United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTION TO DISMISS AND DENYING MOTION
FOR PRELIMINARY INJUNCTION Re: Dkt. Nos. 17, 31
J. DAVILA United States District Judge.
civil rights action, Plaintiff Wared Alfarah
("Plaintiff") alleges that Defendant City of
Soledad ("the City") violated several of
Plaintiff's constitutional rights by effectively shutting
down his business. The City contends that its actions were
justified because the business hosted games that fell into a
category of slot machines prohibited by state criminal law.
Plaintiff seeks damages as well as a declaratory judgment
from this Court delineating the boundaries of that law.
before the court are the City's motion to dismiss
Plaintiff's complaint and Plaintiff's motion for a
preliminary injunction. See Dkt. Nos. 17, 30. Having
carefully considered the parties' arguments, the Court
finds that Plaintiff's complaint fails to state a claim
and that it is inappropriate for this federal Court to issue
a declaratory judgment interpreting state law. For the
reasons set forth in further detail below, the motion to
dismiss is GRANTED, and the motion for a preliminary
injunction is DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
ran a retail business called VAPE N CONNECT
("VNC"). Dkt. No. 1 ("Compl."), ¶ 2.
In addition to selling vaping products, VNC offered
pay-to-play games. Id., ¶ 9. Players began by
funding a game account card and entering the information from
that card at a PC terminal, which then revealed the amount of
the potential prize the player could win. Id.,
¶ 9-1. The actual game involved a cursor that moved
along the screen across a series of bars and stopped when the
player pressed a button. Id., ¶ 9-2. Based on
the bar on which the player stopped the cursor, the player
won a corresponding amount of money. Id. Although
the potential win amounts were random, the player's skill
allegedly determined the actual amount the player won.
Id., ¶ 10.
about September 9, 2015, several officers of the City's
police department entered the store without a warrant and
began insisting that these games constituted illegal
gambling. Id., ¶¶s 12-15. Plaintiff
explained how the games worked and told the officers that a
City official had assured Plaintiff that he could continue
operating the games as long as they were not slot machines.
Id., ¶ 12. Nevertheless, the officers told
Plaintiff that he needed to obtain a license to operate a
casino, threatened to arrest him, seized all of the game
account cards as evidence, and forced Plaintiff to sign a
property receipt. Id., ¶ 14. Plaintiff was
forced to close his business. Id., ¶ 16.
Defendant has yet to file any criminal charges against
relevant criminal statute applies to slot machines, defined
as machines that accept money and award the player money or
anything else of value "by reason of any element of
hazard or chance or of other outcome unpredictable by"
the player. Cal. Penal Code § 330b(d). "Pinball and
other amusement machines or devices, which are predominantly
games of skill, " do not count as slot machines.
Id. § 330b(f). The California Supreme Court has
said that a slot machine under this statute must
"award cash or other prizes of value to users . . . by
arranging or prearranging winning sweepstakes entries in a
manner that is unpredictable to the user." People ex
rel. Green v. Grewal, 61 Cal.4th 544, 562-63 (2015).
believes that the games at VNC were games of skill and not
slot machines. He brings five causes of action: (1) a claim
under the Declaratory Judgment Act ("DJA") for a
declaratory judgment that the games at issue are legal; (2) a
42 U.S.C. § 1983 claim for violations of the First
Amendment because providing the game was protected commercial
speech; (3) a § 1983 claim for violations of the Fourth
Amendment for an unreasonable search or seizure without a
warrant; (4) a § 1983 claim for violations of the Fifth
Amendment for an unlawful taking of property without due
process; and (5) a § 1983 claim for violations of the
Equal Protection Clause of the Fourteenth Amendment because
Defendant allows other businesses offering similar games to
continue to operate. Compl., ¶¶s 24-52. Plaintiff
brings all of these claims against the City itself
"because its policies, customs and improper training of
its officers caused Plaintiff's injuries."
Id., ¶ 3.
seeks to enjoin the City from destroying any seized property,
interfering with Plaintiff's business, or threatening or
initiating criminal prosecution or other action arising from
Plaintiff's offering these games. Id. at 13-14.
Plaintiff also seeks the aforementioned declaratory judgment
that the games in question are legal under § 330b.
Id. at 14. Finally, Plaintiff seeks compensatory and
general damages for the alleged constitutional violations.
Id. at 14-15.
January 7, 2016, the City moved to dismiss all of these
claims. See Dkt No. 17. Plaintiff filed a written
opposition to the motion. See Dkt. No. 24. On March
4, 2016, after the parties had fully briefed the motion to
dismiss, but before the Court had held a hearing on the
motion, Plaintiff moved for a preliminary injunction.
See Dkt. No. 30. The City opposed the motion in
writing. See Dkt. No. 35. The Court heard arguments
on both motions on June 23, 2016. See Dkt. No. 43.
Federal Rule of Civil Procedure 12(b)(6)
Rule of Civil Procedure 8(a) requires a plaintiff to plead
each claim with sufficient specificity to "give the
defendant fair notice of what the . . . claim is and the
grounds upon which it rests." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (internal quotation
marks omitted). Although particular detail is not generally
necessary, the factual allegations "must be enough to
raise a right to relief above the speculative level"
such that the claim "is plausible on its face."
Id. at 556-57. A complaint which falls short of the
Rule 8(a) standard may be dismissed if it fails to state a
claim upon which relief can be granted. Fed.R.Civ.P.
12(b)(6). Dismissal of a claim under Rule 12(b)(6) may be
based on a "lack of a 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); see
Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097,
1104 (9th Cir. 2008).
motion to dismiss stage, the court must read and construe the
complaint in the light most favorable to the non-moving
party. Autotel v. Nev. Bell Tel. Co., 697 F.3d 846,
850 (9th Cir. 2012) (citation omitted). When deciding whether
to grant a motion to dismiss, the court generally "may
not consider any material beyond the pleadings." Hal
Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d
1542, 1555 n.19 (9th Cir. 1990). However, the court may
consider material submitted as part of the complaint or
relied upon in the complaint, and may also consider material
subject to judicial notice. See Lee v. City of Los
Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).
court must accept as true all "well-pleaded factual
allegations" in the complaint. Ashcroft v.
Iqbal, 556 U.S. 662, 664 (2009). However, "courts
are not bound to accept as true a legal conclusion couched as
a factual allegation." Twombly, 550 U.S. at
555. Nor is a complaint sufficient if it merely "tenders
naked assertions devoid of further factual enhancement."
Iqbal, 556 U.S. at 678 (internal quotation marks
omitted). In other words, "to be entitled to the
presumption of truth, allegations in a complaint or
counterclaim may not simply recite the elements of a cause of
action, but must contain sufficient allegations of underlying
facts to give fair notice and to enable the opposing party to
defend itself effectively." Eclectic Props. E., LLC
v. Marcus & Millichap Co., 751 F.3d 990, 996 (9th Cir.
2014) (quoting Starr v. Baca, 652 F.3d 1202, 1216
(9th Cir. 2011)). "In all cases, evaluating a
complaint's plausibility is a
‘context-specific' endeavor that requires courts to
‘draw on . . . judicial experience and common
sense.'" Levitt v. Yelp! Inc., 765 F.3d
1123, 1135 (9th Cir. 2014) (alteration in original) (quoting
Eclectic Props. E., 751 F.3d at 996).
event that a motion to dismiss is granted, "leave to
amend should be granted ‘unless the court determines
that the allegation of other facts consistent with the
challenged pleading could not possibly cure the
deficiency.'" DeSoto v. Yellow Freight Sys.,
Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting
Schreiber Distrib. Co. v. Serv-Well Furniture Co.,
806 F.2d 1393, 1401 (9th Cir. 1986)). A district court may
dismiss without leave to amend "where the amendment
would be futile." Gardner v. Martino, 563 F.3d
981, 990 (9th Cir. 2009) (citing Thinket Ink Info. Res.,
Inc. v. Sun Microsystems, Inc., 368 F.3d 1053, 1061 (9th
Cir. 2004)). "When a proposed amendment would be futile,
there is no need to prolong the litigation by permitting
further amendment." Id. (quoting Chaset v.
Fleer/Skybox Int'l, LP, 300 F.3d 1083, 1088 (9th
Section 1983 Claims
1983 is a ‘vehicle by which plaintiffs can bring
federal constitutional and statutory challenges to actions by
state and local officials.'" Naffe v. Frey,
789 F.3d 1030, 1035 (9th Cir. 2015) (quoting Anderson v.
Warner, 451 F.3d 1063, 1067 (9th Cir. 2006)). In other
words, "Section 1983 ‘is not itself a source of
substantive rights, ' but merely provides ‘a method
for vindicating federal rights elsewhere
conferred.'" Albright v. Oliver, 510 U.S.
266, 271 (1994) (quoting Baker v. McCollan, 443 U.S.
137, 144 n.3 (1979)). To state a § 1983 claim, a
plaintiff (1) "must allege the violation of a right
secured by the Constitution and laws of the United States,
" and (2) "must show that the alleged deprivation
was committed by a person acting under color of state
law." Naffe, 789 F.3d at 1035-36 (quoting
West v. Atkins, 487 U.S. 42, 48 (1988)).
"Dismissal of a § 1983 claim following a Rule
12(b)(6) motion is proper if the complaint is devoid of
factual allegations that give rise to a plausible inference
of either element." Id. at 1036 (citations
longstanding Supreme Court precedent, "[p]laintiffs who
seek to impose liability on local governments under §
1983 must prove that ‘action pursuant to official
municipal policy' caused their injury." Connick
v. Thompson, 563 U.S. 51, 60-61 (2011) (quoting
Monell v. Dep'tof Soc. Servs. of City of
N.Y., 436 U.S. 658, 691 (1978)). Municipalities are not
vicariously liable for the actions of their employees.
Monell, 436 U.S. at 691. Instead, courts may impose
§ 1983 liability on municipalities in only three
circumstances: (1) when implementation of the
municipality's official policies or established customs
inflicts the constitutional injury; (2) when omissions
leading to constitutional injuries amount to official policy
or deliberate indifference on the part of the municipality;
or (3) when the individual committing ...