United States District Court, N.D. California, San Jose Division
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS;
ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT'S
ADMINISTRATIVE MOTION TO FILE PARTS OF ITS MOTION TO DISMISS
UNDER SEAL RE: DKT. NOS. 27, 29
J. DAVILA, UNITED STATES DISTRICT JUDGE
Moreland Apartments Associates, Seaside Apartments
Associates, and San Jose Apartments Associates allege that
Defendant LP Equity misappropriated trade secrets, engaged in
unfair competition, and intentionally interfered with
contractual relations. See First Amended Complaint
(“FAC”), Dkt. 25. The Court finds this motion
suitable for consideration without oral argument.
See N.D. Cal. Civ. L.R. 7-1(b). Having considered
the Parties' papers, Defendant's motion to dismiss is
are limited partnerships formed in the 1980s to acquire real
property in California and to “construct, own, hold,
lease, and operate” apartment projects. FAC
¶¶ 9-11. Defendant purchases limited partnership
interests. Id., Ex. A.
2015, Defendant began soliciting some of Plaintiffs'
limited partners, asking if they would be interested in
selling their limited partnership interest. Id.
¶ 12; Id., Ex. A. As Exhibit A shows, the
letters requested that the limited partner, if interested in
selling their interest, send a K-1 form to Defendant.
Id. ¶ 11; Id., Ex. A. Defendant
specifically requested that interested limited partners
“black out or remove [their] social security number on
the K-1” form before mailing it to Defendant.
Id., Ex. A. Allegedly, many of the limited partners
are elderly, unsophisticated investors who are
“ignorant of the[ir] investment, its value, and the tax
implications associated with a sale of the security.”
Id. ¶ 19. Plaintiffs contend that
Defendant's solicitation was “aggressive [and]
predatory.” Id. ¶¶ 12,
further allege that Defendant solicited limited partners in a
manner that violated the partnership terms. Id.
¶ 22. The transfer of a limited partnership interest
requires written approval of the general partners.
Id. Despite knowing this, Defendant only solicited
the limited partners to evade the terms of the limited
partnership agreement and to coerce the limited partners to
breach their contract with Moreland. Id.
contend that Defendant obtained the identities and personal
information, i.e., home addresses, home and cellular
phone numbers, and social security numbers, of
Plaintiffs' limited partners through improper means.
Id. ¶ 23. Plaintiffs argue that this
information constitutes trade secrets. Id.
¶¶ 25-26. Plaintiffs further allege that Defendant
engaged in malicious acts to purchase the limited
partners' interests and that Defendant's
solicitations were misleading. Id. ¶ 45.
Lastly, Plaintiffs argue that Defendant intentionally
disrupted the performance of Plaintiffs' limited partners
under the partnership agreement. Id. ¶ 53.
21, 2019, Plaintiffs filed their First Amended Complaint.
See generally FAC. Defendant filed a Motion to
Dismiss Plaintiffs' First Amended Complaint on June 4,
2019. Defendant's Motion to Dismiss (“Mot.”),
Dkt. 29. On June 17, 2019, Plaintiffs filed an opposition.
Moreland Apartments Associates et al.'s Opposition to
Defendant's Motion to Dismiss (“Opp.”), Dkt.
30. Defendant filed its reply on June 24, 2019. Reply in
Support of Defendant's Motion to Dismiss
(“Reply”), Dkt. 31. Defendant also filed a motion
to seal. See Administrative Motion to File Under
Seal Documents in Support of Its Motion to
Dismiss(“Admin Mot.”), Dkt. 27.
survive a Rule 12(b)(6) motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to
“state a claim for relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (discussing Federal Rule of Civil Procedure 8(a)(2)).
A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. Id. The requirement that the court must
“accept as true” all allegations in the complaint
is “inapplicable to legal conclusions.”
Id. “[F]ormulaic recitation of the elements of
a cause of action will not do.” Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 555 (2007). Legal conclusions,
without more, give rise to “unwarranted inferences . .
. insufficient to avoid a Rule 12(b)(6) dismissal.”
Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir.
2009) (quotation marks and citation omitted).
can be based on “the 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). When a
claim or portion of a claim is precluded as a matter of law,
that claim may be dismissed pursuant to Rule 12(b). See
Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 975
(9th Cir. 2010) (discussing Rule 12(f) and noting that
12(b)(6), unlike Rule 12(f), provides defendants a mechanism
to challenge the legal sufficiency of complaints).