The opinion of the court was delivered by: Hayes, Judge:
The matters before the Court are the Motion to Dismiss filed by Defendants John R. Hart, Ronald Langley, Ronald G. Deuster, Richard D. Ruppert, Julie H. Sullivan, Kristina M. Leslie, Carlos C. Campbell, Kenneth J. Slepicka, and Pico Holding, Inc. (ECF No. 6) and the Motion to Remand to State Court filed by Plaintiff Ronald Dennis, suing derivatively. (ECF No. 7).
On August 16, 2011, Plaintiff Dennis initiated this shareholder derivative action by filing a Complaint in the Superior Court of the State of California for the County of San Diego, where it was assigned case number 37-2011-00096377-CU-SL-CTL. (ECF No. 1-4 at 7). On September 30, 2011, Defendants filed a Notice of Removal, removing the case to this Court. (ECF No. 1). Defendants assert that the Court has original jurisdiction over the case pursuant to 28 U.S.C. § 1331 because allegations regarding the negative say on pay vote in the Complaint "pose substantial federal questions [and] necessarily arise under federal law." Id. at 4.
On October 7, 2011, Defendants filed a Motion to Dismiss. (ECF No. 6). Plaintiff filed an Opposition. (ECF No. 14). Defendants filed a Reply. (ECF No. 16).
On October 13, 2011, Plaintiff filed a Motion to Remand to State Court. (ECF No. 7). Defendants filed an Opposition. (ECF No. 15). Plaintiff filed a Reply. (ECF No. 17).
II. Allegations of the Complaint
Plaintiff Ronald Dennis is a shareholder of PICO Holdings, Inc. ("PICO"). (ECF No. 1 at 15 ¶ 13). PICO is a California corporation located in La Jolla, CA. Id. at ¶ 14. PICO "is a diversified holding company that seeks to build and operate businesses where significant value can be created from the development of unique assets." Id. at ¶ 14. Defendants Hart, Langley, Deuster, Ruppert, Sullivan, Leslie, Campbell, and Slepicka serve on the board of directors for PICO. Id. at ¶¶ 15-22.
PICO maintains a "pay-for-performance" policy and filed a proxy statement which stated that PICO's executive compensation program "reward[s executives] for achieving superior growth ...." Id. at ¶ 33. PICO's annual revenue declined from $60.35 million in 2008 to $32.17 million in 2010. Id. at ¶ 34. PICO's stock performance also declined in 2010. Id. at ¶ 36. "Notwithstanding PICO's 2010 results, PICO's executive compensation [for 2010] dramatically inceased" to $14, 278,401. Id. at ¶ 38. The total compensation for PICO's chief executive officer was increased by 487%. Id.
On May 13, 2011, a majority of PICO's shareholders rejected PICO's executive compensation in a "say-on-pay" vote. Id. at ¶¶ 41, 42. "Although advisory in nature, the adverse shareholder vote on PICO's 2010 executive compensation is nonetheless evidence that the 2010 pay hikes were irrational and unreasonable under the circumstances, and were not primarily motivated by a desire to protect PICO's interest." Id. at ¶ 43. "In light of the adverse shareholder vote, the presumption of business judgment has been rebutted, and the burden of proof ... now rests with the PICO Board." Id.
Plaintiff asserts six claims against Defendants as follows: (1) breach of fiduciary duty; (2) gross mismanagement; (3) contribution and indemnification;(4) abuse of control; (5) waste of corporate assets; and (6) unjust enrichment. Plaintiff seek relief including damages, injunctive relief, and a "[d]eclaration that the adverse May 13, 2011 advisory shareholder vote on the PICO Board's 2010 executive compensation rebutted the business judgment surrounding the PICO Board's decisions to increase executive compensation in 2010." Id. at 37.
Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure 8(a) provides: "A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
To sufficiently state a claim to relief and survive a Rule 12(b)(6) motion, a complaint "does not need detailed factual allegations" but the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (quoting Fed. R. Civ. P. 8(a)(2)). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1950 (2009). However, a court is not "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); see, e.g., Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir. 2009) ("Plaintiffs' general statement that Wal-Mart exercised control over their day-to-day employment is a conclusion, not a factual allegation stated with any specificity. We need not accept Plaintiffs' unwarranted conclusion in reviewing a ...