Meidinger v. Zoetis, Inc.

588 F.Supp.3d 947

Curt MEIDINGER, Peggy Meidinger, Tyler Meidinger, and Trevor Meidinger, Plaintiffs,

v.ZOETIS, INC., Defendant.

Case No. 3:21-cv-00097

United States District Court, D. North Dakota, Eastern Division.

Signed March 2, 2022

Morgan Lyn Croaker, Peter W. Zuger, Serkland Law Firm, Fargo, ND, Todd D. Wilkinson, Pro Hac Vice, Wilkinson & Schumacher Law Prof LLC, De Smet, SD, for Plaintiffs.

Mark R. Hanson, Anthony J. Anderson, Nilles Law Firm, Fargo, ND, Robert B. Stock, Vogel Law Firm, Fargo, ND, Joseph H. Blum, Pro Hac Vice, LaRae Neal, Pro Hac Vice, Sean Peter Wajert, Pro Hac Vice, Shook, Hardy & Bacon L.L.P., Philadelphia, PA, for Defendant.

ORDER

Peter D. Welte, Chief Judge

Before the Court is Defendant Zoetis, Inc.’s ("Zoetis") motion to dismiss counts I and II of Plaintiffs’ complaint filed on July 16, 2021. Doc. No. 14. On August 5, 2021, Plaintiffs Curt Meidinger, Peggy Meidinger, Tyler Meidinger, and Trevor Meidinger (together, "the Meidingers") filed a response in opposition. Doc. No. 20. Zoetis filed a reply on August 19, 2021. Doc. No. 21. For the reasons set forth below, the Court grants Zoetis's motion and dismisses counts I and II without prejudice.

I. BACKGROUND

The factual background, which the Court must accept as true for purposes of this motion, is taken from the Meidingers’ complaint. Doc. No. 1. The Meidingers are cattle ranchers and are in the livestock business. Id. ¶ 5. This dispute arises from the Meidingers’ use of a Zoetis growth-promoting implant in their cattle, the alleged effects, and how those alleged effects damaged the Meidingers’ livestock business.

According to the Meidingers, their business of over 35 years has an "industry-topping reputation" for "performance and quality." Id. ¶¶ 5, 7. As part of their business, the Meidingers have annually run between 12,000 and 14,000 yearlings and stockers cattle.¹ Id. ¶ 5. In their cattle, the Meidingers "routinely" use growth promoting implants. Id. ¶ 8. Zoetis is a corporation that, among other things, developed a growth promoting implant at the center of this case – the Synovex One Grass implant ("Synovex"). See id. ¶¶ 4, 9. More specifically, Synovex is a "growth promoting implant that is designed to increase rate of weight gain for up to 200 days in pasture and feedlot steers and heifers." Id. ¶ 10.

As alleged, in summer of 2018, Zoetis representative Ethan Johnson approached Curt Meidinger about Synovex.² Id. ¶ 9. Johnson allegedly explained that Synovex "promised increased performance in gain for yearling steers and heifers, greater marketing flexibility, reduced production costs, and an excellent return on investment." Id. ¶ 11. Based on these representations and "the product literature," the Meidingers purchased approximately 13,800 Synovex implants. Id.

When using Synovex, the Meidingers allege that they followed the protocol "prescribed by Johnson." Id. ¶ 13. To that end, 7,700 head of the Meidingers’ cattle received their first round of Synovex (the "Implanted Cattle") in fall of 2018. Id. ¶ 13. Consistent with their operations, the Implanted Cattle were later placed in pastures for summer grazing. Id. The Implanted Cattle received a second round of Synovex in spring of 2019. Id. ¶ 14.

As summer of 2019 progressed, the Meidingers allege that the Implanted Cattle began exhibiting "buller behavior." Id. Buller behavior occurs when a "rider" repeatedly mounts and rides its pen mate, the "buller," until it is injured or killed. Id. Several calves were killed by Implanted Cattle exhibiting buller behavior, according to the Meidingers. Id. They further allege that the Implanted Cattle also displayed unwanted "staggy" characteristics, or the appearance of mature male cattle, including a thicker neck, heavier muscles, and leaner appearance. Id. The staggy characteristics became more apparent in comparison to other cattle of the same age and quality as the Implanted Cattle were gathered for marketing. Id. ¶ 15. To that end, potential buyers were leery to purchase the Implanted Cattle because, according to the Meidingers, the side effects of Synovex caused the Implanted Cattle to appear mismanaged. Id. As such, the Meidingers assert that they sold their yearlings at a noticeably decreased price. Id. ¶ 16.

According to the complaint, the Meidingers’ long-time customers, Brian and Paul Gader (the "Gaders"), purchased four hundred of the Implanted Cattle in May 2019. Id. ¶¶ 18, 19. By the end of September 2019, the four hundred Implanted Cattle allegedly exhibited distinct bully and staggy features. Id. ¶ 19. To that end, Paul Gader explained to both Curt Meidinger and Johnson that he was able to differentiate the four hundred Implanted Cattle from the other two hundred steers in the same pasture. Id. Curt Meidinger then spoke to Johnson and a veterinarian employed by Zoetis. Id. ¶ 24. The veterinarian confirmed that the Meidingers were "not the only people having issues with [Synovex]." Id. Generally, Meidingers assert that they sustained damages including the injuries and deaths of calves, damage to their reputation, and "staggering" economic loss. Id. ¶¶ 14, 16, 23.

In their complaint, the Meidingers raise four claims: (I) negligence, (II) strict liability, (III) breach of express warranty, and (IV) breach of implied warranties. Doc. 1, pp. 5-9. In its motion, Zoetis moves to dismiss the negligence claim (count I) and strict liability claim (count II). Doc. 15, pp. 1-2. Zoetis argues that the Meidingers failed to plausibly plead their tort claims under Federal Rule of Civil Procedure 12(b)(6). Doc. No. 15, p. 9. Alternatively, Zoetis argues that the damages the Meidingers seek for their tort claims are barred by North Dakota's economic loss doctrine. Doc. No. 15, p. 4.

II. LEGAL STANDARD

A complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Rule 12(b)(6) of the Federal Rules of Civil Procedure requires dismissal if a complaint fails to state a claim upon which relief can be granted. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A complaint is facially plausible where its factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. A plaintiff must plead facts that show more than mere speculation or possibility that a defendant acted unlawfully. Wilson v. Ark. Dep't of Hum. Servs., 850 F.3d 368, 371 (8th Cir. 2017) (citing Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ).

While obligated to accept a complaint's factual allegations as true, courts are not required to accept a plaintiff's legal conclusions or a "formulaic recitation of the elements of a cause of action." In re Pre-Filled Propane Tank Antitrust Litig., 860 F.3d 1059, 1063 (8th Cir. 2017) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ). A complaint does not "suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ " Id. Whether a complaint states a plausible claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Alleruzzo v. SuperValu, Inc. (In re SuperValu, Inc. ), 925 F.3d 955, 962 (8th Cir. 2019) (citation omitted). This action is based on diversity jurisdiction. Therefore, the Court will apply North Dakota substantive law. See DJ Coleman, Inc. v. Nufarm Americas, Inc., 693 F. Supp. 2d 1055, 1059 (D.N.D. 2010).

III. DISCUSSION

The Court turns first to Zoetis's argument that, under Federal Rule of Civil Procedure 12(b)(6), the Meidingers failed to sufficiently plead their negligence claim (count I) and strict liability claim (count II). The Court will then briefly address Zoetis's argument regarding whether North Dakota's economic loss doctrine bars the Meidingers’ recovery on these same claims.

A. Failure to State a Claim

Before assessing the sufficiency of Meidingers’ tort claims, a brief review of the difference between negligence and strict liability under North Dakota law is necessary. The "North Dakota Supreme Court has ‘recognized that negligence and strict liability in tort are separate and distinct theories of products liability and that each theory has a different focus.’ "³

Burgad v. Jack L. Marcus, Inc., 345 F. Supp. 2d 1036, 1038 (D.N.D. 2004) (quoting Oanes v. Westgo, Inc., 476 N.W.2d 248, 253 (N.D. 1991) ). "Strict liability focuses on whether a product is defective and unreasonably dangerous, whereas negligence focuses on whether the manufacturer's conduct falls below the standard of reasonable care." Id. (citing Crowston v. Goodyear Tire & Rubber Co., 521 N.W.2d 401, 406 (N.D. 1994) ). "The essential difference between negligence and strict liability is that in negligence the foreseeability of harm by the manufacturer or seller is a question of fact for the jury while in strict liability knowledge of the product's propensity to inflict harm is assumed regardless of whether the danger was foreseeable by the manufacturer or seller." Oanes v. Westgo, Inc., 476 N.W.2d 248, 253 (N.D. 1991) (internal citations omitted).

Here, Zoetis argues the Meidingers’ complaint "fail[ed] to adequately allege the defect with [Synovex] in support of their tort claims." Doc. No. 15, p. 10. For their negligence claim, while not clearly differentiated, the Meidingers appear to primarily assert two potential theories: (1) negligent design and (2) negligent manufacturing. See Doc. No. 1, ¶¶ 25-31. Similarly, for their strict liability claim, the Meidingers appear to generally assert two possible theories: (1) design defect and (2) design manufacturing defect. See Doc. No. 1, ¶¶ 32-29.

1. Negligent Design/Manufacturing and Strict Liability...