Jane Doe v. Christian Larsen et al Document 148: Order

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KING & SPALDING LLP

Jeanne A. Fugate (SBN 236341) jfugate@kslaw.com Kelly Perigoe (SBN 268872) kperigoe@kslaw.com 50 California Street, Suite 3300 San Francisco, CA 94111 Telephone: (415) 318-1200 Fax: (415) 318-1300 KING & SPALDING LLP Damien Marshall (Pro Hac Vice Application Submitted) dmarshall@kslaw.com 1185 Avenue of the Americas, 34th Floor New York, NY 10036 Telephone: (212) 556-2100 Fax: (212) 556-2222 FILED San Francisco County Superior Court MAY. 07 22K CLitin OF THe UOUR By: Depuly Clerk f Attorneys for Defendants CHRISTIAN LARSEN and Defendant and Cross-complainant RIPPLE LABS INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO JANE DOE, an individual, Plaintiff, Vv.

CHRISTIAN LARSEN, and Does.1 through 10 inclusive Defendant.

Case No. CGC-23-611166 ih LoxbposEp) ORDER SUSTAINING DEFENDANTS’ DEMURRER TO THE FIRST AMENDED COMPLAINT WITHOUT LEAVE TO AMEND

RIPPLE LABS INC.,

Cross-Complainant, Vv.

JANE DOE a/k/a JULIA G. KO, Cross-Defendant.

Date: May 7, 2025 Time: 9:00 a.m.

Dept.: 302 Action Filed: | December 19, 2023 First Amended Complaint Filed: April 15, 2024 Cross-Complaint Filed: July 16, 2024 t

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eo PROPOSED] ORDER Having duly considered the papers filed in support of Defendant Christian Larsen’s and Defendant and Cross-Complainant Ripple Labs Inc.’s (collectively, “Defendants”) Demurrer to the First Amended Complaint of Jane Doe, and cause appearing therefore, the Court rules as follows: .

Defendants’ demurrer to the First Amended Complaint (FAC) is SUSTAINED WITHOUT LEAVE TO AMEND.

On December 19, 2023, Plaintiff Jane Doe sued Christian Larsen and Ripple Labs, Inc., after she attended a business meeting with Defendant Larsen in San Francisco. Plaintiff alleges that Defendant Larsen groped and attempted to kiss Plaintiff during the meeting. In the operative First Amended, Complaint (FAC), Plaintiff alleges causes of action for: (1) sexual battery, (2) sexual assault, (3) denial of civil rights, and (4) gender violence.

Before this action was filed, on October 3, 2022, Defendant Larsen filed a lawsuit (CGC- 22-602138) against Plaintiff for declaratory relief. In that complaint, Defendant Larsen requested declaratory relief that the allegations in an attached draft complaint were false. (RJN, Exhibit 1.) The attached draft complaint was drafted by an attorney representing Plaintiff and alleged essentially the same conduct Plaintiff alleges in this action and the same claims (along with a few that are not in the current suit). The court entered a default judgment on December 1, 2023, declaring “Christian Larsen did not engage in the conduct described in Exhibit A to plaintiff Christian Larsen’s complaint in this action.” (RJN, Exhibit 5, Page 2.) Plaintiff appealed, causing this court to order a stay to be dissolved when remittitur was issued in the related action. Remittitur was issued on December 12, 2024, upholding the default judgment.

The issue on demurrer under section 430.10(e) is, taking the facts properly pleaded and properly noticed as true, does the challenged cause of action necessarily fail to state a cause for relief. (See CCP section 430.10(e); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) In assessing whether the complaint states a cause of action, the court accepts all properly pleaded material facts, but not contentions, deductions, or conclusions of fact or law. (Minton v. Dignity Health (2019), 39 Cal.App.Sth 1155, 1 161.) “[I]f, on consideration of all facts stated, it appears that plaintiff is

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entitled to any relief against defendant, the complaint will be held good, though facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to cause of action shown, or though plaintiff may demand relief to which he is not entitled under facts alleged.” (Augustine v. Trucco (1954) 124 Cal.App.2d 229, 236, quoting Matteson v. Wagoner

(1905) 147 Cal. 739, 742.)

1. Res Judicata

As apreliminary matter, Defendants conflate issue and claim preclusion. In their statement of demurrer, notice of motion, and headings, they argue res judicata, or claim preclusion, bars this lawsuit. Then, in their memorandum of points and authorities, they argue that “Plaintiff is precluded from relitigating the issue of whether Mr. Larsen engaged in the conduct complained of during the January 2018 encounter...” (MPA, 17.) Defendants also describe the collateral estoppel aspect of the res judicata doctrine. (Id.)

“Preclusion comes in two main forms: claim preclusion and issue preclusion.” (Grande v. Eisenhower Medical Center (2022) 13 Cal.5th 313, 323.) The two forms were previously under the umbrella term of res judicata, but now have separate names and elements. (Samara v. Matar

(2018) 5 Cal.5th 322, 326.) “Claim and issue preclusion have different requirements. We have described claim preclusion as applying only when a second suit involves (1) the same cause of action (2) between the same parties [or their privies] (3) after a final judgment on the merits in the first suit. Issue preclusion, by contrast, applies only (1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.” (Grande, 13 Cal.5th at 323 (internal citations and quotations omitted).)

Plaintiff argues that neither form of preclusion applies if the previous judgment was the result of fraud. She claims the fraud here was serving that complaint improperly. However, the Court of Appeal affirmed the trial court’s refusal to relieve her of the default judgment for that very reason, improper service. The finding, which is now part of a final judgment, is law of the case and binding here. Plaintiff provides no basis for not treating this issue as resolved. Thus, the

court accepts it as settled that Defendant did not commit fraud or serve the complaint improperly.

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A. Claim Preclusion

The elements of claim preclusion are met here. First, this suit involves the same causes of action as the previous suit. While the relief sought was different, there can be no doubt that the first judgment resolved al the claims presented in the Plaintiffs substantially similar draft complaint against her. (See Mercola v. Chester (1950) 97 Cal.App.2d 140, 143 [declaratory judgment has a preclusive effect with respect to all questions essential to and determined by the judgment]; Gates v. Superior Court (1986) 178 Cal.App.3d 301, 308; 26 Cal. Jur. 3d Declaratory Relief Section 93 [declaratory judgment is res judicata with respect to all questions essential to and determined by the judgment.”].) The two actions were between the same parties or their privies. And the merits of Plaintiffs current allegations and claims were necessarily and definitively resolved in the first action against Plaintiff. A default is an adjudication on the merits. The judgment in the first action is now final. Given the claims Against Defendant Larsen fail, it follows the claims against Defendant Ripple Labs, Inc. fail because Plaintiff's theory of liability is Ripple is vicariously liable for the results of Larsen’s misconduct, which the first judgment definitively resolved did not occur. Plaintiff has not identified a basis by which she can cure this fundamental defect with her current claims. Thus, the demurrer is sustained without leave to amend under claim preclusion as to both Defendants.

B. Issue Preclusion

In addition, issue preclusion bars Plaintiff’s claims. Issue preclusion applies: (1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party. (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341.) The judgment in the first action is final. In the first action, the court adjudicated the issues presented in this action. The issues were actually litigated and necessarily decided in the first action; otherwise, it would not have been possible for the court to order the relief it did. And the preclusion is being asserted against Plaintiff Doe, who was a party to the first action. The court’s determination in the related action that “Christian Larsen did not engage in the conduct described in Exhibit A to plaintiff Christian Larsen’s complaint in

this action” is binding on the factual issues alleged here. The only factual basis for Plaintiff's

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causes of action appears to be the conduct by Defendant Larsen, which was already adjudicated to have not occurred. Thus, all the claims fail as to him. Defendant Ripple Labs, Inc.’s liability is premised entirely on the factual allegations against Defendant Larsen. The entire complaint hinges on Defendant Larsen’s conduct; thus, leave to amend is inappropriate. The demurrer is sustained without leave to amend on issue preclusion grounds.

2, Other grounds for demurrer The demurrer is sustained on the following independent grounds as well.

A. Vicarious liability Defendants assert the FAC fails to allege sufficient facts to plead that Defendant Ripple Labs is vicariously liable for all claims. The FAC asserts only that “Defendant acted in the course and scope of his employment with the consent, agency or permission, of all Ripple Labs, Inc.” (FAC, 2.) This assertion is a conclusion of law and is disregarded. All claims against Ripple Labs, Inc. fail for lack of support.

Next, Defendants assert that Ripple Labs cannot be held liable for Gender Violence under Civil Code section 52.4(e). This is persuasive. This subdivision provides: “Notwithstanding any other laws that may establish the liability of an employer for the acts of an employee, this section does not establish any civil liability of a person because of his or her status as an employer, unless the employer personally committed an act of gender violence. There is no allegation in the FAC that Ripple Labs committed any acts of gender violence. The complaint only ever describes Ripple Labs as vicariously liable. The third cause of action against Ripple Labs fails for this reason as well.

B. Statute of Limitations Last, Defendants assert the relevant statutes of limitations bar the third and fourth causes of action. As to the third cause of action, the court’s ruling above moots the issue. On the fourth cause of action, it appears that even with the tolling agreements, this claim is barred by the statute of limitations. Plaintiff concedes that the tolling agreements extended the limitations period by approximately 15 months. If the incident occurred in January 2018, and the statute of limitations

on the Unruh claim (the fourth cause of action) is three years; even with all tolling the limitations

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period would have run well before December 2023. The fourth cause of action, thus, fails under the statute of limitations.

Finally, Defendants’ request for judicial notice (RJN) under California Evidence Code Section 452(d) is granted. Notice is limited to the relevant facts properly subject to notice given the materials presented and does not, for example, extend to the truth of assertions in pleadings or transcripts. (See Richtek USA, Inc. v. UPI Semiconductor Corp. (2015) 242 Cal.App.4th 651, 659- 660.) “Although the existence of a document may be judicially noticeable, the truth of statements contained in the document and its proper interpretation are not subject to judicial notice if those matters are reasonably, disputable.” (Fremont Indem. Co. v. Fremont Gen. Corp. (2007) 148 Cal.App.4th 97, 114.) Vv

IT IS SO ORDERED.

DATED: _who, 4 202s Boe DGE ERIOR COURT

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