Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-01060/USCOURTS-casd-3_12-cv-01060-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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'12 OCT 29 PM 12: 31 

.. COUr C 

,,,' .. c CAlif Ch"L 

OEPlI F 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

ANTHONY VELASCO, on behalf of 

himself and all others similarly situated, 

Plaintiffs, 

vs. 

SEI PHARMACEUTICALS, INC., a 

Florida Corporation, and DOES 1-10, 

inclusive, 

Defendant. 

CASE NO. 12cvl060 WQH (MDD) 

ORDER 

HAYES, Judge: 

The matter before the Court is the Motion to Dismiss filed by Defendant SEI 

Pharmaceuticals, Inc. (ECF No.5). 

BACKGROUND 

On April 30, 2012, Plaintiff Anthony Velasco initiated this action by filing a Complaint. 

(ECF No.1). In the Complaint, Plaintiff asserts that Defendant SEI Pharmaceuticals, Inc. 

violated false advertising laws, California's unfair competition laws, and California's 

Consumer Legal Remedies Act ("CLRA"). 

On June 1,2012, Defendant filed a Motion to Dismiss the Complaint. (ECF No.5). 

On June 25, 2012, Plaintiff filed an opposition. (ECF No.6). On June 29,2012, Defendant 

filed a reply. (ECF No.8). 

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ALLEGATIONS OF THE COMPLAINT 

Plaintiff asserts the following three causes of action against Defendant: (I) false 

advertising on the grounds that Defendant made untrue statements and failed to disclose 

information required by law; (2) unfair competition on the grounds that Defendant made 

material misrepresentations and failed to disclose required information in marketing and 

advertising; and (3) violation of CLRA on the grounds that Defendant engaged in unfair 

competition and deceptive business practices. 

Plaintiff asserts that MethylHex 4,2 ("Product") is a dietary supplement product 

manufactured, marketed, and sold by Defendant containing Dimethylamylamine ("DMAA"). 

Plaintiff asserts that Defendant markets the Product as "a supplement that can provide an 

'elevated sense ofwell-being, improved mood, increased CLEAN energy, suppressed appetite 

and heightened focus' .... [and] 'is a powerful CNS stimulant, for added energy, increased 

clarity and a boost in physical performance' .... " (ECF No.1 at 3). Plaintiff asserts that "[t]he 

form of DMAA Defendant uses in the Product is a synthetic form that is both illegal and 

dangerous," and that "Defendant's advertising statements, which fail to mention the risks 

associated with this ingredient, are both false and misleading to consumers." Id. Plaintiff 

asserts that Defendant "has also been warned by the FDA that synthetically-produced DMAA 

is not a 'dietary ingredient' and, therefore, is not eligible to be used as an active ingredient in 

a dietary supplement." Id. at 4. 

Plaintiff asserts that "Plaintiff and members of the Class relied on Defendant's 

misrepresentations and would not have paid as much, if at all, for the Product but for 

Defendant's misrepresentations." Id. at 5. 

STANDARD OF REVIEW 

Federal Rule ofCivil Procedure 12(b)( 6) permits dismissal for "failure to state a claim 

upon which relief can be granted." Fed. R. Civ. P. 12(b )(6). Federal Rule ofCivil Procedure 

8( a) provides that "[a] pleading that states a claim for relief must contain ... a short and plain 

statement ofthe claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). 

Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal 

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theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police 

Dep't, 901 F .2d 696, 699 (9th Cir. 1990). 

A plaintiff's "grounds" to relief must contain "more than labels and conclusions, and 

a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2». When considering a 

motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft 

v. Iqbal, 556 U.S. 662, 679 (2009). However, a court is not "required to accept as true 

allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable 

inferences." Sprewell v. Golden State Warriors, 266 F .3d 979, 988 (9th Cir. 2001). "In sum, 

for a complaint to survive a motion to dismiss, the non-conclusory factual content, and 

reasonable inferences from that content, must be plausibly suggestive ofa claim entitling the 

plaintiff to relief." Moss v. US. Secret Service, 572 F.3d 962,969 (9th Cir. 2009) (quotations 

omitted). 

When analyzing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept 

as true all material facts as they have been plead and construe them in the light most favorable 

to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,337-38 (9th Cir. 1996). 

To award dismissal, it must be shown beyond doubt that the plaintiff cannot prove any set of 

facts that would entitle him to relief. Lewis v. Tel. Employees Credit Union, 87 F.3d 1537, 

1545 (9th Cir. 1996). 

DISCUSSION 

Defendant contends that Plaintiff has failed to plead his claims of false advertisement 

and unlawful misrepresentations with the required specificity under Rule 8(a) and 9(b). 

Defendant contends that "plaintiff has failed to identify a single advertisement or marketing 

statement by Defendant regarding MethylHex 4,2 or a single specific alleged misrepresentation 

relating to the products on which his false advertising, unfair competition, or CLRA claims are 

based." (ECF No.5 at 21). Defendant contends that "Plaintiff's indistinct and generic 

allegations are inadequate to apprise Defendant of the alleged violations of law." Id. 

Defendant contends that "plaintiff has also failed to adequately allege that he relied on any 

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specific advertisements or statements of Defendant when deciding to purchase the product" 

and that "Plaintiff makes only the bare, vague, and conclusory allegations ... without 

identifYing anywhere in his complaint what these marketing claims are, when and where he 

saw them and how he relied on them." Id. at 22. 

Plaintiff contends that "[t]he thrust ofPlaintiffs complaint is that Defendant fails to 

disclose information in the labeling and advertising of the Product concerning the safety of 

the Product, and misrepresents the DMAA in the Product as a 'dietary ingredient. '" (ECF No. 

6 at 14). Plaintiff contends that he properly "alleged that he was lead to purchase the Product 

based on Defendant's misrepresentations and would not have purchased the Product, or paid 

substantially less, but for the alleged misrepresentations." Id. at 20. Plaintiff contends that he 

adequately "plead that the DMAA in the Product is unsafe and dangerous, and that Defendant 

failed to warn consumers of that fact .... [and p]rovided facts ... to establish that Defendant 

knew or should have known that its Product was dangerous, and that the DMAA in the Product 

was not a 'dietary ingredient. '" Id. at 20-2l. Plaintiff asserts that "Plaintiff is capable and 

willing to provide additional facts surrounding his purchase of the Product, the specific 

misrepresentations he relied on, and how they misled him." Id. at 21. 

Rule 8(a) states that a "short and plain statement" is the general threshold for a 

sufficient pleading. Fed. R. Civ. P. 8( a). Rule 9(b) states that claims offraud or mistake, such 

as those alleged here, require a heightened standard of "stat[ing] with particularity the 

circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b); see also In re Sony Grand 

Wega KDF-EAIOIA20 Series Rear Projection HDTVTelevision Litig., 758F. Supp. 2d 1077, 

1087 ("Regardless of the title given to a particular claim, allegations grounded in fraud are 

subject to Rule 9(b)'s pleading requirements."). "A pleading is sufficient under Rule 9(b) if 

it 'staters] the time, place and specific content of the false representations as well as the 

identities of the parties to the misrepresentation.'" In re Sony Grand Wega, 758 F. Supp. 2d 

at 1087, quoting Misc. Servo Workers, Drivers & Helpers V. Philco-Ford Corp., 661 F .2d 776, 

782 (9th Cir.l981); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 

2003) ("Averments offraud must be accompanied by 'the who, what, when, where, and how' 

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of the misconduct charged."). In addition, "the plaintiff must plead facts explaining why the 

statement was false when it was made." Smithv.AllstateIns. Co., 160F.Supp.2d 1150,1152 

(S.D.Ca1.2001) (citation omitted). 

Plaintiffs claims for false advertising, unfair competition, and violation ofCLRA are 

based on allegations offraudulent omissions and misrepresentations committed by Defendant. 

Accordingly, Rule 9(b) pleading requirements apply to the claims. In the Complaint, Plaintiff 

fails to "state the time, place and specific content of the false representations," Misc. Servo 

Workers, Drivers & Helpers, 661 F .2d at 782, or to "plead facts explaining why the statement 

was false when it was made," Allstate Ins. Co., 160 F.Supp.2d at 1152. Plaintiff fails to 

specifically identify "the who, what, when, where, and how ,ofthe misconduct charged." Vess, 

317 F.3d at 1106. Plaintiff fails to "state with particularity the circumstances constituting 

fraud or mistake." Fed. R. Civ. P. 9(b). Absent such particular information in the Complaint, 

Defendant has not received proper notice ofthe claims or the grounds for the claims alleged 

in the Complaint and cannot be held to answer. 

The Court finds that the allegations in the Complaint fail to satisfy the pleading 

requirements of Rule 8(a) and 9(b). 

CONCLUSION 

IT IS HEREBY ORDERED that the Motion to Dismiss filed by Defendants (ECF No. 

5) is GRANTED. Plaintiff may file a motion for leave to file an amended complaint, 

accompanied by the proposed amended complaint, within thirty(30) days from the date ofthis 

order. Ifno motion is filed, the case will be dismissed without prejudice and the Clerk ofthe 

Court will close the case. 

DATED: 

United States District Judge 

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