GARY CISER, on behalf of himself and all others similarly situated, Plaintiff,
NESTLÉ WATERS NORTH AMERICA, INC., Defendant.
WILLIAM J. MARTINI, District Judge.
For several years, Ciser Computer Consulting ("CCC") contracted with Defendant Nestle Waters North America, Inc. ("Nestle") for the delivery of bottled water. CCC's owner, Plaintiff Gary Ciser, paid the bills, which sometimes included late charges. Arguing that the late charges constituted unenforceable penalties under New Jersey law, Ciser brought the instant putative class action alleging violations of the New Jersey Consumer Fraud Act (the "NJCFA"), the common law of liquidated damages, and unjust enrichment. Nestle moves to dismiss all claims pursuant to Federal Rule of Civil Procedure 12(b)(6). There was no oral argument. For the reasons discussed below, the Court will GRANT the motion.
I. FACTUAL BACKGROUND
Nestle delivered bottled water to CCC, and Ciser paid the bills. Second Am. Compl. ¶ 15, ECF No. 20. On several occasions, Ciser did not make timely payments. As a consequence, Nestle charged late fees of $15. Id. ¶ 20. With respect to the late fees, Ciser claims that Nestle's invoices were confusing. Id. ¶¶ 42-45. He claims that he could not tell which month's bill went with which late fee. Id. ¶¶ 43-45. He further claims that his invoices were inconsistent with Nestle's website. Id. ¶ 42. Nestle's website stated that late fees would be "the greater of (i) a late fee not to exceed $20 per month, or (ii) interest of 1.5% per month on any unpaid amount from the invoice date until paid." "[p]ast due invoices... may be assessed a late fees as allowed by law not to exceed $20 per month." Id. ¶ 21. The invoice stated that "[p]ast due invoices may be assessed a late fee as allowed by law not to exceed $20 per month. Additional third party collection/attorney expenses may be assessed at a rate not to exceed 100% of the unpaid balance or the maximum allowed by law." Id. ¶ 22.
The Second Amended Complaint, which the Court refers to as the "SAC, " identifies five occasions in which Ciser paid late fees ranging from roughly 30% to roughly 130% of the underlying bill:
Monthly Charge Invoice Date Days Overdue Late Fee Late Fee As Percentage of Monthly Charge $ 11.3111/12/08 37 $ 15 132.62% $ 25.78 4/10/09 12 $ 15 58.18% $ 37.24 7/10/08 44 $ 15 40.27% $ 39.47 9/12/06 15 $ 15 38% $ 51.96 1/10/07 33 $ 15 28.86%
Id. ¶ 26.
On information and belief, Ciser alleges that when a customer failed to pay its bill in a timely fashion, Nestle would incur two types of costs. First, Nestle would lose out on the interest it would have accumulated had it received timely payments. Id. ¶ 30. Second, Nestle would incur administrative costs if it had to send collection letters or hire collection agencies. Id.
Ciser maintains that "Nestle's late fees policy of a fixed $15 amount (up to $20) has no rational relationship to the actual (or anticipated) direct damages suffered by Nestle Waters." Id. ¶ 32. In the SAC, Ciser focuses on his $51.96 bill from January 10, 2007. Ciser was 33 days late on this payment. Id. ¶ 26. Using the consolidated financial statements for Nestle Group (as opposed to Defendant Nestle Waters North America, Inc.), an NYU business school professor calculated that Nestle lost out on 14 cents in interest because Ciser did not pay on time. Id. ¶ 33. And since Nestle apparently did not call a collection service or send any additional notices to Ciser, Ciser maintains that Nestle's administrative cost for the late payment was zero. Id. ¶ 34. Furthermore, Ciser alleges that if Nestle had sent a collection letter, which costs roughly $1, Nestle would have lost out on only $1.14. Id.
Ciser also claims that Nestle's late fees were "far beyond the customary late fee rate in the bottled water industry." Id. ¶ 38. Ciser claims that Twin Rocks Spring Water Service does not charge a late fee for bottled water deliveries, that Belmar Spring Water charges a $1 late fee, that Diamond Rock Spring Water charges a 10% late fee, and that Blue Mountain Natural Spring Water Company, DS Waters of America, and Water Guys charge a $10 late fee. Id. ¶ 39.
II. PROCEDURAL HISTORY
On August 31, 2011, CCC and Ciser filed an original three-count Complaint against Nestle alleging violations of the NJCFA, the common law of liquidated damages, and unjust enrichment. ECF No. 1. The original Complaint represented that Nestle charged excessive late fees, and that Nestle also breached its contract by charging customers during a grace period. Nestle moved to dismiss. Before the Court could address the motion, CCC and Ciser filed an Amended Complaint. ECF Nos. 8-11. The Amended Complaint also asserted claims under the NJCFA, the common law of liquidated damages, and unjust enrichment. Unlike the original Complaint, the Amended Complaint pursued only the excessive late fee claims. The Amended Complaint did not pursue claims related to charges incurred during grace periods.
On December 16, 2011, Nestle moved to dismiss the Amended Complaint. ECF No. 12. The Court granted the motion on January 31, 2013. ECF No. 21. The Court dismissed CCC's claims on standing grounds. Ciser v. Nestle Waters North America, Inc., No. 11-5031, 2013 WL 396139, at *2 (D.N.J. Jan. 31, 2013). The Court held that Ciser had standing, but the Court also held that Ciser's claims were conclusory. Specifically, the Court noted that Ciser did not plead facts suggesting that Nestle's late fees were unreasonable. The Court explained: "Ciser says nothing about the anticipated or actual costs Nestle Waters incurs as a result of a ...