United States District Court, S.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S FIRST
AMENDED COMPLAINT AND DENYING PLAINTIFF'S MOTION FOR A
MORE DEFINITE STATEMENT
A. HOUSTON United States District Judge
before the Court is Defendant Healthsource International,
Inc.'s (“Healthsource” or
“Defendant”) Motion to Dismiss Plaintiff Julian
Bakery, Inc.'s (“Plaintiff” or “Julian
Bakery”) First Amended Complaint (“FAC”)
for failure to state a claim upon which relief can be granted
pursuant to Federal Rules of Civil Procedure 9(b) and 12
(b)(6), or in the alternative, Defendant moves for a More
Definite Statement pursuant to Rule 12(e). [Doc. No. 10]. The
motion has been fully briefed by the parties. [Doc. Nos. 10,
13, 14]. After careful consideration of the pleadings, and
for the reasons set forth below, the Defendant's Motion
to Dismiss is GRANTED in part and
DENIED in part, and Defendant's Motion
for a More Definite Statement is DENIED.
is a California corporation who manufactures and sells a
variety of health foods, including a line of PALEO WRAPS
branded products. See Doc. No. 4, ¶¶ 1,
2. In 2016, Plaintiff developed the idea for coconut flavored
PALEO WRAPS, and contracted with Defendant to supply them
with the coconut product, which Plaintiff would then sell
under its own label Id. at ¶ 7. Plaintiff
alleges that as early as March of 2016, Defendant began
selling its own coconut flavored wrap marketed as the
NUCOCONUT (“NUCO”), which is identical to
Plaintiff's coconut flavored PALEO WRAPS. Id. at
¶¶ 9, 10. Additionally, Plaintiff alleges that
Defendant sells its NUCO wraps by purchasing Google
AdWords associated with Plaintiff's PALEO
WRAPS trademark. Id. at ¶ 12.
further alleges that contemporaneous to the launch of
Defendant's NUCO wraps, Defendant repeatedly delivered
the incorrect amount of coconut based product to Plaintiff,
sometimes providing less than the ordered amount, and on one
occasion, delivering more than $100, 000 worth of unrequested
goods. Id. at ¶¶ 13, 14. Additionally,
Plaintiff alleges that simultaneous to the launch of
Defendant's NUCO wraps, Defendant began providing
Plaintiff with low quality ingredients which resulted in
decreased sales and negative customer reviews. Id.
at ¶ 16. Plaintiff specifically alleges that Defendant
sent several shipments of coconut flake cereal which
contained impurities that were not compliant with product
specifications, and in turn caused damage to Plaintiff's
“reputation, goodwill, business, sales, and
profits.” Id. at ¶ 17.
Plaintiff alleges that contemporaneous to the launch of
Defendant's NUCO wraps, Defendant's CEO misled at
least one of Plaintiff's customers, Sunfood Corp.
(“Sunfood”), causing Sunfood to believe that
Defendant, and not Plaintiff, produces the PALEO WRAPS
product. Id. at ¶ 19. Plaintiff specifically
alleges that Defendant's CEO falsely informed Sunfood
that the PALEO WRAPS featured on the television show Dr.
Oz were Defendant's NUCO wraps, when they were
actually PALEO WRAPS. Id. at ¶ 20. Plaintiff
alleges that these erroneous claims have been shared on
Facebook, as well as other social media sites. Id.
November 28, 2016, Plaintiff filed the operative FAC
asserting claims for (1) Trademark Infringement, 15 U.S.C.
§ 1114; (2) False Designation of Origin, 15 U.S.C.
§ 1125(a)(1)(A); (3) False Advertising, 15 U.S.C. §
1125(a)(1)(B); (4) Unfair Competition, Cal. Bus. & Prof.
Code §§ 17200, et seq.; (5) False
Advertising (Cal. Bus. & Prof. Code § 17500 et
seq.); (6) Breach of Implied Warranty of
Merchantability; (7) Breach of Implied Warranty of Fitness
for a Particular Purpose; (8) Fraud; and (9) Intentional
Interference with Prospective Economic Advantage. [Doc. No.
January 9, 2017, Defendant moved to dismiss the FAC pursuant
to Rules 12(b)(6), 9(b), and 12(e) of the Federal Rules of
Civil Procedure. [Doc. No. 10]. Having been fully briefed by
the parties, the Court deemed the matter suitable for
disposition without oral argument, and took Defendant's
Motion to Dismiss under submission. [Doc. No. 15].
Federal Rule of Civil Procedure 12(b)(6)
Rule 12(b)(6) of the Federal Rules of Civil Procedure, a
party may move to dismiss for failure to state a claim for
relief. Dismissal is warranted under Rule 12(b)(6) where the
complaint lacks a cognizable legal theory or fails to allege
sufficient facts to support a cognizable legal theory. Li
v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013). Under Rule
8(a)(2) of the Federal Rules of Civil Procedure, the
plaintiff is required to set forth a “short and plain
statement of the claim showing that the pleader is entitled
to relief, ” and “give the defendant fair notice
of what the . . . claim is and the grounds upon which it
rests.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007) (internal citations omitted).
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citing Twombly, 550 U.S. at 570). A claim is
facially plausible when the factual allegations permit
“the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678. In other words, “the
non-conclusory ‘factual content, ' and reasonable
inferences from that content, must be plausibly suggestive of
a claim entitling the plaintiff to relief.” Moss v.
U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009)
(citing Iqbal, 556 U.S. at 678). “Determining
whether a complaint states a plausible claim for relief will
. . . be a context-specific task that requires the reviewing
court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679.
reviewing a motion to dismiss under Rule 12(b)(6), the
reviewing court must assume the truth of all factual
allegations and construe them in the light most favorable to
the nonmoving party. Cahill v. Liberty Mut. Ins.
Co., 80 F.3d 336, 337-38 (9th Cir. 1996). However, legal
conclusions need not be taken as true merely because they are
cast in the form of factual allegations. Ileto v. Glock
Inc., 349 F.3d 1191, 1200 (9th Cir. 2003). “Nor
does a complaint suffice if it tenders ‘naked
assertion[s]' devoid of ‘further factual
enhancement.'” Iqbal, 556 U.S. at 678
(citing Twombly, 550 U.S. at 557).
Analysis i. Whether Federal Rule of Civil
Procedure 9(b) applies to Plaintiff's claims
initial matter, Defendant asserts that all of Plaintiff's
claims, excluding the implied warranty claims, fail because
of noncompliance with Federal Rule of Civil Procedure 9(b).
See generally Doc. No. 10.
9(b) of the Federal Rules of Civil Procedure, requires that
“[i]n alleging fraud or mistake, a party must state
with particularity the circumstances constituting fraud or
mistake.” Under Ninth Circuit case law, Rule 9(b)
imposes two distinct requirements on complaints alleging
fraud. First, the basic notice requirements of Rule 9(b)
require complaints pleading fraud to “state precisely
the time, place, and nature of the misleading statements,
misrepresentations, and specific acts of fraud.”
Kaplan v. Rose, 49 F.3d 1363, 1370 (9th Cir. 1994);
see also Vess v. Ciba-Geigy Corp., U.S.A., 317 F.3d
1097, 1106 (9th Cir. 2003) (citation omitted) (stating that a
plaintiff must set forth the “who, what, when, where
and how” of the alleged misconduct). Second, Rule 9(b)
requires that the ...