Schojan et al v. Papa John's International, Inc. et al
Filing
76
ORDER: Defendant Papa John's Motion to Dismiss Counts III, IV, and V of the Second Amended Complaint and to Strike Plaintiffs' Demand for Injunctive and Declaratory Relief 67 is DENIED. Defendant Papa John's has until and including December 15, 2014, to file its Answer to the Second Amended Complaint. Signed by Judge Virginia M. Hernandez Covington on 12/8/2014. (AKH)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
BRUCE SCHOJAN, individually
and on behalf of all others
similarly situated, ET AL.,
Plaintiffs,
v.
Case No. 8:14-cv-1218-T-33MAP
PAPA JOHNS INTERNATIONAL, INC.,
ET AL.,
Defendants.
_______________________________/
ORDER
This matter comes before the Court pursuant to Defendant
Papa John’s Motion to Dismiss pursuant to Fed. R. Civ. P.
12(b)(1) and 12(b)(6) (Doc. # 67), filed on November 17, 2014.
Papa John’s 1 moves to dismiss Counts III, IV, and V of the
Second Amended Complaint and to strike Plaintiffs’ demands
for
injunctive
Schojan,
and
Timmons,
declaratory
and
relief.
Tollerton
filed
(Id.).
a
Plaintiffs
response
in
opposition to the Motion on December 4, 2014. (Doc. # 74).
For the reasons stated below, the Motion is denied.
I.
1
Background
The remaining Defendants in this action are Papa John’s
International, Inc. and Papa John’s USA, Inc. This Court
will refer to the Defendants collectively as Papa John’s.
However, the Defendants refer to Papa John’s International,
Inc. as PJ International and Papa John’s USA, Inc. as PJ
USA.
Plaintiffs filed this putative class action in state
court on March 28, 2014, alleging that Papa John’s negligently
misrepresented a sales tax for food delivered to customers
that included a sales tax on the Papa John’s delivery fee.
(Doc. # 2 at ¶ 40). Furthermore, Plaintiffs claim that Papa
John’s charged and collected excess sales tax on delivery
fees charged to its customers in violation of Florida law.
(Id.).
Specifically,
Plaintiffs
allege
that
Papa
John’s
included in the base amount upon which the tax was calculated
a $3.00 delivery fee that Plaintiffs claim is exempt from
taxation under Florida law because it is not “part of the
[relevant pizza] sale[s].” (Doc. # 15 at 2).
Papa John’s removed the case to this Court on May 22,
2014, under the Class Action Fairness Act. (Doc. # 1). On
June 11, 2014, Plaintiffs filed an unopposed motion to extend
the time to file a motion for class certification. (Doc. #
13). This Court granted the motion in part and extended the
deadline to September 15, 2014. (Doc. # 14). Thereafter, on
June 13, 2014, Papa John’s moved to dismiss or alternatively
stay this action “because the relief sought – a refund of a
purported sales tax overcharge – is barred by section 213.756,
Florida Statutes, by the voluntary payment doctrine, and
2
because Plaintiffs failed to exhaust their administrative
remedies with the Florida Department of Revenue.” (Doc. #
14).
This Court denied Papa John’s motion to dismiss on July
23, 2014, and directed Papa John’s to file a response to the
Complaint. (Doc. # 34). On September 15, 2014, the parties
filed agreed motions to seal the motion for summary judgment
and motion for class certification. (Doc. ## 50, 51). The
Court denied the parties’ request to seal documents and
directed the motions be filed on the open record. (Doc. #
48). Plaintiffs then filed their motion to certify class on
September 30, 2014. (Doc. # 57). That motion was denied
without prejudice when this Court granted Plaintiffs leave to
amend their Complaint and directed that the motion to certify
class could be refiled in conjunction with the new complaint.
(Doc. # 58).
Plaintiffs filed the Second Amended Complaint on October
6, 2014. (Doc. # 59). The Motion to Certify Class was filed
on October 16, 2014. (Doc. # 60). Papa John’s requested an
extension of time to respond to the Motion until and including
November 17, 2014, which this Court granted. (Doc. ## 63,
64). Papa John’s filed its response in opposition to the
Motion on November 18, 2014. (Doc. # 68). Simultaneously,
3
Papa John’s filed the present Motion to Dismiss the Second
Amended
Class
Action
Complaint
and
Strike
Demand
for
Injunctive and Declaratory Relief (Doc. # 67), which is now
ripe for the Court’s review.
II. Legal Standard
A. Rule 12(b)(1)- Lack of Subject Matter Jurisdiction
Federal
courts
are
courts
of
limited
jurisdiction.
Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994).
“[B]ecause a federal court is powerless to act beyond its
statutory grant of subject matter jurisdiction, a court must
zealously insure that jurisdiction exists over a case, and
should
itself
raise
the
question
of
subject
matter
jurisdiction at any point in the litigation where a doubt
about jurisdiction arises.” Smith v. GTE Corp., 236 F.3d 1292,
1299 (11th Cir. 2001). Motions to dismiss for lack of subject
matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) may
attack jurisdiction facially or factually. Morrison v. Amway
Corp., 323 F.3d 920, 924 n.5 (11th Cir. 2003).
A facial attack on the complaint requires “the court
merely to look and see if the plaintiff has sufficiently
alleged a basis for subject matter jurisdiction, and the
allegations in [the] complaint are taken as true for the
4
purposes of the motion.” Lawrence v. Dunbar, 919 F.2d 1525,
1529 (11th Cir. 1990)(quoting Menchaca v. Chrysler Credit
Corp., 613 F.2d 507, 511 (5th Cir. 1980)). Factual attacks,
in comparison, challenge “the existence of subject matter
jurisdiction in fact, irrespective of the pleadings. . . .”
Scarfo v. Ginsberg, 175 F.3d 957, 960 (11th Cir. 1999)(quoting
Lawrence, 919 F.2d at 1529). When the jurisdictional attack
is factual, the presumption of truthfulness afforded to a
plaintiff under Fed. R. Civ. P. 12(b)(6) does not attach.
Scarfo, 175 F.3d at 960. Because the very power of the Court
to hear the case is at issue, the Court is free to weigh
evidence outside the four corners of the complaint. Eaton v.
Dorchester Dev., Inc., 692 F.2d 727, 732 (11th Cir. 1982).
B. Rule 12(b)(6) - Failure to State a Claim
On a motion to dismiss, this Court accepts as true all
of the factual allegations in the complaint and construes
them in the light most favorable to the plaintiff. Jackson v.
Bellsouth Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).
Further, this Court favors the plaintiff with all reasonable
inferences from the allegations in the complaint. Stephens v.
Dep’t of Health & Human Servs., 901 F.2d 1571, 1573 (11th
Cir. 1990)(“On a motion to dismiss, the facts stated in [the]
5
complaint and all reasonable inferences therefrom are taken
as true.”). However, the Supreme Court explains that:
While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal
citations omitted). Further, courts are not “bound to accept
as true a legal conclusion couched as a factual allegation.”
Papasan v. Allain, 478 U.S. 265, 286 (1986).
In
accordance
with
Twombly,
Federal
Rule
of
Civil
Procedure 8(a) calls “for sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting
Twombly, 550 U.S. at 570). A plausible claim for relief must
include “factual content [that] allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
III. Analysis
A. Lack of Subject Matter Jurisdiction
In order to establish Article III standing, a plaintiff
must
demonstrate:
(1)
an
injury
6
in
fact,
(2)
a
causal
connection between the injury and the conduct complained of,
and (3) that the injury is likely to be redressed by a
favorable decision. See Lujan v. Defenders of Wildlife, 504
U.S. 555, 560–61 (1992). An “injury in fact [consists of] an
invasion of a legally protected interest which is (a) concrete
and
particularized
conjectural
or
and
(b)
hypothetical.”
actual
Id.
at
or
imminent,
not
560
(citations
and
internal quotations omitted). An allegation of an abstract
injury will not suffice. See E.F. Hutton & Co., Inc. v.
Hadley, 901 F.2d 979, 984 (11th Cir. 1990) (“Plaintiffs in
the federal courts must have a personal stake in the outcome
of the case, and must allege some threatened or actual injury
resulting from the putatively illegal action. Abstract injury
is not enough. . . . ”) (citations and internal quotations
omitted).
Absent
allegations
establishing
“a
personal
detriment” to the plaintiff, jurisdiction does not exist.
Zinn v. SCI Funeral Servs. of Fla., Inc., 568 F. App’x 841,
842 (11th Cir. 2014).
According
to
Papa
John’s,
Plaintiff
Timmons
lacks
standing to bring the FDUPTA claim because the “[i]nvoices
could not possibly have caused him any Article III injury.”
(Doc. # 67 at 18). First, Papa John’s submits that “in his
September 10, 2014 Affidavit, Timmons described in detail an
7
order that he claimed to have placed some time before this
lawsuit
[was]
filed.”
(Id.).
Eight
days
later,
Timmons
retracted the statement because “he did not know whether he
had placed the [] Order before or after he became aware that
Papa John’s restaurants charged sales tax on delivery fees.”
(Id.).
Furthermore, Papa John’s argues that “Timmons’ latest
retraction calls into question whether he ever ordered from
Papa John’s at a time when he was unaware that Papa John’s
charged a sales tax on delivery fees.” (Id. at 19).
Finally, Papa John’s argues that the Plaintiffs lack
standing to seek injunctive or declaratory relief because
they have not alleged and cannot show a likelihood of future
injury from the invoices. (Id. at 20). Papa John’s contends
that through involvement in this case, Plaintiffs are aware
of that which they complain and therefore cannot suffer future
harm. (Id. at 21). Specifically, “because they are plainly
aware
that
Papa
John’s
restaurants
charge
sales
tax
on
delivery fees, Plaintiffs have not alleged and cannot prove
a real and immediate threat that they will be harmed in the
future by the allegedly deceptive invoices.” (Id. at 23).
According to Plaintiffs, however, “Defendants’ standing
argument should not be a substitute for summary judgment and
should not reach the merits or existence of any potential
8
affirmative defenses upon which defendants might prevail at
trial or by summary judgment.” (Doc. # 74 at 17). Plaintiffs
further state that “even though Timmons knew of defendants’
unfair practices when he made the purchase referenced in his
affidavit, [that] does not change the fact that he suffered
an injury-in-fact by having to pay a sales tax he did not
lawfully
owe.”
(Id.).
Plaintiffs
aver
that
eliminating
Timmons’ standing at this phase of the proceeding would in
essence grant summary judgment on an affirmative defense.
(Id.). Plaintiffs further argue that they “are not required
to prove a likelihood of future harm to themselves in order
to bring a claim for declaratory or injunctive relief.” (Id.
at 19).
The
amount
of
proof
required
to
establish
standing
varies with the progression of the litigation. See Lujan, 504
U.S. at 561 (“Since [the standing elements] are not mere
pleading requirements but rather an indispensable part of the
plaintiff's case, each element must be supported in the same
way as any other matter on which the plaintiff bears the
burden of proof, i.e., with the manner and degree of evidence
required at the successive stages of the litigation.”). “To
have standing to sue as a class representative it is essential
that a plaintiff must be a part of that class, that is, he
9
must possess the same interest and suffer the same injury
shared by all members of the class he represents.” Schlesinger
v. Reservists Comm. to Stop the War, 418 U.S. 208, 216 (1974).
Therefore, at this time, Plaintiffs have adequately pled
sufficient standing to bring this action. As the litigation
progresses, however, Plaintiffs will be required to establish
that they have Article III standing to raise the class claims
prior to this Court considering whether Plaintiffs adequately
represent the proposed class. See Prado–Steiman ex rel. Prado
v. Bush, 221 F.3d 1266, 1279 (11th Cir. 2000)(“[P]rior to the
certification of a class . . . , the district court must
determine that at least one named class representative has
Article
III
standing
to
raise
each
class
subclaim.”).
However, Plaintiffs need not prove this requirement at this
juncture. “Such fact-intensive Article III standing inquiry
is better suited to the class-certification.” Porter, 2013 WL
6839872, at *2-3; see Murray v. Auslander, 244 F.3d 807, 810
(11th Cir. 2001) (noting that standing in class actions is a
fact-specific inquiry); cf. Clancy v. Bromley Tea Co., No.
12–cv–3003–JST, 2013 WL 4081632, at *4 (N.D. Cal. Aug. 9,
2013)(declining to dismiss a class action on standing grounds
even though the purported class related to products that the
named
plaintiff
did
not
purchase,
10
and
noting
that
“the
question of whether a proposed class can bring claims related
to other products is an issue properly addressed at the class
certification stage.”). Therefore, Papa John’s Motion – as to
the issue of standing - is denied.
B. Failure to State a Claim
According to Papa Johns, Plaintiffs failed to state a
claim under the Florida Deceptive and Unfair Trade Practices
Act (FDUTPA). (Doc. # 67 at 9). To state a claim under FDUTPA,
a plaintiff must demonstrate: (1) a deceptive act or unfair
practice, (2) causation, and (3) actual damages. Hetrick v.
Ideal Image Dev. Corp., 758 F. Supp. 2d 1220, 1229 (M.D. Fla.
2010).
To begin, Papa John’s contends that Plaintiffs have
failed to plausibly allege that they were subjected to a
deceptive
act
or
unfair
practice.
(Doc.
#
67
at
9).
Specifically, Papa John’s argues that Plaintiffs “must allege
facts showing that they purchased goods or services from both
Papa John’s International and Papa John’s USA, and that both
entities committed unfair or deceptive trade practices in
connection
with
Plaintiffs’
purchases.”
(Id.
at
10).
According to Papa John’s, the Second Amended Complaint fails
to satisfy the following requirements:
11
Plaintiffs fail to allege facts showing or
suggesting that any Plaintiff purchased goods or
services from [Papa John’s International], which
they admit sold them no pizzas and owns no Papa
John’s restaurants in Florida.
Plaintiffs fail to allege that Plaintiffs, Schojan,
Tollerton, and Timmons, purchased goods or services
from [Papa John’s USA], and these Plaintiffs have
admitted they never purchased food for delivery
from PJUSA.
Plaintiffs Roberts and Brown fail to allege that
they purchased food for delivery from PJUSA.
(Id.).
Also, Papa John’s contends that Counts III and IV should
be dismissed because the Second Amended Complaint “fails to
allege that each Plaintiff suffered loss in connection with
a purchase of pizza from Defendants.” (Id.). Furthermore,
Papa John’s argues that Counts III and IV should be dismissed
as “the Invoices are not deceptive as a matter of law.” (Id.
at 11). Papa John’s also argues that Plaintiffs have not
sufficiently alleged facts showing the Invoices caused them
harm. (Id. at 14). Namely, “Plaintiffs do not allege that
they relied on the Invoices or that any representation or
omission in the Invoices otherwise caused them to purchase or
pay a premium for Papa John’s pizza.” (Id. at 15). As such,
Papa John’s submits that the Second Amended Complaint merely
12
recites
elements
without
sufficient
factual
support
and
therefore must be dismissed. (Id.).
In response, Plaintiffs submit that they have alleged a
deceptive act or unfair practice as Papa John’s “charges their
Florida customers a sales tax on delivery fees when none is
lawfully owed.” (Doc. # 74 at 4). Specifically, “they do so
by preparing and presenting invoices, e-mails, credit card
charge statements, and website statements that mislead a
consumer into believing that specific, lawful tax is owed
under
Florida
law.”
(Id.).
Furthermore,
according
to
Plaintiffs, the allegations detail examples of “defendants’
deceitful and unfair practices, it also alleges that over
$5,000,000 has been wrongfully confiscated from Floridians
and that the defendants’ continued unlawful conduct causes
Floridians to pay over $100,000 of sales tax every month that
is not owed and which should never have been charged.” (Id.
at 6). Plaintiffs aver that consumers have been misled into
believing that they were paying a lawful tax when in fact
they were not. (Id.).
“[W]hen
support
a
considering
finding
of
whether
unfair
a
defendant's
methods
of
actions
competition,
unconscionable, deceptive, or unfair acts or practices in the
conduct of any trade or commerce, courts have regarded the
13
concept as extremely broad.” MJS Music Publ'n, LLC v. Hal
Leonard Corp., No. 8:06–cv–488–T30EAJ, 2006 WL 1208015, at *2
(M.D. Fla. May 4, 2006)(internal quotation marks omitted).
Whether particular conduct constitutes an unfair or deceptive
trade practice is a question of fact. Siever v. BWGaskets,
Inc., 669 F. Supp. 2d 1286, 1292-93 (M.D. Fla. 2009).
In order for this Court to make a determination as to
whether there was a deceptive act or unfair practice, the
Court would be required to look outside the four corners of
the Second Amended Complaint, which this Court declines to do
at this time. Such a determination is better suited for the
summary judgment stage. As this Court finds it appropriate to
reserve its analysis on this initial element, the Court
further declines to address the elements of causation and
actual damages at this juncture. The Court will make its
determination on Plaintiffs’ FDUTPA claim - in its entirety
– when it is not confined to the four corners of the operative
complaint. Therefore, Papa John’s Motion is denied.
Accordingly, it is hereby
ORDERED, ADJUDGED, and DECREED:
(1)
Defendant Papa John’s Motion to Dismiss Counts III, IV,
and V of the Second Amended Complaint and to Strike
14
Plaintiffs’ Demand for Injunctive and Declaratory Relief
(Doc. # 67) is DENIED.
(2)
Defendant Papa John’s has until and including December
15, 2014, to file its Answer to the Second Amended
Complaint.
DONE and ORDERED in Chambers in Tampa, Florida, this 8th
day of December, 2014.
Copies: All Counsel of Record
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