Pershouse v. L.L. Bean, Inc.

368 F.Supp.3d 185

Benjamin T. PERSHOUSE, Individually and on Behalf of All Others Similarly Situated, Plaintiff,

v.L.L. BEAN, INC., Defendant.

Civil Action No. 18-10800-NMG

United States District Court, D. Massachusetts.

Signed March 26, 2019

Anthony L. Parkhill, Ben Barnow, Barnow and Associates, P.C., Chicago, IL, Michael Liskow, The Sultzer Law Group, P.C., New York, NY, David Pastor, Pastor Law Office, LLP, Boston, MA, for Plaintiff.

Anthony J. Anscombe, Daniel Raymond, Jeremy S. Goldkind, Mary E. Buckley, Stephanie A. Sheridan, Steptoe & Johnson, Chicago, IL, Alt Darlene K, Edwards & Angell, Providence, RI, Peter J. Brann, Stacy O. Stitham, Brann & Isaacson, Lewiston, ME, for Defendant.

MEMORANDUM & ORDER

GORTON, United States District Judge

Plaintiff Benjamin Pershouse ("Pershouse" or "plaintiff") brings this putative class action against L.L. Bean, Inc. ("L.L. Bean" or "defendant"). Pershouse alleges that L.L. Bean rescinded its well-known "100% Satisfaction Guarantee" ("Satisfaction Guarantee" or "the Guarantee") by inserting new conditions for its return policy and then applying them retroactively to purchases made under the original policy. Pershouse claims, among other things, breach of contract, unjust enrichment and unfair or deceptive practices in violation of M.G.L. c. 93A. He also seeks to certify a nationwide class of similarly situated individuals, as well as a subclass of individuals in the Commonwealth of Massachusetts.

Pending before this Court are defendant's 1) motion to dismiss for failure to state a claim and 2) motion to strike the nationwide class claims from the class action complaint.

I. Background

A. Facts

Pershouse is a resident of Woburn, Massachusetts. L.L. Bean is a Maine corporation headquartered in Freeport, Maine. The company was founded in 1912 by Leon Leonwood Bean and specializes in the manufacture and sale of clothing, footwear and outdoor recreation equipment. For decades, L.L. Bean has publicized and been renowned for its Satisfaction Guarantee, which promised that

if something's not working or fitting or standing up to its task or lasting as long as you think it should, we'll take it back.

This return and exchange policy contained no explicit time limits or other conditions, and plaintiff asserts that it formed

part of the benefit of the bargain for purchasers of L.L. Bean products ... [and] has become almost entirely intertwined with the L.L. Bean brand.

Plaintiff alleges that L.L. Bean marketed its Satisfaction Guarantee for years, including in signs displayed prominently in L.L. Bean stores and outlets, on its website and in its catalogs.

In November, 2012, Pershouse bought a pair of women's indoor slippers through L.L. Bean's website. He alleges that "[a]fter a few years of indoor use, the rubber soles of the slippers began to flake off in large chunks". He does not explicitly allege that the slippers were defective or that he was actually dissatisfied with the quality of the slippers. Nor does he indicate precisely when the soles of the slippers began to break off in pieces.

In February, 2018, the Executive Chairman of L.L. Bean posted a letter to the L.L. Bean Facebook page announcing that it was updating its Satisfaction Guarantee in response to perceived abuse by certain customers. The letter explained that:

[A] small, but growing number of customers has been interpreting our guarantee well beyond its original intent. Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales. Based on these experiences, we have updated our policy. Customers will have one year after purchasing an item to return it, accompanied by proof of purchase. After one year, we will work with our customers to reach a fair solution if a product is defective in any way.

The letter included a link to the full return policy. The full policy contained "Special Conditions" in which L.L. Bean would not accept returns or exchanges in certain situations, including: 1) "[p]roducts damaged by misuse, abuse, improper care or negligence, or accidents (including pet damage)"; 2) "[p]roducts showing excessive wear and tear"; 3) "[p]roducts lost or damaged due to fire, flood, or natural disaster"; 4) "[p]roducts with a missing label or label that has been defaced"; 5) "[p]roducts returned for personal reasons unrelated to product performance or satisfaction"; and 6) "[o]n rare occasions, past habitual abuse of our Return Policy". That letter was also emailed to some former L.L. Bean customers, including plaintiff.

In March, 2018, more than five years after Pershouse purchased the slippers from L.L. Bean's website, he attempted to return them to an L.L. Bean store in Burlington, Massachusetts. Although plaintiff presented a proof of purchase to the manager of the store, she refused to accept the return of the slippers because she found they were not defective. Plaintiff alleges that her determination was "erroneous" but does not otherwise explain 1) how the slippers were defective, 2) why he waited so long to return them or 3) that he was actually dissatisfied with the quality of the slippers. Rather, plaintiff submits that L.L. Bean has rescinded its Satisfaction Guarantee for purchases made before February, 2018, and has improperly denied valid returns to stores throughout the country.

B. Procedural History

In April, 2018, plaintiff filed a class action complaint in this Court claiming 1) breach of contract (on behalf of a nationwide class), 2) unjust enrichment (on behalf of a nationwide class), 3) violation of M.G.L. c. 93A (on behalf of the Massachusetts subclass) and 4) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, etseq. (on behalf of a nationwide class). In addition, he seeks a declaratory judgment pursuant to 28 U.S.C. § 2201 that 5) L.L. Bean's letter in February, 2018, constitutes a violation of law and a breach of warranty, 6) L.L. Bean be required to honor the Guarantee with no end date for goods purchased before the publication of the letter and 7) L.L. Bean provide notice to past and future customers regarding the terms of the new return and exchange policy.

Pershouse contends that he and members of the purported classes have not received what was promised to them when they bought the L.L. Bean products and thus overpaid for them. Specifically, he asserts that he and members of the purported classes paid a premium for a "100% Satisfaction Guarantee" when they were actually buying "products that would become subject to an exceptionally limited warranty". He concludes that he and others were, therefore, deprived of "the benefit of the bargain". Pershouse maintains that defendant's rescission of the Guarantee constitutes both a breach of contract and unfair or deceptive conduct in violation of the Massachusetts Consumer Protection Act.

In May, 2018, L.L. Bean filed a motion to dismiss for failure to state a claim, as well as a motion to strike the nationwide class claims in plaintiff's class action complaint. Defendant maintains that 1) plaintiff has failed to state a claim for each count in the complaint and 2) even if some of his claims survive the motion to dismiss, they cannot be brought on behalf of a nationwide class because disparate state common law and consumer protection laws apply to those claims. For the reasons that follow, defendant's motion to dismiss will be allowed.

II. Motion to Dismiss

A. Legal Standard

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In considering the merits of a motion to dismiss, the Court may look only to the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the complaint and matters of which judicial notice can be taken. Nollet v. Justices of Trial Court of Mass., 83 F.Supp.2d 204, 208 (D. Mass. 2000), aff'd, 248 F.3d 1127 (1st Cir. 2000). Furthermore, the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Langadinos v. Am. Airlines, Inc., 199 F.3d 68, 69 (1st Cir. 2000). Although a court must accept as true all of the factual allegations contained in a complaint, that doctrine is not applicable to legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

B. Count I: Breach of Contract

Under Massachusetts law, to prove a breach of contract the plaintiff must demonstrate that 1) "there was a valid contract", 2) "the defendant breached its duties under the contractual agreement" and 3) "the breach caused the plaintiff damage". Shaulis v. Nordstrom, Inc., 120 F.Supp.3d 40, 54 (D. Mass. 2015) (quoting Guckenberger v. Bos. Univ., 957 F.Supp. 306, 316 (D. Mass. 1997) ). Moreover, "[u]nder Massachusetts law, a covenant of good faith and fair dealing is implied in every contract." Id. ("[T]he parties to a contract implicitly agree to deal honestly and in good faith in both the performance and enforcement of the terms of their contract." (internal quotation marks omitted) (quoting Hawthorne's, Inc. v. Warrenton Realty, Inc., 414 Mass. 200, 606 N.E.2d 908, 914 (1993) ) ).

With respect to satisfaction guarantees on goods for sale, Massachusetts law appears to require at least honesty and good faith on the part of the party asserting dissatisfaction. See Weinstein v. Miller, 249 Mass. 516, 144 N.E. 387, 388 (1924) (explaining in the context of a satisfaction guarantee on goods sold that the seller could not allege breach of the buyer's obligation to pay if the buyer "acting in good faith, was actually and honestly dissatisfied").

L.L. Bean asserts that Pershouse fails to state a claim for breach of contract because the law of many states requires a...