United States District Court, W.D. Washington, Seattle
DAVID V. MYERS and SHIVA Y. STEIN, derivatively on behalf of STARBUCKS CORPORATION, Plaintiffs,
TROY ALSTEAD, MARY N. DILLON, ROBERT M. GATES, MELLODY HOBSON, KEVIN R. JOHNSON, SCOTT MAW, JOSHUA COOPER RAMO, HOWARD SCHULTZ, JAMES G. SHENNAN, JR., CLARA SHIH, JAVIER G. TERUEL, MYRON E. ULLMAN, III, CRAIG E. WEATHERUP, Defendants, and STARBUCKS CORPORATION, Nominal Defendant.
Honorable Richard A. Jones United States District Judge.
matter comes before the Court on Nominal Defendant Starbucks
Corporation's (“Starbucks”) and the
Individual Defendants' Motion to Dismiss Complaint for
Breach of Fiduciary Duties and Unjust Enrichment. Dkt. ## 15,
16. The Court is also in receipt of Defendants' unopposed
Request for Judicial Notice. Dkt. # 18. Having reviewed the
briefs submitted by the parties and the relevant portions of the
record, the Court finds oral argument unnecessary. For the
reasons that follow, the Court GRANTS
Starbucks' Motion and the Request for Judicial Notice,
and terminates the Individual Defendants' motion as
are shareholders of Starbucks. Based on media reports,
Plaintiffs allege that Starbucks underpaid its taxes in the
European Union (EU) between 1998 and 2012. Dkt. 4-3
(Complaint) at ¶ 52. The United Kingdom's Parliament
inquired into Starbucks' EU tax structure “to
understand why [Starbucks doesn't] pay the corporate tax
that it appears, on the facts, is due.” Id. at
¶ 54. On December 6, 2012, Starbucks announced to the
London Chamber of Commerce that it would resolve the issue by
paying ten million pounds each year for 2013 and 2014.
Id. at ¶ 60.
Starbucks had entered into an advanced pricing agreement
(“APA”) with the Netherlands. Id. at
¶ 62. The APA established how Starbucks was to calculate
its taxes due to the Netherlands over the course of ten
years. In July 2013, the European Commission
(“Commission”) began an investigation into the
APA on suspicion that the agreement was in violation of
anti-competition prohibitions. Id. at ¶ 62. The
investigation became public on June 11, 2014 when the
Commission confirmed that “it had opened a formal,
in-depth investigation into the corporate structure of
Starbucks in the Netherlands[.]” Id. at ¶
October 21, 2015, the Commission “issued a decision
finding that Starbucks' APA with the Dutch tax
authorities artificially lowered tax[es] paid by its
subsidiary . . . .” Id. at ¶ 66. The
Commission considered the APA to be in violation of Article
107(1) of the Treaty of Functioning of the European Union,
which prevents member states, such as the Netherlands, from
giving corporations unfair competitive advantages.
Id. As a result, the Commission ordered the
Netherlands to collect thirty (30) million euros from
Starbucks. Id. at ¶ 67. The Netherlands
appealed the decision. Id. at ¶ 68.
on the tax schemes that led to Starbucks' payouts to the
EU and the Netherlands, Plaintiffs issued demand letters (the
“Demands”) to the Starbucks' Board of
Directors (“Board”) “to investigate and
commence an action against certain current and/or former
directors and executive officers of the Company.”
Id. at ¶ 79. The Board considered the letters
and relevant documents, and discussed the Demands at two
Board meetings and an executive session. Id. at
¶ 80, Ex. C. On May 24, 2016, the Board refused the
were unsatisfied with the Board's investigation and
subsequent refusal and brought this action on behalf of
Starbucks, alleging that the Board breached their fiduciary
duties and were unjustly enriched as a result. Id.
at ¶¶ 88-104. Defendants now move the Court to
dismiss the lawsuit.
Civ. P. 12(b)(6) permits a court to dismiss a complaint for
failure to state a claim. The rule requires the court to
assume the truth of the complaint's factual allegations
and credit all reasonable inferences arising from those
allegations. Sanders v. Brown, 504 F.3d
903, 910 (9th Cir. 2007). A court “need not accept as
true conclusory allegations that are contradicted by
documents referred to in the complaint.” Manzarek
v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025,
1031 (9th Cir. 2008). The plaintiff must point to factual
allegations that “state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 568 (2007). If the plaintiff
succeeds, the complaint avoids dismissal if there is
“any set of facts consistent with the allegations in
the complaint” that would entitle the plaintiff to
relief. Id. at 563; Ashcroft v. Iqbal, 556
U.S. 662, 679 (2009).
typically cannot consider evidence beyond the four corners of
the complaint, although it may rely on a document to which
the complaint refers if the document is central to the
party's claims and its authenticity is not in question.
Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006).
A court may also consider evidence subject to judicial
notice. United States v. Ritchie, 342 F.3d 903, 908
(9th Cir. 2003).
Standing Under Federal Rule of ...