Sensible Foods, LLC v. World Gourmet, Inc. et al

Filing 26

ORDER by Judge Samuel Conti granting in part and denying in part 14 Motion to Dismiss (sclc2, COURT STAFF) (Filed on 11/3/2011)

1
2
3
4
5

IN THE UNITED STATES DISTRICT COURT

6

FOR THE NORTHERN DISTRICT OF CALIFORNIA

7
SENSIBLE FOODS, LLC,

)
)
Plaintiff,
)
)
v.
)
)
WORLD GOURMET, INC.; HAIN GOURMET, )
INC.; HAIN CELESTIAL GROUP, INC.; )
WORLD GOURMET MARKETING, LLC; AND )
SENSIBLE SNACKS, INC.,
)
)
Defendants.
)
)

8

10
For the Northern District of California

United States District Court

9

11
12
13
14
15
16

I.

17

Case No. 11-2819 SC
ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS'
MOTION TO DISMISS

INTRODUCTION
Plaintiff Sensible Foods, LLC ("Plaintiff") brings this action

18

against Defendants World Gourmet, Inc. ("World Gourmet"), Hain

19

Gourmet, Inc. ("Hain Gourmet"), Hain Celestial Group, Inc., ("Hain

20

Celestial"), World Gourmet Marketing, LLC ("WGM"), and Sensible

21

Snacks, Inc. ("Sensible Snacks") (collectively, "Defendants").

22

No. 1 ("Compl.").

23

Dismiss Plaintiff's Complaint pursuant to Rule 12(b)(6) of the

24

Federal Rules of Civil Procedure.

25

Motion is fully briefed.

ECF

Now before the Court is Defendants' Motion to

ECF No. 14 ("Mot.").

This

ECF Nos. 22 ("Opp'n")1, 23 ("Reply").

26
27
28

1

The Court notes that Plaintiff filed its Opposition seven days
after the deadline set forth in Civil Local Rule 7-3. The Court
will not tolerate future failures to comply with the Local Rules.

1

For the reasons set forth below, the Court GRANTS IN PART and

2

DENIES IN PART Defendants' Motion.

3
4
5

II.

BACKGROUND
As it must on a 12(b)(6) motion to dismiss, the Court takes

6

all well-pleaded factual allegations in the Complaint as true.

7

Plaintiff is engaged in the development and sale of a full line of

8

organic, health, and natural dried fruit and vegetable snacks and

9

related goods.

Compl. ¶ 1.

Plaintiff has continuously used its

United States District Court

For the Northern District of California

10

domain name www.sensiblefoods.com since October 1998 and owns

11

various word and design marks for "Sensible Foods" as well as marks

12

for "Snacks Made Sensible," "Snacking Has Never Been More

13

Sensible," and "Snacking Has Never Been So Sensible" (collectively,

14

"Sensible Foods Marks").

15

spent significant sums and devoted significant resources promoting

16

its Sensible Foods Marks worldwide.

Id. ¶¶ 19-27.

Since 1997, Plaintiff has

Id. ¶ 38.

17

In March 2005, WGM filed with the United States Patent and

18

Trademark Office ("PTO") an application for a mark for protein-

19

based nutrient-dense snack bars and soy-based food bars, among

20

other things.

21

Trademarks provided World Gourmet with a registration number for

22

the mark "Sensible Portions" in connection with the application.

23

Id. ¶ 53.

24

Id. ¶ 41.

In January 2007, the Commissioner for

In June 2007, WGM filed with the PTO an application for the

25

mark "Sensible Snacks" in connection with goods substantially

26

similar to Plaintiff's.

Id. ¶ 54.

In a letter to WGM refusing

27
28

Any documents filed after the applicable deadlines without leave of
the Court henceforth will not be considered.

2

1

registration, the examining trademark attorney found that the

2

"Sensible Snacks" mark so resembled the Plaintiff's registered mark

3

"as to be likely to cause confusion, to cause mistake or to

4

deceive."

5

attorney's findings.

Id. ¶ 55.

Defendants did not challenge the examining
Id. ¶ 64.

Plaintiff alleges that Defendants instead "slowly, willfully,

6
7

incrementally, and maliciously changed Infringing Works . . .

8

mischievously creeping closer and closer through progressive

9

encroachment to Plaintiff's trade dress, packaging, channels of

United States District Court

For the Northern District of California

10

distribution, publication, as well as its [Sensible Foods Marks]."

11

Id. ¶ 65.

12

members of the public have confused Plaintiff's and Defendants'

13

products, to the detriment of Plaintiff's business, and provides

14

numerous examples of alleged confusion, including many emails

15

allegedly sent to Plaintiff instead of Defendants and charges

16

allegedly billed to Plaintiff instead of Defendants.

17

114.

18

Plaintiff alleges that consumers, businesses, and other

Id. ¶¶ 86-

WGM has registered the domain names www.sensibleportions.com,

19

www.soycrisps.com, and www.wgourmet.com.

20

is redirected to www.sensibleportions.com when either

21

www.soycrisps.com or www.wgourmet.com is entered into an internet

22

browser.

23

name is confusingly similar to Plaintiff's.

24

Id. ¶¶ 80-81.

Id. ¶¶ 80-82.

The public

Plaintiffs allege that Defendants' domain
Id. ¶ 82.

In August 2010, Plaintiff met with the CEO of Hain Celestial,

25

who stated that he would not give-up use of the "Sensible Portions"

26

mark but would "modify, address or discontinue use the of the term

27

'sensible snacks.'"

Id. ¶ 70.

28

3

On August 16, 2010, Plaintiff and Hain Celestial signed a

1
2

Confidentiality Agreement providing that each party would refrain

3

from disclosing certain confidential information without the

4

other's approval.

5

parties entered into the Confidentiality Agreement because they

6

were considering a business arrangement through which Hain

7

Celestial would purchase Plaintiff.

8

contemplated sale never occurred, and Plaintiff now alleges that

9

Defendants improperly disclosed certain confidential information in

United States District Court

For the Northern District of California

10

Id. ¶ 116, Confidentiality Agreement at 1.2

violation of the agreement.

Compl. ¶ 126.

The

The

Id. ¶ 122.

On June 9, 2011, Plaintiff filed this action, asserting

11
12

sixteen claims:

(1) breach of contract, (2) breach of implied

13

contract against Hain Celestial; (3) breach of implied covenant of

14

good faith and fair dealing against Hain Celestial; (4) state

15

trademark infringement, Cal. Bus. & Prof. Code § 14200 et seq.; (5)

16

contributory infringement; (6) unfair competition, Cal. Bus. &

17

Prof. Code § 17200 et seq.; (7) deceptive trade practices, Cal.

18

Bus. & Prof. Code § 17500 et seq.; (8) false advertising, Cal. Bus.

19

& Prof. Code § 17500 et seq.; (9) federal trademark infringement,

20

15 U.S.C. § 1051 et seq. (Lanham Act); (10) reverse confusion, 15

21

U.S.C. § 1114 et seq. (Lanham Act); (11) cancellation of federal

22

trademark registration (Lanham Act); (12) cyberpiracy, 15 U.S.C. §

23

1025(d) et seq. (Lanham Act); (13) false advertising,

24

misrepresentation, and unfair competition, 15 U.S.C. § 1125(a) et

25
26
27
28

2

In the Complaint, Plaintiff referenced the Confidentiality
Agreement and identified it as an attachment, but failed to
actually file the document with the Court. Plaintiff later refiled the Complaint with the missing attachment. ECF No. 12-1
("Confidentiality Agreement").

4

1

seq. (Lanham Act); (14) state cyberpiracy, Cal. Bus. & Prof. Code §

2

17525, et seq.; (15) trademark infringement (common law); and (16)

3

unjust enrichment.

4

Id. ¶¶ 115-209.

Defendants filed the instant Motion to Dismiss Plaintiff's

5

Complaint on August 31, 2011.

They make several arguments in favor

6

of dismissal.

7

and fourteenth claims fail to state a claim upon which relief can

8

be granted.

9

Lanham Act claims (claims 4-5, 9-10, 12-13, 15-16) are barred by

First, they argue that Plaintiff's third, fourth,

Second, they argue that Plaintiff's equitable and

United States District Court

For the Northern District of California

10

laches.

They proceed to argue that the court may not retain

11

jurisdiction over Plaintiff's administrative claim for trademark

12

cancellation (claim 11) once the Lanham Act claim is dismissed, and

13

that the Court should decline to exercise supplemental jurisdiction

14

over Plaintiff's state law claims (claims 1-2, 6-8) once all

15

federal claims are dismissed.

16

argue that claims 1-2 and 4-16 should be dismissed because

17

Plaintiff has failed to plead sufficient facts to state a plausible

18

claim.

As a last alternative, Defendants

19
20
21

III. LEGAL STANDARD
A motion to dismiss under Federal Rule of Civil Procedure

22

12(b)(6) "tests the legal sufficiency of a claim."

Navarro v.

23

Block, 250 F.3d 729, 732 (9th Cir. 2001).

24

on the lack of a cognizable legal theory or the absence of

25

sufficient facts alleged under a cognizable legal theory."

26

Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.

27

1988).

"Dismissal can be based

"When there are well-pleaded factual allegations, a court

28

5

1

should assume their veracity and then determine whether they

2

plausibly give rise to an entitlement to relief."

3

Iqbal, 129 S. Ct. 1937, 1950 (2009).

4

court must accept as true all of the allegations contained in a

5

complaint is inapplicable to legal conclusions.

6

recitals of the elements of a cause of action, supported by mere

7

conclusory statements, do not suffice."

8

Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

9

in a complaint must be both "sufficiently detailed to give fair

Ashcroft v.

However, "the tenet that a

Threadbare

Id. (citing Bell Atl.
The allegations made

United States District Court

For the Northern District of California

10

notice to the opposing party of the nature of the claim so that the

11

party may effectively defend against it" and "sufficiently

12

plausible" such that "it is not unfair to require the opposing

13

party to be subjected to the expense of discovery."

14

633 F.3d 1191, 1204 (9th Cir. 2011).

Starr v. Baca,

15
16

V.

DISCUSSION
As a preliminary matter, Plaintiff voluntarily withdraws its

17
18

fourth claim for state trademark infringement, twelfth claim for

19

cyberpiracy under the Lanham Act, fourteenth claim for state

20

cyberpiracy, and sixteenth claim for unjust enrichment.

21

2.

Opp'n at

Accordingly, these claims are DISMISSED WITH PREJUDICE.

22

A.

Breach of the Implied Covenant of Good Faith (Claim 3)

23

The implied covenant of good faith and fair dealing prevents a

24

party to a contract from unfairly frustrating the other party's

25

right to receive the benefits of the contract.

26

Nat'l, Inc., 24 Cal. 4th 317, 349 (2000).

27

breach of the implied covenant of good faith and fair dealing, a

28

6

Guz v. Bechtel

To state a claim for

1

plaintiff must allege more than a mere contractual breach; he or

2

she must allege "a failure or refusal to discharge contractual

3

responsibilities, prompted not by an honest mistake, bad judgment

4

or negligence but rather by a conscious and deliberate act, which

5

unfairly frustrates the agreed common purposes and disappoints the

6

reasonable expectations of the other party thereby depriving that

7

party of the benefits of the agreement."

8

Pacific Business Credit, Inc., 222 Cal. App. 3d 1371, 1395 (Cal.

9

Ct. App. 1990).

Careau & Co. v. Security

It is well settled that a claim for breach of the

United States District Court

For the Northern District of California

10

implied covenant of good faith and fair dealing cannot contradict

11

the express terms of the contract.

12

Mariners Mile Gateway, LLC, 185 Cal. App. 4th 1050, 1061 (Cal. Ct.

13

App. 2010).

14

Thrifty Payless, Inc. v.

Plaintiff alleges that Hain Celestial breached the covenant of

15

good faith and fair dealing by taking actions "which destroyed

16

Plaintiff's rights to receive the fruits of the Confidentiality

17

Agreement between Plaintiff and Hain C[elestial]."

18

Plaintiff's only concrete allegation of a "conscious and

19

deliberate" act breaching the covenant is that Hain Celestial

20

purchased products similar to Plaintiff's from other industry

21

suppliers.

22

by declining to purchase Plaintiff and instead purchasing products

23

similar to Plaintiff's products from a third-party supplier, Hain

24

Celestial deprived Plaintiff of the benefits of the Confidentiality

25

Agreement.

26
27

Id. ¶ 131.

Compl. ¶ 130.

Plaintiff thus appears to be alleging that,

Defendants argue that Plaintiff fails to state a claim for
breach of the implied covenant with regard to the Confidentiality

28

7

terms of the agreement, which provides that neither party "[is]

3

under any legal obligation of any kind whatsoever with respect to

4

any transaction by virtue of this Agreement, except for the matters

5

specifically agreed to herein" and further states that each party

6

reserves the right "to terminate discussions and negotiations with

7

respect to any transaction at any time."

8

¶ 9.

9

Confidentiality Agreement is to preserve the confidentiality of

10

United States District Court

Agreement because Plaintiff's allegation contradicts the express

2

For the Northern District of California

1

exchanged material, not to force one party to purchase products

11

from the other.

12

purchasing products from a third party supplier cannot frustrate

13

the purpose of the Confidentiality Agreement.

14

Confidentiality Agreement

Moreover, Defendants argue, the purpose of the

Mot. at 10.

Accordingly, Hain Celestial's

In response, Plaintiff argues that Defendants misunderstand

15

the Complaint.

16

covenant claim is based not upon the Confidentiality Agreement, but

17

rather upon an implied contract that is the subject of Plaintiff's

18

second claim.

19

the Complaint and attempts to rewrite Plaintiff's third claim.

20

Plaintiff contends that its breach of implied

Defendants reply that this argument misrepresents

The Court agrees with Defendants.

The third claim in the

21

Complaint clearly states that Defendants "unfairly frustrated the

22

agreed common purpose of the Confidentiality Agreement" and

23

"deprived Plaintiff of the benefits of the Confidentiality

24

Agreement."

25

as written, its third claim is premised upon a contract other than

26

the Confidentiality Agreement.

27

Defendants that Plaintiff fails to state a claim with regard to the

Compl. ¶ 131.

Plaintiff cannot credibly contend that,

The Court also agrees with

28

8

1

Confidentiality Agreement because the clear purpose of the

2

Agreement is to preserve the confidentiality of exchanged material,

3

not to force one party to purchase products from the other.

4

Accordingly, the Court DISMISSES Plaintiff's third claim WITH

5

LEAVE TO AMEND.

6

contract other than the Confidentiality Agreement, it shall make

7

this clear in its amended Complaint, not leave Defendants to guess

8

at the underlying basis for the claim.

9

United States District Court

For the Northern District of California

10

B.

If Plaintiff means to premise its claim on a

Laches (Claims 4-5, 9-10, 12-13, 15-16)

Defendants argue that Plaintiff's equitable and Lanham Act

11

claims (claims 4-5, 9-10, 12-13, 15-16) are barred by laches.

12

Laches bars untimely equitable causes of action.

13

equitable time limitation on a party's right to bring suit, resting

14

on the maxim that one who seeks the help of a court of equity must

15

not sleep on his rights."

16

Inc., 304 F.3d 829, 835 (9th Cir. 2002) (internal citations and

17

quotation marks omitted).

18

"requires proof of (1) lack of diligence by the party against whom

19

the defense is asserted, and (2) prejudice to the party asserting

20

the defense."

21

(9th Cir. Cal. 1980) (quoting Costello v. United States, 365 U.S.

22

265, 282 (1961)) (emphasis added).

23

"Laches is an

Jarrow Formulas, Inc. v. Nutrition Now,

It is well established that laches

Bratton v. Bethlehem Steel Corp., 649 F.2d 658, 666

The Court declines to dismiss Plaintiff's claims on the basis

24

of laches because "a laches determination is ill-suited for a

25

motion to dismiss for failure to state a claim."

26

S.p.A. v. Seaside Transp. Servs., LLC, C 10-0803 PJH, 2010 U.S.

27

Dist. LEXIS 92771, at *16 (N.D. Cal. Sep. 7, 2010).

28

9

Italia Marittima,

"Because the

1

application of laches depends on a close evaluation of all the

2

particular facts in a case, it is seldom susceptible of resolution

3

by summary judgment."

4

1078, 1083 (9th Cir. 2000).

5

obstacle to asserting a successful laches defense is even greater

6

because the defendant must rely exclusively upon the factual

7

allegations set forth in the complaint."

8

F.3d 989, 1000 (9th Cir. Cal. 2005), abrogated on other grounds in

9

Taylor v. Sturgell, 553 U.S. 880 (2008).

Couveau v. American Airlines, Inc., 218 F.3d
"At the motion-to-dismiss phase, the

Kourtis v. Cameron, 419

United States District Court

For the Northern District of California

10

In their Motion, Defendants ask the Court to make factual

11

determinations concerning when Plaintiff knew or should have known

12

about the alleged infringement, Plaintiff's diligence in enforcing

13

its rights, and the prejudice to Defendants caused by Plaintiff's

14

alleged delay.

15

parties raise additional factual disputes concerning the strength

16

of Plaintiff's trademark rights, the harm Plaintiff will suffer if

17

relief is denied, whether Defendants acted in good faith, and

18

whether the parties' products are distinct, among other things.

19

Opp'n at 13-18; Reply at 9-14.

20

issues are not set forth the Complaint.

21

were to take notice of the facts set forth in the parties' requests

22

for judicial notice,3 it is premature to determine whether such

23
24
25
26
27
28

Mot. at 12-13.

In Opposition and Reply, the

Most of the facts relevant to these

3

Further, even if the Court

Defendants filed a Request for Judicial Notice, ECF No. 15
("Defs.' RJN"), requesting the Court take judicial notice of the
facts set forth in the exhibits to the Declaration of Nathan B.
Sabri, ECF No. 17 ("Sabri Decl."). In Opposition, Plaintiffs also
filed a Request for Judicial Notice, ECF No. 22-1 ("Pl.'s RJN"),
requesting the Court take judicial notice of the facts set forth in
the exhibits to the Declaration of David W. Baxes, ECF Nos. 22-4
("Baxes Decl."). Because resolution of Defendants' laches defense
inappropriate at this stage, it does not rule on the RJNs, except
as to Plaintiff's Exhibits 3(a), 3(b), and 5, as discussed infra.

10

1

evidence is sufficient to raise a genuine issue of material fact,

2

let alone weigh that evidence.

3

Accordingly, the Court finds that a determination on the

4

adequacy of Defendants' laches defense to claims 4-5, 9-10, 12-13,

5

and 15-16 requires findings of fact and is inappropriate for

6

resolution on a motion to dismiss.

7

C.

Sufficiency of Factual Allegations

8

Defendants argue that all of Plaintiff's claims, except its

United States District Court

third claim for breach of the covenant of good faith and fair

10
For the Northern District of California

9

dealing, should be dismissed for failure to plead sufficient

11

factual allegations in support of those claims.

12

that it has pled sufficient factual allegations to support each of

13

its claims.

14

Defendants as to Plaintiff's first, second, fifth, eighth, and

15

thirteenth claims.

16

sixth, seventh, ninth, tenth, eleventh, and fifteenth claims.
1.

17

Plaintiff responds

For the reasons stated below, the Court agrees with

The Court agrees with Plaintiff as to its

Plaintiff's First Claim for Breach of Contract

Plaintiff's claim for breach of the Confidentiality Agreement

18
19

is a mere recitation of the elements of a breach of contract claim.

20

For example, the Complaint states "Defendants failed to perform all

21

of the conditions, covenants and promises required of them under

22

the confidentiality agreements [sic], including, but not limited to

23

disclosing all or a portion of Plaintiff's Confidential Information

24

without the express or implied consent of Plaintiff."

25

122.

26

information was allegedly disclosed or how it was disclosed.4

27
28

Compl. ¶

Plaintiff pleads no facts regarding, inter alia, what

4

Such

The Court recognizes that the information allegedly disclosed is
purportedly confidential in nature and does not suggest that

11

1

"[t]hreadbare recitals of the elements of a cause of action" are

2

insufficient to state a claim under Iqbal.

3

See 129 S. Ct. at 1950.

Plaintiff argues that its allegation that Defendants breached

4

the contract by "disclosing all or a portion of Plaintiff's

5

Confidential Information" is sufficient to state a claim, and

6

Plaintiff cites to its RJN.

7

Opposition suggest it means to allege that Hain Celestial breached

8

the Confidentiality Agreement by conveying certain information to

9

WGM and disclosing that information at a proceeding before the

Other portions of Plaintiff's

United States District Court

For the Northern District of California

10

Trademarks Trial and Appeal Board ("TTAB").

11

is what Plaintiff means to allege, then it must say so in the

12

Complaint.

13

must be in the Complaint, not in an opposition brief or a RJN.

14

Because Plaintiff has failed to plead sufficient facts in support

15

of its first claim for breach of contract, the Court DISMISSES the

16

claim WITH LEAVE TO AMEND.

17

Opp'n at 19.

If this

The factual allegations necessary to support a claim

The Court further notes that Plaintiff alleges that it entered

18

into the Confidentiality Agreement with Hain Celestial, and the

19

text of the Agreement confirms this fact, but Plaintiff then

20

proceeds to allege that all Defendants breached the Agreement and

21

that there may have in fact been multiple agreements: "[b]y failing

22

to abide by the terms of the Confidentiality Agreement, Defendants

23

breached those agreements."

24

file an amended complaint, it should clarify how many contracts are

Compl. ¶ 123.

If Plaintiff chooses to

25
26
27

Plaintiff should disclose its own confidential information in its
Complaint. Nevertheless, Plaintiff should at least provide in
general terms the information to which it refers and how Defendants
allegedly disclosed that information.

28

12

1

at issue, specify who the parties to those contracts are, and limit

2

allegations of breach to those Defendants who were actually parties

3

to the contracts at issue.
2.

4

Plaintiff's Second Claim for Breach of Implied
Contract

5

Plaintiff's second claim for breach of implied contract

6
7

likewise fails to clearly allege facts sufficient to put Defendants

8

on notice of the nature of the claim.

9

from the Complaint, and from Plaintiff's Opposition for that

Simply put, it is unclear

United States District Court

For the Northern District of California

10

matter, exactly what implied contract Plaintiff contends existed,

11

and which Defendants Plaintiff alleges were parties to said

12

contract.

13

The Complaint appears to allege that one or more Defendants5

14

breached an implied contract by misusing Plaintiff's confidential

15

information without compensating Plaintiff.

16

states:

Plaintiff's Complaint

17
Defendants' [sic] understood that it [sic] was not to
use [Plaintiff's confidential information] for any
purpose other than the Permitted Purposes of the
[Confidentiality Agreement] and that any other use
would
require
Plaintiff's
permission
and
that
Plaintiff would expect compensation for any other use,
thereby
creating
an
implied
contract.
Upon
information
and
belief,
Defendants'
[sic]
used
Plaintiff's information without compensating Plaintiff
for such use – a breach of that implied contract.

18
19
20
21
22
23
24
25
26
27
28

Compl. ¶ 127.

As with its breach of contract claim, Plaintiff has

5

The heading beneath "Second Cause of Action" in the Complaint
states that the claim is against Hain Celestial. The allegations
that follow, however, interchangeably name "Hain C[elestial]" and
"Defendants." See Compl. ¶¶ 125-128.

13

1

not alleged any facts as to how Defendants misused its confidential

2

information.

3

Moreover, in its Opposition Plaintiff appears to change its

4

theory as to what implied contract allegedly existed.

Plaintiff

5

argues that Plaintiff and Hain Celestial agreed that, while

6

potential sale negotiations were ongoing, Plaintiff agreed to

7

suspend its opposition proceedings before the TTAB in exchange for

8

Hain Celestial agreeing to discontinue the use of the phrase

9

"sensible snacks" in connection with its products.

Opp'n at 5-6.

United States District Court

For the Northern District of California

10

This theory is entirely different from that set forth in the

11

Complaint.

12

Defendants allegedly violated, Defendants certainly lack adequate

13

notice to prepare a defense to Plaintiff's claim.

14
15

If Plaintiff cannot pin down what implied contract

Accordingly, Plaintiff's second claim for breach of implied
contract is DISMISSED WITH LEAVE TO AMEND.
3.

16

Infringement

17
18

Plaintiff's Fifth Claim for Contributory

A claim for contributory infringement requires a showing that

19

a defendant "intentionally induc[ed] or encourage[d] direct

20

infringement."

21

15932, 09-16044, 2011 U.S. App. LEXIS 3428, at *10 (9th Cir. Feb.

22

17 2011).

23

contributory infringement should be dismissed because Plaintiff has

24

failed to plead factual allegations of intentional inducement.

25

Plaintiff responds that without discovery it is unable to

26

differentiate among the parties.

MDY Indus., LLC v. Blizzard Entm't, Inc., Nos. 09-

Defendants argue that Plaintiff's fifth claim for

27
28

14

1

The Court agrees with Defendants.

Plaintiff's response is

2

beside the point.

Regardless of whether Plaintiff can

3

differentiate among the parties, Plaintiff has failed to plead

4

facts supporting the claim that any Defendant induced or encouraged

5

another to infringe.

6

merely recite legal conclusions such as: "Defendants have

7

contributed, aided and/or encouraged other Defendants and Does 1-20

8

to infringe . . . ."

9

provide factual allegations supporting these conclusions in order

Plaintiff's allegations underlying this claim

Compl. ¶ 140.

Iqbal requires Plaintiff to

United States District Court

For the Northern District of California

10

to state a plausible claim.

11

claim is DISMISSED WITH LEAVE TO AMEND.

12
13

4.

129 S. Ct. at 1950.

Plaintiff's fifth

Plaintiff's False Advertising Claims

Plaintiff's eighth and thirteenth claims allege false

14

advertising under California and federal law, respectively.

False

15

advertising under section 17500 of the California Business and

16

Professions Code is a claim sounding in fraud.

17

Cases, 46 Cal. 4th 298, 312 n.8 (2009).

18

to the heightened pleading requirements for fraud claims under

19

Federal Rule of Civil Procedure 9(b).

20

Plaintiff must allege facts identifying specific allegedly false

21

statements, including facts showing how the statements were

22

misleading.

23

U.S. Dist. LEXIS 25298, at *9-10 (S.D. Cal. Mar. 17, 2010).

24

Similarly, to state a federal claim for false advertising under the

25

Lanham Act, Plaintiff must identify "false statements of fact" in

26

advertisements that Defendants made about their own or another's

In re Tobacco II

Accordingly, it is subject

In order to state a claim,

See Chua v. Barratt American, No. 09cv105-L(WVG), 2010

27
28

15

1

product.

2

2003) (internal quotation omitted).

3

Rice v. Fox Broad. Co., 330 F.3d 1170, 1180 (9th Cir.

Defendants argue that Plaintiff's false advertising claims

4

should be dismissed because Plaintiff has failed to identify any

5

allegedly false statements made by Defendants.

6

Plaintiff argues that it has sufficiently pled its claims because

7

it has alleged that Defendants have used trademarks that infringe

8

the Sensible Food Marks in public advertising.

9

Court agrees with Defendants.

Mot. at 19.

Opp'n at 21.

The

Plaintiffs have failed to state a

United States District Court

For the Northern District of California

10

claim for false advertising under California or federal law because

11

they have not identified any allegedly false statements made by

12

Defendants.

13

are DISMISSED WITH LEAVE TO AMEND.

14

5.

Accordingly, Plaintiff's eighth and thirteenth claims

Plaintiff's Remaining Claims

15

Defendants argue that all of Plaintiff's remaining claims

16

should be dismissed for lack of specificity because Plaintiff often

17

fails to identify which Defendant is alleged to have committed

18

which wrongful act.

19

discovery it cannot be expected to differentiate among the actions

20

of related corporate entities that have used their own names in

21

confusing fashion in the marketplace.

22

reply that "Plaintiff's blurring of the lines goes well beyond what

23

it needs discovery to clarify."

24

Mot. at 15.

Plaintiff responds that without

Opp'n at 19.

Defendants

Reply at 15.

The Court agrees with Plaintiff.

The Court has noted above

25

that Plaintiff should clarify in any amended complaint which

26

parties it allegedly had contractual agreements with and which

27

parties allegedly breached those contracts.

28

16

Other than those

1

particular instances, however, the Court finds that Plaintiffs'

2

lack of precision in pleading is not so egregious as to warrant

3

dismissal of the Complaint in its entirety, and in fact, is quite

4

understandable given the interrelationship of Defendants and the

5

often confusing fashion in which Defendants have intermingled their

6

names in the marketplace.
Plaintiff alleges, and Defendants do not deny, that Hain

7
8

Celestial, Hain Gourmet, and WGM are affiliated entities.

9

Compl. ¶¶ 5, 8-9.

See

As to the remaining two named defendants,

United States District Court

For the Northern District of California

10

Defendants state: "The Complaint names World Gourmet, Inc. and

11

Sensible Snacks, Inc. as defendants.

12

understanding is that neither of these are actual legal entities."

13

Mot. at 1 n.1.

14

www.sensibleportions.com,6 display the text "World Gourmet, Inc.

15

All Rights Reserved" or "copyright World Gourmet, Inc."

16

Ex. 3(a),(b).7

17

states that "Sensible Snacks, Inc." is the manufacturer of Sensible

18

Portions.

19

confusing nature of the relationships among the various entities,

20

noting that the issue "may be addressed in a subsequent motion if

21

necessary."

Counsel's current

However, printed webpages from WGM's website,

Pl.'s RJN

Another printed page from www.sensibleportions.com

Pl.'s RJN Ex. 5.

Defendants even acknowledge the

Id.

If one thing is clear from this morass, it is that Plaintiff

22
23
24
25
26
27

6

Defendants admit that WGM uses the Internet domain name
www.sensibleportions.com. Reply at 2-3.
7

Defendants do not oppose Plaintiff's RJN with regard to exhibits
3(a), 3(b), and 5. Because these exhibits are public documents are
capable of accurate and ready determination by resort to sources
whose accuracy cannot reasonably be questioned, the Court GRANTS
Plaintiff's Request with regard to these exhibits only.

28

17

1

cannot be expected to unwind the precise legal relationships

2

between affiliated entities that have operated under various names

3

and specify precisely which entity engaged in every particular

4

act.8

5

2d 1171, 1175 (refusing to dismiss complaint for failure to specify

6

which of three defendants -- all affiliates of JP Morgan Chase Bank

7

-- allegedly engaged in which wrongful acts).9

See, e.g., Marseglia v. JP Morgan Chase Bank, 750 F. Supp.

detailed to give fair notice to the opposing party of the nature of

10

United States District Court

The allegations made in a complaint must be both "sufficiently

9
For the Northern District of California

8

the claim so that the party may effectively defend against it" and

11

"sufficiently plausible" such that "it is not unfair to require the

12

8

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Defendants complain specifically that: (1) Plaintiff alleges that
"Defendants" breached a contract and an alleged implied contract to
which only Hain Celestial was allegedly a party; (2) Plaintiff
refers at various times to a trademark application allegedly filed
by WGM as "Defendants' application"; (3) Plaintiff alleges that
"Defendants" exhibited at a trade show under the "World Gourmet
Marketing" name in 2008, prior to the date that Hain Celestial
allegedly acquired WGM; and (4) Plaintiff alleges that "Defendants"
registered the domain name www.sensibleportions.com, while it is
legally impossible for multiple entities to register a single
domain name. Mot. at 17. The Court has addressed the lack of
specificity regarding the contract claims supra. The rest of the
enumerated instances are either typographical errors, which
Defendants shall fix in any amended complaint, or instances where
discovery is necessary to allow Plaintiff to pinpoint precisely
which Defendants were involved. Defendants cannot credibly contend
that such trivialities seriously impair their ability to mount a
defense in this action.
9

The cases Defendants rely on involved much more deficient
complaints, as well as multiple defendants who were not related
entities. For instance, in Page v. Stanley, No. CV 11-02255 CAS
(SS), 2011 U.S. Dist. LEXIS 91358, at *5 (C.D. Cal. Aug. 16, 2011),
the court dismissed a prisoner's pro se complaint that was
"confusing and nonsensical" and failed to specify the incident
giving rise to each claim or which of six law enforcement officers
was allegedly involved in each incident. In Fujikawa v. OneWest
Bank, FSB, Civ. No. 11-00151 HG-KSC, 2011 U.S. Dist. LEXIS 79817,
at *2, *7-8 (D. Haw. July 21, 2011), the court dismissed a mortgage
fraud complaint containing a "series of vague factual allegations"
where plaintiff's counsel had filed numerous nearly identical
complaints in other actions.

18

1

opposing party to be subjected to the expense of discovery."

Starr

2

v. Baca, 633 F.3d 1191, 1204 (9th Cir. 2011).

3

deficiencies specifically discussed supra, Plaintiff's occasional

4

failure to distinguish among Defendants in the instant Complaint

5

does not deprive Defendants of the fair notice necessary to defend

6

against it, and it is not unfair to subject Defendants to discovery

7

to allow Plaintiff to cure the confusion.

Except for the

8

Defendants' Motion is therefore denied with respect to

9

Plaintiff's sixth, seventh, ninth, tenth, eleventh, and fifteenth

United States District Court

For the Northern District of California

10

claims.

11
12

V.

CONCLUSION

13

For the foregoing reasons, the Court GRANTS IN PART AND DENIES

14

IN PART the motion by Defendants World Gourmet, Inc., Hain Gourmet,

15

Inc., Hain Celestial Group, Inc., World Gourmet Marketing, LLC, and

16

Sensible Snacks, Inc. to dismiss Plaintiff Sensible Foods, LLC's

17

Complaint, and rules as follows:

18

•

Plaintiff's fourth claim for state trademark infringement,

19

twelfth claim for cyberpiracy under the Lanham Act, fourteenth

20

claim for state cyberpiracy, and sixteenth claim for unjust

21

enrichment are DISMISSED WITH PREJUDICE.

22

•

Plaintiff's first claim for breach of contract, second claim

23

for breach of implied contract, third claim for breach of

24

implied covenant of good faith and fair dealing, fifth claim

25

for contributory trademark infringement, eighth claim for

26

false advertising in violation of section 17500 of

27

California's Business and Professions Code, and thirteenth

28

19

1

claim for false advertising under the Lanham Act are DISMISSED

2

WITH LEAVE TO AMEND.

3

•

Plaintiff's sixth claim for unfair competition under section

4

17200 of California's Business and Professions Code, seventh

5

claim for deceptive trade practices under section 17500 of

6

California's Business and Professions Code, ninth claim for

7

federal trademark infringement under the Lanham Act, tenth

8

claim for reverse confusion under the Lanham Act, eleventh

9

claim for cancellation of federal trademark registration under

United States District Court

For the Northern District of California

10

the Lanham Act, and fifteenth claim for common law trademark

11

infringement remain undisturbed.

12
13

Plaintiff is granted thirty (30) days leave to file an amended

14

complaint.

If Plaintiff fails to file an amended complaint within

15

this time frame, its first, second, third, fifth, eighth, and

16

thirteenth claims are dismissed WITH PREJUDICE.

17
18

IT IS SO ORDERED.

19
20
21

Dated: November 3, 2011
UNITED STATES DISTRICT JUDGE

22
23
24
25
26
27
28

20