In re Riddell Concussion Reduction Litig.

• Decision Date: 03 August 2015
• Docket Number: Civil Action No. 13–7585 (JBS/JS).
• Citation: 121 F.Supp.3d 402
• Parties: In re RIDDELL CONCUSSION REDUCTION LITIGATION.
• Court: U.S. District Court — District of New Jersey

121 F.Supp.3d 402

In re RIDDELL CONCUSSION REDUCTION LITIGATION.

Civil Action No. 13–7585 (JBS/JS).

United States District Court, D. New Jersey.

Signed Aug. 3, 2015.

James E. Cecchi, Esq., Caroline F. Bartlett, Esq., Carella Byrne Cecchi Olstein Brody & Agnello, P.C., Roseland, NJ, Stephen A. Corr, Esq., Stark & Stark, Yardley, PA, for Plaintiffs Norma D. Thiel, Nicholas W. Farrell, Cahokia School District, Gustavo Galvan, Kenny King, Alliance Youth Sports Association, Douglas Aronson, and Denise Aronson.

Joseph A. Boyle, Esq., Michael Andrew Innes, Esq., Kelley Drye & Warren LLP Parsippany, NJ, for Defendants Riddell, Inc., Riddell Sports Group, Easton–Bell Sports, LLC, EB Sports Corporation, RBG Holdings Corporation, and All American Sports Corporation.

OPINION

SIMANDLE, Chief Judge:

I. INTRODUCTION

In these consolidated actions,¹ Plaintiffs maintain that Defendants Riddell, Inc., Riddell Sports Group, Easton–Bell Sports, LLC, EB Sports Corporation, RBG Holdings Corporation, and All American Sports Corporation (collectively, "Defendants" or "Riddell") marketed their football helmets based on allegedly false or misleading claims that the helmets were equipped with unique concussion reduction technology, and in some instances, that the helmets could reduce concussions by as much as 31%. According to Plaintiffs, Defendants' helmets are incapable of reducing the incidence of concussions compared to other football helmets on the market. Plaintiffs in this action thus contend that they were harmed by paying a $50 price premium for Riddell's helmets which offer no greater protection against concussions than other helmets.

The Court having dismissed their consolidated amended complaint, Plaintiffs filed a Second Amended Complaint ("SAC") to clarify the nature of their claims and to satisfy the heightened pleading standard applicable to their fraud-based claims. This action is before the Court upon Defendants' motion to dismiss the SAC. [Docket Item 50.] Defendants argue that the SAC further obfuscates Plaintiffs' claims, ignores the specificity requirements of Rule 9(b), Fed.R.Civ.P., and fundamentally fails to state plausible claims of consumer fraud.

For the reasons discussed below, the Court will grant in part and deny in part Defendants' motion to dismiss. The Court finds that Plaintiffs' amended pleading largely cures the deficiencies previously identified in their initial consolidated pleading. As detailed below, the Court will permit Plaintiffs' consumer fraud claims to proceed based on allegedly false or misleading marketing statements regarding "concussion reduction technology" and a 31% reduction in concussions for helmets not included in the UPMC study, including youth helmets. However, the Court will dismiss Plaintiffs' consumer fraud claims to the extent they are based on marketing statements which accurately reflect the results of the UPMC study or based on an alleged omission. The Court will also dismiss Plaintiffs' unjust enrichment and assumpsit claims with the exception of the Cahokia School District's claim for unjust enrichment.

II. BACKGROUND

A. Facts

The Court accepts as true the following facts from Plaintiffs' Second Amended Complaint. [Docket Item 45.] Although Plaintiffs have added significant detail to their amended pleading and narrowed their theory of liability, the essential allegations supporting their claims remain unchanged.

1. Background

Defendants design, manufacture, and market football helmets which they claim possess concussion reduction technology. (SAC ¶ 5.) These helmets include the Revolution, Revolution Speed, and Riddell 360.² (Id. ¶ 5.) Plaintiffs contend that Defendants' repeated reference to concussion reduction technology in advertising and marketing materials was intended to "convey to consumers that these football helmets can reduce the incidence of concussion when compared to other modern football helmets available for sale from other manufacturers."³ (Id. ¶ 6.) According to Plaintiffs, however, "objective and reliable research" shows that Defendants' claims are deceptive marketing gambits because the helmets "do not provide the promised ‘Concussion Reduction Technology’ or result in decreasing the incidence of concussions." (Id. ¶ 7.)

Plaintiffs allege that Defendants began an effort, as early as 2002, to capitalize on increased public awareness of and concern about concussions. (Id. ¶¶ 45–48.) To this end, Defendants allegedly solicited a scientific study regarding the protective benefits of their Revolution helmet. (Id. ¶ 49.) Beginning in 2002, the University of Pittsburgh Medical Center ("UPMC") compared concussion rates among high school athletes who wore the Riddell Revolution helmet with those who wore "traditional helmets." (Id. ¶ 50.) The UPMC study, published in a peer-reviewed neurology journal, found that the Revolution helmet reduced concussions by 31% as compared to traditional helmets. (Innes Decl., Ex. A [Docket Item 50–3.] )

Plaintiffs recount in great detail the many reasons they contend the UPMC study was flawed in design and implementation, "infected with potential bias and conflicts of interest," and "fundamentally unreliable." (Id. ¶ 49.) As in the Amended Complaint, Plaintiffs emphasize that Riddell provided a grant to pay the salaries of the two primary authors of the study. (Id. ¶ 51.) A third author, Thad Ide, is a Riddell employee. (Id. ) Moreover, Plaintiffs allege that the study was designed to reach the pre-determined conclusion that the Revolution helmet could reduce concussions as compared to other helmets; that it was a "prospective cohort study" as opposed to a random study; that the traditional helmets were not new, but refurbished; that the participants were not randomly assigned helmets; that the authors disregarded 15% of the collected data without sufficient explanation and manipulated other data to reach a pre-determined conclusion; and that initial data failed to show a statistically significant difference between the helmets. (Id. ¶¶ 54–64.) According to Plaintiffs, the above flaws are consistent with and corroborated by the criticisms of several peer-reviewers. (Id. ¶¶ 70–72.)

Plaintiffs further contend that UPMC warned Defendants regarding their reliance on the study's results. UPMC allegedly instructed Defendants "that this data should not be use[d] as a marketing ploy or marketing tactic from a scientific paper that was not for those purposes." (Id. ¶ 66.) UPMC also told Defendants not to say that the Revolution helmet provides better protection, but Defendants disregarded this admonition. (Id. ¶ 67.) Plaintiffs allege that UPMC also cautioned Defendants in other ways regarding the appropriate use of the study's results, namely that Defendants should refer to the 2.3% reduction in absolute risk as found by the study, as opposed to the 31% reduction in relative risk.⁴ (Id. ¶ 68.) Defendants allegedly ignored UPMC's warnings and failed to disclose these warnings to consumers. (Id. ¶ 69.)

2. Riddell's marketing statements

Plaintiffs contend that, based solely on the results of the UPMC study, Defendants began to market their helmets as possessing concussion reduction technology. Some advertisements contained explicit references to a 31% reduction in concussions for players wearing the Revolution helmet. (Id. ¶ 74.) For example, "Research shows a 31% reductions in concussions in players wearing Riddell Revolution Helmets."⁵ (Id. ) Defendants, however, allegedly made this same 31% reduction claim when advertising other helmets in the Revolution "family" like the IQ, IQ HITS, Youth, Speed, and Speed Youth, even though the UPMC study only included the Revolution helmet. (Id.; Id. ¶ 78.) Plaintiffs note similar statements in a March 16, 2009 press release referring to research which showed that the Revolution helmet reduces "the risk of concussion by nearly a third." (Id. ¶ 77.)

Plaintiffs allege that Defendants used promotional videos to tout the safety of their helmets, including specific design and technological features that Defendants presented as making the helmets safer. (Id. ¶ 79.) According to Plaintiffs, one such video, which is still available on Defendants' websites, states that "on-file reconstructive studies on concussive events showed that many of the players were being struck to the side of the head and the face so we developed our patented side impact protection ... to better handle those blows to the side of the head and the face." (Id. ) Plaintiffs assert that Defendants also promote the safety of their helmets at marketing events called "Protection Tour[s]" intended to "deliver[ ] expert-driven health and safety education to youth football players, parents and coaches nationwide." (Id. ¶ 80.) Similarly, Defendants advertised at youth-focused events such as NFL Play 60 Youth Football Clinics. (Id. ¶ 84.) Defendants also allegedly advertise extensively on social media and the internet and make "the same concussion reduction claims." (Id. ¶ 83.) For example, Plaintiffs provide a screenshot of a Facebook page stating that "the Riddell 360 Youth Helmet is the next evolution of Riddell CRT (Concussion Reduction Technology)." (Id. )

In summary, Plaintiffs contend that "Defendants, through their website, direct sales force, product packaging, promotional advertisements and marketing, and retailers" made the following types of claims regarding the concussion reduction capabilities of their helmets:

• "Riddell's exclusive Concussion Reduction Technology protects young athletes against concussions and impact."

• "The most advanced piece of modern concussion prevention in the game today!"

• "Safer, more protective, and advanced frontal helmet protection designed to reduce concussions."

• "Riddell Revolution CRT (Concussion Reduction Technology) to keep young players safe on the field."

• "Riddell's Concussion Reduction Technology provides increased protection against concussions and impact."

• "The helmet's Revolution Concussion Reduction

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