MEMORANDUM & ORDER
Before the Court is Defendants’ Motion to Dismiss Plaintiffs Complaint. (Doc. 6.) This Motion has been fully briefed and is ripe for adjudication. For the reasons set forth below, Defendants’ Motion to Dismiss is
GRANTED
in part and
DENIED
in part. The Motion is granted as to the class claim under the Ohio Consumer Sales Practice Act, O.R.C. § 1345.01,
et seq.
(“OCSPA”), and as to Count IV. The Court denies the Motion as to Counts II, III, and as to McKinney’s individual claim under the OCSPA, but will certify to the Ohio Supreme Court the question of whether a consumer has standing under the Ohio De
I. BACKGROUND
A. Factual Background 1
Defendants Bayer Corporation and Bayer Healthcare, LLC (collectively referred to as “Bayer”) produce, market, and sell the “One-A-Day” line of vitamins, including the two products at issue in this case: One-A-Day Men’s Health Formula and One-A-Day Men’s 50 + Advantage vitamin products (referred to collectively as the “Vitamin Products”). According to Plaintiff George McKinney (“McKinney”), Bayer falsely advertises that the Vitamin Products “promote prostate health” and “may reduce the risk of prostate cancer” (“the Prostate Claims”). To the contrary, McKinney alleges, one of the key ingredients in the Vitamin Products, which Bayer claims provides these health benefits — selenium — “actually poses serious health risks when taken in the amounts recommended by Bayer.” (Doc. 1 at ¶¶ 1-2.) 2
McKinney alleges that “Bayer does not possess a single proper scientific or clinical study” supporting the Prostate Claims. (Id. at ¶ 4.) He then cites to scientific studies to support his claims that selenium may, in some specific instances, actually increase the risk of aggressive prostate cancer. (Id. at ¶¶ 36-54.) In addition, McKinney points to studies suggesting that selenium may increase the risk of diabetes. (Id. at ¶¶ 38-39.)
McKinney contends that Bayer’s statements regarding the prostate health benefits of the Vitamin Products “were widely disseminated” and appeared on package labels, on its website, and in its commercial advertisements. (Id. at ¶¶ 2, 25.) With respect to the product packaging, McKinney points to language on the front label of One-A-Day Men’s Health Formula which states that it “Supports Prostate Health,” and the back label which provides, in part, that “emerging research suggests Selenium may reduce the risk of prostate cancer.” (Id. at ¶¶ 27-28.) The back of the package further states that:
One A Day Men’s Health Formula is a complete multivitamin plus key nutrients including Selenium to support a healthy prostate. * Selenium may reduce the risk of certain cancers. Some scientific evidence suggests that consumption of Selenium may reduce the risk of certain forms of cancer. However, FDA has determined that this evidence is limited and not conclusive.
(Doc. 1 at ¶ 28; Doc. 7 at 11-12; Doc. 9-1 at 1.) Similarly, the back of the product packaging for One-A-Day Men’s 50 + Advantage states that it contains “nearly
With respect to commercial advertisements, McKinney alleges that, since 2008, “Bayer has run at least eleven versions of television advertisements and at least nine versions of radio advertisements repeating the same misrepresentations.” (Id. at ¶ 25.) Specifically, McKinney alleges, and Bayer does not dispute, that Bayer ran the following television and radio commercials advertising the Vitamin Products:
• Radio Advertisement:
“Prostate cancer. It’s an important subject. Did you know that there are more new cases of prostate cancer each year than any other cancer? And here’s something else you should know. Now, there’s something you can do that may help reduce your risk. Along with your regular doctor checkups, switch to One A Day Men’s. A complete multivitamin plus selenium, which emerging research suggests may help reduce the risk of prostate cancer. One A Day Men’s. Because staying healthy is serious business.”
• Television Advertisement:
“Did you know one in three men will face prostate issues? One in three, really? That’s why One A Day Men’s is a complete multivitamin with selenium which emerging research suggests can help prostate health. One A Day Men’s.”
• Television Advertisement:
“To stay on top of my game after 50,1 switched to a complete multivitamin with more. Only One A Day Men’s 50 + Advantage has gingko for memory and concentration plus support for prostate and heart health. Safe. That’s a great call. One A Day Men’s.”
(Doc. 1 at ¶¶ 30-32.) Finally, McKinney points to Bayer’s website, which repeats the Prostate Claims: “Did you know that 1 in 6 men will face prostate issues? Prostate cancer is the most frequently diagnosed non-skin cancer in men, and emerging research suggests Selenium may reduce the risk of prostate cancer.” (Id. at ¶ 33.)
McKinney alleges that he saw and heard Bayer’s television and radio commercial advertisements and purchased both Vitamin Products in reliance on the Prostate Claims contained therein. (Id. at ¶¶ 34, 78.) The Complaint does not specify which of the advertisements McKinney allegedly saw or relied upon in making his purchases. Nor does it contain any allegations regarding when he purchased the products, the purchase price, or whether McKinney actually consumed the Vitamin Products at issue. McKinney does not allege that he suffered any physical harm from ingesting the Vitamin Products.
B. Procedural History
On February 2, 2010, McKinney filed a putative class action against Bayer alleging that its advertisements for the Vitamin Products, including the product packaging, “are unlawful, unfair, fraudulent, and unconscionable,” because they falsely claim that the Vitamin Products promote prostate health and reduce the risk of prostate cancer. (Doc. 1 at ¶¶ 1-3.) Specifically, McKinney’s Complaint asserts the following four (4) claims for relief stemming from Bayer’s promotion, advertisement, and labeling of the Vitamin Products: (1) violation of the Ohio Consumer Sales Practice Act, O.R.C. § 1345.01, et seq. (“OCS-PA”); (2) violation of the Ohio Deceptive Trade Practices Act, O.R.C. § 4165.01, et seq. (“ODTPA”); (3) breach of express warranty; and (4) breach of implied warranty.
McKinney seeks to bring a class action on behalf of “[a]ll persons who purchased
On February 25, 2010, Bayer filed a Motion to Dismiss Plaintiffs Complaint (Doc. 6).
3
McKinney filed an Opposition to the Motion to Dismiss (Doc. 21), and Bayer filed a Reply in Support (Doc. 22). McKinney sought and obtained leave to file a Sur-reply in Opposition to the Motion to Dismiss (Doc. 23) to address the Supreme Court’s decision in
Shady Grove Orthopedic Assoc., P.A. v. Allstate Ins. Co.,
— U.S. —,
II. STANDARDS OF REVIEW
Bayer brings its Motion to Dismiss pursuant to Rules 12(b)(6) and 12(b)(1) of the Federal Rules of Civil Procedure.
A. Standard of Review Under Rule 12(b)(6)
The Court may dismiss a claim for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). The purpose of a motion under 12(b)(6) is to test the sufficiency of the complaint — not to decide the merits of the case.
It is well-established that a complaint need not set forth in detail all of the particularities of the plaintiffs claim.
See Myers v. Delaware Co.,
No. 2:07-cv-844,
To withstand a motion to dismiss pursuant to Rule 12(b)(6), a complaint must plead facts sufficient “to state a claim for relief that is plausible on its face.”
Twombly,
A district court considering a motion to dismiss must construe the complaint in the light most favorable to the plaintiff and accept all well-pleaded allegations in the complaint as true.
See Grind-staff v. Green,
In ruling on a motion to dismiss, a court may consider: (1) any documents attached to, incorporated by, or referred to in the pleadings; (2) documents attached to the motion to dismiss that are referred to in the complaint and are central to the plaintiffs allegations, even if not explicitly incorporated by reference; (3) public records; and (4) matters of which the court may take judicial notice.
Whittiker v. Deutsche Bank Nat’l Trust Co.,
Here, Bayer requests that the Court take judicial notice of the product packaging for both of the Vitamin Products “because the packaging referenced in Plaintiffs Complaint is illegible and incomplete.” (Doc. 8 at 1-2.) McKinney has neither objected to these documents, nor challenged their authenticity.
See Wright v. General Mills, Inc.,
No. 09CV1532 L(NLS),
B. Standard of Review Under Rule 12(b)(1)
Although Bayer primarily seeks dismissal of McKinney’s Complaint under Rule 12(b)(6), it also requests dismissal of McKinney’s individual OCSPA claim under Rule 12(b)(1) for lack of jurisdiction.
WTiere subject matter jurisdiction is challenged in a Rule 12(b)(1) motion, the plaintiff bears the burden of proving jurisdiction.
Moir v. Greater Cleveland Regional Transit Auth.,
895
A facial attack challenges the sufficiency of the pleading itself. Where the Rule 12(b)(1) motion presents a facial attack, the Court accepts the material allegations in the complaint as true and construes them in the light most favorable to the nonmoving party, similar to the standard for a Rule 12(b)(6) motion.
Id.
(citing
Scheuer v. Rhodes,
In contrast, a factual attack is “not a challenge to the sufficiency of the pleading’s allegation, but a challenge to the factual existence of subject matter jurisdiction.”
Id.
Where the motion presents a factual attack, the allegations in the complaint are not afforded a presumption of truthfulness and the Court weighs the evidence to determine whether subject matter jurisdiction exists. On a factual attack, the Court has broad discretion to consider extrinsic evidence, including affidavits and documents, and can conduct a limited evidentiary hearing if necessary.
See DLX, Inc. v. Kentucky,
III. DISCUSSION
Bayer seeks dismissal of McKinney’s Complaint in its entirety. First, Bayer argues that McKinney’s class claim under the OCSPA fails as a matter of law because his allegations do not satisfy the requirements of O.R.C. § 1345.09(B), and that the Court lacks jurisdiction over his individual OCSPA claim (Count I). Second, Bayer contends that McKinney’s claim for breach of express warranty (Count III) fails because the challenged statements were not affirmations of fact. Third, Bayer argues that McKinney’s ODTPA claim (Count II) fails because consumers cannot file suit under the statute. Fourth, Bayer alleges that McKinney’s breach of implied warranty claim (Count IV) must be dismissed because he has not alleged facts to show privity. Finally, Bayer claims that both of McKinney’s breach of warranty claims fail for the additional reason that he has not identified a cognizable injury and he seeks damages that are not available.
The Court considers each of the claims in McKinney’s Complaint in turn. For the reasons articulated below, the Court finds that dismissal pursuant to Rule 12(b)(6) is proper as to the OCSPA class claim asserted in Count I and as to Count IV (breach of implied warranty). With respect to McKinney’s ODTPA claim on behalf of himself and the Class Members (Count II), Bayer’s Motion is denied. The Court believes there is sufficient uncertainty as to whether a consumer has standing under the statute, and therefore finds it appropriate to certify the issue to the Ohio Supreme Court. As to McKinney’s breach of express warranty claim on behalf of himself and the Class (Count III), Bayer’s motion is denied. Finally, Bayer’s request for dismissal of McKinney’s individual OCSPA claim for lack of subject matter jurisdiction under Rule 12(b)(1) is also denied.
A. Ohio Consumer Sales Practice Act (Count I)
In Count I of the Complaint, McKinney alleges that Bayer’s unsubstantiated claims regarding prostate health-related benefits of the Vitamin Products violate the OCSPA. The OCSPA prohibits suppliers from committing either unfair or deceptive consumer sales practices or unconscionable acts or practices as set forth
The OCSPA permits both individual and class action claims.
See
O.R.C. § 1345.09;
see also City of Findlay v. Hotels.com,
Under O.R.C. § 1345.09(B), a consumer “may qualify for a class action only when a supplier acted in the face of prior notice that its conduct was deceptive or unconscionable.”
Id.
at 34. The requisite notice must be in the form of: (1) a rule adopted by the Ohio Attorney General; or (2) a judicial decision involving substantially similar conduct.
Id.
at 33-34. It is well-established that “[l]ack of prior notice requires dismissal of class action allegations.”
St. Clair v. Kroger Co.,
Bayer argues that McKinney cannot maintain his OCSPA claim as a class action because he has not satisfied the heightened pleading requirements set forth in O.R.C. § 1345.09(B). Specifically, Bayer argues that McKinney fails to allege that Bayer’s conduct was previously declared deceptive or unconscionable in an administrative rule or judicial decision. In response, McKinney alleges that: (1) he can assert a class action under O.R.C. § 1345.09(A) without meeting the requirements set forth in § 1345.09(B); and (2) even if § 1345.09(A) contains a prohibition against class actions, the prohibition conflicts with Rule 23 of the Federal Rules of Civil Procedure and is therefore preempted by Rule 23. According to McKinney, he can assert a class action under either (A) or (B) of the statute.
The parties agree that the Supreme Court’s March 31, 2010 decision in
Shady Grove Orthopedic Assoc., P.A. v. Allstate Ins. Co.,
— U.S.-,
1. Shady Grove v. Allstate
In
Shady Grove,
the Supreme Court addressed a New York law, N.Y. Civ. Prac. Law Ann. § 901(b), which, “in suits seeking penalties or statutory minimum damages ... precludes a federal district court sitting in diversity from entertaining a class action under Federal Rule of Civil Procedure 23.”
Shady Grove,
In a 5-4 decision, the Supreme Court reversed. Justice Scalia, who delivered the opinion of the Court with respect to Parts I and II-A, held that “ § 901(b) does not preclude a federal district court sitting in diversity from entertaining a class action under Rule 23.” Id. at 1433. The majority of the Court agreed that a two-step process applied to its analysis. First, the court must determine “whether Rule 23 answers the question in dispute.” Id. at 1437. If it does, then Rule 23 applies “unless it exceeds statutory authorization or Congress’s rulemaking power.” Id.
Applying this framework, the Court first found that Rule 23 answers the question at issue: whether Shady Grove’s suit could proceed as a class action. Id. The Court noted that Rule 23 “creates a categorical rule entitling a plaintiff whose suit meets the specified criteria to pursue his claim as a class action.” Id. The Court found that Rule 23 and § 901(b) were in conflict because Rule 23 “provides a one-size-fits-all formula for deciding the class-action question,” and § 901(b) “attempts to answer the same question — i.e., it states that Shady Grove’s suit ‘may not be maintained as a class action’ ... because of the relief it seeks.” Id. (emphasis in original). “Rule 23 permits all class actions that meet its requirements, and a State cannot limit that permission by structuring one part of its statute to track Rule 23 and enacting another part that imposes additional requirements.” Id. at 1439. The Court concluded that a conflicting state class action provision could apply in a diversity suit only if “Rule 23 is ultra vires,” or outside the scope of the Rules Enabling Act, 28 U.S.C. § 2071, et seq. Id. at 1437.
In Part II-B of the opinion, Justice Scalia, writing on behalf of himself and three other Justices, found that a Rule of Federal Procedure is within the Rules Enabling Act as long as it regulates procedure only.
Shady Grove,
Although Justice Stevens joined Parts I and II-A of Justice Scalia’s opinion and agreed, under the first step of the framework, that Rule 23 and § 901(b) conflict, he wrote a separate concurrence with respect to the second part of the analysis: whether application of Rule 23 violates the Rules Enabling Act.
See Bearden v. Honeywell Int’l Inc.,
No. 3:09-1035,
In his concurrence, Justice Stevens states that “an application of a federal rule that effectively abridges, enlarges, or modifies a state-created right or remedy violates” the Rules Enabling Act.
Shady Grove,
Justice Stevens held that a federal rule “cannot govern a particular case in which the rule would displace a state law that is procedural in the ordinary use of the term but is so intertwined with a state right or remedy that it functions to define the scope of the state-created right.” Id. at 1452. With respect to the New York law at issue, Justice Stevens concluded that it was “hard to see how § 901(b) could be understood as a rule that, though procedural in form, sexves the function of defining New York’s rights or remedies.” Id. at 1457. Because the New York law limiting class actions did not create substantive rights or remedies, Justice Stevens agreed that Rule 23 controlled the class certification issue. Id. at 1459-60.
Although they took different paths to get there, Justice Scalia and Justice Stevens ultimately reached the same conclusion: application of Rule 23 to the facts presented in
Shady Grove
did not violate the Rules Enabling Act. As a result, although the Court found that Rule 23 falls within statutory authorization, there is no majority opinion explaining why, and the Court has “not set forth a single test for whether a Federal Rule is procedural and thus consonant with the Rules Enabling Act.”
See Retained Realty, Inc. v. McCabe,
2. Relevant Case Law Interpreting the Shady Grove Decision
In a recent decision here in the Northern District of Ohio, Judge James Gwin considered whether, in light of the Supreme Court’s decision in
Shady Grove,
a federal court sitting in diversity should apply the class action limitations set forth
Judge Gwin explained that “O.R.C. § 1345.09 purports to define Ohio’s substantive rights and remedies by creating a cause of action for defrauded consumers and declaring the relief available to them.”
Id.
at *2,
In an analogous decision from the Middle District of Tennessee, the court similarly treated Justice Stevens’ concurrence in
Shady Grove
as the controlling opinion.
See Bearden,
Applying Justice Stevens’ approach, the court in
Bearden
found that the class action limitation was “so intertwined with th[e] statute’s rights and remedies that it functions to define the scope of the substantive rights.”
Id.
at *10,
3. Application of Shady Grove to McKinney’s Class Claim Under the OCSPA.
McKinney claims that, after Shady Grove, he can assert a class action under either O.R.C. § 1345.09(A) or (B) because the statutory prerequisites contained in § 1345.09(B) are preempted by Rule 23. (Doc. 25-1 at 6.) McKinney attempts to distinguish Whirlpool and Bearden on two primary grounds. First, he argues that the Whirlpool and Bearden courts incorrectly assumed that Justice Stevens’ concurring opinion in Shady Grove controls. (Doc. 30 at 1-2.) Second, McKinney attempts to distinguish Whirlpool on grounds that it dealt with a class claim under O.R.C. § 1345.09(B), while McKinney “intentionally limited his CSPA claim to a claim for damages or rescission under R.C. § 1345.09(A) and disclaimed any right to recover treble or statutory damages under division (B).” (Id. at 2.) The Court finds that McKinney’s arguments are not well-taken.
a. The Court Will Apply Justice Stevens’ Concurrence.
As was the case in
Whirlpool
and
Bearden,
the Court finds that Justice Stevens’ concurrence in
Shady Grove
is the controlling opinion by which it is bound.
See Whirlpool,
In
Cundiff,
the Sixth Circuit stated that the “narrowest opinion refers to the one which relies on the least doctrinally far-reaching-common ground among the Justices in the majority: it is the concurring opinion that offers the least change to the law.”
Cundiff
b. O.R.C. § 1345.09 is Substantive in Nature and is Not Preempted by Rule 23.
McKinney next argues that, even if the Court applies Justice Stevens’ concurring opinion, Rule 23 should control because there are no allegations that O.R.C. § 1345.09(A)’s “apparent class action pro
As previously indicated, under Ohio law it is clear that a plaintiff bringing a claim under the OCSPA as a class action must satisfy the requirements set forth in O.R.C. § 1345.09(B). There “must be a substantial similarity between a defendant’s alleged violation of the Act and an act or practice previously declared deceptive by either a rule promulgated by the Attorney General or a court decision that was publicly available when the alleged violation occurred.”
Marrone,
Apparently, McKinney believes that O.R.C. § 1345.09(A) and (B) can be read to provide two separate substantive rights; one which places no restrictions on class actions, and thus presumably would not conflict with Rule 23, and one that expressly authorizes a class action, but does so in only limited circumstances. McKinney’s reading of § 1345.09 is inconsistent with both basic rules of statutory construction and with all Ohio case law interpreting the OCSPA. It is illogical to read § 1345.09(A) to imply an
unlimited
right to pursue class actions when § 1345.09(B) expressly authorizes class actions subject to the limitations set forth therein. The statutory provisions must be read in
pari materia. See Erlenbaugh v. United States,
The Court agrees with the reasoning set forth in
Whirlpool,
and finds that
B. Ohio Deceptive Trade Practices Act (Count II)
Count II of McKinney’s Complaint alleges violation of the Ohio Deceptive Trade Practices Act, O.R.C. § 4165.01,
et seq.
(“ODTPA”).
4
The ODTPA “is substantially similar to the federal Lanham Act, and it generally regulates trademarks, unfair competition, and false advertising.”
Dawson v. Blockbuster, Inc.,
As the parties note, there is a split between courts in the Northern District of Ohio and the Southern District of Ohio on the question of who can file suit under the ODTPA. Some judges in this district have held that a consumer cannot state a claim under the ODTPA because it only governs conduct between commercial entities — not conduct between a commercial entity and a consumer.
See Glassner v. R.J. Reynolds Tobacco Co.,
No. 5:99 CV 0796,
In contrast, McKinney cites to a case from the Southern District of Ohio in which Judge Walter Rice indicated that
Glassner
and
Chamberlain
are “of limited
As Bayer correctly notes, the highest court in Ohio has not yet addressed the issue of whether a consumer can pursue a claim under the ODTPA. As such, this Court must attempt to predict what the Ohio Supreme Court would do if presented with this question.
See Mazur v. Young,
It is well-established that Ohio courts look to the federal Lanham Act when interpreting claims under the ODTPA.
Dawson,
Bayer urges the Court to adopt the court’s reasoning in
Dawson
and to find that a consumer lacks standing to file suit under the ODTPA. (Doc. 22 at 15.) Because the Ohio Supreme Court declined to review Dawson’s discretionary appeal, Bayer argues that this Court should treat
Dawson
“as the proper predictor of how the Ohio Supreme Court would decide this issue.”
6
(Doc. 22 at 15.) In response,
The Lanham Act confers standing on “any person who believes that he or she is or is likely to be damaged.” 15 U.S.C. § 1125(a)(1)(B). The Act specifically defines the word “person” to include “a juristic person as well as a natural person.” 15 U.S.C. § 1127. Despite this language, it is well-established that “a
consumer
does not have standing under the Lanham Act to sue for false advertising.”
Foster v. Wintergreen Real Estate Co.,
In reaching the conclusion that consumers lack standing under the Lanham Act, courts acknowledge that the text of the Act “would give standing to parties, such as consumers, having no competitive or commercial interests affected by the conduct at issue.”
Conte Bros. Automotive, Inc. v. Quaker State-Slick 50, Inc.,
Bayer argues that Ohio courts have consistently held that the principles in the ODTPA are to be interpreted in the same
In response, McKinney points out that, to establish standing in a false advertising claim under the Lanham Act, “the plaintiff must be a competitor of the defendant and allege a competitive injury.”
Praxair, Inc. v. Gen. Insulation Co.,
McKinney argues that this language marks a critical distinction between the standing requirements under the Lanham Act and the requirements under the ODT-PA and counsels against reading them to be co-extensive. (Doc. 21 at 17.) Specifically, he argues: “The fact that a DTPA claimant need not prove ‘competition’ confirms that DTPA’s remedies are available not only to competitors, as Bayer has argued, but also to any other person, including injured consumers such as the Plaintiff.” (Id.) In response, Bayer contends that, simply because a plaintiff asserting a claim under the ODTPA need not prove competition does not define who can file suit under the statute. (Doc. 22 at 16.) Bayer argues that the ODTPA simply relieves the commercial entities it covers from this requirement.
Typically, when confronted with a still-open question of Ohio law, this Court would apply Ohio law as it believes the highest court in Ohio would if presented with the issue. In this instance, however, it is particularly difficult to discern what that high Court would do. It may well decide to follow Dawson; for all of the reasons Bayer urges, that conclusion would appear wholly justified. Because the plain language of the statute defines a “person” to include an “individual,” however, and, unlike in connection with a claim under the Lanham Act, a plaintiff need not prove competition between the parties under the ODTPA, the Court finds that an alternative reading of the act is also possible. Accordingly, the Court finds that it is necessary to certify this issue to the Ohio Supreme Court. This is particularly true given the split between the Northern and Southern District of Ohio as to who has standing under the ODTPA and the fact that a number of Ohio Supreme Court Justices have indicated a belief that the issues raised in Dawson should be addressed by that Court. The parties are hereby ORDERED to submit proposed language for .certification within fourteen (14) days. Accordingly, Bayer’s Motion to Dismiss Count II is DENIED at this time. 8
Count III of the Complaint alleges that Bayer’s statements about the health benefits of the Vitamin Products created an express warranty that the products would actually provide those benefits. (Doc. 1 at ¶ 96.) Bayer seeks dismissal of this claim on grounds that: (1) the challenged statements do not rise to the level of an express warranty because they are not affirmations of fact; and (2) McKinney is attempting to obtain damages that are legally unavailable. To the contrary, McKinney argues, Bayer promised that the Vitamin Products are “safe” and that they promote prostate health, “when in fact, the Complaint alleges [they] do no such thing.” (Doc. 21 at 29.) McKinney alleges that these statements create an express warranty. (IcL) McKinney further argues that he has adequately alleged economic damages and is entitled, at a minimum, to “benefit-of-the-bargain damages.” (Id. at 32). The Court considers these arguments in turn.
It is undisputed between the parties that this case is governed by the Uniform Commercial Code (“UCC”) as adopted by Ohio. To state a claim for breach of warranty under the UCC, a plaintiff must allege: (1) the existence of a warranty; (2) the product failed to perform as warranted; (3) the plaintiff provided the defendant with reasonable notice of the defect; and (4) the plaintiff suffered an injury as a result of the defect.
St. Clair,
Under Ohio law:
(1) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.
(2) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.
(3) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.
O.R.C. § 1302.26(A)(l)-(3). Formal words such as “warrant” or “guarantee” are not necessary to create an express warranty, and the seller need not intend to make a warranty. O.R.C. § 1302.26(B).
An advertisement can create an express warranty where a statement contained therein fulfills the requirements of O.R.C. § 1302.26(A).
Nat’l Mulch and Seed, Inc. v. Rexius Forest By-Products, Inc.,
No. 2:02-cv-1288,
The existence of an express warranty “depends upon the particular circumstances in which the language is used and read.”
Overstreet v. Norden Labs., Inc.,
In
Overstreet,
the Sixth Circuit stated that, “[t]he test is whether the seller assumes to assert a fact of which the buyer is ignorant, or whether he merely states an opinion or expresses a judgment about a thing as to which they may each be expected to have an opinion and exercise a judgment.”
In the Complaint, McKinney alleges that Bayer’s advertisements and labeling of the Vitamin Products created express warranties regarding the health benefits of the products and that those warranties “became part of the basis of the bargain, and are part of a standardized contract be
As previously indicated, the content of the statements at issue is undisputed, and the Court has taken judicial notice of the packaging for the Vitamin Products.
11
McKinney alleges that he relied upon Bayer’s advertised Prostate Claims in making his decision to purchase the products. As such, McKinney claims, Bayer’s statements “became part of the basis of the bargain.” (Doc. 21 at 26.);
See Nat’l Mulch & Seed,
In response, Bayer contends that, when read as a whole, the Prostate Claims amount to conditional statements that the products
might
have certain health benefits, but that they also might not. While Bayer may be correct, and its arguments have some force, it is not an issue for the Court to decide on a motion to dismiss.
See Overstreet,
Turning to the issue of damages, in his briefing, McKinney clarifies that he is seeking only economic damages — not damages for any bodily injury. In the Complaint, McKinney states that he and the class members suffered damages “in the amount of the purchase price [of] the Vitamin Products.” (Doc. 1 at ¶ 100.)
The parties agree that, under the UCC, the measure of damages for breach of warranty is “the difference at the time and
McKinney argues that, at a minimum, he can “recover the difference in value at the time of purchase/acceptance between vitamins that help prevent prostate cancer and ordinary multiple vitamins.” (Doc. 21 at 24) (stating that “[w]ith proper testimony, presumably from an expert, such damages may be ascertained”). As McKinney correctly notes, moreover, there are instances in which “special circumstances” can lead to recovery of the full purchase price.
See Eckstein v. Cummins,
At this juncture, the Court must accept the allegations in the Complaint as true and must construe them liberally in favor of McKinney. McKinney has alleged the necessary elements to state a claim for breach of express warranty. The Court finds, therefore, that McKinney’s allegations are sufficient to make a claim for breach of express warranty plausible. Accordingly, Bayer’s Motion to Dismiss Count III is DENIED.
D. Breach of Implied Warranty (Count IV)
Finally, McKinney asserts that Bayer breached the implied warranty of merchantability under O.R.C. § 1302.27 by misrepresenting that the Vitamin Products were safe and fit for ordinary consumption. (Doc. 1 at ¶ 102.) 12 Bayer seeks dismissal of this claim on grounds that McKinney has failed to allege facts that would establish privity. 13
Under Ohio law, privity of contract is generally a prerequisite to a claim for breach of the implied warranty of merchantability.
Curl v. Volkswagon of Am., Inc.,
McKinney argues, however, that there is an exception to the privity requirement where the consumer “is the intended beneficiary of the manufacturer’s agreement with the retailer/distributor.” (Doc. 21 at 31) (citing
Bobb Forest,
Bayer argues that McKinney’s reliance on
Bobb Forest
is misplaced because, although that court concluded that a privity exception might be applicable in certain specific circumstances, the Ohio Supreme Court subsequently held that vertical privity is required for implied warranty claims under O.R.C. § 1302.27. (Doc. 22 at 20) (citing
Curl,
In Curl, the Ohio Supreme Court indicated that:
A claim for breach of implied warranty, though similar to a tort action, arises pursuant to the law of sales codified in Ohio’s Uniform Commercial Code. The privity requirement, which remains absent in strict liability tort actions, allows sellers of goods to define their scope of responsibility and provides a greater degree of foreseeability regarding potential claimants. To permit a claimant tox-ecover without establishing vertical privity blurs the distinction between contract and tort.
Because there are no allegations that McKinney was in privity of contract with Bayer, he cannot maintain a claim for breach of the implied warranty of merchantability. Accordingly, Count IV is
DISMISSED.
E. Bayer’s Motion to Dismiss McKinney’s Individual OCSPA Claim Under Rule 12(b)(1) is Denied.
Bayer argues that the Court should dismiss McKinney’s individual OCSPA claim under Rule 12(b)(1). Specifically, Bayer argues that, once the Court dismisses the OCSPA class claim and McKinney’s other claims in the Complaint, the Court will lack subject matter jux'isdiction over his individual claim. (Doc. 7 at 15.) (citing
St. Clair,
Given the Court’s denial of the Motion to Dismiss with respect to McKinney’s ODT-PA claim and express warranty claims on behalf of McKinney and the Class, the Court finds that it continues to have supplemental subject matter jurisdiction over McKinney’s individual OCSPA claim. Accordingly, Bayer’s Motion to Dismiss McKinney’s individual OCSPA claim under Rule 12(b)(1) is DENIED.
IV. CONCLUSION
For the foregoing reasons, Defendants’ Motion to Dismiss Plaintiffs Complaint (Doc. 6) is GRANTED in part and DENIED in part. Specifically, Bayer’s Motion is GRANTED as to the OCSPA class claim in Count I and as to Count IV. The Motion is DENIED as to Counts II, III, and as to McKinney’s individual claim under the OCSPA. With respect to the ODTPA claim, the Court will certify to the Ohio Supreme Court the question of whether a consumer has standing to file suit under the statute. The parties shall have fourteen (14) days from the date of this Order to submit proposed language for certification.
IT IS SO ORDERED.
Notes
. Unless otherwise noted, the following facts are derived from Plaintiff's Complaint.
. The Court takes judicial notice that a similar case involving the Vitamin Products is pending in the Southern District of California.
See Johns v. Bayer Corp.,
Case No. 09CV1935 DMS (JMA). In that case, as here, the plaintiffs argue that “Defendants promoted the health benefits of selenium, but that selenium does not in fact prevent or reduce the risk of prostate cancer and may actually be harmful.”
Johns v. Bayer Corp.,
No. 09CV1935 DMS (JMA),
This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.
. Bayer filed a separate Motion to Strike Allegations in Plaintiff’s Complaint (Doc. 10). On July 12, 2010, the Court granted Bayer’s Motion to Strike and ordered Paragraph 56 of the Complaint stricken. (Doc. 26.) Bayer also filed a Motion to Extend Class Certification Motion and Briefing Deadlines pending resolution of this Motion (Doc. 18), which the Court granted as unopposed.
. Specifically, McKinney alleges that Bayer violated the ODTPA by: (1) using deceptive representations in connection with goods; (2) causing “likelihood of confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods;” (3) representing that the goods "have sponsorship, approval, characteristics, ingredients, uses, benefits ... that they do not have;” (4) representing that the goods "are of a particular standard, quality, or grade and they are of another;” and (5) advertising the goods “with intent not to sell them as advertised.” (Doc. 1 at ¶ 92.)
. Alternatively, Bayer argues that, if this Court disagrees with its reading of the ODT-PA, the Court should stay these proceedings and certify the question of the Act’s reach to the Ohio Supreme Court. (Doc. 22 at 17.)
. Notably, while the Ohio Supreme Court declined to accept Dawson’s appeal for review, it did so with three dissents.
See Dawson v. Blockbuster, Inc.,
. McKinney cites, without discussion, two Ohio cases in support of his position that consumers can file suit under the ODTPA. In the first,
Evans v. Cheek,
. Given the Court’s denial of the Motion to Dismiss with respect to McKinney's individual OCSPA claim and the express warranty claim on behalf of McKinney and the Class, the Court does not find it necessary to stay proceedings in this case pending a determination on this issue. The parties can, if necessary, revisit the propriety of a stay at the
. Though the parties do not brief it, McKinney alleges, and Bayer does not dispute, that his counsel notified Bayer of the alleged breach of warranty. (Doc. 1 at II 101.)
. It is undisputed that privity is not required with respect to McKinney’s breach of express warranty claim. Ohio courts have indicated that "the absence of privity of contract does not necessarily prevent a person from maintaining an action for breach of express warranty.”
Cancino v. Yamaha Motor Corp., U.S.A.,
. McKinney points to specific language that he claims constitutes an affirmation of fact or description of the product that became part of the "basis of the bargain.” For example, the front of the Men’s One-A-Day Health Formula packaging states "Supports prostate health.” There is, however, an asterisk leading the purchaser to a disclaimer on the back of the package that: "This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.” (Doc. 9-1 at 1; Doc. 9-2 at 1.) The back of the packaging also states that "Selenium may reduce the risk of certain cancers. Some scientifie evidence suggests that consumption of Selenium may reduce the risk of certain forms of cancer. However, FDA has determined that this evidence is limited and not conclusive.” (Doc. 9-1 at 1.) Similarly, on its website and in the television and radio advertisements, Bayer repeatedly indicates that "emerging research suggests” that selenium: (1) "may help reduce the risk of prostate cancer;” or (2) "can help prostate health.” (Doc. 1 at ¶¶ 30-31, 33.) With respect to the One-A-Day Men's 50+ Advantage, the television commercial states that the product has "support for prostate and heart health. Safe. That’s a great call.” (Id. at ¶ 32.)
. Under O.R.C. § 1302.27(A), "a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.” For goods to be merchantable, they must be, among other things, “fit for the ordinary purposes for which such goods are used” and must "conform to the promises or affirmations of fact made on the container or label if any.” O.R.C. § 1302.27(B)(3), (6).
. McKinney's breach of implied warranty claim is based on a contractual theory of implied warranty, rather than a tort-based theory. This distinction is relevant to the issue of privity. While contract based implied warranty claims require privity of contract between the plaintiff and the defendant, "a plaintiff may be able to recover against a defendant pursuant to [a tort-based theory of implied warranty] despite the lack of privity of contract.”
Bobb Forest,
. McKinney also cites a 1958 Ohio Supreme Court decision for the proposition that "in the case of foodstuffs, cosmetics or medicines, an implied warranty of fitness for human consumption carries from the manufacturer to the ultimate consumer.” (Doc. 21 at 31) (citing
Rogers v. Toni Home Permanent Co.,
. In
Bobb Forest,
the court found that the plaintiff was the intended beneficiary of the sales contract because: (1) the defendant knew it was manufacturing the sawmill for the plaintiff's use; (2) the defendant “did not mass produce sawmills” and it "had only manufactured approximately one sawmill a year since the early 1990s;” and (3) the defendant "knew exactly whom the ultimate consumer of this sawmill would be” and what the plaintiff's “needs and requirements were.”