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In Re Hydroxycut Marketing and Sales v. Iovate Health Sciences Usa

August 10, 2012

IN RE HYDROXYCUT MARKETING AND SALES PRACTICES LITIGATION GILBERT LAURELES, PLAINTIFF,
v.
IOVATE HEALTH SCIENCES USA, INC., ET AL. DEFENDANTS.



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

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

Defendants Iovate Health Sciences U.S.A., Inc., Iovate Health Sciences International Inc., Kerr Investment Holding Corp. f/k/a Iovate Health Sciences Group Inc., Iovate Health Sciences Research Inc., Iovate HC 2005 Formulations Ltd. n/k/a HDM Formulations Ltd., Muscletech Research and Development Inc., General Nutrition Centers, Inc., and GNC Corporation (collective "Defendants") have filed a motion to dismiss Count V of the Complaint and Plaintiff's claim for exemplary damages. For the reasons discussed below, Defendants' motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

On May 2, 2011, Plaintiff Gilbert Laureles commenced this action in the Northern District of Texas. Subsequently, the action 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. 11cv1325 BTM(KSC)).

Plaintiff alleges that he purchased a Hydroxycut product from GNC in Abilene, Texas. (Compl. ¶ 7.1.) In May 2009 and thereafter, Plaintiff suffered injuries, including, but not limited to, liver injury and pancreatitis. (Compl. ¶ 7.3.) Plaintiff alleges that the Hydroxycut product was unsafe because it could cause serious injury to users. (Compl. ¶ 6.12.) Plaintiff alleges that Defendants failed to inform consumers regarding the heath risks posed by the Hydroxycut products and made misrepresentations regarding the products' safety in labeling and packaging. (Compl. ¶ 6.13.)

Plaintiff asserts the following claims against Defendants: (1) strict products liability; (2) negligence; (3) misrepresentation of facts; (4) breach of implied warranty; and (5) fraudulent concealment.

II. STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 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 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 prove 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, 565 U.S. 662, 679 (2009) (internal quotation marks omitted). Only a complaint that states a plausible claim for relief will survive a motion to dismiss. Id.

III. DISCUSSION

Defendants move to dismiss Plaintiff's fraudulent concealment claim as well as Plaintiff's claim for exemplary damages.

Plaintiff represents that he does not oppose the dismissal of his fraudulent concealment claim. Therefore, the Court grants Defendants' motion as to Count V.

Defendants also move to dismiss Plaintiff's claim for exemplary damages. In Paragraphs 15.1 and 15.2 of the Complaint, Plaintiff alleges that Defendants should be punished for their actions through the imposition of punitive damages. According to Plaintiff, "the conduct of Defendants involved either deliberate or purposeful injury to him or actual subjective awareness that serious injury was highly probable, and that such conduct objectively involved an extreme degree of risk or serious injury to him. Said malice or gross negligence was a proximate cause of the injuries and damages suffered by Plaintiff as set out herein." (Compl. ¶ 15.2.)

Defendants contend that Plaintiff has failed to set forth factual allegations supporting his claim for exemplary damages. Under Texas law, exemplary damages may be awarded if the plaintiff proves by clear and convincing evidence that the harm suffered by the plaintiff results from fraud, malice, or gross negligence.*fn1 Tex. Civ. Prac. & Rem. Code Ann. § 41.003. "Gross negligence" is defined as an act or omission:

(A) which when viewed objectively from the standpoint of the actor at the time of its occurrence involves an extreme degree of risk, considering the probability and ...


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