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In Re Hydroxycut Marketing and Sales v. Iovate Health Sciences U.S.A.

August 29, 2011

IN RE HYDROXYCUT MARKETING AND SALES PRACTICES LITIGATION JERRY MCCULLOUGH,
PLAINTIFF,
v.
IOVATE HEALTH SCIENCES U.S.A. INC., ET AL., DEFENDANTS.



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

ORDER GRANTING MOTION TO DISMISS

Defendants Iovate Health Sciences U.S.A. Inc., Iovate Health Sciences Inc., Iovate Health Sciences Research Inc., Iovate Health Sciences International Inc., Muscletech Research and Development Inc., Vitaquest International, LLC, Wal-Mart Associates, Inc., Wal-Mart Stores, Inc., Wal-Mart Stores East, Inc., and Wal-Mart Stores East, LP ("Defendants") have filed a motion to dismiss Counts VI and VII of Plaintiff Jerry McCullough's complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b). Defendants have further moved to dismiss all claims against Wal-Mart. For the reasons discussed below, Defendants' motion to dismiss is GRANTED.

I. BACKGROUND

On August 23, 2010, Plaintiff filed his complaint in the Southern District of New York (Case No. 1:10-civ-6317). On December 14, 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 (Case No. 09md2087) currently pending before the Court. Upon transfer, the case was assigned a separate civil case number in the Southern District of California (Case No. 10cv2557). On January 19, 2011, Defendants filed a motion to dismiss Counts VI and VII of the complaint, and all claims against Wal-Mart. On February 25, 2011, Plaintiff filed his opposition to Defendants' motion to dismiss. On March 4, 2011, Defendants filed a reply in support of their motion to dismiss.

After Defendants filed their motion to dismiss, Plaintiff filed a First Amended Complaint (FAC) pursuant to a stipulation of the parties. The Court construes the motion to dismiss to apply to the FAC, filed on April 28, 2011.

II. LEGAL STANDARDS

A. Federal Rule of Civil Procedure 12(b)(6)

A motion to dismiss under Rule 12(b)(6) should be granted only where a plaintiff's complaint lacks a "cognizable legal theory" or sufficient facts to support a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). When reviewing a motion to dismiss, the allegations of material fact in a plaintiff's complaint are taken as true and construed in the light most favorable to the plaintiff. See Parks Sch. Of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Although detailed factual allegations are not required, factual allegations "must be enough to raise a right to relief above the speculative level." Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not show[n] - that the pleader is entitled to relief." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009) (internal quotation marks omitted). Only a complaint that states a plausible claim for relief will survive a motion to dismiss. Id.

B. Federal Rule of Civil Procedure 9(b)

A motion to dismiss under Rule 9(b) tests the sufficiency of a plaintiff's statement of a claim for fraud. Rule 9(b) requires that a plaintiff state a claim for fraud with particularity as follows:

In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.

Fed. R. Civ. P. 9(b). A court may dismiss a claim of fraud when its allegations fail to satisfy Rule 9(b)'s heightened pleading requirements. Vess v. Ciba-Geigy Corp. U.S.A., 317 F.3d 1097, 1107 (9th Cir. 2003). The Ninth Circuit has confirmed:

Rule 9(b) demands that, when averments of fraud are made, the circumstances constituting the alleged fraud be specific enough to give defendants notice of the particular misconduct ... so that they can defend against the charge and not just deny that they have done anything wrong. Averments of fraud must be accompanied by the 'who, what, when, where, and how' of the misconduct charged. A plaintiff must set forth more than the neutral facts necessary to ...


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