McGee v. Diamond Foods, Inc.
Filing
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ORDER granting 27 Defendant Diamond Foods, Inc.'s Motion to Dismiss Plaintiff's First Amended Complaint. The entire action is dismissed with prejudice.Signed by Judge John A. Houston on 3/27/2017. (jpp)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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JACQUELYN MCGEE,
Case No.: 14cv2446 JAH (DHB)
Plaintiff,
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v.
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ORDER GRANTING DEFENDANT
DIAMOND FOODS, INC.’S MOTION
TO DISMISS PLAINTIFF’S FIRST
AMENDED COMPLAINT [Doc. No.
27]
DIAMOND FOODS, INC.,
Defendant.
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INTRODUCTION
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Presently before the Court is Defendant Diamond Foods, Inc.’s (“Defendant”)
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motion to dismiss Plaintiff Jacquelyn McGee’s (“Plaintiff”) First Amended Complaint
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(“FAC”) for failure to state a claim, [doc. no. 27], following this Court’s March 1, 2016
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order dismissing Plaintiff’s original Complaint, [doc. no. 26]. Defendant’s motion has
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been fully briefed by the parties. Doc. Nos. 28, 29. After careful consideration of the
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pleadings, relevant exhibits, and the entire record in this case, the Court exercised its
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discretion pursuant to CivLR 7.1(d.1) and took Defendant’s motion under submission
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without oral argument. Doc. No. 30. For the reasons set forth below, the Court GRANTS
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Defendant’s motion and DISMISSES the FAC WITH PREJUDICE.
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//
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//
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14cv2446 JAH (DHB)
BACKGROUND1
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On October 14, 2014, Plaintiff filed a class action against Defendant, asserting
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claims for unfair and unlawful business practices under California Unfair Competition
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Law, Cal. Bus. & Prof. Code §§ 17200 et seq., public nuisance under Cal. Civ. Code §§
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3479-3493, and breach of the implied warranty of merchantability. See Doc. No. 1. Plaintiff
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alleged that Defendant manufactures and sells a variety of popcorn products (“the Trans
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Fat Popcorns”) containing partially hydrogenated vegetable oil (“PHVO”), the only dietary
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source of artificial Trans Fat (“TFA”), in the Pop Secret brand, which Plaintiff purchased
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and consumed. Doc. No. 1 at 4. Plaintiff alleged that, since there is “no safe level” of TFA
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intake and there are safe, low-cost, and commercially acceptable alternatives to TFA,
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Defendant unfairly elected not to use substitutes in the Trans Fat Popcorns. Doc. No. 1 at
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4, 7. Plaintiff further alleged that consumption of TFAs is extremely harmful [Id. at 7],
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contributes to the development of cardiovascular disease [Id. at 10], type-2 diabetes [Id. at
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12], breast, prostate, and colorectal cancer [Id. at 14], Alzheimer’s disease and cognitive
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decline [Id.], and organ damage [Id. at 15].
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On November 12, 2014, Defendant filed a motion to dismiss, arguing, inter alia, that
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Plaintiff lacks Article III standing because she suffered no “injury in fact” and,
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notwithstanding its standing argument, Plaintiff fails to state a claim upon which relief can
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be granted. See Doc. No. 7. On December 8, 2014, Plaintiff filed a response in opposition
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to Defendant’s motion. Doc. No. 8. On December 15, 2014, Defendant filed a reply and
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objection to Gregory S. Weston’s Declaration in support of Plaintiff’s opposition. Doc.
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Nos. 9, 10. On August 10, 2015, Plaintiff filed as supplemental authority: (1) 80 Fed. Reg.
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34650 (the Food and Drug Administration’s (“FDA”) June 17, 2015 final determination
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regarding PHVO); and (2) Guttmann v. Nissin Foods Co., 2015 U.S. Dist. LEXIS 92756
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The background section facts included herein have been entirely taken from
Plaintiff’s FAC, the operative document in the motion to dismiss analysis. See Doc. No.
26.
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14cv2446 JAH (DHB)
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(N.D. Cal.) (finding that the plaintiff’s claims for violation of the unfair prong of the Unfair
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Competition Law and breach of the implied warranty of merchantability survive; while all
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other claims are dismissed without leave to amend. However, that Court made no
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determination as to whether the plaintiff had standing). See Doc. No. 17. On August 18,
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2015, Defendant filed a response to Plaintiff’s notice of supplemental authority supporting
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her opposition to Defendant’s motion to dismiss. See Doc. No. 18. On August 21, 2015,
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Defendant provided notice of supplemental authority to the Court regarding Backus v.
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General Mills, Inc., 2015 WL 4932687 (N.D. Cal.). See Doc. No. 19.
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On March 1, 2016, this Court granted Defendant’s motion to dismiss the original
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complaint, finding that Plaintiff lacked Article III standing. Doc. No. 25 at 12. Indeed, the
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Court expressed apprehension with respect to reaching the merits of Plaintiff’s substantive
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claims, on the record before it, because Plaintiff failed to demonstrate an injury in fact. Id.
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The Court underscored defects with respect to economic injury and physical harm suffered.
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Id. at 11-12. First, with respect to Plaintiff’s failure to demonstrate economic injury, the
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Court found that Plaintiff did “not allege an economic injury which satisfies Article III
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standing by alleging that she purchased a product that was less healthy than expected. Also,
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the Court [found] that Plaintiff received the benefit of her bargain when she consumed
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Defendant’s popcorn.” Doc. No. 25 at 11. With respect to Plaintiff’s failure to demonstrate
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injury in fact, as to some physical harm suffered, the Court found that “Plaintiff did not
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allege a credible threat of harm and that the injury alleged does not ‘affect the plaintiff in
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a personal and individual way.’” Id. (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555,
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560 (1992)). Accordingly, the Court dismissed the original complaint without prejudice
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and granted Plaintiff fourteen days to file an amended complaint. Id. at 16.
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On March 16, 2016, Plaintiff filed the instant FAC re-alleging the same causes of
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action asserted in the original complaint. See Doc. No. 26 (alleging the following causes
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of action: (1) injunctive relief; (2) unfair and unlawful business practices under California
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Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq.; (3) public nuisance
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under Cal. Civ. Code §§ 3479-3493; and (4) breach of implied warranty of
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14cv2446 JAH (DHB)
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merchantability); cf. Doc. No. 1 (alleging claims for (1) injunctive relief; (2) unfair and
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unlawful business practices under California Unfair Competition Law, Cal. Bus. & Prof.
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Code §§ 17200 et seq.; (3) public nuisance under Cal. Civ. Code §§ 3479-3493; and (4)
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breach of implied warranty of merchantability). However, the FAC now includes additional
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facts pled in support of (1) Plaintiff’s UCL claim; and (2) Plaintiff’s burden to demonstrate
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standing. Id. at 19, 21. On April 4, 2016, Defendant moved to dismiss the FAC. See Doc.
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No. 27. On May 17, 2016, Plaintiff filed an opposition to Defendant’s motion. See Doc.
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No. 28. On May 24, 2016, Defendant replied. See Doc. No. 29.
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DISCUSSION
I.
Legal Standard
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A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint.
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Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule
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12(b)(6) where the complaint lacks a cognizable legal theory or fails to allege sufficient
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facts to support a cognizable legal theory. Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013).
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“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
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accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,
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556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
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(2007)). A claim is facially plausible when the factual allegations permit “the court to draw
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the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556
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U.S. at 678. In other words, “the non-conclusory ‘factual content,’ and reasonable
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inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff
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to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (citing Iqbal, 556
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U.S. at 678). “Determining whether a complaint states a plausible claim for relief will . . .
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be a context-specific task that requires the reviewing court to draw on its judicial
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experience and common sense.” Iqbal, 556 U.S. at 679.
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In reviewing a motion to dismiss under Rule 12(b)(6), a court must assume the truth
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of all factual allegations and construe the factual allegations in the light most favorable to
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the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996).
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14cv2446 JAH (DHB)
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However, legal conclusions need not be taken as true merely because they are “cast in the
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form of factual allegations.” Ileto v. Glock Inc., 349 F.3d 1191, 1200 (9th Cir. 2003). “Nor
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does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual
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enhancement.’” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 557). The court may
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consider facts alleged in the complaint, documents attached to the complaint, documents
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relied upon but not attached to the complaint when authenticity is not contested, and
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matters of which the court takes judicial notice. Lee v. City of Los Angeles, 250 F.3d 668,
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688–89 (9th Cir. 2001). If a court determines that a complaint fails to state a claim, the
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court should grant leave to amend unless it determines that the pleading could not possibly
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be cured by the allegation of other facts. Doe v. United States, 58 F.3d 494, 497 (9th Cir.
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1995).
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II.
Analysis
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Defendant contends that the FAC fails to state a claim because Plaintiff has no injury
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in fact and still lacks Article III standing. Doc. No. 27 at 14-18. Additionally, Defendant
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argues that the supplemental authority provided to the Court on August 10, 2015, bars
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Plaintiff’s claims because they are preempted by federal law. Id. at 26. Plaintiff disagrees,
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arguing in opposition that she has properly pleaded standing because she alleged facts
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demonstrating physical injury, the risk of harm in the future, and economic injury from
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purchasing an unlawful product. Doc. No. 28 at 13. In reply, Defendant maintains that (1)
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Plaintiff has not properly alleged facts demonstrating standing; and (2) given the Plaintiff’s
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inability to effectively plead her case, and the legal effect of the FDA’s actions, that the
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Court should dismiss the FAC with prejudice. Doc. No. 29 at 6.
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Construing all inferences in the light most favorable to Plaintiff, the Court finds that
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Plaintiff’s FAC fails to cure the Article III standing defects discussed in the Court’s March
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1, 2016 order. Doc. 25 at 11-12. Defendant points out the same, and argues that this Court
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should not depart from applying its previous rationale that is applicable here. Doc. No. 27
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at 12. The Court agrees. Pepper v. United States, 131 S. Ct. 1229, 1250 (2011) (“‘[W]hen
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a court decides upon a rule of law that decision should continue to govern the same issues
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14cv2446 JAH (DHB)
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in subsequent stages in the same case.’” quoting Arizona v. California, 460 U.S. 605, 618
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(1983)). Accordingly, the Court finds that because identical standing defects as were fatal
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in the original complaint persist in the FAC, the Court must ADOPT its prior reasoning
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with respect to the FAC.
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CONCLUSION AND ORDER
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After due consideration, and with respect to the prior order granting Defendant
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Diamond Foods, Inc.’s motion to dismiss for failure to state a claim [Doc. No. 25], the
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Court (1) ADOPTS the reasoning of its March 1, 2016 order granting Defendant Diamond
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Foods, Inc.’s motion to dismiss; (2) GRANTS Defendant Diamond Foods, Inc.’s motion;
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and (3) DISMISSES the entire action WITH PREJUDICE.
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DATED: March 27, 2017
_________________________________
JOHN A. HOUSTON
United States District Judge
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14cv2446 JAH (DHB)
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