Dremak v. Iovate Health Sciences Group, Inc.

299 F.R.D. 648
CourtDistrict Court, S.D. California
DecidedJanuary 27, 2014
DocketNos. 09md2087 BTM (KSC), 09cv1088 BTM(KSC)
StatusPublished
Cited by18 cases

This text of 299 F.R.D. 648 (Dremak v. Iovate Health Sciences Group, Inc.) 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
Dremak v. Iovate Health Sciences Group, Inc., 299 F.R.D. 648 (S.D. Cal. 2014).

Opinion

ORDER DENYING IOVATE DEFENDANTS’ MOTION TO DISMISS, ORDERING MORE DEFINITE STATEMENT AS TO CLAIMS AGAINST RETAILER DEFENDANTS, AND DENYING RETAILER DEFENDANTS’ MOTION TO DISMISS

BARRY TED MOSKOWITZ, Chief Judge.

The Iovate Defendants (Iovate Health Sciences, Inc., Iovate Health Sciences U.S.A., Inc., and Kerr Investment Holding Corp.) have filed a motion to dismiss Count I, in part, and Counts VII and IX, in their entirety from Plaintiffs’ Second Consolidated Amended Class Action Complaint (“SAC”). The Retailer Defendants (GNC Corporation, Wal-Mart Stores, Inc., Walgreens Company, CVS Caremark Corp., Vitamin Shoppe Industries, Inc., NBTY, Inc., BJ’s Wholesale Club, Inc., Kmart Corporation, and Rite Aid Corporation) have filed a separate motion to dismiss Counts I-XV and Count XVII of the SAC. For the reasons discussed above, the Court DENIES the Iovate Defendants’ motion to dismiss and the Retailer Defendants’ motion to dismiss and orders Plaintiffs to file a more definite statement as to the Retailer Defendants.

I. PROCEDURAL BACKGROUND

On December 22, 2009, the First Consolidated Amended Class action Complaint (“FAC”) was filed in this multi-district litigation. Twenty named plaintiffs asserted claims on behalf of themselves and a putative nationwide class of persons who purchased Hydroxycut Products (14 specific Hydroxycut-branded products).

In an order filed on May 31, 2011, the Court dismissed Plaintiffs’ consumer protection, express warranty, and unjust enrichment claims against the Iovate Defendants and Retailer Defendants. The Court held that Plaintiffs had failed to satisfy Rule 9(b)’s heightened pleading standard because the FAC was vague as to what representations each plaintiff relied on and whether each plaintiff actually saw advertising claims before purchasing the Hydroxycut Product.

On August 8, 2011, Plaintiffs filed the SAC. In the SAC, twenty plaintiffs bring the following claims against “Defendants,” which include the “Manufacturer Defendants” as well as the “Retailer Defendants”: (I) violations of 41 states’ consumer protection statutes; (II) violations of Arizona’s Consumer Fraud Act; (III) violations of California’s Consumer Legal Remedies Act; (IV) violations of California’s Business and Professions Code § 17200, et seq.; (V) violations of Florida’s Deceptive and Unfair Trade Practices Act; (VI) violations of Florida’s Statutory False Advertising Law; (VII) violations of Georgia’s Fair Business Practices Act; (VIII) violations of Illinois’ Consumer Fraud Act; (IX) violations of Louisiana’s Unfair Trade Practices and Consumer Protection Law; (X) violations of New Jersey’s Consumer Fraud Act; (XI) violations of New York’s General Business Law, § 349; (XII) violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law; (XIII) violations of Texas’s Deceptive Trade Practices-Consumer Protection Act; (XIV) [652]*652violations of West Virginia’s Consumer Credit and Protection Act; (XV) Breach of Express Warranty under 49 state statutes; (XVI) Breach of Implied Warranty under 49 state statutes; and (XVII) Unjust Enrichment.

In March, 2012, the Iovate Defendants and Retailer Defendants filed their respective motions to dismiss. On July 13, 2012, the motions were denied without prejudice due to a tentative settlement that had been reached among the parties.

On November 19, 2013, the Court entered an order denying final approval of the Class Action Settlement. In light of the Court’s ruling, the parties wished to proceed with the motions to dismiss the SAC. Therefore, the Court deemed the motions re-filed and reset the motions for hearing.

On January 2, 2014, the Court heard oral argument on the motions.

II. DISCUSSION

A. Iovate Defendants’ Motion to Dismiss

The Iovate Defendants move to Dismiss Count I in part, and Counts VII and IX in their entirety on the ground that the consumer protection laws of Georgia (Ga.Code Ann. § 10-l-399(a)), Louisiana (LSA-RS 51:1409.-A), Montana (Mont.Code Ann. § 30-14-133(1)), South Carolina (S.C.Code Ann. § 39-5-140(a)), and Tennessee (Tenn.Code Ann. § 47-18-109(g)), do not allow class actions.1 As discussed below, the Court denies the Iovate Defendants’ motion to dismiss because the Court concludes that the claims are governed by Federal Rule of Civil Procedure 23, which allows a class action to be maintained if certain preconditions are met.

Relying on Justice Stevens’ concurring opinion in Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010), the Iovate Defendants argue that Rule 23 would not apply to the state claims at issue, because application of the Rule would be outside the scope of the Rules Enabling Act, which provides that rules of procedure “shall not abridge, enlarge, or modify a substantive right.” 28 U.S.C. § 2072(b). According to the Iovate Defendants, the state provisions prohibiting class actions are found within the state consumer protection acts and are therefore so intertwined with state rights or remedies that application of Rule 23 would violate the Rules Enabling Act.

The Iovate Defendants would have a strong argument if Justice Stevens’ opinion were the controlling one. However, the Court does not believe this to be the case. Many of the courts that hold that Justice Stevens’ concurring opinion is the controlling opinion of Shady Grove rely on Marks v. United States, 430 U.S. 188, 193, 97 S.Ct. 990, 51 L.Ed.2d 260 (1977), where the Supreme Court explained, “[T]he holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds____”2 But Marks has no application here. As explained by the Ninth Circuit in Lair v. Bullock, 697 F.3d 1200, 1205 (9th Cir.2012), the Marks standard should only be applied [653]*653“where an opinion can be meaningfully regarded as narrower than another and can represent a common denominator of the Court’s reasoning.” This standard “requires that the narrowest opinion is actually the logical subset of other, broader opinions, such that it embodies a position implicitly approved by at least five Justices who support the judgment.” Id. (internal quotation marks omitted).

In Shady Grove, the different opinions of the fractured Court took contrasting approaches to determining whether a New York statute prohibiting class actions in suits seeking penalties or statutory minimum damages precluded a federal district court sitting in diversity from entertaining a class action under Rule 23.

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Bluebook (online)
299 F.R.D. 648, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dremak-v-iovate-health-sciences-group-inc-casd-2014.