United States District Court, D. Nevada
C. MAHAN, UNITED STATES DISTRICT JUDGE
before the court are three separate motions to dismiss filed
by defendants Miller Kaplan Arase, LLP, Anne Salvador, and
Alexandra Chernyak (“MKA defendants”) (ECF No.
31); Amalgamated Transit Union International, James Lindsay
III, Lawrence J. Hanley, Antonette Bryant, Richie Murphy,
Keira McNett, Daniel Smith, and Tyler Home (“ATU
defendants”) (ECF No. 33); and Keolis Transit America,
Inc. and Kelvin Manzanares (“KTA defendants”)
(ECF No. 51). Plaintiffs filed a response to each motion to
dismiss (ECF Nos. 43, 44, 56), to which the MKA, ATU, and KTA
defendants replied (ECF Nos. 53, 54, 59).
before the court is the ATU defendants' motion for leave
to file excess pages. (ECF No. 28).
argument has been requested, but it is not necessary in order
for the court to resolve these motions.
action arises from the investigation into, and subsequent
imposition of trusteeship over, Amalgamated Transit Union
Local 1637 (“Local 1637”). The complaint contains
the following allegations:
Jose Mendoza was the president of Local 1637, which is a
local union that is affiliated with Amalgamated Transit Union
International (“ATU International”). (ECF No. 8).
The remaining plaintiffs in this action consist of Robbie
Harris, Robert Naylor, Myeko Easley, Dennis Hennessey, Gary
Sanders, Linda Johnson-Sanders, and Ceasar Jimenez.
Id. These plaintiffs held various positions on the
former Local 1637 executive board. Id.
2010 and 2016, Mendoza had multiple disputes with ATU
International, many of which revolved around the appropriate
way to read Local 1637's bylaws. Id. Two primary
disagreements between Mendoza and ATU International concerned
the appropriate rate of pay for the president of Local 1637
and whether the president could designate the
secretary-treasurer position as less than full-time.
August 2016, Local 1637 entered into an agreement with Miller
Kaplan Arase, LLP (“Miller Kaplan Arase”), a
certified public accounting firm, to conduct an audit of
Local 1637. Id. The individual auditors, Chernyak
and Salvador, engaged in communications with plaintiffs Home
and Lindsay (without informing Local 1637) to produce the
audit report. Id. The audit report was used by the
ATU defendants to support ATU's own audit, discussed
March 10, 2017, Home, an internal auditor, and Lindsay,
international vice president of ATU International, produced
an internal audit report of Local 1637. Id. The
report found that Mendoza was overpaid and had committed
financial malfeasance. Id. On April 10, 2017,
Hanley, the international president of ATU International,
removed plaintiffs from their positions by imposing a
trusteeship over Local 1637. Id. On June 24, 2017,
the ATU International general executive board ratified the
had been previously employed as a coach operator before
assuming full-time employment as president of Local 1637.
Id. After imposition of the trusteeship, Mendoza was
directed to present for work as a coach operator with Keolis
Transit America, Inc. (“Keolis Transit”), a
company with which Local 1637 had previously contracted.
Id. At this time, Mendoza did not have an active
commercial driver's license (“CDL”), a
requirement for this type of work, and was thus unable to
commence employment. Id. Five days after the
trusteeship was ratified, Keolis Transit terminated Mendoza
“for job abandonment.” Id. Mendoza filed
a grievance with Local 1637, which was forwarded to Keolis
International and Keolis Transit ultimately negotiated a
settlement on Mendoza's behalf that allowed for his
reinstatement with Keolis Transit provided that he recertify
his CDL “within five (5) business days of the ATU's
receipt of this notice.” Id. Mendoza did not
accept the settlement. Id. At the grievance hearing
that followed, defendant Lindsay accepted the settlement on
Mendoza's behalf and without Mendoza's consent.
Id. Mendoza's termination was finalized after he
did not recertify his CDL within the time limit set by the
September 22, 2017, Mendoza initiated the first iteration of
this action in state court, which was removed to federal
court on September 25, 2017. See Mendoza, Jr. v.
Amalgamated Transit Union International, et al., No.
2:17-cv-2485-JCM-CWH, ECF No. 1 (“Mendoza
I”). In Mendoza I, Mendoza's
complaint set forth ten separate causes of action on behalf
of himself as an individual, and on behalf of Local 1637,
against the ATU defendants (excluding Murphy): (1) breach of
contract regarding defendants' alleged amending of
Article 4 of the Local 1637 Constitution and failure to
follow procedure in charging Mendoza; (2) breach of contract
regarding defendants' alleged fraudulent contravention of
the ATU International Constitution and Bylaws in implementing
the trusteeship; (3) breach of implied covenant of good faith
and fair dealing; (4) fraudulent misrepresentation; (5)
negligent misrepresentation; (6) legal malpractice as to
defendants Keira McNett and Daniel Smith; (7) breach of
fiduciary duty; (8) constructive fraud; (9) malicious
prosecution; and (10) civil conspiracy. Id.
25, 2018, plaintiffs filed the present action. (ECF No. 1).
Plaintiffs initially named as defendants ATU International,
Lindsay, Hanley, Bryant, Murphy, McNett, Smith, and Home.
Id. On July 13, 2018, plaintiffs filed an amended
complaint, adding thirteen (13) new causes of action and
naming as defendants the MKA and KTA defendants. (ECF No. 8).
Plaintiffs' amended complaint asserts twenty-seven (27)
causes of action in total. Id. These claims are
based on various federal and state statutes, including the
Labor Management Relations Act (“LMRA”), the
Labor-Management Reporting and Disclosure Act
(“LMRDA”), and the Racketeer Influenced and
Corrupt Organizations Act (“RICO”), among others.
the MKA defendants move to dismiss the ninth, tenth,
thirteenth, nineteenth, twenty-third, twenty-fourth, and
twenty-fifth causes of action pursuant to Federal Rule of
Civil Procedure 12(b)(6). (ECF No. 31). The ATU defendants
move to dismiss all but the twenty-fifth cause of action
pursuant to the same. (ECF No. 33). The KTA defendants move
to dismiss the sixth, eighth, ninth, and tenth causes of
action pursuant to the same. (ECF No. 51).
Motion to dismiss
may dismiss a plaintiff's complaint for “failure to
state a claim upon which relief can be granted.”
Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide
“[a] short and plain statement of the claim showing
that the pleader is entitled to relief.” Fed.R.Civ.P.
8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007). While Rule 8 does not require detailed
factual allegations, it demands “more than labels and
conclusions” or a “formulaic recitation of the
elements of a cause of action.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).
allegations must be enough to rise above the speculative
level.” Twombly, 550 U.S. at 555. Thus, to
survive a motion to dismiss, a complaint must contain
sufficient factual matter to “state a claim to relief
that is plausible on its face.” Iqbal, 556
U.S. at 678 (citation omitted).
Iqbal, the Supreme Court clarified the two-step
approach district courts are to apply when considering a
motion to dismiss. First, the court must accept as true all
well-pled factual allegations in the complaint; however,
legal conclusions are not entitled to the assumption of
truth. Id. at 678-79. Mere recital of the elements
of a cause of action, supported only by conclusory
statements, does not suffice. Id.
the court must consider whether the factual allegations in
the complaint allege a plausible claim for relief.
Id. at 679. A claim is facially plausible when the
plaintiff's complaint alleges facts that allow the court
to draw a reasonable inference that the defendant is liable
for the alleged misconduct. Id. at 678.
the complaint does not permit the court to infer more than
the mere possibility of misconduct, the complaint has
“alleged - but it has not shown - that the pleader is
entitled to relief.” Id. at 679. When the
allegations in a complaint have not crossed the line from
conceivable to plausible, plaintiff's claim must be
dismissed. Twombly, 550 U.S. at 570.
Ninth Circuit addressed post-Iqbal pleading standards in
Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
The Starr court held,
First, to be entitled to the presumption of truth,
allegations in a complaint or counterclaim may not simply
recite the elements of a cause of action, but must contain
sufficient allegations of underlying facts to give fair
notice and to enable the opposing party to defend itself
effectively. Second, the factual allegations that are taken
as true must plausibly suggest an entitlement to relief, such
that it is not unfair to require the opposing party to be
subjected to the expense of discovery and continued
FRCP 9(b) - claims alleging fraud
of fraud are subject to a heightened pleading standard.
See Fed. R. Civ. P. 9(b) (“[A] party must
state with particularity the circumstances constituting fraud
. . . .”). Rule 9(b) operates “to give defendants
notice of the particular misconduct which is alleged, ”
requiring plaintiffs to identify “the circumstances
constituting fraud so that the defendant can prepare an
adequate answer from the allegations.” Neubronner
v. Milken, 6 F.3d 666, 671 (9th Cir. 1993) (citations
complaint must specify such facts as the times, dates,
places, benefits received, and other details of the alleged
fraudulent activity.” Id. (citations omitted).
Rule 9(b) provides that “[m]alice, intent, knowledge,
and other conditions of a person's mind may be alleged
amended complaint sets forth twenty-seven causes of action:
(1) breach of ATU International's constitution and
general laws in violation of LMRDA safeguards against
improper disciplinary action; (2) violation of LMRDA equal
rights (pursuant to LMRDA Title I § 101, 29 U.S.C.
§ 411 and 412); (3) violation of LMRDA free speech; (4)
breach of ATU International's constitution and general
laws in violation of LMRDA trusteeship provisions; (5)
violation of LMRDA indirect election provisions; (6) breach
of duty of fair representation; (7) violation of LMRDA equal
rights (pursuant to LMRDA Title I § 101 and 29 U.S.C.
§ 411(a)(1)); (8) violation of LMRDA prohibition on
receiving and accepting something of value from a union
employer; (9) wire fraud and mail fraud; (10) federal RICO
violation (pursuant to 18 U.S.C. § 1962); (11) LMRA
breach of contract; (12) negligence; (13) defamation and
defamation per se; (14) fraudulent
misrepresentation; (15) legal malpractice; (16) breach of
fiduciary duty; (17) constructive fraud; (18) malicious
prosecution; (19) civil conspiracy; (20) false pretenses
(pursuant to Nevada Revised Statutes § 205.380); (21)
perjury; (22) offering false evidence; (23) false pretenses
(pursuant to Nevada Revised Statutes § 205.377); (24)
state RICO violation (pursuant to Nevada Revised Statutes
§ 207.470 et seq); (25) accounting malpractice
and professional negligence as to the MKA defendants; (26)
accounting malpractice and professional negligence as to
defendant Tyler Home; and (27) breach of fiduciary
duty. (ECF No. 8).
MKA defendants' motion to dismiss
defendants argue in their motion to dismiss that
plaintiffs' ninth, tenth, thirteenth, nineteenth,
twenty-third, twenty-fourth, and twenty-fifth claims should
be dismissed for failing to state a claim upon which relief
can be granted. (ECF No. 31).
Ninth cause of action as to MKA defendants
ninth cause of action alleges that all defendants conspired
to, and in fact did, use wire transmissions and mail services
to defraud plaintiffs of their rights guaranteed by the
LMRDA. (ECF No. 8). These statutes do not expressly confer a
private right of action, and the weight of authority has
concluded that no implied private right of action exists.
E.g., Wisdom v. First Midwest Bank of Popular
Bluff, 167 F.3d 402, 407-08 (8th Cir. 1999) (no implied
private right of action under mail fraud or wire fraud
statutes); Ryan v. Ohio Edison Co., 611 F.2d 1170,
1178 (6th Cir. 1979) (no implied private right of action
under mail fraud statute); Napper v. Anderson, Henley,
Shields, Bradford and Pritchard, 500 F.2d 634, 636 (5th
Cir. 1974) (no implied private right of action under wire
fraud statute), cert. denied, 423 U.S. 837 (1975).
plaintiffs' ninth claim is dismissed with prejudice.
Tenth cause of action as to MKA defendants
tenth cause of action alleges a RICO violation pursuant to 18
U.S.C. § 1962. (ECF No. 8). Specifically, plaintiffs
allege that the criminal offenses pleaded in the eighth and
ninth causes of action serve as predicate offenses under the
RICO statute. Id. The MKA defendants' motion to
dismiss asserts that plaintiffs have not sufficiently
established that the MKA defendants participated in the
management of a RICO enterprise or engaged in a pattern of