Garner v. HealyGarner v. Healy
MEMORANDUM OPINION AND ORDER
Plaintiffs John A Garner (“Gamer”) and Steven G. Grant (“Grant”) (collectively “Plaintiffs”) filed a seven-count Amended Class Action Complaint (“Amended Complaint”) against Defendants Denis J. Healy, Sondra Hirsch Healy, Matthew Broderick, Turtle Wax, Inc., Sheldon G. Adelman, Michael Turk, Pam Carestía, Brian V. Sokol, Blue Coral, Inc., n/k/a Blue Coral/Slick 50, Inc., Simoniz USA, Inc., Wa Syndet Products, Inc. and William M. Gora (“Defendants”) alleging violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”),
BACKGROUND
The focus of this case is Plaintiffs’ allegations that Defendants engaged in deceptive practices by fraudulently advertising, marketing and selling “non-wax products of minimal value as ‘car wax’.” (PI. Mot. at 1.) According to Plaintiffs, Defendants’ products were falsely described as sealer waxes, foam waxes, polish- waxes, foam polishes, and protectants despite the fact that none of the products actually contain “wax.” (Id. at 2.) These products are allegedly referred to as “cheater waxes” in the car wash industry because they have minimal value and do nothing to protect a car or enhance its appearance.
Presently before the Court is Plaintiffs’ motion for class certification. Plaintiffs seek to certify three nationwide classes consisting of all persons who purchased products marketed, produced or distributed as “car wax” by Defendants Turtle Wax (Class A), Blue Coral (Class B) and Simoniz USA (Class C), respectively. For each class, Plaintiffs seek to resolve the following “common questions of law or fact”:
1. Whether Defendants had any basis for representing their products as “car wax,” when none of the ingredients was a wax.
2. Whether the practices complained of constitute schemes to defraud.
3. Whether Defendants conducted or participated in the conduct of the enter*600 prises alleged through a pattern of mail and wire fraud in violation of18 U.S.C. §§ 1341 and 1343.
4. Whether Defendants’ misrepresentations regarding their “wax” products constituted unfair and deceptive practices.
5. Whether Defendants’ misrepresentations constituted a breach of express warranty.
(PI. Mem. at 3.) In sum, Plaintiffs seek certification of their RICO, consumer fraud and express warranty claims — for classes A through C as described above.
Apart from the merits of Plaintiffs’ motion for class certification, the parameters of the motion have also been the subject of heated discussion between the parties. Plaintiffs maintain that “[n]o advertisements are at issue here, only the name and marketing of the products as ‘waxes’ or ‘protectants’, [ ] through the use of misleading names like ‘Turtle Wax,’ ‘Blue Coral Sealer Wax,’ and ‘Simoniz Spray Gloss Wax.’” (PI. Reply at 17-18.) For their part, Defendants complaint that Plaintiffs have done an about-face with respect to which allegations of fraud they now seek to certify. Defendants protest that in their Amended Complaint, Plaintiffs refer to numerous advertisements and promotional materials as significant examples of fraud, while in their class certification motion, any allegations relating to Defendants’ advertisements and promotional materials have been abandoned. (Def. Surreply at 1-2.)
The Court is puzzled as to why Defendants are so disturbed over Plaintiffs’ decision to narrow their class certification motion. Despite Defendants’ protests to the contrary, Plaintiffs’ certification strategy was apparent in their initial certification motion. As such, nowhere in their motion do Plaintiffs make reference to advertisements or promotional materials. Plaintiffs’ motion unequivocally challenges Defendants’ “practice of misrepresenting the nature of their car ‘wax’ products” (PI. Mem. at 8-9) — not specific representations in advertisements or promotional materials.
This Court does not believe that Plaintiffs have unfairly “amended” their Complaint or their motion for class certification.
DISCUSSION
I. Standards For Class Certification
In the instant case, Plaintiffs seek certification under
In evaluating a motion for class certification, the Court does not examine the merits of the ease. Id. at 598. See Amchem Prods., Inc. v. Windsor,
Defendants oppose Plaintiffs’ class certification motion, arguing that, except for numerosity and adequacy, Plaintiffs fail all of
II. Commonality and Predominance
A Commonality
Under
Plaintiffs maintain that “standardized conduct” is at issue in this case; namely, Defendants’ marketing of their products as “wax” or “protectants” when, in fact, the products are neither. Defendants do not deny the existence of common factual issues, but instead, maintain that individual factual issues will predominate over common factual issues. Putting the predominance question to the side for the moment, the Court concludes that the 23(a)(2) requirement of commonality has been met. Indeed, courts have readily found a common nucleus of operative facts when the defendants are alleged to have directed standardized conduct toward the putative class members. See, e.g., Peterson,
B. Predominance
Defendants raise several arguments with respect to
1. Reliance and Proximate Cause
Defendants argue that to demonstrate -violations of RICO and state consumer protection law and breaches of warranty, each class member -will have to show that Defendants’ alleged misrepresentations proximately caused their injuries and that they reasonably relied upon these misrepresentations. (Turtle Wax. Mem. at 7.) Plaintiffs respond by emphasizing that they are not alleging oral misrepresentations or fraud in advertisements that may not have been seen by every potential class member. Rather, they are alleging a standardized course of conduct involving uniform misrepresentations by Defendants.
In Rohlfing v. Manor Care, Inc.,
So far as the issue of proximate cause is concerned, the Court is of a similar mind. To establish proximate cause, Plaintiffs must demonstrate that their purchases occurred after the allegedly fraudulent statements were made, and that the alleged fraud “directly or indirectly” injured Plaintiffs. See Haroco, Inc. v. American Nat. Bank & Trust Co. of Chicago,
2. Individual State Law Issues
Defendants maintain that substantive differences in state consumer fraud law and state warranty law preclude certification of Plaintiffs’ state law claims on a nationwide basis. In support of their contention, Defendants cite to Fisher v. Bristol-Myers Squibb Co.,
Still, Fisher and the pharmaceutical products cases cited by it involve much more complex factual and legal determinations than those in this case. The critical question here is whether Defendants have misrepresented their products to consumers. Unlike a mass tort case or a defective pharmaceutical device case, there are no “subsidiary concepts” such as duty of care, foreseeability or medical/scientific causation lurking in the
Defendants correctly point out that the Fisher court expressed serious reservations about certifying a nationwide class which applied 50 states’ consumer fraud statutes.
On the issue of Plaintiffs’ express warranty claims, Defendants have cited to Walsh v. Ford Motor Co.,
In sum, this Court is well-aware that there is no “general common law” of warranty, nor is there an Esperanto consumer fraud instruction, merging the consumer fraud statutes of the 50 states and the District of Columbia. Nevertheless, the Court is not convinced that the substantive differences in consumer fraud law and warranty law will predominate over the fundamental question of whether Defendants misrepresented their products as “waxes” or “protectants” to consumers.
III. Typicality
Typicality requires the named Plaintiffs to demonstrate that their claims “arise from the same event or practice or course of conduct that gives rise to the claims of other class members and his or her claims are based on the same legal theory.” Rosario,
Initially, Defendants claim that Garner and Grant are not typical of the class because they are not members of the class they seek to represent. Most of Defendants’ arguments, however, rely upon an assumption that Plaintiffs’ claims incorporate specific written misrepresentations or advertisements by each company. As discussed above, “the standardized conduct at issue is the defendants’ marketing of their products as “wax’ or ‘protectants’ when in fact, the products are neither.” (PI. Reply at 11.) Thus, to be “typical” class members, Garner and Grant must have purchased Defendants
The Court has reviewed Garner and Grant’s depositions. While neither individual strikes this Court as being particularly knowledgeable about his legal claim, this is not the standard. Both Garner and Grant purchased one or more of Defendants’ “non-wax “wax’ products,” and both appear to have believed that they were getting something more than they ultimately received. (See, e.g., Garner Dep. at 39, 47-48, 61-64, 70-72; Grant Dep. at 47-49, 53-54, 57, 146.) This is the essence of the claims of the class at large, and the Court finds that Garner and Grant are “typical” class members.
The next question is whether Garner and Grant are subject to any “unique” defenses that, might make them “untypical” of the class at large. Defendants’ primary contention is that Garner and Grant lack standing under the consumer fraud statutes in Illinois, Ohio and Connecticut because they cannot establish that they purchased Defendants’ products in those states. Plaintiffs respond that “it is the behavior of the Defendants that confers standing because the statute of the state where a business formulates and conducts its illegal policies can be applied to an entire class of consumers injured by the practice, including out-of-state consumers.” (PI. Reply at 7.)
This disagreement is not subject to a simple legal resolution. Other courts in this district have grappled with the question of whether Illinois’ consumer fraud statute can be invoked by. non-residents where the deceptive act or practice complained of was perpetrated in Illinois. See, e.g., Tylka v. Gerber Products Co.,
Unfortunately, the road is not so well traveled when it comes to interpreting the Connecticut and Ohio consumer fraud statutes and their application to non-resident consumers. There is some case law that supports the application of both statutes to non-resident consumers. See Brown v. Market Development, Inc.,
The final requirement imposed on class proponents by
First, the class members lack financial incentives to litigate this suit individually. The products at issue in this case are relatively low cost items and the modest possible recovery for each individual plaintiff would be dwarfed by individual litigation costs. This is clearly an instance where “the amounts at stake for individuals may be so small that separate suits would be impracticable.” Amchem Prods., Inc.,
CONCLUSION
As described at length in this opinion, there are still several issues to be resolved concerning the appropriate state law applicable to Plaintiffs’ claims and how that law should be applied in the class context. While Plaintiffs envision three classes (A-C) and, at most, several subclasses, this scheme may ultimately prove to be unworkable as the specifics of a class trial become discernible. The Court will address choice of law issues again when and if it becomes necessary— e.g., on motions for summary judgment.
For the foregoing reasons, the Court grants Plaintiffs’ motion for class certification.
Notes
. In considering a motion for class certification, the Court accepts as true all well pleaded factual allegations. See Hardin v. Harshbarger,
. Even assuming arguendo that Plaintiffs had surreptitiously "amended” their Complaint, the Court can see no justification for requiring Plaintiffs to formally amend their Complaint; thereby striking the original motion for class certification and requiring another round of briefing on the certification issue. That course of action would simply require more time and money — two commodities that this Court does not want either party to spend needlessly. Defendants have had ample time and pages to respond to Plaintiffs' certification motion.
. The Court finds that Plaintiffs' purported class is adequately described in their Amended Complaint for purposes of federal notice pleading.
. This finding is strengthened by the fact that proof of "actual reliance” on the part of each plaintiff is not required under the Illinois Consumer Fraud Act. See Tylka v. Gerber Products Co.,
. Questions of standing may ultimately prove Plaintiffs’ certification scheme unworkable, see infra at 604, and the Court reminds the parties that until there is a decision on the merits, the Court remains free to reevaluate and modify its certification order.
. While Plaintiffs have done a cursory job of explaining how they would handle any variances in state warranty law, the differences highlighted by Defendants involve little more than whether or not individual reliance must be established— an issue already addressed by the Court.
. Defendants have cited to Conn. Gen. Stat § 42-11 Og(b), which defines when class actions are authorized in Connecticut. This statute states that class actions may only be brought on behalf of "residents” of Connecticut or persons "injured” in Connecticut. § 42 — 11 Og(b). It is unclear how to interpret this subsection given the previous subsection which states that "[a]ny person who suffers any ascertainable loss of money or property” may bring an action under the CUTPA. § 42-110g(a) (emphasis added). Moreover, since this is a federal class action under
. The choice of law question may become moot if, for example, Defendants were to seek summary judgment on Plaintiffs’ lone federal claim — ■ RICO. Alternatively, choice of law questions may be irrelevant in a summary judgment motion based upon a common element of consumer fraud statutes, e.g., lack of a “false or misleading statement."