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Fenerjian v. Nong Shim Company, Ltd.

United States District Court, N.D. California

March 30, 2015

STEPHEN FENERJIAN, et al., Plaintiffs,
v.
NONG SHIM COMPANY, LTD., et al., Defendants.

ORDER DENYING SAMYANG KOREA'S MOTION TO DISMISS Re: Dkt. No. 142

WILLIAM H. ORRICK, District Judge.

INTRODUCTION

Defendant Samyang Foods Company. Ltd. ("Samyang Korea") moves to dismiss indirect purchaser plaintiffs' antitrust, unfair competition, and unjust enrichment causes of action for failure to plausibly allege that Samyang Korea was part of the price-fixing conspiracy alleged in this matter. Samyang Korea also argues that indirect purchaser plaintiffs' purported nationwide class under California's Cartwright Act is unconstitutional because the Cartwright Act conflicts with other states' laws and because indirect purchaser plaintiffs' have not alleged sufficient contacts between California and the claims of non-California plaintiffs.

Samyang Korea's motion is DENIED. Indirect purchaser plaintiffs allege that Samyang Korea conspired with the other Korean defendants to raise factory-level prices of its noodles in Korea, that it imported its price-fixed noodles to the United States where they were sold to class members, and that the prices of Samyang's Korean noodles in the United States increased as a result of the conspiracy. That is sufficient at the pleadings stage.

At a minimum, indirect purchaser plaintiffs have plausibly pleaded a Cartwright Act claim on behalf of California residents. Whether indirect purchaser plaintiffs can also state a Cartwright Act claim on behalf of plaintiffs from other states is better resolved at class certification when the parties have a better sense of the other states at issue and the contacts between the claims of plaintiffs from those states and California.

BACKGROUND[1]

Defendants Samyang Korea, Nong Shim Company, Ltd., and Ottogi Ltd. (collectively, the "Korean defendants") manufacture and sell Korean noodles in Korea. Amended Consolidated Indirect Purchaser Compl. ("AIPC") ¶¶ 25-28 [Dkt. No. 121]. On July 12, 2012, the Korean Fair Trade Commission issued an order finding that the Korean defendants conspired to increase the prices of Korean noodles in Korea. Id. at ¶ 3. Following that order, various direct and indirect purchasers of defendants' Korean noodles in the United States filed price-fixing conspiracy actions against the Korean defendants and their alleged American distributors, alleging that the defendants conspired to raise the prices of Korean noodles sold in the United States.[2] The indirect purchaser plaintiffs are individuals who purchased the defendants' noodles from non-party food retailers in Massachusetts, Michigan, Florida, New York, California, and Hawaii. Id. at ¶¶ 10-24.

I previously granted in part and denied in part defendants' motion to dismiss indirect purchaser plaintiffs' original consolidated complaint. Dkt. No. 115. Indirect purchaser plaintiffs subsequently filed an amended indirect purchaser complaint, alleging causes of action for (i) price-fixing conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1; (ii) price-fixing conspiracy in violation of California's Cartwright Act, Cal. Bus. & Code §§ 16700, et seq. ; (iii) violations of antitrust and restraint of trade laws of California, Michigan, Hawaii, and New York; (iv) violations of state consumer protection laws of California, Florida, and Massachusetts; and (v) unjust enrichment and disgorgement under the common laws of Hawaii and Massachusetts. Dkt. No. 121. ¶¶ 170-214. Samyang Korea moves to dismiss indirect purchaser plaintiffs' amended consolidated complaint. Dkt. No. 142. I heard argument on March 25, 2015.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. The court must "accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party, " drawing all "reasonable inferences from those facts in the nonmoving party's favor. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). A complaint may be dismissed if it does not allege "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 pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). However, "a complaint [does not] suffice if it tenders naked assertions devoid of further factual enhancement." Id. (quotation marks and brackets omitted). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id.

DISCUSSION

Samyang Korea argues that: (i) indirect purchaser plaintiffs' federal and state antitrust and consumer protection claims fail because indirect purchaser plaintiffs have not plausibly alleged that Samyang Korea was a member of the conspiracy to raise prices in the United States; (ii) the state consumer protection claims rely on the antitrust claims and therefore also fail; (iii) a nationwide class under California's Cartwright Act is unconstitutional; and (iv) the unjust enrichment claims under Hawaii and Massachusetts law fail because plaintiffs do not allege that any plaintiff purchased Samyang Korea's noodles in Hawaii or Massachusetts. I address each argument in turn.

I. ANTITRUST AND CONSUMER PROTECTION CLAIMS UNDER FEDERAL AND STATE LAW

Samyang Korea argues that "[b]ecause Plaintiffs have failed to allege that a Samyang subsidiary or affiliate imported Samyang products into the United States, or that Samyang otherwise has the capacity to conspire to fix prices in the United States, Plaintiffs' antitrust claim against Samyang fails." Dkt. No. 142 at 7. I rejected Samyang ...


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