United States District Court, E.D. California
ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT
ON THE PLEADINGS (DOC. NO. 58)
matter came before the court on June 21, 2016, for hearing of
defendant’s motion for judgment on the pleadings
brought pursuant to Rule 12(c) of the Federal Rules of Civil
Procedure with respect to plaintiff’s California False
Claims Act claims. Attorney Robert Krase appeared at the
hearing on behalf of plaintiff Sierra View Local Health Care
District (“Sierra View”). Attorney Daniel L.
Baxter appeared on behalf of defendant Influence Health, Inc.
(“Influence”). Following oral argument,
defendant’s motion was taken under submission. For the
reasons stated below, the court will grant defendant’s
motion for judgment on the pleadings.
April 9, 2015, plaintiff Sierra View commenced this action in
the Superior Court of California for the County of
Tulare-South County Justice Center, Case No. PCU260332. (Doc.
No. 1.) On April 8, 2015, defendant Influence removed this
action from state court pursuant to 28 U.S.C. § 1441(b).
case now proceeds before this court on plaintiff‘s
first amended complaint (“FAC”), filed October
27, 2015. (Doc. No. 26.) In the FAC, plaintiff brings eight
claims against defendant: (1) four breach of contract claims,
(2) one unjust enrichment claim, (3) and three claims under
the California False Claims Act (“CFCA”),
California Government Code § 12650. (Id. at 1.)
With respect to the CFCA claims, plaintiff brings these
claims in its capacity as “a political subdivision of
the State of California.” (Id. at 18, 21, 25,
¶¶ 68, 80, 94.)
alleges in relevant part as follows. On February 26, 2010,
plaintiff Sierra View entered into a Software License
Agreement (“License Agreement”) to purchase
software modules from the defendant Influence. (Id.
at 3, ¶ 5.) Plaintiff also entered into a Software
Maintenance Agreement (“Maintenance Agreement”)
with defendant. (Id.) Defendant submitted notices of
completion for software modules that were not finished, and
in May 2011, defendant began wrongfully billing plaintiff
maintenance fees for incomplete modules. (Id. at 5,
¶ 11.) Three years after beginning paying those
maintenance fees, plaintiff discovered that only four of the
twelve modules purchased from defendant were functioning.
(Id. at 7, ¶ 17.) When defendant refused
plaintiff‘s verbal and written requests for a reduction
in the maintenance fees, plaintiff stopped payments.
(Id. at 7, ¶ 18.) In January 2015,
plaintiff’s counsel demanded a refund of the paid
maintenance fees and notified defendant of plaintiff‘s
CFCA claims. (Id. at 8, ¶ 19.)
20, 2016, defendant filed a motion for judgment on the
pleadings, arguing that plaintiff lacked standing to pursue
CFCA claims. (Doc. No. 58.) On June 7, 2016, plaintiff filed
their opposition to defendant’s motion for judgment on
the pleadings. (Doc. No. 59.) On June 14, 2016, defendant
filed their reply to plaintiff’s opposition. (Doc. No.
12(c) of the Federal Rules of Civil Procedure provides that:
“After the pleadings are closed-but early enough not to
delay trial-a party may move for judgment on the
pleadings.” In reviewing a motion brought under Rule
12(c), the court “must accept all factual allegations
in the complaint as true and construe them in the light most
favorable to the nonmoving party.” Fleming v.
Pickard, 581 F.3d 922, 925 (9th Cir. 2009).
same legal standard applicable to a Rule 12(b)(6) motion
applies to a Rule 12(c) motion. Dworkin v. Hustler
Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989).
Accordingly, “judgment on the pleadings is properly
granted when, taking all the allegations in the non-moving
party’s pleadings as true, the moving party is entitled
to judgment as a matter of law.” Marshall Naify
Revocable Trust v. U.S., 672 F.3d 620, 623 (9th
Cir.2012) (quoting Fajardo v. Cnty. of L.A., 179
F.3d 698, 699 (9th Cir.1999)). See also Fleming v.
Pickard, 581 F.3d 922, 925 (9th Cir. 2009) (stating that
“judgment on the pleadings is properly granted when
there is no issue of material fact in dispute, and the moving
party is entitled to judgment as a matter of law”). The
allegations of the nonmoving party must be accepted as true,
while any allegations made by the moving party that have been
denied or contradicted are assumed to be false. MacDonald
v. Grace Church Seattle, 457 F.3d 1079, 1081 (9th Cir.
2006). The facts are viewed in the light most favorable to
the non-moving party and all reasonable inferences are drawn
in favor of that party. Living Designs, Inc. v. E.I.
DuPont de Nemours & Co., 431 F.3d 353, 360 (9th Cir.
have discretion both to grant a motion for judgment on the
pleadings with leave to amend or to simply grant dismissal of
causes of action rather than grant judgment as to them.
Lonberg v. City of Riverside, 300 F.Supp.2d 942, 945
(C.D. Cal. 2004) (citations omitted); see also Pacific
West Group, Inc. v. Real Time Solutions, Inc., 321
Fed.Appx. 566, 569 (9th Cir. 2008); Woodson v. State of
California, No. 2:15-cv-01206-MCE-CKD, 2016 WL 524870,
at *2 (E.D. Cal. Feb. 10, 2016). Generally, dismissal without
leave to amend is proper only if it is clear that “the
complaint could not be saved by any amendment.”
Intri-Plex Techs. v. Crest Group, Inc., 499 F.3d
1048, 1056 (9th Cir. 2007) (citing In re Daou Sys.,
Inc., 411 F.3d 1006, 1013 (9th Cir. 2005)); Ascon
Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th
Cir. 1989) (noting that “[l]eave need not be granted
where the amendment of the complaint . . . constitutes an
exercise in futility”).
their motion for judgment on the pleadings, defendant argues
that plaintiff, Sierra View Local Health District, lacks
standing to pursue their CFCA claims. (Doc. No. 58.)
the CFCA, any person who submits a false claim to the state
or a political subdivision may be sued for damages and civil
penalties. Cal. Gov. Code, § 12651(a); State Ex Rel.
Harris v. PricewaterhouseCoopers, LLP, 39 Cal.4th 1220,
1227 (2006). A political subdivision includes “any
city, city and county, county, tax or assessment district, or
other legally authorized local government entity with
jurisdictional boundaries.” Cal. Gov. Code §
California Government Code § 12652, CFCA claims can only
be brought by the Attorney General, the prosecuting authority
of a political subdivision, or a private party in a quitam
action. Cal. Govt. Code § 12652; Los Angeles
Memorial Coliseum Commission v. Insomniac, Inc., 233
Cal.App.4th 803, 819 (2015). When a person has submitted a
false claim upon political subdivision funds, or upon state
and political subdivision funds, the “prosecuting
authority of the affected political subdivision may bring an
action.” Cal. Gov. Code § 12652(b)(1). See
also State ex rel. Harris v. PricewaterhouseCoopers,
LLP, 39 Cal.4th 1220, 1227 (2006); State ex rel.
Dockstader v. Hambyi, 162 Cal.App.4th 480, 490 (2008)
(stating that “CFCA authorizes the prosecuting
authority of a local agency to pursue recovery only where its
own political subdivision funds are at issue, or where both
its own and state funds are at issue”). Under the
statute, the “prosecuting authority” may be
“the county counsel, city attorney, or other local
government official charged with investigating, filing, and
conducting civil legal proceedings on behalf of, or in the
name of, a particular political subdivision.” Cal. Gov.
Code § 12650(b)(4); see ...