Berks Plant Design And Maintenance, Inc. v. Gaf Materials Corporation

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM Count III of the Amended Complaint

E.D. Pa.May 22, 2017

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA BERKS PLANT DESIGN MAINTENANCE, INC. Plaintiff, v. GAF MATERIALS CORPORATION a/k/a GAF Defendant. Case No. 5:16-cv-06415 (JFL) NOTICE OF MOTION TO DISMISS COUNT III OF THE AMENDED COMPLAINT Oral Argument Requested PLEASE TAKE NOTICE that pursuant to Fed. R. Civ. P. 12(b)(6), and under Defendant GAF’s Memorandum of Law in Support of Motion to Dismiss Count III of the Amended Complaint, and all other pleadings and proceedings in this action, Defendant, GAF will move this Court before the Honorable Joseph F. Leeson, Jr., United States District Judge, at the Edward N. Cahn U.S. Courthouse and Federal Building, 504 West Hamilton Street, Suite 3401, Allentown, PA, 18101, at a date and time to be determined by the Court for an order granting Defendant’s motion to dismiss. Dated: May 22, 2017 Respectfully submitted, By: s/ Kathleen H. Robinson_______________ David R. King, Esq. (SBN 310307) Kathleen H. Robinson, Esq. (SBN 203388) HERRICK, FEINSTEIN LLP One Gateway Center Newark, New Jersey 07102 (973)-274-2000 Email: dking@herrick.com Email: hrobinson@herrick.com Attorneys for Defendant Standard Industries Inc. Case 5:16-cv-06415-JFL Document 20 Filed 05/22/17 Page 1 of 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA BERKS PLANT DESIGN MAINTENANCE, INC. Plaintiff, v. GAF MATERIALS CORPORATION a/k/a GAF Defendant. Case No. 5:16-cv-06415 (JFL) ORAL ARGUMENT REQUESTED MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS COUNT III OF THE AMENDED COMPLAINT David R. King Kathleen Heather Robinson HERRICK, FEINSTEIN LLP One Gateway Center Newark, New Jersey 07102 (973)-274-2000 dking@herrick.com hrobinson@herrick.com Attorneys for Defendant Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 1 of 22 TABLE OF CONTENTS TABLE OF AUTHORITIES .......................................................................................................... ii PRELIMINARY STATEMENT .................................................................................................... 1 STATEMENT OF FACTS ............................................................................................................. 2 STATEMENT OF QUESTIONS INVOLVED.............................................................................. 4 SUMMARY OF ARGUMENT ...................................................................................................... 4 ARGUMENT.................................................................................................................................. 5 A. The NJCFA Claim Fails Under the Applicable Choice Of Law Analysis ..........................6 1. The NJCFA Claim Fails Because Pennsylvania Has Substantially More Relevant Contacts With The Alleged Consumer Fraud 6 2. The NJCFA Claim Fails Because Plaintiff Cannot Demonstrate a Conflict Between the Laws of Pennsylvania and New Jersey Under the Facts Alleged 9 B. The NJCFA Claim Should Be Dismissed For Failure To Properly Plead All Elements Of An NJCFA Claim..........................................................................................11 1. The NJCFA Claim Should Be Dismissed For Failure To Properly Plead An Unconscionable Commercial Practice Recognized Under The NJCFA 11 2. The NJCFA Claim Should Be Dismissed For Failure To Plead Any Aggravating Factors 14 3. Plaintiff’s NJCFA Claim Should Be Dismissed For Failure To Plead With Particularity 15 CONCLUSION............................................................................................................................. 17 Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 2 of 22 ii TABLE OF AUTHORITIES Page Federal Cases Alexander v. CIGNA Corp., 991 F. Supp. 2d 427 (D.N.J. 1998) ..........................................................................................12 Aquila v. Nationwide Mutual Ins. Co., 2008 WL 4899359 (E.D. Pa. Nov. 13, 2008) ............................................................................5 Ashcroft v. Iqbal, 556 U.S. 662 (2009).................................................................................................................13 Baker v. Family Credit Counseling Corp., 440 F. Supp. 2d 392 (E.D. Pa. 2006) .........................................................................................8 Bianchi v. Lazy Days RV Center Inc., 2007 WL 1959268 (D.N.J. July 5, 2007)...........................................................................14, 15 Bubbles N Bows LLC v. Fey Pub. Co., 2007 WL 2406980 (D.N.J. Aug. 20, 2007) .......................................................................11, 12 Cooper v. Samsung Electronics America Inc., 374 Fed. Appx. 250 (3d Cir. 2010)............................................................................................9 Coram Healthcare Corp. v. U.S. Healthcare, Inc., 94 F. Supp. 2d 589 (E.D. Pa. 1999) ...........................................................................................7 Frederico v. Home Depot, 507 F.3d 188 (3d Cir. 2007).....................................................................................................16 Hammersmith v. TIG Ins. Co., 480 F.3d 220 (3d Cir. 2007).......................................................................................................6 In re Actiq Sales and Marketing Practices Litig., 790 F. Supp. 2d 313 (E.D. Pa. 2011) .........................................................................................9 In re Advanta Corp. Sec. Litig., 180 F.3d 525 (3d Cir. 1999).....................................................................................................16 In re Flonase Antitrust Litig., 815 F. Supp. 2d 867 (E.D. Pa. 2011) .........................................................................................9 Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 3 of 22 iii Karnuth v. Rodale, Inc., 2005 WL 1683605 (E.D. Pa. July 18, 2005)..............................................................................9 Knipe v. Smithkline Beecham, 583 F. Supp. 2d 602 (E.D. Pa. 2008) .........................................................................................9 Levy v. Keystone Food Products, 2008 WL 4115856 (E.D.Pa. Aug. 28, 2008) .............................................................................5 Lithuanian Commerce Corp. Ltd. v. Sara Lee Hosiery, 179 F.R.D. 450 (D.N.J. 1998)..................................................................................................10 Maniscalo v. Brother Intern’l Corp., 709 F.3d 202 (3d Cir. 2013).......................................................................................................9 Mardini v. Viking Freight, Inc., 92 F. Supp. 2d 378 (D.N.J. 1999) ............................................................................................12 Miree v. DeKalb Cnty., Ga., 433 U.S. 25 (1977)...................................................................................................................13 Park v. M & T Bank Corp., 2010 WL 1032649 (D.N.J. Mar. 16, 2010)..............................................................................15 Parker v. Howmedica Osteonics Corp., 2008 WL 141628 (D.N.J. Jan. 14, 2008) .................................................................................15 Phillips v. County of Allegheny, 515 F.3d 224 (3d Cir. 2008).......................................................................................................5 Stolba v. Wells Fargo & Co., 2011 WL 3444078 (D.N.J. Aug. 8, 2011) .........................................................................12, 13 Stone St. Serv., Inc. v. Daniels, 2000 WL 1909373 (E.D. Pa. Jan. 21, 2004) ..............................................................................8 Temco Canada Div., RPM Canada v. Dartronics, Inc., 2013 WL 2444076 (D.N.J. June 4, 2013) ................................................................................11 State Cases Cox v. Sears, Roebuck & Co., 138 N.J. 2 (N.J. 1994) ..............................................................................................................11 Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 4 of 22 iv D'Ercole Sales, Inc. v. Fruehauf Corp., 206 N.J. Super. 11 (N.J. App. Div. 1985)................................................................................14 Lewis v. Bayer AG, 2004 WL 1146692 (Pa. Com. Pl. Nov. 18, 2004)......................................................................8 Middlesex County Sewerage Auth. v. Borough of Middlesex, 181 A.2d 818 (N.J. Law Div. 1962) ........................................................................................12 Papergraphics Int'l, Inc. v. Correa, 389 N.J. Super. 8, 13 (N.J. App. Div. 2006)............................................................................10 Princeton Healthcare Sys. v. Netsmart New York, Inc., 422 N.J. Super. 467 (N.J. App. Div. 2011)..............................................................................10 Simpson v. Wider 709 A.2d 1266 (N.J. App. Div. 1999)......................................................................................12 Statutes N.J.S.A. 56:8–1(c) .........................................................................................................................10 N.J.S.A. 56:8–2..............................................................................................................................10 Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 5 of 22 Standard Industries Inc. (f/k/a Building Materials Corporation of America, d/b/a GAF Materials Corporation a/k/a GAF) (“GAF”) respectfully submits this memorandum of law in support of its motion to dismiss the cause of action for violating the New Jersey Consumer Fraud Act (the “NJCFA”) asserted by Plaintiff Berks Plant Design Maintenance, Inc. (“Berks” or “Plaintiff”) in the Amended Complaint filed May 8, 2017 (the “Amended Complaint”). PRELIMINARY STATEMENT This is the Plaintiff’s second -- and hopefully final -- attempt to convert this contract dispute into a consumer fraud case. In its original complaint (the “Complaint”), Berks inartfully sought to tack on claims against GAF for negligence and for violating the Pennsylvania Unfair Trade Practices and Consumer Protection Law (the “UTPCPL”) to try to ratchet up its damages and recover attorneys’ fees. The Court dismissed both claims, but allowed Berks the opportunity to try to replead its consumer fraud claim under the NJCFA. Plaintiff’s new claim under the NJCFA likewise fails. The revised allegations -- even if accepted as true -- do not support an NJCFA claim. Plaintiff’s claim fails first and foremost under settled choice of law analysis because Pennsylvania has the most relevant contacts with the claim, and thus the law of Pennsylvania controls. Even aside from a choice of law analysis, Plaintiff’s purported NJCFA claim fails because the transaction at issue involved custom- designed “merchandise” outside the purview of the NJCFA. Moreover, Berks has not sufficiently alleged a cognizable, unconscionable business practice, let alone any aggravating circumstances or the requisite particularity necessary to state a claim under the NJCFA. For these reasons, each of which is more fully addressed below, Plaintiff’s claim for violation of the NJCFA (Count III) must be dismissed. Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 6 of 22 2 STATEMENT OF FACTS GAF manufactures and markets certain roofing materials and is headquartered in New Jersey. (Compl. at ¶ 3). Berks is a commercial business organized in Pennsylvania and headquartered in Pennsylvania. (Compl. at ¶ 1). Plaintiff engages in the design of packaging lines, the supply of new and used packaging equipment, and the installation and configuration of packaging lines in Pennsylvania. (Compl. at ¶ 2). Berks filed this diversity action in the Eastern District of Pennsylvania on December 14, 2016 (Dkt. No. 1), seeking damages for injury it allegedly suffered in Pennsylvania (Compl. at ¶¶ 27, 29), caused when a contractor from Pennsylvania (Compl. at Exh. E), installed an allegedly defective roofing system on Plaintiff’s facility in Pennsylvania (Compl. at ¶ 16). Plaintiff additionally complained that it was promised, but did not receive, a 15-year warranty for the roof under which GAF would have been obligated to make repairs. (Compl. at ¶¶ 17-18, 22; Am. Compl. at ¶¶ 24, 50, 52, 74). In its original Complaint, Berks understandably laid venue in Pennsylvania, alleging that “substantial” events or omissions occurred here, giving rise to jurisdiction. (Comp. at ¶ 6). Plaintiff alleged that by reason of supplying allegedly defective roofing materials, GAF breached implied warranties of fitness for a particular purpose and merchantability under Pennsylvania law, breached contractual obligations by allegedly failing to properly install the roof and failing to honor the warranty, committed actionable negligence, and violated the Pennsylvania UTPCPL. (Compl. at Counts I-IV). Berks premised its consumer fraud claim on GAF allegedly listing goods of a certain quality or quantity which were not what was actually provided or installed. (Compl. at Count IV). Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 7 of 22 3 GAF moved to dismiss the negligence claim as barred by the economic loss and gist of the action doctrines, and the UTPCPL claim as barred insofar as the transaction in issue was of a commercial nature and thus excluded by the UTPCPL. (Dkt. No. 8-1). The Court dismissed both claims, but, notwithstanding the Court’s skepticism that a consumer fraud claim could survive under New Jersey law, granted leave to Plaintiff to attempt to replead on NJCFA claim. (Dkt. No. 14). Berks filed its Amended Complaint on May 8, 2017 (Dkt. No. 19), this time seeking to couch its claims as centrally tied to New Jersey so as to support the NJCFA claim. Plaintiff now alleges that only “some” of the events or omissions giving rise to the claims occurred in Pennsylvania. (Am. Compl. at ¶ 8). Moreover, the new NJCFA claim is now premised not upon GAF’s allegedly wrongful listing goods of a certain quality or quantity which were not what was actually provided or installed, but instead upon GAF’s allegedly false promise, purportedly in connection with the sale of the roof in issue, to provide a 15 year warranty that was never delivered. (Am. Compl. at Count III). Plaintiff also alleges that GAF suggested a potential fix to its purportedly defective roof (i.e. roof drains). (Am. Compl. at ¶ 85). Attempting to tie its claims to New Jersey, Plaintiff now alleges that (1) GAF employee Peter Engelmann, who inspected the roof in issue in Pennsylvania, and advised on the project in Pennsylvania, was somehow a New Jersey employee of GAF1 (Am. Compl. at ¶ 12); (2) that the 1 This allegation is false; discovery will show that although Mr. Engelmann was a Technical Service Representative whose territory included Pennsylvania, his home base was actually in New York at all times relevant to the Complaint. Indeed, as discovery will show, although GAF is headquartered in New Jersey, it employs individuals throughout the United States, and has multiple manufacturing facilities, including in Pennsylvania, thus diminishing Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 8 of 22 4 warranty allegedly promised in Pennsylvania, but not delivered in Pennsylvania, would have issued from New Jersey (Am. Compl. at ¶¶ 25, 71-72); and (3) Berks lobbed voluminous complaints into New Jersey when it discovered the roof -- a roof installed by a Pennsylvania contractor on Berk’s Pennsylvania facility -- was allegedly defective, but GAF refused the remedy Berks sought.2 (Am. Compl. at ¶¶ 33, 36). Plaintiff also appears to have cut and pasted the phrase “from its headquarters in New Jersey” repeatedly when mentioning GAF, apparently seeking to bolster the flimsy connection to New Jersey. These new allegations (whether true or not) are insufficient to support the NJCFA claim, and accordingly, the Court should dismiss the new claim and allow the action to proceed as a contract dispute. STATEMENT OF QUESTIONS INVOLVED 1. Should Plaintiff’s cause of action for violation of the NJCFA be dismissed under applicable choice of law analysis? 2. Should Plaintiff’s cause of action for violation of the NJCFA be dismissed because Plaintiff fails to plead unconscionable conduct, fails to plead aggravating circumstances, and fails to plead the alleged fraud with particularity? SUMMARY OF ARGUMENT Plaintiff’s cause of action for violation of the NJCFA should be dismissed under Pennsylvania’s choice of law analysis, because even assuming that Berks could establish an any significance of the location of its headquarters. However, for purposes of this motion, the Court may accept the allegations as true, because it does not change the outcome. 2 Because these allegations concern post-transaction statements, they appear to be of no consequence to the NJCFA claim or, presumably, a conflict of law analysis. Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 9 of 22 5 actual conflict between the UTPCPL and the NJCFA, Pennsylvania is the state with the most significant relationship to the claim, and this Court has already concluded that Berks has no claim under Pennsylvania’s consumer fraud law. Plaintiff’s NJCFA claim separately fails because (1) custom designed and delivered merchandise is not covered under the NJCFA; (2) Berks cannot rely on misrepresentations as to future or contingent acts, which are not cognizable under the NJCFA; (3) Plaintiff fails to plead aggravating circumstances as necessary when an NJCFA claim is premised on breach of contract or warranty; and (4) Berks fails to plead any alleged fraud with the requisite particularity required under Fed. R. Civ. P. 9(b). ARGUMENT Plaintiff’s NJCFA claim should be dismissed under Federal Rule of Procedure 12(b)(6) for failure to state a claim. Rule 12(b)(6) is designed to screen out cases where “a complaint states a claim based upon a wrong for which there is clearly no remedy, or a claim which the plaintiff is without right or power to assert and for which no relief could possibly be granted.” Levy v. Keystone Food Products, 2008 WL 4115856, at *2 (E.D.Pa. Aug. 28, 2008) (citing Port Auth. v. Arcadian Corp., 189 F.3d 305, 311-12 (3d Cir. 1999)). A motion filed under Rule 12(b)(6) requires the reviewing court to determine “whether the plaintiff would be able to prevail even if she were able to prove all of her allegations.” Aquila v. Nationwide Mutual Ins. Co., 2008 WL 4899359, at *3 (E.D. Pa. Nov. 13, 2008) (citing Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d. Cir. 2006). If a complaint does not allege enough factual matter (taken as true) to suggest all the required elements of a cause of action, dismissal is appropriate. Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Tested under the foregoing standards, Plaintiff’s NJCFA claim should be dismissed. Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 10 of 22 6 A. The NJCFA Claim Fails Under the Applicable Choice Of Law Analysis Plaintiff’s NJCFA claim fails under proper choice of law analysis. Under Pennsylvania federal choice of law rules, the Court must apply the law of the state with the greater interest in the matter at hand. This inquiry into state interests is to be performed qualitatively, by analyzing relevant contacts. Hammersmith v. TIG Ins. Co., 480 F.3d 220, 230–31 (3d Cir. 2007). Step one in the choice of law analysis requires the court to determine whether an actual conflict exists between two state laws. Hammersmith, 480 F.3d at 229. Step two, the final step in the choice of law analysis, requires the court to assess the relevant contacts of each state based on the underlying facts. Hammersmith, 480 F.3d at 231. Plaintiff’s NJCFA claim as pleaded fails both steps. Most starkly, even assuming Berks could meet the first prong and establish an actual conflict, it would fail the second prong because Pennsylvania’s contacts far outweigh New Jersey’s. 1. The NJCFA Claim Fails Because Pennsylvania Has Substantially More Relevant Contacts With The Alleged Consumer Fraud There can be no question that Pennsylvania law controls. Berks is a Pennsylvania business. It premises its NJCFA claim on GAF’s purported misrepresentation to it – in Pennsylvania – that GAF would warrant a roof in Pennsylvania, which was thereafter purportedly installed incorrectly in Pennsylvania, by a Pennsylvania contractor, resulting in harm to Plaintiff in Pennsylvania. It is therefore Pennsylvania law that controls. In the context of consumer fraud, where reliance upon false or fraudulent representations or advertising is alleged to have been a substantial factor in causing a plaintiff to purchase a defendant's goods or services (as is the case here), the Restatement (Second) of Conflict of Laws Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 11 of 22 7 § 148 identifies the factors a court should consider in determining which state has the most significant relationship to the occurrence and parties. See, e.g. Coram Healthcare Corp. v. U.S. Healthcare, Inc., 94 F. Supp. 2d 589 (E.D. Pa. 1999) (“Pennsylvania courts have often looked to the Restatement to identify what contacts to consider . . . In fraud cases, the Restatement places particular importance on the ‘state where the false representations are made and received’ if the ‘plaintiff’s action in reliance took place in the same state”) (collecting cases) (citing Restatement (Second) of Conflict of Laws §§ 145 and 148).3 Where a plaintiff alleges it has suffered harm in Pennsylvania, on account of its reliance on a defendant’s false representations allegedly made in Pennsylvania, the local law (i.e. the law of Pennsylvania) determines the rights and liabilities of the parties absent exceptional considerations of comity not in issue here. Id.; Restatement (Second) of Conflict of Laws § 148(1). Even where a Plaintiff can argue some tie between the allegedly false representation and a second state (here, New Jersey), the analysis still requires application of Pennsylvania law. The factors which govern which state's law should be applied in such an instance include the following: (a) the place, or places, where the plaintiff acted upon the defendant's representations, (b) the place where the plaintiff received the representations, (c) the place where the defendant made the representations, (d) the domicile, residence, nationality, place of incorporation and place of business of the parties, 3 See also Restatement (Second) of Conflict of Laws ¶ 145, identifying general principals of conflicts issues in connection with tort claims, all of which likewise demonstrate that Pennsylvania law controls. Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 12 of 22 8 (e) the place where a tangible thing which is the subject of the transaction between the parties was situated at the time, and (f) the place where the plaintiff is to render performance under a contract which he has been induced to enter by the false representations of the defendant. Restatement (Second) of Conflict of Laws § 148(2). Every single factor points to the application of Pennsylvania law. Regarding factor (d), while GAF’s principal place of business is located in New Jersey, and while Plaintiff alleges that Mr. Engelmann haled from New Jersey, the Restatement notes that “[t]he domicile, residence and place of business of the plaintiff are more important than are similar contacts on the part of the defendant.” Restatement (Second) of Conflict of Laws § 148 cmt. 2(i). This is no surprise given that state consumer protection laws are designed to protect the residents of the states in which the statutes are promulgated. Stone St. Serv., Inc. v. Daniels, 2000 WL 1909373 (E.D. Pa. Jan. 21, 2004); see also, Lewis v. Bayer AG, 2004 WL 1146692, at *12 (Pa. Com. Pl. Nov. 18, 2004) (“State consumer protection acts are designed to protect the residents of the state in which a deceptive act occurs or the individual resides and therefore the state where the individual resides has an overriding interest in applying the law of that state.”); Baker v. Family Credit Counseling Corp., 440 F. Supp. 2d 392, 414 (E.D. Pa. 2006) (“federal courts in other jurisdictions have refused to apply [Pennsylvania's Unfair Trade Practices Act] to non-residents of Pennsylvania”). None of the repleaded allegations (i.e. that Mr. Engelmann supposedly haled from New Jersey, that the warranty would have issued from New Jersey, or that Plaintiff -- after the fact -- lobbed complaints into New Jersey and received an unsatisfactory response) are of significance to a proper choice of law analysis, let alone suggest or compel the application of New Jersey law. To the contrary, it is well settled under Pennsylvania jurisprudence that the place where Plaintiff Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 13 of 22 9 resides is often of dispositive consideration, as is the location of alleged performance and injury - - all of which mandate the application of Pennsylvania law here. In re Actiq Sales and Marketing Practices Litig., 790 F. Supp. 2d 313, 321-322 (E.D. Pa. 2011) (consumer’s forum state is the state with paramount interest under consumer protection laws, that defendant is domiciled elsewhere is insufficient to invoke foreign state’s statute). In re Flonase Antitrust Litig., 815 F. Supp. 2d 867, 883 (E.D. Pa. 2011) (state of purchase of goods or services is state with most significant contacts); Karnuth v. Rodale, Inc., 2005 WL 1683605 (E.D. Pa. July 18, 2005) (regardless of the fact that the defendant was domiciled in PA, plaintiff’s consumer fraud claims are dictated by domicile of plaintiffs); Knipe v. Smithkline Beecham, 583 F. Supp. 2d 602 (E.D. Pa. 2008) (notwithstanding defendant’s domicile in PA, NJ law controlled where purchaser resided in New Jersey and harm occurred there). 4 Thus, even assuming, arguendo, that a conflict exists between the Pennsylvania UTPCPL and the NJCFA (it is GAF’s position that no conflict exists), the assessment of relevant contacts brings Plaintiff’s claims squarely within the application of Pennsylvania law (not New Jersey law). For this reason alone, Plaintiff’s NJCFA claim plainly fails. 2. The NJCFA Claim Fails Because Plaintiff Cannot Demonstrate a Conflict Between the Laws of Pennsylvania and New Jersey Under the Facts Alleged Plaintiff has also failed to allege a transaction that could potentially be covered by the NJCFA. In its first motion to dismiss, GAF demonstrated that Berks could not maintain a consumer fraud claim under the Pennsylvania UTPCPL because of the commercial nature of the 4 Had Plaintiff sued in New Jersey, the result would be the same. Maniscalo v. Brother Intern’l Corp., 709 F.3d 202, 209-210 (3d Cir. 2013); Cooper v. Samsung Electronics America Inc., 374 Fed. Appx. 250, 255 (3d Cir. 2010). Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 14 of 22 10 transaction in issue. (Dkt. 8-1 at pp. 6-7). While the NJCFA does not exclude all commercial transactions, it does exclude such transactions if they are for custom-designed purchases, as alleged here.5 Thus, Plaintiff fails both prongs of Pennsylvania’s choice of law analysis. For example, in Princeton Healthcare, the New Jersey Appellate Division considered the applicability of the NJCFA to a commercial transaction initiated by a request for proposal and involving merchandise that was tailored for a specific client’s needs. There, the Princeton Healthcare facility, assisted by a computer consultant, prepared a request for proposals for a computer software system. 422 N.J. Super. at 469. The parties engaged in negotiation, and the resulting contract provided for installation of a system tailored to the specifications for the company in issue. Id. at 474. Because of the facts that the subject system was obtained via request for proposal and tailored to the client’s needs, the appellate court concluded that the NJCFA did not apply. Here, the Amended Complaint on its face brings this matter within the holdings in Princeton Healthcare -- Plaintiff complains that, like in Princeton Healthcare, it entertained bids and proposals from a select group of vendors for the roof system to be applied to its commercial 5 The NJCFA only applies to sales of “real estate,” which is not involved in this case, and “sales of merchandise.” N.J.S.A. 56:8–2. The NJCFA defines “merchandise” as including “any objects, wares, goods, commodities, services or anything offered, directly or indirectly to the public for sale.” N.J.S.A. 56:8–1(c) (emphasis added). New Jersey courts have repeatedly explained that “the public,” as used in the definition of “merchandise,” refers to “the public at large.” Princeton Healthcare Sys. v. Netsmart New York, Inc., 422 N.J. Super. 467, 473 (N.J. App. Div. 2011) (citing Finderne Mgmt. Co. v. Barrett, 402 N.J. Super. 546, 570 (N.J. App. Div. 2008)). “The CFA does not cover every sale in the marketplace” because “CFA applicability hinges on the nature of a transaction, requiring a case by case analysis.” Papergraphics Int'l, Inc. v. Correa, 389 N.J. Super. 8, 13 (N.J. App. Div. 2006); Lithuanian Commerce Corp. Ltd. v. Sara Lee Hosiery, 179 F.R.D. 450, 469 (D.N.J. 1998). The CFA does not reach custom-designed transactions. Princeton Healthcare Sys., 422 N.J. Super. at 473-474. Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 15 of 22 11 facility in Pennsylvania. (Am. Compl. at ¶ 70). Berks ultimately settled on GAF, which allegedly visited the site and provided specifications for a roof system meeting Plaintiff’s needs, and then purportedly provided oversight during the installation of that system. (Am. Compl. at ¶¶ 12-14). As a result, the transaction at issue is excluded from coverage under the NJCFA. See also, Temco Canada Div., RPM Canada v. Dartronics, Inc., 2013 WL 2444076, at *3 (D.N.J. June 4, 2013) (finding customized product is not “merchandise … within the purview of the [NJCFA]”). For this reason too, Plaintiff cannot assert a cognizable claim for alleged consumer fraud under New Jersey law. B. The NJCFA Claim Should Be Dismissed For Failure To Properly Plead All Elements Of An NJCFA Claim Even were the Court to reach the unlikely conclusion that New Jersey law applies to Plaintiff’s purported consumer fraud claim, Plaintiff’s NJCFA claim fails for multiple other, independent reasons. 1. The NJCFA Claim Should Be Dismissed For Failure To Properly Plead An Unconscionable Commercial Practice Recognized Under The NJCFA Plaintiffs must establish that GAF engaged in an “unlawful practice” to plead a CFA claim. Cox v. Sears, Roebuck & Co., 138 N.J. 2, 17 (N.J. 1994). Unlawful practices fall into three categories: 1) affirmative acts, 2) knowing omissions, and 3) regulatory violations. Id. To constitute consumer fraud, the business practice in question must be “misleading” and “stand outside the norm of reasonable business practice in that it will victimize the average consumer.” Bubbles N Bows LLC v. Fey Pub. Co., 2007 WL 2406980, *8 (D.N.J. Aug. 20, 2007) (citing Turf Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 16 of 22 12 Lawnmower Repair, Inc. v. Bergen Record Corp., 139 N.J. 392, 416 (1995). Alleged consumer fraud must raise a matter of public concern sufficient to trigger a suspicion of actual malice. Id. The conduct “must deal primarily with consumer fraud viewed as a whole in light of all surrounding circumstances.” Id. In this matter, Berks hinges its NJCFA claim on an alleged promise to provide a 15-year warranty after installation of the commercial roof in issue. However, New Jersey law is clear that statements as to future or contingent events do not constitute misrepresentations, intentional or negligent, even though they may turn out to be wrong. Stolba v. Wells Fargo & Co., 2011 WL 3444078, at *4 (D.N.J. Aug. 8, 2011) (citing Chatlos Sys., Inc. v. Nat’l Cash Register Corp., 479 F.Supp. 738, 749–49 (D.N.J.1979); United Mobile Homes, Inc. v. ING Inv. Mgmt., LLC, 34 Fed. Appx. 876, 877 (3d Cir. 2002)) (alleged promise not to foreclose in future not cognizable). See also, Alexander v. CIGNA Corp., 991 F. Supp. 2d 427, 436 (D.N.J. 1998) (statements that something will happen or is expected to happen in the future insufficient to state a claim for fraud); Mardini v. Viking Freight, Inc., 92 F. Supp. 2d 378, 385 (D.N.J. 1999) (dismissing fraud claim based on statement by employer regarding future promotion because alleged misrepresentation concerned a future event); Middlesex County Sewerage Auth. v. Borough of Middlesex, 181 A.2d 818 (N.J. Law Div. 1962) (“Statements as to future or contingent events, as to expectations and probabilities, or as to what will be or is intended to be done in the future, do not constitute misrepresentations even though they turn out to be false, at least where they are not made with intent to deceive, and where the parties have equal means of knowledge.”), aff'd, 79 N.J. Super. 24, certif. denied, 40 N.J. 501 (1963); Simpson v. Wider 709 A.2d 1266, 1373 (N.J. App. Div. 1999) (“Possibilities are not ‘presently existing facts.”). Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 17 of 22 13 Plaintiff pleads only a single throw-away statement in the entirety of the Amended Complaint that “GAF had no intention to honor its promise to provide BPDM with at 15-year warranty.” (Am. Compl. at ¶ 74) However, a mere promise to do something in the future, which goes unfulfilled, does not constitute fraud unless the promisor had no intention of keeping such promise at the time it was made. Stolba, 2011 WL 344078, at *4 (citing Scivoletti v. JP Morgan Chase Bank, N.A., 2010 WL 2652527, at *3 (D.N.J. June 25, 2010)). Accordingly, Plaintiff’s specious allegation is wholly insufficient to survive a motion to dismiss. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.” Id. While courts will accept well-pleaded allegations as true for the purposes of a motion to dismiss, they do not accept unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. Miree v. DeKalb Cnty., Ga., 433 U.S. 25, 27 n.2 (1977). There is nothing plausible regarding Plaintiff’s factually bereft, sweeping legal conclusion of intent, that a long-standing roofing manufacturer conducts business via false promises of warranties to commercially sophisticated clients. For this reason, too, Plaintiff’s NJCFA claim fails. Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 18 of 22 14 2. The NJCFA Claim Should Be Dismissed For Failure To Plead Any Aggravating Factors Separately, Plaintiff’s NJCFA claim should be dismissed for failure to allege substantial aggravating circumstances that rise to the level of unconscionability. Purported unfairness is inevitable where there is an allegation that a party breached a contract, but that fact standing alone does not entitle the non-breaching party to recovery under the NJCFA. D'Ercole Sales, Inc. v. Fruehauf Corp., 206 N.J. Super. 11, 31 (N.J. App. Div. 1985). For this reason, New Jersey courts reject attempts to convert ordinary breach of contract or breach of warranty claims into NJCFA claims. See Id. at 25 (N.J. App. Div. 1985) (“A breach of warranty, or any breach of contract, is not per se unfair or unconscionable, and a breach of warranty alone does not violate a consumer protection statute.”) (internal and external citations omitted). “The NJCFA requires that “substantial aggravating circumstances” accompany a breach of warranty in order to recover under the NJCFA.” Bianchi v. Lazy Days RV Center Inc., 2007 WL 1959268, at * 4 (D.N.J. July 5, 2007) (citing Suber v. Chrysler Corp., 104 F.3d 578, 587 (3d. Cir.1997)). In Bianchi, the plaintiff purchased a new recreational vehicle that included a limited warranty. Id. at *1. Within days, the odometer stopped working, and although the defendant in the first instance offered a potential correction (computer work at a Caterpillar facility), when that potential remedy did not repair the issue, the defendant allegedly failed to provide further solution. Id. at **1-2. The plaintiff sought to assert an NJCFA claim. However, the claim was dismissed for failure to allege cognizable, aggravating factors. Id. at *5. The Court finds that there are no facts alleged here that could be considered substantial aggravating factors. The facts alleged amount to no more than a breach of warranty. At most, plaintiff alleges Freightliner represented it was going to fix something that it was then unable to fix. There were no deceptive practices, false paperwork or safety hazards allegedly undertaken by Freightliner in breaching the Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 19 of 22 15 warranty in regard to the R.V.’s odometer. The facts alleged by Plaintiff are analogous to those raised in Bianchi (i.e., GAF allegedly made an unfulfilled promise to Berks, and allegedly suggested one mode of repair in connection with roof drains, but thereafter failed to remedy purported roof defects). Plaintiff fails to plead any semblance of substantial aggravating factors, and for this additional independent reason too, its NJCFA claim fails. 3. Plaintiff’s NJCFA Claim Should Be Dismissed For Failure To Plead With Particularity To state a cause of action under the NJCFA, a plaintiff must allege: “(1) an unlawful practice by the defendants (discussed supra); (2) an ascertainable loss by plaintiff; and (3) a causal nexus between the first two elements-defendants’ allegedly unlawful behavior and the plaintiff’s ascertainable loss.” Parker v. Howmedica Osteonics Corp., 2008 WL 141628, at *2 (D.N.J. Jan. 14, 2008). Additionally, an NJCFA claim sounding in fraud (like Plaintiff’s false promise allegations here) must meet the heightened pleading requirement under Fed R. Civ. P. 9(b). Tremco Canada Div. v. Dartronics, Inc., 2013 WL 244076 (D.N.J. June 4, 2013) (collecting cases). Fed. R. Civ. P. 9(b) requires that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Plaintiffs “alleging fraud must state the circumstances of the alleged fraud[ulent act] with sufficient particularity to place the defendant on notice of the ‘precise misconduct with which [it is] charged.’” Park v. M & T Bank Corp., 2010 WL 1032649, at *5 (D.N.J. Mar. 16, 2010) (citing Lum v. Bank of America, 361 F.3d 217, 223–24 (3d Cir. 2004)). As interpreted and applied by Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 20 of 22 16 the Third Circuit, Rule 9(b) requires “plaintiffs to plead ‘the who, what, when, where, and how: the first paragraph of any newspaper story.’” In re Advanta Corp. Sec. Litig., 180 F.3d 525, 534 (3d Cir. 1999) (quoting DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990)); see also Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007) (holding that Rule 9(b) requires a party alleging fraud to state the circumstances of the alleged fraud “with sufficient particularity to place the defendant on notice of the ‘precise misconduct with which [it] is charged.’”). Plaintiff appears to hinge its NJCFA claim on an alleged promise to provide a 15-year warranty after installation of the commercial roofing system at issue that supposedly induced Plaintiff to purchase the roofing system in the first instance. However, this central allegation is not only devoid of required particularity, but so muddled as to require outright dismissal. Instead of pleading with any necessary particularity, Plaintiff couches its pleadings of fraud in the alternative, alleging that either: (1) Defendant GAF affirmatively told it that it would be given a 15-year warranty regardless of the condition of the new roof (Am. Compl. at ¶ 24); (2) the Pennsylvania contractor expressly warranted that the roof would be covered by a 15-year warranty (Am. Compl. at ¶ 50); or (3) by supplying materials and supervising installation, GAF in that manner warranted that the roofing system would be effective for 15-years (Am. Compl. at ¶ 52). The substance and manner of the allegedly fraudulent promise, let alone the “who, what, when, where, and how” of the allegedly fraudulent promise, are simply absent. For this reason too, Plaintiff’s NJCFA claim must be dismissed. Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 21 of 22 17 CONCLUSION For all of the foregoing reasons, GAF respectfully requests that the Court enter an Order dismissing Plaintiff’s NJCFA claim (Count III) in its entirety, with prejudice. Dated: May 22, 2017 Respectfully submitted, By: s/ Kathleen H. Robinson ____________ David R. King, Esq. (SBN 310307) Kathleen H. Robinson, Esq. (SBN 203388) HERRICK, FEINSTEIN LLP One Gateway Center Newark, New Jersey 07102 (973)-274-2000 Email: dking@herrick.com Email: hrobinson@herrick.com Attorneys for Defendant Standard Industries Inc. HF 11481368v.1 #15637/0020 Case 5:16-cv-06415-JFL Document 20-1 Filed 05/22/17 Page 22 of 22 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA BERKS PLANT DESIGN MAINTENANCE, INC. Plaintiff, v. GAF MATERIALS CORPORATION a/k/a GAF Defendant. Case No. 5:16-cv-06415 (JFL) CERTIFICATE OF CONCURRENCE / NON-CONCURRENCE I, Kathleen H. Robinson, Esquire, certify that Plaintiff Berks Plant Design Maintenance Inc. does not concur in Defendant’s Motion to Dismiss Count III of the Amended Complaint. Dated: May 22, 2017 Respectfully submitted, By: s/ Kathleen H. Robinson_______________ David R. King, Esq. (SBN 310307) Kathleen H. Robinson, Esq. (SBN 203388) HERRICK, FEINSTEIN LLP One Gateway Center Newark, New Jersey 07102 (973)-274-2000 Email: dking@herrick.com Email: hrobinson@herrick.com Attorneys for Defendant Standard Industries Inc. Case 5:16-cv-06415-JFL Document 20-2 Filed 05/22/17 Page 1 of 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA BERKS PLANT DESIGN MAINTENANCE, INC. Plaintiff, v. GAF MATERIALS CORPORATION a/k/a GAF Defendant. Case No. 5:16-cv-06415 (JFL) ORDER ON MOTION TO DISMISS AND NOW, this _____ day of ___________________, 2017, upon consideration of Defendant’s Motion to Dismiss Count III of the Amended Complaint pursuant to Rule 12(b)(6), and upon consideration of the briefs of the parties, and oral argument, if any, IT IS HEREBY ORDERED that said motion is GRANTED. Count III (New Jersey Consumer Fraud Action Claim) is hereby dismissed with prejudice from the above-captioned matter. BY THE COURT: _________________________________ Case 5:16-cv-06415-JFL Document 20-3 Filed 05/22/17 Page 1 of 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA BERKS PLANT DESIGN MAINTENANCE, INC. Plaintiff, v. GAF MATERIALS CORPORATION a/k/a GAF Defendant. Case No. 5:16-cv-06415 (JFL) CERTIFICATION OF SERVICE Kathleen H. Robinson, of full age, hereby certifies as follows: 1. I am an attorney at law admitted to practice in the United States District Court for the Eastern District of Pennsylvania. I am an associate with the law firm of Herrick, Feinstein LLP, attorneys for Defendant GAF in the above-referenced proceeding. 2. On May 22, 2017 I caused a true and correct copy of Defendant’s Motion to Dismiss Count III of the Amended Complaint, and all supporting papers, to be filed electronically utilizing the CM/ECF system, and thereby, to be served by e-mail on that same date on the CM/ECF participants that receive electronic notification in these proceedings. 3. I certify under penalty of perjury that the foregoing is true and correct. Dated: May 22, 2017 ___s/ Kathleen H. Robinson __________ Kathleen H. Robinson Case 5:16-cv-06415-JFL Document 20-4 Filed 05/22/17 Page 1 of 1