Scientology v. DeCrescenzo (Federal) Motion To Dismiss

Case 2:17-cv-09158-GW-SK Document 13-1 Filed 02/20/18 Page 1 of 29 Page ID #:47
1 John P. Blumberg - CA State Bar No. 70200

Ave Buchwald - CA State Bar No. 70305
2 BLUMBERG LAW CORPORATION
444 West Ocean Blvd., Suite 1500
3 Long Beach, California 90802
Tel No. (562) 437-0403; Fax No. (562) 432-0107
4 jblumberg@BlumbergLaw.com
abuchwald@BlumbergLaw.com
5
6 Attorney for Defendant
7
8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
10
11 CHURCH OF SCIENTOLOGY ) CASE NO: 2:17-cv-09158-GW-SK
INTERNATIONAL, )
12 ) DEFENDANT’S MEMORANDUM
Plaintiff, ) OF POINTS AND AUTHORITIES
13 ) IN SUPPORT OF MOTION TO
vs. ) DISMISS FOR FAILURE TO
14 ) STATE A CLAIM UPON WHICH
LAURA ANN DeCRESCENZO aka ) RELIEF CAN BE GRANTED
15 LAURA A. DIECKMAN, ) [FRCP 12(b)(6)]
)
16 Defendant. ) [Notice of Motion and Motion,
) Request for Judicial Notice and
17 ) Proposed Order concurrently filed
) herein]
18 )
) Date: March 22, 2018
19 ) Time: 8:30 a.m.
) Courtroom: 9D
20 )
) Action Filed: December 21, 2017
21 ) Trial Date: None
) Judge: Hon. George H. Wu
22 )
____________________________________ ) Mag. Judge: Hon. Steve Kim
23
24
25
26
27
28
1
POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS
1 TABLE OF CONTENTS
2
3 Table of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4
5 MEMORANDUM OF POINTS AND AUTHORITIES . . . . . . . . . . . . . . . . . . . . . 7
6
7 I. ABSTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 7
8
9 II. FACTUAL AND PROCEDURAL BACKGROUND . . . . . . . . . . . . . . . . . . 7
10
11 III. MOTION TO DISMISS: LEGAL STANDARD AND
12 REQUEST FOR JUDICIAL NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
13
14 IV. THE COURT HAS JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
15
16 V. THE ANTI-INJUNCTION ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
17
18 VI. THE RELITIGATION EXCEPTION TO THE
19 ANTI-INJUNCTION ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
20
21 A. The Court Is Not Empowered to Enjoin the Pending
22 State Action Because of the Preclusive Effect of the
23 California Court of Appeal’s Final Decision . . . . . . . . . . . . . . . . . . . 15
24
B. If the Court is Empowered to Enjoin the Pending
25
State Court Action, It Nevertheless Should Refrain
26
From Doing So and Grant the Motion to Dismiss . . . . . . . . . . . . . . . 21
27
28 VII. LEAVE TO AMEND SHOULD NOT BE GRANTED . . . . . . . . . . . . . . . . 27
2
1 TABLE OF AUTHORITIES
2
3 United States Supreme Court Cases
4
5 Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) . . . . 10, 11
6 Atlantic Coast Line R.R. Co. v. Bhd. of Locomotice Eng’rs,
398 U.S. 281, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970) . . . . . . . . . . . . 14, 16, 22
7
Brown v. Felson, 442 U.S. 127, 99 S.Ct. 2205, 60 L.Ed.2d 767 (1979) . . . . . . . . . 18
8
Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 108 S.Ct. 1684,
9 100 L.Ed.2d 127 (1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 15, 21
10 Parsons Steel, Inc. v. First Ala. Bank, 474 U.S. 518,
106 S.Ct. 768, 88 L.Ed.2d 877 (1986) . . . . . . . . . 16, 17, 18, 22, 23, 24, 25, 26
11
Smith v Bayer Corp., 564 U.S. 299, 131 S.Ct. 2368,180 L.Ed.2d 341 . . . . . . . . 15, 16
12
Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623,
13 97 S.Ct. 2881, 53 L.Ed.2d 1009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14
Ninth Circuit Cases
15
16 Alton Box Bd. Co. v. Esprit de Corp., 682 F.2d 1267 (9th Cir.1982) . . . . . . . . . . . 14
17 Amwest Mortgage Corp. v. Grady, 925 F.2d 1162 (9th Cir.1991) . . . . . . . . . . . . . . 15
18 Bechtel Petroleum, Inc. v. Webster, 796 F.2d 252 (9th Cir.1986) . . . . . . . . . . . 14, 15
19 Bennett v. Medtronic, 285 F.3d 801 (9th Cir.2002) . . . . . . . . . . . . . . . . . . . . . . . . . 14
20 Blalock Eddy Ranch v. MCI Telecomm. Corp., 982 F.2d 371 (9th Cir.1992) . . . 15, 21
21 Branch v. Tunnell, 14 F.3d 449 (9th Cir.1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
22 Brother Records , Inc. v. Jardine, 432 F.3d 939
(9th Cir.2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 17, 18, 19, 20, 24
23
California v. Randstron, 284 F.3d 969 (9th Cir.2002) . . . . . . . . . . . . . . . . . . . . . . . . 13
24
Cook, Perkiss and Liehe, Inc. v. Northern California
25 Collection Serv. Inc., 911 F.2d 242 (9th Cir.1990) . . . . . . . . . . . . . . . . . . . . . 27
26 Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir.2002) . . . . . . . . . . . . . 11
27 Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542 (9th Cir.1990) . . 11
28 Hartmann v. Cal. Dep’t of Corr. & Rehab., 707 F.3d 1114 (9th Cir.2013) . . . . . . 27
3
1 Holder v. Holder, 305 F.3d 854 (9th Cir.2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

2 In re Gilead Scis Sec. Litig., 536 F.3d 1049 (9th Cir.2008) . . . . . . . . . . . . . . . . . . . 11
3 Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir.2001) . . . . . . . . . . . . . . . . . . . . . 11
4 Lou v. Belzberg, 834 F.2d 730 (9th Cir.1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5 Manufactured Home Inc. v. Louisiana-Pacific Corp.,
428 F.3d 831 (9th Cir.2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 12
6
Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097 (9th Cir.2008) . . . . . . . . 10
7
Merle Norman Cosmetics, Inc. v. Victa, 936 F.2d 466 (9th Cir.1991) . . . . . . . . 14, 21
8
Negrete v. Allianz Life Ins. Co., 523 F.3d 1091 (9th Cir.2008) . . . . . . . . . . . . . 12, 14
9
Quackenbush v. Allstate Ins. Co., 121 F.3d 1372 (9th Cir.1997) . . . . . . . . . . . . 12, 15
10
Sandpiper Village Condominium Ass’n., Inc. v. th
11 Louisiana-Pacific Corp., 428 F.3d 831 (9 Cir.2005) . . . . . . .13, 22, 23, 24, 25
12 Sprewel v. Golden State Warriors, 266 F.3d 979 (9th Cir.2001) . . . . . . . . . . . . . . . 11
13 United States v. Cote, 51 F.3d 178 (9th Cir.1995) . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14 United States v. Ritchie, 342 (9th Cir.2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
15 Zhang v. Dept. of Labor & Immigration, 331 F.3d 1117 (9th Cir.2003) . . . . . . . . . 27
16
17 Other Circuit Cases
18
19 Bailey v. State Farm Fire and Cas. Co., 414 F.3d 1187 (10th Cir.2005) . . . . . 25, 26
20 Burr & Forman v. Blair, 470 F.3d 1019 (11th Cir.2006) . . . . . . . . . . . . . . . . . . . . . 13
21 CFE Group, LLC v. Firstmerit Bank, N.A., 809 F.3d 346 (7th Cir.2015) . . . . . . . . . 26
22 First Alabama Bank of Montgomery,th N.A. v. Parsons
Steel, Inc., 825 F.2d 1475 (11 Cir.1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
23
Ramsden v. AgriBank, FSB, 214 F.3d 865 (7th Cir.2000) . . . . . . . . . 17, 23, 24, 25, 26
24
Southern California Petroleum Corp. v. Harper,
25 273 F.2d 715 (5th Cir.1960) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
26 Thompson v. Illinois Dept. of Prof. Reg., 300 F.3d 750 (7th Cir.2002) . . . . . . . . . . 11
27 ///
28 ///
4
1 Miscellaneous Cases
2
3 Adams v. Trimble, No. S-11-01360, 2012 WL 260160
(E.D. Cal. Jan. 27, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4
Baltazar v. Yates, No. EDCV 04-00274, 2010 WL 2195979
5 (C.D.Cal. April 28, 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6 Blatty v. Warner Bros. Entertainment, Inc., No. CV 10-06611,
2011 WL 1327379 at *7 (C.D.Cal. April 21, 2011) . . . . . . . . . . . . . . . . . . . . 21
7
Chase v. County of San Bernardino, No. EDCV 12-1082,
8 2012 WL 1285 (C.D. Cal. Nov. 6, 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9 Connecticut General Life Ins. Co. v. Ramsey, No. S-07-0819,
2007 WL 2225797 (E.D.Cal.July 31, 2007) . . . . . . . . . . . . . . . . . . . . . . . 12, 25
10
Hernandez v. Gonzalez, 504 F.Supp.2d 825, 836 (C.D.Cal.2007) . . . . . . . . . . . . . 18
11
Kag West, LLC v. Malone, No. 15-cv-03827,
12 2016 WL 3951651 (N.D. Cal. July 22, 2016) . . . . . . . . . . . . . . . . . . . . . . 21, 25
13 Morris v. Parke, Davis & Co., 667 F.Supp. 1332 (C.D.Cal.1987) . . . . . . . . . . . . . 20
14 Paralyzed Victims of Am. v. McPherson, No. C 06-4670,
2008 WL 4183981 at *5 (N.D.Cal. Sept. 8, 2008) . . . . . . . . . . . . . . . . . . . . 11
15
16 California Cases
17
Border Business Park, Inc. v. City of San Diego,
18 142 Cal.App.4th 1538, 49 Cal.Rptr.3d 259, 280 . . . . . . . . . . . . . . . . . . . 20, 21
19 City of West Hollywood v. Kihagi, 16 Cal.App.5th 739, 749,
224 Cal.Rptr.3d 577, 583 (2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
20
People v. Mitchell, 81 Cal.App.4th 132, 155, 96 Cal.Rptr.2d 401, 417 (2000) . . . . 18
21
Producers Dairy Delivery Co. v. Sentry Ins. Co., 41 Cal.3d 903,
22 226 Cal.Rptr. 558 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
23 Sandoval v. Super. Ct., 140 Cal.App.3d 932 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . 19
24 Schultz v. Fulton Associates, Nos. B197266, 2007 WL 3334334,
(Cal. Ct. App. 2nd Dist. Nov. 9, 2007) (unpublished) . . . . . . . . . . . . . . . . . . 20
25
South Sutter, LLC v. LJ Sutter Partners, L.P.,
26 193 Cal.App.4th 634, 123 Cal.Rptr.3d 301 (2011) . . . . . . . . . . . . . . . . . . . . 20
27 Union Oil Co. of California v. Reconstruction Oil Co.,
58 Cal.App.2d 30, 35-36, 135 P.2d 621, 624 (1943) . . . . . . . . . . . . . . . . . . . 18
28
5
1 Federal Statutes
2
3 28 U.S.C. § 1657 (All Writs Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4 28 U.S.C. § 1738 (Full Faith & Credit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5 28 U.S.C. § 2883 (Anti-Injunction Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6
7 Federal Rules
8
9 F.R.C.P. 12(b)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10 Fed. R. Evid. 201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11
12 Misc
13
14 Restatement (Second) of Judgments, § 13 . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 20, 21
15 18 C. Wright, A. Miller, & E. Cooper, Federal Practice
and Procedure § 4405, p. 82 (2d ed.2002) . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16
17
18
19
20
21
22
23
24
25
26
27
28
6
1 MEMORANDUM OF POINTS AND AUTHORITIES

2
3 I. ABSTRACT
4
5 Defendant Laura DeCrescenzo (“DeCrescenzo”) filed an action in state
6 court alleging a federal claim and numerous state claims. Plaintiff Church of
7 Scientology International (“CSI”) removed the action to the district court. In
8 2009, the district court dismissed the federal claim and remanded the state law
9 claims. Now that trial has been set to begin on August 13, 2018, CSI seeks to
10 enjoin DeCrescenzo from further prosecuting her state court action, arguing that
11 there is preclusive effect of the district court’s prior order dismissing the federal
12 claim based on the statute of limitations. But in 2011, the California Court of
13 Appeal ruled that the district court’s order did not have preclusive effect.
14 Thereafter, CSI continued to actively defend the action in the state court, including
15 seeking appellate relief from state court orders (a) denying its two motions for
16 summary judgment and (b) compelling its production of documents. Based on
17 these circumstances, and the Ninth Circuit’s limitations on the res judicata effect
18 of a dismissal based on the statute of limitations, the court should grant
19 DeCrescenzo’s motion and dismiss the action.
20
21 II. FACTUAL AND PROCEDURAL BACKGROUND
22
23 On April 2, 2009, DeCrescenzo filed an action in the Los Angeles County
24 Superior Court. Compl. ¶ 6. She filed a First Amended Complaint on May 19,
25 2009, alleging a federal forced labor and human trafficking claim under 15 U.S.C.
26 § 1589 and numerous state law claims. Compl. ¶s 6 and 8. Based on the federal
27 claim, CSI removed the action to this Court. Compl. ¶10. CSI then moved to
28 dismiss the federal and all state claims. Compl. ¶11; ECF No. 5 in cv-09-03984.
7
1 On November 5, 2009, the District Court dismissed the federal claim without
2 leave to amend and remanded the action back to the Los Angeles Superior Court.
3 Compl. ¶s 12 and 13; ECF No. 27 in cv-09-03984, Ex. A. The Court held that the
4 federal claim was time-barred under the applicable federal statute of limitations
5 because under the facts alleged, equitable tolling and equitable estoppel were
6 inapplicable as a matter of law. Id. The court granted the motion to dismiss the
7 federal claim without leave to amend, but “decline[d] to entertain the remaining
8 state law claims” and remanded them back to the Los Angeles County Superior
9 Court. Id. In other words, the District Court left it to the Los Angeles County
10 Superior Court to determine whether DeCrescenzo should be given leave to amend
11 her state law claims to state further facts in support her contention that CSI was
12 equitably estopped from asserting its statute of limitations defense and, if she did
13 so, whether such facts were sufficient under California law. DeCrescenzo did not
14 appeal the District Court’s order. Compl. ¶ 13.
15
16 When the case returned to the Los Angeles County Superior Court, CSI
17 demurred to the remaining claims on the grounds that they were time-barred and
18 that DeCrescenzo was collaterally estopped from prosecuting them by the District
19 Court’s order. Compl. ¶ 14. The Superior Court sustained the demurrer on the
20 first ground with leave to amend and did not comment on CSI’s collateral estoppel
21 argument. Id.
22
23 On February 2, 2010, DeCrescenzo filed a second amended complaint,
24 adding Religious Technology Center (“RTC”) as a defendant. Compl. ¶ 15; Ex. B.
25 CSI and RTC separately demurred on the same two grounds. Compl. ¶ 16; Ex. C;
26 Ex. D. The Superior Court sustained CSI’s demurrer on March 18, 2010 and
27 RTC’s demurrer on April 30, 2010; both without leave to amend. Ex. C; Ex. D.
28 On April 30, 2010, the court explained that it rejected CSI and RTC’s collateral
8
1 estoppel argument but sustained the demurrers on the ground that they were time-
2 barred. Compl. ¶ 17 DeCrescenzo appealed. Compl. ¶s 17 and 18.
3
4 On appeal, CSI argued in part that the judgment should be affirmed on the
5 basis of the preclusive effect of the federal court’s order. Ex. E: Respondents’
6 Brief; Ex. F: Respondents’ Supplemental Post-Argument. The California Court of
7 Appeal disagreed, concluding that the doctrine of collateral estoppel was not
8 applicable. Compl. ¶ 19; Ex. G: Opinion. CSI petitioned for rehearing,
9 contending in part that the doctrine did apply. Compl. ¶ 22. The opinion was
10 slightly modified, but the petition for rehearing was denied. Compl. ¶ 22; Ex. H;
11 Order Modifying Opinion and Denying Rehearing. CSI then petitioned the
12 California Supreme Court to review the matter, again contending that the doctrine
13 of collateral estoppel applied. Compl. ¶ 23; Ex. I: Petition for Review; Docket:
14 Ex. J. The petition was denied on September 14, 2011. Ex. J; Ex. K. (CSI
15 mistakenly alleges that the petition was denied on May 15, 2013. Compl. ¶23.)
16 CSI did not petition the United States Supreme Court for review. Dockets of
17 United States Supreme Court for Laura DeCrescenzo: Ex. U.
18
19 On October 25, 2012, CSI and RTC jointly moved for summary judgment
20 on the basis that DeCrescenzo’s claims were barred by the statutes of limitations.
21 Ex. L. The motion was denied. Ex. M.
22
23 On February 8, 2013, DeCrescenzo moved to compel CSI to produce certain
24 documents. Ex. N. CSI opposed the motion, contending that the documents were
25 protected from discovery by California’s penitent-clergy privilege and the Free
26 Exercise Clause of the United States Constitution. Ex. O. The motion was
27 granted on March 6, 2013. Ex. P. CSI petitioned the Court of Appeal for relief.
28 Ex. Q. The petition was summarily denied. Ex. R. CSI’s petition to California’s
9
1 Supreme Court for review was also summarily denied. Ex. S; Ex. T. CSI then
2 petitioned the United States Supreme Court for a writ of certiorari and sought a
3 stay of the state court action pending resolution of its petition. Ex. U; Ex. V. The
4 United States Supreme Court denied CSI’s application for a stay on June 16, 2013
5 and CSI’s petition for writ of certiorari on October 7, 2013. Ex. V.
6
7 On October 27, 2015, CSI and RTC jointly moved for summary judgment
8 on the ground that every cause of action of DeCrescenzo’s second amended
9 complaint was barred by the protections for freedom of religion found in the First
10 Amendment to the United States Constitution and Article I of the California
11 Constitution. Compl. ¶ 24; Ex. W. The motion was denied. Ex. X. CSI
12 petitioned the Court of Appeal for relief. Ex. Y; Ex. Z. When the petition was
13 summarily denied, CSI petitioned California’s Supreme Court for review. Ex.
14 AA; Ex. BB. The California Supreme Court summarily denied the petition for
15 review on September 14, 2016. Ex. CC; Ex. DD.
16
17 Now that trial has been scheduled for August 13, 2018, CSI returns to this
18 court to enjoin further proceedings in the state court. Compl. ¶s 25 and 26.
19
20 III. MOTION TO DISMISS: LEGAL STANDARD AND
21 REQUEST FOR JUDICIAL NOTICE
22
23 Dismissal under F.R.C.P 12(b)(6) is appropriate where the complaint lacks a
24 cognizable legal theory or sufficient facts to support a cognizable legal theory.
25 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir.2008).
26 When deciding whether to grant a motion to dismiss, the court must generally
27 accept as true all well-pleaded factual allegations. Ashcroft v. Iqbal, 556 U.S. 662,
28 664, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). However, “courts are not bound to
10
1 accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S.
2 at 678.
3
4 “The court does not usually consider any material beyond the pleadings for
5 a Rule 12(b)(6) analysis. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896
6 F.2d 1542, 1555, n. 19 (9th Cir.1990). But the court can consider material referred
7 to in the complaint and material subject to judicial notice. Lee v. City of Los
8 Angeles, 250 F.3d 668, 688-689 (9th Cir.2001); Branch v. Tunnell, 14 F.3d 449,
9 454 (9th Cir.1994) (overruled on other grounds by Galbraith v. County of Santa
10 Clara, 1119, 1127 (9th Cir.2002). Such material “trumps” any contradictory
11 allegations of the complaint. Thompson v. Illinois Dept. of Prof. Reg., 300 F.3d
12 750, 754 (7th Cir.2002); see also In re Gilead Scis. Sec. Litig., 536 F.3d 1049,
13 1055 (9th Cir.2008); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.
14 2001). A court’s consideration of such material does not convert the motion to
15 dismiss into a motion for summary judgment. United States v. Ritchie, 342 F.3d
16 903, 908 (9th Cir.2003).
17
18 The court may judicially notice a fact that is not subject to reasonable
19 dispute because it . . . can be accurately and readily determined from sources
20 whose accuracy cannot be reasonably questioned.” Fed. R. Evid. 201(b)(2).
21 Generally, a court may take judicial notice of matters of public record. Lee v. City
22 of Los Angeles, 250 F.3d 668, 689. In addition, judicial notice is appropriate for
23 information obtained from government websites. See Paralyzed Victims of Am. v.
24 McPherson, No. C 06-4670, 2008 WL 4183981 at *5 (N.D.Cal. Sept. 8, 2008). In
25 a preclusion context, such as the case at bar, the federal court takes judicial notice
26 of court documents such as an opinion by the California Court of Appeal and the
27 briefs filed in that proceeding. Manufactured Home Cmtys. Inc. v. City of San
28 Jose, 420 F.3d 1022, 1037 (9th Cir.2005); see also Holder v. Holder, 305 F.3d
11
1 854, 866 (9th Cir.2002); Chase v. County of San Bernardino, No. EDCV 12-1082,
2 2012 WL 12850677 at *3 (C.D. Cal. Nov. 6, 2012); Adams v. Trimble, No. S-11-
3 01360, 2012 WL 260160 at *3 (E.D. Cal. Jan. 27, 2012). In the case at bar, all of
4 the exhibits covered by DeCrescenzo’s request for judicial notice are court
5 documents of one type or another. As such, the accuracy of their contents cannot
6 be reasonably questioned. In addition, the materials are “helpful for examining the
7 claims litigated in the state court.” Manufactured Home Cmtys. Inc. 420 F.3d at
8 1037. Thus, the Court should take judicial notice of these state proceedings.
9 Regardless of whether judicial notice of the documents is taken, due to the specific
10 allegations of the complaint, “there is no factual inquiry that would bar reaching
11 the merits of [DeCrescenzo’s] Motion to Dismiss under Federal Rule of Civil
12 Procedure 12(b)(6).” Chase at *3.
13
14 By its complaint, CSI seeks declaratory and injunctive relief. CSI seeks this
15 Court’s review of the decision by the California Court of Appeal that this Court’s
16 prior order remanding DeCrescenzo’s action to the Los Angeles County Superior
17 Court had no preclusive effect on her state claims and to enjoin DeCrescenzo from
18 further prosecuting that action, now set for trial. The requested relief is
19 tantamount to enjoining the state court proceeding. Quackenbush v. Allstate Ins.
20 Co., 121 F.3d 1372, 1377 (9th Cir.1997); Negrete v. Allianz Life Ins. Co., 523 F.3d
21 1091, 1098 (9th Cir.2008). Thus, a motion to dismiss is an appropriate procedural
22 method by which a district court can resolve an action such as that brought by CSI.
23 See, e.g., Connecticut General Life Ins. Co. v. Ramsey, No. S-07-0819, 2007 WL
24 2225797 (E.D.Cal.July 31, 2007) at *1: “Defendants . . . move to dismiss plaintiff
25 Connecticut General Life Insurance Company’s claim for declaratory and relief.
26 Connecticut General seeks to enjoin the Ramseys from proceeding with a
27 California state court action . . . . For the following reasons, the court
28 DISMISSES Connecticut General’s action.” (Footnotes omitted.)
12
1 IV. THE COURT HAS JURISDICTION

2
3 CSI is seeking to enjoin DeCrescenzo from further prosecuting her state
4 court action under the All Writs Act, 28 U.S.C. § 1657. The Act provides that
5 federal courts “may issue all writs necessary or appropriate in aid of their
6 respective jurisdictions and agreeable to the usages and principles of law.”
7 Although, by its terms, the All Writs Act refers only to “writs,” it codifies the
8 long-recognized powers of courts of equity to effectuate their decrees by
9 injunction. Burr & Forman v. Blair, 470 F.3d 1019, 1026 (11th Cir.2006). Thus,
10 the court has subject matter jurisdiction under the All Writs Act. California v.
11 Randstron, 284 F.3d 969, 974 (9th Cir.2002).
12
13 V. THE ANTI-INJUNCTION ACT
14
15 “The All Writs Act is limited by the Anti-Injunction Act, which prevents a
16 federal court from enjoining the ‘proceedings in a State court except as authorized
17 by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or
18 effectuate its judgments.’ 28 U.S.C. § 2883.” Sandpiper Village Condominium
19 Ass’n., Inc. v. Louisiana-Pacific Corp., 428 F.3d 831, 842 (9th Cir.2005). “The
20 Act, which has existed in some form since 1793 . . . is a necessary concomitant of
21 the Framers’ decision to authorize, and Congress’ decision to implement, a dual
22 system of federal and state courts. It represents Congress’ considered judgment as
23 to how to balance the tensions inherent in such a system. Prevention of frequent
24 federal court intervention is important to make the dual system work effectively.
25 By generally barring such intervention, the Act forestalls ‘the inevitable friction
26 between the state and federal courts that ensues from the injunction of state
27 judicial proceedings by a federal court.’ Vendo Co. v. Lektro-Vend Corp., 433
28 U.S. 623, 630-631, 97 S.Ct. 2881, 2887, 53 L.Ed.2d 1009 (1977) (plurality
13
1 opinion). Due in no small part to the fundamental constitutional independence of

2 the States, Congress adopted a general policy under which state proceedings
3 ‘should normally be allowed to continue unimpaired by intervention of the lower
4 federal courts, with relief from error, if any, through the state appellate courts and
5 ultimately this Court.’ Atlantic Coast Line R. Co. v. Locomotive Engineers, 398
6 U.S. 281, 287, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234 (1970).” Chick Kam Choo v.
7 Exxon Corp., 486, U.S. 140, 146, 108 S.Ct. 1684, 1689, 100 L.Ed.2d 127 (1988).
8
9 Because the Anti-Injunction Act is designed to prevent friction between
10 federal and state courts, federal intervention is barred in all but the narrowest
11 circumstances. See Alton Box Bd. Co. v. Esprit de Corp., 682 F.2d 1267, 1271 (9th
12 Cir.1982); Bennett v. Medtronic, 285 F.3d 801, 805 (9th Cir.2002). Accordingly,
13 the limited three exceptions of the Anti-Injunction Act will not be enlarged by
14 loose statutory construction. Atlantic Coast Line, 398 U.S. at 287, 90 S.Ct. 1739,
15 1743, 26 L.Ed.2d 234. Rather, any doubts as to the propriety of a federal
16 injunction against state court proceedings must be resolved in favor of permitting
17 the state court to proceed. Id., at 297, 90 S.Ct. 1739, 26 L.Ed.2d 234. Thus, an
18 injunction will be upheld only on “a strong and unequivocal showing” that such
19 relief is necessary. Bechtel Petroleum, Inc. v. Webster, 796 F.2d 252, 253-54 (9th
20 Cir.1986) quoting Judge Wisdom in Southern California Petroleum Corp. v.
21 Harper, 273 F.2d 715, 719 (5th Cir.1960). In other words, the Anti-Injunction Act
22 establishes “the general rule that courts in the United States shall not enjoin
23 proceedings in state courts.” Merle Norman Cosmetics, Inc. v. Victa, 936 F.2d
24 466, 468 (9th Cir. 1991). “Unless one of the three statutory exceptions applies, a
25 federal injunction restraining prosecution of a state court is absolutely prohibited.”
26 Lou v. Belzberg, 834 F.2d 730, 739-40 (9th Cir.1987). Whether an injunction is
27 absolutely prohibited under the Anti-Injunction Act is a question of law. Negrete,
28 523 F.3d 1091, 1096; Quackenbush, 121 F.3d at 1377. Furthermore, “the fact that
14
1 an injunction may issue does not mean that it must issue.” Chick Kam Choo, 466
2 U.S. 140, 151, 108 S.Ct. 1684, 1692, 100 L.Ed.2d 127; see also Quackenbush, 121
3 F.3d at 1377; Blalock Eddy Ranch v. MCI Telecomm. Corp., 982 F.2d 371, 375
4 (9th Cir.1992). In that instance, whether to enjoin a state proceeding is committed
5 to the sound discretion of the district court. Bechtel Petroleum, Inc. at 253.
6
7 VI. THE RELITIGATION EXCEPTION TO THE
8 ANTI-INJUNCTION ACT
9
10 A. The Court Is Not Empowered to Enjoin the Ongoing State Action
11 Because of the Preclusive Effect of the California Court of Appeal’s Final
12 Decision.
13
14 CSI contends that the third exception to the Anti-Injunctive Act, which
15 permits a federal court to enjoin state proceedings when necessary to protect or
16 effectuate its judgments, applies. Compl. ¶ 33. “This third exception to the Anti-
17 Injunction Act is commonly referred as the relitigation exception.” Amwest
18 Mortgage Corp. v. Grady, 925 F.2d 1162, 1164 (9th Cir.1991); see also v Bayer
19 Corp., 564 U.S. 299, 306, 131 S.Ct. 2368, 2375, 180 L.Ed2d 341. “It is founded
20 in the well-recognized concepts of res judicata and collateral estoppel.” Chick
21 Kam Choo, 486 U.S., at 147, 108 S.Ct. 1684. But the relitigation exception
22 permits a federal court to enjoin a state proceeding “only in rare cases.” Smith, at
23 302, 131 S.Ct. 2368. “After all, a court does not usually ‘get to dictate to other
24 courts the preclusion consequences of its own judgment.’ 18 C. Wright, A. Miller,
25 & E. Cooper, Federal Practice and Procedure § 4405, p. 82 (2d ed. 2002) . . . .
26 Deciding whether and how prior litigation has preclusive effect is usually the
27 bailiwick of the second court (here, the one in [California]). So issuing an
28 injunction under the relitigation exception is resorting to heavy artillery. For that
15
1 reason, every benefit of the doubt goes toward the state court, see Atlantic Coast
2 Line, 398 U.S., at 287, 297, 90 S.Ct. 1739; an injunction can issue only if
3 preclusion is clear beyond peradventure.” Smith, 564 U.S., at 307, 131 S.Ct. 2368.
4
5 And, when the state court (here California) has already ruled that the state
6 action is not barred by the res judicata effect of the federal judgment, “the situation
7 is drastically changed.” Brother Records, Inc. v. Jardine, 432 F.3d 939, 943 (9th
8 Cir.2005, citing Parsons Steel, Inc. v. First Ala. Bank, 474 U.S. 518, 524, 106
9 S.Ct. 768, 88 L.Ed.2d 877 (1986). The state ruling itself may be binding on the
10 federal court under the Full Faith and Credit Act, 28 U.S.C. § 1738. That Act
11 provides that state court proceedings ‘shall have the same full faith and credit in
12 every court within the United States . . . as they have by law and usage in the
13 courts of such State . . . from which they are taken.’ 28 U.S.C. § 1738.” Brother
14 Records, at 943. As the Supreme Court reasoned: “[T]he Anti-Injunction Act and
15 the Full Faith and Credit Act can be construed consistently, simply by limiting the
16 relitigation exception of the Anti-Injunction Act to those situations in which the
17 state court has not yet ruled on the merits of the res judicata issue. Once the state
18 court has finally rejected a claim of res judicata, then the Full Faith and Credit Act
19 becomes applicable and federal courts must turn to state law to determine the
20 preclusive effect of the state court’s decision.” Parsons, 474 U.S., at 525, 106
21 S.Ct. 768. Even the state court’s mistaken rejection of the claim of res judicata
22 “does not justify the highly intrusive remedy of a federal-court injunction against
23 the enforcement of the state-court judgment.” Parsons, at 525, 106 S.Ct. 768.
24
25 The next question, then, is whether in ruling, the state appellate court “has
26 finally rejected [the] claim of res judicata.” Parsons, 474 U.S. 518, 525; see also
27 Brother Records, 432 F.3d 939, 943. If so, the district court is required to follow
28 it and thus dismiss the action. Id. at 944. The issue has arisen when the state trial
16
1 court has denied a motion for summary judgment, ruling that the federal action has
2 no preclusive effect. In First Alabama Bank of Montgomery, N.A. v. Parsons
3 Steel, Inc., 825 F.2d 1475 (11th Cir.1987), the Eleventh Circuit held that under the
4 law of Alabama, the issue was whether the ruling became the law of the case. Id.,
5 at 1480. Because Alabama equates finality for purposes of issue preclusion with
6 appealability, and the trial court’s ruling denying the motion for summary
7 judgment was not appealable, it did not become the law of the case and, therefore,
8 was not final for purposes of issue preclusion. Id. Accordingly, the district court
9 was empowered to exercise its discretion and determine whether to issue the
10 injunction. See also Ramsden v. AgriBank, 214 F.3d 865, 869 (7th Cir.2000)
11 holding under Wisconsin law, an order denying a motion for summary judgment
12 did not bar the district court from exercising discretion.
13
14 But the issue at bar, as exemplified by this case, is whether the state
15 appellate court’s conclusion that the previous federal order does not have
16 preclusive effect sufficiently “final” when the matter is remanded back to the trial
17 court for further proceedings. This situation has arisen once, coincidentally in the
18 Ninth Circuit. In Brother Records, 432 F.3d 939, Jardine was sued by Brother
19 Records, Inc. (“BRI”) in federal court for trademark infringement. Jardine brought
20 an action against BRI in the California Superior Court. BRI brought a motion for
21 summary judgment in federal court, which the district court partially granted, and
22 then demurred in the superior court on the ground that res judicata barred the
23 claims. The superior court sustained the demurrer and Jardine appealed. The
24 California Court of Appeal reversed on the ground that Jardine’s claims were not
25 barred by res judicata or collateral estoppel. BRI then moved to enjoin the state
26 court proceeding under the All Writs Act. The United Stated District Court for the
27 Central District of California, the Honorable Harry Hupp, judge presiding, held
28 that it had the power to enjoin the state court action; and exercised its discretion
17
1 by denying the motion. The Ninth Circuit noted that it did not have to answer to
2 the question of whether the Court of Appeal’s res judicata ruling was sufficiently
3 final under California law: “If the Court of Appeal’s decision is final and
4 preclusive under state law, then the district court was required to follow it and thus
5 acted properly in denying the injunction. See Parsons, 474 U.S. at 525, 106 S.Ct.
6 768. Even if the decision is not final and preclusive, we conclude that the district
7 court did not abuse its discretion in giving it effect.” Brother Records at 944.
8
9 In dicta, the Ninth Circuit indicated that the issue should be resolved under
10 res judicata principles. Brother Records, 432 F.3d 939, 943-944. The Ninth
11 Circuit made no mention of the law of the case doctrine. But “[t]he doctrine is
12 closely related to res judicata, or claim preclusion, which ‘ensures the finality of
13 decisions. . . .’ Brown v. Felsen, 442 U.S. 127, 131, 99 S.Ct. 2205, 60 L.Ed.2d 767
14 (1979).” Hernandez v. Gonzalez, 504 F.Supp.2d 825, 836 (C.D.Cal.2007).
15 “‘[F]inality is a cornerstone of both the res judicata and the law of the case
16 doctrines.” People v. Mitchell, 81 Cal.App.4th 132, 155, 96 Cal.Rptr.2d 401, 417
17 (2000); see also Union Oil Co. of California v. Reconstruction Oil Co., 58
18 Cal.App.2d 30, 35-36, 135 P.2d 621, 624 (1943): the “law of the case” doctrine
19 dictates that an appellate court’s holding on a rule of law that is necessary to the
20 appellate court’s opinion “is a final determination thereof, and, like the final
21 judgment in any other case, estops the parties thereto from afterwards questioning
22 its correctness.” “To promote finality, the ‘law of the case’ doctrine holds that ‘the
23 decision of an appellate court on a legal issue must be followed in all subsequent
24 proceedings in the same case.’ United States v. Cote, 51 F.3d 178, 181 (9th
25 Cir.1995). . . .” Hernandez, at 836; see also City of West Hollywood v. Kihagi, 16
26 Cal.App.5th 739, 749, 224 Cal.Rptr.3d 577, 583 (2017): appellate rulings “must
27 be adhered to throughout the case’s subsequent progress in the trial court and on
28 subsequent appeal.” Therefore, under the law of the case doctrine, the California
18
1 Court of Appeal’s holding that DeCrescenzo’s state claims are not precluded by
2 this district court’s previous ruling dismissing her federal claim is sufficiently final
3 and preclusive to be given full faith and credit, thus prohibiting this court from
4 entertaining whether an injunction should issue. See Parsons, 474 U.S. at 525,
5 106 S.Ct. 768. The same results when applying the doctrine of res judicata as
6 indicated in Brother Records, 432 F.3d 939, 943.
7
8 In Brother Records, 432 F.3d 939, 943, the Ninth Circuit indicated that it “is
9 not entirely clear” under California law whether the Court of Appeal’s opinion is
10 sufficiently final and preclusive. Id., at 943. The court noted that some California
11 cases have held that a judgment is final when it terminates the litigation between
12 the parties, while other cases, such as Sandoval v. Super. Ct., 140 Cal.App.3d 932,
13 190 Cal.Rptr. 29 (1983), have followed the Restatement (Second) of Judgments §
14 13 that for issue preclusion purposes, “final judgment” includes any prior
15 adjudication in another action that is determined to be sufficiently firm to be
16 accorded conclusive effect. Under the Restatement (Second) Judgments §13, the
17 decision is final for purpose of issue preclusion if (a) the parties were fully heard
18 and (b) the trial court’s decision was either subject to appeal or was in fact
19 reviewed on appeal. Sandoval at 936, 190 Cal.Rptr. 29. In the case at bar, the
20 preclusive effect of the district court’s order dismissing DeCrescenzo’s federal
21 claim and remanding the remaining claims back to the Superior Court was fully
22 litigated. The parties were fully heard and the California Court of Appeal
23 rendered a reasoned opinion. Thus, if California follows Sandoval and the
24 Restatement (Second) Judgments § 13, then the effect is the same as applying the
25 law of the case doctrine, i.e., the court is not empowered to exercise its discretion.
26
27 Since Brother Records was decided, a series of cases indicate that
28 California follows the Sandoval analysis, i.e., the Restatement (Second)
19
1 Judgments §13. In Border Business Park, Inc. v. City of San Diego, 142
2 Cal.App.4th 1538, 1564, 49 Cal.Rptr.3d 259, 280 (2006), the California Court of
3 Appeal adopted Sandoval and Restatement (Second) Judgments, §13: “[F]or
4 purposes of issue preclusion, as opposed to res judicata, ‘“final judgment”
5 includes any prior adjudication of an issue in another action that is determined to
6 be sufficiently firm to be accorded conclusive effect.’ (Rest.2d, § 13, italics added;
7 see . . . Sandoval . . . 140 Cal.App.3d 932, 936, 190 Cal.Rptr. 29.)” The court
8 then stated that whether a prior adjudication of an issue was “sufficiently firm” is
9 based on the factors listed in Restatement (Second) Judgments § 13, again citing
10 Sandoval. Border Business Park at 1565, 49 Cal.Rptr.3d 259.
11
12 The California Court of Appeal revisited the issue and applied the
13 Restatement in Schultz v. Fulton Associates, Nos. B197266, B197270, 2007 WL
14 3334334, (Cal. Ct. App. 2nd Dist. Nov. 9, 2007) (unpublished) 1 In doing so, it
15 stated at *3: “The Supreme Court and Courts of Appeal have followed the view of
16 the Restatement Second of Judgment. (. . . Producers Dairy Delivery Co. v. Sentry
17 Ins. Co. (1986) 41 Cal.3d 903, 911 [226 Cal.Rptr. 558, 562]; Border Business
18 Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 1538, 1564. . . .” In
19 Producers Dairy Delivery Co., the California Supreme Court stated at p. 911, 226
20 Cal.Rptr. at 562: “[W]e agree with the analysis set forth in Sandoval . . . (relying
21 on Rest.2d Judgment, §13.)” And in South Sutter, LLC v. LJ Sutter Partners, L.P.,
22 193 Cal.App.4th 634, 663, 123 Cal.Rptr.3d 301, 324 (2011), the Court of Appeal
23
24
1. “Unpublished opinions from the California courts do not have formal
25 precedential effect and are not binding on this Court. See Morris v. Parke, Davis
26 & Co., 667 F.Supp. 1332, 1347, fn. 12 (C.D. Cal. 1987).” Baltazar v. Yates, No.
EDCV 04-00274, 2010 WL 2195979 at fn. 8 (C.D.Cal. April 28, 2010). While
27 California Rule of Court 8.115 provides that an unpublished case may not be cited
28 except in certain circumstances not applicable here, the rule is not binding on this
federal court. Id.
20
1 cited Border Business Park on this point as precedent. This Court did likewise in
2 Blatty v. Warner Bros. Entertainment, Inc., No. CV 10-06611, 2011 WL
3 13217379 at *7 (C.D.Cal. April 21, 2011). Accordingly, it is now settled that
4 California follows § 13 of the Restatement Second of Judgments. As explained
5 above, under that analysis, the California Court of Appeal’s decision that this
6 Court’s order dismissing DeCrescenzo’s federal cause of action and remanding the
7 state claims back to the Los Angeles County Superior Court did not have any
8 preclusive effect is deemed to be final because the parties had the opportunity to
9 be heard and the appellate court supported its decision with a reasoned opinion.
10 These factors are undisputable. Thus, the Court of Appeal’s opinion should be
11 deemed final. Consequently, this Court is not empowered to enjoin the ongoing
12 state court proceeding.
13
14 B. If the Court is Empowered To Enjoin the Pending State Court Action, It
15 Nevertheless Should Refrain From Doing So and Grant the Motion to Dismiss.
16
17 As mentioned above, “the fact that an injunction may issue under the Anti-
18 Injunction Act does not mean that it must issue.” Chick Kam Choo, 486 U.S. at
19 151, 108 S.Ct. 1684; see also Quakenbush, 121 F.3d at 1377; Blalock, 982 F.2d at
20 375; Merle, 936 F.2d at 486. Stated differently, “it is within this Court’s
21 discretion to refrain from issuing the requested injunction.” Kag West, LLC v.
22 Malone, No. 15-cv-03827, 2016 WL 3951651 (N.D. Cal. July 22, 2016) at *2. As
23 discussed below, the Court should refrain from issuing an injunction based on
24 concerns of comity and federalism, strengthened by CSI’s seven-year delay, CSI’s
25 failure to seek review by the United States Supreme Court, and the conclusion that
26 the California Court of Appeal got it right.
27 ///
28 ///
21
1 In Sandpiper, 428 F.3d 831, the Ninth Circuit reversed a district court’s
2 order enjoining the defendant’s further prosecution of a state court action. Owners
3 of structures on which Inner-Seal Siding had been installed brought a class action
4 against the manufacturer, Louisiana-Pacific Corporation (“L-P”), in the District
5 Court for the District of Oregon. The suit settled and the district court approved
6 and adopted the settlement agreement and entered an order and final judgment.
7 Lester, a Minnesota corporation, purchased Inner-Seal Siding which it
8 incorporated into buildings that it constructed and sold to its customers. As a
9 distributor, Lester was not a class member and was not a party to the settlement
10 agreement. However, class member claims against Lester were released by the
11 settlement. Lester sued L-P in Minnesota state court. L-P’s motion for summary
12 judgment was denied on the basis that the res judicata effect of the settlement
13 agreement and federal court order barred Lester’s suit, the matter was tried and a
14 jury rendered a verdict in Lester’s favor. L-P then immediately filed a motion in
15 the Oregon federal district court to enjoin the state court from entering judgment.
16 The federal court issued the injunction. Lester appealed. The Ninth Circuit
17 reversed for two reasons. First, Lester was not collaterally estopped from
18 prosecuting L-P because “Lester was not named as a party to the class action and
19 was not a member of the nationwide class.” Id. at 848. Second, “[t]he district
20 court’s invocation of the relitigation exception was improper for the additional
21 reason that any potential for relitigation of covered claims was addressed [in the
22 Minnesota state court action]. . . . The proper recourse for L-P was to appeal
23 through the state court system and, if necessary, to petition the Unites States
24 Supreme Court for review. See Parsons . . . 474 U.S. 518, 525-26, 106 S.Ct. 768 .
25 . . ; Atlantic Coast Line, 398 U.S. at 296, 90 S.Ct. 1739. . . . ‘[L]ower courts
26 possess no power whatsoever to sit in direct review of state court decisions.’
27 Atlantic Coast Line, 398 U.S. at 296, 90 S.Ct. 1739. Indeed, ‘the highly intrusive
28 ///
22
1 remedy of a federal-court injunction against the enforcement of [a] state court

2 judgment’ is not justified even where a state court mistakenly rejects the res
3 judicata effect of a prior federal judgment. Parsons, 474 U.S. at 525, 106 S.Ct.
4 768. . . .” Id. at 850.
5
6 In his concurring opinion, Judge Silverman agreed that the district court had
7 abused its discretion because the interests of comity outweighed potential
8 relitigation: “When Lester sued L-P in Minnesota state court, L-P immediately
9 could have moved for an injunction in the district court. Instead, it asserted res
10 judicata in the state court. . . . [¶] Then things went sour for L-P. The jury
11 awarded $13.2 million. . . . L-P [then] ran to district court and sought to enjoin the
12 state court proceeding. At that point, however, it was too late. In my view, once
13 L-P raised its res judicata defense in state court and that court ruled on it, the
14 interests of comity outweighed the district court’s perceived need to prevent
15 possible relitigation of its judgment.” Sandpiper at 853-54. Judge Silverman
16 continued: “Ramsden v. AgriBank, 214 F.3d 865 (7th Cir.2000), dealt with a
17 similar issue: the propriety of enjoining state court proceedings where the state
18 court rules that a prior federal judgment does not bar the claim at issue, but state
19 law would not give preclusive effect to that ruling. . . . Agribank . . . obtained an
20 injunction that barred the state court from further considering any issues between
21 the parties. . . . [¶] The Seventh Circuit vacated the injunction. . . . [I]n light of
22 the comity concerns in Parsons, the Seventh Circuit held that:
23
24 ‘Once a state court considers a res judicata defense and rules that
25 a prior federal judgment does not actually bar a claim, the affront of
26 federal court intervention stripping the state court of power to continue
27 is greatly magnified. After such a ruling, the interests in preventing
28 possible relitigation are therefore generally outweighed by the
23
1 heightened comity concerns except in the most extraordinary

2 circumstances.’ Id. at 870-871” Sandpiper at 854-55.
3
4 Two months later, the Ninth Circuit decided Brother Records, 432 F.3d 939.
5 As discussed above, in that case, the California Court of Appeal – rather than the
6 trial court – held that the federal court’s order did not have preclusive effect and
7 remanded the matter back to the trial court for further proceedings. The defendant
8 then filed suit in federal court and moved for an injunction. The district court
9 denied the motion. On appeal, the Ninth Circuit affirmed:
10
11 “Even if the decision [of the California Court of Appeal] is not final and
12 preclusive, we conclude that the district court did not abuse its
13 discretion in giving it effect. Absent a preclusive final judgment, the
14 district court could still determine ‘the propriety of a federal-court
15 injunction under the general principles of equity, comity, and federalism
16 . . . .’ Parsons, 474 U.S. at 526, 106 S.Ct. 768. The Court of Appeal’s
17 decision on res judicata was sufficiently definitive that all three of these
18 principles are satisfied by according great weight to that state court’s
19 ruling. . . . We agree with the Seventh Circuit’s observation that once
20 the state court has considered and decided the state court issue, ‘the
21 affront of federal court intervention stripping the state court of power to
22 continue is greatly magnified.’ Ramsden v. AgriBank, FCB, 214 F.3d
23 865, 870 (7th Cir.2000). By adhering to the state court’s decision, the
24 district court furthered the purpose of Parsons and the Anti-Injunction
25 Act., which is to ‘prevent friction between federal and state courts by
26 barring federal intervention in all but the narrowest of circumstances.’
27 Sandpiper . . . 428 F.3d [at] 842. . . .” Brother Records, 432 F.3d at 944.
28 ///
24
1 The affront of federal court intervention stripping the state court of power in
2 the case at bar is similarly magnified. Not only did the trial court find CSI’s res
3 judicata defense to be inapplicable, so did the Court of Appeal in a reasoned
4 opinion. CSI then sought a rehearing by the Court of Appeal on that basis and
5 when that was denied filed a petition for review with the California Supreme
6 Court that was also denied. It then ignored the holding in Sandpiper that its
7 remedy was to petition the United States Supreme Court for review because the
8 district court’s discretion is necessarily restricted to “prevent the relitigation
9 exception from simply being turned into a vehicle for seeking appellate review of
10 a state court decision in federal court.” Ramsden, 214 F.3d 865, 872.
11
12 Similarly, in Merle, 936 F.2d 466, the Ninth Circuit affirmed the district
13 court’s dismissal of appellant’s suit to enjoin the respondent’s state court
14 proceeding. The court held: “In considering whether to exercise their power to
15 enjoin state court proceedings under the relitigation exception of the Anti-
16 Injunctive Act, district courts must be guided by ‘general principles of equity,
17 comity, and federalism.’ Parsons . . . 474 U.S. 518, 526, 106 S.Ct. 768, 773, 88
18 L.Ed.2d 877. . . . In applying these principles, the district court acted entirely
19 within its discretion when it determined that because nothing prevented Merle
20 Norman from raising its defenses of res judicata and collateral estoppel in the
21 California courts, it would not issue an injunction.” Merle, at 468; see also Kag
22 West, LLC, 2016 WL 3951651 denying motion to enjoin; Connecticut General
23 Life Ins. Co., 2007 WL 2225797 granting motion to dismiss.
24
25 Equity principles also weigh in favor of dismissing the action. Thus, delay
26 in seeking the injunction can be a ground for a district court refraining from
27 enjoining a state court action. In Bailey v. State Farm Fire and Cas. Co., 414 F.3d
28 1187 (10th Cir.2005), the Tenth Circuit affirmed the district court’s denial of
25
1 defendants’ request to enjoin a state court action based on delay: “[T]he district
2 court acted out of respect for the work already performed by the state court. . . . [¶]
3 Defendants occupied a significant amount of the state court’s time in litigation
4 before seeking relief from the federal system. Defendants continued litigating in
5 the state court for more than a year before returning to the federal system to
6 request an injunction. This amount of time is not insignificant. See Ramsden, 214
7 F.3d at 868 (‘Because the relitigation exception bears on the delicate relationship
8 between state and federal courts, strict timing requirements cabin its
9 invocation.’).” Bailey at 1190-1191. Similarly in the case at bar, if CSI wanted to
10 seek an injunction, it should have returned to this Court much earlier than it did.
11
12 CSI litigated the action in the state trial and appellate courts for eight years.
13 CSI raised its preclusion defense in the state court and lost there. After the Court
14 of Appeal held the defense was unavailing, CSI petitioned for rehearing and when
15 the petition was denied, it petitioned the California Supreme Court for review.
16 When its petition for review was denied in 2011, CSI was required to seek review
17 by the Supreme Court of the United States. See CFE Group, LLC v. Firstmerit
18 Bank, N.A., 809 F.3d 346, 352-53 (7th Cir.2015) citing Ramsden, 214 F.3d at 872
19 quoting Parsons, 474 U.S. at 525, 106 S.Ct. 768: “Challenges to the correctness of
20 a state court’s determination as to the conclusive effect of a federal judgment must
21 be pursued by way of appeal through the state-court system and certiorari from
22 this Court.” CSI’s delay dwarfs that of the defendants in Bailey, 414 F.3d 1187.
23
24 Even the state court’s mistaken rejection of the claim of res judicata
25 “does not justify the highly intrusive remedy of a federal-court injunction against
26 the enforcement of the state-court judgment.” Parsons, at 525, 106 S.Ct. 768.
27 Nevertheless, the California courts did not err in their determination that the
28 doctrine of res judicata does not bar DeCrescenzo’s state court claims. In its
26
1 appellate briefs, CSI relied on and cited cases for the proposition that federal law
2 determines the preclusive effect of a prior federal court judgment and that a
3 dismissal based on the statute of limitations is a judgment on the merits. (See Ex.
4 E; Ex. F and Ex. I.) But CSI ignored two applicable exceptions: “A dismissal on
5 statute of limitations grounds generally does not bar a subsequent action in a
6 different forum when the limitations period in the second forum is longer than the
7 first, and has not yet expired. . . . [¶] Additionally, . . . res judicata should not
8 apply to a previous dismissal that was based on the statute of limitations if the
9 effect of the bar would be unfair. . . .” Zhang v. Dept. of Labor & Immigration,
10 331 F.3d 1117, 1118-19 (9th Cir.2003). The California Court of Appeal impliedly
11 found either or both of these exceptions apply because it limited the federal court’s
12 ruling to the federal claim and held that the state claims were not barred by the
13 applicable California statutes of limitations if DeCrescenzo proved the facts she
14 alleged in her second amended complaint.
15
16 For the reasons discussed, the Court should refrain from enjoining
17 DeCrescenzo’s state court action.
18
19 VII. LEAVE TO AMEND SHOULD NOT GRANTED
20
21 “A district court may deny leave to amend when amendment would be
22 futile.” Hartmann v. Cal. Dep’t of Corr. & Rehab., 707 F.3d 1114, 1129-30 (9th
23 Cir.2013). Leave to amend need not be given when “the pleading could not
24 possibly be cured by the allegations of other facts.” Cook, Perkiss and Liehe, Inc.
25 v. Northern California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir.1990.)
26 ///
27 ///
28 ///
27
1 That is the case at bar. Thus, leave to amend should not be given. The motion
2 should be granted and the matter dismissed.
3
4 Dated: February 20, 2018 s/ John P. Blumberg
5 JOHN P. BLUMBERG
6
7 s/ Ave Buchwald
8 AVE BUCHWALD
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1 CERTIFICATE OF SERVICE
2
3 I, the undersigned, declare that I am over the age of 18 and am not a [arty to
this action. I am in the City of Long Beach, California; my business address is
4 Blumberg Law Corporation at 444 West Ocean Boulevard, Suite 1500, Long
Beach, California 90802.
5
6 On the date below, I served a copy of the foregoing document entitled:
7 DEFENDANT’S MEMORANDUM OF POINTS AND AUTHORITIES IN
SUPPORT OF MOTION TO DISMISS FOR FAILURE TO STATE A
8 CLAIM UPON WHICH RELIEF CAN BE GRANTED [FRCP 12(b)(6)]
9 on the interested parties in said case as follows:
10 Served Electronically
Via the Court’s CM/ECF System
11
12 Counsel for the Plaintiff :
13
Eric M. Lieberman, Esq.
14 Rabinowitz, Boudin, Standard, Krinsky & Lieberman, LLP
61 Broadway, Suite 1800
15 New York, NY 10006
Telephone: (212) 254-1111
16 Facsimile: (212) 674-4614
17 Email: elieberman@rbskl.com
18 Bert H. Dexler, Esq.
Kendall Brill & Kelly, LLP
19 10100 Santa Monica Blvd., Suite 1725
Los Angeles, California 90067
20 Telephone: (310) 556-2700
Facsimile: (310) 556-2705
21
Email: bdeixler@kbkfirm.com
22
23 I declare under penalty of perjury under the laws of the United States of
America that the foregoing is true and correct. I declare that I am employed in the
24 office of a member of the Bar of this Court, at whose direction the service was
made. This declaration is executed in Pasadena, California on February 20, 2018.
25
Kelly Lasorsa /s/ Kelly Lasorsa
26
(Type or Print Name) (Signature of Declarant)
27
28
29

Scientology v. DeCrescenzo (Federal) Motion To Dismiss

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Case 2:17-cv-09158-GW-SK Document 13-1 Filed 02/20/18 Page 1 of 29 Page ID #:47

1 John P. Blumberg - CA State Bar No. 70200

1 Holder v. Holder, 305 F.3d 854 (9th Cir.2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

1 MEMORANDUM OF POINTS AND AUTHORITIES

1 IV. THE COURT HAS JURISDICTION

1 opinion). Due in no small part to the fundamental constitutional independence of

1 remedy of a federal-court injunction against the enforcement of [a] state court

1 heightened comity concerns except in the most extraordinary

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