501 F.Supp.3d 662
E.D. Mo.2020Background
- Plaintiff Janice Goldman purchased multiple deeply discounted items from a Kate Spade outlet in Missouri (Oct. 2016–July 2019) and alleges at least nine identifiable purchases.
- Goldman alleges outlet tags showed inflated “original” prices and that many outlet items were manufactured for outlets, materially inferior, and never actually sold at the claimed original prices, making discounts false and misleading.
- She brought a putative statewide class action under the Missouri Merchandising Practices Act (MMPA) and unjust enrichment; defendants are Tapestry, Inc. and Kate Spade, LLC.
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(1) (jurisdiction) and 12(b)(6) (failure to state a claim), arguing lack of standing for non-purchased products, deficient CAFA diversity/amount allegations, and insufficiently pleaded fraud under Rule 9(b).
- The court found Goldman failed to satisfy CAFA’s jurisdictional allegations and, alternatively, failed to plead MMPA/unjust-enrichment claims with the particularity required by Rule 9(b), and granted the motion to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge products she did not buy | Goldman says injury stems from the pricing scheme itself and she purchased more than nine items (records available) so she can represent similar-product claims | Tapestry: plaintiff only has standing for the exact items she actually purchased | Court: plaintiff has standing theory as to similar products generally, but similarity/typicality is a class-certification issue, not a jurisdictional bar |
| CAFA jurisdiction (citizenship, amount in controversy, numerosity) | Goldman alleges Missouri residency and >$5M aggregate damages for a statewide five‑year class | Tapestry: Goldman failed to plead citizenship properly (resident ≠ citizen), failed to identify LLC members, and gave no factual support for >$5M | Held: CAFA requirements not adequately alleged; dismissal for lack of subject-matter jurisdiction under Rule 12(b)(1) |
| MMPA – ascertainable loss and unlawful practice (pleading sufficiency) | Goldman alleges benefit-of-the-bargain loss because products were worth less than advertised and that outlet products are inferior/made-for-outlet | Tapestry: plaintiff offers only conclusory allegations; she did not allege facts showing items were sold at higher bona fide prices or their true value; Rule 9(b) applies and was not satisfied | Held: Even assuming MMPA applies, claims dismissed under Rule 12(b)(6)/Rule 9(b) for failure to plead particular facts (who, what, when, where, how) showing the fraud and loss |
| Unjust enrichment | Goldman says Tapestry received and retained the benefit (purchase payments) under inequitable circumstances | Tapestry: no adequately pleaded misrepresentation/value differential to show inequity | Held: Dismissed for same pleading deficiencies as MMPA claim; cannot determine reasonable value or unjust enrichment without more facts |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires concrete injury)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for Rule 12(b)(6))
- ABF Freight Sys., Inc. v. Int’l Bhd. of Teamsters, 645 F.3d 954 (standing affects subject‑matter jurisdiction)
- Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (plaintiff bears burden to show amount in controversy in removal/CAFA context)
- In re SuperValu, Inc., 870 F.3d 763 (standing vs. adequacy of class representative; class‑certification distinction)
- Drobnak v. Andersen Corp., 561 F.3d 778 (Rule 9(b) permits allegations on information and belief only in limited circumstances)
- Joshi v. St. Luke’s Hosp., Inc., 441 F.3d 552 (Rule 9(b) requires identification of who, what, where, when, how for fraud claims)
- BJC Health Sys. v. Columbia Cas. Co., 478 F.3d 908 (conclusory allegations do not satisfy Rule 9(b))
- Reece v. Bank of New York Mellon, 760 F.3d 771 (resident ≠ citizen for diversity jurisdiction)
- E3 Biofuels, LLC v. Biothane, LLC, 781 F.3d 972 (LLC citizenship determined by members' citizenship)
- Thompson v. Allergan USA, Inc., 993 F. Supp.2d 1007 (Missouri MMPA uses benefit‑of‑the‑bargain rule)
- Finke v. Boyer, 56 S.W.2d 372 (price paid is irrelevant to benefit‑of‑the‑bargain measure of loss)