Falat v. Sacks

Falat v. Sacks

Opinion

CIVIL MINUTES - GENERAL

Proceedings: [IN CHAMBERS] Order Regarding Motions to Dismiss

Before the Court are three motions:

First, Defendants Rodney Cyril Sacks, Hilton Hiller Schlosberg, Thomas J. Kelly, Emelie C. Tirre, Mark J. Hall, Kathleen E. Ciaramello, Gary P. Fayard, Jeanne P. Jackson, Steven G. Pizula, Benjamin M. Polk, Sydney Selati and Mark S. Vidergauz (collectively, the "Individual Defendants"), filed a motion to dismiss the Complaint of Plaintiff Frank Falat ("Falat"). Individual Mot., Dkt. No. 30. Falat opposed. Individual Opp'n., Dkt. No. 40. The Individual Defendants replied. Individual Reply, Dkt. No. 42.

Second, Nominal Defendant Monster Beverage Corporation ("Monster"), filed a motion to dismiss Falat's Complaint. Monster Mot., Dkt. No. 31. Falat opposed. Opp'n. to Monster, Dkt. No. 38. Monster replied. Monster Reply, Dkt. No. 41

Third, Monster and the Individual Defendants (collectively, "Defendants") filed a request for judicial notice. RJN, Dkt. No. 32. Falat filed an opposition to the RJN. Opp'n. to RJN, Dkt. No. 39. [*2]  The Defendants filed a reply. Reply to RJN, Dkt. No. 43

For the following reasons, the Court GRANTS both motions to dismiss, with leave to amend, and GRANTS the RJN.

I. Background

The following facts are alleged in Falat's Complaint. Compl, Dkt. No. 1.

Monster is a Delaware corporation with its headquarters in Corona, California, and is publicly listed on the NASDAQ. Id. ¶ 43. Through its subsidiaries, Monster employs more than 3,500 people and distributes its line of Monster Energy Drinks and other beverages worldwide. Id. ¶¶ 43, 46, 48.

Defendants Rodney C. Sacks ("Sacks"), Hilton H. Schlosberg ("Schlosberg"), Mark J. Hall ("Hall"), Kathleen E. Ciaramello ("Ciaramello"), Gary P. Fayard ("Fayard"), Jeanne P. Jackson ("Jackson"), Steven G. Pizula ("Pizula"), Benjamin M. Polk ("Polk"), Sydney Selati ("Selati"), and Mark S. Vidergauz ("Vidergauz") (collectively, the "Director Defendants") are members of Monster's Board. Id. ¶¶ 44-45, 49-56. Sacks is also Monster's CEO, and Schlosberg is its President, COO, and CFO. Id. ¶¶ 44-45. Ciaramello is European Refreshments' designee to the Board. Id. ¶ 50. European Refreshments is an indirect wholly-owned subsidiary of The Coca-Cola Company, which [*3]  owns a stake in Monster. Id.; see also McDonald Decl., Ex. 4, at 7. Defendants Emelie C. Tirre ("Tirre") and Thomas J. Kelly ("Kelly") (together, the "Non-Director Defendants") are executive officers of Monster: Tirre is President of the Americas, and Kelly is the Executive Vice President, Finance, for Monster's main operating subsidiary. Compl, Dkt. No. 1 ¶¶ 47, 48.

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