Berger v. L.L. Bean, Inc.

• Decision Date: 28 December 2018
• Docket Number: 18-cv-1280 (ENV) (SMG)
• Parties: Anita BERGER, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. L.L. BEAN, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

351 F.Supp.3d 256

Anita BERGER, Individually and on Behalf of All Others Similarly Situated, Plaintiff,

v.L.L. BEAN, INC., Defendant.

18-cv-1280 (ENV) (SMG)

United States District Court, E.D. New York.

Signed December 28, 2018

Correy Ann Kamin, Janine Lee Pollack, Wolf Haldenstein Adler Freeman & Herz LLP, Michael Milton Liskow, The Sultzer Law Group P.C., New York, NY, Alen Richard Beerman, Roseman, Beerman & Beerman, LLP, Lake Success, NY, Erich P. Schork, Pro Hac Vice, Anthony L. Parkhill, Pro Hac Vice, Barnow and Associates, P.C., Chicago, IL, for Plaintiff.

Evan Glassman, Steptoe & Johnson LLP, New York, NY, Anthony J. Anscombe, Pro Hac Vice, Daniel Raymond, Pro Hac Vice, Darlene Alt, Pro Hac Vice, Steptoe & Johnson LLP, Mary E. Buckley, Sedgwick LLP, Chicago, IL, Meegan Brooks, Pro Hac Vice, Stephanie Sheridan, Pro Hac Vice, Steptoe & Johnson LLP, San Francisco, CA, for Defendant.

MEMORANDUM & ORDER

VITALIANO, D.J.

Plaintiff Anita Berger, individually and on behalf of all others similarly situated, has filed a putative class action complaint, demanding damages and equitable relief for harm supposedly arising out of changes in L.L. Bean's "satisfaction guarantee" policy. Compl. (ECF No. 1). On behalf of a nationwide class, consisting of herself and all other "persons in the United States and its territories who purchased, other than for resale, products from L.L. Bean prior to February 9, 2018," id. ¶¶ 8, 23, she alleges (1) breach of contract, (2) unjust enrichment, and (3) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. Compl. ¶¶ 32-42, 61-75. Separately, she asserts claims on behalf of a New York subclass, consisting of all persons in the State of New York who purchased, other than for resale, products from L.L. Bean prior to February 9, 2018. On behalf of the New York subclass, she alleges (1) violation of New York General Business Law § 349 and (2) violation of New York General Business Law § 350. Compl. ¶¶ 43-60. L.L. Bean has moved (1) to dismiss this action for lack of subject matter jurisdiction and failure to state a claim, and (2) to strike the class allegations. For reasons that will be discussed below, L.L. Bean's motion to dismiss is granted because this Court lacks subject matter jurisdiction. Lacking jurisdiction, the Court cannot and does not reach the motion to dismiss for failure to state a claim or the motion to strike.

Background

For much of its history, L.L. Bean provided a "100% Satisfaction Guarantee," id. ¶ 15 (quoting L.L. Bean Catalog, Christmas 2013), on its products, promising that "if something's not working or fitting or standing up to its task or lasting as long as you think it should, [the company would] take it back," id. ¶ 11 (quoting Returns and Exchanges , L.L. Bean (Nov. 28, 2016), https://www.llbean.com/llb/shop/510624 [https://web.archive.org/web/20161128235134/https://www.llbean.com/llb/shop/510624] ("Old Policy") ). It advertised that this guarantee had "[n]o [c]onditions" and "[n]o [e]nd [d]ate." Compl. ¶ 15 (quoting L.L. Bean Catalog, Christmas 2013).

Then came the change that sent plaintiff sprinting for the courthouse. On February 9, 2018, L.L. Bean modified its satisfaction guarantee policy. It announced that customers who purchase L.L. Bean products on or after February 9, 2018 and who "are not 100% satisfied ... may return [the products] within one year of purchase for a refund. After one year, [L.L. Bean] will consider any items for return that are defective due to materials or craftsmanship." Id. ¶ 19 (emphasis added) (quoting L.L. Bean, https://www.llbean.com/shop/513705). Going forward, L.L. Bean announced, its lifetime guarantee would now be largely limited to one year.

However, this change in L.L. Bean's guarantee was not retroactive. Although plaintiff alleges that certain provisions of the guarantee were changed retroactively, she does not dispute that the guarantee applicable to her purchases remains of lifetime duration. Rather, she alleges that the guarantee was changed retroactively only insofar as "[a]ll returns, including returns of Prior Purchases, are now subject to a mandatory proof of purchase requirement and various Special Conditions unilaterally declared by Defendant." Pl.'s Opp'n to Def.'s Mot. to Dismiss at 1 (ECF No. 28-10) ("Opp'n"). That is, if plaintiff wishes to return a purchase made prior to the change in policy, she must produce proof of purchase. Moreover, as relevant to plaintiff's action, the new special conditions include the requirement that "products not be ‘damaged by misuse, abuse, improper care or negligence, or accidents (including pet damage)’ or suffer from ‘excessive wear and tear.’ " Id. at 3 (quoting Compl. ¶ 19).

Berger is a long-time L.L. Bean customer who, on November 16, 2016, purchased an "Ultrawarm Coat" from the company. Compl. ¶ 8. On February 28, 2018, less than three weeks after the announced policy change, plaintiff filed the instant complaint, despite the fact that she had never tried to return her jacket and had no intention of doing so. On June 11, 2018, the parties filed their fully briefed motion. In the intervening time, courts in the Northern District of Illinois, Bondi v. L.L. Bean, Inc. , No. 18-cv-1101 (RWG), 2018 WL 3157712 (N.D. Ill. June 28, 2018), and the Northern District of California, Shirley v. L.L. Bean, Inc. , No. 18-cv-2641 (YGR) (N.D. Cal. Aug. 15, 2018), have dismissed similar actions.

Legal Standard

A federal court must dismiss a case for lack of subject matter jurisdiction when the court "lacks the statutory or constitutional power to adjudicate it." Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.A.R.L. , 790 F.3d 411, 417 (2d Cir. 2015) (quoting Makarova v. United States , 201 F.3d 110, 113 (2d Cir. 2000) ). The burden of establishing federal subject matter jurisdiction rests on the shoulders of the party invoking jurisdiction, not the party challenging it, and proof of jurisdiction must be by a preponderance of the evidence. See, e.g. , Augienello v. FDIC , 310 F.Supp.2d 582, 587-88 (S.D.N.Y. 2004). Although a court "must accept as true all material factual allegations in the complaint," it must not draw inferences favorable to the party asserting jurisdiction, with respect to the question of jurisdiction, J.S. ex rel. N.S. v. Attica Cent. Schs. , 386 F.3d 107, 110 (2d Cir. 2004), and it "may resolve disputed factual issues by reference to evidence outside the pleadings," Augienello , 310 F.Supp.2d at 588. Moreover, "no presumptive truthfulness attaches to the complaint's jurisdictional allegations." Id. (quoting Guadagno v. Wallack Ader Levithan Assocs. , 932 F.Supp. 94, 95 (S.D.N.Y. 1996) ).

Discussion

I. Federal Jurisdiction

Because the Court has no power to address the merits of a case in the absence of subject matter jurisdiction, defendant's 12(b)(1) motion must be decided before reaching its 12(b)(6) or 12(f) motion. See Polera v. Bd. of Educ. , 288 F.3d 478, 481 (2d Cir. 2002). In adjudicating this fundamental question, it must be kept in mind that, despite the supremacy of federal law, federal courts, unlike their state brethren, are courts of limited subject matter jurisdiction. Durant, Nichols, Houston, Hodgson & Cortese-Costa P.C. v. Dupont , 565 F.3d 56, 62 (2d Cir. 2009). "A federal court's entertaining a case that is not within its subject matter jurisdiction is no mere technical violation; it is nothing less than an unconstitutional usurpation of state judicial power." Atanasio v. O'Neill , 235 F.Supp.3d 422, 424 (E.D.N.Y. 2017) (citations omitted); see also Vera v. Republic of Cuba , 867 F.3d 310, 316 (2d Cir. 2017) ("[S]ubject matter jurisdiction ‘functions as a restriction on federal power.’ " (quoting Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee , 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982) ) ).

Consequently, given their limited role in the judicial system established by our Constitution, federal courts have a continuing and independent duty to ensure that they possess subject matter jurisdiction, and must dismiss a case when they find subject matter jurisdiction lacking. Although L.L. Bean has trained its fire on this core threshold issue, had it not, the Court, indeed, would be obligated to consider it. See Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action."); Wachovia Bank, N.A. v. Schmidt , 546 U.S. 303, 316, 126 S.Ct. 941, 163 L.Ed.2d 797 (2006) ("Subject-matter jurisdiction ... must be considered by the court on its own motion, even if no party raises an objection."); Durant , 565 F.3d at 62 (citing Louisville & Nashville R.R. v. Mottley , 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908) ).

II. Standing

a. Article III Requirements

Article III of the Constitution "limits the ‘judicial power’ of the United States to the resolution of ‘cases’ and ‘controversies.’ " Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, Inc. , 454 U.S. 464, 471, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). The Supreme Court has interpreted this grant of power to require that a plaintiff have standing to sue and, further, that the requirements of standing continue to be satisfied throughout the litigation from start to finish. Article III standing has three elements. Lujan v. Defs. of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). "First, the plaintiff must have suffered an ‘injury in fact’ – an invasion of a legally protected interest which is (a) concrete and particularized and (b) ‘actual or imminent, not "conjectural" or "hypothetical.’ " " Id. (citations omitted). In its most recent restatement of standing doctrine, Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016), the Supreme Court clarified the concreteness requirement. Id. at 1547-50. "Second, there must be a causal connection between the injury and the conduct complained of." Lujan , 504 U.S. at 560, 112...