INDUSTRIA DE ALIMENTOS ZENU S.A.S. v. LATINFOOD U.S. CORP. et al
OPINION. Signed by Judge Kevin McNulty on 3/9/2018. (sm, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
INDUSTRIA DE ALIMENTOS ZENU
Civ. No. 16-6576 (KM)(MAH)
LATINFOOD U.S. CORP. d/b/a ZENU
PRODUCTS CO., and WILSON
KEVIN MCNULTY. U.S.D,J.:
Plaintiff Industria de Alimentos Zenü, S.A.S (industria”) brought a
sixteen-count action against the defendants, Latinfood U.S. Corp doing
business as ZenU Products Co. (“Latinfood”), and Wilson Zuluaga. Latinfood
has asserted a counterclaim for tortious interference with prospective economic
advantage against Industria and Cordialsa, Inc. (“Cordialsa”).
Industria and Cordialsa now move under Federal Rule of Civil Procedure
12(b)(6) to dismiss the most recent amended version of Latinfood’s
Counterclaim for failure to state a claim. For the reasons set forth below, that
motion is denied.
I previously considered this case in the context of Latinfood and Mr.
Zuluaga’s motion to dismiss Counts 1—4 and 11—16 of the Amended Complaint
under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon
which relief can be granted. See Industria de Alimentos Zenu S.A.S. v. Latinfood
U.S. Corp., No. CV 16-6576 (KM)(MAH), 2017 WL 6940696 (D.N.J. Dec. 29,
2017). Familiarity with that opinion, which relates the background of the
litigation and the allegations of the complaint, is assumed.
Latinfood filed an answer generally denying those allegations and
asserting a counterclaim for tortious interference with prospective economic
advantage against Industria and Cordialsa. (Answer, Counterclaims
The current amended version of the counterclaim (cited as “Counterclaim”,
ECF no. 89 at 19—25) alleges as follows.
Industria is a corporation organized under the laws of Colombia and is a
wholly-owned subsidiary of Orupo Nutresa S.A.2 (Counterclaim
Cordialsa is a corporation organized under the laws of Texas, and is also a
wholly-owned subsidiary of Grupo Nutresa S.A. (Id.
4, 12). Cordialsa, which
began its operations in 2004, is the “marketing arm and distribution company
for Grupo Nutresa S.A.” (Id.
According to Latinfood, Cordialsa “uses different channels of distribution
to commercialize its products in the U.S.,” including “supermarkets,
convenience stores, club stores, mass merchandisers and dollar stores.” (Id.
For the purposes of this 12(b)(6) motion to dismiss, I will assume the allegations
in the Answer (where the counterclaims are made) are true. See Section III, infra.
Industria’s Amended Complaint (AC) similarly alleges that Industña is a whollyowned subsidiary of Gmpo Nutresa S.A., “the largest Colombian food corporation with
annual global sales of approximately U.S. $3 billion.” (AC ¶ 13). According to
Industria, “Gmpo Nutresa conducts business and sells products in the United States
through United States-based subsidiaries.” (Id.)
13). Cordialsa has warehouses in Houston, Texas; Laredo, Texas; and Los
Angeles, California. (Id.) Latinfood alleges upon information and belief that
Cordialsa sells its products in California, Nevada, Arizona, Texas, Florida, New
York, New Jersey, Illinois, and Georgia. (Id. at
On or around July 15, 2015, Mr. Zuluaga, on behalf of Latinfood, paid a
regular visit to its customer Food Fair Supermarket in Paterson, New Jersey.
18). During that visit the store manager requested that Mr. Zuluaga
remove all of Latinfood’s Zenu-branded products from the store. (Id.) The
manager informed Mr. Zuluaga that the area manager of Cordialsa, Alejandro
Yepes, had told him that Latinfood’s ZenU-branded products were “fake.”’ (Id.)
The manager also stated that Yepes “intimidated” him “into removing the
products from the store entirely.” (Id.)
On that same date, Mr. Zuluaga allegedly spoke to Mr. Yepes in the
parking lot of the supermarket. (Id. at
19). Yepes acknowledged that he had
told the Food Fair Supermarket manager the Latinfood products were “fake,”
and also “that he had requested [the products] be removed from the store
shelves.” (Id.) Yepes also stated that “he had been given direct orders from his
manager, Luis Arango” not only to “identify points of sale of any Zenu-branded
products,” but also to tell those points of sale “that the products were ‘fake.”’
(Id.) Yepes stated that Arango had told him that the products “had to be
removed immediately from the sales floor.” (Id.)
Later that day, Latinfood sent a cease-and-desist letter to Arango and
Cordialsa. The letter described the incident at Food Pair Supermarket, and
demanded that “such malicious actions” stop and such “willfully false
statements” cease. (Id. ¶ 20; a copy of the letter is at ECF no. 69-2.) Latinfood
asserts that despite the letter, it “continued to receive several comments from
various Latinfood customers that Industria and/or Cordialsa” had contacted
them and informed them that Latinfood’s Zenu-branded products were “Take’
and that the customers should immediately stop carrying the products.” (Id. ¶
21). Latinfood alleges that “Industria’s and/or Cordialsa’s false and malicious
comments” caused Latinfood’s sales and volumes to decrease or even cease
22). The counterclaim alleges that Industria and Cordialsa
“seek to interfere with Latinfood’s current and prospective customer
relationships, and thereby deprive Latinfood of its economic advantage to
which it is entitled.” (Id.
II. Procedural History
On October 5, 2016, Industria filed its initial Complaint against
Latinfood, doing business as “ZenU Products Co.”, and Mr. Zuluaga. (Cplt.) It
asserted eight claims against Latinfood and Mr. Zuluaga for infringmenet of
trademarks and unfair competition.
On April 21, 2017, Industria filed an Amended Complaint asserting
sixteen causes of action against Latinfood and Mr. Zuluaga.3 (AC) Although the
initial Complaint centered on the Zenu mark, the Amended Complaint added
claims with respect to the Ranchera mark. Counts 1-4 and 11 arise under the
Lanham Act. Counts 5-10 allege copyright infringement of specific copyrights
owned by Industria. (Id. ¶13 126-67). Counts 12-14 allege violations of the IAC.
176-98) Counts 15 and 16 allege unfair competition in violation of the
New Jersey Fair Trade Act, N.J. Stat. Ann. 56:4-1 et seq. (Id.
On May 19, 2017, Latinfood and Mr. Zuluaga filed a Partial Answer to
Industria’s Amended Complaint (ECF no. 36), as well as a motion to dismiss
Counts 1-4 and 11-16. (ECF no. 37) I denied that motion to dismiss by Order
and Opinion filed December 29, 2017. (ECF nos. 81, 82)
On June 30, 2017, pursuant to stipulation, Latinfood and Zuluaga filed
their Amended Partial Answer, with a Counterclaim asserted by Latinfood
against Industria and Cordialsa.4 ((ECF no. 44 at 22-25)5
The Court filed a stipulation and Order allowing Industria to file the Amended
Complaint. (ECF no. 33) In light of the filing of the Amended Complaint, this Court
administratively terminated (ECF no. 34) a pending motion (ECF no. 14) to dismiss the
As against Industria, this is properly deemed a counterclaim. Cordialsa,
however, is not a plaintiff. Technically, then, as to Cordialsa the “counterclaim” is
actually a third-party complaint. The Clerk’s Office docketed the submission as
On September 8, 2017, Latinfood and Mr. Zuluaga filed their Second
Amended Partial Answer with Counterclaim. (ECF nos. 60, 62). The
counterclaim of tortious interference with prospective economic advantage was
asserteds by Latinfood against Industria and Cordialsa. (Id.)
On September 29, 2017, Industria and Cordialsa filed a renewed motion
to dismiss the version of Latinfood’s counterclaim contained in the Second
Amended Partial Answer. (ECF no. 69). As Exhibit A to the motion, they
attached a copy of the cease-and-desist letter sent from Mr. Zuluaga, on behalf
of Latinfood, to Luis Arango. (ECF no. 69-2, Exh. A). Exhibit B is a copy of the
counsel’s responding letter, dated November 10, 2015. (ECF no. 69-2, Exh. B).
On October 30, 2017, Latinfood and Mr. Zuluaga filed papers in
opposition to the motion to dismiss the then-current Counterclaim, attaching a
declaration from Mr. Zuluaga. (ECF no. 77). On November 13, 2017, Industria
and Cordialsa filed their reply. (ECF no. 78).
On January 29, 2018, Latinfood and Mr. Zuluaga filed a Third Amended
Partial Answer with Counterclaim. (ECF no. 89). On February 9, 2018, the
parties stipulated that the pending motion to dismiss the Counterclaim would
be deemed to apply to the version in the Third Amended Partial Answer. (ECF
no. 92). The matter is thus fully briefed and ripe for decision.
A motion to dismiss counterclaims is reviewed under the same standard
as a motion to dismiss a complaint under Fed. R. Civ. P. 12(b)(6). In re
Gabapentin Patent Litig., 648 F. Supp. 2d 340, 346 (D.N.J. 2009) (citing
Organon Inc. v. Mylan Phann., 293 F. Supp. 2d 453, 456-57 (D.N.J. 2003)).
“Second Amended Partial ANSWER to Complaint with JURY DEMAND Causes of Action
5-10, Amended THIRD PARTY COMPLAINT against Cordialsa USA, Inc., INDUSTRIA
DE ALIMENTOS ZENU S.A.S. by WILSON ZULUAQA, LATINFOOD U.S. CORP.” For
ease of reference, I will continue to refer to the “Counterclaim” as such. The
ten-ninoIor makes no difference in substance.
Industria filed a motion for preliminary injunction, which was withdrawn by
stipulation on October 23, 2017. (ECF nos. 49, 74). Industria and Cordialsa filed a
motion to dismiss the Counterclaim, later withdrawn in response to its amendment.
(ECF nos. 51, 65)
Under Rule 12(b)(6), a party may move for the dismissal of a claim, if it fails to
state a claim upon which relief can be granted. The moving party bears the
burden of showing that no claim has been stated. Animal Science Products, Inc.
u. China Minmetals Corp., 654 F.3d 462, 469 n. 9 (3d Cir. 2011). For the
purposes of a motion to dismiss, the facts alleged in the complaint are accepted
as true and all reasonable inferences are drawn in favor of the non-moving
party. New Jersey Carpenters & the Trustees Thereof v. Tishman Const. Corp. of
N.J., 760 F.3d 297, 302 (3d Cir. 2014).
A counterclaimant’s obligation to provide the grounds for entitlement to
relief requires more than labels and conclusions; a formulaic recitation of the
elements of a cause of action will not do. Bell AtL Corp. v. Twombly, 550 U.s.
544, 55 (2007). Thus, the counterclaimant’s factual allegations must be
sufficient to raise a counterclaimant’s right to relief above a speculative level,
so that a claim is “plausible on its face.” Id. at 570; see also West Run Student
Housing Assocs., LLC v. Huntington Nat. Bank, 712 F.3d 165, 169 (3d Cir.
2013). That facial-plausibility standard is met “when the [counterclaimant]
pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). While “[t}he plausibility
it asks for more than a
standard is not akin to a ‘probability requirement’.
sheer possibility.” Iqbal, 556 U.S. at 678.
In considering a motion under Rule 12(b)(6), I am confined to the
allegations contained within the counterclaims, with some narrow exceptions.
Courts may consider “document[s] integral to or explicitly relied upon in the
complaint,” or any “undisputedly authentic document.
attachefdl as an
exhibit to a motion to dismiss if the [counterclaimant]’s claims are based on the
document.” In re Asbestos Products Liab. Litig. (No. VI), 822 F.3d 125, 134 n.7
(3d Cir. 2016) (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410,
1426 (3d Cir. 1997)); Pension Ben. Guar. Corp. v. White Consol. Indus., 998 F.2d
1192, 1196 (3d Cir. 1g93fl; see also Schmidt u. Skolas, 770 F.3d 241, 249 (3d
Cir. 2014) (“However, an exception to the general rule is that a ‘document
integral to or explicitly relied upon in the complaint’ may be considered
‘without converting the motion to dismiss into one for summary judgment. “‘)
(quoting In re Burlington Coat Factory, 114 F.3d at 1426); Pension Ben. Guar.
Corp., 998 F.2d at 1196).
Under New Jersey law, a claimant alleging tortious interference with
prospective economic advantage must show that (1) it had a reasonable
expectation of economic advantage; (2) the interference was done intentionally
and with malice; (3) the interference caused the loss of prospective gain; and (4)
the injury caused damage. Printing Mart-Morristown v. Sharp Elecs. Corp., 116
N.J. 739, 751 (1989). SeeAuaya Inc., RPv. Telecom Labs, Inc., 838 F.3d 354,
382 (3d Cir. 2016).
In the Counterclaim, Latinfood6 alleges first that it had a continuing
economic relationship with its customers and “an expectation of prospective
economic advantage from relationships to be established with new customers
in the future.” (Counterclaim ¶ 25). Second, it alleges that Industria and
Cordialsa intentionally spread “false and malicious information, even though
both companies are well aware of Latinfood’s valid Zenü registration.” (Id. ¶ 23).
The alleged “false and malicious” information primarily consists of Industria
and Cordialsa’s alleged statements that Latinfood’s Zenü products were “fake”’
and instructions to customers, particularly a Food Fair supermarket, that they
should immediately stop carrying Latinfood’s products. (Id.
Latinfood asserts that similar statements by Cordialsa’s field representatives in
the northeast region of the United States induced other customers to cease
In their initial submissions, Industria and Cordialsa argued that only Latinfood
had standing to bring the counterclaim for tortious interference. (P1. Br. 5-6). They
maintained that Mr. Zuluaga had failed to establish his standing in a personal
capacity and therefore any counterclaims asserted by him must be dismissed. (Id. at
5). Latinfood acknowledges, however, that it is the only counterplaintiff. (Def Br. 12).
Latinfood’s position is entirely consistent with the wording of the Counterclaim. I
therefore disregard the standing argument as moot.
doing business with Latinfood. (Id.
¶ 26). Fourth, and finally, Latinfood alleges
that “[ajs a direct and proximate result of [Industria and Cordialsa’s} malicious
inducement to potential and existing clients of Latinfood not to engage in any
business activities with Latinfood, Latinfood suffered damages that will be
established at trial.” (Id.
A. Sufficiency of Allegations against Industria
The motion to dismiss the Counterclaim first focuses on the sufficiency
of Latinfood’s allegations that Industria participated in, or may be held liable
for, the alleged tordous acts.
As noted above, the Counterclaim alleges generally that “Industha and
Cordialsa” made malicious statements. Specifically, however, it alleges only
statements by Cordialsa’s area manager, Mr. Yepes. Industria argues that the
allegations of the Counterclaim against itself (as opposed to Cordialsa) are
conclusonj and do not contain sufficient factual detail. It argues further that
paragraphs 21 and 22 use the phrase “Industria and/or Cordialsa” in a
manner that fails to specify the role of each. (Id.)
There are two potential routes to liability on the part of Industria, one
direct and one indirect. First, Latinfood might allege and prove that Industria
acted in concert with Cordialsa and participated directly in the alleged tortious
interference. Second, it might attempt to pierce the corporate veil as to these
sister corporations, and thus attribute Cordialsa’s acts to Industña.
The Counterclaim, I find, plausibly asserts the first theory. Essentially it
alleges that Grupo Nutresa, Industria, and Cordialsa are an integrated
operation. In particular, Cordialsa is “the marketing arm and distribution
company for Grupo Nutresa.” (Counterclaim
¶ 13) And it alleges that a
representative of Cordialsa intimidated a Food Fair manager from stocking
Latinfood products that were “fake.” In context, it is easily inferable that “fake”
meant that the products were knockoffs masquerading as Industria’s products.
That Cordialsa would assert Industria’s trademark rights plausibly supports an
inference that it was acting in concert with Industria. That, of course, falls far
short of conclusive proof, but it is a plausible enough allegation to require
discovery of the relevant facts, which would naturally be within the control of
The second theory, piercing the corporate veil, has two primary elements.
“First, there must be such a unity of interest and ownership that the separate
personalities of the corporation and the individual no long exist. Second, the
circumstances must indicate that adherence to the fiction of separate corporate
existence would sanction a fraud or promote injustice.” State Capital Title &
Abstract Co. v. Pappas Bus. Set-vs., LLC, 646 F.Supp.2d 668, 679 (D.N.J. 2009).
Generally veil piercing presents a fact-intensive issue, requiring discovery. See
N. Am. Steel Connection, Inc. v. Watson Metal Products Corp., 2010 WL
3724518, at *10 (D.N.J. Sept.14, 2010) (citations omitted), affd, 515 F. App’x
176 (3d Cir. 2013).
Since the Counterclaim adequately pleads direct liability, I set aside the
veil-piercing theory. The motion to dismiss on these grounds is denied.
B. Element 1- Reasonable Expectation of Economic Advantage
The motion next focuses on the sufficiency of the allegations of the first
element of the tort, i.e., that Latinfood had a reasonable expectation of
economic advantage. See Printing Mart, 116 N.J. at 751.
A plaintiff asserting a claim of tortious interference with prospective
economic advantage “must allege facts that show some protectable right—a
prospective economic or contractual relationship. Although the right need not
equate with that found in an enforceable contract, there must be allegations of
fact giving rise to some ‘reasonable expectation of economic advantage.”’
MacDougall v. Weiched, 144 N.J. 380, 404, 677 A.2d 162, 174 (1996) (citing
Printing Mart, 116 N.J. at 751). SeeAvaya Inc., RP, 838 F.3d at 382 (quoting
Printing Mart, 116 N.J. at 754, 755) (noting that “such prospective relations
include ‘the opportunity of selling or buying land or chattels or services, and
any other relations leading to potentially profitable contracts”, and observing
that “Ic] ourts have found ‘a reasonable expectation of economic gain in as
slight an interest as prospective public sales.”’) The New Jersey Supreme Court
straightforwardly stated that “[a] complaint must demonstrate that a plaintiff
was in ‘pursuit’ of business.” Printing Mart, 116 N.J. at 751; see also id. at 75354; Avaya Inc., 838 F.3d at 382.
Industria and Cordialsa protest that the “bulk” of Latinfood’s claim rests
on alleged statements to unidentified Latinfood customers. They cite Eli Lilly &
Co. v. Roussel Corp., which disfavors such anonymous allegations:
FA] plaintiff asserting a tortious interference claim must allege facts
that show an existing or prospective economic or contractual
relationship; ‘[a] mere allegation of lost business does not suffice.’
The Complaint must ‘allege facts that, if true, would give rise to
a reasonable probability that particular anticipated contracts
Thus, the claimed loss of
would have been entered into.’.
unknown customers cannot, standing alone, state a claim for
tortious interference with prospective business relations.’
23 F. Supp. 2d 460, 494 (D.N.J. 1998) (quoting Advanced Power Sys., Inc. v.
Hi—Tech Sys., Inc., 801 F. Supp. 1450, 1459 (E.D. Pa.1992)).
The Counterclaim, however, clearly alleges tortious statements and loss
of business in relation to Food Fair Supermarket, an identified customer, on
July 15, 2015. It alleges that Food Fair stopped ordering Latinfood’s Zenu
products as a result of the acts complained of. (Counterclaims ¶11 18-20, 26).
Latinfood asserts that the Counterclaim’s references to unidentified third
parties were included only as fortifying examples of statements that the
products were “fake” and needed to be removed from retailers’ shelves,
statements that were made even after the cease-and-desist letter. (See p. 3,
supra.) Be that as it may, such additional allegations do not detract from the
specific allegations as to Food Fair. I will not dismiss a sufficient allegation
merely because it is accompanied by others that may not be sufficient.
In their reply, Industria and Cordialsa argue that the Counterclaim fails
to allege that Food Fair Supermarket ceased doing business with Latinfood.
The Counterclaim specifically alleges, however, that the store manager of Food
Fair requested that Latinfood pick up and remove all of its ZenU products from
the store, and that Yepes “intimidated the manager into removing the products
from the store entirely.” (Counterclaim
¶ 18).7 That is sufficient.
The motion to dismiss Latinfood’s Counterclaim, insofar as it is based on
failure to plead the element of reasonable expectation of economic advantage, is
C. Element 2- Malice
The motion next focuses on the second element of tortious interference
with prospective economic advantage, i.e., malice.
To set forth a cause of action, the plaintiff must allege that the defendant
engaged in “the intentional doing of a wrongful act without justification or
excuse.” Printing Mart-Morristown, 116 N.J. at 756. Malice “is determined on an
individualized basis, and the standard is flexible, viewing the defendants
actions in the context of the facts presented.” Lamorte Bums & Co.
167 N.J. 285, 306 (2001). As explained by the New Jersey Supreme
Court, “[o]ften it is stated that the relevant inquiry is whether the conduct was
sanctioned by the ‘rules of the game,’ for where a plaintiffs loss of business is
merely the incident of healthy competition, there is no compensable tort
injury.” Id. (citing Ideal Dairy Farms, Inc.
Farmland Dairy Farms,
Inc., 282 N.J. Super. 140, 199 (App. Div.), certif denied, 141 N.J. 9 (1995)).
“The conduct must be both ‘injurious and transgressive of generally accepted
standards of common morality or of law,”’ and “[t]he line clearly is drawn at
conduct that is fraudulent, dishonest, or illegal and thereby interferes with a
competitor’s economic advantage.” Id. at 306—07 (internal citations omitted).
Relying on C.R. Bard, Inc. p. Wordtronics Corp., 235 N.J. Super. 168 (Law.
Div. 1989), lndustria and Cordialsa maintain that Latinfood has not pled
malicious interference because the alleged statement that Latinfood’s products
The Counterclaim also makes more general allegations about “customers” which may or
may not be intended to include Food Fair. It alleges that “[d]ue to Jndustria’s and/or
Cordialsa’s false and malicious comments, Latinfood’s sales and volumes purchased by the
customers (which were told the false information) are significantly lower and/or ceased
completely.” (Id. ¶ 22). And it goes on to state that Cordialsa’s statements induced “clients not
to conduct business [with] Latinfood.” (Id. ¶ 26).
were “‘fake”8 was a truthful one. See also East Penn Sanitation, Inc. v. Grinndll
Haulers, Inc., 294 N.J. Super. 158, 180 (App. Div. 1996) (holding that a finding
of malice could not be made based on “the communication of truthful
information which ultimately promotes the State’s public policy.”) In their reply
brief, they add that because their conduct was motivated by the legitimate
desire to protect their global brand and consumers, malice cannot be found.
(Def. Reply 5) (citing Cargifl Glob. Trading v. Applied Dcv. Co., 706 F. Supp. 2d
563, 576 (D.N.J. 2010)).
I find the allegations sufficient. Cordialsa’s statement that Latinfood’s
Zenü products were “fake” will easily bear the interpretation that they were
being passed off as Industria’s products via infringement of Industria’s
trademark. The issue of whether that statement is true lies at the heart of this
lawsuit. To be sure, Industria and Cordialsa have their own story to tell; they
say that they never infringed a valid trademark or misrepresented the origin of
their products, and never engaged in any unacceptable business practice. But
the Counterclaim adequately alleges that they did. Resolution of such factual
issues must await summary judgment or trial.
Accordingly, the motion to dismiss Latinfood’s Counterclaim, to the
extent it rests on failure to plead malice, is denied.
Industria and Cordialsa interpret the word “fake” as meaning that “[Latinfood]’s
products were not the authentic products the stores presumed them to be, or that
they did not derive from Industria.” (P1. Br. at 8) (citing ECF no. 69-2, Eth. B).
For the reasons outlined above, Industña and Cordialsa’s motion to
dismiss Latinfood’s Counterclaim is denied.
An appropriate order follows.
Dated: March 9, 2018
Ke in McNultj
United States District Ju
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