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Flaster/Greenberg P.C. v. Brendan Airways

June 10, 2009


The opinion of the court was delivered by: Hon. Joseph H. Rodriguez

Memorandum Opinion and Order

This matter comes before the Court on a Motion to Dismiss filed by Defendant, Brendan Airways, LLC d/b/a/ USA 3000 ("Defendant"), on September 16, 2008. Defendant's motion seeks to dismiss Counts II, III, IV, and V pursuant to Fed. R. Civ. P. 12(b)(6). The Court has reviewed the written submissions of the parties and heard oral argument on May 27, 2009. For the reasons expressed on the record during oral argument and for the reasons that follow, Defendant's motion is granted in part and denied in part.

Factual History

On a motion to dismiss, the Court accepts as true the factual allegations in the complaint and from those facts gives Plaintiff all reasonable inferences. Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 (3d Cir. 1994). From that perspective, the facts are as follows. On or about February 22, 2008, Plaintiff, Flaster/Greenberg, P.C., a New Jersey law firm ("Plaintiff"), entered into a written agreement with Defendant. (Compl. ¶3.) In the agreement entitled, "Group Space Agreement," Defendant agreed to transport via airplane nineteen lawyers and management employees of Plaintiff's law firm from Philadelphia, Pennsylvania to Fort Lauderdale, Florida to attend Plaintiff's annual business retreat on October 23, 2008. (Compl.¶3, ¶7). Additionally, Defendant agreed to transport sixteen employees on Sunday, October 26, 2008 and eleven employees on Tuesday, October 28, 2008 from Fort Lauderdale, Florida to Philadelphia, Pennsylvania. (Compl. ¶ 8). In consideration Plaintiff paid an initial non-refundable deposit of $2,455.62. (Compl.¶9.)

Prior to entering into the Group Space Agreement, Plaintiff advised Defendant of the necessity of transportation arrangements for its annual business retreat in Florida in October 2008. (Compl.¶4.) Further, Plaintiff told Defendant that as a law firm it was important to recognize the economic value of time for its lawyers. (Compl.¶5.) Plaintiff further advised Defendant that "it was important to have reliable transportation arrangements to minimize interference with their legal work, and maximize their ability to provide legal services," in addition to conducting their retreat efficiently. (Compl.¶5.) Defendant "knew, or at the very least should have known, that if it failed to provide the transportation agreed upon," Plaintiff's retreat would be significantly disrupted and Plaintiff would suffer damages. (Compl.¶6.)

On May 16, 2008 -three months after the parties entered into the Group Space Agreement- Defendant wrote to Plaintiff stating that "USA 3000 has most recently made the decision to withdraw their Fall service to and from [Fort Lauderdale] due to the rising cost of fuel." (Exhibit 2, "Cancellation Letter.") Defendant issued Plaintiff a refund of the "non-refundable" $2,455.63 deposit in full. (Compl. ¶13.) Following the receipt of the Cancellation Letter, Plaintiff contacted Defendant and demanded performance of the transportation agreed upon or, in the alternative, pay damages suffered as a result of the breach. (Compl. ¶14.) Defendant refused to remedy the breach other than returning the deposit. (Compl. ¶16.) Defendant attempted to mitigate its damages by making alternative transportation arrangements, but the alternative arrangements cost $2,000 more than the Group Space Agreement itinerary. (Compl. ¶19).

Due to the breach, twelve of Plaintiff's attorneys had to stay in Fort Launderdale, costing the firm $50,000.00 in lost revenue on Monday, October 27, 2008. In addition, Plaintiff had to pay $2,400.00 in hotel room expenses for the extra night in the Florida hotel. (Compl. ¶23.) Expenses for meals and rental cars were also incurred. (Compl. ¶24.)

Plaintiff filed this civil action alleging the following causes of action: breach of contract (Count I), violation of the New Jersey Consumer Fraud Act (Count II), quantum meruit (Count III), fraud in the inducement (Count IV) and a breach of the covenant of good faith and fair dealing (Count V).*fn1 On September 16, 2008 Defendant filed the instant motion to dismiss, pursuant to Fed. R. Civ. P. 12 (b)(6), as to Counts II, III, IV, and V of the complaint.


I. Standard Under Federal Rule of Civil Procedure 12(b)(6)

A complaint should be dismissed pursuant to Rule 12(b)(6) if the alleged facts, taken as true, fail to state a claim. Fed. R. Civ. P. 12(b)(6); see In re Warfarin Sodium, 214 F.3d 395, 397-98 (3d Cir. 2000). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do." Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007) (internal citations omitted). Thus, a motion to dismiss should be granted unless the plaintiff's factual allegations are "enough to raise a right to relief above the speculative level on the assumption that all of the complaint's allegations are true (even if doubtful in fact)." Id. at 1965 (internal citations omitted).

When deciding a motion to dismiss pursuant to Rule 12(b)(6), only the allegations in the complaint, matters of public record, orders, and exhibits attached to the complaint, are taken into consideration. Chester County Intermediate Unit v. Pa. Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990). A district court must accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom. See Oshiver, 38 F.3d at 1384. Moreover, these allegations and inferences must be viewed in the light most favorable to the plaintiff. Id. However, a court need not accept "'unsupported conclusions and unwarranted inferences,'" Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (citation omitted), and "[l]egal conclusions made in the guise of factual allegations . . . are given no presumption of truthfulness," Wyeth v. Ranbaxy Labs., Ltd., 448 F. Supp. 2d 607, 609 (D.N.J. 2006) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Kanter v. Barella, 489 F.3d 170, 177 (3d Cir. 2007) (quoting Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005)) ("[A] court need not credit either 'bald assertions' or 'legal conclusions' in a complaint when deciding a motion to dismiss.").

It is not necessary for the plaintiff to plead evidence. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir. 1977). The question before the court is not whether the plaintiff will ultimately prevail. Watson v. Abington Twp., 478 F.3d 144, 150 (2007). Instead, the court simply asks whether the plaintiff has articulated "enough facts to state a claim to relief that is plausible on its face." Twombly, 127 S.Ct. at 1974.

II. Motion to Dismiss Count II: Plaintiff's Claim Under the New Jersey Consumer Fraud Act Preempted by the Airline Deregulation Act

A. Express Premption

Preemption doctrine is rooted in the Supremacy Clause. See U.S. Const., art. VI, cl. 2 ("This Constitution, and the laws of the United States which shall be made in pursuance thereof...shall be the supreme law of the land."). Under the doctrine, a state law yields to a federal law in any case where the state law either contravenes or interferes with the stated purpose of the federal law. See Hillsborough County, Fla. v. Automated Med. Labs., Inc., 471 U.S. 707, 712 (1985) (citing Gibbons v. Ogden, 22 U.S. (9 Wheat) 1, 211 (1824)). Thus, "the purpose of Congress is the ultimate touchstone" in preemption analysis. See Retail Clerks Intern. Ass'n, Local 1625, AFL-CIO v. Schermerhorn, 375 U.S. 96, 103 (1963). That purpose or intent is "primarily discerned from the language of the statute, and the statutory framework surrounding it." Medtronic, Inc., v. Lohr, 518 U.S. 470, 486 (1996) (quoting Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 111 (1992) (Kennedy, J., concurring in part and concurring in judgment)). Notably, preemption applies in three distinct cases: 1) when Congress explicitly states its intention to preempt state law (express preemption); 2) when federal and state law cannot be harmoniously read together because they are in direct conflict (conflict preemption); and (3) when Congress legislates in a comprehensive manner so as to solely occupy a particular area of the law (field preemption). Kehm Oil Co. v. Texaco, Inc., 537 F.3d 290, 298 (3d Cir. 2008) (citations omitted).

Two principles inform the Court's judgment with respect to the preemptive scope inquiry. Medtronic, Inc., 518 U.S. at 485. First, there is a longstanding presumption against the preemption of state police power regulations. Cipollone v. Ligget Group, Inc., 505 U.S. 504, 518 (1992). Any preemption analysis must start with the "assumption that the historic police powers of the States [are] not to be superseded ... unless that was a clear and manifest purpose of Congress." See Altria Group, Inc., v. Good, 129 S.Ct. 538, 543 (2008) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)). Nevertheless, preemption may still apply even if the law at issue is a "matter of special concern to the States". Fid. Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 152 (1982). The Supreme Court recognizes that "[t]he relative importance to the State of its own law is not material when there is a conflict with a valid federal law, for the Framers of our Constitution provided that the federal law must prevail." Id. (quoting Free v. Bland, 369 U.S. 663, 666 (1962)). Accordingly, the second principle that informs the Court's judgment with respect to preemptive scope necessarily must be congressional purpose. ...

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