Del Fierro v. Pepsico Intern.
| Citation | 897 F. Supp. 59 |
| Decision Date | 29 August 1995 |
| Docket Number | No. 94 CV 5780.,94 CV 5780. |
| Parties | Vicente DEL FIERRO Jr., for himself and in behalf of Coalition 349 Inc., Plaintiff, v. PEPSICO INTERNATIONAL, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
Antonio M. Flores, Jamaica Estates, NY, for plaintiff.
Jones, Day, Reavis & Pogue (Chester Hinshaw, Patricia Villareal, of counsel), Dallas, TX and (Kenneth Puhala, of counsel), New York City, for defendant.
Plaintiff, a Philippine resident and citizen, brings this diversity suit on behalf of himself and a consumer group he heads in the Philippines against PepsiCo Inc., incorrectly sued as "PepsiCo International" ("PepsiCo"), alleging breach of contract in connection with a promotional "instant-cash" game conducted by PepsiCo in the Philippines.
PepsiCo moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1), (2) and (6), for lack of subject matter jurisdiction, standing, and personal jurisdiction. In the alternative, PepsiCo asks the court to decline jurisdiction over a foreign class.
The complaint alleges, in substance, the following.
In approximately February of 1992 Pepsi-Co, with the assistance of an "international promotions consultant" and a New York advertising firm and through its Philippine bottler, launched the "Number Fever Game," a promotion directed at consumers in the Philippines.
The Number Fever Game offered consumers the chance to win instant cash prizes. Plaintiff says that, according to the publicized rules, the inside of each Pepsi bottle cap was marked with a three-digit number and a potential prize amount, ranging from one thousand Pesos (P1,000) to one million Pesos (P1,000,000). During the period that the game ran, the exchange rate was thirty Pesos to one U.S. dollar. Each day of the game, PepsiCo would announce a new winning number. A person who had a bottle cap with the same three-digit number as the one announced would win whatever prize amount was marked on that cap.
On May 22, 1992 PepsiCo announced that the winning number was 349. Because of an error, far more consumers than intended or anticipated by PepsiCo held bottle caps containing the number 349 and listing various cash prizes.
PepsiCo refused to honor the bottle caps printed with "349," despite consumers' attempts to claim their prizes. PepsiCo says predetermined security codes were also printed under each bottle cap, and that PepsiCo used that code to establish the true winners. Plaintiff says the rules did not mention the matching security code as a precondition to winning.
Plaintiff says the Number Fever Game was a contract between PepsiCo and all participating consumers, and PepsiCo breached that contract by refusing to redeem the "winning" bottle caps.
Plaintiff Vicente Del Fierro Jr., who holds at least one bottle cap, sues on behalf of himself and a consumer group called "Coalition 349." Plaintiff is president of Coalition 349 and says the group is comprised of "several thousand of winners of Pepsi's `Number Fever Game.'" He seeks $400,000,000 in actual damages, $1,000,000 in "moral and exemplary" damages, and attorneys fees and costs.
The affidavit of Alexander Poblador, Philippine counsel for PepsiCo, states the following additional facts relevant to this motion.
PepsiCo Inc.-Philippine Branch ("PepsiCo-Philippines") is PepsiCo's office in the Philippines. Pepsi-Cola Far East Trade Development Co., Inc. ("PepsiCo Far East"), PepsiCo's concentrate supplier, and Pepsi-Cola Products Philippines, Inc. ("PepsiCo Products"), PepsiCo's Philippine bottler, are Philippine corporations. Poblador Aff. in Supp. of Mot. to Dismiss, ¶ 4.
Both PepsiCo-Philippines and PepsiCo Products developed the Number Fever Game, with the assistance of a New York advertising agency. Before implementing the promotion they received approval from the Department of Trade and Industry, a Philippine government agency regulating sales promotions, and from the Advertising Board of the Philippines. Poblador Aff. ¶¶ 5-7.
A consulting firm in Mexico developed the plan for selecting and placing non-winning and winning numbers under the bottle caps, and PepsiCo says that it was an error by that firm that caused so many caps to be mistakenly marked with the winning number 349. Poblador Aff. ¶ 9.
On a motion to dismiss, plaintiff bears the burden of making a prima facie showing that the court has subject matter jurisdiction. See, e.g., Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir.1994); Pariente v. Scott Meredith Literary Agency, Inc., 771 F.Supp. 609, 613 (S.D.N.Y.1991). PepsiCo says plaintiff has not established diversity jurisdiction under 28 U.S.C. § 1332.
The complaint adequately alleges diversity of citizenship. Plaintiff is a Philippine citizen and resident, and PepsiCo is incorporated and has its principal place of business in the United States. 28 U.S.C. § 1332. But that section also requires that the amount in controversy exceed $50,000. Id.
Plaintiff's complaint purports to bring this action "for himself and in behalf of Coalition 349" and alleges that the claims of members of Coalition 349 "total more or less $400,000,000." Nevertheless, this allegation does not satisfy the amount in controversy requirement for several reasons.
Plaintiff has no standing to assert claims on behalf of Coalition 349 or its individual members. As the Supreme Court has concluded, "the plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties." Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975). See also, In re Application of Dow Jones & Co., 842 F.2d 603, 606 (2d Cir.1988), cert. denied, 488 U.S. 946, 109 S.Ct. 377, 102 L.Ed.2d 365 (1988).
The present complaint asserts only plaintiff's individual claim, and the court reviews that claim to determine if it meets the $50,000 amount in controversy requirement.
The complaint does not allege the value of plaintiff's own claim. PepsiCo notes that, according to one newspaper article, plaintiff "holds a 1-million-peso bottle cap." See Aff. of Chester J. Hinshaw in Supp. of Mot. to Dismiss, Exh. B. PepsiCo says one million Pesos were worth $41,528 on December 16, 1994, the day plaintiff filed this action, see Zacharia v. Harbor Island Spa, Inc., 684 F.2d 199, 202 (2d Cir.1982) ().
But according to plaintiff's counsel, plaintiff "holds 30 bottle caps in his own name worth P1,000,000 each for a total value of P30,000,000, or $1,245,840." See Pl.'s Mem. in Opp. to Mot. to Dismiss.
PepsiCo submits an earlier affidavit from plaintiff, in which he stated that "these 30 caps were previously owned by my children and some were given to me by friends and relatives." See Hinshaw Reply Aff., Exh. A (Del Fierro Aff., ¶ 6). Under Philippine law plaintiff does not own the right to commence or maintain an action based on bottle caps given to him, unless the transferors of those caps have assigned the right of action through public, properly notarized instruments. See Reply Aff. of Alexander J. Poblador in Supp. of Mot. to Dismiss, ¶ 4 ().
PepsiCo thus argues, and the court agrees, that without producing evidence of properly executed assignments plaintiff cannot count caps given to him after the number "349" was selected to satisfy the amount in controversy requirement.
Plaintiff's complaint also seeks moral and exemplary damages in the amount of $1,000,000, apparently on behalf of plaintiff and the "several thousands" of Coalition 349 members. The court cannot determine with certainty what amount of punitive damages plaintiff seeks on his own behalf. But even assuming that there are only 2,000 members of Coalition 349 (the lowest possible estimate of the "several thousands" claimed by plaintiff), the court concludes that plaintiff's punitive damages claim would amount to no more than $500 for each member. Thus plaintiff has not established that his claim meets the $50,000 jurisdictional minimum.
Plaintiff's counsel says that he intended to bring this action on behalf of a class of bottle cap holders in the Philippines, and that he forgot to check the class action box on the cover sheet. But the complaint does not mention that it is intended as a class action, nor does it allege the requisite elements of a class under Federal Rule of Civil Procedure 23. In particular, the complaint fails to allege that each member of the purported class meets the amount in controversy requirement.
See Supp.Aff. of Alexander J. Poblador.
The court assumes that plaintiff's counsel would not knowingly take part in a fraud on the court. The court nevertheless is wary about the ability of counsel, who is located in the United States, to monitor properly the activities of Coalition 349 and to make sufficient pre-filing inquiries so as to avoid the risk of sanctions under Federal Rule of Civil Procedure 11.
The court could perhaps grant plaintiff leave to amend the complaint to attempt to state a class action, and require additional forms of...
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Ilusorio v. Ilusorio-Bildner
...in forum non conveniens rulings, have concluded that the Philippines is an adequate alternative forum. See, e.g., Del Fierro v. Pepsico Int'l, 897 F.Supp. 59 (E.D.N.Y.1995); Transunion Corp. v. Pepsico, Inc., 640 F.Supp. 1211 (S.D.N.Y. 1986), aff'd, 811 F.2d 127 (2d Cir.1987); Cruz v. Marit......