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Kelsey K. v. NFL Enterprises LLC

United States District Court, N.D. California

July 21, 2017

KELSEY K., individually and on behalf of all others similarly situated, Plaintiff,
v.
NFL ENTERPRISES LLC, et al., Defendants.

          ORDER DENYING MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         Following dismissal of her antitrust claims, plaintiff moves for leave to file an amended complaint. The motion is Denied.

         STATEMENT

         Plaintiff Kelsey K. brought this action against the National Football League and 27 of its member clubs based on allegations that defendants violated the Sherman Act and the Cartwright Act by conspiring to “suppress the compensation” of and “eliminate competition among them for” cheerleaders (see Dkt. No. 38-1 ¶ 1). This action comes in the wake of a string of wage-and-hour lawsuits against NFL clubs in recent years to benefit cheerleaders, but it is not itself a wage-and-hour suit. Instead, this action opens a new chapter in litigation concerning NFL cheerleaders based on “more sinister” allegations of antitrust conspiracy between clubs (see Id. ¶ 102). Five other clubs in the NFL do not even employ cheerleaders and have thus been left out of this lawsuit.

         A prior order dated May 25 granted defendants' motion to dismiss, finding that plaintiff had alleged neither “parallel conduct with plus factors” nor antitrust injury (see Dkt. No. 36). That order permitted plaintiff to move for leave to amend but cautioned that she “should be sure to plead her best case” (id. at 13). Pursuant to the May 25 order, plaintiff now moves for leave to file an amended complaint (Dkt. No. 38). Defendants oppose the proposed amendment as futile (Dkt. No. 39). This order follows full briefing and oral argument.

         ANALYSIS

         Rule 15(a)(2) advises, “The court should freely give leave when justice so requires.” In ruling on motions for leave to amend, courts consider (1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether the plaintiff has previously amended their complaint. Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2003). Futility alone can justify denying leave to amend. Ibid.; see also Ebner v. Fresh, Inc., 838 F.3d 958, 968 (9th Cir. 2016). The parties debate only the futility factor on the instant motion.

         For purposes of assessing futility, the legal standard is the same as it would be on a motion to dismiss, i.e., the proposed amendment must plead “enough facts to state a claim to relief that is plausible on its face.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has facial plausibility when its factual content 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). While all allegations of material fact are taken as true and construed in the light most favorable to plaintiff, conclusory allegations of law and unwarranted inferences are insufficient to warrant granting leave to amend. Cf. Ove v. Gwinn, 264 F.3d 817, 821 (9th Cir. 2001). For example, “formulaic recitation of the elements” of a claim are not entitled to the presumption of truth. Iqbal, 556 U.S. at 681. This order considers allegations in the proposed amendment, attached exhibits, and matters properly subject to judicial notice. See Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1030-31 (9th Cir. 2008).

         It bears repeating that plaintiff's proposed amendment, like her initial complaint, asserts only claims for violations of antitrust law. In other words, to repeat, “[t]his is not a lawsuit for violation of wage-and-hour or labor laws [or] for general maltreatment of cheerleaders. . . . Plaintiff chose to assert antitrust claims, so she must plead factual allegations sufficient to show violations of antitrust law” (Dkt. No. 36 at 4). The factual allegations must answer the basic questions of “who, did what, to whom (or with whom), where, and when?” See Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1047-48 (9th Cir. 2008).

         1. Sherman Act Claim.

         Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations.” 15 U.S.C. 1. A Section 1 claim requires (1) a contract, combination, or conspiracy (2) intended to unreasonably restrain or harm trade (3) that actually injures competition and (4) harms the plaintiff via the anticompetitive conduct. Name.Space, Inc. v. Internet Corp. for Assigned Names & Numbers, 795 F.3d 1124, 1129 (9th Cir. 2015); see also Aerotec Int'l, Inc. v. Honeywell Int'l, Inc., 836 F.3d 1171, 1178 (9th Cir. 2016) (citing Am. Needle, Inc. v. Nat'l Football League, 560 U.S. 183, 189-90 (2010)).

         Plaintiff's proposed amendment asserts “an overarching conspiracy of two per se illegal agreements: a No Poaching Agreement and a Wage Fixing Agreement” (Dkt. No. 38 at 8), but fails to allege facts supporting any plausible inference of such a conspiracy. It would be redundant and unnecessary to catalogue every deficiency in the proposed amendment, many of which overlap with issues already discussed in the May 25 order. Instead, this order primarily focuses on new issues teed up by the proposed amendment that justify denial of leave to amend.

         A. Alleged ...


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