United States District Court, D. Oregon
STEVEN A.W. DE JARAY, PERIENNE DE JARAY, and DARREL R. OSWALD, Plaintiffs,
LATTICE SEMICONDUCTOR CORPORATION, an Oregon-headquartered Delaware corporation, and JOHN and JANE DOES 1-20, Defendants.
Douglas F. Stewart and Philip J. Benzanson Jr., Bracewell
LLP, 701 Fifth Avenue, Suite 6200, Seattle, WA 98104; Phillip
L. Sampson, Jr., Bracewell LLP, Nadia H. Dahab, Stoll Stoll
Berne Lokting & Schlachter P.C., 209 of Attorneys for
F. Foran, James P. Bennett, George C. Harris, and Robert L.
Cortez Webb, Morrison & Forrester LLP, Jack R. Scholz and
Matthew J. Kalmanson, Hart Wagner, LLP, Of Attorneys for
OPINION AND ORDER
MICHAEL H. SIMON UNITED STATES DISTRICT JUDGE
Steven A.W. de Jaray, Perienne de Jaray, and Darrell R.
Oswald (collectively, “Plaintiffs”) bring this
lawsuit against Lattice Semiconductor Corp.
(“Lattice”) and other unknown defendants seeking
damages for False Advertising under the Lanham Act,
Negligence, and Fraud, arising out of a transaction between
Lattice and Apex-Micro Manufacturing Corporation
(“Apex”). Plaintiffs were shareholders of Apex.
Plaintiffs allege that Lattice failed properly to advertise
the export-controlled status of two specific programmable
logic devices (the “Seized Goods”). These devices
were later seized by Canadian Border authorities who
suspected the Seized Goods of being export controlled.
Plaintiffs allege that the seizure and following civil and
criminal investigations resulted from Lattice’s
material misrepresentations and omissions and caused
reputational injury to Plaintiffs. Plaintiffs further allege
that Lattice made public representations to them through
Lattice’s data sheets that the Seized Goods were not
export controlled while privately, in communications with
government investigators, representing the opposite-that the
Seized Goods were export controlled.
filed a motion to dismiss, arguing that the relevant statute
of limitations has expired, Plaintiffs fail to state a claim
under Rule 12(b)(6) of the Federal Rules of Civil Procedure,
and Plaintiffs lack standing to recover damages under the
Lanham Act. Plaintiffs then moved for leave to file a first
amended complaint, which clarifies certain facts and adds
claims for negligent misrepresentation and breach of the duty
of good faith and fair dealing. For the reasons stated below,
Plaintiffs’ motion for leave to file a first amended
complaint is granted and Defendants’ motion to dismiss
is denied, without prejudice to renew against
Plaintiffs’ first amended complaint.
Motion to Dismiss
motion to dismiss for failure to state a claim may be granted
only when there is no cognizable legal theory to support the
claim or when the complaint lacks sufficient factual
allegations to state a facially plausible claim for relief.
Shroyer v. New Cingular Wireless Servs., Inc., 622
F.3d 1035, 1041 (9th Cir. 2010). In evaluating the
sufficiency of a complaint’s factual allegations, the
court must accept as true all well-pleaded material facts
alleged in the complaint and construe them in the light most
favorable to the non-moving party. Wilson v.
Hewlett-Packard Co, 668 F.3d 1136, 1140 (9th Cir. 2012);
Daniels-Hall v. Nat’l Educ. Ass’n, 629
F.3d 992, 998 (9th Cir. 2010). To be entitled to a
presumption of truth, allegations in a complaint “may
not simply recite the elements of a cause of action, but must
contain sufficient allegations of underlying facts to give
fair notice and to enable the opposing party to defend itself
effectively.” Starr v. Baca, 652 F.3d 1202,
1216 (9th Cir. 2011). The court must draw all reasonable
inferences from the factual allegations in favor of the
plaintiff. Newcal Indus. v. Ikon Office Solution,
513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not,
however, credit the plaintiffs legal conclusions that are
couched as factual allegations. Ashcroft v. Iqbal,
556 U.S. 662, 678-79 (2009).
complaint must contain sufficient factual allegations to
“plausibly suggest an entitlement to relief, such that
it is not unfair to require the opposing party to be
subjected to the expense of discovery and continued
litigation.” Starr, 652 F.3d at 1216. “A claim
has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl
Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “The
plausibility standard is not akin to a probability
requirement, but it asks for more than a sheer possibility
that a defendant has acted unlawfully.” Mashiri v.
Epstein Grinnell & Howell, 845 F.3d 984, 988 (9th
Cir. 2017) (quotation marks omitted).
Motion to Amend
15(a)(2) of the Federal Rule of Civil Procedure provides that
the “court should freely give leave [to amend a
pleading] when justice so requires.” A district court
should apply Rule 15’s “policy of favoring
amendments . . . with extreme liberality.” Price v.
Kramer, 200 F.3d 1237, 1250 (9th Cir. 2000) (quotation
marks omitted). The purpose of the rule “is ‘to
facilitate decision on the merits, rather than on the
pleadings or technicalities.’” Novak v.
United States, 795 F.3d 1012, 1020 (9th Cir. 2015)
(quoting Chudacoff v. Univ. Med. Ctr., 649 F.3d
1143, 1152 (9th Cir. 2011)). A district court, however, may,
within its discretion, deny a motion to amend “due to
undue delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, [and] futility of the
amendment.” Zucco Partners, LLC v. Digimarc
Corp., 552 F.3d 981, 1007 (9th Cir. 2009) (alteration in
original) (quoting Leadsinger, Inc. v. BMG Music
Publ’g, 512 F.3d 522, 532 (9th Cir. 2008)).
“Not all of the factors merit equal weight. As this
circuit and others have held, it is the consideration of
prejudice to the opposing party that carries the greatest
weight.” Eminence Capital, LLC v. Aspeon,
Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Futility of
amendment, however, “can, by itself, justify the denial
of a motion for leave to amend.” Bonin v.
Calderon, 59 F.3d 815, 845 (9th Cir. 1995). Generally,
however, “[a]bsent prejudice, or a strong showing of
any of the remaining [four] factors, there exists a
presumption under Rule 15(a) in favor of granting leave to
amend.” Eminence Capital, 316 F.3d at 1052 (alterations
added, emphasis in original). When weighing the factors, all
inferences should be made in favor of granting the motion to
amend. Griggs v. Pace Am. Grp., Inc., 170 F.3d 877,
880 (9th Cir. 1999).
Motion to Amend
argues that Plaintiffs’ proposed amended complaint is
futile because its claims are time-barred, Plaintiffs fail to
state a claim, and Plaintiffs do not have ...