United States District Court, D. New Jersey
WILLIAM J. MARTINI, U.S.D.J.
Distributors sold Plaintiffs the rights to distribute certain
Coca-Cola products in parts of northern New Jersey.
Plaintiffs' amended complaint brings claims against
Coca-Cola and co-Defendants for fraud, negligence, and
conspiracy. Coca-Cola now moves pursuant to Federal Rule of
Civil Procedure 12(b)(6) to dismiss the amended complaint for
failure to state a claim upon which relief may be granted.
Fed.R.Civ.P. 12(b)(6). For reasons that follow, the motion to
dismiss is GRANTED and the amended complaint
is DISMISSED without prejudice.
following facts are drawn from the amended complaint. Cert.
Daniel S. Einhorn, Ex A. Defendant Eastern Distributors is a
re-seller of exclusive routes (or
“distributorships”) for certain Coca-Cola
products in the tristate region. FAC ¶ 11. Plaintiffs
Bergen Beverage and Yojo Corp. (collectively,
“Plaintiffs”) are New Jersey companies that
purchased from Eastern Distributors the exclusive rights to
distribute Coca-Cola products in parts of northern New
Jersey. Id. at ¶ 14.
Beverage entered into its Independent Operator Distributor
Agreement with Eastern on July 8, 2015, for the purpose of
“marketing and sale of certain chilled juice, juice
drink and milk beverages of The Coca-Cola [Company] and
Odwalla, Inc.” Id. at ¶¶ 20, 22.
Yojo signed a similar agreement with Eastern on August 6,
2015. Both contracts specify a term of 10 years. Id.
at ¶ 21. The agreements warrant that Eastern has
obtained the rights from Coca-Cola to resell exclusive
distribution rights throughout the tristate area.
Id. at ¶ 23. The contracts provide for
“Volume-Based Incentives, ” which “would
provide substantial savings to Plaintiffs and would result in
the distributorships being financially successful for
Plaintiffs.” Id. at ¶ 25. According to
Plaintiffs, these performance incentives proved illusory,
because-as Defendants knew at the time of the
contract-“it would be impossible for the Plaintiffs to
meet the ‘volume targets'” given the lack of
demand for Coca-Cola products on the routes they purchased.
Id. at ¶ 49. “For example, one of the
programs provided that if plaintiff brought 300 cases of
Simply Juice in one week that they would get an additional 60
cases at no costs, but in reality the plaintiff sold at most
38 cases a week during the promotion.” Id. at
claim that Coca-Cola promised the assistance of sales
professionals, but that the sales team did not work the hours
or provide the promotional services owed to Plaintiffs.
Id. at ¶ 56. According to the amended
complaint, after Bergan Beverage entered into its contract
with Eastern, a manager from Coca-Cola advised Bergan
Beverage that “there were not enough customers on the
route, that this route was too spread out geographically . .
. [and] could not work financially.” Id. at
¶ 57. Plaintiffs also assert four contract claims
against Eastern Distribution, but those counts beyond the
purview of this motion.
Yojo and Bergan Beverage each stopped doing business in the
distribution routes because of their inability to turn a
profit. Id. at ¶¶ 68, 72. Plaintiffs filed
this lawsuit against Defendants on June 27, 2017. ECF No. 1.
The amended complaint asserts against all Defendants
conspiracy (Count 5), fraud and negligent representation
(Count 6), and negligence (Count 7). Coca-Cola moves to
dismiss all three claims against it. Plaintiffs filed their
opposition along with a cross-motion to amend, to which they
attached the amended complaint. On November 22, 2017, the
parties stipulated that the cross-motion to amend be granted
as unopposed, and that the pending motion to dismiss be
decided as to the amended complaint without further briefing.
ECF No. 37.
Rule of Civil Procedure 12(b)(6) provides for the dismissal
of a complaint, in whole or in part, if the plaintiff fails
to state a claim upon which relief can be granted. The moving
party bears the burden of showing that no claim has been
stated. Hedges v. United States, 404 F.3d 744, 750
(3d Cir. 2005). In deciding a motion to dismiss under Rule
12(b)(6), a court must take all allegations in the complaint
as true and view them in the light most favorable to the
plaintiff. See Warth v. Seldin, 422 U.S. 490, 501
(1975); Trump Hotels & Casino Resorts, Inc. v. Mirage
Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998).
a complaint need not contain detailed factual allegations,
“a plaintiff's obligation to provide the
‘grounds' of his ‘entitlement to relief'
requires 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). Thus, the factual allegations must be sufficient
to raise a plaintiff's right to relief above a
speculative level, such that it is “plausible on its
face.” See Id. at 570; see also Umland v.
PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008).
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, 129
S.Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at
556). While “[t]he plausibility standard is not akin to
a ‘probability requirement' . . . it asks for more
than a sheer possibility.” Iqbal, 129 S.Ct. at
parties dispute which state's law applies to
Plaintiffs' tort claims. A federal court sitting in
diversity jurisdiction must apply the forum state's
choice-of-law rules. Curtiss-Wright Corp. v. Rodney Hunt
Co., Inc., 1 F.Supp.3d 277, 283 (D.N.J. 2014). The
contracts between Plaintiffs and Defendant Eastern
Distributors specify New York as the choice of law,
that provision does not govern tort claims against Coca-Cola,
which did not contract directly with Plaintiffs. The Court
need not conduct an extended choice-of-law analysis in this
case because the relevant areas of New York and New Jersey
law do not conflict. Accordingly, the Court will apply the
law of New Jersey, the forum state. Id.; Rowe v.
Hoffman-La Roche, 917 A.2d 767, 771 (N.J. 2007).
Civil Conspiracy (Count 5)
of the amended complaint adds a claim for civil conspiracy
against Eastern and Coca-Cola. Plaintiff claims that
“Eastern and Coca-Cola both agreed to and engage in
[sic] the conspiracy to fraudulent [sic] induce Plaintiffs,
with knowledge that the oral representations made to
Plaintiffs were false and with the intent that Plaintiffs
rely on the false representations to Plaintiffs [sic]
detriment.” Am. Compl. p. 17. Coca-Cola argues that
Count 5 fails to satisfy the requirement of Rule 9(b) that
all claims based on fraud be plead with particularity.
See In re. Ins. Brokerage Antitrust Litig., 618 F.3d
300, 347-48 (3d Cir. 2010). The Court agrees. “Pursuant
to Rule 9(b), a plaintiff alleging fraud must state the
circumstances of the alleged fraud with sufficient
particularity to place the defendant on notice of the precise
misconduct with which [it is] charged.” Frederico
v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007)
(citations omitted). This heightened pleading standard
applies to claims of conspiracy to defraud. In Re. Ins.
Brokerage Antitrust Litig., 618 F.3d at 347-48. The
amended complaint fails to cite any facts supporting an
inference that Coca-Cola and Eastern formed an illicit