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In Re Hydroxycut Marketing and Sales Practices Litigation v. Muscletech Research and Development

May 23, 2011

IN RE HYDROXYCUT MARKETING AND SALES PRACTICES LITIGATION DEWAYNE AUSTIN, AN INDIVIDUAL; JOSELYN HARDWICK, AN INDIVIDUAL; HEATHER PYLE, AN INDIVIDUAL; CARL QUICK, JR.,, AN INDIVIDUAL, PLAINTIFFS,
v.
MUSCLETECH RESEARCH AND DEVELOPMENT, INC., ET AL., DEFENDANTS.



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

ORDER DENYING MOTION TO DISMISS AND DENYING AS MOOT MOTION TO AMEND COMPLAINT

Defendants have filed a motion to dismiss Plaintiffs' Complaint for failure to state a claim. Plaintiffs have filed a motion to file an amended complaint that adds factual allegations in support of their fraud claims. For the reasons discussed below, Defendants' motion to dismiss is DENIED, and Plaintiffs' motion for leave to amend is DENIED AS MOOT.

I. BACKGROUND

On July 30, 2010, Plaintiffs filed their complaint in the Northern District of Alabama (Alabama Civil Case No. 10-cv-02093-RDP). On November 4, 2010, the case was transferred to the Southern District of California as a tag-along action to the In re Hydroxycut Marketing and Sales Practices multi-district litigation currently pending before the Court. Upon transfer, the case was assigned a separate civil case number in the Southern District of California (Case No. 10cv2269 BTM(CAB)).

Plaintiff Dewayne Lee Austin is a resident of New Mexico. Plaintiff Joselyn A. Hardwick is a resident of Alaska. Plaintiff Heather Pyle is a resident of Arkansas. Plaintiff Carl Quick, Jr. is a resident of Wyoming. According to the Complaint, Plaintiffs purchased certain Hydroxycut products and suffered physical injury as a result of the consumption of such products.

Plaintiffs assert the following claims against the defendants: (1) negligence/wantonness; (2) product liability; (3) intentional misrepresentation; (4) negligent misrepresentation; (5) breach of express warranty; (6) breach of implied warranty of merchantability; (7) breach of implied warranty of fitness for particular purpose; (8) unjust enrichment; and (9) fraud and misrepresentation.

After Defendants filed their motion to dismiss, Plaintiffs filed a First Amended Complaint (mislabeled "Second Amended Complaint") pursuant to a stipulation of the parties. The First Amended Complaint ("FAC") adds new defendants as well as more factual allegations in support of Plaintiffs' fraud claim. The Court construes the motion to apply to the FAC.

II. DISCUSSION

A. Fraud Claims

Defendants contend that Plaintiffs' fraud-based claims (intentional misrepresentation,

negligent misrepresentation, and fraud and misrepresentation) fail because Plaintiffs have failed to satisfy the pleading requirements of Fed. R. Civ. P. 9(b).

Originally, Plaintiffs failed to identify what Hydroxycut product they took, when the product was consumed, what fraudulent statements or materials they relied on, how or where the misrepresentations were made, and when the fraudulent misrepresentations occurred.

In the FAC, Plaintiffs have added factual allegations remedying these defects. (FAC ¶ 51.) The Court is satisfied that Plaintiffs have pled fraud with sufficient specificity.

Defendants argue that Plaintiff Pyle's claim for "negligent misrepresentation" must be dismissed because Arkansas state law does not recognize such a cause of action. However, Arkansas recognizes a cause of action for "constructive fraud," which is "the making of misrepresentations by one who, not knowing whether they are true or not, asserts them to be true without knowledge of their falsity and without moral guilt or evil intent." South County, Inc. v. First Western Loan Co., 871 S.W.2d 325, 327 (Ark. 1994). The Court will not dismiss Pyle's claim merely because it is mislabeled "negligent misrepresentation." It would ...


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