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Adonia Holding Gmbh v. Adonia Organics LLC

United States District Court, D. Arizona

December 16, 2014

Adonia Holding GmbH, Plaintiff,
v.
Adonia Organics LLC, et al., Defendants.

ORDER

G. MURRAY SNOW, District Judge.

Pending before the Court is the Motion to Dismiss of Defendants Adonia Organics LLC, Dr. Marc Franco Tahilian, and Jane Doe Franco. (Doc. 14.) For the following reasons, the Motion is denied.

BACKGROUND

This action arises from business disputes between Defendant Adonia Organics LLC ("Adonia Organics"), an Arizona limited liability company, and Plaintiff Adonia Holding GmbH ("Adonia Holding"), a private company incorporated in Austria. In its First Amended Complaint ("FAC"), Adonia Holding alleges that Dr. Marc Franco Tahilian, a representative of Adonia Organics, promised Adonia Holding that it could become the exclusive dealer of Adonia products in Eastern Europe. Tahilian also represented to Adonia Holding that all of Adonia Organics' resellers in Europe were bound by contract to sell only within their predetermined geographic boundaries.

In 2013, Adonia Holding and Adonia Organics orally agreed that Adonia Holding would be given the exclusive right to sell Adonia products in Serbia, Bosnia, Herzegovina, Montenegro, Romania, Poland, the Czech Republic, and Slovakia.

Based on this oral agreement, Adonia Holding traveled to these countries, created affiliated companies, registered the products, retained the services of public relations companies, advertised, held press conferences, and obtained celebrity endorsements. Adonia Holding also bought Internet domains, began creating platforms for online sale of Adonia products, and made plans to meet with a pharmacy distributor in Poland.

On August 30, 2013, Adonia Holding alleges that it and Adonia Organics entered into a written distributorship agreement entitled the Eastern European Reseller Agreement (the "Agreement"). The Agreement stated that Adonia Holding would be given the exclusive right to sell Adonia products in Eastern Europe "upon its initial purchase of ADONIA products" so long as Adonia Holding made "all effort to achieve product registration with these Eastern European Countries within 90 days of the signing of [the Agreement], "-November 28, 2013. (Doc. 13, Ex. A.) In addition, the Agreement required Adonia Holding to order 39, 500 units over a 21-day period after obtaining product registration in three countries. Adonia Holding registered the products in Romania, Poland, and Serbia by the date required.

From September through December 2013, Adonia Holding became aware that Quad A Concept GmbH ("Quad A"), a Germany-based Adonia products reseller, had begun selling Adonia products in Eastern Europe. Quad A directly or through partner companies launched several online shops targeted at Eastern Europe, held a press conference in Romania, and sold products to customers in Eastern Europe. Adonia Holding sent several emails to Adonia Organics requesting intervention, and Adonia Organics told Quad A and some of the partner companies to cease and desist. However, Adonia Organics did not pursue any legal remedies against Quad A, and after more instances of Quad A selling products in Eastern Europe, Adonia Organics did not continue to request Quad A to cease. Adonia Organics did make assurances to Adonia Holding that it would try to remedy the situation, but Quad A continued to sell Adonia products into Eastern Europe.

During this same time, Adonia Holding purchased 890 units of product from Adonia Organics. Although Adonia Holding alleges it was ready and willing to purchase the full 39, 500 units called for in the Agreement, it chose not to because Adonia Organics did not ensure Adonia Holding's exclusivity in Eastern Europe. Doc. 13 at ΒΆ 55. Adonia Holding initiated suit on June 3, 2013, bringing claims of breach of contract, breach of the duty of good faith and fair dealing, unjust enrichment against Adonia Organics. In addition, Adonia Holding brought claims of fraudulent misrepresentation and consumer fraud against Adonia Organics, Dr. Marc Franco Tahilian, and Dr. Tahilian's wife based on their community estate.

DISCUSSION

II. Legal Standard

Rule 12(b)(6) is designed to "test[] the legal sufficiency of a claim." Navarro v. Bloc k, 250 F.3d 729, 732 (9th Cir. 2001). To survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), a complaint must contain more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action"; it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While "a complaint need not contain detailed factual allegations... it must plead enough facts to state a claim to relief that is plausible on its face.'" Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). Plausibility requires "more than a sheer possibility that a defendant has acted unlawfully." Twombly, 550 U.S. at 555.

When analyzing a complaint for failure to state a claim under Rule 12(b)(6), "[a]ll allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party." Smith v. Jackson, 84 F.3d 1213, 1217 (9th Cir. 1996). However, legal conclusions couched as factual allegations are not given a presumption of truthfulness, and "conclusory allegations of law and unwarranted ...


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