Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Hydroxycut Marketing and Sales Practices Litigation

July 29, 2010

IN RE HYDROXYCUT MARKETING AND SALES PRACTICES LITIGATION
KERRY M. DONALD AND NADIA DONALD, PLAINTIFFS,
v.
IOVATE HEALTH SCIENCES GROUP, INC., IOVATE HEALTH SCIENCES U.S.A. INC., IOVATE HEALTH SCIENCES INC., MUSCLETECH RESEARCH AND DEVELOPMENT, INC., GNC CORPORATION, GN OLDCO CORPORATION (F/K/A GENERAL NUTRITION CORPORATION), GENERAL NUTRITION COMPANIES INC., GENERAL NUTRITION CENTERS, INC., GENERAL NUTRITION CENTER INTERNATIONAL, INC., AND GENERAL NUTRITION WORLDWIDE, INC., DEFENDANTS.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

(S.D. Cal. No. 10CV00910)

ORDER DENYING MOTION TO REMAND

Plaintiffs Kerry M. Donald and Nadia Donald ("Plaintiffs") have filed a motion to remand ("Motion") this action to state court. For the reasons discussed below, Plaintiffs' motion to remand is DENIED WITHOUT PREJUDICE.

I. BACKGROUND

On January 22, 2010, Plaintiffs filed a complaint in the Supreme Court of New York, Kings County (Index No. 1948/2010). On February 18, 2010, Plaintiffs filed an Amended Complaint ("FAC"). On March 25, 2010, Defendants filed a Notice of Removal and the case was transferred to the Eastern District of New York. On April 23, 2010, Plaintiffs filed a Motion to Remand ("Motion"). On April 26, 2010, the case was transferred to join the Multidistrict Litigation ("MDL") in the Southern District of California. Upon transfer, the case became part of the pending MDL entitled In re Hydroxycut Marketing and Sales Practices Litigation (09md2087), and was assigned a separate civil case number in the Southern District of California (10cv910). On May 4, 2010, Plaintiffs re-filed their Motion to Remand in the MDL action in the Southern District of California. The Court held a hearing on the motion on June 30, 2010.

II. LEGAL STANDARD

Section 1441 permits removal of any action over which the federal court would have original jurisdiction. 28 U.S.C. § 1441. If an action is not founded on a claim or right arising under the Constitution, treaties or laws of the United States, it is only removable if none of the defendants is a citizen of the state in which the action is brought. 28 U.S.C. § 1441(b). Title 28 U.S.C. § 1447(c) provides for remand based on lack of subject matter jurisdiction "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction . . . ." 28 U.S.C. § 1447(c).

Section 1332 gives federal district courts jurisdiction over civil actions in which the amount in controversy exceeds $75,000 and is between citizens of different states. 28 U.S.C. § 1332(a). For the purposes of § 1332 and § 1441, a corporation is deemed a citizen of any state of which it has been incorporated and of the state where it has its principal place of business. 28 U.S.C. § 1332(c)(1). A corporation's principal place of business is its "nerve center" - "the place where the corporation's high level officers direct, control, and coordinate the corporation's activities." Hertz Corp. v. Friend, 130 S.Ct. 1181, 1186 (2010). For diversity jurisdiction to exist, none of the defendants can be a citizen of the same state as one of the plaintiffs. Since Plaintiffs are citizens of New York, none of Defendants can be citizens of New York.

III. DISCUSSION

Plaintiff, Kerry M. Donald, alleges that, after ingesting Hydroxycut products manufactured, marketed and sold by defendants, he experienced severe muscle pain and discolored urine and was hospitalized for ten days. (FAC ¶ 52.) In the FAC, Plaintiffs bring ten claims against Defendants. (FAC ¶¶ 61-133.)

Based on the representations at the motion hearing and the record before the Court, the Court makes the following findings of fact. Hydroxycut is manufactured by Iovate Health Sciences, Inc. ("Health Sciences"), which is located in Oakville, Ontario, Canada. It has 300 employees in the Toronto area and it engages in research, development and advertising. Health Sciences contracts with other corporations who actually manufacture Hydroxycut. Health Sciences purchases the ingredients from suppliers in the United States which are shipped to the manufacturers. Iovate Health Sciences U.S.A., Inc. ("Iovate U.S.A.") purchases the Hyrdoxycut from Health Sciences and has it warehoused at the facility operated by Kuehne and Nagel in Blasdell, New York. Terry Begley ("Begley") is the sole director and employee of Iovate U.S.A. and operates out of his office in Oakville, Ontario (a suburb of Toronto). Begley negotiates and enters into contracts with retailers. He then directs Kuehne and Nagel to deliver a specific quantity of product out of its Blasdell warehouse to the retailers. Kuehne and Nagel has discretion to determine what portion of product of the ultimate contract amount to ship on a specific date. However, Kuehne and Nagel acts as an independent contractor executing contracts negotiated and entered into by Begley from his office in Ontario. The retailers send returns to the Kuehne and Nagel run warehouse. The retailers pay Iovate U.S.A. by sending payments to a lock box at the Royal Bank of Canada. Iovate U.S.A. is incorporated in Delaware and has an agent for service of process there. Counsel for the defendants in this case communicate with its clients through in house counsel at Iovate Health Sciences Research, Inc. in Oakville, Ontario. Counsel's invoice for work done on this case are sent to the offices in Oakville, Ontario. Counsel is paid through checks drawn on the Royal Bank of Canada.

Plaintiffs seek a remand of this case on three grounds: (1) that the Court lacks diversity jurisdiction because Defendant Iovate Health Sciences U.S.A. Inc. is a citizen of New York; (2) that Defendants should be judicially estopped from declaring that Iovate U.S.A.'s principal place of business is not in New York; and (3) that Defendants' notice of removal was defective. Plaintiffs also seek attorney fees and costs pursuant to 28 U.S.C. § 1447(c).

A. Principal Place of Business

The parties do not dispute that all the defendants other than Iovate U.S.A. are citizens of states other than New York. Thus, the question for complete diversity is ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.