United States District Court, S.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION [DOC. 7] TO DISMISS
James Lorenz Judge.
before the Court is Defendants' motion to dismiss Plaintiff
House of Lebanon's (“Plaintiff”) first
amended complaint. The Court decides the matter on the papers
submitted and without oral argument. See Civ. L. R. 7.1(d.1).
For the reasons stated below, the Court GRANTS IN
PART and DENIES IN PART
case arises out of a dispute involving a project to construct
new cottages in Balboa Park. The cottages at issue are run by
non-profit organizations with an aim toward educating the
public about the culture of various foreign countries. Each
cottage, it seems, is to be operated by a member of Defendant
House of Pacific Relations International Cottages
(“HPR”). Plaintiff is a member of HPR. Along with
eight other HPR members, all of whom are
defendants in this action, Plaintiff sought to occupy
one of nine cottages to be constructed in a proposed HPR
expansion project (the “Project”) in Balboa Park.
effort to gain inclusion into the Project, Plaintiff (1)
organized as a non-profit entity; (2) became a member of HPR;
(3) paid HPR over $34, 000; and (4) prepared paperwork for
presentation to the City of San Diego, the San Diego Planning
Commission, and the Balboa Park Committee. Furthermore, some
or all of the defendants in this case represented to
Plaintiff that they would permit Plaintiff to participate in
the Project. In reliance upon these representations made by
unspecified defendants, Plaintiff communicated its support of
the project to the San Diego City Council. Subsequently, City
Council approved the project, but Defendants excluded
Plaintiff from participating in the Project.
Plaintiff filed an amended complaint in the Superior Court of
California, County of San Diego, alleging (1) discrimination
in violation of 42 U.S.C. § 1981; (2) a right to
declaratory relief; (3) breach of contract; (4) breach of the
implied covenant of good faith and fair dealing; (5) ultra
vires action; (6) fraud; (7) negligent misrepresentation; (8)
a right to an inspection and accounting; and (9) violation of
California Business and Professions Code § 17200. (See
FAC [Doc. 1-2].) Defendants removed to this Court and now
move to dismiss under Fed.R.Civ.P. 12(b)(6). (See Rem. Not.
[Doc. 1]; MTD [Doc. 7]; Joinder [Doc. 8].) Plaintiff opposes.
(See Opp'n [Doc. 11].)
court must dismiss a cause of action for failure to state a
claim upon which relief can be granted. Fed.R.Civ.P.
12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the
complaint's sufficiency. See N. Star Int'l v.
Ariz. Corp. Comm'n., 720 F.2d 578, 581 (9th Cir.
1983). The court must assume the truth of all factual
allegations and “construe them in the light most
favorable to [the nonmoving party].” Gompper v.
VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002); see
also Walleri v. Fed. Home Loan Bank of Seattle, 83 F.2d
1575, 1580 (9th Cir. 1996).
Supreme Court explained, “[w]hile 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 Atl. Corp. v. Twombly, 127
S.Ct. 1955, 1964-65 (2007) (internal citations and quotation
marks omitted). Instead, the allegation in the complaint
“must be enough to raise a right to relief above the
speculative level.” Id. at 1965. A complaint
may be dismissed as a matter of law either for lack of a
cognizable legal theory or for insufficient facts under a
cognizable theory. Robertson v. Dean Witter Reynolds,
Inc., 749 F.2d 530, 534 (9th Cir. 1984).
of Plaintiff's Amended Complaint alleges a violation of
42 U.S.C. § 1981.
§ 1981 provides that All persons within the jurisdiction
of the United States shall have the same right in every State
and Territory to make and enforce contracts, to sue, be
parties, give evidence, and to the full and equal benefit of
all laws and proceedings for the security of persons and
property as is enjoyed by white citizens, and shall be
subject to like punishment, pains, penalties, taxes,
licenses, and exactions of every kind, and to no other.
42 U.S.C. § 1981(a). The Supreme Court has articulated
that § 1981 forbids only racial discrimination
in the making of contracts. Saint Francis College v.
Al-Khazraji, 481 U.S. 604, 609 (1987). § 1981 does
not prohibit discrimination on the basis of national
origin in the making of contracts. Id. at 613.
Here, Plaintiff explicitly bases its § 1981 claim on
national origin discrimination. (FAC ¶ 29). Indeed, the
Amended Complaint does not even state the racial ancestry of
Plaintiff's members. Nor does it allege how any
discrimination it suffered was based on the race of its
members. Accordingly, the Court GRANTS WITHOUT
PREJUDICE Defendants' motion as to the §