On December 29, 2012, defendants Zeina Sidaqui and Koogix filed a motion to dismiss plaintiff's claims under Federal Rules of Civil Procedure 12(b)(6) and 9. (ECF 6.) Plaintiff filed an opposition on March 1, 2013; Sidaqui and Koogix filed a reply on March 8, 2013. (ECF 15, 16.) For the reasons explained below, the court GRANTS in part and DENIES in part Sidaqui and Koogix's motion.
Plaintiff is a publisher of academic and technical textbooks used both by schools and business entities. (Compl. ¶ 9, ECF 1.) Defendant Mamoon "Mike" Alahmad contacted plaintiff in early 2011, stating that he was a Bank of America employee; Alahmad requested samples of plaintiff's textbooks for Bank of America's internal training programs. (Id. ¶¶ 10-11.) Alahmad explained that Bank of America was interested in purchasing textbooks from plaintiff directly, which the bank would then provide to its employees. (Id. ¶ 11.) During negotiations between Alahmad and plaintiff, Alahmad stated that the purchases would be made through BOA, an entity that Bank of America used to supply contracts. (Id. ¶ 16.)
On July 12, 2011, plaintiff and BOA entered into a Volume Pricing Agreement (VPA) governing BOA's purchase of textbooks from plaintiff. (Id. ¶ 17.) The parties agreed that BOA would receive a seventy percent discount on the retail price, that BOA would purchase at least 1,000 books every thirty days for twelve months, and that the books were for Bank of America's internal use only and would not be resold. (Id. ¶ 17.) Alahmad requested that plaintiff ship the textbooks to his home address because Bank of America's training center was not ready to receive shipments; when plaintiff declined, Alahmad supplied a business address in Sacramento, California for BOA. (Id. ¶ 18.) Alahmad and plaintiff entered into seven additional VPAs, the last being executed on May 31, 2012. (ECF ¶ 19.) In Spring 2012, Alahmad told plaintiff that Bank of America's training office was relocating and asked for the textbooks to be shipped temporarily to his home in Wilton, California. (Id. ¶ 21.) Plaintiff at that point agreed. (Id.)
In August 2012, plaintiff discovered that a seller named "Koogix" was selling on Amazon.com and Alibris.com more than one hundred of the textbook titles that plaintiff had sold to BOA through Alahmad. (Id. ¶ 25.) Plaintiff subsequently learned that Koogix was a web domain registered to Sidaqui at Alahmad's Wilton, California address. (Id. ¶ 26.) BOA's payment history with plaintiff showed that Alahmad and Sidaqui had appeared as "remitter" on checks that BOA had used to pay plaintiff. (Id.) Plaintiff also learned that BOA was a Wyoming corporation registered at Alahmad's Wilton, California address, not an affiliate of Bank of America. (Id.)
On December 4, 2012, plaintiff filed the complaint in this action against Alahmad, Sidaqui, Koogix and BOA, stating the following causes of action against all defendants: (1) fraud/intentional misrepresentation; (2) breach of contract; (3) violation of California's Unlawful Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. (ECF 1.) Sidaqui and Koogix now move to dismiss each claim as to them. (ECF 6.)
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." A court may dismiss "based on the lack of cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
Although a complaint need contain only "a short and plain statement of the claim showing that the pleader is entitled to relief," FED. R. CIV. P. 8(a)(2), in order to survive a motion to dismiss this short and plain statement "must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint must include something more than "an unadorned, the-defendant-unlawfully-harmed-me accusation" or "'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action.'"
Id. (quoting Twombly, 550 U.S. at 555). Determining whether a complaint will survive a motion to dismiss for failure to state a claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. Ultimately, the inquiry focuses on the interplay between the factual allegations of the complaint and the dispositive issues of law in the action. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).
In making this context-specific evaluation, this court must construe the complaint in the light most favorable to the plaintiff and accept as true the factual allegations of the complaint. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). This rule does not apply to "'a legal conclusion couched as a factual allegation,'" Papasan v. Allain, 478 U.S. 265, 286 (1986) (quoted in Twombly, 550 U.S. at 555), nor to "allegations that contradict matters properly subject to judicial notice" or to material attached to or incorporated by reference into the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988-89 (9th Cir. 2001). A court's consideration of documents attached to a complaint or incorporated by reference or matter of judicial notice will not convert a motion to dismiss into a motion for summary judgment. United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003); Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995); see also Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002) (noting that even though court may look beyond pleadings on motion to dismiss, generally court is limited to face of the complaint on 12(b)(6) motion).
A. Motion to Dismiss Fraud Claims
Koogix and Sidaqui argue that plaintiff has not sufficiently alleged that they committed fraud. (ECF 6 at 4.) The elements of a claim for fraud under California law are: "(1) the defendant made a false representation as to a past or existing material fact; (2) the defendant knew the representation was false at the time it was made; (3) in making the representation, the defendant intended to deceive the plaintiff; (4) the plaintiff justifiably and reasonably relied on the ...