Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Julian Bakery, Inc. v. Healthsource International, Inc.

United States District Court, S.D. California

March 28, 2018

JULIAN BAKERY, INC., a California corporation, Plaintiff,
v.
HEALTHSOURCE INTERNATIONAL, INC. d/b/a NUCOCONUT, a California corporation, Defendants.

          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

          JOHN A. HOUSTON United States District Judge

         INTRODUCTION

         Pending 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.

         BACKGROUND

         I. Factual Background

         Plaintiff is a California corporation who manufactures and sells a variety of health foods, including a line of PALEO WRAPS branded products[1]. 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[2] associated with Plaintiff's PALEO WRAPS trademark. Id. at ¶ 12.

         Plaintiff 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.

         Finally, 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.

         II. Procedural Background

         On 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. 4].

         On 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].

         DISCUSSION

         I. Federal Rule of Civil Procedure 12(b)(6)

         Under 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).

         “To 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.

         In 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).

         a. Analysis i. Whether Federal Rule of Civil Procedure 9(b) applies to Plaintiff's claims

         As an 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.

         Rule 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.