Storey v. Attends Healthcare Prods., Inc.

BEVERLY K. STOREY and BRENDA L. CARL,individually and on behalf ofthemselves and all others similarly situated, Plaintiffs, v. ATTENDS HEALTHCARE PRODUCTS, INC., Defendant.

CASE NO. 15-CV-13577

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

June 3, 2016

HONORABLE GEORGE CARAM STEEH

OPINION AND ORDER GRANTING DEFENDANT'S RENEWED MOTION TO DISMISS (DOC. 14) AND GRANTING PLAINTIFFS' REQUEST TO FILE A SECOND AMENDED COMPLAINT

Defendant Attends Healthcare Products, Inc. ("Defendant") sells extended-wear incontinence products ("Extended Wear Products"). According to named plaintiffs Beverly Storey and Brenda Carl ("Plaintiffs"), Defendant falsely represented that its Extended Wear Products were safe for long-term use and failed to warn of the risks associated with long-term use. Plaintiffs' first amended complaint ("FAC") contains four counts: (1) breach of the implied warranty of merchantability, (2) breach of an implied warranty of fitness for a particular purpose, (3) violation of state consumer protection acts, and (4) unjust enrichment. (Doc. 11). The two named Plaintiffs state that they purchased the Extended Wear Products in Michigan and Arizona,¹ and they ultimately aspire to represent a nationwide class of consumers who purchased the Extended Wear Products throughoutthe United States. Thus, each count of the FAC cites to the relevant statutory provisions of all fifty states and the District of Columbia.²

Defendant now moves the Court to dismiss the FAC pursuant to Federal Rule of Civil Procedure 12(b)(6) and to strike the class allegations. (Doc. 14, Def.'s Mot. Dismiss). Plaintiffs filed a Response, and Defendant filed a Reply to that Response. (Doc. 16, Pls.' Resp.; Doc. 17, Def.'s Reply). In its Motion to Dismiss, Defendant argues that Plaintiffs lack standing and that Plaintiffs have failed to state a claim under any of the four counts, for various reasons. Moreover, Defendant argues that the Court should strike Plaintiffs' class allegations because some of the putative class members' claims accrued outside the applicable statutes of limitations and are therefore time barred.

Ruling on the instant motion would appear to be a daunting task, given that Plaintiffs have asserted their four counts under the laws of all fifty states and the District of Columbia. But ultimately the questions to be decided today are (1) whether the two named Plaintiffs have standing and (2) whether the Plaintiffs have stated a claim upon which relief may be granted to the two named Plaintiffs. The Court has not yet certified a class, and the possibility that Plaintiffs have stated a claim for relief on behalf of some unnamed putative class member is not enough to allow the FAC to survive the instant motion. Since the two parties agree (or assume) that the laws of Arizona and Michigan govern the two named Plaintiffs' claims, the Court will only have to consider Arizona and Michigan law to rule on the instant motion.

The Court will grant Defendant's motion to dismiss for the reasons explained below. In short, a fundamental flaw permeates all four counts of the FAC. All four counts are premised on Plaintiffs' contention that Defendant's Extended Wear Products are not safe for long-term use. But Plaintiffs have utterly failed to allege any facts that would render this contention plausible, other than a conclusory allegation that use of the Extended Wear Products "increase[s] the risk or likelihood of serious health consequences, including urinary tract infections and/or other irritations of the skin." (FAC ¶ 88). Such a conclusory allegation is entitled to no weight under the Rule 12(b)(6) standard, as explicated by the Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009).

The Court will, however, grant Plaintiffs an opportunity to amend their FAC pursuant to Federal Rule of Civil Procedure 15(a)(2), for reasons that will be explained in detail below.

I. RULE 12(B)(6) STANDARD

When a party attacks a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must decide whether the complaint states a claim upon which relief may be granted. Generally speaking, the court must construe the complaint in favor of the plaintiff, accept the allegations of the complaint as true, and determine whether the plaintiff's factual allegations present plausible claims. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554-56 (2007). But there are some types of allegations that a court need not accept as true and which are therefore insufficient to allow a complaint to survive a Rule 12(b)(6) motion. In particular, a court should not accept "legal conclusions cloaked as fact." Haddad v. Randall S. Miller Associates, PC, 587 F. App'x 959, 963 (6th Cir. 2014)(unpublished). Similarly, "naked assertions devoid of further factual enhancement" and "unadorned, the-defendant-unlawfully-harmed-me accusation[s]" are insufficient to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). This means that to survive a Rule 12(b)(6) motion to dismiss, a complaint must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) (quoting Twombly, 550 U.S. at 555) (citations and quotation marks omitted). Even though a complaint need not contain "detailed" factual allegations, its "factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true." Id.

II. DISCUSSION

A. The Named Plaintiffs Have Standing.

Defendant first argues that the Court must dismiss the FAC because Plaintiffs lack standing under Article III of the Constitution. Defendant asserts that Plaintiffs lack standing because they have not alleged that they suffered any injury in fact. In their Response, Plaintiffs argue that it would be premature for the Court to rule on standing. The Court rejects Plaintiffs' argument that the Court should delay in addressing the question whether the named Plaintiffs (as opposed to the unnamed putative class members) have standing. The Court holds that the named Plaintiffs have established standing.

1. The Court Will Address Standing at This Time.

As explained above, Defendant claims that Plaintiffs lack standing. Plaintiffs, however, argue that it would be "premature" for the Court to address the issue of Article III standing prior to ruling on class certification. (Pls.' Resp. at 15). Plaintiffs are correct thatadditional standing issues would potentially arise if the question of class certification were to ever come before the Court.³ But it would not be premature for the Court to address the standing of the named Plaintiffs (that is, the putative class representatives, Ms. Storey and Ms. Carl). After all, if the named Plaintiffs lack standing, then the action must be dismissed, regardless of whether some (unnamed) members of the proposed class have standing. See O'Shea v. Littleton, 414 U.S. 488, 494 (1974) ("[I]f none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendants, none may seek relief on behalf of himself or any other member of the class.").

As the cases cited by Plaintiffs indicate, in a situation where the Rule 23 class-certification issues are "logically antecedent" to the Article III standing issues, it is appropriate for a court to defer ruling on standing until after ruling on class certification. Amchem Prods., Inc. v. Windsor, 521 U.S. 591. 612 (1997); see also Ortiz v. Fibreboard Corp., 527 U.S. 815, 831 (1999). Class-certification issues are logically antecedent to Article III issues when the Article III issues arise from the certification of the class. See Mahon v. Ticor Title Ins. Co., 683 F.3d 59, 65 (2d Cir. 2012); In re Auto. Parts Antitrust Litig., 29 F. Supp. 3d 982, 999-1000 (E.D. Mich. 2014). In the instant case, the class-certification issues are not logically antecedent to the Article III issues concerning the named Plaintiffs. The Defendant's standing arguments have nothing to do with the unnamed putative class members. Therefore, Amchem and Ortiz are not controlling, and the Court will not defer ruling on standing.

2. The Named Plaintiffs Were Injured in Fact.

A plaintiff bears the burden of demonstrating that he or she has standing to sue. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). The plaintiff must establish three elements. Id. First, the plaintiff must establish that he or she has suffered an "injury in fact." Id. at 560. Second, the plaintiff must establish that there is "a causal connection between the injury and the [defendant's] conduct complained of." Id. And third, the plaintiff must establish that it is likely that the injury will be redressed if the court grants the requested relief. Id. at 561. Here, Defendant only challenges the injury-in-fact element. The other two elements (causation and redressability) are obviously satisfied: If Plaintiffs were indeed injured as a result of their purchase of Defendant's Extended Wear Products, then Defendant's conduct caused their injury, and the requested money damages from Defendant would redress that injury. Thus, the analysis below focuses on the injury-in-fact element.

In order for a plaintiff to show an injury in fact, the plaintiff must establish that he or she has suffered an injury that is "concrete and particularized" and "actual or imminent, not conjectural or hypothetical." Lujan, 504 U.S. at 560 (citation and internal quotation marks omitted). "A 'concrete' injury must be 'de facto'; that is, it must actually exist." Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). A "risk of real harm" is sufficient to satisfy the concreteness requirement. Id. Moreover, an injury in fact "may exist solely by...