Townsend Farms Inc. v. Goknur Gida Maddeleri Enerji Imalat Ithalat Ihracat Ticaret VE Sanayi A.S., et alNOTICE OF MOTION AND MOTION to Dismiss Amended Consolidated ComplaintC.D. Cal.July 15, 2016DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 NOTICE OF MOTION TO DISMISS AMENDED CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG WILLIAM W. OXLEY (SBN 136793) william.oxley@dechert.com MEGHAN ROHLING KELLY (SBN 292236) meghan.kelly@dechert.com MICHELLE M. RUTHERFORD (SBN 268669) michelle.rutherford@dechert.com NATHAN MCCLELLAN (SBN 291435) nathan.mcclellan@dechert.com ANNA DO (SBN 281327) anna.do@dechert.com DECHERT LLP US Bank Tower 633 West 5th Street 37th Floor Los Angeles, CA 90071-2013 Telephone: +1 213 808 5700 Facsimile: +1 213 808 5760 Attorneys for Defendants United Juice Corp., a New Jersey corporation, and Goknur Gida Maddeleri Enerji Imalat Ithalat Ticaret Ve Sanayi Anonim Sirketi dba Goknur Foodstuffs Import Export Trading and Production Co. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION TOWNSEND FARMS, INC., Plaintiff, vs. GÖKNUR GIDA MADDELERI ENERJI IMALAT ITHALAT IHRACAT TICARET ve SANAYI A.S., et al., Defendants. CASE NO. 8:15-cv-00837-DOC-JCG [Consolidated Case No. 8:15-cv-00840- DOC-JCG] GOKNUR AND UNITED JUICE’S NOTICE OF MOTION TO DISMISS AMENDED CONSOLIDATED COMPLAINT The Hon. David O. Carter Trial Date: None Set Date: August 15,2016 Time: 8:30 a.m. Courtroom: 9D PURELY POMEGRANATE, INC. and VALLEY FORGE INSURANCE CO., Plaintiffs, vs. GÖKNUR GIDA MADDELERI ENERJI IMALAT ITHALAT IHRACAT TICARET ve SANAYI A.S., et al., Defendants. Case 8:15-cv-00837-DOC-JCG Document 81 Filed 07/15/16 Page 1 of 3 Page ID #:481 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - NOTICE OF MOTION TO DISMISS AMENDED CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG PLEASE TAKE NOTICE that on August 15, 2016 at 8:30 a.m., in courtroom 9D of the above-referenced Court, Defendants United Juice Corp. and Goknur Gida Maddeleri Enerji Imalat Ithalat Ticaret Ve Sanayi Anonim Sirketi dba Goknur Foodstuffs Import Export Trading and Production Co. will hereby move the Court to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), the following claims in Plaintiffs Townsend Farms, Inc., Purely Pomegranate, Inc., and Valley Forge Insurance Co.’s Amended Consolidated Complaint and Demand for Jury Trial, Rec. Doc. 72: 1. Claims for relief eleven and twenty-one, both for contribution; 2. Claim five, for negligent interference with economic advantage; 3. Claims nine and twenty-three, both for intentional misrepresentation; 4. Claims four and nineteen, both for negligent misrepresentation; 5. Claim twenty-four for violation of California Business and Professions Code section 17200; and 6. Claims ten and sixteen, both for strict liability. Counsel for Defendants and Plaintiffs met and conferred pursuant to Local Rule 7-3 on numerous occasions both by telephone and in writing. During these discussions, Plaintiffs agreed to dismiss their negligence per se claims (claims for relief three and seventeen) without prejudice. See written meet and confer correspondence, attached as Exhibit A at p. 5. Plaintiffs further agreed to add documents in support of their contract claim (claim for relief twelve). See, Ex. A at p. 7. Defendants’ motion to dismiss is based on this notice, the memorandum of points and authorities in support, the Court’s file in this action, all matters of which the Court must or may take judicial notice, and such further evidence and argument as may be presented at the hearing on this motion. Case 8:15-cv-00837-DOC-JCG Document 81 Filed 07/15/16 Page 2 of 3 Page ID #:482 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - NOTICE OF MOTION TO DISMISS AMENDED CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG Dated: July 15, 2016 DECHERT LLP By: /s/ Meghan Rohling Kelly William W. Oxley Meghan Rohling Kelly Michelle M. Rutherford Nathan McClellan Anna Do Attorneys for Defendants United Juice Corp., a New Jersey corporation, and Goknur Gida Maddeleri Enerji Imalat Ithalat Ticaret Ve Sanayi Anonim Sirketi dba Goknur Foodstuffs Import Export Trading and Production Co. 16015103 Case 8:15-cv-00837-DOC-JCG Document 81 Filed 07/15/16 Page 3 of 3 Page ID #:483 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 MEMORANDUM ISO MOTION TO DISMISS CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG WILLIAM W. OXLEY (SBN 136793) william.oxley@dechert.com MEGHAN ROHLING KELLY (SBN 292236) meghan.kelly@dechert.com MICHELLE M. RUTHERFORD (SBN 268669) michelle.rutherford@dechert.com NATHAN MCCLELLAN (SBN 291435) nathan.mcclellan@dechert.com ANNA DO (SBN 281327) anna.do@dechert.com DECHERT LLP US Bank Tower 633 West 5th Street 37th Floor Los Angeles, CA 90071-2013 Telephone: +1 213 808 5700 Facsimile: +1 213 808 5760 Attorneys for Defendants United Juice Corp., a New Jersey corporation, and Goknur Gida Maddeleri Enerji Imalat Ithalat Ticaret Ve Sanayi Anonim Sirketi dba Goknur Foodstuffs Import Export Trading and Production Co. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION TOWNSEND FARMS, INC., Plaintiff, vs. GÖKNUR GIDA MADDELERI ENERJI IMALAT ITHALAT IHRACAT TICARET ve SANAYI A.S., et al., Defendants. CASE NO. 8:15-cv-00837-DOC-JCG [Consolidated Case No. 8:15-cv-00840- DOC-JCG] MEMORANDUM IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS CONSOLIDATED COMPLAINT The Hon. David O. Carter Trial Date: None Set Date: August 15, 2016 Time: 8:30 a.m. Courtroom: 9D PURELY POMEGRANATE, INC. and VALLEY FORGE INSURANCE CO., Plaintiffs, vs. GÖKNUR GIDA MADDELERI ENERJI IMALAT ITHALAT IHRACAT TICARET ve SANAYI A.S., et al., Defendants. Case 8:15-cv-00837-DOC-JCG Document 81-1 Filed 07/15/16 Page 1 of 9 Page ID #:484 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - MEMORANDUM ISO MOTION TO DISMISS CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG I. INTRODUCTION This action arises from a 2013 Hepatitis A outbreak that occurred after consumers ate a Townsend Farms, Inc. (“TFI”) frozen berry mix product contaminated with the Hepatitis A virus. Amended Consolidated Complaint (“Complaint”) at ¶¶ 1, 18. Plaintiffs allege that Defendant Goknur Gida Maddeleri Enerji Imalat Ithalat Ticaret Ve Sanayi Anonim Sirketi’s (“Goknur”) pomegranate arils1 were in TFI’s product and were the source of the contamination. Defendants deny this allegation. Nonetheless, Plaintiffs are seeking damages from Goknur, and its subsidiary United Juice Corp., for liabilities Plaintiffs say they have incurred and may incur as a result of, among other things, the lawsuits that followed the outbreak. In this motion, Goknur and United Juice ask the Court to dismiss several of Plaintiffs’ twenty-five claims for relief because each is improperly pled and legally deficient.2 1 Pomegranate arils are the edible seed pods found inside the pomegranate. 2 Plaintiffs claim that Defendants are barred from moving to dismiss any claim that formed part of their original complaints and threatened Defendants’ counsel with “Rule 11 sanctions” if they continued to attempt to discuss dismissal of claims not raised in the parties’ opening meet and confer discussions. Ex. A. at 11. Plaintiffs are incorrect and their threat of sanctions is baseless. Over Defendants’ objection, Plaintiffs successfully moved for leave to amend and filed an Amended Consolidated Complaint on June 10, 2016. Rec. Doc. 34. The Court then granted Defendants an extension of time to “respon[d] to Plaintiffs’ Amended Consolidated Complaint” until July 15, 2016. July 1, 2016 Order, Rec. Doc. 74 at 2. Plaintiffs’ Amended Consolidated Complaint supersedes all prior complaints, “the latter being treated thereafter as non-existent” and the “original pleading no longer performs any function.” Ramirez v. County of San Bernadino, 806 F.3d 1002, 1008 (9th Cir. 2015) (citations omitted). Likewise, Defendants’ answers to those “non-existent” complaints serve no function and Defendants are free to move to dismiss any part of the Amended Consolidated Complaint. Case 8:15-cv-00837-DOC-JCG Document 81-1 Filed 07/15/16 Page 2 of 9 Page ID #:485 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - MEMORANDUM ISO MOTION TO DISMISS CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG II. STATEMENT OF FACTS Goknur sources, processes, and exports a variety of fruit products from Turkey to countries all over the world. Goknur imported pomegranate arils to the United States through its subsidiary United Juice. Compl. at ¶¶ 11, 18. Before and during part of 2013, Plaintiff Purely Pomegranate, Inc. (“PPI”) purchased Goknur pomegranate arils through sales arranged by fruit broker Fallon Trading Co., Inc. Compl. at ¶¶ 6, 24. PPI resold some of those arils to TFI, who used Goknur as one of its sources of pomegranate arils for its products. Compl. at ¶ 24. In May 2013, the consumption of TFI’s organic antioxidant berry blend caused a Hepatitis A outbreak in parts of the United States. Compl. at ¶¶ 23-24. Consumers who contracted Hepatitis A, and consumers who claim they were exposed to the product, sued Plaintiffs and, in some cases, Goknur and United Juice. Compl. at ¶ 26. Plaintiffs sued Goknur and United Juice in these consolidated proceedings claiming that Goknur and United Juice must pay for any of the Plaintiffs’ liabilities that stem from the underlying cases because the Goknur arils were supposedly the source of the hepatitis A contamination. Compl. at ¶¶ 26-36. Defendants will demonstrate at trial that these allegations are wrong. In the meantime, Defendants file this motion to dismiss in an effort to eliminate claims that are improperly pled and that have no basis in the law. III. PLAINTIFFS FAIL TO STATE A CLAIM FOR CONTRIBUTION (Claims for Relief Eleven and Twenty-One) A claim for contribution is available only “[w]here a money judgment has been rendered jointly against two or more defendants in a tort action” and “may be enforced only after one tortfeasor has, by payment, discharged the joint judgment.. ..” Cal. Code Civ. Proc. §§ 875, 876; Richards v. Owens-Illinois, Inc., 14 Cal.4th 985, 993 (1997), superseded by statute on other grounds. Plaintiffs have not alleged and, indeed, cannot allege that a money judgment has been rendered jointly Case 8:15-cv-00837-DOC-JCG Document 81-1 Filed 07/15/16 Page 3 of 9 Page ID #:486 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - MEMORANDUM ISO MOTION TO DISMISS CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG against them and Defendants. See Compl. at ¶¶91, 136. Instead, Plaintiffs allege that “in the event [Plaintiffs] [are] found liable in damages” for negligence or other claims, Plaintiffs “are entitled to contribution from Defendants . ...” Compl. at ¶¶91, 136-137. This is insufficient to state a claim for contribution. Richards, 14 Cal. 4th at 993; Western Steamship Lines, Inc. v. San Pedro Peninsula Hosp., 8 Cal. 4th 100, 108 (1994) (“Indemnity is distinguished from the related doctrine of contribution in that the latter presupposes a common liability which is shared by the joint tortfeasors on a pro rata basis.”) (citations omitted). Plaintiffs’ claim for contribution is premature and should be dismissed. IV. PPI’S NEGLIGENT INTERFERENCE CLAIM FAILS (Claim for Relief Five) To allege negligent interference with economic advantage, PPI must plead (1) an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship. Amer. Chem. Co. v. The Superior Court of Los Angeles Cty., 59 Cal. App. 4th 764, 786 (1997). PPI fails to allege that, as a result of Defendants’ negligent acts, it lost in whole or in part the economic benefits or advantage reasonably expected from its relationships with third parties. Therefore, its claim for negligent interference with an economic relationship should be dismissed. Case 8:15-cv-00837-DOC-JCG Document 81-1 Filed 07/15/16 Page 4 of 9 Page ID #:487 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - MEMORANDUM ISO MOTION TO DISMISS CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG V. PLAINTIFFS’ INTENTIONAL MISREPRESENTATION CLAIMS FAIL (Claims for Relief Nine (by PPI and Valley Forge) and Twenty-Three (by TFI)) To state a claim for misrepresentation, Plaintiffs must allege (1) a misrepresentation; (2) scienter (knowledge of the statements’ falsity); (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) damages. Lazar v. Sup. Ct., 12 Cal.4th 631, 638 (1996). Because intentional misrepresentation is a species of fraud, the claim is subject to Federal Rule of Civil Procedure 9(b)’s heightened pleading requirement. Deschaine v. IndyMac Mortg. Svcs., 617 Fed. App’x. 690, 692 (9th Cir. 2015). Rule 9(b) requires Plaintiffs to state each element of a fraud claim with particularity and allege “specific facts setting forth the circumstances which constitute the fraud.” Aldana v. Bank of Am., N.A., No. CV 14-7489, 2014 WL 6750276, at *7 (C.D. Cal. Nov. 26, 2014) (citations omitted). This means Plaintiffs must allege the “who, what, when, where and how” of the fraud to support their claim. Id. (citing Vess v. Ciba-Geigy Corp., USA, 317 F.3d 1097, 1106 (9th Cir.2003)). Instead of attempting to satisfy this heightened pleading standard, Plaintiffs simply make general assertions that “Defendants” made “false” representations to “all those in the supply chain,” and generally promised to produce arils “in compliance with all applicable laws.” Compl. at ¶ 79. The law requires much more, and the Court should dismiss the claim for intentional misrepresentation. Deschaine, 617 Fed. App’x. at 692; Aldana, 2014 WL 6750276 at *7. TFI’s intentional misrepresentation claim (the twenty-third claim for relief) fails for the additional reason that TFI also alleges it is the assignee of a contract with Defendants. Compl. at ¶¶ 93-97. TFI’s breach of contract claim is based on the alleged breach of a promise to process pomegranate arils in accordance with safety protocols and food laws. Compl. at ¶¶ 93-96. These same factual allegations Case 8:15-cv-00837-DOC-JCG Document 81-1 Filed 07/15/16 Page 5 of 9 Page ID #:488 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - MEMORANDUM ISO MOTION TO DISMISS CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG are also the basis TFI’s fraud claim. Compl. at ¶¶ 142-143 (alleging that Defendants’ misrepresented that arils were processed in accordance with safety protocols and food laws). The law does not permit this. “Under California law, to maintain a fraud claim based on the same factual allegations as a breach of contract claim, a plaintiff must show that ‘the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm.’” Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal.4th 979, 989-90 (2004) (quoting Erlich v. Menezes, 21 Cal. 4th 543, 552 (Cal. 1999)). Despite this clear requirement, TFI does not allege that Defendants had any independent duty beyond their contractual obligations to process the pomegranate arils in accordance with safety protocols and food laws. See Compl. at ¶¶ 142-143. TFI also does not plead that Defendants’ alleged misrepresentation regarding the arils’ processing was done intentionally or with the intent to harm. Id. These allegations cannot support a fraud claim and the claim should be dismissed. VI. PLAINTIFFS’ NEGLIGENT MISREPRESENTATION CLAIMS FAIL (Claims for Relief Four (by PPI and Valley Forge) and Nineteen (by TFI)) Plaintiffs’ negligent misrepresentation claims fail for the same reasons as their intentional misrepresentation claims. These claims are also subject to Rule 9(b)’s heightened pleading standard. Neilson v. Union Bank of Cal., 290 F.Supp.2d 1101, 1141 (C.D.Cal.2003) (“It is well-established in the Ninth Circuit that both claims for fraud and negligent misrepresentation must meet Rule 9(b)’s particularity requirements.”). Instead of pleading the claim with the specificity the law requires, Plaintiffs again make conclusory allegations that Defendants “negligently misrepresented to each link successively in the supply chain . . . that the Pomegranate Arils were safe and compliant with all applicable laws.” Compl. at ¶¶ 55, 128. As a result, the Court should dismiss Plaintiffs’ claims for negligent misrepresentation. Case 8:15-cv-00837-DOC-JCG Document 81-1 Filed 07/15/16 Page 6 of 9 Page ID #:489 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - MEMORANDUM ISO MOTION TO DISMISS CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG TFI’s separate claim for negligent misrepresentation is also invalid because it is based on the same allegations as its breach of contract claim and TFI does not allege that Defendants had any duty beyond their contractual obligations. Compare Compl. at ¶¶93-96 (breach of contract allegations) with Compl. at ¶¶128-129 (negligent misrepresentation allegations). As explained above, that is not allowed. Robinson Helicopter, 34 Cal.4th. at 989-90. VII. PLAINTIFFS’ UNLAWFUL BUSINESS PRACTICES CLAIM FAILS (Claim for Relief Twenty Four) Plaintiffs try to plead a California Business and Professions Code section 17200 claim by making the bald assertion that “Defendants sold adulterated Pomegranate Arils, thereby misrepresenting the nature, quality and characteristics of their product.” Compl. at ¶148 (emphasis added). However, the “[u]nknowing sale of a defective good is not [the kind of] sharp or deceptive business practice” the UCL was designed to prohibit. Mathison v. Bumbo, 2008 WL 8797937, *12 (C.D. Cal. Aug. 18, 2008). Plaintiffs do not allege that Defendants knew they were selling or importing pomegranate arils containing the Hepatitis A virus. Therefore, the Court should dismiss the claim. Id. VIII. PLAINTIFFS’ STRICT LIABILITY CLAIM FAILS (Claims for Relief Ten and Sixteen) A commercial plaintiff cannot recover damages it has suffered on a theory of strict liability in tort. Gentry Contr. Co. v. Sup. Ct., 212 Cal. App. 3d 177, 180-83 (1989) (citing Sumitomo Bank v. Taurus Developers, Inc., 185 Cal.App.3d 211, 226-227 (1986); Muro v. Superior Court, 184 Cal.App.3d 1089, 1097-1098 (1986); Sacramento Regional Transit Dist. v. Grumman Flxible, 158 Cal.App.3d 289, 298 (1984); Kaiser Steel Corp. v. Westinghouse Elec. Corp., 55 Cal.App.3d 737, 748 (1976); U.S. Financial v. Sullivan, 37 Cal.App.3d 5, 18-19 (1974) ). Plaintiffs are not consumers. They are corporations (Compl. at ¶¶ 3-9, 18-21) that cannot assert claims for damages under a theory of strict liability. Id. The Court should dismiss Case 8:15-cv-00837-DOC-JCG Document 81-1 Filed 07/15/16 Page 7 of 9 Page ID #:490 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - MEMORANDUM ISO MOTION TO DISMISS CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG Plaintiffs’ claims for strict liability. IX. PLAINTIFFS’ NEGLIGENCE PER SE CLAIM (Claim for Relief Three and Seventeen) During meet and confer discussions, Plaintiffs agreed to dismiss without prejudice their negligence per se claim. See written meet and confer correspondence, attached as Exhibit A at pp. 5, 12. To the extent that Plaintiffs are no longer agreeing to dismiss this claim, Defendants will address its deficiencies of in their reply briefing. X. TFI’S BREACH OF EXPRESS CONTRACT CLAIM (Claim for Relief Twelve) Plaintiff TFI also agreed during the meet and confer process to attach “purchase orders and invoices between Fallon and Goknur/United Juice Corp.” in support of their breach of contract claim. Ex. A at pp. 7, 12. To the extent that TFI no longer intends to do so, Defendants will address the deficiencies of this claim in the absence of those documents in their reply briefing. XI. CONCLUSION Based on the foregoing, Defendants request that the Court grant the motion to dismiss. Case 8:15-cv-00837-DOC-JCG Document 81-1 Filed 07/15/16 Page 8 of 9 Page ID #:491 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - MEMORANDUM ISO MOTION TO DISMISS CONSOLIDATED COMPLAINT CASE NO. 8:15-CV-00837-DOC-JCG Dated: July 15, 2016 DECHERT LLP By: /s/ Meghan Rohling Kelly William W. Oxley Meghan Rohling Kelly Michelle M. Rutherford Nathan McClellan Anna Do Attorneys for Defendants United Juice Corp., a New Jersey corporation, and Goknur Gida Maddeleri Enerji Imalat Ithalat Ticaret Ve Sanayi Anonim Sirketi dba Goknur Foodstuffs Import Export Trading and Production Co. Case 8:15-cv-00837-DOC-JCG Document 81-1 Filed 07/15/16 Page 9 of 9 Page ID #:492 Exhibit A Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 1 of 28 Page ID #:493 4842-4287-6466.1 701 B Street, Suite 1900 San Diego, California 92101 Telephone: 619.233.1006 Fax: 619.233.8627 www.lewisbrisbois.com LISA L. RICKSECKER DIRECT DIAL: 619.699.4918 LISA.RICKSECKER@LEWISBRISBOIS.COM June 17, 2016 File No. 34162.107 ARIZONA • CALIFORNIA • COLORADO • CONNECTICUT • FLORIDA • GEORGIA • ILLINOIS • INDIANA • KANSAS • KENTUCKY • LOUISIANA • MARYLAND • MASSACHUSETTS • MISSOURI • NEVADA • NEW JERSEY • NEW MEXICO • NEW YORK • NORTH CAROLINA • OHIO • OREGON • PENNSYLVANIA • RHODE ISLAND • TEXAS • WASHINGTON • WEST VIRGINIA VIA ELECTRONIC MAIL ONLY G. David Godwin, Esq. Robert Binion, Esq. Squire Patton Boggs (US) LLP 44 Montgomery Street, Suite 400 San Francisco, California 94104 E-Mail: david.godwin@squirepb.com Robert.binion@squirepb.com Christopher Van Gundy, Esq. Arthur S. Garrett III, Esq. Keller and Heckman, LLP Three Embarcadero Center, Suite 1420 San Francisco, California 94111 E-Mail: vangundy@khlaw.com garrett@khlaw.com Re: Townsend Farms, Inc. v. Goknur Gida Maddeleri Enerji Imalat Ithalat Ihracat Ticaret ve Sanayi A.S., et al. & Purely Pomegranate, et al. v. Goknur Gida Maddeleri Enerji Imalat Ithalat Ihracat Ticaret ve Sanayi A.S., et al., United States District Court, Central District of California, Southern Division, Case No. 15-CV-837-DOC-JCG Dear Counsel: We are writing to meet and confer regarding Plaintiffs Townsend Farms, Inc. (“TFI”), Purely Pomegranate, Inc. (“PPI”), and Valley Forge Insurance Company’s (“VFIC”) (collectively “Plaintiffs”) Consolidated Complaint, Docket No. 72 (“Complaint”). Defendants Goknur Gida Maddeleri Enerji Imalat Ithalat Ihracat Ticaret ve Sanayi Anonim Sirketi (“Goknur”) and United Juice Corp. (“United Juice”) (collectively “Defendants”) intend to file a motion to dismiss and motion to strike portions of Plaintiffs’ Complaint. California Central District Local Rule 7-3, Conference of Counsel Prior to Filing of Motions, states in pertinent part: In all cases not listed as exempt in L.R. 16-12, and except in connection with discovery motions (which are governed by L.R. 37-1 through 37-4) and applications for temporary restraining orders or preliminary injunctions, counsel contemplating the filing of any motion shall first contact opposing counsel to discuss thoroughly, preferably in person, the substance of the contemplated motion and any potential Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 2 of 28 Page ID #:494 G. David Godwin, Esq. Christopher Van Gundy, Esq. June 17, 2016 Page 2 4842-4287-6466.1 LEWIS BRISBOIS BISGAARD & SMITH LLP • www.lewisbrisbois.com resolution. The conference shall take place at least seven (7) days prior to the filing of the motion. Defendants’ last day to file a responsive pleading to the Complaint is July 1, 2016. As such, this letter is timely. I. Plaintiffs’ Negligence Per Se Claims Are Subject To Dismissal, As Plaintiffs Are Not Within The Protected Class Of Persons For Whom The Unidentified Law Was Adopted. Plaintiffs allege a negligence per se claim against Defendants. Plaintiffs allege that Defendants provided adulterated pomegranate arils based on “Section 402 of the U.S. Federal Food, Drug & Cosmetic Act (‘FDCA’)[.]” They do not cite any specific law that Defendants allegedly violated. Assuming that vague references to the FDCA, “other laws,” and “various U.S. food safety laws” are sufficient, Plaintiffs’ claim for negligence per se is still subject to dismissal. In order to maintain a negligence per se claim, a party must be within the protected class of persons for whom the law was adopted. Ramirez v. Nelson, 44 Cal. 4th 908 (2008). Here, Plaintiffs admit that the individual consumers, not Plaintiffs, suffered injuries. As such, they do not fall within the class of persons for whom the statute was adopted, and the cause of action is subject to dismissal. II. Plaintiffs’ Strict Products Liability Claims Fail As Plaintiffs Are In The Chain Of Distribution, And They Are Not The Intended Party To Be Protected By The Law. As you know, consumers, not Plaintiffs, claim to have suffered health injuries as a result of their alleged consumption of the berry mix at issue. As you also must know, Plaintiffs played an integral role of distributing the berry mix. To that end, a distributor can be held liable in tort for defective products. See generally Soule v. GM Corp., 8 Cal. 4th 548 (1994). In addition, the purpose of strict products liability is to protect consumers who are powerless to protect themselves. Greenman v. Yuba Power Products, Inc., 59 Cal. 2d 57 (1963). The doctrine of products liability does not apply as between parties who: (1) deal in a commercial setting; (2) from positions of relatively equal economic strength; (3) bargain the specifications of the product; and (4) negotiate concerning the risk of loss from defects in it. Plaintiffs are not within the class of persons protected by the doctrine. Kaiser Steel Corp. v. Westinghouse Elec. Corp., 55 Cal. App. 3d 737 (1976). Plaintiffs’ claims for strict products liability are therefore to dismissal with prejudice, as Plaintiffs cannot amend their complaint to conform with the general principles set forth above. Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 3 of 28 Page ID #:495 G. David Godwin, Esq. Christopher Van Gundy, Esq. June 17, 2016 Page 3 4842-4287-6466.1 LEWIS BRISBOIS BISGAARD & SMITH LLP • www.lewisbrisbois.com III. Plaintiffs’ Implied Warranty Claims Cannot Be Maintained Against Defendants. Plaintiffs assert a breach of the implied warranty of merchantability claim against Defendants. The plain language of California Civil Code § 1791.1(d) provides that “a buyer of consumer goods injured by a breach” is the proper party for this claim. Further, where a plaintiff cannot allege that he personally suffered any injury, he cannot allege a defect in the product. Mathison v. Bumbo, 2008 U.S. Dist. LEXIS 108511 (C.D. Cal. August 18, 2008). Here, Plaintiffs admit that the individual consumers suffered personal injuries. Accordingly, the implied warranty for merchantability is subject to dismissal. Plaintiffs also assert a claim for breach of the implied warranty of fitness for a particular purpose. This claim, like the products liability claim, is meant to protect a certain class of people, and it is typically asserted against retailers and distributors. Roberts v. Electrolux Home Prods., 2013 U.S. Dist. LEXIS 185488 (C.D. Cal. March 4, 2013) (citations omitted). In addition, this claim cannot be asserted where the purpose of the product described in the complaint is not distinct from ordinary purpose. Mathison v. Bumbo, 2008 U.S. Dist. LEXIS 108511 (C.D. Cal. August 18, 2008). In this case, Plaintiffs are distributors of the berry mix, which is the product that caused the personal injuries to the consumers. In addition, Plaintiffs cannot state any purpose of the product other than its ordinary purpose - human consumption. In addition, the parties must be in privity to maintain these causes of action and here there was no privity with PPI / VF and no privity with TFI. Thus, this claim is subject to dismissal with prejudice. IV. TFI’s Contract Claim Fails To Attach The Contract Or Set Out The Terms In Verbatim. TFI, through Fallon, asserts a claim for breach of contract.1 TFI does attach any contract to the Complaint, nor does it set forth verbatim the alleged terms of any contract. Instead, TFI attaches a purchase order and sales order (see Exhibit A), which do not name Defendants as the parties to either of the agreements. Therefore, the breach of contract claim is subject to dismissal. Otworth v. So. Pacific Transp. Co., 166 Cal. App. 3d 452 (1985). 1 TFI does not attach Fallon’s assignment to the Complaint. Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 4 of 28 Page ID #:496 G. David Godwin, Esq. Christopher Van Gundy, Esq. June 17, 2016 Page 4 4842-4287-6466.1 LEWIS BRISBOIS BISGAARD & SMITH LLP • www.lewisbrisbois.com V. Plaintiffs’ California Business & Professional Code Claims Are Fatally Flawed, As The Unknowing Sale Of Defective Goods Is Not A Sharp Or Deceptive Practice. The UCL was designed to prevent sharp or deceptive business practices, and the unknowing sale of defective goods is not a sharp or deceptive practice. Mathison v. Bumbo, 2008 U.S. Dist. LEXIS 108511 (C.D. Cal. August 18, 2008) (citations omitted). In the Complaint, Plaintiffs admit that Defendants did not always allegedly sell defective pomegranate arils. Therefore, Defendants did not knowingly or intentionally sell defective pomegranate arils, and Plaintiffs’ UCL claims must be dismissed. VI. TFI’s Breach Of Express Warranty Claim Is Defective. TFI, through an alleged assignment of Fallon’s claim, asserts a breach of express warranty claim despite failing to allege that Fallon gave Defendants an opportunity to replace the alleged defective pomegranate arils. The UCC applies to the sale of goods between commercial parties, and in this case, Fallon, through TFI, never notified Defendants that its goods were defective. In failing to do so, this claim is fatally defective. In re MyFord Touch Consumer Litigation, 46 F. Supp. 3d 946 (N.D. Cal. 2014). VII. An Award Of Punitive Damages For Out-Of-State Conduct That Causes Out-Of-State Harm Is Unconstitutional. In the Complaint, Plaintiffs seek punitive damages for various claims. Importantly, TFI, VFCI, and Fallon are not California corporations. As out-of-state corporations, these parties cannot be awarded punitive damages to punish Defendants for out-of-state conduct that causes out-of-state harm. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 421-22 (2003). Further, PPI, though a California corporation, did not conduct any business with Defendants in California. As such, the punitive damages claims by these out-of-state Plaintiffs should be dismissed. Please let us know whether you will agree to dismiss the above-mentioned claims for the reasons set forth above. We look forward to hearing from you prior to June 24th. Very truly yours, /s/ Lisa L. Ricksecker Lisa L. Ricksecker of LEWIS BRISBOIS BISGAARD & SMITH LLP AT/LLR Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 5 of 28 Page ID #:497 CBM-IPG\SF683419-1 G. David Godwin Direct Dial: 415.743.2554 david.godwin@squirepb.com 45 Offices in 21 Countries Squire Patton Boggs (US) LLP is part of the international legal practice Squire Patton Boggs, which operates worldwide through a number of separate legal entities. Please visit squirepattonboggs.com for more information. June 24, 2016 VIA EMAIL AND US MAIL Lisa L. Ricksecker, Esq. Lewis Brisbois Bisgaard & Smith LLP 701 B Street, Suite 1900 San Diego, California 92101 Re: Valley Forge/PPI v. Goknur, et al. Dear Ms. Ricksecker: We are in receipt of and responding to your June 17, 2016 letter regarding the Consolidated Complaint. We respond to your concerns in the order presented in your letter. Certain of the issues concern claims brought by all Plaintiffs and our response is on behalf of all Plaintiffs. Other issues concern claims brought solely by Townsend Farms, Inc. (“TFI”) and the response to those issues is on TFI’s behalf. I. PLAINTIFFS’ NEGLIGENCE PER SE CLAIMS The Third and Seventeenth Claims for Relief in the Consolidated Complaint are for negligence per se. Plaintiffs agree negligence per se is an evidentiary presumption and, therefore, Plaintiffs agree to dismiss these two claims without prejudice. II. PLAINTFFS’ STRICT PRODUCTS LIABILITY CLAIMS The Tenth and Sixteenth Claims for Relief in the Consolidated Complaint are for strict liability. Defendants assert that these claims cannot be brought by Plaintiffs as commercial entities citing Kaiser Steel Corp. v. Westinghouse Elec. Corp., 55 Cal.App.3rd 737 (1976). The test set forth in Kaiser Steel and quoted in your letter is factual in nature and for the finder of fact to determine. International Knights of Wine, Inc. v. Ball Corp.,110 Cal.App.3d 1001, 1006 (1980); East Bay Mun. Utility Dist. v. FMC Corp. (2003) 2003 WL 353410 *8. Plaintiffs believe the evidence will show one or more of the Kaiser Steel factors is not met but in any event cannot be determined at the pleading stage. Sunterra Corp. v. Perini Building Co., 2008 WL 4951419 *2 (E.D. Cal. 2008). Consequently, Plaintiffs are unwilling to dismiss these claims. Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 6 of 28 Page ID #:498 Lisa Ricksecker Re: Valley Forge/PPI v. Goknur, et al. June 24, 2016 Page 2 CBM-IPG\SF683419-1 III. PLAINTIFFS’ IMPLIED WARRANTY CLAIMS The Sixth, Seventh, Fourteenth and Fifteenth Claims for Relief in the Consolidated Complaint are for the implied warranties of fitness for a particular purpose and merchantability. Defendants assert these claims may only be brought the consumers, citing Cal. Civ. Code § 1791.1 and two decisions from the Central District. To begin, section 1791 is part of the Song Beverly Act, which is inapplicable to this action. Plaintiffs’ claims are brought under the Commercial Code, sections 2314 and 2315. Second, Plaintiffs are proper parties under the Commercial Code. See e.g. Cardinal Health 301, Inc. v. Tyco Electronics Corp., 169 Cal.App.4th 116, 144 (2008). Finally, the arils were intended for the specific purposes of TFI’s product and Purely Pomegrante’s dried product and not any ordinary purpose to the extent one existed at all. Consequently, Plaintiffs’ implied warranty claims have merit and will not be dismissed. IV. TFI’S CONTRACT CLAIM TFI’s Twelfth Claim for Relief in the Consolidated Complaint is for Fallon Trading’s assigned breach of contract claim. This claim for relief is not legally deficient for lack of an attached written contract, or a verbatim recitation of contract terms. The very first sentence of this claim for relief (para. 93) makes clear there was no formal contract, but rather “an exchange of sales documents, emails, prior course of conduct, and/or other written and/or oral communications, beginning at least with a February 2011 meeting in Turkey . . . .” Plaintiffs cannot attach or quote verbatim a document that, as the Consolidated Complaint pleads, does not exist. For this reason, the case you cite, Otworth v. So. Pacific Transp. Co., 166 Cal. App. 3d 452 (1985), is factually distinguishable. In Otworth, the alleged complaint was supposedly written, and there were no allegations as to the essential elements of a breach of contract. Here, by contrast, the Consolidated Complaint is clear that the contract is not found within a single written instrument, and of course you have not claimed, and you cannot claim, that we did not plead sufficiently the essential elements of a contract under California law. In addition, Otworth makes reference to “code pleading” “standards” in California state law practice, which is not the “notice pleading” permitted in federal court. A complaint in federal court need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)- a short and plain statement- to survive a motion to dismiss for failure to state a claim under Rule 12(b)(6). Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003); Fed. R. Civ. P. 8(a)(2). For a complaint to sufficiently state a claim, its "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The Consolidated Complaint easily meets this standard. Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 7 of 28 Page ID #:499 Lisa Ricksecker Re: Valley Forge/PPI v. Goknur, et al. June 24, 2016 Page 3 CBM-IPG\SF683419-1 As a compromise, and without waiver of our position, we offer to attach to the Consolidated Complaint purchase orders and invoices between Fallon and Goknur/United Juice Corp. V. PLAINTIFFS’ CALIFORNIA BUSINESS AND PROFESSIONS CODE CLAIMS The Twenty Fourth and Twenty Fifth Claims for Relief in the Consolidated Complaint are for violations of Cal. Bus. & Prof. Code §§ 17200 and 17500. Defendants assert that it can be inferred that Defendants did not knowingly or intentionally sell defective pomegranate arils and that this is fatal to these claims. The premise of your argument here is that Plaintiffs supposedly “admit that Defendants did not always allegedly sell defective pomegranate arils.” This is factually not true, and contrary to the very specific pleadings of the Consolidated Complaint. There are, for example, no allegations that Defendants sometimes sold non-defective pomegranate arils, and in fact paragraph 38 clearly states that your clients’ misdeeds were “conscious, willful and repeated” (emphasis supplied). Claims for Relief Nine and Twenty Three for intentional misrepresentation again make clear that your clients’ misconduct was intentional. These allegations are in direct contrast to the allegations in the cited case, Mathison v. Bumbo, 2008 U.S. Dist. LEXIS 108511 (C.D. Cal. Aug. 18, 2008). In Mathison, plaintiffs did not allege that the products in question were defective, or that defendants knew of the defects. There is no statement by the Court that a plaintiff must allege for the state unfair competition claims that a defendants must “always allegedly sell defective pomegranate arils,” as you erroneously contend. VI. TFI’S BREACH OF EXPRESS WARRANTY CLAIM TFI’s Thirteenth Claim for Relief in the Consolidated Complaint is for Fallon Trading’s assigned breach of express warranty. In re My Ford does not support Defendant’s position. The plaintiffs in In re My Ford who had their Express Warranty claim dismissed were suing because an entertainment system in their vehicles did not work as promised. The specific plaintiffs who had their Express Warranty claims dismissed had failed to give the manufacturer the opportunity to repair the entertainment system. The Plaintiffs’ argued that the manufacturer could not repair the system so they did not take the system into the manufacturer to provide an opportunity to cure. According to the Court, the failure, under the facts pleaded, did not support the Plaintiffs’ position that any effort to repair the system would be futile. In re My Ford is not on point with the instant facts. Here, Defendants argue that that Fallon’s express warranty claim fails because Fallon at no time provided Defendant the opportunity to replace the defective pomegranate arils. Defendants’ position defies logic. Defendants’ economic loss did not come from its inability to replace the defective product. The economic loss came from the fact that Defendant sold to Plaintiff Fallon a product that failed of its essential Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 8 of 28 Page ID #:500 Lisa Ricksecker Re: Valley Forge/PPI v. Goknur, et al. June 24, 2016 Page 4 CBM-IPG\SF683419-1 purpose: to be fit for human consumption. There is no right to cure in this instance as a cure is impossible to remedy the damage caused by the product failing its essential purpose. Such an effort would be futile. Plaintiffs have no obligation to provide notice where none can be given. The sale of a food product under circumstances where the adulteration can only be discovered after the harm occurs is not similar to the sale of an entertainment system that could be taken to a dealership for a manufacture’s attempted repairs or replacement. The harm giving rise to the Express Warranty claim had occurred by the time both Plaintiff and Defendant knew that the arils had failed of their essential purpose. No notice, at that point, could be given. VII. PLAINTIFFS’ PUNITIVE DAMAGES CLAIM Paragraphs 154 and 155 set forth Plaintiffs’ claim for punitive damages. Defendants argue that (1) TFI, Fallon and “VFCI [sic]” are out of state corporations and cannot bring claims for conduct causing out of state harm; and (2) “PPI”, a California corporation did not conduct business with Defendants in California. Defendants cite State Farm Mut. Auto Ins. Co. v. Campbell, 538 US 408 (2003). Defendants’ position misreads State Farm and misinterprets the facts as plead in Plaintiffs’ complaint. State Farm holds in relevant part here that “as a general rule, [ a State does not] have a legitimate concern in imposing punitive damages to punish a defendant for unlawful acts committed outside of the State's jurisdiction.” Id. at 421. State Farm does not stand for the premise that out of state corporations such as TFI and Valley Forge are prohibited from bringing a claim for punitive damages in the state where a defendant’s conduct caused the harm to occur. To the contrary, State Farm was focused on conduct which occurred in another state that may have been illegal, and the underlying admitted out- of-state evidence lacked a nexis to the issues and relevant facts before the Utah Court. Here, the Court has already found specific jurisdiction in California as against Goknur based on the transactions and conduct that led Defendants’ product to enter the state and cause bodily injuries here. Plaintiffs have alleged that Defendants grew, sourced and processed the arils which were then represented as safe for human consumption. Defendants induced Plaintiffs to purchase the arils based on representations made that the product was safe and complied with all applicable laws and regulations, including those of California. Defendants also shipped the product directly into California for distribution throughout the United States. In disregarding food safety laws by consciously, willfully and repeatedly failing to take the necessary steps to protect consumers and the Plaintiffs who purchased and subsequently distributed the adulterated product which harmed California consumers, and subsequently representing that the product was safe for human consumption, Defendants subjected themselves to the jurisdiction of courts in California and a claim for punitive damages. The conduct of representing the safety of the product and the injuries that subsequently followed occurred in California. That three of the Plaintiffs are not California Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 9 of 28 Page ID #:501 Lisa Ricksecker Re: Valley Forge/PPI v. Goknur, et al. June 24, 2016 Page 5 CBM-IPG\SF683419-1 corporations is not relevant to the analysis of a California court asserting jurisdiction to impose punitive damages for conduct and harm which occurred in California. We are available to discuss these issues further. Sincerely, SQUIRE PATTON BOGGS (US) LLP G. David Godwin cc: Heidi Inman, Esq. Christopher G. Van Gundy, Esq. William Gaar, Esq. Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 10 of 28 Page ID #:502 1 Rutherford, Michelle From: Van Gundy, Christopher G. Sent: Tuesday, July 12, 2016 10:37 AM To: Rutherford, Michelle; Godwin, David; Garrett, Arthur S.; Binion, Robert A.; William E. Gaar Cc: Kelly, Meghan Rohling Subject: RE: TFI v Goknur et al: M&C correspondence Michelle, That complaint was a consolidation of two prior complaints which your client already answered. The main substantive distinction was the addition of punitive damages. I don’t see how your client gets to answer the previous claims for relief, and now can move to dismiss all claims for relief it previously answered. Your client made its decision to answer, and now seeks a second bite at the apple. Bests, Christopher G. Van Gundy Partner tel: +1 415.948.2831 | fax: +1 415.948.2808 | vangundy@khlaw.com Three Embarcadero Center, Suite 1420, San Francisco, Ca. 94111 Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet. http://www.khlaw.com/images/khlaw-emailsignature.jpg Visit our websites at www.khlaw.com or www.packaginglaw.com for additional information. From: Rutherford, Michelle [mailto:Michelle.Rutherford@dechert.com] Sent: Tuesday, July 12, 2016 10:33 AM To: Godwin, David; Van Gundy, Christopher G.; Garrett, Arthur S.; Binion, Robert A.; William E. Gaar Cc: Kelly, Meghan Rohling Subject: RE: TFI v Goknur et al: M&C correspondence Dave, Plaintiffs, including your clients, filed an amended consolidated complaint on June 10, 2016. Defendants have not yet filed a response to the June 10, 2016 Complaint, which is the operative complaint. I hope this clears up any confusion. Best, Michelle Michelle M. Rutherford Dechert LLP 213 808 5713 Direct michelle.rutherford@dechert.com Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 11 of 28 Page ID #:503 2 From: Godwin, David [mailto:david.godwin@squirepb.com] Sent: Monday, July 11, 2016 8:16 AM To: Rutherford, Michelle ; Van Gundy, Christopher G. ; garrett@khlaw.com; Binion, Robert A. ; William E. Gaar Cc: Kelly, Meghan Rohling Subject: RE: TFI v Goknur et al: M&C correspondence Dear Michelle, I note that with respect to our client’s first amended complaint, Goknur and UJC have already answered and cannot now raise new challenges to causes of action already responded to. See e.g. the attached answer of Goknur. Please confirm your clients will not raise such new challenges. Best regards, Dave From: Godwin, David Sent: Sunday, July 10, 2016 7:17 PM To: 'Rutherford, Michelle'; Van Gundy, Christopher G.; garrett@khlaw.com; Binion, Robert A.; William E. Gaar Cc: Kelly, Meghan Rohling Subject: RE: TFI v Goknur et al: M&C correspondence The June 17 meet and confer clearly set forth the grounds your clients were challenging and specifically states at both the second paragraph and the final sentence that it is limited to those grounds. It had to be so limited because that was the last day to meet and confer. We proposed to extend the time within which Goknur and UJC could decide whether to move on those grounds (except for the two already resolved) but that in no way opened up the meet and confer process again for all other issues. The lone exception was for punitive damages. No other issue is on the table. You never once reached out to me our my firm. We represent Valley Forge and PPI. We have no other co-counsel. In any event, your discussions with Mr. Van Gundy did not include any request to reopen all claims. Rather, it was limited to the punitive damages issue. Should you chose to include issues not previously the subject of the original meet and confer or renege on the negotiated point on the contract cause of action we will seek Rule 11 sanctions. The time has long passed for your clients to answer the complaint (I note Goknur failed to respond in a timely fashion from when it was served and never sought an extension of time to respond). No further extension of time will be granted as we are coming up on expert discovery. We will respond substantively to your latest correspondence consistent with the points made above. Best regards, Dave From: Rutherford, Michelle [mailto:Michelle.Rutherford@dechert.com] Sent: Saturday, July 09, 2016 1:05 PM To: Godwin, David; Van Gundy, Christopher G.; garrett@khlaw.com; Binion, Robert A.; William E. Gaar Cc: Kelly, Meghan Rohling Subject: RE: TFI v Goknur et al: M&C correspondence Dave, There is no basis for your contention that Defendants have waived their right to file a motion to dismiss on any and all claims. There is nothing in the stipulation, meet and confer correspondence, or court’s order granting the extension that precludes Goknur or UJC from moving to dismiss on any portion of Plaintiffs’ complaint that fails to plead a claim. Indeed, in the most recent stipulation we agreed to extend Plaintiffs’ deadline to amend so that the parties could continue meeting and conferring on “all issues pertaining to a possible motion to dismiss.” Your position is against the Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 12 of 28 Page ID #:504 3 letter and spirit of the meet and confer process and uses Defendants’ willingness to participate in that process as gamesmanship against them. I informed your co-counsel on Thursday that we would be moving to dismiss on additional parts of the Complaint not previously raised in the meet and confer correspondence and he did not object. Further, Plaintiffs’ counsel agreed in writing on Thursday that Defendants would not be held to their prior agreement to forego moving to dismiss on Plaintiffs’ request for punitive damages. The contract claims are improper for reasons that cannot be cured by attachment of documents allegedly setting out terms and Plaintiffs remain free to dismiss their negligence per se claims. There is clearly no possibility that Plaintiffs will be prejudiced by Defendants’ filing of a motion to dismiss that addresses all deficient parts of the complaint. And, finally, our meet and confer email of yesterday is timely under LR 7-3 and nothing in the local rules or the FRCP limits the grounds for a motion to dismiss when the deadline to file, and thereby the deadline to meet and confer, has been extended. Indeed, the most recent stipulation extends the meet and confer deadline to next Friday. I am happy to look at any authority you have that would support your contention, but currently see no basis for it. Last, we agreed to the recent stipulation giving Plaintiffs more time to amend with the understanding that the professional courtesy would be reciprocated, if necessary. It simply makes no sense for us to file a motion to dismiss if the operative complaint is then mooted a week later by Plaintiffs’ amendments. And, I see no reason for Plaintiffs’ position other than an attempt to improperly limit the scope of Defendants’ motion to dismiss. Michelle Michelle M. Rutherford Dechert LLP 213 808 5713 Direct michelle.rutherford@dechert.com -------- Original message -------- From: "Godwin, David" Date: 7/9/16 9:37 AM (GMT-08:00) To: "Rutherford, Michelle" , "Van Gundy, Christopher G." , garrett@khlaw.com, "Binion, Robert A." , "William E. Gaar" Cc: "Kelly, Meghan Rohling" Subject: RE: TFI v Goknur et al: M&C correspondence The purpose of the original extension was to avoid multiple amendments. The parties agreed to the resolution of the issues concerning the negligence per se and contract causes. As you note, the June 17 meet and confer did not raise many of the issues contained in your latest correspondence and cannot now be raised. They have been waived as they were not included in the original meet and confer. Only those issues raised in the June 17 meet and confer that formed the basis of our agreement to extend the time can be the subject of any motion to dismiss. Pursuant to the extension Goknur and United Juice must decide whether they will move on the remaining issues raised in its June 17 meet and confer and advise us whether they will or not. No further extension will be granted. We will respond to your latest meet and confer to the extent it addresses the prior issues raised. Best regards, Dave From: Rutherford, Michelle [mailto:Michelle.Rutherford@dechert.com] Sent: Saturday, July 09, 2016 9:21 AM To: Godwin, David; Van Gundy, Christopher G.; garrett@khlaw.com; Binion, Robert A.; William E. Gaar Cc: Kelly, Meghan Rohling Subject: RE: TFI v Goknur et al: M&C correspondence Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 13 of 28 Page ID #:505 4 Gentlemen, We would also like to get Plaintiffs’ positions on a joint stipulation to extend our time to move to dismiss until 7 days after Plaintiffs file their Amended Complaint. As I mentioned on the phone Thursday, it seems backwards to have us move to dismiss and then y’all file an amended complaint and it goes against the original and standard order of things. So, please let me know if Plaintiffs are willing to stipulate to an extension of time for Goknur and UJC to file their motion to dismiss until July 29, 7 days after Plaintiffs’ deadline to amend passes. Please let me know your amenability to a stipulation putting our deadline to file a motion to July 29, dismiss 7 days after Plaintiffs file their amended complaint. I’m available to discuss anytime. Thanks, Michelle Michelle M. Rutherford Dechert LLP 213 808 5713 Direct michelle.rutherford@dechert.com From: Rutherford, Michelle Sent: Friday, July 08, 2016 5:26 PM To: 'david.godwin@squirepd.com' ; 'Van Gundy, Christopher G.' ; 'garrett@khlaw.com' ; 'robert.binion@squirepb.com' ; William E. Gaar Cc: Kelly, Meghan Rohling Subject: TFI v Goknur et al: M&C correspondence Chris, David, and Bill, As I discussed with Chris yesterday, Goknur and UJC intend on moving forward with a motion to dismiss. I write to continue the meet and confer process and discuss a few claims for which we will seek dismissal that were not mentioned in prior correspondence. While it may go without saying, I incorporate by reference all prior meet and confer correspondence including the June 17, 2016 letter from Goknur and UJC’s counsel to Plaintiffs. Goknur and UJC intend to move to dismiss all claims listed in the June 17 letter, in addition to the claims listed below. Further meet and confer issues: Equitable Indemnity: To state a claim for equitable or implied indemnity, a plaintiff must allege that it “is jointly and severally liable” with the defendants from whom it is seeking indemnity. Chubb Custom Ins. Co. v. Space Systems/Loral, Inc., No. C 09-04485 JF (PVT), 2010 WL 689940, at *9 (N.D.Cal. Feb. 23, 2010) (dismissing an equitable indemnity claim because the plaintiff failed to allege that it and the defendant were joint tortfeasors). Plaintiffs make no such allegation and instead allege that defendants alone were responsible for the purported injuries to the plaintiffs in the Underlying Claims. See Compl. at ¶¶43,133 (alleging that “any liability on the part of PPI for the Underling Claims is because of . . . Defendants.”). Plaintiffs have not properly alleged a claim for equitable indemnity. If you contend the complaint does allege that Plaintiffs and at least one Defendants are joint tortfeasors, or jointly and severally liable, please point us to that portion of the complaint. Negligence: Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 14 of 28 Page ID #:506 5 This claim is premature because no fact finder has yet found that Goknur or UJC were negligent. Indeed, the Complaint alleges the claim in the future tense, “Defendants will have breached” a duty of care if the “allegations of the Underlying Claims are true.” Compl. at ¶48. Put another way, without a determination of Goknur’s negligence as it pertains to the Underlying Claims, Plaintiffs cannot plead that such unestablished negligence caused their alleged losses and the claim has not yet accrued. See People ex rel. Dept. of Trans. v. Superior Court, 26 Cal.3d 744, 755 (1980) (tort defendant’s action for equitable indemnity does not accrue until the time of payment). Moreover, the negligence claim is a form of indemnity claim, which as stated above is not properly alleged. Negligent interference with Economic Advantage: The elements for this cause of action are “1) a valid contract between plaintiff and a third party; 2) the defendant's knowledge of the contract; 3) [negligent] acts by the defendant [that] induce a breach or disruption of the contractual relationship; 4) actual breach or disruption of the contractual relationship; and 5) resulting damage.” Lowery v. City of Santa Clara, No. C 09-0229 PVT, 2009 WL 975455, at *4 (N.D. Cal. Apr. 10, 2009) (elements are the same as interference with contract, “except that the plaintiff must allege a duty of care and negligent breach of that duty, rather than intent”). Plaintiffs have not alleged the existence of any contracts with third parties that were breached as a result of Defendants’ negligent acts. Plaintiffs allege only that Defendants were “aware . . . of the nature and economic prospects of PPI.” Compl. ¶60. Plaintiffs fail to state a claim. Intentional Misrepresentation: This claim fails to plead that any Defendants’ purported misrepresentation was the cause of damage to any Plaintiff. While paragraph 82 states that PPI “was induced to purchase the Pomegranate Arils to is detriment,” it does not plead what that detriment was or that the misrepresentation was the cause of that detriment, both required elements. Lemon v. Bear Stearns, 2012 WL 2395169, *6 (C.D.Cal. Jun. 25, 2012). And in paragraph 145 TFI does not even allege that the purchase was to its detriment. These deficiencies likely come from the fact that Plaintiffs have included irrelevant and unrelated allegations in paragraph 79-80 and 142-143. The documents listed in paragraphs 79 and 142 are confidential and the allegations in paragraphs 80 and 143 pertain to other products, or are not true. We will be moving to strike the allegations in paragraphs 79-80 and 142-143 of the Complaint. Moreover, the Complaint fails to allege the claim with the required level of specificity and does not allege the “who, what, when, where” required under Rule 9(b). Aldana v. Bank of Am., N.A., No. CV 14-7489-GHK FFMX, 2014 WL 6750276, at *7 (C.D. Cal. Nov. 26, 2014) (citing Vess v. Ciba-Geigy Corp., USA, 317 F.3d 1097, 1106 (9th Cir.2003) (Intentional misrepresentation is a species of fraud and therefore subject to Rule 9(b)'s heightened pleading requirement. Rule 9(b) requires Plaintiffs to state with particularity “specific facts setting forth the circumstances which constitute the fraud. This means the Plaintiffs must allege the “who, what, when, where and how” supporting their intentional misrepresentation claim.)). Finally, Plaintiffs’ alleged misrepresentation is identical to Plaintiffs’ alleged breach by Defendants of the “contract” terms. Compare Compl. at ¶¶93-96 (alleged breach of contractual to process arils in accordance with safety protocols and food laws) with Compl. at ¶¶79-80 (alleged tortious misrepresentation that arils were not processed in accordance with HACCP guidelines or applicable laws and regulations). But conduct amounting to a breach of contract can only be used to support a separate tort claim when “it also violates a duty independent of the contract.” Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal.4th 979, 989 (2004). Plaintiffs cannot use the same conduct to support their intentional misrepresentation and breach of contract claims, and they have failed to allege that the misrepresentation violated a duty independent of Defendants’ purported contractual obligations. Plaintiffs claim fails. Negligent misrepresentation: Plaintiffs’ negligent misrepresentation claim is also subject to a heightened pleading standard and Plaintiffs are required to alleged the “who, what, when, where and how” of their claim, they have not. Neilson v. Union Bank of California, N.A., 290 F.Supp.2d 1101, 1141 (C.D.Cal.2003) (“It is well-established in the Ninth Circuit that both claims for fraud and negligent misrepresentation must meet Rule 9(b)'s particularity requirements.”). Instead, Plaintiffs conclusorily allege Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 15 of 28 Page ID #:507 6 without detail that Defendants “negligently misrepresented to each link successively in the supply chain . . . that the Pomegranate Arils were safe and compliant with all applicable laws.” Compl. at ¶55. This is insufficient to state a claim that meets the particularity requirements of Rule 9(b). Contribution: This claim is also premature and fails to properly allege all the elements. A claim of contribution requires a plaintiff to allege that Defendants have been found to be jointly liable and that Plaintiffs have already paid more than their share of that obligation. Sullins v. Exxon/Mobil Corp., 729 F.Supp.2d 1129, 1138 (N.D.Cal. 2010) (“the right to contribution exists as a separate contract implied by law . . .. [w]here two or more parties are jointly liable on an obligation and one of them makes payment of more than its share, the one paying comes into possession of a new obligation against the others for their proportion of what it has paid for them.”). Plaintiffs allege only that “in the event PPI is found liable” they would be entitled to contribution. Compl. ¶¶91, 136-137. But Plaintiffs have not alleged that they have paid more than their share of a proven joint obligation. The claim is not properly plead. 17500 claim: Goknur and UJC incorporate their prior arguments regarding these claims and further respond that section 17500 requires an allegation that the defendant made a false or misleading statement to the public in advertising. Cal. Bus. Prof. Code §17500. Plaintiffs fail to allege that any Defendant made a statement in advertising that was disseminated to the public and the claim fails. The 17500 claim is not properly plead. Punitive Damages: The factual allegations Plaintiffs use to support Plaintiffs’ alleged entitlement to punitive damages are unrelated to the conduct alleged to support Plaintiffs other claims. Plaintiffs have not, and cannot, allege facts supporting punitive damages on these claims and instead rely on facts related to other Goknur product lines. See Compl. at ¶38 (alleging facts related to non-aril purported “adulterated foodstuffs” and “pomegranate juice concentrate”). This is an obvious attempt to use unrelated, purported “prior bad acts” to support a current claim for damages. This is not proper and Plaintiffs have not stated facts regarding Defendants’ conduct that would rise to the level of punitive damages as their conduct relates to the pomegranate arils at issue in this case. See De Anza Santa Cruz Mobile Estates Homeowners Assn. v. De Anza Santa Cruz Mobile Estates, 94 Cal. App. 4th 890, 912, 114 Cal. Rptr. 2d 708, 725 (2001) (acknowledging a plaintiff may recover punitive damages when the “tortious conduct” at issue was characterized by fraud, oppression, or malice); see also Kerins v. Hartley, 27 Cal.App.4th 1062, 1074-75 (1994) (plaintiff must prove that defendant’s conduct “in causing the exposure” amounts to oppression, fraud, or malice). We will also move to strike the allegations in paragraph 38 as irrelevant and unrelated to Plaintiffs claims. I am happy to discuss these issues over the phone, but am also fine receiving a response to this meet and confer letter by email. I hope you all have a nice weekend. Thanks, Michelle Michelle M. 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Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 17 of 28 Page ID #:509 Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 18 of 28 Page ID #:510 Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 19 of 28 Page ID #:511 Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 20 of 28 Page ID #:512 Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 21 of 28 Page ID #:513 Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 22 of 28 Page ID #:514 Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 23 of 28 Page ID #:515 Washington, D.C. Brussels San Francisco Shanghai This document was delivered electronically. www.khlaw.com Three Embarcadero Center Suite 1420 San Francisco, CA 94111 tel. 415.948.2800 fax 415.948.2808 Writer’s Direct Access C h r i s t op h e r Va n G u n d y (415) 948-2831 v a n g u n d y @ k h l a w. c o m July 14, 2016 Via Electronic Mail Michelle M. Rutherford Dechert LLP US Bank Tower 633 West 5th Street, 37th Floor Los Angeles, CA 90071-2013 Re: Townsend Farms v. Goknur, et al. Dear Michelle: This responds to your email of July 8, 2016 and the ensuing email chains between you and Plaintiffs’ counsel as part of a meeting and conferring for your apparent plan to move to dismiss certain claims for relief in Consolidated Complaint. I am writing on behalf of Plaintiff Townsend Farms, Inc. (“TFI”) only. However, I join in the positions expressed by David Godwin and Robert Binion on behalf of Plaintiffs Purely Pomegranate, Inc. and Valley Forge Insurance Company in this meeting and conferring process to the extent applicable to TFI’s claims for relief. First, I note that you intend to move to dismiss the following claims for relief: equitable indemnity; negligence; negligent interference with economic advantage; intentional misrepresentation; negligent misrepresentation; contribution; and punitive damages. Also, you claim you will move to strike certain paragraphs of the Consolidated Complaint. I should also note that TFI did not assert a claim for relief for negligent interference with economic advantage, so I will not address this portion of your letter. Previous Answer As explained in prior email communications, Defendants now seek to move to dismiss all of these claims for relief which they previously answered months ago (with the exception of the claim for punitive damages). Defendants have provided no legitimate basis for answering TFI’s last complaint, the First Amended Complaint, and then moving to dismiss the very same claims for relief previously answered simply because the Court ordered the consolidation of TFI’s First Amended Complaint with co-Plaintiffs’ First Amended Complaint. Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 24 of 28 Page ID #:516 KELLER AND HECKMAN LLP Michelle M. Rutherford July 14, 2016 Page 2 This document was delivered electronically. For this reason alone I believe the Court can and should deny your motion as to the claims for relief previously answered. Your purported bases for the motion to dismiss misstate the facts and/or law, and/or in several instances are without a good faith basis, and should be rejected by the Court for the additional reasons, explained below. Unless you are willing to drop your objections, I do not see the point of moving for leave to amend as I discussed with prior counsel given that you seem committed to filing a motion to dismiss, and my prior agreement with Ms. Inman was premised on the notion that she would not file a motion to dismiss. Equitable Indemnity As long stated in reported California state court decisions, the pleading elements of equitable indemnity are: “(1) a showing of fault on the part of the indemnitor and (2) resulting damages to the indemnitee for which the indemnitor is contractually or equitably responsible.” Expressions at Rancho Niguel Assn. v. Ahmanson Developments, Inc., 86 Cal. App. 4th 1135, 1139-40 (2001). You cite an unpublished federal trial court decision for the proposition that TFI was required to plead that TFI and Defendants were joint tortfeasors. For support, this unpublished decision cites to Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group, 143 Cal. App. 4th 1036 (2006). Stop Loss does not support the pleading requirement of joint tortfeasors that you propose. Rather, it explains that to plead equitable indemnity, “there must be some basis for tort liability against the proposed indemnitor . . . . it is based on a duty owed to the underlying plaintiff, although vicarious liability and strict liability also may sustain application of equitable indemnity.” Stop Loss, 143 Cal. App. 4th at 1040. TFI has alleged tort liability against Defendants in spades, and therefore all pleading requirements for equitable indemnity are met. In addition, construing the pleadings in the light most favorable to TFI, as the Court surely will, TFI already has plead joint liability in paragraph 28 of the Consolidated Complaint: “any liability on the part of TIF or Fallon in this regard equitably shall be imputed to Defendants on the basis of vicarious, constructive, derivative or secondary liability, and not as the result of any active negligence or other wrong doing by TFI or Fallon.” “Vicarious” liability was pled, as mentioned in Stop Loss, and in any event there can be no secondary or active v. passive negligence unless of course there is a third-party to whom Plaintiffs and Defendants stand together as joint tortfeasors. Negligence I do not understand how you can maintain that the pleading requirements of negligence require that we plead that a fact-finder found Defendants negligent. Our jury trial is set for April 11, 2017, and that jury will be the fact-finder of Defendants’ negligence. Moreover, we do not, as you claim, plead “in the future tense.” We pled in relevant part: “Defendants breached their Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 25 of 28 Page ID #:517 KELLER AND HECKMAN LLP Michelle M. Rutherford July 14, 2016 Page 3 This document was delivered electronically. duty of care ultimately to TFI and Fallon by negligently failing to ensure that the Pomegranate Arils were not tainted with HAV.” Consolidated Complaint, ¶ 125. Simply put, your assertion that we cannot even plead negligence until a finder of fact in the underlying consumer actions makes that determination is without any conceivable good faith basis in law. Defendants were negligent, and that negligence, as we pled, caused TFI to suffer damages that it already has incurred, and is continuing to incur. I strongly urge you to drop this position. Intentional Misrepresentation I first note here that you try to argue that the intentional misrepresentations claims by Plaintiffs fail because they are asserting breach of contract claims for relief. This is wrong. No plaintiff party to this litigation is asserting a breach of contract claim for relief in its own right. TFI was assigned and is asserting a breach of contract claim by Fallon Trading Co., but Fallon Trading Co. is not asserting a claim for intentional misrepresentation. You claim that TFI fails to plead that the intentional misrepresentation caused TFI any damage. However, TFI plead: “[i]n reliance on Defendants’ representations, TFI was induced to purchase the Pomegranate Arils and use them in its products that were then sold in certain Costco stores in western states . . . Defendants’ fraudulent conduct . . . justifies the award of damages and other losses, including, but not limited to, the economic losses specified elsewhere herein, in an amount to be determined trial.” Consolidated Complaint, ¶ 145, 146. You did not reference paragraph 146, where TFI linked your clients’ fraudulent conduct with damages in the form of “economic losses” and other losses. Economic and other losses caused by fraudulent conduct meets the detriment requirement. Inducing TFI fraudulently to purchase pomegranate arils that were infected with Hepatitis A, as pled throughout the Consolidated Complaint, is a further example of pleading of harm from the fraudulent conduct. Moreover, contrary to your assertions, we have pled all of the elements for intentional misrepresentation, with specificity, going so far as to name a “Guarrantee” dated March 28, 2012. We identified the misrepresentation, your clients’ intent to deceive, the deception and reliance, the true facts, and the detriment. In this regard, your unspecified motion to strike certain allegations in the Consolidated Complaint does not change this fact. We have plead the “who, what, when, where and how,” and we do not need to plead every such instance. Finally, you make reference to some alleged defect in our pleading involving “confidential documents.” You do not explain why the alleged “confidential” nature of those documents somehow renders our pleading legally deficient. I am not aware of any good faith basis for a motion to dismiss, and you have provided none, based on a reference to documents in a complaint, which documents you deem are “confidential.” Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 26 of 28 Page ID #:518 KELLER AND HECKMAN LLP Michelle M. Rutherford July 14, 2016 Page 4 This document was delivered electronically. Negligent Misrepresentation In paragraphs 18, 19 and 23 of the Consolidated Complaint, TFI alleges that Defendants made specific representations concerning the quality of those products, including fitness for human consumption, that TFI relied on those representations when purchasing the product, and that obviously those allegations were untrue since the arils were infected with Hepatitis A. And, as previously explained, the Consolidated Complaint makes explicit reference to one such misrepresentation. The elements of negligent misrepresentation are met here. Contribution You claim that TFI failed to plead joint liability with Defendants, but paragraph 136 directly rebuts this position: “then such negligence and/or strict product liability occurred through the joint, concurrent and/or successive negligence of Defendants . . . . ” We also allege, contrary to your assertion, that if TFI is adjudged liable, it will have paid more than its fair share by requiring Defendants “to pay . . . the percentage of comparative fault assessed or assessable against Defendants and each of them.” Consolidated Complaint, ¶ 137. California follows a comparative fault system for contribution, so the request for contribution based on comparative fault can only be interpreted to mean that TFI paid more than its fair share. Section 17500 As alleged throughout the Consolidated Complaint, Defendants made misrepresentations in the pomegranate aril supply chain. This satisfies any “public dissemination” pleading requirement. In the event the Court permits you to answer and then move to dismiss the claims for relief, in an effort to resolve disputes, we can add this allegation. Punitive Damages Contrary to your assertions, the factual allegations regarding Defendants’ manufacturing processes are directly relevant to the arils at issue in this case. Defendants’ failure to sufficiently hire, train and supervise employees in food safety processes led to quality problems, chief of which, as pled, was the infection of the arils with Hepatitis A. The reference to other products highlights the ongoing nature of the productions problems that led directly to the Hepatitis A infection, just one example of which is mentioned in paragraph 80 regarding foreign material introduced into the pomegranate arils at issue. Moreover, your objections go to evidentiary issues and do not bear on the pleading sufficiency of these punitive damages allegations. Indeed, you do not challenge the pleading sufficiency and therefore admit they are sufficient. The Court has already considered the sufficiency of these allegations when we previously moved to amend to add punitive damages, and I see nothing new in your current arguments. Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 27 of 28 Page ID #:519 KELLER AND HECKMAN LLP Michelle M. Rutherford July 14, 2016 Page 5 This document was delivered electronically. I am happy to discuss whatever changes we can make to address your objections and avoid a motion to dismiss. However, some of your objections lack any good faith basis, such as the objections to punitive damages, and seem calculated to manufacture a basis for a motion to dismiss. Please feel free to contact me if you think a genuine compromise is possible. Sincerely, Christopher Van Gundy 4831-1401-0932, v. 1 Exhibit A Case 8:15-cv-00837-DOC-JCG Document 81-2 Filed 07/15/16 Page 28 of 28 Page ID #:520 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 [PROPOSED] ORDER GRANTING MOTION TO DISMISS CASE NO. 8:15-CV-00837-DOC-JCG WILLIAM W. OXLEY (SBN 136793) william.oxley@dechert.com MEGHAN ROHLING KELLY (SBN 292236) meghan.kelly@dechert.com MICHELLE M. RUTHERFORD (SBN 268669) michelle.rutherford@dechert.com NATHAN MCCLELLAN (SBN 291435) nathan.mcclellan@dechert.com ANNA DO (SBN 281327) anna.do@dechert.com DECHERT LLP US Bank Tower 633 West 5th Street 37th Floor Los Angeles, CA 90071-2013 Telephone: +1 213 808 5700 Facsimile: +1 213 808 5760 Attorneys for Defendants United Juice Corp., a New Jersey corporation, and Goknur Gida Maddeleri Enerji Imalat Ithalat Ticaret Ve Sanayi Anonim Sirketi dba Goknur Foodstuffs Import Export Trading and Production Co. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION TOWNSEND FARMS, INC., Plaintiff, vs. GÖKNUR GIDA MADDELERI ENERJI IMALAT ITHALAT IHRACAT TICARET ve SANAYI A.S., et al., Defendants. CASE NO. 8:15-cv-00837-DOC-JCG [Consolidated Case No. 8:15-cv-00840- DOC-JCG] [PROPOSED] ORDER GRANTING GOKNUR’S AND UNITED JUICE’S MOTION TO DISMISS AMENDED CONSOLIDATED COMPLAINT The Hon. David O. Carter Trial Date: None Set Date: August 15,2016 Time: 8:30 a.m. Courtroom: 9D PURELY POMEGRANATE, INC. and VALLEY FORGE INSURANCE CO., Plaintiffs, vs. GÖKNUR GIDA MADDELERI ENERJI IMALAT ITHALAT IHRACAT TICARET ve SANAYI A.S., et al., Defendants. Case 8:15-cv-00837-DOC-JCG Document 81-3 Filed 07/15/16 Page 1 of 2 Page ID #:521 DECHERT LLP ATTO RN EY S AT LA W LO S A NG EL ES 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 - [PROPOSED] ORDER GRANTING MOTION TO DISMISS CASE NO. 8:15-CV-00837-DOC-JCG THIS CAUSE having come before the Court on Defendants Goknur Gida Maddeleri Enerji Imalat Ithalat Ticaret Ve Sanayi Anonim Sirketi (“Goknur”) and United Juice Corp.’s Motion to Dismiss Amended Consolidated Complaint, and this Court having considered the motion and all other papers and arguments related thereto, it is hereby ORDERED that: Goknur and United Juice Corp.’s Motion to Dismiss Amended Consolidated Complaint is GRANTED. Dated: , 2016 _________________________________ HON. DAVID O. CARTER UNITED STATES DISTRICT JUDGE Case 8:15-cv-00837-DOC-JCG Document 81-3 Filed 07/15/16 Page 2 of 2 Page ID #:522
