Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-04632/USCOURTS-cand-3_04-cv-04632-23/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1961 Racketeering (RICO) Act

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For the Northern District of California

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States District C

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For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO BAY AREA RAPID

TRANSIT DISTRICT,

Plaintiff,

 v.

 WILLIAM D. SPENCER, et al.,

Defendants.

 /

No. C 04-04632 SI

ORDER RE: PLAINTIFF’S

APPLICATION FOR LEAVE TO FILE

MOTION FOR RECONSIDERATION

Plaintiff has filed an application for leave to file a motion for reconsideration of the Court’s order

granting defendants’ motion for summary judgment on plaintiff’s fourth claim for relief (unjust

enrichment). For the following reasons, the Court GRANTS plaintiff’s application for leave to file. 

In the Northern District of California, no motion for reconsideration may be brought without

leave of court. See Civil L.R. 7-9(a). Civil Local Rule 7-9(b) provides, in pertinent part:

The moving party must specifically show: 

(1) That at the time of the motion for leave, a material difference in fact or law exists

from that which was presented to the Court before entry of the interlocutory order for

which the reconsideration is sought. The party must also show that in the exercise

of reasonable diligence the party applying for reconsideration did not know such fact

or law at the time of the interlocutory order; or 

(2) The emergence of new material facts or a change of law occurring after the time

of such order; or 

(3) A manifest failure by the Court to consider material facts or dispositive legal

arguments which were presented to the Court before such interlocutory order. 

 

See Civil L.R. 7-9(b). Moreover, the motion may not repeat any oral or written argument made by the

moving party in support of or opposition to the interlocutory order of which the party seeks

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reconsideration. See Civil L.R. 7-9(c).

Plaintiff argues that the Court failed to consider the principles of unjust enrichment that plaintiff

advanced in opposition to defendants’ motion for summary judgment. The Court disagrees. The Court

applied the California state law test for unjust enrichment, which is: “To state a claim for unjust

enrichment, a plaintiff must allege: (1) receipt of a benefit; and (2) unjust retention of the benefit at the

expense of another.” Sigma Dynamics, Inc. v. E. Piphany, Inc., No. C-04-569, 2004 U.S. Dist. LEXIS

24261, at *1, *15 (N.D. Cal. May 21, 2004); see also Lectrodryer v. Seoulbank, 77 Cal. App. 4th 723,

726 (Cal. Ct. App. 2000) (“the elements for a claim of unjust enrichment [are] receipt of a benefit and

unjust retention of the benefit at the expense of another.” (citing cases)). Plaintiff’s opposition focused

on the principle that a plaintiff need not have suffered any loss to recover from a defendant for unjust

enrichment. Quoting Unilogic, Inc. v. Burroughs Corp., 10 Cal. App. 4th 612 (Cal. Ct. App. 1992),

plaintiff argued that “[i]n some situations, a benefit has been received by the defendant but the plaintiff

has not suffered a corresponding loss, or in some cases, any loss, but nevertheless the enrichment of

defendant would be unjust. . . . In such cases, the defendant may be under a duty to give to the plaintiff

the amount by which he has been enriched.” Id. at 628 (emphasis added). The Court did not, and does

not, find fault with this principle. However, plaintiff failed to establish that this case falls within “such

cases” where an unjust enrichment claim “may be” appropriate absent a showing of damages. Plaintiff

cited no analogous case law, no analogous illustrations from the Restatement of Restitution, and nothing

to suggest that under California law an owner, who cannot show damages, may recover under a theory

of unjust enrichment from a defendant who fraudulently obtained a subcontract. 

Plaintiff has now somewhat clarified its theory of unjust enrichment, citing a New Jersey

Supreme Court case holding “that when a public contract is obtained by bribing a public official, the

public entity is entitled to the gross profits obtained by the wrongdoer,” under a theory of unjust

enrichment, regardless of “whether the [public entity] suffered damages.” County of Essex v. First

Union Nat’l Bank, 891 A.2d 600, 607 (N.J. 2006). Plaintiff argues that California courts, if presented

with the issue, would rule the same way as the New Jersey Supreme Court. Because California courts

have not addressed an unjust enrichment claim analogous to plaintiff’s claim, and because dicta from

the Unilogic case quoted above suggests that the California courts may under some circumstances

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dispense with a showing of damages for an unjust enrichment claim, the Court will allow the parties

another opportunity to clarify this state law claim. 

The Court therefore GRANTS plaintiff leave to file a motion for reconsideration. Plaintiff shall

file its motion, not to exceed seven pages, on or before January 5, 2007. Defendants shall file a

reply, not to exceed seven pages, on or before January 10, 2007. Should a hearing be necessary, the

Court will schedule one after receiving all the papers. The parties should address the following issues:

(1) What are the elements of a claim of unjust enrichment under California law? 

(2) In particular, what makes a retention of profits “unjust” under California law?

(3) In particular, what does “at the expense of another” mean under California law?

(4) Does an unjust enrichment claim require some form of privity between the plaintiff and the

defendant? Does the enriched party have to receive the funds at issue directly from the plaintiff?

The parties should also discuss whether there are genuine issues of material fact as to each of the

elements of the unjust enrichment claim. (Docket No. 220)

IT IS SO ORDERED.

Dated: December 19, 2006 

SUSAN ILLSTON

United States District Judge

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