Opinion
Case No. 3:14-cv-00604-YY
02-21-2017
REGGIE KELLY and MARIE WESTROPE, individually and on behalf of all others similarly situated, Plaintiff, v. RINGLER ASSOCIATES INCORPORATED, PAUL HOFFMAN, MICHAEL CASEY, ROBERT S. BELL, CECIL T. MATHEWS, PATRICK C. FARBER, JAMES R. WEBER, JOHN B. JOSEPH, PATRICK L. KELLY, and ROBERT BLATTENBERG, Defendants.
FINDINGS AND RECOMMENDATIONS
YOU, Magistrate Judge :
INTRODUCTION
Plaintiffs Marie Westrope ("Westrope") and Reggie Kelly ("Kelly") have brought this action against Ringler Associates Incorporated ("Ringler"), Paul Hoffman ("Hoffman"), Michael Casey ("Casey"), Robert S. Bell ("Bell"), Cecil T. Mathews ("Mathews"), Patrick C. Farber ("Farber"), James R. Weber ("Weber"), John B. Joseph ("Joseph"), Patrick Kelly ("Kelly"), and Robert Blattenberg ("Blattenberg") (collectively "Defendants") individually and on behalf of putative class members alleging that Plaintiffs and class members were injured as a direct result of Defendants' negligence. Plaintiffs also allege that they are entitled to damages under ORS 746.310, Alaska Stat. § 21.33.037, and similar statutes that provide a private right of action against persons who assist in unlicensed insurance transactions. Defendants Ringler and Hoffman have filed a Motion to Dismiss Plaintiffs' First Amended Complaint pursuant to FRCP 12(b)(6) for failure to state a claim. ECF #131. Individual defendants Casey, Bell, Mathews, Farber, Weber, Joseph, Kelly, and Blattenberg join in that motion. ECF #138, at 2. Additionally, seven of the nine individual defendants—Casey, Bell, Mathews, Farber, Weber, Kelly, and Blattenberg (collectively "Consultants")—seek to dismiss the claims against them pursuant to FRCP 12(b)(2) for lack of personal jurisdiction. ECF #138, at 5. For the reasons discussed below, Defendants' motion to dismiss for failure to state a claim should be DENIED and Consultants' motion to dismiss for lack of personal jurisdiction should be GRANTED.
See Ala. Code § 27-10-1; Fla. Stat. § 626.901; Haw. Rev. Stat. §§ 431:8-202 to 204; 215 Ill. Comp. Stat. § 121-4; Minn. Stat. § 60K.47; N.C. Gen. Stat. § 58-28-45; S.C. Code Ann. § 38-45-120; Tex. Ins. Code Ann. §101.201.
Defendants Hoffman and Joseph have not moved to dismiss for lack of personal jurisdiction.
ALLEGATIONS IN FIRST AMENDED COMPLAINT
Plaintiffs Westrope and Kelly suffered serious injuries decades ago and respectively sought compensation for their injuries in Oregon and California state courts. First Am. Compl. (ECF #125), ¶¶ 19, 20. Following litigation, Westrope and Kelly's underlying claims were resolved with what are known as qualified-assignment structured settlements. Id. ¶¶ 6, 19, 20, 35. These qualified-assignment structured settlements were brokered by Defendants. Id. ¶¶ 6, 35.
Defendant Ringler is a primary market structured settlement agreement ("SSA") broker. Id. ¶ 2. Defendants Hoffman, Casey, Bell, Mathews, Farber, Weber, Joseph, Kelly and Blattenberg were involved with Ringler in various capacities, including as founding members of the company, corporate officers, and SSA brokers. Id. ¶¶ 23-31.
"An SSA is an agreement whereby a defendant or its liability insurer agrees to pay the claimant or plaintiff a certain amount of money over a period of time (usually many years) instead of in a lump sum." Id. ¶ 2. SSAs can be attractive to both parties to an injury claim. Id. ¶¶ 32-33. The claimant or plaintiff receives a higher total amount of tax free income in installments over an extended period of time. Id. ¶ 32. The defendant or its liability insurer can take a one-time exclusion from income and deduct the cost of the annuity contract as a business expense. Id. ¶ 33.
SSAs "take one of two forms—either a 'buy and hold' structured settlement where the defendant or liability insurer remains liable, or a structured settlement using a qualified assignment, as such term is defined under Section 130 of the Internal Revenue Code (I.R.C. § 130)." Id. ¶ 35. All of the SSAs at issue in this case involve qualified assignments. Id.
In a qualified assignment SSA, the defendant or its insurer transfers its long-term periodic payment obligation to a third-party. Id. ¶ 36. "The third party, called an assignment company or qualified assignee, becomes the owner of the annuity that funds the periodic payments due under the settlement agreement." Id. The settling defendant or its insurer is released from any further liability to make periodic payments once it funds the annuity and makes the qualified assignment. Id. Thus, the solvency of the life-insurance company issuing the annuity is critical. Id.
Plaintiffs and class members allege that Defendants selected Executive Life Insurance Company of New York ("ELNY") to fund Plaintiffs and class members underlying annuities despite ELNY's financial troubles at the time. Id. ¶¶ 1, 7. ELNY was one of several life- insurance companies offering annuities to fund SSAs at the time Defendants selected ELNY. Id. ¶ 50. "Defendants were free to select from one or more of these insurers when tailoring a structured settlement plan to meet the needs of the annuitants." Id. Defendants brokered Plaintiffs' and class members' structured settlements exclusively with ELNY annuities and, in return, received from ELNY an undisclosed commission of 4% of each annuity purchased up front. Id.
According to Plaintiffs, "Defendants knew that the purpose of the structured settlements and their services was to benefit Plaintiffs and class members." Id. ¶ 52. "[T]he ELNY application Defendants signed and submitted to ELNY names Plaintiffs and class members as 'annuitant' and 'payee.'" Id. In order to complete the application, Defendants collected information about Plaintiffs and class members including their future medical needs. Id. Defendants knew that the settlement payments were to be paid out over a long period of time. Id.
Plaintiffs and class members further allege that at the time Defendants selected ELNY to fund annuities for Plaintiffs and class members, "ELNY was not licensed to sell insurance in twenty four states, including Oregon and Alaska." Id. ¶¶ 7, 42. States license insurance companies in order to ensure their financial soundness and monitor their solvency. Id. ¶ 43. As ELNY was not licensed in nearly half the states in the United States, including Oregon and Alaska, those states could not oversee ELNY's financial condition. Id. ¶ 44. In states where ELNY was licensed, ELNY was required by state insurance regimes to file financial reports disclosing the company's financial health. Id. ¶ 45. Defendants knew the residency of each ELNY annuitant based on their annuity applications and, according to Plaintiffs, reasonable SSA brokers would have scrutinized ELNY's financial reports. Id. ¶¶ 42, 45.
In addition to selecting ELNY to fund Plaintiffs' structured settlement annuities, Defendants selected ELNY's parent, the First Executive Corporation ("FEC"), as the assignment company. Id. ¶ 8. FEC also allegedly suffered from financial troubles at the time. Id. ¶¶ 8, 10. Plaintiffs allege Defendants knew or should have known of ELNY's and FEC's financial troubles. Id. ¶¶ 7-8, 39-41, 52.
"ELNY and FEC were heavily invested in junk bonds." Id. ¶ 39. Junk bonds are high yield instruments that carry a corresponding higher risk of default. Id. In 1986, when the value of junk bonds collapsed, FEC was the world's largest holder of junk bonds. Id. Plaintiffs allege that there were various warning signs indicating that ELNY was in financial trouble, which a reasonable broker would have recognized at the time Defendants placed Plaintiffs with ELNY annuities. Id. ¶¶ 40-41. Specifically, Plaintiffs contend that Defendants failed to scrutinize ELNY's reports in states where ELNY was licensed, ELNY lacked financial oversight in states where it was not licensed, Defendants should have known that the New York Insurance Department was conducting an examination into ELNY's financial condition, and Defendants should have known about the risks of funding structured settlements with annuities from financially weak companies in light of Baldwin United's collapse in 1983. Id. ¶¶ 40-41, 44-45. According to Plaintiffs, a reasonable broker would not have used FEC as the assignment company given that its risky asset mix could affect ELNY and a reasonable broker would not have used ELNY to fund the annuity given its overexposure to junk bonds. Id. ¶ 39, 41.
ELNY and FEC were in significant financial trouble at the end of the 1980s and into the early 1990s. Id. ¶ 10. In April 1991, the New York Superintendent of Insurance placed ELNY into rehabilitation. Id. FEC filed for bankruptcy protection in May, 1991. Id. "In April 2012, The New York State Liquidation Bureau declared ELNY to be insolvent, and a liquidation plan was approved." Id. ¶ 12. "However, the plan left over 1,500 ELNY annuitants, including Plaintiffs and the Class, with a shortfall totaling over $920 million." Id. Plaintiff Westrope's payments were reduced by 52% and Plaintiff Kelly's payments were reduced by 50%. Id. ¶ 58.
Plaintiffs claim that Defendants breached their duty of care to Plaintiffs and the class in purchasing structured settlement annuities from ELNY and using FEC as the assignment company. Id. ¶ 74. Plaintiffs also seek damages "pursuant to Alaska Stat. § 21.33.037, [ORS] 746.310, and other applicable state statutes that were enacted and designed to protect insureds against harm caused by the sale of unlicensed insurance." Id. ¶ 77.
Ala. Code § 27-10-1; Fla. Stat. § 626.901; Haw. Rev. Stat. §§ 431:8-202 to 204; 215 Ill. Comp. Stat. § 121-4; Minn. Stat. § 60K.47; N.C. Gen. Stat. § 58-28-45; S.C. Code Ann. § 38-45-120; Tex. Ins. Code Ann. §101.201.
PROCEDURAL HISTORY
Plaintiffs filed their original complaint on April 11, 2014. Compl. (ECF #1), ¶ 1. The original complaint was brought on behalf of Plaintiffs and a class of all persons who both entered into structured settlement agreements funded by annuity contracts issued by ELNY and who resided in states where ELNY was not licensed to do business at the time the agreements were brokered. Id. ¶ 56. The complaint brought negligence claims on behalf of the class and statutory claims on behalf of a statutory subclass. Id. ¶¶ 56-57.
Defendants filed a Motion to Dismiss the original complaint on June 26, 2014, asserting that Plaintiffs had failed to state plausible negligence and statutory claims. Mot. to Dismiss (ECF #17). In her Findings and Recommendations, Judge Janice Stewart made a number of findings that are relevant to this motion. First, she found that the negligence claim survived under Oregon law because Defendants had a "heightened duty of care" to exercise reasonable care in procuring SSAs for Plaintiffs who "were intended third-party beneficiaries" to the annuity contracts. F. & R., J. Stewart (ECF #82), at 17. Second, she found that Plaintiffs had sufficiently alleged breach. Id. at 19-20. Defendants had submitted exhibits seeking to prove that ELNY was financially sound at the time ELNY's annuities were sold—and thereby prove that Defendants had not breached their duty to Plaintiffs—but Judge Stewart declined to take judicial notice of those exhibits. Id. at 19; Op. & Order, J. Stewart (ECF #81).
On February 20, 2015, Judge Michael Mosman issued an Opinion and Order adopting Judge Stewart's Findings and Recommendations. Am. Op. and Order, J. Mosman (ECF #98). Judge Mosman found that "Defendants owed Plaintiffs a legal duty of care as third-party beneficiaries of the contracts between Defendants and the settling tortfeasors, ELNY, and FEC." Id. at 6. Judge Mosman noted that "Oregon courts have found defendants in similar situations to Defendants in this case to be agents working in part for the economic benefit of an intended third-party beneficiary, and therefore have found the defendants owe a duty of care to that beneficiary." Id. at 6. Judge Mosman additionally found:
Defendants' profession is dedicated to purchasing annuities that are intended to benefit accident victims. Defendants knew that the annuity it was procuring in this case would provide insurance intended to benefit Plaintiffs with secure annuity payments for life. As such, Plaintiffs can plausibly claim to have been third-party beneficiaries to all of Defendants' interactions, agreements, and contracts with the underlying tortfeasors, FEC, and ELNY. As such, Plaintiffs have stated a plausible claim for negligence under both Oregon and Alaska law. Defendants' motion to dismiss the Plaintiffs' negligence claims is denied.Id. at 7.
Plaintiffs subsequently filed their First Amended Complaint ("FAC") on March 7, 2016. ECF #125. As discussed above, the FAC brings claims on behalf of Plaintiffs and a class of all persons who entered into SSAs brokered by Defendants that were funded by an ELNY annuity, received annuity benefits from ELNY pursuant to a structured settlement agreement, and suffered annuity benefit cuts on or after August 8, 2013. Id. ¶ 62. In addition, the FAC asserts claims against Defendants Casey, Bell, Mathews, Farber, Weber, Joseph, Kelly, and Blattenberg. Id. ¶ 1.
FINDINGS
Defendants move to dismiss the negligence claims pursuant to FRCP 12(b)(6) for failure to state a claim. Additionally, seven of the nine individual Defendants—Casey, Bell, Mathews, Farber, Weber, Kelly, and Blattenberg—separately move to dismiss the claims against them pursuant to FRCP 12(b)(2) for lack of personal jurisdiction. ECF #138, at 5. Defendants' motion to dismiss for failure to state a claim should be denied, and Consultant's motion to dismiss for lack of personal jurisdiction should be granted.
I. Motion to Dismiss Regarding Former Plaintiff Timothy Culhane's Claims
Defendants have moved to dismiss claims asserted by Timothy Culhane ("Culhane") for failure to state a claim. ECF #131, at 19. After Defendants' motion was filed, Culhane filed a Notice of Voluntary Dismissal. ECF #154. Accordingly, to the extent Defendants' motion to dismiss pertains to Culhane, it is moot.
For the court's convenience, the parties submitted copies of their briefing with redactions that related to Culhane's claims. ECF #161.
II. Defendants' Motions to Dismiss for Failure to State a Claim
Defendants contend that Plaintiffs have failed to allege a plausible claim of negligence by (1) expanding their allegations to include states in which ELNY was licensed, (2) alleging that Ringler was negligent in selecting FEC, and (3) alleging that Ringler was negligent in only selecting ELNY. These arguments lack merit, as discussed below.
A. Rule 12(b)(6) - Standard of Review
Pursuant to FRCP 12(b)(6), dismissal is appropriate when the complaint fails to state a claim. To survive a motion to dismiss for failure to state a claim, a complaint must contain sufficient factual allegations which, when accepted as true, give rise to a plausible inference that a defendant violated a plaintiff's rights. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "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. Determining facial plausibility is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. The court takes all allegations of material fact as true and construes them in the light most favorable to the nonmoving party. Parks Sch. Of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995).
B. Choice of Law
"When a federal court sits in diversity to hear state law claims, the conflicts laws of the forum state—here [Oregon]—are used to determine which state's substantive law applies." CRS Recovery, Inc. v. Laxton, 600 F.3d 1138, 1141 (9th Cir. 2010); see also Simon v. Philip Morris Inc., 124 F. Supp. 2d 46, 53 (E.D.N.Y. 2000) (applying this rule in a nationwide class action). New choice-of-law rules for torts and other noncontractual claims went into effect in Oregon on January 1, 2010. ORS 15.400-460 (renumbered from ORS 31.850-890); HTI Holdings, Inc. v. Hartford Cas. Ins. Co., No. 10-cv-06021-TC, 2011 WL 4595799, at *6 (D. Or. Aug. 24, 2011); see generally Symeon C. Symeonides, Oregon's New Choice-of-Law Codification For Tort Conflicts: An Exegesis, 88 Or. L. Rev. 963, 965 (2009). Notably, under Oregon's current rules, the choice-of-law analysis is not necessarily driven by Oregon law. ORS 15.440. For example, where neither the plaintiff nor the defendant is domiciled in Oregon and they are domiciled in different states, a court will have to determine "whether the laws of those states would produce a different outcome . . . ." ORS 15.440 (emphasis added).
Neither party has directly addressed what law the court is to apply in assessing negligence claims involving the named Plaintiffs or putative class members. For the purposes of the prior motion, Judge Stewart assumed, as did the parties, that Oregon law applied to Westrope's negligence claim and Alaska law applied to Kelly's negligence claim. ECF #82, at 9. Similarly, Judge Mosman assessed Plaintiffs' negligence claim under both Oregon law and Alaska law. ECF #98, at 5. Neither Judge Stewart nor Judge Mosman felt it necessary to consider, nor did the parties advance an argument that the court should consider, what law or laws would apply to the putative class. ECF #82, at 8-9 (noting that "[t]he motion does not address the laws of other states that may apply to putative class members who reside in other states."); ECF #98, at 5.
As the parties have not addressed what law or laws should apply to the putative class, and the court finds it is premature to consider what law or laws apply to the putative class, this court addresses only the law that the court previously applied to Westrope's and Kelly's claims: Oregon law and Alaska law. See In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Television Litigation, 758 F. Supp. 2d 1077, 1096 (S.D. Cal. 2010) ("In a putative class action, the Court will not conduct a detailed choice-of-law analysis during the pleading stage.").
C. Negligence—Licensing
Plaintiffs' original complaint alleged that "Defendants owed a duty to Plaintiffs and the Negligence Class to exercise reasonable care when procuring annuities from life insurance companies to fund structured settlements." ECF #1, ¶ 67. Plaintiffs' original claim hinged on lack of licensure; specifically, Plaintiffs alleged that "[a] reasonable insurance broker would have or should have known that ELNY was not licensed to sell insurance in [26 states] and would have or should have placed plaintiffs and class members with structured settlement products that were available from life insurance companies licensed in Plaintiffs' and class members' respective states." Id. at ¶ 68. Plaintiffs and the putative class members only resided in the 26 states where ELNY was unlicensed at the time of the alleged tortious conduct. Id. at ¶¶ 17-18, 56.
Plaintiffs' FAC adds a number of allegations that, importantly, expand the putative class. Once again, Plaintiffs allege that "Defendants owed a duty to Plaintiffs and the Negligence Class to exercise reasonable care when procuring annuities from life insurance companies to fund structured settlements." ECF #125, ¶ 73. But the FAC's putative class now includes "[a]ll persons who (1) entered into SSAs brokered by Defendants that were funded by ELNY annuity[;] (2) received annuity benefits from ELNY pursuant to that structured settlement; and (3) suffered annuity benefit cuts on or after August 8, 2013." ECF #125, ¶ 62. Thus, the new putative class includes both putative class members who resided in the 26 states where ELNY was unlicensed at the time of the alleged tortious conduct plus putative class members who resided in the remaining states where ELNY was licensed.
Defendants argue that, as a matter of law, there can be no duty or breach under Plaintiffs' new allegations. ECF #131, at 19 n.7, 20; Defs.' Reply (ECF #147), at 8. In particular, Defendants argue that Plaintiffs have not alleged a plausible claim that Ringler breached a duty by selecting ELNY when ELNY was solvent and its financial health rated A+ (Superior) by A.M. Best in 1985. Defendants also argue that Ringler did not breach a duty by choosing ELNY where ELNY was licensed to conduct business in 24 states. ECF # 131, at 20. They assert that, in the 24 states where ELNY was licensed, "any further duty on Ringler to investigate ELNY's financial health would have been (at the least) superfluous and (at the worst) entirely impossible." Id. at 23.
Defendants' argument regarding solvency and A.M. Best has already been decided. Defendants raised the same argument in their previous motion to dismiss. ECF #17, at 15. Judge Stewart declined to take judicial notice of ELNY's A.M. Best rating, finding that such factual evidence could not be considered at the motion to dismiss stage. Op. and Order, J. Stewart, ECF #81, at 2. Judge Mosman found that "Defendants owed Plaintiffs a legal duty of care as third-party beneficiaries of the contracts between Defendants and the settling tortfeasors, ELNY, and FEC," and that Plaintiffs had "stated a plausible claim for negligence under both Oregon and Alaska law." ECF #98, at 6, 8. This issue should not be revisited again.
With respect to Defendants' other argument, that they breached no duty in choosing ELNY in states where ELNY was licensed, it is premature to consider what law or laws might apply to putative class members from states where ELNY was licensed at the time of the alleged tortious conduct. See Barth v. Firestone Tire and Rubber Co., 661 F. Supp. 193, 203 (N.D. Cal. 1987) (noting that courts "generally consider only the claims of a named plaintiff in ruling on a motion to dismiss a class action complaint prior to class certification"); Donohue v. Apple, Inc., 871 F. Supp. 2d 913, 923 (N.D. Cal. 2012) (declining to dismiss state law claims at motion to dismiss stage given that the parties had not submitted briefing on choice-of-law or class certification); In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Television Litigation, 758 F. Supp. 2d 1077, 1096 (S.D. Cal. 2010) ("In a putative class action, the Court will not conduct a detailed choice-of-law analysis during the pleading stage."); Speyer v. Avis Rent a Car Sys, Inc., 415 F. Supp. 2d 1090, 1094 (S.D. Cal. 2005) (declining to consider whether a forum selection clause was applicable to all potential class plaintiffs as, at the motion stage, "the Court must determine only whether the forum selection clause is applicable to the named plaintiffs, and if so, whether the clause can be enforced against them."). This court has already ruled that Plaintiffs have plausibly pleaded a claim of negligence under Oregon and Alaska law with respect to the named Plaintiffs and should not at this point consider law pertaining to putative plaintiffs.
Also, defining a professional's standard of care is often a question that involves expert testimony. "In most negligence actions against professionals, expert testimony is necessary to inform the jury of the applicable standard of care." Childers v. Spindor, 91 Or. App. 119, 122, 754 P.2d 599, 600 (1988). "A jury generally is not able to determine what is reasonable professional conduct without such testimony." Id. Here, in the FAC, Plaintiffs allege that, in states where ELNY was licensed, "[r]easonable SSA brokers would have scrutinized ELNY's reports" and "recognized the risks imposed by ELNY's asset mix and not used it as a vehicle to fund Plaintiffs' and class members' structured settlements." ECF #125, ¶ 45. As Plaintiffs correctly argue, the reasonableness of Defendants' behavior is an issue that will involve expert testimony and is the proper subjects for a motion to dismiss. ECF #144, at 26.
D. Negligence—Selecting FEC
In the FAC, Plaintiffs now allege that, in addition to selecting ELNY as the annuity-issuing insurance company, Ringler was negligent in selecting FEC as the qualified assignment company. ECF #131, at 23. Defendants contend that Plaintiffs:
(1) have failed to allege that any other entities were available or willing at the time to assume these underlying tortfeasors' payment obligations, whether in conjunction with an ELNY annuity or otherwise;
(2) have failed to allege that Plaintiffs would have approved of a settlement wherein any entity other than FEC assumed these obligations; or, in the alternative,
(3) have failed to allege that the underlying tortfeasors were willing or able to purchase "buy and hold" annuities to settle Plaintiffs' claims instead of assigning their liability.Id. at 23-24.
Contrary to Defendants' assertion, Plaintiffs indeed have alleged in the FAC that "other life insurance companies offered structured settlement products that were available to Plaintiffs and class members" and "[n]one of these companies has had to reduce benefits." ECF #125, ¶ 59. Plaintiffs also allege that "[a] reasonable broker would not have selected an operating company related to ELNY like FEC as the assignment company because its financial problems could impact ELNY's finances and its ability to make annuity payments." Id., ¶ 8. When the FAC is read in the light most favorable to Plaintiffs, it is implicit in their allegations that they would have approved a settlement involving an entity other than FEC. Thus, Plaintiffs have asserted a facially plausible claim.
E. Negligence - Diversification
Similarly, Defendants note that Plaintiffs now allege Ringler was negligent in only selecting ELNY. ECF #131, at 24. Defendants challenge this allegation on three grounds, arguing that Plaintiffs have failed to allege:
(1) that selecting more than one annuity issuer was a decision that Ringler itself could have made;Id.
(2) that Plaintiffs would have each agreed to structure their settlements using annuities from more than one insurance company; or
(3) that this was even possible in 1985.
However, Plaintiffs have alleged in the FAC that "ELNY was one of several life insurance companies offering annuities to fund SSAs at the time Defendants brokered Plaintiffs and class members' SSAs." ECF #125, ¶ 50. Further, they assert that "Defendants were free to select from one or more of these insurers when tailoring a structured settlement plan to meet the needs of the annuitants." Id. (emphasis added). Additionally, they claim that if "Defendants were free to select from one or more insurers," they presumably had the authority to select more than one insurer, and Plaintiffs would have approved of Defendants' actions if they had been fully advised of the pitfalls of proceeding with only ELNY. Id. Construing the allegations in the light most favorable to Plaintiffs, they have alleged factual content that allows the court to reasonably infer that Defendants had the authority to diversify, that Plaintiffs would have agreed to such diversification, and such diversification was possible in 1985.
For all of the reasons discussed above, Defendants' motion to dismiss for failure to state a claim for relief should be denied.
III. Defendants' Motion to Dismiss for Lack of Personal Jurisdiction
Consultants have moved to dismiss Plaintiffs' claims against them for lack of personal jurisdiction. ECF #138, at 5. This motion should be granted, as Plaintiffs have failed to establish personal jurisdiction over any of the Consultants.
A. Rule 12(b)(2) - Standard of Review
Pursuant to FRCP 12(b)(2), dismissal is appropriate when the court lacks personal jurisdiction over defendants. The plaintiff bears the burden of establishing that personal jurisdiction is proper. Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008).
"Federal Courts ordinarily follow state law in determining the bounds of their jurisdiction over defendants." Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (citing Daimler AG v. Bauman, 134 S. Ct. 746, 753 (2014)). "Oregon law authorizes personal jurisdiction to the full extent permitted by the United States Constitution." Id. (citing ORCP 4(L)).
The Due Process Clause requires that nonresident defendants "have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quotations omitted). In a suit against nonresident defendants, "[p]ersonal jurisdiction over each defendant must be analyzed separately." Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129-30 (9th Cir. 2003).
"Where, as here, the motion is based on written materials rather than an evidentiary hearing the plaintiff need only make a prima facie showing of jurisdictional facts." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (quotations omitted). Otherwise stated, the court is to "only inquire into whether the plaintiff's pleadings and affidavits make a prima facie showing of personal jurisdiction." Id. (quotations omitted). "Although the plaintiff cannot 'simply rest on the bare allegations of its complaint,' uncontroverted allegations in the complaint must be taken as true." Schwarzenegger, 374 F.3d at 800 (quoting Amba Marketing Systems, Inc. v. Jobar International, Inc., 551 F.2d 784, 787 (9th Cir. 1977).
B. Specific Jurisdiction
Plaintiffs allege that the court has specific jurisdiction over Defendants. ECF #144, at 28. Courts analyze specific jurisdiction under a three-prong test:
Personal jurisdiction may be general or specific. Plaintiffs do not allege general jurisdiction over Consultants. See ECF #144, 28-35.
(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform
some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1227-28 (9th Cir. 2011) (quoting Schwarzenegger, 374 F.3d at 802) (emphasis in original). Plaintiffs bear the burden of satisfying the first two prongs. Id. If Plaintiffs are unable to establish both prongs, personal jurisdiction is lacking. Id. If Plaintiffs are able to establish both prongs, "the burden then shifts to the defendant to 'present a compelling case' that the exercise of jurisdiction would not be reasonable." Schwarzenegger, 374 F.3d at 802 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985)).
(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and
(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.
Plaintiffs may meet the first prong by establishing either purposeful direction of activities at the forum or purposeful availment of the privilege of doing business in the forum or "by some combination thereof." Yahoo! Inc. v. La Ligue Contre Le Racisme, 433 F.3d 1199, 1206 (9th Cir. 2006). Courts generally apply the purposeful direction analysis in cases involving tortious conduct. Mavrix Photo, Inc., 647 F.3d at 1228. "In tort cases, [courts] typically inquire whether a defendant purposefully directs his activities at the forum state, applying an effects test that focuses on the forum in which the defendant's actions were felt, whether or not the actions themselves occurred within the forum." Id. (quoting Yahoo! Inc., 433 F.3d at 1206) (internal quotations omitted). Stemming from the Supreme Court's decision in Calder v. Jones, the 'effects test' "requires that the defendant allegedly must have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state." Mavrix Photo, Inc., 647 F.3d at 1228 (citing 465 U.S. 783 (1984)).
A purposeful availment analysis, on the other hand, is generally applied in contract cases. Schwarzenegger, 374 F.3d at 802. A purposeful availment analysis looks to whether "a defendant purposefully availed himself of the privilege of doing business in a forum state . . . ." Id. A purposeful availment showing "typically consists of evidence of the defendant's actions in the forum, such as executing or performing a contract there." Id. "By taking such actions, a defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Id. (quotations and citations omitted). "In return for these benefits and protections, a defendant must—as a quid pro quo— submit to the burdens of litigation in that forum." Id. (quotations and citations omitted).
1. Purposeful Availment—Guiding Spirit
Plaintiffs first contend that "[t]he [Consultants], as corporate decision makers, purposefully availed themselves of the privilege of conducting business in Oregon by advertising their services in Oregon and deciding to offer ELNY annuities to fund structured settlements in Oregon." ECF #144, at 29. Plaintiffs contend that the Consultants were Ringler's "guiding spirits" and directed, participated in, and authorized Ringler's activities in Oregon. Id. at 41.
"Under the fiduciary shield doctrine, a person's mere association with a corporation that causes injury in the forum state is not sufficient in itself to permit that forum to assert jurisdiction over the person." Davis v. Metro Prod., Inc., 885 F.2d 515, 520 (9th Cir. 1989). "Rather, there must be a reason for the court to disregard the corporate form." Id. A court may do so where a defendant "is a primary participant or guiding spirit in the alleged wrongdoing intentionally directed at [Oregon]." Wolf Designs, Inc. v. DHR Co., 322 F. Supp. 2d 1065, 1072 (C.D. Cal. 2004); see also Davis, 885 F.2d at 523 n.10 ("Cases which have found personal liability on the part of corporate officers have typically involved instances where the defendant was the 'guiding spirit' behind the wrongful conduct, . . . or the 'central figure' in the challenged corporate activity." (quoting Escude Cruz v. Ortho Pharmaceutical Corp., 619 F.2d 902, 907 (1st Cir. 1980)).
In Wolf Designs, the court "exercised personal jurisdiction over the president of a defendant company, despite the fact that he never traveled to California or advertised there, because he directed, participated in, and authorized the corporate defendant's California conduct." 322 F. Supp. 2d at 1072. The president owned 100% of the company's stock, admitted that he made the final decision with respect to the alleged wrongdoing, and admitted that he had the "final say" when it came to the defendant's policies. Id. at 1069, 1073.
Plaintiffs also cite Calder. In Calder, the individual defendant was the president of the defendant newspaper, editor of the defendant newspaper, "over[saw] just about every function of the [newspaper]," approved of article ideas, and edited articles in their "final form." Id. 465 U.S. at 786. Additionally, the individual defendant was the editor of the allegedly libelous article, knew that the article would have a "potentially devastating impact upon respondent," and knew that "brunt of th[e] injury" would be felt in the state with the largest circulation, i.e., the forum state. Id. at 789-90; see also Int'l Mfg. Co. v. Landon, Inc., 336 F.2d 723, 724, 729 (9th Cir. 1964) (finding that individual defendant was the company's guiding spirit where he was the sole stockholder and president, and he "directed the manufacture and sale of the [patent infringing product.]"); j2 Global Commc'ns, Inc. v. Blue Jay, Inc., No. C 08-4254 PJH, 2009 WL 29905, at *9 (N.D. Cal. Jan. 5, 2009) (holding individual defendant was guiding spirit where he was the president and sole officer of relevant company and was personally and solely responsible for directing tortious act at forum state); Skydive Ariz., Inc. v. Quattrocchi, No. CV 05-2656-PHX-MHM, 2009 WL 6597892, at *6 (D. Ariz. Feb. 2, 2009) (finding pair of individual defendants were guiding spirits of jointly held defendant companies where they "created and controlled/directed an intricate web of corporate entities that engaged in conduct directed at the [forum state] and were intimately involved in the day-to-day operations of the [defendant companies].").
Thus, in deciding this issue, courts have considered whether there is some combination of evidence that the individual defendant had the ability to control, actually exercised that control, and exercised that control over the alleged tortious activity. See Calder, 465 U.S. at 786; Davis, 885 F.2d at 522-23; Int'l Mfg. Co., 336 F.2d at 724; j2 Global Commc'ns, Inc., 2009 WL 29905, at *9; Skydive Ariz., Inc., 2009 WL 6597892, at *6; Wolf Designs, Inc., 322 F. Supp. 2d at 1073.
As the Consultants point out, Plaintiffs have set a high bar for themselves by arguing that "each Individual Defendant should be held to account for the actions of Ringler because each and every one of them acted as Ringler's 'guiding spirit' and its 'central figure.'" ECF #147, at 22 (emphasis in original). The cases cited by Plaintiffs involve a single individual defendant or at most two defendants. See Calder, 465 U.S. at 786 (joint president/editor of newspaper and newspaper reporter); Davis, 885 F.2d at 522-23 (two joint owners); Int'l Mfg. Co., 336 F.2d at 724 (sole owner); j2 Global Commc'ns, Inc., 2009 WL 29905, at *9 (president of company); Skydive Ariz., Inc., 2009 WL 6597892, at *6 (two joint owners); Wolf Designs, Inc., 322 F. Supp. 2d at 1073 (sole owner). Here, Plaintiffs argue that seven individual defendants should be deemed guiding spirits. This does not mean that a court cannot find personal jurisdiction over these individuals; however, Plaintiffs must establish a prima facie case that each of these seven individuals served as a guiding spirit.
Plaintiffs have not met their burden. Plaintiffs' FAC's allegations are either conclusory or insufficient to make a prima facie case. Plaintiffs argue that Mathews, Kelly, and Blattenberg as founding members, determined how Ringler would "'design[] the best possible settlement solution' for injured persons, including those in Oregon." ECF #144, at 30 (quoting FAC, ¶ 22). In making this argument, Plaintiffs rely on language referring to the company's founders on Ringler's website:
When Ringler Associates incorporated in 1975, the interlocking ring design represented our six founders. . . . Today we look at each ring of the Ringler logo as representing everyone in designing the best possible settlement solution . . .ECF #125, ¶ 22. The relevance of this statement, however, if any, relates to the company "[t]oday" rather than the company at the time of the alleged tortious conduct. Id.
With respect to Blattenberg, Plaintiffs allege that "[a]ccording to Ringler's website, [Blattenberg] served as CEO as well as a member of the Board of Directors at Ringler and "has been a key contributor, setting the strategic direction and creating milestones for success at Ringler for three decades leading to Ringler's 40th anniversary in 2015. [Blattenberg] has also been an advocate for injured parties and the structured settlement industry." ECF #125, ¶ 31. However, Plaintiffs do not allege when Blattenberg served as CEO or as a member of Ringler's Board of Directors. Id. According to Blattenberg's declaration, he was an operations/ administrative manager in 1983 and was promoted to Chief Operating Officer sometime in 1985. Blattenberg Decl., ECF #139-7, at ¶ 3. It is unclear what role, if any, Blattenberg played in the alleged tortious conduct, which occurred around 1985. Further, as Defendants point out, being a key contributor and setting strategy is not the same as making the "final decision with respect to the [alleged wrongful conduct]," or having the "final say over company policies." Wolf Designs, Inc., 322 F. Supp. 2d at 1073; see also j2 Global Commc'ns, Inc., 2009 WL 29905, at *9 (noting that the individual defendant was "personally and solely responsible for arranging the [alleged tortious conduct]").
Westrope's annuity was issued by ELNY on June 28, 1985, and assigned to FEC the same day. ELNY Annuity Funding Westrope's Structured Settlement, Ex. H. (ECF #132-8), at 2; Westrope's Assignment Agreement, Ex. E (ECF #132-5), at 4. Kelly's annuity was issued by ELNY on July 9, 1985, and assigned to FEC on July 31, 1985. ELNY Annuity Funding Kelly's Structured Settlement, Ex. G (ECF #132-7), at 2; Kelly's Assignment Agreement, Ex. D (ECF #132-4), at 4.
In the FAC, Plaintiffs also refer to an ABA Journal advertisement by Ringler, which they claim lists Blattenberg. ECF #125, ¶ 57. At oral argument, Plaintiffs conceded that this advertisement pertained to Blattenberg's deceased father.
Regarding Farber, the FAC does not address his role at the company other than to state that "[h]e was involved with Defendant Hoffman in brokering Plaintiff Kelly's structured settlement funded by an ELNY annuity." ECF #125, ¶ 27. In his declaration, Farber states he was merely an employee of Ringler. Farber Decl., ECF #139-4, ¶ 5. There is a "general trend [among] the district courts to find that employees, who are not officers and directors, are protected by the fiduciary shield doctrine." Precision Orthopedic Implants, Inc. v. Lima Corporate S.P.A., No. 2:16-cv-02945-ODW (PLA), 2016 WL 7187299, at *5 (C.D. Cal. Dec. 9, 2016).
The remaining individual defendants are Bell and Weber, who are heads of regions, and Casey, who is the tenth member of the company and a former chairman. The FAC alleges that these individuals, and all of the Consultants generally, were "involved in marketing Ringler's services nationally, including within this District, and the decision to utilize ELNY to fund Ringler brokered structured settlements." ECF #125, ¶¶ 24-28, 30-31. However, it is not clear to what extent the Consultants were involved in marketing or the decision to utilize ELNY to fund Ringler brokered structured settlements. Mere involvement in marketing Ringler's services or the allegedly tortious activity is insufficient to overcome the fiduciary shield doctrine on a guiding spirit theory. See Calder, 465 U.S. at 790 (noting that individual defendants' "contacts with [the forum state] are not to be judged according to their employer's activities there"); Precision Orthopedic Implants, Inc., 2016 WL 7187299, at *5 (finding that individual defendant was not guiding spirit despite individual defendant's numerous contacts with the plaintiff where individual defendant was only involved at the direction of others); Mulato v. Wells Fargo, 76 F. Supp. 3d 929, 947 (N.D. Cal. 2014) (finding that individual defendants were not guiding spirits where they only communicated with plaintiff on behalf of company and lacked unilateral authority with respect to the alleged tortious conduct).
For these reasons, Plaintiffs have not made a prima facie case that any of the Consultants were Ringler's guiding spirits.
2. Purposeful Direction
Plaintiffs next contend that this court has personal jurisdiction because Consultants purposefully directed their commercial activities at residents of this state. Where a "commercial actor's efforts are 'purposefully directed' toward residents of another State," due process permits courts to exercise personal jurisdiction over that defendant in the "absence of physical contacts" with the forum. Burger King, 471 U.S. at 476. Even if a corporation's officers, directors, or employees are protected by the fiduciary shield for the purposes of a guiding spirit analysis, they may still be subject to personal jurisdiction under a purposeful direction analysis. Davis, 885 F.2d at 522; Ott v. Mortg. Inv'rs Corp. of Ohio, Inc., 65 F. Supp. 3d 1046, 1056 (D. Or. 2014) ("the fiduciary shield doctrine is not a question of constitutional significance and does not limit personal jurisdiction in states that have statutes extending jurisdiction to the limits of due process"); Alternative Legal Sols., Inc. v. Ferman Mgmt. Servs., Corp., No. CIV. 07-880-ST, 2008 WL 65584, at *7 (D. Or. Jan. 4, 2008) (where individual contacts subjected a defendant to personal jurisdiction in Oregon, it was no shield that he was an officer of the company that was also being sued).
As mentioned above, a purposeful direction analysis is generally used in tort cases. Mavrix Photo, Inc., 647 F.3d at 1228. The court applies an 'effects test,' looking to whether the plaintiff has alleged that the defendant has "(1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state." Id.
"Intentional act" has a specialized meaning in the context of the effects test. Schwarzenegger, 374 F.3d at 806. In this context, courts construe "intent" as "an intent to perform an actual, physical act in the real world, rather than intent to accomplish a result or consequence of that act." Id. For example, "if the actor, having pointed a pistol at another, pulls the trigger, the act is the pulling of the trigger and not the impingement of the bullet upon the other's person." Id.
Here, Plaintiffs have failed to allege that the Consultants have committed an intentional act. Plaintiff's FAC makes two relevant allegations with respect to Oregon. ECF #125, ¶¶ 24-28, 30-31, 57. First, the FAC alleges that Consultants were "involved in marketing Ringler's services nationally, including within this District, and the decision to utilize ELNY to fund Ringler brokered structured settlements." Id. ¶¶ 24-28, 30, 31. Second, the FAC states that "Ringler placed an advertisement in the ABA Journal in 1982 depicting a young injured girl with the caption 'Do you really think you can win in court - against her?" Id. ¶ 57. The FAC goes on to allege that, "Defendants Mathews, Blattenberg, Kelly, Farber, Weber, Casey and Hoffman include their names and contact information in this particular advertisement." Id.
Even taking these uncontroverted allegations as true, as the Consultants point out, it was Ringler that placed the advertisement. Even if the Consultants had placed the advertisement, courts have been reluctant to exercise personal jurisdiction over defendants based on advertisements in national magazines absent some additional facts. Gonzales v. Palo Alto Labs, Inc., No. C 10-2456 MEJ, 2010 WL 3930440, at *5 (N.D. Cal. Oct. 6, 2010) (listing cases where courts have found that an advertisement in a national magazine did not meet the requisite minimum contacts); Indiana Plumbing Supply, Inc. v. Standard of Lynn, Inc., 880 F. Supp. 743, 746 (C.D. Cal. 1995) ("Numerous cases have held that national advertising alone is not enough to establish a defendant's 'purposeful availment' of a forum."). For example, in Calder, the individual defendants knew that the published article would have a severe effect on the plaintiff and knew that injury would be felt by the plaintiff in the forum state. 465 U.S. at 789-90. In Gordy v. Daily News, L.P., the fact that a newspaper had small circulation in the forum did not prevent the court from exercising personal jurisdiction where the individual defendant's allegedly defamatory article "targeted" the individual plaintiff and the individual defendant knew that the plaintiff lived in the forum state. 95 F.3d at 833-34. In Keeton v. Hustler Magazine, Inc., a magazine was subject to personal jurisdiction because it was a "national publication aimed at a nationwide audience." 465 U.S. 770, 781 (1984). Thus, the Court held, "[t]here is no unfairness in calling it to answer for the contents of that publication wherever a substantial number of copies are regularly sold and distributed." Id.
These additional facts are absent here. Plaintiffs have not alleged that the Consultants targeted Plaintiffs through the ABA advertisement or that the Consultants even had any knowledge of Plaintiff Westrope's presence in the forum. And Plaintiffs have failed to allege any details about the ABA Journal's circulation in Oregon at the time of the alleged tortious conduct or note the extent of the Consultants' knowledge of the ABA Journal's circulation in Oregon.
Finally, as the "constitutional touchstone" of personal jurisdiction analysis "remains whether the defendant purposefully established 'minimum contacts' in the forum state," the court examines the Consultants' contacts with Oregon. Burger King, 471 U.S. at 474. Plaintiffs allege that the Consultants had "substantial aggregate contacts in this District." ECF #125, ¶ 18. However, Plaintiffs do not provide evidence to support that statement. In fact, the evidence is to the contrary. According to the Consultants' declarations, none of the Consultants have:
(1) Resided in Oregon, Casey Decl., ECF #139-1, ¶ 5; Bell Decl., ECF #139-2, ¶ 5; Mathews Decl., ECF #139-3, ¶ 5; ECF #139-4, ¶ 6; Weber Decl., ECF #139-5, ¶ 5; Kelly Decl., ECF #139-6, ¶ 5; ECF #139-7, ¶ 7;
(2) Maintained an office in Oregon, ECF #139-1, ¶ 6; ECF #139-2, ¶ 6; ECF #139-3, ¶ 6; ECF #139-4, ¶ 7; ECF #139-5, ¶ 6; ECF #139-6, ¶ 6; ECF #139-7, ¶ 8;
(3) Traveled to Oregon on Ringler business, ECF #139-1, ¶ 7; ECF #139-2, ¶ 7; ECF #139-3, ¶ 7; ECF #139-4, ¶ 8; ECF #139-5, ¶ 7; ECF #139-6, ¶ 7; ECF #139-7, ¶ 9;
(4) Maintained a bank account in Oregon, ECF #139-1, ¶ 9; ECF #139-2, ¶ 9; ECF #139-3, ¶ 9; ECF #139-4, ¶ 9; ECF #139-5, ¶ 9; ECF #139-6, ¶ 9; ECF #139-7, ¶ 10;
(5) Maintained a registered agent for the service of process in Oregon, ECF #139-1, ¶ 10; ECF #139-2, ¶ 10; ECF #139-3, ¶ 10; ECF #139-4, ¶ 11; ECF #139-5, ¶ 10; ECF #139-6, ¶ 10; ECF #139-7, ¶ 11;
(6) Owned or leased property in Oregon, ECF #139-1, ¶ 11; ECF #139-2, ¶ 11; ECF #139-3, ¶ 11; ECF #139-4, ¶ 12; ECF #139-5, ¶ 11; ECF #139-6, ¶ 11; ECF #139-7, ¶ 12; or
(7) Owned any business interests in Oregon, ECF #139-1, ¶ 12; ECF #139-2, ¶ 12; ECF #139-3, ¶ 12; ECF #139-4, ¶ 13; ECF #139-5, ¶ 12; ECF #139-6, ¶ 12; ECF #139-7, ¶ 13.
Moreover, none of the Consultants have "spoken to or entered into any contract" with Plaintiff Westrope, who resides in Oregon. ECF #139-1, ¶ 14; ECF #139-2, ¶ 14; ECF #139-3, ¶ 14; ECF #139-4, ¶ 15; ECF #139-5, ¶ 14; ECF #139-6, ¶ 14; ECF #139-7, ¶ 14. None of them have "participate[d], or materially aid[ed], in the structured settlements entered into by" Plaintiff Westrope. ECF #139-1, ¶ 15; ECF #139-2, ¶ 15; ECF #139-3, ¶ 15; ECF #139-4, ¶ 16; ECF #139-5, ¶ 15; ECF #139-6, ¶ 15; ECF #139-7, ¶ 15. And none of the Consultants have "ever communicated with anyone in the State of Oregon related to the structured settlements entered into by" Plaintiff Westrope. ECF #139-1, ¶ 16; ECF #139-2, ¶ 16; ECF #139-3, ¶ 16; ECF #139-4, ¶ 17; ECF #139-5, ¶ 16; ECF #139-6, ¶ 16; ECF #139-7, ¶ 16. Plaintiffs have failed to make a prima facie showing of personal jurisdiction and Consultants' motion to dismiss for lack of personal jurisdiction should be granted.
Consultants move for dismissal with prejudice. ECF #138, at 15. Plaintiffs have failed to proffer any reason why the dismissal should be without prejudice. Moreover, this case is almost three years old. The initial complaint was filed in 2014 and the FAC, which added the Consultants, was not filed until 2016. The discovery deadline of August 12, 2016, has passed and there is a pending motion for class certification. The case should move forward toward resolution. Thus, the claims against Consultants should be dismissed with prejudice. /// /// ///
CONCLUSION
For the reasons discussed above, the court should find Defendant Ringler and Hoffman's motion to dismiss for failure to state a claim (ECF #131) is MOOT as to former Plaintiff Culhane, and otherwise the motion should be DENIED. Consultants' motion to dismiss (ECF #138) should be DENIED IN PART to the extent they join in the motion to dismiss for failure to state a claim, and otherwise GRANTED IN PART to the extent they claim lack of personal jurisdiction, and the claims against Consultants should be dismissed with prejudice.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due Tuesday, March 07, 2017. If no objections are filed, then the Findings and Recommendations will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
This Findings and Recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.
DATED February 21, 2017.
/s/ Youlee Yim You
Youlee Yim You
United States Magistrate Judge