In re Processed Egg Prods. Antitrust Litig.

• Decision Date: 19 March 2013
• Docket Number: MDL No. 2002.,No. 08–md–02002.,08–md–02002.
• Citation: 931 F.Supp.2d 654
• Parties: In re: PROCESSED EGG PRODUCTS ANTITRUST LITIGATION. This Document Applies to: All Indirect Purchaser Plaintiff Actions.
• Court: U.S. District Court — Eastern District of Pennsylvania

931 F.Supp.2d 654

In re: PROCESSED EGG PRODUCTS ANTITRUST LITIGATION. This Document Applies to: All Indirect Purchaser Plaintiff Actions.

MDL No. 2002.

No. 08–md–02002.

United States District Court, E.D. Pennsylvania.

March 19, 2013.

Sandra A. Jeskie, Duane, Morris LLP, Philadelphia, PA, pro se.

MEMORANDUM

GENE E.K. PRATTER, District Judge.

I. Introduction

This multidistrict litigation involves allegations that defendant egg producers and trade groups conspired to restrict the supply of eggs in this country. After the Defendants successfully moved to partially dismiss the Second Amended Complaint to the extent the claims for damages fell outside the applicable statutes of limitations, the Indirect Purchaser Plaintiffs filed Third and Fourth Amended Consolidated Class Action Complaints. Predictably, the Defendants now seek to partially dismiss the Plaintiffs' Fourth Amended Complaint (hereinafter, the “IPFAC”). Specifically, the Defendants move to partially dismiss 41 state claims invoking the laws of 21 different jurisdictions.¹ For the following reasons, the Court grants the motion with prejudice.

II. Background, Factual Allegations, and Legal Standards

The background of this litigation and the core factual allegations contained in the IPFAC were set forth at length in In re Processed Egg Products Antitrust Litigation, 851 F.Supp.2d 867 (E.D.Pa.2012), an opinion that also discussed the applicable legal standards for reviewing a motion to dismiss in this case, including the relevance of the Erie doctrine's precepts to the Court's consideration of the Plaintiffs' state law claims, as well as Federal Rules of Civil Procedure 8, 9(b), and 12(b)(6). Accordingly, the Court will not repeat that legal framework in this Memorandum except to incorporate its prior opinion by reference here.

III. Legal Discussion

In their briefing, the Defendants summarize the relevant limitations periods governing the 41 state claims. The Plaintiffs do not dispute the Defendants' representations as to the lengths of the various statutes of limitations. Moreover, the Plaintiffs do not contest the Defendants' argument that these statutes of limitations partially bar their claims for damages absent some sort of equitable tolling. Instead, the Plaintiffs argue that they sufficiently allege facts that permit them to rely on two doctrines. First, the Plaintiffs contend that they have pled facts which plausibly suggest that the discovery rules of 16 states should toll their claims arising under the laws those jurisdictions.² Second, the Plaintiffs argue that they may rely on the fraudulent concealment doctrines of 17 states.³ The Court considers each of these doctrines in turn.

A. The Discovery Rule

The Court will first discuss whether the IPFAC pleads sufficient facts to permit the Plaintiffs to rely on the 16 discovery rules arguably at issue in this case. As a general matter, the discovery rule “postpones the accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action.” 51 Am.Jur.2d Limitation of Actions § 158 (2012). Therefore, the rule tends to “operate [ ] ... when a plaintiff does not know, or could not through the exercise of reasonable diligence know, of the wrong [.]” Id. However, in deciding whether the Plaintiffs adequately plead facts to invoke the discovery rule, the Court must undertake a state-by-state analysis and “ ‘apply the substantive law of the state whose law governs the action.’ ” Egg Prods., 851 F.Supp.2d at 878 n. 8 (quoting Spence v. ESAB Grp., Inc., 623 F.3d 212, 217 (3d Cir.2010)). The parties appear to recognize this requirement, given that they devote nearly 150 pages in their briefs to discussing the discovery rules and other equitable tolling doctrines of various states.

While the parties agree that the Erie doctrine applies in this matter, they differ as to the pleading standard that the Plaintiffs must satisfy in order to rely on the discovery rule. Specifically, the Plaintiffs contend that Rule 8 of the Federal Rules of Civil Procedure “is applicable to allegations necessary to invoke the relevant states' discovery rules,” see Docket No. 750 at 29, while the Defendants argue that Rule 9(b) sets forth the appropriate pleading standard, see Docket No. 756 at 10. However, the Court need not resolve this dispute because Rule 9(b) is relaxed even if it does apply.

Under the Federal Rules of Civil Procedure, “Rule 9(b) is relaxed concerning pleading ‘conditions of a person's mind.’ ” In re Processed Egg Prods. Antitrust Litig., No. 08–md–2002, 2011 WL 5980001, at *11 (E.D.Pa. Nov. 30, 2011) (quoting Fed.R.Civ.P. 9(b)). As stated above, the discovery rule generally turns on whether a plaintiff discovered or should have discovered her cause of action. To the extent that the specific discovery rules discussed infra reflect this general understanding, they essentially require the Plaintiffs to allege that they “ ‘were not aware, nor should they have been aware, of the facts supporting their claim until a time within the limitations period measured backwards from when the plaintiffs filed their complaint.’ ” Id. at *3 (quoting Forbes v. Eagleson, 228 F.3d 471, 487 (3d Cir.2000)). The Court has previously applied a relaxed Rule 9(b) standard to determine the sufficiency of such allegations, see id. at *11, and finds that a relaxed standard should apply here as well. However, the strictures of Rule 8 still apply to the IPFAC, and its factual allegations must be such as to allow the Court to reasonably infer that the Plaintiffs may rely on the discovery rules they cite.

1. Arizona

The Arizona discovery rule establishes that “a plaintiff's cause of action does not accrue until the plaintiff knows or, in the exercise of reasonable diligence, should know the facts underlying the [claim.]” Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of Am., 182 Ariz. 586, 898 P.2d 964, 966 (1995) (emphasis added); see also Elm Ret. Ctr., LP v. Callaway, 226 Ariz. 287, 246 P.3d 938, 941 (2010) (“The discovery rule tolls limitations untilthe plaintiff possesses a minimum knowledge sufficient to recognize that a wrong occurred and caused injury.”) (citations and quotations omitted) (emphasis added). Put differently—and in the Plaintiffs' own words—the discovery rule only tolls the statute of limitations until “a plaintiff knows, or in the exercise of reasonable diligence should have known, of the defendants' wrongdoing.” See Docket No. 750 at 49.

The critical word in the foregoing sentences is “until.” The discovery rule is not a tool that plaintiffs may employ at-will to evade the statute of limitations. Instead, it is a doctrine with a limited reach, and its tolling benefit ends once a plaintiff discovers her injury. Therefore, a plaintiff cannot plausibly suggest that the discovery rule applies to her claim unless she alleges the date on which she learned of her injury. A complaint that lacks such an allegation offers mere speculation as to the applicability of the discovery rule, and fails to suggest plausibly that the benefit of the rule extends to the plaintiff. See Zavala v. Wal Mart Stores, Inc., 691 F.3d 527, 542 (3d Cir.2012) (“Even on a motion to dismiss, we are not required to credit mere speculation.”); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (a complaint must include factual allegations that “raise a right to relief above the speculative level”).

The necessity of alleging a specific tolling date should not surprise the Plaintiffs, as the Court extensively addressed this issue some 14 months ago in partially dismissing the direct purchaser plaintiffs' complaint. See Egg Prods., 2011 WL 5980001, at *8–11.⁴ In its prior opinion, the Court noted that tolling under the fraudulent concealment doctrine, like Arizona's discovery rule, “lasts only ‘until the plaintiff knows, or should reasonably be expected to know, in the exercise of due diligence, the concealed facts supporting the cause of action.’ ” Id. at *9 (emphasis in original) (quoting Forbes, 228 F.3d at 487). The Court then held that the direct purchaser plaintiffs failed to allege a specific tolling date, and that they thus “failed to plausibly suggest, much less actually plead, that they did not know or could not have reasonably known, in the exercise of due diligence, of the facts supporting their claim” until a time within the limitations period. Id. at *11.

Additionally, other courts have required a plaintiff to allege a tolling date in order to rely on the discovery rule. In Fox v. Ethicon Endo–Surgery, Inc., 35 Cal.4th 797, 27 Cal.Rptr.3d 661, 110 P.3d 914 (2005), the California Supreme Court held that “[i]n order to rely on the discovery rule for delayed accrual of a cause of action, a plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show ... the time and manner of discovery” of his injury. Id. at 920–21 (citations and quotations omitted). Although California did not establish this pleading requirement under a federal Rule 8 analysis, its “time and manner of discovery” rule supports the view that a plaintiff must allege a specific tolling date in order to plausibly suggest that she did not learn of her claims until a time within the limitations period. See Training Inst., Inc. v. City of Chicago, 937 F.Supp. 743, 750–51 (N.D.Ill.1996) (holding that a plaintiff who attempts to rely on the discovery rule must plead the date she discovered her injury); Stewart Coach Indus., Inc. v. Moore, 512 F.Supp. 879, 886 (S.D.Ohio 1981) (“[T]he plaintiff who seeks to rely on the ‘discovery rule’ [must] affirmatively and particularly plead the date of discovery ... or face dismissal of the complaint.”); Powell v. Cooper, 603 N.W.2d 748, 1999 WL 516756, at *9, 1999 Wisc.App. LEXIS 794, at *1, 28 (Wis.Ct.App.1999) (holding that a plaintiff could not rely on the...