Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-00456/USCOURTS-caed-2_07-cv-00456-1/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

CAROL LEE MEINHOLD, suing

individually and on behalf of

all others similarly situated,

NO. CIV. S-07-00456 FCD EFB

Plaintiff,

v. MEMORANDUM AND ORDER

SPRINT SPECTRUM, L.P., a

Delaware limited partnership;

and defendant DOES 1 through

100, inclusive,

Defendants.

----oo0oo----

This matter comes before the court on defendant Sprint

Spectrum, L.P.’s (“Sprint”) motion to dismiss plaintiff Carol Lee

Meinhold’s (“Meinhold”) complaint pursuant to Rules 12(b)(1),

12(b)(6), 9(b), and 23(b)(3) of the Federal Rules of Civil

Procedure. The court heard oral argument on the matter on April

27, 2007. For the reasons set forth below, defendant’s motion to

dismiss plaintiff’s complaint is GRANTED.

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1 The facts of this case are taken from plaintiff’s

allegations in the complaint.

2

BACKGROUND1

In June 2004, plaintiff Meinhold and defendant Sprint

entered into defendant’s cellular phone service agreement (the

“Agreement”) in Rocklin, California. (Complaint, Ex. 1 to Notice

of Removal, filed Mar. 9, 2007, ¶ 3). Defendant advertises,

markets, and sells cellular phone services to consumers, such as

plaintiff. (Id. ¶ 2). As part of their advertising campaign,

defendant broadly represents that consumers will only be charged

for roaming fees if they make calls outside of the Sprint

Nationwide PCS Network or local service area (the “Network”). 

(Id.) Defendant also represents that consumers will not be

charged excess roaming fees if they pay an additional sum of

money to include roaming coverage in their plans. (Id.) 

Defendant further represents to consumers that they will only be

responsible for download charges that are in excess of the

promotional credit that is included in their service plans, plus

any applicable taxes. (Id.)

Plaintiff alleges that after entering into the Agreement,

defendant began to charge her for roaming minutes although her

calls were made within the Network and that defendant continued

to charge her for roaming minutes even after she paid an

additional monthly fee to add roaming coverage to her plan. (Id.

¶ 3). Plaintiff also noticed that she was charged fees that were

in excess of the promotional credit included in her plan for

downloads that she did not request or receive. (Id.)

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3

On February 5, 2007, plaintiff filed this action in the

Superior Court of the State of California for the County of

Placer, asserting claims for violations of Business and

Professions Code §§ 17200 and 17500 and violations of California

Civil Code §§ 1710(2) and 1710(3). Plaintiff’s claims are based

upon defendant’s alleged “unlawful, unfair, and fraudulent

conduct in (1) charging excess roaming fees to consumers who

signed up for defendant’s cellular service plans, and (2)

charging excess fees to consumers for downloading games,

applications, ringers, screensavers, etc..” (Compl. ¶ 1). On

March 9, 2007, defendant removed the case to this court on the

basis of diversity jurisdiction. 

STANDARD

A. Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) allows a defendant

to attack a pleading for lack of subject matter jurisdiction.

Fed. R. Civ. P. 12(b)(1). The court presumes a lack of subject

matter jurisdiction until it is proved otherwise. See Kokkonen

v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994);

Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th

Cir. 1989). The plaintiff bears the burden of proof that

jurisdiction exists. See Stock West, Inc., 873 F.2d at 1225. 

The nature of the burden depends on the type of jurisdictional

challenge. A complaint will be dismissed for lack of subject

matter jurisdiction if (1) the cause does not “arise under” any

federal law or the United States Constitution, (2) there is no

case or controversy within the meaning of that constitutional

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term, or (3) the cause is not one described by any jurisdictional

statute. Baker v. Carr, 369 U.S. 186, 198 (1962). 

A motion to dismiss for lack of subject matter jurisdiction

may attack either the allegations of the complaint (a “facial

attack”), or the existence of subject matter jurisdiction in fact

(a “factual attack”). See Thornhill Publ’g Co. v. General Tel. &

Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). If, as here,

the challenge is a factual attack, “the district court may review

evidence beyond the complaint without converting the motion to

dismiss into a motion for summary judgment.” Safe Air for

Everyone v. Mayer, 373 F.3d 1035, 1039 (9th Cir. 2004). The

court need not presume the truthfulness of the allegations in the

complaint. Id. “Once the moving party has converted the motion

to dismiss into a factual motion by presenting affidavits or

other evidence properly brought before the court, the party

opposing the motion must furnish affidavits or other evidence

necessary to satisfy its burden of establishing subject matter

jurisdiction.” Id. (quoting Savage v. Glendale Union High Sch.,

343 F.3d 1036, 1039 n.2 (9th Cir. 2003)). 

“Where the jurisdictional issue is separable from the merits

of the case, the judge may consider the evidence presented with

respect to the jurisdictional issue and rule on that issue,

resolving factual disputes if necessary.” Thornhill, 594 F.2d at

733. However, where jurisdiction is “inextricably bound to the

merits of the case,” Cameron v. Children’s Hosp. Med. Ctr., 131

F.3d 1167, 1170 (6th Cir. 1997), such that resolution of the

jurisdictional inquiry depends on the resolution of the merits,

“the trial court should employ the standard applicable to a

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motion for summary judgment.” Augustine v. United States, 704

F.2d 1074, 1077 (9th Cir. 1983); see also Careau Group v. United

Farm Workers of America, 940 F. 2d 1291, 1293 (9th Cir. 1990). 

“[T]he question of jurisdiction and the merits of an action will

be considered intertwined where . . . ‘a statute provides the

basis for both the subject matter jurisdiction of the federal

court and the plaintiff’s substantive claim for relief.” Sun

Valley Gasoline, Inc. v. Ernst Enters., Inc., 711 F.2d 138, 139-

40 (9th Cir. 1983) (quoting Timberlane Lumber Co. v. Bank of

America, 549 F.2d 597, 602 (9th Cir. 1976). 

B. Rule 9(b)

Rule 9(b) of the Federal Rules of Civil Procedure provides

that “[i]n all averments of fraud or mistake, the circumstances

constituting fraud or mistake shall be stated with

particularity.” In order to comply with the requirements of Rule

9(b), the circumstances constituting the alleged fraud “must be

‘specific enough to give defendants notice of the particular

misconduct which is alleged to constitute the fraud charged so

that they can defend against the charge and not just deny that

they have done anything wrong.’” Bly-Magee v. California, 236

F.3d 1014, 1019 (9th Cir. 2001) (quoting Neubronner v. Milken, 6

F.3d 666, 672 (9th Cir. 1993)). “Averments of fraud must be

accompanied by ‘the who, what, when, where, and how’ of the

misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d

1097, 1106 (9th Cir. 2003) (quoting Cooper v. Pickett, 137 F.3d

616, 627 (9th Cir. 1997)). The plaintiff “must set forth more

than the neutral facts necessary to identify the transaction. 

The plaintiff must set forth what is false or misleading about a

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statement, and why it is false.” Id. (quoting Decker v. GlenFed,

Inc., 42 F.3d 1541, 1548 (9th Cir. 1994)) (emphasis in original).

ANALYSIS

A. Standing

The issue of standing is a threshold determination of

“whether the litigant is entitled to have the court decide the

merits of the dispute or of particular issues.” Warth v. Seldin,

422 U.S. 490, 498 (1975); Steel Co. v. Citizens For A Better

Env’t, 523 U.S. 83 (1998). Article III limits “the federal

judicial power ‘to those disputes which confine federal courts to

a role consistent with a system of separated powers and which are

traditionally thought to be capable of resolution through the

judicial process.’” Valley Forge Christian Coll. v. Americans

United For Separation of Church and State, Inc., 454 U.S. 464,

472 (1982) (quoting Flast v. Cohen, 392 U.S. 83, 97 (1968));

Steele, 523 U.S. at 102. “Those who do not possess Article III

standing may not litigate as suitors in the Courts of the United

States.” Id. at 476. 

The Supreme Court has set forth that “[t]he ‘irreducible

constitutional minimum of standing’ contains three requirements.” 

Steele, 523 U.S. at 102-03 (quoting Lujan v. Defenders of

Wildlife, 504 U.S. 555, 560 (1992)). First, plaintiff must

allege an “injury in fact – a harm suffered by the plaintiff that

is concrete and actual or imminent, not conjectural, or

hypothetical.” Id. at 103 (internal quotations and citations

omitted). Second, plaintiff must allege causation – “a fairly

traceable connection between the plaintiff’s injury and the

complained-of conduct of the defendant.” Steele, 523 U.S. at

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2 At oral argument, defendant conceded that plaintiff had

standing for her claims arising out of the assessment of

downloading fees.

7

103. (citing Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26,

41-42 (1976). Third, the injury must be redressable – there must

be “a likelihood that the requested relief will redress the

alleged injury. Steele, 523 U.S. at 103 (citing Simon, 426 U.S.

at 45-46).

Defendant contends that plaintiff does not have Article III

standing to bring this suit because she has not suffered an

injury in fact. This case has been removed to this court based

upon diversity jurisdiction pursuant to 28 U.S.C. § 1332. As

such, jurisdiction is not conferred by any statute under which

plaintiff has brought her claims. Cf. Thornhill, 594 F.2d 730. 

Whether plaintiff has suffered an injury sufficient to confer

Article III standing is not “inextricably bound” to the

resolution of the merits of plaintiff’s claims under California

state law and thus, is a separable inquiry. See Cameron, 131

F.3d at 1170. Therefore, the court does not employ the standard

applicable to a motion for summary judgment and considers the

evidence presented by the parties with respect to the

jurisdictional issue, resolving factual disputes if necessary. 

See Thornhill, 594 F.2d at 733. 

Specifically, defendant asserts that plaintiff has not

suffered an injury in fact with respect to her claims arising out

of roaming charges2

 because (1) defendant made her whole through

the issuance of credits for any roaming charges that she had

paid; and (2) she is no longer assessed roaming charges on any of

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her five phone numbers. (Decl. of Brandon Howard (“Howard

Decl.”), filed Mar. 16, 2007, ¶ 7). In response, plaintiff

submits an affidavit, declaring (1) that the credit issued by

Sprint did not remedy all the charges in dispute at the time that

the credit was issued; and (2) that she still incurred additional

roaming charges on the invoice that she received from Sprint in

September 2006. (Decl. of Carol Lee Meinhold in Supp. of Opp’n

to Def.’s Mot. to Dismiss (“Meinhold Decl.”), filed Apr. 13,

2007, ¶¶ 3-4).

In its reply, Sprint presents evidence that on August 22,

2006, Sprint revised plaintiff’s account so that she is no longer

assessed roaming charges on any of her five phone numbers. 

(Decl. of Brandon Howard in Supp. of Def.’s Reply (“Howard Reply

Decl.”), filed Apr. 20, 2007, ¶ 4). Specifically, defendant

attaches plaintiff’s billing statements from August 22, 2006

until March 22, 2007. (Exs. A-D to Howard Reply Decl.). On

Meinhold’s August 22, 2006 billing statement, Sprint issued a

credit of $204.65 for the roaming fees that she had paid. (Id.) 

However, as a result of processing time, a roaming charge of

$3.00 was assessed to plaintiff on her September 22, 2006 billing

statement. (Id. ¶ 5). Subsequently, Sprint reversed the roaming

charges assessed to Meinhold on her September statement and

credited her $3.13 on her October 22, 2006 billing statement. 

(Id. ¶ 6). Plaintiff has not been billed for any roaming charges

since her September 22, 2006 billing statement. (Id. ¶ 7).

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3 Because defendant presented new evidence in support of

its reply, the court will consider plaintiff’s unauthorized

supplemental declaration. At oral argument, the court ordered

plaintiff to submit the billing statements upon which she relied

in her supplemental declaration, and allowed defendant to file

any additional evidence in response.

9

In a supplemental declaration filed by plaintiff,3 she

asserts that since June 22, 2004, Sprint charged her a total of

$282.50 in disputed roaming charges. (2d. Supp. Decl. of Carol

Lee Meinhold in Resp. to Def.’s Reply (“2d. Supp. Meinhold

Decl.”), filed May 4, 2007, ¶ 6). While plaintiff acknowledges

that defendant issued her credits in the total amount of $261.80,

(Id. ¶ 7), plaintiff contends that she has suffered an economic

injury due to the disputed roaming charges that have not been

credited to her account in the amount of $20.70. (Id. ¶ 8). 

Plaintiff also states that Sprint charged her fees for downloads

that she did not request or receive. (Supp. Decl. of Carol Lee

Meinhold in Resp. to Def.’s Reply (“Supp. Meinhold Decl.”), filed

Apr. 24, 2007, ¶ 4).

In defendant’s supplemental reply, defendant does not assert

that plaintiff’s billing records do not support her alleged

injury from roaming charges in the amount of $20.70. Rather,

defendant argues that plaintiff cannot claim that she was injured

for roaming charges incurred between June 24, 2004 and May 23,

2005 because plaintiff never complained to Sprint before about

these charges and thus, acquiesced in their validity. 

Defendant’s argument is not well taken. Defendant

originally moved to dismiss plaintiff’s claims for injuries

arising out of assessed roaming charges for lack of standing

because it asserted that it had already credited plaintiff for

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all assessed roaming charges that were in dispute. In

opposition, plaintiff presented evidence that she did not receive

a credit for certain roaming charges that she disputes as

improperly assessed. In response, defendant does not assert that

these roaming charges were credited, but that these charges were

proper. In support of this contention, defendant proffers

evidence only that plaintiff has repeatedly contacted defendant

about concerns with her bill and that she did not contact

defendant about these charges specifically. Such evidence is

insufficient to rebut plaintiff’s documented evidence that she

suffered an injury in fact arising out of the assessment of

roaming charges. Therefore, plaintiff has set forth an injury

arising out of the imposition of roaming charges sufficient to

allege Article III standing. 

However, while plaintiff has proffered sufficient evidence

demonstrating that she has suffered injury in fact from the

imposition of roaming and downloading fees by defendant,

plaintiff has not demonstrated that she has standing to seek

prospective relief for her claims arising out of roaming fees. 

Where a party seeks prospective relief, she must establish that

there is “a likelihood of future injury.” White v. Lee, 227 F.3d

1214, 1242 (9th Cir. 2000). “Past exposure to illegal conduct

does not in itself show a present case or controversy regarding

injunctive relief if unaccompanied by any continuing, present

adverse effects.” Lujan, 504 U.S. at 564 (internal quotations

omitted). Defendants have presented evidence that plaintiff’s

account was adjusted so that she was no longer assessed roaming

charges, and that plaintiff has not been assessed any charges for

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4 At oral argument, plaintiff conceded that she did not

have standing to seek prospective relief in regards to her claims

arising out of assessed roaming charges.

5 Defendant’s motion to dismiss pursuant to Rule 12(b)(6)

is based upon its argument that plaintiff has not suffered an

injury in fact. Because the court found that plaintiff has

demonstrated sufficient standing to assert at least some of her

claims, the court does not address the merits of defendant’s Rule

12(b)(6) motion. Further, a motion for 12(b)(6) addresses only

the sufficiency of the allegations in the complaint. Cruz v.

Beto, 405 U.S. 319, 322 (1972). To the extent defendant’s

arguments relating to injury are based on facts outside of the

complaint, the court cannot consider such facts under a Rule

12(b)(6) analysis. 

11

roaming calls made after August 22, 2006. (Howard Reply Decl. ¶

7). Plaintiff has proffered no evidence to the contrary.4 As

such, there is insufficient evidence that, at the commencement of

litigation in February 2007, there was a likelihood that

defendant Sprint would assess roaming fees to plaintiff Meinhold

in the future. See Lujan, 504 U.S. at 563-64; cf. White, 227

F.3d at 1242-43 (finding that a temporary policy in place for a

month did not defeat the likelihood of future injury). 

Therefore, plaintiff lacks subject matter jurisdiction to

litigate her claims for prospective relief based upon roaming

charges assessed by defendant, and defendant’s motion to dismiss

such claims for prospective relief are GRANTED without leave to

amend.5 

B. Failure to Plead Fraud with Particularity

Defendant asserts that plaintiff’s complaint should be

dismissed because she fails to plead fraud with particularity. 

Plaintiff argues that not all of her claims are grounded in

fraud, but that to the extent they are, she has adequately

alleged facts supporting her claims. Plaintiff contends that she

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does not need to meet Rule 9(b)’s heightened pleading requirement

with respect to her claims brought pursuant to §§ 17200 and 17500

of the Business and Professions Code because fraud is not a

necessary element of these claims, nor are her claims grounded in

fraud. 

“In cases where fraud is not a necessary element of a claim,

a plaintiff may choose nevertheless to allege in the complaint

that the defendants has engaged in fraudulent conduct.” Vess,

317 F.3d at 1103. The Ninth Circuit has held that in such cases,

where fraudulent conduct is the basis of the claim, that claim is

“grounded in fraud” and “the pleading of that claim as a whole

must satisfy the particularity requirement of Rule 9(b).” Id. at

1103-04 (citations omitted). Claims may be “grounded in fraud”

where a plaintiff alleges a uniform course of fraudulent conduct. 

Id. at 1103. Under California law, the “indispensable elements

of a fraud claim include a false representation, knowledge of its

falsity, intent to defraud, justifiable reliance, and damages.” 

Moore v. Brewster, 96 F.3d 1240, 1245 (9th Cir. 1996) (superceded

by statute on other grounds) (citing Bank of the West v. Valley

Nat’l Bank of Arizona, 41 F.3d 471, 477 (9th Cir. 1994)). 

Plaintiff’s allegations relating to her claim under § 17200

provide that “[t]he unlawful, unfair, and fraudulent business

practices by defendants,” as described in the preceding

allegations of her claim, “present a continuing threat to

Plaintiff” who suffered and continues to suffer monetary loss as

a result of these practices. (Compl. ¶ 23) (emphasis added). 

Plaintiff’s allegations relating to her claim under § 17500

provide that defendant made representations that it knew or

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6 Plaintiff argues that defendant’s knowledge of

wrongdoing or of the falsity is not necessary to a claim under §

17500. While this may be true, plaintiff has alleged that

defendant knowingly misled plaintiff and the public and continues

to do so.

7 Plaintiff relies heavily on the Northern District’s

opinion in Qarbon.com v. eHelp Corp., 315 F. Supp. 2d 1046 (N.D.

Cal. 2004). However, the facts of Qarbon are readily

distinguishable from the facts alleged in plaintiff’s complaint. 

In Qarbon, the counterclaimant, eHelp Corp., alleged that Qarbon

was enforcing an invalid patent in bad faith. Id. at 1052. 

Counterclaimaint’s assertions neither contained the word “fraud”

nor alleged that Qarbon intended to defraud the public or that

the public justifiably relied on the misrepresentation. In this

case, not only does the plaintiff explicitly refer to defendant’s

alleged “fraudulent” conduct throughout the complaint, she also

alleges facts that give rise to intent and reliance by the

public. Therefore, plaintiff’s argument is entirely without

merit. 

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should have known were untrue or misleading and that defendants

will continue to do so. (Compl. ¶¶ 27-29). Such facts

necessarily imply fraud by defendant.6 Further, the factual

basis for all of plaintiffs’ claims arise out of a uniform course

of alleged fraudulent conduct, specifically, the false and

misleading statements allegedly made by defendant through its

advertising and marketing. (Compl. ¶¶ 1-2) (“This is a consumer

action by Plaintiff . . . to secure [relief] based upon

defendant’s unlawful, unfair, and fraudulent conduct.”) (emphasis

added). Therefore, all of plaintiff’s claims are “grounded in

fraud” such that she must meet 9(b)’s heightened pleading

standard.7 

In this case, plaintiff failed to identify any specific

statement made by defendant, let alone explain why such specific

statements were fraudulent. See Moore, 96 F.3d at 145-46

(holding that the requirements of 9(b) were not satisfied where

specific statements or actions were not identified). Plaintiff

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generally alleges that false or misleading statements were made

to her and the public through Sprint’s advertisements. Meinhold

does not identify what advertisements she is referring to, when

she saw them, where she saw them, or how the statements made in

those specific advertisements were untrue or misleading. Such

general allegations are insufficient to give defendant notice of

the particular misconduct charged by plaintiff. See, e.g., Vess,

317 F.3d at 1106 (dismissing plaintiff’s fraud claims where

plaintiff failed to provide the particulars of when, where, or

how the alleged conspiracy occurred); United States v. SmithKline

Beecham, 245 F.3d 1048, 1051 (9th Cir. 2001) (holding that broad

allegation that the defendant “knowingly . . . changed control

numbers to wrongfully represent lab results did not satisfy Rule

9(b) where the plaintiff did not specify the types of tests, the

employees who performed the tests, or the dates, time, or places

where the tests were conducted); Decker, 42 F.3d at 1547-48

(requiring the plaintiff to state the time, place, and content of

an alleged misrepresentation and explain why the statement is

false and misleading in order to satisfy Rule 9(b)); cf. Cooper,

137 F.3d at 627 (holding that the plaintiff satisfied the

requirements of Rule 9(b) where a complaint for excessive revenue

recognition identified some of the specific customers defrauded,

the four types of improper revenue recognition, the general time

frame in terms of financial quarters, that the fraud arose out of

financial statements, and that plaintiff was misled by

defendant’s claiming that its policy was stricter than it was). 

Rather, plaintiff’s general allegations would put defendant in

the untenable position of having to deny that it has ever done

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8 Because defendant’s motion to dismiss is GRANTED

pursuant to Rule 9(b), the court does not consider defendant’s

Rule 23(b)(3) arguments relating to plaintiff’s class action

allegations.

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anything wrong in regards to its advertising and marketing, a

circumstance that Rule 9(b) demands be avoided. See Vess, 317

F.3d at 1106. Therefore, because plaintiff has not pled her

allegations of fraud with particularity, defendant’s motion to

dismiss is GRANTED with leave to amend.8 See Doe v. United

States, 58 F.3d 494, 497 (9th Cir. 1995) (“In dismissing for

failure to state a claim, a district court should grant leave to

amend even if no request to amend the pleading was made, unless

it determined that the pleading could not be cured by the

allegation of other facts.”) (citations and quotations omitted);

see also Vess, 317 F.3d at 1107 (holding that dismissals under

Rule 9(b) are functionally equivalent to dismissals under Rule

12(b)(6) and should be without prejudice if defects are curable).

CONCLUSION

For the foregoing reasons, defendant’s motion to dismiss

plaintiff’s complaint is GRANTED. Plaintiff is granted twenty

(20) days from the date of this order to file a first amended

complaint in accordance with this order. Defendant is granted

thirty (30) days from the date of service of plaintiff’s first

amended complaint to file a response thereto.

 IT IS SO ORDERED.

DATED: May 16, 2007

Case 2:07-cv-00456-FCD-EFB Document 21 Filed 05/16/07 Page 15 of 15