IN RE: GENENTECH (2024)

ORDER

This matter comes before the court on the Motion for Partial Judgment on the Pleadings [Doc. 662] of defendant Genentech, Inc. For the reasons set forth below, the motion is granted in part and denied in part.

I. Background/Procedural History

This matter has a lengthy procedural history, which the court will not fully summarize. Relevant to this motion, the matter currently includes fourteen separate cases, which have been consolidated for pretrial proceedings in this multidistrict litigation (“MDL”). The MDL was initially assigned to U.S. District Judge Terence C. Kern.

On November 12, 2020, plaintiffs filed the Master Complaint, supplemented by separate Short Form Complaints specific to each plaintiff. [Doc. 440; Doc. 442 to Doc. 455]. The Master Complaint invokes the court's diversity jurisdiction pursuant to 28 U.S.C. § 1332 and includes the following claims: (1) fraud; (2) breach of express warranty; (3) breach of implied warranty; (4) California False Advertising and Unfair Competition Violations pursuant to Cal. Bus. & Pro. Code §§ 17500 et seq. and 17200 et seq.; and (5) unjust enrichment. [Doc. 440].

On December 3, 2020, Genentech filed a motion to dismiss the Master Complaint wherein it argued, in part, that plaintiffs’ equitable claims for unjust enrichment and violations of California's unfair competition and false advertising laws should be dismissed because plaintiffs have adequate remedies at law. [Doc. 456].

In a May 16, 2022 Opinion and Order, Judge Kern denied Genentech's motion to dismiss the Master Complaint. [Doc. 476]. In the Opinion and Order, Judge Kern did not explicitly address Genentech's argument that plaintiffs’ equitable claims fail because plaintiffs have adequate remedies at law. [Id.].

On June 29, 2023, the MDL was reassigned from Judge Kern to the undersigned. [Doc. 595].

On February 16, 2024, Genentech filed the motion for partial judgment on the pleadings. [Doc. 662]. Plaintiffs responded in opposition on March 8, 2024 [Doc. 671], and Genentech filed a reply on March 22, 2024. [Doc. 676]. Thus, the motion is ripe for the court's determination.

II. Standard

Pursuant to Federal Rule of Civil Procedure 12(c), “[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.” “A motion for judgment on the pleadings ‘should not be granted unless the moving party has clearly established that no material issue of fact remains to be resolved and the party is entitled to judgment as a matter of law.’ ” Colony Ins. Co. v. Burke, 698 F.3d 1222, 1228 (10th Cir. 2012) (quoting Park Univ. Enters. v. Am. Cas. Co., 442 F.3d 1239, 1244 (10th Cir. 2006)). The Tenth Circuit treats a motion for judgment on the pleadings under Rule 12(c) as a motion to dismiss pursuant to Rule 12(b)(6). Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000). Thus, “to survive judgment on the pleadings, [plaintiff] must allege ‘a claim to relief that is plausible on its face.’ ” Sanchez v. U.S. Dep't of Energy, 870 F.3d 1185, 1199 (10th Cir. 2017) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). The Tenth Circuit has described the plausibility standard as follows: “To determine whether the claim to relief is ‘plausible on its face,’ we examine the elements of the particular claim and review whether the plaintiff has pleaded ‘factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ ” Sanchez, 870 F.3d at 1199 (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937).

III. Analysis

In the motion for partial judgment on the pleadings, Genentech seeks dismissal of plaintiffs’ statutory claim for violation of California's Unfair Competition Law (UCL) and False Advertising Law (FAL), as well as plaintiffs’ unjust enrichment claim to the extent premised on California law.

As an initial matter, it is not clear to the court—either from the Master Complaint or the motion briefing—the extent to which the unjust enrichment claim is premised on California law. Neither party provides the court a choice-of-law analysis, and the allegations in the Master Complaint are insufficient to determine choice-of-law at this stage. Thus, under the circumstances, resolution of the choice-of-law issue and dismissal of the unjust enrichment claim to the extent premised on California law would be premature. See Fed. Ins. Co. v. Indeck Power Equip. Co., No. CIV-15-491-D, 2016 WL 3676803, at *2 (W.D. Okla. July 7, 2016) (collecting cases).

Further, “[a] motion to dismiss under Rule 12(b)(6) doesn't permit piecemeal dismissals of parts of claims; the question at this stage is simply whether the complaint includes factual allegations that state a plausible claim for relief.” BBL, Inc. v. City of Angola, 809 F.3d 317, 325 (7th Cir. 2015) (articulating the standard in the context of a motion for judgment on the pleadings); see also Fed. Trade Comm'n v. Nudge, LLC, 430 F. Supp. 3d 1230, 1246 (D. Utah 2019) (“As many courts have recognized, parties may not use rule 12(b)(6) to dismiss only parts of a claim.”); Murphy v. City of Tulsa, No. 15-CV-528-GKF-PJC, 2016 WL 11619779 (N.D. Okla. Feb. 29, 2016) (court cannot dismiss legal theories on 12(b)(6)). Thus, Genentech's request for dismissal of the unjust enrichment claim to the extent premised on California law is improper and therefore denied.

Turning to the UCL and FAL claim, Genentech argues that, pursuant to the decisions of the U.S. Court of Appeals for the Ninth Circuit in Sonner v. Premier Nutrition Corporation, 971 F.3d 834 (9th Cir. 2020) and Guzman v. Polaris Industries, Inc., 49 F.4th 1308 (9th Cir. 2022), the equitable claim fails because the plaintiffs have an adequate remedy at law.¹

In Sonner, plaintiff Kathleen Sonner sought injunctive relief, restitution, and damages under the California Consumers Legal Remedies Act (CLRA), as well as injunctive relief and restitution pursuant to the UCL. Sonner, 971 F.3d at 838. The case proceeded for years but, two months prior to trial, Ms. Sonner sought leave to amend her pleading to abandon her request for CLRA damages. Id. at 838. The court granted the request, and defendant subsequently moved to dismiss the restitution claim pursuant to Federal Rule of Civil Procedure 12(b)(6) based on the availability of an adequate legal remedy. The district court granted defendant's motion. Id.

On appeal, the Ninth Circuit framed its inquiry as whether “a federal court sitting in diversity can award equitable restitution under state law if an adequate legal remedy exists.” Id. at 842. The Circuit answered in the negative, reasoning that “[i]t has been a fundamental principle for well over a century that state law cannot expand or limit a federal court's equitable authority.” Id. at 841. That is, “a state ‘statute does not change the nature of the federal courts’ equitable powers.’ ” Id. at 842 (quoting Can. Life Assurance Co. v. LaPeter, 563 F.3d 837, 843 (9th Cir. 2009)). Thus, the Circuit held “that the traditional principles governing equitable remedies in federal courts, including the requisite inadequacy of legal remedies, apply when a party requests restitution under the UCL and CLRA in a diversity action.” Sonner, 971 F.3d at 844. Because Ms. Sonner had failed to establish that she lacked an adequate legal remedy at law, the Circuit concluded that the district court did not err in dismissing Ms. Sonner's claims for equitable restitution under the UCL and CLRA. Id.

Two years later, the Ninth Circuit applied Sonner in Guzman. In that case, plaintiff Jeremy Albright filed a complaint asserting claims pursuant to the CLRA, UCL, and FAL. Guzman, 49 F.4th at 1310. The district court dismissed the CLRA and FAL claims as time-barred, leaving only the UCL claim. Id. at 1311. The district court subsequently granted defendant's motion for summary judgment as to the UCL claim, reasoning that “Albright still had an adequate legal remedy under the CLRA, even though his CLRA claim for damages had been dismissed as time-barred.” Id. The court reasoned that “a plaintiff's failure to timely comply with the requirements to obtain a remedy at law does not make the remedy inadequate, so as to require the district court to exercise its equitable jurisdiction.” Id. Therefore, plaintiff could not seek equitable relief. Id.

On appeal, the Ninth Circuit “agree[d] with the district court that Albright could not bring his equitable UCL claim in federal court because he had an adequate legal remedy in his time-barred CLRA claim.” Id. In reaching its conclusion, the Circuit rejected Albright's argument that Sonner was distinguishable because his UCL claim was dismissed involuntarily and not for purposes of gamesmanship as in Sonner. Id. at 1313. Specifically, the court reasoned,

Sonner’s holding applies to equitable UCL claims when there is a viable CLRA damages claim, regardless of whether the plaintiff has tried to avoid the bar to equitable jurisdiction through gamesmanship. Nothing in Sonner’s reasoning suggested that its holding was limited to cases in which a party had voluntarily dismissed a damages claim to avoid a jury trial.

Id. Thus, the court concluded, “because Albright had an adequate legal remedy in his time-barred CLRA claim, the district court lacked equitable jurisdiction to hear Albright's UCL claim.” Id.

Genentech urges the court to apply Sonner and Guzman and dismiss plaintiffs’ UCL and FAL claim for lack of equitable jurisdiction. As an initial matter, Sonner and Guzman are not binding upon this court. As a transferee court, this court must apply the law of the Tenth Circuit. See In re: EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices & Antitrust Litigation, 44 F.4th 959, 980 (10th Cir. 2022) (quoting AER Advisors, Inc. v. Fid. Brokerage Servs., LLC, 921 F.3d 282, 288, 288 n.5 (1st Cir. 2019) (internal citation omitted) (“Our sister circuits unanimously agree that ‘when one district court transfers a case to another, the norm is that the transferee court applies its own Circuit's cases on the meaning of federal law.’ We see no reason to depart from the consensus view.”)); Murphy v. F.D.I.C., 208 F.3d 959, 966 (11th Cir. 2000) (of federal common law defenses, reasoning “[s]ince federal courts are all interpreting the same federal law, uniformity does not require that transferee courts defer to the law of the transferor circuit”); Blazer v. Black, 196 F.2d 139, 144 (10th Cir. 1952) (“While the substantive right to recover on his claim is governed by state law, the form or mode of his claim for relief is a matter of Federal procedure.”); see also United States v. Carson, 793 F.2d 1141, 1147 (10th Cir. 1986) (“It is well settled that the decisions of one circuit court of appeals are not binding upon another circuit.”).

However, the court affords Sonner and Guzman careful consideration as the U.S. Supreme Court has expressed “that the remedies afforded and modes of proceeding pursued in the Federal courts, sitting as courts of equity, are not determined by local laws or rules of decision, but by general principles, rules, and usages of equity having uniform operation in those courts wherever sitting.” Guffey v. Smith, 237 U.S. 101, 114, 35 S.Ct. 526, 59 L.Ed. 856 (1915) (emphasis added); see also Oklahoma ex rel. Drummond v. Tyson Foods, Inc., 653 F. Supp. 3d 937 (N.D. Okla. 2023) (quoting Phoenix Mut. Life Ins. Co. v. Adams, 30 F.3d 554, 564 (4th Cir. 1994)) (“[I]n fashioning federal common law, courts do not look to the law of a particular state, but rather should apply common-law doctrines best suited to furthering the goals of the applicable law. ‘Consequently, federal common law should be consistent across the circuits.’ ”).

With respect to their fundamental holdings, Sonner and Guzman are consistent with Tenth Circuit case law. As recognized by the Ninth Circuit in Sonner, its decision “mirrors those of several other circuits, which have concluded, consistent with York, that state law cannot circumscribe a federal court's equitable powers even when state law affords the rule of decision.” Sonner, 971 F.3d at 843 (citing Davilla v. Enable Midstream Partners, L.P., 913 F.3d 959, 972-73 (10th Cir. 2019) (“The Supreme Court has concluded that ‘State law cannot define the remedies which a federal court must give’ ․ Thus, the practice of borrowing state rules of decision does not apply with equal force to determining appropriate remedies, especially equitable remedies, as it does to defining actionable rights.”)). Further, the Tenth Circuit has recognized that “[a]s tradition goes, the equitable power of the courts is available only when legal remedies are demonstrably inadequate.” Sanders v. Mountain Am. Fed. Credit Union, 689 F.3d 1138, 1144 (10th Cir. 2012). Rather, it appears that tension exists only when Sonner and Guzman are applied to equitable claims at the pleading stage.

Plaintiffs argue that the Tenth Circuit expressly permits pleading equitable claims as alternatives to legal claims and therefore Sonner and Guzman ought not apply. It is true that the Tenth Circuit has interpreted Federal Rule of Civil Procedure 8 to permit a party to plead both legal and equitable claims, regardless of consistency. See Blazer, 196 F.2d at 144; Boulware v. Baldwin, 545 F. App'x 725, 729 (10th Cir. 2013) (“Federal pleading rules have for a long time permitted the pursuit of alternative and inconsistent claims.”); Haynes Trane Serv. Agency, Inc. v. Am. Standard, Inc., 51 F. App'x 786 (10th Cir. 2002); see also Fed. R. Civ. P. 8(d)(3) (“A party may state as many separate claims or defenses as it has, regardless of consistency.”).

However, the court does not interpret Sonner and Guzman to wholly prohibit pleading in the alternative as permitted by Rule 8. Rather, the undersigned joins those courts interpreting Sonner and Guzman to require that plaintiffs assert lack of an adequate remedy at law in order to plausibly allege a claim for equitable relief under the UCL and FAL. See In re Apple Processor Litig., No. 22-16164, 2023 WL 5950622, at *2 (9th Cir. Sept. 13, 2023) (internal citation omitted) (“Plaintiffs were obligated to allege that they had no adequate legal remedy in order to state a claim for equitable relief, and they have ‘fail[ed] to explain’ how the money they seek through restitution is any different than the money they seek as damages.”); Azizpor v. Lowe's Home Ctrs., LLC, No. 23-CV-452-LL-DDL, 2024 WL 1349650, at *6 (S.D. Cal. Mar. 29, 2024) (internal citation omitted) (“[T]his Court agrees that nothing in Sonner precludes Plaintiffs from pleading alternate claims as provided by Rule 8 of the Federal Rules of Civil Procedure. However, alternate claims must also be adequately pled.”); Valiente v. Simpson Imports, Ltd., No. 23-CV-02214-AMO, ––– F.Supp.3d ––––, ––––, 2024 WL 695700, at *13 (N.D. Cal. Feb. 20, 2024) (“Sonner and Guzman do not mandate dismissal of [plaintiff's] claims because the decisions ‘require far less at the pleading stage.’ ”); Lau v. Gen Dig. Inc., No. 22-CV-08981-JST, 2023 WL 10553772, at *6 (N.D. Cal. Sept. 13, 2023) (internal citations and quotations omitted) (“To survive a motion to dismiss under Sonner, plaintiffs need only plead the absence of an adequate remedy at law. This requirement was not modified by Guzman.”); Stafford v. Rite Aid Corp., No. 17-CV-1340-TWR-JLB, 2023 WL 2876109, at *4 (S.D. Cal. Apr. 10, 2023) (collecting cases) (“Plaintiffs’ prayer for equitable relief must plausibly allege ‘the inadequacy of a legal remedy.’ ”); Rodriguez v. FCA US LLC, No. 22-CV-01445-FWS-JDE, 2023 WL 3150075, at *4 (C.D. Cal. Mar. 21, 2023) (“Having considered the relevant authorities, the court reads Guzman and Sonner as confirming that Plaintiff must adequately allege the inadequacy of a remedy at law prior to proceeding at the motion to dismiss stage.”); Fan v. Home Depot U.S.A., Inc., No. 21-CV-01355-WBS-KJN, 2022 WL 16964099, at **2-3 (E.D. Cal. Nov. 16, 2022).²

The court next considers whether its interpretation of Sonner and Guzman is consistent with Tenth Circuit case law. The parties do not direct the court to any Tenth Circuit authority regarding the pleading requirements for alternative claims. Thus, the court begins its analysis with Rule 8. Pursuant to subsection (a) of the Rule:

[a] pleading that states a claim for relief must contain:

(1) a short and plain statement of the grounds for the court's jurisdiction, unless the court already has jurisdiction and the claim needs no new jurisdictional support;

(2) a short and plain statement of the claim showing that the pleader is entitled to relief; and

(3) a demand for the relief sought, which may include relief in the alternative or different types of relief.

Fed. R. Civ. P. 8(a). The parties do not address whether the claims for equitable relief implicate subsection 8(a)(1), 8(a)(2), 8(a)(3), or a combination thereof. However, the court need not decide the issue as plaintiffs’ UCL and FAL claim fails to satisfy all three requirements.

Looking first to Rule 8(a)(1), as previously stated, plaintiffs’ California state-law claim implicates the court's equitable jurisdiction and require that plaintiffs lack an adequate remedy at law. See Sonner, 971 F.3d at 841-42; Sanders, 689 F.3d at 1144. With respect to subject matter jurisdiction, the Tenth Circuit has stated, “[t]he party seeking the exercise of jurisdiction in his favor ‘must allege in his pleading the facts essential to show jurisdiction.’ ” Spring Creek Expl. & Prod. Co. v. Hess Bakken Inv., II, LLC, 887 F.3d 1003, 1014 (10th Cir. 2018) (quoting Penteco Corp. v. Union Gas Sys., Inc., 929 F.2d 1519, 1521 (10th Cir. 1991)); see also Dalton v. City of Las Vegas, 282 F. App'x 652, 655 (10th Cir. 2008) (“Rule 8(a)(1) is satisfied if the complaint say[s] enough about jurisdiction to create some reasonable likelihood that the court is not about to hear a case that it is not supposed to have the power to hear.”). To the extent that these same principles apply to the court's equitable jurisdiction, plaintiffs fail to allege that they lack an adequate remedy at law. Thus, plaintiffs have failed to allege “facts essential to show jurisdiction.”

Turning next to Rule 8(a)(2), in their response, plaintiffs characterize the UCL and FAL cause of action as an alternative claim. However, district courts in this Circuit that have recognized that “alternative pleading does not absolve a plaintiff of the duty to present facts that would state a claim on all theories.” Denney v. Humana Ins. Co., 704 F.Supp.3d 1262, 1267 (W.D. Okla. 2023); see also Molitor v. Mixon, No. CIV-16-1202-HE, 2016 WL 9050778, at *2 n.3 (W.D. Okla. Nov. 21, 2016) (“It is true, as plaintiff urges, that a party may plead alternative theories arising out of the same facts, but there must still be some basis in those facts for concluding that a particular claim or theory of recovery is plausibly supported by them.”); Davis v. Comcast Corp., No. 18-CV-00720-MEH, 2018 WL 3303300, at *3 (D. Colo. July 5, 2018); MC Oil & Gas LLC v. Ultra Res., Inc., No. 15-CV-0038, 2015 WL 2452923, at *2 (D. Utah May 22, 2015) (quoting Holman v. Indiana, 211 F.3d 399, 407 (7th Cir. 2000)) (“While plaintiffs ‘need not use particular words to plead in the alternative, they must use a formulation from which it can be reasonably inferred that this is what they [are] doing.’ ”). Here, however, in the Master Complaint, plaintiffs do not allege that the UCL and FAL claim is pled in the alternative to the legal claims. Nor does the Master Complaint include any allegations that plaintiffs lack an adequate remedy at law, such as damages, or facts upon which the court may reasonably infer that plaintiffs lack an adequate remedy at law. Thus, plaintiffs have failed to plausibly plead the UCL and FAL claim in the alternative.

Finally, to the extent that plaintiffs’ request for equitable relief implicates Rule 8(a)(3) and its requirement that the pleading include a demand for the relief sought, district courts in this Circuit have required the prayer for relief to include an “assertion of the nature of relief alleged.” See U.S. Dep't of Lab. v. Mr. Cao's LLC, No. 22-1165-TC-RES, 2022 WL 16948601, at *6 (D. Kan. Nov. 15, 2002); United States ex rel. Hanlon v. Columbine Mgmt. Servs., Inc., No. 13-CV-00826-REB-KLM, 2015 WL 11658699, at *2 (D. Colo. Oct. 23, 2015); Isengard v. N.M. Pub. Educ. Dep't, No. 08-CIV-0300-JB-RLP, 2009 WL 5220371, at *5 (D.N.M. Dec. 9, 2009). The Master Complaint's Request for Relief does not include a demand for restitution or other equitable relief and therefore Rule 8(a)(3) is not satisfied.

Based on the foregoing, plaintiffs have failed to state a claim for relief under UCL and FAL.³ Thus, plaintiffs’ claim for California False Advertising and Unfair Competition Violations is dismissed.⁴

IV. Conclusion

WHEREFORE, the Motion for Partial Judgment on the Pleadings [Doc. 662] of defendant Genentech, Inc. is granted in part and denied in part. The motion is granted as to Count IV – California False Advertising and Unfair Competition Violations. The motion is denied as to the unjust enrichment claim to the extent premised on California law.

IT IS SO ORDERED this 17th day of April 2023.

FOOTNOTES

1.   Claims under the FAL and UCL are equitable in nature as “remedies available in a UCL or FAL action are limited to injunctive relief and restitution.” In re Vioxx Class Cases, 180 Cal.App.4th 116, 103 Cal. Rptr. 3d 83, 96 (2009).

2.   The court's conclusion in this regard is not inconsistent with the decision of U.S. District Judge Raymond P. Moore in Goodrich v. Alterra Mountain Co., No. 20-CV-01057-RM-SKC, 2021 WL 2633326, at *9 (D. Colo. June 25, 2021). In Goodrich, Judge Moore explicitly declined to “decide whether Plaintiffs may plead claims in the alternative in light of Sonner because even if they could do so, they have failed to do so.” Goodrich, 2021 WL 2633326, at *9. Thus, Judge Moore concluded “under Sonner, in the absence of pleading that they have no adequate remedy at law, Plaintiffs’ California Statutory Claims seeking equitable relief fail.” Id. (emphasis added). Further, and more significantly, the interpretation does not run afoul of the well-established principle that “equitable claims are considered subsequent to decision on legal claims.” Colo. Coal Furnace Distribs., Inc. v. Prill Mfg. Co., 605 F.2d 499, 505 (10th Cir. 1979); see also Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962).

3.   The Short Form Complaints do not contain any additional allegations related to the California UCL and FAL claim. The majority of the Short Form Complaints do not allege material facts or claims that are not alleged in the Master Complaint. [Doc. 443 to Doc. 452 and Doc. 454]. Two of the Short Form Complaints include additional class allegations, but no additional factual allegations regarding the equitable claims. [Doc. 453 and Doc. 455]. One of the Short Form Complaints brings a claim under the Illinois Consumer Fraud statute. [Doc. 442].

4.   In response, plaintiffs “request leave to amend the Master Complaint to further explain how the legal claims and remedies are inadequate.” [Doc. 671, p. 12 n.8]. However, plaintiffs’ request does not comply with Local Civil Rule 7-1(h) and therefore the court does not consider the request.

GREGORY K. FRIZZELL, UNITED STATES DISTRICT JUDGE