In Re Sears, Roebuck & Company Tools Marketing and Sales Practices Litigation
Filing
120
MEMORANDUM Opinion Signed by the Honorable John F. Grady on 3/22/2012. Mailed notice(cdh, )
05-4742.121-JCD
March 22, 2012
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
IN RE SEARS, ROEBUCK & CO.
TOOLS MARKETING AND SALES
PRACTICES LITIGATION
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MDL-1703
No. 05 C 4742
----------------------------------JEFFREY GREENFIELD,
individually and on behalf of all
others similarly situated,
Plaintiff,
v.
SEARS, ROEBUCK & CO.,
Defendant.
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No. 05 C 4744
MEMORANDUM OPINION
Before the court are two motions: (1) the motion of defendant
Sears, Roebuck & Company to dismiss Count II of plaintiff Jeffrey
Greenfield’s first amended class action complaint; and (2) the
motion of plaintiff for certification of a Florida class.
reasons
discussed
below,
defendant’s
motion
is
For the
granted,
and
plaintiff’s motion is denied.
BACKGROUND
In this multidistrict litigation (“MDL”), plaintiffs claim
that defendant Sears, Roebuck & Company (“Sears”) deceptively
advertised its line of “Craftsman” tools as manufactured in the
United States when in fact many of the tools are foreign-made or
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contain significant foreign parts.
This is the last remaining
member case of the MDL pending before this court.
The procedural
history of these cases is as follows:
There are seven “member cases” that are or were part of
this multidistrict litigation filed in or transferred to
this court for pretrial proceedings. Four of them--Cyr
(05 CV 2627), Chatham (05 CV 2852), Hutson (05 CV 4745),
and Tidwell (05 CV 5881)--were voluntarily dismissed. We
remanded another--Santamarina (05 CV 4743)--to the
California state court.
Most of the rulings we have issued have been in
Anderson (05 CV 2623). In December 2007, we issued an
opinion denying plaintiffs’ first motion for class
certification. In re Sears, Roebuck & Co. Tools Mktg. &
Sales Practices Litig., Nos. 05 CV 4742 & 05 CV 2623,
2007 WL 4287511 (N.D. Ill. Dec. 4, 2007). Plaintiffs
defined the putative class as “[a]ll persons and entities
throughout the United States” who purchased one or more
Craftsman tools that were not all or virtually all made
in the United States. They sought certification of a
nationwide class for their unjust enrichment claims and
an undefined set of classes or subclasses under the laws
of seven states--Alabama, Ohio, Pennsylvania, Indiana,
Connecticut, Texas, and Minnesota--for their consumer
fraud claims. We denied certification for a number of
reasons, including the overbreadth of the proposed
classes, lack of typicality, and lack of predominance.
Subsequently, plaintiffs again amended their complaint,
and after some of the named plaintiffs were dismissed,
the remaining plaintiffs were Stephen Jolley, a
Pennsylvania citizen, and Curtis Oates, an Indiana
citizen.
Jolley moved for certification of a
Pennsylvania class, and Oates moved for certification of
an Indiana class. In October 2009, we issued an opinion
denying those motions. In re Sears, Roebuck & Co. Tools
Mktg. & Sales Practices Litig., Nos. 05 CV 4742 & 05 CV
2623, 2009 WL 3460218 (N.D. Ill. Oct. 20, 2009).
We
rejected the proposed classes because they were
materially identical to the classes plaintiffs had
previously proposed, plaintiffs made no attempt to
distinguish our prior ruling, and none of plaintiffs’ new
arguments were persuasive. Some months later, Jolley and
Oates reached a settlement with Sears, and by agreement
of the parties, we entered an order on August 16, 2010
dismissing those two plaintiffs’ claims with prejudice.
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Plaintiffs’ counsel then shifted their efforts to
Greenfield (05 CV 4744), the seventh case pending in the
MDL; it had been dormant since its filing in 2005.
Greenfield, who seeks to represent classes of Florida
purchasers of Craftsman tools, filed an amended complaint
on August 18, 2010.
In re Sears, Roebuck & Co. Tools Mktg. & Sales Practices Litig.,
No. 05 CV 4742, 2011 WL 2745772, at *3 (N.D. Ill. July 11, 2011)
(footnotes omitted).
Greenfield’s complaint is titled “First Amended Class Action
Complaint.”
Greenfield is a Florida resident who alleges that in
2004, he bought a Craftsman ratcheting screwdriver from the Sears
store in Aventura, Florida that “did not qualify to be marketed as
Made in the USA.”
(Am. Compl. ¶¶ 6-7, 64.)
He alleges that
“[s]urrounding the tool was in-store signage which [he] recalls
stated the following: Craftsman Quality, Guaranteed for life, Made
in the USA, only $19.95.”
He also alleges that he “saw print
advertisements, in-store signage, television commercials (including
ones with Bob Vila and AJ Foyt) and markings on Craftsman tools,
all of which stated that Craftsman products are ‘made in the
U.S.A.’”
and
that
he
purchased
his
Craftsman tools were made in the U.S.A.
The
complaint
further
alleges
tool
believing
that
all
(Am. Compl. ¶ 6.)
that
in
the
year
2000,
approximately 20 percent of Craftsman products were not made in the
United States, and by 2005, this number had increased to 70
percent.
(Am. Compl. ¶ 41.)
Sears had conducted and was aware of
research showing that consumers believed that “Made in USA” was a
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significant attribute of Craftsman tools.
(Am. Compl. ¶¶ 42-44.)
In addition:
Sears knew that if it became known that its Craftsman
products were not made in the U.S.A., then it would be
forced to reduce its prices and profit margins on
Craftsman to be in line with other manufacturers.
Sears decided not to correct the misconception its
customers had about the origin of its Craftsman products
because such a disclosure would cost it money.
Sears chose not to make it known that such a high
percentage of its tools were not made in the U.S.A.,
despite the actual knowledge that its customers believed
Craftsman products were made in the U.S.A., because such
a disclosure would force Sears to reduce the profit
margin on its Craftsman line of products.
(Am. Compl. ¶¶ 47-49.)
Greenfield
asserts
claims
for
violation
of
the
Florida
Deceptive and Unfair Trade Practices Act (“FDUTPA”) (Count I),
breach of warranty under the Magnuson-Moss Warranty Act (Count II),
and unjust enrichment (Count III).
class of Florida plaintiffs.
He seeks certification of a
Sears moves for dismissal of Count
II.
DISCUSSION
A.
Defendant’s Motion to Dismiss Count II
In Count II, Greenfield alleges that Sears made false “express
warranties” and “express representations” in its advertising and on
some of its Craftsman packaging that Craftsman tools were “Made in
the USA.” (Am. Compl. ¶¶ 111-114.) According to Greenfield, these
“Made in USA” representations “constituted warranties that because
the Craftsman tools were made in America and by American workers,
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they were of higher quality than tools made outside America,” Am.
Compl. ¶ 117, and because they were false, violated the MagnusonMoss Warranty Act, 15 U.S.C. § 2301 et seq. (the “Act”).
The Act
provides that “a consumer who is damaged by the failure of a
supplier, warrantor, or service contractor to comply with any
obligation under this chapter, or under a written warranty, implied
warranty, or service contract, may bring suit for damages and other
legal and equitable relief.”
15 U.S.C. § 2310(d)(1).
In Anderson (to which we have also referred as Chatham), 05 C
2623, we issued an opinion granting Sears’s motion to dismiss,
among other claims, the plaintiffs’ Magnuson-Moss claim.
In re
Sears, Roebuck & Co. Tools Mktg. & Sales Practices Litig., Nos. 05
CV 4742 & 05 CV 2623, 2006 WL 1443737, at *3-4 (N.D. Ill. May 17,
2006).
We agreed with Sears that the “Made in USA” representation
does not meet the Act’s definition of a “written warranty,” which
is as follows:
A) any written affirmation of fact or written promise
made in connection with the sale of a consumer product by
a supplier to a buyer which relates to the nature of the
material or workmanship and affirms or promises that such
material or workmanship is defect free or will meet a
specified level of performance over a specified period of
time, or
(B) any undertaking in writing in connection with the
sale by a supplier of a consumer product to refund,
repair, replace, or take other remedial action with
respect to such product in the event that such product
fails to meet the specifications set forth in the
undertaking,
which written affirmation, promise, or undertaking
becomes part of the basis of the bargain between a
supplier and a buyer for purposes other than resale of
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such product.
15 U.S.C. § 2301(6).
In our opinion, we held:
Sears maintains that the phrase “Made in USA” does not
constitute a “written warranty” because it does not
affirm or promise that the material or workmanship is
defect-free or will perform at a specified level over a
specified time.
We agree.
The phrase is a product
description that does not inform consumers that the tools
are defect-free or make any representation about
performance at a specified level over a specified time.
We
are
unpersuaded
by
plaintiffs’ curious
(and
unsupported) argument that “Made in USA” is a
representation that the tool will have a “lifetime level
of performance.”
Although the phrase does arguably
relate to the “nature” of the material or workmanship, it
fails to satisfy the defect-free/performance prong of §
2301(6)(A).
2006 WL 1443737, at *4 (citation omitted).
In his brief in response to the instant motion, plaintiff
persists in maintaining that the “‘specified level of performance
over a specified period of time’ is that the Craftsman products are
‘Made in America’ which must be a lifetime level of performance, as
the American workmanship of a product cannot change over time from
American made to made in China.”
(Pl.’s Opp’n to Def.’s Mot. to
Partially Dismiss the Am. Compl. at 4.)
We remain unpersuaded.
Plaintiff would have us ignore the plain language of the Act, which
requires an affirmance of a specified level of performance and a
specified
period
of
time.
“Made
in
the
USA”
is
not
a
representation that satisfies this subsection (A) requirement. Nor
does it meet subsection (B)’s requirement of a written “undertaking
. . . to refund, repair, replace, or take other remedial action.”
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No action whatsoever is promised.
Plaintiff contends that even if the phrase “Made in USA” does
not constitute a written warranty, he “should be allowed to pursue
a claim for breach of implied warranty under the Act.”
Opp’n at 6.)
(Pl.’s
This argument strikes us as deliberately vague.
It
is unclear whether it is an assertion that the complaint adequately
alleges a breach of implied warranty, or, rather, a concession that
it does not allege such a breach, coupled with a request to amend
the complaint.
Plaintiff does not explicitly seek to amend the
complaint. Either way, the argument fails. In his response brief,
plaintiff maintains that Sears breached the implied warranty of
merchantability arising under Florida law, but nowhere in the
complaint is this breach of implied warranty alleged.
And it is
far too late in this litigation to permit an amendment to the
complaint.
In 2006, plaintiffs made the same argument that the
phrase “Made in USA” constitutes an “implied” warranty, and we
rejected it, stating that we did not understand how the phrase
could be both an express and an implied warranty.
Dictionary
defines
an
“implied
warranty”
as
“[a]n
Black’s Law
obligation
imposed by the law when there has been no representation or
promise.” Black’s Law Dictionary 1725 (9th ed. 2009). Plaintiff’s
claim is based on an express representation, and he makes no effort
to address our prior ruling.
Even if Greenfield’s complaint adequately alleged a breach of
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an implied warranty under the Act, the claim would nonetheless fail
because plaintiff has not alleged that he provided Sears with the
requisite “reasonable opportunity to cure” the alleged failure to
comply with a warranty obligation.
The Act provides in pertinent
part:
No action (other than a class action or an action
respecting a warranty to which subsection (a)(3) of this
section applies) may be brought under subsection (d) of
this section for failure to comply with any obligation
under any written or implied warranty or service
contract, and a class of consumers may not proceed in a
class action under such subsection with respect to such
a failure except to the extent the court determines
necessary to establish the representative capacity of the
named plaintiffs, unless the person obligated under the
warranty or service contract is afforded a reasonable
opportunity to cure such failure to comply. In the case
of such a class action (other than a class action
respecting a warranty to which subsection (a)(3) of this
section applies) brought under subsection (d) of this
section for breach of any written or implied warranty or
service contract, such reasonable opportunity will be
afforded by the named plaintiffs and they shall at that
time notify the defendant that they are acting on behalf
of the class. In the case of such a class action which
is brought in a district court of the United States, the
representative capacity of the named plaintiffs shall be
established in the application of rule 23 of the Federal
Rules of Civil Procedure.
15 U.S.C. § 2310(e) (emphasis added); see also Cunningham v.
Fleetwood Homes of Georgia, Inc., 253 F.3d 611, 618 (11th Cir.
2001) (“[P]rior to bringing suit for breach of warranty [under the
Act], a consumer must give persons obligated under the warranty a
reasonable opportunity to ‘cure’ the failure to comply with the
obligations at issue.”).
Plaintiff argues that pursuant to the language of § 2310(e),
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“a class action may be filed without notice and opportunity to
cure.”
(Pl.’s Opp’n at 8.)
That is true; the statute allows a
Magnuson-Moss class action to be brought before the defendant is
given an opportunity to cure (only to the point of establishing the
named plaintiffs’ representative capacity), but plaintiff did not
file a Magnuson-Moss class action, which requires at least one
hundred named plaintiffs.
15 U.S.C. § 2310(d).
As Sears points
out, Count II is brought as an individual-consumer claim, which
must comply with the pre-filing opportunity to cure requirement.
Plaintiff submits that even if he was not exempted from having
to afford Sears a reasonable opportunity to cure, he satisfied this
requirement by sending Sears a letter on February 28, 2006, four
years before he amended his complaint to add the Magnuson-Moss
claim.
(Pl.’s Opp’n at 10 & Ex. 1.)
plaintiff’s brief.
The letter is attached to
This argument misses the mark.
The complaint
fails to allege that plaintiff provided Sears with an opportunity
to cure, and it does not mention the letter.
We will not permit
amendments to the complaint at this juncture.
Moreover, plaintiff
cannot rely on the letter to demonstrate notice because it did not
comply
with
the
notice
requirements
of
Fla.
Stat.
Ann.
§
672.607(3)(a), which the parties agree is applicable. The statute,
a UCC provision, provides that the “buyer must within a reasonable
time after he or she discovers or should have discovered any breach
notify the seller of breach or be barred from any remedy.”
This
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provision is supplemented by a comment 4, which states: “The
content of the notification need merely be sufficient to let the
seller know that the transaction is still troublesome and must be
watched. . . . The notification which saves the buyer’s rights
under this Article need only be such as informs the seller that the
transaction is claimed to involve a breach, and thus opens the way
for normal settlement through negotiation.”
The letter plaintiff
relies upon does not meet even this minimum standard because it
fails to identify any “transaction” or product that allegedly
involved a breach.
The purportedly defective Craftsman tool that
Greenfield
is
bought
not
identified
in
the
letter,
and
the
complaints on file at the time did not identify any particular tool
that Greenfield had bought.
Because plaintiff has failed to state a claim for breach of
warranty under the Magnuson-Moss Warranty Act, Count II will be
dismissed.
B.
Plaintiff’s Motion for Class Certification
Federal Rule of Civil Procedure 23 allows a member of a class
to sue as a representative of the class only if (1) joinder of all
members is impractical because the class is so numerous, (2)
questions
of
law
or
fact
are
common
to
the
class,
(3)
the
representative’s claims are typical of those of the class, and (4)
the representative will fairly and adequately protect the interests
of the class.
Fed. R. Civ. P. 23(a).
“All of these elements are
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prerequisites to certification; failure to meet any one of them
precludes certification as a class.”
Retired Chicago Police Ass’n
v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993).
The plaintiff also must show that the action is maintainable
under one of the three categories of Rule 23(b).
Here, class
certification is sought under Rule 23(b)(3), which requires that
common
questions
of
law
or
fact
predominate
over
questions
affecting only individual members and that a class action is the
best
method
controversy.
for
fairly
and
efficiently
adjudicating
the
The movant bears the burden of proving that all of
Rule 23’s requirements are satisfied. Trotter v. Klincar, 748 F.2d
1177, 1185 (7th Cir. 1984).
That is, “he must be prepared to prove
that there are in fact sufficiently numerous parties, common
questions of law or fact, etc.”
Wal-Mart Stores, Inc. v. Dukes, --
- U.S. ----, 131 S. Ct. 2541, 2551, 180 L. Ed. 2d 374 (2011).
“Class certification requires a rigorous investigation into the
propriety of proceeding as a class . . . .”
Livingston v.
Associates Fin., Inc., 339 F.3d 553, 558 (7th Cir. 2003); see also
Dukes, 131 S. Ct. at 2551.
On a motion for class certification, we need not necessarily
accept
the
plaintiff’s
allegations
as
true.
See
Szabo
Bridgeport Machs., Inc., 249 F.3d 672, 675-76 (7th Cir. 2001).
v.
A
court “may not refuse to certify a class on the ground that it
thinks
the
class
will
eventually
lose
on
the
merits,”
Loeb
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Industries, Inc. v. Sumitomo Corp., 306 F.3d 469, 480 (7th Cir.
2002), but where a question of suitability for class treatment
overlaps with a merits question, we must “make a preliminary
inquiry into the merits,” Szabo, 249 F.3d at 676.
See also Dukes,
131 S. Ct. at 2551 (“Frequently [the required] ‘rigorous analysis’
will entail
some
underlying claim.
overlap with
the
merits of
the
plaintiff’s
That cannot be helped.”).
As explained above, we denied plaintiffs’ previous motions for
class certification. In their first motion, plaintiffs defined the
putative class as “[a]ll persons and entities throughout the United
States” who purchased one or more Craftsman tools that were not all
or
virtually
all
made
in
the
United
States.
They
sought
certification of a nationwide class for their unjust enrichment
claims and an undefined set of classes or subclasses under the laws
of seven states for their consumer fraud claims.
at *4.
2007 WL 4287511,
In the second and third motions, plaintiffs used largely
the same definition with geographical and temporal limitations,
defining the putative classes as “all persons” who purchased one or
more Craftsman tools in Pennsylvania or Indiana between January 1,
2000 and December 2, 2004, that were not all or virtually all made
in the United States.
2009 WL 3460218, at *4.
In both of our decisions on plaintiffs’ motions, we held that
class treatment was not appropriate for several reasons.
proposed classes were
The
wildly overbroad; they included persons who
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could not prove deception due to the fact that they (1) bought
Craftsman tools but never saw any Craftsman advertising; (2) bought
the tools but never saw Craftsman “Made in USA” advertising; or (3)
bought the tools with the knowledge that they were not made in the
United States.
We followed the reasoning of Oshana v. Coca-Cola
Co., 472 F.3d 506 (7th Cir. 2006), in which the plaintiff brought
unjust enrichment and statutory consumer fraud claims based on the
Coca-Cola Company’s alleged failure to disclose that fountain Diet
Coke and bottled Diet Coke were not identical products.
The
Seventh Circuit noted that both of these claims required proof that
the plaintiff was deceived.
Id. at 513-15.
Because plaintiff’s
class definition required only the purchase of a fountain Diet Coke
and therefore
could
include
deceived
could
not
and
millions
show
any
of
people
damage,
let
who
were not
alone
damage
proximately caused by the alleged deception, the Seventh Circuit
affirmed the district court’s holding that the proposed class was
improper.
Here,
as
in
Oshana,
plaintiffs’
proposed
class
definition was improper; it included many class members who were
not deceived and therefore could not have suffered any damage.
Another reason for denying class certification was plaintiffs’
failure to demonstrate that their claims were sufficiently typical
of the putative class.
The evidence is that advertising for
Craftsman tools varies greatly and is disseminated through a host
of different media; plaintiffs themselves alleged that they saw or
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heard a number of different Craftsman advertisements. The putative
class was exposed to a varied mix of representations, communicated
through different channels and absorbed in different ways and to
different degrees, and causation would also be different for each
plaintiff; therefore, typicality was lacking.
We also held that
plaintiffs failed to satisfy the predominance requirement because
the bulk of the proof on both the consumer fraud and unjust
enrichment claims would relate to individual factual issues such as
reliance and causation.
Greenfield now seeks certification of a Florida class.
The
proposed class consists of “[a]ll persons in Florida who, between
May
2000
and
the
present,
purchased
in
Florida
one
or
more
Craftsman tool(s) that were not all or virtually all ‘Made in
USA.’”
1.)1
(Pl.’s Mem. in Supp. of Mot. for Class Certification at
Except for the geographical limitation and the expanded time
frame, this class definition is identical to the definition we
previously rejected in our 2009 opinion.
But plaintiff maintains
that the landscape has changed: “[B]ecause reliance is not an
element of a claim under FDUTPA, and because Florida common law
1/
This definition is for “Class 1” as set forth in paragraph 83 of the
amended complaint. Excluded from the class are Sears, its subsidiaries, parents,
divisions, or affiliates, and its officers and directors.
Paragraph 83 of the amended complaint also defines a “Class 2”: “All
persons in Florida who, between May of 2000 and the present, purchased in Florida
one or more Craftsman tool(s) and who paid more than the price Sears would have
charged had it been known that Craftsman tools were not all or substantially all
Made in the USA.” In an order entered on September 23, 2011, we granted Sears’s
motion to strike the Class 2 allegations from the complaint because plaintiff
declined our invitation to file an amended class certification motion that would
include a request to certify Class 2, and we will not permit any further motions
for class certification in these proceedings.
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regarding breach of warranty and unjust enrichment claims also
eliminate issues of reliance, the concerns expressed by this Court
regarding the scope of the class, typicality, predominance and
superiority in previous rulings on class certification of related
litigations are not at issue here.”
(Pl.’s Mem. at 1.)
We will begin, then, with an analysis of the FDUTPA and the
case law interpreting the statute.
The FDUTPA prohibits “[u]nfair
methods of competition, unconscionable acts or practices, and
unfair or deceptive acts or practices in the conduct of any trade
or commerce.”
Fla. Stat. Ann. § 501.204.
It provides: “In any
action brought by a person who has suffered a loss as a result of
a violation of this part, such person may recover actual damages,
plus attorney’s fees and court costs . . . .”
Fla. Stat. Ann. §
501.211.
The parties agree that there are three elements of a claim for
damages under the FDUTPA: 1) a deceptive act or unfair practice; 2)
causation; and 3) actual damages.
See, e.g., Wright v. Emory, 41
So. 3d 290, 292 (Fla. Dist. Ct. App. 2010); Kia Motors Am. Corp. v.
Butler, 985 So. 2d 1133, 1140 (Fla. Dist. Ct. App. 2008).
They
disagree, however, about what Florida law requires a plaintiff to
prove
in
causation.
order
to
satisfy
these
elements--most
importantly,
Plaintiff maintains that “subjective individualized
proof of reliance and causation is not required under FDUTPA”
(Pl.’s Mem. at 16), relying on a line of cases holding that
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plaintiffs need not prove actual reliance on an allegedly deceptive
act or practice, but merely that the practice was “likely to
deceive a consumer acting reasonably in the same circumstances.”
See Davis v. Powertel, Inc., 776 So. 2d 971, 974 (Fla. Dist. Ct.
App. 2000).2
According to plaintiff, the class members can also
prove causation collectively by making this same showing that the
alleged deceptive conduct “would in theory deceive an objective
reasonable consumer.”
(Pl.’s Mem. at 24.)
Sears, on the other
hand, contends that because the circumstances of the alleged
deception
are
not
the
same
for
all
putative
class
members,
collective proof cannot be used to demonstrate causation.
Each party can find support for its position in relevant case
law.3
Plaintiff
relies
primarily
on
federal-court
decisions
interpreting the FDUTPA: Fitzpatrick v. General Mills, Inc., 635
F.3d 1279 (6th Cir. 2011) (“Fitzpatrick II”); Fitzpatrick v.
General Mills, Inc., 263 F.R.D. 687 (S.D. Fla. 2010) (“Fitzpatrick
I”); and Nelson v. Mead Johnson Nutrition Co., 270 F.R.D. 689 (S.D.
Fla. 2010).
2/
In Davis, a Florida state appellate court reversed the trial court’s
denial of certification of a class of plaintiffs who alleged that the defendant,
a cellular-phone company, sold phones without disclosing the fact that they had
been modified to work only on the company’s network. 776 So. 2d at 972-73. The
appellate court held that proof of reliance was unnecessary under the FDUTPA and
that because the alleged deceptive practice reduced the phones’ value, issues of
causation and damages would be common to all members of the class. Id. at 97475.
3/
In his opening brief, plaintiff fails to acknowledge the split in
authority; he states that “Florida law is clear that reliance it [sic] not an
element of a claim and causation is judged on an objective standard with regard
to the entire class.” (Pl.’s Mem. at 23.)
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In
Fitzpatrick
I,
the
district
court
granted
class
certification on an FDUTPA claim that was based on the allegation
that General Mills falsely claimed that its yogurt, Yo-Plus, aided
in promoting digestive health in ways that other yogurt did not.
The district court held that “to satisfy the FDUTPA’s causation
requirement, each plaintiff is required to prove only that the
deceptive
practice
would--in
theory--deceive
an
objective
reasonable consumer,” acknowledging case law to the contrary but
explaining that it was bound by an earlier Eleventh Circuit ruling.
263 F.R.D. at 694-95 (citing Cold Stone Creamery, Inc. v. Lenora
Foods I, LLC, 332 F. App’x 565, 567 (11th Cir. 2009)).
In
Fitzpatrick II, the Eleventh Circuit agreed with the district
court’s analysis.
635 F.3d at 1283.4
In Nelson, plaintiff claimed that defendant Mead Johnson &
Company had violated the FDUTPA by falsely claiming that Enfamil
Lipil infant formula was the only baby formula that contained two
nutrients essential to brain and eye development.
The district
court granted the plaintiff’s motion for class certification, and
on the issue of causation, held that the class members would not be
required to “submit individualized proof to establish causation.”
270 F.R.D. at 697.
In a footnote, the court noted the split in the
Florida courts regarding the interaction of the reliance and
4/
The Court of Appeals vacated the district court’s class certification
order only because the definition of the class the district court certified
appeared to erroneously require a showing of individual reliance. 635 F.3d at
1283.
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causation elements of an FDUTPA claim, but concluded that in some
instances, a plaintiff could prove causation without having relied
on the deceptive practice:
Some Florida District Courts of Appeal have determined
that causation is an element of a consumer FDUTPA action
for damages. See, e.g., Rollins, Inc. v. Butland, 951 So.
2d 860, 869 (Fla. Dist. Ct. App. 2006). Because those
cases identify a causation element, they appear to be at
odds with Davis and Latman [v. Costa Cruise Lines, N.V.,
758 So. 2d 699 (Fla. Dist. Ct. App. 2000)].5 Indeed, the
concepts of causation and reliance can be deeply
intertwined, for a deceptive practice seemingly cannot
have caused an aggrieved party damages unless the
aggrieved party relied on the deceptive practice. Upon
closer inspection, however, a deceptive practice can
cause a consumer damages even if the consumer does not
rely on the deceptive practice when purchasing a
particular product. Ostensibly, a deceptive practice
allows a manufacturer or vendor to charge a premium for
a product that the manufacturer would not be able to
command absent the deceptive practice. Thus, even if an
individual consumer does not rely on a deceptive practice
when deciding to purchase that product, the consumer will
have paid more for the product than she otherwise would
have. Consequently, the consumer suffers damages.
270 F.R.D. at 692 n.2.
invokes
a
similar
Greenfield quotes from this passage and
damages
theory,
arguing
that
“Sears’
misrepresentation that Craftsman products are Made in the USA
allowed Sears to charge a premium price for foreign-made products
that was not warranted . . . , and consumers paid that unwarranted
premium (regardless of what they subjectively believed or what ads
5/
The plaintiffs alleged in Latman that the defendant cruise line
violated the FDUTPA by falsely labeling a fare mark-up that was not wholly a
pass-through charge as a “port charge.” 758 So. 2d at 701. The appellate court
reversed the trial court’s denial of class certification, holding that the
plaintiffs were not required to show that they were misled by the label and that
they could show damages by proving “that the passenger parted with money for what
should have been a ‘pass-through’ port charge, but the cruise line kept the
money.” Id. at 703.
- 19 -
they saw).”
(Pl.’s Mem. at 24.)
Sears contends that unlike Fitzpatrick and Nelson, the instant
case “involves tens of thousands of different products, each of
which
were
individually
advertised,
marketed
and
labeled
differently” and “more than ten years of differing advertisements,
marketing and labeling,” much of which did not mention or reference
the United States, as well as different communications between some
putative class members and Sears salespeople.
21.)
(Def.’s Resp. at
Sears relies on a number of Florida state appellate court
decisions that have retreated from and/or distinguished Davis and
Latman and required that plaintiffs present individualized proof in
order to satisfy the FDUTPA’s causation element.
See, e.g., Tire
Kingdom, Inc. v. Dishkin, --- So. 3d ----, 2011 WL 3311742, at *7-9
(Fla. Dist. Ct. App. July 6, 2011) (distinguishing Latman as a
“rare exception to the general rule that collective proof of
individualized
transactions
cannot
be
used
to
prove
the
indispensable element of causation in an FDUTPA class action” and
rejecting plaintiffs’ argument that all putative class members who
received
an
allegedly
deceptive
coupon
for
automotive
repair
services were “misled as a matter of law”); Miami Auto. Retail,
Inc. v. Baldwin, --- So. 3d ----, 2011 WL 2496609, at *6 (Fla.
Dist. Ct. App. June 15, 2011) (distinguishing Latman on the basis
that “in this case each plaintiff will have received a different
communication and may have reacted differently” and noting that the
- 20 -
“FDUTPA requires proof of each individual plaintiff’s actual (not
consequential) damage and defendant’s causation of damage”); Philip
Morris USA Inc. v. Hines, 883 So. 2d 292, 294-95 (Fla. Dist. Ct.
App. 2003) (questioning “whether Davis gives fair consideration to
the principle of causation” in the FDUTPA and distinguishing it on
the basis that the putative class members had different reasons for
purchasing the product at issue and some suffered no damages caused
by the alleged deceptive practices); Hutson v. Rexall Sundown,
Inc.,
837
So.
2d
1090,
1092-93
(Fla.
Dist.
Ct.
App.
2003)
(distinguishing Davis and holding that the typicality requirement
was not satisfied where some putative class members had no FDUTPA
claims because they were not deceived and therefore suffered no
damages); Egwuatu v. South Lubes, Inc., 976 So. 2d 50, 53-54 (Fla.
Dist. Ct. App. 2008) (where plaintiffs alleged that defendant
misrepresented a markup as a tax, affirming trial court’s denial of
class certification and distinguishing Davis and Latman because
individualized inquiries would be required to determine whether
customers knew the fee was not a tax); Kia Motors Am. Corp. v.
Butler, 985 So. 2d 1133, 1140-41 (Fla. Dist. Ct. App. 2008)
(reversing trial court’s certification of class of automobile
purchasers
because,
among
other
reasons,
individual
inquiries
regarding alleged brake defect would be necessary to determine
liability and damages); Rollins, Inc. v. Butland, 951 So. 2d 860,
871-75 (Fla. Dist. Ct. App. 2006) (reversing the trial court’s
- 21 -
certification of a class of purchasers of termite-extermination
services and finding that class-wide proof of causation would be
impossible; rejecting plaintiff’s argument that the “diminished
market value” of the service due to false advertising could be
proven
on
a
class-wide
basis).
In
Tire
Kingdom,
the
court explained that to make a determination that a plaintiff paid
more than was bargained for, “it follows that each class member’s
Tire Kingdom experience--including the precise language of each
advertisement, the class member’s awareness of Tire Kingdom’s
shop-fee signage, and the class member’s conversations with Tire
Kingdom employees--would have to be explored to determine Tire
Kingdom’s liability to each class member.” 2011 WL 3311742, at *8.
There
are
two
reasons
why
we
disagree
with
plaintiff’s
assertion that the Fitzpatrick decisions and Nelson (to which we
will refer as the “federal decisions”) are “controlling.”
Mem. at 13.)
(Pl.’s
The first stems from our responsibility to ascertain
Florida law; we must apply the FDUTPA as we believe the Florida
Supreme Court would apply it.
236-37 (1940).
See West v. AT & T, 311 U.S. 223,
That court has not spoken on the issue of the
interaction between the reliance and causation elements of an
FDUTPA claim, but Florida appellate courts have.
Those decisions
control, unless there are persuasive indications that the Florida
Supreme Court would decide the issue differently.
See id. at 237.
Although there is conflicting precedent in the Florida state
- 22 -
appellate courts (Davis and Latman and their progeny), the great
weight of recent authority in those courts, as set forth above,
supports
Sears’s
position
and
holds
requires individualized proof.
persuade us otherwise.
that
causation
typically
The federal decisions do not
To the extent that they can be read to
relieve plaintiffs of their obligation to show that the alleged
deceptive practice caused them harm, those decisions neglect the
plain language of the FDUTPA, which states that “anyone aggrieved
by a violation” of the statute may bring an action, and that actual
damages are recoverable by “a person who has suffered a loss as a
result
of
a
violation”
of
the
statute.
Fla.
Stat.
Ann.
§
501.211(1), (2) (emphasis added).
Second, the federal decisions are factually distinguishable.
Fitzpatrick involved one product, Yo-Plus, and the allegedly false
claim that Yo-Plus had a unique digestive health benefit was
“communicated in one way or another to every purchaser of Yo-Plus
in Florida.”
Fitzpatrick I, 263 F.R.D. at 694 (emphasis added).
The district court found that the “digestive health benefit of YoPlus is a common and conspicuous theme found in every Yo-Plus
advertisement that the Court has reviewed,” noting that the message
regarding digestive health was consistently used by defendant in
all of its various advertising media.
Id. at 700.
Likewise,
Nelson involved one product, Enfamil Lipil infant formula, and
advertisements with the consistent message that Enfamil Lipil
- 23 -
uniquely provided certain nutrients that improve brain and eye
development.
270 F.R.D. at 695 n.4, 697 n.6.
In contrast, in the
instant case, there are thousands of different Craftsman tools at
issue.
And we have previously found that “there was and is a large
amount of advertising for Craftsman tools that varies greatly” and
that “[o]nly a portion of Craftsman advertising and marketing
contained “Made in USA”-type representations.” 2007 WL 4287511, at
*6.
That finding will stand.
Like other plaintiffs in these MDL
proceedings, Greenfield persists in arguing that Sears had a
“systematic, uniform and pervasive marketing scheme” for Craftsman
tools that represented that the tools were made in the United
States.
(Pl’s Mem. at 23.)
by the evidence.
That argument is simply not borne out
Many of Sears’s advertisements did not contain a
“Made in USA” claim; instead, they featured other themes, such as
the durability and reliability of Craftsman tools.
(E.g., Pl.’s
Exs. 33, 35.)6
6/
A bit of a sideshow developed regarding plaintiff’s evidence of Sears’s
television commercials for Craftsman tools. A couple of weeks after plaintiff
filed his reply brief, he submitted a DVD that the reply described as “containing
a copy of all commercials referenced” therein. (Pl.’s Reply at 2 n.4.) The DVD,
Exhibit 69, contains video of twelve commercials. Sears subsequently moved for
leave to file a sur-reply in which it argues that plaintiff’s reply misrepresents
the content of the commercials as well as the content of three other exhibits,
Exhibits 66-68. Plaintiff then filed a motion to strike the affidavit of Maria
Scavo, the paralegal who filed an affidavit in support of Sears’s motion for
leave to file a surreply. In the alternative, plaintiff sought leave to depose
Ms. Scavo in relation to her affidavit. (In her affidavit, Ms. Scavo states that
she has viewed the commercials contained on Exhibit 69, and she describes them
briefly.) At the hearing on the two motions, we granted Sears leave to file the
surreply, considering the motion itself to be Sears’s surreply, and stated that
we did not want to take any further briefs on the subject. We took plaintiff’s
motion to strike under advisement and indicated to plaintiff’s counsel that if
we ultimately concluded that the affidavit would bear upon our decision on class
certification, we would either strike it (after giving Sears an opportunity to
respond) or allow the deposition of Ms. Scavo.
- 24 -
It is our view that the Florida Supreme Court would take the same
approach as recent Florida appellate court decisions and require a
plaintiff to show that the alleged misrepresentation actually
caused him harm.
To do otherwise in the name of the general
principle that the FDUTPA does not require reliance would, in
effect, remove its causation requirement.
Each plaintiff in
Greenfield’s putative class will have to show that the alleged
“Made in USA” misrepresentation caused him or her damage, which
would necessitate individualized proof.
Accordingly, the proposed
The affidavit does not factor into our decision, and the motion to strike
is therefore denied as moot.
The court is quite capable of reviewing the
Craftsman commercials and other advertisements and determining what they say.
Whether they actually contain misrepresentations is beside the point on a motion
for class certification.
What matters is whether there is evidence of, as
plaintiff puts it, a “ubiquitous ‘Made in USA’ branding campaign.” (Pl.’s Mem.
at 2.) We have previously found, and find yet again, that there is not, despite
plaintiffs’ continued insistence to the contrary. Only a portion of Craftsman
advertising contained “Made in USA” representations, and only a portion of the
putative class viewed those representations. In our 2007 opinion, we rejected
as conclusory plaintiffs’ argument that the “total mix” of information had the
“overriding message” that Craftsman products are American-made. 2007 WL 4287511,
at *7. Greenfield attempts to bolster the argument by pointing to an online
survey conducted for Sears in 2006, which found that “nearly 90% of consumers
believe that Craftsman hand tools and power tools are made in the USA.” (Pl.’s
Ex. 17.)
According to plaintiff, this research demonstrates that “Sears’
extensive and deceptive efforts to brand Craftsman as all ‘Made in USA’
succeeded.”
(Pl.’s Mem. at 6.)
Plaintiff conveniently overlooks his own
allegations. He does not allege that Sears’s “Made in USA” claim was always
deceptive, but that it became deceptive at some point in the year 2000 because
Sears began outsourcing the production of Craftsman products. The researcher did
not trace the origin of the consumers’ belief or link it to any particular point
in time. It is quite possible that many of those research subjects had formed
their belief about the place of manufacture of Craftsman tools well before the
class period. It does not follow that the consumers’ belief is evidence of, and
must have been caused by, a pervasive “false branding” campaign.
In his reply brief, plaintiff raises another evidentiary dispute concerning
Sears’s submission of the declarations of Tom Arvia, a Sears employee who
discusses Sears’s Craftsman advertising and pricing (Def.’s Ex. 2), and Arthur
McKeague, a Sears employee who discusses Sears’s CORE database system for product
data (Def.’s Ex. 12). Plaintiff argues in footnote 3 that we should strike these
declarations because “Sears never previously identified” them in its
interrogatory responses as persons with knowledge, and therefore plaintiff never
deposed Arvia or McKeague. We decline to strike the declarations because we did
not find it necessary to rely on either of them to decide this motion.
- 25 -
Florida
class
identified.
suffers
from
the
same
problems
we
previously
It is overbroad because it contains a great many
individuals who were not deceived and could not have been injured,
and plaintiff has not shown that his claim is typical of those of
the putative class. In addition, individual questions of causation
will continue
to
predominate despite
the
FDUTPA’s
lack
of
a
reliance requirement.
Putting to one side the problem that the class includes
plaintiffs who could not have suffered injury, plaintiff has also
failed to demonstrate that there is a reasonable methodology for
proving causation and damages on a class-wide basis.
Plaintiff’s
theory is that common issues predominate as to damages because
Sears “is charging a premium that it would not have charged for
[Craftsman tools] had it disclosed that the products were not ‘Made
in USA.’” (Pl.’s Reply at 23.)
The “evidence” of this purported premium is addressed at pages
9 through 11 of plaintiff’s opening brief.
Plaintiff first points
out that Sears commissioned marketing research in the years 20032005 showing that if it became known among Craftsman customers that
Craftsman
products
were
made
overseas,
nearly
half
of
those
customers “would expect to pay 10% to 25% less for such products,”
and 25 percent would not buy the products at all.
(Pl.’s Mem. at
9-10.) In the absence of evidence that the Sears buyers--employees
who set the prices for Craftsman tools--took this market research
- 26 -
into account when doing their work (or even knew about it), the
results of the marketing research--what some customers said they
would expect to pay--are not relevant to Sears’s actual pricing
practices. Plaintiff has no evidence (and Sears’s witnesses deny)
that the buyers knew about or considered the research.
Plaintiff mischaracterizes and significantly overstates the
remainder of the evidence he relies upon.
He asserts that Sears
employed a “merchandising plan” for Craftsman that it described as
“Good, Better, Best” and that it placed Craftsman at the “Better”,
or middle, level.
plaintiff
(Pl.’s Mem. at 10.)
does not
support
the
The evidence cited by
conclusion
that
there
was
an
overarching “merchandising plan” or that such a “plan” affected
pricing.
Nor does the cited evidence support plaintiff’s next
contention--that “Sears’ business records consistently frame [Good,
Better, Best] as pricing categories.” But plaintiff’s most serious
overstatement is that “Sears’ business records provide specific
evidence that, within the ‘Good’ to ‘Better’ and/or ‘Best’ price
differential,
10%
to
25%
of
the
premium
is
attributable
Craftsman’s positioning as a ‘Made in USA’ brand.”
11.)
Plaintiff
cites
an
e-mail
between
a
to
(Pl.’s Mem. at
Sears
buyer
of
“stationary power tools and accessories” and a vendor wherein the
buyer states that a hypothetical domestically-made “tap and die”
set could command a $10 (or 20%) higher “target price” as a
Craftsman tool. (Pl.’s Ex. 46.) The other two documents plaintiff
- 27 -
(conclusorily)
relies
on
contain
more
general
discussion
of
Craftsman pricing (as compared with Sears’s “Companion” tools)
(Pl.’s Ex. 63) or profit margins that differ depending on place of
manufacture
evidence”
(Pl.’s
of
a
10
Ex.
to
47)
25
and
are
percent
similarly
not
across-the-board
“specific
markup
on
Craftsman tools due to its position as an American-made brand.
In support of its position that plaintiff’s “premium” theory
of damages is fatally flawed, Sears submits the expert report of
Stephen D. Prowse, who holds a Ph.D. in economics.
Dr. Prowse
prepared his report in connection with the Santamarina case and
declares that it applies equally to Greenfield’s theory.
Ex. 32.)
(Def.’s
In the report, Dr. Prowse opines that impact and damages
in this case cannot be determined by generalized proof and that
each individual putative class member’s claim would have to be
examined on a product-by-product basis.
Greenfield objects to Dr.
Prowse’s analysis and argues that it should be “given little to no
weight” because, among other things, Dr. Prowse “does not have . .
. experience regarding the calculation of damages in actions
involving
consumer
fraud,
deceptive
practices,
and/or
advertising or regarding the valuation of retail goods.”
false
(Pl.’s
Reply at 29-30 n.29.)7
7/
On February 10, 2012, plaintiff filed a motion to exclude Dr. Prowse’s
report. Three days later, plaintiff filed a motion to exclude another expert
report submitted by Sears, that of Dr. Yoram Wind, which is Exhibit 27 to Sears’s
response. Sears then moved to strike both motions. In an order dated February
15, 2012, we granted Sears’s motion and struck plaintiff’s motions for three
reasons: (1) plaintiff’s motions were untimely; (2) they constituted improper
additional briefs on class certification; and (3) neither report is critical to
- 28 -
It does not require much “experience regarding the calculation
of damages in actions involving consumer fraud” to conclude that
plaintiff’s attempt to demonstrate a likely class-wide damages
methodology
is
a
wholesale
failure.
Because
plaintiff’s
presentation is so conclusory, we did not find it necessary to rely
on Dr. Prowse’s report; we do, however, agree with him that
plaintiff’s attempt to show a likely methodology is seriously
flawed.
Plaintiff’s
opening
memorandum states simply
that
“[t]he
pricing studies and Sears’ data reflecting the actual differentials
between
Sears’
Companion
brand
and
the
Craftsman
brand
for
substantially similar products provides a basis to measure damages”
and that “evidence from Sears’ consumer research and pricing data
will establish that everyone in the class paid prices for foreignmade Craftsman products that included a premium attributable to
Craftsman’s falsely achieved status as a ‘Made in USA’ brand.”
(Pl.’s Mem. at 11, 25.)
It is difficult to gather from the
conclusory presentation, but evidently plaintiff is offering two
alternative proposed methodologies: one that relies on Sears’s
pricing studies and historical profit margins on Craftsman tools,
and one that relies on the differences between Craftsman pricing
and Companion pricing. As discussed above, plaintiff’s evidence of
a premium, which consists of bits and pieces of items cobbled
our class-certification decision.
- 29 -
together, is so weak it is virtually nonexistent. His theory rests
on a host of baseless assumptions: that Sears’s Companion brand of
tools is comparable to the Craftsman brand; that there is a 10 to
25 percent premium for Craftsman tools over Companion tools; that
the premium applies to all Craftsman tools; and that the premium is
attributable to market perception of the country of origin of
Craftsman tools and not to some other product attribute.
Simply
adopting plaintiff’s assumptions would not be compatible with the
“rigorous analysis” that the Supreme Court in Dukes instructs us to
undertake.
See 131 S. Ct. at 2551.
The putative class of Florida purchasers suffers from a number
of the same fatal problems identified in our previous opinions;
those problems persist despite the fact that this case involves a
different consumer fraud statute. The proposed class is overbroad,
and plaintiff has failed to satisfy the typicality and predominance
requirements of Rule 23. Although plaintiff contends that “Florida
legal
precedent
regarding
substantive
liability
[for]
unjust
enrichment claims and the suitability of such claims for class
certification . . . differentiate this proposed class action from
previous actions,” Pl.’s Mem. at 13, these problems apply equally
to the unjust enrichment claim. Plaintiffs will have to prove that
they conferred a benefit on Sears and that Sears appreciated,
accepted and retained the benefit under circumstances that make it
inequitable to retain that benefit without paying fair value for
- 30 -
it.
See Florida Power Corp. v. City of Winter Park, 887 So. 2d
1237, 1241 (Fla. 2004).
These “circumstances” involve the alleged
“Made in USA” deception.
As we found in our 2007 and 2009
opinions, the bulk of the proof on the unjust enrichment claim will
relate to individual factual issues relating to the deception, as
well as causation.
Plaintiff
Greenfield
has
failed
to
establish
that
the
prerequisites of Rule 23 are satisfied, and his motion for class
certification will be denied.
CONCLUSION
The motion of defendant Sears, Roebuck & Company to dismiss
plaintiff’s claim in Count II for violation of the Magnuson-Moss
Act
[7]
is
Plaintiff
granted.
Jeffrey
Count
II
Greenfield’s
Florida class [25] is denied.
is
dismissed
motion
for
with
prejudice.
certification
of
a
Plaintiff’s motion to strike the
affidavit of Maria Scavo, or in the alternative for leave to depose
her, [54] is denied.
A status hearing is set for April 28, 2012, at 11:00 a.m.
DATE:
March 22, 2012
ENTER:
_________________________________________________
John F. Grady, United States District Judge
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