United States District Court, C.D. California
KENO V. THOMAS
STARZ ENTERTAINMENT LLC, ET AL.
Attorneys Present for Plaintiffs: Dan Stormer Brian Olney
Attorneys Present for Defendants: Eric Amdursky Margaret
Present: The Honorable CHRISTINA A. SNYDER Judge
DEFENDANTS’ MOTION TO DISMISS PLAINTIFF’S
FIRST AMENDED COMPLAINT (DKT. 63, FILED APRIL 13,
CHRISTINA A. SNYDER Judge
October 29, 2015, plaintiff Keno V. Thomas
(“plaintiff”) filed this action in the Los
Angeles County Superior Court against defendants Starz
Entertainment (“Starz”); Michael Thornton
(“Thornton”); Liberty Media Corp.; Starz; Starz,
LLC; Chris Albrecht (“Albrecht”), and Does 1
through 20 (collectively,
“defendants”). Dkt. 1, Ex. A,
(“Complaint”). On November 30, 2015, defendants
removed this action to this Court on the basis of federal
question and diversity jurisdiction. Dkt. 1.
brief, plaintiff, who is a former executive of the television
network Starz, alleges that defendants retaliated against and
ultimately fired him in violation of state and federal law.
Specifically, plaintiff’s original complaint asserted
claims for (1) Retaliation in Violation of California Labor
Code § 1102.5(b); (2) Retaliation in Violation of
California Labor Code § 1102.5(c); (3) Retaliation in
Violation of California Government Code § 12940(h); (4)
Retaliation in Violation of 42 U.S.C. § 1981; (5)
Wrongful Termination in Violation of Public Policy; (6)
Failure to Prevent Retaliation in Violation of California
Government Code§ 12940, et seq.; and (7)
Intentional Infliction of Emotional Distress
(“IIED”). See generally Complaint.
December 7, 2015, defendants filed a Rule 12(b)(6) motion to
dismiss (i) plaintiff’s first and second claims for
retaliation in violation of the California Labor Code; (ii)
plaintiff’s fourth claim for retaliation in violation
of 42 U.S.C. § 1981, and (iii) plaintiff’s seventh
claim for intentional infliction of emotional distress. Dkt.
21. In an order dated February 29, 2016, the Court dismissed
without prejudice plaintiff’s first and second claims
for retaliation in violation of Labor Code § 1102.5(b)
and (c), and similarly dismissed without prejudice
plaintiff’s seventh claim for intentional infliction of
March 30, 2016, plaintiff filed the operative first amended
complaint (“FAC”). On April 13, 2016, defendant
filed the instant motion to dismiss the first, second, and
seventh claims in the operative FAC. Dkt. 63
(“Motion”). On May 9, 2016, plaintiff filed an
opposition to the instant motion. Dkt. 67
(“Opp’n”). On May 23, 2016, defendant filed
a reply. Dkt. 68 (“Reply”). On July 11, 2016, the
Court provided the parties with a tentative order and held
oral argument on the instant motion.
carefully considered the parties’ arguments, the Court
concludes as follows.
alleges the following facts in his FAC:
2004, plaintiff was hired by defendant Starz as its Senior
Vice President of Sales and Affiliate Marketing. FAC ¶
14. In this role, plaintiff held management responsibility
for Starz’s accounts with several of its distributors,
including DirecTV, Dish Network, Verizon FiOS, and AT&T
U-verse. Id. ¶ 15. Plaintiff states that
throughout his employment at Starz he has been troubled by
what he perceives as a lack of diversity among Starz’s
senior level management. Id. ¶ 13. For example,
plaintiff asserts that, at the time of his termination, he
was the only senior-level African-American at Starz.
Id. Plaintiff claims that, as a senior executive at
Starz, he advocated on behalf of women and minorities by,
among other things, speaking to human resources about the
lack of diversity at Starz and prioritizing the hiring of
women and minorities in his department. Id. ¶
20. Nonetheless, plaintiff states that these actions exposed
him to ridicule at the hands of Starz’s management.
August 16, 2013, defendant Thornton was named Starz’s
Chief Revenue Officer and became plaintiff’s direct
supervisor. Id. ¶ 18. In 2013 and 2014,
plaintiff raised concerns to the management of Starz
regarding two practices that he believed were unlawful.
First, in January 2013, Starz announced the appointment of
Derek Chang, a former Executive Vice President at DirecTV, to
its board of directors. Id. ¶ 24(b). As
detailed more fully infra, plaintiff informed Starz
management, including defendant Thornton, that he believed
Chang could use confidential information he had obtained from
DirecTV, such as DirecTV’s proprietary information
concerning its pricing and licensing fees, for his own
benefit. Id. ¶ 24(c). Plaintiff states that the
management personnel to whom he raised these concerns agreed
with plaintiff that there may be a risk of Chang improperly
using DirecTV’s confidential information for his own
benefit. Id. However, when plaintiff raised the
issue again a few months later, Thornton threatened to fire
plaintiff if he ever spoke about the matter again.
Id. ¶ 24(f).
plaintiff alleges that he disclosed to Thornton that he
believed Starz had obtained a favorable deal with one of its
major distributors, Comcast, as a result of illegal insider
manipulation and unfair influence on a pending merger.
Id. ¶¶ 26-34. Specifically, plaintiff
alleges that, in early 2014, “Comcast’s affiliate
carriage contract with Starz was set to expire” and
that “it was . . . anticipated among Starz’[s]
executives that Comcast would . . . seek to negotiate a new
affiliate carriage contract.” Id. ¶ 27.
Plaintiff further alleges that, at the same time, Comcast and
Time Warner Cable, another distribution company, were
attempting to obtain federal approval for a merger of their
two companies. Id. ¶ 28. Plaintiff contends
that “the FCC and Department of Justice were
scrutinizing the proposed Comcast and Time Warner Cable
merger, ” and that, “[i]n an effort to obtain
governmental approval for the merger, ” Comcast and
Time Warner Cable proposed to sell millions of subscribers to
a third distribution company, Charter Communications.
Id. Plaintiff alleges that a member of the Starz
board of directors, non-party Gregory Maffei, who is also on
the Charter board of directors, “conspired” with
defendant Thornton “to manipulate the Charter/Comcast
boasted [to plaintiff during dinner one evening] that he had
urged Mr. Maffei to call Comcast and demand that, as a
clandestine part of the Charter/Comcast deal, Comcast extend
its Starz affiliate carriage deal at a loss for Comcast and
at a great profit for Starz.” Id. ¶ 31.
Plaintiff states that when he learned about these events from
defendant Thornton, he became concerned that such conduct may
have violated the law and that Maffei’s actions in
particular breached his fiduciary duty to Charter and thus
violated California Corporations Code § 309(a).
Id. ¶ 32. However, when plaintiff
“approached [defendant] Thornton and raised concerns
about the legality of Comcast’s deal with Starz,
” Thornton “sternly warned [plaintiff] to never
repeat what he just said because it could cost [plaintiff]
his job.” Id. ¶ 34.
2013, Starz and DirecTV entered into negotiations because
their existing contract was set to expire on August 31, 2014.
Id. ¶ 35. Plaintiff alleges that Thornton
repeatedly threatened to fire plaintiff, who was largely
responsible for the DirecTV negotiations, if the deal was not
completed by August 31, 2014. Id. By February 2014,
Starz and DirecTV had not concluded their negotiations and
DirecTV began removing Starz from its marketing packages.
Id. ¶ 36. Plaintiff alleges that by mid-2014,
Thornton and other Starz executives began excluding plaintiff
from meetings and emails regarding the DirecTV negotiations.
Id. ¶ 39. Plaintiff states that negotiations
between Starz and DirecTV intensified in the Summer of 2014.
Id. ¶ 41. But plaintiff avers that he was left
out of key meetings and emails, and that Thornton negotiated
directly with DirecTV on behalf of Starz. Id.
¶¶ 41-43. By mid-August 2014, plaintiff had been so
excluded from the DirecTV negotiations that Thornton refused
even to tell plaintiff about Starz’s negotiations
strategy with DirecTV. Id. ¶¶ 46-47.
on August 22, 2014, Starz and DirecTV executed an agreement
extending their contract. Id. ¶ 49. The
following month, during a meeting on September 4, 2014,
defendant Thornton allegedly directed Kara Tefft,
Starz’s Director of Finance, to order Mr. Thomas to
“arbitrarily inflate [certain] revenue figures and
subscriber numbers” for a presentation to Starz’s
Board. Id. ¶ 51. As detailed more fully
infra, plaintiff refused the order, believing that
acting upon Tefft’s directive “would have
violated numerous state and federal statutes prohibiting the
knowing falsification of a corporation’s documents,
” including California Corporations Code § 2254;
California Corporations Code § 2255(b); California
Corporations Code § 1507; and Section 13(b)(5) of the
Securities Exchange Act, 15 U.S.C. § 78m(b)(5), and Rule
13b2-1 thereunder, 17 C.F.R. § 240.13b2-1. FAC ¶
further states that beginning in the Summer of 2014, he
“began experiencing significant emotional distress and
health deterioration, in large part due to . . .
Starz’[s] deplorable treatment of him.”
Id. ¶ 58. During the week of September 8, 2014,
plaintiff states that his health “reached a breaking
point” forcing him to miss work. Id. Shortly
thereafter, plaintiff took a three-week medical leave of
absence for alleged depression and anxiety. Id.
¶ 59. The week that plaintiff returned from his medical
leave, Starz terminated his employment. Id. ¶
Motion to Dismiss Pursuant to Federal Rule of Civil Procedure
motion pursuant to Federal Rule of Civil Procedure 12(b)(6)
tests the legal sufficiency of the claims asserted in a
complaint. Under this Rule, a district court properly
dismisses a claim if “there is a ‘lack of a
cognizable legal theory or the absence of sufficient facts
alleged under a cognizable legal theory.’ ”
Conservation Force v. Salazar, 646 F.3d 1240, 1242
(9th Cir. 2011) (quoting Balisteri v. Pacifica Police
Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)).
“While a complaint attacked by a Rule 12(b)(6) motion
to dismiss does not need detailed factual allegations, a
plaintiff’s obligation to provide the
‘grounds’ of his ‘entitlement to
relief’ requires more than labels and conclusions, and
a formulaic recitation of the elements of a cause of action
will not do.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007). “[F]actual allegations must
be enough to raise a right to relief above the speculative
considering a motion pursuant to Rule 12(b)(6), a court must
accept as true all material allegations in the complaint, as
well as all reasonable inferences to be drawn from them.
Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998).
The complaint must be read in the light most favorable to the
nonmoving party. Sprewell v. Golden State Warriors,
266 F.3d 979, 988 (9th Cir. 2001). However, “a court
considering a motion to dismiss can choose to begin by
identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.
While legal conclusions can provide the framework of a
complaint, they must be supported by factual
allegations.” Ashcroft v. Iqbal, 556 U.S. 662,
679 (2009); see Moss v. United States Secret
Service, 572 F.3d 962, 969 (9th Cir. 2009) (“[F]or
a complaint to survive a motion to dismiss, the
non-conclusory ‘factual content, ’ and reasonable
inferences from that content, must be plausibly suggestive of
a claim entitling the plaintiff to relief.”).
Ultimately, “[d]etermining whether a complaint states a
plausible claim for relief will . . . be a context-specific
task that requires the reviewing court to draw on its
judicial experience and common sense.” Iqbal,
556 U.S. at 679.
a court converts a Rule 12(b)(6) motion into a motion for
summary judgment, a court cannot consider material outside of
the complaint (e.g., facts presented in briefs,
affidavits, or discovery materials). In re American
Cont’l Corp./Lincoln Sav. & Loan Sec. Litig.,
102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other
grounds sub nom Lexecon, Inc. v. Milberg Weiss Bershad Hynes
& Lerach, 523 U.S. 26 (1998). A court may, however,
consider exhibits submitted with or alleged in the complaint
and matters that may be judicially noticed pursuant to
Federal Rule of Evidence 201. In re Silicon Graphics Inc.
Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999); see
Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir.
general rule, leave to amend a complaint which has been
dismissed should be freely granted. Fed.R.Civ.P. 15(a).
However, leave to amend may be denied when “the court
determines that the allegation of other facts consistent with
the challenged pleading could not possibly cure the
deficiency.” Schreiber Distrib. Co. v. Serv-Well
Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).
instant motion, defendants seek to dismiss claims one and two
for retaliation in violation of California Labor Code
§§ 1102.5(b) and 1102.5(c), respectively, as well
as claim seven for intentional infliction of emotional
distress. For the reasons explained below, the Court (1)
GRANTS defendants’ motion as to plaintiff’s
section 1102.5(b) claim for retaliation based upon disclosure
of unlawful conduct, (2) DENIES the motion as to
plaintiff’s section 1102.5(c) ...