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Nutri Pharmaceuticals Research, Inc. v. Stauber Performance Ingredients, Inc.

United States District Court, D. Nevada

December 10, 2019



         Presently before the court is plaintiff/counter-defendant Nutri Pharmaceuticals Research, Inc.'s (“plaintiff”) motion for partial summary judgment. (ECF No. 22). Defendant/counter-claimant Stauber Performance Ingredients, Inc. (“defendant”) filed a response (ECF No. 27), to which plaintiff replied (ECF No. 28).

         Also before the court is defendant's motion in limine. (ECF No. 29). Plaintiff filed a response (ECF No. 33), to which defendant replied (ECF No. 34).

         I. Background

         The instant action arises from a series of allegedly-breached contracts. On one hand, plaintiff claims that defendant failed to pay for thirty-two shipments of goods. (ECF No. 1). On the other hand, defendant claims that plaintiff breached three unrelated contracts when it shipped rancid goods. (ECF No. 5).

         Plaintiff manufactures and supplies “nutritional bioactive supplements.” (ECF No. 22 at 1). Defendant provides ingredients to the food, nutritional, pharmaceutical, cosmetic, and pet care industries. Id. at 2. The parties first began doing business with one another in October 2007. Id. Defendant would purchase and resell materials that plaintiff manufactured. Id. This business relationship continued without incident for almost ten years. Id.

         Then problems began to arise. (ECF No. 29 at 2). Defendant ordered borage oil powder from plaintiff in December 2015, and against in January 2016, for one of its customers, Glanbia Nutritionals, Inc. (“Glanbia”). Id. at 3. Glanbia used the borage oil powder to make gummies but, when the gummies were finished in January 2017, [1] it informed defendant that the gummies smelled rancid. Id. Glanbia attributed the smell to the borage oil powder. Id. Defendant tested the borage oil powder and found that it had high peroxide values, which were consistent with rancidity. Id. at 3-4.

         After this incident, Glanbia tested the borage oil powder that it had ordered in June 2016, before it produced rancid-smelling gummies. Id. at 4. The test showed a high peroxide value, which is consistent with rancidity. Id.

         Defendant ordered conjugated linoleic acid oil powder for another one of its customers, Milk Specialties Global Events (“Milk”), in March 2017, which plaintiff delivered in May. Id. at 2-3. Milk rejected the conjugated linoleic acid oil powder because of a rancid smell. Id. at 3. Defendant tested the conjugated linoleic acid oil powder and found that it had high peroxide values, which was consistent with rancidity. Id. at 3.

         Defendant refunded both Glanbia and Milk for their orders. Id. at 4. Plaintiff denied responsibility for the rancid products. (ECF No. 33 at 2 (plaintiff maintains that the products “became rancid due to factors beyond [its] control.”)).

         More problems arose between August 2017 and October 2017. (ECF No. 22 at 2). Defendant placed thirty-two purchase orders with plaintiff for various products, and plaintiff delivered them to defendant's customers. Id. Although defendant's customers received the goods as required by the thirty-two purchase orders, defendant refused to pay for the goods. Id. Defendant claims that it is entitled to offset any monies owed to plaintiff for the thirty-two shipments because plaintiff breached the Glanbia and Milk contracts by delivering rancid goods. (ECF No. 27 at 6-7).

         Plaintiff now moves for summary judgment only on its claims against defendant. (ECF No. 22). Defendant moves to exclude the opinion and testimony of plaintiff's rebuttal expert. (ECF No. 29).

         II. Legal Standard

         A. Motion for summary judgment

         The Federal Rules of Civil Procedure allow summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

         For purposes of summary judgment, disputed factual issues should be construed in favor of the non-moving party. Lujan v. Nat'l Wildlife Fed., 497 U.S. 871, 888 (1990). However, to be entitled to a denial of summary judgment, the nonmoving party must “set forth specific facts showing that there is a genuine issue for trial.” Id.

         In determining summary judgment, a court applies a burden-shifting analysis. The moving party must first satisfy its initial burden. “When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted).

         By contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the non-moving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323-24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

         If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987).

         In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by ...

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