiff's income
and the reporting of his finances. Based on this information,
Defendant Brasich drafted a report recommending investigation of
Plaintiff. Brasich forwarded this report to Defendant State
Medical Board on June 16, 2003. Brasich also approached Defendant
Toussaint to commence an Internal Revenue Service ("IRS")
investigation of Plaintiff.
On or about August 8, 2003, Defendant Stillwell and three other
Medical Board investigators interviewed Plaintiff at his medical
office in El Cajon. Plaintiff met with the investigators and
answered their questions. Plaintiff also allowed them to examine
the office, as well as his drug dispensing records and invoices.
According to Plaintiff, the investigators found nothing to raise
concerns over his practice, nor had any patient filed a complaint
of malpractice, mistreatment or other complaint. On August 26,
2003, Defendant Stillwell served an investigational subpoena
ordering him to appear and testify before Defendants Stillwell
and Kennedy. Plaintiff, with counsel, met with the Defendants on
November 14, 2003.
On November 20, 2003, the IRS and Defendant IRS Special Agent
Darline Toussaint, sought, and received, five separate search
warrants to search Plaintiff's medical offices, home, storage
facilities and safe deposit box. The IRS and Defendant Toussaint
searched these locations on November 24, 2003. The IRS seized, in
addition to business and tax records authorized by the warrant,
records and treatment histories for each of Plaintiff's patients.
On July 28, 2004, the federal grand jury's investigation of
Plaintiff ended with no criminal charges filed.
Approximately one year after Plaintiff met with Defendants
Stillwell and Kennedy of the State Medical Board, the Medical
Board filed a petition on December 2, 2004, for an order to
compel psychiatric examination of Plaintiff, as well as submit to
blood and urine tests.
2. Procedural History Plaintiff individually, and on behalf of his patients
(collectively "Plaintiffs"), filed the instant complaint on
February 1, 2005. The Honorable Jeffrey T. Miller extended the
answer deadline for federal defendants on March 15 and April 5,
2005. See Doc. Nos. 15 and 18. Plaintiffs and State Defendants
also stipulated to Plaintiffs not seeking a default judgment
within thirty days of service of the complaint. See Doc. No.
On May 5, 2005, Defendant Toussaint, joined by the DEA, moved
to disclose the grand jury material in Plaintiff's investigation.
See Doc. Nos. 22 and 24. Plaintiff filed a response on May 23,
2005. Doc. No. 28. Defendant Toussaint filed a reply on June 1,
2005. Plaintiff subsequently filed a motion for protective order,
and for leave to file pleadings and documents under seal on June
21, 2005. See Doc. No. 37. Defendants DEA and Toussaint, joined
by State Defendants, filed a response on July 12, July 18, and
July 26, 2005, respectively. See Doc. Nos. 36, 38 and 41. The
motions to disclose grand jury material and for protective order
were heard by Magistrate Judge Battaglia on July 29, 2005. See
Doc. No. 47. Judge Battaglia granted Defendants' motion for
disclosure of grand jury material and Plaintiffs' motion for
protective order. Id. Judge Battaglia also granted Defendant
DEA's motion for extension of time to respond to the complaint.
The instant motion was filed by State Defendants on May 12,
2005. Doc. No. 25. Plaintiffs filed an opposition on June 16,
2005. Doc. No. 33. The State Defendants filed a reply on July 11,
2005. Doc. No. 35. This case was transferred to this Court on
July 27, 2005. Doc. No. 44. On September 29, 2005, this motion
was taken under submission without an oral hearing pursuant to
Civ. LR 7.1 (d.1). See Doc. No. 58.
A motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) tests the sufficiency of the complaint. Navarro v.
Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal of a claim
under this Rule is appropriate only where "it appears beyond
doubt that the plaintiff can prove no set of facts in support of
his claim which would entitle him to relief." Conley v. Gibson,
355 U.S. 41, 45-46 (1957); Navarro, 250 F.3d at 732. Dismissal
is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson
v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir.
1984); see also Neitzke v. Williams, 490 U.S. 319, 326 (1989)
("Rule 12(b)(6) authorizes a court to dismiss a claim on the
basis of a dispositive issue of law."). Alternatively, a
complaint may be dismissed where it presents a cognizable legal
theory yet fails to plead essential facts under that theory.
Robertson, 749 F.2d at 534. However, motions to dismiss are
generally disfavored and rarely granted. See Gilligan v. Jamco
Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997).
In reviewing a motion to dismiss under Rule 12(b)(6), the Court
must assume the truth of all factual allegations and must
construe all inferences from them in the light most favorable to
the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th
Cir. 2002); Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,
337-38 (9th Cir. 1996). However, legal conclusions cast in the
form of factual allegations need not be taken as true. Ileto ...