1 2 3 4 5 UNITED STATES DISTRICT COURT 6 NORTHERN DISTRICT OF CALIFORNIA 7 8 THE UNITY CARE GROUP, Case No. 22-cv-02221-JD

9 Plaintiff,

ORDER RE MOTION TO DISMISS

v. 10

11 COUNTY OF SANTA CLARA,

CALIFORNIA,

12 Defendant.

13

14 Plaintiff Unity Care Group is a non-profit organization that provides services to youth 15 transitioning out of foster care. Dkt. No. 1 ¶ 2. From 2008 to 2019, it contracted with defendant 16 Santa Clara County to provide “wraparound services” to improve outcomes for “African 17 Ancestry” children and families in the County’s foster care system. Id. ¶¶ 15-18. Unity Care is 18 led by African American officers and directors. Id. ¶ 75. It states that it was the County’s largest 19 employer of African Ancestry staff and largest service provider to the African Ancestry 20 community. Id. 21 Unity Care says it was underpaid by the County compared to “white-led” organizations, 22 and that the County defunded and terminated its services without justification. Id. ¶¶19-47. It 23 alleges that these actions by the County constitute race discrimination under 42 U.S.C. §§ 1981 24 and 1983. Id. ¶¶ 70-83. It also alleges violations of Article I of the California Constitution, the 25 Unruh Civil Rights Act, Cal. Civ. Code § 51, and the Unfair Competition Law, Bus. & Prof. Code 26 §§ 17200, et seq., and asserts claims for breach of contract, assumpsit, and accounts stated under 27 California law. Id. ¶¶ 70-135. 1 The County asks to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1) 2 and 12(b)(6). Dkt. No. 14. The parties’ familiarity with the record is assumed, and the complaint 3 is dismissed with leave to amend. 4 The Court has written extensively on the standards governing a Rule 12(b)(6) motion to 5 dismiss, and incorporates that discussion here. See Escobar-Lopez v. City of Daly City, 527 F. 6 Supp. 3d 1123, 1127-28 (N.D. Cal. Mar. 2021). In summary, Rule 8(a)(2) of the Federal Rules of 7 Civil Procedure requires that a complaint make “a short and plain statement of the claim showing 8 that the pleader is entitled to relief.” To meet that rule, and to survive a Rule 12(b)(6) motion to 9 dismiss, a plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” 10 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This calls for “factual content that allows 11 the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 12 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The plausibility analysis is “context-specific” and not 13 only invites but “requires the reviewing court to draw on its judicial experience and common 14 sense.” Id. at 679. 15 The complaint as it presently stands does not meet these standards. To start, the 42 U.S.C. 16 § 1983 claim is untimely on the face of the allegations. A Section 1983 claim is subject to the 17 two-year statute of limitations in California Code of Civil Procedure § 335.1, and typically accrues 18 “when the plaintiff knows or has reason to know of the injury which is the basis of the action.” 19 Bonelli v. Grand Canyon Univ., 28 F.4th 948, 951-52 (9th Cir. 2022) (internal quotations 20 omitted); see also Khaoone v. Sonoma Cty. Main Adult Det. Facility, No. 22-cv-04065-JD, 2022 21 WL 16528135, at *1 (N.D. Cal. Oct. 28, 2022). All of the alleged discriminatory acts by the 22 County are said to have occurred between 2008 and 2019. See Dkt. No. 1 ¶¶ 19-30, 32-36, 43-46. 23 Consequently, the complaint does not describe constitutional violations that accrued within the 24 two years before Unity Care filed suit on April 8, 2022. 25 Unity Care responds that the Section 1983 claim accrued when the County said on 26 September 22, 2020, that it would not implement reconciliation and settlement procedures to 27 calculate the amount it owed Unity Care under its 2018-2019 contract. Dkt. No. 16 at 5; Dkt. No. 1 1 ¶ 65. While this might have violated the parties’ contract, Unity Care does not allege or explain 2 how this event is tantamount to unconstitutional conduct actionable under Section 1983. 3 Unity Care’s continuing violations suggestion is also unavailing. See Dkt. No. 16 at 4-5. 4 This exception allows a plaintiff to seek relief for actions that occurred outside the limitations 5 period in narrow circumstances. Bird v. Dep’t of Human Servs., 935 F.3d 738, 746 (9th Cir. 6 2019). It may apply when a plaintiff alleges either “a series of related acts, one or more of which 7 falls within the limitations period,” or “the maintenance of a discriminatory system both before 8 and during [the limitations] period.” Id. (internal quotations omitted). As a practical matter, “little 9 remains of the continuing violations doctrine” after the Supreme Court’s decision in Nat’l R.R. 10 Passenger Corp. v. Morgan, 536 U.S. 101 (2002). Bird, 935 F.3d at 748. “Except for a limited 11 exception for hostile work environment claims--not at issue here--the serial acts branch is virtually 12 non-existent.” Id. Courts have “consistently refused to apply the systematic branch to rescue 13 individualized claims that are otherwise time-barred.” Id. All of this forecloses Unity Care’s 14 reliance on the exception to resuscitate the Section 1983 claim. 15 The claim under 42 U.S.C. § 1981 is not time-barred. Claims that arise under Section 16 1981, as amended by the Civil Rights Act of 1991, are subject to the four-year statute of 17 limitations period in 28 U.S.C. § 1658. Jones v. R.R. Donelley & Sons Co., 541 U.S. 369, 383 18 (2004). The 1991 amendment added Section 1981(b), which clarified that the term “make and 19 enforce contracts” includes the “termination of contracts, and the enjoyment of all benefits, 20 privileges, terms, and conditions of the contractual relationship.” Id. (quoting 42 U.S.C. 21 § 1981(b)). Unity Care’s complaint expressly cites Section 1981(b), and alleges that the County 22 unfairly terminated its contract and withheld payments owed under the contract. See Dkt. No. 1 23 ¶¶ 72, 76. Because Unity Care alleges that its contract was terminated without justification in 24 2019, and that it was underpaid for its 2018-2019 contract, its Section 1981 claim is timely. See 25 id. ¶¶ 46, 65. 26 The County’s suggestion that Section 1981 does not provide a remedy against state actors, 27 Dkt. No. 14 at 9, is misdirected. See Yoshikawa v. Seguirant, 41 F.4th 1109, 1116 (9th Cir. 2022) 1 Limitations periods aside, the complaint does not state a claim under 42 U.S.C. $§ 1981 or 2 1983 because it does not plausibly allege that the County discriminated against Unity Care 3 pursuant to an official policy, custom or practice. Single or isolated incidents do not give rise to 4 these claims. See Escobar-Lopez, 527 F. Supp. 3d at 1127-28; Harrison v. City & Cty. of San 5 || Francisco, No. 21-cv-07072-JD, 2022 WL 3093303, at *1 (N.D. Cal. June 1, 2022). The 6 || complaint does not provide any facts that might plausibly allege that the County has a policy or 7 || practice of underpaying African American-led organizations. See Dkt. No. | {fj 19-23, 25-31. 8 So too for the allegation that the County omitted language from Unity Care’s contracts that 9 would have protected Unity Care from discrimination. Jd. 24. There are no factual allegations 10 || that this was a policy or practice, or that other groups typically received more favorable contracts. 11 See id. 12 Overall, the Section 1981 and 1983 allegations do not plausibly allege that the County 5 13 acted pursuant to a policy of discrimination “so persistent and widespread as to practically have 14 the force of law.” See Connick v. Thompson, 563 U.S. 51, 60-61 (2011). 3 15 That resolves all of the federal claims, which are the basis of the Court’s subject matter a 16 || jurisdiction in this case. The Court declines to exercise supplemental jurisdiction over the state 3 17 law claims until a plausible federal claim is alleged. 18 U.S.C. § 1376(c)(3); Parra v. PacifiCare 18 of Ariz., Inc., 715 F.3d 1146, 1156 (9th Cir. 2013); Doe v. City of Concord, No. 20-cv-02432-JD, 19 2021 WL 3140782, at *2 (N.D. Cal. July 26, 2021). Unity Care may file an amended complaint 20 || by January 17, 2023. It may not add new claims or defendants without the Court’s prior approval. 21 A failure to meet this deadline will result in dismissal under Federal Rule of Civil Procedure 22 || 41(b). 23 IT IS SO ORDERED. 24 Dated: December 29, 2022 25 26

JAMES ATO

27 United fates District Judge 28