Affholter, et. al. vs. Franklin County Water District, et.al., No. 1:2007cv00388 - Document 562 (E.D. Cal. 2009)
Court Description: Memorandum Decision And Order GRANTING WITH LEAVE TO AMEND BAC Defendants Motion To Dismiss 486 , signed by Judge Oliver W. Wanger on 10-16-09. (Coffman, Lisa)
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1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 FOR THE EASTERN DISTRICT OF CALIFORNIA 12 13 ABARCA RAUL VALENCIA, et al., 14 15 16 17 1:07-CV-00388 OWW GSA Plaintiffs, MEMORANDUM DECISION AND ORDER RE BAC DEFENDANTS MOTION TO DISMISS PLAINTIFFS EIGHTEENTH CLAIM FOR FRAUD AND TO DISMISS AND STRIKE CONSPIRACY TO COMMIT FRAUD ALLEGATIONS OF PLAINTIFFS SIXTH AMENDED COMPLAINT (DOC. 486) v. MERCK & CO., INC., et al., Defendants. 18 19 I. INTRODUCTION. 20 21 Defendants Merck & Co., Inc., Amsted Industries, Inc., 22 Baltimore Aircoil Co., Inc., and Track Four, Inc. (collectively 23 the BAC Defendants ) move to dismiss the eighteenth claim for 24 relief, entitled Fraud and Deceit, in Plaintiffs sixth amended 25 complaint ( SAC ). The BAC Defendants also move to dismiss 26 27 28 Plaintiffs nineteenth claim for conspiracy to the extent it is based on fraud or concealment and to strike from Plaintiffs 1 1 conspiracy claims paragraphs 280 and 281, which allege fraud and 2 concealment. 3 The BAC Defendants argue: 4 (1) That the fraud claims in the eighteenth and nineteenth 5 causes of action fail to satisfy the pleading requirements of 6 7 8 Federal Rule of Civil Procedure 9(b) because the SAC fails to allege: 9 (a) that any individual Plaintiff read or heard any of 10 the allegedly fraudulent statements; or 11 (b) that he or she took any specific action in reliance 12 on the allegedly fraudulent statements; and 13 (2) That Plaintiffs have not alleged facts sufficient to 14 15 16 demonstrate a duty of disclosure owed by the BAC to any Plaintiff. 17 18 II. STANDARD OF DECISION Rule 9(b) requires that, in all averments of fraud, the 19 circumstances constituting fraud be stated with particularity. One 20 21 of the purposes behind Rule 9(b) s heightened pleading requirement 22 is to put defendants on notice of the specific fraudulent conduct 23 in order to enable them to adequately defend against such 24 allegations. 25 Cir. 1996). 26 See In re Stac Elec. Litig., 89 F.3d 1399, 1405 (9th Further, Rule 9(b) serves to deter the filing of complaints as a pretext for the discovery of unknown wrongs, to 27 protect [defendants] from the harm that comes from being subject to 28 2 1 fraud charges, and to prohibit plaintiffs from unilaterally 2 imposing upon the court, the parties and society enormous social 3 and economic costs absent some factual basis. Id (internal 4 citations and quotations omitted). 5 As a general rule, fraud allegations must state the time, 6 7 place, and specific content of the false representations as well as 8 the identities of the parties to the misrepresentation. 9 Schreiber Distrib. v. Serv-Well Furniture Co.., 806 F.2d 1393, 10 1401 (9th Cir. 1986). 11 describe the who, what, when, where, and how of the alleged 12 misconduct. In other words, an allegation of fraud must Cooper v. Picket, 137 F.3d 616, 627 (9th Cir. 1997). 13 III. ANALYSIS 14 15 16 A. Duty to Disclose. The twenty-third claim in Plaintiffs fifth amended complaint 17 FAC, entitled Civil Conspiracy, was dismissed with leave to 18 amend on May 18, 2009. 19 Doc. 419. Acknowledging [a] long line of cases establishes that there is no independent cause of action for 20 civil conspiracy under California Law, the ruling held that 21 22 Plaintiffs may maintain a separate civil conspiracy count based 23 upon [] incorporated allegations of nuisance and trespass. 24 Id. at 12-14. 25 26 27 In addition, Plaintiffs attempted to base their conspiracy claim on allegedly fraudulent conduct. Id. at 14. Specifically, the FAC alleged that BAC Defendants conspired to conceal and/or 28 3 1 misrepresent the nature and extent of ... contamination emanating 2 from the former BAC facility. 3 allegation raises fraudulent misrepresentation or fraudulent FAC ¶295. Whether such an 4 concealment, Plaintiffs must comply with the requirements of 5 Federal Rule of Civil Procedure 9(b). Doc. 419 at 14. Because 6 7 Plaintiffs appear[ed] to restrict their argument to fraudulent 8 concealment, Plaintiffs must allege that the BAC Defendants had a 9 duty to disclose the allegedly concealed facts to the plaintiffs. 10 Id. at 14-15 (citing Hahn v. Mirda, 147 Cal. App. 4th Cal. App. 11 4th 740, 745 (2007)). 12 Plaintiffs cited no authority for their claims that because 13 the BAC Defendants had a duty to disclose to the Regional Water 14 15 Quality Control Board ( Regional Board ) all relevant factual 16 information necessary for the Regional Board to adequately oversee 17 the remediation of this contamination site, this duty reasonably 18 extends to Plaintiffs. 19 alternative contention was also rejected, namely that a special 20 relationship existed between the residents located within a mile of Doc. 419 at 19-21. Plaintiffs 21 the BAC facility (of which plaintiffs herein are included) and the 22 BAC defendants ... demonstrated [by] the fact that the Regional 23 24 Board instructed the BAC defendants to send out Fact Sheets 25 related to the contamination and designated that [these] be sent 26 out to the residents living within a one mile radius of the 27 facility. Id. at 21. Plaintiffs made absolutely no mention of 28 4 1 any duty to disclose on the part of the BAC Defendants in the FAC. 2 Id. at 22. 3 Plaintiffs requested leave to amend the conspiracy claim to 4 better articulate their theory of duty. Id. at 22. The BAC 5 Defendants suggested that leave to amend would be futile because 6 7 the law does not support the imposition of a duty to disclose under Id. The May 18, 2009 Decision reviewed 8 the circumstances here. 9 the circumstances in which a duty to disclose might arise: 10 11 12 13 14 ...Heliotis v. Schuman, 181 Cal. App. 3d 646, 651 (1986), held that, There are four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts. 15 Assuming Plaintiffs invoked the second circumstance, that defendant 16 17 had exclusive knowledge of material facts not known to the 18 plaintiff, the decision provided: 19 20 21 22 23 24 25 LiMandri [v. Judkins] explained that where material facts are known to one party and not to the other, failure to disclose them is not actionable fraud unless there is some relationship between the parties which gives rise to a duty to disclose such known facts. [52 Cal. App. 4th 326,] 336-37. As a matter of common sense, such a relationship can only come into being as a result of some sort of transaction between the parties. Id.; see also Shin v. Kong, 80 Cal. App. 4th 498, 509 (2000) ( A duty to disclose facts arises only when the parties are in a relationship that gives rise to the duty, such as seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement. ). 26 27 28 Here, Plaintiffs seek an extension of the law, one that would find a relationship, and therefore a duty to disclose, existed between the BAC Defendants and Plaintiffs by virtue of the fact that the Regional Board 5 1 2 3 4 5 ordered the BAC Defendants to issue Fact Sheets to Plaintiffs explaining the BAC Site contamination. This is a novel theory for which Plaintiffs offer no legal support. Such a theory would create a private right of action for failing to disclose the subject matter of any Board order to a site owner or operator to promote information disclosure. Such a decision is the province of the legislature. The BAC Defendants motion to dismiss is GRANTED WITH LEAVE TO AMEND as to any civil conspiracy based on fraudulent concealment.... 6 Id. at 23-24 (emphasis added). 7 8 In the currently-operative SAC, Plaintiffs invoke the fourth, 9 rather than the second, circumstance described in Heliotus, which 10 imposes a duty to disclose when the defendant makes partial 11 representations but also suppresses some material facts. 12 words, half-truths can trigger fraud liability. 13 In other As the California Supreme Court explained in Warner Constr. Corp. v. City of Los 14 Angeles, even the half-truths doctrine requires a transactional or 15 other special relationship: 16 17 18 19 In transactions which do not involve fiduciary or confidential relations, a cause of action for nondisclosure of material facts may arise [where] ... the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead.... 20 21 22 2 Cal. 3d 285, 294 (1970). The parties disagree as to whether this rule nevertheless Warner, for 23 requires a transactional or special relationship. 24 example, which specifically indicated that half-truths could result 25 in liability [i]n transactions which do not involve fiduciary or 26 confidential relations, id. at 294 (emphasis added), involved 27 parties in privity to a contract for construction, id. at 285. 28 6 1 But, other cases suggest a broader application of the rule. 2 Vega v. Jones, Day, Reavis & Pogue, 121 Cal. App. 4th 282, 3 292 (2004), involved the omission of material facts from statements 4 made by an attorney to opposing parties during a corporate merger 5 transaction. Nevertheless, Vega explicitly rejected a rule that 6 7 fraud based on nondisclosure requires an independent duty of 8 disclosure. 9 not a client of defendants, could not allege any special 10 circumstances that would give rise to an independent duty of 11 disclosure, the Vega court emphasized: 12 Assuming without discussion that plaintiff, who was In some but not all circumstances, an independent duty to disclose is required; active 13 concealment may exist where a party while under no duty to speak, 14 15 nevertheless does so, but does not speak honestly or makes 16 misleading statements or suppresses facts which materially qualify 17 those stated. 18 omitted). 19 20 Id. at 293-94 (internal citations and quotations Similarly, Cicone v. URS Corp., 183 Cal. App. 3d 194, 201 (1986), involved alleged representations made by an attorney to a 21 third party in connection with the sale of a business. The BAC 22 Defendants emphasize that Cicone and Vega were decided in the 23 24 context of a transactional realationship. Yet, like Vega, Cicone 25 also relied upon the general rule that disclaims any need for a 26 special relationship: 27 28 7 1 Although a duty to disclose a material fact normally arises only where there exists a confidential relation between the parties or other special circumstances require disclosure, where one does speak he must speak the whole truth to the end that he does not conceal any facts which materially qualify those stated. One who is asked for or volunteers information must be truthful, and the telling of a half-truth calculated to deceive is fraud. 2 3 4 5 6 7 Id. at 201 (internal citations omitted). Likewise, Moore v. IMCO Recycling of Cal., Inc., 2005 WL 8 9 5887179 (C.D. Cal. 2005), involved parties to a real estate 10 transaction who allegedly failed to disclose environmental 11 contamination. 12 In negotiating the sale, the subsidiary stated in writing that [t]he only environmental issues on the properly that 13 involved the local environmental regulatory agencies were the 14 15 underground storage tank (UST) removal projects, even though the 16 defendants allegedly had knowledge of other environmental issues on 17 the property. 18 volunteered to speak on the Property s environmental issues, they 19 took on a duty of full disclosure of known environmental issues. 20 Id. Id. at *10. Moore held that when defendants 21 The BAC Defendants again emphasize that Moore applied this 22 rule in the context of a real estate transaction, but fail to 23 24 acknowledge that Moore relied on Vega for the general proposition 25 that an independent duty to disclose is not always required: 26 active concealment may exist where a party while under no duty to 27 speak, nevertheless does so, but does not speak honestly or makes 28 8 1 misleading statements or suppresses facts which materially qualify 2 those stated. 3 Id. at *9. Plaintiffs rely on Randi W. v. Muroc Joint Unified Sch. 4 Dist., 14 Cal. 4th 1066 (1997), in which the California Supreme 5 Court applied Warner s misleading half-truths doctrine to find that 6 7 a school district could be liable for fraudulent misrepresentation 8 for issuing a letter of recommendation for a vice principal that 9 implied he was fit to interact safely with female students, despite 10 the fact that defendants knew he had been charged with relevant 11 sexual improprieties. 12 The Randi W. court view[ed] [the] case as a misleading half-truths situation in which defendants, having 13 undertaken to provide some information regarding [the vice14 15 principal s] teaching credentials and character, were obliged to 16 disclose all other facts which materially qualify the limited 17 facts disclosed. 18 California Supreme Court cited Warner, 2 Cal. 3d at 294, and 19 California Civil Code § 1710(3), which provides that deceit 20 within the meaning of § 1709 s cause of action for fraudulent 21 Id. at 1082. To support this rule, the deceit 1 means the suppression of a material fact by one who gives 22 misleading information of other facts. 23 Randi W. discussed the issue of special relationship. 24 25 First, defendants had alternative courses of conduct to avoid 26 1 27 28 Section 1709 explains that fraudulent deceit involves [o]ne who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers. 9 1 liability, namely, (1) writing a full disclosure letter 2 revealing all relevant facts regarding [the employee s] background, 3 or (2) writing a no comment letter omitting any affirmative 4 representations regarding [the employee s] qualifications, or 5 merely verifying basic employment dates and details. Id. at 1078. 6 7 Absent a special relationship between the sender and recipient of 8 those types of communications, liability may not be imposed for 9 mere nondisclosure or other failure to act. 10 the absence of such a special relationship between the original 11 employer and the hiring entity, the California Supreme Court 12 Id. However, despite considered whether it would be appropriate to expand a tort duty 13 of care to the writer of a letter of recommendation, taking into 14 15 16 17 consideration the potential social and economic consequences. Id. at 1079. On the one hand, the Randy W. court acknowledged a strong 18 public policy in favor of protecting children from sexual or 19 physical abuse. 20 considered that the threat of potential tort liability [might] Id. at 1078-79. At the same time, Randy W. 21 inhibit employers from freely providing reference information, 22 restricting the flow of information prospective employers need and 23 24 impeding job applicants in finding new employment. Id. at 1080. 25 Balancing these interests, Randi W. held that the author of a 26 letter of recommendation owes to prospective employers and third 27 persons a duty not to misrepresent the facts in describing the 28 10 1 qualifications and character of a former employee, if making these 2 misrepresentations would present a substantial, foreseeable risk of 3 physical injury to the prospective employer or third persons. Id. 4 at 1081. 5 The BAC Defendants argue that Randi W. is distinguishable 6 7 because it was, in fact, based on the employment relationships at 8 issue, implying the presence of a special relationship. 9 Randi W. explicitly disclaimed the existence of any special 10 relationship between the former and present employer, yet 11 nevertheless imposed liability if making these misrepresentations 12 But, would present a substantial, foreseeable risk of physical injury to 13 the prospective employer or third persons. The latter 14 15 16 17 qualification was necessary to balance the competing public policy interests. Here, in contrast, there are no such competing policy 18 interests. 19 communications, allegedly directed at Plaintiffs, the BAC 20 Defendants issued statements that contamination at their site was Plaintiffs assert that in four separate public 21 non-hazardous and/or relatively innocuous. See SAC ¶¶ 259-263. 22 Plaintiffs further allege that the BAC defendants knowingly omitted 23 24 material information pertaining to the nature and extent of the 25 contamination. Here, there is no public policy that justifies 26 qualifying the general rule, articulated in numerous California 27 cases and California Civil Code § 1710(3), that one who volunteers 28 11 1 information must be truthful, and the telling of a half-truth 2 calculated to deceive is fraud. 3 Plaintiffs have sufficiently alleged that the BAC Defendants 4 had a duty not to tell half-truths because the BAC Defendants spoke 5 about contamination and spoke misleadingly. Proof is not required 6 7 8 9 at the pleading stage. B. Specificity of Pleading. The BAC Defendants next object that Plaintiffs have not pled 10 their fraud claim with sufficient specificity. The BAC Defendants 11 protest that Plaintiffs have at best identified four documents 12 13 without: (a) specifying any parts of those documents that they 14 contend are false or (b) naming any individual plaintiffs who 15 allegedly heard or read the (unspecified) allegedly false part(s) 16 of the documents. 17 18 Doc. 556 at 2. The first objection is without merit. Plaintiffs have identified four documents that are alleged public statements made 19 by the BAC Defendants, which allegedly constitute instances in 20 21 which the BAC Defendants volunteered half-truths calculated to 22 deceive. 23 made in those documents is per se false. 24 these documents misleadingly imply the absence of other, contrary, 25 material facts. 26 Plaintiffs do not allege that any particular statement Rather, they allege that Plaintiffs specifically explain the ways in which they allege the four communications were materially misleading: 27 28 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Each of the above referenced communications directly from the MERCK DEFENDANTS to the public including plaintiffs herein, while discussing certain aspects of the contamination and remediation at the former BAC facility, failed to include material information concerning the contamination which rendered the information contained within these communications as half-truths calculated to deceive plaintiffs. Specifically, none of these communication initiated by the MERCK DEFENDANTS to plaintiffs herein, included any of the following material information related to the contamination and its potential health affects on plaintiffs: 1) that the MERCK DEFENDANTS were first notified of significant contamination of the facility in at least 1983 through the County Health Department, yet continued to utilize the chemicals in their wood processing operations for another eight years before discontinuing the treatment of lumber at the facility; 2) the amount of chemicals contaminating the soil and groundwater was significant and that the MERCK DEFENDANTS continued use of the chemicals for some eight years after it was made aware of the contamination significantly increased the amount of chemicals contaminating the environment and also resulted in the significant migration of the pollution plume into plaintiffs neighborhood; 3) that a storm water pond on the facility was confirmed to have high levels of Hexavalent Chromium in excess of drinking water standards and that the pond had been connected for decades to the adjacent El Capitan Canal flowing immediately to the east of the Beachwood neighborhood, resulting in the El Capitan Canal being described by the Regional Water Quality Control Board as a main pollutant pathway from the facility; 4) that significant portions of bare soil at the BAC facility was contaminated and that dust from the facility could have caused contaminants to become airborne exposing plaintiffs to the contamination; 5) that airborne contaminants could have historically and currently contaminated home grown vegetables and fruit as a result of the deposit of the airborne contaminants on the produce and the transmigration of contaminants in groundwater and soil through the roots of vegetables and trees located on plaintiffs property; 6) that the storm water retention pond identified above was originally required to be remediated, pursuant to the Toxic Pits Cleanup Act because it was hazardous according to the Department of Toxic Substances; 7) that exposure to Hexavalent Chromium and Arsenic could result in a host of physical ailments, symptoms and diseases, including but 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 not limited to cancer, pulmonary conditions and diseases, respiratory conditions and diseases, dermatological conditions and diseases, neurological conditions and diseases, reproductive toxicity and birth defects, ophthalmological conditions and diseases could result in the above-identified health issues; 9) that certain private drinking water wells had in fact been impacted with contaminants from the BAC facility; 10) that the MERCK DEFENDANTS had received a violation as early as 1987, with regard to the presence of hazardous materials located onsite, and were specifically informed that soil samples at the site showed hazardous levels of Copper and Chromium and that if the cleanup did not occur, the Health Department could pursue administrative, civil and criminal action against the facility; 11) that the MERCK DEFENDANTS had been informed in 1987 of the presence of contaminated soil and pond sediment at the facility that exceeded background levels; 12) that in 1988, the MERCK DEFENDANTS were informed that the pond sediment exceeded by ten fold acceptable limits for the presence for Hexavalent Chromium and was informed that certain groundwater wells showed Chromium above background levels; 13) that in 1988, the MERCK DEFENDANTS were informed that subsurface soils contained Copper at hazardous amounts and that groundwater had been impacted by the Chromium; 14) that in 1988, BAC was informed that it was required to post a Proposition 65 warning on its facility, due to its use of Hexavalent Chromium and Hexavalent Chromium s link to cancer or reproductive toxicity; 15) that in 1988, the Regional Board informed the BAC that its investigations had confirmed high concentrations of Arsenic, Chromium and Copper in subsoils and that the Board was concerned about the potential for impacting water quality ; 16) that in 1990, the Department of Health Services informed MERCK DEFENDANTS that the presence of hazardous waste at the facility and the elevated levels of Chromium and Arsenic at the facility required closure of the facility; 17) that as early as 1992, the MERCK DEFENDANTS were aware that the contaminants had impacted groundwater and had migrated offsite into the Beachwood Neighborhood; 18) that at least by 1994, the MERCK DEFENDANTS had been specifically advised that risks to human health did exist as a result of the contamination, including risk from direct dermal contact with contaminated soil and airborne particles exposing residents to contamination via wind, dust, home gardens and home grown fruit; 19) that the need for increased construction activities and property 14 1 access related to remediation of the site was as a result of the continued expansion and migration of the groundwater plume which had migrated into the Beachwood Neighborhood placing the residents drinking water at risk; 20) that the groundwater plume was in fact located beneath some of plaintiffs real property; and 21) that the highest concentrations of Hexavalent Chromium contamination at the site were extensive and represented one of the highest hot spots of Hexavalent Chromium contamination in the county, and in particular, hot spots in excess of 170,000 ppbs of Chromium. 2 3 4 5 6 7 8 9 SAC ¶262. More compelling is the BAC Defendants assertion that the SAC 10 does not allege with sufficient particularity the specific 11 Plaintiffs who received any misleading half-truths and/or the ways 12 in which those Plaintiffs relied upon any such statements. The BAC 13 Defendants cite Mirkin v. Wasserman, 5 Cal. 4th 1082, 1091-93, 14 15 which concerned allegations that a corporation intentionally 16 misrepresented its financial condition in order to inflate share 17 values. 18 shareholder plaintiffs attempt to apply the fraud-on-the-market 19 doctrine to excuse them from pleading that they actually heard and 20 relied upon the misrepresentations. The California Supreme Court rejected corporate Although the Mirkin court 21 [did] not doubt that stock prices adjust in response to the 22 dissemination of material information...., it does not follow that 23 24 investors will be left without a remedy unless we adopt the fraud- 25 on-the-market doctrine. Investors, including plaintiffs in this 26 case, already have remedies under federal and state law that do not 27 require the pleading or proof of actual reliance. 28 15 Id. at 1101. 1 Plaintiffs rejoin by citing Barnhouse v. City of Pinole, 133 2 Cal. App. 3d 171, 191-192 (1992), for the proposition that 3 liability may be imposed where a representation was intended to be 4 relied upon by the public or a general class of persons that 5 includes the plaintiffs. Doc. 555 at 13. Barnhouse did indeed 6 7 hold that [i]t is not necessary that the maker of the It is enough 8 representation have any particular person in mind. 9 that he intends or has reason to expect to have it repeated to a 10 particular class of persons and that the person relying upon it is 11 one of that class. 12 omitted). Id. (internal citation and quotations But, in so holding, Barhnouse was concerned with 13 whether a subsequent purchaser of a property, not in privity with 14 15 the developer, could sue the developer for deceit by nondisclosure. 16 Id. at 193. 17 finding that it is foreseeable that there will be [subpurchasers] 18 and that they will be the ones to suffer damage. 19 20 Barnhouse answered this question in the affirmative, Id. Although Barnhouse arguably permits the participation of Plaintiffs who were not owners of the properties at the time the 21 BAC Defendants made their alleged half-truth statements, it does 22 not excuse the requirement that the fraud be pled with 23 24 particularity. Here, although the complaint does specify who made 25 the statements on behalf of the BAC Defendants, Plaintiffs do not 26 identify who received the statements. 27 the misrepresentations were aimed at the BAC Contamination 28 16 Plaintiffs only allege that 1 Plaintiffs, as opposed to the Yosemite Plaintiffs, as those 2 categories are defined in the complaint. 3 This is insufficient. Likewise, Plaintiffs assert they have adequately pleaded 4 reliance in compliance with California Civil Code § 1711, which 5 provides: 6 Deceit upon the public, etc. One who practices a deceit with intent to defraud the public, or a particular class of persons, is deemed to have intended to defraud every individual in that class, who is actually misled by the deceit. 7 8 9 10 This concerns only the intent to defraud, and simply points out 11 that one who makes false representations with fraudulent intent 12 need not have any particular victim in mind. Mirkin, 5 Cal. 4th 13 at 1092. Nevertheless, [l]itigants who rely on section 1711 must 14 15 still plead and prove actual reliance. Id. Although the 16 complaint generally alleges that Plaintiffs reasonably relied upon 17 [the information given by the BAC Defendants] in failing to take 18 appropriate measures to protect themselves and their families as 19 well as their real properly from exposure to contamination and in 20 failing to seek redress...for their injuries, SAC at ¶267, the 21 lack of specificity in these allegations does not provide the BAC 22 Defendants with sufficient information upon which to build a 23 24 defense to a fraud claim. Plaintiffs must identify by name 25 specific Plaintiffs who received the allegedly misleading 26 information and relied upon it to their detriment. 27 28 17 1 2 IV. CONCLUSION For the reasons set forth above, Defendants motion to dismiss 3 is GRANTED WITH LEAVE TO AMEND. 4 days from electronic service to file an amended complaint. Plaintiffs shall have ten (10) 5 6 7 SO ORDERED Dated: October 16, 2009 /s/ Oliver W. Wanger Oliver W. Wanger United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18
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