Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 1 of 17 Page ID #:749 'O' 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 CV 21-03595-RSWL-AS x 11 SPRINGFIELD CLINIC, LLP, ORDER re: TBS Defendants’ 12 Plaintiff, Motion for Judgment on 13 v. the Pleadings [78] 14

PRIMEX CLINICAL

15 LABORATORIES, INC., 16 Defendant. 17 PRIMEX CLINICAL

LABORATORIES. INC.,

18 Third-Party Plaintiff, 19 v. 20 21 TBS BUSINESS SOLUTIONS USA INC.; and TEWODROS SAHILU, 22 Third-Party Defendants. 23 24 Plaintiff Springfield Clinic, LLP (“Springfield”) 25 initiated this Action [1] against Defendant Primex 26 Laboratories, Inc. (“Primex”), alleging: (1) breach of 27 contract; (2) unjust enrichment; (3) money had and 28 received; (4) conversion; (5) negligent 1 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 2 of 17 Page ID #:750

1 misrepresentation; and (6) violations of California’s

2 Unfair Competition Law.

3 On July 7, 2021, Primex impleaded TBS Business 4 Solutions, Inc. (“TBS”) and Tewodros Sahilu 5 (collectively, “TBS Defendants”). Primex filed a Third- 6 Party Complaint [14] against TBS Defendants for: (1) 7 breach of contract; (2) unjust enrichment; (3) money had 8 and received; (4) conversion; (5) negligent 9 misrepresentation; (6) violations of California’s Unfair 10 Competition Law; and (7) equitable indemnity. 11 Currently before the Court is TBS Defendants’ 12 Motion for Judgment on the Pleadings (the “Motion”) 13 [78]. Having reviewed all papers submitted pertaining 14 to this Motion, the Court NOW FINDS AND RULES AS 15 FOLLOWS: the Court GRANTS TBS Defendants’ Motion. 16 I. BACKGROUND 17 A. Factual Background 18 Springfield is a multi-specialty physician practice 19 that provides health care throughout central Illinois. 20 Compl. (“Springfield Compl.”) ¶¶ 6, 8, ECF No. 1. On or 21 about April 6, 2020, Springfield entered into a Product 22 Supply Agreement (“PSA”) with Primex, a diagnostic 23 service provider, for the purchase of 1 million 3M- 24 branded masks. Third-Party Compl. (“Primex Compl.”) 25 ¶ 11, ECF No. 14. On April 30, 2020, Springfield sent a 26 purchase order to Primex in accordance with the PSA 27 (“Springfield Purchase Order”). Springfield Compl. 28 ¶ 18. That same day, Primex responded to the 2 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 3 of 17 Page ID #:751

1 Springfield Purchase Order with an invoice for

2 $1,789,425, and Springfield paid the invoice by wire

3 transfer. Id. ¶¶ 19-20. 4 Immediately upon receipt of these funds on April 5 30, Primex tendered the sum of $970,000 to TBS, a 6 supplier and distributor of various goods, in exchange 7 for 1 million 3M masks. Primex Compl. ¶ 19. This was 8 the first of a series of transactions entered into 9 between Primex and TBS in April, May, and June 2020. 10 Id. ¶ 17. Through these transactions, Primex sought to 11 fulfill the Springfield Purchase Order along with orders 12 placed by seven other clients. Id. ¶ 17 tbl.1. In 13 fact, Primex placed three additional orders with TBS on 14 April 30, 2021, for clients other than Springfield. Id. 15 This included an order for 1.5 million masks for a total 16 purchase price of $1,455,000. Id. 17 Primex alleges that Sahilu, an agent and alter ego 18 of TBS, had represented to Primex that TBS could obtain 19 3M products more quickly than any other wholesaler and 20 that Primex would receive priority allocation of masks 21 because Primex was a first responder. Id. ¶¶ 5, 18. 22 However, TBS failed to supply masks sufficient to 23 satisfy the Springfield Purchase Order or any of the 24 other purchase orders from Primex’s various clients. 25 Primex Compl. ¶ 20. Primex accepted some alternative, 26 non-3M branded masks from TBS and was refunded a total 27 of $1,086,400. Id. ¶¶ 22 tbl.2, 23. Primex alleges 28 that TBS refuses to either perform its remaining 3 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 4 of 17 Page ID #:752

1 contractual obligations or refund the remaining balance

2 owed to Primex. Id. ¶ 25. Primex now seeks recovery

3 from TBS for a total of $2,220,731.20. Id. ¶ 24. This 4 total includes an alleged balance owed for the orders 5 involving Primex clients other than Springfield. Id. 6 ¶¶ 17 tbl.1, 22 tbl.2; id. Prayer for Relief. 7 B. Procedural Background 8 Springfield filed its complaint (“Springfield 9 Complaint”) [1] against Primex on April 28, 2020. 10 Primex filed its third-party complaint (“Primex 11 Complaint”) [14] on July 7, 2020, impleading TBS 12 Defendants into this Action. TBS Defendants then filed 13 a third-party complaint [29] on October 5, 2020, 14 impleading Studebaker Defendants. On January 6, 2022, 15 this Court granted [57] Studebaker Defendants’ motion to 16 dismiss TBS’s third-party complaint. TBS then amended 17 its Answer [60] to the Primex Complaint on January 19, 18 2022, to include counterclaims against Studebaker 19 Defendants that were nearly identical to the claims it 20 had alleged in its third-party complaint. Studebaker 21 Defendants moved to dismiss [71] the counterclaims 22 brought against it, and the Court granted Studebaker 23 Defendants’ motion [77]. 24 TBS Defendants filed the instant Motion for 25 Judgment on the Pleadings [78] on May 20, 2022; Primex 26 filed its Opposition [79] on June 1, 2022; TBS 27 Defendants replied [83] on June 7, 2022. 28 /// 4 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 5 of 17 Page ID #:753

1 II. DISCUSSION

2 A. Legal Standard

3 Federal Rule of Civil Procedure 12(c) states that 4 “[a]fter the pleadings are closed . . . a party may move 5 for judgment on the pleadings.” Judgment on the 6 pleadings is appropriate when the moving party is 7 entitled to judgment as a matter of law. Fajardo v. 8 County of Los Angeles, 179 F.3d 698, 699 (9th Cir. 9 1999). A motion for judgment on the pleadings is 10 “functionally identical” to a Rule 12(b)(6) motion to 11 dismiss for failure to state a claim, meaning the same 12 pleading standards apply. Dworkin v. Hustler Magazine, 13 Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). Allegations 14 in the non-moving party’s pleadings are taken as true, 15 and facts are viewed in the light most favorable to the 16 non-moving party. Living Designs, Inc. v. E.I. DuPont 17 de Nemours & Co., 431 F.3d 353, 360 (9th Cir. 2005). 18 Any allegations made by the moving party that are denied 19 or contradicted are assumed to be false. MacDonald v. 20 Grace Church Seattle, 457 F.3d 1079, 1081 (9th Cir. 21 2006); Doleman v. Meiji Mut. Life Ins. Co., 727 F.2d 22 1480, 1482 (9th Cir. 1984). 23 Judgment on the pleadings is improper when the 24 district court goes beyond the pleadings to resolve an 25 issue; such a proceeding must properly be treated as a 26 motion for summary judgment. Hal Roach Studios, Inc. v. 27 Richard Feiner & Co., 896 F.2d 1542, 1550 (citing Fed R. 28 Civ. P. 12(c)). However, the court may consider facts 5 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 6 of 17 Page ID #:754

1 that are subject to judicial notice. Heliotrope Gen.,

2 Inc. v. Ford Motor Co., 189 F.3d 971, 981 n.18 (9th Cir.

3 1999). 4 B. Analysis 5 1. Bad Faith Allegation 6 Primex asserts that TBS Defendants filed the 7 instant Motion in bad faith and that counsel for TBS 8 Defendants admitted to bringing this Motion to “buy 9 time.” See Decl. of Houston M. Watson (“Watson Decl.”) 10 ¶¶ 7-9, ECF No. 79-1. TBS Defendants dispute this 11 interpretation of its counsel’s words and object to the 12 statements in the Watson Declaration on various 13 evidentiary grounds. See Decl. of Arash Beral in Supp. 14 of Reply ¶ 4, ECF No. 83-1; TBS Defs.’ Evid. Objs. to 15 Watson Decl., ECF No. 83-2. 16 The Court will consider TBS Defendants’ Motion 17 regardless of the bad faith allegations because there is 18 a strong legal basis for finding that the impleader of 19 TBS Defendants was improper. The merits of the Motion 20 thus run contrary to the notion that it was filed in bad 21 faith. For this reason, the Court also declines to 22 issue sanctions here based on any recklessness by TBS 23 Defendants’ counsel. See Calop Bus. Sys., Inc. v. City 24 of L.A., 984 F. Supp. 2d 981, 1020-21 (C.D. Cal. 2013). 25 Because the Court concludes that the Motion should be 26 granted regardless of the bad faith allegations, the 27 Court need not consider TBS Defendants’ evidentiary 28 objections to the Watson Declaration and therefore 6 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 7 of 17 Page ID #:755

1 OVERRULES them as moot.

2 2. The Motion

3 TBS Defendants move for judgment on the pleadings, 4 asserting that: (1) Primex failed to properly plead 5 alter-ego liability against Sahilu; (2) Primex’s Counts 6 II-VII fail to state valid claims; and (3) Primex 7 improperly joined TBS Defendants to this Action. See 8 generally Mot. The Court finds that TBS Defendants’ 9 impleader was improper under Rule 14 of the Federal 10 Rules of Civil Procedure for three reasons. First, the 11 Springfield Complaint and the Primex Complaint concern 12 two distinct contracts regarding entirely separate 13 transactions. Second, Primex fails to state a claim for 14 equitable indemnity because TBS Defendants’ liability is 15 not derivative of the main action. Lastly, permitting 16 TBS Defendants to remain in this suit would not promote 17 judicial efficiency. 18 The Court therefore GRANTS TBS Defendants’ Motion. 19 Because the improper joinder of TBS Defendants is 20 dispositive of the Motion, the Court need not address 21 TBS Defendants’ other arguments concerning alter ego 22 liability and failure to state a claim. 23 a. Joinder under Rule 14 24 A defendant is permitted to implead a third party 25 “who is or may be liable to it for all or part of the 26 claim against it.” Fed. R. Civ. P. 14(a)(1). “The 27 crucial characteristic of a Rule 14 claim is that the 28 defendant is attempting to transfer to the third-party 7 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 8 of 17 Page ID #:756

1 defendant the liability asserted against him by the

2 original plaintiff.” Stewart v. Am. Int'l Oil & Gas

3 Co., 845 F.2d 196, 199 (9th Cir. 1988) (quoting 6 Fed. 4 Prac. & Proc. § 1446 (1971 ed.)). Thus, for impleader 5 to be permitted, the third party’s liability must be “in 6 some way dependent on the outcome of the main claims” 7 and be secondary or derivative in nature. United States 8 v. One 1977 Mercedes Benz, 708 F.2d 444, 452 (9th Cir. 9 1983) (citations omitted). 10 It is not enough that the facts underlying the main 11 claim and those underlying the third-party claim are 12 “inextricably intertwined.” Uldricks v. Kapaa 382, LLC, 13 No. 07-117 JMS/KSC, 2007 WL 2694409, at *4 (D. Haw. 14 Sept. 11, 2007). A third-party claim is also not 15 derivative of the main claim simply because the pending 16 action between the plaintiff and defendant establishes 17 the measure of damages sustained by the defendant due to 18 a breach by a third party. Ruthardt v. Sandmeyer Steel 19 Co., No. Civ. A. 94-6105, 1995 WL 434366, at *2 (E.D. 20 Pa. July 21, 1995). 21 i. Separate and Distinct Contracts 22 Impleader is improper where the underlying suit and 23 the third-party suit are governed by separate and 24 distinct contracts. See Stewart, 845 F.2d at 199 25 (affirming the district court’s ruling that impleader 26 was improper where “the transaction which gave rise to 27 the original complaint and the transaction which gave 28 rise to the third-party complaint were completely 8 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 9 of 17 Page ID #:757

1 separate”); see also Ruthardt, 1995 WL 434366, at *2

2 (finding impleader improper where defendant alleged that

3 a third party’s breach of its contract with defendant 4 caused defendant to breach its separate contract with 5 plaintiff). Here, joinder of TBS Defendants to this 6 Action is improper because TBS Defendants’ liability to 7 Primex is governed solely by the provisions of the 8 Primex-TBS contract. Thus, TBS Defendants’ liability is 9 not derivative in nature because it in no way depends on 10 the outcome of the suit between Springfield and Primex. 11 Primex argues that impleader is proper because the 12 Springfield-Primex contract and the Primex-TBS contract 13 were negotiated and executed contemporaneously on April 14 30, 2020. Opp’n 6:19-22. But the action between 15 Springfield and Primex arises from a Product Supply 16 Agreement, dated April 6, 2020, which led to a Purchase 17 Order on April 30, 2020. Primex Compl. ¶ 11. By 18 contrast, the claims between Primex and TBS Defendants 19 arise from a series of transactions entered into in 20 April, May, and June 2020. Id. ¶ 17. Moreover, 21 Primex’s claims against TBS Defendants also involve 22 orders for masks destined for other clients. Id. ¶ 17 23 tbl.1. These facts together establish that the 24 Springfield and Primex Complaints involve distinct 25 transactions and separate contracts. 26 The fact that both contracts may have involved the 27 same product does not make TBS Defendants’ liability 28 derivative in nature. See Produce Pay, Inc. v. 9 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 10 of 17 Page ID #:758

1 Agrosale, Inc., 533 F. Supp. 3d 1140, 1144 (S.D. Fla.

2 2021) (concluding impleader was improper because the

3 main action and third-party action were governed by 4 separate contracts, even though the very same shipment 5 of produce was involved in both branches of litigation). 6 Regardless, the masks that TBS ultimately procured for 7 Primex were different from the ones Primex had 8 originally contracted for with Springfield. Primex 9 Compl. ¶ 21. 10 Because the Springfield and Primex Complaints 11 concern separate contracts with distinct facts 12 underlying their creation and execution, TBS Defendants’ 13 liability does not depend on the outcome of the suit 14 between Springfield and Primex. It may be found that 15 TBS Defendants are not liable to Primex even if Primex 16 is found liable to Springfield. Conversely, it may be 17 the case that TBS Defendants breached their contract 18 with Primex even though Primex did not breach its 19 contract with Springfield. These possibilities support 20 the conclusion that impleader of TBS Defendants is 21 improper. See Stewart, 845 F.2d at 199; Ruthardt, 1995 22 WL 434366 at *2. 23 ii. Equitable Indemnity 24 Impleader requires some legal basis for holding TBS 25 Defendants liable for Springfield’s injuries, such as an 26 assertion of “contribution, indemnification, 27 subrogation, or another type of vicarious liability.” 28 Ruthardt, 1995 WL 434366, at *2. Because the two 10 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 11 of 17 Page ID #:759

1 actions are governed by separate contracts, the only

2 possible basis for TBS Defendants’ derivative liability

3 is Primex’s claim for equitable indemnity. However, 4 this equitable indemnity claim fails because Primex has 5 not proven that TBS Defendants had a sufficient legal 6 obligation to Springfield. 7 Equitable indemnity “permit[s] a concurrent 8 tortfeasor to obtain partial indemnity from other 9 concurrent tortfeasors.” Am. Motorcycle Ass’n v. 10 Superior Ct., 20 Cal. 3d 578, 598 (1978). Under 11 California law, equitable indemnity also encompasses 12 claims for implied contractual indemnity, which exists 13 where “two parties in a contractual relationship were 14 both responsible for injuring a third party.” Prince v. 15 Pac. Gas & Elec. Co., 45 Cal. 4th 1151, 1159 (2009). 16 However, implied contractual indemnity is not available 17 “in the absence of a joint legal obligation to the 18 injured party.” Id. at 1160. Thus, the success of 19 Primex’s indemnity claim hinges on whether TBS 20 Defendants owed a duty to Springfield, either in 21 contract or in tort. See Patton v. Experian Data Corp., 22 No. SACV 17-01559-JVS(DFMx), 2018 WL 6184773, at *3 23 (C.D. Cal. Sept. 12, 2018). 24 Primex argues that TBS Defendants owed a duty to 25 Springfield because all of the Purchase Orders between 26 TBS and Primex clearly indicated that Springfield was 27 the ultimate delivery destination and because TBS 28 accepted money from Primex knowing it came from 11 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 12 of 17 Page ID #:760

1 Springfield. Opp’n 2:11-15, 8:6-7. Primex thus argues

2 that these facts made Springfield a beneficiary of the

3 Primex-TBS contract and created a duty of care running 4 from TBS to Springfield. Id. at 13:9-11. 5 First, there is no contractual duty running from 6 TBS to Springfield because the Springfield-Primex 7 agreement does not refer to TBS and does not evince an 8 intent to incorporate the Primex-TBS agreement. See 9 generally Springfield Compl; see Unilease Comput. Corp. 10 v. Major Comput. Inc., 126 F.R.D 490, 493 (S.D.N.Y 1989) 11 (holding that where plaintiff’s lease with defendant did 12 not refer in any way to defendant’s lease with third- 13 party defendant, impleader was improper because there 14 was no indication of an intent to incorporate the third- 15 party agreement by reference). While Primex may have 16 only played an intermediary role, its contractual duty 17 to Springfield was not contingent on TBS’s delivery of 18 masks to Primex. 19 Further, TBS’s knowledge that the goods it agreed 20 to supply would ultimately be delivered to Springfield 21 did not create a contractual duty running from TBS to 22 Springfield. Id. at 493. Primex alone owed a 23 contractual duty to Springfield to deliver masks 24 pursuant to their agreement. Since the underlying claim 25 between Springfield and Primex is governed by a contract 26 that does not include TBS, TBS Defendants are not 27 jointly and severally liable to Springfield for Primex’s 28 breach. See Zurich Am. Ins. Co. of Il., 2020 WL 12 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 13 of 17 Page ID #:761

1 2732046, at *9 (E.D. Cal. May 26, 2020) (holding that

2 defendant and third party were not jointly and severally

3 liable for defendant’s breach of contract with plaintiff 4 where third party did not contract with plaintiff); 5 Produce Pay, Inc., 533 F. Supp. 3d at 1145 (finding 6 defendant’s allegation that it was acting as an 7 intermediary between plaintiff and a third party 8 insufficient to conclude that either contract at issue 9 was contingent on the performance of the other, and 10 therefore no duty existed between plaintiff and third 11 party). 12 Primex’s claim that a tort duty exists running from 13 TBS to Springfield also fails. The Primex Complaint’s 14 allegations regarding the existence of a tort duty are 15 conclusory and not entitled to deference. See Tesoro 16 Refin. & Mktg. Co. LLC, 2014 WL 4364393, at *5 (N.D. 17 Cal. Aug. 29, 2014). Moreover, the California Supreme 18 Court has held that negligent breach of contract is 19 generally insufficient to establish tort liability. 20 Erlich v. Menezes, 21 Cal. 4th 543, 552 (1999). Some 21 California cases have found a tort duty of care running 22 from a third party to a plaintiff where two separate 23 contracts governed the action. See, e.g., Langley v. 24 Pac. Gas & Elec. Co., 41 Cal. 2d 655, 660 (1953). 25 However, these cases are limited to special situations 26 warranting independent tort damages, such as 27 construction contracts or duties owed by public 28 utilities derived from the Public Utilities Code. 13 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 14 of 17 Page ID #:762

1 Willdan v. Sialic Contracts Corp., 158 Cal. App. 4th 47,

2 50; Langley, 41 Cal. 2d at 661.

3 Here, Primex offers no compelling rationale for 4 finding that a tort duty exists between TBS and 5 Springfield. Primex had the freedom to bargain for an 6 express indemnification clause in its contract with TBS 7 and failed to do so. There are no inequities in 8 bargaining power or other policy reasons to support 9 treating Primex differently than any other business 10 entity. See Tesoro Refin. & Mktg. Co. LLC v. Pac. Gas & 11 Elec. Co., No. 14-cv-00930-JCS, 2014 WL 4364393, at *6 12 (N.D. Cal. Aug. 29, 2014) (finding no tort duty between 13 third-party and plaintiff where there was no independent 14 basis for the duty, such as a state regulation evincing 15 an intent to impose such a duty, or policy reasons to 16 support treating the third-party differently from a 17 typical business entity). The California Supreme Court 18 has cautioned against awarding such tort remedies in 19 contract disputes because “restrictions on contract 20 remedies serve to protect the ‘freedom to bargain over 21 special risks and [to] promote contract formation by 22 limiting liability to the value of the promise.’” 23 Erlich, 21 Cal. 4th at 553 (quoting Freeman & Mills, 24 Inc. v. Belcher Oil Co., 11 Cal. 4th 85, 98 (1995)). 25 iii. Judicial Efficiency 26 Finally, even if TBS Defendants were derivatively 27 liable to Springfield, impleader would not serve Rule 28 14’s purpose of promoting judicial efficiency. Sw. 14 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 15 of 17 Page ID #:763

1 Adm’rs, Inc. v. Rozay’s Transfer, 791 F.2d 769, 777 (9th

2 Cir. 1986).

3 The distinct facts underlying the negotiation and 4 execution of the Springfield-Primex contract and the 5 Primex-TBS contract would make litigating them together 6 inefficient. Each Complaint describes an entirely 7 distinct set of events and transactions. Compare 8 Springfield Compl., with Primex Compl. The Complaints 9 relate to one another only in that they both involved 10 the purchase of the same product. See Springfield 11 Compl. ¶ 1; Primex Compl. ¶ 18. The Primex Complaint, 12 however, involves transactions with seven clients other 13 than Springfield and seeks relief against TBS Defendants 14 related to all seven transactions. Primex Compl. ¶ 17- 15 22, 17 tbl.1. Thus, the Primex Complaint involves 16 claims regarding transactions that are irrelevant to the 17 underlying suit between Springfield and Primex. See 18 Helferich Pat. Licensing, LLC v. Legacy Partners, LLC, 19 917 F. Supp. 2d 985, 989-90 (D. Ariz. 2013) (denying 20 impleader where the original claim and third-party claim 21 were governed by different contracts because it would 22 raise issues extraneous to the primary contract). 23 In short, Primex has not sufficiently established 24 that TBS Defendants would be derivatively liable in the 25 event Primex is held liable to Springfield. Permitting 26 the impleader of TBS Defendants would unduly complicate 27 litigation of Springfield’s claims and would not serve 28 the goal of judicial efficiency. The parties in this 15 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 16 of 17 Page ID #:764

1 Action would be best served by the opportunity to

2 litigate their contractual disputes separately.

3 Impleader of TBS Defendants into this Action is thus 4 improper, and the Court therefore GRANTS the Motion for 5 Judgment on the Pleadings. 6 b. Leave to Amend 7 “The court should give leave [to amend] freely when 8 justice so requires.” Fed. R. Civ. P. 15(a)(2). In the 9 Ninth Circuit, “Rule 15’s policy of favoring amendments 10 to pleadings should be applied with ‘extreme 11 liberality.’” United States v. Webb, 655 F.2d 977, 979 12 (9th Cir. 1981). In deciding whether to grant leave to 13 amend, a Court may consider “the presence of . . . bad 14 faith, undue delay, prejudice to the opposing party, 15 and/or futility.” Owens v. Kaiser Found. Health Plan, 16 Inc., 244 F.3d 708, 712 (9th Cir. 2001). 17 Primex claims that it is “ready willing and able” 18 to supplement and elaborate on the derivate nature of 19 the duty undertaken by the TBS Defendants in connection 20 with the acquisition of the masks for Springfield. Opp’n 21 7:19-20. However, even if Primex was willing to amend 22 and limit its Complaint against TBS Defendants to the 23 transactions exclusively relating to the Springfield 24 Purchase Order, Primex would still lack a basis for 25 derivative liability because the two Complaints are 26 based on distinct contracts. 27 The other facts that Primex states it would add are 28 either irrelevant to derivative liability or are already 16 Case 2:21-cv-03595-RSWL-AS Document 86 Filed 07/25/22 Page 17 of 17 Page ID #:765

1 alleged in the Primex Complaint. See Opp’n 7:18-8:7.

2 Because the defective impleader of TBS Defendants into

3 this Action cannot be cured through amendment, leave to 4 amend would be futile. See Nat’l Funding, Inc. v. Com. 5 Credit Counseling Servs., Inc., 817 F. App’x 380, 385 6 (9th Cir. 2020) (affirming district court’s denial of 7 leave to amend where plaintiff “failed to delineate any 8 additional facts it would add in support of [its] claim 9 to cure [the] deficiencies”). The Court therefore 10 DENIES Primex leave to amend. 11 III. CONCLUSION 12 Based on the foregoing, the Court GRANTS TBS 13 Defendants’ Motion for Judgment on the Pleadings and 14 DISMISSES the Primex Complaint without leave to amend. 15 IT IS SO ORDERED. 16 17 DATED: July 25, 2022 _____/_s/_ R__o_na_l_d_ S_._W_._ L_e_w_ ______

HONORABLE RONALD S.W. LEW

18 Senior U.S. District Judge 19 20 21 22 23 24 25 26 27 28 17