Zaycer v. Sturm Foods, Inc.

• Decision Date: 12 September 2012
• Docket Number: Civil Action No. RDB–11–3693.
• Citation: 896 F.Supp.2d 399
• Parties: Cecile L. ZAYCER, Plaintiff, v. STURM FOODS, INC., et al., Defendants.
• Court: U.S. District Court — District of Maryland

896 F.Supp.2d 399

Cecile L. ZAYCER, Plaintiff,

v.STURM FOODS, INC., et al., Defendants.

Civil Action No. RDB–11–3693.

United States District Court,

D. Maryland.

Sept. 12, 2012.

Steven Lee Tiedemann, JPB Enterprises Inc, Columbia, MD, for Plaintiff.

Michael M. Conway, Rebecca R. Hanson, Foley and Lardner LLP, Chicago, IL, Paul R. Monsees, Foley and Lardner LLP, Washington, DC, for Defendants.

Memorandum Opinion

RICHARD D. BENNETT, District Judge.

This putative class action lawsuit arises out of a complaint filed by Cecile L. Zaycer (“Plaintiff” or “Zaycer”) on behalf of herself and other persons similarly situated who purchased a Weis brand single-serve coffee product in Maryland, New Jersey, New York, Pennsylvania, and/or West Virginia. Plaintiff has sued Defendants Sturm Foods, Inc. (“Sturm”), TreeHouse Foods, Inc. (“TreeHouse”), and Weis Foods, Inc. (“Weis”) (collectively “Defendants”), for (1) violations of the consumer protection laws of Maryland, Pennsylvania, and West Virginia (Counts I, II, VI); (2) violations of New York's Deceptive Acts and Practices Law and False Advertising Law (Count III, IV); and (3) violations of New Jersey's Fraud in Sales or Advertising of Merchandise Law (Count V).

Pending before this Court is Defendants' Joint Motion to Dismiss (ECF No. 13). Defendants Sturm and Weis move this Court to dismiss Counts II through VI of the Plaintiff's Amended Complaint for lack of standing pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. Defendant TreeHouse moves for dismissal on the ground that this Court lacks personal jurisdiction under Rule 12(b)(2). This Court has reviewed the entire record and finds that no hearing is necessary. See Local Rule 105.6 (D.Md.2011). For the reasons that follow, Defendants' Motion to Dismiss (ECF No. 13) will be GRANTED.

Background

Plaintiff Cecile L. Zaycer is a citizen of Maryland and purports to represent a class of plaintiffs in Maryland, New Jersey, New York, Pennsylvania, and West Virginia. Pl.'s Am. Compl. ¶ 1, ECF No. 5. Plaintiff seeks damages for herself and others similarly situated who were injured by the Defendants' alleged violations of numerous state consumer protection laws. Id. ¶ 24. Essentially, Plaintiff alleges that Defendants engaged in unfair or deceptive acts in selling, packaging, and marketing of single-serve coffee cartridges known as “K–Cups” (the “Product”), for use in Keurig brand coffee machines.

The Plaintiff alleges that the Product is intentionally designed and packaged to deceive and mislead to the consumer by way of its stated ingredients and purpose as an “alternative to other ‘K–Cup’ brands of ground coffee.” Id. ¶ ¶ 15, 19. Specifically, the Plaintiff alleges that the terms “Soluble & Microground” on the packaging are used as a replacement for “Instant” and thus intentionally misleading and intended to defraud and mislead consumers. Id. ¶ 20. Additionally, the Plaintiff alleges that the product container, shelf display, and store location are intentionally selected to confuse and mislead consumers into buying a product that will provide the same “freshly brewed cup of coffee” provided by a Keurig K–Cup. Id. Defendants are Sturm Foods, Inc., TreeHouse Foods, Inc., and Weis Foods, Inc.¹ Sturm, a corporate citizen of Wisconsin, is the manufacturer and distributor of the Product at issue. Id. ¶ 2. TreeHouse, a corporate citizen of Illinois, is the parent company of Sturm. Id. ¶ 3. Weis, a corporate citizen of Pennsylvania, operates retail grocery stores in Maryland, New Jersey, New York, Pennsylvania, and West Virginia where it sells the Product. Id. ¶ 4.

On or about December 19, 2011, Zaycer purchased the Product from a Weis grocery store in Laurel, Maryland. Id. ¶ 7. According to the Plaintiff, the Product at issue contains “instant coffee” rather than actual coffee grounds. Id. ¶ 17. The user of the Product finds that the hot water from the Keurig brewer is merely added to the instant coffee in the single-serve cup, producing a hot cup of “instant coffee” instead of “freshly brewed coffee.” Id. ¶¶ 17–18. Left behind, after this process, is an empty plastic cup. Id. ¶ 18.

The Plaintiff seeks to certify a class comprised of every person who purchased the Product in a Weis store because each potential class member was “similarly deceived, misled, and damaged by the packaging and false or misleading statements contained thereupon.” Id. ¶ 24. The potential Plaintiff Class contains sub-classes, each sub-class comprised of purchasers from the individual states where Weis sells the Product, specifically, Maryland, New Jersey, New York, Pennsylvania, and West Virginia. Id. ¶ 25. The Plaintiff asserts that the multiple states have similar consumer protection laws and the facts are the same among the potential class members. Id. ¶ 26. Additionally, the Plaintiff asserts that these facts predominate over any questions affecting only individual members, making the class actions superior to other available methods for adjudicating the controversy. Id. ¶ 27. At this time, Zaycer is the only named plaintiff, and all of the events that caused her injury occurred from a single purchase of the Product in a Weis store in Maryland. Id. ¶ 7.

In their Motion to Dismiss, Defendants argue that the Plaintiff lacks standing to sue under the separate consumer protectionlaws of New Jersey, New York, Pennsylvania, or West Virginia (Counts II—VI). Def.'s Mot. to Dismiss, ECF No. 13. Accordingly, the Defendants do not challenge the Plaintiff's Article III standing concerning the alleged violations of the Maryland Consumer Protection Act (Count I). Additionally, Defendant TreeHouse moves to dismiss on the ground that TreeHouse has no contacts in Maryland and as a result, this Court lacks personal jurisdiction over the company. Id.

In her Opposition to Defendants' Motion to Dismiss, Plaintiff does not contest Defendant TreeHouse's Motion to Dismiss for lack of personal jurisdiction. Pl.'s Opp. at 1, n. 1, ECF No. 21. However, Plaintiff does contest the Motion to Dismiss for lack of standing as to Defendants Sturm and Weis. Id. at 1. Plaintiff's opposition to the Motion to Dismiss for lack of standing is premised on an interpretation of two Supreme Court cases that the Plaintiff claims direct the court to consider the issue of class certification prior to the issue of Article III standing. Id. at 5–8. Drawing on Ortiz v. Fibreboard Corp., 527 U.S. 815, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999) and Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), Zaycer argues that class certification is “logically antecedent” to the Article III standing inquiry, and as a result, this Court should delay considering standing until the class has been certified and it can consider the standing with reference to the class as a whole. Id. at 8.

Standard of Review

Defendants move to dismiss Plaintiff's case for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. A motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) challenges a court's authority to hear the matter brought by a complaint. See Davis v. Thompson, 367 F.Supp.2d 792, 799 (D.Md.2005). A plaintiff carries the burden of establishing subject matter jurisdiction. Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir.1999); Biktasheva v. Red Square Sports, Inc., 366 F.Supp.2d 289, 294 (D.Md.2005). The court may “consider evidence outside the pleadings” in a 12(b)(1) motion to determine if it has jurisdiction over the case. Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir.1991). “The court should grant the 12(b)(1) motion only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Biktasheva, 366 F.Supp.2d at 294 (quoting Richmond, 945 F.2d at 768).

Under Rule 12(b)(1), if a party lacks standing the court automatically lacks subject matter jurisdiction. See Pitt County v. Hotels.com, L.P., 553 F.3d 308, 312 (4th Cir.2009). To meet the standing requirement, “[a] plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief.” Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984); see also Bishop v. Bartlett, 575 F.3d 419, 423 (4th Cir.2009).

Analysis

The crux of this case concerns whether the Plaintiff has standing to represent potential class members who were harmed by the Product under the consumer protection laws of states where the Plaintiff is not a citizen. The threshold question this Court must answer in ruling on this motion to dismiss is whether it should evaluate the named plaintiff's standing to bring the claims asserted under the individual state's consumer protection laws in Counts II through VI or whether it should wait until the class certification stage to make this assessment. This Court will first address the preliminary issues pertaining to the personal jurisdiction over Defendant TreeHouse and the Plaintiff's standing to bring Count I under the Maryland Consumer Protection Act. In order to frame the issue at bar, the “logically antecedent” concept will then be examined. This Court will evaluate the Plaintiff's argument that class certification should be considered “logically antecedent” to the Article III standing inquiry. Finally, this Court will consider the threshold question and evaluate the timing of the Article III standing inquiry as it concerns the Plaintiff's ability to bring claims on behalf of unnamed plaintiffs.

I. Preliminary Matters

In the Defendants' Joint Motion to Dismiss, Defendant TreeHouse moves to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2). Def.'s Mot. to Dismiss at 2, ECF No. 13. TreeHouse argues that it is a corporate citizen of Illinois and Delaware. Def.'s Mem. in support of Mot....