The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United 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.
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.
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 be a
waste of time and effort to require Plaintiffs to file a new complaint
for purposes of separating out Pyle's claim and re-labeling it
Defendants also argue that Plaintiff Quick's claim for "fraud and misrepresentation" should be dismissed because under Wyoming law, the "nondisclosure of information cannot support a claim for misrepresentation." Again, the issue is not whether Plaintiff has a legal claim but what the precise label should be under state law. Wyoming does recognize a cause of action for fraudulent concealment. See Throckmartin v. Century 21 Top Realty, 226 P.3d 793, 808 (Wyo. 2010). ...