Whitehead v. The Nautilus Group, Inc.

• Decision Date: 18 April 2006
• Docket Number: No. 05-CV-4074.,05-CV-4074.
• Citation: 428 F.Supp.2d 923
• Parties: Thomas E. WHITEHEAD, Individually, and as Class Representative on Behalf of all Similarly Situated Persons, Plaintiff v. The NAUTILUS GROUP, INC. and Nautilus Direct d/b/a Bowflex, Defendants.
• Court: U.S. District Court — Western District of Arkansas

428 F.Supp.2d 923

Thomas E. WHITEHEAD, Individually, and as Class Representative on Behalf of all Similarly Situated Persons, Plaintiff v. The NAUTILUS GROUP, INC. and Nautilus Direct d/b/a Bowflex, Defendants.

No. 05-CV-4074.

United States District Court, W.D. Arkansas, Texarkana Division.

April 18, 2006.

John C. Goodson, Keil & Goodson, Louis Bradon Paddock, Michael B. Angelovich, Nix, Patterson & Roach, LLP, Texarkana, AR, James M. Pratt, Jr., James M. Pratt, Jr., P.A., Camden, AR, for Plaintiff.

John Jarrod Russell, Spencer F. Robinson, Ramsay, Bridgforth, Harrelson and Starling LLP, Pine Bluff, AR, for Defendants.

MEMORANDUM OPINION AND ORDER

BARNES, District Court.

Before the Court is Plaintiff Thomas E. Whitehead's Motion to Remand. (Doc. 10) Defendants The Nautilus Group, Inc. and Nautilus Direct d/b/a Bowflex (hereinafter collectively referred to as "Nautilus") filed a response and a supplement to their response. (Does. 13 and 16) On January 27, 2006, the Court held a hearing on the motion. (Doc. 18) After the hearing, Plaintiff filed a supplement to his motion to remand, (Doc. 19) and Defendants filed a response to the supplement. (Doc. 20) The Court finds the motion ripe for consideration.

I. BACKGROUND

Whitehead filed this putative class action in the Circuit Court of Miller County, Arkansas on February 9, 2005, alleging claims for unjust enrichment and fraud. (Doc. 1-2, Plaintiffs Original Class Complaint) Nautilus designs, manufactures, markets, sells, and distributes home gym products called "Bowflex." (Id. ¶ 1) Whitehead alleged that as a result of investigations by the United States Consumer Product Safety Commission ("CPSC"), Nautilus voluntarily initiated two recalls of Bowflex machines. Nautilus initiated the first recall in January 2004 for the Bowflex "Power Pro Fitness Machine with a Lat Tower attachment" and "instructed customers to `stop using [their] backboard bench and the Lat Tower immediately and contact Bowflex for a free repair or replacement kit.'" (Id., ¶ 2) Whitehead further alleged Nautilus represented that consumers who contacted Nautilus would receive their repair kits in approximately two weeks, but, in fact, repair kits were not shipped to consumers for six weeks or longer. (Id., ¶ 3) Nautilus initiated the second recall in November 2004. The second recall involved: [1] the "Bowflex Power Pro home gym without a Lat Tower purchased prior to October 2002," [2] the "Bowflex Power Pro home gym with a Lat Tower . . . purchased prior to May 1, 2004," and [3] the "Bowflex Ultimate home gym purchased prior to May 1, 2004." (Id., ¶ 4) Whitehead alleged Nautilus instructed consumers to stop using the Bowflex machines in the incline position until the repair kit had been installed. (Id.) Again, Nautilus informed consumers they would receive their free repair kit within two weeks, but the repair kits were not shipped for six weeks or longer. (Id., ¶ 5)

Whitehead alleged Nautilus' failure to provide the repair kits in the time it represented rendered the Bowflex machines useless until the repair kits were actually provided. (Id., ¶ 18) Whitehead sought to represent a nationwide class of consumers who owned the recalled Bowflex machines. (Id., p. 6, ¶ 20) Whitehead sought recovery for himself and the putative class for the loss of use of the Bowflex machines resulting from the delayed delivery of the repair kits. (Id., ¶¶ 27-47)

On October 11, 2005, the Miller County court entered an order (Doc. 1-15) docketing Whitehead's First Amended Class Complaint. (Doc. 1-12, p. 5) In his amended complaint, Whitehead alleges that Nautilus possesses the names, addresses, and telephone numbers of the majority of Bowflex machine owners. (Doc. 1-12, ¶ 3) Despite Nautilus' possession of this information, it did not immediately ship repair kits to these customers at their known addresses; instead, Nautilus required its customers to request a repair kit. (Id., ¶ 5)

While Whitehead still only pled causes of action for unjust enrichment and fraud in his first amended complaint, he added factual allegations and bases for recovery under his unjust enrichment and fraud causes of action not found in his original complaint. For example, Whitehead's amended complaint alleged by forcing customers to ask for a repair kit, Nautilus possibly rendered "its customers permanently unfit." (Id., ¶ 6) Whitehead also alleged Nautilus forced customers to wait for weeks "while newly formed muscles softened and cardiac health diminished." (Id., ¶ 11) Whitehead pled that Nautilus had been unjustly enriched by requiring customers to request the repair kits before Nautilus shipped the kits, (Id., ¶¶ 42, 44, 46, 49, 52) not just because of the delay in receiving the repair kit, as alleged in the original complaint. Whitehead also pled Nautilus fraudulently represented to its customers that they had a "duty to request a repair kit." (Id., ¶ 56) Whitehead also sought damages associated with customers having "to affirmatively request a repair kit rather than ... sending the repair kit to all known customers." (Id., ¶ 61(d))

On October 25, 2005, Nautilus removed this case pursuant to 28 U.S.C. §§ 1441 and 1453, alleging "[t]his Court has original jurisdiction of this action pursuant to 28 U.S.C. § 1332 because the matter in controversy exceeds the sum or value of $5,000,000 exclusive of interest and costs, and is a class action in which any member of a class of plaintiffs is a citizen of a state different from any defendant." (Doc. 1, 116) Nautilus alleges Whitehead's first amended complaint did not relate back to the filing of his original complaint, which was filed prior to the effective date of the Class Action Fairness Act of 2005 ("CAFA"). (Id., ¶ 5) Nautilus also alleged the Court had supplemental jurisdiction of any claims that do relate back to the filing of Whitehead's original complaint pursuant to 28 U.S.C. § 1367.

Whitehead's motion to remand argues [1] CAFA does not provide a basis for federal jurisdiction over this action because it was "commenced" before CAFA's "date of enactment," and [2] that if a relation back analysis is proper, his first amended complaint relates back to his original complaint. In its response, Nautilus argues that Whitehead's original complaint is a nullity under Arkansas law, and there is no original complaint to which Whitehead's first amended complaint can relate back. Under Nautilus' argument, the only possible date Whitehead could have commenced his civil action was on the date he filed his first amended complaint, October 11, 2005, which would mean CAFA applies to this civil action.

Also in its response, Nautilus argues for the first time that this Court has jurisdiction based on a federal question pursuant to 28 U.S.C. § 1331 because Whitehead attacks a federal recall procedure. Nautilus bases this argument on the fairly recent United States Supreme Court decision in Grable & Sons Metal Products, Inc. v. Dame Engineering & Mfg., 545 U.S. 308, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005)(holding a federal court has federal question jurisdiction under 28 U.S.C. § 1331 over a state law claim if the state law claim necessarily states a federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing congressionally approved balance of federal and state judicial responsibilities). Whitehead had not addressed whether this Court had jurisdiction over this case based on federal question jurisdiction as of the hearing on his motion to remand. At the hearing, the Court allowed Whitehead to file a supplement to his motion to remand addressing the issues raised by Nautilus concerning federal question jurisdiction. In his supplement, Whitehead argues [1] Nautilus did not timely raise federal question jurisdiction as a basis for removal, and [2] his complaint does not raise a federal question that would support jurisdiction in this Court. Nautilus has responded to these arguments with its own supplement. The Court turns to these jurisdictional issues.

II. DISCUSSION

A. Jurisdiction under CAFA

The issue here is whether Whitehead commenced his civil action on February 9, 2005, the date he filed his original complaint with the Circuit Court of Miller County, or on October 11, 2005, when his first amended complaint was filed with the Circuit Court of Miller County. CAFA applies to civil actions commenced on or after February 18, 2005. See 28 U.S.C. § 1332 note; Class Action Fairness Act of 2005, § 9, 119 Stat. at 14. CAFA does not define the word "commenced." State law determines when a civil action is commenced in state court. See Plubell v. Merck & Co., Inc., 434 F.3d 1070, 1071 (8th Cir.2006) citing Schorsch v. Hewlett-Packard Co., 417 F.3d 748, 751 (7th Cir.2005). In Arkansas, generally a civil action is commenced by the filing of a complaint with the clerk of the court. Ark. R. Civ. P. 3(a). However, since Nautilus argues Whitehead did not commence his civil action until October 11, 2005, after the effective date of CAFA, the issue becomes whether Whitehead's first amended complaint relates back to the filing of his original complaint or is instead a new civil action. See e.g. Plubell, 434 F.3d at 1071. The Court must look to Arkansas law for a determination of the relation back issue. Id., 434 F.3d at 1071-74.

Ark. R. Civ. P. 15(c) states

(c) Relation Back of Amendments. An amendment of a pleading relates back to the date of the original pleading when: (1) the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading[.]

Before Rule 15(c) can apply, there must be pleadings to amend. St. Paul Mercury Ins. Co. v. Circuit Court of Craighead County, Western Div., 348 Ark. 197, 73 S.W.3d 584 (2002). In some instances, Arkansas appellate courts have ruled complaints with certain defects should be treated as never having been filed; Rule 15(c)...