Grocery Outlet, Inc. v. Naftali, Inc.

I. BACKGROUND

1 A. Grocery Outlet Contracts with Naftali 2 Naftali is “a national manufacturer and marketer of travel and well-being products.” 3 Compl. ¶ 2. Grocery Outlet is a retailer with 455 independently-operated stores located 4 throughout eight states. Id. ¶ 8; RJN, Ex. B.2 5 Between May and June of 2020, Grocery Outlet contracted with Naftali to purchase 6 sanitizing wipes (“Goods”) to sell at its retail supermarket locations. Compl. ¶ 1. The 7 Goods included four types of sanitizing wipes. Id. ¶ 13. Naftali “represented that the 8 wipes could be used to sterilize, to kill germs on, and/or as an antibacterial on both 9 surfaces and skin and that the wipes were in full compliance with federal and state law.” 10 Id. ¶ 2. Relying on Naftali’s representations, Grocery Outlet purchased 718,032 units of 11 the Goods, at a total cost of $1,802,253.12. Id. ¶¶ 12, 15. 12 Grocery Outlet highlights three relevant representations that Naftali made in the 13 Purchase Orders: 14 • “Except for Goods that Buyer has agreed to recondition, Seller expressly warrants 15 that the Goods are not subject to any label-change or tag-removal requirements . . .” 16 • “Seller is in…