Montgomery v. Kraft Foods Global, Inc.

Decision Date16 May 2016
Docket NumberNo. 15–1283.,15–1283.
Citation822 F.3d 304
PartiesPamella MONTGOMERY, on behalf of herself and for the benefit of all with the common or general interest, any persons injured, and all others similarily situated, Plaintiff–Appellant, v. KRAFT FOODS GLOBAL, INC., a Delaware Corporation; Starbucks Corporation, a Washington Corporation, Defendants–Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

ARGUED: Timothy H. McCarthy, Jr., Okemos, Michigan, for Appellant. Aaron M. Panner, Kellogg, Huber, Hansen, Todd, Evans & Figel, Washington, D.C., for Appellees. ON BRIEF: Timothy H. McCarthy, Jr., Okemos, Michigan, for Appellant. Aaron M. Panner, Caitlin Hall, Kellogg, Huber, Hansen, Todd, Evans & Figel, Washington, D.C., Dean N. Panos, Thalia L. Myrianthopoulos, Jenner & Block LLP, Chicago, Illinois, for Appellees.

Before: BOGGS, SUTTON, and COOK, Circuit Judges.

OPINION

COOK, Circuit Judge.

Plaintiff Pamella Montgomery bought a Tassimo, a single-cup coffee brewer manufactured by Kraft Foods, expecting it to brew Starbucks coffee. After the purchase, however, she struggled to find Starbucks T–Discs—single–cup coffee pods compatible with the brewer. In fact, the Starbucks T–Disc supply eventually disappeared as Kraft's business relationship with Starbucks soured. Disappointed with her purchase, Montgomery sued Kraft and Starbucks (Defendants) on behalf of a class for violations of various Michigan laws. After dismissing several claims and denying class certification on the rest, the district court entered judgment in Montgomery's favor when she accepted Defendants' joint offer of judgment under Federal Rule of Civil Procedure 68. Montgomery now appeals the dismissal of her claims for breach of express and implied warranties, the denial of class certification on her consumer-protection claims, and the attorney's fees the district court awarded as part of the Rule 68 settlement. We AFFIRM the district court's dismissal of the warranty claims, DISMISS the class-certification appeal as moot, and AFFIRM the attorney's-fees award.

I.

Montgomery purchased a Tassimo from her local grocery store that bore a sticker reading: “Featuring Starbucks® Coffee.” But as Starbucks T–Discs became “increasingly difficult and [later] impossible to find,” she learned that Starbucks had announced its plan to terminate its distribution agreement with Kraft and that the two companies were embroiled in arbitration over the contract. See Kraft Foods Global, Inc. v. Starbucks Corp., 411 Fed.Appx. 428 (2d Cir.2011). In response, Montgomery sued both companies on behalf of a class for violation of the Michigan Consumer Protection Act (MCPA), innocent misrepresentation, breach of express and implied warranties, and breach of contract.

Defendants each moved to dismiss the complaint for failure to state a claim, and the district court, having first found the innocent misrepresentation claim abandoned, granted the motions as to the claims for breach of express warranties, breach of implied warranty, and breach of contract, but denied the motion as to several MCPA claims. Montgomery then requested class certification on those remaining claims, which the district court denied. Seeking a resolution—encouraged by the district courtDefendants submitted a joint Rule 68 offer of judgment, agreeing to pay MCPA statutory damages of $250, Mich. Comp. Laws § 445.911(2), plus reasonable attorney's fees and costs to be determined by the court. Montgomery accepted the offer of judgment, and requested $174,786.50 in attorney's fees plus $5,183.56 in costs. Viewing that amount as unreasonable, the district court instead ordered Defendants to pay Montgomery $6,767 in fees and costs. She appeals the dismissal of her warranty claims, the denial of class certification, and the attorney's-fees award.

II.
A. Jurisdiction over the Warranty–Claim Appeal

We first respond to Defendants' position that Montgomery's agreement to settle her individual consumer-protection claims divests this court of jurisdiction to consider her challenge to the interlocutory dismissal of her warranty claims. But a confession of judgment by defendants on fewer than all claims moots only the claims resolved in the plaintiff's favor by the agreed judgment; other issues remaining in the case may be appealed. See Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 333, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980) ; see also UAW v. Dana Corp., 697 F.2d 718, 721 (6th Cir.1983) (en banc) ([T]here are instances ‘in which one issue in a case has become moot, but the case as a whole remains alive because other issues have not become moot.’ (quoting Univ. of Texas v. Camenisch, 451 U.S. 390, 394, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981) )).

We read the record as showing that Montgomery settled only her individual consumer-protection claims. Defendants' Rule 68 offer of judgment reads:

[Defendants] offer to allow judgment to be taken against them under Plaintiff's First Amended Class Action Complaint and in favor of:
Plaintiff in the amount of $250.00, inclusive of all damages that may be assessed against Defendants under the Michigan Consumer Protection Act, M.C.L. § 445.911(2), plus reasonable attorneys' fees and costs actually incurred and attributable to the prosecution of Plaintiff's individual claims, as determined by the Court under applicable law.

Though Defendants now argue that the settlement merged all of Montgomery's claims, when responding to her attorney's-fees request at the district court, Defendants actually distinguished among them, noting that “the great majority of Plaintiff's claims were dismissed by the Court and that Montgomery “agreed to settle her remaining claims for $250.” Thus, because both parties viewed the offer as extinguishing only Montgomery's consumer-protection claims, we maintain jurisdiction over her appeal of the warranty claims' dismissal.

B. Dismissal of Warranty Claims

We review the district court's dismissal of Montgomery's warranty claims under Federal Rule of Civil Procedure 12(b)(6) de novo, looking for a “short and plain statement ... showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2) ; see also Ctr. for Bio–Ethical Reform, Inc. v. Napolitano, 648 F.3d 365, 369 (6th Cir.2011) (citing City of Monroe Emps. Ret. Sys. v. Bridgestone Corp., 399 F.3d 651, 664 (6th Cir.2005) ). The complaint “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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

Montgomery alleges that Defendants breached express warranties and the implied warranty of merchantability under the Michigan Uniform Commercial Code. Mich. Comp. Laws §§ 440.2313, 2314. We examine each claim in turn.

1. Express Warranty

Montgomery claims that Defendants made and breached several express warranties: (1) The Tassimo afforded customers the “present and continued availability” of compatible Starbucks T–Discs, (2) the Tassimo was “designed for use” with the Starbucks T–Discs, and (3) Starbucks T–Discs were “designed for use” with the Tassimo. Kraft moved to dismiss the express-warranty claim because Montgomery failed to plead that she was in privity of contract with Defendants, and Montgomery countered that, as a third-party beneficiary of the Kraft–Starbucks distribution agreement, she met the privity requirement. The district court rejected Montgomery's assertion of third-party-beneficiary status and dismissed the express-warranty claim against both Defendants on privity grounds.

None of Montgomery's arguments persuade us that the district court erred in its dismissal. Though the Michigan Supreme Court has yet to rule on the privity issue regarding express-warranty claims, a Michigan Court of Appeals concluded that, because an express warranty constitutes a specific contract term, “privity of contract is necessary for a remote purchaser to enforce a manufacturer's express warranty.” Heritage Res., Inc. v. Caterpillar Fin. Servs. Corp., 284 Mich.App. 617, 774 N.W.2d 332, 343 n. 12 (2009). [D]ecisions by ‘the Michigan Court of Appeals are binding authority where the Michigan Supreme Court has never addressed the issue decided therein.’ Berrington v. Wal–Mart Stores, Inc., 696 F.3d 604, 608 (6th Cir.2012) (quoting Morrison v. B. Braun Med., Inc., 663 F.3d 251, 257 n. 1 (6th Cir.2011) ).

Montgomery insists, however, that no privity requirement exists for express-warranty claims under Michigan law, relying on our statement in Pack v. Damon Corp., 434 F.3d 810, 814 (6th Cir.2006), that the Michigan Uniform Commercial Code “does not limit the extension of express warranties to direct sellers.” But Pack predated the Michigan Court of Appeals' Heritage decision, and we follow Heritage “until the Michigan Supreme Court or another panel of the Michigan Court of Appeals rules otherwise.” Wieczorek v. Volkswagenwerk, A.G., 731 F.2d 309, 310 (6th Cir.1984).

To properly plead a breach-of-express-warranty claim then, Montgomery needed to allege that she was in privity with Defendants. She didn't; her complaint acknowledged that she bought her Tassimo from a Fred Meijer grocery store, not directly from Defendants. And Montgomery's appeal abandons the third-party-beneficiary theory she pressed before the district court. See Dixon v. Ashcroft, 392 F.3d 212, 217 (6th Cir.2004) (citing Boyd v. Ford Motor Co., 948 F.2d 283, 284 (6th Cir.1991) ). Accordingly, we affirm the district court's dismissal of Montgomery's express-warranty claim.

2. Implied Warranty of Merchantability

Montgomery also claims that Defendants breached the implied warranty of merchantability. Under Michigan law, every seller warrants, among other things, that the sold goods (1) “are fit for the ordinary purposes for which [the] goods are used” and (2) “conform to the promises or affirmations...

To continue reading

Request your trial
26 cases
  • Tennessee v. U.S. Dep't of State
    • United States
    • U.S. District Court — Western District of Tennessee
    • 19 Marzo 2018
    ...capacity theory of standing, see Montgomery v. Kraft Foods Glob., Inc. , 2012 WL 6084167 at *6 (W.D. Mich. Dec. 6, 2012), aff'd , 822 F.3d 304 (6th Cir. 2016) ("The Court also notes that Plaintiff failed to specifically respond to Defendants' arguments regarding subsection (h) in either of ......
  • Starr v. VSL Pharm., Inc.
    • United States
    • U.S. District Court — District of Maryland
    • 28 Diciembre 2020
    ...that "the Michigan Supreme Court has yet to rule on the privity issue regarding express-warranty claims," Montgomery v. Kraft Foods Glob., Inc. , 822 F.3d 304, 308 (6th Cir. 2016), the Michigan Court of Appeals, the intermediate appellate court, has held that for a breach of express warrant......
  • Francis v. Gen. Motors, LLC
    • United States
    • U.S. District Court — Eastern District of Michigan
    • 30 Noviembre 2020
    ...Co. v. Air King Am., Inc. , No. 08-12263, 2009 WL 10680607, at *4 (E.D. Mich. Mar. 26, 2009) ); see also Montgomery v. Kraft Foods Glob., Inc. , 822 F.3d 304, 309 (6th Cir. 2016) ("Montgomery's claim for breach of the implied warranty of merchantability [under Michigan law] survives the .........
  • Chapman v. Gen. Motors LLC
    • United States
    • U.S. District Court — Eastern District of Michigan
    • 31 Marzo 2021
    ... ... 2295, 144 L.Ed.2d 715 (1999) ; Amchem Products, Inc. v. Windsor , 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d ... Ill. Feb. 18, 2020) ... MI Montgomery v. Kraft Foods Glob., No privity ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT