Professional Documents
Culture Documents
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NOTICE OF MOTION AND MOTION TO DISMISS UNDER FRCP 12(b)(2) AND 12(b)(6); MEMORANDUM OF POINTS AND AUTHORITIES
IN SUPPORT THEREOF
Case 2:18-cv-03462-JLS-KES Document 35 Filed 07/20/18 Page 2 of 35 Page ID #:230
1 TABLE OF CONTENTS
2 I. INTRODUCTION .......................................................................................... 2
3 II. FACTUAL BACKGROUND......................................................................... 3
4 A. USOC’s Role Under the Ted Stevens Amateur Sports Act ................. 3
5 B. Larry Nassar’s Abuse of Plaintiff......................................................... 7
6 III. ARGUMENT .................................................................................................. 7
7 A. USOC Is Not Subject to Personal Jurisdiction in California ............... 7
8 B. The Complaint Relies on Impermissible Group Pleading ................. 10
9 C. The Complaint Fails to Set Forth Facts Sufficient to Establish Any
10 Negligence Cause of Action Against USOC ..................................... 12
11 The Law Imposes No Duty to Protect Others from Unforeseen
12 Criminal Acts by Third Parties ................................................ 13
13 The Complaint Also Fails to Allege a Breach of any Duty ..... 20
14 The Complaint Fails to Allege that USOC Proximately Caused
15 Nassar’s Abuse ......................................................................... 21
16 The Complaint’s Negligent Supervision and Negligent
17 Hiring/Retention/Training Claims Are Inapplicable to USOC 21
18 D. The Fifth Cause of Action Should be Dismissed Because the
19 Complaint Alleges No Fiduciary Duty .............................................. 22
20 E. The Sixth Cause of Action for Constructive Fraud Fails for the Same
21 Reasons as the Breach of Fiduciary Duty Claim ............................... 23
22 F. The Complaint’s Second Cause of Action for Violation of Masha’s
23 Law Is Inapplicable to USOC ............................................................ 24
24 G. The Complaint’s Third Cause of Action Does Not State a Claim of
25 Intentional Infliction of Emotional Distress as to USOC .................. 24
26 H. The Fourth Cause of Action for Unfair Business Practices Must Be
27 Dismissed ........................................................................................... 25
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1 TABLE OF AUTHORITIES
2
Page(s)
3
Cases
4
Ashcroft v. Iqbal,
5
556 U.S. 662 (2009) ...................................................................................................... 10
6
Avila v. Citrus Cmty. Coll. Dist.,
7 38 Cal. 4th 148 (2006) .................................................................................................. 13
8
Behagen v. Amateur Basketball Ass’n of U.S.,
9 884 F.2d 524 (10th Cir. 1989) ........................................................................................ 5
10 Bell Atl. Corp. v. Twombly,
11 550 U.S. 544 (2007) ...................................................................................................... 10
12 Bristol-Myers Squibb Co. v. Super. Ct. of Cal.,
137 S. Ct. 1773 (2017) .................................................................................................... 8
13
16
C.R. v. Tenet Healthcare Corp.,
169 Cal. App. 4th 1094 (2009) ..................................................................................... 26
17
Castaneda v. Olsher,
18 41 Cal. 4th 1205 (2007) .......................................................................................... 13, 20
19
Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co.,
20 20 Cal. 4th 163 (1999) .................................................................................................. 25
21 City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
22 68 Cal. App. 4th 445 (1998) ......................................................................................... 22
23 Clark v. Super. Ct.,
24
50 Cal. 4th 605 (2010) .................................................................................................. 25
25 Daimler AG v. Bauman,
571 U.S. 117 (2014) .................................................................................................... 7, 8
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3 Doe v. Liberatore,
478 F. Supp. 2d 742 (M.D. Pa. 2007) ........................................................................... 24
4
5 Doe v. Schneider,
2013 WL 5429229 (E.D. Pa. 2013) .............................................................................. 24
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Doe v. U.S. Youth Soccer Ass’n., Inc.,
7
8 Cal. App. 5th 1118 (2017) ....................................................................... 14, 15, 16, 17
8
Evan F. v. Hughson United Methodist Church,
9 8 Cal. App. 4th 828 (1992) ........................................................................................... 22
10
Fernandez v. Morris,
11 2008 WL 2775638 (S.D. Cal. 2008) ............................................................................. 25
12 Flores v. AutoZone W., Inc.,
13 161 Cal. App. 4th 373 (2008) ....................................................................................... 21
14 Flores v. Cty. of L.A.,
15
758 F.3d 1154 (9th Cir. 2014) ...................................................................................... 21
18
Garcia v. Paramount Citrus Ass’n, Inc.,
164 Cal. App. 4th 1448 (2008) ..................................................................................... 17
19
Glazer Capital Mgmt., LP v. Magistri,
20 549 F.3d 736 (9th Cir. 2008) ........................................................................................ 17
21
Golden Spread Council, Inc. No. 562 of Boy Scouts of Am. v. Akins,
22 926 S.W. 2d 287 (Tex. 1996)........................................................................................ 20
23 Hinojosa v. Livingston,
24 807 F.3d 657 (5th Cir. 2015) ........................................................................................ 11
25 Hughes v. Pair,
26 46 Cal. 4th 1035 (2009) ................................................................................................ 26
27 In re Gilead,
536 F.3d at 1055 ....................................................................................................... 3, 11
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Mehr v. Féderation Internationale de Football Ass’n,
115 F. Supp. 3d 1035 (N.D. Cal. 2015) .......................................................................... 9
19
Melton v. Boustred,
20 183 Cal. App. 4th 521 (2010) ........................................................................... 13, 17, 20
21
Monsanto Co. v. Geertson Seed Farms,
22 561 U.S. 139 (2010) ...................................................................................................... 25
23 Noble v. Sears, Roebuck & Co.,
24 33 Cal. App. 3d 654 (1973) .......................................................................................... 22
25 M.A. ex rel. P.K. v. Vill. Voice Media Holdings, LLC,
26 809 F. Supp. 2d 1041 (E.D. Mo. 2011) ........................................................................ 24
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3 Ransom v. Lee,
2015 WL 6856978 (C.D. Cal. 2015) ............................................................................ 13
4
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Strasner v. Touchstone Wireless Repair & Logistics, LP,
5 Cal. App. 5th 215 (2016) ............................................................................................. 9
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Summers v. Earth Island Inst.,
20 555 U.S. 488 (2009) ...................................................................................................... 25
21
Swartz v. KPMG LLP,
22 476 F.3d 756 (9th Cir. 2007) .............................................................................. 7, 10, 26
23 Terracom v. Valley Nat’l Bank,
24 49 F.3d 555 (9th Cir. 1995) ............................................................................................ 8
25 U.S. Bank Nat’l Ass’n v. Friedrichs,
26 2013 WL 589111 (S.D. Cal. 2013) ............................................................................... 12
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36 U.S.C. § 220524 .............................................................................................................. 5
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124 Cong. Rec. S9821-22 (daily ed. June 26, 1978) ........................................................... 4
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NOTICE OF MOTION AND MOTION TO DISMISS UNDER FRCP 12(b)(2) AND 12(b)(6); MEMORANDUM OF POINTS AND AUTHORITIES
IN SUPPORT THEREOF
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NOTICE OF MOTION; MOTION TO DISMISS; MEMORANDUM OF POINTS AND AUTHORITIES
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1 The Complaint asserts that USOC acted negligently in failing to discover and
2 prevent Nassar’s misconduct. The law is clear, however, that a defendant has no duty to
3 protect against the criminal acts of a third party absent a special relationship. Here, the
4 Complaint fails to allege the basis of a special relationship between Plaintiff and USOC.
5 It also fails to adequately allege the crucial and related issue of foreseeability. As to the
6 remaining claims, the Complaint fails to allege any of the requisite mental states which
7 range from an intent to aid Nassar (Masha’s Law), an intent to deceive Plaintiff
8 (constructive fraud), or recklessness as to Nassar’s behavior (intentional infliction of
9 emotional distress). In fact, the Complaint expressly states that USOC was not even
10 aware of Nassar’s misconduct until USA Gymnastics terminated its relationship with him
11 and reported him to law enforcement in 2015. Compl. ¶ 18.
12 The Complaint also asserts a breach of a fiduciary duty predicated on the theory
13 that USOC is a “mandated reporter” under the California Penal Code. The Complaint
14 does not identify a basis for that conclusion and, even if it did, USOC’s status as a
15 “mandated reporter” would not create a fiduciary relationship. The Unfair Business
16 Practices claim fails because it does not identify a cognizable remedy. Finally, the sexual
17 harassment claim fails as to USOC because the allegations provide no basis for holding
18 USOC vicariously liable for Nassar’s misconduct.
19 Ultimately, the substantive allegations as to USOC’s conduct do not state any valid
20 claim for relief. The Court should therefore dismiss all causes of action against USOC.
21 II. FACTUAL BACKGROUND1
22 A. USOC’s Role Under the Ted Stevens Amateur Sports Act
23 USOC is a private, federally chartered, non-profit organization that serves as
24
1
25 This factual background is based on the factual allegations contained in the Complaint
and properly excludes “allegations that are merely conclusory, unwarranted deductions of
26
fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th
27 Cir. 2008) (citation omitted). It also relies on information set forth in the Ted Stevens
Amateur Sports Act, which is referred to throughout the Complaint.
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1 the coordinating body for athletic activity in the United States directly relating to the
2 Olympic, Paralympic, and Pan-American Games. It operates pursuant to the Ted Stevens
3 Amateur Sports Act of 1978 (“ASA”), which “was enacted to correct the disorganization
4 and the serious factional disputes that seemed to plague amateur sports in the United
5 States.” S.F. Arts & Athletics, Inc. v. U.S. Olympic Comm., 483 U.S. 522, 544-45 (1987)
6 (citing H. R. Rep. No. 95-1627, at 8 (1978); S. Rep. No. 95–770, at 2–3 (1978)). Before
7 the ASA, there was no official process for selecting athletes to represent the United States
8 in the Olympic games. Rival sports organizations across the country often established
9 inconsistent eligibility criteria that led to uncertainty and infighting over which athletes
10 could compete in the Olympics. See id.
11 The ASA resolved this uncertainty by empowering USOC to designate a single
12 organization to serve as each sport’s “national governing body” (NGB), of which USA
13 Gymnastics is one. 36 U.S.C. § 220521. The ASA authorizes USA Gymnastics and the
14 other 49 NGBs to “represent the United States in the appropriate international sports
15 federation;” “conduct amateur athletic competition, including national championships;”
16 exercise jurisdiction over international competitions; and “recommend to [USOC]
17 individuals and teams to represent the United States in the Olympic Games, the
18 Paralympic games, and the Pan-American Games.” § 220523. Congress also gave
19 USOC the exclusive right under the ASA to license the “Olympic” brand in order to
20 generate funds, which USOC uses to support the NGBs and athletes. § 220506. For
21 example, USOC may license the right for a third-party training site to designate itself as
22 an “Olympic” site, or for a beverage to be the official “Olympic” drink. See id.
23 Congress specifically declined to give USOC control over the day-to-day affairs of
24 NGBs. 124 Cong. Rec. S9821-22 (daily ed. June 26, 1978) (statement of Sen. Ted
25 Stevens) (explaining that the sports organizations would remain “autonomous in the
26 governance of their sport”). Instead, Congress requires sports organizations to
27 demonstrate complete autonomy in order to become an NGB:
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1 Compl. ¶ 22. More broadly, USA Gymnastics “selects and trains the United States
2 gymnastics teams for the Olympics and World Championships, promotes gymnastics
3 locally and nationally, and serves as a resource center for members, clubs, fans and
4 gymnasts throughout the United States.” Compl. ¶ 20. USA Gymnastics also organizes
5 and manages the Olympic qualifying events to select the gymnasts who will compete in
6 the Olympics. Id.
7 In 2012, USOC voluntarily launched a “SafeSport” initiative to help combat sexual
8 abuse in amateur athletics. Compl. ¶ 12. As part of that initiative, USOC provided the
9 NGBs with a resource guide called the “SafeSport Handbook,” to help NGBs develop
10 their own policies and staffing procedures. Id. USOC also established and funded the
11 Center for SafeSport. The Center was launched in 2017 with a mission to “safeguard[]
12 amateur athletes against abuse, including emotional, physical, and sexual abuse, in
13 sports” and to develop policies and procedures for preventing sexual abuse; it received
14 congressional authorization in 2018. Protecting Young Victims from Sexual Abuse and
15 Safe Sport Authorization Act of 2017, S. 534, 115th Cong. § 202 (2017).
16 Collectively, the NGBs have more than three million members and tens of
17 thousands of staff members or volunteers. According to the Complaint, USA Gymnastics
18 alone includes “more than 174,000 athletes and professional members, [and over] 25,000
19 professional, instructor[,] and club members.”4 Compl. ¶ 20. It sanctions
20 “[a]pproximately 4,000 competitions and events throughout the United States” each year.
21 Id. Consistent with its statutory mandate, USOC does not oversee the day-to-day
22 operations of this network of NGBs nor would it have the wherewithal to do so.
23
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4
26 “Professional Members” are competitive coaches who participate in USA Gymnastics
sanctioned events. “Member Club[s]” are gymnastics clubs eligible to host USA
27
Gymnastics sanctioned events. See
28 https://usagym.org/pages/membership/pages/membership_overview.html.
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25 5
The Complaint alleges that USOC owed various legal duties with respect to the Karolyi
26 Ranch, although it does not allege any abuse there. See, e.g., Compl. ¶¶ 9, 10, 21. In any
event, the conclusory statements as to USOC’s legal duties must be disregarded at the
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pleading stage, because the Complaint does not allege facts to suggest that USOC
28 controlled the Ranch. Swartz v. KPMG LLP, 476 F.3d 756, 765 (9th Cir. 2007).
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1 California” (Compl. ¶ 1), but does not identify any conduct by USOC as the direct cause
2 of this abuse. To the contrary, the self-evident direct cause of Plaintiff’s injuries was
3 Nassar’s utter disregard for morality, medical ethics, and the strictures of criminal law.
4 Additionally, the Complaint fails to allege that USA Gymnastics was USOC’s
5 agent, such that USA Gymnastics’ conduct in California should be imputed to USOC. To
6 support jurisdiction based on a theory of agency, the Complaint must allege that USOC
7 “exert[ed] power over [USA Gymnastics’] day-to-day operations . . . akin to a
8 nonresident puppeteer pulling the strings of a California puppet.” Strasner v. Touchstone
9 Wireless Repair & Logistics, LP, 5 Cal. App. 5th 215, 224 (2016).
10 For example, in Mehr v. Féderation Internationale de Football Association
11 (“FIFA”), plaintiffs were members of FIFA-sanctioned youth organizations who suffered
12 concussions while participating in FIFA-sanctioned events. 115 F. Supp. 3d 1035, 1043-
13 44 (N.D. Cal. 2015). The plaintiffs sued FIFA in California for negligence on the theory
14 that FIFA should have promulgated more rules and policies to prevent concussions. Id.
15 The Mehr plaintiffs argued for jurisdiction on the grounds that FIFA required its member
16 organizations to follow FIFA’s rules and policies, FIFA agents in California arranged
17 matches between FIFA-sanctioned teams in California, FIFA maintained a medical center
18 in California, and FIFA sponsored videogame competitions in California. Id. at 1049-50.
19 The court held that it lacked personal jurisdiction over FIFA because none of plaintiffs’
20 claims “ar[o]se from any specific FIFA forum-related activity, and to the extent there are
21 allegations regarding FIFA’s contacts with California, they are limited to allegations
22 relating to contracts of a commercial nature that are unrelated to claims based on FIFA’s
23 alleged failure to implement concussion-related protocols.” Id. at 1052.
24 Here, the argument for specific jurisdiction is far weaker because the Complaint
25 includes no allegations regarding USOC activities in California. Furthermore, whereas
26 FIFA “exert[ed] massive worldwide influence and regulation over all aspects of soccer,
27 including in the United States and in California” (id. at 1052), USOC exerts no such
28 control over gymnastics. See JES Props., Inc., 458 F.3d at 1230-31 (the NGBs retain
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1 “monolithic control” over their respective sports). The Complaint’s suggestion that
2 USOC has the statutory right to decertify USA Gymnastics as an NGB for failing to
3 adopt USOC’s policies (Compl. ¶ 13) is no different from FIFA’s right to do the same,
4 and does not convert USA Gymnastics (or any of its staff) into an agent of USOC. See
5 Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir. 2009) (Wal-Mart’s right to
6 terminate suppliers did not give Wal-Mart control over the suppliers’ employees).
7 Likewise, the Complaint does not state any basis to support its legal conclusion
8 that “each and every Defendant was an employee, agent, and/or servant of Defendants.”
9 Compl. ¶ 40. Swartz, 476 F.3d at 765 (allegations of “acting as agents” without “stated
10 factual basis are insufficient as a matter of law”). Indeed, the Complaint undermines the
11 existence of an agency relationship between Nassar and USOC by acknowledging that
12 “[USA Gymnastics] was the primary entity owning, operating, and controlling the
13 activities and behavior of its employees . . . including, but not limited to NASSAR.”
14 Compl. ¶ 20.
15 For all of these reasons, the Complaint fails to establish personal jurisdiction over
16 USOC and should therefore be dismissed.
17 B. The Complaint Relies on Impermissible Group Pleading
18 In addition to the absence of personal jurisdiction, all causes of action against
19 USOC should be dismissed because of the Complaint’s pervasive reliance on conclusory
20 allegations and improper group pleading.
21 To survive a Rule 12(b)(6) motion, a complaint must plead “enough facts to state a
22 claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
23 570 (2007). A claim is facially plausible when supported by “factual content that allows
24 the court to draw the reasonable inference that the defendant is liable for the misconduct
25 alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In reviewing the plausibility of a
26 complaint, courts “accept factual allegations in the complaint as true,” Manzarek v. St.
27 Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008), but must disregard
28 legal conclusions. Iqbal, 556 U.S. at 678. Courts also do not “accept as true allegations
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1 These allegations are both impermissibly conclusory and constitute improper group
2 pleading, and the Court must disregard all of them in considering this motion.6 The
3 remaining allegations of the Complaint do not identify any action, inaction, or duty that
4 would support a viable claim for relief against USOC; for that reason alone, dismissal of
5 all claims as to USOC is required. U.S. Bank Nat’l Ass’n v. Friedrichs, 2013 WL
6 589111, at *9 (S.D. Cal. 2013). Furthermore, each of the claims asserted against USOC
7 fails on its merits for the reasons set forth below.
8
C. The Complaint Fails to Set Forth Facts Sufficient to Establish Any
9 Negligence Cause of Action Against USOC
10 The Complaint acknowledges that USOC did not employ or retain Nassar and only
11 learned of his misconduct years after he abused Plaintiff. It nevertheless asserts that
12 USOC was negligent in failing to protect Plaintiff from Nassar (Seventh Cause of
13 Action); negligent in supervising Nassar (Eighth Cause of Action); negligent in
14 retaining/hiring Nassar (Ninth Cause of Action); and negligent in failing to warn, train, or
15 educate Plaintiff about Nassar (Tenth Cause of Action).
16 The negligence claims must be dismissed as to USOC because the Complaint does
17 not establish that USOC stood in a special relationship with Plaintiff such that it could be
18 held liable for the criminal conduct of a third party. Moreover, the Complaint fails to
19 allege that Nassar’s criminal conduct was highly foreseeable to USOC. Accordingly, the
20 Complaint fails to allege the existence of a duty or any other element of negligence.
21
22
23
24
25 6
Such conclusory allegations include paragraphs 33, 39-44, 46-47, 51-55, 57-61, 63-69,
26 71, and 73 of the Complaint, as well as every allegation in the causes of action (other
than those discussing Plaintiff’s own conduct). The Complaint resorts to this grouping
27
because, as demonstrated by the facts that are specifically alleged, USOC was not
28 involved in supervising or controlling either Nassar or Plaintiff.
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3 The existence of a “duty” is a question of law. See Avila v. Citrus Cmty. Coll.
4 Dist., 38 Cal. 4th 148, 161 (2006). A defendant does not owe an affirmative duty to
5 protect individuals from the misconduct of third parties, absent a showing of a “special
6 relationship” between the defendant and the plaintiff. Melton v. Boustred, 183 Cal. App.
7 4th 521, 532 (2010). Even if a special relationship exists, a court must then apply the
9 whether and to what extent a duty should be imposed. Melton, 183 Cal. App. 4th at 532.
10 Under Rowland, the most significant factors are the foreseeability of the harm, weighed
11 against the burden of taking preventative measures. Castaneda v. Olsher, 41 Cal. 4th
12 1205, 1213 (2007) (“Foreseeability and the extent of the burden to the defendant are
14 Here, the Complaint fails to allege the existence of a special relationship because it
15 fails to establish that USOC exercised significant control over USA Gymnastics athletes
16 and the environment in which they practiced their sport. Similarly, the Complaint fails to
17 allege the high level of foreseeability necessary to establish a duty under Rowland.
19 special relationship requires a showing that the victim relies upon the defendant for
20 protection and the defendant has “superior control over the means of protection.”
21 Regents of Univ. of Cal. v. Super. Ct. (“Regents”), 4 Cal. 5th 607, 621 (2018) (“The
23 2015 WL 6856978, *4 (C.D. Cal. 2015) (“A basic requisite of a duty based on a special
24 relationship is the defendant’s ability to control the other person’s conduct.”). The
25 concept of a defendant’s control over the victim’s welfare is key to cases finding the
27 school, Searcy v. Hemet Unified Sch. Dist., 177 Cal. App. 3d 792, 803-04 (1986), or
28
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1 because of control inherent in the parties’ relationship, Doe v. U.S. Youth Soccer Ass’n.,
2 Inc. (“US Youth”), 8 Cal. App. 5th 1118, 1129-30 (2017).
3 In Regents, the California Supreme Court focused on the concept of control to find
4 that a university has a special relationship with students participating in school activities,
5 but noted that this relationship does not extend to activities where the school’s control is
6 limited. 4 Cal. 5th at 633. Regents involved a UCLA student who was being treated at
7 the university clinic for mental illness, including paranoia, schizophrenia, and auditory
8 hallucinations, and later stabbed a classmate during a chemistry lab without provocation.
9 Id. at 614-17. The injured classmate sued UCLA for failing to protect her, and she
10 alleged that she stood in a special relationship with UCLA when the attack occurred. Id.
11 The Court explained that “special” relationships share certain features, the first of
12 which is, “[w]hereas one party [is] dependent, the other has superior control over the
13 means of protection.” Id. at 621. Special relationships also have “defined boundaries,”
14 meaning that “a duty of care is owed to a limited community, not the public at large.” Id.
15 After reviewing the forms of control that modern universities exercise with respect to
16 students, the Court concluded that “the modern university provides a setting in which
17 every aspect of student life is, to some degree, university guided.” Id. at 625. The Court
18 identified a host of means by which colleges exercise control over their students,
19 including the employment of health, safety and housing staff; disciplinary programs; the
20 provision of housing, security and a range of extracurricular activities; and influencing
21 students values, consciousness, relationships, and behaviors. Id. Hence, universities
22 “have superior control over the environment and the ability to protect students.” Id.
23 Based on these principles, the court held that UCLA stood in a special relationship with
24 students, but that its duty was limited to “enrolled students who are at foreseeable risk of
25 being harmed in a violent attack while participating in curricular activities at the school.”
26 Id. at 633. The court expressly stated that the special relationship does not extend to non-
27 school activities, over which the university has little control. Id. at 626.
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1 In Searcy, the plaintiff student was injured while walking home from school and
2 sued the school district, among others. 177 Cal. App. 3d 792, 796 (1986). The California
3 Court of Appeal affirmed the trial court’s grant of demurrer on the basis that no special
4 relationship existed. Id. at 796, 803. The court held that, because the school only has
5 “discretionary authority to influence conditions affecting the safety of students’
6 transportation to and from school,” the school’s special relationship to students does not
7 apply where “a student had departed homeward after school hours.” Id. at 796, 804.
8 Consistent with Regents, the defendant’s special relationship existed only in
9 circumstances in which the defendant controlled the plaintiff’s environment.
10 In US Youth, the Court of Appeal considered the existence of a special relationship
11 in the context of a children’s soccer organization. 8 Cal. App. 5th 1118. In that case, the
12 plaintiff child was abused by his coach and sued the national soccer organization (“US
13 Youth”) and the state and regional affiliates through which US Youth operates. The
14 court’s analysis focused on a different form of control, namely, US Youth’s control of its
15 state and regional affiliates and, through them, the adults with whom the plaintiff
16 interacted—including his coach/molester. Id. at 1131. Specifically, the Court found that
17 US Youth “determined which individuals, including [the perpetrator], had custody and
18 supervision of children involved in its programs.” Id. at 1131; see also id. at 1135 (“US
19 Youth and [its affiliates] controlled which individuals had access to the children in their
20 programs”). Given US Youth’s control of its affiliates and their hiring practices, the
21 court concluded that, “as in the school, daycare, and scouting settings, [US Youth and its
22 affiliates], through the coaches, acted as ‘quasi-parents’ by assuming responsibility for
23 the safety of the players whose parents were not present.” Id. at 1130.
24 Regents, Searcy, US Youth, and the prior special relationship cases support the
25 conclusion that USOC has no special relationship with USA Gymnastics athletes,
26 including Plaintiff. At an organizational level, USA Gymnastics is not an “affiliate”
27 through which USOC operates, unlike the local soccer organizations in US Youth. To the
28 contrary, under the ASA, USA Gymnastics is an independent, autonomous organization
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1 that exercises complete control over its sport. 36 U.S.C. § 220522(a)(5); see also JES
2 Props., Inc., 458 F.3d at 1230-31. USOC therefore does not control USA Gymnastics in
3 the way that US Youth controlled its local affiliates.
4 At an operational level, the Complaint itself states that USA Gymnastics “selects
5 and trains the United States gymnastics teams for the Olympics and World
6 Championships,” and that USA Gymnastics organizes and controls the events at which its
7 athletes competed. Compl. ¶ 20. Further, USA Gymnastics “independently decides and
8 controls all matters central” to its governance (§ 220522(a)(5)), including procedures for
9 hiring employees or retaining volunteers. In other words, control of USA Gymnastics is
10 alleged to reside with USA Gymnastics itself. Unlike US Youth and its affiliates, USOC
11 is not alleged to control USA Gymnastics’ facilities or personnel. Importantly, USOC
12 does not “determine[] which individuals, including [Nassar], had custody and supervision
13 of children involved in [USA Gymnastics’] programs.” Cf. US Youth, 8 Cal. App. 5th at
14 1131. Certainly the Complaint does not allege facts demonstrating that USOC acted as a
15 “quasi-parent” to USA Gymnastics’ athletes. See id.
16 In contrast to UCLA’s dominion over its campus in Regents, USOC does not
17 establish and maintain the environment in which USA Gymnastics athletes live or
18 practice. Unlike student life on a university campus, it cannot be said that “every aspect
19 of [a USA Gymnastics athlete’s] life is, to some degree . . . guided” by USOC. Cf.
20 Regents, 4 Cal. 5th at 625. The Complaint therefore does not support the existence of a
21 special relationship.
22 The lack of a special relationship is dispositive and warrants dismissal of the
23 negligence causes of action. Seo v. All-Makes Overhead Doors, 97 Cal. App. 4th 1193,
24 1203 (2002). See also Quigley, 65 Cal. App. 4th at 1034 (“[C]ourts should be hesitant to
25 impose new tort duties when to do so would involve complex policy decisions, especially
26 when such decisions are more appropriately the subject of legislative deliberation . . . .”).
27 No Foreseeability. Even if the Complaint properly alleged a special relationship,
28 it fails to demonstrate that the harm was foreseeable. Melton, 183 Cal. App. 4th at 532;
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1 see also US Youth, 8 Cal. App. 5th at 1131. Foreseeability is a pillar of the duty analysis
2 under Rowland and where, as here, the Complaint alleges failure to foresee criminal
3 conduct, the level of foreseeability required is “extraordinarily high.” Melton, 183 Cal.
4 App. 4th at 532; see Garcia v. Paramount Citrus Ass’n, Inc., 164 Cal. App. 4th 1448,
5 1457 (2008) (same). An “extraordinarily high” level of foreseeability is required for
6 claims involving criminal conduct because there is a “strong inference” that criminals
7 strive to conceal their wrongdoing from others. Glazer Capital Mgmt., LP v. Magistri,
8 549 F.3d 736, 746–47 (9th Cir. 2008) (“To the contrary, the surreptitious nature of the
9 transactions creates an equally strong inference that the payments would have
10 deliberately been kept secret—even within the company.”). The facts of this case bear
11 out this presumption: the Complaint states that Nassar actively concealed his abuse
12 “under the guise of providing her care and treatments necessary for [Plaintiff] to
13 compete.” Compl. ¶ 49.
14 The California Court of Appeal’s decision in Roman Catholic Bishop v. Superior
15 Court is instructive regarding the foreseeability of a third party’s criminal conduct. 42
16 Cal. App. 4th 1556 (1996). There, the plaintiff (through her parents) sued Reverend
17 Omemaga for sexual abuse and sued the church that employed him for negligence.
18 Specifically, the plaintiff alleged that the church was responsible for supervising its
19 priests, had represented that it was a safe environment for religious worship, had held
20 Omemaga out to the public as a “competent and trustworthy Roman Catholic Priest,” and
21 had negligently failed to warn the public of his dangerous propensities. Id. at 1560. The
22 court dismissed plaintiff’s claims against the church as a matter of law because (1) the
23 church lacked actual knowledge of Omemaga’s actions, and (2) the church would not
24 have known about Omemaga’s dangerous propensities because he did not have a criminal
25 history. Id. at 1565. Accordingly, the church did not owe a duty to protect the plaintiff
26 from Omemaga because the church could not have foreseen his conduct. Id. at 1565-67.
27 Here, the facts weigh even more heavily against finding foreseeability as to USOC.
28 As the Complaint acknowledges, USOC lacked actual knowledge of Nassar’s actions just
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25
7
26 Although not necessary to the resolution of this motion, the USOC notes for context that
the Membership and Credentials Committee was a volunteer group comprised of athletes
27
and representatives of NGBs, and a representative from USOC. The committee was
28 disbanded in 2003 and its functions are managed by USOC staff with relevant expertise.
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1 Inc., 2016 WL 3745953, at *16 (S.D. Tex. 2016) (“The only fact alleged in support of the
2 element of breach is the explosion itself, but this is not sufficient” because “[t]he Court
3 cannot infer breach, much less proximate causation, from the fact of injury alone.”).
4 The Complaint Fails to Allege that USOC Proximately Caused
5 Nassar’s Abuse
6 The only allegation in the Complaint touching on causation is the general and
7 vague assertion that USOC’s failure to “adequately train and supervise all staff” or its
8 failure to “adopt and implement safety measures, policies and procedures” fostered “an
9 environment where such abuse could continue to occur.” Compl. ¶¶ 65-69. Such
10 conclusory allegations of causation are inadequate. Vizcaino v. Areas USA, Inc., 2015
11 WL 13573816, at *7 (C.D. Cal. 2015). This is particularly true in light of the fact that
12 Nassar was retained by USA Gymnastics, a separate organization. Compl. ¶ 27. The
13 Complaint does not indicate how changes in USOC’s policies and procedures supposedly
14 would have affected Nassar’s conduct.
15 There is also no basis to infer that more or different USOC policies would have
16 deterred Nassar, because criminal actors who are undeterred by the threat of criminal
17 sanctions are unlikely to be deterred by corporate policies or training. See, e.g., Flores v.
18 Cty. of L.A., 758 F.3d 1154, 1160 (9th Cir. 2014) (“If the threat of prison time does not
19 sufficiently deter sexual assault, it is not plausible to assume that a specific instruction
20 not to commit sexual assault will provide such deterrence.”); Flores v. AutoZone W., Inc.,
21 161 Cal. App. 4th 373, 385 (2008) (dismissing theory that an employee’s physical attack
22 of a customer was proximately caused by insufficient training). The Complaint’s failure
23 to sufficiently allege causation offers a third, independent basis for dismissing the
24 negligence claims.
25 The Complaint’s Negligent Supervision and Negligent
26 Hiring/Retention/Training Claims Are Inapplicable to USOC
In addition to all of the above deficiencies, the Complaint’s negligent supervision
27
and negligent retention/hiring/training causes of action are inapplicable to USOC because
28
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1 Nassar was not USOC’s employee or agent. See Noble v. Sears, Roebuck & Co., 33 Cal.
2 App. 3d 654, 664 (1973) (holding that there can be no liability for negligent supervision
3 “in the absence of knowledge by the principal that the agent or servant was a person who
4 could not be trusted to act properly without being supervised”) (emphasis added); Evan
5 F. v. Hughson United Methodist Church, 8 Cal. App. 4th 828, 837 (1992) (“[T]he theory
6 of negligent hiring here encompasses the particular risk of molestation by an employee
7 with a history of this specific conduct.”) (emphasis added).
8
D. The Fifth Cause of Action Should be Dismissed Because the Complaint
9 Alleges No Fiduciary Duty
10 The Complaint fails to sufficiently allege any factual basis to infer (1) the existence
11 of a fiduciary relationship creating a duty; (2) a breach of that duty; and (3) damages
12 proximately caused by that breach. City of Atascadero v. Merrill Lynch, Pierce, Fenner
13 & Smith, Inc., 68 Cal. App. 4th 445, 483 (1998) (elements of claim).
14 The Complaint advances the theory that USOC was a fiduciary because it was a
15 “mandated reporter” under the California Reporting Act, California Penal Code section
16 11165.7. 8 Compl. ¶¶ 108, 19. However, USOC is not a legally “mandated reporter”
17 under the plain language of that Reporting Act. The Reporting Act contains a
18 comprehensive list of legally “mandated reporters,” such as athletic coaches, therapists,
19 and child welfare service workers, all of whom are required to report known or suspected
20 sexual abuse. None of the roles or occupations listed in Section 11165.7 corresponds to
21 USOC. In fact, a mandatory reporting requirement can apply only to an individual, not to
22 an entity. See Cal. Penal Code §§ 11166, 11165.7. Thus, the category of legally
23 “mandated reporter” is inapplicable to USOC. And even if USOC could be a legally
24
25
8
26 The California Reporting Act was amended in 2000 to replace the term “Childcare
Custodian” with “Mandated Reporter.” P.S. v. San Bernardino City Unified Sch. Dist.,
27
174 Cal. App. 4th 953, 963 (2009). Nevertheless, the Complaint occasionally uses the
28 term “Childcare Custodian” in place of “Mandated Reporter.” Compl. ¶ 108.
22
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1 mandated reporter, it would not then automatically become a fiduciary. See generally
2 Wolf v. Super. Ct., 107 Cal. App. 4th 25, 30 (2003) (describing basis for fiduciary duty).
3 Given that the Complaint fails to establish a fiduciary relationship, the Complaint
4 necessarily fails to allege breach of a fiduciary duty or that such a breach caused
5 Plaintiff’s damages. Accordingly, the Fifth Cause of Action should be dismissed.
6
E. The Sixth Cause of Action for Constructive Fraud Fails for the Same
7 Reasons as the Breach of Fiduciary Duty Claim
8 Constructive fraud requires (1) a breach of a fiduciary duty; (2) non-disclosure of
9 that breach; (3) intent to deceive; and (4) reliance resulting in injury. Prakashpalan v.
10 Engstrom, Lipscomb & Lack, 223 Cal. App. 4th 1105, 1131 (2014). Because the
11 Complaint fails to allege a breach of a fiduciary duty, this claim fails as well. Moreover,
12 the constructive fraud claim is subject to the heightened pleading standards of Federal
13 Rule of Civil Procedure 9(b). See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103–
14 04 (9th Cir. 2003) (even “[i]n cases where fraud is not a necessary element of a claim, a
15 plaintiff may choose nonetheless to allege . . . that the defendant has engaged in
16 fraudulent conduct,” in which case, Rule 9(b)’s heightened pleading requirement must be
17 met). To satisfy Rule 9(b)’s heightened standard, “the pleadings must state precisely the
18 time, place, and nature of the misleading statements, misrepresentations, and specific acts
19 of fraud.” Kaplan v. Rose, 49 F.3d 1363, 1370 (9th Cir. 1994) (emphasis added),
20 overruled on other grounds, City of Dearborn Heights Act 345 Police & Fire Ret. Sys. v.
21 Align Tech., Inc., 856 F.3d 605, 616 (9th Cir. 2017); SEC v. Yuen, 221 F.R.D. 631, 634
22 (C.D. Cal. 2004). Here, the Complaint does not identify any misstatements,
23 misrepresentations, or other acts of fraud by USOC, nor does it specify the time, place, or
24 nature of any such acts. The Complaint’s conclusory fraud allegations are insufficient to
25 survive dismissal. Compl. ¶ 136 (alleging that “Defendants USOC, USAG, MSU,
26 PENNY, PARRILLA, and and DOES 1 through 500” acted “with the intent to conceal
27 and defraud”); ¶ 139 (basing claim off of “the fraud of Defendants USOC, USAG, MSU,
28 PENNY, PARRILLA and DOES 1 through 500”); Warren v. Fox Family Worldwide,
23
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1 Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (the mere allegation that a defendant acted with
2 a particular state of mind is a conclusion, not a fact, and must therefore be disregarded on
3 a motion to dismiss).
4
F. The Complaint’s Second Cause of Action for Violation of Masha’s Law
5 Is Inapplicable to USOC
6 Masha’s Law (Child Abuse Victims’ Rights Act, 18 U.S.C. § 2255) is a federal
7 statute that creates a civil cause of action for victims of certain criminal offenses against
8 the perpetrator and those who directly aided and abetted him. Doe v. Liberatore, 478 F.
9 Supp. 2d 742, 754-6 (M.D. Pa. 2007); see also Doe v. Schneider, 2013 WL 5429229, at
10 *10 (E.D. Pa. 2013) (for defendant to “be liable under CAVRA, the Plaintiff must
11 demonstrate that . . . the defendant knew the offense was being committed; and . . . the
12 defendant acted with the intent to facilitate it.”). Here, nothing in the Complaint suggests
13 that USOC “knew the offense was being committed” or that USOC “acted with the intent
14 to facilitate it”; to the contrary, the Complaint acknowledges that USOC was unaware of
15 Nassar’s misconduct while it was ongoing. Thus, the Complaint fails to allege aiding and
16 abetting liability. Liberatore, 478 F. Supp. 2d at 754-6. The Masha’s Law cause of
17 action is completely meritless and should be dismissed out of hand. See M.A. ex rel. P.K.
18 v. Vill. Voice Media Holdings, LLC, 809 F. Supp. 2d 1041, 1054 (E.D. Mo. 2011)
19 (dismissing Masha’s Law claim where plaintiff’s “allegations. . . d[id] not describe the
20 specific intent required for aiding and abetting under § 2.”).
21 G. The Complaint’s Third Cause of Action Does Not State a Claim of
22 Intentional Infliction of Emotional Distress as to USOC
The Complaint contradicts its own allegations that USOC committed intentional
23
infliction of emotional distress (“IIED”). Specifically, the Complaint asserts that all
24
defendants are liable for IIED because they (1) put Nassar in a position of authority; and
25
(2) failed to report Nassar’s misconduct. Compl. ¶¶ 94-95. Yet Plaintiff acknowledges
26
that USA Gymnastics, not USOC, designated Nassar as USA Gymnastics’ team
27
physician. Compl. ¶ 31. Further, the Complaint alleges that USOC did not learn of
28
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1 Nassar’s misconduct until his termination in 2015. Id. ¶ 18. While his misconduct was
2 ongoing, or even while Plaintiff was participating in USA Gymnastics, USOC knew of
3 no wrongdoing to report. Furthermore, USOC’s failure to discover or report conduct of
4 which it was unaware is necessarily neither “outrageous” nor “reckless.” See Martinez v.
5 Cty. of Sonoma, 2015 WL 5354071, at *9 (N.D. Cal. Sept. 14, 2015) (discussing elements
6 of IIED). Cf. Fernandez v. Morris, 2008 WL 2775638, at *11 (S.D. Cal. 2008).
7
H. The Fourth Cause of Action for Unfair Business Practices Must Be
8 Dismissed
9 For the reasons discussed above, the conclusory allegations underlying the Unfair
10 Competition Law (“UCL”) cause of action fail to satisfy the heightened pleading
11 standards of Rule 9(b), and thus, the UCL claim should be dismissed. Kearns v. Ford
12 Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009); Compl. ¶¶ 101-103. Moreover, the
13 UCL claim fails to allege a cognizable form of relief and therefore fails to allege
14 standing. Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 149 (2010). The
15 available relief for a UCL claim is limited to injunctive relief and restitution, not
16 damages. Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 179
17 (1999). Here, the Complaint fails to demonstrate an “actual and imminent” threat of
18 future harm, which is necessary for injunctive relief. Summers v. Earth Island Inst., 555
19 U.S. 488, 493 (2009). Nassar is effectively serving a life sentence and a new entity,
20 SafeSport, has been created to specifically safeguard against future sexual abuse. See
21 Protecting Young Victims from Sexual Abuse and Safe Sport Authorization Act of 2017,
22 S. 534, 115th Cong. § 202 (2017). Likewise, restitution is inapplicable because Plaintiff
23 did not provide USOC with any money due to an unfair business practice. Clark v.
24 Super. Ct., 50 Cal. 4th 605, 614 (2010).
I. The First Cause of Action (Sexual Harassment) Is Inapplicable to
25
USOC
26 The Complaint alleges that Nassar made sexual advances to Plaintiff, all for his
27 “sexual gratification.” Compl. ¶ 77; Cal. Civ. Code § 51.9 (elements of sexual
28
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1 harassment claim); Hughes v. Pair, 46 Cal. 4th 1035, 1044 (2009). In an attempt to hold
2 USOC vicariously liable, the Complaint alleges that (1) Nassar’s misconduct was “in the
3 course and scope of his agency/employment with Defendants” (Compl. ¶ 77), and (2) that
4 “Defendants . . . ratified the sexual misconduct of NASSAR by retaining him in
5 employment after discovering, or ignoring the facts that would have led them to discover,
6 his misconduct.” Id. ¶ 81.
7 The first theory fails because the Complaint does not allege facts to establish that
8 Nassar was USOC’s employee or agent. John R. v. Oakland Unified Sch. Dist., 48 Cal.
9 3d 438, 452 (1989) (discussing principles of respondeat superior). To the contrary, the
10 Complaint states that USA Gymnastics “was the primary entity owning, operating and
11 controlling the activities and behaviors of . . . NASSAR.” Compl. ¶ 20. As to USOC, the
12 Complaint merely asserts that “NASSAR was an employee, agent, and/or servant of
13 USAG, USOC, MSU, and DOES 1 through 500,” which is simply a legal conclusion the
14 Court must disregard. Compl. ¶¶ 33, 78; Wal-Mart Stores, Inc., 572 F.3d at 683; Swartz,
15 476 F.3d at 765.
16 The ratification theory also fails as to USOC. Since USOC never employed Nassar
17 or engaged him as agent, it follows that it did not “retain” him in either of those
18 capacities. See C.R. v. Tenet Healthcare Corp., 169 Cal. App. 4th 1094, 1110-11 (2009)
19 (ratification requires principal/agent or employer/employee relationship).
20 IV. CONCLUSION
21 For the foregoing reasons, the Complaint should be dismissed with prejudice.
22
23
DATED: July 20, 2018 COVINGTON & BURLING LLP
28
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