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Troche v. Bimbo Foods Bakeries Distribution, Inc.

United States District Court, W.D. North Carolina, Charlotte Division

April 28, 2014

MICHAEL TROCHE, individually and on behalf of all similarly situated individuals, Plaintiffs,


ROBERT J. CONRAD, Jr., Magistrate Judge.

THIS MATTER comes before the Court on Defendant's Motion To Dismiss, (Doc. 36), and the Magistrate Judge's Memorandum and Recommendation (M&R), (Doc. 48), recommending that this Court deny Defendant's Motion. Defendant filed objections to the M&R, and the parties have briefed the relevant issues extensively. (Docs. 48-52). This matter is ripe for review.


Plaintiff and the members of the Class formed agreements with Defendant Bimbo Foods Bakeries Distribution (BFBD) to distribute bakery products purchased from Defendant to various stores within areas specified by the agreements. The products included a variety of well-established brands available from BFBD. (Doc. 35: Amended Complaint ¶ 20). In May 2007, Plaintiff Troche entered into one such contract, or "Distribution Agreement, " (Agreement) with BFBD, then known as George Westin Bakeries Distribution, Inc. (Docs. 35 ¶ 5; 35-1).

The Agreement contemplates that Plaintiff would purchase products from BFBD at a certain price and then re-sell them to various customers at a higher price, thereby earning a profit on the difference. (Doc. 35 ¶ 30). Plaintiffs allege that the common practice was for them to pick up the products from one of BFBD's facilities and deliver them to various stores in their specified area. (Doc. 35 ¶ 29). As part of the Agreement, Plaintiffs were also responsible for maintaining adequate supplies in the stores, rotating product, and removing stale or damaged product. (Id.; 35-1 § 4.1).

The Agreement identifies Plaintiffs as "distributors" and "independent contractors" and expressly states that "[n]o fiduciary relationship exists between the parties." (Docs. 35 ¶ 28; 35-1 § 2.3). This provision notwithstanding, Plaintiffs allege that BFBD's managers routinely exerted supervisory and disciplinary control over Plaintiffs. (Doc. 35 ¶ 33). The crux of Plaintiffs' complaint involves allegations of interference by BFBD with the relationship between Plaintiffs and their customers, including contacting store members about matters related to Plaintiffs' business, and determining which products Plaintiffs could distribute to various stores. Plaintiffs also allege that BFBD negotiated promotions with Plaintiffs' customers that imposed burdens on Plaintiffs and squeezed their margins of profit. (Id. ¶ 42).

In 2011, BFBD acquired a bakery division of Sara Lee and began promoting products that competed directly in the marketplace with those distributed by Plaintiffs. Plaintiffs allege several adverse consequences including decreased shelf space and loss of sales as a result of Defendant's promotion of Sara Lee products.

Plaintiffs filed suit in this district in 2011 alleging violations of the federal Fair Labor Standards Act (FLSA) as well as various state law claims. Since then, the case has migrated to and from federal court in Pennsylvania where the FLSA claim was dismissed. The remaining claims are for breach of contract (Counts I-V), breach of fiduciary duty (Count VI), unfair and deceptive trade practices (UDTPA) (Count VII), and violations of the North Carolina Wage and Hour Act (Count VIII). Defendants moved under Rule 12(b)(6) to dismiss Counts I-VII. (Doc. 36). On March 12, 2014 the Magistrate Judge issued an M&R recommending that this Court deny Defendant's motion. On March 21, 2014, BFBD objected to the M&R specifically Defendant contends that no fiduciary relationship existed between the parties and that Plaintiff has not alleged "substantial aggravating factors" sufficient to support a claim for unfair and deceptive trade practices. The Court reviews Defendant's objections de novo.


The district court may assign dispositive pretrial matters pending before the court to a magistrate judge for "proposed findings of fact and recommendations." 28 U.S.C. § 636(b)(1)(B). The Federal Magistrate Act provides that "a district court shall make a de novo determination of those portions of the report or specific proposed findings or recommendations to which objection is made." Id. at § 636(b)(1)(C); Camby v. Davis, 718 F.2d 198, 200 (4th Cir. 1983). However, "when objections to strictly legal issues are raised and no factual issues are challenged, de novo review of the record may be dispensed with." Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982). Similarly, de novo review is not required by the statute "when a party makes general or conclusory objections that do not direct the court to a specific error in the magistrate judge's proposed findings and recommendations." Id. "[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (quoting FED. R. CIV. P. 72 advisory committee's note).

In its review of a Rule 12(b)(6) motion, "the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff." Mylan Labs Inc. v. Matakari, 7 F.3d 1130, 1134 (4th Cir. 1993). But the court need not accept allegations that "contradict matters properly subject to judicial notice or exhibit." Blankenship v. Manchin, 471 F.3d 523, 529 (4th Cir. 2006). A plaintiff's "[f]actual allegations must be enough to raise a right of relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Id. at 563. A complaint attacked by a Rule 12(b)(6) motion to dismiss will survive if it contains sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "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." Thus, the applicable test on a motion for judgment on the pleadings is whether, when viewed in the light most favorable to the party against whom the motion is made, genuine issues of material fact remain or whether the case can be decided as a matter of law. Alexander, 801 F.Supp.2d at 433.


Defendants lodged two main objections which are reviewed de novo. Defendants contend that no fiduciary duty existed between the parties, and that Plaintiff has not alleged "substantial aggravating circumstances" sufficient to support a ...

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