230 F. Supp. 3d 1266
N.D. Ala.2011Background
- This memorandum opinion consolidates two related Alabama federal cases, Boyd and Green, with identical legal questions and parallel motions to dismiss.
- Plaintiffs allege breach of express warranty and RICO violations based on the trade names SteamVac and PowerSteamer, asserting the names imply steam use though the products allegedly only use hot water.
- Defendants are TTI Floorcare North America and Wal-Mart in Boyd and Bissell Homecare and Wal-Mart in Green; Wal-Mart marketed and sold the manufacturers’ products.
- Plaintiffs purchased the products at Alabama Wal-Mart stores and claim damages due to the alleged mismatch between the naming and actual steam production.
- The court previously dismissed related actions for lack of federal subject matter jurisdiction; plaintiffs refiled with RICO theories to restore jurisdiction.
- The court grants the defendants’ motions to dismiss in both actions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do trade names create express warranties under Alabama law? | SteamVac/PowerSteamer names expressly warrant steam use. | Trade names do not describe the goods or promise steam use; they only identify authenticity, not function. | Trade names alone do not create express warranties about steam production. |
| Are the RICO claims sufficiently pleaded under § 1962(c)? | Allegations show a pattern of racketeering through mail/wire fraud linked to advertised products. | Pleading fails to meet Rule 9(b)’s specifics and to allege an actionable enterprise and pattern. | RICO claims dismissed for failure to plead with particularity and to identify a viable enterprise. |
| Is there a cognizable RICO conspiracy claim under § 1962(d)? | Conspiracy to defraud based on retailer-manufacturer relationships and advertising. | No underlying RICO violation and no plausible agreement; parallel conduct shows independent activity. | RICO conspiracy claim dismissed for lack of underlying violation and plausible agreement. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. Supreme Court 2009) (pleading must be plausible, not merely possible)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. Supreme Court 2007) (pleading requires more than unadorned accusations)
- Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (U.S. Supreme Court 1985) (definition of RICO pattern and enterprise)
- Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283 (11th Cir. 2010) ( Rule 9(b) heightened pleading applicable to fraud-based RICO claims)
- Mohawk Indus., Inc. v. Carpenter, 465 F.3d 1277 (11th Cir. 2006) (enterprise as a continuing unit; structure matters for RICO)
- La Trace v. Webster, 17 So.3d 1210 (Ala. Civ. App. 2008) (authenticity promises can create express warranties in some contexts)
- Neff v. Kehoe, 708 F.2d 639 (11th Cir. 1983) (express warranty of authenticity via seller’s statements)
- Szajna v. General Motors Corp., 115 Ill.2d 294, 503 N.E.2d 760 (Illinois Supreme Court 1987) (name alone does not create an express warranty of quality)
- Gerber Prods. Co. v. W. La. Vending, 552 F.3d 934, 552 F.3d 934 (9th Cir. 2008) (product name can be misleading under consumer protection but not necessarily express warranty)
- Gilliam v. Indiana Nat. Bank, 337 So.2d 352 (Ala. Civ. App. 1976) (seller adoption of manufacturer’s warranty not automatic)
- Stachon v. United Consumers Club, Inc., 229 F.3d 673 (7th Cir. 2000) (enterprise and conspiracy pleading requires more than mere business relationship)