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Church & Dwight Co., Inc v. Spd Swiss Precision Diagnostics

December 16, 2010

CHURCH & DWIGHT CO., INC,
PLAINTIFF,
v.
SPD SWISS PRECISION DIAGNOSTICS, GMBH, DEFENDANT.



The opinion of the court was delivered by: Wolfson, United States District Judge:

*NOT FOR PUBLICATION

OPINION

In the present matter, Defendant SPD Swiss Precision Diagnostic, GmBH's ("Defendant" or "SPD") moves to dismiss Plaintiff Church & Dwight Co., Inc.'s ("Plaintiff" or "C&D") Complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) and moves to strike portions of Plaintiff's Complaint pursuant to Fed. R. Civ. P. 12(f). C&D and SPD are business competitors in the pregnancy test market. In this case, Plaintiff alleges that SPD deprived C&D of its favorable publicity by persuading a consumer magazine, through allegedly false statements, to not publish favorable results of a study regarding C&D's pregnancy test. In that regard, Plaintiff asserts that SPD tortiously interfered with Plaintiff's prospective economic advantage and that SPD's conduct violated the New Jersey Consumer Fraud Act ("NJCFA" or the "Act"). The Court has considered the moving, opposition and reply papers for both motions, and for the reasons stated below, Defendant's motion to dismiss is denied with respect to Plaintiff's claim of tortious interference, and granted with respect to Plaintiff's NJCFA claim; and Defendant's motion to strike is denied.

Background

C&D markets and distributes, amongst other things, consumer pregnancy tests, including products sold under the First Response® brand. See Compl., ¶ 7. SPD markets competing products.

In its Complaint, Plaintiff alleges that in 2008, Consumers Union, a nonprofit testing and information organization that evaluates and recommends consumer products to the public by way of its Consumer Reports magazine and website, informed Plaintiff that it would conduct a study ("the 2009 study") comparing the pregnancy tests distributed by Plaintiff, Defendant, and other companies. Id. ¶¶ 18, 22. Consumers Union had conducted a similar study in 2003 ("the 2003 study"). Id. ¶19. The report of the 2003 study was published in the February 2003 issue of Consumer Reports and recommended Plaintiff's pregnancy test over all other pregnancy tests, including that of Defendant. Id. Plaintiff alleges that this recommendation led to a direct increase in sales of Plaintiff's pregnancy test, as well as increased goodwill, market share, and shelf space. Id. ¶ 21.

Plaintiff further alleges that the 2009 study, conducted by Consumer Union, used test samples provided by Dr. Lawrence Cole, and again showed that Plaintiff's pregnancy test was more sensitive than any other consumer pregnancy test evaluated and tested, including Defendant's Clear Blue Easy pregnancy test. Id. ¶ 25. Consumers Union informed Plaintiff that it planned to publish the study online in May 2009 and in print in 2009. Id. ¶ 22. Plaintiff alleges that Defendant became aware of the fact that Consumers Union planned to publish this study, and in an effort to prevent Consumers Union from publishing the results, made false and misleading representations to Consumers Union about the integrity of Dr. Cole and thus the integrity, accuracy, and reliability of the 2009 study. Id. ¶ 29. The Complaint alleges that these false and misleading statements caused Consumers Union to not publish the study. Id. ¶¶ 31. Accordingly, Plaintiff alleges that it was deprived of the prospective economic advantage associated with the publication of a favorable study in Consumer Reports, similar to the increased sales and positive market impact that C&D previously enjoyed from the publication of the 2003 study in Consumer Reports. Id. ¶ 31.

Discussion

I. Motion to Dismiss

A.Standard of Review

The Federal Rules of Civil Procedure provide that a complaint "shall contain (1) a short and plain statement of the grounds upon which the court's jurisdiction depends ... (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks." Fed.R.Civ.P. 8(a). The purpose of a complaint is "to inform the opposing party and the court of the nature of the claims and defenses being asserted by the pleader and, in the case of an affirmative pleading, the relief being demanded." 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1182 (3d ed.2004).

In reviewing a motion to dismiss for failure to state a claim under 12(b)(6), a Court must take all allegations in the complaint as true, viewed in the light most favorable to the plaintiff "and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citation and quotations omitted). In Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), the Supreme Court "retired" the language in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), that "a complaint should 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 his claim which would entitle him to relief." Twombly, 550 U.S. at 561 (quoting Conley, 355 U.S. at 45-46). Rather, the factual allegations in a complaint "must be enough to raise a right to relief above the speculative level." Id. at 555. The Third Circuit summarized the pleading requirement post-Twombly:

The Supreme Court's Twombly formulation of the pleading standard can be summed up thus: 'stating ... a claim requires a complaint with enough factual matter (taken as true) to suggest 'the required element.' This 'does not impose a probability requirement at the pleading stage,' but instead 'simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of 'the necessary element.' Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at 556).

In affirming that the Twombly standard applies to all motions to dismiss, the Supreme Court recently further clarified the 12(b)(6) standard. "First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "Second, only a complaint that states a plausible claim for relief survives a motion to dismiss." Iqbal, 129 S.Ct. at 1950. Accordingly, "a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. In short, "a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to 'show' such an entitlement with its facts." Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009).

The Third Circuit recently reiterated that "judging the sufficiency of a pleading is a context-dependent exercise" and "[s]ome claims require more factual explication than others to state a plausible claim for relief." West Penn Allegheny Health System, Inc. v. UPMC, --- F.3d ----, 2010 WL 4840093, *8 (3d Cir., Nov. 29, 2010). This means that, "[f]or example, it generally takes fewer factual allegations to state a claim for simple battery than to state a claim for antitrust conspiracy." Id. That said, the Rule 8 pleading standard is to be applied "with the same level of rigor in all civil actions." Id. at *7 (quoting Ashcroft, 129 S.Ct. at 1953).

B.Tortious Interference with Prospective Economic Benefit*fn1

Count I of the Complaint asserts a state law claim for tortious interference with prospective economic advantage. To establish such a claim, Plaintiff must plead that: (1) it had a reasonable expectation of an economic benefit; (2) Defendant's knowledge of that expectancy; (3) Defendant's wrongful, intentional interference with that expectancy; (4) the reasonable probability that the claimant would have received the anticipated economic benefit, but for Defendant's interference; and (5) damages resulting from the defendant's interference. Fineman v. Armstrong World Industries, Inc., 980 F.2d 171, 186 (3d Cir. 1992).

For the following reasons, the Court finds that Plaintiff sufficiently pleads a claim for tortious interference with prospective economic benefit. Accordingly, Defendant's motion to dismiss as to this claim is denied.

1.Reasonable Expectation of Economic Benefit or Advantage

To establish the first prong, Plaintiff must allege facts "giving rise to some 'reasonable expectation of economic advantage.'" Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 751 (1989) (quoting Harris v. Perl, 41 N.J. 455, 461 (1964)); see also Med Alert Ambulance, Inc. v. Atlantic Health System, Inc., No. 04-1615, 2007 WL 2297335, at *16 (D.N.J. Aug. 16, 2007) (emphasis added). "Without searching far, courts have succeeded in finding a reasonable expectation of economic benefit." Printing Mart, 116 N.J. at 753. Courts easily find a reasonable expectation of economic benefit even where the sale is to the public at large. Id. at 751-53; see Di Cristofaro v. Laurel Grove Memorial Park, 43 N.J. Super. 244, 255-56 (App. Div. 1957) (the court found that an independent maker of cemetery markers had a reasonable expectation of selling monuments to the public, which had been interfered with by a grave-marker-fee requirement imposed by a cemetery); see also Graco, Inc. v. PMC Global, Inc., No. 08-1304, 2009 WL 904010, at *32 (D.N.J. Mar. 31, 2009).*fn2

For example, the court in Teva Pharm. Indus., Ltd. v. Apotex, Inc., No. 07-5514, 2008 WL 3413862 (D.N.J. Aug. 8, 2008),found that the plaintiff's allegation that it "has a continuing, economically advantageous relationship for the supply of carvedilol for use in its carvedilol products" sufficient to establish a reasonable expectation of prospective economic benefit. Id. at *27-29; see Graco, 2009 WL 904010 at *32 (Plaintiff "alleges a reasonable expectation of an economic benefit from selling products to customers in the trade with which [Defendant] intentionally and wrongfully interfered."). In short, a complaint must demonstrate that the plaintiff was in ...


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