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Agricola Baja Best, S. De. R.L. De C.V., A Business Entity Organized Under the Laws of the Republic of Mexico v. Harris Moran Seed Company

February 15, 2012

AGRICOLA BAJA BEST, S. DE. R.L. DE C.V., A BUSINESS ENTITY ORGANIZED UNDER THE LAWS OF THE REPUBLIC OF MEXICO, PLAINTIFF,
v.
HARRIS MORAN SEED COMPANY, A CALIFORNIA CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Irma E. Gonzalez United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS [Doc. No. 6]

Presently before the Court is Defendant Harris Moran Seed Company ("Defendant")'s motion to dismiss Plaintiff Agricola Baja Best ("Plaintiff")'s complaint. [Doc. No. 6.] For the reasons below, the Court GRANTS IN PART and DENIES IN PART Defendant's motion.

BACKGROUND

The following facts are taken from the complaint. Plaintiff is a commercial agricultural grower of strawberries and tomatoes, among other things, and is a business entity organized under the laws of the Republic of Mexico with its principal place of business in Mexico. [Doc. No. 1, Compl. ¶ 3.] Defendant is a commercial seller of seeds, including tomato seeds, and is a corporation organized under the laws of California with its principal place of business in California. [Id. ¶ 4.] On or about November 24, 2010, Plaintiff entered into an oral contract with Defendant for the sale of 2.06 pounds of "Espartaco F1" variety tomato seeds and 3.02 pounds of "Moctezuma F1" variety tomato seeds from Defendant to Plaintiff for approximately $90,177. [Id. ¶ 5.]

Plaintiff sought to purchase the tomato seeds to cultivate 37.7 hectacres of farmland in Mexico. [Compl. ¶ 15.] Plaintiff's farmland is located in an area where it is difficult to grow tomatoes due to a large population of thrips in the area--winged insects that spread the tomato spotted wilt virus ("spotted wilt"), a virus that is often fatal to affected tomato crops. [Id. ¶ 11.] Plaintiff alleges that its fields are under constant thrip control methods. [Id.] Due to these conditions, the use of tomato seeds that are not susceptible to spotted wilt is essential for Plaintiff's farming operations. [Id. ¶ 12.]

Prior to purchasing the tomato seeds, Plaintiff expressed its concern about its spotted wilt problem to Defendant. [Compl. ¶ 12.] Plaintiff alleges that Defendant's sales representatives, including but not limited to Jorge Machado, recommend the "Espartaco F1" and "Moctezuma F1" variety tomato seeds as the best available option for Plaintiff's particular needs. [Id.] Defendant classifies its plant varieties using four different levels of resistance to pest or pathogen infection:

(1) Immunity ("I"); (2) Resistance ("R"); (3) Intermediate Resistance ("IR"); and (4) Susceptible ("S").*fn1 [Compl. ¶¶ 8-9, Ex. 1.] Plaintiff alleges that Defendant warranted and misrepresented to Plaintiff that the tomato seeds it bought had Intermediate Resistance ("IR") to spotted wilt and that the "Moctezuma F1" tomato seeds had a high ability to adapt to different areas with spotted wilt incidence. [Id. ¶ 10.]

Plaintiff alleges that the tomato seeds it purchased did not have Intermediate Resistance ("IR") as defined by Defendant to spotted wilt and instead were highly Susceptible ("S") to spotted wilt. [Compl. ¶ 14.] Plaintiff alleges that Defendant's defective tomato seeds damaged Plaintiff's tomato harvest. [Id. ¶ 19.] Plaintiff had estimated it would be able to obtain a total productions of 377,000 tomato boxes from the fields planted with the seeds that it purchased from Defendant. [Id.] However, Plaintiff was only able to sell 36,591 tomato boxes for export and 35,396 mini-boxes to the domestic market. [Id. ¶ 20.] Plaintiff also alleges that it incurred production costs related to the harvest, including fertilizer, irrigation, and labor. [Id.]

On October 26, 2011, Plaintiff filed a complaint against Defendant alleging eight causes of action for: (1) breach of contract, (2) breach of express warranty, (3) breach of implied warranty of merchantability, (4) breach of implied warranty of fitness for a particular purpose, (5) products liability, (6) negligence, (7) negligent misrepresentation, and (8) fraud. [Compl.] By the present motion, Defendant seeks to dismiss Plaintiff's claims for breach of contract, implied warranty, product liability, negligent misrepresentation, and fraud. [Doc. No. 6-1, Def.'s Mot.]

DISCUSSION

I. Legal Standards for a Motion to Dismiss

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a). A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. FED. R. CIV. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must accept all factual allegations pleaded in the complaint as true, and must construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir.1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556).

However, "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." Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)) (alteration in original). A court need not accept "legal conclusions" as true. Iqbal, 129 S. Ct. at 1949. In spite of the deference the court is bound to pay to the plaintiff's allegations, it is not proper for the court to assume that "the [plaintiff] can prove facts that [he or she] has not alleged or that defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). "Where a complaint pleads facts that ...


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