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Fernandez v. Obesity Research Institute, LLC

United States District Court, Ninth Circuit

August 28, 2013

DEMARIE FERNANDEZ, ALFONSO MENDOZA, and RHONDA STANLEY, on behalf of all others similarly situated, Plaintiffs,
v.
OBESITY RESEARCH INSTITUTE, LLC, CONTINUITY PRODUCTS LLC, WAL-MART STORES, INC., HENNY DEN UIJL, and BRYAN CORLETT, Defendants.

MEMORANDUM AND ORDER

MORRISON C. ENGLAND, Jr., Chief District Judge.

Plaintiffs DeMarie Fernandez ("Fernandez"), Alfonso Mendoza ("Mendoza") and Rhonda Stanley ("Stanley") (collectively referred to as "Plaintiffs") brought an action against Obesity Research Institute ("ORI"), Continuity Products ("CP"), Wal-Mart Stores ("Wal-Mart"), Henny den Uijl ("Uijl") and Bryan Corlett ("Corlett") (collectively referred to as "Defendants") alleging the following causes of action: (1) Violation of the Magnuson-Moss Warrant Act ("MMWA"); (2) Breach of Warranty; (3) Breach of the Implied Warranty of Merchantability; (4) Unjust Enrichment; (5) Violation of Consumers Legal Remedies Act ("CLRA"); and (6) Violation of the Unfair Competition Law. Several motions are pending before the Court including: (1) Defendants' Motions to Dismiss (ECF Nos. 10 and 12); (2) Defendants' Motion to Change Venue (ECF No. 20); (3) Defendants' Motion to Stay (ECF No. 21); (4) Plaintiffs' Motion to Appoint Class Counsel (ECF No. 26); and (5) Plaintiffs' Motion for Preliminary Injunction (ECF No. 29.)[1] For the reasons discussed below, the Court DENIES Defendants' Motion to Change Venue (ECF No. 20) and Plaintiffs' Motion for Preliminary Injunction (ECF No. 29). The Court GRANTS Defendants' Motion to Stay (ECF No. 21).[2] Because the Court granted Defendants' Motion to Stay, the remaining motions are denied without prejudice.

BACKGROUND[3]

The facts are generally as follows, Plaintiffs bought Defendants' product, Lipozene, which Defendants market as a "weight loss breakthrough" that will "get rid of pounds of body fat without a change in lifestyle." In reality, Lipozene's primary ingredient is konjac root, which is a form of dietary fiber that does not "get rid of pounds of body fat" as promised. Plaintiffs allege that Defendants knew the product was ineffective for weight loss, but they intentionally marketed Lipozene with false and misleading representations about its effectiveness for weight loss anyways.

More specifically, Plaintiff Fernandez lives in Vacaville, California. In late 2012, Fernandez bought Lipozene from a Wal-Mart store in Vacaville, California. The container she bought stated that Lipozene was safe and effective and that it was clinically proven to reduce weight and body fat. Fernandez bought Lipozene because she believed it would help her lose weight, but after using it for several weeks, she concluded Lipozene was ineffective.

Plaintiff Mendoza lives in Covina, California. In February 2013, Mendoza bought three bottles of Lipozene through ORI's toll-free number after watching a television advertisement about the product. The containers Mendoza bought included an image of a Lipozene pill dissolving body fat with a caption that states "78% of weight lost is pure body fat." Mendoza bought the product because he believed it would help him lose weight, but soon concluded that it was worthless.

Plaintiff Stanley lives in Dublin, California. In late 2012, Stanley bought two bottles of Lipozene from a Wal-Mart store in Maysville, California. Stanley bought Lipozene because Stanley believed it would help her lose weight, but several weeks after using it as directed, Stanley concluded it was worthless.

ANALYSIS

A. Motion to Change Venue

"For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). The purpose of Section 1404(a) is to "prevent the waste of time, energy, and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense." Van Dusen v. Barrack , 376 U.S. 612, 616 (1964) (internal quotation marks omitted). On a motion to transfer venue, the moving party must make "a strong showing of inconvenience to warrant upsetting the plaintiff's choice of forum." Hope v. Otis Elevator Co. , 389 F.Supp.2d 1235, 1243 (E.D. Cal. 2005) (quoting Decker Coal Co. v. Commonwealth Edison Co. , 805 F.2d 834, 843 (9th Cir. 1986)). The Court has discretion in deciding whether such transfer is warranted based on an "individualized, case-by-case consideration of convenience and fairness." Van Dusen , 376 U.S. at 622.

Once the court determines a case could have been brought before the proposed transferee court, it must consider a number of private and public factors relating to the interests of the parties and the judiciary. For example, the court may consider: (1) the plaintiff's choice of forum; (2) respective parties' contacts with the forum; (3) contacts relating to the plaintiff's cause of action in the forum; (4) the cost of litigation in either forum; (5) the ease of access to sources of proof; (6) the complexity of the governing law; (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses; and (8) other factors that, in the interest of justice, impact the convenience or fairness of a particular venue. Jones v. GNC Franchising, Inc. , 211 F.3d 495, 498-99 (9th Cir. 2000).

Defendants argue that the U.S. District Court for the Southern District ("Southern District") is a more convenient forum because: (1) OPI's and CP's principal place of business is in San Diego County which is located in the Southern District; (2) all business decisions related to this case were made in San Diego County; (3) ORI's and CP's businesses would be disrupted without a transfer because ORI, CCP, Uijl, Corlett, and their staff would be required to travel to the United States District Court for the Eastern District of California ("Eastern District"); and (5) all of ORI's and CP's business records are located in San Diego County. (ECF No. 20). Defendants also argue that only two of the three named Plaintiffs live in the Eastern District; Mendoza lives in the Central District of California which Defendants insist is closer to the Southern District of California. Further, Defendants argue that if this action is certified as a class action, it will include Plaintiffs from all over the country. Id . Plaintiffs argue the opposite. Plaintiffs argue that transferring the case shifts the inconvenience from Defendants to Plaintiffs. (ECF No. 26).

Venue is proper in the Eastern District because a substantial part of the events occurred within the Eastern District. 28 U.S.C. § 1391 (b)(2) (West). Both Stanley and Fernandez live in the Eastern District, and both Plaintiffs bought Lipozene at Wal-Mart stores in the Eastern District. Defendants insist that the Eastern District is extremely inconvenient for them even though they are located in the Southern District within the same state, not across the county. To date, Defendants have not appeared in the Eastern District despite filing several motions because in the Digital Age most litigation occurs electronically. Physical location means less when electronic filing is available. Both Defendants and Plaintiffs filed their motions electronically. Similarly, Defendants allege that discovery will be burdensome because sources of proof are located in the Southern District. The "ease of access to sources of proof" is an outdated factor, as most discovery will be conducted electronically and the ...


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