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Kim Allen and Lainie Rideout, On Behalf of v. Similasan Corporation and Similasan Ag

May 14, 2013

KIM ALLEN AND LAINIE RIDEOUT, ON BEHALF OF THEMSELVES, ALL OTHERS SIMILARLY SITUATED, AND THE GENERAL PUBLIC, PLAINTIFF,
v.
SIMILASAN CORPORATION AND SIMILASAN AG, DEFENDANTS.



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

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

On April 18, 2012, Defendant Similasan Corporation ("Defendant" or "Similasan") filed a motion to dismiss or strike Plaintiffs' First Amended Complaint ("FAC") (ECF No. 14). For the reasons below, Defendants' motion is hereby GRANTED, but its request for reasonable attorney's fees is DENIED. The Court DISMISSES the FAC with leave to amend within twenty-one (21) days.

I. BACKGROUND

Plaintiffs Kim Allen and Lainie Rideout ("Plaintiffs") filed the FAC against Similasan Corporation and Similasan AG on April 2, 2012, alleging, inter alia, violations of California's Consumers Legal Remedies Act ("CLRA"), California Unfair Competition Law ("UCL"), California False Advertising Law ("FAL"), breach of express and implied warranties, and unjust enrichment. Similasan AG has since been dismissed by joint motion of the parties. (See ECF No. 25.)

Plaintiff Kim Allen is a resident of Florida. Plaintiff Lainie Rideout is a resident of California. Defendant Similasan Corporation markets and sells homeopathic products throughout the United States. Plaintiffs allege that they purchased various products*fn1 on the basis of unsubstantiated advertising claims made by Defendant on the products' packaging and on Defendant's website, and that Defendant was unjustly enriched thereby.

II. LEGAL 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, 556 U.S. 662, 679 (2009) (internal quotation marks omitted).

III. DISCUSSION

Plaintiffs assert six causes of action: (1) violation of the CLRA, (2) violation of the UCL, (3) violation of the FAL, (4) breach of express warranty, (5) breach of implied warranty of merchantability, and (6) money had and received, money paid and unjust enrichment.

In its motion to dismiss, Similasan argues, inter alia, that Plaintiff Rideout was improperly joined, that the Court has no personal jurisdiction over Similasan as to Plaintiff Allen's claims, that both Plaintiffs lack standing as to particular claims, that Plaintiffs' FAC has failed to meet certain pleading requirements, and that Plaintiff Allen's class allegations should be stricken because her claims are not typical of the class. Similasan also requests reasonable attorneys' fees, alleging that the lawsuit was brought in bad faith.

The Court addresses each of these arguments in turn.

A. Improper Joinder

Similasan argues that Plaintiff Rideout was improperly joined into this action in the FAC because her claims involve different products and arise out of different transactions, with no questions of law or fact common to both sets of claims. Federal Rule of Civil Procedure 20 allows the permissive joinder of plaintiffs where: (1) they assert any right to relief jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (2) any question of law or fact common to all plaintiffs will arise in the action. Fed.R.Civ.P. 20(a)(1).

The Supreme Court and Ninth Circuit have both made clear that Rule 20 "is to be construed liberally in order to promote trial convenience and to expedite the final determination of disputes, thereby preventing multiple lawsuits." League to Save Lake Tahoe v. Tahoe Reg'l Planning Agency, 558 F.2d 914, 917 (9th Cir. 1977). See also United Mine Workers of America v. Gibbs, 383 U.S. 715, 724 (1966) ("Under the rules, the impulse is toward entertaining the broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and remedies is strongly encouraged.")

With that guidance in mind, the Court holds that Plaintiff Rideout was not improperly joined. While the concept of a "series of transactions or occurrences" is a fluid one, a broad reading of the language, as mandated by the case law, easily encompasses transactions in which both plaintiffs purchased Similasan's products on the basis of allegedly false claims by the defendant.

B. Personal Jurisdiction

Defendant Similasan also argues that the Court does not have personal jurisdiction over it. California's long-arm statute allows a court to exercise personal jurisdiction "to the full extent permitted by due process." Bancroft & Masters, Inc. v. Augusta Nat. Inc., 223 F.3d 1082, 1086 (9th Cir. 2000); see Cal. Civ. Code § 410.10. A court has general personal jurisdiction where the defendant has "substantial" or "continuous and systematic" contacts with the forum state, such that the defendant may be haled into court for any action therein. See id. The defendant has offered evidence that it is a Colorado-based company that has no presence in California aside from limited sales through a handful of retailers, and the plaintiffs have not alleged any facts which contradict this. Therefore, the Court finds that the defendant has insufficient ties to establish general jurisdiction.

With regard to specific jurisdiction, it exists where "(1) the defendant has performed some act or consummated some transaction within the forum or otherwise purposefully availed himself of the privileges of conducting activities in the forum, (2) the claim arises out of or results from the defendant's forum-related activities, and (3) the exercise of jurisdiction is reasonable." Id. Defendant draws attention to the second prong, arguing that Plaintiff Allen's claims should be dismissed for lack of jurisdiction because she alleges that she bought Defendant's products in Florida.

The plaintiffs argue that the Court should hear Plaintiff Allen's claims because they are related to Plaintiff Rideout's claims, insofar as they involve allegations that Similasan engaged in deceptive marketing practices. Under the doctrine of pendent personal jurisdiction, "a defendant may be required to defend a 'claim for which there is no independent basis of personal jurisdiction so long as it arises out of a common nucleus of operative facts with a claim in the same suit over which the court does have personal jurisdiction.'" CE Distribution, LLC v. New Sensor Corp., 380 F.3d 1107, 1113 (9th Cir. 2004) (quoting Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004)). Such a decision is left to ...


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