Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—M.D. Fla.: Florida claims against two distributors for nonpayment of a seafood shipment may proceed, (Oct 14, 2014)

By Linda O’Brien, J.D., LL.M.

A seafood processer sufficiently stated Florida Deceptive and Unfair Trade Practices Act (FDUTPA) claims against two distributors and importers of seafood for failing to pay for a seafood shipment made pursuant to a sales agreement, the federal district court in Tampa has decided. Contrary to the defendants’ claims, an FDUTPA claim could be based on a single unfair or deceptive act, even if it involved only a single party, single transaction, or single contract (Zhangzhou Ocean Rich Foodstuffs Co. Ltd. v. Newport International of Tierra Verde, Inc., October 10, 2014, Honeywell, CS.).

In August 2012, seafood processor Zhangzhou Ocean Rich Foodstuffs Co. (Ocean Rich) entered into a sales agreement with Crab Source for a shipment of crab cakes. When Ocean Rich failed to receive timely payment for the shipment, the company was informed that Crab Source was merging with seafood distributor Newport International of Tierra Verde and the merger was the cause of the delayed payment. After payment was ultimately made for the first shipment, Crab Source and Newport requested a second shipment of crab cakes. In February 2013, Ocean Rich sent the second shipment and agreed to be paid by a third-party company, Draco Foods. Subsequently, Ocean Rich was informed that Crab Source was no longer in business and Newport and Draco denied responsibility for payment for the second shipment.

Ocean Rich filed suit against Newport and Draco, alleging violations of the FDUTPA, among other claims. The defendants moved for dismissal for failure to state a claim.

The FDUTPA provides that a party may initiate a civil action against another party who has engaged in unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.

The court found that the plaintiff alleged a plausible claim for relief. In rejecting the defendants’ argument that the FDUTPA did not provide a cause of action for a single incident, the court noted that the FDUTPA applies to private causes of action arising from a single unfair or deceptive act, even if it involves only a single party, single transaction, or single contract. Thus, the plaintiff was not required to plead a “habitual or customary” practice by the defendants.

Additionally, the plaintiff’s allegations met the specificity requirement of Federal Rule of Civil Procedure 9(b), since the plaintiff identified the misrepresentations, who made them, when they were made, and how they were made. The plaintiff also sufficiently alleged causation, the court determined.

The case is No. 8:14-cv-1179-T-36TGW.

Attorneys: Emily E. Smith-Lee (Smith Lee Nebenzahl, LLP), and Natly Torres-Alvarado (Torres Alvarado, PA) for Zhangzhou Ocean Rich Foodstuffs Company Ltd. Kristopher Kest (Lowndes, Drosdick, Doster, Kantor & Reed, PA) for Newport International of Tierra Verde, Inc., and Draco Foods, Inc.

Companies: Zhangzhou Ocean Rich Foodstuffs Company Ltd.; Newport International of Tierra Verde, Inc.; Draco Foods, Inc.

Cases: StateUnfairTradePractices FloridaNews