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Gilliam v. Galvin

United States District Court, D. Hawaii

August 6, 2019

WILLIAM H. GILLIAM, Plaintiff,
v.
MIKE GALVIN, a/k/a J. MICHAEL GALVIN; JOAN CHERICE KRUSSEL a/k/s JOAN CHERICE COTE, MATHEW AARON COTE a/k/a MATT COTE, a/k/a MATTHEW A COTE, AIRBNB, INC. AND AIRBNB PAYMENTS, INC., Defendants.

          ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS WITH LEAVE TO AMEND

          JILL A. OTAKE, UNITED STATES DISTRICT JUDGE

         Presently before the Court are two motions to dismiss: Defendants Joan Krussel's and Matthew Cote's[1] Motion to Dismiss, ECF No. 9, and Defendant Mike Galvin's Motion to Dismiss, ECF No. 11. For the reasons set forth below, Defendants' motions are GRANTED.[2]

         I. BACKGROUND

         Plaintiff and Defendant Galvin own condominiums in the same complex in in Poipu, Kauai. First Am. Compl. (“FAC”) ¶ 5. In March of 2015, Defendants Cote rented Plaintiff's condominium unit through Airbnb. Id. ¶ 9. Upon arriving at the unit, Defendants Cote informed Airbnb that there were hidden cameras in Plaintiff's apartment, and publicly posted a disparaging review of Plaintiff's unit, stating that it contained hidden cameras. Id. ¶¶ 9(b) & (i). Plaintiff alleges that the Cotes' rental and review of Plaintiff's condominium was all part of a conspiracy with Galvin to harm Plaintiff's competitiveness in the rental market. Id. ¶¶ 12-13.

         Plaintiff brought the initial Complaint on March 11, 2019. ECF No. 1. The Complaint alleged that Defendants violated two federal statutes: The Lanham Act (Count 1) and the Hobbs Act (Count 8). It also asserted the following state law claims: Unfair and Deceptive Trade Practices under Hawai‘i Revised Statute § 480-2 (Count 2), Unfair and Deceptive Trade Practices under Washington Revised Statute § 19.86 (Count 3), “Tortious Interference with Past Present Future Relationship” (Count 4), Fraud (Count 5), Defamation (Count 6), Declaratory Judgment seeking to reverse a prior state court judgment in small claims court (Count 7), and a claim against Defendants for their breach of the Airbnb terms of service (Count 10). Id. The Complaint also asserted two breach of contract claims against Airbnb (Counts 9 and 11). The initial complaint alleges diversity jurisdiction, asserting that Plaintiff is a U.S. Citizen, “neither a resident of Washington or California, residing overseas; but, frequent visitor to Hawaii.” ECF No. 1 ¶ 1.

         Defendants Cote filed their Motion to Dismiss on June 14, 2019, ECF No. 9, and Defendant Galvin filed his Motion to Dismiss on June 20, 2019, ECF No. 11, joined by Defendants Cote. ECF No. 12. In response to the motions to dismiss, Plaintiff filed the FAC on July 8, 2019. ECF No. 26. The FAC removed the Hobbs Act Claim and added new allegations with respect to Plaintiff's residency. The FAC alleges that Plaintiff is “now a qualified resident of Hawaii.” FAC ¶ 1.

         Because Plaintiff filed an amended complaint, the Court requested that Defendants inform the Court whether they wished to proceed with their motions to dismiss. ECF No. 28. By letter to the Court, Defendants Cote sought to proceed with their motion, because the FAC did not cure any jurisdictional defects in the original Complaint. ECF No. 30. They also asked the Court to construe their motion as brought under Federal Rule of Civil Procedure 12(b)(1) in addition to 12(b)(6). Id. Defendant Galvin did not respond to the Court's request.

         II. STANDARD OF REVIEW

         A. Rule 12(b)(6)

         Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint that fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “On a motion to dismiss, the court accepts the facts alleged in the complaint as true.” UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1014 (9th Cir. 2013) (quoting Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988)). But conclusory allegations of law, unwarranted deductions of fact, and unreasonable inferences are insufficient to defeat a motion to dismiss. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Nat'l Ass'n for the Advancement of Psychoanalysis v. Cal. Bd. of Psychology, 228 F.3d 1043, 1049 (9th Cir. 2000). When a court dismisses a claim under Rule 12(b)(6), “leave to amend should be given freely, ” and dismissal with prejudice is proper only where “amendment would be futile.” Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1041 (9th Cir. 2011).

         B. Rule 12(b)(1)

         Because Federal Courts are courts of limited subject matter jurisdiction, the plaintiff bears the burden to establish jurisdiction. Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986). Dismissal under FRCP 12(b)(1) is warranted when the plaintiff fails to meet its burden. Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). The Court may rely on evidence submitted outside of the complaint to resolve factual disputes concerning the existence of jurisdiction. McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988).

         III. DISCUSSION

         Defendants argue that the Court lacks subject matter jurisdiction because (1) the only federal claim alleged-the Lanham Act claim-must be dismissed, precluding federal question jurisdiction; (2) the Court should decline to exercise supplemental jurisdiction over the state law claims; and (3) the Complaint fails to plead diversity ...


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