Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-01745/USCOURTS-casd-3_18-cv-01745-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:2201 Creation of a Remedy - Declaration of Rights

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

BLACK MOUNTAIN EQUITIES, 

INC., et al.,

Plaintiffs,

Case No. 18-cv-1745-BAS-KSC

ORDER GRANTING 

PLAINTIFFS’ MOTION TO 

DISMISS

[ECF No. 58]

v.

PLAYERS NETWORK, INC.,

Defendant.

This case began in July 2018 when Plaintiffs Black Mountain Equities, Inc. 

and Gemini Special Opportunities Fund, LP filed a Complaint against Defendant 

Players Network, Inc. After much back and forth, in October 2019, Plaintiffs filed 

the operative complaint, the second amended complaint. (ECF No. 48.) Defendant 

filed an answer which included affirmative defenses and a counterclaim. (“Answer 

& CC,” ECF No. 54.) Plaintiffs move to dismiss the fifth through ninth affirmative 

defenses and the counterclaim. (“Mot., ECF No. 58.)

I. Failure to File an Opposition

Plaintiffs’ Motion was noticed for December 30, 2019; thus, any opposition 

would have been due on December 16, 2020. On that day, Defendant’s attorneys

Mr. Ales and Mr. Cabrera instead filed a motion to withdraw as counsel and a motion 

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for extension of time to file responses to Plaintiffs’ pending Motion to Dismiss and 

to motion to compel. (ECF No. 63.) Mr. Ales and Mr. Cabrera claimed that 

Defendant had refused to cooperate with them. (Id. at 2.) Neither counsel was 

willing to continue representing Defendant. (Id. at 3.) Counsel asked to withdraw 

and requested the Court grant an extension for Defendant, unrepresented, to file 

responses to the two pending motions. (Id.)

The Court denied without prejudice the motion to withdraw because 

corporations may appear in federal courts only through licensed counsel. (ECF No. 

64, at 2 (citing cases).) The Court noted that if Defendant “is unable to retain new 

counsel in anticipation of counsel’s withdrawal within the next thirty days, Mr. Ales 

and Mr. Cabrera may file a renewed motion” to withdraw on or before January 21, 

2020. The Court also granted an extension of time to February 3, 2020 for Defendant

to respond to Plaintiffs’ two pending motions.

Since this order, nothing has been filed by Defendant or its counsel. Civil 

Local Rule 7.1.f.3.c. provides “[i]f an opposing party fails to file [an opposition] in 

the manner required by Civil Local Rule 7.1.e.2, that failure may constitute a consent 

to the granting of a motion or other request for ruling by the court.” Thus, Defendant 

has failed to oppose the Motion to Dismiss, and on this ground alone, the Court could 

grant Plaintiffs’ Motion.

II. Analysis

The Court evaluated the contested affirmative defenses, counterclaim, and 

Plaintiffs’ arguments. The fifth affirmative defense broadly asserts that any 

performance by Defendant was excused by the conduct of Plaintiffs. The next three 

defenses assert that the complaint is barred for various reasons: fraud or negligent 

misrepresentations (sixth defense); the doctrine of illegality of contract (seventh 

defense); and the doctrine of unclean hands and “failure to do equity” (eighth 

defense). The ninth affirmative defense asserts that Plaintiffs have acted in bad faith. 

The counterclaim requests a declaratory judgment setting forth “the respective rights, 

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duties and obligations of the parties . . . including determining that [Plaintiffs] have 

damaged Players Network by their wrongful conduct.” (Answer & CC ¶ 20.)

Turning first to the sixth defense (asserting fraud), claims sounding in fraud or 

mistake must comply with the heightened pleading requirements of Federal Rule of 

Civil Procedure 9(b), which requires that, “[i]n alleging fraud or mistake, a party 

must state with particularity the circumstances constituting fraud or mistake. Malice, 

intent, knowledge, and other conditions of a person’s mind may be alleged 

generally.” Rule 9(b) “requires . . . an account of the time, place, and specific content 

of the false representations as well as the identities of the parties to the 

misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007)

(quotation omitted). “To comply with Rule 9(b), allegations of 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) (quotation omitted).

The Court agrees with Plaintiffs that Defendant failed to set forth sufficient

allegations regarding fraud. In fact, there are no supporting allegations behind the 

general claim of fraud; thus, Plaintiffs have been given no notice as to what they have 

done that is allegedly fraudulent. The Court also agrees that Defendant provided 

insufficient information regarding its broad claims of Plaintiffs’ illegality, 

wrongdoing, unclean hands, and bad faith. Defendant provided no factual support 

for these affirmative defenses. Therefore, the Court DISMISSES affirmative 

defenses five through nine for failure to state a claim.

As to the counterclaim, the Court also agrees with Plaintiffs that Defendant’s 

request for declaratory judgment is vague. Defendant claims it is “entitled to have 

this Court enter a declaratory judgment setting forth the respective rights, duties and 

obligations of the parties hereto concerning said allegations, including determining 

that [Plaintiffs] have damaged Players Network by their wrongful conduct.” 

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(Answer & CC ¶ 20.) It is unclear exactly what “wrongful conduct” Defendant 

references, and, as noted above, Defendant’s broad allegations of fraud, illegality, 

and wrongdoing do not state a claim. The same result applies here—without more 

factual allegations, it is unclear exactly what Defendant is seeking.

III. Conclusion

For the foregoing reasons, the Court GRANTS Plaintiffs’ Motion to Dismiss. 

(ECF No. 58.) Defendant MAY file an amended answer (with or without 

counterclaims) on or before March 18, 2020. If Defendant fails to file an amended 

answer by this date, the five affirmative defenses and the counterclaim will be 

stricken with prejudice and Defendant will proceed using its answer as is with the 

certain the material stricken.

IT IS SO ORDERED.

DATED: February 18, 2020

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