416 F.Supp.3d 394
M.D. Penn.2019Background
- Plaintiffs Silva and Avenetti (Oregon residents) bought Rite Aid-branded dietary supplements; plaintiffs challenge the front "principal display panel" labeling as misleading about serving size/amount per capsule or tablet.
- Bottles have both a principal display panel (front) and a supplement-facts label (back); plaintiffs do not allege they read the supplement-facts labels prior to purchase.
- Plaintiffs filed a second amended complaint asserting intentional and negligent misrepresentation, breach of contract, breach of express and implied warranties, unjust enrichment, and violation of Pennsylvania's UTPCPL.
- Rite Aid moved to dismiss under Fed. R. Civ. P. 12(b)(1) and 12(b)(6) arguing lack of standing for injunctive relief, failure to plead pre-suit UCC notice, and that the economic-loss doctrine or contract principles bar certain tort and warranty claims.
- The court dismissed plaintiffs' request for injunctive relief and their claims for breach of contract and express/implied warranty and fraudulent misrepresentation (with leave to amend some claims), but permitted the UTPCPL and unjust enrichment claims to proceed; Rule 23/class issues deferred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for injunctive relief | Plaintiffs seek leave to allege intent to purchase again and thus can seek injunctive relief | No credible allegation of likely future injury; speculative if plaintiffs will be deceived again | Request for injunctive relief dismissed for lack of Article III standing (no likely future injury) |
| UCC pre-suit notice for breach/warranty claims | Labels create contractual/warranty obligations; plaintiffs need not yet plead notice | 13 Pa. Cons. Stat. § 2607(c)(1) requires notice of breach within a reasonable time; failure to plead notice bars remedies | Breach of contract and express/implied warranty claims dismissed without prejudice for failure to plead pre-suit notice; leave to amend to allege compliance |
| Economic-loss doctrine (UTPCPL, fraud, negligent misrep) | UTPCPL and tort claims should survive; Pennsylvania law does not categorically bar UTPCPL | Werwinski predicts economic-loss bars UTPCPL and fraud claims | UTPCPL claim permitted (state precedent Dixon/Knight and Dittman show change); fraudulent misrepresentation barred by economic-loss rule; negligent misrep dismissal denied without prejudice pending contract-term development |
| Contract formation / labels as contract and breach | Principal display panel alone created contractual promise breached by Rite Aid | Contract must be read as a whole (front and back labels); plaintiffs did not allege breach of the full contract terms | Breach-of-contract claim dismissed without prejudice for failure to plead plausible breach of the whole contract; leave to amend |
Key Cases Cited
- Susan B. Anthony List v. Driehaus, 573 U.S. 149 (2014) (standing/injury-in-fact framework for injunctions)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing elements)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (concreteness requirement for injury-in-fact)
- McNair v. Synapse Grp., Inc., 672 F.3d 213 (3d Cir. 2012) (future injury presumption and standing for injunctive relief)
- Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir. 2002) (predictive ruling that economic-loss bars UTPCPL and fraud claims)
- Dittman v. Univ. of Pittsburgh Med. Ctr., 196 A.3d 1036 (Pa. 2018) (Pennsylvania Supreme Court clarifying recoverability of purely economic loss under tort theories)
- Dixon v. Northwestern Mutual, 146 A.3d 780 (Pa. Super. Ct. 2016) (Pennsylvania Superior Court holding economic-loss does not bar UTPCPL)
- Knight v. Springfield Hyundai, 81 A.3d 940 (Pa. Super. Ct. 2013) (similar Superior Court treatment regarding UTPCPL)
- In re Johnson & Johnson Talcum Powder Prods. Mktg., 903 F.3d 278 (3d Cir. 2018) (discussing likelihood of future injury for injunctive relief)