Charles Ballard v. Bhang Corporation

SECOND AMENDED COMPLAINT All Defendants amending Amended Complaint/Petition[17], filed by plaintiff Charles Ballard

Central District of California, cacd-5:2019-cv-02329

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8 Page ID #:297 Reuben D. Nathan, Esq. (SBN 208436) 1 Email: rnathan@nathanlawpractice.com NATHAN & ASSOCIATES, APC 2 2901 W Coast Hwy Ste 200 Newport Beach, CA 92663 3 Phone: (949) 270-2798 4 Ross Cornell, Esq., APC (SBN 210413) Email: rc@rosscornelllaw.com 5 5042 Wilshire Blvd. 46382 Los Angeles, CA 90036 6 Phone: (562) 612-1708 7 Attorneys for Plaintiff Charles Ballard and the Proposed Class 8 9 UNITED STATES DISTRICT COURT 10 FOR THE CENTRAL DISTRICT OF CALIFORNIA 11 12 Charles Ballard, an individual on behalf of Case No. 5:19-cv-02329-JGB-KK 13 himself and all others similarly situated and the general public, SECOND AMENDED CLASS 14 ACTION COMPLAINT 15 Plaintiff v. 16 17 Bhang Corporation; Bhang, Inc.; 18 CannaRoyalty Corp. dba Origin House; Kaya Management, Inc.; Fluid South, Inc. 19 dba Sol Distro; Jeff Droege; Shanna 20 Droege and Does 1 through 25, inclusive, Demand For Jury Trial 21 Defendants 22 23 24 25 1 26 SECOND AMENDED CLASS ACTION COMPLAINT 27 28 8 Page ID #:298 1 COMES NOW PLAINTIFF, CHARLES BALLARD, WHO HEREBY ALLEGES 2 THE FOLLOWING: 3 4 Plaintiff, CHARLES BALLARD ("Plaintiff") brings this action on behalf of 5 himself and all others similarly situated against Defendants BHANG CORPORATION, 6 BHANG, INC., CANNAROYALTY CORP. dba ORIGIN HOUSE., KAYA 7 MANAGEMENT, INC., FLUID SOUTH, INC. dba SOL DISTRO, JEFF DROEGE 8 and SHANNA DROEGE (the "Defendants"). 9 The allegations in this Complaint, stated on information and belief, have evidentiary 10 support or are likely to have evidentiary support after a reasonable opportunity for further 11 investigation and discovery. 12 13 NATURE OF ACTION 14 1. Plaintiff files this class action lawsuit on behalf of himself and all similarly 15 situated persons who were misled into purchasing Bhang Products (as defined below) due 16 to false and misleading advertising, marketing and packaging as described herein. 17 2. Plaintiff brings this action on behalf of himself and a California and 18 Nationwide proposed class of purchasers of the Bhang Products for violations of the 19 California Consumer Legal Remedies Act, the California False Advertising Law, the 20 California Unfair Competition Law, breach of express warranty, breach of the implied 21 warranty of merchantability and for fraud and negligent misrepresentation. 22 23 PARTIES 24 3. Plaintiff, Charles Ballard ("Plaintiff"), is a citizen of California, who resides in the county of Riverside. 25 2 26 SECOND AMENDED CLASS ACTION COMPLAINT 27 28 8 Page ID #:299 1 4. Plaintiff has purchased Bhang Medicinal Chocolate during the time period 2 2016 through 2018 from retail locations, including in Riverside County, Orange County 3 and Los Angeles County, and in doing so altered his position in an amount equal to the 4 amounts, including the price premiums, he paid for the Bhang Products. Plaintiff and the 5 Proposed Class would not have purchased or paid a price premium for the Bhang 6 Products had he known that the representations stated in the marketing of and on the 7 labels of the Bhang Products regarding the amounts and/or levels of THC and/or CBD 8 content were false, deceptive and/or misleading. 9 5. Plaintiff saw, read, and relied on the statements, representations, warranties 10 contained on front and back labels of the Bhang Product packaging and in marketing 11 materials regarding the quantities of THC and CBD contained within the Bhang Products 12 before purchasing the Bhang Products. Plaintiff purchased one or more of the Bhang 13 Products at a premium price and would not have made the purchases of the Bhang 14 Products had he known the statements, representations, and warranties regarding the 15 THC and/or CBD amounts and/or levels did not conform to the claims made by the 16 Defendants. 17 6. The "Bhang Products" as defined herein refers to all Bhang chocolate bars 18 sold prior to December 31, 2018, including but not limited to: Dark Chocolate, 19 Milk Chocolate, Toffee Chocolate, Pretzel Chocolate, Sugar-Free Dark Chocolate, 20 Fire Chocolate, Ice Chocolate, Cookies & Cream Chocolate, Cherries & Cream, CBD 21 Caramel Dark Chocolate, Parisian Espresso, Caramel Mocha, Dark Blueberry, Full 22 Spectrum CBD Dark Chocolate and Full Spectrum CBD Milk Chocolate (hereinafter the 23 "Bhang Products"), which are marketed, advertised, distributed and sold by the 24 Defendants in California and throughout the United States. 25 3 26 SECOND AMENDED CLASS ACTION COMPLAINT 27 28 8 Page ID #:300 1 7. Defendant, BHANG CORPORATION is Nevada corporation with 2 headquarters in Miami. 3 8. Defendant BHANG, INC., formerly known as Pele Mountain Resources, 4 Inc., is a Canadian Corporation with headquarters in Miami. 5 9. Defendants BHANG CORPORATION and BHANG, INC. are referred to 6 collectively herein as "Bhang"). Bhang is actually responsible for the wrongful 7 CBD/THC content and marketing claims regarding the Bhang Products in that Bhang 8 directly participated together with the other Defendants in formulating the Bhang 9 Products, marketing and marketing claims. Bhang participated with the Defendants in 10 the unlawful practices described herein by exercising unbridled control over formulating 11 the misleading, fraudulent and deceptive Bhang Products, marketing and marketing 12 claims described herein. 13 10. Defendant CANNAROYALTY CORP. dba ORIGIN HOUSE (hereinafter 14 "CannaRoyalty") is a Canadian Corporation with headquarters in Ontario. The term 15 "CannaRoyalty" as used herein will include all post-acquisition activities of Defendant 16 KAYA MANAGEMENT, INC. CannaRoyalty is actually responsible for the wrongful 17 CBD/THC content and marketing claims regarding the Bhang Products in that 18 CannaRoyalty directly participated together with the other Defendants in formulating the 19 Bhang Products, marketing and marketing claims. CannaRoyalty participated with the 20 Defendants in the unlawful practices described herein by exercising unbridled control 21 over formulating the misleading, fraudulent and deceptive Bhang Products, marketing 22 and marketing claims described herein. 23 11. Defendant KAYA MANAGEMENT, INC. (hereinafter "Kaya") was 24 acquired by Defendant CANNAROYALTY CORP. dba ORIGIN HOUSE in March, 2018 and prior to the acquisition was a California Corporation with headquarters in 25 4 26 SECOND AMENDED CLASS ACTION COMPLAINT 27 28 8 Page ID #:301 1 Irvine. Kaya is actually responsible for the wrongful CBD/THC content and marketing 2 claims regarding the Bhang Products in that Kaya directly participated together with the 3 other Defendants in formulating the Bhang Products, marketing and marketing claims. 4 Kaya participated with the Defendants in the unlawful practices described herein by 5 exercising unbridled control over formulating the misleading, fraudulent and deceptive 6 Bhang Products, marketing and marketing claims described herein. 7 12. Defendant FLUID SOUTH, INC. dba SOL DISTRO (hereinafter "Sol 8 Distro") is a California Corporation with headquarters in Costa Mesa. Sol Distro is 9 actually responsible for the wrongful CBD/THC content and marketing claims regarding 10 the Bhang Products in that Sol Distro directly participated together with the other 11 Defendants in formulating the Bhang Products, marketing and marketing claims. Sol 12 Distro participated with the Defendants in the unlawful practices described herein by 13 exercising unbridled control over formulating the misleading, fraudulent and deceptive 14 Bhang Products, marketing and marketing claims described herein. 15 13. Defendants JEFF DROEGE and SHANNA DROEGE (hereinafter the 16 "Droege Defendants") are residents of the State of California. The Droege Defendants 17 are actually responsible for the wrongful CBD/THC content and marketing claims 18 regarding the Bhang Products in that Droege Defendants directly participated together 19 with the other Defendants in formulating the Bhang Products, marketing and marketing 20 claims. The Droege Defendants participated with the Defendants in the unlawful 21 practices described herein by exercising unbridled control over formulating the 22 misleading, fraudulent and deceptive Bhang Products, marketing and marketing claims 23 described herein. 24 14. The Bhang Products contain the statements, representations, and warranties,, which were/are and are false, misleading, and deceptive claims and advertisements set 25 5 26 SECOND AMENDED CLASS ACTION COMPLAINT 27 28 8 Page ID #:302 1 forth on packaging, labeling and in advertisements as alleged herein. On information and 2 belief, the Bhang Products do not contain the amounts and/or levels of THC and/or CBD 3 identified on the Products' labels, packaging, and marketing materials. Independent lab 4 testing commissioned by Plaintiff of the Bhang Products reveals that the amounts and/or 5 levels of THC and/or CBD do not conform to the statements, representations, and 6 warranties set forth on the front and back labels, packaging, or marketing materials of the 7 Bhang Products. The actual amounts and/or levels of THC and/or CBD are substantially 8 less than stated on the front and back of the labels, packaging, and marketing materials by 9 Defendants. Consumers, such as Plaintiff and the proposed class purchase medicinal 10 products for the amounts and/or levels of THC and/or CBD. The amounts and/or levels 11 of THC and/or CBD are not only material, but the primary reason consumers purchase 12 THC and/or CBD products such as Bhang Products. But for the false statements, 13 representations, and warranties contained on the Bhang Products' front and back labels, 14 packaging, and marketing materials. Sample picture of the statements, representations, 15 and warranties contained on the Bhang Products are set forth below: 16 17 18 19 20 21 22 23 24 25 6 26 SECOND AMENDED CLASS ACTION COMPLAINT 27 28 8 Page ID #:303 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 15. The true names and capacities, whether individual, corporate, associate or 16 otherwise of each of the Defendants designated herein as a DOE are unknown to Plaintiff 17 at this time, who therefore, sue said Defendants by fictitious names, and will ask leave of 18 this Court for permission to amend this Complaint to show their names and capacities 19 when the same have been ascertained. 20 16. Plaintiff is informed and believes and thereon alleges that each of the 21 Defendants, including each Defendant designated as a DOE, is legally responsible in some 22 manner for the events and happenings herein referred to, and caused injuries and damages 23 thereby to these Plaintiffs as alleged herein. 24 25 7 26 SECOND AMENDED CLASS ACTION COMPLAINT 27 28 8 Page ID #:304 1 2 ALTER EGO ALLEGATIONS 3 17. Plaintiff is informed and believes and thereon alleges that the Defendants 4 herein, including but not limited to Bhang Corporation and Bhang, Inc., CannaRoyalty 5 Corp. dba Origina House and Kaya Management, Inc., Fluid South, Inc. dba Sol Distro and 6 the Droege Defendants, and the DOES were at all times herein the alter ego ("ALTER 7 EGO") of each other, and each of them, by reason of the following: 8 (a) Plaintiff is informed and believes and thereon alleges that each defendant at 9 all times herein created, dominated, influenced and controlled each ALTER EGO and the 10 officers thereof as well as the business, property, assets, accounts and affairs of each 11 ALTER EGO. 12 (b) Plaintiff is informed and believes and thereon alleges that at all times 13 herein mentioned there existed and now exists a unity of interest and ownership between 14 each defendants and each ALTER EGO such that legal separateness of and individual 15 governance of the ALTER EGOS never truly existed and/or has ceased. 16 (c) Plaintiff is informed and believes and thereon alleges that at all times 17 since the incorporation of each ALTER EGO, each ALTER EGO has been and now is a 18 mere shell and naked framework which the individual defendants used as a conduit for the 19 conduct of their per