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Hodges v. Vitamin Shoppe, Inc.

United States District Court, Third Circuit

January 15, 2014

STEVEN HODGES, on behalf of himself and all others similarly situated, Plaintiff,
v.
VITAMIN SHOPPE, INC., Defendant.

OPINION

STANLEY R. CHESLER, District Judge.

This matter comes before the Court upon the motion filed by Defendant Vitamin Shoppe, Inc. ("Defendant" or "Vitamin Shoppe") to dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Plaintiff Steven Hodges ("Plaintiff" or "Hodges") has opposed the motion. The Court has considered the papers filed by the parties. For the reasons that follow, the motion to dismiss will be granted in part and denied in part. Hodges will be granted leave to file an Amended Complaint.

I. BACKGROUND

This putative class action involves allegedly false claims made by Vitamin Shoppe in the labeling and advertising of a dietary supplement product known as "True Athlete Training Formula" (hereinafter, the "Product"). According to the Complaint, Vitamin Shoppe, which manufactures and sells the Product, promotes the Product as a bodybuilding, fitness training and endurance developing formula. The Complaint avers that, contrary to statements made by Vitamin Shoppe about the Product's efficacy, the Product cannot deliver the promised results because the Product's ingredients are ineffective and/or because the instructed dosage is insufficient to achieve the results. Hodges, who is a citizen of California residing in Los Angeles, alleges that on or about December 2, 2012, he purchased the Product from Vitamin Shoppe's website. He further alleges that he, and the putative nationwide class of Product purchasers, would not have purchased the Product or would have paid substantially less for it had it not been for Defendant's misrepresentations. Hodges filed this lawsuit in federal court on May 30, 2013, claiming violation of the New Jersey Consumer Fraud Act, breach of express and implied warranties and unjust enrichment. This Court has subject matter jurisdiction over the action pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2).

II. DISCUSSION

A. Article III Standing

Defendant has argued that the action must be dismissed pursuant to Rule 12(b)(1) on the grounds that Hodges has no standing under Article III to bring this suit. Article III standing is a threshold question of jurisdiction. Ballentine v. United States , 486 F.3d 806, 810 (3d Cir. 2007). Accordingly, before turning to an examination of the sufficiency of the claims pled by Hodges, the Court must first address Defendant's argument regarding constitutional standing.

Article III empowers the Court to hear only "cases or controversies, " which means that (1) a plaintiff has suffered an injury-in-fact, (2) the injury is fairly traceable to some action of the defendant and (3) the injury is capable of redress by the court. Lujan v. Defenders of Wildlife , 504 U.S. 555, 560 (1992). These three elements constitute "the irreducible constitutional minimum" of Article III standing. Id .; see also Steel Co. v. Citizens For A Better Environment , 523 U.S. 83, 103-04 (1998) ("This triad of injury in fact, causation, and redressability comprises the core of Article III's case or controversy requirement....") The Supreme Court has held that the party invoking federal jurisdiction bears the burden of establishing Article III standing. Steel Co. v. Citizens For A Better Environment , 523 U.S. at 103-04.

Vitamin Shoppe's standing argument focuses on the injury-in-fact requirement. In Lujan, a seminal case on Article III standing, the Supreme Court defined injury in fact as "an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical." Lujan , 504 U.S. at 560. The Lujan Court added that by "particularized, " it meant that the harm claimed must personally affect the plaintiff, as opposed to some third party. Id. at 561 n. 1. Vitamin Shoppe maintains that Hodges cannot establish that he has sustained injury-in-fact based on his mere purchase of the product. It stresses that the Complaint does not allege either that Hodges himself ingested the subject dietary supplement or that he was, in his experience using the Product, disappointed by its underperformance and/or failure to provide the promised enhancement to his exercise routine.

Hodges, however, does not bring this lawsuit seeking relief for bodily harm allegedly caused by the Product. Were that the case, Defendant's argument concerning the absence of any allegations of Product use by Plaintiff himself might be on point. While standing does not depend on the merits of a plaintiff's claims, "it often turns on the nature and source of the claim asserted." Warth v. Seldin , 422 U.S. 490, 500 (1975). This is not a personal injury action. Rather, it concerns Plaintiff's claims that he was defrauded by Vitamin Shoppe's allegedly false statements about the Product to consumers in the marketplace and as a result bought merchandise that was "useless." (Compl. ¶ 15.) He alleges that he purchased the Product on the Vitamin Shoppe website "for his own use, and not for resale" and that "prior to purchasing the Product, [he] read and relied on Defendant's misrepresentations." (Id. ¶ 8.) Plaintiff's alleged economic loss in connection with his own purchase is both particularized and actual: it claims harm to himself, not a third person, and regards a real, non-hypothetical transaction. The alleged loss suffices to constitute injury-in-fact. Danvers Motor Co., Inc. v. Ford Motor Co. , 432 F.3d 286, 291 (3d Cir. 2005) (discussing requirements of Article III standing and noting that "[w]hile it is difficult to reduce injury-in-fact to a simple formula, economic injury is one of its paradigmatic forms."). The Court is satisfied that Hodges has established the he has Article III standing to bring this suit, and thus insofar as Defendant's motion seeks dismissal for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), the motion will be denied.

B. Sufficiency of the Claims

Vitamin Shoppe also seeks dismissal of the entire Complaint pursuant to Rule 12(b)(6). A complaint will survive a motion under Rule 12(b)(6) only if it states "sufficient factual allegations, accepted as true, to state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly , 550 U.S. 544, 570 (2007)). "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." Id . (citing Twombly , 550 U.S. at 556.) Following Iqbal and Twombly, the Third Circuit has held that, to prevent dismissal of a claim, the complaint must show, through the facts alleged, that the plaintiff is entitled to relief. Fowler v. UPMC Shadyside , 578 F.3d 203, 211 (3d Cir. 2009). While the Court must accept all factual allegations as true and construe the complaint in the light most favorable to the plaintiff, it need not accept a "legal conclusion couched as a factual allegation." Baraka v. McGreevey , 481 F.3d 187, 195 (3d Cir. 2007); Fowler , 578 F.3d at 210-11; see also Iqbal , 556 U.S. at 679 ("While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations."). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, will not suffice." Iqbal , 556 U.S. at 678.

Moreover, the heightened pleading standard of Federal Rule of Civil Procedure 9(b) applies to Plaintiff's Consumer Fraud Act claim. F.D.I. C. v. Bathgate , 27 F.3d 850, 876 (3d Cir.1994). Rule 9(b) states: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." As interpreted and applied by the Third Circuit, Rule 9(b) requires "plaintiffs to plead the who, what, when, where, and how: the first paragraph of any newspaper story.'" In re Advanta Corp. Sec. Litig. , 180 F.3d 525, 534 (3d Cir.1999) (quoting DiLeo v. Ernst & Young , 901 F.2d 624, 627 (7th Cir.1990)); see also Frederico v. Home Depot , 507 F.3d 188, 200 (3d Cir.2007) (holding that Rule 9(b) requires a party alleging fraud to state the circumstances of the alleged fraud "with sufficient particularity to place the defendant on notice of the precise misconduct with which [it] is charged.'"). To satisfy Rule 9(b)'s stringent pleading requirements, the plaintiff must "inject precision or some measure of substantiation into a fraud allegation." Frederico , 507 F.3d at 200.

Examining the Complaint's Consumer Fraud Act claim according pleading standards of Rule 8(a) and 9(b), the Court concludes that it fails to state a claim upon which relief can be granted. A claim under the Consumer Fraud Act entails three prima facie elements: "(1) unlawful conduct by defendant; (2) an ascertainable loss by plaintiff; and (3) a causal relationship between the unlawful conduct and the ascertainable loss." Bosland v. Warnock Dodge, Inc. , 197 N.J. 543, 557 (2009). Conduct in violation of the Consumer Fraud Act is defined as "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...." N.J.S.A. 56:8-2. The principal deficiency in Plaintiff's claim lies in the Complaint's lack of factual ...


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