McGowan V Weinstein - Boies MTD

Case 2:19-cv-09105-ODW-GJS Document 35 Filed 01/31/20 Page 1 of 34 Page ID #:227
1 KENDALL BRILL & KELLY LLP

Janet I. Levine (State Bar No. 94255)
2 jlevine@kbkfirm.com
Robert E. Dugdale (State Bar No. 167258)
3 rdugdale@kbkfirm.com
Sarah E. Moses (State Bar No. 291491)
4 smoses@kbkfirm.com
10100 Santa Monica Blvd., Suite 1725
5 Los Angeles, California 90067
Telephone: 310.556.2700
6 Facsimile: 310.556.2705
7 Attorneys for Defendants David Boies and
Boies Schiller Flexner LLP
8
UNITED STATES DISTRICT COURT
9
CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
10
11
ROSE MCGOWAN, Case No. 2:19-cv-09105-ODW (GJS)
12
Plaintiff, DEFENDANTS DAVID BOIES AND
13 BOIES SCHILLER FLEXNER LLP’S
v. NOTICE OF MOTION AND MOTION
14 TO DISMISS PURSUANT TO
HARVEY WEINSTEIN, et al., FEDERAL RULE OF CIVIL
15 PROCEDURE 12(b)(6)
Defendants.
16 [Proposed Order Submitted
Concurrently Herewith]
17
Date: May 11, 2020
18 Time: 1:30 p.m.
Place: Courtroom of the Honorable Otis
19 D. Wright II
20 Trial Date: Not yet set
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Case No. 2:19-cv-09105-ODW (GJS)
NOTICE OF MOTION AND MOTION TO DISMISS
1 NOTICE OF MOTION AND MOTION

2 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
3 PLEASE TAKE NOTICE that on May 11, 2020, at 1:30 p.m., or as soon
4 thereafter as the matter may be heard, in Courtroom 5D of this Court, located at 350
5 West 1st Street, Los Angeles, California 90012, Defendants David Boies and Boies
6 Schiller Flexner LLP (“BSF”) (collectively, the “BSF Defendants”) will and hereby
7 do move this Court for an order dismissing the claims filed against them by Plaintiff
8 Rose McGowan. (ECF No. 1).
9 The BSF Defendants move on the grounds that, pursuant to Federal Rule of
10 Civil Procedure 12(b)(6), McGowan fails to state any claim against them upon
11 which relief can be granted.1 This Motion is based on this Notice of Motion and
12 Motion, the attached Memorandum of Points and Authorities in support of the
13 Motion filed concurrently herewith, the record in this action, and any evidence and
14 argument that may be presented at or before the hearing on the Motion.
15 This Motion is made following the conference of counsel required pursuant to
16 Local Rule 7-3, which took place on January 22, 2020.
17 DATED: January 31, 2020 Respectfully submitted,
18
KENDALL BRILL & KELLY LLP
19
20 By: /s/ Janet I. Levine
21 Janet I. Levine
Robert E. Dugdale
22
Sarah Moses
23
Boies Schiller Flexner LLP
25
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28 1
The BSF Defendants are named in all the claims except Count Seven.
2 Case No. 2:19-cv-09105-ODW (GJS)
1 TABLE OF CONTENTS
Page
2
3 I. INTRODUCTION ............................................................................................. 1
4 II. SUMMARY OF THE ALLEGATIONS IN THE COMPLAINT .................... 2
5 III. ARGUMENT .................................................................................................... 4
6 A. McGowan’s RICO Claims Should Be Dismissed .................................. 4
7 1. McGowan Cannot Properly Allege the BSF Defendants
Engaged in a “Pattern of Racketeering Activity” ......................... 5
8
(a) The Single Scheme to Defraud a Single Victim
9 Over the Short Timespan Alleged by McGowan
Does Not Amount to “Closed-Ended Continuity” ............. 6
10
(b) Since the Alleged Racketeering Activity Had a
11 Built-In End Point, McGowan Has Not Shown
“Open-Ended Continuity” .................................................. 8
12
2. McGowan Lacks RICO Standing Because She Has Not
13 Sustained an Injury to Her Business or Property Directly
Caused by the Racketeering Conduct She Alleges....................... 9
14
(a) McGowan Cannot Establish She Suffered Non-
15 Speculative Injuries Compensable Under RICO............. 10
16 (b) The Racketeering Acts McGowan Alleges Did Not
Directly Cause Her Purported Injuries ............................. 12
17
3. McGowan Has Not Alleged Facts Showing that the BSF
18 Defendants Operated or Managed Her Claimed
Racketeering Enterprise .............................................................. 14
19
4. McGowan’s RICO Conspiracy Claim Also Fails ...................... 15
20
B. McGowan’s ECPA Claim Is Incurably Deficient................................. 16
21
1. The ECPA Does Not Impose Secondary Civil Liability ............ 16
22
2. The Conversations Allegedly Recorded by Black Cube
23 Were Recorded in Compliance with the ECPA ......................... 17
24 C. McGowan’s State Law Fraud Claims Fail Because She Does Not
Allege Compensable Damages Caused by the Alleged Fraud ............. 18
25
D. McGowan’s Bane Act Claim Fails ....................................................... 19
26
E. McGowan’s Computer Crimes Claim Fails.......................................... 21
27
F. McGowan’s Conversion Claim Fails Because She Cannot Allege
28 a Complete Dispossession of Her “Stolen” Manuscript ....................... 22
i Case No. 2:19-cv-09105-ODW (GJS)
1 G. McGowan’s IIED Claim Must Be Dismissed Because She Fails

to Allege Facts Showing It Is Not Time-Barred ................................... 23
2
H. McGowan’s Negligent Hiring and Supervision Claim Fails ................ 24
3
IV. CONCLUSION ............................................................................................... 25
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ii Case No. 2:19-cv-09105-ODW (GJS)
1
TABLE OF AUTHORITIES
2
Page(s)
3
4 Federal Cases
5 Allwaste, Inc. v. Hecht,
65 F.3d 1523 (9th Cir. 1995) ................................................................................ 7
6
7 Anza v. Ideal Steel Supply Corp.,
547 U.S. 451 (2006) ........................................................................................... 13
8
Ashcroft v. Iqbal,
9
556 U.S. 662 (2009) ............................................................................................. 4
10
Baumer v. Pachl,
11 8 F.3d 1341 (9th Cir. 1993) ................................................................................ 14
12
Bell Alt. v. Twombly,
13 550 U.S. 544 (2007) ............................................................................................. 4
14 Berg v. First State Ins. Co.,
15 915 F.2d 460 (9th Cir. 1990) .............................................................................. 10
16 Biofeedtrac, Inc. v. Kilinor Optical Enters. & Consultants, SRL,
17 832 F. Supp. 585 (E.D.N.Y. 1993) ..................................................................... 14
18 Boyle v. United States,

556 U.S. 946-47 (2009) ........................................................................................ 8
19
20 Camarillo v. Maywood,
2008 WL 4056994 (C.D. Cal. Aug. 27, 2008) ............................................. 10, 11
21
Canyon Cty v. Syngenta Seeds, Inc.,
22 519 F.3d 969 (9th Cir. 2008) ................................................................................ 9
23
Caro v. Weintraub,
24 618 F.3d 94 (2d Cir. 2010) ................................................................................. 18
25 Cedric Kushner Promotions, Ltd. v. King,
26 533 U.S. 158 (2001) ............................................................................................. 4
27 Chaset v. Fleer/Skybox Int’l, LP,
28 300 F.3d 1083 (9th Cir. 2002) ............................................................................ 10
iii Case No. 2:19-cv-09105-ODW (GJS)
1 Doe v. GTE Corp.,

347 F.3d 655 (7th Cir. 2003) .............................................................................. 16
2
3 Doe v. Roe,
958 F.2d 763 (7th Cir. 1992) .............................................................................. 10
4
Edwards v. Marin Park, Inc.,
5
356 F.3d 1058 (9th Cir. 2004) ............................................................................ 15
6
Fausel v. Shellpoint Mortgage Servicing, LLC,
7 2019 WL 6794201 (C.D. Cal. Aug. 12 2019) .................................................... 15
8
Fischkoff v. Iovance Biotherapeutics, Inc.,
9 339 F. Supp. 3d 408 (S.D.N.Y. 2018) ................................................................ 23
10 Flip Mortgage Corp. v. McElhone,
11 841 F.2d 531 (4th Cir. 1988) ................................................................................ 8
12 Gamboa v. Velex,
457 F.3d 703 (7th Cir. 2006) ................................................................................ 9
13
14 H.J. Inc. v. Nw. Bell Tel. Co.,
492 U.S. 229 (1989). ............................................................................................ 6
15
16 Hahn v. Rothman,
2010 WL 11515464 (C.D. Cal. Jan. 12, 2010)................................................... 13
17
Harper & Row Publishers, Inc. v. Nation Enters.,
18 723 F.2d 195 (2d Cir. 1983) ............................................................................... 23
19
Hemi Group, LLC v. City of New York,
20 559 U.S. 1 (2010) ......................................................................................... 12, 13
21 Howard v. Am. Online, Inc.,
22 208 F.3d 741 (9th Cir. 2000) ................................................................................ 6
23 Jurisearch Holdings, LLC v. Lawriter, LLC,
24 2009 WL 10670588 (C.D. Cal. Apr. 13, 2009) .................................................. 23
25 Kirch v. Embarq Mgmt. Co.,

702 F.3d 1245 (10th Cir. 2012) ......................................................................... 16
26
27 Kovacic v. Cty. of Los Angeles,
2016 WL 1125558 (C.D. Cal. Mar. 21, 2016) ................................................... 20
28
iv Case No. 2:19-cv-09105-ODW (GJS)
1 Liu v. Li,
2010 WL 4286265 (C.D. Cal. Oct. 21, 2010) .................................................... 15
2
3 Miranda v. Ponce Fed. Bank,
948 F.2d 41 (1st Cir. 1991) .................................................................................. 5
4
Mulligan v. Nichols,
5
2013 WL 12124003 (C.D. Cal. June 3, 2013).................................................... 20
6
NSI Tech. Serv. Corp. v. Nat’l Aeronautics & Space Admin.,
7 1996 WL 263646 (N.D. Cal. Apr. 13, 1996)........................................................ 7
8
Oman v. Delta Air Lines, Inc.,
9 889 F.3d 1075 (9th Cir. 2018) ............................................................................ 22
10 Oscar v. Univ. Students Co-op Ass’n,
11 965 F.2d 783 (9th Cir. 1992) .......................................................................... 9, 10
12 Peavy v. WFAA-TV, Inc.,
221 F.3d 158 (5th Cir. 2000) .............................................................................. 16
13
14 Pitts Sales, Inc. v. King World Prods., Inc.,
383 F. Supp. 2d 1354 (S.D. Fla. 2005) ............................................................... 17
15
16 Primary Care Investorsth
Seven, Inc. v. PHP Heathcare Corp.,
986 F.2d 1208 (8 Cir. 1993) ............................................................................... 7
17
Prime Partners IPA of Temecula, Inc. v. Chaudhuri,
18 2012 WL 1669726 (C.D. Cal. May 14, 2012).................................................... 12
19
Religious Tech. Ctr. v. Willersheim,
20 971 F.2d 364 (9th Cir. 1992) ................................................................................ 7
21 Reves v. Ernst & Young,
22 507 U.S. 170 (1993) ........................................................................................... 14
23 Rezner v. Bayerishche Hyp-Und Vereinsbank AG,
24 630 F.3d 866 (9th Cir. 2010) .............................................................................. 12
25 Sanford v. MemberWorks, Inc.,

625 F.3d 550 (9th Cir. 2010) .............................................................................. 15
26
27 Sedima, S.P.R.I v. Imrex Co.,
473 U.S. 479 (1985) ............................................................................................. 4
28
v Case No. 2:19-cv-09105-ODW (GJS)
1 Sprewell v. Golden State Warriors,

266 F.3d 979 (9th Cir. 2001) ................................................................................ 4
2
3 Sussman v. Am. Broad. Cos.,
186 F.3d 1200 (9th Cir. 1999) ...................................................................... 17, 18
4
Sybersound Records v. UAV Corp.,
5
517 F.3d 1137 (9th Cir. 2008) ............................................................................ 13
6
Terpin v. AT&T Mobility, LLC,
7 399 F. Supp. 3d 1035 (C.D. Cal. 2019) .............................................................. 22
8
Ticketmaster LLC v. Prestige Entm’t W., Inc.,
9 315 F. Supp. 3d 1147 (C.D. Cal. 2018) ............................................................. 21
10 Turner v. Cook,
11 362 F.3d 1219 (9th Cir. 2004) .......................................................................... 6, 8
12 U.S. Airline Pilots Ass’n v. Awappa, LLC,
615 F.3d 312 (4th Cir. 2010) ................................................................................ 8
13
14 Wagh v. Metris Direct, Inc.,
348 F.3d 1102 (9th Cir. 2003) .............................................................................. 5
15
16 Walter v. Drayson,
538 F.3d 1244 (9th Cir. 2008) ............................................................................ 14
17
California Cases
18
19 Abbot v. Stevens,
133 Cal. App. 2d 242 (1955) .............................................................................. 18
20
All. Mortg. Co. v. Rothwell,
21 10 Cal. 4th 1226 (1995) ...................................................................................... 18
22
City & Cty. of San Francisco v. Ballard,
23 136 Cal. App. 4th 381 (2006) ............................................................................. 20
24 Doe v. Capital Cities,
25 50 Cal. App. 4th 1038 (1996) ............................................................................. 25
26 Federico v. Superior Court (Jenry G.),
27 59 Cal. App. 4th 1207 (1997) ............................................................................. 25
28
vi Case No. 2:19-cv-09105-ODW (GJS)
1 Fox v. Ethicon Endo-Surgery, Inc.,

35 Cal. 4th 797 (2005) ........................................................................................ 24
2
3 Nagy v. Nagy,
210 Cal. App. 3d 1262 (1989) ...................................................................... 18, 19
4
Norwest Mortg., Inc. v. Superior Court,
5
72 Cal. App. 4th 214 (1999) ............................................................................... 22
6
Phillips v. TLC Plumbing, Inc.,
7 172 Cal. App. 4th 1133 (2009) ........................................................................... 24
8
Unruh-Haxton v. Regents of Univ. of Calif.,
9 162 Cal. App. 4th 343 (2008) ............................................................................. 23
10 Federal Statutes
11
18 U.S.C. § 1961(1)(B)............................................................................................ 13
12
18 U.S.C. § 1961(5) ................................................................................................... 5
13
18 U.S.C. § 1962(c) ................................................................................................... 4
14
15 18 U.S.C. § 1962(d) ............................................................................................. 4, 15
16 18 U.S.C. § 2511(1)(a) ............................................................................................ 16
17 18 U.S.C. § 2511(2)(d) ............................................................................................ 17
18
18 U.S.C. § 2520(e) ................................................................................................. 24
19
Fed. R. Civ. Proc. 9(b) ............................................................................................. 15
20
21 Fed. R. Civ. Proc. 12(b)(6) ........................................................................................ 4
22 California Statutes
23 Cal. Civ. Code § 52.1(b) .................................................................................... 19, 20
24 Cal. Civ. Code § 52.1(k) .......................................................................................... 20
25
Cal. Code Civ. Proc. § 335.1 ............................................................................. 23, 24
26
Cal. Penal Code § 502 ....................................................................................... 21, 22
27
28
vii Case No. 2:19-cv-09105-ODW (GJS)
1 MEMORANDUM OF POINTS AND AUTHORITIES

2 I. INTRODUCTION
3 Ms. McGowan’s complaint against the man she claims sexually assaulted her
4 casts too wide a net in seeking to hold attorney David Boies and his law firm, Boies
5 Schiller Flexner LLP (“BSF”), liable for alleged harms they did not cause and for
6 alleged crimes and torts they did not commit. McGowan’s 72-page complaint is
7 littered with inaccurate assertions and conclusory accusations connected only by the
8 apparent effort to mask the absence of any factual or legal basis for claims against
9 Mr. Boies and BSF (collectively the “BSF Defendants”).
10 Of course, at this Motion to Dismiss stage of a case, McGowan’s factual
11 allegations must be accepted as true; factual disputes, of which there are many,
12 come later only if her claims survive this stage. But McGowan’s conclusory
13 allegations fall well short of satisfying the legal requirements governing her claims;
14 and even ignoring the factual inaccuracies throughout the Complaint, her claims
15 against the BSF Defendants are legally and incurably defective and should be
16 dismissed as a matter of law.
17 McGowan’s two RICO claims fail because, in addition to other incurable
18 defects, she both lacks standing to assert them and cannot establish the continuity of
19 conduct a RICO claim requires. Her Federal Wiretap Act claim (an Electronic
20 Communications Privacy Act or “ECPA” claim) ignores both that the BSF
21 Defendants would have had to violate the ECPA themselves, which is nowhere
22 alleged, and that the recording of conversations that is alleged (though not against
23 the BSF Defendants) is not proscribed by the ECPA, which instead explicitly
24 permits such recording.
25 McGowan’s state law fraud claims fail because they do not allege any
26 compensable damages caused by the asserted fraud. Her speech-based Bane Act
27 claim fails to recognize that such a claim must be based on allegations of explicitly
28 threatened physical violence—allegations she cannot make and has not made against
1 the BSF Defendants. Her claim that the BSF Defendants violated California’s
2 computer crimes statute fails because (i) she inverts this claim’s causation elements;
3 and (ii) she ignores that this statute does not apply extraterritorially (as she alleges
4 no conduct within California covered by this statute). Her conversion claim ignores
5 dispositive case law recognizing that taking a copy of a manuscript does not
6 constitute a conversion where, as is indisputably the case here, a defendant’s actions
7 do not result in the complete dispossession of the property at issue. Her intentional
8 infliction of emotional distress (“IIED”) claim fails because her allegations cannot
9 satisfy the two-year statute of limitations. And her negligent hiring claim
10 insufficiently alleges necessary elements.
11 These fundamental legal flaws cannot be cured by amendment, and each
12 claim against the BSF Defendants should be dismissed with prejudice.
13 II. SUMMARY OF THE ALLEGATIONS IN THE COMPLAINT
14 In June 2016, McGowan announced she was writing a memoir called
15 “Brave.” (Complaint (“Compl.”) ¶¶ 6, 31). Four months later, she cryptically
16 signaled in a series of tweets that her book would reveal damaging information
17 about Harvey Weinstein (“Weinstein”), including that he had raped her. (Id. ¶¶ 32-
18 33). According to McGowan, in response, Weinstein turned for help to, among
19 others, Boies, with whom Weinstein and his companies had a long-standing
20 attorney-client relationship, and Boies’ law firm, BSF. (Id. ¶ 34). Specifically,
21 Weinstein requested that the BSF Defendants assist him in retaining an investigative
22 agency named “Black Cube” that Weinstein wished to hire to probe the nature and
23 source of allegations being made against him and to try to gather information that
24 could support an effort to put a stop to negative stories about him. (Id. ¶¶ 16, 34-
25 38). The BSF Defendants engaged Black Cube on Weinstein’s behalf via two
26 agreements—an initial agreement in October 2016, and a second in July 2017. (Id.
27 ¶¶ 36, 37, 99). Both included written assurances that Black Cube’s investigative
28 techniques had been vetted by attorneys and that its investigators would comply
1 with the law in providing their services. (Id. ¶ 37).

2 Apart from alleging that the BSF Defendants assisted Weinstein by retaining
3 investigators to act on his behalf and by dealing with payments made to those
4 investigators—tasks which attorneys routinely perform for their clients—McGowan
5 offers no more than a series of conclusory allegations in her effort to envelop the
6 BSF Defendants in her dispute with others. She baldly claims that the BSF
7 Defendants “attempted to shield Black Cube’s activities from public disclosure,” (id.
8 ¶ 140(b)), but offers no facts to support this allegation or to explain its relevance;
9 she vaguely alleges that the BSF Defendants “provided strategic non-legal advice”
10 to Black Cube concerning the scheme alleged in her Complaint (id.), but similarly
11 provides no specifics supporting that assertion; and she baldly asserts that the BSF
12 Defendants “sought to intimidate and silence” unnamed individuals who were either
13 Weinstein’s victims or who sought to publish his victims’ stories, but offers no facts
14 to show the BSF Defendants did any such thing or acted in any way outside their
15 role as attorneys who provided a client with a professional service. (Id.).
16 Instead, McGowan alleges only that, over about nine months, individuals
17 whom McGowan identifies as Black Cube “operatives” (1) misidentified who they
18 were to her in an attempt to befriend her and gain her trust; (2) occasionally spoke
19 with her over the telephone, met with her a handful of times, and intermittently
20 exchanged e-mails with her; and/or (3) surreptitiously tape-recorded some of their
21 conversations with her, all for the alleged purpose of obtaining insight into her then-
22 unpublished and unfinished memoir (which was published in January 2018). (Id.
23 ¶¶ 64-67, 70-72, 75-77, 97, 103-05, 107-10, 121-22, 127).
24 As a result of this purported “racketeering” conduct, involving a single
25 alleged scheme, a single purpose, and a single victim over a period of several
26 months, McGowan claims she sustained various personal injuries, as well as
27 purported “concrete economic losses” in the form of “decreased book sales,”
28 unspecified lost employment and commercial opportunities, and various fees and
1 costs in unnamed amounts, among other injuries. 2 (Id. ¶¶ 128, 131, 148). But she
2 neither alleges any facts demonstrating how any of these purported “concrete
3 economic losses” were directly caused by the racketeering conduct she alleges, nor
4 does she offer facts showing how BSF lawyers providing the discrete professional
5 service for a long-time client of engaging private investigators on his behalf
6 somehow engaged in “racketeering” or other actionable behavior.
7 III. ARGUMENT
8 A cause of action cannot survive a Rule 12(b)(6) motion without “enough
9 facts to state a claim to relief that is plausible on its face.” Bell Alt. v. Twombly, 550
10 U.S. 544, 570 (2007). Allegations must contain “more than labels and conclusions,”
11 (id. at 555), and a court should not accept “unreasonable inferences” or
12 “unwarranted deductions of fact.” Sprewell v. Golden State Warriors, 266 F.3d 979,
13 988 (9th Cir. 2001); see also Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).
14 A. McGowan’s RICO Claims Should Be Dismissed
15 The Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18
16 U.S.C. § 1962(c)-(d), “makes it ‘unlawful for any person employed by or associated
17 with any enterprise . . . to conduct or participate in the conduct of such an
18 enterprise’s affairs’ through the commission of two or more statutorily defined
19 crimes – which RICO calls a ‘pattern of racketeering activity.’” Cedric Kushner
20 Promotions, Ltd. v. King, 533 U.S. 158, 160 (2001). To state a RICO claim, a
21 plaintiff must allege (1) conduct (2) of an enterprise (3) through a pattern (4) of
22 racketeering activity (known as “predicate acts”) (5) causing injury to the plaintiff’s
23 “business or property.” Sedima, S.P.R.I v. Imrex Co., 473 U.S. 479, 496 (1985).
24
2
25 McGowan’s Complaint contains numerous other accusations unconnected to the legal claims
she makes against the BSF Defendants—ranging from an unsupported claim that drugs were
26 planted in her wallet on an airplane (allegations that have triggered a defamation lawsuit against
McGowan and her lawyers—Baez et.al. v. Rose McGowan et. al., 2020L000768, Cook County,
27 Illinois), to complaints about a heckler who appeared at one of her book signings. (Compl., ¶¶ 55-
28 62, 128). None of this involves behavior cognizable under RICO, nor is it conduct remotely tied
to anything the BSF Defendants allegedly did.
1 Because of the stigmatizing and potent nature of a RICO claim and its “quasi-
2 criminal nature,” courts routinely dismiss RICO claims early in litigation unless a
3 plaintiff can allege facts sufficient to meet RICO’s exacting requirements. See
4 Wagh v. Metris Direct, Inc., 348 F.3d 1102, 1108 (9th Cir. 2003) (“the need for the
5 expeditious and orderly progress of . . . litigation” is particularly pronounced in a
6 civil RICO suit because of its “quasi-criminal” nature and “Courts should . . . ‘strive
7 to flush out frivolous RICO allegations at an early stage of the litigation’”) (citation
8 omitted), overruled on other grounds by Odom v. Microsoft, 486 F.3d 541 (9th Cir.
9 2007); Miranda v. Ponce Fed. Bank, 948 F.2d 41, 44 (1st Cir. 1991) (“it would be
10 unjust if a RICO plaintiff could defeat a motion to dismiss simply by asserting an
11 inequity attributable to a defendant’s conduct and tacking on a self-serving
12 conclusion that the conduct amounted to racketeering”).
13 Here, McGowan’s RICO claims fail for at least three reasons:
14 (1) She fails to establish a “pattern of racketeering activity” that features
15 either closed-ended or open-ended continuity;
16 (2) She lacks standing to pursue her RICO claims because she does not
17 allege a non-speculative injury that (a) is compensable under RICO and (b) was
18 directly caused by the racketeering activity she alleges; and
19 (3) As attorneys, the BSF Defendants cannot be held civilly liable under
20 RICO absent facts sufficient to allege that they managed or operated a RICO
21 enterprise, and McGowan has alleged no such facts whatsoever.
22 1. McGowan Cannot Properly Allege the BSF Defendants
Engaged in a “Pattern of Racketeering Activity”
23
To state a RICO claim, a plaintiff must allege that each defendant engaged in
24
“at least two acts of racketeering activity”—or RICO predicate offenses—that
25
occurred within 10 years of each other. 18 U.S.C. § 1961(5). In addition, since
26
proof of two RICO predicate offenses occurring within ten years of each other is a
27
necessary, but normally not sufficient, showing to establish “a pattern of
28
1 racketeering activity,” a plaintiff must also plead and prove that the racketeering
2 acts alleged are related to one another, are non-sporadic, and are continuous in order
3 to establish a “pattern of racketeering.” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229,
4 236-43 (1989). To this end, “[t]o establish a RICO pattern, it must also be shown
5 that the predicates themselves amount to, or that they otherwise constitute a threat
6 of, continuing racketeering activity.” Id. To satisfy this continuity requirement, a
7 plaintiff must plead and prove either “a series of related predicates extending over a
8 substantial period of time,” [i.e., closed-ended continuity], . . . , or past conduct that
9 by its nature projects into the future with a threat of repetition [i.e. open-ended
10 continuity].” Id. at 242 (brackets in original); Howard v. Am. Online, Inc., 208 F.3d
11 741, 750 (9th Cir. 2000). Because McGowan has not properly alleged the existence
12 of either the closed-ended or open-ended continuity required under RICO, those
13 claims fail as a matter of law.
14 (a) The Single Scheme to Defraud a Single Victim Over
the Short Timespan Alleged by McGowan Does Not
15
Amount to “Closed-Ended Continuity”
16 To properly allege “closed-ended continuity” sufficient to establish a “pattern
17 of racketeering activity,” a plaintiff must allege a series of related RICO predicate
18 offenses extending over a substantial time period. Turner v. Cook, 362 F.3d 1219,
19 1229 (9th Cir. 2004). “Predicate acts extending over a few weeks or months and
20 threatening no future criminal conduct do not satisfy this [continuity] requirement.”
21 H.J. Inc., 492 U.S. at 241; Howard, 208 F.3d at 750. While RICO claims involving
22 a single scheme and single victim are theoretically possible, the presence (or lack) of
23 multiple schemes and victims in a RICO case is “highly relevant to the inquiry into
24 the continuity of the defendant’s racketeering activity.” H.J. Inc., 492 U.S. at 240.
25 Factors to consider in determining whether a plaintiff has sufficiently pled the type
26 of closed-ended continuity required to maintain a RICO claim, include: “(1) the
27 number and variety of predicate acts; (2) the presence of separate schemes; (3) the
28 number of victims; and (4) the occurrence of distinct injuries caused by the alleged
1 racketeers.” NSI Tech. Serv. Corp. v. Nat’l Aeronautics & Space Admin., 1996 WL
2 263646, at * 3 (N.D. Cal. Apr. 13, 1996) (citations omitted). And courts have
3 repeatedly recognized that “[a] single plan with a singular purpose and effect does
4 not constitute a ‘pattern’ of racketeering activity.” Id. (citations omitted).
5 At best, McGowan alleges a single scheme with a single purpose—a plan to
6 defraud her into disclosing pre-publication excerpts of a book she was writing to
7 individuals allegedly employed by Black Cube—and no variety of predicate acts
8 whatsoever, as they all relate to this single scheme. Her accusations center on a
9 single supposed victim – herself.3 And the only alleged injuries she sustained that
10 directly resulted from the racketeering activity she alleges are limited to the
11 supposed emotional distress she suffered upon learning she had been misled by
12 certain Black Cube employees.
13 Furthermore, the “fraud” McGowan alleges spanned less than ten months and
14 involved only intermittent contact between her and anyone associated with Black
15 Cube. (Compl. ¶¶ 64-67, 70-72, 75-77, 97, 103-05, 107-10, 121-22 (describing
16 intermittent contacts McGowan had with Black Cube’s “agents” between January
17 and October 2017)). As alleged, this scheme was not nearly long enough to
18 constitute a “closed-ended” pattern of racketeering. Religious Tech. Ctr. v.
19 Willersheim, 971 F.2d 364, 366 (9th Cir. 1992) (“We have found no case in which a
20 court has held the requirement [for closed-ended continuity] to be satisfied by a
21 pattern of activity lasting less than a year. A pattern of activity lasting only a few
22 months does not reflect the ‘long term criminal conduct’ to which RICO was
23 intended to apply”) (emphasis added); 4 Primary Care Investors Seven, Inc. v. PHP
24
25 3
McGowan’s claim that there were “countless victims” of the defendants’ scheme is completely
26 unsubstantiated; she fails to allege any racketeering act committed by any defendant that allegedly
injured any other person in any tangible way.
27 4
While there is no “bright line” one-year minimum requirement to establish the degree of
28 “closed-ended continuity” needed to maintain a RICO claim, Allwaste, Inc. v. Hecht, 65 F.3d
1 Heathcare Corp., 986 F.2d 1208, 1215 (8th Cir. 1993) (holding a scheme of 11
2 months is insufficient to satisfy RICO’s closed-ended continuity requirement and
3 noting that Circuits throughout the country consistently hold the same regarding
4 schemes of less than one year). Nor do her claims of an alleged fraud that involved
5 a single scheme, carried out for a single purpose, and that harmed a single victim
6 over this short period of time remotely meet what is required to show the type of
7 closed-ended continuity needed to establish a pattern of racketeering activity. Flip
8 Mortgage Corp. v. McElhone, 841 F.2d 531, 538 (4th Cir. 1988) (holding that a
9 fraudulent scheme occurring over several years but impacting only one victim did
10 not qualify as a RICO offense).
11 To plead a closed-ended RICO scheme, a plaintiff must allege a substantial
12 and varied history of past criminal conduct occurring over a substantial period of
13 time. Having not done so, McGowan’s RICO claims fail. 5
14 (b) Since the Alleged Racketeering Activity Had a Built-In
End Point, McGowan Has Not Shown “Open-Ended
15
Continuity”
16 To properly allege “open-ended continuity” sufficient to establish a “pattern
17 of racketeering activity,” a plaintiff must allege a form of racketeering activity that
18 by its nature projects into the future with a threat of repetition. Turner, 362 F.3d at
19 1229. “A plaintiff cannot demonstrate open-ended continuity if the racketeering
20 activity alleged has a built-in ending point.” U.S. Airline Pilots Ass’n v. Awappa,
21 LLC, 615 F.3d 312, 319 (4th Cir. 2010). This is so “even if the purported scheme
22
23 1523, 1528 (9th Cir. 1995), McGowan has not only alleged a purported RICO offense that
spanned less than one year, she has alleged a RICO claim involving a single scheme and purpose
24 and one in which she is the only victim who was allegedly injured by the RICO predicate acts she
alleges. This compels a conclusion that McGowan has not alleged the type of long-term and
25 multi-faceted criminal conduct Congress sought to address when it enacted RICO.
5
26 McGowan’s failure to allege facts showing that the “enterprise” alleged in her Complaint was
engaged in long-term criminal conduct is also one of several reasons why her Complaint does not
27 properly allege the existence of a RICO enterprise at all. See Boyle v. United States, 556 U.S. 938,
28 946-47 (2009) (recognizing an associated-in-fact enterprise must have “longevity sufficient to
permit [its] associates to pursue the enterprise’s purpose”).
1 takes several years to unfold, involves a variety of criminal acts, and targets more
2 than one victim.” Gamboa v. Velex, 457 F.3d 703, 709 (7th Cir. 2006).
3 In every respect, McGowan’s claims involve a purported “enterprise” that had
4 a built-in end point—stopping or discrediting a book McGowan was threatening to
5 and did publish. McGowan concedes she has published the book at issue in her
6 claims; the relationship between Black Cube and the other defendants was governed
7 by a contractual arrangement of a finite nature that ended more than two years ago;
8 and the events McGowan alleges in her Complaint are now in the past to such a
9 degree that they have already been the subject of numerous newspaper and
10 magazine articles, and even two books from which McGowan has liberally
11 borrowed her accusations. (Compl., ¶ 132). Because the Complaint offers no
12 specific allegations that the purported RICO enterprise McGowan alleges is engaged
13 in ongoing racketeering activity or in racketeering activity that inherently includes
14 the potential for repetition in perpetuity, McGowan has not alleged the type of
15 “open-ended continuity” required to maintain her RICO claims.
16 2. McGowan Lacks RICO Standing Because She Has Not
Sustained an Injury to Her Business or Property Directly
17
Caused by the Racketeering Conduct She Alleges
18 “A civil RICO plaintiff only has standing if, and can only recover to the
19 extent that, he has been injured in his business or property by the conduct causing
20 the violation.” Canyon Cty v. Syngenta Seeds, Inc., 519 F.3d 969, 975 (9th Cir.
21 2008); Oscar v. Univ. Students Co-op Ass’n, 965 F.2d 783, 785-88 (9th Cir. 1992)
22 (plaintiff who sustained a mix of non-tangible injuries and alleged financial harms
23 that were not directly caused by the racketeering acts he alleged lacked standing to
24 bring a RICO claim), abrogated on other grounds by Diaz v. Gates, 420 F.3d 897
25 (9th Cir. 2005). Whether a plaintiff has sufficiently alleged an injury to her business
26 or property caused by a defendant’s purported racketeering activity is a question of
27 law properly addressed in a motion to dismiss. Oscar, 965 F.2d at 785. Here,
28 McGowan lacks standing because the injuries she alleges are not compensable under
1 RICO and were not directly caused by the racketeering activity she alleges.
2 (a) McGowan Cannot Establish She Suffered Non-
Speculative Injuries Compensable Under RICO
3
Not all harms confer standing to assert a RICO claim. A wide class of
4
intangible harms, such as personal injuries, are not compensable under RICO
5
because they are not injuries to one’s “business or property.” Id. at 783. For
6
instance, reputational harm, mental anguish, and pain and suffering are not injuries
7
to “business or property” that confer standing to sue under RICO. See, e.g., Chaset
8
v. Fleer/Skybox Int’l, LP, 300 F.3d 1083, 1087 (9th Cir. 2002) (reputational harms
9
are not “concrete financial loss[es]” compensable under RICO); Berg v. First State
10
Ins. Co., 915 F.2d 460, 463-64 (9th Cir. 1990) (personal injuries, including
11
emotional distress that results in pecuniary losses, are not compensable under
12
RICO). McGowan also cannot rely upon financial losses that are derivative of
13
harms not compensable under RICO to establish standing. See Doe v. Roe, 958 F.2d
14
763, 766 (7th Cir. 1992) (plaintiff who claimed to have suffered financial losses
15
compensable under RICO, including “expenses for increased personal security,”
16
lacked standing, as such expenses were “derivative” of her lost sense of security and
17
thus “reflect[ed] personal injuries which are not compensable under RICO”). As
18
this Court has recognized, standing to pursue a RICO claim is only available to
19
plaintiffs who suffer a “concrete financial loss,” and a “plaintiff cannot maintain a
20
RICO claim where the loss he has suffered is ‘purely speculative.’” Camarillo v.
21
Maywood, 2008 WL 4056994, at *2 (C.D. Cal. Aug. 27, 2008) (citations omitted).
22
Because all the injuries McGowan alleges are either (a) personal injuries not
23
compensable under RICO; (b) derivative of personal injuries not compensable under
24
RICO; and/or (c) entirely speculative, she lacks standing to assert her RICO claims.
25
The principle injuries McGowan claims she sustained—“mental anguish” and
26
“emotional distress”—are personal injuries not compensable under RICO. (Compl.
27
¶ 128 (asserting that McGowan suffered “a mental breakdown,” “sought treatment
28
1 for post-traumatic stress disorder,” and “spent the better part of 2018 feeling like she
2 would not survive the trauma”)). The same is true to the extent she claims to have
3 suffered harm to her “business reputation” as a result of the defendants’ actions (see
4 id. ¶¶ 131, 145, 148), as such harm is likewise not a tangible injury to one’s
5 “business or property” that provides standing to assert a RICO claim.
6 In addition to these non-compensable personal injuries, McGowan alleges, in
7 only summary fashion, that she sustained “concrete financial losses,” including (1)
8 the purported “interruption and termination” of her “relationships with commercial
9 partners (including, for example, the interruption of McGowan’s book tour and
10 resulting interference with her relationships with her publisher and the many
11 retailers involved in the book tour)”; (2) unspecified “fees and costs” paid to her
12 literary agents; (3) unspecified legal fees and costs associated with her criminal
13 drug-possession case and with Weinstein’s alleged efforts to prevent the publication
14 of her book; (4) decreased book sales; (5) unspecified “lost employment
15 opportunities”; and (6) unidentified “lost commercial opportunities, including film,
16 television, book, and other media projects.” (Id. ¶ 145). There is nothing
17 “concrete” about any of this. For instance, while McGowan claims to have suffered
18 “lost book sales” and lost employment and commercial opportunities, 6 she offers no
19 further facts about those alleged injuries, rendering them entirely speculative.
20 Lastly, to the extent McGowan’s purported injuries could be measurable in
21 any “concrete” way, they are purely derivative of injuries she allegedly suffered that
22 are not compensable under RICO, such as the purported damage to her emotional
23
24 6
As this Court has held, a barebones claim that a plaintiff has suffered an injury under RICO as a
25 result of losing a job or employment opportunity must be supported by allegations showing such
an injury occurred, such as allegations a plaintiff actually lost a specific job or employment
26 opportunity due to the racketeering conduct alleged. Camarillo, 2008 WL 4056994 at *2
(dismissing RICO claims without leave to amend because the damages alleged by the plaintiff,
27 including a non-specific claim he had lost his job as a result of the defendant’s purported
racketeering conduct, were speculative). Here, McGowan does not identify any job or
28 employment opportunities she actually lost as a result of the racketeering conduct that she alleges.
1 state and reputation. McGowan’s claim that she sustained harm as a result of the
2 interruption of her book tour, that she lost job opportunities, and that she lost book
3 sales all fall in this category of purported harms derivative of her claim that she
4 sustained harm to her mental health and reputation as a result of alleged efforts to
5 surreptitiously obtain information from her about her book prior to its publication.
6 (Id. ¶¶ 131, 145, 148). Indeed, McGowan specifically alleges that she canceled her
7 book tour, and apparently did harm to her business relationships by doing so,
8 because she suffered a “mental breakdown” that reportedly plagued her throughout
9 much of 2018. (Id. ¶ 128). Accordingly, the “concrete” financial harm McGowan
10 claims to have suffered from the cancellation of her book tour—like the
11 employment and commercial opportunities she claims she lost due to her allegedly
12 stained reputation—are “plainly derivative of” personal injuries she claims she
13 suffered as a result of the defendants’ alleged conduct and thus are not compensable
14 under RICO and do not confer RICO standing to McGowan.
15 (b)The Racketeering Acts McGowan Alleges Did Not
Directly Cause Her Purported Injuries
16
McGowan also does not have standing to assert her RICO claims because the
17
racketeering acts she alleges did not directly cause her any “concrete financial loss.”
18
“To state a civil claim under RICO, a plaintiff is required to show that a
19
RICO predicate offense not only was a but-for cause of his injury, but was the
20
proximate cause as well.” Hemi Group, LLC v. City of New York, 559 U.S. 1, 9
21
(2010); Rezner v. Bayerishche Hyp-Und Vereinsbank AG, 630 F.3d 866, 873 (9th
22
Cir. 2010) (to have standing to pursue a civil RICO claim, a plaintiff “is required to
23
show that the racketeering activity was both a but-for and a proximate cause of his
24
injury”). As this Court has recognized, courts have imposed a “stringent proximate
25
cause requirement” in RICO cases. Prime Partners IPA of Temecula, Inc. v.
26
Chaudhuri, 2012 WL 1669726, at *7 (C.D. Cal. May 14, 2012) (emphasis added).
27
Proximate cause for RICO “requires some direct relation between the injury asserted
28
1 and the injurious conduct alleged. A link that is too remote, purely contingent, or
2 indirect is insufficient.” Hemi Group, LLC, 559 U.S. at 9. “When a court evaluates
3 a RICO claim for proximate causation, the central question it must ask is whether
4 the alleged violation led directly to the plaintiff’s injuries.” Anza v. Ideal Steel
5 Supply Corp., 547 U.S. 451, 461 (2006) (emphasis added); Sybersound Records v.
6 UAV Corp., 517 F.3d 1137, 1149 (9th Cir. 2008).
7 Here, the only racketeering conduct McGowan alleges to support her RICO
8 claim is an alleged wire fraud scheme in which false pretenses were used to gain
9 access to excerpts of a book McGowan was writing, which was believed to contain
10 negative information about Weinstein. 7 But there is no direct casual connection
11 alleged between this alleged racketeering activity and the injuries McGowan claims
12 to have sustained. For instance, McGowan offers no facts whatsoever to explain
13 how this alleged fraud directly resulted in any “lost commercial opportunities,”
14 impacted her book sales, or damaged business relationships she had with others.
15 Even more notably, McGowan’s Complaint utterly fails to make the required
16 direct casual connection between any alleged wrongdoing on the part of the BSF
17 Defendants with any non-speculative injury to a concrete business or property
18 interest belonging to McGowan. Indeed, McGowan does not contend that the BSF
19 Defendants directly caused her any harm at all; her sole allegations are that they
20 allegedly “hired” and paid Black Cube, “attempted to shield Black Cube’s activities
21 from public disclosure,” “engaged Bloom and the Bloom firm to participate in the
22 scheme,” provided some form of “unidentified strategic non-legal advice concerning
23 the scheme,” and “sought to intimidate and silence the scheme’s victims and
24
25 7
While McGowan alleges a number of other ways she claims she was aggrieved by various
26 people who attempted to harm her reputation or dissuade her from publishing her memoir, none of
those superfluous allegations concern acts that remotely qualify as “racketeering activity.” As this
27 Court has recognized, what qualifies as “racketeering activity” is strictly limited to particular
28 criminal acts listed at 18 U.S.C. § 1961(1)(B) that are “indictable,” a fact McGowan blissfully
ignores. Hahn v. Rothman, 2010 WL 11515464, at *2-3 (C.D. Cal. Jan. 12, 2010).
1 publishers of the victims’ accounts.” (Compl. ¶ 140(b)). Not only do such alleged
2 actions by the BSF Defendants not constitute “racketeering activity” recognized
3 under the RICO statute, none of what the BSF Defendants allegedly did directly
4 caused any of McGowan’s claimed injuries, as required for McGowan to have
5 standing to bring her RICO claims against the BSF Defendants.
6 3. McGowan Has Not Alleged Facts Showing that the BSF
Defendants Operated or Managed Her Claimed
7
Racketeering Enterprise
8 To hold legal professionals like the BSF Defendants liable under RICO,
9 McGowan must allege specific facts showing they (1) assumed a role within a
10 racketeering enterprise apart from providing legal services to the enterprise; and
11 (2) “operated” or “managed” (or “directed” and “controlled”) the affairs of the
12 enterprise. McGowan has not made such a showing, and thus her RICO claims fail.
13 In Reves v. Ernst & Young, 507 U.S. 170, 184 (1993), the Supreme Court held
14 that professionals who are merely employed by or associated with an alleged RICO
15 enterprise cannot be held liable under RICO unless they participate in the
16 “operation” or “management” of the enterprise in some way beyond providing their
17 professional services to the enterprise. The Ninth Circuit has followed Reves by
18 recognizing that providing professional services cannot subject an attorney to RICO
19 liability unless the attorney “directed or controlled” an alleged RICO enterprise. See
20 Walter v. Drayson, 538 F.3d 1244, 1248-49 (9th Cir. 2008) (affirming dismissal of a
21 RICO claim brought against an attorney where the facts pled did not show the
22 defendant-attorney played a role in the management or operation of the alleged
23 enterprise); Baumer v. Pachl, 8 F.3d 1341, 1344 (9th Cir. 1993) (affirming dismissal
24 of a RICO claim against an attorney who drafted letters and agreements as part of an
25 alleged conspiracy because the plaintiff failed to plead facts sufficient to show the
26 attorney directed or controlled the purported RICO enterprise); Biofeedtrac, Inc. v.
27 Kilinor Optical Enters. & Consultants, SRL, 832 F. Supp. 585, 587 (E.D.N.Y. 1993)
28 (no RICO liability where an attorney provided advice and legal services to advance
1 a fraudulent scheme but was not involved in creating the scheme).

2 Here, the crux of McGowan’s claim against the BSF Defendants is that they
3 contracted with an investigative firm on behalf of a client and administered the
4 payments due to that investigative firm under the contract—acts lawyers routinely
5 undertake on behalf of clients. Apart from a single, conclusory allegation asserting
6 that the BSF Defendants “provided strategic non-legal advice” to Black Cube of
7 some unknown sort at some unknown time and for some unknown purpose (Compl.
8 ¶ 140(b)), McGowan offers no allegation that the BSF Defendants operated or
9 managed the alleged RICO enterprise.8 Since McGowan has not pled such facts, her
10 RICO claims against the BSF Defendants fail.9
11 4. McGowan’s RICO Conspiracy Claim Also Fails
12 Because McGowan’s substantive RICO claim fails, her RICO conspiracy
13 claim fails as well. Sanford v. MemberWorks, Inc., 625 F.3d 550, 559 (9th Cir.
14 2010) (“plaintiffs cannot claim that a conspiracy to violate RICO [pursuant to 18
15 U.S.C. § 1962(d)] existed if they do not adequately plead a substantive violation of
16 RICO”) (citation omitted). Accordingly, McGowan’s second cause of action should
17 be dismissed with prejudice in conjunction with her first cause of action.
18
8
19 Indeed, McGowan alleges quite the opposite, claiming the BSF Defendants failed to adequately
oversee the activities of the Black Cube employees who allegedly committed the racketeering acts
20 that are the subject of her Complaint. (Compl. ¶ 224).
9
21 Civil RICO claims based in purported fraud, like those here, are subject to Federal Rule of Civil
Procedure 9(b)’s heightened pleading standards, which require a plaintiff to allege “the who, what,
22 and where” of the alleged fraud with particularity. Edwards v. Marin Park, Inc., 356 F.3d 1058,
1065-66 (9th Cir. 2004). As this Court has noted, a plaintiff does not satisfy Rule 9(b) by merely
23 lumping the “defendants” together and alleging they collectively engaged in fraudulent conduct.
Liu v. Li, 2010 WL 4286265, at * 2, 4 (C.D. Cal. Oct. 21, 2010). Each defendant’s role in the
24 alleged fraud must be pled with particularity. Id. McGowan fails to meet this rigorous standard,
25 never specifying when, how, and under what circumstances the BSF Defendants directed a fraud
targeting her, and instead alleges only they “hired” and “paid” Black Cube on Weinstein’s behalf,
26 somehow “attempted to shield Black Cube’s activities from public disclosure,” and provided
unidentified “strategic non-legal advice” to unidentified persons as part of an alleged scheme.
27 (Compl. ¶ 140(b)). This pleading failure alone compels dismissal of her RICO claims, as well as
her similarly-deficient state fraud claims, which are also subject to Rule 9(b). Fausel v. Shellpoint
28 Mortgage Servicing, LLC, 2019 WL 6794201, at *9 (C.D. Cal. Aug. 12 2019).
1 B. McGowan’s ECPA Claim Is Incurably Deficient

2 The ECPA makes it an offense to “intentionally intercept [] . . . any wire, oral,
3 or electronic communication.” 18 U.S.C. § 2511(1)(a). McGowan’s ECPA claim
4 against the BSF Defendants fails because (1) the only non-conclusory allegation she
5 makes to support her ECPA claim against the BSF Defendants is that the BSF
6 Defendants hired Black Cube, which recorded communications between McGowan
7 and its personnel, but there is no ECPA civil liability for procuring violations of the
8 ECPA; and (2) McGowan alleges that the conversations were recorded by a party to
9 those conversations, and the ECPA does not prohibit such recordings.
10 1. The ECPA Does Not Impose Secondary Civil Liability
Courts have repeatedly recognized that a 1986 amendment to the ECPA
11
eliminated liability under the ECPA for those who “procure[] any other person to
12
intercept, disclose, or use” communications covered by the ECPA. See Kirch v.
13
Embarq Mgmt. Co., 702 F.3d 1245, 1246-47 (10th Cir. 2012) (the ECPA, as
14
amended in 1986, does not impose civil liability on one who “procures” another to
15
illegally intercept communications covered by the ECPA); Doe v. GTE Corp., 347
16
F.3d 655, 659 (7th Cir. 2003) (nothing in the ECPA “condemns assistants, as
17
opposed to those who directly perpetrate the act” and a “statute that is this precise
18
about who, other than the primary interceptor, can be liable should not be read to
19
create a penumbra of additional but unspecified liability”); Peavy v. WFAA-TV, Inc.,
20
221 F.3d 158, 169 (5th Cir. 2000) (Congress’ act of removing “procurement” from
21
the portion of the ECPA providing a civil remedy confirmed the ECPA no longer
22
provides for secondary liability in a civil action).
23
Here, McGowan does not allege the BSF Defendants secretly recorded any
24
conversation with her. Instead, she claims that certain Black Cube employees
25
secretly taped some of their conversations and the BSF Defendants procured Black
26
Cube to have them do so. (Complaint ¶ 150 (seeking to hold the defendants liable
27
for “procur[ing] other persons” to violate the ECPA)). Since there are no allegations
28
1 the BSF Defendants directly recorded any conversation with McGowan, and
2 secondary liability is not available under the ECPA in civil cases, her ECPA claim
3 against the BSF Defendants should be dismissed with prejudice.
4 2. The Conversations Allegedly Recorded by Black Cube Were
Recorded in Compliance with the ECPA
5
Independently, the ECPA specifically permits the type of recordings Black
6
Cube allegedly made. The ECPA allows recordings where the individual recording
7
a communication “is a party to the communication . . . unless such communication
8
is intercepted for the purpose of committing any criminal or tortious act in violation
9
of the Constitution or laws of the United States or of any State.” 18 U.S.C. §
10
2511(2)(d). As the allegations in the Complaint confirm the alleged recordings here
11
fall within the scope of § 2511(2)(d), McGowan’s ECPA claim fails.
12
First, McGowan alleges that the Black Cube personnel who allegedly
13
recorded conversations with her were “parties” to those conversations within the
14
meaning of § 2511(2)(d). A “party to a communication under § 2511(2)(d) is
15
defined as a party who is present when the oral communication is uttered and need
16
not directly participate in the conversation.” Pitts Sales, Inc. v. King World Prods.,
17
Inc., 383 F. Supp. 2d 1354, 1361 (S.D. Fla. 2005); Sussman v. Am. Broad. Cos., 186
18
F.3d 1200, 1201-02 (9th Cir. 1999) (applying § 2511(2)(d) where the person who
19
made surreptitious recordings was a “participant” in the recorded conversation).
20
Here, McGowan asserts the conversations were recorded by the very same people
21
who were speaking with her. (Compl. ¶ 78).
22
Second, McGowan offers no facts to indicate that anyone made any recording
23
“for the purpose of committing any criminal or tortious act.” 18 U.S.C. §
24
2511(2)(d). Under this provision, it is not enough to allege that the means to obtain
25
the recording were unlawful (i.e., that the recording was procured by fraud, or was
26
made in a state where a recording cannot be made without the consent of all parties
27
to a conversation); the person recording the conversation must intend to use the
28
1 recording for an additional, subsequent purpose that itself is tortious or criminal.

2 Sussman, 186 F.3d at 1202-03 (“[W]here the purpose is not illegal or tortious, but
3 the means are, the victims must seek redress elsewhere”). Accordingly, courts have
4 universally recognized that “under [the ECPA], a defendant must have the intent to
5 use the illicit recording to commit a tort or crime beyond the act of the recording
6 itself.” Caro v. Weintraub, 618 F.3d 94, 98 (2d Cir. 2010). And, “to survive a
7 motion to dismiss, a plaintiff must plead sufficient facts to support an inference that
8 the offender intercepted the communication for the purpose of a tortious or criminal
9 act that is independent of the intentional act of recording.” Id. at 100.
10 McGowan has not alleged in a non-conclusory manner that any defendant
11 used or intended to use any recordings made of her conversations to commit a crime
12 or tort. Instead, to the extent she alleges any sort of fraud or wrongdoing, it is fraud
13 or wrongdoing she claims was committed in order to record these conversations.
14 That does not amount to an independent wrong triggering an ECPA violation, and
15 thus, her ECPA claim fails.
16 C. McGowan’s State Law Fraud Claims Fail Because She Does Not
Allege Compensable Damages Caused by the Alleged Fraud
17
A plaintiff “must suffer actual monetary loss to recover on a [California]
18
fraud claim.” All. Mortg. Co. v. Rothwell, 10 Cal. 4th 1226, 1240 (1995). This is
19
because “[f]raudulent representations which work no damage cannot give rise to an
20
action at law and an allegation of a definite amount of damage is essential to stating
21
a cause of action.” Abbot v. Stevens, 133 Cal. App. 2d 242, 247 (1955).
22
Moreover, a plaintiff can recover emotional distress damages for fraud only
23
when she also suffers financial harm. Nagy v. Nagy, 210 Cal. App. 3d 1262, 1269
24
(1989). In Nagy, a husband brought fraud and IIED claims against his wife, alleging
25
she deceived him into believing he was the biological father of their son. Id. at
26
1265-66. The husband claimed his wife’s misrepresentation caused him to
27
“develop[] a very close and intimate relationship” with the son and to “perform[] all
28
1 acts that a father would towards a son.” Id. at 1266. The trial court sustained the
2 wife’s demurrer and the Court of Appeal affirmed, holding that “developing an
3 intimate relationship” with the child—while perhaps caused by the wife’s
4 “betrayal”—was not a legally cognizable harm. Id. at 1269-70. The court
5 confirmed that “[a]lthough damages for emotional distress can be recovered in a
6 fraud cause of action, such damages have been allowed only as an aggravation of
7 other damages.” Id. (emphasis added).
8 Here, McGowan has asserted claims for fraudulent deceit under California
9 Civil Code § 1709 and common law fraud based on “deceptive” statements the
10 defendants allegedly made or “caused [] to be made” about the identities and
11 intentions of certain Black Cube employees in order to “gain McGowan’s trust” and
12 to use that trust to “steal her unpublished manuscript.” (Compl. ¶¶ 161, 170, 178).
13 Notably, McGowan does not allege that the BSF Defendants communicated directly
14 with her in any way. And while McGowan alleges the misrepresentations made by
15 others “harmed her greatly” because she “ended up revealing sensitive information
16 that prepared defendants to discredit and malign her publicly, undermining her
17 book, commercial projects, and reputation, causing her damages” (id. ¶¶ 164, 173),
18 she does not allege any concrete financial harm caused by these purported
19 misrepresentations, let alone a “definite amount of damage” linked to this alleged
20 fraud. Accordingly, her fraud claims both fail.
21 D. McGowan’s Bane Act Claim Fails
22 The Bane Act creates a civil cause of action against one who intentionally
23 interferes with, or attempts to interfere with, the Constitutional rights of another by
24 threats, intimidation, or coercion. Cal. Civ. Code § 52.1(b). Significantly, the Bane
25 Act is not violated through speech alone (as opposed to engaging in an act of
26 violence) unless the speech threatens violence against a specific person; that person
27 reasonably fears, because of the speech, violence will be committed against them or
28 their property; and the person threatening violence has the apparent ability to carry
1 out the threat. Cal. Civ. Code § 52.1(k). Insofar as purely speech-based claims
2 under the Bane Act are concerned, like the one McGowan attempts to assert here:
3 (1) the speech must explicitly threaten physical violence and do more than merely
4 have some coercive effect;10 (2) menacing statements do not constitute a “threat” of
5 violence under the Bane Act;11 and (3) “false and derogatory” public statements
6 about a person do not violate the Bane Act.12
7 McGowan does not allege that the BSF Defendants, or anyone acting on their
8 behalf, threatened her with physical violence. Nor does she allege that she
9 reasonably feared physical violence would be committed against her by any such
10 person who had the apparent ability to do so. In fact, the nature of McGowan’s
11 allegations foreclose the notion she can properly state a claim under the Bane Act,
12 as the thrust of her claim is that certain Black Cube employees engaged in deception
13 to befriend her in order to gain her trust—the type of conduct that is the exact
14 opposite of threatening someone with physical violence. Given these circumstances,
15 McGowan’s incorrectly-pled Bane Act claim fails as a matter of law. 13
16
10
17 City & Cty. of San Francisco v. Ballard, 136 Cal. App. 4th 381, 408 (2006) (sustaining
demurrer to Bane Act claim where the City of San Francisco “threatened” a plaintiff with millions
18 of dollars in fines and demolition of his building, holding that the plaintiff failed to allege “any
conduct that rises to the level of a threat of violence or coercion”).
19
11
Kovacic v. Cty. of Los Angeles, 2016 WL 1125558, at *10 (C.D. Cal. Mar. 21, 2016) (no Bane
20 Act violation where police officers detained plaintiffs and allegedly told them to “shut the f**k
21 up,” holding such speech falls “far short of the ‘threat of violence’ threshold” under the Bane Act).
12
Mulligan v. Nichols, 2013 WL 12124003, at *1, 4 (C.D. Cal. June 3, 2013) (police group
22 accusing a victim of police violence of being a “delusional” drug addict did not violate the Bane
23 Act because “[t]hese statements do not rise to the level of threats, intimidation, or coercion”).
13
Perhaps recognizing the deficiencies in her Bane Act claim, McGowan misstates the elements,
24 asserting the defendants violated her constitutional rights through “fraud, coercion, or
25 intimidation” (Compl. ¶¶ 177-78). The Bane Act, in fact, requires a showing the defendants did so
through “threats, coercion, or intimidation.” Cal. Civ. Code § 52.1(b). The sleight of hand does
26 not save her claim. No case recognizes that fraudulent conduct (as opposed to violent conduct) or
fraudulent speech (as opposed to threatening speech) violates the Bane Act. And while McGowan
27 repeatedly asserts that the purported use of Black Cube employees to befriend her was “coercive,”
28 cases like Ballard make it clear that conduct which has a coercive effect does not violate the Bane
Act unless accompanied by an explicit threat of violence. Ballard, 136 Cal. App. 4th at 408.
1 E. McGowan’s Computer Crimes Claim Fails

2 California Penal Section 502 (misidentified in the Complaint as California
3 Civil Code Section 502) was enacted to expand protection from “tampering,
4 interference, damage, and unauthorized access to lawfully created computer data
5 and computer systems” and provides a private cause of action against any person
6 who commits one of the “public offenses” listed in Section 502(c). McGowan
7 asserts her computer crimes claim under Section 502(c)(1) (Compl. ¶ 192), which
8 creates a cause of action against one who “[k]nowingly accesses and without
9 permission alters, damages, deletes, destroys, or otherwise uses any data, computer,
10 computer system, or computer network in order to either (A) devise or execute any
11 scheme or artifice to defraud, deceive, or extort, or (B) wrongfully control or obtain
12 money, property, or data.” This claim fails for two reasons.
13 First, McGowan’s claim inverts Section 502(c)(1)’s causality requirement:
14 While Section 502(c)(1) prohibits accessing computer data “in order to . . . defraud,
15 deceive, or extort” another person, McGowan alleges the defendants defrauded her
16 in order to gain access to her computer data. (Compl. ¶¶ 192-95 (alleging the
17 defendants engaged in “a scheme or artifice to defraud” McGowan by having a
18 person named “Filip” assume a false persona to gain access to a manuscript on her
19 computer)). This is not a basis for liability under Section 502(c)(1), and since
20 McGowan does not allege anyone accessed her computer in order to defraud,
21 deceive, or extort her or someone else, her Section 502(c)(1) claim fails.14
22 Second, McGowan has not alleged the defendants accessed her computer at
23 any point in California “without permission,” a fundamental element of a Section
24
25 14
Stating a claim under Section 502(c)(1) also requires a plaintiff to plead and prove that a
26 defendant “altered, damaged, deleted, or destroyed” the computer data accessed, allegations
McGowan also does not make. See Ticketmaster LLC v. Prestige Entm’t W., Inc., 315 F. Supp. 3d
27 1147, 1175 & n.5 (C.D. Cal. 2018) (where this Court held that a plaintiff must show a defendant
28 “altered, damaged, deleted, or destroyed” data to trigger liability under Section 502(c)(1), and that
merely “using” misappropriated data does not trigger such liability).
1 502 claim. Indeed, the only allegation she makes involving any act which took
2 place in California involving her computer is an allegation that she allowed Filip to
3 read excerpts of her book off her laptop during a meeting they had in Los Angeles in
4 May 2017. (Compl. ¶¶ 76-77, 194 (“Filip had . . . permission . . .”)). Accordingly,
5 there is no activity involving any unlawful intrusion into McGowan’s computer that
6 occurred in California and that triggers the California criminal statute she invokes.15
7 F. McGowan’s Conversion Claim Fails Because She Cannot Allege a
Complete Dispossession of Her “Stolen” Manuscript
8
McGowan claims the defendants are liable for conversion because they
9
obtained excerpts of a book she was writing prior to their publication, first during a
10
meeting in Los Angeles and later during a meeting in New York. (Compl. ¶¶ 77,
11
103, 200). Whether this claim is analyzed under New York law or California law
12
makes no difference. In either case, one does not “convert” another’s property
13
unless one converts that property for one’s own use, to the complete exclusion of the
14
rightful owner’s access to the property. Since McGowan does not allege she was
15
deprived of dominion over the then-unpublished excerpts of her allegedly
16
“converted” manuscript (and cannot make such a claim because she eventually
17
published her book), her conversion claim fails.
18
New York and California law both provide that to state a conversion claim, a
19
plaintiff must plead and prove the defendant “exercise[d] [ ] unauthorized dominion
20
21
15
22 McGowan also bases her computer crimes claim on her rank speculation that Filip accessed her
computer without her permission “to view or remove files” when she left it unattended to go to the
23 bathroom while meeting with Filip in New York in July 2017. (Compl. ¶¶ 103, 195). Even if this
claim were plausible, McGowan cannot invoke Section 502, a California criminal statute, to
24 address an alleged computer intrusion that took place in New York. California law presumes the
25 legislature “did not intend the statutes of this state to have force or operation beyond the
boundaries of the state.” Norwest Mortg., Inc. v. Superior Court, 72 Cal. App. 4th 214, 222
26 (1999). Accordingly, unless the legislature indicates otherwise, “if the liability-creating conduct
occurs outside of California, California law generally should not govern that conduct.” Oman v.
27 Delta Air Lines, Inc., 889 F.3d 1075, 1079 (9th Cir. 2018). See Terpin v. AT&T Mobility, LLC,
399 F. Supp. 3d 1035, 1047-48 (C.D. Cal. 2019) (dismissing state law claims, including alleged
28 violations of Section 502, where none of the alleged computer hacking occurred in California).
1 and control” over the plaintiff’s property “to the complete exclusion of the rightful
2 possessor.” Harper & Row Publishers, Inc. v. Nation Enters., 723 F.2d 195, 199,
3 201 (2d Cir. 1983), rev’d on other grounds, 471 U.S. 539 (1985) (emphasis added);
4 see Jurisearch Holdings, LLC v. Lawriter, LLC, 2009 WL 10670588, at *7 (C.D.
5 Cal. Apr. 13, 2009) (holding that a plaintiff could not state a claim for conversion of
6 compact discs containing a plaintiff’s data because “[w]here property is capable of
7 being copied, wrongful possession of copies does not typically give rise to a
8 conversion claim if the rightful owner retains possession of the original or retains
9 access to other copies”). Pleading merely that a defendant obtained an electronic
10 copy of a document, where the original remains intact and in plaintiff’s possession,
11 does not state a conversion claim. See Jurisearch, 2009 WL 10670588, at *7;
12 Fischkoff v. Iovance Biotherapeutics, Inc., 339 F. Supp. 3d 408, 415 (S.D.N.Y.
13 2018) (plaintiff did not state a facially plausible claim for conversion of confidential
14 information under New York law because defendant’s act of downloading or
15 copying confidential documents did not deprive the plaintiff of dominion, rights, or
16 possession to files/documents); see also Harper, 723 F.2d at 201 (the alleged
17 “conversion” of a copy of a manuscript, where the owner continues to exercise
18 dominion over the manuscript, does not constitute conversion under New York law).
19 Where, as here, a defendant purportedly takes a copy of a document without
20 the author’s permission, he has not converted that document. Therefore,
21 McGowan’s conversion claim fails as a matter of law.
22 G. McGowan’s IIED Claim Must Be Dismissed Because She Fails to
Allege Facts Showing It Is Not Time-Barred
23
The statute of limitations for an intentional infliction of emotional distress
24
(“IIED”) claim is two years and begins to accrue “when the cause of action is
25
complete with all of its elements.” Cal. Code Civ. Proc. § 335.1; Unruh-Haxton v.
26
Regents of Univ. of Calif., 162 Cal. App. 4th 343, 357 (2008). A plaintiff may only
27
pursue a claim outside this limitations period under the “discovery rule,” which
28
1 extends accrual until the plaintiff knows, or has reason to know, of the cause of
2 action. Fox v. Ethicon Endo-Surgery, Inc., 35 Cal. 4th 797, 806-07 (2005). To rely
3 upon the discovery rule to assert an otherwise time-barred claim, a plaintiff must
4 “specifically plead facts to show (1) the time and manner of discovery; and (2) the
5 inability to have made earlier discovery despite reasonable diligence.” Id. at 808.
6 McGowan alleges the defendants intentionally inflicted emotional distress on
7 her by utilizing deceit to obtain a preview of parts of her memoir prior to its
8 publication. (Compl. ¶¶ 204, 207). She does not allege that her manuscript was
9 stolen within the two-year statute of limitations. Rather, she alleges it was stolen, at
10 the very latest, on July 19, 2017 (id. at ¶ 103), but she did not file her Complaint
11 until more than two years later. (ECF No. 1).
12 Since McGowan seeks to recover on her IIED claim for conduct that occurred
13 more than two years before she filed her lawsuit, she must plead when and how she
14 learned of the defendants’ “deception” and plead facts to show she could not have
15 discovered it earlier through reasonable diligence. She does not do so. As a result,
16 her allegations do not meet the pleading requirements needed to avail herself of the
17 “discovery rule,” and her IIED claim should be dismissed as time-barred.16
18 H. McGowan’s Negligent Hiring and Supervision Claim Fails
19 To state a viable claim for negligent hiring and supervision, a plaintiff must
20 allege both that the defendant had a duty to hire/supervise properly and failed in that
21 duty, and also that the negligent hiring and supervision was the proximate cause of a
22 foreseeable harm. Phillips v. TLC Plumbing, Inc., 172 Cal. App. 4th 1133, 1139-40
23 (2009). Here, McGowan fails to allege either.
24 McGowan’s claim the BSF Defendants were negligent in engaging Black
25 Cube is based solely on her citation to some unspecified “public information” that
26
27 16
McGowan’s ECPA (Count 3), Bane Act (Count 6), and negligent hiring and supervision
28 (Count 11) claims are also subject to a two-year statute of limitations and are time-barred for this
reason. 18 U.S.C. § 2520(e); Cal. Code Civ. Proc. § 335.1.
1 members of Black Cube were under investigation for using illegal methods.
2 (Compl. ¶ 37). That is not a basis for a negligent hiring claim, see Federico v.
3 Superior Court (Jenry G.), 59 Cal. App. 4th 1207, 1214 (1997) (negligent hiring
4 claim does not exist unless employer knows or should know facts that would warn a
5 reasonable person the employee presents an undue risk of harm), especially here,
6 where the contracts engaging Black Cube explicitly stated law firms had vetted its
7 techniques and the contracts required lawful activity. And further, McGowan does
8 not identify a specific harm the BSF Defendants should have been on guard for
9 concerning Black Cube that later materialized. As California courts require a close
10 nexus between an identifiable risk of harm a potential hire poses and the harm the
11 hire allegedly caused, McGowan’s omission in this regard is fatal to her cause of
12 action. See, e.g., Doe v. Capital Cities, 50 Cal. App. 4th 1038, 1054 (1996).
13 Finally, as set forth above, this claim fails due to the lack of any foreseeable
14 harm caused by hiring Black Cube or supervising its activities. Given this, her
15 negligent hiring and supervision claim should be dismissed.
16 IV. CONCLUSION
17 For these reasons, McGowan’s claims should be dismissed with prejudice.
18 DATED: January 31, 2020 Respectfully submitted,
19
KENDALL BRILL & KELLY LLP
20
By: /s/ Janet I. Levine
21
Janet I. Levine
22 Robert E. Dugdale
Sarah E. Moses
23
25 Boies Schiller Flexner LLP
26
27
28

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Case 2:19-cv-09105-ODW-GJS Document 35 Filed 01/31/20 Page 1 of 34 Page ID #:227

1 KENDALL BRILL & KELLY LLP

1 NOTICE OF MOTION AND MOTION

1 G. McGowan’s IIED Claim Must Be Dismissed Because She Fails

18 Boyle v. United States,

1 Doe v. GTE Corp.,

25 Kirch v. Embarq Mgmt. Co.,

25 Sanford v. MemberWorks, Inc.,

1 Sprewell v. Golden State Warriors,

1 Fox v. Ethicon Endo-Surgery, Inc.,

1 MEMORANDUM OF POINTS AND AUTHORITIES

1 with the law in providing their services. (Id. ¶ 37).

1 a fraudulent scheme but was not involved in creating the scheme).

1 B. McGowan’s ECPA Claim Is Incurably Deficient

1 recording for an additional, subsequent purpose that itself is tortious or criminal.

1 E. McGowan’s Computer Crimes Claim Fails

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