Mirza v. Ignite USA, LLC
| Decision Date | 12 February 2020 |
| Docket Number | 19 C 5836 |
| Citation | 439 F.Supp.3d 1058 |
| Parties | Dominique MIRZA and Tara Luchetti, individually and on behalf of all others similarly situated, Plaintiffs, v. IGNITE USA, LLC, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Katrina Carroll, Carlson Lynch, LLP, Chicago, IL, for Plaintiffs.
Joseph J. Krasovec, III, Jeffrey Maxwell Heckendorn, Schiff Hardin LLP, Chicago, IL, Steven Edward Swaney, Pro Hac Vice, Schiff Hardin LLP, San Francisco, CA, for Defendant.
Before the Court is Defendant Ignite USA, LLC's ("Ignite") motion to dismiss Plaintiffs Dominique Mirza ("Mirza") and Tara Luchetti's ("Luchetti") (collectively, "Plaintiffs") amended class action complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the following reasons, the Court denies the 12(b)(1) motion and grants in part the 12(b)(6) motion.
For purposes of this motion, the Court accepts as true the following facts from the amended complaint. Alam v. Miller Brewing Co. , 709 F.3d 662, 665–66 (7th Cir. 2013). All reasonable inferences are drawn in Plaintiffs' favor. League of Women Voters of Chicago v. City of Chicago , 757 F.3d 722, 724 (7th Cir. 2014).
Plaintiff Mirza is a citizen of Pennsylvania who resides in East Stroudsburg, Pennsylvania. Plaintiff Luchetti is a citizen of New York who resides in East Rochester, New York. Defendant Ignite is an Illinois corporation with its principal place of business in Chicago, Illinois. Ignite distributes reusable beverage containers, coffee mugs, water bottles, and kids' cups under the "Contigo" brand name.
Both Mirza and Luchetti are parents to young children. In October of 2018, Luchetti purchased a Contigo® Kids Cleanable Water Bottle from a Target store in Penfield, New York. In April of 2019, Mirza bought two stainless steel Contigo® Kids Cleanable Water Bottles from a Target store in Pennsylvania. At some point after buying the water bottles, the bottles' clear silicone spout detached, posing a choking hazard to Plaintiffs' children. On August 27, 2019, Ignite issued a recall for the water bottles. The recall offered to replace the lid on the water bottles but did not offer purchasers any monetary relief.
Plaintiffs seek to represent a class defined as all persons in the United States who bought a Contigo® Kids Cleanable Water Bottle subject to the August 27, 2019 Voluntary Recall, who refused to take part in the recall. Furthermore, Mirza looks to represent a subclass of members who bought the water bottles in the State of Pennsylvania, while Luchetti seeks to represent those who purchased the water bottles in New York.
Plaintiffs allege that they relied and understood the name on the water bottles' packaging, "Contigo Kids," to represent that the bottles were safe for children to use. They further allege that they would not have bought the water bottles had it not been for the label's suggestion that the product was designed for and safe for children. However, because the water bottles' silicone spout detached and posed a choking hazard to children, Plaintiffs claim that naming the water bottles "Contigo Kids" was false and deceptive conduct that violates several consumer protection laws.
Based on these events and allegations, Plaintiffs filed their initial complaint on August 29, 2019. On October 29, 2019, Plaintiffs filed an amended complaint, alleging claims for breach of implied warranty of merchantability in Count I, unjust enrichment in Count II, violation of Pennsylvania's Unfair Trade Practices and Consumer-Protection Law ("UTPCPL"), 73 Pa.Stat. §§ 201-2, et seq. in Count III, and violation of New York General Business Law ("GBL") §§ 349 and 350 in Counts IV and Count V.
Ignite moves the Court to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(1), arguing that Plaintiffs lack standing. Alternatively, Ignite urges the Court to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6), arguing that Plaintiffs have not pled facts sufficient to state claims on all five counts.
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) challenges a court's subject-matter jurisdiction. As in resolving a Rule 12(b)(6) motion, the court assumes the truth of the operative complaint's well-pleaded factual allegations, but not its legal conclusions. See Zahn v. N. Am. Power & Gas, LLC , 815 F.3d 1082, 1087 (7th Cir. 2016) ; Silha v. ACT, Inc. , 807 F.3d 169, 173 (7th Cir. 2015). The court must also consider "documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice," along with additional facts set forth in the nonmovant's brief opposing dismissal, so long as those additional facts "are consistent with the pleadings." Phillips v. Prudential Ins. Co. of Am. , 714 F.3d 1017, 1019–20 (7th Cir. 2013).
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) "tests the sufficiency of the complaint, not the merits of the case." McReynolds v. Merrill Lynch & Co. , 694 F.3d 873, 878 (7th Cir. 2012). The allegations in the complaint must set forth a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A plaintiff need not provide detailed factual allegations, but it must provide enough factual support to raise its right to relief above a speculative level. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
A claim must be facially plausible, meaning that the pleadings must "allow ... the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The claim must be described "in sufficient detail to give the defendant ‘fair notice of what the ... claim is and the grounds upon which it rests.’ " E.E.O.C. v. Concentra Health Servs., Inc. , 496 F.3d 773, 776 (7th Cir. 2007) (quoting Bell Atlantic Corp. , 550 U.S. at 555, 127 S.Ct. 1955 ). "[T]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements," are insufficient to withstand a 12(b)(6) motion to dismiss. Ashcroft , 556 U.S. at 678, 129 S.Ct. 1937.
Ignite asserts that Plaintiffs lack Article III standing to bring their claims. To establish standing to sue in a federal court, a plaintiff must allege that they suffered an injury-in-fact, that is fairly traceable to the challenged conduct of the defendant, and that such injury is likely redressable by a favorable judicial decision. Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). Ignite argues that Plaintiffs do not sufficiently allege an injury.
To adequately allege an injury-in-fact, a plaintiff must allege that he or she suffered "an invasion of a legally protected interest" that is "concrete and particularized" and "actual or imminent, not conjectural or hypothetical." Spokeo, Inc. , 136 S. Ct. at 1548. For an injury to be "particularized," it "must affect the plaintiff in a personal and individual way." Id. A "concrete" injury must be "de facto"; that is, it must actually exist. Id.
Plaintiffs' amended complaint alleges that they paid more for the water bottles than they would otherwise pay for a dangerous and defectively designed product. Plaintiffs also challenge the adequacy of the recall program offered by Ignite, alleging that the program does not provide minimal notice to class members and does not adequately compensate for the lost use of the product while a replacement lid was processed. Ignite contends that both, the "benefit-of-the-bargain" and "lost use" theories do not form cognizable injuries under Article III, particularly where a free remedy—i.e., a recall—would have restored to Plaintiffs the benefit of their bargain. But that is not the law in this Circuit.
As far as standing is concerned, the Seventh Circuit has held that "[a] financial injury creates standing." In re Aqua Dots Prod. Liab. Litig. , 654 F.3d 748, 751 (7th Cir. 2011) (hereinafter, " Aqua Dots "). Aqua Dots involved a class of plaintiffs who—like Plaintiffs here—did not suffer any physical injury but alleged that they paid more than they would have if they had known of the product's risks and defects. The Aqua Dots Plaintiffs filed a suit challenging the adequacy of a recall issued by defendants and sought a full refund under federal law with punitive damages under state law. Notwithstanding the recall, the Seventh Circuit found that the plaintiffs sufficiently alleged a financial injury that satisfies Article III's injury requirement by claiming that they paid more for the product than they otherwise would have. Id. at 750–51. As in Aqua Dots , the presence of a recall here does not defeat the fact that Plaintiffs have alleged sufficient facts to support a financial injury—that is, they would not have paid a premium price for a defective product.1
Ignite's reliance on Sugasawara v. Ford Motor Company is misplaced. Sugasawara v. Ford Motor Co. , 2019 WL 3945105, at *6–7 (N.D. Cal. 2019). In Sugasawara , the court found financial injuries like the ones alleged here insufficient for standing purposes where a recall actually restored the value of the vehicles by fixing the defect. But unlike plaintiffs in Sugasawara , the Plaintiffs here did not take part in the recall, and thus the benefit of their bargain was not restored to them. The Court accordingly finds that Plaintiffs have alleged sufficient facts to support an injury-in-fact. Given that no other element of standing is challenged, the Court denies Ignite's motion to dismiss under Rule 12(b)(1).
Ignite alternatively urges the Court to dismiss all five counts of Plaintiffs' amended complaint for failure to state a claim.
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