Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_18-cv-07575/USCOURTS-cand-5_18-cv-07575-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

NICHOLAS BRANDT, et al.,

Plaintiffs,

v.

VERIZON COMMUNICATIONS, INC., et 

al.,

Defendants.

Case No.18-cv-07575-VKD 

ORDER GRANTING MOTION TO 

DISMISS FIRST AMENDED 

COMPLAINT

Re: Dkt. No. 30

Plaintiffs Nicholas Brandt and Gregory James assert the following claims against 

defendants Verizon Communications, Inc. (“Verizon”) and MCI Communications Services, Inc. 

(“MCI”) for: (1) intentional concealment and misrepresentation, (2) promissory fraud, (3) 

negligent misrepresentation, (4) violation of California Labor Code § 970 (misrepresentation); (5) 

promissory estoppel, and (6) declaratory judgment that the general releases that plaintiffs signed 

are unenforceable under California Civil Code § 1668. Dkt. No. 29. Pursuant to Rule 12(b)(6) of 

the Federal Rules of Civil Procedure, defendants move to dismiss all of plaintiffs’ claims in the 

first amended complaint (“FAC”) as barred by release agreements plaintiffs signed. Dkt. No. 30. 

The Court heard oral argument on defendants’ motion on August 13, 2019. Dkt. No. 35.

This Court has jurisdiction over this diversity action pursuant to 28 U.S.C. § 1332. Dkt. 

No. 29 ¶¶ 8-12, 13. Having considered the parties’ briefs and the arguments made at the hearing, 

the Court grants the motion to dismiss without leave to amend. 

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I. BACKGROUND

A. Factual Background

Plaintiffs are residents of California and Arizona and former employees of defendants.1 

Dkt. No. 29 ¶¶ 8-9. Defendants are Delaware corporations that do business and maintain offices 

in California. Id. ¶¶ 10-11. MCI is a subsidiary of Verizon2and was plaintiffs’ direct employer. 

Id. ¶ 11. 

In January 2014, Verizon announced the acquisition of Intel Media, Inc. (“Intel Media”). 

At that time, Mr. Brandt and Mr. James had worked for Intel Media for approximately 18.5 years 

and 21 years, respectively. Id. ¶¶ 2, 19, 28. Following the announcement of the acquisition, on 

January 24, 2014, plaintiffs attended a meeting hosted by Verizon human resources 

representatives. Id. ¶¶ 20-26. At the meeting, the representatives explained Verizon’s severance 

benefit. Id. ¶ 25. Specifically, the Verizon representatives stated that the severance benefit would 

equal two weeks of compensation at the employee’s ending pay-rate for each year of service. Id. 

The representatives stated that Intel Media employees who chose to work for Verizon would 

receive full credit under Verizon’s severance program for the years they had worked for Intel 

Media in addition to years worked for Verizon. Id. During the presentation, the Verizon 

representatives did not mention any cap on the number of service years that would be used to 

calculate the severance benefit. Id. ¶ 26. 

This severance benefit was a material factor in plaintiffs’ decisions to accept employment 

with Verizon following the acquisition. Id. ¶ 31. In particular, Mr. Brandt says that he expressly 

relied on information about calculation of the severance benefit and even expressly confirmed that 

information with Verizon before accepting employment. Id. ¶ 32. He emailed Verizon 

representatives—including those that hosted the January 24 presentation—to confirm that his 

18.53years of service at Intel Media would transfer to Verizon, and that the severance benefit was 

 

1 Paragraph 9 of the FAC alleges that Mr. James resides in Arizona, yet paragraph 13 alleges that 

both plaintiffs are California citizens. At the hearing on defendants’ first motion to dismiss, 

plaintiffs’ counsel clarified that Mr. James in fact resides in Arizona. Dkt. No. 24. 

2 For convenience, the Court refers to both defendants collectively hereafter as “Verizon.” 

3 Although the emails attached to the FAC state that Mr. Brandt had “over 19 years” of service 

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calculated at two weeks per year of service. Id. ¶¶ 33-38; see also id., Ex. A at 2. In response, 

Verizon representatives stated that “[s]ervice credited by Intel as of the Closing date will generally 

be recognized by Verizon for purposes of eligibility to participate in, vesting and benefit accrual 

under the following Verizon benefit plans and programs [including] Severance.” Id., Ex. A at 2. 

Verizon’s representatives also stated, “The Verizon severance plan offers a severance payment of 

two weeks of total target compensation (base pay + STI) for every year of service, a prorated STI 

payment, COBRA subsidy for the terms of the severance and outplacement services.” Id., Ex. A 

at 1. The emails from Verizon representatives did not mention a cap on service years. Id. ¶¶ 4, 

38. Shortly before their deadline to accept Verizon’s offer of employment, plaintiffs received an 

email that included a link to the Verizon Severance Plan (“the severance plan”). Id. ¶ 40. 

Plaintiffs did not read the severance plan. Id. ¶ 41.

Ultimately, plaintiffs accepted positions with Verizon. Mr. Brandt was required to relocate 

from Oregon to California, leaving behind his network of family and friends and other 

professional opportunities in Oregon. Id. ¶ 32. Mr. James remained in Arizona. Id. ¶ 9.

In March 2017, Verizon terminated plaintiffs’ employment. Id. ¶ 6. In connection with 

the termination, Verizon advised plaintiffs that their severance benefits were capped at 17.5 years 

of service under the severance plan. Id. Verizon declined to increase the amount of severance 

offered. Id. As a condition of receiving their severance payments, Verizon required plaintiffs to 

sign a general release and waiver of claims (“the severance release”), including a waiver under 

California Civil Code § 1542. Id. ¶ 76. Each plaintiff signed a severance release, which they say 

they were forced to do based on economic duress. Id. ¶ 6; see also id. ¶ 79. 

The FAC is not entirely clear regarding what followed, but at some point, plaintiffs 

engaged legal counsel who attempted to negotiate with Verizon on their behalf regarding 

severance payments. Id. ¶ 77. Plaintiffs submitted claims to Verizon and filed appeals as required 

by Verizon’s internal dispute resolution process, but Verizon declined to pay any severance 

 

with Intel Media as of February 2014, the FAC pleads the Mr. Brandt had 18.5 years of services as 

of January 2014. Compare Dkt. No. 29 ¶¶ 28, 64 with Dkt. No. 29, Ex. A at 2. The Court accepts 

the allegations of the FAC as true.

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benefit beyond the 17.5-year cap. Id. ¶ 6. Mr. James alleges that he is owed a further $63,924.47 

in severance pay, and Mr. Brandt alleges that he is owed a further $24,621.69 in severance pay. 

Id. ¶¶ 87-88. 

B. Procedural Background

Plaintiffs filed this action on December 17, 2018. Dkt. No. 1. On May 15, 2019, the Court 

granted defendants’ motion to dismiss pursuant to Rule 12(b)(6), finding that plaintiffs’ claims for 

breach of contract and promissory estoppel were preempted under the Employee Retirement 

Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1144(a), and that the remaining claims were

barred by the severance releases. Dkt. No. 27. The Court granted plaintiffs leave to amend. Id. at 

11–13. Plaintiffs filed the FAC on May 28, 2019, which is the operative complaint and the subject 

of defendants’ second motion to dismiss. Dkt. No. 29. 

II. LEGAL STANDARD

“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a 

claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation 

Force v. Salazar, 646 F.3d 1240, 1241–42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 

729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, a court accepts as 

true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. 

Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). While a complaint need 

not contain detailed factual allegations, it “must contain sufficient factual matter, accepted as true, 

to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible 

when it “allows the court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged.” Id. 

A court generally may not consider any material beyond the pleadings when ruling on a 

Rule 12(b)(6) motion. If matters outside the pleadings are considered, “the motion must be treated 

as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d). However, a court may 

consider matters that are “capable of accurate and ready determination by resort to sources whose 

accuracy cannot reasonably be questioned.” Roca v. Wells Fargo Bank, N.A., No. 15-cv-02147-

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KAW, 2016 WL 368153, at *3 (N.D. Cal. Feb. 1, 2016) (quoting Fed. R. Evid. 201(b)). 

Documents appended to the complaint, incorporated by reference in the complaint, or which 

properly are the subject of judicial notice may be considered along with the complaint when 

deciding a Rule 12(b)(6) motion. Khoja v. Orexigen Therapeutics, 899 F.3d 988, 998 (9th Cir. 

2018); see also Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 

(9th Cir. 1990). 

III. DISCUSSION

A. Plaintiffs’ Amended Allegations

Plaintiffs’ sixth claim for relief seeks a declaration that the severance releases plaintiffs 

signed are not enforceable against them by operation of California Civil Code § 1668. Dkt. No. 

29 ¶¶ 75-85. Section 1668 states: “All contracts which have for their object, directly or indirectly, 

to exempt anyone from responsibility for his own fraud, or willful injury to the person or property 

of another, or violation of law, whether willful or negligent, are against the policy of the law.” In 

other words, a party may not exempt itself from liability for concurrent or future torts, where at 

least one element of the tort occurs concurrently or after the signing of the contract. SI 59 LLC v. 

Variel Warner Ventures, LLC, 29 Cal. App. 5th 146, 152–53 (2018); see also Blankenheim v. E.F. 

Hutton & Co., 217 Cal. App. 3d 1463, 1472–73 (1990) (holding that a party may not contract 

away liability for negligent misrepresentation); Simmons v. Ratterree Land Co., 217 Cal. 201, 204 

(1932) (“It is settled beyond doubt, manifestly on sound grounds of justice, that a seller cannot 

escape liability for his own fraud or false representations by the insertion of provisions such as are 

embodied in the contract of sale herein. . . . Fraud in the inducement of a contract vitiates the 

entire agreement and destroys that consent which is essential to the existence of a valid contract.”).

The Court previously dismissed all of plaintiffs’ claims as barred as a matter of law 

because plaintiffs released all such claims in exchange for receiving severance benefits. Dkt. No. 

27 at 11–13. In dismissing plaintiffs’ claims, the Court held that section 1668 did not apply 

because plaintiffs did not sign the releases until Verizon offered them severance benefits upon 

termination, at which time plaintiffs were aware of the severance cap provision, the alleged 

misrepresentations concerning calculation of severance payments, and the fact that the amount of 

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severance Verizon offered was less than plaintiffs believed they were owed. Id. at 12. However, 

because plaintiffs represented at the hearing that they signed the releases under economic duress

(which they had not pled), the Court granted leave to amend the complaint to add those 

allegations. Id. at 13.

Plaintiffs’ FAC now includes allegations regarding the purported economic duress. 

Plaintiffs plead that they were “bound to fulfill the pre-condition of signing the form General 

Release” in order to receive their accrued severance compensation, and that “[t]heir only 

alternative was to engage in uncertain, costly and lengthy litigation with Verizon at a time when 

they would be unemployed and without a source of income from wages, an unacceptable 

alternative to receiving a significant portion of the promised severance benefits.” Dkt. No. 29 ¶

78. Specifically, plaintiffs plead that they were under serious duress because they faced 

“potentially extended unemployment” as the result of poor re-employment prospects due to their 

ages, which were “well beyond the age range within which technology companies regularly seek 

engineers.” Id. ¶ 79. As a result, plaintiffs say that they expected to face personal financial 

hardship from “extended unemployment and minimal income from unemployment insurance,” and 

therefore they signed the releases. Id.

Defendants move to dismiss the FAC on the basis that plaintiffs have released all claims. 

Specifically, defendants contend that (1) the severance releases do not violate section 1668 as a 

matter of law, (2) plaintiffs failed to adequately allege economic duress, and (3) the severance 

releases are supported by adequate consideration.

B. Whether the Court Should Decline to Consider the Severance Releases at the 

Pleading Stage

As a threshold matter, plaintiffs argue that it would be improper for the Court to dismiss 

their claims on the basis of the severance releases at the pleading stage because the existence and 

operation of the releases are matters that concern an affirmative defense that plaintiff should not 

have to anticipate in their FAC. Dkt. No. 32 at 7, 10, 16–17. This argument is not well-taken. 

In granting Verizon’s first motion to dismiss, the Court observed that plaintiffs seek a 

declaration that the severance releases they signed are unenforceable. The releases themselves are 

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the basis for plaintiffs’ own claim for relief; they are not merely an affirmative defense raised by 

Verizon.4 Dkt. No. 27 at 5. Plaintiffs plead essentially the same claim for declaratory relief in the 

FAC. Dkt. No. 29 ¶¶ 75-85. Thus, as before, the severance releases are an integral part of 

plaintiffs’ own claim and not merely an affirmative defense. 

C. Application of California Civil Code § 1668

Defendants argue that the FAC fails to cure the main defect of the original complaint: that 

plaintiffs did not plead any allegations supporting their theory that the releases improperly absolve 

Verizon from liability for concurrent or future fraud claims. Dkt. No. 30 at 7–9.

In the FAC, plaintiffs now plead that they were required to “pre-agree” to the severance 

releases. Specifically, upon accepting employment with Verizon in February 2014, plaintiffs say 

they unknowingly agreed to sign releases in the future as a condition of receiving severance 

benefits in the event they were terminated. Dkt. No. 29 ¶¶ 76, 77, 80 (“Plaintiff[s] had unwittingly 

committed themselves to executing such a General Release in accepting employment with Verizon 

in 2014 as a pre-condition of receiving any severance compensation whatsoever. . . . The act of 

actually executing that General Release was effectively a formality pre-ordained by plaintiff[s’]

acceptance of employment with Verizon in 2014 and, derivatively, acceptance of the pre-condition 

of signing a General Release to receive accrued severance benefits.”). Plaintiffs’ acknowledgment

in 2014 that a future award of severance benefits would require signing a release is not the 

equivalent of releasing Verizon in advance for future intentional wrongs it might commit. Rather, 

in 2017, when they were terminated, plaintiffs had a choice: (a) receive severance benefits and 

sign releases releasing claims against Verizon, or (b) refuse to sign the releases, forego the 

severance benefits being offered, and dispute the amount of benefits owed. None of the 

allegations in the FAC plausibly supports plaintiffs’ theory that they effectively had already signed 

the releases when they were hired in 2014. 

In opposing Verizon’s motion to dismiss, plaintiffs attempt a new argument: they say that 

when Verizon refused to pay severance benefits for years of service beyond the 17.5 year cap, it 

 

4 As plaintiffs do not dispute the contents or authenticity of the releases, the Court took judicial 

notice of them, even though they are not attached to the complaint or the FAC.

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effectively “ratified” its earlier misrepresentations about the severance benefits and that this 

ratification transformed the earlier misrepresentation into a misrepresentation concurrent with the 

signing of the severance releases, thereby implicating the prohibitions of section 1668. Dkt. No. 

32 at 14 (“Provided with the opportunity to remedy that past wrong, defendants instead chose to 

refuse to take any corrective action or offer plaintiffs new consideration, instead choosing to 

acknowledge and ratify the original wrong by their inaction . . . .”); see also Dkt. No. 32 at 15 

(“[T]he 2017 refusal of defendants to correct that wrongful act when brought to their attention is a 

ratification which continued the original wrongfulness, bringing it into the immediate time-frame 

when plaintiffs needed to either put pen to paper or risk the forfeiture of a major benefit.”). This 

ratification theory is not pled in the FAC, but even if it were, such an argument could be thrown 

up to defeat virtually any release simply by characterizing the released party’s past conduct as 

“ratified” by its current position, and therefore “concurrent” with the release. Plaintiffs’ amended 

allegations do not plausibly assert that the purpose of the severance releases was to immunize 

Verizon for concurrent or future fraud.

D. Economic Duress

As described above, the FAC includes allegations that plaintiffs signed the severance 

releases under economic duress. Dkt. No. 29 ¶¶ 78-79. Plaintiffs raised their economic duress 

argument during the April 23, 2019 hearing on Verizon’s first motion to dismiss in the context of 

a discussion of plaintiffs’ sixth claim for a declaratory judgment that the releases are 

unenforceable under section 1668. Dkt. No. 24. However, as pled, plaintiffs’ economic duress 

allegations do not fall within the scope of that statute; instead, they describe a separate basis for 

concluding that plaintiffs should not be bound by the releases they signed as to the claims pled in 

the FAC. Dkt. No. 32 at 12. 

Economic duress is an equitable doctrine which requires plaintiffs to plead that (1) Verizon 

engaged in a sufficiently coercive wrongful act; (2) a reasonably prudent person in plaintiffs’ 

economic position would have had no reasonable alternative but to succumb to Verizon’s 

coercion; (3) Verizon knew of plaintiffs’ economic vulnerability; and (4) Verizon’s coercive 

wrongful act actually caused or induced plaintiffs to sign the severance releases. Tanner v. Kaiser 

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Found. Health Plan, Inc., No. C 15-02763-SBA, 2016 WL 4076116, at *4 (N.D. Cal. Aug. 1, 

2016); Johnson v. Int’l Bus. Machines Corp., 891 F. Supp. 522, 529 (N.D. Cal. 1995). Verizon 

argues that plaintiffs do not plausibly plead facts supporting any of these elements. Dkt. No. 30 at 

9–12. 

1. Coercive wrongful act

Plaintiffs argue that Verizon’s misrepresentations about the severance cap constituted a 

sufficiently coercive wrongful act to support a claim of economic duress. Dkt. No. 32 at 14–15. 

The Court previously concluded that Verizon’s alleged misrepresentations might support a claim 

that Verizon fraudulently induced or wrongfully coerced plaintiffs to accept employment with 

Verizon in 2014. See Dkt. No. 27 at 13. But, as discussed above, plaintiffs have not identified a 

coercive wrongful act relating to the signing of the releases in 2017. See supra Section III.C.

2. Reasonable alternatives

Even if plaintiffs had identified a coercive wrongful act associated with the releases, 

plaintiffs must also plead facts showing that “a reasonably prudent person subject to [such

wrongful] act may have no alternative but to succumb” to the coercion “when the only other 

alternative is bankruptcy or financial ruin.” Johnson, 891 F. Supp. at 529 (quoting Richard & 

Whillock, Inc. v. Ashton Dev., Inc., 157 Cal. App. 3d 1154 (1984)). Courts employ an objective 

test to determine if “reasonable alternatives” exist. Id. 

Plaintiffs allege that, without severance payments from Verizon, they faced unemployment 

and potential difficulty in obtaining new employment because of their age. Dkt. No. 29 ¶¶ 78-79. 

In their opposition to the motion to dismiss, they say they faced the “immediate loss of all income 

other than unemployment insurance benefits and a need to start the consumption of any accrued 

savings and/or the liquidation of assets, with early withdrawal penalties in the case of accrued 

retirement assets,” although these specific assertions are not included in the FAC. Dkt. No. 32 at 

12–13. Verizon argues that these allegations do not rise to the level of economic duress. Dkt. No. 

30 at 10–11; Dkt. No. 33 at 5. 

The Court agrees that the allegations of the FAC describe economic difficulties that are a 

far cry from bankruptcy or financial ruin. “That plaintiff did not have a job and needed the money 

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offered under the agreement to pay his bills does not equate to economic duress. The same could 

be said of almost any case where an employee is discharged and offered severance pay.” Perez v. 

Uline, Inc., 157 Cal. App. 4th 953, 960 (2007). Plaintiffs’ claim is subject to dismissal if they do 

not plead allegations that support this element. Cf. Doe 1 v. Morrison & Foerester LLP, No. 3:18-

cv-02542-JSC, Dkt. No. 83, at 7–12 (N.D. Cal. May 1, 2019) (denying motion for judgment on the 

pleadings on economic duress rescission claim because “the Court cannot say as a matter of law 

that a reasonably prudent woman who was eight months pregnant, was facing the loss of both her 

job and her paid maternity leave, was the primary wage-earner in her family, and could [no] longer 

afford her current home, would have had reasonable alternatives to signing the release and 

accepting the severance package Defendant offered”). 

3. Knowledge of plaintiffs’ economic vulnerability

“A defendant’s knowledge of a plaintiff’s economic exigencies is a necessary component 

of liability of economic duress.” Johnson, 891 F. Supp. at 530 (internal quotation marks omitted). 

Plaintiffs have not pled that Verizon knew that they would inevitably be subject to “imminent 

financial ruin” if they did not sign the severance release agreement. See Tanner, 2016 WL 

4076116, at *4. The mere fact that Verizon knew that plaintiffs had been laid off and “needed” 

the money offered under the agreement is not sufficient. See Perez, 157 Cal. App. 4th at 959–60 

(economic duress was not present when defendant knew plaintiff needed the money offered under 

the severance agreement to pay his bills). 

Plaintiffs have failed to plead facts supporting this element of economic duress. Nothing 

in the FAC suggests that Verizon knew of plaintiffs’ “particular economic circumstances nor of 

any peculiar economic vulnerability.” Johnson, 891 F. Supp. at 530. At the hearing, plaintiffs 

pointed to a statement Verizon’s counsel allegedly made to plaintiffs’ counsel to the effect that 

plaintiffs were “over a barrel” because they would not receive severance benefits unless they 

signed releases. Plaintiffs suggest that the Court should infer from this allegation that Verizon 

knew of plaintiffs’ particular economic circumstances. Such an inference is simply not 

reasonable, particularly where plaintiffs do not plead that either of them ever shared information 

about their economic circumstances with Verizon. Iqbal, 556 U.S. at 679 (“Determining whether 

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a complaint states a plausible claim for relief will . . . be a context-specific task that requires the 

reviewing court to draw on its judicial experience and common sense. But where the well-pleaded 

facts do not permit the court to infer more than the mere possibility of misconduct, the complaint 

has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’”) (internal citation 

omitted).

4. Inducement by coercive wrongful act

Plaintiffs acknowledge that they were aware of Verizon’s severance cap, had the benefit of 

legal counsel, and opted to sign the releases anyway. They contend that by requiring a signed 

release as a condition for the payment of severance benefits, Verizon induced them to sign the 

releases. This argument is premised on the thesis that requiring signed releases was itself a 

coercive wrongful act, which the Court has already rejected. Plaintiffs’ allegations on this point 

fail for at least the same reasons.

The Court concludes that plaintiffs have not adequately pled economic duress sufficient to 

invalidate the severance releases or render them unenforceable. 

E. Lack of Adequate Consideration

The FAC includes a claim that the severance releases are unenforceable for lack of 

consideration. Dkt. No. 29 ¶ 83. Defendants argue that plaintiffs received severance benefits as 

consideration for the releases, and that the releases themselves so state. Dkt. No. 30 at 12–13. 

Plaintiffs respond that the severance payments were not new consideration for the releases but 

were owed to plaintiffs by operation of their employment agreements. Dkt. No. 32 at 12, 14. 

California Civil Code § 1541 provides that “[a]n obligation is extinguished by a release 

therefrom given to the debtor or the released party by the creditor or releasing party, upon a new 

consideration, or in writing, with or without new consideration.” “In general, a written release 

extinguishes an obligation covered by the release’s terms, provided it has not been obtained by 

fraud, deception, misrepresentation, duress, or undue influence.” Skrbina v. Fleming Cos., Inc., 45 

Cal. App. 4th 1353, 1366 (1996). As discussed above, plaintiffs acknowledge that they signed the 

releases with full knowledge of the circumstances, including Verizon’s severance cap and the 

severance amounts being offered, and that legal counsel assisted them. Because the severance 

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releases are in writing, no new consideration was required. Cal. Civ. Code § 1541. 

The allegations in the FAC do not support plaintiffs’ claim that the releases lacked

consideration and are therefore unenforceable. 

F. Leave to Amend

“Where the plaintiff has previously been granted leave to amend and has subsequently 

failed to add the requisite particularity to its claims, ‘[t]he district court’s discretion to deny leave 

to amend is particularly broad.’” Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 1007 

(9th Cir. 2009), as amended (Feb. 10, 2009) (quoting In re Vantive Corp. Sec. Litig., 283 F.3d 

1079, 1097–98 (9th Cir. 2002)). The Court has already afforded plaintiffs leave to amend to add 

allegations of economic duress, but plaintiffs have again failed to adequately plead facts to support 

their claim. Plaintiffs do not seek leave to amend, nor did they indicate in their opposition brief or 

at the hearing that there were any additional facts they could possibly plead to overcome the

FAC’s factual deficiencies if given leave to amend.5 In their opposition brief and at the hearing, 

plaintiffs acknowledged that they did not face imminent financial ruin, in part, because they had 

access to unemployment insurance and retirement savings accounts. Dkt. No. 32 at 12–13; Dkt. 

No. 35. It appears, therefore, that plaintiffs cannot possibly plead the requisite elements of 

economic duress. In these circumstances, the Court concludes that granting further leave to amend 

would be futile. Rivera v. BAC Home Loans Servicing, L.P., 756 F. Supp. 2d 1193, 1197 (N.D. 

Cal. 2010) (“[W]hen amendment would be futile, dismissal may be ordered with prejudice.”); 

Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (“[A] district court should grant 

leave to amend . . . unless it determines that the pleading could not possibly be cured by the 

allegation of other facts.”) (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995). 

Accordingly, the Court dismisses the FAC without leave to amend. 

 

5 Plaintiffs suggest that their claim of economic duress might be borne out by discovery. Dkt. No. 

32 at 17. But plaintiffs must first clear the hurdle of adequately stating a claim before they are 

permitted to proceed to discovery on that claim. Twombly, 550 U.S. at 563 n.8 (“[B]efore 

proceeding to discovery, a complaint must allege facts suggestive of illegal conduct.”); see also 

Optical Coating Lab., Inc. v. Applied Vision, Ltd., No. C-92-4689 MHP, 1995 WL 150513, at *4 

(N.D. Cal. Mar. 20, 1995) (“Discovery cannot, however, serve as a substitute for an adequate 

pleading . . . .”).

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IV. CONCLUSION

For the foregoing reasons, the Court grants Verizon’s motion to dismiss without leave to 

amend. The initial case management conference scheduled for September 3, 2019 is VACATED. 

The parties’ stipulated request to continue the case management conference and Verizon’s request 

to appear telephonically are denied as moot. Dkt. Nos. 34, 39. The Clerk of the Court shall close 

the file.

IT IS SO ORDERED.

Dated: August 29, 2019

VIRGINIA K. DEMARCHI

United States Magistrate Judge

Case 5:18-cv-07575-VKD Document 40 Filed 08/29/19 Page 13 of 13