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Ninespot, Inc. v. Jupai Holdings Limited

United States District Court, D. Delaware

April 17, 2019

NINESPOT, INC., Plaintiff,
v.
JUPAI HOLDINGS LIMITED, PUJI MEDIA HOLDINGS LIMITED, and PUJI JUPAI ASSET MANAGEMENT, Defendants.

          MEMORANDUM

         Presently before me are Defendant Puji Jupai Asset Management's Motion to Dismiss, or in the Alternative, Strike Portions of First Amended Complaint (D.I. 105), Defendant Jupai Holdings Limited's Motion to Dismiss Plaintiff Ninespot, Inc.'s First Amended Complaint (D.I. 107), and Defendant Puji Media Holdings Limited's Motion Pursuant to Rules 12(b)(6) and 12(b)(7) to Dismiss Plaintiffs First Amended Complaint (D.I. 110). The Parties have fully briefed the issues. (D.I. 106, 108, 111, 117, 118, 119, 120, 121, 123). I heard oral argument on March 28, 2019. After full consideration of the briefing, the motions are resolved as follows.

         I. Background

         I summarized the facts and circumstances underlying this case in my July 30, 2018 Memorandum Order ("Order") that addressed Defendants' last round of pre-answer motions. (D.I. 102 at 1-3). As part of the Order, I granted Plaintiffs request for leave to amend its complaint. (Id. at 26). Plaintiff filed its First Amended Complaint ("FAC") on August 13, 2018. (D.I. 103).

         This chart summarizes the claims of the original complaint, the Order, and Plaintiffs amended claims as pled in the FAC:

Original Complaint

(D.I. 1)

Ruling on Motion to Dismiss (D.I. 102)

First Amended Complaint (D.I. 103)

(1) Breach of Contract (Puji)[1]

Maintained

(1) Breach of the BCA[2] (Puji)

(2) Breach of the SPA[3]

(All Defendants)

(2) Breach of Contract (PJ)

Maintained

(3) Breach of Contract (Jupai)

Dismissed

(4) Breach of Implied Covenant of Good Faith and Fair Dealing (All Defendants)

Maintained: Puji Dismissed: Jupai and PJ

(3) Breach of Implied Covenant of Good Faith and Fair Dealing (Puii and Jupai)

(5) Intentional Interference with Contractual Relations (Puji and Jupai)

Dismissed

X

(6) Intentional Interference with Prospective Economic Relations (Puji)

Dismissed

X

(7) Breach of Fiduciary Duty (Puji)

Dismissed

X

(8) Intentional Misrepresentation (All Defendants)

Maintained: Puji Dismissed: Jupai and PJ

(4) Intentional Misrepresentation (Puji and Jupai)

9) Violation of Delaware Deceptive Trade Practices Act (All Defendants)

Dismissed

X

(5) Aiding and Abetting Fraud (Jupai)

         Defendants filed the present motions to dismiss on September 10, 2018.

         II. Legal Standards

         A. Rules 12(b)(6) and 9(b)

         When reviewing a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court must accept the complaint's factual allegations as true. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). Rule 8(a) requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Id. at 555. The factual allegations do not have to be detailed, but they must provide more than labels, conclusions, or a "formulaic recitation" of the claim elements. Id. ("Factual allegations must be enough to raise a right to relief above the speculative level... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)."). Moreover, there must be sufficient factual matter to state a facially plausible claim to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The facial plausibility standard is satisfied when the complaint's factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. ("Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." (internal quotation marks omitted)).

         Federal Rule of Civil Procedure 9(b) requires that a complaint must state with particularity the circumstances constituting fraud or mistake. Conditions of a person's mind may be alleged generally. Fed.R.Civ.P. 9(b). Complaints that fail to plead fraud or false claims grounded in fraud with the requisite particularity are dismissed in the same manner as a dismissal under Rule 12(b)(6). Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003).

         B. Rule 12(b)(7)

         Under Federal Rule of Civil Procedure 12(b)(7), a defendant may move to dismiss a case for a plaintiffs failure to join a required party pursuant to Rule 19. To determine whether the case must be dismissed, the Court must first decide whether the party is "necessary" within the meaning of Rule 19(a). Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306, 312 (3d Cir. 2007). An absent party is necessary if either, "(1) the present parties will be denied complete relief in the absence of the party to be joined, or (2) the absent party will suffer some loss or be put at risk of suffering such loss if not joined." Koppers Co. v. Aetna Cas. & Sur. Co., 158 F.3d 170, 175 (3d Cir. 1998). If the party is necessary under Rule 19(a) and joinder is feasible, the party is required and must be joined. If the absent party is necessary and cannot be joined, the Court must next determine whether the party is considered "indispensable" under Rule 19(b). Id. Whether a party is indispensable is determined by balancing:

(1) the extent to which a judgment rendered in the person's absence might prejudice that person or the existing parties;
(2) the extent to which any prejudice could be lessened or avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
(3) whether a judgment rendered in the person's absence would ...

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