DONNEFELD v. PETRO HOME SERVICES
2:16-cv-00882
D.N.J.Mar 24, 2017Background
- Plaintiff M. Norman Donnenfeld, a New York resident, purchased Petro home heating oil under a fixed-price plan, paid a $300 termination fee in Dec. 2014, and switched to Petro’s ceiling-price plan (max price $2.899/gal) for deliveries from a Plainview, NY depot.
- Donnenfeld alleges Petro routinely charged the ceiling price despite market price declines, depriving ceiling-plan customers of downward price adjustments; he sued on behalf of a putative nationwide class asserting statutory and common-law consumer claims.
- Defendants are three corporate entities (PHS, Petro Holdings, Inc., Petro, Inc.) none of which are alleged to be incorporated or have principal places of business in New Jersey; Plaintiff mailed payments to a Newark, NJ PO box and alleged five NJ depots.
- Defendants moved to dismiss for lack of personal jurisdiction, failure to state a claim, to strike the class allegations, and to stay discovery; the Court considered briefs and decided on the motion without oral argument.
- The Court dismissed the Complaint without prejudice for lack of personal jurisdiction and, alternatively, for failure to state a plausible claim, and denied as moot the motions to strike the class allegations and to stay discovery; plaintiff was granted 30 days to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction (general) | Newark PO box, NJ depots and systematic contacts render Petro "at home" in NJ | Defendants lack incorporation/PPB in NJ; contacts insufficient for general jurisdiction | No general jurisdiction; allegations insufficient to show an "exceptional" presence |
| Personal jurisdiction (specific) | NJ mailing address and corporate activities support specific jurisdiction | Contacts do not relate sufficiently to this litigation and party-to-party links unclear | No specific jurisdiction; Complaint fails to allege contacts with reasonable particularity |
| Failure to state a claim (price-fluctuation theory) | Petro promised market-based downward adjustments; market prices fell and plaintiff was charged ceiling | Plaintiff’s allegations are conclusory; lacks factual showing of market price declines or timing to support deception | Dismissal alternatively warranted under Rule 12(b)(6): plaintiff failed to plausibly plead price declines or facts allowing inference of liability |
| Motion to strike class allegations & stay discovery | Premature to strike class claims; merits and class issues require discovery | Class allegations allegedly incurably deficient; discovery should be stayed pending motion | Motion to strike and to stay discovery denied as moot given dismissal; court did not reach merits of class-certification arguments |
Key Cases Cited
- Daimler AG v. Bauman, 134 S. Ct. 746 (Sup. Ct.) (general-jurisdiction "at home" standard)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (Sup. Ct.) (distinguishing general and specific jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (Sup. Ct.) (specific-jurisdiction purposeful direction/contacts test)
- Ashcroft v. Iqbal, 556 U.S. 662 (Sup. Ct.) (plausibility standard for pleadings)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Sup. Ct.) (pleading must raise reasonable expectation that discovery will uncover proof)
- O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312 (3d Cir.) (framework for specific-jurisdiction analysis)
- Marten v. Godwin, 499 F.3d 290 (3d Cir.) (federal courts follow state long-arm limits subject to Due Process)
- Nicastro v. McIntyre Mach. Am., Ltd., 201 N.J. 48 (N.J. 2010) (New Jersey treats long-arm as coterminous with constitutional limits)