Nestle Purina PetCare Company v. The Blue Buffalo Company Ltd.

Filing 449

MEMORANDUM AND ORDER re 389 MOTION to Dismiss Party filed by Third Party Defendant Diversified Ingredients, Inc. The motion is GRANTED in part and DENIED in part. Blue Buffalo shall file an amended third-party complaint no later than 9/25/2015 in accordance with the terms of this Order. Signed by District Judge Rodney W. Sippel on 9/8/15. (CAR)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
NESTLÉ PURINA PETCARE COMPANY,
Plaintiff/Counterclaim Defendant,
vs.
THE BLUE BUFFALO COMPANY LTD.,
Defendant/Counterclaim Plaintiff,

AND RELATED ACTIONS

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Case No. 4:14 CV 859 RWS

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MEMORANDUM AND ORDER
This matter is before me on third-party defendant Diversified Ingredients, Inc.’s motion
to dismiss the Blue Buffalo Company, Ltd.’s claims against it. Blue Buffalo’s claims against
Diversified arise out of an underlying action in which Nestle Purina Petcare Company alleged
that Blue Buffalo falsely advertised its pet foods as free of poultry by-product meal in violation
of the Lanham Act, 15 U.S.C. § 1125. Blue Buffalo now admits that poultry by-product was in
some of its pet foods. However, it claims that its ingredient supplier, Wilbur-Ellis, and
ingredient broker, Diversified Ingredients, deceived Blue Buffalo when they sold it by-product
meal instead of chicken and turkey meal. Blue Buffalo brings third-party claims against WilburEllis and Diversified, alleging that the ingredient suppliers are liable to it for indemnity and
contribution for any harm Blue Buffalo is found to have committed against Purina, as well as for
additional damages under theories of breach of contract, breach of warranty, fraud,
misrepresentation, negligence, unjust enrichment, unfair competition, and other statutory
violations.

Diversified now moves to dismiss Blue Buffalo’s claims against it for failure to state a
claim upon which relief can be granted. For the reasons that follow, I will grant in part and deny
in part Diversified’s motion.
Legal Standard
In ruling on a motion to dismiss brought under Fed. R. Civ. P. 12(b)(6), I must accept as
true all factual allegations in the complaint and view them in the light most favorable to the
plaintiff. Kohl v. Casson, 5 F.3d 1141, 1148 (8th Cir. 1993). “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 Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S. at 678. While a court must accept factual
allegations as true, it is “not bound to accept as true a legal conclusion couched as a factual
allegation.” Carton v. Gen. Motor Acceptance Corp., 611 F.3d 451, 454 (8th Cir. 2010) (internal
citations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (internal citations omitted).
Discussion
Diversified argues that I should dismiss Blue Buffalo’s third-party claims against it
because a) Blue Buffalo cannot seek indemnity or contribution for any Lanham Act liability as a
matter of law, and b) Blue Buffalo’s remaining claims are improperly joined under Fed. R. Civ.
P. 14(a) because they are not derivative of Purina’s false advertising claims against Blue Buffalo.
In the alternative, Diversified argues that I should sever Blue Buffalo’s claims against it from the

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underlying case between Purina and Blue Buffalo to avoid needless delay, confusion, and
complication.
A. Indemnity and Contribution Claims
Diversified argues that there is no right to indemnity or contribution for Lanham Act
claims. Despite Blue Buffalo’s policy argument otherwise, I agree with Diversified that Blue
Buffalo’s claims for indemnity and contribution for its alleged violation of the Lanham Act are
barred as a matter of law. There is no federal common law right to indemnity or contribution
under which Blue Buffalo can assert claims for its potential Lanham Act liability. Getty
Petroleum Corp. v. Island Transp. Corp., 862 F.2d 10, 16 (2d Cir. 1988), cert. denied, 490 U.S.
1006, 109 S.Ct. 1642, 104 L.Ed.2d 157 (1989). Additionally, there is no express right of
contribution or indemnity under the Lanham Act. See id. at 16; 15 U.S.C. § 1117. Other courts
have addressed the question of whether a right to contribution is impliedly permitted by the
Lanham Act and have held that they are not. See, e.g., Wagner v. Circle W. Mastiffs, No. 2:08CV-00431, 2010 WL 1009904, at *9 (S.D. Ohio Mar. 12, 2010) (compiling cases); Getty
Petroleum Corp., 862 F.2d 10, 16 (2d Cir. 1988), cert. denied, 490 U.S. 1006, 109 S.Ct. 1642,
104 L.Ed.2d 157 (1989); Santana Products, Inc. v. Bobrick Washroom Equip., Inc., 69 F. Supp.
2d 678, 684, 687 (M.D. Pa. 1999). I agree with the reasoning in these cases and will also decline
to imply a right to indemnity or contribution with respect to Purina’s Lanham Act claim against
Blue Buffalo.
Diversified also argues that Blue Buffalo may not obtain indemnity or contribution for
any liability it is found to have under Purina’s claims for unjust enrichment and unfair
competition under Missouri common law because they are intentional torts. Under the
“intentional misconduct rule,” Missouri courts prohibit claims for contribution or indemnity

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among willful joint tortfeasors. Missouri Pac. R. Co. v. Whitehead & Kales Co., 566 S.W.2d
466, 469 (Mo. 1978). However, when the underlying causes of action are “broad enough to
encompass both intentional and negligent conduct,” the intentional misconduct rule might not
apply. See Charter Express, Inc. v. United S. Assur. Co., 1990 US. Dist. LEXIS 10301, at *4
(W.D. Mo. July 30, 1990).
Here, Purina’s claims against Blue Buffalo for unjust enrichment and unfair competition
are pleaded broadly enough to encompass both intentional and negligent conduct. Moreover, at
this stage of the case, I must accept Blue Buffalo’s factual allegations as true, including its
allegation that that the byproduct was in its food without its knowledge or intent. Additionally,
the extent or basis of Blue Buffalo’s potential liability on these claims is yet to be determined.
As a result, I cannot say that Blue Buffalo has failed to state a claim for indemnity or
contribution for Purina’s unjust enrichment and unfair competition claims.
B. Joinder of Claims
Diversified argues that I should dismiss Blue Buffalo’s remaining claims as improperly
joined under Fed. R. Civ. P. 14. because they are independent actions not derived from Purina’s
claims against Blue Buffalo. Rule 14(a)(1) allows a defendant to, “as a third-party plaintiff,
serve . . . a nonparty who is or may be liable to it for all or part of the claim against it.”
Diversified concedes that in addition to permitting impleader of third-party defendants when they
may have derivative liability, joinder is also proper under Rule 14 if a party is secondarily liable
for claims of contribution and indemnity. Having already found that Blue Buffalo may maintain
its third-party claims for contribution and indemnity arising out of Purina’s unfair competition
and unjust enrichment claims, it follows that joinder of Diversified is proper under Rule 14.
Additionally, to the extent that any of Blue Buffalo’s remaining claims are not based on

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derivative liability, they are still properly joined under Fed. R. Civ. P. 18. Rule 18 provides that
“[a] party asserting a . . . third-party claim may join, as independent or alternate claims, as many
claims as it has against an opposing party.” Fed. R. Civ. P. 18(a). As a result, I will not dismiss
Blue Buffalo’s remaining claims against Diversified.
C. Severance in the Court’s Discretion
Diversified’s final argument is that I should sever the claims and case against it from the
underlying action filed by Purina against Blue Buffalo because confusion, delay, and needless
complication will result if Diversified remains in the action. The right to implead third parties is
not automatic and the decision to permit impleader rests within the sound discretion of the trial
court. City of St. Louis v. Cernicek, et al., No. 400-CV-1895, 2001 WL 34134733, at *3 (E.D.
Mo. Sept. 25, 2001). In determining whether impleader is appropriate, a district court must
balance the benefits derived from impleader – the benefits of settling related matters in one suit
— against possible prejudice to the plaintiffs and the third party defendants, the complication of
issues at trial, the merit of the third-party complaint, and any additional expense that would be
incurred by the parties. Id.
There is a risk that allowing Blue Buffalo’s third-party claims to proceed will prejudice
and impose additional expense on the third-party defendants. However, the addition of the thirdparty defendants is not likely to complicate the issues at trial because whether the third-parties
are in the action or not, the focus of the suit will remain the same: determining what is in Blue
Buffalo’s food, and Blue Buffalo’s knowledge, if any. Additionally, although the third-party
defendants may incur some additional expense related to their inclusion in this admittedly highly
contentious suit, Diversified need not participate in any issues that arise solely between Purina
and Blue Buffalo that do not relate to Blue Buffalo’s claims against Diversified. Furthermore, if

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the parties were required to litigate these same issues in a separate suit, they would also incur
expenses that could have been avoided by trying the claims in one action. Moreover, settling all
related matters in one suit greatly benefits the other parties to the suit and interests in judicial
economy.1 As a result, I conclude that the benefits of allowing Blue Buffalo to implead
Diversified outweigh the possible prejudice, complication, and expense that could be incurred by
the parties.
Accordingly,
IT IS HEREBY ORDERED that Diversified Ingredients’ motion to dismiss [389] is
GRANTED in part and DENIED in part. Blue Buffalo shall file an amended third-party
complaint no later than September 25, 2015 in accordance with the terms of this Order.

_________________________________
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 8th day of September, 2015.

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Third-party defendant Wilbur-Ellis has not moved for severance, and the claims against Wilbur-Ellis involve and
will require discovery on many of the same issues raised in Blue Buffalo’s claims against Diversified. Additionally,
Purina consented to the addition of the third-party defendants at the May 6, 2015 status hearing in this case. See
Transcript of Status Conference, #[270].
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