Case 3:09-md-02087-BTM-KSC Document 706 Filed 05/24/11 Page 1 of 5
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
`IN RE HYDROXYCUT MARKETING
`AND SALES PRACTICES LITIGATION
`
`Case No. 09md2087 BTM(CAB)
`
`VELMA J. CARTER, an individual;
`SUREE WANDA BRYSON, an individual;
`RAYMOND C. LEE, and individual;
`Plaintiffs,
`
`v.
`
`MUSCLETECH RESEARCH AND
`DEVELOPMENT, INC., et al.,
`Defendants.
`
`Case No. 10cv2580 BTM(CAB)
`ORDER GRANTING MOTION TO
`DISMISS FOR LACK OF
`JURISDICTION AS TO IOVATE
`COPYRIGHT LTD.; DENYING
`MOTION TO DISMISS; AND
`DENYING AS MOOT MOTION TO
`AMEND COMPLAINT
`
`Defendant Iovate Copyright Ltd. (“Copyright”) has filed a motion to dismiss for lack of
`personal jurisdiction. The other defendants (“Defendants”) have filed a motion to dismiss
`Plaintiffs’ Complaint for failure to state a claim. Plaintiffs have filed a motion to file an
`amended complaint that adds factual allegations in support of their fraud claims. For the
`reasons discussed below, Copyright’s motion to dismiss is GRANTED, Defendants’ motion
`to dismiss is DENIED, and Plaintiffs’ motion for leave to amend is DENIED AS MOOT.
`
`I. BACKGROUND
`On September 30, 2010, Plaintiffs filed their complaint in the Northern District of
`Alabama (Alabama Civil Case No. 10-cv-2655-AKK). On December 15, 2010, the case was
`transferred to the Southern District of California as a tag-along action to the In re Hydroxycut
`Marketing and Sales Practices multi-district litigation currently pending before the Court.
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`Case 3:09-md-02087-BTM-KSC Document 706 Filed 05/24/11 Page 2 of 5
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`Upon transfer, the case was assigned a separate civil case number in the Southern District
`of California (Case No. 10cv2580 BTM(CAB)).
`Plaintiff Velma J. Carter is a resident of Mississippi. Plaintiff Suree Wanda Vryson is
`a resident of South Carolina. Plaintiff Raymond C. Lee is a resident of Washington, D.C.
`According to the Complaint, Plaintiffs purchased “Hydroxycut products” at Wal-mart and
`suffered physical injury as a result of the consumption of such products.
`(1)
`Plaintiffs assert
`the
`following
`claims against
`the defendants:
`negligence/wantonness; (2) product liability; (3) intentional misrepresentation; (4) negligent
`misrepresentation; (5) breach of express warranty; (6) breach of implied warranty of
`merchantability; (7) breach of implied warranty of fitness for particular purpose; (8) unjust
`enrichment; and (9) fraud and misrepresentation.
`After Defendants filed their motions to dismiss, Plaintiffs filed a First Amended
`Complaint (mislabeled “Second Amended Complaint”) pursuant to a stipulation of the parties.
`The First Amended Complaint (“FAC”) adds new defendants as well as more factual
`allegations in support of Plaintiffs’ fraud claim. The Court construes the motion to dismiss
`for failure to state a claim to apply to the FAC.
`
`II. DISCUSSION
`
`A. Copyright’s Motion
`Copyright has filed a motion to dismiss for lack of personal jurisdiction. Because this
`case was originally filed in the Northern District of Alabama, this Court can exercise personal
`jurisdiction over Copyright only to the extent that the Northern District of Alabama could have.
`In re Dynamic Random Access Memory, 2005 WL 2988715, at * 2 (N.D. Cal. Nov. 7, 2005).
`
`
`Copyright contends that Plaintiffs have not made out a prima facie case of either
`general or specific jurisdiction, as needed to satisfy federal due process. See Helicopteros
`Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414 (1984). According to the declaration
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`Case 3:09-md-02087-BTM-KSC Document 706 Filed 05/24/11 Page 3 of 5
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`of Jo-Ann Heikkila, Copyright is a Canadian corporation which has never been licensed to
`do business in the United States, has never maintained an office or bank account in the
`United States, has never maintained a website accessible by United States citizens, and has
`not had any involvement in the manufacture, sale, or advertisement of Hydroxycut-branded
`products.
`Plaintiffs did not file an opposition to Copyright’s motion. Plaintiffs’ Complaint itself
`merely states that “[a]t all times relevant hereto, Iovate Copyright, Ltd. was and is doing
`business within this judicial district.” (Compl. ¶ 10.) The Complaint does not set forth any
`factual allegations supporting this conclusory statement.
`When a defendant brings a motion to dismiss for lack of personal jurisdiction, the
`plaintiff bears the burden of establishing that jurisdiction is proper. Sher v. Johnson, 911
`F.2d 1357, 1361 (9th Cir. 1990). If the district court decides the motion without holding an
`evidentiary hearing, “the plaintiff need only make a prima facie showing of the jurisdictional
`facts.” Id.
`Plaintiffs have not alleged any facts tending to show that the Northern District of
`Alabama has general or specific jurisdiction over Copyright. Therefore, Plaintiffs have failed
`to make out a prima facie showing of personal jurisdiction, and the Court GRANTS
`Copyright’s motion to dismiss for lack of personal jurisdiction.
`
`B. Defendants’ 12(b)(6) Motion to Dismiss & Plaintiffs’ Motion for Leave to Amend
`
`1. Fraud Claims
`Defendants contend that Plaintiffs’ fraud-based claims (intentional misrepresentation,
`negligent misrepresentation, and fraud and misrepresentation) fail because Plaintiffs have
`failed to satisfy the pleading requirements of Fed. R. Civ. P. 9(b).
`Originally, Plaintiffs failed to identify what Hydroxycut product they took, when the
`product was consumed, what fraudulent statements or materials they relied on, how or where
`the misrepresentations were made, and when the fraudulent misrepresentations occurred.
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`Case 3:09-md-02087-BTM-KSC Document 706 Filed 05/24/11 Page 4 of 5
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` In the FAC, Plaintiffs have added factual allegations remedying these defects. (FAC ¶ 52.)
`The Court is satisfied that Plaintiffs have pled fraud with sufficient specificity.
`Defendants argue that Plaintiff Lee’s claim for “negligent misrepresentation” must be
`dismissed because Virginia law does not recognize a cause of action for “negligent
`misrepresentation.” Under Virginia law, the proper name for such a claim is “constructive
`fraud.” See Hansen v. Stanley Martin Companies, Inc., 585 S.E.2d 567, 573 n. 4 (Va. 2003)
`(“Negligent misrepresentation is the essence of a claim for constructive fraud in Virginia.”);
`Goff v. J. Sargeant Reynolds Comm. College, 2004 WL 2093444, at * 2 (Va. Cir. Ct. Sept.
`20, 2004) (explaining that plaintiff asserting counts for intentional misrepresentation and
`negligent misrepresentation really alleged “actual and constructive fraud.”) However, the
`Court will not dismiss Plaintiff Lee’s claim merely because it is mislabeled “negligent
`misrepresentation.”
`
`2. Breach of Warranty Claims
`Defendants argue that Plaintiffs’ breach of warranty claims fail to state a claim
`because Plaintiffs did not plead that they gave Defendants notice of the breach before filing
`suit.
`
`Under the U.C.C., where a tender of goods has been accepted, “the buyer must within
`a reasonable time after he discovers or should have discovered any breach notify the seller
`of breach or be barred from any remedy . . . .” U.C.C. § 2-607(3)(a). It appears that the
`weight of authority holds that the U.C.C.’s notice requirements do not rigidly apply to
`consumer buyers who suffered personal injuries as a result of the breach of warranty. See,
`e.g., Connick v. Suzuki Motor Co., Ltd., 675 N.E. 2d 584, 590 (Ill. 1996); Smith v. Stewart,
`667 P. 2d 358, 365 (Kan. 1983); Maybank v. S.S. Kresge Co., 273 S.E.2d 681, 684-85 (N.C.
`1981).
`Plaintiffs point out that South Carolina’s version of U.C.C. § 2-607(3)(a) specifically
`states “no notice of injury to the person in the case of consumer good shall be required.”
`S.C. Code § 36-2-607(3)(a). As for Virginia law and Mississippi law, the cases cited by
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`Case 3:09-md-02087-BTM-KSC Document 706 Filed 05/24/11 Page 5 of 5
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`Defendants do not hold that consumers who suffer personal injury must give notice before
`filing a claim for breach of warranty. Accordingly, the Court denies Defendants’ motion to
`dismiss the breach of warranty claims for failure to give notice.
`
`3. Unjust Enrichment
`Defendants move to dismiss Plaintiff Velma Carter’s unjust enrichment claim on the
`ground that unjust enrichment is not an independent theory of recovery under Mississippi
`law. Although Carter may not be able to bring a free-standing claim of unjust enrichment,
`such a claim is not necessarily improper if it is accompanied by predicate claims upon which
`relief could be granted. See Cole v. Chevron USA, Inc., 554 F. Supp. 2d 655, 673 (S.D.
`Miss. 2007) (explaining that “a claim for unjust enrichment depends upon a showing of some
`legally cognizable wrong by which a defendant has been unjustly enriched at the expense
`of the plaintiff.”). It makes little difference whether the claim for the remedy of unjust
`enrichment is asserted in a separate count or in a prayer for relief.
`
`III. CONCLUSION
`For the reasons discussed above Iovate Copyright Ltd.’s motion to dismiss for lack
`of personal jurisdiction [09md2087 - Doc. No. 444 ; 10cv2580 - Doc. No. 11] is GRANTED.
`Plaintiffs’ claims against Iovate Copyright Ltd. are DISMISSED due to the lack of personal
`jurisdiction. Defendants’ motion to dismiss [09md2087 - Doc. No. 445; 10cv2580 - Doc. No.
`12] is DENIED. Plaintiffs’ motion for leave to file an amended complaint [09md2087 - Doc.
`No. 491; 10cv2580 - Doc. No. 14] is DENIED AS MOOT. Defendants shall file an answer
`to the FAC within 20 days of the entry of this Order.
`IT IS SO ORDERED.
`
`DATED: May 24, 2011
`
`Honorable Barry Ted Moskowitz
`United States District Judge
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