Report and Recommendation

HUGH B. SCOTT, Magistrate Judge.

I. INTRODUCTION

In the late spring and summer of 2014, "[t]he FDA [Food and Drug Administration], Canadian health officials, the CDC [Centers for Disease Control], and state and local officials investigated an outbreak of Salmonella Newport, Salmonella Hartford and Salmonella Oranienburg illnesses linked to products containing organic sprouted chia seed powder." (Dkt. No. 50-4 at 2 (hereafter [50-4 at 2]).) The investigation led to product recalls by plaintiff Navitas LLC ("Navitas"); Health Matters America, Inc. and Advantage Health Matters, Inc. (collectively, "Health Matters"); and Bio Essential Botanicals ("Bio Essential"), among other companies. Navitas subsequently sued Health Matters and Bio Essential, its chia seed suppliers, for breach of contract and other theories of liability pertaining to the outbreak. Health Matters, in turn, filed a third-party complaint to implead other companies that allegedly were part of the chia seed supply chain that ended with Navitas: EVI Inc. and EVI International Group (collectively, "EVI"); Tradin Organics USA LLC;1 Rowland Seeds Inc.; and Avafina Commodities Inc. The latter two third-party defendants have since been stipulated out of the case. [82, 83.] Bio Essential filed cross-claims against Health Matters. There are many more details to the parties' allegations, but this summary is a good start.

This case now comes before the Court primarily on two dispositive motions. Health Matters has filed a motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure [42] to dismiss most of Bio Essential's cross-claims, for various reasons including failure to plead a contractual relationship and failure to plead elements of a products liability claim. EVI has filed its own motion to dismiss or to stay the case, based mostly on the abstention doctrine set forth in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). Health Matters and Bio Essential also have filed motions to amend as an alternative remedy should some or all of their respective pleadings be dismissed. [68, 71.] Additionally, Rowland Seeds Inc. and Avafina Commodities Inc. had filed their own motions to dismiss [49, 56] before they were stipulated out of the case; those motions technically remain pending.

District Judge Lawrence J. Vilardo has referred this case to this Court under 28 U.S.C. § 636(b). [25.] The Court held oral argument on February 20, `. [92.] For the reasons below, the Court respectfully recommends granting Health Matters's motion to dismiss, but without prejudice to amend; denying EVI's motion to dismiss; granting Bio Essential's motion to amend; and denying the remaining motions as moot.

II. BACKGROUND

A. Basic Facts Generally

This case concerns the fallout from contamination of chia seed products with salmonella bacteria. For basic background purposes only, the Court takes judicial notice that one example of a chia seed product is organic sprouted chia powder, a nutritional supplement made by sprouting chia seeds and milling them to the consistency of flour. Navitas is a retail seller of chia seed products. According to the complaint, around 2011 Navitas entered into agreements with Bio Essential and Health Matters to obtain a supply of chia seed products that would be sold under the Navitas brand name.

The first couple of years between the companies seem to have proceeded uneventfully, but then the salmonella outbreak struck. The outbreak occurred in 2014 and affected at least 31 customers in the United States and Canada. Navitas has summarized the outbreak as follows:

[1 at 3-4.]

B. This Litigation Begins

Navitas began this case by filing its complaint on August 29, 2016. The complaint contains five claims and names Bio Essential and Health Matters as adverse parties. In the first claim, Navitas accuses all defendants of breach of contract. "There is no federal tolerance for Salmonella, a potentially deadly pathogen. Thus, the presence of Salmonella in the contracted for chia seed products is a breach of the sales contract." [1 at 4.] In the second claim, Navitas accuses all defendants of a breach of the implied warranty of merchantability. "Because the subject chia seed products introduced, supplied, sold and/or distributed by Defendants to Plaintiff Navitas [] were contaminated with Salmonella, the chia seed products were not reasonably fit for their ordinary purposes." [Id. at 5.] In the third claim, Navitas accuses all defendants of a breach of the implied warranty of fitness for a particular purpose. "Plaintiff Navitas relied on each Defendant's skill and judgment in selecting or furnishing suitable chia seed products for the particular purpose for which the products were to be used by Plaintiff Navitas, i.e., re-packaging and sale for human consumption." [Id. at 6.] In the fourth claim, Navitas accuses all defendants of a breach of the implied warranty for the sale of food. "Defendants materially breached the implied warranty for the sale of food by providing Plaintiff Navitas with chia seed products contaminated with Salmonella, for which there are no federal tolerances, and thus, necessitating the recall of the subject chia seed products by Plaintiff Navitas." [Id. at 7.] In the fifth claim, Navitas accuses all defendants of negligence.

C. Third-Party Complaint and Cross-Claims

Within a few months, this case acquired another layer of pleadings that reflected the layers of suppliers, processors, and retailers in the chia products market. On April 19, 2017, Health Matters filed a third-party complaint under Rule 14,2 naming EVI Inc., EVI International Group, Tradin Organics USA LLC, Rowland Seeds Inc., and Avafina Commodities Inc. as third-party defendants. [35.] According to the third-party complaint, Health Matters "purchased raw chia and flax seeds (the `Seeds') from Third-Party Defendants EVI, Tradin, Rowland, and Avafina." [35 at 3.] Health Matters then sent the Seeds to Bio Essential to be germinated and milled. Once it received the milled seed products, Health Matters package the products under various labels and sold or resold them to various wholesale and retail customers. [35 at 3-4.] When discussing the salmonella outbreak and the resulting product recalls, Health Matters's key contention is that "[u]pon information and belief, the products recalled contained Seeds, or byproducts therefrom, which came from the Third-Party Defendant Seed Vendors." [35 at 5.]

The third-party complaint contains four claims. In the first claim, Health Matters accuses all third-party defendants of a breach of the implied warranty of merchantability. According to Health Matters, "Each of the Seed Vendors breached its implied warranty of merchantability because the Seeds would not pass without objection in the trade under the contract description, due to the Salmonella Contamination. Each of the Seed Vendors breached its implied warranty of merchantability because the Seeds were not of fair average quality within the description, due to the Salmonella Contamination. Each of the Seed Vendors breached its implied warranty of merchantability because the Seeds were not fit for the ordinary purposes for which they are used, due to the Salmonella Contamination." [35 at 6.] In the second claim, Health Matters accuses all third-party defendants of breach of the implied warranty of fitness for a particular purpose. "Each of the Seed Vendors breached the implied warranty of fitness for a particular purpose because the Seeds were not fit for human consumption due to Salmonella Contamination." [35 at 8.] In the third claim, Health Matters accuses all third-party defendants of negligence. In the fourth claim, Health Matters accuses all third-party defendants of strict products liability.

This case also includes cross-claims. On May 25, 2017, Bio Essential filed an answer to Navitas's complaint that included affirmative defenses along with 11 cross-claims against Health Matters. The cross-claims cover contribution; indemnity; negligence; breach of oral contract; breach of written contract; breach of warranty; product liability; strict products liability; negligence and negligence per se; unfair trade practices; and fraud. [39 at 12-22.]

In the motions that are pending, the parties have made requests for a variety of dispositive relief against each other's claims or cross-claims. Rather than attempt to summarize them here, the Court will address each request individually below.

III. DISCUSSION

A. Motions to Dismiss Generally

Most of the relief sought in the pending motions would consist of dismissals under Rule 12(b)(6). "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. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citations omitted). Courts assess Rule 12(b)(6) motions "accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiff's favor." Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 61 (2d Cir. 2010) (internal quotation marks and citation omitted). "On a motion to dismiss, the court may consider any written instrument attached to the complaint as an exhibit or any statements or documents incorporated in it by reference." Yak v. Bank Brussels Lambert, 252 F.3d 127, 130 (2d Cir. 2001) (editorial and internal quotation marks and citation omitted). "Simply stated, the question under Rule 12(b)(6) is whether the facts supporting the claims, if established, create legally cognizable theories of recovery." Cole-Hoover v. Shinseki, No. 10-CV-669, 2011 WL 1793256, at *3 (W.D.N.Y. May 9, 2011) (internal quotation marks and citation omitted).

As a preliminary matter, the Court must decide whether to consider a number of documents that have become part of the record but lie outside of the original and third-party complaints. "Because a Rule 12(b)(6) motion challenges the complaint as presented by the plaintiff, taking no account of its basis in evidence, a court adjudicating such a motion may review only a narrow universe of materials. Generally, we do not look beyond facts stated on the face of the complaint, documents appended to the complaint or incorporated in the complaint by reference, and matters of which judicial notice may be taken." Goel v. Bunge, Ltd., 820 F.3d 554, 559 (2d Cir. 2016) (internal quotation and editorial marks and citation omitted). "Where a document is not incorporated by reference, the court may neverless consider it where the complaint relies heavily upon its terms and effect, thereby rendering the document integral to the complaint. However, even if a document is integral to the complaint, it must be clear on the record that no dispute exists regarding the authenticity or accuracy of the document. It must also be clear that there exist no material disputed issues of fact regarding the relevance of the document." DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010) (internal quotation marks and citations omitted). "A document is integral to the complaint where the complaint relies heavily upon its terms and effect. Merely mentioning a document in the complaint will not satisfy this standard; indeed, even offering limited quotations from the document is not enough. In most instances where this exception is recognized, the incorporated material is a contract or other legal document containing obligations upon which the plaintiff's complaint stands or falls, but which for some reason—usually because the document, read in its entirety, would undermine the legitimacy of the plaintiff's claim—was not attached to the complaint." Goel, 820 F.3d at 559 (internal quotation and editorial marks and citations omitted).

Applying this standard, the Court can consider a few of the documents in the record. The record contains a copy of a complaint that Health Matters filed in the Ontario Superior Court of Justice on May 24, 2016. [50-3.] No one has disputed the accuracy or authenticity of this document. Any litigation that might be occurring in Canada is not referenced in either the original or the third-party complaint but directly affects the Court's subject-matter jurisdiction— specifically, whether the Court should abstain from hearing this case. The Court has more to say about the Canadian litigation below; for now, the Court acknowledges that it has considered the copy of the Ontario complaint for the limited purpose of comparing allegations in that case to allegations in this case. The record also contains copies of various press releases that provide some details about the salmonella outbreak and the ensuing product recalls. [50-4 to 50-12.] The Court has not relied on these press releases for any legal analysis, but since the parties have not disputed any of the details in them, the Court has considered them briefly for background purposes only. Finally, the record contains copies of what appear to be purchase orders between Health Matters and Bio Essential. [70-1.] The parties do not dispute the authenticity or accuracy of these copies; in fact, Health Matters believes [81 at 3] that the purchase orders support its arguments even though Bio Essential submitted them. In the absence of any dispute about authenticity or accuracy, the Court has considered the purchase orders as central to understanding various arguments from the parties about the existence or absence of contractual obligations.

The Court has not considered any other documentary evidence in the record. For example, Bio Essential included in its papers copies of what appear to be various email messages along with photographs of product samples. [70-2 at 70-8.] At most, these documents are evidence, and "[t]he court's function on a Rule 12(b)(6) motion is not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985) (citation omitted).

B. Health Matters Motion (Dkt. No. 42)

Through its motion, Health Matters seeks dismissal of the fourth through eleventh cross-claims that Bio Essential has asserted against it.

i. Fourth and Fifth Cross-Claims

Health Matters seeks dismissal of Bio Essential's fourth and fifth cross-claims, for breach of oral contract and breach of written contract, respectively. The fourth cross-claim reads in its entirety as follows:

[39 at 13-14.] The fifth cross-claim reads in its entirety as follows:

[39 at 14-15.]

According to Health Matters, Bio Essential has not pled the terms of any oral or written contract that existed. With respect to any purported oral contract,

[42-1 at 3-4.] Health Matters makes a similar argument against any allegations about a written contract:

[42-1 at 4.] Bio Essential defends its pleading of a breach of oral contract as follows:

[69 at 3-4.] Bio Essential has a similar argument about how it pled the breach of a written contract:

[69 at 4-5.]

"Under New York law, an action for breach of contract requires proof of (1) a contract; (2) performance of the contract by one party; (3) breach by the other party; and (4) damages." First Inv'rs Corp. v. Liberty Mut. Ins. Co., 152 F.3d 162, 168 (2d Cir. 1998) (internal quotation marks and citation omitted). Contracts can be created orally and can be implied from the conduct of the parties. See, e.g., Baltimore & O.R. Co. v. United States, 261 U.S. 592, 598 (1923) ("Such an agreement will not be implied unless the meeting of minds was indicated by some intelligible conduct, act or sign.") (citation omitted); R.G. Grp., Inc. v. Horn & Hardart Co., 751 F.2d 69, 74 (2d Cir. 1984) ("The point of these rules is to give parties the power to contract as they please, so that they may, if they like, bind themselves orally or by informal letters, or that they may maintain `complete immunity from all obligation' until a written agreement is executed. What matters are the parties' expressed intentions, the words and deeds which constitute objective signs in a given set of circumstances.") (citations omitted); see also Consarc Corp. v. Marine Midland Bank, N.A., 996 F.2d 568, 575-76 (2d Cir. 1993) (citing factors frequently used to determine when parties intend to be bound absent a writing). Depending on the circumstances, written purchase orders can either create contracts on their own or can confirm existing oral or written contracts. See, e.g., Gambino v. Payne, No. 12-CV-824-LJV-MJR, 2017 WL 1046733, at *2 (W.D.N.Y. Mar. 20, 2017) (purchase order stated on its face that it was the contract); Daisey Indus., Inc. v. K-Mart Corp., No. 96 CIV. 4211 AGS RLE, 1997 WL 642553, at *3 (S.D.N.Y. Oct. 17, 1997) ("In their telephone agreement, Daisy and Kmart had met the requirements for a contract. Indeed, they had reached a greater level of specificity, agreeing on colors, sizes and desired style. The purchase orders were merely written confirmations of the contract already agreed to by the parties.") (citation omitted).

Here, Health Matters has the better position about the cross-claims in their current form, but the defects are not fatal. The Court agrees with Health Matters that Bio Essential's cross-claims currently do not plead details such as who all the parties to the contracts were; how long the contracts were supposed to last; what the delivery terms were and for what price; and, in the case of the purchase orders, whether each purchase order constituted an independent contract or a course of conduct under some broader contract. Cf. Valley Lane Indus. Co. v. Victoria's Secret Direct Brand Mgmt., L.L.C., 455 F. App'x 102, 104 (2d Cir. 2012) (summary order) ("Without providing additional factual allegations regarding, inter alia, the formation of the contract, the date it took place, and the contract's major terms, the proposed amended complaint similarly fails to sufficiently plead the existence of a contract."); Commercial Lubricants, LLC v. Safety-Kleen Sys., Inc., No. 14-CV-7483 (MKB), 2017 WL 3432073, at *16 (E.D.N.Y. Aug. 8, 2017) (failure to plead sufficient contractual details fatal to a tortious-interference claim); Emerald Town Car of Pearl River, LLC v. Philadelphia Indem. Ins. Co., No. 16 CIV. 1099 (NSR), 2017 WL 1383773, at *7 (S.D.N.Y. Apr. 12, 2017) (same); see also, e.g., Rochester-Genesee Reg'l Trans. Auth. v. Cummins Inc., No. 09-CV-6370-MAT, 2010 WL 2998768, at *4 (W.D.N.Y. July 28, 2010). Nonetheless, the parties agree implicitly that they had some kind of relationship, and that Health Matters delivered some quantity of chia seeds to Bio Essential, at some point in time, under some circumstances. Amending the cross-claims thus would not be futile; this early in the litigation, with no scheduling order in place and no significant amount of discovery having occurred yet, Bio Essential should have a chance to do so. Cf., e.g., Hillair Capital Invs., L.P. v. Integrated Freight Corp., 963 F.Supp.2d 336, 339 (S.D.N.Y. 2013) ("Here, at this early stage of the case, there is no concern about delay, bad faith, or prejudice. The critical issue is whether the [amendment] would be futile."); Peters v. City of Buffalo, 848 F.Supp.2d 378, 382 (W.D.N.Y. 2012) ("Defendants have provided no grounds on which they would be prejudiced. Further, this Court finds that at this early stage of the litigation there is no undue prejudice to defendants that would preclude amendment of the complaint.").

The Court thus recommends granting Health Matters's motion with respect to the fourth and fifth cross-claims, but without prejudice to amend.

ii. Sixth Cross-Claim

Health Matters seeks dismissal of Bio Essential's sixth cross-claim, for breach of warranty. The sixth cross-claim reads in its entirety as follows:

[39 at 15-16.] Health Matters argues simply that Bio Essential has not pled the terms of any express warranty and has not pled the occurrence of any sale that would implicate any warranties:

[42-1 at 5.] Bio Essential responds that it "relied upon the oral and express representations by Health Matters that they would provide seeds which were capable of being tolled, and leading up to the recall, delivered seeds of inferior quality and which may have been contaminated with salmonella." [69 at 6.] As for the argument about not selling anything or providing only services, Bio Essential notes that

[69 at 6.] Finally, Bio Essential defends its belief that an implied warranty of fitness accompanied every delivery of chia seeds from Health Matters:

[69 at 8.]

For the same reasons noted above regarding the fourth and fifth cross-claims, the arguments about express warranties are easy to address. The purchase orders that Bio Essential has included in its motion papers [70-1] say nothing about warranties. Any oral contracts, as Bio Essential has pled them so far, also say nothing. Nonetheless, at this very early stage of the litigation and given that products deliveries did occur, Bio Essential should have one chance to plead what express warranties it believes exist and how they came into existence. The assertion of an implied warranty requires re-pleading for a different reason. "Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind." N.Y. U.C.C. ("UCC") § 2-314 (McKinney 2018). Even if just a technicality based on other facts pled, Bio Essential should plead that Health Matters qualifies as a merchant under the UCC and should explain why. Once Bio Essential properly invokes the UCC, its claim about implied warranties will be adequate for Rule 12 purposes. See Silva v. Smucker Nat. Foods, Inc., No. 14-CV-6154 JG RML, 2015 WL 5360022, at *11 (E.D.N.Y. Sept. 14, 2015) ("Where the sale of a food or beverage is concerned, courts have ruled that the product need only be fit for human consumption to be of merchantable quality.") (citations omitted); Hohn v. S. Shore Serv., Inc., 529 N.Y.S.2d 129, 130 (App. Div. 1988) ("A distributor impliedly warrants that foods sold by description are fit for human consumption and merchantable.") (citation omitted).

Accordingly, the Court recommends granting Health Matters's motion with respect to the sixth cross-claim, but without prejudice to amend.

iii. Seventh and Eighth Cross-Claims

Health Matters seeks dismissal of Bio Essential's seventh and eighth cross-claims, for product liability and strict products liability, respectively. The seventh cross-claim reads in its entirety as follows:

[39 at 16-17.] The eighth cross-claim reads in its entirety as follows:

[39 at 17-18.] In seeking dismissal, Health Matters has highlighted how the seventh and eighth cross-claims refer to warranties as other cross-claims did. "BEB's Seventh and Eighth cross-claims, `products liability' and `strict liability,' repeat the allegations of the Sixth cross-claim nearly verbatim, creating confusion as to what exact theory of liability BEB intends to assert." [42-1 at 6.] Health Matters then proceeds to argue that "the cross-claims fail as a matter of law because they fail to set out facts necessary to support two essential elements of both theories: damages and causation." [39 at 6.] Health Matters explains the alleged absence of necessary elements as follows:

[39 at 7.] Bio Essential defends its cross-claims with arguments including the argument that "[t]he warranties were relative to the intended use, more specifically, Health Matters was to supply seeds of sufficient quality to be tolled (i.e. sprouted, dried and milled). In particular, the Plaintiff's suit claims that the products delivered by Health Matters contained salmonella contaminated chia seeds. Bio Essential has reason to believe that the contamination occurred either prior to the supply of seeds by Health Matters to Bio Essential or following the return of the tolled seeds to Health Matters." [69 at 10.] Bio Essential argues further that "the strict product liability claim arises for the same reason that the breach of warranty claims arise, namely due to the fact that the bailment arrangement between Health Matters (as bailor) and Bio Essential (as bailee) is akin to a sale and Health Matters knows that it is sourcing the raw materials for Bio Essential to manufacture into the final product which are the sprouted and milled Chia seeds for human consumption which Health Matters sells to other retailers like the Plaintiff, Navitas, LLC." [69 at 12.]

A review of the elements of product and strict product claims is warranted. "To state a cause of action for negligence, [] plaintiffs must show: (1) that [defendants] owed them a duty, or obligation, recognized by law, (2) a breach of the duty, (3) a reasonably close causal connection between [defendant's] conduct and the resulting injury and (4) loss or damage resulting from the breach. In the absence of a duty, as a matter of law, no liability can ensue. Thus it may be said that the defendant was negligent, but is not liable because he was under no duty to the plaintiff not to be." McCarthy v. Olin Corp., 119 F.3d 148, 156 (2d Cir. 1997) (internal quotation marks and citations omitted). The duty in question has to arise independent of contractual obligations; among other sources, statutes and regulations can give rise to a duty of care. Cf., e.g., Great Lakes Cheese of New York, Inc. v. Agri-Mark, Inc., No. 714CV0232GTSATB, 2016 WL 5717337, at *12 (N.D.N.Y. Sept. 30, 2016) (handling of raw milk). With respect to strict liability, "[a] manufacturer who places into the stream of commerce a defective product which causes injury may be held strictly liable. In New York, there are three distinct claims for strict products liability: (1) a manufacturing defect, which results when a mistake in manufacturing renders a product that is ordinarily safe dangerous so that it causes harm; (2) a warning defect, which occurs when the inadequacy or failure to warn of a reasonably foreseeable risk accompanying a product causes harm; and (3) a design defect, which results when the product as designed is unreasonably dangerous for its intended use." McCarthy, 119 F.3d at 154-55 (citations omitted).

Here, the seventh and eighth cross-claims need clarification that might come in an amended pleading. The seventh cross-claim, in its current form, does not do enough to set forth a duty, and a breach of that duty, apart from contractual obligations covered by other cross-claims. The eighth cross-claim does not make clear which type of strict-liability theory Bio Essential wishes to advance. The references to warranties in both cross-claims repeat theories in other cross-claims and are a needless distraction. Since Bio Essential should have a chance to amend other parts of its pleading, it should have a chance to amend these cross-claims as well. The Court thus recommends granting Health Matters's motion with respect to Bio Essential's seventh and eighth cross-claims, but without prejudice to amend.

iv. Ninth Cross-Claim

Health Matters seeks dismissal of Bio Essential's ninth cross-claims, for negligence and negligence per se. The ninth cross-claim reads in its entirety as follows:

[39 at 18-19.] Health Matters argues that "[a]s in the Seventh and Eighth cross-claims, the Ninth cross-claim sets out no facts showing `injuries and damages' suffered, or how they were proximately caused by Health Matters' negligence." [42-1 at 7.] With respect to the claim for negligence per se,

[42-1 at 8-9.] Bio Essential responds as follows:

[69 at 14-16.]

"Negligent performance of a contract may give rise to a claim sounding in tort as well as one for breach of contract. The two claims may be submitted as alternatives to the jury, as a matter of both New York substantive law and federal procedural law. A negligence claim may be brought provided that the plaintiff alleges that a legal duty independent of the contract itself has been violated." Dorking Genetics v. United States, 76 F.3d 1261, 1269 (2d Cir. 1996) (internal quotation marks and citations omitted). "Under the rule of negligence per se, if (1) a statute is designed to protect a class of persons, (2) in which the plaintiff is included, (3) from the type of harm which in fact occurred as a result of its violation, the issues of the defendant's duty of care to the plaintiff and the defendant's breach of that duty are conclusively established upon proof that the statute was violated." Sackin v. TransPerfect Glob., Inc., 278 F.Supp.3d 739, 748 (S.D.N.Y. 2017) (internal quotation marks and citations omitted). Like the seventh cross-claim, the ninth cross-claim does not do enough to set forth a legal duty independent of any contractual relationship between Bio Essential and Health Matters. The ninth cross-claim also does not do enough to set forth the elements necessary for a claim of negligence per se. Neither membership in a protected class nor any specific statute or regulation appears in the ninth cross-claim. Cf. Bishop v. Best Buy, Co. Inc., No. 08 CIV. 8427 LBS, 2011 WL 4011449, at *9 (S.D.N.Y. Sept. 8, 2011) (dismissal of a claim that "fails to cite any statute imposing a specific duty to protect Plaintiff that Defendants breached"); Anchundia v. Ne. Utilities Serv. Co., No. CV 07-4446 (AKT), 2010 WL 2400154, at *5 (E.D.N.Y. June 11, 2010) ("Where plaintiff fails to identify the statute upon which the claim is based, it is impossible to determine if the plaintiff was in a class sought to be protected by the statute or whether the injury suffered by the plaintiff was the type of injury the statute was designed to prevent. It is also impossible to assess whether the defendant breached a duty imposed by statute."). Nonetheless, as with the plaintiff in Anchundia, one opportunity to amend is appropriate under the circumstances. The Court thus recommends granting Health Matters's motion with respect to Bio Essential's ninth cross-claim, but without prejudice to amend.

v. Tenth and Eleventh Cross-Claims

Health Matters seeks dismissal of Bio Essential's tenth and eleventh cross-claims, for unfair trade practices and fraud. The tenth cross-claim reads in its entirety as follows:

[39 at 19-20.] The eleventh cross-claim reads in its entirety as follows:

[39 at 21.] To the extent that both cross-claims mention the phrase "unfair trade practices," Health Matters has guessed that Bio Essential had certain statutes in mind and argues as follows:

[42-1 at 9-10.] Health Matters argues the following in response to any suggestions of fraud:

[42-1 at 10.] In response, Bio Essential more or less confirmed Health Matters's guesses about possible statutes in play. Bio Essential then proceeds to defend its allegations of unfair trade practices and fraud:

[69 at 16-18.]

Bio Essential's allegations warrant a closer look at the purpose and operation of New York's General Business Law ("GBL") § 349. "Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful." GBL § 349(a). This principle operating subsection of the statute is very broad, and individuals may enforce it through the private right of action at Section 349(h). The New York Court of Appeals has elaborated on the type of conduct that the statute aims to prohibit:

Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 647 N.E.2d 741, 744 (N.Y. 1995) (citations omitted). Implicit in Oswego and in the statute itself is the goal of leveling the proverbial playing field that consumers and businesses use to transact. The typical consumer—and the statute carries the connotation that "consumer" means an individual person—has neither the time nor the means to investigate all internal information that businesses have about their products and practices. Modern commerce would collapse if consumers could not trust information in the marketplace as complete and accurate in all material respects. See Watts v. Jackson Hewitt Tax Serv. Inc., 579 F.Supp.2d 334, 346 (E.D.N.Y. 2008) ("Section 349 is meant to empower consumers, especially the disadvantaged and to even the playing field of their disputes with better funded and superiorly situated fraudulent businesses.") (internal quotation marks and citations omitted); N. State Autobahn, Inc. v. Progressive Ins. Grp. Co., 953 N.Y.S.2d 96, 102 (App. Div. 2012) ("The requirement that the consumer-oriented conduct be materially misleading limits the availability of section 349(a) to cases where the deception pertains to an issue that may bear on a consumer's decision to participate in a particular transaction. As such, the statute is limited in its application to those acts or practices which undermine a consumer's ability to evaluate his or her market options and to make a free and intelligent choice."). A representative but non-exhaustive list of activities that do or do not fall under GBL § 349 looks like this:

21 N.Y. Jur. 2d Consumer and Borrower Protection § 8 (citations omitted). Three concepts can be inferred from the above list: 1) "consumers" again are generally understood to be individual people; 2) businesses risk liability when they engage in deceptive acts about their own products or services and how they might be hiding information when pushing those products or services into the marketplace; and 3) the deceptive acts have to affect a potential consumer decision to acquire the products or services in question.

Understanding the principles from Oswego and the three concepts described above reveal how Bio Essential's tenth and eleventh cross-claims fall short of advancing a cognizable claim under GBL § 349. Under the most generous possible reading of the tenth and eleventh cross-claims, Bio Essential is accusing Health Matters of blaming it falsely for the salmonella outbreak. Health Matters is not being accused of lying about its own product at the time of sale, to induce Bio Essential to buy. The cross-claims do not clarify whether any alleged conduct by Health Matters occurred in New York. Bio Essential has not established that it qualifies as the type of consumer contemplated under GBL § 349. See, e.g., Exxonmobil Inter-Am., Inc. v. Advanced Info. Eng'g Servs., Inc., 328 F.Supp.2d 443, 448 (S.D.N.Y. 2004) ("The New York courts have also suggested that a consumer, for § 349 purposes, is one who purchases goods and services for personal, family or household use.") (internal quotation and editorial marks and citations omitted); Small v. Lorillard Tobacco Co., 720 N.E.2d 892, 897 (N.Y. 1999) ("Generally, claims under the statute are available to an individual consumer who falls victim to misrepresentations made by a seller of consumer goods through false or misleading advertising.") (citation omitted). Finally, the entire allegation of unfair trade practice appears to fall within the context of a contractual relationship between Bio Essential and Health Matters. See Wilson v. Nw. Mut. Ins. Co., 625 F.3d 54, 65 (2d Cir. 2010) (conduct "unique to the parties" does not fall under GBL § 349).

Since the same purported conduct forms the basis of Bio Essential's fraud allegations, the fraud allegations do not fare any better. "To state a claim for fraudulent inducement under New York law, Plaintiffs must allege the following elements: (1) that the defendant made a representation, (2) as to a material fact, (3) which was false, (4) and known to be false by the defendant, (5) that the representation was made for the purpose of inducing the other party to rely upon it, (6) that the other party rightfully did so rely, (7) in ignorance of its falsity (8) to his injury." Eaves v. Designs for Fin., Inc., 785 F.Supp.2d 229, 246 (S.D.N.Y. 2011) (internal quotation marks and citations omitted). "A practice may carry the capacity to mislead or deceive a reasonable person but not be fraudulent. That distinction separates plaintiffs' fraud claims from their section 349 claims. Fraud is wrongful enough to occupy a civil classification just short of criminal conduct. Over the years fraud has generally been defined by behavior involving intentional, false representations and other connotations of scienter such as willfulness, knowledge, design and bad faith." Gaidon v. Guardian Life Ins. Co. of Am., 725 N.E.2d 598, 606 (N.Y. 1999) (citations omitted). "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). Here, to the extent that Bio Essential is suggesting fraudulent inducement, it has not pled that anyone actually was fraudulently induced to change course in business transactions. Bio Essential has not pled that it was defrauded or fraudulently induced in any way; the eleventh cross-claim reads as if other entities should be making the claim that they did or did not make business decisions based on Health Matters's alleged lies. The eleventh cross-claim also lacks details about where the fraud occurred, who was involved, and what precise harm resulted beyond damage to reputation, which perhaps would fall under some other claim like libel or slander.

For the above reasons, the tenth and eleventh cross-claims do not set forth cognizable claims in their current form. Since, however, the Court is recommending an opportunity to amend other cross-claims, there is no harm in giving Bio Essential a chance to amend these to cross-claims as well. The Court thus recommends granting Health Matters's motion with respect to Bio Essential's tenth and eleventh cross-claims, but without prejudice to amend.

C. Rowland Seeds Motion (Dkt. No. 49)

Third-party defendant Rowland Seeds Inc. had filed this motion seeking dismissal of the third-party complaint as against itself, for several reasons. The motion technically remains pending, but Rowland Seeds Inc. was released from this case by stipulation on January 18, `. [82.] The Court accordingly recommends denying this motion as moot.

D. Avafina Motion (Dkt. No. 56)

As with the motion by Rowland Seeds Inc., third-party defendant Avafina Commodities Inc. had filed this motion seeking dismissal of the third-party complaint as against itself, for various reasons. The motion technically remains pending, but Avafina Commodities Inc. was released from this case by stipulation on January 18, `. [83.] The Court accordingly recommends denying this motion as moot.

E. EVI Motion (Dkt. No. 64)

EVI has filed a motion that primarily3 seeks dismissal of the third-party complaint under the abstention doctrine set forth in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). The key fact supporting EVI's request is the existence of a Canadian case related to this one: Advantage Health Matters Inc. and Health Matters America Inc. v. EVI International Group LLC et al., No. CV-16-553341 (Can. Ont. Sup. Ct. J.) (the "Canadian Case"). [50-3.] In the Canadian Case, filed on May 24, 2016, Health Matters is suing EVI International Group LLC, EVI Inc., Tradin Organics USA LLC, Rowland Seeds Inc., Avafina Commodities Inc., Bio Essential Botanicals, Inc., Live Better Brands LLC, and Everspring Farms. The factual allegations of the Canadian Case are summarized in these paragraphs from the complaint:

[50-3 at 6-7.]

EVI reads the factual allegations from the Canadian Case to be identical to the allegations from Health Matters's third-party complaint here. On that basis, EVI considers the Canadian Case to be a parallel proceeding and believes that the factors outlined in Colorado River warrant abstention:

[64-1 at 3.]

Health Matters opposes abstention and addresses each of the Colorado River factors. Health Matters's arguments include the following:

[72 at 10-11.]

The Court begins with a review of the principles governing abstention for reasons related to parallel proceedings. "Abstention from the exercise of federal jurisdiction is the exception, not the rule. The doctrine of abstention, under which a District Court may decline to exercise or postpone the exercise of its jurisdiction, is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it. Abdication of the obligation to decide cases can be justified under this doctrine only in the exceptional circumstances where the order to the parties to repair to the state court would clearly serve an important countervailing interest." Colorado River, 424 U.S. at 813 (internal quotation marks and citation omitted). "[T]he decision whether to dismiss a federal action because of parallel state-court litigation does not rest on a mechanical checklist, but on a careful balancing of the important factors as they apply in a given case, with the balance heavily weighted in favor of the exercise of jurisdiction. The weight to be given to any one factor may vary greatly from case to case, depending on the particular setting of the case." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 16 (1983), superseded in part on other grounds as stated in, e.g., Finnie v. H & R Block Fin. Advisors, Inc., 307 F. App'x 19, 21 (8th Cir. 2009) (unpublished decision). Though no mechanical checklist applies, courts contemplating abstention under Colorado River should consider, among other factors, "(1) whether the controversy involves a res over which one of the courts has assumed jurisdiction; (2) whether the federal forum is less inconvenient than the other for the parties; (3) whether staying or dismissing the federal action will avoid piecemeal litigation; (4) the order in which the actions were filed, and whether proceedings have advanced more in one forum than in the other; (5) whether federal law provides the rule of decision; and (6) whether the state procedures are adequate to protect the plaintiff's federal rights." Woodford v. Cmty. Action Agency of Greene Cty., Inc., 239 F.3d 517, 522 (2d Cir. 2001) (citations omitted).

The above factors evolved in the context of domestic litigation, when the potential parallel proceedings came from federal and state court. When the proceeding that is potentially parallel to federal litigation comes from an international tribunal, the emphasis changes a little. "[T]he starting point for the inquiry remains unchanged: a district court's virtually unflagging obligation to exercise its jurisdiction. In weighing the considerations for and against abstention, a court's heavy obligation to exercise jurisdiction exists regardless of what factors are present on the other side of the balance." Royal & Sun All. Ins. Co. of Canada v. Century Int'l Arms, Inc., 466 F.3d 88, 93 (2d Cir. 2006) (internal quotation marks and citations omitted). That said, "[i]n the context of parallel proceedings in a foreign court, a district court should be guided by the principles upon which international comity is based: the proper respect for litigation in and the courts of a sovereign nation, fairness to litigants, and judicial efficiency. Proper consideration of these principles will no doubt require an evaluation of various factors, such as the similarity of the parties, the similarity of the issues, the order in which the actions were filed, the adequacy of the alternate forum, the potential prejudice to either party, the convenience of the parties, the connection between the litigation and the United States, and the connection between the litigation and the foreign jurisdiction. This list is not exhaustive, and a district court should examine the totality of the circumstances to determine whether the specific facts before it are sufficiently exceptional to justify abstention." Id. at 94 (internal quotation marks and citations omitted); see also AAR Int'l, Inc. v. Nimelias Enterprises S.A., 250 F.3d 510, 518 (7th Cir. 2001) ("[W]e apply the same general principles with respect to parallel proceedings in a foreign court in the interests of international comity.") (citations omitted).

Here, the totality of the circumstances weighs against abstention. The one issue that draws the Court's attention the most, and that has received the most consideration from the Court, is an issue that stretches across most if not all of the Colorado River factors: the absence of Navitas from the Canadian Case. In the Canadian Case, Health Matters is suing a number of other companies—including companies no longer present in this case—for contractual and other damages that it allegedly suffered when it bought contaminated seeds. As the plaintiff in the Canadian Case, Health Matters seeks full recovery of its claimed damages regardless of what happens with indemnity or contribution among the defendants that it named. In contrast, Health Matters filed the third-party complaint here not to seek any recovery for itself, but rather to soften any blow, through contribution, that a jury might deliver should Navitas ultimately win at trial. (See [35 at 6] "If Plaintiff Navitas sustained damages as alleged in the Complaint through any culpable conduct other than its own, said damages were proximately and substantially caused by each of the Third-Party Defendant Seed Vendor's breach of its implied warranty of merchantability, without any culpable conduct on the part of Defendants/Third-Party Plaintiffs contributing thereto.").4 Navitas is not a party at all in the Canadian Case, but it is the only plaintiff here; its presence here adds a layer of events and a layer of complexity that will never be litigated in the Canadian Case.5 Cf. Lexington Ins. Co. v. Integrity Land Title Co., 721 F.3d 958, 970 (8th Cir. 2013) (affirming a finding of no parallel proceedings; "Resolution of Fidelity's tort and contract claims against Integrity would demand no interpretation of the E & O policy nor clarify for Lexington whether it owed a defense to Integrity in Fidelity's two lawsuits (or if it owed Integrity reimbursement of any defense costs associated with the other state-court actions)."); Kirby McInerney LLP v. Lee Med., Inc., No. 17-CV-4760 (KBF), 2017 WL 4685101, at *3 (S.D.N.Y. Oct. 16, 2017) (finding no parallel proceedings where certain substantive issues appeared as principal claims in one smaller case and cross-claims in a larger case with a different plaintiff). In a sense, then, the Canadian Case could be viewed as a subset of this case: An ultimate resolution of all issues in this case could have a res judicata effect on the entire Canadian Case, while an ultimate resolution of the entire Canadian Case could be limited to a collateral estoppel effect on contribution without affecting Navitas at all. Compare Coakley Landfill Grp. v. IT Corp., 116 F.Supp.2d 244, 246 (D.N.H. 2000) ("Jurisdiction in this suit is based upon diversity of citizenship and none of the claims involve federal law. However, this is the only forum with jurisdiction over all of the parties and, although the state forum may adequately protect the interests of the parties, the state has already stayed its proceedings to avoid piecemeal litigation and in the recognition that the federal forum is more convenient.") with Commercial Cas. Ins. Co. v. Swarts, Manning & Assocs., Inc., 616 F.Supp.2d 1027, 1033-34 (D. Nev. 2007) (finding parallel proceedings where the combination of claims, cross-claims, and counterclaims created the same claims against the same parties in state and federal court); see also Carter v. 36 Hudson Assocs., LLC, No. 09 CIV.4328DLC, 2010 WL 2473834, at *4 (S.D.N.Y. June 17, 2010) (denying abstention "since the disputes in the two lawsuits are sufficiently distinct"). The court in the Canadian Case appears to have recognized that the Canadian Case would be the smaller circle within the larger circle here, if the two cases were represented in a Venn diagram. At oral argument, the parties represented to the Court that the court in the Canadian Case has either formally or informally stayed proceedings, waiting to see what happens here. That delay offsets the technical fact that the Canadian Case was filed first.

A lesser factor that the Court has considered is the possibility of a peripheral federal question entering the case. As explained above, the Court is recommending dismissal of some of Bio Essential's cross-claims but without prejudice to amend. One of the cross-claims subject to amendment concerns negligence per se. Upon amendment, if Bio Essential identifies specific federal statutes or regulations whose violation could be addressed only here then litigating a potential federal violation in federal court would add some weight to the argument against abstention. Cf. Andrea Theatres, Inc. v. Theatre Confections, Inc., 787 F.2d 59, 63 (2d Cir. 1986) ("Although state courts may properly consider federal claims raised as defenses in a state court action, including claims over which federal courts have exclusive jurisdiction, they may not grant affirmative relief based on claims for which federal jurisdiction is exclusive.").

Under these circumstances, the Court does not consider this case and the Canadian Case to be parallel proceedings. Even if the two cases were parallel, abstention would lead only to scenarios that prejudiced Navitas for no good reason. If the Court abstained from addressing the third-party complaint only then piecemeal litigation would result. Navitas would be prevented here from receiving a full and proper apportionment of any damages that it suffered; at the same time, Navitas would be left looking on helplessly as part of that full and proper apportionment ran its course in a foreign country without its involvement at all. Though in a different procedural posture, an analogous logic appeared in Glenclova Inv. Co. v. Trans-Res., Inc., 874 F.Supp.2d 292, 313 (S.D.N.Y. 2012); the court there stayed a federal case that was missing certain parties, while those missing parties litigated an important issue in state court. The analogy to this case comes through the principle that courts, when possible, should avoid imposing outcomes on parties who are not even present to challenge those outcomes. Alternatively, the only way in which the Court could grant abstention while avoiding piecemeal litigation would be to stay the entirety of this case, which would leave Navitas waiting months or years to pursue its own relief for reasons completely out of its control. Given again that the court in the Canadian Case already has decided to wait and to see what happens here, letting this case move forward in full and in the ordinary course is the better approach. The Court thus recommends denying EVI's motion.

F. Bio Essential Motion to Amend [68]

As an alternative to denial of Health Matters's motion to dismiss its cross-claims, Bio Essential cross-moved under Rule 15(a)(2) for leave to amend its own cross-claims. Rather than address the motion to amend separately, the Court chose to address the propriety of amending the cross-claims as it reviewed each part of Health Matters's motion. In short, the Court believes that allowing Bio Essential one opportunity to amend its cross-claims will cause no prejudice this early in the case and will satisfy the mandate that "[t]he court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2). The Court thus recommends granting Bio Essential's motion; the Court suggests that any amended cross-claims be filed within 20 days of the adoption of this Report and Recommendation by Judge Vilardo.

G. Advantage Health Matters and Health Matters Motion [71]

Health Matters had filed a motion for an order "(1) denying Third-Party Defendants EVI Inc. and EVI International Group's motion to dismiss; (2) in the alternative, granting Defendants/Third-Party Plaintiffs' motion to amend the Third-Party Complaint." [71 at 2.] Since the Court is recommending denial of EVI's motion to dismiss on its own substance, a separate order to Health Matters to the same effect would be redundant. With denial, amendment would not be necessary. The Court thus recommends denying this motion as moot.

IV. CONCLUSION

For all of the foregoing reasons, the Court respectfully recommends adjudicating the motions currently pending as follows:

V. OBJECTIONS

A copy of this Report and Recommendation will be sent to counsel for the parties by electronic filing on the date below. "Within 14 days after being served with a copy of the recommended disposition, a party may serve and file specific written objections to the proposed findings and recommendations." Fed. R. Civ. P. 72(b)(2); see also 28 U.S.C. § 636(b)(1). Any objections must be filed electronically with the Clerk of the Court through the CM/ECF system.

"As a rule, a party's failure to object to any purported error or omission in a magistrate judge's report waives further judicial review of the point." Cephas v. Nash, 328 F.3d 98, 107 (2d Cir. 2003) (citations omitted); see also Mario v. P & C Food Markets, Inc., 313 F.3d 758, 766 (2d Cir. 2002) ("Where parties receive clear notice of the consequences, failure timely to object to a magistrate's report and recommendation operates as a waiver of further judicial review of the magistrate's decision.") (citation omitted). "We have adopted the rule that failure to object timely to a magistrate judge's report may operate as a waiver of any further judicial review of the decision, as long as the parties receive clear notice of the consequences of their failure to object. The rule is enforced under our supervisory powers and is a nonjurisdictional waiver provision whose violation we may excuse in the interest of justice." United States v. Male Juvenile (95-CR-1074), 121 F.3d 34, 38-39 (2d Cir. 1997) (internal quotation marks and citations omitted).

"Where a party only raises general objections, a district court need only satisfy itself there is no clear error on the face of the record. Indeed, objections that are merely perfunctory responses argued in an attempt to engage the district court in a rehashing of the same arguments set forth in the original papers will not suffice to invoke de novo review. Such objections would reduce the magistrate's work to something akin to a meaningless dress rehearsal." Owusu v. N.Y. State Ins., 655 F.Supp.2d 308, 312-13 (S.D.N.Y. 2009) (internal quotation and editorial marks and citations omitted).

SO ORDERED.