Nixon Peabody Motion to Dismiss

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ROBERT C. BERNIUS (Pro hac vice admission pending) JOHN H. RIDDLE (State Bar No. 51418) ANDREW R. NEILSON (State Bar No. 221694) BRIAN J. SMITH (State Bar No. 257827) NIXON PEABODY LLP One Embarcadero Center, 18th Floor San Francisco, California 94111-3600 Telephone: (415) 984-8200 Facsimile: (415) 984-8300 Attorneys for Defendant NIXON PEABODY LLP

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

KENDRICK PATTERSON, ADAM BERGMAN, MICHAEL ATTIANESE, ANDREA LEVY, DARYL YEAKLE, and RAYMOND R. PLANTE, each individually, and on behalf of all others similarly situated and the general public, Plaintiff, vs. STEPHEN V. O’NEAL, individually and on behalf of those similarly situated; THOMAS HILL, individually and on behalf of those similarly situated; ELLEN L. BASTIER, individually and on behalf of those similarly situated; MARK WEITZEL, individually and on behalf of those similarly situated; JULIAN MILLSTEIN, individually and on behalf of those similarly situated; JEFFREY STEINER, individually and on behalf of those similarly situated; DAVID P. GRAYBEAL, individually and on behalf of those similarly situated; ORRICK HERRINGTON & SUTCLIFFE LLP, a limited liability partnership; DLA PIPER LLP, a limited liability partnership; NIXON PEABODY LLP, a limited liability partnership; HOWREY LLP, a limited liability partnership; and MORGAN LEWIS & BROCKIUS LLP, a limited liability partnership; Defendants.

Case No. 09-cv-03031-SC CLASS ACTION NOTICE OF MOTION AND MOTION TO DISMISS BY DEFENDANT NIXON PEABODY LLP MEMORANDUM OF POINTS AND AUTHORITIES Date: Time: Location: Judge: September 25, 2009 10:00 a.m. Courtroom 1 Hon. Samuel Conti

Accompanying Documents: Request for Judicial Notice; [Proposed] Order Granting Defendant Nixon Peabody’s Motion to Dismiss

26 27 28 -1DEFENDANT NIXON PEABODY LLP’S MOTION TO DISMISS UNDER RULE 12(b)(6) CASE NO. 09-CV-03031-SC 12658229.5

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TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on September 25, 2009, at 10:00 a.m., or as soon thereafter as the matter may be heard in Courtroom 1 of the above-entitled Court, located at 450 Golden Gate Avenue, 17th Floor, San Francisco, California, Defendant NIXON PEABODY LLP will, and hereby does, move to dismiss Plaintiffs’ Third Claim for Relief pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim against upon which relief can be granted. The Motion is supported by this Notice of Motion and attached Memorandum of Points and Authorities, Request for Judicial Notice, and Proposed Order, any other pleadings and papers on file in this matter, and such other oral and documentary evidence as may be presented at oral argument. DATED: August 12, 2009 NIXON PEABODY LLP

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By:

/s/ Andrew Neilson ROBERT C. BERNIUS JOHN RIDDLE ANDREW R. NEILSON BRIAN J. SMITH Attorneys for Defendant NIXON PEABODY LLP

DEFENDANT NIXON PEABODY LLP’S MOTION TO DISMISS UNDER RULE 12(b)(6) CASE NO. 09-CV-03031-SC 12658229.5

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MEMORANDUM OF POINTS AND AUTHORITIES I. PRELIMINARY STATEMENT

3 This case arises out of the dissolution of the law firm of Thelen LLP. 4 Plaintiffs contend that the law firm of Nixon Peabody LLP (“Nixon Peabody”) violated the 5 federal Worker Adjustment and Retraining Notification Act (“WARN Act”) by failing to provide 6 proper notice to former employees of Thelen LLP before a “mass layoff” or “plant closure.” There is 7 no allegation that any of the Plaintiffs were ever employed, at any time, by Nixon Peabody. 8 To survive this motion to dismiss, Plaintiffs’ First Amended Class Action Complaint (the 9 “Complaint”) must meet a two pronged test. It must (1) contain sufficient pleaded facts which, if 10 accepted as true, state a claim for relief that (2) is “plausible on its face.” Ashcroft v. Iqbal, 129 S. Ct. 11 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-556 (2007)). 12 As to the required facts, a complaint that contains “labels and conclusions” or “a formulaic 13 recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. What is 14 required is “further factual enhancement.” Id. 15 In addition, the plausibility standard requires “more than a sheer possibility that a defendant 16 has acted unlawfully. …Where a complaint pleads facts that are ‘merely consistent with’ a 17 defendant’s liability, it ‘stops short of the line between possibility and plausibility…’” and must be 18 dismissed. Twombly, 550 U.S. at 557 (brackets omitted). 19 The Third Claim for Relief in the Complaint (the only claim directed at Nixon Peabody) fails 20 to meet either standard: it pleads no pertinent facts, and its formulaic allegations are facially 21 implausible. For those reasons, it should be dismissed. 22 II. 23 This action arises out of the “demise” of Thelen, a nationwide law firm. (Complaint at ¶ 1). 24 Thelen announced that it was dissolving on October 30, 2008 and, on the same day, informed 25 Plaintiffs that their final day of employment would be November 30, 2008. (Id. at ¶ 21). 26 To state a WARN Act claim against Nixon Peabody, the complaint must contain sufficient 27 factual matter to show—in the words of the statute—that Nixon Peabody purchased all or part of 28 -3DEFENDANT NIXON PEABODY LLP’S MOTION TO DISMISS UNDER RULE 12(b)(6) CASE NO. 09-CV-03031-SC 12658229.5

STATEMENT OF FACTS

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Thelen’s business, and that it failed to give proper notice to former Thelen employees after the effective date of that purchase. 29 U.S.C. § 2101(b)(1). Plaintiffs, however, merely parrot legal conclusions, as follows: In 2008, Defendant NIXON PEABODY purchased a significant part of Thelen's business. Plaintiffs are informed and believe and thereon allege that Defendant NIXON PEABODY is a successor of Thelen for labor law purposes. Defendant NIXON PEABODY is a law firm that has substantially continued the same business operations of Thelen, with substantially the same employees working in similar jobs and working conditions, with similar supervisory personnel, using similar methods and offering similar services. (Complaint at ¶¶ 22-23). No facts are pleaded demonstrating Nixon Peabody’s role in the alleged WARN Act violations. Plaintiffs describe the demise of Thelen as a “vivisection,” whereby several law firms, including Nixon Peabody, “purchased the most profitable aspects of the Thelen’s business.” (Id. at ¶ 2). Yet no details of Nixon Peabody’s supposed purchase of an unspecified “significant part” of Thelen’s “business” are set forth. Indeed, the only “fact” alleged—that Nixon Peabody’s “purchase” occurred “in 2008,” (as did the supposed “purchases” by the other Law Firm Defendants of other “parts” of Thelen’s business)—offers nothing probative concerning the alleged WARN Act violation. (Id. at ¶¶ 16, 19, 22, 25, 28). Similarly, there are no dates, or any other factual support, for the conclusory allegation that Nixon Peabody and the other Law Firm Defendants all became the “successors” of a single law firm “for labor law purposes.” (Id. at ¶¶ 17, 20, 23, 26, 29). Plaintiffs’ “information and belief” allegations about so-called “purchases” and “business operations” are, of course, really not facts at all. They are legal conclusions, passed off as facts. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 555). In addition, Plaintiffs’ claims against Nixon Peabody are inherently implausible, and the Complaint demonstrates as much. The accusations against Nixon Peabody are accompanied by identically empty and mechanical accusations against four other law firms: Orrick Herrington; DLA Piper; Howrey; and Morgan Lewis. Indeed, these same Plaintiffs, in a suit filed November 24, 2008 -4DEFENDANT NIXON PEABODY LLP’S MOTION TO DISMISS UNDER RULE 12(B)(6) CASE NO. 09-CV-03031-SC

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(3:08-cv-5322) in this Court, set out their generic claim against fully one hundred “John Doe” Law Firms in the language they set forth in this case, verbatim: Plaintiffs are informed and believe and thereon allege that Defendant Does 401 through 500 are successors of [Thelen] for labor law purposes. Defendant Does 401 through 500 are law firms or other entities that have substantially continued the same business operations of [Thelen], with substantially the same employees working in similar jobs and working conditions, with similar supervisory personnel, using similar methods and offering similar services.1 Plaintiffs’ claims that former Thelen lawyers and staff joined not just Nixon Peabody but many other law firms; that all of those law firms (or, at least, the five firms named in this action) are “successors” of Thelen; and that all of those law firms are consequently liable under the WARN Act are far-fetched, at best. Rather, it is evident that Plaintiffs have reflexively sued multiple law firms claiming, without any factual support, that each law firm “purchased” the “profitable aspects” of a business that “had no profits.” (Complaint at ¶¶ 1, 2). The Complaint thus lacks the requisite “facial plausibility.” It does not plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 556). For these two reasons, Plaintiffs’ Third Claim for Relief must be dismissed for failure to state a claim upon which relief can be granted. III. A. LEGAL ARGUMENT

Plaintiffs Fail to State Claim Under the WARN Act. Under Rule 12(b)(6) a complaint should be dismissed if it lacks a cognizable legal theory or

21 fails to allege sufficient facts to support a cognizable legal theory. Twombly, 550 U.S. at 555; 22 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). Entitlement to relief 23 requires more than a formulaic recitation of the elements of a cause of action. 550 U.S. at 555. A 24 complaint must contain (1) sufficient factual matter to state a claim for relief that is (2) plausible on 25 its face.” Iqbal, 129 S. Ct. at 1949. 26 27 28
1

See attached Request for Judicial Notice. This language is taken from Paragraph 11 of the initial Complaint (filed November 24, 2008) and Paragraph 11 of the Third Amended Complaint (filed July 8, 2009).

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1.

No facts support the claim that Nixon Peabody “purchased” Thelen’s business.

Plaintiffs contend that Nixon Peabody is liable as a purchaser under the WARN Act. The WARN Act provides in pertinent part that: In the case of a sale of part or all of an employer’s business, the sellers shall be responsible for providing notice for any plant closing or mass layoff in accordance with section 3 of this Act [29 USC § 2102], up to and including the effective date of sale. After the effective date of the sale of part or all of an employer’s business, the purchaser shall be responsible for providing notice for any plant closing or mass layoff in accordance with section 3 of this Act [29 USC §§ 2101 et seq.], any person who is an employee of the seller … as of the effective date of the sale shall be considered an employee of the purchaser immediately after the effective date of the sale. 29 U.S.C. § 2101(b); Int’l Alliance of Theatrical and Stage Employees and Moving Picture Machine Operators v. Compact Video Services, Inc., 50 F.3d 1464, 1468 (9th Cir. 1995) (holding that the WARN Act’s sales exception allocates notice responsibility to the party who actually makes the decision that creates an employment loss). Plaintiffs claim that Nixon Peabody purchased an unspecified “significant part” of Thelen’s business. (Complaint at ¶ 22). They allege that “several other law firms purchased … the most profitable aspects of the Thelen firm’s business.” (Complaint at ¶ 2). Presumably, Nixon Peabody was one of those firms. The Complaint offers no supporting facts. Plaintiffs fail even to allege the “effective date” of Nixon Peabody’s purported purchase, such that liability for failure to provide WARN Act notice could be established: failure to provide 60 days notice is fact-intensive and depends entirely on the specific dates of the alleged sale and employment termination. The Complaint’s vague claim that the Law Firms purchased various aspects of Thelen’s business “in 2008” is meaningless. Similarly, although Plaintiffs state that several Thelen partners “moved on” to other firms, that “fact,” in the context of a dissolved law firm, is a tautology. (Complaint at ¶ 1). It says nothing with respect to Nixon Peabody and, even if it did, the fact that former Thelen employees “moved on” is utterly irrelevant to the determining whether there was a “sale” for WARN Act purposes. See McCaffrey v. Brobeck, Phleger & Harrison, LLP et al., 2005 U.S. Dist. LEXIS 40327, *13 (N.D. Cal. 2005) (holding that Morgan Lewis’ admission of former Brobeck attorneys, even en masse, -6DEFENDANT NIXON PEABODY LLP’S MOTION TO DISMISS UNDER RULE 12(B)(6) CASE NO. 09-CV-03031-SC

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cannot be considered a sale of a law firm business within the meaning of the WARN Act). Plaintiffs have simply copied the elements of a WARN Act violation, pasted them in boilerplate fashion into the Complaint, and inserted “Law Firm Defendants” or “Nixon Peabody” as they deemed necessary to allege a claim, without providing any facts to support that exercise. That is all they have done. There is no more. Their formulaic recitation of the elements of a cause of action does not state a viable claim. The Third Claim for Relief should be dismissed. 2. No facts support the claim that Nixon Peabody is a “successor” to Thelen.

As are Plaintiffs’ bald allegations concerning the supposed “purchases” of Thelen’s business, Plaintiffs’ generic allegations that the Law Firm Defendants “substantially continued the same business operations of Thelen, with substantially the same employees working in similar jobs and working conditions, with similar supervisory personal, using similar methods and offering similar services” is a legal conclusion, taken almost verbatim from case law discussing successor liability. (Complaint at ¶¶ 17, 20, 23, 26, 29). Indeed, Plaintiffs’ language is almost identical to the language of the Ninth Circuit in Nat’l Labor Relations Board v. Jeffries Lithograph Co., 752 F.2d 459, 463465 (9th Cir. 1985) where the court explains the legal standard for determining whether a company is a “successor employer.” Plaintiffs’ mechanical assertions are devoid of supporting facts. Again, there is no more. The Complaint “mention[s] no specific time, place, or person involved.” Twombly, 550 U.S. at n.10. The allegations are factually insufficient to state a viable claim, and for this reason alone the Third Claim for Relief should be dismissed. 3. The absence of facts and the Complaint’s facial implausibility require dismissal.

To avoid dismissal, the complaint must “possess enough heft to ‘sho[w] that the pleader is entitled to relief.’” Twombly, 550 U.S. at 557. Two “working principles” underlie the Twombly test. A complaint that fails to satisfy both requirements must be dismissed: First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. [Federal Rule of Civil Procedure 8] does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to -7DEFENDANT NIXON PEABODY LLP’S MOTION TO DISMISS UNDER RULE 12(B)(6) CASE NO. 09-CV-03031-SC

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dismiss. Determining whether a complaint states a plausible claim for relief will … be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not “show[n]”—“that the pleader is entitled to relief.” Iqbal, 129 S.Ct. at 1949-1950 (internal citations omitted). Plaintiffs’ allegations against Nixon

5 Peabody fail to satisfy either requirement mandated by Twombly and Iqbal. 6 First, the Complaint is a textbook example of conclusory pleadings. “[B]ecause they are no 7 more than conclusions, [they] are not entitled to the assumption of truth.” Iqbal, 129 S. Ct. at 1950. 8 Since the Complaint here consists of nothing more than a recitation of the elements of a claim, it must 9 be dismissed. 10 In addition, even if the Complaint did contain “well-pleaded factual allegations,” the court 11 “should assume their veracity and then determine whether they plausibly give rise to an entitlement to 12 relief.” Iqbal, 129 S. Ct. at 1950. The Complaint in this action fails the plausibility test as well. 13 There is nothing in the Complaint demonstrating the plausibility of Plaintiffs’ case and everything 14 suggesting the contrary. It is claimed that Thelen lawyers and staff joined many law firms at 15 unspecified times; that all of those law firms “purchased” the “profitable aspects” of a business that 16 “had no profits;” that all of those law firms are “successors” of Thelen; and that all of those law firms 17 are liable under the WARN Act for the termination of all of Thelen’s former employees. There is 18 nothing in the Complaint that shows Plaintiffs’ entitlement to relief against Nixon Peabody. 19 Plaintiffs’ WARN Act claim set forth in Third Claim for Relief must be dismissed. 20 B. 21 Rule 15(a) allows Plaintiffs one amendment as of right, which Plaintiffs have already used for 22 their First Amended Class Action Complaint. Hinton v. NMI Pac. Enters., 5 F.3d 391 (9th Cir. 23 1993). A second amendment requires leave of court or written consent of the adverse parties. Fed. 24 R. Civ. P. 15(a). If an amendment would be “futile” the Court may refuse to allow Plaintiffs to file 25 another amended complaint. Moore v. Kayport Package Express, 885 F.2d 531, 538 (9th Cir. 1989); 26 27 15(a) do not require the courts to indulge in futile gestures”). An amendment is “futile” if the 28 -8DEFENDANT NIXON PEABODY LLP’S MOTION TO DISMISS UNDER RULE 12(B)(6) CASE NO. 09-CV-03031-SC

Leave to Amend Would Be Futile and Should Not Be Granted.

Glick v. Koenig, 766 F.2d 265, 268-269 (7th Cir. 1985) (“[t]he liberal amendment rules under Rule

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complaint could not survive a motion for summary judgment. Wilson v. American Trans Air, Inc., 874 F.2d 386, 392 (7th Cir. 1989). An amendment here would be a “futile gesture.” To be sure, if Plaintiffs had any factual support their recitation of the legal elements of a WARN Act, they would have asserted them. The Complaint taken as a whole indicates the obvious: Plaintiffs cannot allege facts sufficient to support a WARN Act claim because no law firm “purchased” all or part of Thelen. In the absence of a “purchase” of Thelen, none of the law firms to which former Thelen employees “moved on” has any obligation to provide notice under the WARN Act. Because any attempt to amend the Complaint would be futile, Plaintiffs’ WARN Act claim ought to be dismissed with prejudice. IV. CONCLUSION

For the foregoing reasons, Nixon Peabody respectfully requests that the Court grant this Motion and dismiss Plaintiffs’ Third Claim for Relief with prejudice.

DATED: August 12, 2009

Respectfully submitted, NIXON PEABODY LLP

By:

/s/ Andrew Neilson ROBERT C. BERNIUS JOHN RIDDLE ANDREW R. NEILSON BRIAN J. SMITH Attorneys for Defendant NIXON PEABODY LLP

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