Court Opinion

ID: 4406134
Source: CourtListenerOpinion
Date Created: 2019-06-12 20:00:51.844078+00
Date Added: 2024-06-11T14:52:38.816137
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUN 12 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

NORTH AMERICAN WELLNESS                         No.    17-56497
CENTER HOLDINGS, LLC,
                                                D.C. No.
                Plaintiff-Appellant,            5:16-cv-02010-VAP-DTB

 v.
                                                MEMORANDUM*
TEMECULA VALLEY REAL ESTATE,
INC., DBA KW Commercial; et al.,

                Defendants-Appellees.

                   Appeal from the United States District Court
                       for the Central District of California
                   Virginia A. Phillips, District Judge, Presiding

                             Submitted June 10, 2019**
                               Pasadena, California

Before: WARDLAW, BYBEE, and OWENS, Circuit Judges.

      North American Wellness Center Holdings, LLC (“NAWC”) appeals from

the district court’s dismissal of its complaint with prejudice under Federal Rule of

Civil Procedure 12(b)(6). As the parties are familiar with the facts, we do not

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
recount them here.1 We review the district court’s dismissal of the complaint de

novo. See Starr v. Baca, 652 F.3d 1202, 1205 (9th Cir. 2011). We affirm.

      1. NAWC alleges several federal securities law violations. Because each

allegation must implicate a “security,” NAWC argues that this transaction involved

an “investment contract.” We review de novo whether a transaction involves a

“security.” See Salameh v. Tarsadia Hotel, 726 F.3d 1124, 1129 (9th Cir. 2013).

      Even if the two agreements here – the land sale and advisory arrangement –

constituted a single transaction, see id. at 1131-32, NAWC failed to plausibly

allege the requisite expectation of profit from the efforts of others. See SEC v. W.J.

Howey Co., 328 U.S. 293, 298-99 (1946). An “investment contract” requires that

“the efforts made by those other than the investor [be] the undeniably significant

ones.” SEC v. Glenn W. Turner Enters., Inc., 474 F.2d 476, 482 (9th Cir. 1973).

NAWC does not allege that it gave up legal control over the development, nor,

even generously interpreting the complaint, that it practically lacked control over

it. See Hocking v. Dubois, 885 F.2d 1449, 1460-61 (9th Cir. 1989) (en banc)

(“[T]he question of an investor’s control over his investment is decided in terms of

practical as well as legal ability to control.”). Because NAWC retained control

over almost all, if not all, of “the essential managerial efforts which affect[ed] the

failure or success of the enterprise,” Glenn W. Turner Enters., Inc., 474 F.2d at

      1
          We grant Appellee’s motion for judicial notice. Dkt. Nos. 19, 21.
                                           2
483, we affirm the district court’s dismissal of the federal securities claims.

      2. NAWC also alleges violations of § 1 and § 2 of the Sherman Act. Here,

too, it has insufficiently pled these claims. Regarding § 1, most consequentially,

NAWC alleged only injury to itself, not to any competition. See Brantley v. NBC

Universal, Inc., 675 F.3d 1192, 1200 (9th Cir. 2012). It “merely recite[s] the bare

legal conclusion that competition has been restrained unreasonably.” Id. at 1198

(citation omitted). Similarly, NAWC’s § 2 claim fails to plausibly allege that

defendants either had the “specific intent to monopolize” or engaged in any

“anticompetitive conduct.” Alaska Airlines, Inc. v. United Airlines, Inc., 948 F.2d

536, 542 (9th Cir. 1991). Thus, we also affirm the dismissal of the antitrust claims.

      3. Lastly, NAWC argues that the district court erred in denying leave to

amend its complaint. We affirm the decision to dismiss with prejudice. NAWC

had a prior opportunity to amend. See Chodos v. W. Publ’g Co., 292 F.3d 992,

1003 (9th Cir. 2002) (explaining that a district court has broad discretion to deny

leave to amend when it previously granted this request). Moreover, allowing

NAWC another opportunity to amend would have been futile. No facts – and

NAWC did not proffer any additional facts before the district court, or on appeal –

could transform this generic real estate transaction into either a securities

transaction or an antitrust violation. See Sweaney v. Ada County, 119 F.3d 1385,

1393 (9th Cir. 1997).

                                           3
AFFIRMED.

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