The Kroger Co. et al v. Bumble Bee Foods Llc et al

MOTION to Dismiss for Failure to State a Claim re Amended Complaint

S.D. Cal.August 5, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO DONGWON INDUSTRIES’ NOTICE OF MOT. AND MOT. TO DISMISS KROGER PLS.’ AM. COMPL. 16-cv-00051 JLS (MDD) LATHAM & WATKINS LLP Daniel M. Wall (CA 102580) Belinda S Lee (CA 199635) Niall E. Lynch (CA 157959) Ashley M. Bauer (CA 231626) 505 Montgomery Street, Suite 2000 San Francisco, California 94111-6538 Telephone: +1.415.391.0600 Facsimile: +1.415.395.8095 Dan.Wall@lw.com Belinda.Lee@lw.com Niall.Lynch@lw.com Ashley.Bauer@lw.com Counsel for Defendant Dongwon Industries Co., Ltd. UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA IN RE: PACKAGED SEAFOOD PRODUCTS ANTITRUST LITIGATION This document relates to: Kroger Co., et al. v. Bumble Bee Foods, LLC, et al., No. 16-cv-00051, (ECF No. 19) Case No.: 16-cv-00051 NOTICE OF MOTION AND MOTION TO DISMISS KROGER PLAINTIFFS’ AMENDED COMPLAINT AGAINST DONGWON INDUSTRIES CO., LTD. PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) Date: November 16, 2016 Time: 9:30 a.m. Place: 4A Judge: Hon. Janis L. Sammartino Case 3:16-cv-00051-JLS-MDD Document 21 Filed 08/05/16 Page 1 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 ATTORNEYS AT LAW SAN FRANCISCO DONGWON INDUSTRIES’ NOTICE OF MOT. AND MOT. TO DISMISS KROGER PLS.’ AM. COMPL. 16-cv-00051 JLS (MDD) NOTICE OF MOTION AND MOTION TO DISMISS TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that on November 16, 2016 at 9:30 AM, or as soon thereafter as the matter may be heard, Defendant Dongwon Industries Co., Ltd. moves the Court, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for an Order dismissing The Kroger Co., Albertsons Companies, LLC, Hy-Vee, Inc., H.E. Butt Grocery Company and Ahold U.S.A., Inc. (collectively, “Kroger Plaintiffs”) Amended Complaint without further leave to amend. This Motion is made on the grounds that: 1. Kroger Plaintiffs have not adequately pleaded that Dongwon Industries Co., Ltd. (“Dongwon Industries”) directly participated in the alleged conspiracy. Rather, Plaintiffs allege bare assertions and legal conclusions, which are insufficient to render their conspiracy claims against Dongwon Industries plausible. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). 2. Nor have Plaintiffs adequately alleged that Dongwon Industries may be held vicariously liable for the alleged acts of StarKist Co. (“StarKist”), its subsidiary. Plaintiffs have not alleged facts sufficient to satisfy the alter ego or agency tests. Indeed, Plaintiffs’ weak allegations of supposed control and corporate dominance fall far short of what is needed to overcome the strong presumption of corporate separateness. See United States v. Bestfoods, 524 U.S. 51, 61 (1998). This Motion is based upon this Notice of Motion, the accompanying Memorandum of Points and Authorities In Support of Motion to Dismiss Plaintiffs’ Complaints Against Dongwon Industries Co., Ltd. and Dongwon Enterprise Co., Ltd. Pursuant to Federal Rule of Civil Procedure 12(b)(6), the complete files and records in these consolidated actions, and such other matters as the Court may consider. Case 3:16-cv-00051-JLS-MDD Document 21 Filed 08/05/16 Page 2 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 ATTORNEYS AT LAW SAN FRANCISCO DONGWON INDUSTRIES’ NOTICE OF MOT. AND MOT. TO DISMISS KROGER PLS.’ AM. COMPL. 16-cv-00051 JLS (MDD) DATED: August 5, 2016 LATHAM & WATKINS LLP By: s/ Ashley M. Bauer Daniel M. Wall Belinda S Lee Niall E. Lynch Ashley M. Bauer 505 Montgomery Street, Suite 2000 San Francisco, CA 94111-6538 Tel: (415) 391-0600 Fax: (415) 395-8095 E-mail: Dan.Wall@lw.com Belinda.Lee@lw.com Niall.Lynch@lw.com Ashley.Bauer@lw.com Counsel for Defendant Dongwon Industries Co., Ltd. Case 3:16-cv-00051-JLS-MDD Document 21 Filed 08/05/16 Page 3 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 ATTORNEYS AT LAW SAN FRANCISCO DONGWON INDUSTRIES’ NOTICE OF MOT. AND MOT. TO DISMISS KROGER PLS.’AM. COMPL. 16-cv-00051 JLS (MDD) CERTIFICATE OF SERVICE I certify that on August 5, 2016, I filed the foregoing notice of motion and motion with the Clerk of the Court for the United States District Court, Southern District of California by using the Court’s CM/ECF system, and also served counsel of record via this Court’s CM/ECF system. DATED: August 5, 2016 LATHAM & WATKINS LLP By: s/ Ashley M. Bauer ASHLEY M. BAUER Case 3:16-cv-00051-JLS-MDD Document 21 Filed 08/05/16 Page 4 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) LATHAM & WATKINS LLP Daniel M. Wall (CA 102580) Belinda S Lee (CA 199635) Niall E. Lynch (CA. 157959) Ashley M. Bauer (CA 231626) 505 Montgomery Street, Suite 2000 San Francisco, California 94111-6538 Telephone: +1.415.391.0600 Facsimile: +1.415.395.8095 Dan.Wall@lw.com Belinda.Lee@lw.com Niall.Lynch@lw.com Ashley.Bauer@lw.com Counsel for Defendants Dongwon Industries Co., Ltd. and Dongwon Enterprise Co., Ltd. UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA IN RE: PACKAGED SEAFOOD PRODUCTS ANTITRUST LITIGATION This document relates to: (1) Affiliated Foods, Inc., et al. (ECF No. 152) (2) The Kroger Co., et al. v. Bumble Bee Foods LLC, et al., No. 16-cv-0051 (ECF No. 19) (3) Meijer, Inc., et al. v. Bumble Bee Foods, LLC, et al., No. 16- cv-0398 (ECF No. 11) (4) Publix Super Mkts., Inc., et al. v. Bumble Bee Foods, LLC, et al., No. 16-cv-0247 (ECF No. 12) Case No.: 15-MD-2670 JLS (MDD) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS’ COMPLAINTS AGAINST DONGWON INDUSTRIES CO., LTD. AND DONGWON ENTERPRISE CO., LTD. PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) Date: November 16, 2016 Time: 9:30 a.m. Place: Courtroom 4A Judge: Hon. Janis L. Sammartino Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 1 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) TABLE OF CONTENTS Page I. INTRODUCTION .......................................................................................... 1 II. STATEMENT OF FACTS ............................................................................. 2 A. The Two “Dongwon” Entities ............................................................. 2 B. Plaintiffs’ Allegations about Dongwon Industries .............................. 3 C. Plaintiffs’ Allegations about Dongwon Enterprise .............................. 4 III. ARGUMENT ................................................................................................. 5 A. Legal Standard ..................................................................................... 5 B. Dongwon Industries Should Be Dismissed ......................................... 6 1. Plaintiffs Have Not Alleged that Dongwon Industries Directly Participated in Any Conspiracy .................. 6 2. Plaintiffs Also Fail to Plead that Dongwon Industries Is Vicariously Liable for Any StarKist Conduct ...................................................................................... 7 a. The Presumption of Corporate Separateness .................. 7 b. Plaintiffs Fail to Adequately Plead Alter Ego Liability ........................................................................... 9 (1) Plaintiffs Do Not Allege a “Unity of Interest” Between StarKist and Dongwon Industries .............................................. 9 (2) Plaintiffs Do Not Allege an Inequitable Result ............................................... 13 c. Plaintiffs Fail to Adequately Allege StarKist Was the Agent of Dongwon Industries ......................... 14 3. Group Pleading Cannot Save Plaintiffs’ Claims ..................... 14 C. Dongwon Enterprise Also Should Be Dismissed .............................. 15 IV. CONCLUSION ............................................................................................ 16 Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 2 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) TABLE OF AUTHORITIES Page(s) CASES Arnold Chevrolet LLC v. Tribune Co., 418 F. Supp. 2d 172 (E.D.N.Y. 2006) ................................................................ 8 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ....................................................................................... 1, 6 Bastidas v. Good Samaritan Hosp., No. 13-04388, 2014 WL 3362214 (N.D. Cal. July 7, 2014) .................. 8, 11, 12 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................................. passim Best v. Mobile Streams, Inc., No. 1:12-CV-564, 2014 WL 4988220 (S.D. Ohio Oct. 7, 2014) ..................... 11 Bowoto v. Chevron Texaco Corp., 312 F. Supp. 2d 1229 (N.D. Cal. 2004) ............................................................. 8 Brennan v. Concord EFS, Inc., 369 F. Supp. 2d 1127 (N.D. Cal. 2005) ........................................................... 15 Calvert v. Huckins, 875 F. Supp. 674 (E.D. Cal. 1995) ......................................................... 9, 10, 11 Castellanos v. JPMorgan Chase & Co., No. 09-CV-00969, 2009 WL 1833981 (S.D. Cal. June 23, 2009) ..................... 9 Corcoran v. CVS Health Corp., No. 15-CV-3504, 2016 WL 948880 (N.D. Cal. Mar. 14, 2016) ................ 11, 12 DM Research, Inc. v. College of Am. Pathologists, 170 F.3d 53 (1st Cir. 1999) ................................................................................ 6 Doe v. Unocal Corp., 248 F.3d 915 (9th Cir. 2001) ........................................................................ 8, 10 E. & J. Gallo Winery v. EnCana Energy Servs., Inc., No. 03-5412, 2008 WL 2220396 (E.D. Cal. May 27, 2008) ......................... 7, 8 Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 3 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) Gerritsen v. Warner Bros. Entm’t, Inc., 116 F. Supp. 3d 1104 (C.D. Cal. 2015) ................................................ 10, 11, 13 Hall-Magner Grp. v. Firsten, No. 11-cv-312, 2011 WL 5036027 (S.D. Cal. Oct. 24, 2011) ......................... 13 Hillside Drilling Inc. v. Goldman Sachs Grp., No. 09-1896, 2009 WL 2246215 (N.D. Cal. July 27, 2009) .............................. 8 In re TFT-LCD (Flat Panel) Antitrust Litig., 586 F. Supp. 2d 1109 (N.D. Cal. 2008) ........................................................... 14 ING Bank v. Ahn, No. C09-00995, 2010 WL 1948624 (N.D. Cal. May 13, 2010) ...................... 14 Kendall v. Visa USA, Inc., 518 F. Supp. 3d 1042 (9th Cir. 2008) ........................................................ passim Montgomery v. Wal-Mart Stores Inc., No. 12-CV-3057, 2013 WL 5278649 (S.D. Cal. Sept. 18, 2013) .................. 6, 9 Name.Space, Inc. v. Internet Corp. for Assigned Names and Nos., 795 F.3d 1124 (9th Cir. 2015) ............................................................................ 6 Neilson v. Union Bank of Cal., 290 F. Supp. 2d 1101 (C.D. Cal. 2003) ........................................................ 9, 13 Neu v. Terminix Int’l, No. 07-6472, 2008 WL 962096 (N.D. Cal. Apr. 8, 2008) ............................... 10 Payoda, Inc. v. Photon Infotech, Inc., No. 14-cv-04103, 2015 WL 4593911 (N.D. Cal July 30, 2015)...................... 12 Rodriguez v. JP Morgan Chase & Co., 809 F. Supp. 2d 1291 (S.D. Cal. 2011) .............................................................. 8 Sherman v. British Leyland Motors, Ltd., 601 F.2d 429 (9th Cir. 1979) .............................................................................. 7 Sun Microsystems Inc. v. Hynix Semiconductor Inc., 622 F. Supp. 2d 890 (N.D. Cal. 2009).............................................................. 14 United States v. Bestfoods, 524 U.S. 51 (1998) ....................................................................................... 7, 11 Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 4 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) Wady v. Provident Life and Accident Ins. Co. of Am., 216 F. Supp. 2d 1060 (C.D. Cal. 2002) ............................................................ 13 Wechsler v. Macke Int’l Trade, Inc., 486 F.3d 1286 (Fed. Cir. 2007) .......................................................................... 8 Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 5 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) I. INTRODUCTION With only the thinnest of allegations, Plaintiffs seek to drag both Dongwon Industries and Dongwon Enterprise into a massive lawsuit where they do not belong. Plaintiffs’ claims against both companies are the product of an all too common practice of naming every corporate parent and affiliate possible-without regard to evidentiary facts or the strong presumption of corporate separateness. No harm to Plaintiffs, but the high cost to both Dongwon Industries and Dongwon Enterprise in defending these lawsuits is very real. The few allegations that Plaintiffs do make about either Dongwon Industries or Dongwon Enterprise reveal just how little connection either company has to any conspiracy put forward by Plaintiffs’ Complaints. These allegations fall far short of what is required to state a plausible claim for relief: First, Plaintiffs have not adequately pled that Dongwon Industries played any direct role in the alleged conspiracy. Instead, their allegations amount to nothing more than the exact type of “bare assertions” and “formulaic recitations of the elements of a cause of action” that the Supreme Court has repeatedly rejected as insufficient. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007); Ashcroft v. Iqbal, 556 U.S. 662 (2009). Second, Plaintiffs have alleged no legitimate grounds for disregarding the separate corporate identities of Dongwon Industries and its subsidiary StarKist Co. It is true that Dongwon Industries owns StarKist. It is equally true that Dongwon Industries’ employees have transferred to StarKist, and some have even transferred back. These and other unremarkable facts alleged by Plaintiffs are applicable to nearly every corporate parent and subsidiary, and they do not satisfy the heavy burden Plaintiffs face in alleging an alter ego or agency theory for liability. Finally, the one and only allegation against Dongwon Enterprise-that it is the owner of StarKist and, accordingly, “controlled and supervised” StarKist-also falls far short of what is needed to allege alter ego or agency liability. At best, this Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 6 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) allegation is a legal conclusion that carries no weight. At worst, it is factually incorrect and contradicted by the allegations made by several other Plaintiffs. Both Dongwon Industries and Dongwon Enterprise should be dismissed from this case. II. STATEMENT OF FACTS A. The Two “Dongwon” Entities Plaintiffs’ different Complaints name two different corporations with “Dongwon” in their names as Defendants, and they define the term “Dongwon” differently. Dongwon Industries Co., Ltd. (“Dongwon Industries”) has been named as a Defendant in six Complaints (CFP, DPP, Kroger, Meijer, Publix and Wegmans)1 and, to date, has only been served with three of them (Kroger, Meijer, and Publix).2 Dongwon Enterprise Co., Ltd. (“Dongwon Enterprise”) has been named in two Complaints (Affiliated Foods and Winn-Dixie)3 and has only been served with the Affiliated Foods Complaint. The EPP Complaint and other individual direct purchaser Complaints do not name either Dongwon Industries or Dongwon Enterprise. 1 Consol. Class Action Compl., In re Packaged Seafood Prods. Antitrust Litig., No. 15-MD-02670, ECF No. 153 (“CFP Compl.”); Consol. Direct Purchaser Class Compl., In re Packaged Seafood Prods., No. 15-MD-2670, ECF No. 147 (“DPP”); Am. Compl., Kroger Co., et al. v. Bumble Bee Foods LLC, et al., No. 16- cv-0051, ECF No. 19 (“Kroger”); Am. Compl., Meijer, Inc. v. Bumble Bee Foods, LLC, et al., No. 16-cv-0398, ECF No. 11 (“Meijer”); Am. Compl., Publix Super Mkts., Inc. et al. v. Bumble Bee Foods, LLC, et al., No. 16-cv-0247, ECF No. 12 (“Publix”); Am. Compl., Wegmans Food Mkts., Inc. v. Bumble Bee Foods LLC, et al., No. 3:16-cv-00264, ECF No. 11 (“Wegmans”). 2 CFPs, DPPs, and Wegmans have not yet served Dongwon Industries. Therefore, Dongwon Industries does not formally move to dismiss those Complaints at this time. However, given the often verbatim allegations shared between those Complaints and the three that have been served, the arguments in this Motion apply equally to those three unserved Complaints as well. 3 Consol. Am. Compl. for Violation of the Sherman Act, 15 U.S.C. § 1, In re Packaged Seafood Prods., No. 15-MD-2670, ECF No. 152 (“Affiliated Foods”); First. Am. Compl. & Demand for Jury Trial, In re Packaged Seafood Prods., No. 15-MD-2670, ECF No. 151 (“Winn-Dixie”). Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 7 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) Dongwon Industries is a Korean corporation and, currently, the 100% shareholder of Defendant StarKist Co. (“StarKist”). Kroger ¶ 19. Dongwon Enterprise, a Korean corporation and holding company, is the majority shareholder in Dongwon Industries and has never had a direct ownership stake in StarKist. B. Plaintiffs’ Allegations about Dongwon Industries The three Complaints that Dongwon Industries seeks to dismiss in this motion (Kroger, Meijer, and Publix) are virtual verbatim copies of each other.4 Taken together, Plaintiffs’ allegations against Dongwon Industries boil down to allegations about: (1) Dongwon Industries’ acquisition, ownership, and operation of StarKist, (Kroger ¶¶ 18, 20, 61, 63); (2) Dongwon Industries’ other operations, such as its tuna fishing fleet, (Kroger ¶ 21, 35-37); (3) Public statements by Dongwon Industries about StarKist or the tuna market generally, (Kroger ¶¶ 21, 53); and (4) Dongwon Industries employees and officers who have worked at StarKist, and StarKist employees who left after the acquisition.5 Kroger ¶ 23 & n.3. These allegations do nothing but describe lawful business operations by Dongwon Industries and fail to state anything close to an antitrust violation. 4 With only slight variations in paragraph numbering, the allegations about Dongwon Industries in these Complaints (as well as the Wegmans Complaint) are verbatim copies of each other. For the sake of brevity, we cite only to the Kroger Complaint in this Memorandum. To translate the Kroger citations to the other Complaints, subtract three for the Publix Complaint (i.e., Kroger ¶ 18 is Publix ¶ 15), and subtract four for the Meijer and Wegmans Complaints (i.e., Kroger ¶ 18 is Meijer ¶ 14 and Wegmans ¶ 14). 5 Of the four executives mentioned in the Complaints, two are not even alleged to be Dongwon Industries employees: one allegedly is an executive at Dongwon F&B and another allegedly serves as an executive of Dongwon Precision Machinery Company. Kroger ¶ 23. Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 8 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) The remainder of Plaintiffs’ allegations about Dongwon Industries are allegations of ultimate facts-the precise types of “labels and conclusions” that both the Supreme Court and the Ninth Circuit have found insufficient to state a conspiracy claim. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554 (2007); Kendall v. Visa USA, Inc., 518 F.3d 1042, 1046-47 (9th Cir. 2008). Plaintiffs allege Dongwon Industries: (1) “directly . . . participated in the conspiracy” (Kroger ¶ 19); and (2) “knowingly and intentionally sold [its] canned tuna in the United States to Plaintiffs and others under the StarKist brand at prices that were inflated as a result of the conspiracy.” Id. ¶ 20. Those are Plaintiffs’ only allegations of knowledge or participation in the alleged conspiracy by Dongwon Industries.6 Plaintiffs also make equally conclusory legal assertions about the relationship between Dongwon Industries and StarKist. StarKist is claimed to: (1) be “controlled” and “domin[ated]” by Dongwon Industries (Kroger ¶¶ 19-20); (2) be the “agent” and/or “alter ego” of Dongwon Industries (Kroger ¶ 23);7 (3) be “vertically integrated” with Dongwon Industries (Kroger ¶ 20); and (4) share “a common global marketing image” with Dongwon Industries. Kroger ¶ 21. C. Plaintiffs’ Allegations about Dongwon Enterprise Dongwon Enterprise is named in two Complaints only (Winn-Dixie8 and Affiliated Foods) and, to date, has been served by Affiliated Foods only.9 6 DPPs also allege that Dongwon Industries: (1) was “fully aware of what was happening in the United States market for PSPs,” (DPP ¶ 99); and (2) “directly profited” and “registered substantial additional income” from the conspiracy. DPP ¶¶ 105, 107. These allegations are similarly conclusory and likewise would be subject to dismissal had DPPs timely served the DPP Complaint. 7 Similarly, DPPs allege that “StarKist is the instrumentality and alter ego of Dongwon . . . .” DPP ¶ 29 (emphasis in original). 8 It is unclear whether Winn-Dixie and CFPs meant to sue Dongwon Industries or Dongwon Enterprise. The Winn-Dixie Complaint lacks a caption specifically identifying each individual Defendant it is suing, but it defines “Dongwon” as Dongwon Enterprise, and appears to sue Dongwon Enterprise as a Defendant. Winn-Dixie ¶¶ 15-16. The ambiguity comes from a comparison to the nearly verbatim CFP Complaint. There, with an identical paragraph, CFPs also define “Dongwon” as Dongwon Enterprise, but CFPs have sued only Dongwon Industries. CFP ¶¶ 21-22. Ultimately, regardless of whether “Dongwon” was Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 9 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) Affiliated Foods does not allege that Dongwon Enterprise directly participated in any conspiracy. Instead, the only allegation that Affiliated Foods makes about Dongwon Enterprise is that it became the owner of StarKist in October 2008 and ultimately became its operator in October 2010 when it “controlled and supervised the business, operations, and activities of StarKist.” Affiliated Foods ¶ 31. This lone allegation is both conclusory and factually incorrect-it was Dongwon Industries (not Dongwon Enterprise) that acquired StarKist. Compare Affiliated Foods ¶ 31, with CFP ¶¶ 21, 23, and DPP ¶ 23, and Kroger ¶ 18. It is also insufficient to state a claim against Dongwon Enterprise. III. ARGUMENT A. Legal Standard In order to state a conspiracy claim, Plaintiffs must allege “enough factual matter (taken as true) to suggest that an agreement was made.” Twombly, 550 U.S. at 556. Plaintiffs must also allege “evidentiary facts . . . which could prove the [alleged] conspiracy.” Kendall, 518 F.3d at 1047-48 (finding “appellants pleaded only ultimate facts, such as conspiracy, and legal conclusions. They failed to plead the necessary evidentiary facts to support those conclusions.”). To meet this burden, Plaintiffs must plead “who, did what, to whom (or with whom), where, and when.” Id. at 1048. The Court need not accept as true mere labels and legal conclusions. As the Ninth Circuit has made clear: “It is not enough merely to include conclusory allegations that certain actions were the result of a conspiracy; the plaintiff must allege facts that make the conclusion plausible.” Name.Space, Inc. v. Internet intended to be Dongwon Enterprise or Dongwon Industries, the nearly identical CFP and Winn-Dixie Complaints (neither of which have been served) do not state claims against either entity. 9 Dongwon Enterprise does not move to dismiss the Winn-Dixie Complaint because it has not been properly served. However, these arguments apply equally to the Winn-Dixie Complaint, which shares many verbatim passages with the DPP and CFP Complaints. Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 10 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) Corp. for Assigned Names and Nos., 795 F.3d 1124, 1129 (9th Cir. 2015). “[T]erms like ‘conspiracy, or even ‘agreement,’ are border-line: they might well be sufficient in conjunction with a more specific allegation . . . but a court is not required to accept such terms as a sufficient basis for a complaint.” Twombly, 550 U.S. at 557 (quoting DM Research, Inc. v. College of Am. Pathologists, 170 F.3d 53, 56 (1st Cir. 1999)). Instead, the Court should undertake a “context-specific analysis involving the Court’s ‘judicial experience and common sense.’” Montgomery v. Wal-Mart Stores, Inc., No. 12-CV-3057, 2013 WL 5278649, at *5 (S.D. Cal. Sept. 18, 2013) (Sammartino, J.) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). B. Dongwon Industries Should Be Dismissed 1. Plaintiffs Have Not Alleged that Dongwon Industries Directly Participated in Any Conspiracy Plaintiffs have failed to state a claim that Dongwon Industries directly participated in any conspiracy. Their conclusory allegations that Dongwon Industries “directly . . . participated in” the alleged conspiracy (Kroger ¶ 19) are insufficient to meet the Twombly standard. Ashcroft, 556 U.S. at 678, 681 (citing Twombly, 550 U.S. at 557). These allegations of ultimate facts epitomize the kind of “bare assertion[s]” that run afoul of the Supreme Court’s holding in Twombly that “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555-56. None of the Complaints allege “facts such as a ‘specific time, place, or person’” from Dongwon Industries who was “involved in the alleged conspirac[y].” Kendall, 518 F.3d at 1047 (quoting Twombly, 550 U.S. at 565 & n.10). Likewise, Plaintiffs’ assertion that, during the alleged conspiracy, Dongwon Industries manufactured canned tuna and “knowingly and intentionally sold [it] in the United States” at artificially inflated prices under the StarKist brand due to its “vertical integrat[ion]” with StarKist (Kroger ¶ 20) is again nothing more than a “bare assertion” and “formulaic recitation” of the elements of a conspiracy Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 11 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) claim. Twombly, 550 U.S. at 556. Dongwon Industries acquired StarKist and now sells tuna to StarKist. There is nothing unlawful, or even notable, about that fact. That Plaintiffs have dressed up this fact with some legal elements of their claims does not convert it into a cause of action. Plaintiffs’ Complaints fail to answer the basic questions of “who, did what, to whom (or with whom), where, and when” as to Dongwon Industries. Kendall, 518 F.3d at 1048. As such, they have not alleged specific facts establishing Dongwon Industries’ direct participation in any alleged conspiracy, and their claims against Dongwon Industries should be dismissed. 2. Plaintiffs Also Fail to Plead that Dongwon Industries Is Vicariously Liable for Any StarKist Conduct Having failed to set forth any allegations that plausibly suggest Dongwon Industries’ direct participation in any conspiracy, Plaintiffs attempt to impute StarKist’s alleged conduct to Dongwon Industries by claiming it is the “agent and alter ego” of Dongwon Industries. Kroger ¶ 23. This pleading ploy also fails, as Plaintiffs have not met the high burden of alleging facts establishing that Dongwon Industries should be vicariously liable for the acts of its incorporated subsidiary. a. The Presumption of Corporate Separateness Plaintiffs may not assert claims against Dongwon Industries solely based on its ownership of StarKist. “It is a general principle of corporate law deeply ‘ingrained in our economic and legal systems’ that a parent corporation . . . is not liable for the acts of its subsidiaries.” United States v. Bestfoods, 524 U.S. 51, 61 (1998). In addition, “[t]he independence of a subsidiary from [its] parent corporation is to be presumed.” E. & J. Gallo Winery v. EnCana Energy Servs., Inc., No. 03-5412, 2008 WL 2220396, at *5 (E.D. Cal. May 27, 2008); see also Sherman v. British Leyland Motors, Ltd., 601 F.2d 429, 441 (9th Cir. 1979) (holding that the “relationship of parent and subsidiary” is “not enough” to attach antitrust liability to a parent company for the actions of its subsidiary); Arnold Chevrolet LLC v. Tribune Co., 418 F. Supp. 2d 172, 178 (E.D.N.Y. 2006) (“[I]n Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 12 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) the antitrust context, courts have held that absent allegations of anticompetitive conduct by the parent, there is no basis for holding a parent liable for the alleged antitrust violation of its subsidiary.”). In fact, “courts generally treat the alter ego doctrine as a drastic remedy and disregard the corporate form only reluctantly and cautiously.” Hillside Drilling Inc. v. Goldman Sachs Grp., No. 09-1896, 2009 WL 2246215, at *4 (N.D. Cal. July 27, 2009) (quoting Wechsler v. Macke Int’l Trade, Inc., 486 F.3d 1286, 1295 (Fed. Cir. 2007)). “Only in unusual circumstances will the law permit a parent corporation to be held either directly or indirectly liable for the acts of its subsidiary.” E. & J. Gallo Winery, 2008 WL 2220396, at *5 (quoting Bowoto v. Chevron Texaco Corp., 312 F. Supp. 2d 1229, 1234 (N.D. Cal. 2004)). There are only two exceptions to the strong presumption of corporate independence: (1) the alter ego doctrine, where there is “such unity of interest and ownership that the separate personalities of the corporation and the [subsidiary] no longer exist” and it would be inequitable to maintain the corporate form; and (2) an agency relationship, where the “parent so controls the subsidiary as to cause the subsidiary to become merely the instrumentality of the parent.” Rodriguez v. JP Morgan Chase & Co., 809 F. Supp. 2d 1291, 1299-1300 (S.D. Cal. 2011); see also Doe v. Unocal Corp., 248 F.3d 915, 926 (9th Cir. 2001) (plaintiffs must “demonstrate that the parent and subsidiary are ‘not really separate entities’ and satisfy the alter ego exception to the general rule that a subsidiary and the parent are separate entities.”).10 Plaintiffs have not pled either exception to the presumption of corporate separateness, and their claims should be dismissed. 10 Doe and many other cases involving the issue of whether a subsidiary’s contacts may be imputed to the parent company for purposes of personal jurisdiction are frequently cited in cases about vicarious liability, as both employ the same analysis. See, e.g., Bastidas v. Good Samaritan Hosp., No. 13-04388, 2014 WL 3362214, at *4 (N.D. Cal. July 7, 2014); E. & J. Gallo, 2008 WL 2220396, at *11. Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 13 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) b. Plaintiffs Fail to Adequately Plead Alter Ego Liability Plaintiffs have not adequately alleged evidentiary facts that would establish StarKist as the “alter ego” of Dongwon Industries. To meet that pleading burden, Plaintiffs must plead facts to satisfy a two-part test: “First, there must be such unity of interest and ownership that the separate personalities of the corporation and the [subsidiary] no longer exist . . . . Second, there must be evidence that, if the actions in question are treated as those of the corporation alone, an inequitable result will follow.” Montgomery, 2013 WL 5278649, at *5; see also Castellanos v. JPMorgan Chase & Co., No. 09-CV-00969, 2009 WL 1833981, at *11 (S.D. Cal. June 23, 2009) (granting motion to dismiss a parent corporation where the plaintiff did not allege how the parent was responsible for the unlawful acts of its subsidiary). “Conclusory allegations of ‘alter ego’ status are insufficient to state a claim. Rather, [P]laintiff[s] must allege specifically both of the elements of alter ego liability, as well as facts supporting each.” Neilson v. Union Bank of Cal., 290 F. Supp. 2d 1101, 1116 (C.D. Cal. 2003). Here, Plaintiffs cannot show the requisite unity of interest or that an inequitable result would follow if StarKist’s conduct is not imputed to Dongwon Industries. (1) Plaintiffs Do Not Allege a “Unity of Interest” Between StarKist and Dongwon Industries Plaintiffs’ allegations do not satisfy the “unity of interest” prong of the alter ego test and, therefore, fail to state a vicarious liability claim against Dongwon Industries. The “unity of interest” prong requires well-pled facts showing that Dongwon Industries does “more than exercise the broad oversight typically indicated by common ownership and common directorship.” Calvert v. Huckins, 875 F. Supp. 674, 679 (E.D. Cal. 1995). Showing “some measure of control . . . is simply not enough.” Id. The test is satisfied only when plaintiffs allege facts sufficient to show that the parent “dictates every facet of [the subsidiary’s] business-from broad policy decision[s] to routine matters of day-to-day Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 14 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) operation.” Gerritsen v. Warner Bros. Entm’t, Inc., 116 F. Supp. 3d 1104, 1140 (C.D. Cal. 2015) (emphasis added) (quoting Doe, 248 F.3d at 926). Plaintiffs do not allege specific facts that indicate that Dongwon Industries controlled every facet of StarKist’s business and, therefore, have not established unity of interest. Acquisition and “Control”: Plaintiffs’ allegations that Dongwon Industries “controls” or “dominates” StarKist through its acquisition of the company, or that Dongwon Industries used its “control” over StarKist to conspire with other Defendants, are conclusory and carry no weight in this analysis. See Gerritsen, 116 F. Supp. 3d at 1136 (finding conclusory allegations of alter ego status are insufficient to state a claim); Kroger ¶¶ 19-20. Such allegations are insufficient to show anything beyond some vague “measure of control,” which “is simply not enough.” Calvert, 875 F. Supp. at 679 (finding no alter ego liability where: (i) the parent and subsidiary had some interlocking directorates and officers; (ii) the parent incorporated the subsidiary’s income figures into its financial reports; and (iii) the parent and subsidiary shared counsel); see also Neu v. Terminix Int’l, No. 07-6472, 2008 WL 962096, at *7 (N.D. Cal. Apr. 8, 2008) (dismissing claims against parent company where plaintiff alleged in a conclusory fashion that the parent “directly participate[d], guide[d], and manage[d] all of the activities of the [subsidiary].”). Plaintiffs’ conclusory labels of “control” and “domina[tion]” do nothing to establish that Dongwon Industries controls StarKist’s “broad policy decisions [and] routine matters of day-to-day operation.” Gerritsen, 116 F. Supp. 3d at 1138. “Vertical Integration”: Plaintiffs’ unremarkable allegation that Dongwon Industries and StarKist are vertically integrated because Dongwon Industries sells raw tuna to StarKist for packing also fails to satisfy the “unity of interest” prong of the alter ego test. Kroger ¶¶ 19-20. To hold otherwise would eviscerate the fundamental notion of corporate separateness and subject the vast majority of corporations to vicarious liability for the conduct of their subsidiaries. See Best v. Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 15 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) Mobile Streams, Inc., No. 1:12-CV-564, 2014 WL 4988220, at *3 (S.D. Ohio Oct. 7, 2014) (in the personal jurisdiction context, finding no alter ego jurisdiction where plaintiffs alleged the companies were vertically integrated, emphasizing that the proper analysis is the parent company’s control over the subsidiary). Shared Executives, Officers, and Directors: Plaintiffs’ allegation that some current and former11 Dongwon Industries executives, officers, and directors had, or currently have, ties to StarKist, without more, is likewise insufficient to establish alter ego liability. The Supreme Court held that it is a “well established principle [of corporate law] that directors and officers holding positions with a parent and its subsidiary can and do ‘change hats’ to represent the two corporations separately, despite their common ownership.” Bestfoods, 524 U.S. at 69 (citation omitted). Further, “[c]ourts generally presume that such dual status individuals wear their ‘parent hats’ when serving the parent’s interest, and their ‘subsidiary hats’ when serving the subsidiary’s interests.” Bastidas, 2014 WL 3362214, at *4. “To defeat this presumption, [Plaintiffs] would need to allege facts demonstrating that the dual status individuals were acting in the parent’s interest, and not the subsidiary’s, when they engaged in the challenged conduct.” Id. Plaintiffs have not. 11 DPPs’ allegations that American executives at StarKist left “voluntarily and involuntarily” following Dongwon Industries’ acquisition of StarKist, followed by the arrival of Korean executives,” (DPP ¶ 28) similarly fails to show a unity of interest between the two companies and would be subject to dismissal had DPPs timely served their Complaint. DPPs do not allege that Dongwon Industries was involved in firing any StarKist executives. But even if they had, such allegations are insufficient to demonstrate that Dongwon Industries “dictates every facet of [StarKist’s] business [including] routine matters of day-to-day operation.” Gerritsen, 116 F. Supp. 3d at 1140; Calvert, 875 F. Supp. at 679 (finding the plaintiffs’ allegation that the parent and subsidiary “have some interlocking directors and officers . . . does not justify piercing the corporate veil.”). The involvement of a parent company in some “discrete business decisions” of its subsidiary does not justify piercing the corporate veil between the two entities. Corcoran v. CVS Health Corp., No. 15-CV-3504, 2016 WL 948880, at *7 (N.D. Cal. Mar. 14, 2016) (evidence that parent owned the subsidiary, was involved in business decisions of the subsidiary, and that the two entities had overlapping officers and directors was not enough to establish unity of interest). Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 16 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) Plaintiffs claim to identify four individuals who have overlapping ties to both “Dongwon” and StarKist. Kroger ¶ 23. However, in this four-person list, Plaintiffs identify only one person who allegedly serves as a director of both StarKist and Dongwon Industries, and another who allegedly previously worked as an executive at Dongwon Industries and is presently an executive at StarKist. Id. As Plaintiffs themselves allege, the other two men held no positions with Dongwon Industries at all and, instead, held positions with three different corporations (Dongwon F&B and Dongwon Enterprise for one individual, and Dongwon Precision Machinery Company for the other). Id. Dongwon F&B and Dongwon Precision Machinery Company are not Defendants in any of these cases. Not only have Plaintiffs barely managed to identify any overlapping executives, officers, or directors between StarKist and Dongwon Industries, but they have also failed to allege whether those individuals were wearing their Dongwon Industries or their StarKist “hats” during the alleged conspiracy. Bastidas, 2014 WL 3362214, at *4. Thus, the allegations regarding shared executives, officers, and directors do not satisfy the “unity of interest” element under the alter ego test. “Common Marketing Image”: Plaintiffs’ allegations about public statements that Dongwon Industries made on its website and elsewhere about the “Dongwon Group” or its ownership and “common global marketing image with StarKist” also fail to establish the requisite unity of interest between the two companies for alter ego liability. Kroger ¶ 21. Even if a parent and subsidiary “hold themselves out to the public as being one and the same entity. . . . Such marketing puffery carries no weight in establishing whether a parent and its subsidiary are in fact alter egos.” Payoda, Inc. v. Photon Infotech, Inc., No. 14-cv- 04103, 2015 WL 4593911, at *3 (N.D. Cal July 30, 2015); see Corcoran, 2016 WL 948880, at *7 (that the parent presents itself as one integrated company on its website and in government filings and for marketing purposes was not enough to show unity of interest). Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 17 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) * * * Plaintiffs have not pled any facts to overcome the presumption of corporate separateness and show that StarKist is controlled by Dongwon Industries to such a degree that StarKist does not have its own corporate identity. Instead, Plaintiffs’ allegations reveal nothing more than a standard parent-subsidiary relationship between the two entities. Having failed to allege a unity of interest, Dongwon Industries should be dismissed. (2) Plaintiffs Do Not Allege an Inequitable Result Plaintiffs also fail to plead the second “inequitable results” prong of the alter ego test. That alone is fatal to Plaintiffs’ alter ego theory because the alter ego test “unmistakably” consists of two elements, and Plaintiffs must allege facts that support both elements. Wady v. Provident Life and Accident Ins. Co. of Am., 216 F. Supp. 2d 1060, 1070 (C.D. Cal. 2002). Plaintiffs have made no claims that an inequitable result will follow if the alleged conspiratorial actions are attributed to only StarKist. See Hall-Magner Grp. v. Firsten, No. 11-cv-312, 2011 WL 5036027, at *4 (S.D. Cal. Oct. 24, 2011) (Sammartino, J.) (in the personal jurisdiction context, finding the plaintiff “provided no evidence at all that failure to disregard the corporation would result in fraud or injustice”) (citation omitted). “[B]ad faith is a critical factor” in the inequitable result element of the alter ego test. Gerritsen, 116 F. Supp. 3d at 1143; see also Nielson, 290 F. Supp. 2d at 1117 (“[C]ourts generally require some evidence of bad faith conduct on the part of defendants before concluding that an inequitable result justifies an alter ego finding.”). Importantly, Plaintiffs have not alleged any bad faith such that an inequitable result would necessarily follow if the Court follows the presumption of corporate separateness and does not pierce the corporate veil separating StarKist and Dongwon Industries. Because Plaintiffs have not satisfied both elements of the alter ego test, their claims as to Dongwon Industries should be dismissed. Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 18 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) c. Plaintiffs Fail to Adequately Allege StarKist Was the Agent of Dongwon Industries Just as Plaintiffs fail to allege that Dongwon Industries and StarKist are alter egos, they also fail to adequately allege that StarKist is the “agent” of Dongwon Industries. Kroger ¶ 23. To successfully plead an agency relationship, Plaintiffs must allege the traditional common law agency test: “(1) manifestation by the principal that the agent shall act for him; (2) that the agent has accepted the undertaking; and (3) that there is an understanding between the parties that the principal is to be in control of the undertaking.” Sun Microsystems Inc. v. Hynix Semiconductor Inc., 622 F. Supp. 2d 890, 899 (N.D. Cal. 2009) (citing Restatement (Third) of Agency § 1.01). Here, Plaintiffs do not even attempt to satisfy the first two elements of the agency relationship test. They plead no facts that Dongwon Industries wanted StarKist to act on its behalf, or that StarKist accepted any invitation to act for Dongwon Industries. This failure of pleading alone is sufficient to undermine an agency claim. See Twombly, 550 U.S. at 556-57; Kendall 518 F.3d at 1046-48. Finally, while Plaintiffs do assert various conclusory allegations using the words “agent” and “control,” (Kroger ¶¶ 18-19, 23), those allegations do not satisfy the third element of the agency test, which requires Plaintiffs to allege specific facts showing that Dongwon Industries exercised “day to day control” over StarKist. Sun Microsystems, 622 F. Supp. 2d at 899; see also ING Bank v. Ahn, 758 F. Supp. 2d 936, 941 (N.D. Cal. 2010) (holding that control must be “comprehensive, immediate, and day-to-day” to establish an agency relationship). 3. Group Pleading Cannot Save Plaintiffs’ Claims Finally, Plaintiffs cannot save their claims against Dongwon Industries by collectively referring to Dongwon Industries and StarKist as “StarKist,” “StarKist Defendants,” or “Defendants” in their Complaints. See In re TFT-LCD (Flat Panel) Antitrust Litig., 586 F. Supp. 2d 1109, 1117 (N.D. Cal. 2008) (“[G]eneral Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 19 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) allegations as to all defendants, to ‘Japanese defendants,’ or to a single corporate entity such as ‘Hitachi’ is insufficient to put specific defendants on notice of the claims against them.”). Plaintiffs must make “individualized allegations about each” defendant, and “must allege that each individual defendant joined the conspiracy and played some role in it.” Id. Here, Plaintiffs’ general pleadings impermissibly “lump [Dongwon Industries] in with the other . . . [D]efendants for purposes of pleading the conspiracy.” Brennan v. Concord EFS, Inc., 369 F. Supp. 2d 1127, 1136 (N.D. Cal. 2005). Plaintiffs must plead Dongwon Industries’ direct involvement and role in the alleged conspiracy. They have not “specifically connect[ed]” Dongwon Industries to any plausible conspiracy, and their claims against Dongwon Industries should be dismissed. Id. * * * Plaintiffs have failed to allege sufficient non-conclusory facts to show a unity of interest between Dongwon Industries and StarKist, or that an inequitable result will follow if the corporate veil separating the two companies is not pierced. Nor have Plaintiffs alleged the requisite facts to establish an agency relationship between Dongwon Industries and StarKist. As such, Plaintiffs have not alleged that Dongwon Industries is vicariously liable for StarKist’s alleged actions, and their claims should be dismissed. C. Dongwon Enterprise Also Should Be Dismissed As noted above, Winn-Dixie and Affiliated Foods make very few allegations against Dongwon Enterprise and (to-date) only Affiliated Foods has served Dongwon Enterprise. Affiliated Foods’ sole allegation about how Dongwon Enterprise “became the operator of StarKist” in October 2010 and “controlled and supervised the business, operations, and activities of StarKist” falls far short of alleging any alter ego or agency basis for vicarious liability against Dongwon Enterprise. Affiliated Foods ¶ 31. This sole allegation is also untrue: Dongwon Enterprise has never directly owned StarKist. Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 20 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) Affiliated Foods’ claims against Dongwon Enterprise should also be dismissed. IV. CONCLUSION Plaintiffs fail to allege facts sufficient to connect either Dongwon Industries or Dongwon Enterprise directly to any alleged conspiracy. Plaintiffs also fail to plead any facts showing that either Dongwon Industries or Dongwon Enterprise should be held vicariously liable as StarKist’s alter ego or agent. As such, the Court should dismiss the Complaints as to Dongwon Industries and Dongwon Enterprise in their entirety. DATED: August 5, 2016 LATHAM & WATKINS LLP By: s/ Ashley M. Bauer Daniel M. Wall Belinda S Lee Niall E. Lynch Ashley M. Bauer 505 Montgomery Street, Suite 2000 San Francisco, CA 94111-6538 Tel: (415) 391-0600 Fax: (415) 395-8095 E-mail: Dan.Wall@lw.com Belinda.Lee@lw.com Niall.Lynch@lw.com Ashley.Bauer@lw.com Counsel for Defendants Dongwon Industries Co., Ltd. and Dongwon Enterprise Co., Ltd. Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 21 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 ATTORNEYS AT LAW SAN FRANCISCO MEM. P. & A. IN SUPP. OF DONGWON MOT. TO DISMISS 15-MD-2670-JLS (MDD) CERTIFICATE OF SERVICE I certify that on August 5, 2016, I filed the foregoing Memorandum of Points and Authorities with the Clerk of the Court for the United States District Court, Southern District of California by using the Court’s CM/ECF system, and also served counsel of record via this Court’s CM/ECF system. DATED: August 5, 2016 LATHAM & WATKINS LLP By: s/ Ashley M. Bauer ASHLEY M. BAUER Case 3:16-cv-00051-JLS-MDD Document 21-1 Filed 08/05/16 Page 22 of 22