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Aundria Arlandson, et al., On Behalf of Themselves and All Others Similarly Situated v. Hartz Mountain Corporation

May 26, 2011

AUNDRIA ARLANDSON, ET AL., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
HARTZ MOUNTAIN CORPORATION,SERGEANT'S PET CARE PRODUCTS, INC., AND SUMMIT VETPHARM, LLC, DEFENDANTS.



The opinion of the court was delivered by: William J. Martini, U.S.D.J.

OPINION

This matter comes before the Court on Defendant Hartz Mountain Corporation ("Hartz"), Sergeant‟s Pet Care Products ("Sergeant‟s"), and Summit Vetpharm, LLC‟s ("Summit") motions to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(b)(2). There was no oral argument. Fed. R. Civ. P. 78. For the reasons stated below, Defendants‟ motions to dismiss is GRANTED in part and DENIED in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs‟ Consolidated Amended Complaint ("Complaint") brings a putative class action on behalf of themselves and other purchasers and users of "spot on" flea and tick treatments manufactured by Defendants Hartz, Sergeant‟s, and Summit. Defendants all manufacture "spot on" flea and tick control products ("Products") that are sold over the counter and contain Pyrethrin or Pyrethrin derivatives. (Compl. ¶ 177.) "Spot on" flea and tick treatments are ones that are applied directly to one or more localized areas on the body of the pet. (Compl. ¶ 185.)

On May 5, 2009, as updated January 10, 2010, the Environmental Protection Agency ("EPA"), which regulates the safety of pesticides, issued an advisory, reporting that it is "intensifying its evaluation of spot-on pesticide products for flea and tick control due to recent increases in the number of reported adverse reactions in pets treated with these products." (Compl. ¶ 185.) Additionally, on August 3, 2009, the national Humane Society of the United States ("HSUS") released public comments to the EPA specifically addressing Defendant Hartz, stating that "the HSUS continues to receive complaints regarding Hartz flea and tick products more than any other manufacturer." (Compl. ¶187.)

Plaintiffs allege that Defendants‟ Products are unsafe because they sickened and, in some cases, killed their pets. (Compl. ¶ 2.) The Complaint includes 28 named Plaintiffs from various states whose pets were allegedly harmed after being treated with flea and tick products sold by Hartz, Sergeant‟s or Summit. Ten Plaintiffs residing in seven different states are alleging claims against Hartz ("Hartz Plaintiffs"): Laura Bouse (California), Violeta Cruz (Georgia), Stacie Gibbs (Pennsylvania), Deanna Marsocci (North Carolina), Rich Parsons (California), Barbara Pennell (North Carolina), Michael Powell (Arizona), Kristy Pruitte (North Carolina), Richard Swanson (New York), and Lisa Tuyes (Louisiana). Fourteen Plaintiffs residing in nine different states are alleging claims against Sergeant‟s ("Sergeant‟s Plaintiffs"): Aundria Arlandson (Minnesota), William and Gretchen Brynteson (Minnesota), Melanie Canceli (California), Linda Carden (Tennessee), Lisa Dachenhausen (New York), Claire Enkosky (New York), Stephanie Grandy (Illinois), Bonnie Kyrros (Oregon), Tiffany Murphy (California), Miriam Poore (Florida), Kathy Slivan (Pennsylvania), Shelby Touchstone (Florida), and Marie Zolnowski (New Jersey). Four Plaintiffs residing in four different states are alleging claims against Summit ("Summit Plaintiffs"): Lisa Dougherty (Maryland), Kathleen Fedrow (California), Ywanna Longmire (Virginia), and Catharine Vexler (Texas).

Plaintiffs, on behalf of themselves and other purchasers of Defendants‟ products, bring the following causes of action: (1) breach of implied warranty of merchantability (Count One); (2) breach of express warranty (Count Two); (3) violation of the New Jersey Consumer Fraud Act ("NJCFA") against Defendants Hartz and Summit*fn1 (Count Three); and (4) unjust enrichment (Count Four). Specifically, Plaintiffs seek economic damages based upon the difference between the amount they paid for the product and the diminished (or nonexistent) value of the product as a result of it being unsafe to apply to their pets.*fn2

II. DISCUSSION

A.Motion to Dismiss Standard

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated, Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005), and dismissal is appropriate only if, accepting all of the facts alleged in the complaint as true,*fn3 the plaintiff has failed to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). Although a complaint need not contain 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 the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Thus, the factual allegations must be sufficient to raise a plaintiff‟s right to relief above a speculative level, see id. at 570, such that the court may "draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949 (2009) (citing Twombly,opinions on the pending motions to dismiss in the following flea and tick treatment cases: Smith 550 U.S. at 556). While "[t]he plausibility standard is not akin to a "probability requirement‟ ... it asks for more than a sheer possibility..." Iqbal, 129 S.Ct. at 1949 (2009).

In considering a motion to dismiss, the court generally relies on the complaint, attached exhibits, and matters of public record. Sands v. McCormick, 502 F.3d 263 (3d Cir. 2007). The court may also consider "undisputedly authentic document[s] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff‟s claims are based on the [attached] document[s]." Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Moreover, "documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered." Pryor v. Nat'l Coll. Athletic Ass'n, 288 F.3d 548, 560 (3d Cir. 2002).

B.Sergeant's Motion to Dismiss for Lack of Personal Jurisdiction

Federal Rule of Civil Procedure 12(b)(2) provides for the dismissal of a complaint where the court has no personal jurisdiction over the defendant. Sergeant‟s, a Nevada Corporation with its principal place of business in Omaha, Nebraska, contends that the Court does not have personal jurisdiction over it. (Sergeant‟s Moving Br. at 3.) A district court may exercise personal jurisdiction over a nonresident of the forum to the extent authorized by the forum state‟s long-arm statute. See Provident Nat'l Bank v. California Fed. Sav. Loan Ass'n, 819 F.2d 434, 436 (3d Cir. 1987) (citing Fed. R. Civ. P. 4(e)). New Jersey‟s long-arm statute permits an exercise of jurisdiction to the fullest extent allowed by the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Nicholas v. Saul Stone & Co., LLC, 224 F.3d 179, 184 (3d Cir. 2000); N.J. Ct. R. 4:4-4. Thus, courts in this state may exercise personal jurisdiction over nonresident defendants if they have established "certain minimum contacts with [New Jersey] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted).

Personal jurisdiction may be either general or specific to the particular litigation. General jurisdiction only exists where the defendant has continuous or systematic contacts with the forum. Sergeant‟s is a Nevada corporation, with its principal place of business in Nebraska, and has no offices, bank accounts, assets, or employees in New Jersey. (Sergeant‟s Moving Br. at 3.) Sergeant‟s connection to New Jersey alleged by Plaintiffs is through its products being sold and marketed in the state and purchased by Plaintiff Marie Zolnowski. (Pls.‟ Opp. Br. at 48.) These contacts likely do not constitute "continuous or systematic contacts" with New Jersey so as to support general jurisdiction.

Regardless of whether general jurisdiction exists, however, the Court finds that specific jurisdiction over Sergeant‟s is supported here. Specific jurisdiction is established where the defendant has sufficient "minimum contacts" with the forum, and the cause of action arises directly out of those contacts. Hanson v. Denckla, 357 U.S. 235, 253 (1958); Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 (1984).

Minimum contacts are established if "the defendant purposely avails itself of the privilege of conducting activities within the forum State, thus invoking the benefit and protection of its laws." Hanson, 357 U.S. at 253 (citing Int'l Shoe, 326 U.S. at 319). Specific jurisdiction is not satisfied, however, where the unilateral acts of the plaintiff alone bring the defendant into the forum. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 298 (1980). Rather, a plaintiff must show "a deliberate targeting of the forum," O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 317 (3d Cir. 2007), such that the defendant should "reasonably anticipate being haled into court there." World-Wide Volkswagen, 444 U.S. at 297. Finally, the burden is on the plaintiff to establish personal jurisdiction once challenged. General Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001). However, until an evidentiary hearing is held, Plaintiffs "need only establish a prima facie case of personal jurisdiction," and are "entitled to have [their] allegations taken as true and all factual disputes drawn in [their] favor." O'Connor, 496 F.3d at 316 (quoting Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.)).

Plaintiffs have alleged that Sergeant‟s products are sold in pet stores within New Jersey, and that one of the Plaintiffs, Marie Zolnowski, is a New Jersey citizen that purchased the product in New Jersey. Sergeant‟s chose to have its products sold by New Jersey retail stores, and was aware that its products would then be sold to consumers in New Jersey, and has therefore purposefully availed itself of the "privilege of conducting activities" within New Jersey. See Hanson, 357 U.S. at 253. Furthermore, since the Sergeant‟s Plaintiffs‟ claims arise out of the purchase of Sergeant‟s flea and tick control products, and Plaintiff Marie Zolnowski made her purchase in New Jersey, the claims "arise out of" Sergeant‟s minimum contacts within New Jersey. As such, this Court has specific personal jurisdiction over Sergeant‟s.

Sergeant‟s further argues that even if specific jurisdiction exists as to Plaintiff Marie Zolnowski‟s claims, it does not exist as to the claims of the other named Plaintiffs or the putative class outside of New Jersey residents. Specific jurisdiction is evaluated on a claim-by-claim basis. Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007) (citing Remick v. Manfredy, 238 F.3d 248, 255-56 (3d Cir. 2001)). However, there is no requirement that the evaluation be done for each plaintiff individually. See Miller Yacht Sales, 384 F.3d 93 (holding that specific jurisdiction must be claim- and defendant-specific, but not addressing whether it must be plaintiff-specific). Since Plaintiff Marie Zolnowski‟s claims arise out of Sergeant‟s contacts with New Jersey, and since all Plaintiffs in this action are joining in the same causes of action, the specific jurisdiction supported by Plaintiff Marie Zolnowski‟s claim extends to the claims as made by all Plaintiffs.

Finally, Sergeant‟s moves in the alternative to transfer the claims against Sergeant‟s to the District of Nebraska. Under 28 U.S.C. § 1404(a), "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." The goals of 28 U.S.C. § 1404(a) are "to prevent the waste of time, energy and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense." Van Dusen v. Barrack, 376 U.S. 612 (1964). The burden is on the moving party to establish the need for a transfer. Jumara v. State Farm Inc. Co.,55 F.3d 873, 879 (3d Cir. 1995). While a transfer to the District of Nebraska may be more convenient for Sergeant‟s, it will not prevent the waste of time, energy and money. Currently pending in this Court are multiple other pending actions asserting similar claims against manufacturers of "spot-on" flea and tick products. One of these other pending actions, Johansson v. Central Garden and Pet Company, Civ. No. 10-6372, was transferred to this Court from the Northern District of California to prevent the waste of time and energy in having such a similar action pending in another District. As such, the Court finds the claims against Sergeant‟s should not be transferred out of this Court, and therefore Sergeant‟s motion in the alternative to transfer the case to the District of Nebraska is denied.

C.Choice of Law Principles

Since Plaintiffs‟ claims are all based on state law, at the outset the Court must determine which law to apply to Plaintiffs‟ claims. New Jersey‟s choice of law rules apply, as a federal court sitting in diversity must apply the forum state‟s choice of law rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 383 U.S. 487, 496 (1941). New Jersey has adopted the "most significant relationship" test of the Restatement (Second) of Conflict of Laws. P. V. v. Camp Jaycee, 197 N.J. 132, 142-43, 962 A.2d 453 (2008).*fn4 This analysis, which must be performed on an issue-by-issue basis, is a two-step process. Id. at 143. The first step is to determine whether an actual conflict of law exists, for if no conflict exists, the law of the forum state applies. Id. Second, if a conflict does exist, the Court must determine which state has the "most significant relationship" to the claim, by "weigh[ing] the factors set forth in the Restatement section corresponding to the plaintiff‟s cause of action." Nikolin v. Samsung Elecs. Am., Inc., Civ. No. 10-1456, 2010 U.S. Dist. LEXIS 110942, at *9 (D.N.J. Oct. 18, 2010).

Plaintiffs argue that it is premature to conduct a proper choice of law analysis, as the Court does not yet have a full factual record. Due to the factual inquiry that may be necessary to properly weigh the Restatement factors, "it can be inappropriate or impossible for a court to conduct that analysis at the motion to dismiss stage when little or no discovery has taken place." In re Samsung DLP Television Class Action Litigation, Civ. No. 07-2141, 2009 WL 3584352, at *3 (D.N.J. Oct. 27, 2009). However, "[s]ome choice of law issues may not require a full factual record and may be amenable to resolution on a motion to dismiss." Harper v. LG Elecs. United States, Inc., 595 F. Supp. 2d 486, 491 (D.N.J. 2009). As such, courts in this Circuit have sometimes determined that the choice of law analysis in a putative class action can be done at the motion to dismiss stage. See, e.g., Cooper v. Samsung Elecs. Am., Inc., 374 Fed. Appx. 250, 255 n.5 (3d Cir. 2010); Warma Witter Kreisler, Inc. v. Samsung Electronics America, Inc., Civ. No. 08-5380, 2010 U.S. Dist. LEXIS 34584, at *2 (D.N.J. Apr. 8, 2010); Knox v. Samsung Electronics America, Inc., Civ. No. 08-4308, 2009 U.S. Dist. LEXIS 53685, at *2 (D.N.J. June 25, 2009). Other times, however, Courts in this District have deferred the choice of law analysis until the class certification stage. See Harper, 595 F. Supp. 2d at 490-91; In re Samsung, 2009 WL 3584352, at *3; In re Mercedes-Benz Tele Aid Contract Litig., 257 F.R.D. 46, 55 (D.N.J. 2009); In re K-Dur Antitrust Litig., 338 F. Supp. 2d 517, 541 (D.N.J. 2004); In re Hypodermic Products Antitrust Litig., Civ. No. 05-1602, 2007 U.S. Dist. LEXIS 47438, at *16 (D.N.J. June 29, 2007).

In order to decide whether choice of law analysis is appropriate at the motion to dismiss stage in this particular case, the Court will follow the guidance provided in Harper, and determine whether the choice of law issues "require a full factual record" or not. 595 F. Supp. 2d at 491. Since choice of law analysis must be undertaken on an issue-by-issue basis, the Court will also determine whether or not to defer its choice of law decision on an issue-by-issue basis. The factual record available at this time may be full enough for certain choice of law determinations but not for others. Therefore, New Jersey‟s choice of law analysis will be addressed for each issue, and should the choice of law determination for that issue require a fuller factual record, the Court will defer its decision until such factual record is available.

D.Preemption Under FIFRA

Defendants first argue that Plaintiffs‟ claims are preempted by the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 ("FIFRA"), as Plaintiffs‟ claims for relief seek to alter the EPA-approved labels and package inserts of Defendants‟ Products. FIFRA provides a comprehensive scheme for regulating labels used on pesticides such as Defendants‟ Products. When a pesticide manufacturer applies to the EPA for registration of a pesticide product, the manufacturer "must submit a proposed label to [the] EPA as well as certain supporting data." Bates v. Dow Agrosciences L.L.C., 544 U.S. 431, 438 (2005) (citing 7 U.S.C. § 136a). The EPA then determines what warnings or precautions must appear on the product‟s label, and notifies the manufacturer of its labeling decision. 7 U.S.C. § 136a(c). Under FIFRA, the EPA is essentially given full control to regulate labels used on pesticides. While state governments can regulate pesticide labeling in conjunction with the federal government, they are expressly prohibited from "impos[ing] or continu[ing] in effect any requirements for labeling or packaging in addition to or different from" those established by the federal government. 7 U.S.C. § 136v(b). This includes "judge-made rules" in addition to statutes and regulations. Bates, 544 U.S. at 443. However, this preemption is limited in scope to judge-made requirements for "labeling or packaging," where said requirement is more than is required under FIFRA. Id. at 444.

The Supreme Court‟s decision in Bates instructs courts as to what types of claims are preempted by FIFRA. In Bates, the Supreme Court held that, "rules that require manufacturers to design reasonably safe products, to use due care in conducting appropriate testing of their products, to market products free of manufacturing defects, and to honor their express warranties or other contractual commitments plainly do not qualify as requirement for labeling or packaging." 544 U.S. at 444 (finding that the petitioners‟ claims for defective design, defective manufacture, negligent testing, and breach of express warranty were not pre-empted). The Supreme Court further explained that "the proper inquiry calls for an examination of the elements of the common-law duty at issue," not an examination of the potential effects of imposing those common law requirements. Id. at 445. The Third Circuit, in examining Congress‟s purpose in passing FIFRA, additionally explains that ...


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