BATCHELOR et al v. PROCTOR & GAMBLE CO. et al, No. 2:2014cv02424 - Document 31 (D.N.J. 2014)
Court Description: OPINION. Signed by Judge Jose L. Linares on 11/13/14. (DD, )
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BATCHELOR et al v. PROCTOR & GAMBLE CO. et al Doc. 31 NOT FOR PUBLICATION UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY KAREN BATCHELOR, Individually and as owner of Eminence Hair Design, VICTORIA JOLLEY BACCHUS, DENISA WILSON AVERY, MILLICENT BAILEY, and DONNA WEEKS, and EMINENCE HAIR DESIGN Civil Action No. 14-2424 (JLL) OPINION Plaintiffs, V. PROCTER & GAMBLE CO., PROCTER & GAMBLE DISTRIBUTING LLC, CLAIROL, and CLAIROL PROFESSIONAL, Defendants. LINARES, District Judge. This matter comes before the Court by way of Defendants P&G-C lairol, Inc., The Procter & Gamble Distributing, LLC, and the Procter & Gamble Compa ny (collectively, “Defendants”)’ motion to dismiss, (CMJECF No. 25), a substantial majority of Plaintiffs Karen Batchelor, Victoria Jolley Bacchus, Denisa Wilson-Avery, Millicent Bailey, Donna Weeks, and Eminence Hair Design (collectively, “Plaintiffs”)’ Amended Complaint (“AC” )(CM/ECF No. 25) pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court has considered the submissions made in support of and in opposition to Defendant’s motion, and decide s this matter without oral argument pursuant to Fed. R. Civ. P. 78. For the reasons set forth below, Defendant’s motion to dismiss is granted. Dockets.Justia.com I. 1 BACKGROUND Karen Batchelor (“Batchelor”) owns Eminence Hair Design (“Eminence”), a hair salon located in Englewood, New Jersey. (AC ¶ 30.) Victoria Jolley Bacchus, Denisa WilsonAvery, Millicent Bailey, and Donna Weeks (collectively, “customer Plaintiffs”) were customers of Eminence Hair Design from 2010 to 2012. (Id. at 31.) Defendants manufacture, sell, distribute, and advertise the product “Clairol Professional premium crème demi permanente Deep Conditioning for healthy shine Soy Complex Ammo nia Free hair color” (“Product”). Defendants’ Product was advertised as being “ammonia free” and 2 able to “nourish, moisturize, hydrate, condition and/or otherwise keep hair healthy and in good condition.” (Id. at ¶ 34.) Allegedly because of these attributes, Batchelor applied the Product to the customer Plaintiffs’ hair. (Id.) Prior to their use of Defendants’ product, the customer Plainti ffs all had hair that was “in good and healthy condition, texture and elasticity[.j” (Id. at ¶ 32.) They were also regular customers of Eminence Hair Design. (Id.) As a consequence of using Defendants’ product, the customer Plaintiffs suffered “severe hair loss, hair breakage, hair burn, burns to head and/or scalp, balding, and other such physic al injury, emotional/psychological distress [sic] and economic loss” arising out of “correc tive treatment, procedures, hair restoration/replacement.” (Id. at ¶ 35.) Further, they stopped frequenting Eminence Hair Design once they were injured by Defendants’ product. (Id. at ¶ 36.) Plaintiffs allege that their injuries were caused by the fact that, contrary to the label’s representations, Defendants’ Product actually contained ammonia. (Id. at ¶ 37.) Plaintiffs filed These facts are taken from Plaintiff’s Amended Complaint and are taken as true solely for the purposes of the motion. Despite 2 the Court’s instruction in its previous Opinion, Plaintiffs continue to use the full name of Defendants’ product, “Clairol Professional Premium Crème Demi Permanente deep conditioning for healthy shine soy complex ammonia free hair color,” every time they mention it in the Amended Complaint. For ease of reading, this Court asks Plaintiffs again to write the full name of the Product once and refer to it as “product” thereafter in any futare documents they submit to the Court. their Amended Complaint on August 22, 2014. [CM/ECF No. 23.] On September 25, 2014, Defendant moved to dismiss a substantial majority of the claims in the Amended Compl aint. {CM/ECF No. 25.] II. LEGAL STANDARD For a complaint to survive dismissal, it “must contain 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) (citing Bell Ati. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Federal Rule of Civil Procedure 8(a) (2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 545 (quoting Conley v. Gibson , 355 U.S. 41, 47 (1957)). In evaluating the sufficiency of a complaint, a court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the non-moving party. See Phillips v. County ofAllegheny, 515 F.3d 224, 234 (3rd Cir. 2008). “Factual allegations must be enough to raise a right to relief above the speculative level.” Twomblv, 550 U.S. at 555. Further, “[a] pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elemen ts of a cause of action will not do.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555, 557). “Threa dbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Thus, legal conclusions draped in the guise of factual allegations may not benefit from the presumption of truthfulness. Id. Additionally, in evaluating a plaintiffs claims , generally “a court looks only to the facts alleged in the complaint and its attachments withou t reference to other parts of the record.” Jordan v. Fox, Rothschild, O’Brien & Frankel, 20 F.3d 1250, 1261 (3rd Cir. 1994). Rule 9(b) of the Federal Rules of Civil Procedure imposes a heightened pleading requirement of factual particularity with respect to allegations of fraud, independent of the standard applicable to a Rule I 2(b)(6) motion. Rule 9(b) states: “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” Fed. R. Civ. P. 9(b). This heightened pleading requirement is designed “to place the defendants on notice of the precise misconduct with which they are charged, and to safeguard defendants against spurious charge s of immoral and fraudulent behavior.” Seville fndus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d Cir. 1984). Thus, Rule 9(b) requires plaintiffs to plead “the who, what, when, where, and how: the first paragraph of any newspaper story” whenever alleging a claim of fraud. In re Advanta Corp. Sec. Litig., 180 F.3d 525, 534 (3d Cir. 1999). The Third Circuit has also noted that “{a]lthough Rule 9(b) falls short of requiring every material detail of the fraud such as date, location, and time, plaintiffs must use ‘alternative means of injecting precision and some measu re of substantiation into their allegations of fraud.” In re Rockefeller Ctr. Props. Sec. Litig., 311 F.3d 198, 216 (3d Cir. 2002) (quotingin reNiceSvs., Ltd. Sec. Litig., 135 F. Supp. 2d 551, 576 (D.N.J . 2001)). Where there are multiple defendants, plaintiffs must plead predicate acts of fraud with particularity as to each defendant. See, e.g., Seville, 742 F.2d at 791. III. DISCUSSION A. Motions Before the Court 1. Defendant’s argument Defendant argues that dismissal is warranted on the following grounds: (1) Ms. Batche lor nor Eminence Hair Design can proceed with a claim under the Product Liability Act; (2) Ms. Batchelor nor Eminence Hair Design adequately pled an ascertainable loss or causati on under the Consumer Fraud Act; (3) the Customer Plaintiffs fail to state a claim for breach of expres s warranty; and (4) Plaintiffs cannot pursue a claim for punitive damages under the Produc t Liability Act. 2. Plaintiff’s opposition Plaintiffs respond to Defendant’s motion by asserting that: (1) Plaintiffs Batchelor and Eminence Hair Design sufficiently pled under the Product Liability Act; (2) Plaintiffs Batche lor and Eminence Hair Design have sufficiently pled a cause of action against Defendants for violation of the New Jersey Consumer Fraud Act; (3) Defendant’s motion to dismiss Plainti ffs’ cause of action for breach of express warranty should be denied; and (4) Plaintiffs state sufficient facts to plead a cause of action for punitive damages herein. B. Design Defect and Failure to Warn under the PLA The PLA defines a product liability action as “any claim or action brought by a claimant for harm caused by a product, irrespective of the theory underlying the claim, except actions for harm caused by breach of an express warranty.” Sinclair v. Merck & Co., Inc., 195 N.J. 51, 62 (2008) (quoting MJS.A. 2A:58C—lb)(3)). The Act defines harm as: (a) physical damage to property, other than to the product itself; (b) personal physical illness, injury or death; (c) pain and suffering, mental anguish or emotional harm; and (d) any loss of consortium or services or other loss deriving from any type of harm described in subparagraphs (a) through (c) of this paragraph.” Id. (quoting N.J.S.A. 2A:58C—1(b)(2)). The Supreme Court of New Jersey has interpr eted this definition to mean that plaintiffs cannot sue for economic loss under the PLA in the absence of personal physical injury. Id. at 65. In Sinclair, the Court explained that “the injury portion of the definition [of harm] . . . require[s] [a] ‘personal physical’ injury, just like there must be a ‘personal physical’ illness and ‘personal physical’ death.” Id. As such, the Supreme Court of New Jersey held in Sinclair that patients that had taken defective medicine, but had not suffered any physical harm, could not bring suit under the PLA even though they had incurred costs associated with monitoring the potential damage the defective medicine might have caused them. Id. Additionally, the court in Portee v. Jaffee, required the following elements to be alleged for a cause of action involving the negligent infliction of emotional distress: (1) the death or serious physical injury of another caused by defendants negligence; (2) a marital or intima te, familial relationship between plaintiff and the injured person; (3) observation of the death or injury at the scene of the accident; and (4) resulting severe emotional distress. 84 N.J. 88, 101, 417 A.2d 521, 528 (1980). Defendant argues that Batchelor nor Eminence can sue for economic loss under the PLA because neither has alleged a personal physical injury. Moreover, Defendant conten 3 ds that Batchelor nor Eminence can sue for any alleged property damages because a claim for property damage under the PLA must involve “physical damage” to the property, not lost customers, sales, revenue, profit, income, etc. Finally, Defendant asserts that the alleged “physical/emotional/psychological” injury claimed by Batchelor does not result from her use of the products, but rather from the loss of the Customer Plaintiffs as patrons of Emine nce. Therefore, Defendant argues, because Batchelor has not identified any law to suggest that a plaintiff may assert a claim under the PLA for emotional harm in the absence of any direct, physical harm to her caused by use of the product nor does her claim comply with the Defendants do not presently move to dismiss Counts I and II of Plaintiff’s Amended Complaint with respect to the Customer Plaintiffs. (See Def. Opp. Br. at 5; FN 2). requirements under NJ law if her alleged injury stems from the injury to the Customer Plainti ffs, Counts I and TI must be dismissed. Plaintiffs respond to Defendants contention by citing to case law for the proposition that a plaintiff may sue for defective product design and/or failure to warn that results in proper ty damage, other than damage to the product itself. Plaintiffs contend that they are not suing for the lost value of the product itself nor the lost monies used to buy the product, but for the “uniqu e property damage” to the business Batchelor owns and for the personal physical injurie s Batchelor suffered. As the Court held in its previous Opinion, a plaintiff must allege “personal physic al injury” in order to sue for economic loss under the PLA. Moreover, the Court also held that none of the damages alleged by Plaintiffs are a result of the “physical damages done to Batche lor’ s property. Despite their chance to amend, Plaintiffs have stilled failed to sufficiently allege a personal physical injury suffered by Batchelor and Eminence and actual physic al damage to Batchelor’s property. Moreover, the Court finds that even if Batchelor or Emine nce is trying to base her claim on the physical injury claimed by the Customer Plaintiff, this claim still fails because Batchelor and Eminence have failed to allege any of the required elemen ts for negligent infliction of emotional distress as articulated by the court in Portee. Therefore, Counts I and II are dismissed with prejudice as to Plaintiffs Batchelor and Eminence. C. Ascertainable Loss and Causation under the CFA a. Ascertainable Loss To state a claim of under the CFA, a plaintiff must allege that “the defend ant engaged in an unlawful practice that caused an ascertainable loss to the plaintiff.” Freder ico v. Home Depot, 507 F.3d 188, 202 (3d Cir. 2007) (citing Cox v. Sears Roebuck & Co., 138 N.J. 2 (1994) ). Though the CFA has a broad scope, a plaintiff cannot recast a viable products liability claim as a fraud claim under the CFA. Sinclair, 195 N.J. at 65-66 (“claims for harm caused by produc a t are governed by the PLA irrespective of the theory underlying the claim... [Djespite the broad reach we give the CFA, the PLA is paramount when the underlying claim is one for harm caused by a product”). To establish ascertainable loss, a plaintiff “must suffer a definite, certain and measurable loss, rather than one that is merely theoretical.” Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009); see also Shelton v. Rest..com Inc., 543 F. App’x 168, 170 (3d Cir. 2013) (explaining that plaintiffs must allege a “measurable loss” in order to survive a motion to dismiss). A plaintiff must assert facts that show “either an out-of-pocket loss or a demon stration of loss in value.” Dist. 1]99P Health and Weifare Plan v. Janssen, L.P., 784 F.Supp.2d 508, 530 (D.N.J. 2011). Furthermore, claims under the CFA are held to the higher pleading standa rd of Rule 9(b) of the Federal Rules of Civil Procedure. See Frederico, 507 F.3d at 200. Defendant argues that Batchelor and Eminence’s claim under the CFA fails because both have not properly pled ascertainable loss. Specifically, Defendant contends that Plainti ff has improperly pled that the alleged losses “where proximately cause [sic] by the use and consumption,” not the purchase of the product. Moreover, Defendant asserts that Plainti ffs have failed to offer facts to establish the alleged economic loss with sufficient particu larity, including the date when the Customer Plaintiffs stopped going to Eminence, how often they frequented Eminence, etc. Plaintiffs responds to Defendant’s argument by stating that they have suffici ently pled ascertainable loss in the Amended Complaint so as to give Defendant fair notice of the claim. Plaintiff cites to case law for the proposition that a plaintiff need only set forth sufficient facts that could be developed through discovery, which Plaintiffs contend they have done in the Amended Complaint. Here, Plaintiffs again fail to plead the second element of a CFA claim with particu larity. They allege that: That as a direct and proximate result of the foregoing, Plaintiffs [Batchelor] and [Eminence] sustained and suffered and continue to sustain and suffer ascertainable economic/monetary loss in value that exceeds $150,000.00 including but not limited to: the cost of buying Defendants’ defective product’ the loss of [Customer Plaintiffs] as clients/customers and the weekly, monthly and yearly revenue derived from said Plaintiff customers, the costs of the free hair services including free weaves, free deep conditioning and other free corrective hair services Plaintiffs [Batchelor] and [Eminence] provided to [Customer Plaintiffs] for the physical damage to their respective hair and the loss of other clients and potential clients as a direct and proximate result of the damage to Plaintiffs [Batchelor] and [Eminence]’s damaged reputation and business reputation as hair stylist and hair salon directly and proximately caused by the use and consumption of Defendants’ defective product herein and/or employment of their methods, acts, practices andJor omissions set forth and alleged herein. (AC at ¶ 87). Though their Complaint alleges that the customer Plaintiffs stopped frequenting Eminence Hair Design once they were injured by Defendants’ product, it does not contain facts setting forth the alleged economic loss with particularity, as required under the higher pleading standard of Federal Rule of Civil Procedure 9(b) and as instructed by the Court in its previous Opinion. For example, it does not allege the date when the customers stopped going to Batchelor’s hair salon, how much money they spent there, whether Batchelor herself suffere d economic loss or if it was suffered by her business, or facts that demonstrate either an out-ofpocket loss or a demonstration of loss in value. Because they have not alleged an ascertainable loss, Batchelor and Eminence have failed to plead a cause of action under the CFA. Thus, Count Ill of the Complaint is dismis sed with prejudice as to Batchelor and Eminence. 4 D. Breach of Express Warranty In order to establish a claim for breach of express warranty in New Jersey, a plaintiff must allege: “(1) that [the defendants] made an affirmation, promise or description about the produc t; (2) that this affirmation, promise, or description became part of the basis of the bargain for the product; and (3) that the product ultimately did not conform to the affirmation, promis e or description.” Snyder v. Farnam Companies, Inc., 792 F.Supp.2d 712, 721 (D.N.J. 2011) (citatio ns omitted). Defendant argues that the Breach of Express Warranty should be dismissed as to the Customer Plaintiffs because nowhere in the Amended Complaint do Plaintiffs assert that the Customer Plaintiffs bought the Product. The Court Agrees. Therefore, Count IV is dismis sed with prejudice as to the Customer Plaintiffs. Moreover, Defendant contends that the Claim should also be dismissed as to Plainti ffs Batchelor and Eminence because although the Amended Complaint alleges that Batchelor purchased the Product, it does not allege in what capacity Batchelor or Emine nce bought the Product. Here, Plaintiff has sufficiently alleges that “[Batchelor] purchased on behalf of her company, [Eminence], Defendants’ [Product]...” (AC at 110). This allegation is too ambiguous. ¶ Despite the Court’s instruction in its previous Opinion, Plaintiffs have failed to suffici ently allege To state a claim under the Consumer Fraud Act, Plaintiffs must allege sufficient facts to demonstrate: (1) unlawful conduct; (2) an ascertainable loss; and (3) a causal relationship between the unlawful conduct and the ascertainable loss. Smajlaj v. campbell Soup Co., 782 F. Supp. 2d 84, 97 (D.N.J. 2011). Because the Court dismisses Plaintiff’s CFA claim for failure to allege ascertainable loss, the Court declines to address whether Plaintiff’s properly alleged the element of causation under the CFA in this Opinion. who bought the Product, in what capacity it was bought, or whose funds were used to buy the product. Plaintiffs also fail to address this ambiguity in their Opposition Brief, despite Defendant’s contention in support of the motion. The Court finds that Plaintiffs Batchelor and Eminence have not sufficiently alleged a Breach of Express Warranty claim. Therefore, Defendants motion to dismiss the Breach of Express Warranty against Plaintiffs Batchelor and Eminence is granted. Count IV as to Plaintiffs Batchelor and Eminence is dismissed with prejudice. E. Punitive Damages Under the PLA The PLA generally prohibits the award of punitive damages. It states that: Punitive damages shall not be awarded if a drug or device. which caused the claimant’s harm was subject to premarket approval or licensure by the federal Food and Drug Administration under the “Federal Food, Drug, and Cosmetic Act,” 52 Stat. 1040, 21 U.S.C. § 301 et seq. or the “Public Health Service Act,” 58 Stat. 682, 42 U.S.C. §201 et seq. and was approved or licensed; or is generally recognized as safe and effective pursuant to conditions established by the Food and Drug Administration and applicable regulations, including packaging and labeling regulations. . . N.J.S.A. 2A:58C—5(c). The statute contains one exception. That exception permits a plainti ff to seek punitive damages “where the product manufacturer knowingly withheld or misrepresente d information required to be submitted under the [FDA’s] regulations.” Id. Plaintiffs, howev er, have once again, not asserted any facts indicating or raising the reasonable inference that Defend ants knowingly withheld from or misrepresented information to the FDA, or that Defendant’s Produc t was required to be submitted under the FDA’s regulations. Though Plaintiffs argue otherw ise in their opposition brief, they once again do not cite to any supporting facts alleged in the Amended Complaint, as previously instructed by the Court in its previous Opinion. (P1. Br., 37-39.) Therefore, Count V is dismissed with prejudice. IV. CONCLUSION For the reasons set forth above, Defendant’s motion to dismiss [CMIECF No. 25] is granted. Counts I and II are dismissed with prejudice as to Plaintiffs Batchelor and Emine nce. Count III is dismissed with prejudice as to Plaintiffs Batchelor Eminence. Count VI dismis is sed with prejudice as to all Plaintiffs. Count V is dismissed with prejudice as to all Plainti ffs. An appropriate Order accompanies this Opinion. / - Dated: November L’ 2014 7Z Jose/t/Linares United States District Judge
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