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AAA Wholesalers Distribution, LLC v. Tropical Cheese Industries, Inc.

United States District Court, D. Rhode Island

September 3, 2019

AAA WHOLESALERS DISTRIBUTION, LLC, a Rhode Island limited liability company, and ARISMENDY DISLA, as an individual and President and Owner of AAA WHOLESALERS DISTRIBUTIONS, LLC., Plaintiffs,


          Patricia A. Sullivan, United States Magistrate Judge.

         On September 28, 2018, Plaintiffs AAA Wholesalers Distribution, LLC (“AAA”), and Arismendy Disla, AAA's owner and President, initiated this action against Defendant Tropical Cheese Industries, Inc. (“Tropical”); their verified complaint is signed by Mr. Disla. AAA and Tropical are business rivals that intensely competed in the sale and distribution of cheese and dairy products to grocery markets, particularly Spanish markets and smaller specialty markets. ECF No. 1 ¶¶ 10-13. AAA was a leading importer/exporter of a full line of food products, at one time the only full-line Mexican food redistributor in the nation. Id. ¶ 11. Tropical's business is more focused; it manufactures and sells cheese and other dairy products. Id. ¶ 4. AAA ceased all operations in April 2016. Id. ¶ 23. It blames Tropical for its demise. Id. ¶¶ 23, 28.

         This is the second case in this Court between AAA and Tropical.[1] In the first case, filed in September 2015, Tropical sued AAA and one of its employees (not Mr. Disla) for breach of contract, unfair competition and tortious interference; as to AAA; the first action was voluntarily dismissed. Id. ¶ 14. In the present case, AAA (and Mr. Disla, its owner/President) are suing Tropical. They allege that Tropical's business practices caused AAA's loss of business, leading to its April 2016 demise, and caused Disla to suffer severe emotional distress. Their Verified Complaint advances four causes of action. In Count I, AAA and Mr. Disla both allege Defamation/False Light; Mr. Disla alone claims Intentional Infliction of Emotional Distress in Count II; both assert Tortious Intentional Interference with a Contractual Relationship in Count III and Abuse of Process (based on the filing of Tropical I) in Count IV.

         Tropical has filed a motion to dismiss. ECF No. 11. Grounded in Fed.R.Civ.P. 12(b)(6), and invoking Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), Tropical's motion challenges the sufficiency of the claims in Counts I and II.[2] It argues that defamation and false-light publicity as charged in Count I rely entirely on conclusory allegations that cannot clear the Twombly/Iqbal bar, as well as that some, if not all, of the defamation is beyond Rhode Island's one-year statute of limitations for words spoken (R.I. Gen. Laws § 9-1-14(a)). Similarly, Count II, in Tropical's view, is defective because Mr. Disla's claim of emotional distress tracks the language of the legal elements but lacks a single fact to render plausible the existence of the essential element (under Rhode Island law) of a physical manifestation of symptoms.

         In response, Plaintiffs contend that many of the utterances in Count I occurred within one year prior to the Verified Complaint and that those that did not are saved by the continuing tort doctrine; they also contend that some of the actionable utterances amount to non-verbal defamation, which they contend is covered by the default (three-year) statute of limitations in R.I. Gen. Laws § 9-1-14(b). As to Count I's factual sufficiency, Plaintiffs brush aside Twombly/Iqbal, arguing that they need not be as specific as Tropical wants. Mr. Disla defends Count II with the argument that he has put in enough regarding his physical symptoms. Plaintiffs alternatively request leave to amend the Verified Complaint.[3]

         Tropical's Fed.R.Civ.P. 12(b)(6) motion has been referred to me for report and recommendation. 28 U.S.C. § 636(b)(1)(B). For the reasons that follow, I recommend that the motion be granted.

         I. BACKGROUND [4]

         In 2005, Mr. Disla established AAA, a business that sold and distributed a full line of food products, including cheese and dairy, to Spanish groceries in the United States. ECF No. 1 ¶¶ 3, 7, 10, 11. At one time, AAA was the nation's only full-line Mexican food distributor; its gross revenue exceeded $2 million between the “approximate years 2015 and 2017.” Id. ¶¶ 8, II. Tropical is AAA's direct competitor in serving the needs of Spanish grocery stores for cheese and dairy products. Id. ¶¶ 12-13. AAA ceased operations in April 2016[5] because of Tropical's unfair practices. Id. ¶ 23.

         On September 29, 2015, while AAA was still operating, Tropical filed a lawsuit against AAA and Alejandro Castillo, a AAA employee who formerly worked for Tropical. Id. ¶ 14; see Tropical I, ECF No. 1. Tropical's lawsuit claimed Mr. Castillo violated a non-compete agreement he had signed with Tropical, and that he was sharing Tropical's trade secrets with his new employer, AAA. Tropical I, ECF No. 1. In its complaint, Tropical alleged breach of contract against Mr. Castillo, as well as unfair competition and tortious interference with contractual relationships as to Mr. Castillo and AAA. Id. Because Mr. Castillo failed to appear, the Court entered default judgment against him on June 21, 2016. Tropical I, ECF No. 19. On February 1, 2017, the Court dismissed all claims against AAA based on Tropical's December 30, 2016, unobjected-to filing of a motion for voluntary dismissal. ECF No. 53. Mr. Disla was not named as a party in Tropical I, nor does his name appear in the Tropical I complaint. Tropical I, ECF No. 1.

         In the instant case, Plaintiffs' allegations against Tropical focus on the approximate time period of 2015 to 2017. See Compl. ¶ 16. To the extent that the Verified Complaint alleges facts involving AAA, it claims that Tropical's representatives “interacted” with “established and potential customers of the Plaintiffs” for the purpose of luring business away from AAA. Id. These interactions included Tropical's representatives “citing the fact that [AAA] was being sued [in Tropical I] as a reason not to purchase products from AAA.” Id. Plaintiffs further allege that Tropical's representatives engaged in competitive dirty tricks, including “inducing [AAA's] customers to allow Defendant to scrutinize invoices, and reveal other propriety information, in an effort to undercut the Plaintiffs' prices and service/sales methods”; physically manipulating the presentation of Plaintiffs' products in grocery locations so potential customers could not find AAA's items; and moving AAA's sales material and other signage, replacing them with Tropical's. Id. ¶¶ 17, 19, 20. Plaintiffs claim (on information and belief) that Tropical's representatives offered cash incentives and free products to Plaintiffs' customers in exchange for testimony against AAA in Tropical I. Id. ¶ 21. Due to Tropical's “unfair practices, ” “Plaintiffs lost business relationships with clients, customers, investors, banking relations and like contacts, many of which were built over a decade.” Id. ¶ 22. Tropical's practices forced AAA to cease its operations in April 2016; prior to that time, AAA's business extended throughout the United States and to approximately thirty other countries. Id. ¶¶ 9, 23, 28.

         For his claims, Mr. Disla alleges that Tropical's “statements” were made intentionally to demean and falsely reflect on him, his professional acumen and reputation, giving the public a misleading impression of him as unreliable and untrustworthy. ECF No. 1 ¶¶ 26-29. He claims that the defamation and false light publicity caused him to be shocked, humiliated, and to endure pain and suffering and emotional distress, “with resulting physical and emotional manifestations.” Id. ¶ 32. He also alleges that this “extreme and outrageous conduct” was intentional for the purpose of inflicting severe emotional distress. Id. ¶¶ 35-36. To support his claim for infliction of emotional distress, Mr. Disla further describes this “conduct” as “outrageous, ” “atrocious and egregious, ” “beyond all possible bounds of decency and . . . utterly intolerable in a civilized community.” Id. ¶ 37. He claims he has “suffered severe emotional distress. Id. ¶ 39.


         To avoid foundering in the face of a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a complaint must allege a plausible entitlement to relief that gives the defendant fair notice of the claim and the grounds on which it rests. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555, 559. The plausibility inquiry requires the court to distinguish “the complaint's factual allegations (which must be accepted as true) from its conclusory legal allegations (which need not be credited).” Morales-Cruz v. Univ. of P.R., 676 F.3d 220, 224 (1st Cir. 2012).

         This two-pronged approach begins by identifying and disregarding statements in the complaint that merely offer “‘legal conclusion[s] couched as . . . fact[ ]'” or “[t]hreadbare recitals of the elements of a cause of action.” Iqbal, 556 U.S. at 1949-50 (quoting Twombly, 550 U.S. at 555). “A plaintiff is not entitled to ‘proceed perforce' by virtue of allegations that merely parrot the elements of the cause of action.” Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011). The Court must determine whether the well-pled facts, taken as true, are sufficient to support “the reasonable inference that the defendant is liable for the misconduct alleged.” Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) (quoting Iqbal, 556 U.S. at 678). In doing so, the complaint should be read holistically with a heavy dose of common sense. Rodr ...

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