Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-03754/USCOURTS-cand-4_05-cv-03754-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MELINDA GARCIA,

Plaintiff,

v.

AMBER HASKETT, and DOES 1 through 50,

inclusive,

Defendants.

 /

No. C 05-3754 CW

ORDER GRANTING IN

PART AND DENYING

IN PART

DEFENDANT'S

MOTION TO DISMISS

Defendant Amber Haskett moves to dismiss Plaintiff Melinda

Garcia's claims under Federal Rules of Civil Procedure 12(b)(1) and

12(b)(6), and alternatively moves for a more definite statement

under Rule 12(e), an order compelling arbitration and an award of

sanctions (Docket No. 5). Plaintiff opposes the motion, and crossmoves for a "Rule 11 inquiry" into Defendant's motion for

sanctions. In separate motions, Defendant requests that the Court

take judicial notice of certain documents (Docket Nos. 6, 19). The

matter was heard on December 2, 2005. 

Having considered all of the papers filed by the parties and

oral argument on the motion, the Court grants in part Defendant's

motion to dismiss and denies it in part, as set forth below, and

denies Defendant's motions for an order compelling arbitration and

an award of sanctions. The Court denies Plaintiff's cross-motion

for sanctions. 

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BACKGROUND

Plaintiff's complaint and the attached exhibits allege the

following. In or around August, 2003, Plaintiff and Defendant

formed Garcia & Haskett, LLP (the Partnership), a California

limited liability partnership engaging in the practice of law. In

and around January, 2005, Plaintiff discovered, among other

wrongful conduct, that Defendant was manipulating the Partnership's

accounting to her benefit and to the detriment of Plaintiff. In

and around January 17, 2005, Plaintiff notified Defendant that

Plaintiff intended to dissolve the Partnership. Thereafter,

Plaintiff and Defendant entered into discussions and negotiations

regarding the dissolution of the Partnership. The parties engaged

legal counsel to represent them in connection with these

negotiations. Plaintiff engaged Mark Figueiredo, Esq., and

Defendant engaged Bernard Kenneally, Esq. 

During the dissolution negotiations, Plaintiff communicated

with her legal counsel by electronic mail (email), among other

means. Plaintiff and Defendant maintained email accounts on the

Partnership's computer server, which was hosted by a third party,

Tri-Valley Internet. Plaintiff's email account was

mgarcia@garciahaskett.com and Defendant's email account was

ahaskett@garciahaskett.com. It was the Partnership practice that

no one other than the email account holder was authorized to access

that account's email. Plaintiff's computer was password-protected

and Plaintiff did not disclose her password to Defendant. 

Defendant's computer was also password-protected and Plaintiff was

not aware of Defendant's password. On at least one occasion,

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Plaintiff and Defendant discussed whether Defendant had checked

Plaintiff's emails while Plaintiff was away on vacation. Defendant

responded that she had not checked Plaintiff's emails, that she did

not have the password and that it was not any of Defendant's

business to look at Plaintiff's emails. 

On or about February 22, 2005, Plaintiff filed a lawsuit in

Alameda County Superior Court for dissolution of the Partnership

among other claims (Dissolution Lawsuit). On or about March 1,

2005, Plaintiff and Defendant agreed to dissolve the Partnership

pursuant to the Agreement Dissolving Partnership (Dissolution

Agreement), which was made effective as of February 1, 2005. In

accordance therewith, Plaintiff dismissed the Dissolution Lawsuit.

Thereafter, Plaintiff formed the Garcia Law Group (GLG) and

Defendant formed the Haskett Law Firm (HLF). Pursuant to the

Dissolution Agreement, Plaintiff retained possession of the

Partnership's computer server and contributed it to GLG. Plaintiff

started to experience computer problems and suspected that the

problem may have been caused by an outside computer hacker gaining

access to the GLG computer server. Plaintiff then had the GLG

computer consultant examine the server to trouble-shoot the

problem. The computer consultant was able to diagnose and correct

the problem. This consultant informed Plaintiff that, while

examining the server problems, he had discovered some unusual

activity on the server. He explained that in February, 2005,

Defendant had accessed Plaintiff's emails and had forwarded them to

an individual later identified to be Defendant's attorney. These

emails included confidential attorney-client communications and

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were forwarded to one or more third parties. 

As a standard practice, Plaintiff's outgoing email messages

included the following statement at the end:

This communication constitutes an electronic communication

within the meaning of the Electronic Communications Privacy

Act, 18 USC 2510, and its disclosure is strictly limited to

the recipient intended by the sender of this message. This

communication may contain confidential and privileged material

for the sole use of the intended recipient and receipt by

anyone other than the intended recipient does not constitute a

loss of the confidential or privileged nature of the

communication. Any review or distribution by others is

strictly prohibited. If you are not the intended recipient

please contact the sender by return electronic mail and delete

all copies of this communication. For more information about

Garcia & Haskell LLP, contact us at 925-475-2000 or visit us

at http://www.garciahaskett.com. 

Compl. ¶ 22.

On September 16, 2005, Plaintiff filed this complaint alleging

1) intentional interception of confidential email communications in

violation of 18 U.S.C. § 2511(1)(a); 2) intentional use of

intercepted email communication in violation of 18 U.S.C.

§ 2511(1)(b); 3) intentional disclosure of intercepted email

communication in violation of 18 U.S.C. § 2511(1)(c); 4) fraudulent

concealment; 5) rescission of the Dissolution Agreement; 6) breach

of fiduciary duty; 7) invasion of privacy pursuant to California

Penal Code sections 632 and 637.2; 8) conspiracy; and 9) conversion

of $28,500 held in the Partnership account.

 LEGAL STANDARD

I. Rule 12(b)(1)

A. Generally

Dismissal is appropriate under Rule 12(b)(1) when the district

court lacks subject matter jurisdiction over the claim. Fed. R.

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Civ. P. 12(b)(1). Federal subject matter jurisdiction must exist

at the time the action is commenced. Morongo Band of Mission

Indians v. Cal. State Bd. of Equalization, 858 F.2d 1376, 1380 (9th

Cir. 1988), cert. denied, 488 U.S. 1006 (1989). A Rule 12(b)(1)

motion may either attack the sufficiency of the pleadings to

establish federal jurisdiction, or allege an actual lack of

jurisdiction which exists despite the formal sufficiency of the

complaint. Thornhill Publ’g Co. v. Gen. Tel. & Elecs. Corp., 594

F.2d 730, 733 (9th Cir. 1979); Roberts v. Corrothers, 812 F.2d

1173, 1177 (9th Cir. 1987).

Subject matter jurisdiction is a threshold issue which goes to

the power of the court to hear the case. Therefore, a Rule

12(b)(1) challenge should be decided before other grounds for

dismissal, because they will become moot if dismissal is granted. 

Alvares v. Erickson, 514 F.2d 156, 160 (9th Cir.), cert. denied,

423 U.S. 874 (1975); 5A Charles Alan Wright & Arthur R. Miller,

Federal Practice & Procedure § 1350, p. 210 (2d ed. 1990).

A federal court is presumed to lack subject matter

jurisdiction until the contrary affirmatively appears. Stock West,

Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989). 

An action should not be dismissed for lack of subject matter

jurisdiction without giving the plaintiff an opportunity to amend

unless it is clear that the jurisdictional deficiency cannot be

cured by amendment. May Dep’t Store v. Graphic Process Co., 637

F.2d 1211, 1216 (9th Cir. 1980). 

B. Federal Claims

Title 28 U.S.C. § 1331 grants federal courts jurisdiction over

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cases arising under federal law. In order for a complaint to state

a claim arising under federal law, it must be clear from the face

of a plaintiff's well-pleaded complaint that there is a federal

question. See Easton v. Crossland Mortgage Corp., 114 F.3d 979,

982 (9th Cir. 1997). Where jurisdiction is intertwined with the

merits, the court must assume the truth of the allegations in a

complaint unless controverted by undisputed facts in the record. 

Warren v. Fox Family Worldwide, Inc., 328 F.2d 1136, 1139 (9th Cir.

2003). Only in "exceptional" circumstances may a Rule 12(b)(1)

motion be granted in cases premised on federal question

jurisdiction. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir.

1987). Such dismissals are permitted “where the alleged claim

under the constitution or federal statutes clearly appears to be

immaterial and made solely for the purpose of obtaining federal

jurisdiction or where such claim is wholly insubstantial and

frivolous." Bell v. Hood, 327 U.S. 678, 682-83 (1946).

II. Rule 12(b)(6)

A motion to dismiss for failure to state a claim will be

denied unless it is “clear that no relief could be granted under

any set of facts that could be proved consistent with the

allegations.” Falkowski v. Imation Corp., 309 F.3d 1123, 1132 (9th

Cir. 2002), citing Swierkiewicz v. Sorema N.A., 534 U.S. 506

(2002). A complaint must contain a “short and plain statement of

the claim showing that the pleader is entitled to relief.” Fed. R.

Civ. P. 8(a). “Each averment of a pleading shall be simple,

concise, and direct. No technical forms of pleading or motions are

required.” Fed. R. Civ. P. 8(e). These rules “do not require a

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claimant to set out in detail the facts upon which he bases his

claim. To the contrary, all the Rules require is ‘a short and

plain statement of the claim’ that will give the defendant fair

notice of what the plaintiff’s claim is and the grounds on which it

rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957).

When granting a motion to dismiss, a court is generally

required to grant a plaintiff leave to amend, even if no request to

amend the pleading was made, unless amendment would be futile. 

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911

F.2d 242, 246-47 (9th Cir. 1990). In determining whether amendment

would be futile, a court examines whether the complaint could be

amended to cure the defect requiring dismissal “without

contradicting any of the allegations of [the] original complaint.” 

Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990).

III. Rule 12(e)

"[T]he proper test in evaluating a motion under Rule 12(e) is

whether the complaint provides the defendant with a sufficient

basis to frame his responsive pleadings." Federal Sav. and Loan

Ins. Corp. v. Musacchio, 695 F. Supp. 1053, 1060 (N.D. Cal. 1988)

(citing Famolare Inc. v. Edison Bros. Stores, Inc., 525 F. Supp.

940, 949 (E.D. Cal. 1981)). 

"Motions for a more definite statement are viewed with

disfavor and are rarely granted because of the minimal pleading

requirements of the Federal Rules." Sagan v. Apple Computer, Inc.,

874 F. Supp. 1072, 1077 (1994). "Rule 12(e) is designed to correct

only unintelligibility in a pleading not merely a claimed lack of

detail." FRA S. p. A. v. Surg-O-Flex of America, Inc., 415 F.

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Supp. 421, 427 (S.D.N.Y. 1976). The proper tool for eliciting

additional detail is discovery, not a Rule 12(e) motion. 

Musacchio, 695 F. Supp at 1060 (citing Kuenzell v. United States,

20 F.R.D. 96, 98 (N.D. Cal. 1957)).

A Rule 12(e) motion may be granted, however, "where the

complaint is so general that ambiguity arises in determining the

nature of the claim or the parties against whom it is being made." 

Sagan, 874 F. Supp. at 1077. 

IV. Rule 11

Federal Rule of Civil Procedure 11 requires a court to impose

sanctions on an attorney, a represented party, or both, when the

attorney has signed and submitted to the court a pleading, motion

or other paper that is not, to the attorney's knowledge and belief

after reasonable inquiry, "well grounded in fact" and "warranted by

existing law or a good faith argument for the extension,

modification, or reversal of existing law." Fed. R. Civ. P. 11. 

An attorney's signature also constitutes a warranty that the paper

is not "interposed for any improper purpose, such as to harass or

to cause unnecessary delay." Id.

The standard for determining whether a pleading, motion or

other paper is either frivolous or interposed for an improper

purpose is one of objective reasonableness at the time of the

attorney's signature. Conn v. Borjorquez, 967 F.2d 1418, 1421 (9th

Cir. 1992) (citing Woodrum v. Woodward County Okla., 866 F.2d 1121,

1127 (9th Cir. 1989); Golden Eagle Distrib. Corp. v. Burroughs

Corp., 801 F.2d 1531, 1538 (9th Cir. 1986). In assessing whether

the filing of a particular paper was frivolous under Rule 11, the

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court should not consider the ultimate failure on the merits or the

subjective bad faith of the signer, but rather whether the position

taken was "legally unreasonable" or "without factual foundation." 

Zaldivar v. City of Los Angeles, 780 F.2d 823, 831 (9th Cir. 1986).

 JUDICIAL NOTICE 

 Defendant requests that the Court take judicial notice of

various documents filed in Garcia v. Haskett, et al, No. VGO5199424

(Alameda Super. Ct. 2005), the case brought by Plaintiff against

Defendant in the Superior Court of California. Defendant further

seeks judicial notice of In re Fred Houston, No. 03-40690 J7

(Bankr. N.D. Cal. 2003), a case pending in the bankruptcy court

against the Partnership. Plaintiff does not object. Under Rule

201 of the Federal Rules of Evidence, a court may take judicial

notice of facts that are not subject to reasonable dispute because

they are either generally known or capable of accurate and ready

determination. Because judicial filings are not subject to

reasonable dispute and are capable of accurate and ready

determination, the Court GRANTS Defendant's request for judicial

notice of these documents. 

The Court also takes judicial notice of the parties'

Dissolution Agreement. The Court is "generally confined to

consideration of the allegations in the pleadings" in deciding a

Rule 12(b)(6) motion. Embury v. King, 191 F. Supp. 2d 1071, 1076

(N.D. Cal. 2001). One exception to this rule is the "incorporation

by reference doctrine," which permits a district court to consider

the defendant's attachment of extrinsic evidence to a motion to

dismiss if the attachment is integral to the plaintiff's claims and

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its authenticity is not disputed. In re Silicon Graphics Inc. Sec.

Litig., 183 F.3d 970, 986 (9th Cir. 1999); see also Parrino v. FHP,

Inc., 146 F.3d 699, 706 n.3 (9th Cir. 1998). Contrary to

Plaintiff's assertion, the Agreement is integral to Plaintiff's

claims and may be considered; the complaint repeatedly refers to

the dissolution and the resulting Agreement, and one of the objects

of the complaint is rescission of the Agreement. See Ismart Int'l

Ltd. v. I-Docsecure, LLC, 2005 WL 588607, *6-7 (N.D. Cal. Feb. 14,

2005) (taking judicial notice of Formation Agreement, which

complaint sought to rescind, but denying judicial notice of

separate Operating Agreement not referenced in complaint). 

Similarly, the redacted emails are integrally related to

Plaintiff's complaint and may be considered by the Court. 

DISCUSSION

I. Motion to Dismiss for Lack of Subject Matter Jurisdiction

Defendant moves to dismiss the case for lack of subject matter

jurisdiction on the grounds that the Dissolution Agreement releases

all Plaintiff's claims against Defendant, and Plaintiff's

electronic interception claims are manufactured solely to obtain

federal jurisdiction. 

Plaintiff brings three claims under 18 U.S.C. § 2511 for

intentional interception, use and disclosure of confidential

communications. Although, as noted in Section II(A) below,

Plaintiff's allegations fail to state a claim for violation of that

statute, the claims on their face do clearly arise under federal

law. See Bollard v. California Province of the Society of Jesus,

196 F.3d 940, 951 (9th Cir. 1999) ("Any non-frivolous assertion of

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a federal claim suffices to establish federal jurisdiction, even if

that claim is later dismissed on the merits under Rule 12(b)(6).") 

Defendant's argument that the claims are insubstantial or

frivolous is intertwined with the merits of the complaint itself,

and therefore the Court must assume the truth of Plaintiff's

allegations. Warren, 328 F.2d at 1139. Defendant has not shown

that this is an exceptional case where the alleged federal claim is

"immaterial" or "wholly insubstantial and frivolous." Bell, 327

U.S. at 682-83. Viewed in Plaintiff's favor, the allegations show

that Plaintiff was fraudulently induced to enter into the

Dissolution Agreement because of Defendant's interception of email. 

The alleged federal violation is related to the rest of the

complaint, and it is not wholly insubstantial and frivolous. 

Therefore, the Court denies Defendant's motion to dismiss the case

for lack of subject matter jurisdiction. 

II. Motion to Dismiss for Failure to State a Claim

A. Interception, Use and Disclosure Claims

Title 18 U.S.C. § 2511(1)(a) provides that one who

"intentionally intercepts, endeavors to intercept, or procures any

other person to intercept or endeavor to intercept, any wire, oral,

or electronic communications" shall be subject to criminal

liability and civil suit. "Intercept" is defined as "the aural or

other acquisition of the contents of any wire, electronic, or oral

communication through the use of any electronic, mechanical, or

other device." 18 U.S.C. § 2510(4). 

In order to constitute unlawful interception of electronic

communication, email messages must have been intercepted from a

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transient storage facility, not a place of permanent storage. See

United States v. Councilman, 418 F.3d 67, 85 (1st Cir. 2005) (en

banc) (holding that "electronic communication" includes

communications in temporary, transient electronic storage intrinsic

to the communication process); Wesley College v. Pitts, 974 F.

Supp. 375 (D. Del. 1997) (concluding that acquisition of electronic

communications in electronic storage does not constitute

interception). In her complaint, Plaintiff alleges that Defendant

accessed email "on the Partnership account, routed through the

Partnership computer server which was hosted by a third-party, TriValley Internet." Compl. ¶ 12. Plaintiff "retained possession of

the Partnership's computer server" and contributed it to GLG. Id.

¶ 17. These facts suggest that the server was a permanent, not a

temporary and transient, storage facility. Thus, Defendant's

alleged access of Plaintiff's email does not constitute unlawful

interception of electronic communication in violation of

§ 2511(1)(a). Plaintiff's second and third claims for violation of

§§ 2511(1)(b) and 2511(1)(c) similarly involve interception of

electronic communications.

For these reasons, the Court grants Defendant's 12(b)(6)

motion to dismiss the federal claims. Plaintiff may file a First

Amended Complaint (FAC) if she can truthfully, and without

contradicting her original complaint, allege facts showing that

Defendant intercepted email communications while they were in

temporary, transient electronic storage. If Plaintiff cannot

adequately allege a federal claim, her remaining State law claims

will be dismissed without prejudice to refiling in State court. 

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B. Fraudulent Concealment

In her reply brief, Defendant argues that Plaintiff's claim

for fraudulent concealment should be dismissed because Plaintiff

cannot "prove" the elements of an action for fraud based on

concealment. Def.'s Reply at 6. This is not the standard used to

evaluate a motion to dismiss. Therefore, Defendant's 12(b)(6)

motion to dismiss this claim is denied. 

C. Rescission

Defendant moves to dismiss Plaintiff's claim for rescission of

the Dissolution Agreement on the grounds that Plaintiff has

received the benefits of the Agreement thus far, and has brought

this claim to manufacture federal jurisdiction or for wrongful

purposes relating to the bankruptcy case. 

A party to a contract may rescind the contract if the consent

of the party rescinding was obtained through "duress, menace,

fraud, or undue influence, exercised by or with the connivance of

the party as to whom he rescinds, or of any other party to the

contract jointly interested with such party." Cal. Civil Code

§ 1698(b)(1); see also Lombardi v. Sinanides, 71 Cal. App. 272, 279

(1925). However, "a defrauded party must exercise his [or her]

election to rescind with reasonable promptness after discovering

the fraud." Le Clercq v. Michael, 88 Cal. App. 2d 700, 702 (1948). 

Acts "indicating an intent to abide by the contract are evidence of

an affirmance thereof and of a waiver of the right to rescind." 

Id. (citing Ruhl v. Mott, 120 Cal. 668, 677 (1898)). 

Here, the parties dispute whether Plaintiff has promptly

sought rescission and whether her acts indicate an intent to abide

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by the contract. These issues of fact cannot be resolved in the

context of this motion to dismiss. However, the Court notes that

should Plaintiff prevail in her claim for rescission, she would

have to return all benefits received pursuant to the Dissolution

Agreement. 

D. Conversion

Defendant moves to dismiss Plaintiff's claim for conversion on

the grounds that Plaintiff has failed to allege the required

element of lack of consent. 

A claim for conversion will fail where the owner "either

expressly or impliedly assents to or ratifies the taking, use or

disposition" of the property. Farrington v. A. Teichert & Son,

Inc., 59 Cal. App. 2d 468, 474 (1943). Defendant contends that

both parties received an equal distribution of $28,500 that was

held in the Partnership account pursuant to Plaintiff's suggestion

"through her counsel via email." Def. Mot. to Dismiss at 10. This

dispute of fact cannot be resolved in the context of this motion to

dismiss. However, to the extent that Defendant took a distribution

of the $28,500 pursuant to the Dissolution Agreement or another

understanding, Plaintiff will not be able to show that Defendant

converted the sum. 

E. Invasion of Privacy

Finally, Defendant contends that Plaintiff has failed to plead

a legally cognizable claim under California Penal Code § 632, a

State law counterpart to 18 U.S.C. § 2511. 

California Penal Code § 632(a) establishes liability for a

person who, 

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intentionally and without the consent of all parties to a

confidential communication, by means of any electronic

amplifying or recording device, eavesdrops upon or records the

confidential communication, whether the communication is

carried on among the parties in the presence of one another or

by means of a telegraph, telephone, or other device, except a

radio . . . . 

Defendant argues that Plaintiff fails to allege that Defendant

took steps to "record" Plaintiff's emails because all Partnership

emails were recorded on the firm's computer server by default. 

Defendant also argues that to the extend Plaintiff alleges

eavesdropping, she fails to state a claim because "eavesdropping"

involves "the interception of communications by the use of

equipment which is not connected to any transmission line." People

v. Ratekin, 212 Cal. App. 3d 1165, 1168 (1989). 

Plaintiff argues that she does not know how Defendant

intercepted her email, and thus should be allowed to proceed with

discovery. Plaintiff fails to explain how her email could have

been intercepted without connection to a transmission line. 

Without such an allegation, Plaintiff cannot bring a claim for

eavesdropping. With respect to the alleged "recording,"

Plaintiff's allegations are unclear, but appear to include the use

of a scanner. However, scanning a piece of paper is not the same

as "recording" a communication. Therefore, the Court dismisses

Plaintiff's claim for violation of § 632. Plaintiff is granted

leave to amend her § 632 claim if she can truthfully, and without

contradicting her original complaint, allege facts showing that

Defendant eavesdropped upon or recorded a confidential

communication. 

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III. Motion for a More Definite Statement

Defendant moves to dismiss Plaintiff's complaint on the

grounds that it is vague and ambiguous with respect to the alleged

damage suffered and the relief sought. 

Rule 12(e) only requires that Plaintiff provide Defendant with

sufficient notice to allow Defendant to respond to her claims. The

facts indicating the nature of Plaintiff's confidential

communication and its alleged interception by Defendant in

violation of 18 U.S.C. § 2511 provide Defendant with a sufficient

basis to frame her answer. Accordingly, the Court denies

Defendant's motion for a more definite statement. 

IV. Motion to Compel Arbitration

Defendant seeks an order compelling arbitration pursuant to

Paragraph 3.15 of the Dissolution Agreement. Plaintiff opposes

enforcement of the arbitration provision on the grounds that it is

part of a contract allegedly procured by fraud. 

 Pursuant to 9 U.S.C. § 1 et seq. of the Federal Arbitration

Act (FAA), written arbitration agreements shall be "valid,

irrevocable, and enforceable, save on such grounds as exist in law

or at equity for revocation of any contract." 9 U.S.C. § 2; see

also Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)

("States may regulate contracts, including arbitration clauses,

under general contract law principles and they may invalidate an

arbitration clause upon such grounds as exist at law or in equity

for the revocation of any contract") (internal quotations omitted). 

"Thus, generally applicable contract defenses, such as fraud,

duress, or unconscionability, may be applied to invalidate

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arbitration agreements without contravening § 2." Id. Under

California law, "[f]raud, either actual or constructive, is a

sufficient ground for rescission of a contract." Lombardi, 71 Cal.

App. at 279; see also Cal. Civil Code §§ 1688 and 1689.

Here, based on her claims of fraudulent concealment and for

rescission of the Dissolution Agreement, Plaintiff may not be bound

by the arbitration provision in Paragraph 3.15 of the Dissolution

Agreement. 

V. Motion for Sanctions 

Pursuant to Rule 11 of the Federal Rules of Civil Procedure,

Defendant seeks an award of sanctions against Plaintiff's counsel

in the amount of $10,000. Plaintiff argues that the Court should

deny Defendant's motion because Defendant failed to comply with

Rule 11's "safe harbor" and filing provisions. Plaintiff, in turn,

moves for a Rule 11 inquiry into Defendant's counsel's defective

Rule 11 motion. 

 The "safe harbor" provision of Rule 11 requires a party

seeking sanctions to allow the party against whom sanctions are

sought an opportunity to withdraw the challenged pleading or

filing. See Fed. R. Civ. P. 11(c)(1)(A). A motion for sanctions

shall be made separately from other motions and may not be filed

until twenty-one days after it is served upon the other party. Id.

During this time, the party against whom sanctions are sought has

the opportunity to withdraw or "appropriately correct[]" the

challenged filing. Id. Courts have held that the twenty-one day

hold on filing a motion for Rule 11 sanctions is a prerequisite to

recovering sanctions. See Thomas v. Treasury Management

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Association, Inc., 158 F.R.D. 364, 369 (D. Md. 1994). 

Defendant presents no evidence that she has complied with the

safe harbor provision. The "safe harbor" provision is a

prerequisite, non-compliance with which results in the denial of a

Rule 11 motion for sanctions. See Cannon v. Cherry Hill Toyota,

Inc., 190 F.R.D. 147, 158-59 (D. N.J. 1999) (finding that

plaintiff's failure to comply with safe harbor provisions

necessitates a denial of plaintiff's motion for sanctions). 

Accordingly, Defendant's motion for sanctions is denied. 

Plaintiff has also failed to demonstrate that she has complied

with the safe harbor provisions of Rule 11(c)(1)(A). Therefore,

the Court denies Plaintiff's request for Rule 11 sanctions. 

CONCLUSION

 For the foregoing reasons, Defendant's motion to dismiss (Docket

No. 5) is GRANTED in part and DENIED in part, as follows. The

Court denies Defendant's motion to dismiss for lack of subject

matter jurisdiction. The Court grants Defendant's Rule 12(b)(6)

motion to dismiss with respect to Plaintiff's federal claims

involving unlawful interception of her email, and grants the motion

to dismiss Plaintiff's claim under California Penal Code § 632(a),

but denies the motion with respect to Plaintiff's other State law

claims. The Court denies without prejudice Defendant's motion to

compel arbitration, and denies both parties' requests for Rule 11

sanctions. The Court GRANTS Defendant's requests for judicial

notice (Docket Nos. 6 and 19). 

Plaintiff may file a FAC within twenty days of this order if

she can truthfully, and without contradicting her original

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complaint, allege that Defendant intercepted email communications

in temporary, transient electronic storage. If Plaintiff fails to

allege cognizable federal claims, the Court will dismiss the

remaining State law claims for lack of subject matter jurisdiction,

without prejudice to refiling in State court. If Plaintiff chooses

to include in her FAC a claim under California Penal Code § 632(a),

she must allege facts showing that Defendant eavesdropped upon or

recorded a confidential communication. 

IT IS SO ORDERED.

Dated: 12/21/05

 

CLAUDIA WILKEN

United States District Judge

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