I. Introduction
Indirect purchasers
In response, Defendants have jointly filed the Motion sub judice which tries to crack, if not wholly topple, most of the Plaintiffs’ claims by seeking full or partial dismissal of all counts.
II. Background
This multidistrict litigation concerns numerous consolidated and coordinated actions based upon allegations of a conspira
In this Opinion the Court addresses one, albeit a multifaceted one, of the Defendants’ pending motions to dismiss the IP-SAC.
III. Factual Allegations
As the parties are already well-aware, and indeed, have represented to the Court, the IPSAC alleges virtually the same underlying facts as the Direct Purchaser Plaintiffs’ complaint, notwithstanding some (generally minor) factual distinctions, and as to be expected, authored in a different drafting style. Both pleadings set forth factual allegations concerning the Defendants’ alleged conspiracy to decrease the supply of eggs and thereby increase egg prices, the Defendants’ conduct undertaken in relation thereto, and the nature of the egg industry in terms of structure, production practices, and market dynamics. See Sept. 26, 2011 Mem. and Order,
Plaintiffs — to wit, 23 individuals and three corporations — bring this action on behalf of themselves individually and as class actions on behalf of other similarly situated indirect purchasers. These individual named Plaintiffs are residents of, or incorporated in, Arizona, California, the District of Columbia, Florida, Kansas, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Mexico, New York, North Carolina, Tennessee, Utah, Vermont, West Virginia, or Wisconsin. IP-SAC ¶¶ 19-44. They each purportedly “indirectly purchased shell eggs and/or egg products during the Class Period” and suffered economic injury by paying “supra-competitive prices for shell eggs and egg
Plaintiffs request federal injunctive relief pursuant to Section 16 of the Clayton Act on behalf of themselves and a nationwide class. As to the state law claims, Plaintiffs, individually and on behalf of members of the proposed classes,
As alleged, the Plaintiffs’ federal and state claims are based upon the Defendants’ conduct relating to
a long-running conspiracy between and among Defendants and certain unnamed co-conspirators extending from at least January 1, 2000 through the present ... with the purpose and effect of fixing, raising, and maintaining and/or stabilizing prices and restricting output of both shell eggs and egg products (collectively, “eggs”) sold indirectly to Plaintiffs and other indirect purchasers in the United States, including the Class Jurisdictions.
IPSAC ¶ 1; see also id. ¶¶ 6, 140. Defendants supposedly took “coordinated efforts” to advance the aims of the conspiracy. Id. ¶ 7. According to Plaintiffs, coordination among Defendants was facilitated by the trade group Defendants, United Egg Producers (“UEP”), United Egg Association (“UEA”), and United States Egg Marketers (“USEM”); most of the other named Defendants are allegedly members of some of these groups. See, e.g., id. ¶¶49, 51, 137, 255, 286. Many of the Defendants’ decisions, discussions, and agreements concerning various aspects of the conspiracy apparently occurred at, or are connected to, these trade groups’ committee and member meetings, and were communicated to Defendants through UEP’s newsletter. See, e.g., id. ¶¶ 143-47, 152-156, 158-167, 170, 173-76, 192-209, 212-17.
The Defendants’ “coordinated efforts” allegedly were mechanisms to reduce the supply of eggs in terms of either egg production or availability in the egg market. By reducing the supply of eggs, Defendants apparently sought to manipulate certain features of the domestic egg market as a means of increasing egg prices. Those market features include the price inelasticity of demand for eggs, the lack of product substitutes for eggs, minimal product differentiation among eggs, and industry consolidation. Id. ¶¶ 2, 127-31. Because of these market features — and more particularly, the inelasticity of demand — “small reductions in supply can lead to sharp increases in egg prices.” Id. ¶ 2.
The specific “coordinated efforts” undertaken throughout the alleged conspiracy period entailed various flock reduction, chick hatch reduction, molting, and hen disposal initiatives, as well as the adoption of and compliance with the United Egg Producers Certification Program and the United States Egg Marketers export program. See, e.g., id. ¶¶ 6, 170, 219, 293.
The UEP Certification Program originated as an “animal husbandry program” that mandated lower cage space densities for hens, but evolved into a program whereby egg producers would comply with the Program’s guidelines in order to be able to sell or market eggs with a logo indicating that the eggs were certified under the Program. See, e.g., id. ¶¶ 158,160, 224, 298. The IPSAC alleges that initially
[certification required a producer to (a) meet [a] cage space allowance ... [ofan] average of 56 square inches per hen ...; (b) commit to meeting the guideline for beak trimming ...; (c) commit to meeting the guidelines for molting ...; (d) commit to meeting the guidelines for handling and transportation for both pullets and spent hens ...; (e) agree to be audited annually by a 3rd party independent auditor to confirm that the company is meeting guidelines; (f) agree to provide UEP with a copy of the audit results upon the completion of each audit; and (g) recognize that passing the audit is necessary in order to maintain the certification status.
Id. ¶ 159. The Certification Program’s guidelines also required (or eventually came to require): reduction in chick hatch, 100% of an egg producers’ egg production be in compliance with the guidelines, and a prohibition on the practice of “backfilling cages to replace mortality.” See, e.g., id. ¶¶ 174-75, 202, 295.
The USEM export program “aimed to have its members export shell eggs even when the export prices were lower than domestic egg prices” with the alleged purpose of “raising domestic U.S. prices through reduced supply.” Id. ¶ 240. One central feature of the export program was that “USEM members that did not provide eggs for the export would agree to ‘repay1 or ‘reimburse’ the USEM members that provided eggs for the export in order to ‘share’ any losses incurred when exporting shell eggs at below-market prices.” Id. ¶ 243.
As described in the IPSAC, the Defendants’ “coordinated efforts” enabled Defendants to realize the ultimate objectives of their conspiracy: decreased egg supply, and thus higher egg prices and greater revenues and profits. See, e.g., id. ¶¶ 150, 181-83, 247, 312, 323.
IV. Legal Standards
A. Rule 12(b)(6)
For purposes of this Rule 12(b)(6) motion, the Court must accept as true all well-pleaded allegations in the complaint and must construe the pleading in the light most favorable to the Plaintiffs. Phillips v. County of Allegheny,
A complaint need allege “only enough facts to state a claim of relief that is plausible on its face” so as to test whether “plaintiffs ... have ... nudged their claims across the line from conceivable to plausible” to survive a Rule 12(b)(6) motion. Twombly,
B. Rule 9(b)
To determine whether a particular claim is subject to and meets the Rule 9(b) pleading standard, the Third Circuit Court of Appeals has held that “where the plaintiff grounds [her] claims in allegations of fraud — and the claims thus ‘sound in fraud’ — the heightened pleading requirements of Rule 9(b) apply.” In re Suprema Specialties, Inc. Sec. Litig.,
The Third Circuit Court of Appeals illustrated the application of this standard in the context of an antitrust claim in Lum v. Bank of America,
To satisfy the Rule 9(b) pleading requirements, a complaint may either describe “the circumstances of the alleged fraud with precise allegations of date, time, or place” or may use “some [other] means of injecting precision and some measure of substantiation into their allegations of fraud.” Bd. of Trs. of Teamsters Local 863 Pension Fund v. Foodtown, Inc.,
While a significant purpose of Rule 9(b) is to provide notice of the precise misconduct at issue, courts “should ... apply the rule with some flexibility and should not require plaintiffs to plead issues that may have been concealed by the defendants.” Rolo,
Likewise, Rule 8 continues to apply even when under Rule 9(b) “[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed.R.Civ.P. 9(b). For purposes of its meaningful presence in Rule 9(b) the word “ ‘generally’ is a relative term” and “it is to be compared to the particularity requirement applicable to fraud or mistake.” Iqbal,
V. Legal Discussion
A. Article III Standing as to Four State Antitrust Claims
Defendants contend that the 26 named Plaintiffs have no standing, as would be demanded by Article III of the Constitution, to pursue antitrust claims under the laws of Iowa, Mississippi, North Dakota, and South Dakota. Specifically, Defendants argue that Plaintiffs have failed to allege an injury that would provide a basis for constitutional standing to bring claims under those four states’ antitrust laws. The defense argument is that the named Plaintiffs have “failed to show that they suffered any injury entitling them to bring the[ ] claims” because no named Plaintiffs are alleged to reside, or to have purchased eggs, in those four states. Defs.’ Mot. at 5.
Plaintiffs retort that the “named [class] representatives meet normal standing re
Plaintiffs characterize the defense arguments as raising “what are really [class] certification issues in the guise of standing at this point in the litigation,” id. at 57, particularly the adequacy of an out-of-state named Plaintiff to serve as class representative as to a particular state claim, id. at 56 n. 39; Tr. at 91:15-21. They assert that consideration of such issues should be deferred until the class certification stage of this litigation on the grounds that the issues are “premature because class certification issues are ‘logically antecedent’ to questions about standing in that ... the ‘standing’ asserted by Defendants would not exist but for Plaintiffs’ asserting claims on behalf of a class.” Pis.’ Resp. at 56-57.
Despite the divergent positions, amid the parties’ arguments there is an apparent consensus that the Court may consider the standing of the named Plaintiffs at this time. Indeed, Defendants make this assertion outright, whereas embedded in the Plaintiffs’ arguments is the contention that named Plaintiffs have standing to bring the four states’ antitrust claims at this time and have alleged that they have suffered an injury. But, to the extent that Plaintiffs invoke “logically antecedent” language and charge that Defendants are actually raising questions as to the named Plaintiffs’ adequacy as class representatives, they obfuscate the narrower issue raised by Defendants’ motion, namely, whether the named Plaintiffs have alleged facts that plausibly demonstrate injury-in-fact sufficient to confer upon them individual Article III standing to bring antitrust claims under the laws of Iowa, Mississippi, North Dakota, and South Dakota.
1. Requirements for Article III Standing
Generally, Article III standing is a threshold issue for any case, including class actions. See Warth v. Seldin,
Of these three elements, Defendants here place only the injury-in-fact element at issue. The Third Circuit Court of Appeals has articulated the nature of an injury that is sufficient to confer Article III standing:
To establish injury in fact, a plaintiff must allege an injury that is both (1) ‘concrete and particularized’ and (2) ‘actual or imminent, not conjectural or hypothetical.’ Each of these definitional strands imposes unique constitutional requirements. An injury is “concrete” if it is “real,”, or “distinct and palpable, as opposed to merely abstract,” while an injury is sufficiently “particularized” if it “affect[s] the plaintiff in a personal and individual way.” The second requirement — “actual or imminent, not conjectural or hypothetical” — makes plain that if a harm is not presently or “actually]” occurring, the alleged future injury must be sufficiently “imminent.” Imminence is “somewhat elastic,” but requires, at the very least, that the plaintiffs “demonstrate a realistic danger of sustaining a direct injury.” In other words, there must be a realistic chance — or a genuine probability — that a future injury will occur in order for that injury to be sufficiently imminent.
Id. at 238 (citations omitted).
The consideration of the injury-in-fact element bears particular significance because the nature of a party’s injury “is relevant to the determination of whether she has ‘alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues.’ ” Davis v. Passman,
2. Named Plaintiffs’ Article III Standing
Defendants argue that all named Plaintiffs in this case lack Article III standing to pursue the four states’ antitrust claims “because they do not and cannot allege to have been injured under the laws of these jurisdictions.” Defs.’ Mot. at 5. As a fundamental premise of their argument, Defendants claim that “each of the relevant states requires at least some part of the alleged injury to have occurred in that particular state,” id. at 6, and Defendants further posit that meeting this in-state injury requirement can only be accomplished either by an allegation that named Plaintiffs are residents of, or actually purchased eggs in, those states. Here, the IPSAC does neither.
While the Defendants’ Motion only asks the Court to decide whether the named Plaintiffs have Article III standing as to the four specific state antitrust claims, their argument — by invoking elements of those claims and arguing that those elements impose certain in-state requirements as to injury — is pecking at similar, but conceptually distinct, questions. These questions ask whether Plaintiffs have a right to maintain a private enforcement action under the states’ statutes, and whether the Plaintiffs have a cause of action — which, by way of example, may ask more specifically whether the alleged injury is legally and judicially cognizable. These inquiries go to issues of whether the states’ statutes authorize these named Plaintiffs to sue, issues which are sometimes cloaked in terms such as “statutory standing” or “antitrust standing,” and question whether the scope of the rights of action under the four states’ antitrust statutes include the Plaintiffs’ alleged injury.
The Supreme Court has drawn some distinctions among these concepts. In one opinion, the Court defined “standing” and “cause of action” as follows:
standing is a question of whether a plaintiff is sufficiently advers[e] to a defendant to create an Article] III case or controversy, or at least to overcome prudential limitations on federal-court jurisdiction; cause of action is a question of whether a particular plaintiff is a member of the class of litigants that may, as a matter of law, appropriately invoke the power of the court ....
Davis,
Indeed, it is necessary for the Court to distinguish Article III standing issues from “statutory standing” and cause of action issues because “the. question whether a plaintiff states a claim for relief ‘goes to the merits’ in the typical case, not the justiciability of a dispute, and conflation of the two concepts can cause confusion.” Bond v. United States, — U.S. -,
The Supreme Court’s analysis continues: It is firmly established in our cases that the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction, i.e., the courts’ statutory or constitutional power to adjudicate the case.... ‘[J]urisdiction ... is not defeated ... by the possibility that the averments might fail to state a cause of action on which petitioners could actually recover.’ Rather, the district court has jurisdiction if “the right of the petitioners to recover under their complaint will be sustained if the Constitution and laws of the United States are given one construction and will be defeated if they are given another,” unless the claim “clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous.”
Steel Co.,
Thus, even if Defendants are correct that the four states’ statutes require an intrastate injury — either due to in-state residency or in-state purchase of eggs— such an argument is beside the point. An Article III standing inquiry simply does not require considering the elements of a state claim as “jurisdictional prerequisites.” To inject the condition that Plaintiffs must satisfy certain elements of the
As it happens, the Article III constitutional standing criterion is met here as to the four states’, antitrust claims. The IPSAC alleges that the named Plaintiffs paid artificially inflated prices for eggs because of the Defendants’ conspiracy.
This injury can be redressed, if granted, by the relief sought by named Plaintiffs, which includes, inter alia, monetary damages to compensate for their financial harm as a result of conspiracy. See, e.g., IPSAC ¶¶ 9, C, D, E (describing relief requested).
Moreover, the named Plaintiffs’ four state antitrust claims at issue here are not wholly immaterial, frivolous, or devoid of merit for purposes of constitutional standing. The defense argument that the named Plaintiffs lack injury sufficient to confer standing is contingent upon the claim that the four states’ laws do not allow named Plaintiffs to recover for their alleged injuries arising from the Defendants’ alleged conspiratorial conduct. Defendants argue that “each of the relevant states requires at least some part of the alleged injury to have occurred in that particular state,” and Defendants cite to certain statutory language and one case in support of their construction of the laws. See Defs.’ Mot. at 6 & n. 3.
However, on their faces the four states’ statutory provisions can plainly be construed to not require in-state residency or an in-state purchase, but rather only that some of the Defendants’ conduct occurred, or the effects of which were felt, within the state — thereby violating the statute.
For example, under the Iowa Competition Law, “[t]he state or a person who is injured or threatened with injury by conduct prohibited under this chapter may bring suit” for various specified forms of relief. Iowa Code § 553.12. Such prohibited conduct includes a “contract, combination, or conspiracy between two or more persons shall not restrain or monopolize trade or commerce in a relevant market.” Id. § 553.4. These provisions can be read to permit a broad class of persons to maintain a civil enforcement action so long as they suffer an injury resulting from a violation of the law. Upon an unadorned reading of the Competition Law, and contrary to the Defendants’ position, a cognizable injury under the statute does not appear to be exclusively restricted to injuries of residents, or injuries sustained intrastate.
The North Dakota Antitrust Act contains similarly broad language: “[a] person threatened with injury or injured in that person’s business or property by a violation of this chapter may bring an action for appropriate injunctive or other equitable relief, [and] damages sustained.” N.D. CentCode § 51-08.1-08(2). The Act prohibits “[a] contract, combination, or conspiracy between two or more persons in restraint of, or to monopolize, trade or commerce in a relevant market.” Id. § 51-08.1-02. As with the Iowa Competition Law, a cognizable injury does not appear to be restricted to residents’ injuries, or injuries experienced due to transactions occurring within North Dakota’s borders.
South Dakota’s antitrust law also grants a private right of action for a person injured by a violation of that antitrust provision and does not contain statutory language that explicitly requires an intrastate injury. Under that law, “[a] person injured in his business or property by a violation of this chapter may bring an action for appropriate injunctive or other equitable relief, damages sustained and, as determined by the court, taxable costs and reasonable attorney’s fees.” See S.D. Codified Laws § 37-1-14.3. The law also provides: “A contract, combination, or conspiracy between two or more persons in restraint of trade or commerce any part of which is within this state is unlawful.” Id. § 37-1-3.1 (emphasis added).
Furthermore, as to these three states’ antitrust laws, there is a dearth of interpretative authority with respect to whether and to what extent, if any, there is an “intrastate” requirement as to a presumptive plaintiffs injury in order for that injury to be cognizable. With respect to the Iowa Competition Law specifically, one commentator notes that an “unusual feature of both Sections 4 and 5 of the Iowa Competition Law is their explicit reference to ‘relevant market,’ which is defined in Section 3 of the law to mean ‘the geographical area of actual or potential competition in a line of commerce, all or any part of which is within this state.’ Neither
The Mississippi antitrust law states: “[a]ny person, natural or artificial, injured or damaged by a trust and combine as herein defined, or by its effects direct or indirect, may recover all damages of every kind sustained by him or it and in addition a penalty of five hundred dollars ($500.00).” Miss.Code Ann. § 75-21-9. The statute defines a “trust or combine,” as “a combination, contract, understanding or agreement, expressed or implied, between two or more persons, corporations or firms or association of persons or between any one or more of either with one or more of the others, when inimical to public welfare and the effect of which would be ... [t]o restrain trade.” Id. § 75-21-1. Like the other three previously discussed statutes, one plausible construction of this Mississippi statutory language does not require that cognizable injury be limited to residents’ injuries or injuries suffered within the state.
In support of their construction of the Mississippi antitrust law, Defendants cite In re Microsoft Corporation Antitrust Litigation, No. MDL 1332,
In sum, it appears that there is an absence of definitive legal authority as to whether vel non an extraterritorial injury that might be traced to an antitrust violation is cognizable under the Iowa, Mississippi, North Dakota, and South Dakota antitrust statutes. Either construction of those four laws is possible and neither can
be said to be strained or without appropriate attribute. Indeed, some “[sjtate antitrust laws can extend to transactions involving interstate commerce” and “some state statutes, or judicial interpretations of those provisions may expressly address the extraterritorial effects of a state’s antitrust law.” 1 ABA Section of Antitrust Law, Antitrust Law Developments, 625 (6th ed. 2007). Moreover, the existence of these statutory construction issues certainly suggests that the named Plaintiffs’ claims pursuant to these states’ antitrust laws cannot be deemed foreclosed by case law, or otherwise completely devoid of merit. See Nesbit,
B. Utah Antitrust Claim
Plaintiffs do not dispute the Defendants’ characterization of Utah law in any of the aforementioned respects; nor do they dispute the cited legal authority. Indeed, Plaintiffs do not raise any challenge to the defense contention that Plaintiffs cannot recover for claims arising from damages accruing before May 1, 2006 under the Utah Antitrust Act. Accordingly, the Court determines that it is appropriate to grant the Defendants’ motion to dismiss the Plaintiffs’ claims under the Utah Antitrust Act arising from damages that occurred prior to May 1, 2006.
C. Scope of the IPSAC’s Definition of “Egg Products”
Defendants raise a challenge to the scope of the IPSAC’s definition of “egg products” with respect to “manufactured products incorporating processed eggs such as baked goods and mayonnaise” on
In response, Plaintiffs agree that the IPSAC definition of egg products is “overly inclusive” by including “manufactured products incorporating processed eggs such as baked goods and mayonnaise,” and further “agree to limit the scope of egg products in this action to ‘shell substitutes such as liquid, frozen, and dry eggs,’ the portion of the definition of egg products set forth in the [IPSAC] that Defendants do not challenge.” Pis.’ Mot. at 62. Given the Plaintiffs’ agreement to narrow the definition, the Court grants without prejudice the Defendants’ Motion as to this issue. Plaintiffs may seek leave to proceed with their proposed amendment with the appropriate motion or equivalent procedure to achieve pleading precision on this point as by for example, stipulation, and the Court expects that the amendment or stipulation will be respectful of the discussions among counsel on this point.
D. Separate Egg Products Conspiracy
Defendants argue that Plaintiffs have alleged a separate conspiracy relating to egg products which should be dismissed for failure to state a claim. However, because this challenge hinges — at least to some degree — upon the definition of “egg products” in the IPSAC, and given that the definition of egg products will be amended pursuant to Plaintiffs’ aforementioned agreement to do so, it would be improvident for the Court to consider this argument at this time in the absence of the actual amendment or stipulation. Accordingly, the Court denies the Motion in this respect without prejudice to Defendants to raise these or similar arguments based upon the amended definition of “egg products,” if the circumstances so warrant.
E. State Consumer Protection Claims
Defendants move to dismiss all of the Plaintiffs’ alleged consumer protection claims under nine states’ laws: California, the District of Columbia, Florida, Kansas, Massachusetts, New Mexico, New York, North Carolina, and West Virginia.
1. California
Defendants mount a dual challenge to the Plaintiffs’ claim under the California Unfair Competition Law (“UCL”). First, Defendants argue that the alleged claim fails to satisfy both Federal Rules of Civil Procedure 8 and 9(b) because the IPSAC does not contain adequate factual allegations of deceptive conduct and instead only relies on alleged antitrust violations. Sec
The UCL prohibits engaging in “unfair competition,” which is defined, inter alia, as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof.Code § 17200. “[A] person who has suffered injury in fact and has lost money or property as a result of the unfair competition” may bring suit for such a violation. Id. § 17204; see also id. § 17203; Californians for Disability Rights v. Mervyn’s, LLC,
Defendants argue that Plaintiffs cannot satisfy the pleading standards in alleging a UCL claim because Plaintiffs “are clearly attempting to restyle a supply control theory into [a] consumer fraud claim[]” by “dress[ing] their antitrust case in the clothes of a. consumer fraud claim” and that certain allegations in the IPSAC of fraudulent conduct “are insufficient to comply with Federal Rule 8.” Defs.’ Mot at 22-23. Plaintiffs counter by arguing that the Defendants’ alleged antitrust violations are the grounds for their UCL claim, and that the requisite alleged antitrust violation is the unlawful, unfair or fraudulent business act or practice.
Indeed, antitrust violations can constitute “unfair competition” under the UCL. See Sheet Metal Workers Local 441 Health & Welfare Plan v. GlaxoSmithKline, PLC,
The Court agrees that it is an analytically sensible and entirely fair operation of pleading standards and substantive law to conclude that the IPSAC’s allegations giving rise to alleged antitrust violations also give rise to the Plaintiffs’ UCL claim. Plaintiffs have alleged that they suffered injury in fact and lost money or property due to the Defendants’ practices of “unfair competition.” See, e.g., IPSAC ¶ 332 (“As a direct and proximate result of Defendants’ unlawful practices, including combinations and contracts to restrain trade and allocate relevant markets, Plaintiff [and class members] have been injured in their business and/or property in that they paid more for shell eggs and egg products than they otherwise would have paid in the absence of Defendants’ unlawful conduct.”). The IPSAC alleges, supported by other factually specific allegations concerning the contours of the conspiracy, that Defendants committed “unlawful, unfair or fraudulent business act[s] or practiees[s] in violation of’ the UCL by “engaging in a continuing unlawful trust and concert of, the substantial terms of which were to fix, raise, stabilize, and maintain prices of, allocate markets for, and restrain and manipulate the supply of shell eggs and egg products at supra-competitive levels.” IPSAC ¶¶ 329-30. More specifically, such conduct entails the Defendants purportedly advancing the goals of their antitrust conspiracy through eight alleged “collective actions,” which included various flock reduction and early molting initiatives, and actions taken in connection with the United Egg Producers Certification Program and the United States Egg Marketers export program. Whatever else it may be, if it occurred, the unlawful price-fixing alleged in the IPSAC surely would constitute unfair competition within the meaning of the UCL.
Defendants have not contended that the IPSAC fails to allege an antitrust violation for purposes of bringing a UCL claim (except with respect to injuries relating to certain egg products), nor have they raised any arguments that Plaintiffs have failed to sufficiently allege their separate California antitrust claim under Section 16720, California Business and Professions Code. See IPSAC ¶¶ 325-28. Thus, the Defendants’ argument does not support the conclusion that Plaintiffs have failed to meet the Rule 8 pleading requirements as to their UCL claim.
Contrary to the Defendants’ contention otherwise, case law from the Third Circuit does not require that the heightened pleading standard under Rule 9(b) be applied to the Plaintiffs’ UCL claim. This particular alleged violation of the UCL is simply not grounded in fraud nor does it “sound in fraud.” The Plaintiffs’ UCL claim arises from the alleged conduct— namely, the alleged conspiracy to reduce the supply of eggs as allegedly advanced by the eight collective actions — which, as
As to the Defendants’ second challenge to the Plaintiffs’ UCL claim, the Court concludes that Plaintiffs have sufficiently alleged their eligibility for seeking restitution. The California Supreme Court has explained:
Restitution under section 17203 [of the UCL] is confined to restoration of any interest in “money or property, real or personal, which may have been acquired by means of such unfair competition.” (Italics added.) A restitution order against a defendant thus requires both that money or property have been lost by a plaintiff, on the one hand, and that it have been acquired by a defendant, on the other.... But the economic injury that an unfair business practice occasions may often involve a loss by the plaintiff without any corresponding gain by the defendant, such as, for example, a diminishment in the value of some asset a plaintiff possesses. (See Overstock.com, Inc. v. Gradient Analytics, Inc. (2007)151 Cal.App.4th 688 , 716,61 Cal.Rptr.3d 29 [a plaintiff who alleged that a defendant’s defamatory statements diminished its assets and reduced its market capitalization adequately alleged UCL standing]; Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005)129 Cal.App.4th 1228 , 1240, 1262,29 Cal.Rptr.3d 521 [a plaintiff whose home and car were vandalized by defendant animal rights protesters adequately alleged lost property under Prop. 64].)
Kwikset Corp.,
Thus, the issue at hand is whether Plaintiffs have connected their alleged loss— which they claim is the loss of “money by paying more than they should have for eggs as a result of Defendants’ unfair method of competition,” Pis.’ Resp. at 24— with a “corresponding gain” by and of the Defendants. Defendants argue that while such a gain might be demonstrated by alleging that Plaintiffs “purchased eggs originating from any of the Defendants,” Plaintiffs have failed to do so. Defs.’ Mot. at 33. For example, an allegation that a plaintiff “paid money to a retailer to purchase [defendant] Microsoft’s product based on false or misleading statements on the product package” would demonstrate eligibility for restitution because it can be inferred that the plaintiffs’ payment for the product to the retailer benefitted Microsoft. Shersher v. Superior Court,
However, legal authority also exists to propose that a “corresponding gain” may be able to be a more broadly-defined benefit conferred upon the defendant by a plaintiff. Troyk v. Farmers Group, Inc.,
“ ‘A person who has been unjustly enriched at the expense of another is required to make restitution to the other.’ (Rest., Restitution, § 1.) ‘A person is enriched if he receives a benefit at another’s expense. (Id., com. a, p. 12.) The term “benefit” “denotes any form of advantage.” (Id., com. b, p. 12.) Thus, a benefit is conferred not only when one adds to the property of another, but also when one saves the other from expense or loss. Even when a person has received a benefit from another, he is required to make restitution “only if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for him to retain it.” (Id., com. c, p. 13.)’ (Ghirardo v. Antonioli [ 14 Cal.4th 39 ,57 Cal.Rptr.2d 687 ,924 P.2d 996 (Cal.1996) ]) ‘For a benefit to be conferred, it is not essential that money be paid directly to the recipient by the party seeking restitution.’ (California Federal Bank v. Matreyek (1992)8 Cal.App.4th 125 , 132,10 Cal.Rptr.2d 58 ....)” ....
Id. at 617 (quoting County of Solano v. Vallejo Redevelopment Agency,
In this manner, the factual allegations that relate to the Plaintiffs’ California unjust enrichment claim are relevant as to the UCL claim. As discussed in greater detail infra, in relation to the arguments focused on the Plaintiffs’ unjust enrichment claims — and specifically the general discussion concerning the conferral of benefits upon Defendants
2. District of Columbia
Defendants contest the Plaintiffs’ claim under the District of Columbia Consumer Protection and Procedures Act (“DCCPPA”) for failure to state a claim under the pleading standards of Rules 8 and 9(b) because, according to Defendants, “more than simply the elements of an antitrust violation” must be alleged. Defendants also argue that a DCCPPA claim requires pleading unconscionable conduct but the IPSAC fails to sufficiently plead that element.
The DCCPPA prohibits “unlawful trade practices.” The Act defines “trade practice” to be “any act which does or would create, alter, repair, furnish, make available, provide information about, or, directly or indirectly, solicit or offer for or effectuate, a sale, lease or transfer, of consumer
Just as the California UCL encompasses violations of the California antitrust law, violations of the District of Columbia Antitrust Act of 1980, D.C.Code § 28-4501, et seq., can constitute unlawful trade practices within the purview of the DCCPPA. See Marbry v. EMI Music Distrib., Civil Action No. 3731-00,
Likewise, the Court’s rationale which led to the conclusion that Defendants had not demonstrated that Plaintiffs had failed to plead a California UCL claim also applies here. Plaintiffs have alleged that their DCCPPA claim is based upon the alleged antitrust violation. See, e.g., IPSAC ¶ 340-41 (alleging that “Defendants agreed to, and did in fact, act in restraint of trade or commerce by unfairly and deceptively fixing, raising, stabilizing, and maintaining prices of, allocating markets for, and restraining and manipulating the supply of shell eggs and egg products at supracompetitive levels” and that this “conduct constitutes ‘unlawful trade practices’ ” under the DCCPPA). Defendants do not raise any objections to the effect that Plaintiffs have inadequately alleged an antitrust violation.
Furthermore, the Court’s reasoning as to why a Rule 9 pleading standard does not apply to the Plaintiffs’ UCL claim applies to the DCCPPA claim as well. The Plaintiffs’ claim for the DCCPPA violation is based upon factual allegations that do not entirely rely on fraud, and thus the Plaintiffs’ DCCPPA claim does not sound in fraud so as to require the application of Rule 9 under Third Circuit case law.
Neither of the Defendants’ objections to the Plaintiffs’ DCCPPA claim are meritorious, and the Court denies the Defendants’ Motion as to the Plaintiffs’ DCCPPA claim.
3. Florida
Defendants move to dismiss the claim that their alleged conduct violated the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”). They argue this claim is deficient under the pleading stan
The FDUTPA prohibits “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Fla. Stat. § 501.204(1). The three elements of a FDUTPA claim are “ ‘(1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.’ ” In re Flonase Antitrust Litig.,
The first element of the claim encompasses antitrust violations because “the acts proscribed by subsection 501.204(1) include antitrust violations.” Mack v. Bristol-Myers Squibb Co.,
Thus, contrary to the Defendants’ arguments otherwise, no allegations of fraudulent conduct must be pled in order for Plaintiffs to sufficiently allege under Rule 8 a FDUTPA claim based upon an antitrust violation. Indeed, once again, Plaintiffs are alleging that the Defendants’ alleged antitrust violation is itself the unfair method of competition prohibited by the FDUTPA. See, e.g., Pis.’ Resp. at 445; IPSAC ¶¶ 348-49 (alleging that “Defendants agreed to, and did in fact, act in restraint of trade or commerce by unfairly and deceptively fixing, raising, stabilizing, and maintaining prices of, allocating markets for, and restraining and manipulating the supply of shell eggs and egg products at supracompetitive levels ....” and such conduct “constitute^] unfair and deceptive trade practices in violation of [the FDUTPA]”). Defendants do not contend that Plaintiffs wholly have failed to sufficiently allege antitrust violations. Accordingly, their argument that the IPSAC fails to state a FDUTPA claim falls short.
4. Kansas
Defendants argue for the dismissal of the Plaintiffs’ claim under the Kansas Consumer Protection Act (“KCPA”) because “Kansas law does not permit Plaintiffs to reformulate or rephrase their antitrust claims as [KCPA] claims” and thus the IPSAC’s allegations do not support a cognizable claim under the KCPA. Defs.’ Mot at 28-29. They also contend that Plaintiffs fail to state a KCPA claim in satisfaction of the pleading standards of Rules 8 and 9(b).
The KCPA prohibits a supplier from “engaging] in any deceptive act or practice in connection with a consumer transaction.” Kan. Stat. Ann. § 50-626(a). “Consumer transaction” is defined as “a sale, lease, assignment or other disposition for value of property or services within this state ... to a consumer; or a solicitation by a supplier with respect to any of these dispositions.” Kan. Stat. Ann. § 50-624(c). The Act sets forth a non-exclusive list of conduct that “whether or not any consumer has in fact been misled” constitutes “deceptive acts or practices.” Kan. Stat. Ann. § 50-626(b). One such “deceptive act or practice” is “the willful failure to state a material fact, or the willful concealment, suppression or omission of a material fact.” Kan. Stat. Ann. § 50-626(b)(3). Plaintiffs claim this provision as the basis for their KCPA claim. Pis.’ Resp. at 21.
For Plaintiffs to establish their KCPA claim based upon Section 50-626(b)(3) they must allege these elements: (1) Plaintiffs were consumers; (2) Defendants were suppliers; (3) Defendants willfully failed to state, concealed, suppressed, or omitted, a certain matter or information; and (4) that certain matter or information was a material fact. See Pattern Instructions Kan. 4th Civil § 129.04; see also Cole v. Hewlett Packard Co., — Kan. App. -, -,
In contrast to the California, the District of Columbia, and Florida claims discussed above, Plaintiffs contend that their KCPA claim is “not merely a restatement of [their] Kansas antitrust claims.” Pis.’ Resp. at 20. Rather, Plaintiffs contend in their briefing that their KCPA claim is one arising from a subset of the broader conduct attributed to the alleged conspiracy to reduce the supply of eggs:
Defendants engaged in unfair and deceptive acts by public[ly] claiming to reduce their flock size pursuant to recommended animal husbandry guidelines — ■ which are by definition guidelines promoting the health of the chickens and quality of the eggs — to obtain consumer-oriented certification from the UEP ... when in fact the guidelines were nothing more than a cover for Defendants’ illegal conspiracy to limit supply.
As alleged in the IPSAC, the KCPA claim is premised upon allegations relating to the entire conspiracy to reduce the supply of eggs. As alleged, “Defendants agreed to, and did in fact, act in restraint of trade or commerce by unfairly and deceptively fixing, raising, stabilizing, and maintaining prices of, allocating markets for, and restraining and manipulating the supply of shell eggs and egg products at supracompetitive levels” and “[b]y reason of the foregoing, Defendants and their co-conspirators have engaged in conduct that constitutes deceptive and unconscionable acts and practices” under the KCPA. IP-SAC ¶¶ 367-68.
A fair reading of these allegations suggests that the purported deceptive activity is broadly comprised of the entire alleged agreement to reduce the supply of eggs and the collective various alleged actions undertaken to advance the object of the agreement. These allegations (as well as the other IPSAC allegations specifically pled as to the KCPA claim which allege, inter alia, the effects of the conduct, unequal bargaining power, and so forth, see id. ¶¶ 369-72 — none of which invoke any element of a KCPA claim under Section 50 — 626(b)(3)) simply do not plausibly suggest that Defendants willfully failed to state, concealed, suppressed, or omitted a certain matter or information to which a reasonable person would attach importance in determining his choice of action in the transaction involved.
Given that the Plaintiffs’ KCPA claim as articulated in the operative pleading does not satisfy Rule 8, the Court grants the Defendants’ motion to dismiss this claim without prejudice.
5. Massachusetts
Defendants attack Plaintiffs’ Massachusetts Consumer Protection Act (“G.L. ch. 93A”) claim because of the Plaintiffs’ failure to allege compliance with the Act’s pre-suit notification procedures. They also claim that Plaintiffs have failed to state a claim consistent with the demands of Rules 8 and 9(b) because Plaintiffs do not sufficiently plead allegations of fraudulent conduct and that allegations of antitrust violations alone are inadequate to allege a violation of G.L. ch. 93A.
Generally, a plaintiff is required to provide a defendant with a written demand for relief of the specific deceptive practices claimed before commencing a suit for a G.L. ch. 93A violation. The relevant statutory language provides:
At least thirty days prior to the filing of any such action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any prospective respondent.
Mass. Gen. Laws. ch. 93A § 9(3); see also In re Flonase Antitrust Litig.,
Invoking the exception, Plaintiffs contend that the requirement of pre-suit notification does not pertain to them because the IPSAC does not allege that Defendants, as the “prospective respondents,” maintain places of business or keep assets within Massachusetts. Defendants do not dispute this rebuttal. Indeed, no such dispute would be sensible, given that the IPSAC plainly does not recite any factual allegations that the Defendants’ places of business or assets are located in Massachusetts. Accordingly, pleading pre-suit notification is not required here.
“A party alleging a violation of G.L. c. 93A, § 9(1), must establish (1) that the defendant has committed a violation of G.L. c. 93A, § 2; (2) injury; and (3) a causal connection between the injury suffered and the defendant’s unfair or deceptive method, act, or practice.” Herman v. Admit One Ticket Agency LLC,
The Massachusetts Supreme Court has recognized:
In analyzing what constitutes unfair methods of competition and unfair or deceptive acts or practices, which are not defined in G.L. c. 93A, this court looks to interpretations by the Federal Trade Commission and Federal courts of § 5(a)(1) of the Federal Trade Commission Act (FTC Act) .... The Federal Trade Commission may, under § 5(a)(1) of the FTC Act, enforce the antitrust laws, including the Sherman Act and the Clayton Act, but it is not confined to their specific prohibitions.... It may bar incipient violations of those statutes, ..., and conduct which, although not a violation of the letter or spirit of the antitrust laws, is nevertheless either an unfair method of competition, or an unfair or deceptive act or practice .... To the extent that the same conduct may violate both the antitrust laws and the FTC Act, such conduct may be the subject of simultaneous parallel enforcement actions.
Ciardi v. F. Hoffmann-La Roche, Ltd.,
This summary of Massachusetts law demonstrates that Defendants err in contending that Plaintiffs are impermissibly bringing an antitrust case restyled as a consumer protection violation under the Massachusetts Consumer Protection Act. Plaintiffs are alleging that the purported conspiracy to reduce the supply of eggs and egg products and thereby artificially increase those products’ prices is a G.L. ch. 93A violation. See IPSAC ¶¶ 389-90 (pleading that “Defendants agreed to, and did in fact, act in restraint of trade or commerce by unfairly and deceptively fixing, raising, stabilizing, and maintaining prices of, allocating markets for, and restraining and manipulating the supply of shell eggs and egg products at supracompetitive levels” and that as a result “Defendants and their co-conspirators engaged in ‘“unfair methods of competition and unfair or deceptive acts or practices’ ” in knowing and willful violation of M.G.L.A c. 93A”). As the Court has already noted, Defendants do not argue that the IPSAC’s allegations are insufficient to state federal and other state antitrust claims (except as to injuries relating to certain egg products), and Defendants even appear to argue that the allegations plead antitrust violations. See Defs.’ Reply at 8. Given that Massachusetts allows indirect purchasers to bring what are in essence antitrust violations pursuant to G.L. ch. 93A, no allegations of fraudulent conduct must be pled in order to sufficiently allege a G.L. ch. 93A claim.
In sum, the Defendants’ arguments do not raise any valid basis for dismissing the Massachusetts law claim, and the Court denies their motion in this respect.
6. New Mexico
Defendants also argue that Plaintiffs insufficiently plead an “unconscionable trade practice” within the meaning of the New Mexico Unfair Practices Act (“NMUPA”), and thus fail to state a claim based upon a violation of that Act.
The NMUPA provides: “Unfair or deceptive trade practices and unconscionable trade practices in the conduct of any trade or commerce are unlawful.” N.M. Stat. Ann. § 57-12-3. The Act separately defines both “unfair or deceptive trade practice” and “unconscionable trade practice,” but the Court need evaluate only the latter concept in order to resolve this Motion. The NMUPA defines an “unconscionable trade practice” as:
an act or practice in connection with the sale, lease, rental or loan, or in connection with the offering for sale, lease, rental or loan, of any goods or services, including services provided by licensed professionals, or in the extension of credit or in the collection of debts that to a person’s detriment:
(1) takes advantage of the lack of knowledge, ability, experience or capacity of a person to a grossly unfair degree; or
(2) results in a gross disparity between the value received by a person and the price paid.
N.M. Stat. § 57-12-2(E) (emphasis added).
These provisions of the NMUPA appear largely undeveloped, and there is only sparse case law that has addressed either of the two definitions of “unconscionable trade practice.” The law has developed
For example, as to the second definition of an “unconscionable trade practice” involving “gross disparity” between price paid and “value received,” Defendants have argued that in Hernandez v. Wells Fargo Bank N.M., N.A.,
However, the Defendants’ reading of Hernandez and arguments based upon that reading are not entirely, much less inexorably, justified. Rather, the Hernandez usage of “benefit received” can be read as merely a synonym for “value received,” not intended to convey any substantive difference of “message.” Indeed, although the Hernandez Court uses the term “benefit received,” it does not further elaborate or provide any discussion that might illuminate the meaning of the term, including whether vel non it implicates consumer utility.
At this time, the Court need only address whether the IPSAC’s allegations plead the second definition of “unconscionable trade practice” under the NMUPA.
Defendants quantify the alleged artificially-inflated price increase by example, alleging that Defendants attributed their alleged export program — one of the eight collective actions allegedly advancing the conspiracy to reduce the supply of eggs — to a 40% increase in the domestic prices of eggs. See id. ¶247 (“As the Wall Street Journal reported on September 23, 2008: The industry group [UEP] itself credited the [export] campaign with helping to boost domestic egg prices, which rose more than 40% in the next year.”). In light of these allegations, and given this early stage of the litigation, the Court concludes that dismissal of the NMUPA'-claim as a matter of law is not warranted at this time.
The case law discussed above demonstrates that a fact-intensive inquiry is required to determine whether Defendants’ engaged in conduct related to the sale of eggs that resulted in a “gross disparity” between the benefit received and the price paid. Moreover, although Defendants have proposed one approach to pleading gross disparity (one not entirely supported by the legal authority cited), they have not identified any case law specific to the NMUPA that has held that gross disparity between value received and price paid cannot be sufficiently pled based upon factual allegations that Plaintiffs paid artificially-inflated prices for eggs as a result of a supply-side price-fixing conspiracy.
Indeed, there is case law that has concluded otherwise. Several federal courts that have considered similar factual allegations (some even less specific than those in the IPSAC) have determined that such allegations are sufficient to state a NMU-PA claim based upon gross disparity and are sufficient to withstand a motion to dismiss. See, e.g., TFT-LCD,
7. New York
Defendants move to dismiss the Plaintiffs’ claim brought pursuant to General Business Law § 349 of the New York Consumer Protection Statute. They argue that Plaintiffs do not state such a claim for relief because, inter alia, the IPSAC does not contain factual allegations that plausibly suggest that the conduct purported to be the basis for the Section 349 claim caused the Plaintiffs’ harm.
General Business Law § 349 prohibits “[deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state.” N.Y. Gen. Bus. Laws § 349(a). As the Court of Appeals of New York has summarized:
A plaintiff under section 349 must prove three elements: first, that the challenged act or practice was consumer-oriented; second, that it was misleading in a material way; and third, that the plaintiff suffered injury as a result of the deceptive act. Whether a representation or an omission, the deceptive practice must be “likely to mislead a reasonable consumer acting reasonably under the circumstances.” A deceptive practice, however, need not reach the level of common-law fraud to be actionable under section 349. In addition, a plaintiff must prove “actual” injury to recover under the statute, though not necessarily pecuniary harm.
Further, as we have repeatedly stated, reliance is not an element of a section 349 claim. The plaintiff, however, must show that the defendant’s “material deceptive act” caused the injury.
Stutman v. Chem. Bank,
“[T]o qualify as a prohibited act under the statute, the deception of a consumer must occur in New York.” Goshen v. Mutual Life Ins. Co. of New York,
Plaintiffs argue that their Section 349 claim arises from “Defendants deceptively hid[ing] their price-fixing conspiracy from Plaintiffs, affecting the broad public interest in New York[,] ... by providing] pretextual reasons for rising prices, citing, among other reasons, animal husbandry guidelines as the reason for curtailments in supply.” Pis.’ Resp. at 26. However, this theory does not plainly emanate from the actual allegations pled by the Plaintiffs as to the Section 349 claim as articulated in the IPSAC. To the extent that the IPSAC arguably invokes concepts of “hiding” and “pretext,” it appears that to do so Plaintiffs primarily rely on the vague, convenient catch-all adverb “deceptively” that does appear in their pleading.
The IPSAC alleges that “Defendants agreed to, and did in fact, act in restraint of trade or commerce by unfairly and deceptively fixing, raising, stabilizing, and maintaining prices of, allocating markets for, and restraining and manipulating the supply of shell eggs and egg products at supracompetitive levels.” IPSAC ¶ 454 (emphasis added). As alleged, this “knowing and willful conduct of the Defendants ... constitutes materially misleading consumer-oriented deceptive acts or practices within the meaning of N.Y. Gen. Bus. Law § 349 [because] Defendants’ actions materially misled New York consumers and resulted in consumer injury and broad adverse impact on the public at large, and harmed the public interest of New York State in an honest marketplace in which economic activity is conducted in a competitive manner.” Id. ¶ 455. According to the IPSAC, “[a]s a result of Defendants’ illegal conduct Plaintiffs and members of the New York Indirect Purchaser State Class paid supra-competitive, artificially inflated prices for shell eggs and egg products” and Plaintiffs are “seeking actual damages only for their injuries.” Id. ¶¶ 457-58.
Plaintiffs defend these allegations by claiming that there is case law to suggest that allegations that plead “in a conclusory fashion that defendants engaged in deceptive conduct” in order to conceal the alleged price-fixing conspiracy satisfies the requisite pleading standard. Pis.’ Resp. at 25. But this argument is at odds with and is directly contradicted by the principle that in order to sufficiently plead a claim a plaintiff must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly,
Regardless, there are insufficient factual allegations in the IPSAC to plausibly suggest that the alleged “hiding” of the antitrust conspiracy from Plaintiffs through pretextual explanations for rising egg prices actually caused the Plaintiffs’ alleged injury. “[W]hile the statute does not require proof of justifiable reliance, a plaintiff seeking compensatory damages must show that the defendant engaged in a material deceptive act or practice that caused actual, although not necessarily pecuniary, harm.” Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A.,
As Defendants correctly argue, the IPSAC does not plausibly suggest that the purported pretextual explanations for the rising egg prices are the actual cause of the Plaintiffs’ alleged harm of paying artificially-inflated prices for eggs. Indeed, as this articulation of the Plaintiffs’ Section 349 claim demonstrates, Plaintiffs would have paid artificially-inflated egg prices before Defendants allegedly began to offer pretextual reasons for those increases. Moreover, there are no factual allegations, or causation theories proffered, by Plaintiffs that would suggest that the Defendants’ alleged misleading conduct caused artificially-inflated egg prices after the challenged conduct allegedly occurred. Because this element of a Section 349 claim has not been sufficiently pled, Plaintiffs cannot have stated a claim that Defendants have violated Section 349 for purposes of meeting the demands of Rule 8.
8. North Carolina
Defendants urge that the Plaintiffs’ claim under Section 75-1.1 of the North Carolina Unfair and Deceptive Trade Practices Act (“UDTPA”) be dismissed on the grounds that the IPSAC does not allege facts suggesting that a plaintiff detrimentally relied on a deceptive statement or misrepresentation. They assert this claim is deficiently pled under Rules 8 and 9(b).
Section 75-1.1 of the UDTPA provides: “Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.” N.C. Gen.Stat. § 75-l.l(a). Certain violations of state and federal law can constitute a per se violation of Section 75-1.1. See generally Noel L. Allen, North Carolina Unfair Business Practice § 9.04 (3d ed. 2004) (Oct. 2011 Supplement) (discussing per se violations of Section 75-1.1).
The Fourth Circuit Court of Appeals has found that one such per se violation is a violation of federal antitrust law. See ITCO Corp. v. Michelin Tire Corp.,
Highly persuasive to us is the fact that the substantive provisions of the North Carolina act are reproduced verbatim from § 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1), and that the North Carolina Supreme Court, consistent with that observation, had held that “[b]ecause of the similarity in language, it is appropriate for us to look to the federal decisions interpreting the FTC Act for guidance in construing the meaning of ... § 75-1.1.” Of course, it is an accepted tenet of basic antitrust law that § 5 of the Federal Trade Commission Act sweeps within its prohibitory scope conduct also condemned by § 1 of the Sherman Act.
ITCO Corp.,
Apart from per se violations, plaintiffs have alternative recourse in pleading a prima facie UDTPA violation in terms of “unfair methods of competition” and “unfair or deceptive acts or practices.” The UDTPA distinguishes between these two concepts. See Henderson v. U.S. Fidelity & Guar. Co.,
As for the latter concept, to set forth the elements for a prima fade claim of “unfair or deceptive practices,” North Carolina law requires a plaintiff to demonstrate that: “(1) defendant committed an unfair or deceptive act or practice, (2) the action in question was in or affecting commerce, and (3) the act proximately caused injury to the plaintiff.” Dalton v. Camp,
As to the former concept, according to the Court of Appeals of North Carolina, “[n]o precise definition of ‘unfair methods of competition’ as used in [Section 75-1.1] exists.” United Laboratories, Inc. v. Kuykendall,
Unfair competition has been referred to in terms of conduct “which a court of equity would consider unfair.” ... Thus viewed, the fairness or unfairness of particular conduct is not an abstraction to be derived by logic. Rather, the fair or unfair nature of particular conduct is to be judged by viewing it against the background of actual human experience and by determining its intended and actual effects upon others.
Id.; see also Universal Furniture Intern., Inc. v. Collezione Europa USA, Inc.,
The Defendants’ objections to the UDT-PA claim are based entirely upon the contention that Plaintiffs must allege their reliance on a defendant’s statement or misrepresentation and have failed to do so. This argument directly invokes a prima facie claim for an “unfair or deceptive practice.” However, as the foregoing summary of North Carolina law concerning the UDTPA demonstrates, a Section 75-1.1 claim may also arise in the form of a per se violation, such as a violation of the Sher
Furthermore, given that a violation of the Sherman Act constitutes a per se violation of Section 75-1.1, and acknowledging that Defendants have not raised any arguments on the grounds that Plaintiffs entirely have failed to sufficiently allege federal antitrust violations, for that reason alone the motion to dismiss this claim cannot succeed. A fair reading of the IPSAC’s allegations suggests that the Defendants’ alleged federal antitrust violation is the basis for the Section 75-1.1 claim. See, e.g., Pis.’ Resp. at 4-5; IPSAC ¶¶ 466-67, 469 (alleging that “Defendants agreed to, and did in fact, act in restraint of trade or commerce by unfairly and deceptively fixing, raising, stabilizing, and maintaining prices of, allocating markets for, and restraining and manipulating the supply of shell eggs and egg products at supraeompetitive levels .... ” and that the “Defendants’ unlawful practices, including combinations and contracts to restrain trade and allocate the relevant markets” constitutes the violation of Section 75-1.1).
Thus, it is appropriate to deny the Defendants’ motion as to the Section 75-1.1 claim.
9. West Virginia
Defendants argue for the dismissal of the Plaintiffs’ West Virginia Consumer Credit and Protection Act (‘WVCCPA”) on the grounds that Plaintiffs failed to allege that they satisfied the statutorily-required pre-suit notice and provision for an opportunity to cure.
The WVCCPA requires that before bringing suit for a violation of the Act a consumer must notify the seller of the alleged violation at issue:
[N]o action may be brought pursuant to the provisions of this section until the consumer has informed the seller or lessor in writing and by certified mail of the alleged violation and provided the seller or lessor twenty days from receipt of the notice of violation to make a cure offer: Provided, That the consumer shall have ten days from receipt of the cure offer to accept the cure offer or it is deemed refused and withdrawn.
W. Va.Code § 46A-6-106(b) (emphasis in original).
Plaintiffs admit that they have failed to allege pre-suit notification. At oral argument,
Defendants agreed to allow Plaintiffs to cure the omissions via amendment. Tr. 81:4-82:3. Accordingly, the Court grants the motion to dismiss the WVCCPA claim without prejudice to Plaintiffs to undertake to cure the acknowledged shortcoming.
Defendants move to dismiss all 21 of the Plaintiffs’ unjust enrichment claims. Plaintiffs have brought those claims under the laws of Arizona, California, the District of Columbia, Florida, Iowa, Kansas, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wisconsin.
At the outset, the Court notes that the prima facie elements for various state unjust enrichment claims are not entirely birds of a feather. That is, it is well-accepted that the “elements necessary to allege unjust enrichment vary state by state.” Flonase,
As to virtually each of the Plaintiffs’ unjust enrichment claims — excepting those brought under the laws of Arizona, North Dakota, and Tennessee — the IPSAC poses the following three cookie-cutter allegations:
A. By engaging in the unlawful conduct described herein, Defendants received higher prices for their eggs that were sold to indirect purchasers in the [Name of State ] than would have been possible absent the illegal conduct. See, e.g., IPSAC ¶¶ 333, 345, 353.
B. The Defendants were able to achieve their increased revenues and profits from their sales of eggs to [Name of State ] indirect purchasers because the demand for eggs by indirect purchasers is relatively price inelastic, as Defendants understood. Thus, the ability of Defendants to profit from then-sales of eggs to indirect purchasers in [Name of State ] was connected to and due to the increased prices paid for Defendants eggs by indirect purchasers in [Name of State]. See, e.g., IPSAC ¶¶ 334, 346, 354.
C. Defendants were enriched by their illegal activities at the expense of [Name of State ] indirect purchasers of eggs and thus Defendants should be ordered to make restitution for the benefit of [Name of State ] indirect purchasers because it would be unjust to allow Defendants to retain the benefits of their sales of eggs at illegally inflated prices. See, e.g., IPSAC ¶¶ 335, 347,355.
Defendants raise several arguments for dismissal of the unjust enrichment claims — some specific to certain state’s laws and others more broadly generalized to the law of several states. The Court addresses these arguments in turn.
1. Unjust Enrichment Claim: North Dakota
Defendants have raised several grounds for the dismissal of the Plaintiffs’ North Dakota unjust enrichment claim. Plaintiffs have stated that they “do not contest dismissal of the North Dakota claims for unjust enrichment.” Pis. Resp. at 52 n. 34. Therefore, the Court grants the Defendants’ motion to dismiss the unjust enrichment claim under North Dakota law, and will proceed to discuss in this decision the Plaintiffs’ remaining 20 unjust enrichment claims.
Defendants claim that neither the laws of California nor Mississippi recognize unjust enrichment as an independent cause of action. Rather, in those states, Defendants contend, the principles of unjust enrichment apply only as a measure of damages. Plaintiffs defend the IPSAC by asserting that both of these states’ courts recognize a separate cause of action for unjust enrichment. The Court concludes that the Plaintiffs’ position on this point is the correct one.
California courts, including the Supreme Court of California, have acknowledged that parties may pursue causes of action arising from an unjust enrichment claim under California law. See, e.g., Ghirardo v. Antonioli,
Likewise, with respect to Mississippi, there is considerable authority that supports the existence of an independent state law claim for unjust enrichment. See, e.g., Owens Corning v. R.J. Reynolds Tobacco Co.,
3. Absence of Adequate Remedy at Law: 10 Jurisdictions
Defendants move to dismiss the unjust enrichment claims under the laws of 10 states- — -Arizona, Florida, Massachusetts, Minnesota, Nevada, New Mexico, North Carolina, South Dakota, Utah, and Vermont — on the grounds that Plaintiffs have failed to allege the absence of an adequate remedy at law. According to Defendants, the absence of an adequate remedy at law is a’ “necessary element” of an equitable claim for unjust enrichment under these states’ laws.
As discussed above, the elements necessary to establish an unjust enrichment vary state by state, and some jurisdictions require proof of elements that others do not require. Consequently, an evaluation of the Defendants’ argument simply requires determining whether the absence of an adequate remedy at law is actually an element of the prima facie case for unjust enrichment under the law of a given state — for which Plaintiffs would have the burden of proof. Some jurisdictions may only recognize this legal precept as an affirmative defense or some other equitable consideration,
If the first scenario applies, the Plaintiffs must plead that element of the prima facie claim under state law. If the latter several scenarios apply, Plaintiffs have no
Furthermore, under any of the aforementioned scenarios, that a complaint alleges an unjust enrichment claim and also brings alternative claims for relief that might constitute adequate remedies at law is of no consequence under the pleading constraints of the Federal Rules of Civil Procedure. Rule 8 allows plaintiffs to plead claims in the alternative despite inconsistencies “in both legal and factual allegations.” Indep. Enters. Inc. v. Pittsburgh Water and Sewer,
As a starting point, the Court concludes that the absence of an adequate remedy at law is not an element of the prima facie case for unjust enrichment under the laws of 9 of the jurisdictions at issue — Florida, Massachusetts, Minnesota, Nevada, New Mexico, North Carolina, South Dakota, Utah, and Vermont.
As to the jurisdiction of Arizona, the Court determines that the absence of an adequate remedy at law is a prima facie element of a claim for unjust enrichment.
The Defendants’ argument thus follows that the IPSAC’s allegations specific to Arizona are insufficient to comply with the Plaintiffs’ obligation to plead that “they lack an adequate remedy at law.” The IPSAC’s allegations as to Arizona specifically plead:
The enrichment of Defendants that occurred because of Defendants’ illegal activities was without legally cognizable justification. To the extent legal remedies do not sufficiently accomplish disgorgement of Defendants’ illegal profits from their sales to indirect purchasers in Arizona, Defendants should be ordered to make restitution for the benefit of Arizona indirect purchasers because it would be unjust to allow Defendants to retain the benefits of their sales of eggs at illegally inflated prices.
IPSAC ¶¶ 324 (emphasis added). In light of Rule 8(d)(2)’s permissiveness of alternative pleading, given the IPSAC’s italicized language above, and allowing for all inferences to be drawn in favor of Plaintiffs, the Court cannot rule as a matter of law that Plaintiffs have failed to plausibly suggest that there is an absence of an adequate remedy at law. The factual allegations in the IPSAC are consistent with the absence of an adequate remedy at law as to the recovery of either all or part of the Defendants’ enrichment as connected to the Plaintiffs’ impoverishment.
In sum, the Court denies the Defendants’ motion to dismiss the 10 state unjust enrichment claims on the grounds of the availability of an adequate remedy at law.
4. Benefit of Bargain: 20 Jurisdictions
Defendants attack generally all 20 of the Plaintiffs’ remaining unjust enrichment claims on the grounds that unjust enrichment is unavailable as an “independent cause of action” when Plaintiffs have received the “benefit of the bargain” for which they contracted. Based upon the lone two cases Defendants cite as authority for their argument, the Court discerns that Defendants are invoking the principle embodied in Section 107(1) of Restatement (First) of Restitution:
A person of full capacity who, pursuant to a contract with another, has performed services or transferred property to the other or otherwise has conferred a benefit upon him, is not entitled to compensation therefor other than in ac- , cordance with the terms of such bargain, unless the transaction is rescinded for fraud, mistake, duress, undue influence or illegality, or unless the other has failed to perform his part of the bargain.
See also New Motor Vehicles,
However, Defendants do not raise appropriate grounds for such a dismissal because their argument is based upon what is essentially a model law rather than actual law. Beyond raising the principle, as articulated by the First Restatement,
5. Exhaustion of Remedies: Tennessee
Under Tennessee law, although Plaintiffs “need not be in privity with a defendant to recover under a claim of unjust enrichment,” Plaintiffs must allege that they have exhausted all remedies against parties with whom Plaintiffs were in privity of contract. Freeman Indus., LLC v. Eastman Chem. Co.,
Courts interpreting Tennessee law have found that remedial efforts are futile in several kinds of circumstances. For example, one Tennessee court has held that remedial efforts are futile when a plaintiff can demonstrate that the party with whom it was in privity of contract is “judgment proof.” See Bank of Nashville v. Chipman, No. M2010-01581-COA-R3-CV,
Some federal courts sitting in diversity have found that consumer plaintiffs have adequately pled futility of pursuing remedies under Tennessee law by alleging, inter alia, that the resellers of a product (■i.e., the parties in privity of contract with plaintiffs) were not involved in the producer defendants’ price-fixing conspiracy, and thus not liable for or the cause of the plaintiffs’ alleged losses resulting from that conspiracy. See TFT-LCD (Flat Panel),
Accordingly, the Court denies the Defendants’ motion to dismiss the Tennessee unjust enrichment claim on these grounds.
6. Unjust Enrichment Claim Prior to May 1,2006: Utah
In tandem with their previously-discussed argument that the Utah Antitrust Act does not permit indirect purchasers to recover damages accruing before May 1, 2006, Defendants also claim that the Plaintiffs’ Utah claim for unjust enrichment arising from conduct occurring prior to May 1, 2006 should be dismissed. It appears that Defendants are contending that, as a general rule of thumb, indirect purchasers should be barred from pursuing an unjust enrichment claim in those jurisdictions where indirect purchasers cannot obtain relief under that jurisdiction’s antitrust and/or consumer protection laws due to lack of standing or otherwise. Defendants contend that Utah qualifies as one such jurisdiction — at least prior to the May 1, 2006 effective date of the Utah Antitrust Act amendment that provides for indirect purchaser recovery under the Act. See Utah Code Ann. § 76-10-918. To be clear, Defendants do not challenge the Plaintiffs’ pursuit of an unjust enrichment claim for alleged conduct that occurred on or after May 1, 2006. Thus, Defendants are only challenging the temporal scope of the Utah unjust enrichment claim and seeking partial dismissal of this claim.
This analytical approach should not be remarkable given that courts have approached similar questions as to a particular jurisdiction’s preclusion of an unjust enrichment claim in the context of indirect purchasers by examining the law of the specific jurisdiction. See, e.g., In re Microsoft Corp. Antitrust Litig.,
Defendants have referenced — through citation rather than analytical discussion— the rationales of several federal courts in support of their argument. Defs.’ Mot. at 43 (citing Flonase,
However, even if the general principles, as expressed by those cases, are recognized across various state jurisdictions, that does not mean that a given jurisdiction, such as Utah, has adopted a particular legal principle or whether that principle is the only guidance that bears consideration. Compare 2B N. Singer & J. Singer, Sutherland on Statutory Construction § 50.1 (7th ed. 2008) (“In cases of conflict between legislation and the common law, legislation governs because it is the latest expression of the law.”) with id. (“Where there is a limitation by statute which is capable of more than one construction the statute must be given that construction which is consistent with common law.... The legislature is presumed to know the common law before a statute was enacted. Absent an indication that the legislature intends a statute
The cases upon which Defendants rely in no way indicate how Utah law treats the interplay between its statutory and common law schemes, and when common law might be precluded by statute (and statutory interpretation). There is specific Utah law concerning statutory construction. See, e.g., Utah Code Ann. §§ 68-3-1, 68-3-2 (before and after May 11, 2010 amendment); Daniels v. Gamma West Brachytherapy, LLC,
Moreover, Defendants have not established that the law of Utah ever affirmatively adopted the rationale of Illinois Brick as a “policy”, statute, or otherwise prior to May 1, 2006. Cf. In re Microsoft Corp. Antitrust Litig.,
This panoply of issues — and even others that have not been mentioned
7. Standing to Assert Unjust Enrichment Claim for Egg Products: New York
Defendants contend that the Plaintiffs’ unjust enrichment claim under New York law fails insofar that the Plaintiffs’ alleged losses resulting from “egg products” purchases of “manufactured products incorporating processed eggs such as baked goods and mayonnaise” are too remote to support such a claim. Defendants previously objected under Associated General Contractors to the breadth of the IPSAC’s definition of “egg products” due to its inclusion of “manufactured products incorporating processed eggs,” and now invoke those arguments as grounds for dismissing the Plaintiffs’ New York unjust enrichment claim as to injuries due to purchases of “manufactured products incorporating processed eggs.”
As previously discussed, Plaintiffs have agreed to narrow the IPSAC’s definition of “egg products” to not include “manufactured products incorporating processed eggs,” and because this definition is central to the Defendants’ arguments, the Court will refrain from considering the Defendants’ argument at present without the actual amendment. Consequently, Court denies the Motion without prejudice to Defendants to raise these grounds for dismissal of the New York unjust enrichment claim based upon the amended definition of “egg products” as may then become appropriate.
8. Benefits Conferred on Defendants: 16 Jurisdictions
All parties agree that an unjust enrichment claim under the laws of 16 jurisdictions — the District of Columbia, Florida, Iowa, Kansas, Massachusetts, Minnesota, Nevada, New Mexico, New York, North Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wisconsin— requires Plaintiffs to plead as an element of the claim that they conferred a benefit upon Defendants. However, the parties dispute two matters concerning the requisites for pleading this element as to the 16 claims: (1) whether the IPSAC is devoid of factual allegations that Plaintiffs conferred any benefit upon Defendants; and (2) whether 10 of the 16 jurisdictions at issue require (or likely would require) the conferral of a “direct benefit” as opposed to an “indirect benefit.” The Court discusses these narrow issues in turn.
a. Factual Allegations of Any Benefit Conferred
Defendants claim that the IPSAC does not allege that Plaintiffs conferred any benefit upon Defendants, and as a result, all 16 claims are deficient. Defendants initially posit that the only way to satisfy this element is for Plaintiffs to allege that they either “(1) purchased eggs that originated from Defendants’ birds or (2) purchased eggs directly from Defen
To start, Defendants failed to cite any persuasive legal authority in support of them initial claim that the two particular types of factual allegations as to the origin of the eggs purchased are necessary in all 16 jurisdictions at issue. Defendants have generally cited in a footnote one case per jurisdiction only to show that “a claim for unjust enrichment requires a plaintiff to plead and prove that it conferred a benefit upon the defendant.” Defs.’ Mot. at 44. Instead, Defendants have only cited Myzel v. Fields,
Although Defendants appear to narrow the issue presented in their reply brief, the recalibrated argument does not comport with the IPSAC’s allegations. Defendants raise no objections to the Plaintiffs’ rebuttal that it is unnecessary to plead factual allegations concerning specifics about the origins of their purchases and that the 16 jurisdictions are permissive in allowing the “conferral” to be non-monetary form of advantage. Indeed, Defendants accept this proposition of law, stating that “restitution is typically available where' — -to take a textbook example — a doctor provides medical assistance to the incapacitated victim of an automobile accident.” Defs.’ Reply at 25. Even so, Defendants argue: “However, the IPSAC is devoid of any allegations of any such non-monetary ‘benefit’ that Plaintiffs conferred on Defendants.” Id.
The Defendants’ characterization of the IPSAC is incorrect as the IPSAC has alleged certain factual allegations to show that the Defendants’ alleged benefit is conferred by virtue of the act of the named Plaintiffs’ purchasing eggs. Specifically, Plaintiffs allege that the egg market has particular “structural features”:
(a) the lack of product differentiation or high substitutability of product between different producers; (b) the prevalence of cross marketing arrangements that facilitate price communication between rivals; (c) relative concentration within the industry; and (d) high demand price inelasticity.
IPSAC ¶ 119. Plaintiffs further plead as to each of the 16 jurisdictions that Defendants leveraged these particular facets of the egg market to advance the aims of their alleged conspiracy, thereby receiving the “benefit” of increased revenues and profits because the prices in the egg market as a whole were artificially inflated:
The Defendants were able to achieve their increased revenues and profitsfrom their sales of eggs to [Name of State ] indirect purchasers because the demand for eggs by indirect purchasers is relatively price inelastic, as Defendants understood. Thus, the ability of Defendants to profit from their sales of eggs to indirect purchasers in [Name of State ] was connected to and due to the increased prices paid for Defendants eggs by indirect purchasers in [Name of State ].
See, e.g., IPSAC ¶¶ 346, 354, 361.
This narrative of factual allegations plausibly suggests that the Plaintiffs’ losses in purchasing eggs at artificially-inflated prices are connected to the Defendants’ benefits. A fundamental function of the egg market as alleged in the IPSAC is the demand for eggs, as manifested by consumer purchases of eggs. Thus, even if Plaintiffs did not purchase eggs from a retailer who purchased from a specific Defendant, Defendants nevertheless obtained the benefit of Plaintiffs purchasing eggs at an artificially inflated price because each and every egg purchase by consumers would contribute to increasing (or sustaining at an artificial level) egg prices in a market in which the alleged supply of eggs was artificially decreased. In other words, the claim is that Defendants allegedly manipulated the supply curve of the market recognizing that because demand was inelastic and eggs are essentially a commodity good (ie., minimal product differentiation), prices would increase in response to, and as a result of, consumer purchases regardless of whether they were purchased from a Defendant or a non-conspirator. Accordingly, any demand-side activity in the egg market, ie., the Plaintiffs’ purchases, would financially benefit Defendants generally because their eggs would be selling at a market price that was artificially inflated. See also IPSAC ¶ 56 n. 4 (describing the company, Urner Barry, Inc., as “a price reporting service for the egg industry ... [which produces] newsletters [that] publish egg price quotations that are widely relied on in the setting of wholesale egg prices under spot purchasers and long-term contracts”).
The Defendants’ final retuning of their argument also does not provide sufficient grounds for dismissal. Defendants assert, “even if such allegations were found in the IPSAC, and even if Plaintiffs had explained how they ‘conferred’ this ‘benefit’ on Defendants, Plaintiffs have not cited a single authority permitting an unjust enrichment claim based on such an allegation.” Defs.’ Reply at 25 n. 18. Even assuming this is true, Defendants likewise have not cited any authority (and certainly no authorities specific to each of the 16 jurisdictions) that bars an unjust enrichment claim based upon such a factual premise as a matter of law. But Defendants have accepted the Plaintiffs’ legal proposition that a “ ‘benefit’ conferred can be any form of advantage, not just the indirect payment of money.” Defs.’ Reply at 25 (emphasis added). This legal proposition embraces the notion that a plaintiff can “confer” her conduct to enrich a defendant. It follows that the Court cannot conclude at this time as a matter of law as to the 16 jurisdictions at issue that the Plaintiffs’ factual allegations that their acts of purchasing eggs conferred the Defendants’ benefit of increased revenues from their egg sales are insufficient to show that plaintiffs conferred any benefit upon Defendants.
b. Conferral of a “Direct Benefit”
For reasons previously discussed, supra, Plaintiffs have not alleged that they directly conferred a benefit upon Defendants. In other words, Plaintiffs have not pled facts to show that the named Plaintiffs’ purchased eggs directly from Defendants.
Thus, the issue presented by the Defendants’ next argument is whether the law of those 10 jurisdictions require (or likely would require) the conferral of a “direct benefit” as opposed to an “indirect benefit.” If a jurisdiction requires such a “direct benefit” to state a claim, then dismissal of the Plaintiffs’ claim is warranted. The Court proceeds to examine what the law of the 10 jurisdictions requires as to this element in terms of two categories: (1) 5 jurisdictions that Defendants claim require a “direct benefit,” and (2) 5 jurisdictions that Defendants claim likely require a “direct benefit.”
i. Claimed “Direct Benefit” Jurisdictions
Defendants claim that “Plaintiffs must prove that they directly conferred a benefit on Defendants” as to unjust enrichment claims brought under the laws of Florida, Kansas, New York, North Carolina, and Utah. The Court determines that none of these states’ laws necessarily require as a matter of law for Plaintiffs to “prove that they directly conferred a benefit on Defendants” in order to state an unjust enrichment claim.
aa. Florida
Defendants rely on Peoples National Bank of Commerce v. First Union National Bank of Florida,
The Court agrees that it appears the courts in Peoples National and the cases cited by Defendants have determined that an allegation or evidence of a “direct benefit” is required. Nonetheless, there exists other valid Florida law that does not require direct interactions between the plaintiff and defendant in order for a benefit to have been conferred. See Variety Children’s Hosp. v. Vigliotti,
Shands Teaching Hospital and Clinics, Inc. v. Beech Street Corp.,
This line of cases demonstrates that Florida courts recognize “that some benefit must flow to the party sought to be charged.” Coffee Pot Plaza Partnership v. Arrow Air Conditioning and Refrigeration, Inc.,
Given that Florida law does not appear to require the conferral of a direct benefit exclusively, as Defendants claim, the Court cannot dismiss the Florida unjust enrichment claims as a matter of law by reason of a failure to adequately allege that Plaintiffs conferred a direct benefit upon Defendants.
bb. Kansas
The Court is not persuaded that Kansas law requires the pleading of a conferral of a direct benefit. In support of their position, Defendants cite one, unpublished decision from the Tenth Circuit Court of Appeals, Spires v. Hospital Corporation of America,
Moreover, Defendants have not raised any objections to the Plaintiffs’ claim that “there is no requirement of a ‘direct benefit’ or even an in-kind benefit passing from plaintiffs to defendants under Kansas law,” nor did Defendants challenge the cases cited by Plaintiffs in support of that claim. Pis.’ Resp. at 45.
In sum, Kansas unjust enrichment law allows claims for the conferral of indirect benefits. Thus, a failure to plead a “direct benefit” cannot be appropriate grounds for dismissal, and the Court will not dismiss the Plaintiffs’ unjust enrichment claim under Kansas law.
cc. New York
In Sperry v. Crompton Corp.,
This case law demonstrates that the Defendants’ contention that “Plaintiffs must prove that they directly conferred a benefit on Defendants” is misplaced as to New York law. New York law does not require such a direct relationship. Indeed, the solitary case that Defendants cited in support of their position, In re Bayou Hedge Funds Investment Litigation,
Thus, although Plaintiffs have not alleged facts suggesting the conferral of a direct benefit, such a deficit is not in and of itself fatal to a New York unjust enrichment claim as a matter of law. The motion to dismiss on these grounds is denied.
dd. North Carolina
Defendants argue that North Carolina law requires Plaintiffs to plead the conferral of a direct benefit in order to state an unjust enrichment claim as announced by Effler v. Pyles,
Plaintiff has not shown that she conferred a benefit on defendant [second wife]. [Second wife] received title to the property through her husband. Although he had previously acquired his interest in this property with plaintiffs assistance, this does not satisfy plaintiffs burden of showing that she conferred a benefit directly on defendant [second wife].
Id. at 152.
Defendants rely on the holding’s reliance on the word “directly” as an accurate embodiment of North Carolina law, and highlight that another court has recognized the same. See Defs.’ Mot. at 45 n. 23 (citing Baker Const. Co., Inc. v. City of Burlington,
Nonetheless, the Court is not convinced at this time that the Supreme Court of North Carolina would agree with this narrow, highly technical, approach to an unjust enrichment theory of liability. First, there is some indication in Effler itself that its usage of the word “directly” is an aberration in North Carolina law because the decision references no case law or legal authority that might explain its specific rationale on this point or word choice. Indeed, “the Effler court relied on the North Carolina Supreme Court’s decision in Booe v. Shadrick,
That the claim in Embree arose in the context of an equitable lien is of little consequence because it is still invokes the same principles of unjust enrichment that are recognized under North Carolina law.
Accordingly, the Court determines that North Carolina law embraces a broader definition of “conferral of a benefit” beyond only the conferral of a direct benefit. See also TFT-LCD (Flat Panel),
ee. Utah
The Court does not adopt the Defendants’ claim that Utah law necessarily
In Baugh v. Darley,
The mere fact that a person benefits another is not of itself sufficient to require the other to make restitution therefor.... Services officiously or gratuitiously furnished are not recoverable .... Nor are services performed by the plaintiff for his own advantage, and from which the defendant benefits incidentally, recoverable.
Services performed by the plaintiff outside the terms of the agreement [of sale] would, of course, ordinarily be voluntary and, therefore, such services could not in any case be recoverable regardless of the statute of frauds. However, one might perform work or services intended for his own benefit, or for the benefit of another, in reliance upon as distinguished from in pursuance of an unenforceable agreement. Generally, unless such services enhance or benefit the property of the defendant or otherwise confer on him a direct benefit, they do not form the basis for a contract imposed by law because there is no ‘unjust enrichment’ as that term is used in law. Where such services operate to confer a direct benefit upon the defendant, they may be recoverable.
Id. at 337 (emphasis added).
In another case cited by Defendants, Jeffs v. Stubbs,
We addressed the third element in Baugh v. Darley,112 Utah 1 ,184 P.2d 335 (1947). This court stated:
Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another. The benefit may be ... beneficial services conferred ....
Services officiously or gratuitously furnished are not recoverable. Nor are services performed by the plaintiff for his own advantage, and from which the defendant benefits incidentally, recoverable.
Id. at 337 (internal citations omitted). Here, the claimants improved the land in reliance upon the [owner defendant’s representations that they could live on the land for the rest of their lives. Even though the claimants intended to benefit from the improvements by occupying them during their lifetimes, the claimants’ services still conferred a direct, not incidental, benefit on the [owner defendant].
Id. at 1248 (emphasis added).
Both of these decisions demonstrate that the use of “direct” is used to draw a distinction from “incidental,” as in the realm of a “by-product,” specifically to explicate that “services performed by the plaintiff for his own advantage” cannot constitute grounds for unjust enrichment. Indeed, the Supreme Court of Utah has articulated this principle another way:
The benefit conferred satisfies this requirement if the defendant’s retention of the benefit would be unjust without providing compensation.... [U]njust enrichment does not result if the defendant has received only an incidental benefit from the plaintiffs service ....
Emergency Physicians Integrated Care v. Salt Lake County,
Accordingly, the Court concludes that Utah law does not mandate that a plaintiff demonstrate that she directly conferred a benefit upon a defendant. The Court denies the motion in this respect.
ii. Likely “Direct Benefit” Jurisdictions
Defendants argue that the courts of five jurisdictions — the District of Columbia, Minnesota, South Dakota, Vermont, and West Virginia — “have not ruled on whether a plaintiff must directly confer a benefit upon defendant.” Defs.’ Mot. at 46. Nonetheless, they contend that it is appropriate for the Court to predict that these five jurisdictions would require a plaintiff to confer a direct benefit on a defendant in order to field an unjust enrichment claim solely because some other jurisdictions require the same unjust enrichment elements and have held that the conferral of a direct benefit is required.
The Third Circuit Court of Appeals has explained that when a federal court sitting in diversity must make a prediction as to a precise legal issue a certain legal standard must be satisfied. In doing so, the Court is required to consult and evaluate particular sources of legal authority:
In adjudicating a case under state law, we are not free to impose our own view of what state law should be; rather, we are to apply existing state law as interpreted by the state’s highest court in an effort to predict how that court would decide the precise legal issues before us. Kowalsky v. Long Beach Township, 72F.3d 385, 388 (3d Cir.1995). In the absence of guidance from the state’s highest court, we must look to decisions of state intermediate appellate courts, of federal courts interpreting that state’s law, and of other state supreme courts that have addressed the issue. Wiley v. State Farm Fire & Cas. Co., 995 F.2d 457 , 459-60 (3d Cir.1993). We must also consider “analogous decisions, considered dicta, scholarly works, and any other reliable data tending convincingly to show how the highest court in the state would decide the issue at hand.” McGowan v. University of Scranton,759 F.2d 287 , 291 (3d Cir.1985) (quoting McKenna v. Ortho Pharmaceutical Corp.,622 F.2d 657 , 663 (3d Cir.1980)) (internal quotation marks omitted).
Koppers Co., Inc. v. Aetna Cas. and Sur. Co.,
Defendants have urged the Court to predict that the five jurisdictions likely would require a “direct benefit” if the issue was presented to those jurisdictions’ highest courts. However, aside from arguing that the Court should look to the five jurisdictions that Defendants claim do require a direct benefit (a conclusion that the Court declined as to each of those jurisdictions, supra), - Defendants have provided no other legal authority from which the Court might predict, consistent with the Third Circuit standard, whether those five jurisdictions would require pleading a “direct benefit.” Certainly, especially in a far-ranging case such as this, the task is decidedly daunting to collect and analyze non-definitive case law and then predict what various courts around the country would do with a case, recognizing that it is entirely possible that those predictions may — indeed, likely will — be not entirely consistent. But given the posture of these issues as presented to the Court at this time, it is virtually impossible for the Court to undertake this task with any certainty now. Plaintiffs have argued that “in light of the general principles underlying such [unjust enrichment] actions — to prevent parties from benefitting from their wrongdoing — [which] apply in all states, absent strong evidence from the relevant state courts, this court should not imply such a requirement.” Pis. Resp. at 42. Defendants have not raised any argument disagreeing with this proposition.
Furthermore, Plaintiffs contend the unjust enrichment claims do “not require such a direct benefit,” and provide moderate analysis of the “conferral of a benefit” requirement on a state-by-state basis as to the District of Columbia, Minnesota, South Dakota, Vermont, and West Virginia. Pis.’ Resp. at 42-43, 47, 49-52. In their reply brief, Defendants do not address such analyses whatsoever with respect to the claims brought under the laws of the District of Columbia, Minnesota, and Vermont. Through their silence, it appears Defendants have no objections to the Plaintiffs’ justifications for their claims. Insofar that Defendants have apparently protested certain of the Plaintiffs’ supporting legal authority as to unjust enrichment claims of South Dakota and West Virginia, the Court does not agree with the Defendants’ contention that W.J. Bachman Mechanical Sheetmetal Co., Inc. v. Wal-Mart Real,
It follows that the Court declines at this time to make the predictions of law for
VI. Conclusion
For the foregoing reasons, the Court denies in part and grants in part the Defendants’ motion consistent with the terms delineated in this Opinion. Insofar that the Court grants in part the Motion without prejudice, Plaintiffs may seek leave to amend their complaint upon the appropriate motion, or stipulation, provided that they do so promptly.
An appropriate Order follows.
Notes
. Indirect purchasers buy products not directly from the product’s original source but from other parties further along the distribution chain. See generally Illinois Brick Co. v. Illinois,
. The IPSAC is the operative pleading for the indirect purchaser plaintiffs, replacing or superseding all of the previously-filed individual and consolidated complaints.
. This inventory does not include the claims that Plaintiffs withdrew at oral argument. At that time, Plaintiffs withdrew all of their claims arising under Maine or Puerto Rico law. They also withdrew consumer protection claims based upon the laws of Michigan, South Dakota, or Wisconsin.
. The Defendants’ Motion to Dismiss the Indirect Purchaser Plaintiffs’ Second Amended Consolidated Class Action Complaint is filed at Docket No. 332. Plaintiffs responded to the Motion (Doc. No. 355), and Defendants filed a reply brief (Doc. No. 385). The parties submitted several supplemental materials to the Court. At oral argument all counsel ably presented on the Motion, and the transcript of the argument is in the record at Docket No. 597.
. The Court is separately addressing the Defendants' other pending motions to dismiss relating to the IPSAC.
. Except when distinctions are necessary for clarity, the general use of the term "eggs” and "egg” in this Opinion will be consistent with the IPSAC’s definition, i.e., "eggs” is inclusive of "shell eggs” and “egg products.”
. The members of these proposed classes, individuals and entities, are defined by their state of residency with respect to each of the 22 state jurisdictions at issue and who “indirectly purchased shell eggs and/or egg products produced from shell eggs produced from Defendants' or their co-conspirators' caged birds during the Class Period.” Id. ¶¶ 108.
. The Court’s jurisdiction over the Plaintiffs' state law claims is predicated on the diversity of the parties and supplemental jurisdiction. See 28 U.S.C. §§ 1332, 1367. In such circumstances the Court is “required to apply the substantive law of the state whose law governs the action.” Spence v. ESAB Group, Inc.,
Yet many of the parties' arguments concerning the Motion at bar "put in mind of the concept of 'general' common law that prevailed in the era of Swift v. Tyson. The assumption is that the common law of the 50 states and the District of Columbia ... is basically uniform and can be abstracted in a single [encapsulation of ‘law’].” Matter of Rhone-Poulenc Rorer, Inc.,
The purpose of the Erie doctrine and “the intent of that decision was to insure that ... the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court.” Guaranty Trust Co. of New York v. York,
. Although it appears that Rule 9(b) is generous in permitting a generalized pleading in this regard, one treatise has noted that this sentence “suggests that the [Rule's] draftsmen felt a need to qualify the first sentence to insure that it was not interpreted to require a party pleading fraud or mistake to allege the specific circumstances of fraudulent intent, knowledge of the falsity of a statement, or mistaken belief in its truth.” 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure % 1301.
. Before proceeding further on this Motion, the Court is compelled to comment upon the parties’ approach to articulating and supporting their arguments. In many respects, the parties’ respective work is indeed impressive. However, at other times, the parties’ work product contained deficiencies ranging from a dearth of meaningful (indeed, sometimes even unreliable) citation to legal authority, erroneous characterizations of the opposing parties’ arguments (or worse, ignoring those arguments or failing to comprehend and directly address their substance), and complete omission of legal analysis. In some respects this has led to additional challenges for the Court to try to evaluate the efficacy of the arguments. Certainly that effort has been made more time consuming as a result — albeit, there was never quite a need to resort to soliciting all of the queen’s horses and all of the queen’s men to piece the parties’ arguments together. Such advocacy is, fortunately, uncharacteristic of the fine professionals who have, to date, appeared in this case.
At times, the press of business can make consistently high level performance extremely difficult. The Court urges the litigators involved in this case to rededicate themselves to presenting their clients' positions in the most compelling light appropriate whenever possible and to have the well-earned and deserved confidence to forego arguments put forth merely for arguments’ sake.
. Because the singular issue at bar is the named Plaintiffs’ individual Article III standing to bring the antitrust claims under the laws of Iowa, Mississippi, North Dakota, and South Dakota, the issue presented does not arise as a result of, or invoke, issues relating to class certification or implicate the standing of proposed class members. Certainly, sometimes the factors and facts considered during a class certification inquiry overlap with Article III standing, but nonetheless Article III standing is analytically and conceptually distinct from those other matters. See generally Wright & Miller, supra, § 1785.1 (’'[B]oth standing and mootness also frequently appear as threshold requirements for the maintenance of federal class actions and must be considered in addition to the requirements of Rule 23 when deciding whether a particular action may be certified. It is important when considering the applicability of these two doctrines to class actions to keep in mind that these concepts serve both constitutional and prudential concerns: they ensure that a justiciable or live issue is presented, thereby satisfying the Article III requirement that federal courts only entertain cases or controversies, and they seek to ascertain whether the person asserting the claim is sufficiently interested so
There is long-standing precedent to the effect that when a "class action” is introduced into the standing equation, the requirement that a named plaintiff must have standing to bring it is unaltered. Insofar that a case "may be a class action ... adds nothing to the question of standing, for even named plaintiffs who represent a class ‘must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.' ” Lewis v. Casey,
Accordingly, there is no reason to defer consideration of the particular Article III standing issue raised by Defendants until class certification. The succinct conclusion in In re Flonase Antitrust Litig.,
This Court agrees with the legal analysis articulated in Flonase and those other courts’ decisions as to these issues involving named plaintiffs' standing, and determines that the rationale advanced by those courts is applicable to this case. In short, the Court concludes that it is not required to defer an Article III standing inquiry as to the named Plaintiffs.
. Generally, the Third Circuit Court of Appeals considers motions to dismiss for lack of standing as Rule 12(b)(1) motions. See Ballentine v. United States,
. Accord Sullivan v. DB Investments, Inc.,
. Cf. 2 Moore et al., Federal Practice § 12.30 (3d ed. 2011) ("Whether a statutory provision that establishes a threshold for relief is jurisdictional or goes to the merits determines whether a failure to comply with the provision is grounds for dismissal (at any time in the litigation) under Rule 12(b)(1), or whether a failure to meet the threshold is merely a basis for summary judgment or for dismissal for failure to state a claim under Rule 12(b)(6), matters that are subject to very different procedural rules and limits. Under the "bright line” rule of Arbaugh v. Y & H Corp., [federal] statutory threshold requirements should not be treated as jurisdictional unless Congress has clearly stated that they are.”).
. See, e.g., IPSAC ¶ 8 ("Plaintiffs ... have been forced to pay supra-competitive prices for shell eggs and egg products and, thus, as a result of Defendants’ illegal actions, have suffered antitrust injury.”); id. ¶ 18 (“[E]ach Plaintiff purchased shell eggs and/or egg products in the state in which they reside or conduct business and suffered an economic injury as a result of Defendants' illegal conduct described in this Complaint.”); id. ¶¶ 359, 411, 476, 490 (“As a direct and proximate result of Defendants’ unlawful and anti-competitive practices, including combinations and contracts to restrain trade and monopolize the relevant markets, Plaintiff[s] ... have been injured in their business and/or property in that they paid supra-competitive, artificially inflated prices for shell eggs and egg products.”).
. Furthermore, such relief is afforded in private enforcement actions brought under the four statutes. See Iowa Code § 553.12 ("... may bring suit to ... 2. Recover actual damages ...”); Miss.Code Ann. § 75-21-9 (“... may recover all damages of every kind sustained by him or it ...”); N.D. Cent.Code § 51-08.1-08 ("... may bring an action for ... damages sustained ...”); S.D. Codified Laws § 37-1-14.3 (''■■■ may bring an action for ... damages sustained ...”).
. To the extent that named Plaintiffs seek the redress of injunctive relief in relation to any of their federal or state claims, it is less clear from the IPSAC's allegations whether those Plaintiffs have Article III standing for such relief. Article III standing is to be considered in light of the specific allegations and the relief sought, which with respect to injunctive relief requires consideration of whether a plaintiff is "likely to suffer future injury.” Lyons,
. Not only the federal courts embrace the plain meaning rule of statutory construction, but so, too, do the appellate courts of the states here concerned. See Murphy v. Millennium Radio Group, LLC.,
. As to the South Dakota antitrust law, some federal courts have determined that in order to allege that a plaintiff is entitled to bring suit thereunder, it must be alleged that either a part of the conspiracy or the conspiracy’s restraint of trade occurred within South Dakota. See In re New Motor Vehicles Canadian Export Antitnist Litig.,
. For purposes of this analysis, the Court need not decide at this time whether the Mississippi statute is ambiguous or whether its plain meaning applies. (This is true for all four state antitrust statutes at issue for that matter). However, one Mississippi court has noted that one statutory provision sets forth the legislative intent of the antitrust statute, which may have some bearing on the construction of the statute:
Even if the [antitrust] statute was ambiguous, which it clearly is not [with respect to the Attorney General’s enforcement of the law], the legislative intent of the act is clearly to 'suppress' all trust and monopolies. Miss.Code Ann. § 75-21-39 (1972). The Mississippi Code states "[the Mississippi Antitrust Act] shall be liberally construed in all courts to the end that trusts and combines may be suppressed, and the benefits arising from competition in business preserved to the people of this state.”
Hood ex rel. State v. BASF Corp., No. 56863,
. In light of this analysis, the Court is not proceeding to further consider prudential standing concerns at this time. The Court concludes such analysis is also not required at present because Defendants have only challenged the named Plaintiffs’ Article III constitutional standing. Furthermore, there is no requirement that prudential standing issues must always be resolved before the merits— and certainly not, as in this case, when the parties have not framed prudential standing issues explicitly or suitably for the Court’s consideration. See Bowers v. Nat'l Collegiate Athletic Ass'n,
. Defendants have characterized this argument as a "standing” issue by claiming that "Plaintiffs have no standing to sue for damages arising before May 1, 2006.” Defs.' Mot. at 9. Based on the Court's prior discussion of
. To the extent that the defense may have obliquely raised the issue in connection with its Motion, the Court does not address whether the Plaintiffs’ claims arising from conduct that occurred prior to May 1, 2006 may be dismissed. The Defendants’ briefing and oral argument did not present or frame this question in a sufficient fashion that would allow the Court to address it. Similarly, Plaintiffs have articulated only that they oppose the Defendants on this score.
Defendants cite but a single legal authority in connection with this issue, In re Aftermarket Filters Antitrust Litigation, No. 08-cv-04883,
. To determine whether it might be appropriate to raise this or a similar issue again following the Plaintiffs' agreement to amend the definition of "egg products” and whether a Rule 12(b)(6) motion might be the appropriate means to do so, the Defendants should refer to the Court’s prior decision on a motion in which most of the same Defendants here raised similar issues directed to the Direct Purchaser Plaintiffs’ pleading in this multidistrict litigation. See Oct. 14, 2011 Mem. and Order,
. Once a plaintiff has satisfied the injury requirement under Section 17203 of the UCL, "[sjuch injuries satisfy the plain meaning of section 17204’s 'lost money or property’ requirement, qualify as injury in fact, and would permit a plaintiff to seek an injunction against the offending business practice even in the absence of any basis for restitution.” Kwikset,
. Even Defendants argue that insofar that the IPSAC alleges that the logo for the Animal Care Certified program was misleading, "these allegations do not form the basis of Plaintiffs' consumer fraud claims” and that "Plaintiffs’ causes of action malte it exceedingly clear that Plaintiffs are seeking damages resulting only from the allegedly 'artificially high' egg prices and are concerned with Defendants' conduct only as it relates to the alleged reduction in the supply of eggs.” Defs.' Mot. at 39-40.
. The Court notes that Defendants have not sought dismissal of the California unjust enrichment claim on the basis of failure to adequately plead the "conferral of a benefit," although, as discussed infra, the defense does challenge certain of the unjust enrichment claims on that and other grounds.
. The Court reads the reference to Arizona in the last sentence of the referenced pleading paragraph to be a typographical error, given that these allegations are essentially cookie-cutter as to each state unjust enrichment claim:
The Defendants were able to achieve their increased revenues and profits from their sales of eggs to California indirect purchasers because the demand for eggs by indirect purchasers is relatively price inelastic, as Defendants understood. Thus, the ability of Defendants to profit from their sales of eggs to indirect purchasers in California was connected to and due to the increased prices paid for Defendants eggs by indirect purchasers in [California].
Id.
. Marbry explicitly addressed a defense argument on a motion to dismiss an indirect purchaser class action on a theory of a price-fixing conspiracy among distributors of compact discs ("CDs”), which contended that the DCCPPA "protects against deceptive trade practices, not unfair competition. Since plaintiff has not alleged any misrepresentation that deceived her, the consumer protection count, defendants say, must be dismissed.” Marbry,
. Plaintiffs have brought a District of Columbia antitrust claim (see IPSAC ¶¶ 336-39) which they argue is the basis for their DCCPPA claim. See Pis.’ Resp. at 5 ("[T]he
. The two cases upon which Defendants rely for this position are inapposite. Neither of those cases, In re Flash Memory Antitrust Litigation,
For example, in Flash Memoiy, that court determined that the antitrust price-fixing theory at issue could be brought under the DCCPPA because the Act “proscribes the imposition of prices that are ‘unconscionably high,' i.e., prices that are 'unreasonably favorable’ to the seller, where 'the buyer did not have a meaningful choice of alternatives under the circumstances.' ” Id. at 1157-58. In reaching this conclusion, the court relied on a District of Columbia Court of Appeals case that addressed D.C.Code § 28-3904(r), a DCCPPA provision that prohibits “mak[ing] or enforcing] unconscionable terms or provisions of sales or leases.” Id. at 1158 (citing Ford v. Chartone, Inc.,
Moreover, to the extent that Defendants, by citing D.C.Code § 28-3904(r), contend that Plaintiffs have brought a DCCPPA claim pursuant to that provision, see Pis.’ Reply at 16, they are in error. Plaintiffs confirmed at oral argument that their DCCPPA claim rests on the Defendants’ alleged violation of the D.C. Antitrust Act and not subdivision (r). See Tr. at 95:22-96:2; 96:17-21.
. Although Defendants generally argue that "consumer fraud causes of action require Plaintiffs to plead more than simply the elements of an antitrust violation,” Defs.' Reply at 8, they have not provided any authority that this is true under Florida law in circumstances where an alleged antitrust violation is the purported unfair method of competition.
. Additionally, for the same reasons the Court already discussed in relation to the consumer protections claims of California and the District of Columbia, the Plaintiffs'
. The Court need not determine or even address whether the pleading satisfies Rule 9(b) at this time. However, the Court recognizes that Plaintiffs did not raise any objection to the Defendants' claim that Rule 9 pleading standards apply to the KCPA claim.
. The court summarized the plaintiff’s complaint as follows:
The plaintiff alleges that, beginning in January, 1990, the defendants conspired among themselves to restrain free trade of vitamin products by suppressing and eliminating competition. The conspiracy consisted of formal and informal collusion by the defendants to: (1) fix, increase, and maintain prices for vitamin products; (2) coordinate price increases among themselves for the sale of vitamin products; (3) allocate among themselves the volume of sales and market shares of vitamin products; (4) allocate among themselves all or part of certain contracts to supply vitamin products to various customers; and (5) refrain from submitting bids, or submit collusive, noncompetitive, and rigged bids. The effect of the defendants’ alleged conduct was to restrict competition in the sale of vitamin products in Massachusetts and to force consumers to pay prices for such products that were artificially inflated.
Id. at 306-07.
. Furthermore, because the factual allegations of the contours of the alleged conspiracy and the "collective efforts,” as discussed above in relation to the other state antitrust claims, do not sound in fraud, heightened pleading under Rule 9(b) is not required.
. What Defendants appear to discount in Hernandez is that court’s recognition that the value received for a good or service must be evaluated by considering the specific factual circumstances of the good or service and its purchase. This includes considering factors specific to the production side of that good or service, including, inter alia, the provider’s costs, industry regulation, general industry practices, actions of the providers’ competitors, and a providers' business plan and marketing strategy. See Hernandez,
. Because the allegations that give rise to the NMUPA claim are based upon the second definition of “unconscionable trade practice” and those allegations do not sound in fraud, consideration of Rule 9(b) is not required here for reasons previously discussed supra in relation to other state antitrust claims.
. Although Defendants contend that the NMUPA requires Plaintiffs to plead "something more than merely alleging that the price of a product was unfairly high,” the case cited by Defendants in support of this position does not appear to have reached that conclusion based upon consideration of New Mexico law. See In re Graphics Processing Units Antitrust Litig.,
. In light of the Court’s determination that Plaintiffs may proceed with their NMUPA claim at this time, the Court does not determine whether Plaintiffs have also stated such a claim pursuant to the first definition of an “unconscionable trade practice.”
. Given the Court’s decision, the Court need not address at this time whether Rule 9(b) applies here.
. The legal authority is opaque as to whether a violation of North Carolina antitrust constitutes a Section 75-1.1 claim. See Allen, supra, § 27.01 (recognizing that "some courts and commentators have viewed the Chapter 75 antitrust prohibitions to be coincidentally illegal under § 75-1.1, [and] at least one court has regarded part of former N.C. Gen. Stat. § 75-5 to be outside the scope of § 75.1-1” (footnote omitted)).
. There is no unequivocal law in North Carolina that bars consumers from bringing a UDTPA claim based upon an "unfair method of competition.” See John F. Graybeal, Unfair Trade Practices, Antitrust and Consumer Welfare in North Carolina, 80 N.C. L.Rev. 1927, 1991-98 (2002) (discussing North Carolina law concerning whether consumers, as opposed to competitors, may pursue an unfair method of competition claim under the UDT-PA). Defendants have raised no arguments for dismissal on this basis.
. The Court determines that the antitrust conspiracy alleged does not sound in fraud for the reasons already discussed supra in relation to other state claims. Thus, Rule 9(b) does not apply to this claim.
. Considering a summary judgment motion, one court recently concluded that "the plaintiff's failure to comply with the mandatory prerequisite set forth in Section 46A-6-106(b) bar[red] her from bringing a claim." Stanley v. Huntington Nat. Bank, No. 1:11CV54,
. Because the Court is dismissing for lack of pre-suit notification allegations, the Court does not address Defendants’ arguments for dismissal on the basis of Rules 8 and 9(b).
. See also 1 Witkin Summary Cal. Law Contracts § 1013 ("The right to restitution or quasi-contractual recovery is based upon unjust enrichment. Where a person obtains a benefit that he or she may not justly retain, the person is unjustly enriched. The quasi-contract, or contract 'implied in law,’ is an obligation (not a true contract ...) created by the law without regard to the intention of the parties, and is designed to restore the aggrieved party to his or her former position by return of the thing or its equivalent in money."); see generally Douglas L. Johnson & Neville L. Johnson, What Happened To Unjust Enrichment In California? The Deterioration of Equity in the California Courts, 44 Loy. L.A. L.Rev. 277 (2010) (advancing the thesis that an independent cause of action for unjust enrichment exists under California law).
. See 66 Am.Jur.2d Restitution and Implied Contracts § 28 (recognizing that an adequate remedy at law can be a defense to unjust enrichment); 3 Dan B. Dobbs, Law of Remedies § 12.8(2) at 204 (2d ed.1993) (recognizing that the adequacy test need not be a part of the prima facie case and can be “one factor to be considered in deciding whether relief is warranted”).
. This latter proposition is illustrated by the Restatement (Third) of Restitution (2011). Section 4(2) of the Restatement provides that the unavailability of an adequate remedy at law is not a consideration in an unjust enrichment claim: "A claimant otherwise entitled to a remedy for unjust enrichment, including a remedy originating in equity, need not demonstrate the inadequacy of available remedies at law.” Id. § 4(2). As the comment to Section 4(2) explains: “Although some remedies in restitution are indeed equitable in origin, there is no requirement that a claimant who seeks any of the remedies described in this Restatement must first demonstrate the inadequacy of a remedy at law. An argument to the contrary should appear antiquated today, but § 4(2) is included to remove any doubt.” See also 1 George E. Palmer, Law of Restitution § 1.6 at 34 (1978) (“Although an occasional decision suggests that restitution will be denied when alternative remedies are considered adequate, innumerable cases demonstrate that this is incorrect.” (footnote omitted)). Moreover, the Restatement does not include "adequate remedy at law” among the possible defenses to unjust enrichment. See id. §§ 62-70.
. The Court reaches this conclusion based upon the following assessment of the laws of the nine states.
Florida
Plaintiffs need not plead the unavailability of remedy provided by law to state a claim for unjust enrichment under Florida law. The Supreme Court of Florida has acknowledged that the "elements of an unjust enrichment claim are 'a benefit conferred upon a defendant by the plaintiff, the defendant's appreciation of the benefit, and the defendant's acceptance and retention of the benefit under circumstances that make it inequitable for him to retain it without paying the value thereof.’ ” Florida Power Corp. v. City of Winter Park,
Massachusetts
The unavailability of an adequate remedy at law is not within the parameters of the prima facie claim for unjust enrichment as articulated by Massachusetts courts:
[T]he sine qua non of unjust enrichment is that the defendant has been unjustly enriched.
"Even where a person has received a benefit from another, he is liable to pay therefor only if the circumstances are such that, as between the two persons, it is unjust for him to retain it.”
.... The term is not descriptive of conduct which, standing alone, would justify an action for recovery. Unjust enrichment is an essentially equitable doctrine requiring proof of some misconduct, fault or culpable action on the part of the defendant as "wrongdoer” which renders his retention of a benefit at the expense of another contrary to equity and good conscience.
DeSanctis v. Labell’s Airport Parking Inc., 1991 Mass.App.Div. 37, 40,
Minnesota
The prima facie elements of an unjust enrichment claim, as articulated by the Supreme Court of Minnesota, do not include the absence of an adequate remedy at law. That court has held:
To establish an unjust enrichment claim, the claimant must show that the defendant has knowingly received or obtained something of value for which the defendant "in equity and good conscience” should pay. Klass v. Twin City Fed. Sav. and Loan Ass'n,291 Minn. 68 ,190 N.W.2d 493 , 494-95 (1971). "[Ujnjust enrichment claims do not he simply because one party benefits from the efforts or obligations of others, but instead it must be shown that a party was unjustly enriched in the sense that the term unjustly’ could mean illegally or unlawfully.” First Nat'l Bank v. Ramier,311 N.W.2d 502 (Minn.1981).
ServiceMaster of St. Cloud v. GAB Business Services, Inc.,
Nevada
Under Nevada law, the unavailability of an adequate remedy at law is not a part of the prima facie case for unjust enrichment. According to the Supreme Court of Nevada:
“Unjust enrichment is tire unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience.” Nevada Industrial Dev. v. Benedetti,103 Nev. 360 , 363 n. 2,741 P.2d 802 (1987). This court has observed that the essential elements of unjust enrichment "are a benefit conferred on the defendant by the plaintiff, appreciation by the defendant of such benefit, and acceptance and retention by the defendant of such benefit.” Unionamerica Mtg. v. McDonald,97 Nev. 210 , 212,626 P.2d 1272 (1981).
Topaz Mut. Co., Inc. v. Marsh,
New Mexico
The unavailability of an adequate remedy at law is not counted among the elements of an unjust enrichment claim under New Mexico law. "To prevail on a claim for unjust enrichment, 'one must show that: (1) another has been knowingly benefitted at one's expense (2) in a manner such that allowance of the other to retain the benefit would be unjust.’ " City of Rio Rancho v. Amrep Southwest Inc.,
Furthermore, in New Mexico, "[t]here is no requirement that the creation of a statutory remedy at law for a particular type of claim will automatically supplant an equitable remedy that addresses the same claim. [Any] major departure from the long tradition of equity practice should not be lightly implied.” Starko, Inc. v. Presbyterian Health Plan, Inc., - N.M. -,
North Carolina
As to unjust enrichment under North Carolina law, the pleading of an absence of an adequate remedy at law is not necessary to state a claim. The Supreme Court of North Carolina has observed:
In order to establish a claim for unjust enrichment, a party must have conferred a benefit on the other party. The benefit must not have been conferred officiously, that is it must not be conferred by an interference in the affairs of the other party in a manner that is not justified in the circumstances. The benefit must not be gratuitous and it must be measurable.... [T]he defendant must have consciously accepted the benefit.
Booe v. Shadrick,
South Dakota
The prima facie claim for unjust enrichment under South Dakota law does not necessarily involve addressing an adequate remedy at law. "In order to establish unjust enrichment, three elements must be proven: (1) a benefit was received; (2) the recipient was cognizant of that benefit; and (3) the retention of the benefit without reimbursement would unjustly enrich the recipient." Mack v. Mack,
Utah
Proof of an absence of an adequate remedy at law is not required to state a prima facie claim for unjust enrichment in Utah. The Supreme Court of Utah has held:
In order to prevail on a claim for unjust enrichment, three elements must be met. See Berrett v. Stevens,690 P.2d 553 , 557 (Utah 1984). First, there must be a benefit conferred on one person by another. See id. Second, the conferee must appreciate or have knowledge of the benefit. See id. Finally, there must be "the acceptance or retention by the conferee of the benefit under such circumstances as to make it inequitable for the conferee to retain the benefit without payment of its value,” Id. The plaintiff must prove all three elements to sustain a claim of unjust enrichment.
Desert Miriah, Inc. v. B & L Auto, Inc.,
Vermont
To establish a prima facie claim for unjust enrichment under Vermont law, Plaintiffs are not obliged to show the unavailability of an adequate remedy at law. "[T]he elements of unjust enrichment [are]: whether '(1) a benefit was conferred on defendant; (2) defendant accepted the benefit; and (3) defendant retained the benefit under such circumstances that it would be inequitable for defendant not to compensate plaintiff for its value.' ” Reed v. Zurn,
. In Arizona, the prima facie claim for unjust enrichment includes the element of the absence of an adequate remedy at law. "In Arizona, five elements must be proved to make a case of unjust enrichment: (1) an enrichment; (2) an impoverishment; (3) a connection between the enrichment and the impoverishment; (4) absence of justification for the enrichment and the impoverishment and (5) an absence of a remedy provided by law." See Community Guardian Bank v. Hamlin,
. Defendants contend that the standard for “determining whether a remedy is 'adequate' ” is "the 'availability' of a reme’dy not the 'likelihood of its success.' ” Defs.’ Mot. at 50 (quoting Tudor Development Group, Inc. v. U.S. Fidelity & Guar. Co.,
. It does not appear that Plaintiffs must plead facts that demonstrate the futility of other types of remedies against the egg resellers because the IPSAC does not allege any facts that might suggest such alternative means of relief for the Plaintiffs' losses, such as, by way of example, an unjust enrichment claim against the resellers. Cf. Chocolate,
. Defendants originally presented this argument in a far broader context, claiming generally that the Court should dismiss the "Plaintiffs' tag-along unjust enrichment claims in states where Plaintiffs' lack standing to bring their primary claims or where the primary claim fail[s] as a matter of law. Thus, for the same reasons that each of Plaintiffs['] statutory claims fail, their unjust enrichment claims should be dismissed as
. To the extent that Defendants rely on Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc.,
As a result, the court held, "We can find no justification for permitting plaintiffs to proceed on their unjust enrichment claim once we have determined that the District Court properly dismissed the traditional tort claims because of the remoteness of plaintiffs' injuries from defendants' wrongdoing.” Id. at 937. Consequently, this statement cannot be read, as Defendants appear to believe, to stand for the proposition that dismissal of the tort claim in itself was the reason why the unjust enrichment claim was dismissed. Rather, the court dismissed both claims based on the same underlying rationale.
. This Court earlier observed in this Opinion that there is legal authority that has determined that indirect purchasers cannot not recover for damages accruing prior to the May 1, 2006 effective date of the amendment to the Utah Antitrust Act. However, the Court granted the Defendants' motion insofar that Plaintiffs did not dispute this authority and did not raise any objections to Defendants’ arguments. The Court's decision thus did not address or identify the specific operative law invoked by Defendants in support of their argument and whether such law constituted an affirmative adoption of Illinois Brick as a policy prior to May 1, 2006.
. This category of factors might include, inter alia, consideration of the Plaintiffs' theory of their Utah unjust enrichment claim— whether the claim is “parasitic” or “freestanding” — and the factual allegations pled in support of the claim. See New Motor Vehicles,
. Of course, Defendants may renew this argument — insofar that Defendants choose to further and appropriately develop the argument — at another stage in this litigation.
. The Defendants have presented these issues in such a way that the Court is not being asked to address any questions involving whether for purposes of Rule 12(b)(6) Plaintiffs have sufficiently alleged facts that plausibly suggest the “conferral of a benefit” element, as defined by each of the jurisdictions' law.
. However, to the extent that Plaintiffs also argue that the IPSAC has factual allegations from which it can be inferred that the eggs purchased originated with the Defendants, this approach is unsuccessful. The Plaintiffs’ characterizations of the IPSAC are inconsistent with the actual allegations.
In defining the various state class members, the IPSAC alleges as to each class that ”[a]ll individuals and entities residing in [Name of State ] that indirectly purchased shell eggs and/or egg products produced from shell eggs produced from Defendants’ or their co-conspirators’ caged birds.” IPSAC ¶ 108. However, as Defendants correctly argue, there are no factual allegations as to the origin of the eggs purchased by the named individual Plaintiffs. See IPSAC ¶¶ 19-44 ("This Plaintiff indirectly purchased shell eggs and/or egg products during the Class Period and was injured as a result of Defendants’ illegal conduct.”). The claims brought by the named individual Plaintiffs are the focus of this motion to dismiss.
Plaintiffs argue that "the policies at issue— the conspiracy — are the official policies of a membership organization! ] representing 'more than 95% of [the] nation’s laying hens’ and essentially all the largest producers.” Pis.’ Resp. at 41 (citing IPSAC ¶¶ 47-51). By highlighting this allegation, Plaintiffs attempt to imply that 95% of laying hens in the egg industry were subject to the alleged conspiracy, and as such, when Plaintiffs made any egg purchase, they more than likely were purchasing from the Defendants. However, the factual allegation cited describes UEP alone and not the named Defendants as a group, so the allegation can only stand for what it says: UEP as an organization represents 95% of domestic laying hens (by representing 198 producer members, IPSAC ¶ 136).
While UEP as an organization might represent that percentage of laying hens, that does not necessarily mean that 95% of laying hens were covered by the alleged conspiracy. As alleged, UEP was not an egg producer itself. See also id. ¶ 283 ("UEP has declared that it did not sell eggs to consumers.”); id. ¶ 284
Regardless, to the extent that Plaintiffs are attempting to intimate that the IPSAC alleges that the Defendants’ laying hens collectively produced 95% (or an otherwise high percentage) of the egg market (including egg products as currently defined by the IPSAC) and thus that the Plaintiffs’ alleged egg purchases were originally produced by Defendants, this is unproductive. There are no allegations that directly or inferentially support such a claim.
. This is not to say that at another stage of the litigation that similar arguments — arguments further developed in relation to jurisdiction-specific law — might or might not prevail.
. Defendants appear to argue that by definition only direct purchasers, and not indirect purchasers, can meet this "direct benefit” requirement.
. Defendants do not address the Plaintiffs’ argument on this point of Kansas law, suggesting that Defendants have abandoned this argument.
. See id. at 923 (recognizing that a remedy for unjust enrichment is an equitable lien); see generally Restatement (First) of Restitution § 4 ("In situations in which a person is entitled to restitution, he is entitled, in an appropriate case, to one or more of the following remedies: ... (d) a decree by a court of equity that a lien upon the subject matter or its proceeds be established, enforced, discharged, or reduced.”); Restatement (Third) of Restitution & Unjust Enrichment § 56 ("An equitable lien secures the obligation of the defendant to pay the claimant the amount of the defendant's unjust enrichment as separately determined.”).
. One of those cases cited. Concrete Products Co. v. Salt Lake County,
. The Defendants' contention that these two cases support their position is contradicted by the Defendants' original position that these jurisdictions "have not ruled on whether a plaintiff must directly confer a benefit upon defendant.” Defs.' Mot. at 46.