Opinion
No. 19-03081-CV-S-BP
08-09-2019
Dale E. CRAGGS, Plaintiff, v. FAST LANE CAR WASH & LUBE, L.L.C., d/b/a In & Out Carwash, Defendant.
Craig R. Heidemann, Douglas, Haun & Heidemann, Bolivar, MO, Nickolas W. Allen, Douglas, Haun & Heidemann, Springfield, MO, for Plaintiff. Glennon P. Fogarty, Husch Blackwell LLP, St. Louis, MO, Shelly A. Rosenfelder, St. Louis, MO, Shelly A. Rosenfelder, Christopher Weiss, Husch Blackwell LLP, Springfield, MO, for Defendant.
Craig R. Heidemann, Douglas, Haun & Heidemann, Bolivar, MO, Nickolas W. Allen, Douglas, Haun & Heidemann, Springfield, MO, for Plaintiff.
Glennon P. Fogarty, Husch Blackwell LLP, St. Louis, MO, Shelly A. Rosenfelder, St. Louis, MO, Shelly A. Rosenfelder, Christopher Weiss, Husch Blackwell LLP, Springfield, MO, for Defendant.
ORDER DIRECTING PLAINTIFF TO FILE SECOND AMENDED COMPLAINT
BETH PHILLIPS, CHIEF JUDGE
Plaintiff filed this case in state court in September 2018 and filed a First Amended Class Action Petition in January 2019. Defendant removed the case to federal court in February 2019 based on provisions of the Class Action Fairness Act, ("CAFA"), 28 U.S.C. § 1332(d). Now pending is Defendant's Motion for Judgment on the Pleadings. As discussed below, Plaintiff is directed to file a Second Amended Complaint, at which point Defendant's motion will be denied as moot (leaving Defendant free to file a new motion if it desires to do so).
I. BACKGROUND
According to the First Amended Class Action Petition, ("the Petition"), Defendant owns and operates three automated car washes: one in Springfield, Missouri and two in Joplin, Missouri. (Doc. 1-1, p. 45, ¶ 3.) Defendant offers five different types (or "packages") of washing services, each costing more than the last and each with additional services. (Doc. 1-1, p. 46, ¶ 8.) Four of the five packages are allegedly "promised [to be a] ‘full wash’ ", (Doc. 1-1, p. 47, ¶ 12), although there are no details regarding how this promise is made (or what it means). Regardless, Plaintiff alleges that "the use of brushes and mitters are necessary ... to clean the vehicles." (Doc. 1-1, p. 47, ¶ 12.) "[M]itters are essentially strips of cloth on a motorized, overhead unit which move back and forth over the vehicle as it passes below. When the mitters are not operational, the top of the vehicle will not be cleaned ...." (Doc. 1-1, p. 47, ¶ 15.) Plaintiff also alleges that "Defendant ... advertises that its car wash lasts for three minutes," (Doc. 1-1, p. 47, ¶ 16), although there are no details about how this representation is made.
The Court will refer to the pleading as a Petition as that is the nomenclature used in state court, where the document was filed.
All page numbers are those generated by the Court's CM/ECF system.
On August 20, 2018, "Plaintiff purchased a single-use ‘Ultimate’ car wash for $15.00, expecting to receive a ‘full wash’ as promised by Defendant." (Doc. 1-1, p. 47, ¶ 17.) However, the mitter motor was not functioning, so the mitters did not move and the top of Plaintiff's car was not properly cleaned. (Doc. 1-1, pp. 47-48, ¶¶ 18-19.) Plaintiff alleges that the mitters had not been working "for days" and "[o]n information and belief, components of Defendant's carwashes fail to perform or are wholly inoperative on a regular basis, yet Defendant does not warn its customers ... [that] the carwash is not fully functional or that they will not receive a ‘full wash.’ " (Doc. 1-1, p. 48, ¶¶ 21-22.) Finally, Plaintiff alleges that the "car wash lasts about two minutes and 25 seconds instead of the full 3 minutes Defendant advertises." (Doc. 1-1, p. 48, ¶ 24.)
Plaintiff does not specify which car wash he went to.
From these facts, Plaintiff asserts four claims on behalf of all of Defendant's customers over the last five years:
Count I Violation of the Missouri Merchandising Practices Act, ("the MMPA")
Count II Breach of Contract
Count III Unjust Enrichment
Count IV Money Had and Received
The first class Plaintiff seeks to represent consists of everyone who purchased a car wash in the last five years and "[who] were not warned that component(s) of Defendant's carwash were not functioning and ... did not receive a full car wash." (Doc. 1-1, p. 49, ¶ 28.) The second class consists of everyone who purchased a car wash in the last five years when Defendant advertised that its car wash lasted for three minutes and "[w]ho did not receive a full three-minute car wash." (Doc. 1-1, p. 49, ¶ 29.)
II. DISCUSSION
"After the pleadings are closed ... a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings can be used (as Defendant has) to argue that the plaintiff has failed to state a claim for which relief can be granted, Fed. R. Civ. P. 12(h)(2), in which case the motion is governed by the standard used to consider motions to dismiss for failure to state a claim under Rule 12(b)(6). Ellis v. City of Minneapolis , 860 F.3d 1106, 1109-10 (8th Cir. 2017).
When considering a motion to dismiss under Rule 12(b)(6), the Court "must accept as true all of the complaint's factual allegations and view them in the light most favorable to the Plaintiff[ ]." Stodghill v. Wellston School Dist. , 512 F.3d 472, 476 (8th Cir. 2008).
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. A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.
Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quotations and citations omitted). A claim is facially plausible if it allows the reasonable inference that the defendant is liable for the conduct alleged. E.g., Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Horras v. American Capital Strategies, Ltd. , 729 F.3d 798, 801 (8th Cir. 2013). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.
The Court generally concludes that there are insufficient details to support Plaintiff's allegations. These inadequacies are compounded with respect to the MMPA claim because (as will be discussed) Rule 9 imposes a heightened pleading requirement for Plaintiff's claim under the MMPA. However, Plaintiff's operative pleading was filed in state court, and he should be allowed an opportunity to amend his pleadings to comply with federal pleading requirements. Moreover, one of Plaintiff's arguments regarding his proposed classes has been foreclosed by an Eighth Circuit decision that was issued after briefing on Defendant's motion was completed. For these reasons, Plaintiff is directed to file a Second Amended Complaint that addresses the issues discussed below.
A. Count I – The MMPA
The MMPA prohibits "[t]he act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce ...." Mo. Rev. Stat. § 407.020.1. The Missouri Attorney General has primary enforcement and rulemaking authority under the MMPA, but in certain circumstances private individuals may also assert claims under the MMPA. To state a private cause of action under the MMPA a plaintiff must show that (1) he purchased merchandise; (2) he purchased the merchandise for personal, family, or household use; (3) he suffered an ascertainable loss; and (4) the ascertainable loss was caused by a violation of the MMPA. Mo. Rev. Stat. § 407.025.1 ; Hess v. Chase Manhattan Bank, USA, N.A. , 220 S.W.3d 758, 773 (Mo. 2007) (en banc.). The primary issue before the Court is whether Plaintiff has adequately alleged that Defendant violated the MMPA.
1. Rule 9(b)
First, the Court considers Defendant's argument that Count I does not satisfy the requirements of Rule 9. "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). "To satisfy the particularity requirement of Rule 9(b), the complaint must plead such facts as the time, place, and content of the defendant's false representations, as well as the details of the defendant's fraudulent acts, including when the acts occurred, who engaged in them, and what was obtained as a result." U.S. ex rel. Raynor v. Nat'l Rural Utilities Co-op. Fin., Corp. , 690 F.3d 951, 955 (8th Cir. 2012) (quotation omitted). Rule 9(b) is intended to provide the defendant with adequate notice of the claim and protect it from baseless claims, but the degree of specificity that is required may depend on the nature of the fraud alleged. United States ex rel. Thayer v. Planned Parenthood of the Heartland , 765 F.3d 914, 918 (8th Cir. 2014).
Plaintiff first argues that Rule 9 does not apply to MMPA claims and contends that the Eighth Circuit has never applied Rule 9 to an MMPA claim. (Doc. 26, pp. 8-9 & n.3). The Court disagrees. In Kuhns v. Scottrade, Inc. , 868 F.3d 711 (8th Cir. 2017), the plaintiff presented a claim under the MMPA, alleging that the defendant had not instituted sufficient security measures to protect customers' electronic information. The Eighth Circuit dismissed the claim for several reasons, the first of which is that the MMPA claim "is a claim that sounds in fraud that was not pleaded with particularity required by Rule 9(b) of the Federal Rules of Civil Procedure." Kuhns , 868 F.3d at 719. Moreover, numerous district judges in Missouri have held that Rule 9(b) applies to MMPA claims, particularly those that (as was the case in Kuhns and is the case here) are fraud-like in that they are based on misrepresentations and omissions. E.g., Hays v. Nissan N. Am. Inc. , 297 F. Supp. 3d 958, 962–63 (W.D. Mo. 2017) ; Baryo v. Philip Morris USA, Inc. , 435 F. Supp. 2d 961, 968 (W.D. Mo. 2006).
Plaintiff also asserts that he is not asserting an MMPA claim that sounds in fraud. (Doc. 26, p. 10 ("even though Plaintiff's MMPA claim is not based on fraud, he has pled with sufficient particularity ....").) Plaintiff does not explain this assertion. Regardless, the Court concludes that his claim sounds in fraud because it is based on alleged misrepresentations and omissions of material fact. At a minimum, it is at least as "fraud like" as the claim asserted in Kuhns , and as stated the Eighth Circuit held that Rule 9(b) applied to that MMPA claim.
Plaintiff next argues that even if Rule 9(b) applies, Count I satisfies its requirements. The Court disagrees. Count I alleges that Defendant represented that its carwashes provided a "full wash" and would last three minutes, but that neither representation was true. (Doc. 1-1, p. 54, ¶¶ 49-52.) However, these general allegations do not satisfy the pleading requirements of Rule 9(b) ; Plaintiff has not alleged who at the car wash made these representations to Plaintiff, when the representations were made, the language that was employed, or any of the circumstances in which they were made. Count I must be amended to allege the "who, what, where, when and how" of the representations that form the basis of the MMPA claim. See Crest Const. II, Inc. v. Doe , 660 F.3d 346, 353 (8th Cir. 2011) (summarizing Rule 9(b)'s requirements).
These details are not only necessary to satisfy Rule 9(b), but also to make it plausible that they constituted terms of Plaintiff's contract with Defendant and were heard by Plaintiff in a manner that supports his unjust enrichment and money had and received claims.
2. Other Pleading Issues
All of Plaintiff's claims suffer from common inadequacies, stemming from the fact that Plaintiff engaged in a single transaction at one of Defendant's three locations. The Court will address these issues with respect to Count I (although it applies to all four of Plaintiff's claims).
Plaintiff alleges that he engaged in a single transaction in August 2018. Necessarily, then, Plaintiff has engaged in a transaction at only one of Defendant's three locations. While he has plausibly alleged that the mitter did not work on the day he went and that his car wash was less than three minutes long, he has not alleged any plausible facts about locations where he did not purchase a car wash or the circumstances at the car wash he patronized on other occasions. The fact that he encountered a non-functioning mitter on a single occasion at a single location does not make it plausible that mitters (or anything else) are routinely inoperative at Defendant's other locations. His experience also does not make it plausible that mitters (or anything else) are routinely inoperative at the location he went to on days other than August 29, 2018. Finally, nothing about his experience plausibly demonstrates what customers at other locations (and at other times) were or were not told.
3. Other Issues
Defendant raises additional issues with respect to Count I (1) that the Court need not address given the directive that Plaintiff amend his pleading or (2) that the Court rejects.
First, Defendant argues that the phrase "full wash" is mere puffery, so the MMPA claim is not actionable. Puffery consists of statements that sound like objective facts but that are actually opinions or statements so lacking in objective standards that they cannot be proven or refuted. Statements constituting puffery cannot support a common law fraud claim, e.g., Clark v. Olson , 726 S.W.2d 718, 719-20 (Mo. 1987) (en banc), but the Missouri Supreme Court has explicitly not addressed whether puffery can give rise to an MMPA claim. In Hurst v. Nissan N. Am., Inc. , 529 S.W.3d 322, 325 (Mo. 2017) (en banc), the Missouri Supreme Court stated that "[t]he question of whether ‘puffery’ is actionable under the MMPA, as opposed to the common law in which such statements generally are not actionable, is an interesting question worthy of study. But that question need not be decided in this case." However, while it is an open question under Missouri law (and many federal judges have held that puffery is not actionable under the MMPA), the Court discerns no present need to resolve the issue. Plaintiff must amend Count I to include the who, what, where, when, and other circumstances under which a "full wash" was promised in order to comply with Rule 9(b). Once that is done, Plaintiff may have presented additional information about Defendant's promise to provide a "full wash" that will provide a better basis for the Court's decision if Defendant elects to re-present this argument. Thus, this issue is best addressed if Defendant raises it after Plaintiff amends his pleadings.
Defendant contends that Hurst held that "statements that vehicles were ‘luxury’ or ‘premium’ were not actionable under the MMPA," in which case "certainly a ‘full’ car wash is even less actionable ...." (Doc. 31, p. 3 (emphasis in original).) The Court does not agree with this characterization of Hurst . The Missouri Supreme Court was "willing to assume—for purposes of the present case—that, when a manufacturer represents a particular line of vehicles as ‘luxury’ or ‘premium’ or the like, those statements are sufficiently factual for this Court to leave to a jury the questions of whether those representations were false in a particular case and, if so, whether they were material." Hurst , 529 S.W.3d at 325. The court nonetheless reversed judgement for the plaintiff because the evidence introduced at trial was insufficient to establish that the dashboards in the cars were not "luxury" or "premium." Id. The Court did not reverse the judgment in favor of the plaintiff because the representations were not actionable and specifically "le[ft] for another day the debate as to where the MMPA draws the line between mere ‘puffery’ and actionable statements of fact." Id.
Defendant also contends that the Petition does not adequately allege that Plaintiff suffered an "ascertainable loss" with respect to the claim that the wash did not last three minutes. (Doc. 14, pp. 15-16.) The Court disagrees. Plaintiff alleges that he paid $15 and expected to get a three-minute car wash but was shorted by thirty-five seconds. At the rate of $5/minute, this means that he suffered an ascertainable loss of approximately $2.08.
Finally, Defendant correctly argues that an MMPA claim based on the omission of a material fact requires that those facts be known to the defendant, or capable of being known to the defendant upon a reasonable inquiry. Hope v. Nissan N. Am., Inc. , 353 S.W.3d 68, 84 (Mo. Ct. App. 2011) ; Plubell v. Merck & Co. , 289 S.W.3d 707, 714 (Mo. Ct. App. 2009). Characterizing Plaintiff's claim as asserting that it omitted the material fact that the promised "full wash" would not be provided, Defendant argues that the MMPA claim should be dismissed because Plaintiff has not adequately alleged Defendant's knowledge that the machinery at the car wash did not work. (Doc. 14, p. 12.) Accepting that Plaintiff's claim is based on an omission (instead of being based on the false promise of a "full wash"), the Court disagrees. The Petition alleges that Plaintiff saw the non-functioning mitter motor when he was at the car wash, (Doc. 1-1, ¶ 18), making it plausible that Defendant could have discovered its malfunctioning equipment with reasonable inquiry.
B. Count II – Breach of Contract
Defendant contends that Plaintiff has not sufficiently alleged the existence of a contract. On this point, the Court disagrees. The Petition clearly alleges that he paid Defendant money in exchange for a car wash; that constitutes a contract.
However, the Court agrees that Plaintiff has not pleaded sufficient facts to establish that his contract was breached. He has not alleged sufficient facts to establish that his contract included a term regarding the length of the car wash. He also has not alleged sufficient facts to establish that his contract included a term for a "full wash" and, if it did, anything about what the parties expected would constitute a "full wash." These inadequacies may be addressed when Plaintiff amends his pleadings as required by Part II.A, above, and the Court believes it best to address these issues (if raised by Defendant) after Plaintiff files his Second Amended Complaint.
C. Counts III and IV – Unjust Enrichment and Money Had and Received
The parties agree that both unjust enrichment and money had and received require proof that the plaintiff relied on a statement made by defendant. (Doc. 14, pp. 20-21; Doc. 26, pp. 20-21.) Defendant argues that these counts must be dismissed because the Petition does not adequately allege that Plaintiff relied on any misrepresentations or omissions. As with several of the other issues, this is one that is best considered (if necessary) after Plaintiff amends his pleading.
D. Plaintiff's Class Allegations
Finally, Defendant argues that Plaintiff's class allegations should be dismissed because it is obvious that neither class can be certified. Defendant also argues that one of the proposed classes constitutes an impermissible "fail safe" class. The Court agrees with several of Defendant's points but will permit Plaintiff to amend his class allegations.
Class certification is governed by Rule 23 of the Federal Rules of Civil Procedure. To be certified a class must satisfy the requirements of numerosity, commonality, typicality, and adequacy. Fed. R. Civ. P. 23(a). The class also must qualify under one of the provisions of Rule 23(b) ; here, because Plaintiff seeks monetary damages the classes he proposes must satisfy Rule 23(b)(3), which requires that "the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for" resolving the controversy. "Sometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim," General Tele. Co. of SW v. Falcon , 457 U.S. 147, 160, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982), in which case the district court can determine whether or not a class should be certified at the pleading stage without the benefit of a motion to certify. E.g., Kennedy v. Unumprovident Corp. , 50 Fed. App'x 354, 355 (9th Cir. 2002) ; Nobles v. State Farm Mut. Auto. Ins. Co. , 2012 WL 4090347, at *2 (W.D. Mo. 2012).
The Court begins with the first class, which consists of Defendant's customers "[w]ho were not warned that component(s) of Defendant's carwash were not functioning; and [w]ho did not receive a full car wash." (Doc. 1-1, p. 49, ¶ 28.) First, the Court does not believe that the Petition alleges that Plaintiff's claim plausibly shares sufficient commonality, or is typical of, all class members. Plaintiff alleges that he did not receive a full wash because the mitter motors were not working – however, even if operative mitter motors are a component of a full wash, Plaintiff seeks to represent all customers who were denied a full wash, regardless of the reason. This would require Plaintiff to litigate whether the failure of other pieces of equipment means that customers did not receive a full wash – even though the only failure that he experienced related to the mitters. The Petition presents no basis for plausibly concluding that he has anything in common with, or that his claim is typical of, anyone other than a customer who similarly experienced a nonfunctioning mitter motor. Second, by conditioning membership in the class on whether the customer did or did not receive a full wash, the class is effectively defined in terms of whether a person can prevail on the merits. This is referred to as a "fail-safe class." E.g., McCaster v. Darden Restaurants, Inc. , 845 F.3d 794, 799 (7th Cir. 2017). Recently – and after briefing on Defendant's motion was completed – the Eighth Circuit held that fail-safe classes are impermissible, at least with respect to classes certified pursuant to Rule 23(b)(3). Orduno v. Pietrzak , 932 F.3d 710, 717 (8th Cir. 2019).
Defendant presents this as an issue of standing, but the Court believes this characterization is misleading. A plaintiff has standing to assert claims on behalf of a certified class – which assumes that the requirements of Rule 23 have been met. Thus, the real question is: Has Plaintiff adequately pleaded that he can satisfy Rule 23 ? If he has, then the standing issue is resolved. Therefore, the issues Defendant has raised are best considered in the context of Rule 23's requirements.
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The second class consists of Defendant's customers who purchased "during a time that Defendant advertised that its car washes lasted for three minutes; and [w]ho did not receive a full three-minute wash." (Doc. 1-1, p. 49, ¶ 29.) This is not a fail-safe class. Defendant nonetheless contends that this class should be dismissed because it will require individualized inquiries "into how long each customer's car wash lasted and how each customer was damaged thereby," the terms of each customer's contract, and each customer's reliance. (Doc. 14, p. 23.) These arguments relate to Plaintiff's obligation to demonstrate that the common issues predominate over the individual issues, and the Court lacks sufficient information to make a determination on this issue at this time. The matter is best addressed after Plaintiff amends his pleadings (and even then, perhaps in the context of a motion to certify).
III. CONCLUSION
For the reasons stated above, Plaintiff is directed to file a Second Amended Complaint within fourteen days of this Order. At a minimum, the Second Amended Complaint must provide additional information about the two representations that form the basis for Plaintiff's claims: that he was to receive a "full wash" and that the car wash was to last for three minutes. The Second Amended Complaint must (1) provide the who, what, where, when, and other circumstances of the representations as required by Rule 9(b), (2) demonstrate that these provisions were plausibly part of Plaintiff's contract with Defendant, and (3) provide as much information as possible to explain what the parties agreed would constitute a "full wash." In addition, the Second Amended Complaint must include sufficient facts to make it plausible that all three of Defendant's locations – not just the one Plaintiff visited – routinely do not operate properly, and that the location that he visited routinely does not have fully operating equipment. Plaintiff must also amend his allegations with respect to the "full wash" class to (1) insure that it is not a fail-safe class and (2) provide a plausible basis for believing that Plaintiff's claim shares common facts or law and is typical of claims by customers who had a car wash with an operating mitter motor.