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J. Mark Moore, State Bar No. 180473 jmm@mllawyers.net H. Scott Leviant, State Bar No. 200834 hsl@mllawyers.net MOORE & LEVIANT LLP 20700 Ventura Blvd., Suite 140 Woodland Hills, CA 91364 Telephone: (877) 360-7020 Facsimile: (310) 870-7020 Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA FINN PETTE, et al., Plaintiffs, vs. INTERNATIONAL UNION OF OPERATING ENGINEERS, a trade union, et al., Defendants. Case No.: 2:12-cv-09324-DDP-VBK CLASS ACTION PLAINTIFFS NOTICE OF MOTION AND MOTION FOR RECONSIDERATION OF PORTIONS OF THE COURTS OCTOBER 9, 2013 ORDER GRANTING MOTIONS TO DISMISS Date: Time: Location: November 18, 2013 10:00 a.m. Courtroom 3 312 N. Spring Street Los Angeles, CA 90012

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TO THE COURT, TO ALL PARTIES AND TO THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that on Monday, November 18, 2013 at 10:00 a.m., or as soon thereafter as may be heard, in Courtroom 3 of the above-entitled Court, located at 312 N. Spring Street, Los Angeles, California, 90012-4701, Plaintiffs Finn Pette, James Mclaughlin, Daniel Himmelberg, Glenn Szalay, Jay Brophy, Anne Brophy, Cheryl Culbreath, Robert Fox, John Crooks, Nye Nelson, Linda Pette, Judy Mclaughlin, Christine Himmelberg, Erik B. Smith, Christopher Menor, and Patrick Adams (Plaintiffs) will and hereby do move the Court for reconsideration of its Order, issued October 9, 2013 (Docket No. 151). Specifically, Plaintiffs respectfully move for an order: 1. Reconsidering the portion of the October 9, 2013 Order dismissing Plaintiffs aiding and abetting claim for with prejudice based on principles of federal aiding and abetting law, since aiding and abetting liability under California law can be predicated on state law claims for violations of the Unfair Competition Law (UCL), Cal. Bus. & Prof. Code section 17200, et seq., and for common law breach of fiduciary duty. The prior complaint contained both a UCL claim, which this Court expressly authorized Plaintiffs to amend and expand, and a claim for Breach of Fiduciary Duties under ERISA and Common Law, with respect to which this Court also granted leave to amend. In dismissing the aiding and abetting claim with prejudice based entirely on federal aiding and abetting principles (Dkt. 151 at 10:4-11, 14-15), it appears the Court did not consider the import of these state law claims, which can support aiding and abetting liability; 2. Reconsidering the portion of the October 9, 2013 Order dismissing all of Plaintiffs RICO claims with prejudice on the ground that Plaintiffs pled, and identified in their Opposition briefing, allegations of direct injury to themselves and class members resulting from forced contributions into the
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EPEC fund. The Court recognized the presence of such allegations in its Order at page 2, but then did not consider their effect in the subsequent analysis that led to its conclusion that RICO standing was absent. Plaintiffs request for reconsideration of this claim is limited to the Defendants associated with the EPEC contributions, which have previously been identified as the IUOE Defendants. Plaintiffs therefore respectfully move for reconsideration pursuant to to Local Rule 7-18(c), on the ground that the Court failed to consider material facts presented to it in reaching its ruling on the RICO and aiding and abetting claims. This motion is made following the October 11, 2013 conference of counsel pursuant to Local Rule 7-3. At the time of the conference, counsel for the IUOE Defendants indicated that they would oppose the Motion, and counsel for the other Defendants expressed their uncertainty as to whether they would oppose the motion. This motion is based upon this Notice, the Memorandum of Points and Authorities filed in support thereof, the pleadings and records on file in this action, the October 9, 2013 Order of this Court, and such additional oral argument and evidence as may be presented at the hearing on this motion. Respectfully submitted Dated: October 21, 2013 MOORE & LEVIANT LLP By: /s/ J. Mark Moore J. Mark Moore H. Scott Leviant Attorneys for Plaintiffs

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TABLE OF CONTENTS INTRODUCTION ..........................................................................................1

II. THE STANDARD GOVERNING MOTIONS FOR RECONSIDERATION 2 III. RECONSIDERATION IS WARRANTED HERE .........................................3 A. The Dismissal of the RICO Claims Should Be Reconsidered With Respect to Allegations of Forced EPEC Contributions, Since Plaintiffs Alleged That They Paid Mandatory EPEC Contributions, but the Court Did Not Analyze Those Allegations in Deciding That RICO Standing Was Lacking............................................................................................... 3 B. The Dismissal of the Aiding and Abetting Claim Also Should Be Reconsidered Since State Law Recognizes That Claim ............................ 4 IV. CONCLUSION AND RELIEF REQUESTED ...............................................7

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RULES

TABLE OF AUTHORITIES FEDERAL DECISIONAL AUTHORITY McKay v. Hageseth, 2007 WL 1056784 (N.D. Cal. April 6, 2007) .......................... 6 Monaco v. The Bear Stearns Companies, Inc., 2011 WL 11027559 (C.D. Cal. Jan. 13, 2011) ............................................................................................................... 2 Neilson v. Union Bank of California, N.A., 290 F.Supp.2d 1101 (C.D. Cal. 2005) .. 6 Pegasus Satellite Television, Inc. v. DirecTV, Inc., 318 F.Supp.2d 968 (C.D. Cal. 2004) ..................................................................................................................... 2 Plascencia v. Lending 1st Mortg., 583 F.Supp.2d 1090 (N.D. Cal. 2008) ................ 6 Service Employees International Union v. Roselli, 2009 WL 3013501 (N.D. Cal. Sept. 17, 2009) ...................................................................................................... 6 Smith v. Massachusetts, 543 U.S. 462, 475, 125 S.Ct. 1129 (2005) ......................... 2 Velazquez v. GMAC Mortgage Corporation, LLC, 605 F.Supp.2d 1049 (C.D. Cal. 2008) ..................................................................................................................... 5 STATE DECISIONAL AUTHORITY Casey v. U.S. Bank National Assn, 127 Cal.App.4th 1138 (2005) .......................... 6

Local Rule 7-18 ............................................................................................ 3, 1, 2, 7

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MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION Presented with five motions to dismiss Plaintiffs Second Amended Complaint (SAC), raising a host of disparate issues and arguments, the Courts ultimate Order on those motions, issued October 9, 2013 (October 9, 2013 Order, Docket no. 151), dismissed a number of claims with prejudice, including Plaintiffs RICO claims against the IUOE Defendants and Plaintiffs aiding and abetting claim in its entirety. Those discrete aspects of the October 9, 2013 Order were erroneous and should be reconsidered under Local Rule 7-18(c), as this Court, in dismissing those claims, did not consider material facts in making its decision. Specifically, the Court did not consider Plaintiffs allegations that the IUOE Defendants illegally mandated that certain employee Plaintiffs and other employee class members make direct monetary contributions to the IUOEs EPEC fund, under threat of termination or retaliation (Hobbs Act violations), which provides the direct RICO standing that this Court held is necessary. The Court also did not consider that Plaintiffs alleged, and were given leave to amend, state law claims for UCL violations and common law breach of fiduciary duties, both of which permit aiding and abetting liability under state law, irrespective of whether federal law permits aiding and abetting liability for the SACs federal claims.1 Accordingly, Plaintiffs respectfully request that the Court reconsider its Order and hold that the claims in question are not dismissed insofar as the allegations addressed herein are concerned.

Reconsideration of this second issue will prevent the incongruous result of expressly permitting Plaintiffs to allege state law claims that recognize aiding and abetting liability under state law, while simultaneously precluding all aiding and abetting-based liability.
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II.

THE STANDARD GOVERNING MOTIONS FOR RECONSIDERATION Local Rule 7-18 addresses motions for reconsideration of decisions on

motions, stating in pertinent part: L.R. 7-18 Motion for Reconsideration. A motion for reconsideration of the decision on any motion may be made only on the grounds of (c) a manifest showing of a failure to consider material facts presented to the Court before such decision. No motion for reconsideration shall in any manner repeat any oral or written argument made in support of or in opposition to the original motion. Courts in this district and elsewhere have granted reconsideration when they were persuaded that they had not considered relevant facts that were presented to them. See, e.g., Monaco v. The Bear Stearns Companies, Inc., 2011 WL 11027559, *3-4 (C.D. Cal. Jan. 13, 2011) (granting the plaintiffs motion for reconsideration pursuant to L.R. 7-18(c) after the court failed to consider facts regarding tolling of the statute of limitations in dismissing TILA claim); Pegasus Satellite Television, Inc. v. DirecTV, Inc., 318 F.Supp.2d 968, 979 (C.D. Cal. 2004) (granting motion for reconsideration, the Court stating: DirecTV has demonstrated a manifest showing that the Court has failed to consider material facts presented to the court on this issue. See Summary Judgment 2 Order, at 4445. Therefore, reconsideration of the Courts Order denying DirecTV summary judgment on Pegasus claim for restitution of the Launch Fees is appropriate.) Beyond Local Rule 7-18, and as held by the United States Supreme Court, (a) district court has the inherent power to reconsider and modify its interlocutory orders prior to the entry of judgment . . . Smith v. Massachusetts, 543 U.S. 462, 475, 125 S.Ct. 1129, 1139 (2005) (internal quotes omitted).

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III.

RECONSIDERATION IS WARRANTED HERE A. The Dismissal of the RICO Claims Should Be Reconsidered With Respect to Allegations of Forced EPEC Contributions, Since Plaintiffs Alleged That They Paid Mandatory EPEC Contributions, but the Court Did Not Analyze Those Allegations in Deciding That RICO Standing Was Lacking In the SAC, Plaintiffs alleged that they and other union employee class

members were illegally required to make mandatory contributions to the IUOEs EPEC fund. See, e.g., SAC 75-80, 266 (defining an EPEC PAC sub-class). Plaintiffs also discussed those allegations in opposing the IUOE Defendants motion to dismiss the SAC. (See, e.g., Dkt. 125 at 4:18-5:4 and n. 4.) At page 2 of its Order, this Court noted the allegations of forced EPEC contributions, stating: The SAC alleges Defendant Vincent Giblin, the former General President of IUOE, . . . , required local union officers to contribute hundreds and thousands of dollars per year to IUOEs political action fund . . . ([SAC]. 75-80). (October 9, 2013 Order, at 2.) Yet in its subsequent analysis of RICO standing, the Court did not address or analyze Plaintiffs allegations of direct, coerced monetary contributions by union employees. Instead, without addressing those allegations, the Court held that Plaintiffs had alleged no direct, concrete losses to themselves, but rather only injuries to the union and the associated trusts/benefit plans. Based on its conclusion that RICO standing was lacking for this reason, the Court dismissed the RICO claims with prejudice. (See Order at 7:17-22, 10:14-15.)2

For example, the Court stated: The various racketeering acts alleged in the SAC harmed Local 501 and its benefit funds, not Plaintiffs. Even if Plaintiffs had identified any non-speculative injury to themselves, any such harm would be the indirect result of direct injuries to the non-party union and plans. Thus, Plaintiffs cannot satisfy 18 U.S.C. 1964(c), and lack statutory standing to bring their RICO claims. (October 9, 2013 Order, at 7.) This analysis by the Court
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In sum, the SAC alleged that the IUOE Defendants mandated that Plaintiffs and other union employees make direct monetary contributions to the IUOE Defendants EPEC fund. These contributions, as alleged and as argued in opposition by Plaintiffs, were compelled, at the peril of job loss, in violation of the Hobbs Act. Unquestionably, they were paid directly by Plaintiffs and other employees. Yet the Court did not consider those losses in analyzing RICO standing and in concluding that the RICO claims should be dismissed with prejudice based on the absence of any direct, concrete injury. As such, reconsideration is proper. The RICO claims against the IUOE Defendants should be permitted to proceed insofar as the allegations of forced EPEC contributions are concerned. B. The Dismissal of the Aiding and Abetting Claim Also Should Be Reconsidered Since State Law Recognizes That Claim In its Order, the Court also dismissed the SACs aiding and abetting claim, with prejudice. Order at 10:14-15. It did so based solely on federal authorities holding that, where federal statutes are involved, aiding and abetting liability must be expressly authorized. Specifically, the Court stated: Congress has not enacted a civil aiding and abetting statute. Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 182 (1994). Aiding and abetting liability is therefore limited to those statutes in which it is imposed. Id., Freeman v. DirecTV, Inc., 457 F.3d 1001, 1006 (9th Cir. 2006); In re Easysaver Rewards Litigation, 737 F.Supp.2d 1159, 1181 (S.D. Cal. 2010). Plaintiffs Aiding and Abetting claim is dismissed with prejudice. (October 9, 2013 Order, at 10:4-11.) Regardless whether Congressional authorization of aiding and abetting liability is necessary in the context of federal claims, this Court did not consider disregarded the allegations of forced EPEC contributions, which are direct injuries to Plaintiffs and other class members.
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Plaintiffs non-federal claims in dismissing their aiding and abetting claim as a matter of law. First, Plaintiffs alleged a claim for breach of fiduciary duties under ERISA and California common law,3 though the Court found the claim deficient as pled. The Court in its Order noted that Plaintiffs had asserted a Sixth Claim for Breach of Fiduciary Duties Under ERISA or Common Law (October 9, 2013 Order at 8:14-15).4 (Emphasis added.) After finding that the claim was not yet sufficiently pled, the Court granted Plaintiffs leave to amend it. (October 9, 2013 Order at 10.) Likewise, the Court recognized that Plaintiffs had alleged a UCL claim against certain defendants and that Plaintiffs sought to expand and amend that claim. (October 9, 2013 Order at n. 2 [Though no Defendant has moved to dismiss Plaintiffs eight[th] cause of action for unfair competition under California Business & Professions Code 17200, Plaintiffs have expressed a desire to amend that cause of action.].) At the conclusion of its Order, the Court ordered Plaintiffs to amend the UCL claim, stating: Any amended complaint shall also include amendments to Plaintiffs unfair competition claim, to which no Defendant appears to object. (October 9, 2013 Order, at fn. 5.) Both of the aforementioned claims can serve as a predicate primary violation for aiding and abetting liability under California law. This very Court has recognized that aiding and abetting liability may be stated under the UCL. In Velazquez v. GMAC Mortgage Corporation, LLC, 605 F.Supp.2d 1049 (C.D. Cal. 2008) (Pregerson, J.), this Court held: In retrospect, Plaintiffs acknowledge that it may have been preferable to plead the two fiduciary breach theories as separate claims, although labels are not dispositive in the pleading context. The Court described the breach of fiduciary duty claim as lacking sufficient supporting facts. The breach of fiduciary duty claim in the SAC incorporated all of the prior factual allegations therein by reference. In the forthcoming Third Amended Complaint, Plaintiffs will clarify -- within the claim itself -- the facts supporting ERISA and common law fiduciary liability for the various defendants.
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While Californias UCL does not support claims for vicarious liability, a plaintiff can allege a claim for aider and abettor liability under 17200. See In re First Alliance Mortgage Co., 471 F.3d 977, 995-96 (9th Cir. 2006); People v. Toomey, 157 Cal.App.3d 1, 14-15, 203 Cal.Rptr. 642 (1984) ([I]f the evidence establishes defendants participation in the unlawful practices, either directly or by aiding and abetting the principal, liability under section[ ] 17200 ... can be imposed.). To allege aiding and abetting under California law, a plaintiff must plead that the alleged aider and abettor (1) knew that the others conduct constituted a breach of a duty and (2) gave substantial assistance or encouragement to the other so to act. First Alliance, 471 F.3d at 993. Velasquez, 605 F.Supp.2d at 1068. See also Plascencia v. Lending 1st Mortg., 583 F.Supp.2d 1090, 1098 (N.D. Cal. 2008) (recognizing viability of aiding and abetting liability in connection with the UCL); Casey v. U.S. Bank National Assn, 127 Cal.App.4th 1138 (2005) (recognizing existence of state law claim for aiding and abetting of breach of fiduciary duty but finding claim not adequately alleged); Service Employees International Union v. Roselli, 2009 WL 3013501, *6-7 (N.D. Cal. Sept. 17, 2009) (holding, in case in which the IUOE Defendants counsel represented the SEIU plaintiff, that claim for aiding and abetting breach of fiduciary duty was cognizable against former union officials and employees under either common law or the LMRDA); Neilson v. Union Bank of California, N.A., 290 F.Supp.2d 1101, 1118-37 (C.D. Cal. 2005) (finding claim for aiding and abetting fiduciary duty adequately alleged); McKay v. Hageseth, 2007 WL 1056784, *2-3 (N.D. Cal. April 6, 2007) (recognizing that under California law, aiding and abetting liability can exist for negligent acts and UCL violations); Since the Courts Order relied solely on federal law (October 9, 2013 Order at 10), it appears to Plaintiffs that, in dismissing the aiding and abetting claim with
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prejudice, the Court overlooked Plaintiffs allegations of non-federal liability, which in the same Order Plaintiffs were being given leave to amend. Thus, reconsideration under LR 7-18(c) is warranted. Plainly, assuming the elements of state law aiding and abetting liability can be pled (as they were before and can be again), federal law poses no absolute bar to such liability in connection with Plaintiffs primary state law claims. This is particularly true in view of Rule 15s pronouncement that leave to amend should be freely granted when justice so requires, and this Court has already granted leave to amend the primary claims for violations of the UCL and breach of fiduciary duty. IV. CONCLUSION AND RELIEF REQUESTED For the reasons set forth above, Plaintiffs respectfully request that their motion for reconsideration be granted and that the Court vacate its rulings dismissing the RICO claims and the aiding and abetting claim.5 Respectfully submitted Dated: October 21, 2013 MOORE & LEVIANT LLP By: /s/ J. Mark Moore J. Mark Moore H. Scott Leviant Attorneys for Plaintiffs

To the extent the Court deems amendment necessary notwithstanding Plaintiffs belief that, for the reasons set forth herein, the claims at issue should not have been dismissed in their entirety in the first instance, Plaintiffs request leave to amend the operative complaint to re-allege the theory of RICO liability discussed herein and to allege claims for state law aiding and abetting liability with respect to the UCL claim and the claim for common law breach of fiduciary duty. Because Plaintiffs must file an amended complaint that excludes claims consistent with the October 9, 2013 Order before the Court rules on this motion, Plaintiffs believe that a clarifying amendment would also be beneficial if any aspect of this motion is granted.
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