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Charles Pappalardo, et al v. Combat Sports

December 23, 2011

CHARLES PAPPALARDO, ET AL.,
PLAINTIFFS,
v.
COMBAT SPORTS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Cooper, District Judge

MEMORANDUM OPINION

Plaintiffs, Charles Pappalardo, Michael Slebodnik, Jeffrey Welsh, and David Youshock (collectively, "Plaintiffs"), commenced this putative class action against defendants, Combat Sports, Inc., DeMarini Sports, Inc., Easton Bell Sports, Inc. ("Easton"), Hillerich & Bradsby Co., Wilson Sporting Goods, Inc. ("Wilson"), Mattingly Hitting Products, Inc., Miken Sports, Nike USA, Inc. ("Nike"), Rawlings Sporting Goods Co., Inc., and Worth Sports (collectively, the "Manufacturer Defendants"), and Little League, Inc. ("Little League"), and Babe Ruth League, Inc. ("Babe Ruth") (collectively, the "League Defendants"), in New Jersey Superior Court. (Dkt. entry no. 1, Rmv. Not. & Ex. A, Am. Compl.) Defendants removed on the basis that this Court has jurisdiction pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d). (Rmv. Not. at ¶ 18.)

The Amended Complaint asserts claims for (1) violations of the New Jersey Consumer Fraud Act ("NJCFA"), N.J.S.A. § 56:8-1 et seq.; (2) breach of express warranty pursuant to N.J.S.A. § 12A:2-313; (3) breach of implied warranty of merchantability, pursuant to N.J.S.A. § 12A:2-314(1) & (2); (4) breach of implied warranty of fitness for a particular purpose, pursuant to N.J.S.A. § 12A:2-315; (5) unjust enrichment; and (6) negligence. (Am. Compl. at ¶¶ 49-128.) Plaintiffs assert each of these six claims separately as to the Manufacturer Defendants and the League Defendants. (Id.)

Each defendant now moves to dismiss the Amended Complaint insofar as asserted against it, pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). (Dkt. entry no. 36, Easton Mot. to Dismiss; dkt. entry no. 37, Wilson Mot. to Dismiss; dkt. entry no. 38, Combat Sports, Inc. Mot. to Dismiss; dkt. entry no. 39, Nike Mot. to Dismiss; dkt. entry no. 40, Hillerich & Bradsby Co., Miken Sports, Rawlings Sporting Goods Co., Inc., and Worth Sports Joint Mot. to Dismiss; dkt. entry no. 42, Mattingly Hitting Products, Inc. Mot. to Dismiss; dkt. entry no. 44, Little League Mot. to Dismiss; dkt. entry no. 59, Babe Ruth Mot. to Dismiss.)*fn1

Defendants Combat Sports, Inc., Hillerich & Bradsby Co., and Nike have since been voluntarily dismissed from the action by stipulation, and thus their respective motions to dismiss have been rendered moot. (See dkt. entry nos. 62, 67, and 68, Stips. of Dismissal.) The Court decides the motions on the submissions of the parties, without oral argument, pursuant to Local Civil Rule 78.1(b). For the reasons stated herein, the Court will grant the separate motions to dismiss.

BACKGROUND

Plaintiffs allege that they "purchased composite barreled bats manufactured by the Manufacturer Defendants and licensed, approved and endorsed by the League Defendants" for use in organized youth baseball. (Am. Compl. at ¶ 14.)

Plaintiffs assert that the Manufacturer Defendants made representations regarding the "bat performance standard" ("BPF") of the composite barreled bats in question, specifically, that the "Manufacturer Defendants agreed to manufacture and sell bats with a BPF of 1.15 or lower," eventually "the 1.15 BPF began to be printed on the bats themselves," and that the League Defendants "instituted rules and regulations regarding BPF." (Id. at ¶ 20.)*fn2 They allege that research performed in October 2010 indicated that the BPF of composite barreled bats exceeded the listed BPF "once put into actual use," and that the League Defendants imposed moratoria on composite barreled bats in December 2010 and January 2011, which were later amended to bar from use only those composite barreled bats not on each league's list of approved bats. (Id. at ¶¶ 24-29.) Babe Ruth allegedly lifted its moratorium on composite barreled bats on February 4, 2011. (Id. at ¶ 30.)

Plaintiffs allege that they relied upon "the Manufacturer Defendants' advertising and marketing, the representations and warranties contained on the packaging and labels, the representations and warranties contained on the actual bats themselves, and the League Defendants' licensing, approval and endorsement" in purchasing composite barreled bats for their children. (Id. at ¶ 23.) They seek to represent a class composed of

All New Jersey residents who purchased, within six years prior to the filing of this Complaint, composite barreled bats manufactured by the Manufacturer Defendants which had been licensed, endorsed and/or approved by the League Defendants and have or had been ruled ineligible for use in Little League (Majors) 12 and Under Divisions and/or Cal Ripken Division (ages 4-12) of Babe Rule Baseball and/or had a moratorium placed on their use by those organizations. (Id. at ¶ 32.) Plaintiffs allege their loss to include "the purchase price for the composite barreled bats." (Id. at ¶ 46.)

The basis of each of the claims against the Manufacturer Defendants is that they allegedly advertised and marketed composite barreled bats as "being in compliance with the BPF of 1.15" without disclosing that such bats "would not remain in compliance with the BPF of 1.15 once . . . actually placed in use." (See, e.g., id. at ¶¶ 54-55.) The factual predicate for the claims against the League Defendants is "their licensing, endorsement and approval that the composite barreled bats were in compliance with a BPF of 1.15" and therefore "suitable for use in Little League and Babe Ruth" youth baseball. (See, e.g., id. at ¶¶ 93-94, 116.)

DISCUSSION

I. 12(b)(6) Motion to Dismiss Standard

In addressing a motion to dismiss a complaint under Rule 12(b)(6), the Court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine, whether any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). At this stage, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged---but it has not 'show[n]'---that the 'pleader is entitled to relief.'" Iqbal, 129 S.Ct. at 1950 (quoting Rule 8(a)(2)).

The NJCFA claim is subject to the heightened pleading standards of Rule 9(b), which requires that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed.R.Civ.P. 9(b); see Sheris v. Nissan N. Am., Inc., No. 07-2516, 2008 WL 2354908, at *6 (D.N.J. June 3, 2008); Parker v. Howmedica Osteonics Corp., No. 07-2400, 2008 WL 141628, at *2 (D.N.J. Jan. 14, 2008) ("[NJ]CFA claims sounding in fraud are subject to the particularity requirements of Federal Rule of Civil Procedure 9(b).") (quotation omitted).

"The purpose of Rule 9(b) is to provide notice of the precise misconduct with which the defendants are charged and to prevent false or unsubstantiated charges." Rolo v. City Inv. Co. Liquidating Trust, 155 F.3d 644, 658 (3d Cir. 1998) (internal quotation and citation omitted). "To satisfy this standard, the plaintiff must plead or allege the date, time, and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation." Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007). The allegations also must include "who made a misrepresentation to whom and the general content of the misrepresentation." Lum v. Bank of Am., 361 F.3d 217, 224 (3d Cir. 2004). If this specific information is not readily available, a plaintiff may use "alternative means of injecting precision and some measure of substantiation into their allegations of fraud." In re Rockefeller Ctr. Props. Sec. Litig., 311 F.3d 198, 216 (3d Cir. 2002) (quotation omitted).

The Court, in evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, may consider the complaint, exhibits attached thereto, matters of public record, and undisputedly authentic documents if the plaintiff's claims are based upon those documents. See Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993).

II. New Jersey Consumer Fraud Act Claims

The NJCFA provides in relevant part: The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice.

N.J.S.A. § 56:8-2. The term "person" as used in the NJCFA includes, inter alia, natural persons, partnerships, corporations, companies, trusts, business entities and associations. N.J.S.A. § 56:8-1(d).

To state a NJCFA claim, a plaintiff must allege the following elements: "(1) unlawful conduct by defendant; (2) an ascertainable loss by plaintiff[s]; and (3) a causal relationship between the unlawful conduct and the ascertainable loss." Bosland v. Warnock Dodge, Inc., 964 A.2d 741, 749 (N.J. 2009).

Unlawful practices under the NJCFA fall into three general categories: affirmative acts, knowing omissions, and regulation violations. Frederico, 507 F.3d at 202 (quotation omitted). Intent to defraud is not necessary to show unlawful conduct by an affirmative act of the defendant, but is an element of unlawful practice by knowing omission of the defendant. See Torres-Hernandez v. CVT Prepaid Solutions, Inc., No. 08-1057, 2008 WL 5381227, at *6 (D.N.J. Dec. 17, 2008). Plaintiffs plead unlawful conduct against the Manufacturer Defendants in the form of knowingly omitting to disclose "that the composite barreled bats would not remain in compliance with the BPF of 1.15" after being broken in. (Am. Compl. at ¶¶ 55, 94.)

A. Manufacturer Defendants

The Court finds that the allegations in the Amended Complaint lack the requisite specificity -- who, what, and where -- to sustain a cause of action under the NJCFA against any of the Manufacturer Defendants. First, Plaintiffs' allegations in support of its NJCFA claim refer only to the "Manufacturer Defendants," without distinguishing the actions or omissions of any one named Manufacturer Defendant from any other. (See id. at ¶¶ 51-60.) Failure to inform each defendant as to the specific fraudulent acts alleged against it contravenes the pleading requirements of Rule 9(b). See Hale v. Stryker Orthopedics, No. 08-3367, 2009 WL 321579, at *6 (D.N.J. Feb. 9, 2009). Second, as noted above, the Amended Complaint makes no specific allegations as to the relevance and meaning of the "BPF of 1.15," such that it is not evident from the face of the Amended Complaint why representations that a composite barreled bat had a BPF of 1.15 would be misleading. (Am. Compl. at ¶ 20.) See supra n.2. Nor does the Amended Complaint make any specific allegations as to the content of the alleged misleading advertising or marketing, with the exception that the bats may have been stamped as having a 1.15 BPF. (Am. Compl. at ¶ 20.)

With regard to the element of ascertainable loss, Plaintiffs' bare allegation that the Manufacturer Defendants "caused Plaintiffs and the Class to suffer an ascertainable loss in the amount of their [sic] purchase price (plus any applicable finance charges and resulting interest) of the composite barreled bats in question" will not carry their pleading burden. See Franulovic v. Coca Cola Co., Nos. 07-539 & 07-828, 2007 WL 3166953, at *7 (D.N.J. Oct. 25, 2007) (holding that general statements that defendant's claims were misleading, without any specifics about when, where, and for how much, and how often the plaintiff purchased the defendant's product, failed to establish the requisite element of ascertainable loss); accord Solo v. Bed Bath & Beyond, Inc., No. 06-1908, 2007 WL 1237825, at *3 (D.N.J. Apr. 26, 2007). Plaintiffs make no representations whatsoever as to (1) which make and model bats were purchased, (2) from whom the bats were purchased, and (3) when the bats were purchased. (Am. Compl. at ¶ 60.)

There is also absolutely no support for Plaintiffs' conclusory statement that the "Manufacturer Defendants' conduct, acts, and/or omissions as to the BPF of the composite barreled bats have rendered the bats unusable." (Am. Compl. at ¶ 59.) Because Plaintiffs have not specifically identified any of the "composite barreled bats in question," the Court has no way of knowing whether the "bats in question" are even in fact banned from use in Little League.*fn3 Furthermore, Plaintiffs allege no facts in support of this claim other than that the Manufacturer Defendants represented that the composite barreled bats had a BPF of 1.15 or lower; this allegation lacks the "aggravating circumstances" necessary to transform what is essentially a breach of warranty claim into a consumer fraud claim. See Suber v. Chrysler Corp., 104 F.3d 578, 587 (3d Cir. 1997); Cox v. Sears Roebuck & Co., 647 A.2d 454, 462 (N.J. 1994) (observing that "a breach of warranty . . . is not per se unfair or unconscionable," and "substantial aggravating circumstances must be present in addition to the breach"). The Amended Complaint alleges no facts whatsoever from which the Court could infer that the Manufacturer Defendants "acted with knowledge" that the composite barreled bats would not continue to conform to the 1.15 BPF standard. Because "intent is an essential element of the fraud," the NJCFA claim must be dismissed insofar as it is brought against each of the Manufacturer Defendants. Cox, 647 A.2d at 462.

B. League Defendants

Plaintiffs' NJCFA claim against the League Defendants alleges that they "deceptively and unlawfully advertis[ed] by way of their licensing, endorsement and approval that the composite barreled bats were in compliance with a BPF of 1.15." (Am. Compl. at ΒΆ 93.) They assert that this was a misleading omission because the bats "would not remain ...


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