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Anthony Encarnacao, An Individual v. Phase Forward Inc.

March 14, 2012


The opinion of the court was delivered by: Hon. Otis D. Wright II United States District Judge



Pending before the Court is Plaintiff Anthony Encarnacao's ("Plaintiff") Motion for Reconsideration. (Dkt. No. 47.) On February 7, 2012, the Court granted Defendants Phase Forward, Inc.; D. Ari Buchler; Russell J. Campanello; Christopher Menard; Steven Powell; Steven Rosenberg; and Robert K. Weiler's (collectively "Defendants")*fn1 Motion to Dismiss. (Dkt. No. 36.) After careful consideration of the papers filed in support of and in opposition to the instant Motion, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7--15. For the reasons discussed below, Plaintiff's Motion DENIED.


On August 29, 2011, Plaintiff filed a First Amended Complaint alleging, among other things, that Defendants violated the Racketeer Influenced and Corrupt Organization Act ("RICO") and tortiously interfered with the contract between Plaintiff and his employer, Phase Forward. (Dkt. No. 22.) On February 7, 2012, the Court granted Defendants' Motion to Dismiss Plaintiff's RICO and tortious interference with contract claims with prejudice.

On March 5, 2012, Plaintiff filed the instant Motion for Reconsideration. (Dkt. No. 36.) Defendants filed an opposition on March 12, 2012. (Dkt. No. 48.) In essence, Plaintiff contends that the Court failed to consider fully the arguments made in its opposition to Defendants' Motion to Dismiss and that even if Plaintiff's RICO and tortious interference claims were properly subject to dismissal, the Court should have granted Plaintiff leave to amend those claims. The Court disagrees.


"Although Rule 59(e) permits a district court to reconsider and amend a previous order, the rule offers an extraordinary remedy, to be used sparingly in the interests of finality and conservation of judicial resources." Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (internal quotation marks omitted). "[A] motion for reconsideration should not be granted, absent highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in the controlling law." Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) (quoting 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999)). Furthermore, a motion "may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation." Marlyn Nutraceuticals, Inc., 571 F.3d at 880 (internal quotation marks omitted).

Pursuant to Local Rule 7--18, a motion for reconsideration may be made only on the grounds of (a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision. No motion for reconsideration shall in any manner repeat any oral or written argument made in support of or in opposition to the original motion.


Plaintiff's Motion for Reconsideration requests that the Court reconsider its dismissal of Plaintiff's second claim for violation of RICO and fourth claim for tortious interference with contract. The Court considers each in turn.


Plaintiff asserts that the Court committed clear error by dismissing with prejudice Plaintiff's claim for RICO violations. (Mot. 8.) Plaintiff's RICO claim alleges that Defendants fraudulently induced him to remain at Phase Forward by sending him annual email communications containing Compensation Arrangements Defendants never intended to honor and subsequently terminated him and withheld certain deferred compensations. In dismissing this claim with prejudice, the Court noted that Plaintiff could plead no set of facts that could plausibly establish proximate causation. (Dkt. No 44, at 6--7.) Nevertheless, Plaintiff urges that the Court erred because the Court's Order dismissing Plaintiff's RICO claim cannot be reconciled with the Court's December 8, 2011 Order denying Defendants' Motion to Dismiss for lack of personal jurisdiction, which found that Plaintiff had satisfied the "but for" test for purposes of personal jurisdiction. (Mot. 1 (emphasis added).)

"[T]o state a claim under civil RICO, the plaintiff is required to show that a RICO predicate offense not only was a but for cause of his injury, but was the proximate cause as well." Hemi Group, LLC v. City of N.Y., 130 S. Ct. 983, 989 (2010) (internal quotation marks omitted) (emphasis added). "[P]roximate cause . . . requires some direct relation between the injury asserted and the injurious conduct alleged. A link that is too remote, purely contingent, or indirect is insufficient." Id. (citation omitted) (internal quotation marks omitted). "When a court evaluates a RICO claim for proximate causation, the central question it ...

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