Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_06-cv-01958/USCOURTS-azd-3_06-cv-01958-4/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:44 Trademark Infringement

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 1 The Rules of Practice of the United States District Court for the District of Arizona

(the “Local Rules”) provide that the filing of a reply memorandum by the moving party is

optional. See LRCiv 7.2(d). Given certain critical concessions in the C Group’s Motion to

Dismiss, the Court finds that the filing of a reply memorandum would not change the Court’s

ruling. Therefore, the Court issues this Order without consideration of the C Group’s reply. 

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Zila Nutraceuticals, Inc.,

Plaintiff, 

vs.

Nature’s Way Products, Inc. and The C

Group, Inc., 

Defendants. 

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No. CV 06-1958-PCT-SMM

MEMORANDUM OF DECISION AND

ORDER 

Pending before the Court is Defendant The C Group, Inc.’s (the “C Group”) Motion

to Dismiss Plaintiff Zila Nutraceuticals, Inc.’s (“Zila”) First Amended Complaint pursuant

to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. (Dkt.

16.) Zila has filed a response to the C Group’s Motion to Dismiss. (Dkt. 40.) Based on the

parties’ briefs, the Court issues this Order.1

DISCUSSION

A. The Court Will Not Consider Matters Outside the Amended Complaint

In its Motion to Dismiss, the C Group readily concedes that Zila’s First Amended

Complaint alleges that “Nature’s Way and the C Group have used and continue to use three

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 2 In its opposition to the C Group’s Motion, Zila also refers the Court to extraneous

information outside the pleadings. See dkt. 40 (“The Court may review the former website

materials . . . attached as Exhibit B to the Bernard Landes Declaration in Support of Zila’s

Motion for Preliminary Injunction, . . . filed on September 8, 2006 . . . .”). 

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comparative advertising statements that constitute false or misleading advertising under the

Lanham Act, Arizona Consumer Fraud Act, and unfair competition under common law”

(collectively, the “False Advertising Claims”). See Dkt. 16 at 1. The C Group does not

challenge the sufficiency of Zila’s pleading, nor does it contend that Zila’s allegations are

vague, conclusory, or fail to state a claim for relief. See Dkts. 16-17. Rather, the C Group

submits the Declaration of Nancy Chandler, together with a copy of the C Group’s Exclusive

Supply Agreement, and, based on those documents, contends the False Advertising Claims

alleged by Zila have “no basis in fact and no evidentiary support.” See Dkts. 17 at 3, 18, Ex.

A. Among other things, Zila argues that the “C Group’s motion is a premature . . . attempt

to obtain summary disposition of this action.” (Dkt. 40 at 2.) The Court agrees and rejects

both parties’ invitations to rely on extraneous material outside the pleadings and invoke the

provisions of Fed.R.Civ.P. 56. See Dkt. 17 at 2 (“when ‘matters outside the pleading are

presented to and not excluded by the court, the motion [to dismiss under Rule 12(b)(6)] shall

be treated as one for summary judgment and disposed of as provided in Rule 56 . . . .’”)

(modification in original).2

 

In the Ninth Circuit, “a motion to dismiss is not automatically converted into a motion

for summary judgment whenever matters outside the pleading happen to be filed with the

court and not expressly rejected by the court.” North Star Int’l v. Arizona Corporation

Comm’n, 720 F.2d 578, 582 (9th Cir. 1983) (holding that district court properly treated

motion as motion to dismiss, despite presence of affidavits, where there was no indication

of the court’s reliance on outside materials and the court expressly stated that it was

dismissing for failure to state a claim upon which relief could be granted); Keams v. Temple

Technical Institute, Inc., 110 F.3d 44, 46 (9th Cir. 1997) (“12(b)(6) motion need not be

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converted into a motion for summary judgment when matters outside the pleading are

introduced, provided that ‘nothing in the record suggest[s] reliance’ on those extraneous

materials”). Rather, “a district court must take some affirmative action to effectuate

conversion.” Swedberg v. Marotzke, 339 F.3d 1139, 1142 (9th Cir. 2003).

In denying the C Group’s Motion to Dismiss and in justifying its legal conclusion that

Zila has stated claims against the C Group upon which relief could be granted (infra at 3-4),

the Court has not relied on the extraneous information submitted and referred to by the C

Group and Zila. Rather, in accordance with Ninth Circuit precedent, all extraneous

documents outside the pleadings have been excluded from the Court’s determination of

whether Zila has stated a claim against the C Group upon which relief may be granted under

Fed.R.Civ.P. 12(b)(6). North Star Int’l, 720 F.2d at 582.

B. Zila Has Properly Alleged Claims Upon Which Relief May Be Granted

Fed.R.Civ.P. 12(b)(6) authorizes a court to dismiss a claim on the basis of a

dispositive issue of law. Neitzke v. Williams, 490 U.S. 319, 326 (1989). A complaint may

not be dismissed for failure to state a claim “unless it appears beyond doubt that the plaintiff

can prove no set of facts in support of [the] claim which would entitle [the plaintiff] to

relief.” Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir.1987) (quoting Conley v.

Gibson, 355 U.S. 41, 45-46 (1957)). If as a matter of law it is clear that no relief could be

granted under any set of facts that could be proved consistent with the allegations, under Rule

12(b)(6) a claim must be dismissed, without regard to whether it is based on an outlandish

legal theory or on a close but ultimately unavailing one. See Neitzke, 490 U.S. at 327. On

a motion to dismiss for failure to state a claim, the court must presume all factual allegations

of the complaint to be true and draw all reasonable inferences in favor of the nonmoving

party. Usher, 828 F.2d at 561.

As set forth above, the C Group readily concedes that Zila’s Amended Complaint

alleges that both Nature’s Way and the C Group “have used and continue to use three

comparative advertising statements that constitute false or misleading advertising under the

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Lanham Act, the Arizona Consumer Fraud Act, and unfair competition common law.” (Dkt.

16 at 1.) The C Group does not argue that Zila’s allegations are in any way defective, or that

Zila has failed to allege any elements of the False Advertising Claims. Rather, the C Group’s

Motion to Dismiss relies solely on matters outside the pleadings, which the Court has

excluded from consideration. Because the C Group has failed to demonstrate that, as a

matter of law, no relief could be granted under any set of facts that could be proved

consistent with Zila’s allegations, the Court will deny the C Group’s Motion to Dismiss.

Accordingly,

IT IS HEREBY ORDERED DENYING the C Group’s Motion to Dismiss. (Dkt.

16.)

DATED this 11th day of October, 2006.

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