Conde v. Sensa

259 F. Supp. 3d 1064
CourtDistrict Court, S.D. California
DecidedApril 26, 2017
DocketCase No.: 14-cv-51 JLS WVG
StatusPublished
Cited by7 cases

This text of 259 F. Supp. 3d 1064 (Conde v. Sensa) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Conde v. Sensa, 259 F. Supp. 3d 1064 (S.D. Cal. 2017).

Opinion

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTIONS TO DISMISS

(ECF Nos. 80, 81)

Hon. Janis L. Sammartino, United States District Judge

Presently before the Court are two sets of Motions to Dismiss and corresponding briefing. The first set are Defendants Don Ressler’s, Adam Goldenberg’s, Kristin Chadwick’s, IB Holding, LLC’s, and Tech-style, Inc.’s (together, “Primary Defendants”) Motion to Strike and Dismiss the Third Consolidated Amended Class Action Complaint (“Mot. to Dismiss”), (ECF No. 81), Plaintiffs Opposition to the Motion to Dismiss (“Opp’n”), (ECF No. 86), and Primary Defendants’ Reply in Support of the Motion to Dismiss (“Reply”), (ECF No. 89). The second set are Defendants John Drew’s and TCV VI, L.P.’s (together, “TCV Defendants”) Motion to Strike Certain Allegations in the Third Consolidated Amended Complaint and to Dismiss the Third Consolidated Amended Complaint (“Non-Opp. Mot. to Dismiss”), (ECF No. 80), Plaintiffs Non-Opposition to the Non-Opposed Motion to Dismiss (“Non-Opp’n”), (ECF No. 87), and TCV Defendants’ Response to Plaintiffs Statement of Non-Opposition (“Non-Opp’n Reply”), (ECF No. 88). The Court vacated the hearing on these Motions and took the matters under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). Having considered the Parties’ arguments and the law, the Court rules as follows.

BACKGROUND

The Court has previously dismissed various aspects of Plaintiffs alter ego allegations. (Order Granting Without Prejudice Mot. to Dismiss (“Prior MTD Order”), ECF.No. 75.) The general factual overview of this action is as follows.

Sensa crystals were marketed as a weight loss product consisting of “tastant crystals” that users were instructed to sprinkle on their food. (Id. at 2.) The crystals supposedly interacted with users’ taste and smell receptors, triggering bodily responses that would cause users to feel full and therefore stop eating earlier than usu[1067]*1067al. (Id.) Plaintiff alleges that the tastant crystals were developed by Dr. Alan Hirsch, M.D., a board-certified neurologist who claimed in Sensa advertisements that the crystals were “clinically shown” to promote weight loss without dieting. (Id.) Sen-sa has since been, assigned to creditors, following an FTC suit that resulted in a $46.5 million stipulated judgment and several other related legal actions. (See id.) Plaintiff alleges that the Defendants relevant to these pending Motions to Dismiss either held various positions of authority within Sensa or were interrelated corporations at all times relevant to the action. (Id.) Specifically, Sensa Products, LLC was 90% owned by Sensa, Inc. (formerly known as Intelligent Beauty, Inc.) (“IBI”) and 10% owned by Dr. Hirsch. (TCAC ¶¶ 15, 18). IBI was in turn at least partially owned by Intelligent Beauty Holding, LLC (“IBH”), which was in turn at least partially owned TechStyle, Inc. (formerly known as JustFab, Inc.) (“JustFab”). (See id. ¶ 17.)

This action was originally filed on January 7, 2014 by Plaintiff Jose Conde against Defendant Sensa Products, LLC and Does 1-10 alleging violations of California law. (Id.) After various motion practice, the Court consolidated Mr. Conde’s case with two others and appointed interim class counsel. (ECF No. 32.) Plaintiff subsequently filed the SCAC, alleging various tort- and contract-based causes of action. (Prior MTD Order 2.) Count XI — “Alter Ego/Veil Piercing” — was added for the first time in the SCAC and formed the basis of the prior Motion to Dismiss. (Id.) The Court dismissed Count XI as to all then-named Defendants, and , granted Plaintiff leave to file “any amended complaint that cures the deficiencies identified” in the Order. (Id. at 11.)

Plaintiff has now filed a Third Consolidated Amended Class Action Complaint totaling, with attached exhibits, 967 pages. (ECF No. 76.) A large portion of the attached exhibits áre other complaints, each initially filed in state court (“state-court complaints”), from three pending actions: (1) Sensa v. Hirsch (“the Hirsch Action”), Case No. BC581772 (L.A. Sup. Ct. May 13, 2015); (2) Windmill Health Products, LLC, et al. v. TCV VI, LP, et al. (“the Windmill Action”), Case No. NC561252 (L.A. Sup. Ct. Oct. 3, 2016); and (3) Bank of America, N. A v. Sensa, Inc. et al., Case No. NC 564394 (L.A. Sup. Ct. Apr. 20, 2016). The Hirsch and Windmill complaints were previously attached to Plaintiffs Second Amended Class Action Complaint. (Second Consolidated Am. Class Action Compl. Exs. J, K, ECF No. 60.) Relevant to the pending Motions to Dismiss, Plaintiff has reasserted alter ego claims against five previously named Defendants: John Drew; TCV VI, L.P.; Don Ressler; Adam Goldenberg; and Kristin Chadwick. (TCAC ¶¶ 19-24,131-43.) Plaintiff has also for the first time added Defendants IBH and JustFab. (TCAC ¶¶ 16, 17, 131-43.) Each of these Defendants have moved to. dismiss the alter ego allegations against them.

LEGAL STANDARDS

I. Motion to Dismiss

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint “fail[s] to state a claim upon which relief can be granted,” generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Although Rule 8 “does not require ‘detailed factual allegations,’ ... it [does] demand more than an unadorned, the-defendant-unlawfully-harmed-me accusa[1068]*1068tion.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In other words, “a plaintiffs obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). A complaint will not suffice “if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 556 U.S. at 677, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955).

In order 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.’” Id. (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955); see also Fed. R. Civ. P. 12(b)(6); A claim 'is facially plausible when the facts pled “allow the court’to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 677, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955).

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259 F. Supp. 3d 1064, Counsel Stack Legal Research, https://law.counselstack.com/opinion/conde-v-sensa-casd-2017.