United States District Court, S.D. California
CHRISTOPHER KELLER, a New Hampshire Citizen; CURTIS KELLER, a New Hampshire Citizen; and LINDA KELLER, a New Hampshire Citizen, Plaintiffs,
NARCONON FRESH START d/b/a SUNSHINE SUMMIT LODGE; ASSOCIATION FOR BETTER LIVING AND EDUCATION INTERNATIONAL; NARCONON INTERNATIONAL; NARCONON WESTERN UNITED STATES and DOES 1-100, ROE Corporations I-X, inclusive, Defendants.
ORDER: 1. GRANTING IN PART WITH LEAVE TO AMEND AND DENYING IN PART ASSOCIATION FOR BETTER LIVING AND EDUCATION INTERNATIONAL'S, NARCONON INTERNATIONAL'S, AND NARCONON WESTERN UNITED STATES' MOTION TO DISMISS; AND 2. GRANTING IN PART WITH LEAVE TO AMEND AND DENYING IN PART NARCONON FRESH START'S MOTION TO DISMISS [ECFs 10, 11]
CYNTHIA BASHANT, District Judge.
On September 11, 2014, Plaintiffs Christopher Keller ("Christopher"), Curtis Keller ("Curtis"), and Linda Keller ("Linda") commenced this suit against Defendants Narconon Fresh Start d/b/a Sunshine Summit Lodge ("Fresh Start"), Association for Better Living and Education International ("ABLE"), Narconon International ("NI"), and Narconon Western United States ("Western") arising out of Christopher's experience in Fresh Start's drug rehabilitation program. Plaintiffs allege the following causes of action: (1) breach of contract; (2) fraud; (3) negligent misrepresentation; (4) violation of the California Unfair Competition Law ("UCL", Cal. Bus. & Prof. Code §§ 17200, et seq. ); and (5) violation of 18 U.S.C. § 2520, a federal statute prohibiting wiretapping.
NI, Western, and ABLE together moved to dismiss the Complaint against them. ECF 10. Plaintiffs opposed (ECF 16) and NI, Western, and ABLE replied (ECF 18). Fresh Start moved separately to dismiss the Complaint. ECF 11. Plaintiffs opposed (ECF 15) and Fresh Start replied (ECF 20). The Court finds these motions suitable for determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). For the following reasons, the Court GRANTS IN PART WITH LEAVE TO AMEND and DENIES IN PART NI's, Western's, and ABLE's motion to dismiss, and GRANTS IN PART WITH LEAVE TO AMEND and DENIES IN PART Fresh Start's motion to dismiss. ECFs 10, 11.
Plaintiffs claim that on or about April 28, 2014, Linda began searching the internet for a drug rehabilitation facility for her son, Christopher. Compl. ¶ 16, ECF 1. They claim several unrelated websites directed them to Fresh Start representative Josh Penn ("Penn"). Id. ¶¶ 17-18. Plaintiffs claim Fresh Start recorded Linda's calls. Id. at ¶ 123.
Penn allegedly made the following false statements: Fresh Start's program was scientifically and medically proven to be effective; Christopher would be supervised by a doctor or nurse while undergoing detoxification; Fresh Start would provide Christopher extensive drug and addiction counseling; Fresh Start staff was properly trained to treat persons with addiction; Fresh Start's treatment program had a success rate of 76%; and Christopher needed to be enrolled immediately because there were very limited spots available. Compl. ¶¶ 19-21, 26, 50-55. Plaintiffs also claim Penn stated the program cost $33, 000. Id. at ¶ 25. Linda and Curtis decided to place Christopher in the Fresh Start program based on these representations. Id. at ¶ 22. Linda and Curtis executed the contract, which stated that the Fresh Start program was secular in nature. Id. at ¶ 22, Ex. A.
Plaintiffs claim there were numerous empty beds when Christopher entered the program; Christopher was not supervised by a doctor or nurse when he underwent detoxification; Christopher shared a small dirty room with two other people; Christopher witnessed the presence of alcohol and drugs in Fresh Start's facility; Christopher was aware of people having sexual relations in Fresh Start's facility while he was there; Fresh Start was staffed with recent patients who were still at risk of relapse; and Christopher never received any counseling on substance abuse. Compl. ¶¶ 27-30, 64-65. Christopher claims he left Fresh Start early because he did not feel safe and because Fresh Start's staff was unfit to treat him. Id. at ¶ 68.
Plaintiffs also state that Fresh Start's program is actually the Narconon Treatment Program, which uses course materials designed by the Church of Scientology. Compl. ¶¶ 31-34. Fresh Start allegedly had Christopher study material that was copied directly out of Scientology scriptures and which had almost no information about substance abuse. Id. at 34-37. Plaintiffs claim Fresh Start directed Christopher to perform "Training Routines[, ]" such as asking another patient "do fish swim?" for hours on end. Id. at ¶ 39. They also claim Christopher underwent a Scientology ritual called the "Purif." disguised by Fresh Start as "New Life Detoxification[.]" Id. at ¶¶ 42-43. Under this ritual, each day Fresh Start required patients to exercise vigorously, ingest large dosages of niacin and a "vitamin bomb", and then spend five hours in a sauna at temperatures between 160 and 180 degrees Fahrenheit. Id. at ¶¶ 45-46. Plaintiffs assert Fresh Start is using the Narconon program to introduce Scientology to "unwitting patients seeking drug rehabilitation." Id. at ¶ 60.
Plaintiffs further allege that Fresh Start is a mere instrumentality of NI, ABLE, and Western, and that the latter defendants "govern and control nearly every aspect of Narconon Fresh Start's business activities." Compl. ¶¶ 70-71. Plaintiffs claim NI requires individual centers, such as Fresh Start, to abide by manuals NI prints. Id. at ¶ 72. The manuals prohibit Fresh Start from demoting, transferring, or dismissing a permanent staff member without approval from NI; Fresh Start staff members may file "Job Endangerment Chit[s]" with NI if they believe Fresh Start has given orders or denied materials that make work difficult; and Fresh Start employees are required to report misconduct to NI, which is then investigated by both NI and Western. Id. at ¶¶ 73-76. Plaintiffs further claim that NI requires Fresh Start to send detailed weekly reports containing statistics of more than 40 metrics, which both NI and Western review. Id. at ¶ 78.
Finally, Plaintiffs state NI, Western, and ABLE are intimately involved in Fresh Start's operations in the following ways: they require Fresh Start to seek their approval before circulating promotional materials and starting new websites; they assist Fresh Start in creating advertising materials and dictate the materials' content; they conduct "tech inspections" at Fresh Start to determine whether Fresh Start is delivering the Narconon program correctly; they work with individual centers like Fresh Start on legal issues, including patient requests for refunds and complaints to the Better Business Bureau; and they exercise final authority over Fresh Start relating to hiring and firing, delivery of services, finances, advertising, training, and general operations. Id. at ¶¶ 79-80, 83-88.
II. LEGAL STANDARD
A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed.R.Civ.P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must accept all factual allegations pleaded in the complaint as true and must construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557).
"[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." Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)) (alteration in original). A court need not accept "legal conclusions" as true. Iqbal, 556 U.S. at 678. Despite the deference the court must pay to the plaintiff's allegations, it is not proper for the court to assume that "the [plaintiff] can prove facts that [he or she] has not alleged or that defendants have violated the... laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).
Generally, courts may not consider material outside the complaint when ruling on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, documents specifically identified in the complaint whose authenticity is not questioned by parties may also be considered. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superceded by statutes on other grounds). Moreover, the court may consider the full text of those documents, even when the complaint quotes only selected portions. Id. It may also consider material ...