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Victor v. R.C. Bigelow, Inc.

United States District Court, N.D. California

July 7, 2015

ADAM VICTOR, Plaintiff,
v.
R.C. BIGELOW, INC., Defendant.

ORDER GRANTING MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT Re: Dkt. No. 51

WILLIAM H. ORRICK, District Judge.

INTRODUCTION

Plaintiff Adam Victor moves for leave to file a second amended complaint against Defendant R.C. Bigelow, Inc., adding a claim of unjust enrichment. Pursuant to Civil Local Rule 7-1(b), I find this matter appropriate for resolution without oral argument and I VACATE the hearing set for July 8, 2015. Because of a recent Ninth Circuit decision establishing that an unjust enrichment claim can be construed as a viable stand-alone cause of action in California, Victor has good cause to amend the complaint and his motion is GRANTED.

BACKGROUND

Bigelow manufactures and sells tea products. First Amended Complaint ("FAC") ¶ 7 [Dkt. No. 30]. Victor alleges that Bigelow made false health claims by promoting the presence of antioxidants in its black tea products and claiming associated health benefits. FAC ¶¶ 12-13. The false health claims appear on Bigelow's websites and product labels. Id. ¶¶ 12, 87 (product label states " delivers healthful antioxidants "). Enforcement actions by the FDA "targeting identical or similar claims to those made by [Bigelow] have made clear the unlawfulness of such claims." Id. ¶ 41. Victor contends that he relied on and was influenced by these false claims when purchasing Bigelow's tea products, and that this misrepresentation has resulted in unjust profits for Bigelow. Id. ¶¶ 18-19.

The FAC currently alleges causes of action for violations of the California Consumer Legal Remedies Act, the Unfair Competition Law, and the False Advertising Law. Id. ¶¶ 100-154. The last day to amend pleadings was on August 29, 2014. Dkt. No. 46.

Victor now seeks leave to amend the FAC to assert an unjust enrichment cause of action, following the Ninth Circuit's recent holding in Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015), that unjust enrichment is, in some circumstances, a viable cause of action.

LEGAL STANDARD

Federal Rule of Civil Procedure 16 governs "when a party seeks to amend a pleading after the pretrial scheduling order's deadline for amending the pleadings has expired." In re W. States Wholesale Natural Gas Antitrust Litig., 715 F.3d 716, 737 (9th Cir. 2013). Under Rule 16, a schedule may be modified for good cause and with the judge's consent. FED. R. CIV. P. 16(b)(4). "While a court may take into account any prejudice to the party opposing modification of the scheduling order, the focus of the Rule 16(b) inquiry is upon the moving party's reasons for seeking modification." In re W. States Wholesale Natural Gas Antitrust Litig., 715 F.3d at 737 (internal citations and quotations omitted). The "good cause" evaluation "primarily considers the diligence of the party seeking the amendment." Id. (internal citations and quotations omitted).

If the party demonstrates "good cause, " then the party must further demonstrate that leave to amend is appropriate under Federal Rule of Civil Procedure 15. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 608 (9th Cir. 1992) (citation omitted). Courts consider five factors when deciding whether to grant a motion for leave to amend pursuant to Rule 15: (i) bad faith on the part of the movant; (ii) undue delay in filing the motion; (iii) prejudice to the opposing party; (iv) futility of amendment; and (v) whether the plaintiff has previously amended the complaint. See United States v. Corinthian Colls., 655 F.3d 984, 995 (9th Cir. 2011) (citation omitted). Not all factors are weighed equally; consideration of prejudice to the opposing party carries the greatest weight. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (citation omitted).

If a party moves to amend its complaint instead of moving to amend the scheduling order, the court may exercise discretion to deny the motion as untimely or construe the motion as one to amend the scheduling order. See Johnson, 715 F.3d at 608-09 ("court may deny as untimely a motion filed after the scheduling order cut-off date where no request to modify the order has been made") (citation omitted).

DISCUSSION

Unjust enrichment "broadly provides that a person who is unjustly enriched at the expense of another is subject to liability in restitution." Fenerjian v. Nongshim Co., Ltd., 13-cv-04115-WHO, 2014 WL 5685562, at *19 (N.D. Cal. Nov. 4, 2014) (internal citations and quotations omitted). "[A] plaintiff advances a basis for obtaining restitution if he or she demonstrates defendant's receipt and unjust retention of a benefit." Monet v. Chase Home Fin., LLC, 10-cv-0135-RS, 2010 WL 2486376, at *3 (N.D. Cal. June 16, 2010) (internal citations and quotations omitted).

California courts have been split on whether unjust enrichment is an independent claim or merely an equitable remedy under California law. See In re TFT-LCD (Flat Panel) Antitrust Litig., 10-cv-5625-SI, 2011 WL 4345435, at *3 (N.D. Cal. Sept. 15, 2011) (discussing disagreement among California state and ...


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