Portescap India PVT LTD v. Trina Health LLC
2:19-cv-00865
E.D. Cal.Nov 19, 2021Background
- Plaintiff Portescap India PVT LTD sold specially manufactured miniature motors to Bionica, intended for insulin pumps marketed with Trina Health.
- Plaintiff sued Bionica, Trina Health, and individual defendants Gregory Ford Gilbert and Trevor Gilbert for breach of contract and alleged the Gilberts controlled Bionica/Trina (alter ego theory).
- Defendants answered the complaint and then moved to dismiss under Rule 12(b)(6); the court construed the motion as one for judgment on the pleadings under Rule 12(c).
- Defendants argued Plaintiff’s alter ego allegations are mere legal conclusions and fail to plead pervasive control or other facts supporting alter ego liability.
- The court found the complaint insufficient to plead the unity-of-interest and inequitable-result elements of alter ego, but allowed leave to amend rather than dismissing with prejudice.
- The court granted dismissal of the claims against Gregory and Trevor Gilbert with leave to amend; Plaintiff has 30 days to file an amended complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper procedural vehicle | 12(b)(6) dismissal appropriate | Motion filed after answer should be treated as 12(c) | Court treated motion as Rule 12(c) (judgment on the pleadings) for judicial economy |
| Sufficiency of alter ego allegations | Allegations (control, common ownership, undercapitalization, disregard of formalities, defaulted entities, cessation of operations) suffice to pierce corporate veil | Allegations are conclusory; no facts showing pervasive control or bad faith to satisfy unity-of-interest and inequitable-result prongs | Alter ego allegations insufficient as pleaded; dismissal granted with leave to amend |
Key Cases Cited
- Aldabe v. Aldabe, 616 F.2d 1089 (9th Cir. 1980) (motions to dismiss filed after answer may be treated as Rule 12(c) motions)
- Elvig v. Calvin Presbyterian Church, 375 F.3d 951 (9th Cir. 2004) (post-answer dismissal motions should be treated as Rule 12(c))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (courts need not accept legal conclusions as true)
- Sonora Diamond Corp. v. Superior Court, 83 Cal. App. 4th 523 (Cal. Ct. App. 2000) (elements and factors for alter ego liability under California law)
- Ranza v. Nike, Inc., 793 F.3d 1059 (9th Cir. 2015) (unity-of-interest prong requires pervasive control)
- Ahcom, Ltd. v. 28 Smeding, 623 F.3d 1248 (9th Cir. 2010) (discussed in context of alter ego claims by creditors)
- NuCal Foods, Inc. v. Quality Egg LLC, 877 F. Supp. 2d 977 (E.D. Cal. 2012) (inequitable-result prong requires more than an unsatisfied creditor claim; bad faith may be required)