Nutrition Ctr., Inc. v. King Bio, Inc., Case No: 19-CV-00046-MLC
| Citation | 428 F.Supp.3d 1245 |
| Decision Date | 16 December 2019 |
| Docket Number | Case No: 19-CV-00046-MLC |
| Parties | NUTRITION CENTER, INC., Plaintiff, v. KING BIO, INC., Defendant. |
| Court | United States District Courts. 10th Circuit. District of Wyoming |
Kyle A Ridgeway, Alia Thal Scott, Williams Porter Day & Neville, Casper, WY, for Plaintiff.
Hampton K O'Neill, Welborn Sullivan Meck & Tooley, Casper, WY, for Defendant.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
This matter comes before the Court upon Plaintiff's Motion for Summary Judgment [Doc. 19]. Defendant responded to the Motion [Doc. 21] and oral argument was held on December 3, 2019.
This case arises out of a product recall issued by Defendant King Bio, Inc. for products purchased from it by Plaintiff Nutrition Center, Inc. The products at issue were homeopathic drugs purchased by Plaintiff prior to August 2018 through various purchase orders. ECF_19-10; ECF_19-1, Affidavit ¶ 4. The parties agree that the purchase orders constituted binding contracts for the sale of goods between the parties. ECF_19-12. On or around August 30, 2018, Plaintiff received a letter ("Recall Notice") from Defendant stating that Defendant had issued a voluntary recall of its aqueous-base products due to potential contamination and the Recall Notice instructed Plaintiff to quarantine Defendant's aqueous-base products. ECF_19-2. Pursuant to the Recall Notice, Plaintiff inventoried its products and quarantined Defendant's aqueous-base products. ECF_19-1, Affidavit ¶ 12. Another notice directed Plaintiff to return recalled products to Defendant, which it did. ECF_19-3; ECF_19-1, Affidavit ¶¶ 12, 13. Plaintiff incurred costs when it obtained all Defendant products from its distribution network, cancelled certain orders, and reimbursed for products that had already been distributed to independent distributors. ECF_19-1, Affidavit ¶¶ 12, 13.
As part of the recall process, Plaintiff completed a "Recall Form" to receive reimbursement for costs incurred, as requested by Defendant. ECF_19-4. The cost of returned products was $104,706.82 and the amount owed to Plaintiff was $120,819.50. Defendant wrote in an email to Plaintiff that the reimbursement cost was $116,909.22 and admitted the existence and validity of that email. ECF_19-4; ECF_19-5; ECF_19-1, Affidavit ¶ 21; ECF_19-11. Nevertheless, Defendant has failed to reimburse Plaintiff the amount owed. ECF_19-11. Defendant admits that it has not paid Plaintiff its reimbursement amount, but maintains it offered an "in-kind" replacement and that Plaintiff refused its offer to replace the recalled product with new product. Id.
Defendant maintains that it lacks sufficient facts to fully respond to Nutri-West's Motion for Summary Judgment and has filed a Rule 56(d) Affidavit. ECF_21-2. To support its argument, Defendant contends that the parties agreed to schedule an additional deposition of Tony White, Plaintiff's president, if Plaintiff's responses to Defendant's First Set of Interrogatories and Requests for Production of Documents left factual issues unresolved. ECF_21 at 2–3. In his affidavit, Defendant's counsel maintains that the responses left factual questions regarding (a) Plaintiff's own efforts involved in the recall; (b) Plaintiff's independent duty to inspect the products recalled; and (c) the parties' contractual obligations to each other regarding the recall efforts. ECF_21-2 at 2. Additionally, the Rule 56(d) affidavit maintains that the facts currently unavailable that are crucial in responding to Plaintiff's Motion for Summary Judgment include (a) actual language contained in the purchase orders Plaintiff claims as the basis for certain obligations; (b) actual language contained in the alleged quality agreement or manufacturing agreement between the parties governing the production of homeopathic products at issue; (c) the specific steps or acts Plaintiff engaged in to facilitate the recall and the reasonable costs associated with those steps or actions; (d) what Plaintiff's independent duties were as an owner, or seller and distributor of the homeopathic products at issue; (e) what Plaintiff's independent duties were in an FDA recall situation as an owner or seller and distributor of the homeopathic products at issue; (f) whether Plaintiff had an independent duty and obligation to inspect and insure the homeopathic products at issue were not contaminated; and (g) whether Plaintiff failed to independently test and quarantine contaminated homeopathic product.
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see also Mata v. Anderson , 635 F.3d 1250, 1252 (10th Cir. 2011). When determining whether summary judgment is appropriate, courts view evidence and draw all reasonable inferences in the light most favorable to the non-moving party. Mumby v. Pure Energy Servs. (USA), Inc. , 636 F.3d 1266, 1269 (10th Cir. 2011). A fact is considered material if, under the applicable substantive law, it is "essential to the proper disposition of the claim." Wright ex rel. Trust Co. v. Abbott Labs., Inc. , 259 F.3d 1226, 1231–32 (10th Cir. 2001). An issue of fact is considered genuine when "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way."
Adler v. Wal–Mart Stores, Inc. , 144 F.3d 664, 670 (10th Cir. 1998).
The movant bears the initial burden to demonstrate the basis for its motion and must identify the parts of the "pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any" which "demonstrate the absence of a genuine issue of a material fact." Reed v. Bennett , 312 F.3d 1190, 1194 (10th Cir. 2002) (quoting Celotex Corp. v. Catrett , 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). If the movant meets this initial burden, then the non-movant must show more than "[t]he mere existence of a scintilla of evidence in support of the [non-movant's] position ... there must be evidence on which the jury could reasonably find for the [non-movant]." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The non-movant must "go beyond the pleadings and designate specific facts so as to make a showing sufficient to establish the existence of an element essential to that party's case in order to survive summary judgment." Sealock v. Colorado , 218 F.3d 1205, 1209 (10th Cir. 2000). Evidence "must be based on more than mere speculation, conjecture or surmise." Bones v. Honeywell Int'l, Inc. , 366 F.3d 869, 875 (10th Cir. 2004). "Unsubstantiated allegations carry no probative weight in summary judgment proceedings" and do not create a genuine issue of fact. Phillips v. Calhoun , 956 F.2d 949, 951 n.3 (10th Cir. 1992). Evidence to defeat summary judgment must also be admissible at trial. Equality Bank of Evansville, v. Suomi , 836 P.2d 325, 330 (Wyo. 1992).
As for Rule 56(d) affidavits, the rule states the following:
Fed. R. Civ. P. 56(d). Generally, summary judgment should be refused if the non-movant has not had opportunity to discover information essential to its opposition. Madrid v. Chronicle Books , 209 F. Supp. 2d 1227, 1232–33 (D. Wyo. 2002).1
There are several prerequisites to granting relief under Rule 56(d). First, an affidavit from the non-movant must explain why certain facts precluding summary judgment cannot be presented and show how a continuance would enable the party to obtain those facts. Hackworth v. Progressive Cas. Ins. Co. , 468 F.3d 722, 732 (10th Cir. 2006) ; see also Madrid , 209 F. Supp. 2d at 1232–33. The affidavit should identify probable facts unavailable, explain the steps taken to obtain these facts, and explain how additional time will enable the non-movant to rebut the movant's allegations of no genuine issue of fact. Id. Second, the non-movant must also demonstrate that the new discovery could succeed in defeating summary judgment—relief should be denied if the discovery would not alter the outcome of the motion. United States v. Supreme Court of New Mexico , 839 F.3d 888, 905 (10th Cir. 2016). Third, a court should consider whether the non-movant was diligent in pursuing discovery of those facts up until that present point. Valley Forge Ins. Co. v. Health Care Mgmt. Partners, Ltd. , 616 F.3d 1086, 1096 (10th Cir. 2010). A movant's exclusive control over the non-discoverable information weighs heavily in favor of relief under Rule 56(d). Price ex rel. Price v. Western Resources, Inc. , 232 F.3d 779, 783 (10th Cir. 2000). However, other circuits have also considered factors such as whether a party waited until the last minute to serve requests. See Jacked Up, L.L.C. v. Sara Lee Corp. , 854 F.3d 797, 816 (5th Cir. 2017) ; Rivera-Almodóvar v. Instituto Socioeconómico Comunitario, Inc. , 730 F.3d 23, 28–29 (1st Cir. 2013). Ultimately, the Court has discretion in determining whether to grant or deny relief under Rule 56(d). Ellis v. J.R.'s Country Stores, Inc. , 779 F.3d 1184, 1206 (10th Cir. 2015).
The parties are approaching this issue from two very different viewpoints. Plaintiff asserts that this is a simple sales contract claim under the terms of the Uniform Commercial Code ("UCC"). WYO. STAT. ANN. § 34.1-1-101 et seq. (West 2019). According to Plaintiff, Defendant delivered non-conforming goods and, as such, Plaintiff is entitled to the remedies set forth in the UCC. In contrast, Defendant argues that this case is...
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