Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-02924/USCOURTS-casd-3_13-cv-02924-1/pdf.json

Nature of Suit Code: 490
Nature of Suit: Cable/ Satellite TV
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

J & J SPORTS PRODUCTIONS,

INC.,

Plaintiff,

CASE NO. 13-CV-2924 W (JMA)

ORDER GRANTING THIRDPARTY DEFENDANT DIRECTV’S

MOTION TO DISMISS THIRDPARTY PLAINTIFFS’ FIRST

AMENDED THIRD-PARTY

COMPLAINT [DOC. 60]

v.

SALLY AND HENRY’S DOGHOUSE,

LLC, D/B/A SALLY AND HENRY’S

DOGHOUSE BAR AND GRILL,

Defendant.

______________________________

And Related Cross- and Third-Party

Actions.

Pending before the Court is Third-Party Defendant Directv’s motion to dismiss

the First Amended Third-Party Complaint (“FATPC”) of Third-Party Plaintiffs Marc

Bragg, Cynthia Motsch, and Sally and Henry’s Doghouse, LLC, D/B/A Sally and

Henry’s Doghouse Bar and Grill (“TPPs”). (See MTD [Doc. 60].) The Court decides the

matters on the papers submitted and without oral argument. See Civ. L. R. 7.1(d.1). For

the reasons discussed below, the Court GRANTS Directv’s motion to dismiss the

FATPC. 

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I. BACKGROUND

On April 8, 2014, Plaintiff J&J Sports Productions, Inc. (“J&J”) filed its first

amended complaint (“FAC”), alleging that TPP Sally and Henry’s Doghouse, LLC (“the

Doghouse”) purchased the December 2012 Manny Pacquiao v. Juan Manuel Marquez,

IV Welterweight Fight Program (the “Program”) through an account with satellite

television provider Directv, and wrongfully displayed it at the Sally and Henry’s

Doghouse Bar and Grill restaurant in violation of: (1) J&J’s exclusive rights to the

Program; (2) California Business and Professions Code § 17200; and (3) 47 U.S.C. §§

553, 605. (J&J FAC [Doc. 16], ¶¶ 11, 18–20, 22.) J&J alleges that the Doghouse

“intercepted, published, divulged, and exhibited” the Program—which was allegedly

“blacked out” to businesses without a commercial Directv subscription—at the restaurant

for financial gain without first obtaining permission or a license. (Id. ¶¶ 14–17, 23–24.)

Thereafter, TPPs impleaded Directv by filing the FATPC. (See FATPC [Doc. 42-

1].) According to the FATPC, Directv markets and maintains electronic transmission

equipment for satellite television “Services,” including the Program. (Id. ¶ 4.) The

FATPC further alleges that “[s]ometime in 2012,” Directv solicited TPPs to purchase a

commercial satellite television subscription for the Doghouse. (Id. ¶¶ 2, 6.) Directv then

supplied, installed, and provided all satellite equipment and electronic signals to the

Doghouse. (Id. ¶ 10.) The FATPC appears to allege two alternative scenarios: (1) that

Directv deceivedTPPs byselling them a “residential” satellite television account and later

“relabel[ing] or re-identif[ying]” it as “commercial”; or (2) that Directv registered the

satellite television account as either “residential” or “commercial,” but did not inform

TPPs “how the license rights were characterized . . . when it informed and/or noticed

[J&J] of the existence of the account.” (Id. ¶¶ 8–9, 23–24.) 

In the first scenario, Directv allegedly represented to TPPs that they had a

“commercial” account at the Doghouse, when in fact the account was “residential.”

(FATPC, ¶ 8.) Directv allegedly misrepresented that all content distributed to the Directv

equipment installed at the Doghouse “was properly licensed by Directv with the full

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knowledge and consent of any content provider.” (Id. ¶ 14.) Under this scenario,

Directv and J&J knew of and consented to the airing of the Program at the Doghouse,

even if it was improperly done under a “residential” account, because (1) Directv was

required to report transmission of the Program to J&J, who was required to report

satellite sub-licensees to the fight’s promoter, Top Rank, Inc. (id. ¶ 17); (2) the Program’s

signal authenticity and licensing compliance message on the Directv receiver was digitally

transmitted to Directv and to J&J (id. ¶ 20); (3) J&J provided the digital data required

to transmit the Program to the Doghouse through Directv (id. ¶ 21); and (4) J&J accepted

the license fee from Directv for transmission of the Program to the Doghouse (id. ¶ 22).

In the alternative scenario, TPPs allege that Directv ignored their request for a

“commercial” subscription and designated the satellite television account as something

other than “commercial”—either in knowing concert with J&J to defraud TPPs or in

reckless error. (FATPC, ¶¶ 23–24.) In doing so, Directv did not inform TPPs of the

account’s licensing restrictions, including those that applied to the Program, when it

informed J&J of the existence of the Doghouse’s account. (Id. ¶ 9.)

Under both of the scenarios proffered in the FATPC, TPPs allege that Directv

“pressures its salespeople to increase sales by recklessly creating accounts without

oversight such that commercial accounts are created by incorrectly, if not intentionally”

mischaracterizing commercial accounts in order to entice new subscribers with lower

“residential” fees. (FATPC, ¶¶ 36–37.) According to TPPs, Directv, its employees, and

its agents misrepresent—verbally, in Internet advertising, and in writing—that Directv

distributes content such asthe Programto commercial entities with proper authorization. 

(Id. ¶ 38.) The FATPC describes only one unspecified “specific inquiry” by TPPs to

Directv for the “terms, price, license and availability of the Program and similar programs

for display.” (Id. ¶ 39.)

On January 17, 2013, J&J threatened to file the underlying action within ten days. 

(FATPC, ¶ 27.) However, J&J waited nearly eleven months before filing suit. (Id.) TPPs

claim to have detrimentally relied on J&J’s representations as to the timing of the initial

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action because they entered into new contractual obligations with Directv and now suffer

“significant prejudice” in defending against J&J in the direct action and in preserving the

instant third-party suit against Directv. (Id.) 

TPPs bring six causes of action against Directv: (1) fraud and deceit as to the type

of subscription Directv created for the Doghouse; (2) breach of the implied covenant of

good faith and fair dealing; (3) breach of the warranty of fitness for a particular purpose

under Division II of the California Commercial Code (“CCC”); (4) violation of

California Business and Professions Code § 17500 et seq. based on Directv’s alleged false

advertising; (5) violation of the California Unfair Competition Law (“UCL”), California

Business and Professions Code § 17200 et seq.; and (6) breach of contract. (FATPC, ¶¶

48–103.) Directv filed the instant motion to dismiss all of TPPs’ claims under Federal

Rule of Civil Procedure 12(b)(6). TPPs oppose.

II. LEGAL STANDARD

The Court must dismiss a cause of action that fails to state a claim upon which

relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6)

tests the complaint’s sufficiency. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581

(9th Cir. 1983). All material allegations in the complaint, “even if doubtful in fact,” are

assumed to be true, Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), and the court

must “construe them in the light most favorable to [the non-moving party].” Gompper

v. VISX, Inc., 298 F.3d 893, 895–96 (9th Cir. 2002).

As the Supreme Court explained, “[w]hile a complaint attacked by a Rule 12(b)(6)

motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to

provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and

conclusions, and a formulaic recitation of the elements of a cause of action will not do.” 

Twombly, 550 U.S. at 555 (citations omitted). Instead, the allegations in the complaint

“must be enough to raise a right to relief above the speculative level.” Id. A complaint

may be dismissed as a matter of law either for lack of a cognizable legal theory or for

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insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc.,

749 F.2d 530, 534 (9th Cir. 1984).

Generally, a court may not consider material beyond a complaint when ruling on

a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542,

1555 n.19 (9th Cir. 1990). However, the court may consider any documents specifically

identified in the complaint whose authenticity is not questioned by the parties. Fecht

v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995). “[I]f a document is not attached

to a complaint, it may be incorporated byreference into a complaint if the plaintiff refers

extensively to the document or the document forms the basis of the plaintiff's claim.” 

United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (citations omitted). 

III. DISCUSSION

A. TPPs’ Claim for Fraud and Deceit

Directv contends that TPPs’ claim for fraud and deceit is inadequately pleaded

because it fails to state a claim and fails to meet the heightened pleading requirements

set out in Federal Rule of Civil Procedure 9(b). (MTD 5:24–10:8.) TPPs counter that

they have pleaded their fraud and deceit claim with the requisite particularity. (Opp’n,

6:17–7:7.) Alternatively, TPPs allude to additional relevant facts not contained within

the FATPC, and request that the Court grant them leave to amend to include such facts

in an amended third-party complaint. (Id. 5:22–6:16.)

According to California law, the elements of a fraud claim include: (1) a false

representation; (2) knowledge of its falsity; (3) intent to defraud; (4) justifiable reliance;

and (5) damages. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1105 (9th Cir. 2003)

(citations omitted). The FATPC alleges that Directv made “express written

representations regarding the type of the account it created for [TPPs] and/or the

Doghouse.” (FATPC, ¶ 49.) It also alleges that Directv later continued to make “written

and verbal representations including those relating to the license rights it claimed to be

authorized to sell and/or sub-licenses it could grant in connection with the Program.” 

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(Id.) These representations were allegedly false because they misled TPPs as to the true

classification of their Directv account as either “residential” or “commercial.” (See, e.g.,

¶¶ 7–9, 14.) TPPs allege that the representations were “knowingly false and/or made

with reckless disregard of the[ir] truth or falsity.” (Id. ¶ 49.)

Insofar asintent to defraud and justifiable reliance are concerned, TPPs allege that

the purported misrepresentations were made for the purpose of “creating greater profits

for [Directv].” (FATPC, ¶ 49.) TPPs further allege that “Directv intended to and did

cause [TPPs] and/or the Doghouse to justifiably rely on its express written and verbal

representations that the account was commercial when it induced them to believe they

were authorized and properly licensed to display the Program at the Doghouse.” (Id. ¶

54.) Directv’s conduct was allegedly carried out “knowingly and maliciously because it

knew that the Doghouse was a new small business and that it did not have sufficient

financial resources to pay a license fee higher than the amount that Directv promised .

. . the Program would cost pursuant to the subscription agreement and license Directv

had issued.” (Id. ¶ 58.) As to damages, TPPs allege to “have been damaged” as a “direct

and proximate result of Directv’s fraud and deceit.” (Id. ¶ 57; see also ¶¶ 32, 69 (alluding

to costs incurred by TPPs as a result of the underlying claims against the Doghouse).) 

Still, the mere pleading of the elements of a fraud and deceit claim is insufficient

to survive the instant motion. Under Rule 9(b), a party alleging fraud “must state with

particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b); see

Vess, 317 F.3d at1102 (noting that “[r]ule 9(b)’s particularity requirement applies to

state-law causes of action”). Accordingly, such party must allege the “time, place, and

specific content” of the fraud, as well as “the identities of the parties to the

misrepresentation.” Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393,

1401 (9th Cir. 1986). In addition to the “who, what, when, where, and how” of the

alleged fraud, a plaintiff “must [also] set forth what is false or misleading about a

statement, and why it is false.” Vess, 317 F.3d at 1106 (citations and internal quotation

marks omitted). Allegations of fraud that are pleaded with particularity “give defendants

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notice of the particular misconduct . . . so that they can defend against the charge and

not just deny that they have done anything wrong.” Kearns v. Ford Motor Co., 567 F.3d

1120, 1124 (9th Cir. 2009) (citations and internal quotation marks omitted).

Here, the Court agrees with Directv that TPPs have failed to satisfy the pleading

standards of Rule 9(b). TPPs generally allege that Directv made “express written

representations regarding the type of account it created for [TPPs] and/or the

Doghouse.” (FATPC, ¶ 49.) Later, Directv allegedly continued to make “written and

verbal representations including those relating to the license rights it claimed to be

authorized to sell and/or sub-licenses it could grant in connection with the Program.” 

(Id.; see also id. ¶¶ 54–56.) 

These general allegationsfall short because they fail to describe the timing, source,

or specific content of a single fraudulent representation. See Vess, 317 F.3d at 1102;

Schreiber, 806 at 1401. The FATPC does not specify a single statement from any Directv

employee or representative, and does not allege which specific statements TPPs relied

upon or when they were exposed to them. See Kearns, 567 F.3d at 1126. In fact, TPPs

tacitly admit that the FATPC falls short in this regard, vowing to “add more particular

facts by reference to the Directv invoices” if granted leave to amend. (Opp’n, 7:6–7.)

In addition to the latter generalized allegations, TPPs also attempt to allege specific

instances of fraud by Directv. However, each of these allegations falls short of Rule 9(b)’s

requirements because each fails to allege the “who, what, when, where, and how” of the

alleged fraud. See Vess, 317 F.3d at 1106. For instance, the FATPC alleges that

“sometime in 2012,” Directv solicited TPPs to “apply for, purchase, and subscribe to a

commercial account” for the Doghouse. (FATPC, ¶ 6.) Yet, TPPs do not specifically

allege that Directv made any misrepresentations during this solicitation. (Id.) It may be

the case that TPPs have attempted to allege that “sometime in 2012” Directv fraudulently

represented that it would create a commercial account at the Doghouse, but in fact

created a residential account. But even with this generous interpretation, the claim

nonetheless fails to satisfy the pleading requirement for two reasons. 

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First, the FATPC does not identify who made these alleged misrepresentations.

This deficiency is perplexing seeing that, in their opposition, TPPs explain that they are

privy to, and would supplement their claims with, the names and employee numbers of

all “Directv employees that represented the account was commercial” if granted leave to

amend. (Opp’n, 6:5–10 (providing specific names and employee numbers).) Second,

TPPs also fail to identify when the fraud occurred, merely alleging that the

misrepresentations continued from “the time the subscription for the Services was

created”—presumably sometime in 2012—and beyond. (FATPC, ¶ 13.) Therefore,

because TPPs fail to identify who made the alleged misrepresentations and when they

made them, TPPs fraud and deceit claim is insufficient under Rule 9(b).

TPPs also allege that the Directv installation technician who visited the Doghouse

somehow misrepresented the establishment’s account type or programming restrictions

despite knowing that the Doghouse was “obviously commercial.” (FATPC, ¶¶ 35,

50–54.) Yet, TPPs do not provide any information as to the identity of the technician,

1

the date of the installation, or anyspecificrepresentations that were made. The FATPC

further states that after the installation, a screen located on the Directv equipment

installed at the Doghouse displayed a message indicating that the Doghouse was

authorized to receive the transmitted signal—including the Program. (Id. ¶ 20.) However,

TPPs do not describe the on-screen message, when or how often it occurred, or when

they noticed or heeded its information. (Id.) Thus, TPPs’ installation and display

allegations are likewise insufficient under Rule 9(b). See Vess, 317 F.3d at 1106. 

Finally, TPPs allege that Directv misrepresented its services during one “specific

inquiry” that Doghouse made to Directv for “the terms, price, license and availability of

the Program and similar programs for display.” (Id. ¶ 39.) Further details regarding this

The Court recognizes that a plaintiff may not be required to provide this information

1

where such plaintiff lacks personal knowledge of all the underlying facts. See Moore v. Kayport

Package Exp., Inc., 885 F.2d 531, 540 (9th Cir. 1989) (noting that the requirements of Rule 9(b)

“may be relaxed as to matters within the opposing party’s knowledge”). Here, however, as noted

above, TPPs appear to possess such information. (See Opp’n, 6:5–10.) 

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“specificinquiry”—such as the date, the identity or title of the Directv representative, the

substance of the conversation, or whether the inquiry was made telephonically or in

person—are lacking. These allegations do not include the “time, place, and specific

content” of the fraud, nor “the identities of the parties to the misrepresentation.” See

Schreiber, 806 F.2d 1393, 1401. 

In light of the above, TPPs have not stated their fraud claim with sufficient detail

to satisfy Rule 9(b), and it cannot be said that Directv has been given sufficient notice of

the alleged misconduct to effectively investigate or respond to TPPs’ fraud and deceit

claim. See Kearns, 567 F.3d at 1126. Accordingly, the Court GRANTS Directv’s

motion to dismiss Count I of the FATPC WITH LEAVE TO AMEND.

2

B. TPPs’ Claim for Breach of Warranty of Fitness for a Particular Purpose

TPPs allege that Directv breached the warranty of fitness for a particular purpose,

under § 2315 of Division II of the California Commercial Code, because Directv was

required to sell the satellite television subscription “with a warranty against infringement

on the intellectual or other property rights of other parties.” (FATPC, ¶¶ 68–69.) TPPs

also contend that because the Doghouse account was “commercial,” as opposed to

“residential” as Directv claims, the CCC applies. (Opp’n, 5:18–22.) Directv argues that

the CCC is irrelevant here because it applies only to the sale of goods. (MTD, 15:1–28,

16:1–2.) The Court agrees with Directv.

Division II of the CCC “applies to transactions in goods.” Cal. Com. Code §

2102. Under the Code, “goods” are defined as “all things (including specially

manufactured goods) which are movable at the time of identification to the contract for

sale.” Cal. Com. Code § 2105(1). If a transaction involves both goods and services, the

court must determine whether the transaction of goods “predominates” or is merely

Dismissals under 9(b) “should ordinarily be without prejudice” and the court should 2

allow leave to amend “unless the district court ‘determines that the pleading could not possibly

be cured by the allegation of other facts.’” Bly-Magee v. California, 236 F.3d 1014, 1019 (9th

Cir. 2001) (quoting Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000)).

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“incidental” by looking to the “essence of the agreement.” See, e.g., RRX Indus., Inc. v.

Lab-Con, Inc., 772 F.2d 543, 546–47 (9th Cir. 1985). 

Based on the allegations in the FATPC, TPPs’ agreement with Directv was one for

services, not goods. (See FATPC, ¶ 4.) For example, the FATPC concedes that the

agreement with Directv pertained to a “subscription” for satellite television

programming. (Id.) And, in explaining Directv’s business activities, TPPs specifically

refer to those activities as the “Services.” (Id.) TPPs also allege that the equipment

installed at the Doghouse—and through which the programming was sent to the

Doghouse—belonged to Directv. (See id. ¶¶ 10, 17.) Such equipment would have been

useless without Directv’s satellite television services. (See, e.g., id. ¶¶ 4, 10.) That is, the

Directv equipment was merely “incidental” to the underlying agreement, as it served as

a mechanism through which Directv could provide its programming services to the

Doghouse. See RRX, 772 F.2d at 546–47. Thus, the FATPC demonstrates that the

predominant purpose of the agreement between TPPs and Directv was to provide a

service. It follows that the CCC does not apply in this instance. 

Accordingly, the Court GRANTS Directv’s motion to dismiss Count III of the

FATPC for breach of the warranty of fitness for a particular purpose WITHOUT

LEAVE TO AMEND.

3

C. TPPs’ Claim for Breach of Contract

The FATPC alleges that TPPs entered into a contract with Directv to pay for

satellite television services—specifically, “programming and digital transmissions to the

[Doghouse].” (FATPC, ¶¶ 99–100.) The FATPC further alleges that Directv breached

the contract because the Program was not “properly licensed” for display at the

TPPs contend that “the UCC does apply here because the [FATPC] allegesthe Doghouse

3

account was commercial and not residential.” (See Opp’n, 5:18–19 (emphasis added).) This

distinction is immaterial to TPPs’ CCC claim because the Code’s provisions apply only to

transactions involving goods, regardless of whether an agreement is referred to as “commercial”

or “residential.” See Cal. Com. Code § 2102.

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Doghouse, causing TPPs to violate J&J’s licensing rights in the Program. (Id. ¶ 101.)

Directv argues that TPPs fail to identify any contract or any term of the alleged contract

that Directv breached. (MTD, 10:16–26.) 

1. The contract

Under California law, the elements required for a breach of contract claim are: (1)

a contract; (2) the plaintiff’s performance; (3) the defendant’s breach; and (4) damage to

the plaintiff. McDonald v. John P. Scripps Newspaper, 210 Cal. App. 3d 100, 104

(1989) (citation omitted). “Under the federal rules, a plaintiff may set forth the contract

verbatim in the complaint or plead it, as indicated, by exhibit, or plead it according to

its legal effect.” Boland, Inc. v. Rolf C. Hagen (USA) Corp., 685 F. Supp. 2d 1094, 1102

(E.D. Cal. 2010) (citations and internal quotation marks omitted). 

Directv argues that the FATPC fails to “identify a particular contract or breach

and thus fails to allege a contractual relationship.” (MTD, 11:16–18.) TPPs counter that 

“[b]y alleging that Directv created the account, provided, billed and was paid for the

services, [TPPs] have at the least reasonably inferred the basic subject matter of the

commercial contract between the parties.” (Opp’n, 4:1–3.) Although the contract-related

allegations in the FATPC are inartfully pleaded, they do appear to allege the legal effect

of a contract between the parties—albeit in a rudimentary sense.

According to the FATPC, “some or all of [TPPs] had a contract with Directv for

satellite television service, and for purchase of the Program.” (FATPC, ¶ 99.) The

FATPC then alleges that “[t]he contract expressly and/orconstructivelyrequired Directv

to provide for programming and digital transmissions to the 3515 5th Avenue address

that were paid for by [TPPs] and/or the Doghouse.” (Id. ¶ 100.) Thus, as currently

pleaded, the FATPC alleges the existence of a contract that required Directv to provide

satellite television programming to TPPs in exchange for payment.

//

//

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2. The FATPC’s allegations of the specific contract terms and breach thereof

Next, Directv contends that “Doghouse’s breach of contract claim fails because it

fails to point to a term of the contract that was breached [by] Directv.” (MTD, 10:14–15;

see also Reply [Doc. 72], 5:6–9.) TPPs’ response to this point is confusing. In their

opposition, TPPs contend that whether their contract with Directv was a commercial

contract or a residential contract is a disputed issue of material fact. (Opp’n, 4:9–11.)

TPPs further contend that the “Directv Customer Agreement” attached to Directv’s

motion does not constitute the parties’ agreement. (See id. at 4 n.2 (citing Ex. A to Raney

Decl. [Doc. 60-2]).) TPPs seem to have missed the point. 

As mentioned above, a plaintiff bringing a breach of contract claim in federal

court “may set forth the contract verbatim in the complaint or plead it, as indicated, by

exhibit, or plead it according to its legal effect.” Boland, Inc., 685 F. Supp. 2d at 1102

(E.D. Cal. 2010) (citations and internal quotation marks omitted). In order to

adequately plead a contract by its legal effect, a plaintiff must allege the substance of its

relevant terms. N. Cnty. Commc’ns Corp. v. Verizon Global Networks, Inc., 685 F.

Supp 2d 1112, 1122 (S.D. Cal. 2010) (citing McKell v. Wash. Mut., Inc., 142 Cal. App.

4th 1457, 1489 (2006). Thus, “[t]he complaint must identify the specific provision of the

contract allegedly breached bythe defendant.” Donohue v. Apple, Inc., 871 F. Supp. 2d

913, 930 (N.D. Cal. 2012) (citation omitted). Moreover, to determine if the plaintiff has

sufficiently alleged a breach, courts examine the terms of the agreement in conjunction

with the plaintiff’s allegations as to what the defendant did or did not do. See Lyons v.

Coxcom, Inc., 718 F. Supp. 2d 1232, 1238–39 (S.D. Cal. 2009). 

Here, as Directv points out, the FATPC merely alleges that Directv and TPPs had

a contract “for satellite television service, and for purchase of the Program,” and that the

contract “expressly and/or constructively required Directv to provide for programming

and digital transmissions to the 3515 5th Avenue address that were paid for by [TPPs]

and/or the Doghouse.” (FATPC, ¶¶ 99–100.) The FATPC does not allege that Directv

breached this term. Instead, it alleges that “Directv breached the parties’ contract in a

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manner that directly and/orsubstantiallycaused [TPPs] to allegedly violate [J&J’s] license

rights, the foreseeable consequences of which was Plaintiff[’s] institution of this lawsuit.” 

(Id. ¶ 101.) However, the latter allegation is not linked to any specific provision of the

contract that Directv is alleged to have breached. See Donohue, 871 F. Supp. 2d at 930. 

Thus, the FATPC fails to provide a clear factual basis for the Court to determine what

Directv did or did not do vis-à-vis the alleged contract.

4

Accordingly, the Court GRANTS Directv’s motion to dismiss Count VI of the

FATPC for breach of contract WITH LEAVE TO AMEND.

D. TPPs’ Claim for Breach of the Implied Covenant of Good Faith and Fair

Dealing

In the FATPC, TPPs allege that Directv breached the implied covenant of good

faith and fair dealing by creating the wrong type of account for the Doghouse, by failing

to prevent the Doghouse from allegedly infringing upon the rights of J&J, and by

representing to TPPs that the Doghouse had a lawful right to air the Program. (FATPC,

¶ 63.) In its motion, Directv contends that TPPs’ claim for breach of the implied

covenant must fail even if TPPs have identified a contract because Directv did not fail

to perform any of its contractual obligations. (See id. 13:9–14:7.) TPPs counter that the

FATPC in fact alleges a breach of the implied covenant after formation of the contract

because the FATPC “alleges that Directv continued to falsely represent that the

The FATPC generally “incorporate[s] all prior allegations and responses in [TPPs’] 4

Answer, Affirmative Defenses, and Counterclaim filed at the above docket number at this point

in full.” (FATPC, ¶ 2.) TPPs’ blanket incorporation of all such prior allegations is far from

specific, and the Court declines to scour the record to infer which contract, if any, Directv

breached. Eventually, in their opposition to the instant motion, TPPs refer to three exhibits

attached to their own motion to dismiss Directv’s counterclaim, which they claim to be the

operative agreements. (Opp’n, 4 n. 2.) However, these documents are not cited or mentioned in

the FATPC. Therefore, because TPPs incorporate materials beyond the FATPC that are not

specificallyidentified and whose authenticity may be in dispute, the Court willnot examine these

documents to look for the existence of a contract to supplement TPPs inartfully pleaded claim.

See Hal Roach Studios, 896 F.2d at 1555 n.19; Fecht, 70 F.3d at 1080 n.1. 

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Doghouse account was commercial in nature and/or was authorized to receive all

programming and programs provided by Directv.” (Opp’n, 5:13–17.) Directv has the

better of the argument.

5

The implied covenant of good faith and fair dealing is read into every contract and

requires that parties “not to do anything which will deprive the other parties thereto of

the benefits of the contract.” Harm v. Frasher, 181 Cal. App. 2d 405, 417 (1960)

(citations omitted). A breach of this obligation requires “something beyond breach of

the contractual duty itself.” Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. App.

3d 1371, 1394 (1990) (citation and internal quotation marks omitted). However, an

action for breach of a contract’s implied covenant of good faith and fair dealing is

“limited to assuring compliance with the express terms of the contract, and cannot be

extended to create obligations not contemplated by the contract.” Pasadena Live, LLC

v. City of Pasadena, 114 Cal. App. 4th 1089, 1094 (2004) (emphasis in original) (citation

omitted). For example, in Coxcom, the court dismissed a claim for breach of the implied

covenant of good faith and fair dealing against an Internet service provider because the

plaintiff failed to state a breach of contract claim. 718 F. Supp. 2d at 1239. The court

held that under California law, where a plaintiff’s claim for breach of contract fails, “her

claim for breach of the implied covenant must also fail.” Id. 

Here, TPPs have failed to adequately allege that Directv violated any specificterm

of the contract. Because TPPs have failed to identify a single express contractual term

that Directv allegedly violated, TPPs’ claim for breach of the implied covenant must fail,

As Directv points out, a claim for breach of the implied covenant of good faith and fair 5

dealing can sound in tort. (MTD, 14:8–23.) Here, the Court examines only a contract-based

theory because (1) TPPs plead a breach of the implied covenant only in connection with the

contract (see Opp’n, 5:13–14), and (2) because a tort claim for breach of the implied covenant

generally requires that “parties [be] in a ‘special relationship’ with ‘fiduciary characteristics,’”

which TPPs do not allege. See Saldate v. Wilshire Credit Corp., 268 F.R.D. 87, 106 (E.D. Cal.

2010) (quoting Pension Trust Fund v. Fed. Ins. Co., 307 F.3d 944, 955 (9th Cir. 2002)).

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as it would otherwise “extend[] to create obligations not contemplated by the contract”

at issue in this case. See Pasadena Live, LLC, 114 Cal. App. 4th at 1094.

Accordingly, the Court GRANTS Directv’s motion to dismiss Count II of the

FATPC for breach of the implied covenant of good faith and fair dealing WITH LEAVE

TO AMEND. 

E. TPPs Claim Under California’s False Advertising Law6

In Count IV of the FATPC, TPPs assert a claim under California Business and

Professions Code §§ 17500 et seq.—also known as California’s False Advertising Law

(“FAL”). (FATPC, ¶¶ 73–79.) Directv’s challenge to TPPs’ FAL claim is two-pronged. 

First, Directv argues that TPPs have failed to state an FAL claim because they did not

plead sufficient detail about the offending advertisements or sales materials. (MTD,

17:21–18:15.) Second, Directv contends that TPPs’ FAL claim sounds in fraud, and

therefore must be pleaded with particularity under Rule 9(b). (Id. 18:16–26.)

As an initial matter, and as Directv points out in its reply brief, TPPs’ opposition

fails to address Directv’s FAL-related arguments. (See Reply, 7:9–13.) This deficiency

alone would support a dismissal of the FAL claim. See Johnson v. Homecomings Fin.,

2010 WL 3075189, *3 (S.D. Cal. Aug. 5, 2010) (citing City of Arcadia v. EPA, 265 F.

Supp. 2d 1142, 1154 n.16 (N.D. Cal. 2003)) (plaintiff’s failure to address defendant’s

arguments set forth in a motion to dismiss resulted in waiver of any opposition thereto). 

Nevertheless, the Court will briefly address the deficiencies of the FAL claim below. 

“The FAL proscribesthe dissemination of statements that are ‘untrue, misleading,

and which is known, or which by the exercise of reasonable care should be known, to be

untrue or misleading.’” In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection

HDTV Television Litigation, 758 F. Supp. 2d 1077, 1093 (S.D. Cal. 2010) (quoting Cal.

Count IV of the FATPC is entitled “California Unfair Practices Act & Fraud in 6

Advertising.” However, under thiscount, the FATPC only alleges violations of California’s False

Advertising Law (“FAL”), California Business and Professions Code § 17500 et seq. Thus, the

Court’s discussion is limited to the violations of the FAL alleged in Count IV.

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Bus. & Prof. Code § 17500). “This provision has been interpreted broadly to embrace

not only advertising which is false, but also advertising which although true, is either

actually misleading or which has a capacity, likelihood or tendencyto deceive orconfuse

the public.” Id. (citations and internal quotation marks omitted). 

FAL claims are subject to the notice pleading standards set forth in Federal Rule

of Civil Procedure 8(a), which require that claims be alleged with “reasonable

particularity.” In re Sony, 758 F. Supp. 2d at 1093 (citations and internal quotation

marks omitted) (dismissing a plaintiffs’ FAL claim under both Rule 9(b) and “Rule 8’s

more lax pleading standards” because the complaint “failed to identify specific

advertisements, when and where they were shown, or why they were untrue or

misleading”). Where a plaintiff alleges fraud as a basis for a violation of the FAL,

however, the fraud must be alleged with the requisite particularity under Rule 9(b). Id.

Here, the FATPC fails to identify any specific advertisements and fails to allege

when they were distributed or publicized. See 758 F. Supp. 2d at 1093. Instead, TPPs

refer generally to “paper advertisements and advertisements over the Internet” wherein

Directv “failed to disclose that [its] sale of the Program required a separate, hidden

license fee. (FATPC, ¶¶ 73–79.) Without the “reasonable particularity” required of

TPPs’ pleading under Rule 8(a), Directv is without adequate notice of the purportedly

misleading advertising. See id. In other words, because TPPs have not alleged “the

underlying element” of a false advertising claim—that is, a specific advertisement—their

FAL claim is insufficient. VP Racing Fuels, Inc. v. Gen. Petroleum Corp., 673 F. Supp.

2d 1073, 1088 (E.D. Cal. 2009) (“The underlying element of a false advertising claim is

some type of advertising statement.”). 

Moreover, as Directv points out, the caption of Count IV of the FATPC includes

the phrase “Fraud in Advertising.” (FATPC, 20:11–12 (emphasis added).) Additionally,

some of the allegations under the FAL claim—as well as many other allegations

incorporated into the FAL claim byreference—allege fraudulent acts on behalf of Directv. 

(See FATPC, ¶¶ 33–35, 42, 49, 56, 58, 87, 78–79.) Under Rule 9(b), these allegations

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of fraud “must state with particularity the circumstances constituting fraud or mistake.” 

Fed. R. Civ. P. 9(b). However, similar to the Court’s explanation above with regard to

TPPs’ claim for fraud and deceit, the allegations of fraud relating to the FAL claim fail

to state the “time, place, and specific content” of the purported fraud. 

Accordingly, the Court GRANTS Directv’s motion to dismiss Count IV of the

FATPC for violation of the FAL WITH LEAVE TO AMEND.

F. TPPs’ UCL Claim

Lastly, Directv contends that TPPs’ UCL claim fails because such a claim requires

an underlying wrong, and TPPs have failed to “satisfy this threshold requirement.” 

(MTD, 7:14–18 (citing Jensen v. Quality Loan Serv. Corp., 702 F. Supp. 2d 1183,

1199–1200 (E.D. Cal. 2010).) TPPs’ opposition to Directv’s UCL-related contentions

is virtually non-existent. (See Opp’n, 5:5–7.)

The UCL prohibits “any unlawful, unfair or fraudulent business act or practice

and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code §

17200. “Because the statute is written in the disjunctive, it applies separately to business

acts or practices that are (1) unlawful, (2) unfair, or (3) fraudulent,” Jensen, 702 F. Supp.

2d at 1199 (citing Pastoria v. Nationwide Ins., 112 Cal. App. 4th 1490, 1496 (2003),

meaning that each of these prongs “‘is a separate and distinct theory of liability.’” Id.

(quoting Kearns, 567 F.3d at 1127). 

With regard to the “unlawful” prong, the UCL “borrows violations of other laws”

and makes them “independently actionable.” Cel-Tech Commc’ns, Inc. v. L.A. Cellular

Tel. Co., 20 Cal.4th 163, 180 (1999) (citations and internal quotation marks omitted). 

The “unfair” prong prohibits any business act or practice that is contrary to “established

public policy or . . . is immoral, unethical, oppressive or unscrupulous and causes injury

to consumers which outweighs its benefits.” McKell, 142 Cal. App. 4th at 1473

(citations omitted). Alternatively, a claim under the “unfair” prong must “be tethered

to specific constitutional, statutory, or regulatory provisions.” Holomaxx Techs. v.

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Microsoft Corp., 783 F. Supp. 2d 1097, 1108 (N.D. Cal. 2011) (citation and internal

quotation marks omitted). As to the “fraudulent” prong, fraudulent acts actionable

under the UCL are defined as acts likely to deceive members of the public. Sybersound

Records, Inc. v. UAV Corp., 517 F.3d 1137, 1152 (9th Cir. 2008) (citation omitted). 

Claims asserted under the “fraudulent” prong must comport with the pleading standards

of Rule 9(b). See, e.g., Kearns, 567 F.3d at 1122.

The FATPC alleges, inter alia, that Directv violated, and continues to violate, the

UCL by intentionally misrepresenting or improperly designating the classification of its

customers’ accounts, as well as concealing terms or details regarding licensing rights for

variouscontent that Directv provides to its customers. (FATPC, ¶¶ 81–93.) The FATPC

further alleges that Directv, along with J&J, has “created a strict pricing model for the

licensing of the Program which . . . confuses the general public as a result of the

concealed terms and license rights [and] inhibits competition in the marketplace.” (Id.

¶ 92.) Despite these allegations, TPPs’ UCL claim fails for the following reasons.

To the extent that the FATPC attempts to bring a claim under the “unlawful”

prong, TPPs have failed to state any of their above-discussed claims against Directv, and

they and have not alleged a violation of any other provision of law. Thus, no underlying

unlawful act exists for the UCL to “borrow.” To the extent that TPPs attempt to bring

a claim under the “fraudulent” prong, the FATPC fails to plead the alleged fraud with

the requisite particularity under Rule 9(b) as discussed above. 

To the extent that TPPs attempt to bring a claim under the “unfair” prong, TPPs

do not make mention of a specific established public policy. TPPs also fail to explain

how Directv’s alleged conduct is immoral, unethical, oppressive or unscrupulous in

manner injurious to consumers, or how such conduct outweighs its benefits. (See, e.g.,

FATPC, ¶ 94 (stating formulaically that “[t]he anticompetitive effect of this restraint

outweighs any beneficial effect on competition”). Moreover, TPPs have not tethered

their UCL claim to a specific constitutional, statutory, or regulatory provision. 

//

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Accordingly, the Court GRANTS Directv’s motion to dismiss Count V of the

FATPC for violation of the UCL WITH LEAVE TO AMEND. 

III. CONCLUSION & ORDER

For those reasons stated above, the Court GRANTS Directv’s motion to dismiss

the FATPC (Doc. 60) WITHOUT LEAVETOAMEND Count III, and WITH LEAVE

TO AMEND Counts I, II, IV, V, and VI. If TPPs choose to file a second amended thirdparty complaint, they must do so on or before September 7, 2015

IT IS SO ORDERED.

DATED: August 7, 2015

Hon. Thomas J. Whelan

United States District Judge

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