Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-02698/USCOURTS-azd-2_06-cv-02698-0/pdf.json

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

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Herbal Care Systems, Inc., et al., 

Plaintiffs, 

vs.

James Plaza, et al., 

Defendants. 

)

)

)

)

)

)

)

)

)

)

)

)

No. cv-06-2698-PHX-ROS

ORDER

Pending before the Court are Defendant James Plaza’s Motion for Summary Judgment

(Doc. 87) and Plaintiffs’ Partial Motion for Summary Judgment (Doc. 89). For the reasons

stated herein, Defendant’s Motion will be granted in part and denied in part, and Plaintiffs’

Motion will be denied. 

BACKGROUND

Herbal Care Systems, Inc. (“HCS”) sold Paraben-Glycol Free (“PG Free”), a

product used in personal hygiene products such as deodorants. Body Blue, Inc. was a

Canadian company that originally developed the formula for PG Free at the request of

HCS. The two companies had an arrangement by which HCS would forward purchase

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 1 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 Plaza states that this happened only sometimes; sometimes purchase orders were routed

directly through Body Blue.

- 2 -

orders to Body Blue, which would then ship the orders to HCS’s customers.1 HCS would

be paid directly by the customers, and then, in turn, pay Body Blue. 

In July of 2004, Plaintiffs William Grundemann and the Oak Leaf Family Trust

entered into a Stock Redemption Agreement with HCS and Body Blue. The agreement

was executed by Defendant James Plaza on behalf of HCS and by David Elliott as

president of Body Blue. In that agreement, HCS and Body Blue agreed that, in exchange

for purchasing the stock of the Plaintiffs in question, Body Blue would:

continue to license its PG Free technology to [HCS] and to manufacture all

products it currently manufactures and use best efforts to offer to

manufacture all new products for [HCS] and its customers for a period of at

least 64 months after the Closing Date and on substantially the same terms

as Body Blue, Inc. currently provides to [HCS].

The parties also agreed that HCS and its principals would not participate in any business

that competes with the business of HCS. 

After execution of the Stock Redemption Agreement, Plaza, Plaintiffs allege,

coordinated with Body Blue to transfer HCS’s purchase orders to a new company owned

by Plaza (though none of these negotiations came to fruition). In 2005, Plaza instructed

HCS’s customers to pay money directly to Body Blue instead of HCS; Plaza states that

those companies had come under new management and preferred to deal with HCS

directly. Either way, HCS was owed royalties from Body Blue pursuant to a Royalty

Agreement between the two companies. Body Blue continued to pay royalties in 2005

but ceased in 2006, strangling HCS’s cash flow. Plaza received a salary from Body Blue

throughout this period.

Shortly thereafter, Body Blue entered receivership in Canada. HCS was not

termed a creditor able to recover any money from Body Blue.

Plaintiffs allege that Plaza’s actions constituted self-dealing and brought a variety

of claims. On May 21, 2008, the parties stipulated to dismiss with prejudice all counts

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 2 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 -

against Plaza except Count 2 (Breach of Contract) and Count 3 (Breach of Fiduciary

Duty). Plaza asks for summary judgment on both claims; Plaintiffs ask for summary

judgment on the question of Plaza’s liability.

STANDARD OF REVIEW

A court must grant summary judgment if the pleadings and supporting documents,

viewed in the light most favorable to the non-moving party, "show that there is no

genuine issue as to any material fact and that the moving party is entitled to a judgment as

a matter of law." Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-

23 (1986). Substantive law determines which facts are material, and "[o]nly disputes over

facts that might affect the outcome of the suit under the governing law will properly

preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 248 (1986). In addition, the dispute must be genuine; that is, "the evidence is such

that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477

U.S. at 248.

“[A] party seeking summary judgment always bears the initial responsibility of

informing the district court of the basis for its motion, and identifying those portions of

the pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of

material fact.” Celotex, 477 U.S. at 323 (internal quotations and citations omitted). The

party opposing summary judgment “may not rest upon the mere allegations or denials of

[the party’s] pleading, but . . . must set forth specific facts showing that there is a genuine

issue for trial.” Fed. R. Civ. P. 56(e); see Matsushita Elec. Indus. Co., Ltd. v. Zenith

Radio Corp., 475 U.S. 574, 586-87 (1986). There is no issue for trial unless there is

sufficient evidence favoring the non-moving party; "[i]f the evidence is merely colorable,

or is not significantly probative, summary judgment may be granted." Anderson, 477

U.S. at 249-50 (citations omitted). However, "[c]redibility determinations, the weighing

of the evidence, and the drawing of legitimate inferences from the facts are jury functions,

not those of a judge." Id. at 255. Therefore, "[t]he evidence of the non-movant is to be

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 3 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 -

believed, and all justifiable inferences are to be drawn in his favor" at the summary

judgment stage. Id. 

CHOICE OF LAW 

A federal court sitting in diversity applies the forum state’s choice of law rules. 

Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Orr v. Bank of Am., 285

F.3d 764, 772 n.4 (9th Cir. 2002). Arizona courts apply the rules set forth in the

Restatement (Second) of Conflicts (1972) (“Restatement”). Bryant v. Silverman, 703

P.2d 1190, 1191 (Ariz. 1985). 

Here, Plaintiffs allege Breach of Fiduciary Duty and Breach of Contract. Section

145(a) of the Restatement states:

The rights and liabilities of the parties with respect to an issue in tort are

determined by the local law of the state which, with respect to that issue,

has the most significant relationship to the occurrence and the parties . . . .

Plaintiffs are Arizona citizens, HCS was located there, and the actions of HCS officers

that led to the present dispute took place there. Neither party argues that another forum’s

law is more appropriate. Accordingly, Arizona law shall be applied to Plaintiffs’ tort

claim.

Section 187 states that “[t]he law of the state chosen by the parties to govern their

contractual rights and duties will be applied” subject to certain exceptions. The Stock

Redemption Agreement, which is the basis for Plaintiffs’ contract claim, specifies that

Arizona law governs the agreement. There has been no suggestion that Arizona law is

inappropriate as per one of the exceptions listed in the Restatement. Arizona law shall be

applied to Plaintiffs’ contract claim. 

ANALYSIS

A. Breach of Contract

Defendant Plaza argues that he is not a party to the Stock Redemption Agreements that

Plaintiffs allege a breach of. Accordingly, he argues, Plaintiffs’ breach of contract claim must be

dismissed. In that agreement, HCS and Body Blue, Inc. agreed that HCS and its principals would

not participate in any business that competes with the business of HCS. It is axiomatic that nonCase 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 4 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 5 -

parties cannot be held liable for breach of contract barring a special showing by Plaintiff that, for

instance, the corporate veil has been pierced. See, e.g., Ixe Banco, S.A. v. MBNA America Bank,

N.A., No. CV-07-0432, 2008 U.S. Dist. Lexis 19806 at * 36 (S.D.N.Y. Mar. 7, 2008) (“[N]onparties cannot be liable for a breach of contract under New York law” as “New York law respects

corporate separateness unless a plaintiff bears the heavy burden of showing that the corporation was

dominated as to the transaction attacked and that such domination was the instrument of fraud or

otherwise resulted in wrongful or inequitable consequences.”) (internal citations and quotations

omitted); Synapsis, L.L.C. v. Evergreen Data Systems, Inc., No. C-05-01524, 2005 U.S. Dist. Lexis

42339 at * 9-10 (N.D. Cal. Jul. 13, 2005); Meeker v. Gray, 492 N.E.2d 508, 515 (Ill. 5th Dist. 1986).

Plaintiffs have made no such showing, instead arguing merely that Plaza interfered with

HCS’s contractual obligations. Accordingly, Plaintiffs’ breach of contract claim fails. 

B. Breach of Fiduciary Duty

Plaza argues that because Plaintiffs Grundemann and Wilhardt (and the associated family

trust) were not shareholders of HCS as of July 31, 2004 – after which the actions taken by Plaza that

would give rise to liability allegedly occurred – they are owed no fiduciary duty. As such, he

argues, they are merely creditors who are owed no duty of this sort unless the corporation was

insolvent. Plaintiffs respond first that no precedent provides that “once a shareholder agrees to sell

his or her stock back to the company, the fiduciary duty of the officers and directors cease . . .,

especially where that company has not even paid the agreed upon purchase price for that stock.”

Second, Plaintiffs argue that even if Plaintiffs are deemed creditors rather than shareholders, Arizona

law provides they are owed a fiduciary duty nonetheless.

The law is fairly clear that former shareholders may not maintain a derivative action against

a corporation. See, A.R.S. § 10-741; Blasband v. Rales, 971 F.2d 1034. 1041 (3d Cir. 1992).

However, Plaintiffs here appear to be bringing a direct action; the law on such actions is less settled.

The general trend, however, appears to be towards refusing to recognize actions for breach

of fiduciary duty by non-shareholders and the implication of that precedent is that former

shareholders are likewise prohibited. The Supreme Court of Delaware has held that no fiduciary

duty is owed to debenture holders as “[b]efore a fiduciary duty arises, an existing property right or

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 5 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

 Conversely, pledgees of stock generally are found to be owed a fiduciary duty. One court

compared pledges to shareholders as follows: 

Beneficial and legal holders would seem to be similarly situated. A pledgee holding

a security interest in corporate shares is a potential shareholder. He has the same

interest and concern as a shareholder that the corporate affairs be managed properly.

If the officers default, the pledgee suffers harm generically not unlike that

experienced by the shareholder.

Gibson v. Manuel, 534 So. 2d 199, 202 (Miss. 1988).

- 6 -

equitable interest supporting such a duty must exist.” Simons v. Cogan, 549 A.2d 300, 304 (Del.

1988). Similarly, a California appellate court, in finding bondholders were owed no fiduciary duty,

distinguished between bondholders and shareholders in that “bondholders have prior but fixed

claims on a firm’s assets, while shareholders have limited liability for the firm’s debts and unlimited

claims on a firm’s assets.” Pittelman v. Pearce, 8 Cal. Rptr. 2d 359, 364 (2d Ct. App. 1992). Nor

do stock options give rise to a fiduciary duty; “[t]he instrument stands alone, claiming no equity in

the corporation, entitled to no vote, and with no fiduciary obligation of the management to the option

holder’s interest.” Starkman v. Warner Comm., Inc., 671 F.Supp. 297, 304 (S.D.N.Y. 1987); see

also, Glinert v. Wickes Co., No. 10407, 1990 Del. Ch. Lexis 42 at * 9; McLaughlin v. Cendent

Corp., 76 F. Supp. 2d 539, 549-50 (D.N.J. 1999).2 

Former shareholders – even ones who have not yet been paid for the stock in question – are

not easily distinguishable from the classes of interest holders discussed above. Their fortunes no

longer rise and fall with those of the corporation, and they are not relying on the sound management

of corporate officers to steady the value of their interest. Instead, they have a ‘prior but fixed claim’

on the firm’s assets. The fact of their recovery may be affected by a corporate manager’s actions,

but a corporate officer is not managing property for the former shareholder in the shareholder’s

stead.

Similar principles prevent creditors from recovering on a claim for breach of fiduciary duty.

There is, however, an exception to this rule. “[W]hen a firm is insolvent, creditors are included in

the class of persons to whom a board of directors owes a fiduciary duty.” Dawson v. Withycombe,

163 P.3d 1034, 1058 (Ariz. Ct. App. 2007) (emphasis added). This duty “is derived from the

corporate form, which exists for the benefit of the creditors as a class when the firm is insolvent.”

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 6 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 7 -

Id. (citing Prod. Res. Group, L.L.C. v. NCT Group, Inc., 863 A.2d 772, 792 (Del. Ch. 2004); A.R.

Teeters & Assoc., Inc. v. Eastman Kodak Co., 836 P.2d 1034, 1041 (Ariz. Ct. App. 1992)). 

Here, there is no suggestion that HCS was insolvent at the time in question. Plaza notes that

it is undisputed that HCS reported a gross profit in 2004 and continued to make payments under the

stock redemption agreements through the early part of 2006. Because the fiduciary duty of insolvent

firms to creditors arises with insolvency itself – i.e., at the point at which the entity exists for the

purpose of discharging, to the fullest extent possible, its debts to creditors – corporate officers

cannot be held liable under a breach of fiduciary duty theory for acts performed prior to the firm’s

insolvency. Accordingly, summary judgment must be granted to Plaza as to Wilhardt, Coghlin,

Grundemann, and Oak Leaf Trust’s Count Three.

C. Limitation of Liability 

Plaza argues that Plaintiffs’ claims are barred by the limitation of liability provision in HCS’s

Articles of Incorporation. That provision states:

To the fullest extent permitted by the Arizona Revised Statutes, as the same exists

or may hereafter by amended, a director of the Corporation shall not be liable to the

Corporation or its stockholders for monetary damages for any action taken or failure

to take any action as a director. No repeal, amendment or modification of this article

whether direct or indirect, shall eliminate or reduce its effect with respect to any act

or omission of a director of the Corporation occurring prior to such repeal,

amendment or modification.

Arizona law allows for such provisions to be present in the articles incorporation, but includes

exceptions for, among other things, financial benefit received by a director to which the director is

not entitled and intentional infliction of harm on the corporation or the shareholders. A.R.S. § 10-

202(B)(1). Plaintiffs argue that those exceptions exclude Plaza’s acts from inclusion under the

statute; Plaza replies that he did not receive a financial benefit to which he was not entitled or

intentionally inflict harm on the corporation or its shareholders.

This provision has never been interpreted by Arizona courts or federal courts sitting under

Arizona law. However, this Court believes it is clear that the exceptions apply to the actions alleged

against Plaza. As to the first, Plaintiffs allege that Plaza allowed HCS’ cash flow to be diverted to

Body Blue, Inc., “a company which would grant Plaza stock and pay Plaza a six-figure salary.” As

to the second, as Plaintiffs’ Breach of Contract claim fails, Plaintiffs allege Breach of Fiduciary Duty

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 7 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 8 -

through breach of the duty of loyalty. This constitutes an intentional tort. Accordingly, Plaintiffs’

remaining claim is not barred by the release of liability provision.

D. Prior Decision of the Ontario Superior Court of Justice

Plaza argues that a decision of the Ontario Superior Court of Justice issued a decision on this

matter in which it “made no finding or reference to Mr. Plaza or any action taken by Mr. Plaza” and

decided that “HCS lost whatever rights it had to PG Free technology because of Body Blue’s

bankruptcy.” This Court, he argues, should grant comity to those findings of fact and conclude that

Plaintiff did not suffer any damages as a result of Plaza entering into a royalty agreement or moving

purchase orders to Body Blue.

While this Court does indeed respect the comity due the Ontario Superior Court of Justice,

that opinion focuses on the rights and liabilities of HCS and Body Blue relating to PG Free. It was

not attempting to determine the rights and liabilities of Plaza vis-á-vis the shareholder plaintiffs here,

nor did the Ontario court make factual findings concerning those issues. 

E. Punitive Damages

Plaza argues that Plaintiffs have not provided the requisite “clear and convincing” evidence

support a claim for punitive damages. 

Punitive damages require a demonstration that the defendant had an “evil mind” and

demonstrated “aggravated and outrageous conduct.” Linthicium v. Nationwide Life Ins. Co.,

723 P.2d 675, 680 (Ariz. 1986). Plaintiff may meet this burden through “indirect and

circumstantial evidence;” courts recognize that direct evidence (i.e., a statement from the

defendant) of an “evil mind” is rare. Thompson v. Better-Bilt Aluminum Prods. Co., 832

P.2d 203, 210 (Ariz. 1992). In a commercial tort context, punitive damages are harder to obtain.

 The Supreme Court has found that punitive damages are more likely to be appropriate where:

 the harm caused was physical as opposed to economic; the tortious conduct evinced

an indifference or a reckless disregard of the health or safety of others; the target of

the conduct had financial vulnerability; the conduct involved repeated actions or was

an isolated incident; and the harm was the result of intentional malice, trickery, or

deceit, or mere accident. The existence of any one of these factors weighing in favor

of a plaintiff may not be sufficient to sustain a punitive damages award; and the

absence of all of them renders any award suspect. 

BMW of North America, Inc. v. Gore, 517 U.S. 559, 575 (1995).

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 8 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

 Plaintiffs do make a conclusory statement that they are financially vulnerable but fail to

make any further showing on this point.

- 9 -

Here, Plaintiffs have provided some evidence tending to support the theory that Plaza

deliberately drew money away from HCS and directed it to Body Blue for his own material benefit.

However, of the factors elucidated in Gore, Plaintiffs have only began to make a showing that the

harm was the result of intentional malice, trickery, or deceit.3

 At least one court considering the issue

has found that the fact that the defendant acted maliciously was not alone enough to find the

defendant’s “behavior was sufficiently reprehensible for an award of punitive damages.” Chi. Title

Ins. Corp. v. Magnuson, 487 F.3d 985, 1000 (6th Cir. 2007). Accordingly, summary judgment must

be granted to Plaza on this point.

F. Plaza’s Liability

Plaintiffs ask for a finding that Plaza violated his duties as a corporate fiduciary as a matter

of law when he executed a Royalty Agreement that “allowed HCS’s only source of cash flow from

its customers to be diverted to Body Blue, Inc..” Plaintiffs have failed to show that there is no

genuine issue of material fact regarding Plaza’s liability, and their motion for summary judgment

cannot be granted.

The business judgment rule “precludes judicial inquiry into actions taken by a director in

good faith and in the exercise of honest judgment in the legitimate and lawful furtherance of a

corporate purpose.” Albers v. Edelson Tech. Partners L.P., 31 P.3d 821, 828 (Ariz. Ct. App. 2001).

Where “there is a prima facie showing that a director is personally interested in a corporate

transaction, the business judgment rule does not apply, and the burden shifts to the director to show

that the decision with respect to a particular transaction is fair and serves the best interest of the

corporation.” Shoen v. Shoen, 804 P.2d 787, 794 (Ariz. Ct. App. 1990). Where “officers and

directors engage in transactions outside the ordinary scope of the corporate business they are

responsible for losses occurring as a result of their unauthorized use.” Kadish v. Phx.-Scotts. Sports

Co., 466 P.2d 794, 797 (Ariz. Ct. App. 1970). “This is especially true where the acts of an officer

or director smack of self-dealing.” Id. 

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 9 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 10 -

Here, it is undisputed that Plaza served on the board of directors of both companies and was

an employee and shareholder of both companies. As he made inquiries to starting a new company

altogether and as he continued to receive a salary from Body Blue at the point at which it entered

insolvency, cutting off HCS’s revenues, there is some evidence of self-dealing. This, the Court

believes, is sufficient to allow judicial inquiry into Plaza’s business actions. However, Plaintiffs

have certainly not overcome any genuine issues of material fact as to whether Plaza’s actions

violated his duty of loyalty to HCS and its shareholders. Plaza has provided evidence that HCS made

more under the Royalty Agreement than it did under its original arrangement, as well as that the

customers themselves prompted the switch, something that might demonstrate Plaza’s actions were

sound business ones. He has also presented evidence that he did not benefit financially from the

arrangements put in place. Whether Plaza breached his fiduciary duty is a question for the trier of

fact.

Accordingly,

IT IS ORDERED Plaza’s Motion for Summary Judgment is GRANTED IN PART and

DENIED IN PART.

IT IS FURTHER ORDERED Plaintiffs’ Motion for Partial Summary Judgment is

DENIED.

IT IS FURTHER ORDERED Plaintiffs’ Count 2 (Breach of Contract) is DISMISSED

with prejudice as to James and Joyce Plaza.

IT IS FURTHER ORDERED Plaintiffs Wilhardt, Coghlin, Grundemann, and Oak Leaf

Trust’s Count 3 (Breach of Fiduciary Duty) is DISMISSED with prejudice as to James and Joyce

Plaza.

IT IS FURTHER ORDERED all Motions in Limine are due 30 days from the date

of this Order. Responses are due ten days afterward.

IT IS FURTHER ORDERED the parties shall submit a Joint Statement of the Case, of no

more than two short paragraphs for the Court’s review no later than May 15, 2009..

IT IS FURTHER ORDERED the parties shall submit proposed Jury Instructions in

compliance with the procedures available on the Court’s website, including but not limited to: a joint

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 10 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 11 -

set of proposed jury instructions where the parties’ instructions agree, a separate set of instructions

(one for each party) where the parties do not agree, and legal authority supporting all proposed

instructions whether the parties agree or not no later than May 15, 2009.

IT IS FURTHER ORDERED the Joint Proposed Pretrial Order is due May 15, 2009.

IT IS FURTHER ORDERED the parties are to file the proposed trial schedule no later than

May 15, 2009.

IT IS FURTHER ORDERED the parties provide the Court with excerpts of the deposition

testimony they propose to present at trial, in compliance with the procedures available on the Court’s

website, including but not limited to: Plaintiffs highlighting in yellow the portions they wish to offer

and Defendants highlighting in blue those portions they wish to offer. If either party objects to the

proposed testimony, an explanation of the objections is to be set forth independently and appended

to the depositions no later than May 15, 2009.

IT IS FURTHER ORDERED the parties shall review the Court’s standard Juror

Questionnaire (available on the Court’s website) and submit NO MORE THAN 5 PROPOSED

QUESTIONS EACH (or 10 jointly) to be added to the standard Juror Questionnaire with the

Court’s approval no later than July 6, 2009.

IT IS FURTHER ORDERED the parties shall submit a second Joint Statement of the Case,

of no more than a few short sentences for the Juror Questionnaire no later than July 6, 2009.

IT IS FURTHER ORDERED a final pretrial conference is set for August 7, 2009 at 1:30

P.M.

IT IS FURTHER ORDERED a status conference is set to review Juror Questionnaires on

August 10, 2009 at 1:30 P.M.

IT IS FURTHER ORDERED Trial is set for August 11, 2009 at 8:30 A.M.

DATED this 17th day of March, 2009.

Case 2:06-cv-02698-ROS Document 98 Filed 03/17/09 Page 11 of 11