Shoujing Zhou and Nathen W. Barton v. Ting Fu, Ye Ying Zhao, HEA Inc., Hong Li, Jie Huang, Wei Liu, Xiaomin Zhang, Dan Yu, and John Does 1-10

Summary

The United States District Court for the District of Oregon addresses Defendants’ motion to dismiss and strike portions of an amended complaint alleging fraud, unlawful business practices, unjust enrichment, breach of contract, RICO violations, and unregistered securities sales arising from an alleged foreign-currency investment scheme. The court dismisses all claims against Defendants Wei Liu and Dan Yu, with leave to amend, and dismisses the breach-of-contract claim against Defendants Ye Ying Zhao, Hong Li, and Xiaomin Zhang. The court denies the remaining portions of the motion addressed in the excerpt, including the challenge to the timeliness of the Oregon Unlawful Trade Practices Act claim.

Holdings

1. The court dismissed all claims against Yu and Liu because plaintiffs did not adequately allege that either defendant participated in the alleged wrongdoing, and the fraud-based claims failed to satisfy Rule 9(b)'s particularity requirement.
2. The UTPA claim was not time-barred at the pleading stage because plaintiffs sufficiently alleged that they discovered the alleged unlawful conduct in early 2024, less than one year before filing suit.
3. Plaintiffs sufficiently pleaded unjust enrichment claims against Huang, Zhao, Li, and Zhang because they alleged that each defendant benefited from individual material misrepresentations concerning Fu's foreign-currency trading business.
4. The court dismissed the breach of contract claim against Zhao, Li, and Zhang because plaintiffs did not allege that any of those defendants was a party to either contract at issue and did not identify an applicable exception.
5. The court struck allegations concerning Fu's prior criminal history because they were immaterial and scandalous under Rule 12(f).
6. The court struck the WeChat screenshots and voice-message transcripts because they were evidentiary, redundant or immaterial, and not written instruments within Rule 10(c).

Questions Presented

1. Whether the claims against Yu and Liu were adequately pleaded where plaintiffs primarily alleged their marital relationships to other defendants and did not particularize their individual participation in the alleged fraud.
2. Whether plaintiffs' Oregon Unlawful Trade Practices Act claim was barred by the one-year discovery-based statute of limitations.
3. Whether plaintiffs sufficiently pleaded unjust enrichment claims against Huang, Zhao, Li, and Zhang.
4. Whether plaintiffs could assert breach of contract claims against Zhao, Li, and Zhang when they were not alleged to be parties to the contracts between Zhou and Fu or Huang.
5. Whether allegations concerning Fu's prior criminal history and attached WeChat screenshots and voice-message transcripts should be stricken under Rule 12(f).
6. Whether plaintiffs should be required to file a shorter second amended complaint under Rule 8.

Disposition

other