Nicolas Torrent v. Thierry Ollivier et al, No. 2:2015cv02511 - Document 76 (C.D. Cal. 2016)
Court Description: ORDER GRANTING MOTION TO DISMISS IN PART AND DENYING MOTION IN PART 50 by Judge Dean D. Pregerson: Plaintiffs UCL claims and CLRA claim for injunctive relief survive this motion to the extent the claims are premised upon the most famous berry in th e Himalayas and Goji berries originate in the high plateaus of the Himalayan mountains statements. Plaintiffs CLRA damages claim is dismissed without prejudice to its refiling. Leave to amend theoperative complaint in this action, however, is denied. Plaintiffs alter ego and punitive damages claims, and independent cause of action for attorneys fees, are dismissed, with prejudice. (lc)
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Nicolas Torrent v. Thierry Ollivier et al Doc. 76 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 NICOLAS TORRENT, on behalf of himself and all others similarly situated, 13 Plaintiff, 14 15 v. THIERRY OLLIVIER, NATIERRA, and BRANDSTROM, INC., 16 Defendants. 17 ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 15-02511 DDP (JPRx) ORDER GRANTING MOTION TO DISMISS IN PART AND DENYING MOTION IN PART [Dkt. 50] 18 19 Presently before the court is Defendants’ Motion to Dismiss. 20 Having considered the submissions of the parties and heard oral 21 argument, the court grants the motion in part, denies the motion in 22 part, and adopts the following Order. 23 I. 24 Background Defendants market and sell “Himalania” brand goji berries. 25 (First Amended Complaint (“FAC”) ¶ 15.) 26 Torrent, alleges that he purchased Himalania brand goji berries in 27 March 2013. 28 goji berries using packaging that created the impression that (Id. ¶ 8.) Plaintiff, Nicolas Plaintiff alleges that Defendants sold Dockets.Justia.com 1 Defendants’ berries are harvested from the Himalaya mountains. 2 (Id. ¶ 9.) 3 images of mountains, as well as statements such as, “The most 4 famous berry in the Himalayas,” and “Goji berries originate in the 5 high plateaus of the Himalayan mountains.” 6 to agree that Defendants’ packaging no longer uses these 7 statements. 8 9 According to Plaintiff, Defendants’ packaging includes Id. The parties appear Plaintiff further alleges that the berries “come from the Ningxia province of China, which is not what a reasonable consumer 10 considers to be the Himalayas. 11 province is situated in an area of China far north of what the 12 reasonable consumer considers as the Himalayas.” 13 (FAC ¶ 10.) Rather, “the Ningxia (Id.) Plaintiff, on behalf of a putative class of all California 14 purchasers of Himalania brand goji berries, seeks an injunction and 15 restitution under California’s Unfair Competition Law and 16 injunctive relief and damages under California’s Consumer Legal 17 Remedies Act (“CLRA”).1 18 II. 19 Defendants now move to dismiss the FAC. Legal Standard A complaint will survive a motion to dismiss when it contains 20 “sufficient factual matter, accepted as true, to state a claim to 21 relief that is plausible on its face.” 22 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 23 570 (2007)). 24 “accept as true all allegations of material fact and must construe 25 those facts in the light most favorable to the plaintiff.” Ashcroft v. Iqbal, 556 U.S. When considering a Rule 12(b)(6) motion, a court must Resnick 26 27 28 1 Plaintiff also brings an independent cause of action for attorney fees, even though he also requests fees in his prayer for relief. 2 1 v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). 2 need not include “detailed factual allegations,” it must offer 3 “more than an unadorned, the-defendant-unlawfully-harmed-me 4 accusation.” 5 allegations that are no more than a statement of a legal conclusion 6 “are not entitled to the assumption of truth.” Id. at 679. 7 other words, a pleading that merely offers “labels and 8 conclusions,” a “formulaic recitation of the elements,” or “naked 9 assertions” will not be sufficient to state a claim upon which Iqbal, 556 U.S. at 678. 10 relief can be granted. 11 Although a complaint Conclusory allegations or In quotation marks omitted). 12 Id. at 678 (citations and internal “When there are well-pleaded factual allegations, a court 13 should assume their veracity and then determine whether they 14 plausibly give rise to an entitlement of relief.” Id. at 679. 15 Plaintiffs must allege “plausible grounds to infer” that their 16 claims rise “above the speculative level.” Twombly, 550 U.S. at 17 555. “Determining whether a complaint states a plausible claim for 18 relief” is a “context-specific task that requires the reviewing 19 court to draw on its judicial experience and common sense.” 20 556 U.S. at 679. 21 III. Discussion 22 Iqbal, A. Reasonable Consumer Test 23 Defendants contend first that Plaintiff’s UCL and CLRA claims 24 should be dismissed because the reasonable consumer does not know 25 about Ningxia province’s location relative to the Himalayas. 26 at 6.) 27 “reasonable consumer” test, which looks to whether, regardless of 28 the actual falsity of a representation, members of the public are (Mot. Plaintiff’s UCL and CLRA claims are governed by a 3 1 likely to be deceived. 2 934, 938 (9th Cir. 2008); Yumul v. SmartBalance, Inc., 733 3 F.Supp.2d 1117, 1125 (C.D. Cal. 2010). 4 regarding deceptiveness typically cannot be resolved on a motion to 5 dismiss, courts do dismiss product packaging claims where it 6 appears as a matter of law that the public is not likely to be 7 deceived. 8 (N.D. Cal. 2012). 9 Williams v. Gerber Prods. Co., 552 F.3d Although questions See Jones v. ConAgra Foods, Inc., 912 F.Supp.2d 889, 899 The court agrees with Defendants, in part. The FAC alleges 10 that “[t]he goji berries come from the Ningxia province of China, 11 which is not what a reasonable consumer considers to be the 12 Himalayas.” 13 appears to depict the Ningxia province “in an area of China far 14 north of what the reasonable consumer considers as the 15 Himalayas[.]” (Id.) 16 that reasonable consumers are well-versed enough in Chinese 17 geography to have any beliefs about Ningxia’s location or whether 18 Ningxia province qualifies as “Himalayan.” 19 Defendants’ packaging does represent that the berries are a 20 “Product of China,” it makes no reference to Ningxia. 21 extent Plaintiff alleges that the packaging is misleading because 22 reasonable consumers do not consider Ningxia to be part of the 23 Himalayas, those allegations are dismissed. 24 (FAC ¶ 10.) The FAC also includes a map, which Plaintiff cannot, however, plausibly allege Indeed, although Thus, to the The implausible references to consumers’ knowledge of Chinese 25 or Himalayan geography do not, however, render the UCL and CLRA 26 claims deficient in their entirety. 27 Defendants “inten[ded] to create the impression in the minds of 28 consumers that the berries are harvested from the Himalayas . . .,” 4 The FAC also alleges that 1 and makes repeated references to this “impression.” (FAC ¶¶ 9, 2 15.) 3 Defendants’ packaging includes the statements, “The most famous 4 berry in the Himalayas,” and “Goji berries originate in the high 5 plateaus of the Himalayan mountains.” 6 any allegations about consumers’ knowledge of Ningxia, themselves 7 could support a claim that Defendants’ packaging would lead a 8 reasonable consumer to believe that Defendants’ berries are 9 harvested in the Himalayas, when in fact the berries are not That assertion is supported by the factual allegations that These facts, putting aside 10 harvested in the Himalayas. Accordingly, Plaintiff’s UCL and CLRA 11 claims are dismissed only insofar as they relate to consumers’ 12 knowledge of the Ningxia province of China. 13 B. 14 Plaintiff’s original Complaint alleged causes of action under CLRA Notice 15 California’s UCL and the CLRA. 16 relief, including corrective advertising, as well as restitution 17 and damages. 18 recoverable under the UCL. 19 Cal. App. 4th 1350, 1359 (2010). 20 CLRA. 21 plaintiff seeking damages first notify the prospective defendant of 22 the alleged violations and afford the prospective defendant a 23 thirty-day period to remedy the problem. 24 An action for injunctive relief, in contrast, “may be commenced” 25 without prior notice. 26 initiates an action for injunctive relief and then satisfies the 27 notice requirement, the plaintiff may, “not less than 30 days after The complaint sought injunctive (Complaint at 11-12.) Damages, however, are not See Durell v. Sharp Healthcare, 183 Cal. Civil Code § 1780. Damages are available under the The CLRA requires, however, that a Cal. Civ. Code § 1782. Cal. Civ. Code. § 1782(d). 28 5 If a plaintiff 1 commencement of an action for injunctive relief,” amend the 2 complaint to include a request for damages. Id. 3 4 Here, Plaintiff sent a CLRA notice letter on the same day that 5 he filed his complaint for damages. 6 Plaintiff filed the FAC, explicitly requesting damages under the 7 CLRA and referencing his CLRA notice letter. 8 dismiss Plaintiff’s damages claim, with prejudice, for failure to 9 comply with Section 1782. More than thirty days later, Defendants move to Plaintiff responds that, because he 10 amended the complaint and filed the FAC more than 30 days after 11 sending a CLRA notice letter, he has satisfied Section 1782. 12 Although the CLRA notice requirement is not jurisdictional, 13 compliance with it is necessary to state a claim. 14 Corp. v. Superior Court, 52 Cal. App. 3d 30, 39 (1975). Although 15 Plaintiff makes no mention of it, and Defendants refer to it only 16 in a footnote, “[a] significant split among the courts exists on 17 whether dismissal of a CLRA claim for violation of section 18 1782(a)’s notice requirement should be granted with or without 19 prejudice.” 20 01172-YGR, 2012 WL 2792441 at *7 (N.D. Cal. July 9, 2012). 21 Outboard Marine court concluded that “[t]he clear intent of the 22 [CLRA] is to provide and facilitate pre-complaint settlements of 23 consumer actions wherever possible and to establish a limited 24 period during which such settlement may be accomplished.” 52 Cal. 25 App. 3d at 41. 26 dismissed improperly noticed CLRA damages claims with prejudice, 27 finding that such “strict adherence to the statute’s notice 28 provision Outboard Marine Trabakoolas v. Watts Water Techs., Inc., No. 12-cvThe Some federal courts, citing Outboard Marine, have is required to accomplish the Act’s goals of expeditious 6 1 remediation before litigation.” 2 F.Supp.2d 1181, 1196 (S.D. Cal. 2005); See also Cattie v. Wal-Mart 3 Stores, Inc., 504 F.Supp.2d 939, 949-50 (S.D. Cal. 2007); Von Grabe 4 v. Sprint PCS, 312 F.Supp.2d 1285, 1304 (S.D. Cal. 2003); but see 5 Dietz v. Comcast Corp., No. C 06-06352 WHA, 2006 WL 3782902 at *6 6 (N.D. Cal. Dec. 21, 2006) (concluding that dismissal with prejudice 7 would be “draconian,” and finding that other disciplinary measures 8 would more accurately serve the California legislature’s intent). 9 Laster v. T-Mobile USA, Inc., 407 Some courts, however, have determined that a dismissal with 10 prejudice for failure to comply with the CLRA’s notice requirement 11 is not necessary to satisfy the California legislature’s goal of 12 allowing defendants to avoid liability by promptly correcting the 13 alleged wrongs. 14 App. 4th 1235, 1261 (2009); Dietz, 2006 WL 3782902 at *2. 15 Trabakoolas court observed, the CLRA’s notice requirement was 16 intended to “resolve quickly and efficiently consumer complaints,” 17 and “inured to the consumers’ benefit,” and therefore should not 18 operate as a “sword against consumers.” 19 2792441 at *8 (dismissing CLRA damages claim with leave to amend); 20 See also Benson v. Southern California Auto Sales, Inc., 239 21 Cal.App.4th 1198, 1212 (2015) (“[The CLRA] actually has two 22 purposes. 23 economical procedures to secure such protection is the other.”). 24 Morgan v. AT&T Wireless Servs., Inc., 177 Cal. As the Trabakoolas, 2012 WL Protecting consumers is one; providing efficient and This court agrees with the reasoning of Dietz, Morgan, and 25 Trabakoolas that dismissal of Plaintiff’s CLRA damages claim with 26 prejudice would be unduly harsh, and would not serve the interest 27 of protecting consumers. 28 the court is not persuaded that mere dismissal with leave to amend Under the circumstances here, however, 7 1 would be appropriate. Such a result, which would require Defendant 2 to defend against an improperly noticed CLRA damages claim while 3 simultaneously attempting to rectify the underlying issues, would 4 not adequately disincentivize Plaintiff’s noncompliance with the 5 CLRA notice requirement and would hamper efforts to quickly and 6 efficiently address consumer concerns. The court, therefore, 7 dismisses Plaintiff’s CLRA damages claim without leave to amend in 8 the instant action, but also without prejudice to the refiling of 9 the damages claim. 10 C. Alter EGO 11 Plaintiff’s FAC alleges that Defendant Ollivier is liable as 12 the alter ego of both corporate defendants. “The alter ego 13 doctrine arises when a plaintiff comes into court claiming that an 14 opposing party is using the corporate form unjustly and in 15 derogation of the plaintiff’s interests. In certain circumstances 16 the court will disregard the corporate entity and will hold the 17 individual shareholders liable for the actions of the corporation.” 18 Nielson v. Union Bank of Cal., N.A., 290 F. Supp. 2d 1101, 1115 19 (C.D. Cal. 2003). 20 avoid injustice when there is an abuse of the corporate privilege. 21 Id. 22 the corporate form and find liability as to the individuals 23 underneath it. 24 There is a large list of factors a court can consider when 25 determining alter ego liability. 26 that a person owns all of the corporate stock and makes all of the 27 management decisions is insufficient to cause the court to 28 disregard the corporate entity.” The purpose of the alter ego doctrine is to Only “exceptional circumstances” allow a court to disregard Leek v. Cooper, 194 Cal. App. 4th 399, 411 (2011). Id. at 417-18. Id. at 415. 8 “An allegation 1 “Corporate officers and directors cannot ordinarily be held 2 personally liable for the acts or obligations of their 3 corporations. 4 authorize or actively participate in wrongful or tortious conduct.” 5 Taylor-Rush v. Multitech Corp., 217 Cal. App. 3d 103, 113 (1990). 6 A wide variety of factors may be pertinent to the alter ego 7 inquiry, depending on the circumstances of the particular case. 8 Assoc. Vendors, Inc. v. Oakland Meat Co., 210 Cal. App. 2d 825, 838 9 (1962). However, they may become liable if they directly These factors include, but are not limited to, commingling 10 of funds, unauthorized diversion of corporate funds to other uses, 11 failure to maintain adequate corporate records, sole or family 12 ownership of all of the stock in a corporation, failure to 13 adequately capitalize a corporation, use of a corporation as a 14 conduit for the business of an individual, disregard of legal 15 formalities, and diversion of assets from a corporation to a 16 stockholder to the detriment of creditors. 17 at 1038; Zoran Corp. v. Chen, 185 Cal. App. 4th 799, 811-12 (2010); 18 Assoc. Vendors, 210 Cal. App. 2d at 838-39. 19 Schwarzkopf, 626 F.3d The only specific facts alleged regarding Defendant Ollivier 20 are that he founded one corporate defendant and serves as a 21 corporate officer and “opened the doors” of the other corporate 22 defendant. 23 a unity of interest and ownership exists between Ollivier and the 24 corporate defendants, it makes no factual allegations to support 25 that assertion. 26 in block quotes, the FAC’s inadequate alter ego allegations.2 (FAC ¶ 13.) Although the FAC conclusorily asserts that Plaintiff’s Opposition does no more than repeat, 27 2 28 Plaintiff’s Opposition similarly fails to identify any facts (continued...) 9 1 Plaintiff’s claims against Defendant Ollivier are dismissed, with 2 prejudice. 3 D. Attorneys’ Fees 4 Plaintiff’s opposition asks this court“to use its equitable 5 powers to find an independent cause of action for attorneys’ fees.” 6 (Opp. at 18). 7 justifying such a course of action. 8 Action is, therefore, dismissed with prejudice. 9 IV. 10 The court is aware of no authority or reason Plaintiff’s Third Cause of Conclusion For the reasons stated above, Defendants’ Motion to Dismiss is 11 GRANTED in part and DENIED in part. Plaintiff’s UCL claims and 12 CLRA claim for injunctive relief survive this motion to the extent 13 the claims are premised upon the “most famous berry in the 14 Himalayas” and “Goji berries originate in the high plateaus of the 15 Himalayan mountains” statements. 16 dismissed without prejudice to its refiling. 17 operative complaint in this action, however, is denied. 18 Plaintiff’s alter ego and punitive damages claims, and independent 19 cause of action for attorneys’ fees, are dismissed, with prejudice. Plaintiff’s CLRA damages claim is Leave to amend the 20 21 IT IS SO ORDERED. 22 23 Dated: September 2, 2016 DEAN D. PREGERSON United States District Judge 24 25 2 26 27 28 (...continued) supporting a claim for punitive damages. Although the Opposition contends that the FAC alleges purposeful deceit, it contains no citation to any such allegation, and the FAC does not appear to include any factual allegation of malice sufficient to support a claim for punitive damages. 10
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