Smith v. Adidas Am.

• Docket Number: 6:22-cv-788 (BKS/ML)
• Decision Date: 01 September 2023
• Parties: RYAN SMITH, individually and on behalf of all others similarly situated, Plaintiff, v. Adidas America, Inc., Defendant.
• Court: U.S. District Court — Northern District of New York

1

RYAN SMITH, individually and on behalf of all others similarly situated, Plaintiff,
v.
Adidas America, Inc., Defendant.

No. 6:22-cv-788 (BKS/ML)

United States District Court, N.D. New York

September 1, 2023

Appearances

For Plaintiff

Spencer Sheehan

Sheehan & Associates, P.C

For Defendant

Stanton R. Gallegos

Matthew A. Levin

Jermaine F. Brown

Markowitz Herbold PC

MEMORANDUM-DECISION AND ORDER

HON. BRENDA K. SANNES, CHIEF UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Plaintiff Ryan Smith brings this putative class action against Defendant Adidas America, Inc. (Dkt. No. 1.) Plaintiff asserts, individually and on behalf of two putative classes, claims under New York General Business Law, N.Y. Gen. Bus. Law §§ 349, 350, and the “Consumer Fraud Acts” of Maine, Michigan, Idaho, Wyoming, Indiana, North Dakota, and Nebraska; claims for breaches of express warranty, implied warranties of merchantability and fitness for a

2

particular purpose, and the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301 et seq.; and claims for common-law negligent misrepresentation, fraud, and unjust enrichment. (Dkt. No. 1, at 1421.) Plaintiff seeks class certification and compensatory and punitive damages, including statutory damages. (Id. at 21-22.)^[1]Presently before the Court is Defendant's motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. (Dkt. No. 7.) The motion is fully briefed. (Dkt. Nos. 11, 13.) For the following reasons, the Court grants in part and denies in part Defendant's motion to dismiss.

II. FACTS^[2]

Defendant is an Oregon corporation with a principal place of business in Portland, Oregon, and is “known as a leader in sportswear.” (Dkt. No. 1, ¶¶ 60, 66, 110, 129.) Defendant “manufactures, labels, markets, and sells NHL (National Hockey League) jerseys” and is the “official manufacturer of the jerseys worn on the ice by NHL players.” (Id. ¶¶ 1, 69, 110, 129.) Defendant identifies at least some of the NHL jerseys it manufactures and sells as “authentic,” (id. ¶¶ 1, 24, 106-08), and “[o]n its website . . . and in digital, print, radio and/or television marketing, Defendant promotes the jerseys as authentic through labeling, hang tags, and descriptions,” (id. ¶ 22). Plaintiff also describes its “authentic” jerseys on its website as “the same as the one[s] . . . players wear when the puck drops.” (Id. ¶ 24 & n.4.) “Authentic” jerseys are available to consumers from Defendant's retail stores and website and from third-party retail stores and websites and are sold “at a premium price” of approximately $179.99. (Id. ¶¶ 56, 71.)

3

Plaintiff, a citizen of New York, (id. ¶ 59), purchased an “authentic” jersey within New York and “within the statutes of limitations for each cause of action alleged[] at stores and/or websites, including the website of Defendant, adidas.com[,] and NHL.com, over the past three years[] and/or among other times.” (Id. ¶¶ 64, 72.) In purchasing the jersey, Plaintiff “read, reviewed, and relied on Defendant's representations that the jerseys ‘[were] the same as the one[s] . . . players wear when the puck drops' on the ice.” (Id. ¶ 74 (first two alterations in original).) Plaintiff also “relied on the words, descriptions, layout, tags, images, and website descriptions on Defendant's site and those of its third-party partners, about its authentic jerseys.” (Id. ¶ 77.) Plaintiff “understood [‘authentic' jerseys] as being the same jersey[s] that NHL players wear during hockey games.” (Id. ¶ 73.) “Plaintiff bought the [jersey] because he expected it was authentic[] and the same jersey that NHL players wear during hockey games, from the fight strap to the dimples to the stitching and the fit, because that is what the representations said and implied.” (Id. ¶ 76.)

But the “authentic” jerseys “are not those worn on-ice by NHL players.” (Id. ¶ 29.) The “authentic” jerseys differ from on-ice jerseys in several aspects: the quality of the “fight strap” of the “authentic” jerseys is inferior as compared to the fight strap of on-ice jerseys, (id. ¶¶ 30-32); the fabric of the “authentic” jerseys is half the thickness of the fabric of the on-ice jerseys, (id. ¶¶ 33-34); the stitching of the “authentic” jerseys is weaker and less durable than the stitching of the on-ice jerseys, (id. ¶¶ 35-36); the neck holes of the “authentic” jerseys are larger than the neck holes of the on-ice jerseys, (id. ¶ 37); the air-flow dimples of the “authentic” jerseys are smaller and less effective than the air-flow dimples of the on-ice jerseys, (id. ¶¶ 38-42); the logos, numbers, stripes, and names on the “authentic” jerseys are applied via heat pressing while

4

those features of the on-ice jerseys are double-stitched, (id. ¶ 43); and the “authentic” jerseys are manufactured in Indonesia while the on-ice jerseys are manufactured in Canada, (id. ¶ 44).

Other consumers shared Plaintiff's interpretation of “authentic.” (Id. ¶¶ 20, 24, 28, 100.) Specifically, “a website devoted to covering the San Jose Sharks, TealTownUsa.com, published an article by AJ Strong, entitled, ‘Stop Calling Adidas NHL Jerseys Authentic,' in June 2021.” (Id. ¶ 116.) In the article, the author “detailed facts about why ‘it's disingenuous and misleading for [Defendant] to call [the jerseys] “authentic” or “authentic pro”' and recommended ‘[Defendant] [] call[] those jerseys what they are... replicas,'” and “notified [Defendant] that the price of c. $179 was $50 greater than what comparable replica NHL jerseys are sold for.” (Id. ¶¶ 117-18.) Additionally, a “well-known memorabilia and video game blogger known as ‘REZRECTION[]' notified [Defendant] of similar issues identified by Strong” and “isolated numerous ways in which the authentic Adidas NHL jerseys were deficient compared to the on-ice jerseys.” (Id. ¶¶ 119-21.) He also “cautioned his viewers to be careful about paying almost as much for the authentic jerseys as the on-ice jerseys would cost, given what he described as stark differences in quality.” (Id. ¶ 122.)

Had Plaintiff known that “authentic” jerseys were not those worn on the ice by NHL players during games, he “would not have bought the jerseys or would have paid less for them.” (Id. ¶¶ 55, 80, 82, 98, 127, 135.)

Plaintiff proposes the following classes:

New York Class: All persons in the State of New York who purchased the Product during the statutes of limitations for each cause of action alleged; and

Consumer Fraud Multi-State Class: All persons in the States of Maine, Michigan, Idaho, Wyoming Indiana, North Dakota and Nebraska, who purchased the Product during the statutes of limitations for each cause of action alleged.

5

(Id. ¶ 83.)

III. STANDARD OF REVIEW

“A court faced with a motion to dismiss pursuant to both Rules 12(b)(1) and 12(b)(6) must decide the jurisdictional question first because a disposition of a Rule 12(b)(6) motion is a decision on the merits and, therefore, an exercise of jurisdiction.” Mann v. N.Y. State Ct. of Appeals, No. 21-cv-49, 2021 WL 5040236, at *3, 2021 U.S. Dist. LEXIS 209018, at *8 (N.D.N.Y. Oct. 29, 2021) (citation omitted). “In resolving a motion to dismiss under Rule 12(b)(1), the district court must take all uncontroverted facts in the complaint . . . as true[] and draw all reasonable inferences in favor of the party asserting jurisdiction.” Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014) (citation omitted). A court may also “refer to evidence outside the pleadings” and “take judicial notice of documents in the public record.” Krajisnik Soccer Club, Inc. v. Krajisnik Football Club, Inc., No. 20-cv-1140, 2021 WL 2142924, at *2, 2021 U.S. Dist. LEXIS 99456, at *5 (N.D.N.Y. May 26, 2021) (citations omitted).

To survive a motion to dismiss under Rule 12(b)(6) for failure to state a claim, “a complaint must provide ‘enough facts to state a claim to relief that is plausible on its face,'” Mayor & City Council of Balt. v. Citigroup, Inc., 709 F.3d 129, 135 (2d Cir. 2013) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The plaintiff must provide factual allegations sufficient “to raise a right to relief above the speculative level.” Id. (quoting Twombly, 550 U.S. at 555). A court must accept as true all factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. See EEOC v. Port Auth., 768 F.3d 247, 253 (2d Cir. 2014) (citing ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007)).

6

However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678.

IV. ANALYSIS

A. Matters Outside the Pleadings

A court may refer to evidence outside the pleadings in resolving jurisdictional issues raised under Rule 12(b)(1). See Krajisnik Soccer Club, 2021 WL 2142924, at *2, 2021 U.S. Dist. LEXIS 99456, at *5. But “[g]enerally, consideration of a motion to dismiss under Rule 12(b)(6) is limited to consideration of the complaint itself,” Faulkner v. Beer, 463 F.3d 130, 134 (2d Cir. 2006), and “documents attached to the complaint as exhibits,” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). However, considering “materials outside the complaint is not entirely foreclosed on a 12(b)(6) motion.” Faulkner, 463 F.3d at 134. A complaint “is deemed to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference.” Nicosia v. Amazon.com, Inc., 834 F.3d 220, 230 (2d Cir. 2016) (quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002)). “To be incorporated by reference, the complaint must make a clear, definite and substantial reference to the document[].” Lateral Recovery, LLC v. Cap. Merch. Servs., LLC, No. 21-cv-9336, 2022 WL 4815615, at *20, 2022 U.S. Dist. LEXIS 181044, at *64...