Meyer Tipping Suit Combined Dismissals

Case 4:17-cv-05782-JSW Document 103 Filed 02/16/18 Page 1 of 32
1 BAKER BOTTS L.L.P.

Jonathan A. Shapiro (Cal. Bar No. 257199)
2 jonathan.shapiro@bakerbotts.com
Stuart C. Plunkett (Cal. Bar No. 187971)
3 stuart.plunkett@bakerbotts.com
Ariel D. House (Cal. Bar No. 280477)
4 ariel.house@bakerbotts.com
101 California Street, Suite 3600
5 San Francisco, California 94111
Telephone: (415) 291-6200
6 Facsimile: (415) 291-6300
7 Attorneys for Defendants

UNION SQUARE HOSPITALITY
8 GROUP, LLC, DANIEL MEYER,
and SABATO SAGARIA
9
[Additional counsel listed on signature page]
10
UNITED STATES DISTRICT COURT
11
FOR THE NORTHERN DISTRICT OF CALIFORNIA
12
OAKLAND DIVISION
13
14 TIMOTHY BROWN, ) CASE NO. 4:17-CV-05782-JSW

)
15 Plaintiff, ) DEFENDANTS’ MOTION TO DISMISS
) PURSUANT TO FED. R. CIV. P. 12(b)(1) AND
16 v. ) 12(b)(6)
)
17 140 NM LLC, et al., ) Date: April 6, 2018
) Time: 9:00 a.m.
18 Defendants. ) Courtroom: 5
) Judge: Hon. Jeffrey S. White
19 )
) Action Filed: October 6, 2017
20 )
)
21 )
22
23
24
25
26
27
28
DEFENDANTS’ MOTION TO DISMISS PURSUANT CASE NO. 4:17-CV-05782-JSW

TO FED. R. CIV. P. 12(b)(1) AND (12)(b)(6)
1 TABLE OF CONTENTS
2 Page
3 NOTICE OF MOTION AND MOTION ........................................................................................ 1
4 RELIEF REQUESTED ................................................................................................................... 1
5 STATEMENT OF ISSUES TO BE DECIDED ............................................................................. 1
6 MEMORANDUM OF POINTS AND AUTHORITIES ................................................................ 2
7 I. INTRODUCTION .................................................................................................................. 2
8 II. STATEMENT OF ALLEGATIONS ...................................................................................... 5
9 A. The Parties .............................................................................................................. 5
10 B. Plaintiff’s Claims .................................................................................................... 6
11 III. SUMMARY OF ARGUMENT .............................................................................................. 7
12 IV. ARGUMENT .......................................................................................................................... 8
13 A. Plaintiff Lacks Article III Standing......................................................................... 8

14 B. Plaintiff Fails to State any Federal or State Antitrust Claim ................................ 10
15 1. Plaintiff Lacks Standing Under Section 4 of the Clayton Act .................. 10
16 2. Plaintiff’s “Conspiracy” Theory Is Inadequate ......................................... 12
17 3. Plaintiff Fails to Allege a Per Se Violation or Any Facts
Supporting a Rule of Reason Case............................................................ 16
18
C. Plaintiff Fails to State a RICO Claim ................................................................... 18
19
1. Plaintiff Lacks Standing to Bring a RICO Claim ..................................... 18
20
2. Plaintiff’s Boilerplate RICO Allegations Are Insufficient ....................... 19
21
D. Plaintiff Fails to State a UCL Claim ..................................................................... 21
22
V. CONCLUSION ..................................................................................................................... 23
23
24
25
26
27
28

i
1 TABLE OF AUTHORITIES
2 Page(s)
3 CASES
4 Alt. Richfield Co. v. USA Petroleum Co.,

495 U.S. 328 (1990) .....................................................................................................11, 17
5
6 Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of California,

190 F.3d 1051 (9th Cir. 1999) ...........................................................................................10
7
Asa–Brandt, Inc. v. ADM Investor Servs., Inc.,
8 344 F.3d 738 (8th Cir. 2003) .............................................................................................18
9 Ashcroft v. Iqbal,
556 U.S. 662 (2009) .....................................................................................................10, 18
10
Associated Gen. Contractors of Cal., Inc. v. California State Council of
11
Carpenters,
12 459 U.S. 519 (1983) .............................................................................................................9
13 Athena Feminine Techs. Inc. v. Wilkes,

No. C 10-04868 ............................................................................................................21, 22
14
Barber v. U.S. Bank N.A.,
15 No. CV 16-695-R, 2016 WL 9211666 (C.D. Cal. Aug. 9, 2016) ......................................22
16
Bedi v. Hewlett Packard Co.,
17 2008 WL 11226235 (D. Mass. Nov. 17, 2008) .................................................................18
18 Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007) ...............................................................7, 9, 10, 11, 12, 13, 14, 15, 16
19
Brantley v. NBC Universal, Inc.,
20 675 F.3d 1192 (9th Cir. 2012) .......................................................................................7, 17
21 Brunswick Corp v. Pueblo Bowl-O-Mat, Inc.,
22 429 U.S. 477 (1977) ...........................................................................................................11
23 Camacho v. Auto. Club of S. Cal.,

142 Cal. App. 4th 1394 (Cal. Ct. App. 2006) ................................................................8, 22
24
Canyon Cty. v. Syngenta Seeds, Inc.,
25 519 F.3d 969 (9th Cir. 2008) .............................................................................................18
26 Cargill v. Manfort,
479 U.S. 104 (1986) ...........................................................................................................11
27
28 Coburn v. Bank of New York Mellon, N.A.,

No. 2:10-CV-03080 JAM, 2011 WL 1103470 (E.D. Cal. Mar. 22, 2011) ........................22
ii
Credit Bureau Servs., Inc. v. Experian Info. Sols., Inc.,

1 No. SACV 12-2146, 2013 WL 3337676, at *8 (C.D. Cal. June 28, 2013) .......................13
2
Davidson v. Kimberly-Clark Corp.,
3 873 F.3d 1103 (9th Cir. 2017) .........................................................................................7, 8
4 Del. Valley Surgical Supply Inc. v. Johnson & Johnson,

523 F.3d 1116 (9th Cir. 2008) ...........................................................................................10
5
Edwards v. Marin Park, Inc.,
6 356 F.3d 1058 (9th Cir. 2004) ...........................................................................................20
7
Gaitan v. Mortgage Elec. Registration Sys., Inc.,
8 2009 WL 3244729 (C.D. Cal. 2009)..............................................................................7, 21
9 Gerlinger v. Amazon.com Inc.,

526 F.3d 1253 (9th Cir. 2008) .............................................................................................8
10
Green Valley Corp. v. Caldo Oil Co.,
11 2010 WL 2348636 (N.D. Cal. June 8, 2010) .......................................................................8
12 Health & Welfare Fund v. Amgen, Inc.,
13 400 F. App’x 255 (9th Cir. 2010) ......................................................................................18
14 Holmes v. Sec. Inv’r Prot. Corp.,

503 U.S. 258 (1992) ...........................................................................................................18
15
Houser v. Pritzker,
16 28 F. Supp. 3d 222 (S.D.N.Y. 2014)....................................................................................9
17 Imagineering v. Kiewit Pacific Co.,
976 F.2d 1303 (9th Cir. 1992) .....................................................................................18, 19
18
19 In re ATM Fee Antitrust Litig.,

686 F.3d 741 (9th Cir. 2012) .........................................................................................7, 10
20
In re Capacitors Antitrust Litig.,
21 154 F. Supp. 3d 918 (N.D. Cal. 2015) .............................................................................8, 9
22 In re Ditropan XL Antitrust Litig.,
529 F. Supp. 2d 1098 (N.D. Cal. 2007) ...............................................................................8
23
24 In re LTL Shipping Services Antitrust Litig.,

2009 WL 323219 (N.D. Ga. Jan. 28, 2009) .......................................................................14
25
In re Modafinil Antitrust Litig.,
26 837 F.3d 238 (3d Cir. 2016)...............................................................................................10
27 In re Musical Instruments and Equip. Antitrust Litig.,

798 F.3d 1186 (9th Cir. 2015) ...........................................................................................15
28

iii
In re WellPoint, Inc. Out-of-Network UCR Rates Litig.,

1 865 F. Supp. 2d 1002 (C.D. Cal. 2011) .............................................................................16
2
In re WellPoint, Inc. Out-of-Network “UCR” Rates Litig.,
3 No. MDL 09-2074 PSG, 2013 WL 12130034 (C.D. Cal. July 19, 2013) .........................11
4 Int’l Norcent Tech. v. Koninklijke Philips Elecs. N.V.,

No. CV07-00043 MMM, 2007 WL 4976364 (C.D. Cal. Oct. 29, 2007),
5 aff’d, 323 F. App’x 571 (9th Cir. 2009).............................................................................13
6 Ismail v. Wells Fargo Bank, N.A.,
7 No. 2:12-CV-01653-MCE, 2012 WL 5425175 (E.D. Cal. Nov. 6, 2012).........................21
8 Kelsey K. v. NFL Enterprises, LLC,

254 F. Supp. 3d 1140 (N.D. Cal. 2017) .............................................................................15
9
Kendall v. Visa U.S.A., Inc.,
10 518 F.3d 1042 (9th Cir. 2008) .....................................................................................13, 16
11 Krantz v. BT Visual Images, LLC,
89 Cal. App. 4th 164 (2001) ..............................................................................................21
12
13 LAI v. USB-Implementers Forum, Inc.,

No. CV14-05301-RGK, 2014 WL 12600969 (C.D. Cal. Nov. 21, 2014) .........................13
14
Lewis v. Casey,
15 518 U.S. 343 (1996) .............................................................................................................8
16 Lujan v. Defenders of Wildlife,
504 U.S. 555 (1992) .............................................................................................................8
17
Maya v. Centex Corp.,
18
658 F.3d 1060 (9th Cir. 2011) .............................................................................................9
19
Monsanto Co. v. Geertson Seed Farms,
20 561 U.S. 139 (2010) .............................................................................................................8
21 N’west Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co.,

472 U.S. 284 (1985) ...........................................................................................................17
22
Name.Space, Inc. v. Internet Corp. for Assigned Names & Numbers,
23
795 F.3d 1124 (9th Cir. 2015) ...........................................................................................15
24
Nat’l Soc. Of Prof’l Eng’rs v. United States,
25 435 U.S. 679 (1978) .......................................................................................................7, 16
26 NCAA. v. Bd. Of Regents of Univ. of Okla.,

468 U.S. 85 (1984) .............................................................................................................17
27
Odom v. Microsoft Corp.,
28 486 F.3d 541 (9th Cir. 2007) .........................................................................................7, 19

iv
Orchard Supply Hardware LLC v. Home Depot USA, Inc.,

1 967 F. Supp. 2d 1347 (N.D. Cal. 2013) .............................................................................17
2
Oregon Laborers-Employers Health & Welfare Tr. Fund v. Philip Morris Inc.,
3 185 F.3d 957 (9th Cir. 1999) .........................................................................................7, 18
4 Oscar v. Univ. Students Co-op. Ass’n,

965 F.2d 783 (9th Cir. 1992) .............................................................................................19
5
Paladin Assocs. v. Montana Power, Co.,
6 328 F.3d 1145 (9th Cir. 2003) ...............................................................................10, 16, 17
7
Reves v. Ernst & Young,
8 507 U.S. 170 (1993) .......................................................................................................7, 20
9 Salinas v. United States,

522 U.S. 52 (1997) .............................................................................................................20
10
Schreiber Distributing Co. v. Serv-Well Furniture Co., Inc.,
11 806 F.2d 1393 (9th Cir. 1986) ...........................................................................................21
12 Simon v. Value Behavioral Health, Inc.,
13 208 F.3d 1073 (9th Cir. 2000) ...........................................................................................19
14 Spokeo, Inc. v. Robins,

136 S. Ct. 1540 (2016) .....................................................................................................7, 8
15
Stahl Law Firm v. Judicate W.,
16 No. C13-1668 TEH, 2013 WL 6200245 (N.D. Cal. Nov. 27, 2013) ...................................9
17 Steele v. Hospital Corporation of America,
36 F.3d 69 (9th Cir. 1994) .................................................................................................19
18
19 Tanaka v. Univ. of S. Cal.,

252 F.3d 1059 (9th Cir. 2001) ...........................................................................................12
20
Texaco Inc. v. Dagher,
21 547 U.S. 1 (2006) ...............................................................................................................18
22 United States v. Fernandez,
388 F.3d 1199 (9th Cir. 2004), as modified, 425 F.3d 1248 (9th Cir. 2005) .....................20
23
24 United States v. United States Gypsum Co.,

438 U.S. 422 (1978) .......................................................................................................7, 16
25
Walker v. USAA Cas. Ins. Co.,
26 474 F. Supp. 2d 1168 (E.D. Cal. 2007)..............................................................................12
27 Warth v. Seldin,
422 U.S. 490 (1975) .............................................................................................................9
28

v
Wolf Concept S.A.R.L. v. Eber Bros. Wine & Liquor Corp.,

1 736 F. Supp. 2d 661 (W.D.N.Y. 2010) ..............................................................................12
2
STATUTES
3
15 U.S.C. § 15(a) .....................................................................................................................10
4
18 U.S.C. § 1961(4) .................................................................................................................19
5
18 U.S.C. § 1962 ......................................................................................................................20
6
OTHER AUTHORITIES
7
Fed. R. Civ. P. 9 .............................................................................................................7, 19, 21
8
9 Fed. R. Civ. P. 12 ...........................................................................................................1, 4, 8, 9

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

vi
1 NOTICE OF MOTION AND MOTION
2 PLEASE TAKE NOTICE that on April 6, 2018, at 9:00 a.m., in Courtroom 5 of the
3 United States District Court for the Northern District of California, located at 1301 Clay Street,
4 Oakland, California 94612, Defendants 140 NM LLC, d/b/a Trou Normand; Bar Agricole, LLC,
5 d/b/a Bar Agricole; Thaddeaus M. Vogler; Hopemoorelain, LLC, d/b/a Camino; Russell Moore;
6 Allison Hopelain; Es Verdad, LLC, d/b/a Comal; John Paluska; Andrew Hoffman; Union Square
7 Hospitality Group, LLC; Daniel Meyer; Sabato Sagaria; Momofuku 171 First Avenue, LLC;
8 David Chang; Marlow, Inc.; Andrew Tarlow; Molinero LLC, d/b/a Huertas; Jonah Miller; Nate
9 Adler; Happy Cooking Hospitality, Inc.; Gabriel Stulman; Birth of the Cool, LLC, dba Eleven
10 Madison Park; Golden Gate Restaurant Association, New York City Hospitality Alliance, Inc.;
11 and Andrew Rigie (“the Moving Defendants”) will, and hereby do, move the Court to dismiss
12 the Complaint (ECF No. 1) filed by Plaintiff Timothy Brown (“Plaintiff”), pursuant to Rules
13 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.
14 This Motion is made on the grounds that Plaintiff lacks standing under Article III of the
15 United States Constitution, and Plaintiff’s Complaint fails to state a claim upon which relief can
16 be granted under Rule 12(b)(6).
17 This Motion is supported by the following Memorandum of Points and Authorities, the
18 [Proposed] Order filed concurrently herewith, the pleadings and papers on file herein, and such
19 other matters that may be presented to the Court at hearing.
20 RELIEF REQUESTED
21 Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), Defendants request that this Court
22 dismiss Plaintiff Timothy Brown’s Complaint in its entirety.
23 STATEMENT OF ISSUES TO BE DECIDED
24 1. Whether Plaintiff has standing under Article III of the United States Constitution?
25 2. Whether Count 1 of the Complaint against Defendants for violation of Section 1
26 of the Sherman Act states a claim upon which relief can be granted?
27
28
1
1 3. Whether Count 2 of the Complaint against Defendants for violation of the Federal
2 Racketeer Influenced and Corrupt Organizations Act states a claim upon which
3 relief can be granted?
4 4. Whether Count 3 of the Complaint against California Defendants for violation of
5 California’s Cartwright Act states a claim upon which relief can be granted?
6 5. Whether Count 4 of the Complaint against California Defendants for violation of
7 California’s Unfair Competition Law states a claim upon which relief can be
8 granted?
9 6. Whether Count 5 of the Complaint against New York Defendants for violation of
10 New York’s Donnelly Act states a claim upon which relief can be granted?
11 MEMORANDUM OF POINTS AND AUTHORITIES
12 I. INTRODUCTION
13 The Complaint takes aim at Union Square Hospitality Group, LLC (“USHG”), and its
14 founder and a former executive (Danny Meyer and Sabato Sagaria), for eliminating tipping as
15 part of a broader “Hospitality Included” model adopted in late 2015 at one restaurant, and now
16 embraced at over half of its thirteen restaurants. Plaintiff accuses not only the founder of
17 “Hospitality Included,” but also the rest of the Moving Defendants of an antitrust conspiracy and
18 other conduct that cannot withstand a motion to dismiss.

19 USHG is proud of “Hospitality Included.” It is USHG’s answer to the antiquated and
20 socially unjust tipping model, which, over time, has created a “two-tiered wage system with deep
1
21 social and economic consequences for millions.” Mr. Meyer personally called for the “no
22 tipping” debate that continues in the press, on social media, and among policymakers—including
23 in the very reports that have now been downloaded and cut-and-pasted into a frivolous lawsuit.
24
1
See, e.g., Pete Wells, Danny Meyer Restaurants to Eliminate Tipping, N.Y. TIMES, Oct.
25
14, 2015, available at: https://www.nytimes.com/2015/10/15/dining/danny-meyer-restaurants-no-
26 tips.html; Saru Jayaraman, Why Tipping is Wrong, N.Y. TIMES, Oct. 15, 2015, available at:
https://www.nytimes.com/2015/10/16/opinion/why-tipping-is-wrong.html; Danny Meyer, A
27 Letter from Danny Meyer about Hospitality Included, Oct. 14, 2015, available at:
https://www.ushgnyc.com/hospitalityincluded/#letterfromdanny.
28
2
1 Tipping offends USHG’s culture of “Enlightened Hospitality”—not only does it exclude
2 critical team members from sharing in guests’ generosity, but it also hinders personal and
3 professional advancement, and perpetuates systemic inequality and discrimination in the

2
4 restaurant industry, including racial bigotry, gender inequality and sexual misconduct.
5 “Hospitality Included” addresses these deep-seated problems at the root, by: mitigating the pay
6 gap between team members; standardizing growth paths and removing barriers to management
7 advancement; facilitating scheduling flexibility to support working parents; and eliminating the
8 potentially inappropriate power dynamics between guests and service staff in a tipped
9 environment, which can lead to sexual aggression and unwanted advances. Finally, many guests
10 who expect warm hospitality with every USHG meal prefer to pay the single price on the menu,
11 without nostalgia for separate transactions at the bar, table, and coat check.
12 USHG did not, of course, invent tipping, nor was it the first to eliminate it. Restaurants
13 in Europe and Asia rarely subsidize service through tipping. Nor do other leading hospitality and
14 service providers here and abroad, such as the luxury hotels, top airlines, and merchants who
15 compete with personal service. That USHG sparked industry and public controversy by adopting
16 “Hospitality Included”—hosting town halls and inviting internet debates that have been
17 passionate, pro and con—is hardly surprising. Since opening Union Square Cafe in 1985, Mr.
18 Meyer has been a hospitality innovator, personalizing guest relationships long before Salesforce
19 and OpenTable (on 3x5 index cards and mailed newsletters, in the 1980s); the first to ban
20 smoking in New York City (roundly criticized as economic suicide, in the 1990s); for the team-
21 driven national bestseller book on “Enlightened Hospitality” (in 2005); and as one of the
22 standard-bearers for paid parental leave in the restaurant industry, which supports working
23 parents (non-gender specific; birth or adoptive) so that each and every employee can take time to
24 bond with new children while maintaining pay and employment (in 2016). “Hospitality
25
2
26 The tipping practices that Plaintiff is litigating to preserve “have slavery in their history.”
See Corby Kummer, Fine Dining’s Exploitative Tipping System Is Dying, NEW REPUBLIC, Dec.
27 7, 2015, available at: https://newrepublic.com/article/124456/fine-dinings-exploitative-tipping-
system-dying (“Tipping first arrived in this country when employers saw no reason to pay
28 regular wages to recently emancipated slaves. . . .”).
3
1 Included” serves the same, shared goal of improving the lives of restaurant employees and
2 delighting guests. At the same time, “Hospitality Included” enhances robust competition among
3 restaurants, as Plaintiff concedes.
4 Although it may be controversial, “Hospitality Included” does not require federal court
5 intervention. Nor do the varied “tipping solutions” that have been separately considered,
6 embraced, and rejected by the other Defendants. The Complaint should be dismissed, for any
7 number of reasons.
8 First, the out-of-state Plaintiff fails to provide the “case or controversy” necessary to
9 invoke this Court’s authority under Article III. Plaintiff (from Minnesota) does not claim to have
10 ever once dined at any USHG restaurant (all in New York), or ever once crossed paths with
11 Messrs. Meyer or Sagaria (also New Yorkers). Nor does Plaintiff claim to have dined at any of
12 the other restaurants he has sued, much less claim any individual injury “traceable” to the never-
3
13 alleged meal. Plaintiff does not, for example, say he paid a penny more than the price set on
14 any menu, or suffered any other damage at any restaurant, anywhere. Plaintiff thus lacks
15 standing to sue because he does not appear to have been harmed in any way that this Court could
16 redress, under any legal theory. Plaintiff, of course, has many choices when dining out in the
17 Bay Area or New York City, but he has no legal right to set menu prices or compel a restaurant
18 manager to perpetuate wage inequality (through tipping policies or otherwise).

19 Second, the “price-fixing,” “racketeering,” and other inflammatory claims fail for still
20 other reasons. That the USHG Defendants have so vocally advocated for change renders absurd
21 any theory of a clandestine anti-tipping conspiracy. The notion that all Defendants “agreed” to a
22 price-fixing oligopoly is not supported by a single allegation about prices (other than that they
23 will go up). The Complaint also ignores that these restaurants adopted strikingly diverse
24 policies, at different times, with some retaining tipping while others soon reversed course by re-
25 instituting it. The conceded, procompetitive reasons for adopting the various no-tipping models
26 3
As set forth in the Motion to Dismiss brought concurrently by the New York Defendants
27 under Rule 12(b)(2), this out-of-state Plaintiff’s attempt to sue out-of-state Defendants in
California offends Supreme Court and Ninth Circuit precedent under the Fourteenth
28 Amendment.
4
1 make it far more plausible that Defendants exercised their own independent business judgment to
2 set policies at their own restaurants.
3 Third, Plaintiff has not identified the “relevant competitive market” required to bring a
4 legitimate “rule of reason” antitrust case. A restaurant in a Manhattan museum, of course, is not
5 competing for the lunch crowd against a regional Spanish offering in Oakland (although both are
6 excellent). To the extent Plaintiff implies some monolithic national market, he does not explain
7 how the handful of restaurants he has sued could plausibly harm competition or inflate prices at
8 the roughly 620,000 other full-service restaurants in America.
9 Fourth, California’s consumer laws do not protect a Minnesotan who will not say where
10 and when he dined, or how tipping has impacted him, and in any event, has not alleged any
11 actionable conduct. That is, it was not “fraudulent” for USHG to publicly promote “Hospitality
12 Included” in the press, just as nothing was concealed on a consumer-friendly website that
13 disclosed prices along with an interactive restaurant map showing where tipping is welcome.
14 There is nothing “unlawful” about charging the prices listed on the menu, even if the prices are
15 higher (or lower) than those at other restaurants. And USHG certainly did nothing “unfair”—or
16 contrary to California public policy—by discarding a practice that has disadvantaged its cooks,
17 dishwashers, and team cohesion, not to mention (on a more systemic level) negatively impacted
18 racial and gender parity and fueled power imbalances with insidious wage disparity.
19 Simply put, Plaintiff may prefer to dine at virtually any sit-down restaurant in America,
20 where he may find lower menu prices with the option to tip some members of the team, or to
21 save money by not tipping at all. That is a choice, but it is not a national class action. The
22 Complaint should be dismissed.
23 II. STATEMENT OF ALLEGATIONS

24 A. The Parties.
25 Plaintiff Timothy Brown is an individual who purports to represent a nationwide class of
26 individuals who “purchased food or drinks from a defendant restaurant during the time period the
27 restaurant had in place a no-tipping policy.” (Compl. ¶¶ 8, 140.) The Complaint includes no
28 identifying information whatsoever about Mr. Brown—although his civil cover sheet reveals that
5
1 he resides in Minnesota. (Dkt. No. 1–1.) The Complaint contains no indication of where
2 Plaintiff resides, or when and where he allegedly dined at a defendant restaurant with a no-
3 tipping policy. The Complaint says only that Plaintiff “purchased food from certain defendant
4 restaurants during the course of the conspiracy, and was overcharged as a direct result of the
5 conspiracy.” (Compl. ¶ 8.) Plaintiff alleges no additional facts regarding these alleged
6 “overcharges,” including the amount he supposedly paid or even why he ordered anything off a
7 menu if he did not like the prices.
8 The Complaint names 31 Defendants, including restaurants in New York, San Francisco,
9 Oakland, and Berkeley; individual restaurant owners in New York, San Francisco, Oakland,
10 and Berkeley; a former “chief restaurant officer” residing in New York; operating companies
11 in New York that own multiple restaurants in New York and other cities; restaurant industry
12 associations in New York and San Francisco, and an executive director of one of those industry
13 associations. (Compl. ¶¶ 9–39.)
14 B. Plaintiff’s Claims.
15 Plaintiff alleges that these undifferentiated “Defendants” entered into a conspiratorial
16 agreement whereby certain restaurants implemented “no tipping” or “Hospitality Included”
17 policies, imposing higher prices for menu items rather than allowing customers to tip servers.
18 (Compl. ¶ 2.) The Complaint alleges no evidence or any details about any agreement among
19 Defendants, or any subset of them, regarding the implementation of tipping policies.
20 The Complaint instead proffers that the “conspiracy” is somehow evidenced by an
21 entirely public conversation about the merits of “Hospitality Included” in the restaurant
22 industry—a community dialogue that the Complaint chronicles at length. (Id. ¶¶ 47–131.) The
23 Complaint includes extensive quotes from multiple publicly-available sources, including:
24 newspaper articles and blog posts (id. ¶¶ 48–49, 53, 58–60, 62, 64, 76–77, 79–80, 82, 84, 93–94,
25 97, 105–106, 122, 136); Twitter posts (id. ¶¶ 47, 63, 69, 71–73, 78, 85, 96, 100, 102, 104, 107,
26 111, 125); transcripts of and/or information about public events (including radio and television
27 interviews, webcasts, and panel discussions) (id. ¶¶ 50–52, 57, 65–67, 75, 89, 90–92, 95, 101,
28 103, 108, 113, 115–16, 118, 120–21, 123, 126–30, 131, 133–34); restaurant and association
6
1 websites and public announcements (id. ¶¶ 54, 61, 70, 81, 86–88, 98, 109, 114, 118, 132);
2 publicly available court records (id. ¶¶ 55, 117); publicly available surveys (id. ¶¶ 56, 83, 99,
3 110); earnings calls for publicly traded companies (id. ¶¶ 74, 112), and other public commentary
4 available on the Internet (id. ¶¶ 68, 135). This is the sum total of Plaintiff’s alleged “evidence”
5 of “conspiracy.”
6 Based on these public discussions, Plaintiff asserts claims for price-fixing in violation of
7 Section 1 of the Sherman Act (id. ¶¶ 150–57), the California Cartwright Act (id. ¶¶ 164–68), and
8 the New York Donnelly Act (id. ¶¶ 176–79); racketeering in violation of the Racketeer
9 Influenced and Corrupt Organizations Act (id. ¶¶ 158–63); and unfair competition in violation of
10 California’s Unfair Competition Law (id. ¶¶ 169–75). None of those claims has any merit.
11 III. SUMMARY OF ARGUMENT
12 Plaintiff fails to state any claim for relief. First, as a threshold matter, Plaintiff lacks
13 Article III standing because he fails to plead facts demonstrating that he suffered an injury in
14 fact. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016); Davidson v. Kimberly-Clark
15 Corp., 873 F.3d 1103, 1113 (9th Cir. 2017). Plaintiff also lacks statutory standing to bring his
16 claims. See In re ATM Fee Antitrust Litig., 686 F.3d 741, 754 (9th Cir. 2012) (Section 4 of the
17 Clayton Act); Oregon Laborers-Employers Health & Welfare Tr. Fund v. Philip Morris Inc., 185
18 F.3d 957, 963 (9th Cir. 1999) (RICO).

19 Second, Plaintiff’s antitrust claims fail. The Complaint falls far short of the pleading
20 standard set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Here, as in Twombly,
21 the Complaint is unsupported by any factual allegations suggesting that certain Defendants’
22 decisions to eliminate tipping is the result of an unlawful agreement, as opposed to “rational and
23 competitive business strategy unilaterally prompted by common perceptions of the market.” Id.
24 at 554. Also, Plaintiff fails to allege any conduct to trigger a per se analysis, and fails to allege
25 any facts that could support a rule of reason case. See Nat’l Soc. Of Prof’l Eng’rs v. United
26 States, 435 U.S. 679, 692 (1978); United States v. United States Gypsum Co., 438 U.S. 422, 441
27 n.16 (1978); Brantley v. NBC Universal, Inc., 675 F.3d 1192, 1197 (9th Cir. 2012).
28
7
1 Third, Plaintiff’s RICO claim fails because it is based entirely on boilerplate language,
2 fails to meet the heightened pleading standard of Rule 9(b), and fails to allege a valid RICO
3 enterprise, among other deficiencies. See Reves v. Ernst & Young, 507 U.S. 170, 185 (1993);
4 Odom v. Microsoft Corp., 486 F.3d 541, 552 (9th Cir. 2007).
5 Fourth, Plaintiff fails to state a claim under any prong of Section 17200 of the UCL.
6 Plaintiff cannot state an “unlawful” claim because the predicate claims fail. See Gaitan v.
7 Mortgage Elec. Registration Sys., Inc., 2009 WL 3244729, at *11 (C.D. Cal. 2009). The attempt
8 to allege an “unfair” claim fails because Plaintiff makes no effort to demonstrate a “substantial”
9 injury that is not outweighed by consumer benefits or competition—and because Plaintiff could
10 easily have avoided his alleged harm by dining at a different restaurant. See Camacho v. Auto.
11 Club of S. Cal., 142 Cal. App. 4th 1394, 1403 (Cal. Ct. App. 2006).
12 IV. ARGUMENT
13 A. Plaintiff Lacks Article III Standing.

14 Plaintiff fails to allege an injury-in-fact sufficient to establish Article III standing. Article
15 III standing is a “jurisdictional prerequisite to the consideration of any federal claim,” Gerlinger
16 v. Amazon.com Inc., 526 F.3d 1253, 1255 (9th Cir. 2008), and “a threshold inquiry” for any case,
17 including class actions. In re Capacitors Antitrust Litig., 154 F. Supp. 3d 918, 924 (N.D. Cal.
18 2015). To establish Article III standing, Plaintiff must have “(1) suffered an injury in fact, (2)
19 that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be
20 redressed by a favorable judicial decision.” Spokeo, 136 S. Ct. at 1547. To even be heard before
21 this Court, Plaintiff must affirmatively plead facts demonstrating “an invasion of a legally
22 protected interest which is (a) concrete and particularized, and (b) actual or imminent, not
23 conjectural or hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992); see
24 also Davidson, 873 F.3d at 1113 (“plaintiff bears the burden of demonstrating that her injury-in-
25 fact is ‘concrete, particularized, and actual or imminent’”) (citing Monsanto Co. v. Geertson
26 Seed Farms, 561 U.S. 139, 149 (2010)).
27 “To demonstrate standing, ‘named plaintiffs who represent a class must allege and show
28 that they personally have been injured, not that injury has been suffered by other, unidentified
8
1 members of the class to which they belong and which they purport to represent.’” In re Ditropan
2 XL Antitrust Litig., 529 F. Supp. 2d 1098, 1107 (N.D. Cal. 2007) (dismissing state law claims
3 based on law of states where no named plaintiff resided) (quoting Lewis v. Casey, 518 U.S. 343,
4 347 (1996)). The named plaintiff must have standing with respect to each claim the class
5 representative seeks to bring. Id. (citations omitted). Otherwise, the Court “lacks jurisdiction
6 over the claim and must dismiss it.” Capacitors Antitrust Litig., 154 F. Supp. 3d at 925.
7 Under Rule 12(b)(1), the “court presumes a lack of subject matter jurisdiction until the
8 plaintiff meets her burden of establishing subject matter jurisdiction.” Green Valley Corp. v.
9 Caldo Oil Co., 2010 WL 2348636, at *2 (N.D. Cal. June 8, 2010). But here Plaintiff fails to
10 plead any injury at all, much less any “concrete” or “particularized” injury-in-fact. Plaintiff
11 alleges only that he ate at “certain defendant restaurants,” but he neglects to identify where he
12 dined, when he dined, or precisely what tipping policy was in place when he dined. (See Compl.
13 ¶ 8.) Nor does he allege how he supposedly incurred an overcharge or suffered any injury
14 whatsoever when dining at “certain defendant restaurants.” (See id.) Plaintiff’s vague and
15 incomplete accusations are plainly insufficient to establish Article III standing, because the
16 Complaint fails to “allege and show” that the Plaintiff has “personally . . . been injured.” Houser
17 v. Pritzker, 28 F. Supp. 3d 222, 236 (S.D.N.Y. 2014) (quoting Warth v. Seldin, 422 U.S. 490,
18 502 (1975)). Plaintiff presumably knows the facts of whatever personal dining experience have
19 brought him to this Court, and his failure to plead anything about himself or those experiences
20 only spotlights his disregard of Article III standing requirements.
21 Because Plaintiff fails to meet his burden of alleging standing, the Complaint should be
22 dismissed for lack of subject matter jurisdiction under Rule 12(b)(1). See Stahl Law Firm v.
23 Judicate W., No. C13-1668 TEH, 2013 WL 6200245, at *3 (N.D. Cal. Nov. 27, 2013) (lack of
24 Article III standing requires dismissal for lack of subject matter jurisdiction) (citing Maya v.
4
25 Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011)).
26 4
Plaintiff lacks standing to assert the state-law claims for the additional reason that he
27 failed to allege that he resides in (or purchased food in) New York or California. See Capacitors
Antitrust Litig., 154 F. Supp. 3d at 925 (dismissing state-law claims brought under laws of states
28 where no named plaintiff resided or purchased the product at issue).
9
B. Plaintiff Fails to State any Federal or State Antitrust Claim.

1
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court cautioned
2
that antitrust pleadings call for particularly careful scrutiny before concluding that they state a
3
viable claim. Id. at 573. In a case involving allegations of an unlawful antitrust conspiracy,
4
Twombly teaches that allegations of “parallel conduct and a bare assertion of conspiracy” do not
5
suffice. Id. at 556. Boilerplate conclusions of antitrust wrongdoing must be disregarded;
6
plaintiffs must instead plead sufficient factual allegations to meet each element of the claim. Id.
7
at 557; see also Associated Gen. Contractors of Cal., Inc. v. California State Council of
8
Carpenters, 459 U.S. 519, 528 n.17 (1983) (district courts have “power to insist upon some
9
specificity in pleading before allowing a potentially massive factual controversy to proceed”). A
10
plaintiff’s “obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than
11
labels and conclusions, and a formulaic recitation of the elements of a cause of action will not
12
do.” Twombly, 550 U.S. at 555; accord Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
13
The Complaint here does not even come close to meeting those standards. Plaintiff fails
14
to plead any facts plausibly suggesting a conspiracy—as opposed to a public dialogue and
15
unilateral conduct—and instead pleads facts that show the implausibility of his antitrust claims.
16
And as a threshold matter, Plaintiff fails to establish statutory standing requirements.
17
1. Plaintiff Lacks Standing Under Section 4 of the Clayton Act.
18
Plaintiff’s failure to allege Article III standing deprives the Court of subject matter
19
jurisdiction, but Plaintiff also lacks statutory standing to bring an action for damages under the
20
Sherman Act. To bring a private damages action, Section 4 of the Clayton Act requires Plaintiff
21
to allege and prove that he was “injured in his business or property.” See 15 U.S.C. § 15(a). To
22
satisfy this requirement, Plaintiff must allege injury by at least one of the alleged conspirators.
23
In re Modafinil Antitrust Litig., 837 F.3d 238, 266 (3d Cir. 2016). The Supreme Court “has
24
interpreted that section narrowly, thereby constraining the class of parties that have statutory
25
standing to recover damages through antitrust suits.” Del. Valley Surgical Supply Inc. v. Johnson
26
& Johnson, 523 F.3d 1116, 1120 (9th Cir. 2008). As discussed above, Plaintiff fails to allege
27
any injury at all, much less injury caused by Defendants. (Compl. ¶ 8.) Plaintiff thus clearly
28
10
1 lacks standing under Section 4 of the Clayton Act.
2 Clayton Act Section 4 also requires Plaintiff to establish “antitrust injury.” In re ATM
3 Fee, 686 F.3d at 754. To establish antitrust injury, Plaintiff bears the burden of proving “(1)
4 unlawful conduct, (2) causing an injury to the plaintiff, (3) that flows from that which makes the
5 conduct unlawful, and (4) that is of the type the antitrust laws were intended to prevent.” Am. Ad
6 Mgmt., Inc. v. Gen. Tel. Co. of California, 190 F.3d 1051, 1055 (9th Cir. 1999); see also Paladin
7 Assocs. v. Montana Power, Co., 328 F.3d 1145, 1158 (9th Cir. 2003) (“Where the defendant’s
8 conduct harms the plaintiff without adversely affecting competition generally, there is no
9 antitrust injury.”). Thus, to have standing to sue under the Sherman Act, Plaintiff must
10 adequately plead that he has suffered antitrust injury from harm to competition and that he is the
11 proper party to bring the case. See Brunswick Corp v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477,
12 489 (1977); Alt. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 344 (1990) (standing only
13 exists if harm to plaintiff “stems from a competition-reducing aspect or effect of the defendant’s
14 behavior”).
15 Plaintiff flunks this test for multiple reasons. The Complaint does not allege any
16 connection between Plaintiff and Defendants, nor does it offer facts that would demonstrate that
17 the price Plaintiff allegedly paid at some unspecified restaurant might somehow have been
18 affected by the alleged conspiracy. Plaintiff also does not demonstrate that any loss he suffered
19 is “of the type the antitrust laws were designed to prevent” and “flows from that which makes
20 defendants’ acts unlawful.” Cargill v. Manfort, 479 U.S. 104, 113 (1986) (citations omitted). It
21 is implausible that the purported conspiracy to end tipping at a few restaurants in the Bay Area
22 and New York could harm competition in those metropolitan areas, let alone in the putative
23 nationwide market consisting of hundreds of thousands of restaurants that Plaintiff alleges.

5
24 Plaintiff’s Section 1 claim thus also fails for lack of statutory standing.
25 5
In determining antitrust standing under the Cartwright Act and the Donnelly Act,
26 California and New York courts apply federal antitrust law. See Gatt Commc'ns, Inc. v. PMC
Assocs., L.L.C., 711 F.3d 68, 81 (2d Cir. 2013) (stating “We see no reason . . . to interpret the
27 Donnelly Act differently than the Sherman Act with regard to antitrust standing.”); In re
WellPoint, Inc. Out-of-Network "UCR" Rates Litig., No. MDL 09-2074 PSG (FFMX), 2013 WL
28 12130034, at *11 (C.D. Cal. July 19, 2013) (applying federal antitrust standing requirements to a
11
2. Plaintiff’s “Conspiracy” Theory Is Inadequate.

1
Plaintiff’s speculative and conclusory allegations that Defendants “conspired” to adopt
2
“no-tipping” policies are implausible and facially inadequate to state a claim for price fixing
3
under Section 1 of the Sherman Act, or under the California and New York antitrust statutes.
4
Based on Plaintiff’s own allegations, it is far more likely that the Defendants who decided to
5
alter their tipping policies did so independently after listening to the public dialogue and
6
evaluating the competitive benefits of the polices each chose to adopt. Plaintiff offers nothing
7
more than speculation that there was a “conspiracy” and thus cannot “nudge his claims across the
8
line from conceivable to plausible.” Twombly, 550 U.S. at 570.
9
To state a Section 1 claim, Plaintiff must allege not only the existence of a conspiracy or
10
agreement, but also facts showing that it “unreasonably restrained trade under either a per se rule
11
of illegality or a rule of reason analysis.” Tanaka v. Univ. of S. Cal., 252 F.3d 1059, 1062 (9th
12
Cir. 2001). Plaintiff must also adequately allege the existence of a conspiracy to state a claim
13
under the Cartwright Act and the Donnelly Act. See Walker v. USAA Cas. Ins. Co., 474 F. Supp.
14
2d 1168, 1174 (E.D. Cal. 2007) (“In order to maintain a cause of action under the Cartwright
15
Act, the following elements must be established: (1) the formation and operation of the
16
conspiracy; (2) illegal acts done pursuant thereto; and (3) damage proximately caused by such
17
acts.”); Wolf Concept S.A.R.L. v. Eber Bros. Wine & Liquor Corp., 736 F. Supp. 2d 661, 669
18
(W.D.N.Y. 2010) (dismissing Donnelly Act claim for lack of “facts to support the basic elements
19
of a conspiracy claim”). A Complaint cannot be sustained absent a factual predicate “plausibly
20
suggesting”—that is, a pleading more substantial than one that is “merely consistent with”—the
21
existence of a conspiracy or an unlawful agreement that actually and unreasonably restrained
22
trade. See Twombly, 550 U.S. at 566–57.
23
In Twombly, the plaintiff alleged that the regional “Baby Bell” telecommunications firms
24
restrained competition by engaging in parallel anticompetitive conduct to inhibit the growth of
25
upstart local competitors and agreed not to enter geographic markets occupied by other Baby
26
Bells. Id. at 550. The Supreme Court sustained dismissal of the complaint finding that
27
28 Cartwright Act cause of action.).

12
1 allegations of “parallel conduct that could just as well be independent action” are insufficient to
2 state a conspiracy claim. Id. at 555–57. The Court explained that “[w]ithout more, parallel
3 conduct does not suggest conspiracy, and a conclusory allegation of agreement at some
4 unidentified point does not supply facts adequate to show illegality.” Id. Because the challenged
5 conduct was no more likely to result from a conspiracy than from “the natural, unilateral reaction
6 of each [Baby Bell] intent on keeping its regional dominance,” id. at 566, plaintiffs had not
7 “nudged their claims across the line from conceivable to plausible,” id. at 570.
8 The Court also underscored the importance of dismissal when the complaint—such as the
9 one at issue here—lacks factual predicates sufficient to establish a plausible conspiracy, because
10 “it is only by taking care to require allegations that reach the level suggesting conspiracy that we
11 can hope to avoid the potentially enormous expense” of antitrust claims founded on a mere
12 “hope that the [discovery] process will reveal relevant evidence.” Id. at 559.
13 Here, as in Twombly, the Complaint rests on bare assertions of “conspiracy” and parallel
14 conduct, unsupported by any factual allegations suggesting that concerted action is more likely
15 than unilateral business decisions to eliminate tipping following a public dialogue about the
16 topic. (See, e.g., Compl. ¶ 1 (concluding that defendant “restaurant owners are engaged in a
17 sophisticated unlawful conspiracy”); id. ¶ 2 (asserting that “a handful of Bay Area restaurants . . .
18 are part of a larger conspiracy”); id. ¶ 5 (declaring that the “charged conspiracy constitutes a per
19 se unreasonable restraint of trade in violation of” federal and state antitrust laws); id. ¶ 156
20 (asserting that “class representative and putative class members were overcharged on their
21 purchases from defendant restaurants as a result of the conspiracy”).)
22 Critically absent from the Complaint is any allegation regarding the agreement
23 supposedly reached by the Defendants, such as the specific tipping or pricing policy restaurants
24 allegedly “agreed” to implement, the amount of any surcharge, the amount by which menu prices
25 would be increased (or even if they ever were), how that amount allegedly compares with the
26 amount Plaintiff would have otherwise left in a tip, or any factual allegations about the manner
27 and means by which the restaurants supposedly changed any compensation policies. After
28 Twombly, courts routinely hold that such vague and imprecise allegations of agreement are
13
1 insufficient to state a conspiracy claim. See, e.g., Kendall v. Visa U.S.A., Inc., 518 F.3d 1042,
2 1048 (9th Cir. 2008) (affirming dismissal because complaint “does not answer the basic
3 questions: who, did what, to whom (or with whom), where, and when?”); LAI v. USB-
4 Implementers Forum, Inc., No. CV14-05301-RGK (PJWx), 2014 WL 12600969, at *4 (C.D.
5 Cal. Nov. 21, 2014) (dismissing complaint because conspiracy claim was “nothing more than a
6 legal conclusion”); Credit Bureau Servs., Inc. v. Experian Info. Sols., Inc., No. SACV 12-2146
7 JGB (MLGx), 2013 WL 3337676, at *8 (C.D. Cal. June 28, 2013) (dismissing complaint that did
8 “not allege whether there were one or multiple agreements, the form those agreements took, who
9 executed them, or when or where they were enacted”); Int’l Norcent Tech. v. Koninklijke Philips
10 Elecs. N.V., No. CV07-00043 MMM (SSx), 2007 WL 4976364, at *10 (C.D. Cal. Oct. 29, 2007)
11 (dismissing complaint because plaintiff did not allege when, how, or by whom the purported
12 agreement was made, nor did plaintiff identify the parameters of the agreement), aff’d, 323 F.
13 App’x 571 (9th Cir. 2009).
14 Plaintiff’s endless commentary about the very public debate over the USHG Defendants’
15 adoption of “Hospitality Included”—and the differing policies considered, adopted, and in some
16 instances dropped by other restaurants at different times—is makeweight pleading that may be
17 superficially “factual,” but does not lend plausibility to the conspiracy allegations. (See, e.g,
18 Compl. ¶¶ 2, 47–48, 50, 53, 60–61, 74–75, 79–80, 82, and 84.) The same is true of Plaintiff’s
19 discussion of the NYC Alliance Defendants’ industry conferences in February 2015 and March
20 2016, where, as Plaintiff points out, the NYC Alliance brought the “restaurant industry together
21 for candid conversations” on tipping practices. (Id. ¶¶ 57, 100.) Plaintiff’s lengthy narration in
22 both instances demonstrates the implausibility of Defendants entering into a private, illegal
23 agreement. See In re LTL Shipping Services Antitrust Litig., 2009 WL 323219, at *8 (N.D. Ga.
24 Jan. 28, 2009) (plaintiff “cannot state an antitrust claim by showing only that the Defendants
25 made price information publicly available and thus had the opportunity to conspire—a
26 ‘conspired in the open’ sort of argument”).
27 Indeed, if anything, Plaintiff has pleaded himself out of court with still other allegations
28 that foreclose the existence of an anticompetitive agreement by demonstrating that those

14
1 Defendants who revised their tipping policies did so unilaterally for their own business reasons.
2 The Complaint includes numerous allegations showing that Defendants’ tipping policies were in
3 fact a reflection of changing perceptions in the marketplace and a widespread business problem
4 that metastasized into social injustice. The Complaint alleges that the “Hospitality Included”
5 movement was conceived out of a desire to “promote social justice and equality” (Compl. ¶ 3);
6 for “pragmatic and philosophical reasons” (id. ¶ 48); to avoid the potential for tax issues (id. ¶
7 50); to eliminate the disparity in pay among servers and other staff (id. ¶ 65); and to address a
8 serious labor shortage for talented cooks (id.). Accordingly, just as in Twombly, the Complaint
9 itself provides alternative explanations for certain Defendants’ separate transitions to a
10 “Hospitality Included” model, which is a result of a “rational and competitive business strategy
11 unilaterally prompted by common perceptions of the market.” Twombly, 550 U.S. at 554; see
12 also Name.Space, Inc. v. Internet Corp. for Assigned Names & Numbers, 795 F.3d 1124, 1130
13 (9th Cir. 2015) (citation omitted) (“We cannot . . . infer an anticompetitive agreement when
14 factual allegations ‘just as easily suggest rational, legal business behavior.”).
15 Finally, to the extent the Complaint can be read as alleging the adoption, at different
16 times, of loosely similar policies by some Defendants, that too is insufficient to state a claim
17 based on parallel conduct. See In re Musical Instruments and Equip. Antitrust Litig., 798 F.3d
18 1186, 1196 (9th Cir. 2015) (rejecting at the pleading stage allegations of parallel conduct where
19 Defendants adopted similar policies, finding “that fact does not reveal anything more than
20 similar reaction to similar pressures within an interdependent market, or conscious parallelism”).
21 As alleged, Defendants USHG and Danny Meyer, started publicly discussing the concept of “no-
22 tipping” in October 2013, before any of the other Defendants identified in the Complaint, and did
23 not actually implement no-tipping until 2015-2016. (Compl. ¶¶ 47, 61.) Additionally, as
24 alleged, in 2014, only some Bay Area restaurant-Defendants started implementing no-tipping
25 policies. (Id. ¶ 48.) Further, with regard to the NYC Hospitality Alliance, Plaintiff alleges only
26 the discussion, and never the implementation, of a no-tipping policy. (Id. ¶¶ 57, 100.) This is
27 hardly sufficient to demonstrate parallel conduct, much less agreement. See Twombly, 550 U.S.
28
15
1 at 545 (holding that the “inadequacy of showing parallel conduct or interdependence, without
2 more, mirrors the behavior’s ambiguity”).
3 Further, even if “consistent with conspiracy,” parallel conduct is very often “just as much
4 in line with a wide swath of rational and competitive business strategy unilaterally prompted by
5 common perceptions of the market.” Twombly, 550 at 554. The Ninth Circuit “distinguish[es]
6 permissible parallel conduct from impermissible conspiracy by looking for ‘plus factors’” where
7 a plaintiff relies solely on “circumstantial evidence of conspiracy.” Kelsey K. v. NFL
8 Enterprises, LLC, 254 F. Supp. 3d 1140, 1144 (N.D. Cal. 2017). Those requisite “plus factors”
9 are “facts tending to exclude the possibility that defendants acted independently,” of which, here,
10 the Plaintiff offers none. Id. Therefore, where the Plaintiff seeks to infer agreement from
11 parallel conduct, the Complaint must plead factual allegations establishing that the conduct
12 would have been against the Defendants’ independent self-interest absent an unlawful
13 agreement. See Twombly, 550 U.S. at 553-54 & n.7; Kendall, 518 F.3d at 1049. Indeed, the
14 Complaint contains no factual allegations establishing that the conduct would have been against
15 the Defendants’ independent self-interest absent an unlawful agreement. See Twombly, 550 U.S.
16 at 553-54 & n.7; Kendall, 518 F.3d at 1049.
17 3. Plaintiff Fails to Allege a Per Se Violation or Any Facts Supporting a

Rule of Reason Case.
18
Plaintiff attempts to allege only a per se violation of Section 1 of the Sherman Act, but
19
Plaintiff fails to allege any conduct to trigger a per se analysis. For a per se violation, Plaintiff
20
must allege “sufficient facts that Defendants (1) entered into an agreement (2) to fix prices, rig
21
bids, or divided a market” and that Defendants’ conduct was “so plainly anticompetitive that no
22
elaborate study of the industry is needed to establish their illegality.” In re WellPoint, Inc. Out-
23
of-Network UCR Rates Litig., 865 F. Supp. 2d 1002, 1025 (C.D. Cal. 2011); see also Nat’l Soc.
24
Of Prof’l Eng’rs, 435 U.S. at 692. Here, Plaintiff makes conclusory allegations of agreement but
25
describes nothing more than the public exchange of information among certain Defendants.
26
(Compl. ¶¶ 47–139.) It is well-settled, however, that such information exchanges—to the extent
27
they are even arguably sufficient to state a claim—must be judged under the rule of reason,
28
16
1 which requires a showing of harm to competition in a properly defined market. See, e.g., United
2 States Gypsum Co., 438 U.S. at 441 n.16 (“The exchange of price data and other information
3 among competitors does not invariably have anticompetitive effects; indeed, such practices can
4 in certain circumstances increase economic efficiency and render markets more, rather than less,
5 competitive. For this reason, we have held that such exchanges of information do not constitute
6 a per se violation of the Sherman Act.”) (citations omitted).
7 Per se analysis is improper here for the additional reason that the Complaint admits that
8 the alleged “conspiracy” has significant procompetitive justifications. Under established Ninth
9 Circuit precedent, “not all horizontal agreements between competitors are per se invalid.”
10 Paladin Assocs., Inc., 328 F.3d at 1155 (declining to apply per se analysis). Rather, “[t]reating
11 an agreement as per se illegal is appropriate only if the agreement falls within the category of
12 ‘agreements or practices which because of their pernicious effect on competition and lack of any
13 redeeming virtue are conclusively presumed to be unreasonable and therefore illegal without
14 elaborate inquiry as to the precise harm they have caused or the business excuse for their use.’”
15 Id. at 1154 (citation omitted). Ultimately, the decision to apply the per se rule turns on whether
16 “the practice facially appears to be one that would always or most always tend to restrict
17 competition and decrease output.” NCAA. v. Bd. Of Regents of Univ. of Okla., 468 U.S. 85, 100
18 (1984) (declining to apply per se analysis to horizontal restraints on competition). Where,

19 however, “a defendant advances plausible arguments that a practice enhances overall efficiency
20 and makes markets more competitive, per se treatment is inappropriate, and the rule of reason
21 applies.” Paladin Assocs., 328 F.3d at 1155 (citing N’west Wholesale Stationers, Inc. v. Pac.
22 Stationery & Printing Co., 472 U.S. 284, 2985 (1985)).
23 Here, Plaintiff admits that the Defendants advanced several procompetitive justifications
24 for publicly discussing and implementing a “Hospitality Included” model. (See, e.g., Compl. ¶¶
25 61 (increase career opportunities and advancement for staff); id. ¶¶ 65–66, 106 (rectify labor
26 shortage in kitchen staff driven by low wages); id. ¶ 90 (address pay disparity between back of
27 house and front of house) id. ¶ 50, 65, 103, 120, 135 (adapt to minimum wage increases).) Thus,
28
17
1 the Complaint’s own allegations establish that Plaintiff could only conceivably proceed under the
2 rule of reason. But Plaintiff makes no attempt to supply such allegations.
3 To proceed on a rule of reason Section 1 claim, Plaintiff would need to allege and prove
4 not only an agreement to restrain competition, but also that such agreement “actually injures
5 competition.” Brantley, 675 F.3d at 1197 (sustaining dismissal of Section 1 rule of reason claim)
6 (quoting Alt. Richfield, , 495 U.S. at 334). In particular, Plaintiff would need to “allege sufficient
7 facts to support its claim that the restraint in question harmed competition within a relevant
8 geographic and product market.” Orchard Supply Hardware LLC v. Home Depot USA, Inc., 967
9 F. Supp. 2d 1347, 1357 (N.D. Cal. 2013) (dismissing Section 1 rule of reason claim).
10 Plaintiff could never plausibly contend that the Bay Area and New York restaurants
11 operated by certain Defendants compete against each other in the same relevant product or
12 geographic market, let alone that the alleged “conspiracy” among a few restauranteurs could
13 harm competition in such a vast and competitive marketplace. See, e.g., Texaco Inc. v. Dagher,
14 547 U.S. 1, 7 n.2 (2006) (“Respondents have not put forth a rule of reason claim.”); Bedi v.
15 Hewlett Packard Co., 2008 WL 11226235 at *2 (D. Mass. Nov. 17, 2008) (granting defendants’
16 motion to dismiss because “plaintiff pleads solely a per se violation of the Sherman Act”). A
17 lawsuit based on any supposition that “Hospitality Included” at USHG restaurants in Manhattan
18 has stifled competition on New Montgomery Street in San Francisco (Trou Normand) or on
19 Shattuck Avenue in Berkeley (Comal) also calls for dismissal as a matter “common sense." See
20 Iqbal, 556 U.S. 662, 678.
21 C. Plaintiff Fails to State a RICO Claim
22 1. Plaintiff Lacks Standing to Bring a RICO Claim.

23 Plaintiff’s frivolous RICO claim is another red flag. He lacks standing to bring a civil
24 RICO claim for the same reasons he lacks constitutional standing and statutory standing under
25 the Clayton Act. See Oregon Laborers-Employers Health & Welfare Tr. Fund, 185 F.3d at 963
26 (“The requirements for standing to maintain a civil action under RICO and the antitrust laws are
27 similar.”). RICO standing requires a showing that the plaintiff “1) sustained an injury to
28 business or property 2) that was caused by a RICO violation.” Asa–Brandt, Inc. v. ADM Investor
18
1 Servs., Inc., 344 F.3d 738, 752 (8th Cir. 2003). In applying this standard, the Ninth Circuit
2 “requires that a plaintiff asserting injury to property allege ‘concrete financial loss’” and that
3 “[f]inancial loss alone . . . is insufficient.” Canyon Cty. v. Syngenta Seeds, Inc., 519 F.3d 969,
4 975 (9th Cir. 2008) (citations omitted). Further, a plaintiff must also show a “direct relationship
5 between the injury asserted and the injurious conduct alleged.” Imagineering v. Kiewit Pacific
6 Co., 976 F.2d 1303, 1311 (9th Cir. 1992); see also Holmes v. Sec. Inv’r Prot. Corp., 503 U.S.
7 258, 268 (1992) (proximate cause in the RICO context requires “some direct relation between
8 the injury asserted and the injurious conduct alleged”); United Food & Commercial Workers
9 Cent. Pa. & Reg ‘l Health & Welfare Fund v. Amgen, Inc., 400 F. App’x 255, 257 (9th Cir.
10 2010) (affirming dismissal of RICO claims that “failed to satisfy Rule 9(b) with respect to ... an
11 adequate theory of causation or reliance”).
12 For all the reasons outlined above, Plaintiff fails to meet these standards and his RICO
13 claim should be dismissed for this reason alone. See e.g., Steele v. Hospital Corporation of
14 America, 36 F.3d 69, 70 (9th Cir. 1994) (affirming ruling that plaintiffs could not show concrete
15 financial loss where they “failed to show that they ever paid out any of their own money as a
16 result of the alleged scheme.”); Oscar v. Univ. Students Co-op. Ass’n, 965 F.2d 783, 786 (9th
17 Cir. 1992) (“[Plaintiff] has not alleged any financial loss which would be compensable under
18 RICO” where “[s]he has not alleged any out-of-pocket expenditures as a direct or indirect result
19 of the racketeering activity[.]”); Imagineering, 976 F.2d at 1310 (holding that plaintiff’s
20 allegations “do not establish ‘proof of concrete financial loss’, let alone show that money was
21 paid out as a result of [defendant’s] alleged racketeering activity.”). Plaintiff conspicuously does
22 not allege, and cannot plausibly allege, that any amount allegedly added to menu prices as a
23 result of “no tipping” policies in the restaurants he allegedly patronized exceeded the amount he
24 would have otherwise left in a tip. And, even more obviously, there is no way such an allegation
25 could ever be honestly made on behalf of an entire class of consumers.
26 2. Plaintiff’s Boilerplate RICO Allegations Are Insufficient.
27 Plaintiff’s RICO claim is based entirely on boilerplate language and fails, among other
28 deficiencies, to allege a valid RICO enterprise. Under RICO, an “enterprise” is “any individual,
19
1 partnership, corporation, association, or other legal entity, and any union or group of individuals
2 associated in fact although not a legal entity.” 18 U.S.C. § 1961(4). The Ninth Circuit has
3 interpreted this definition to require allegations that: (1) persons were associated for the
4 “common purpose of engaging in a course of conduct,” (2) there was “an ongoing organization,
5 formal or informal,” and (3) the associates functioned as a “continuing unit.” Odom, 486 F.3d at
6 552. Accordingly, Plaintiff must allege that the RICO “enterprise” has its own decision-making
7 structure, including “some mechanisms for controlling and directing the affairs of the group on
8 an ongoing, rather than an ad hoc, basis.” See Simon v. Value Behavioral Health, Inc., 208 F.3d
9 1073, 1083 (9th Cir. 2000) (finding an enterprise did not exist because there was no “system of
10 authority that guided the operation”). In other words, liability under RICO “depends on showing
11 that the defendants conducted or participated in the conduct of the ‘enterprise’s affairs,’ not just
12 their own affairs.” Reves, 507 U.S. at 185.
13 This RICO claim is a generic accusation, unsupported by any factual allegations, but
14 instead resting entirely on a hornbook recitation of the statutory elements. (See Compl. ¶ 161
15 (stating that the “charged conspiracy constitutes an enterprise within the meaning of 18 U.S.C. §
16 1962”); see also id. ¶¶ 157–63.) Plaintiff does not allege that any of the Defendants participated
17 in the operation or management of the alleged RICO enterprise. Plaintiff fails to allege that the
18 alleged enterprise had any structure, organization, whether informal or formal, or that the various
19 Defendants even functioned as one continuing unit. Plaintiff does not allege that the “enterprise”
20 had a “system of authority” guiding the operation. Nor could such allegations plausibly be
21 made, given the disparate nature of Defendants—restaurants, individuals, industry associations,
22 etc. Accordingly, Plaintiff fails to establish a RICO enterprise and thus fails to state a RICO
23 claim.
24 Furthermore, under Section 1962(d), Plaintiff must prove that that Defendants “knew
25 about and agreed to facilitate the [fraudulent] scheme.” Salinas v. United States, 522 U.S. 52, 66
26 (1997); see also United States v. Fernandez, 388 F.3d 1199, 1230 (9th Cir. 2004), as modified,
27 425 F.3d 1248 (9th Cir. 2005) (liability when conspiracy defendant “knowingly agrees to
28 facilitate a scheme which includes the operation or management of a RICO enterprise”)

20
1 (citations omitted). In other words, Plaintiff needed to show that each Defendant had some part
2 in directing the alleged enterprise’s affairs. See Reves, 507 U.S. at 179. Plaintiff makes no such
3 allegations and, in fact, fails to even identify a RICO enterprise separate from the alleged
4 conspiracy.
5 In another sense, the RICO claim is even weaker than Plaintiff’s other failed claims,
6 because Plaintiff also fails to meet the heightened pleading standard required by the Federal
7 Rules to state a RICO claim based on fraud. See Edwards v. Marin Park, Inc., 356 F.3d 1058,
8 1065-66 (9th Cir. 2004) (Rule 9(b) “applies to civil RICO fraud claims”). The Federal Rules
9 require that “in alleging a fraud or mistake, a party must state with particularity the
10 circumstances constituting the fraud or mistake.” Fed. R. Civ. P. 9(b). Here, Plaintiff alleges the
11 Defendants’ “racketeering activity” was both mail and wire fraud, subjecting Plaintiff’s civil
12 RICO claim to heightened pleading requirements under Rule 9(b). See Schreiber Distributing
13 Co. v. Serv-Well Furniture Co., Inc., 806 F.2d 1393, 1400 (9th Cir. 1986) (finding that
14 allegations of fraud require pleading with “sufficient specificity pursuant to Fed. R. Civ. P.
15 9(b).”) Specifically, Plaintiff “must state the time, place, and specific content of the false
16 representations as well as the identities of the parties to the misrepresentation.” Id. at 1401.
17 Plaintiff, however, alleges no facts that could satisfy Rule 9(b), and thus his RICO claim should
18 be dismissed.
19 D. Plaintiff Fails to State a UCL Claim.
20 Plaintiff fails to plead any cognizable claim under Section 17200 of the UCL. As with
21 the other theories, the UCL claim is plead only in vague and conclusory terms. (See Compl.
22 ¶¶ 170–75.) The only apparent basis for the UCL claim is the allegation that “Defendants’
23 violation of the Cartwright Act constitutes a violation of California’s Unfair Competition Law.”
24 (Id. ¶ 172.) But this attempt to invoke the “unlawful” prong fails because it is derivative of a
25 claim that is legally deficient on multiple grounds, as outlined above. Plaintiff cannot state a
26 claim for “unlawful” conduct without alleging facts sufficient to show a violation of the
27 underlying law. Ismail v. Wells Fargo Bank, N.A., No. 2:12-CV-01653-MCE, 2012 WL
28 5425175, at *5 (E.D. Cal. Nov. 6, 2012). Since the Cartwright Act claim fails, Plaintiff’s UCL
21
1 claim also fails. See Gaitan, 2009 WL 3244729 at *11 (plaintiff “cannot state a UCL claim
2 based on those predicate violations, since she has not alleged any ‘unlawful’ activity”); Krantz v.
3 BT Visual Images, LLC, 89 Cal. App. 4th 164, 178 (2001) (UCL claim must “stand or fall
4 depending on the fate of the antecedent substantive causes of action”).
5 The pro forma allegation that “Defendants’ price-fixing conduct constitutes unfair
6 competition and unlawful and fraudulent business acts and practices” (Compl. ¶ 170) is
7 insufficient to place at issue any other prong of the UCL. “Different legal standards and
8 pleading requirements apply to each prong.” Athena Feminine Techs. Inc. v. Wilkes, No. C 10-
9 04868 SBA, 2011 WL 4079927, at *9 (N.D. Cal. Sept. 13, 2011). Thus, “fact-barren,
10 conclusory” allegations are insufficient to state a UCL claim under any UCL prong. Id.; see also
11 Coburn v. Bank of New York Mellon, N.A., No. 2:10-CV-03080 JAM, 2011 WL 1103470, at *5
12 (E.D. Cal. Mar. 22, 2011) (“Plaintiff’s allegation that Defendants’ acts constitute unlawful,
13 unfair, and fraudulent business practices is a conclusory statement devoid of facts and it fails to
14 meet heightened, or even standard, pleading requirements.”).
15 Plaintiff does not even attempt to satisfy the standard under the “unfair” prong, which
16 would require factual allegations that Plaintiff’s alleged injury was (1) “substantial,” (2) not
17 “outweighed by any countervailing benefits to consumers or competition,” and (3) not one that
18 Plaintiff could “reasonably have avoided.” Camacho, 142 Cal. App. 4th at 1403.
19 In some sense, the usual analysis—determining whether the challenged conduct is unfair,
20 unlawful, or fraudulent—is itself academic because every sustainable UCL claim requires a
21 pleading that the supposed misconduct caused an injury. See Barber v. U.S. Bank N.A., No. CV
22 16-695-R, 2016 WL 9211666, at *2 (C.D. Cal. Aug. 9, 2016) (dismissing UCL claim because
23 plaintiff had not “allege[d] facts that show that they have suffered an injury in fact . . . as a result
24 of Defendants’ unfair or fraudulent practices”). Here, Plaintiff alleges no injury, much less a
25 “substantial” one. Furthermore, the consumer “injury” the Complaint theorizes is inherently
26 insubstantial and one that consumers could readily avoid by not dining at a no tipping restaurant.
27 There is no allegation that Defendants have been anything other than transparent about their
28 tipping policies, which apply to patrons who voluntarily choose to dine at a Defendant restaurant
22
1 rather than another restaurant. Regarding the last factor, the Complaint concedes the many
2 consumer benefits of hospitality-included policies, which necessarily outweigh the “injury” the
3 Complaint attempts to allege.
4 V. CONCLUSION
5 For the foregoing reasons, the Court should dismiss Plaintiff’s Complaint for lack of
6 subject matter jurisdiction and for failure to state a claim.
8 Dated: February 16, 2018 Respectfully submitted,
10 By: /s/ Stuart C. Plunkett By: /s/ Judith A. Zahid

Jonathan A. Shapiro Judith A. Zahid
11 jonathan.shapiro@bakerbotts.com jzahid@zelle.com
Stuart C. Plunkett Zelle LLP
12 stuart.plunkett@bakerbotts.com 44 Montgomery Street, Suite 3400
Ariel D. House San Francisco, CA 94104-4807
13 ariel.house@bakerbotts.com Phone: (415) 633-1916
BAKER BOTTS LLP
14 101 California Street, Suite 3600 Jennifer Duncan Hackett (pro hac vice)
San Francisco, California 94111 jhackett@zelle.com
15 Telephone: (415) 291-6200 Zelle LLP
Facsimile: (415) 291-6300 1775 Pennsylvania Avenue, NW, Suite 375
16 Washington DC 20006
Counsel for Defendants Phone: (202) 899-4102
17 Union Square Hospitality Group, LLC,
Daniel Meyer, and Sabato Sagaria Counsel for Defendants
18 140 NM LLC, d/b/a Trou Normand; Bar
Agricole, LLC, d/b/a Bar Agricole;
19 Thaddeaus M. Vogler; Hopemoorelain, LLC,
d/b/a Camino; Russell Moore; Allison
20 Hopelain; Es Verdad, LLC, d/b/a Comal;
John Paluska; Andrew Hoffman
21
22
By: /s/ David L. Snyder By: /s/ Todd Norris
23 David L. Snyder Todd Norris
dsnyder@bsfllp.com todd.norris@bullivant.com
24 Boies Schiller Flexner LLP Bullivant Houser Bailey PC
1401 New York Ave., NW 101 Montgomery St. Suite 2600
25 Washington, D.C. 20005 San Francisco, CA 94104
Phone: (202) 237-2727 Phone: (415) 352-2720
26
Counsel for Defendant Counsel for Defendants
27 Birth of the Cool, LLC, dba Eleven Marlow, Inc.; Andrew Tarlow; Molinero LLC,
Madison Park dba Huertas; Jonah Miller; Nate Adler
28
23
2 By: /s/ Tracy M. Talbot By: /s/ Steven N. Feldman

Tracy M. Talbot Steven N. Feldman
3 Bryan Cave LLP sfeldman@hueston.com
Three Embarcadero Center, 7th Floor Hueston Hennigan LLP
4 San Francisco, California 94111-4070 523 West 6th St., Suite 400
Telephone: (415) 675-3400 Los Angeles, CA 90014
5 (213) 788-4272
Jacob A. Kramer (pro hac vice)
6 Bryan Cave LLP Counsel for Defendants
1155 F Street NW, Suite 700 Happy Cooking Hospitality, Inc.; Gabriel
7 Washington, DC 20004 Stulman
Telephone: (202) 508-6153
8
Lawrence G. Scarborough
9 Bryan Cave LLP
Two North Central Avenue, Suite 2100
10 Phoenix, Arizona 85004-4406
Telephone: (602) 364-7000
11
Counsel for Defendants
12 Momofuku 171 First Avenue, LLC;
David Chang
13
14
15 By: /s/ Fletcher C. Alford By: /s/ Stephen H. Sutro

Fletcher C. Alford Stephen H. Sutro
16 falford@grsm.com shsutro@duanemorris.com
Marie Trimble Holvick Duane Morris LLP
17 mholvick@grsm.com One Market, Spear Tower, Suite 2200
Miguel A. Saldaña San Francisco, CA 94105
18 masaldana@grsm.com Telephone: (415) 957-3008
Gordon Rees Scully Mansukhani, LLP
19 275 Battery Street, Suite 2000 Counsel for Defendant
San Francisco, CA 94111 New York Hospitality Alliance, Inc. and
20 Telephone: (415) 986-5900 Andrew Rigie
Facsimile: (415) 986-8054
21
Counsel for Defendant
22 Golden Gate Restaurant Association
23
24
25
26
27
28
24
1 ATTORNEY ATTESTATION
2 I, Stuart C. Plunkett, hereby attest, pursuant to Civil Local Rule 5-1(i)(3) of the Northern
3 District of California, that the concurrence to the filing of this document has been obtained from
4 each signatory hereto.
6 /s/ Stuart C. Plunkett

Stuart C. Plunkett
7
Counsel for Defendants
8 Union Square Hospitality Group, LLC,
Daniel Meyer, and Sabato Sagaria
9
10
11
12
13 CERTIFICATE OF SERVICE
14 I, Stuart C. Plunkett, hereby certify that on February 16, 2018, I electronically filed the
15 above document with the U.S. District Court for the Northern District of California by using the
16 CM/ECF system. All participants in the case are registered CM/ECF users who will be served
17 by the CM/ECF system.
18
/s/ Stuart C. Plunkett
19 Stuart C. Plunkett
20 Counsel for Defendants
Union Square Hospitality Group, LLC,
21 Daniel Meyer, and Sabato Sagaria
22
23
24
25
26
27
28
25
Case 4:17-cv-05782-JSW Document 103-1 Filed 02/16/18 Page 1 of 3
1 BAKER BOTTS L.L.P.

Jonathan A. Shapiro (Cal. Bar No. 257199)
2 jonathan.shapiro@bakerbotts.com
Stuart C. Plunkett (Cal. Bar No. 187971)
3 stuart.plunkett@bakerbotts.com
Ariel D. House (Cal. Bar No. 280477)
4 ariel.house@bakerbotts.com
101 California Street, Suite 3600
5 San Francisco, California 94111
Telephone: (415) 291-6200
6 Facsimile: (415) 291-6300
7 Attorneys for Defendants

UNION SQUARE HOSPITALITY
8 GROUP, LLC, DANIEL MEYER,
and SABATO SAGARIA
9
10 UNITED STATES DISTRICT COURT
11 FOR THE NORTHERN DISTRICT OF CALIFORNIA
12 OAKLAND DIVISION
13
TIMOTHY BROWN, ) CASE NO. 4:17-CV-05782-JSW
14 )
Plaintiff, ) [PROPOSED] ORDER GRANTING
15 ) DEFENDANTS’ MOTION TO DISMISS
v. ) PURSUANT TO FED. R. CIV. P. 12(b)(1) AND
16 ) 12(b)(6)
140 NM LLC, et al., )
17 ) Date: April 6, 2018
Defendants. ) Time: 9:00 a.m.
18 ) Courtroom: 5
) Judge: Hon. Jeffrey S. White
19 )
)
20 ) Action Filed: October 6, 2017
)
21 )
)
22 )
)
23 )
24
25
26
27
28
CASE NO. 4:17-CV-05782-JSW

1 The Court has reviewed and considered Defendants’ Motion to Dismiss Plaintiff Timothy
2 Brown’s Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil
3 Procedure. Having considered the papers and arguments in support of and opposition to the
4 Motion, and good cause appearing, the Court GRANTS Defendants’ Motion to Dismiss in its
5 entirety, for the reasons set forth below.
6 Plaintiff fails to plead facts to establish Article III standing, and thus the Court lacks
7 subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Plaintiff does not plead facts demonstrating
8 that he suffered any injury in fact. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016);
9 Davidson v. Kimberly-Clark Corp., 873 F.3d 1103, 1113 (9th Cir. 2017). Plaintiff also lacks
10 statutory standing to bring his antitrust and RICO claims. See In re ATM Fee Antitrust Litig.,
11 686 F.3d 741, 754 (9th Cir. 2012) (Section 4 of the Clayton Act); Oregon Laborers-Employers
12 Health & Welfare Tr. Fund v. Philip Morris Inc., 185 F.3d 957, 963 (9th Cir. 1999) (RICO).
13 Even if the Court had subject matter jurisdiction, Plaintiff fails to state a claim on which
14 relief can be granted. Fed. R. Civ. P. 12(b)(6). The Complaint’s antitrust claims fall far short of
15 the pleading standard set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Here, as
16 in Twombly, the Complaint is unsupported by any factual allegations suggesting that certain
17 Defendants’ decisions to eliminate tipping is the result of an unlawful agreement, as opposed to
18 “rational and competitive business strategy unilaterally prompted by common perceptions of the
19 market.” Id. at 554. Also, Plaintiff does not allege any conduct to trigger a per se analysis, nor
20 does he allege any facts that could support a rule of reason case. See Nat’l Soc. Of Prof’l Eng’rs
21 v. United States, 435 U.S. 679, 692 (1978); United States v. United States Gypsum Co., 438 U.S.
22 422, 441 n.16 (1978); Brantley v. NBC Universal, Inc., 675 F.3d 1192, 1197 (9th Cir. 2012).
23 Plaintiff’s RICO claim must be dismissed because it is based entirely on boilerplate
24 language, fails to meet the heightened pleading standard of Rule 9(b), and fails to allege a valid
25 RICO enterprise, among other deficiencies. See Reves v. Ernst & Young, 507 U.S. 170, 185
26 (1993); Odom v. Microsoft Corp., 486 F.3d 541, 552 (9th Cir. 2007).
27 Finally, Plaintiff does not state a claim under any prong of Section 17200 of the Unfair
28 Competition Law. Plaintiff cannot state an “unlawful” claim because the predicate claims are
1 CASE NO. 4:17-CV-05782-JSW

1 defective. See Gaitan v. Mortgage Elec. Registration Sys., Inc., 2009 WL 3244729, at *11 (C.D.
2 Cal. 2009). The attempt to allege an “unfair” claim is inadequate because Plaintiff makes no
3 effort to demonstrate a “substantial” injury that is not outweighed by consumer benefits or
4 competition—and because Plaintiff could easily have avoided his alleged harm by dining at a
5 different restaurant. See Camacho v. Auto. Club of S. Cal., 142 Cal. App. 4th 1394, 1403 (Cal.
6 Ct. App. 2006).
7 Because Plaintiff lacks standing and the Complaint fails to state a claim for relief, the
8 Complaint must be dismissed without leave to amend.

9 IT IS SO ORDERED.
10
Dated: __________________, 2018 ______________________
11 Hon. Jeffrey S. White
12 United States District Judge
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2 CASE NO. 4:17-CV-05782-JSW

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Case 4:17-cv-05782-JSW Document 103 Filed 02/16/18 Page 1 of 32

1 BAKER BOTTS L.L.P.

7 Attorneys for Defendants

14 TIMOTHY BROWN, ) CASE NO. 4:17-CV-05782-JSW

DEFENDANTS’ MOTION TO DISMISS PURSUANT CASE NO. 4:17-CV-05782-JSW

4 RELIEF REQUESTED ................................................................................................................... 1

5 STATEMENT OF ISSUES TO BE DECIDED ............................................................................. 1

6 MEMORANDUM OF POINTS AND AUTHORITIES ................................................................ 2

12 IV. ARGUMENT .......................................................................................................................... 8

13 A. Plaintiff Lacks Article III Standing......................................................................... 8

DEFENDANTS’ MOTION TO DISMISS PURSUANT CASE NO. 4:17-CV-05782-JSW

4 Alt. Richfield Co. v. USA Petroleum Co.,

6 Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of California,

13 Athena Feminine Techs. Inc. v. Wilkes,

18 Bell Atlantic Corp. v. Twombly,

22 429 U.S. 477 (1977) ...........................................................................................................11

23 Camacho v. Auto. Club of S. Cal.,

28 Coburn v. Bank of New York Mellon, N.A.,

Credit Bureau Servs., Inc. v. Experian Info. Sols., Inc.,

4 Del. Valley Surgical Supply Inc. v. Johnson & Johnson,

9 Gerlinger v. Amazon.com Inc.,

13 400 F. App’x 255 (9th Cir. 2010) ......................................................................................18

14 Holmes v. Sec. Inv’r Prot. Corp.,

19 In re ATM Fee Antitrust Litig.,

24 In re LTL Shipping Services Antitrust Litig.,

27 In re Musical Instruments and Equip. Antitrust Litig.,

DEFENDANTS’ MOTION TO DISMISS PURSUANT CASE NO. 4:17-CV-05782-JSW

In re WellPoint, Inc. Out-of-Network UCR Rates Litig.,

4 Int’l Norcent Tech. v. Koninklijke Philips Elecs. N.V.,

7 No. 2:12-CV-01653-MCE, 2012 WL 5425175 (E.D. Cal. Nov. 6, 2012).........................21

8 Kelsey K. v. NFL Enterprises, LLC,

13 LAI v. USB-Implementers Forum, Inc.,

21 N’west Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co.,

26 NCAA. v. Bd. Of Regents of Univ. of Okla.,

DEFENDANTS’ MOTION TO DISMISS PURSUANT CASE NO. 4:17-CV-05782-JSW

Orchard Supply Hardware LLC v. Home Depot USA, Inc.,

4 Oscar v. Univ. Students Co-op. Ass’n,

9 Salinas v. United States,

13 208 F.3d 1073 (9th Cir. 2000) ...........................................................................................19

14 Spokeo, Inc. v. Robins,

19 Tanaka v. Univ. of S. Cal.,

24 United States v. United States Gypsum Co.,

DEFENDANTS’ MOTION TO DISMISS PURSUANT CASE NO. 4:17-CV-05782-JSW

Wolf Concept S.A.R.L. v. Eber Bros. Wine & Liquor Corp.,

9 Fed. R. Civ. P. 12 ...........................................................................................................1, 4, 8, 9

DEFENDANTS’ MOTION TO DISMISS PURSUANT CASE NO. 4:17-CV-05782-JSW

1 NOTICE OF MOTION AND MOTION

13 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.

16 be granted under Rule 12(b)(6).

22 dismiss Plaintiff Timothy Brown’s Complaint in its entirety.

23 STATEMENT OF ISSUES TO BE DECIDED

25 2. Whether Count 1 of the Complaint against Defendants for violation of Section 1

3 relief can be granted?

4 4. Whether Count 3 of the Complaint against California Defendants for violation of

6 5. Whether Count 4 of the Complaint against California Defendants for violation of

11 MEMORANDUM OF POINTS AND AUTHORITIES

18 other conduct that cannot withstand a motion to dismiss.

1 Tipping offends USHG’s culture of “Enlightened Hospitality”—not only does it exclude

3 professional advancement, and perpetuates systemic inequality and discrimination in the

3 restaurants, as Plaintiff concedes.

18 manager to perpetuate wage inequality (through tipping policies or otherwise).

2 set policies at their own restaurants.

8 the roughly 620,000 other full-service restaurants in America.

22 Complaint should be dismissed.