Baye v. HBI Branded Apparel Enterprises LLC et al
Filing
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ORDER granting in part and denying in part 10 Motion to Dismiss. Signed by District Judge George Caram Steeh (MBea)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
SULA BAYE,
Plaintiff,
Case No. 12-CV-12869
vs.
HON. GEORGE CARAM STEEH
HBI BRANDED APPAREL
ENTERPRISES, and PAYLESS
SHOESOURCE, INC.,
Defendants.
_____________________________/
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTION TO DISMISS (DOC. # 10)
INTRODUCTION
Plaintiff, who fell and injured herself in 2010, filed this action under theories of
product liability and personal injury. The action, originally filed in Illinois state court, was
removed to federal court in that state, then transferred to this district. Now before the
court is defendants’ motion to dismiss. As set forth below, that motion is granted in part
and denied in part.
BACKGROUND
Plaintiff Sula Baye, a resident of Illinois, is a lawyer who was pursuing a masters
in health law at the time of the injury leading to this case. That injury occurred in the
summer of 2010, when Baye was staying with friends in the Detroit area to celebrate the
Fourth of July. Baye alleges that on July 5, 2010 she and her friend were shopping at
the Great Lakes Crossings shopping center. Baye alleges that she had seen Payless
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advertisements “touting the benefits of Champion Pace fitness shoes,” came across a
Payless Shoe Source store at the shopping center, and went in. After speaking with a
Payless salesperson, Baye purchased a pair of the fitness shoes. (Complaint at ¶ 11.)
The following morning, Baye fell as she was descending a set of stairs at her
friends’ home in Detroit. Baye was wearing the Champion Pace shoes at the time of the
fall. Baye suffered a “high fibular fracture with ankle dislocation and a deltoid ligament
rupture requiring an open-reduction and internal fixation with placement of several
screws.” (Complaint at ¶ 13.) Baye alleges that the fall occurred because she was
wearing the Champion fitness shoes.
Baye filed suit against defendants in 2010 in Illinois state court, alleging liability
under theories of strict product liability, negligence, breach of express warranty, breach
of implied warranty of merchantability, and breach of implied warranty of fitness for a
particular purpose. Baye also included claims under the Illinois Consumer Fraud and
Deceptive Business Practices Act, 815 ILCS 505 et seq., and a claim of common law
fraud. Defendants then removed the action to the United States District Court for the
Northern District of Illinois on the basis of diversity jurisdiction.
Following removal, defendants filed a motion to transfer the lawsuit to this court
under 28 U.S.C. § 1404(a). The parties agreed that venue was proper in either the
Northern District of Illinois or the Eastern District of Michigan. The Northern District of
Illinois considered the four factors used to evaluate convenience transfers--(1) plaintiff’s
choice of forum; (2) convenience of parties; (3) convenience of witnesses; (4) interests
of justice; and (5) location of material events, citing Roberts & Schaefer Co. v. Merit
Contracting, Inc., 99 F.3d 248, 254 (7th Cir. 1996). The district court first denied the
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motion without prejudice, but later granted it, finding that material events weighed in
favor of Michigan and that discovery had revealed a majority of material events and
witnesses to be in Michigan.1
Defendants now move to dismiss the complaint, asserting that plaintiff’s
complaint pleads actions under Illinois law, not cognizable in Michigan.
ANALYSIS
Standard of Review
Federal Rule of Civil Procedure12(b)(6) allows the court to make an assessment
as to whether the plaintiff has stated a claim upon which relief may be granted. See
Fed. R. Civ. P. 12(b)(6). “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short
and plain statement of the claim showing that the pleader is entitled to relief,’ in order to
‘give the defendant fair notice of what the ... claim is and the grounds upon which it
rests.’” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing Conley v.
Gibson, 355 U.S. 41, 47 (1957)). Even though the complaint need not contain “detailed”
factual allegations, its “factual allegations must be enough to raise a right to relief above
the speculative level on the assumption that all of the allegations in the complaint are
true.” Ass’n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir.
2007) (quoting Bell Atlantic, 550 U.S. at 555).
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The Northern District of Illinois also noted that defendants had indicated a desire
to file a third-party complaint against Denise and Creighton Adams, the friends with whom
Baye was staying at the time of her fall. Noting that such an action “would result in related
litigation in Michigan,” the Illinois district court found the fourth factor, interests of justice,
to weigh in favor of the transfer as well. Plaintiffs emphasize that no such action has been
commenced to date, suggesting that the transfer was pursued by defendants only for the
reason that Michigan’s law is more favorable to their position.
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The court must construe the complaint in favor of the plaintiff, accept the allegations
of the complaint as true, and determine whether plaintiff’s factual allegations present
plausible claims. To survive a Rule 12(b)(6) motion to dismiss, plaintiff’s pleading for relief
must provide “more than labels and conclusions, and a formulaic recitation of the elements
of a cause of action will not do.” Id. (citations and quotations omitted). “[T]he tenet that
a court must accept as true all of the allegations contained in a complaint is inapplicable
to legal conclusions.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). “Nor does a
complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’”
Id. “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’” Id. The plausibility standard requires “more than a
sheer possibility that a defendant has acted unlawfully.” Id. “[W]here the well-pleaded
facts do not permit the court to infer more than the mere possibility of misconduct, the
complaint has alleged–but it has not ‘show[n]’– ‘that the pleader is entitled to relief.’” Id. at
1950.
Applicable Choice of Law Rules and Resulting Choice of Law
A choice of law analysis and determination is needed where application of different-yet arguably applicable--states’ laws will result in different outcomes. The parties do not
dispute that this is the case here, where Illinois recognizes claims for strict liability in tort
for product design defects, and Michigan does not, and Illinois neither caps compensatory
damages for noneconomic injuries nor disallows punitive damages under certain
circumstances, whereas Michigan does.
In their motion to dismiss, defendants argue that because “[p]laintiff seeks recovery
in Michigan for events that occurred in Michigan, her Complaint should conform and be
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subject to Michigan law.” Defendants then assert that the first count in Baye’s complaint,
alleging strict liability, is not recognized in Michigan, and must be dismissed. Similarly,
defendants contend that dismissal is mandated for the third through sixth counts, which
include Illinois statutory causes of action.
Plaintiff describes in her response brief that following a 1404(a) convenience
transfer, the law of the transferor forum continues to apply to a diversity case. Ferens v.
John Deere Co., 494 U.S. 516, 517-19 (1990), Van Dusen v. Barrack, 376 U.S. 612, 639
(1964). Under this principal, Illinois choice of law rules govern the determination of the
parties’ dispute over whether Illinois or Michigan law should apply here. Defendant did not
dispute this principal in reply or at oral argument, but now argues that applying the Illinois
choice of law rules results in a determination that Michigan law applies to this litigation.
The parties agree that Illinois employs the “most significant relationship” test under
the Second Restatement of Conflict of Laws (“Restatement”), and both cite to Townsend
v. Sears Roebuck & Co., 879 N.E.2d 893, 898 (2007) in their discussion of which law
applies. In Townsend, a child was injured in Michigan by a Sears riding lawnmower,
purchased in Michigan. The plaintiffs brought a products liability lawsuit against Sears,
headquartered in Illinois, and sought to apply Illinois law, while defendants wanted
Michigan law to apply. Because the injury occurred in Michigan, and plaintiffs did not
demonstrate that Michigan bore “little relation to the occurrence and the parties,” Michigan
law applied in the Townsend matter. Id. at 166.
The Townsend decision resulted from the court’s application of the “presumptively
applicable law,” which in both that case and this case is Michigan. This is enunciated in
Section 146 of the Restatement, which provides:
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In an action for a personal injury, the local law of the state where the injury
occurred determines the rights and liabilities of the parties, unless, with
respect to the particular issue, some other state has a more significant
relationship under the principles stated in section 6 to the occurrence and the
parties, in which event the local law of the other state will be applied.
Restatement (Second) of Conflict of Laws § 146, at 430 (1971). The court found that
application of Michigan law was in line with the other Restatement sections it was required
to consider: Section 6, which states general principles that must be considered, as well as
Section 145, which states contacts to be taken into account in a torts claim. Under this
process, the court examines the facts and circumstances for the state with the most
significant relationship to the matter, rather than simply apply the doctrine of lex loci delicti.
Section 6 is stated to be the “cornerstone” of the Restatement. This section
provides that:
(1) A court, subject to constitutional restrictions, will follow a statutory
directive of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the choice of the
applicable rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c the relevant policies of other interested states and the relevant
interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
Restatement (Second) of Conflict of Laws § 6, at 10 (1971).
The contacts identified in § 145 of the Second Restatement of Conflict of Laws to
be considered in making a choice of law determination in an injury case are (a) the place
where the injury occurred; (b) the place where the conduct causing the injury occurred; (c)
the domicile, residence, nationality, place of incorporation and place of business of the
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parties; and (d) the place where the relationship, if any, between the parties is centered.
Id. § 145. This section is to be read in harmony with the “guiding principles” of Section 6.
In the instant case, as in Townsend, the product was acquired in Michigan and the
injury occurred in Michigan. Unlike the Townsend case, Michigan is not the place of
residence, incorporation or business of either party. With respect to the conduct causing
the injury, plaintiff asserts that the advertisements Ms. Baye alleges caused her to buy the
shoes were viewed in Illinois, and thus that relevant conduct occurred in Illinois. However,
as defendants assert, neither their headquarters nor principal places of business are in
Illinois, and plaintiff herself quotes from the shoes’ labels in her complaint–a product that
she acquired and used, to her detriment, in Michigan. For these reasons, the court finds
that Michigan is more a part of the relationship between Ms. Baye and the defendants than
any other state. It appears to the court that this conclusion is also consistent with § 6 of the
Restatement.
Plaintiff’s arguments that Baye “just as easily could have purchased the shoes and
injured herself in Chicago” are not convincing. In this vein, Baye cites Illinois cases to
support her assertion that it is purely “fortuitous” that the injury occurred in Michigan.
Those three cases involve auto and bus accidents in which the Illinois courts held that
Illinois law applied, despite the accidents taking place in other states, because Illinois had
the most significant relationship to the action.
However, each of those cases is
distinguishable from the case at bar. For instance, in Murphy v. Mancari’s Chrysler
Plymouth, Inc., 948 N.E.2d 233 (Ill.App. 2011), also a products liability case, plaintiff was
an Illinois resident and defendant was an Illinois corporation. Moreover, the car was
purchased in Illinois, and the parties’ relationship was indisputably based in Illinois. In
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Schulze v. Illinois Highway Transportation Co., 423 N.E.2d 278 (Ill.App. 1981), a
negligence case, all parties were from Illinois. In Miller v. Hayes, 600 N.E.2d 34(Ill.App.
1992), another negligence case, the court determined that both the driver of the car and
the passenger who was killed had domiciles of Illinois.
In summary, the cumulative facts and circumstances present here do not
demonstrate to the court that the relationship between Illinois and this case should
overcome the presumption that the law of Michigan, as the place of the injury, applies
under § 146.
Applicable Relief
While the court agrees with defendants that Michigan law applies to this case,
defendants’ request for relief in the form of dismissal of the complaint in its entirety is
overreaching, and plaintiff has requested leave to amend her complaint to plead under
Michigan law.
Defendants’ motion as to count one, alleging strict product liability, is appropriate,
as Michigan does not recognize strict liability as a theory of recovery in products liability
cases. See Radeljak v. DaimlerChrysler Corp., 719 N.W. 2d 40 (2006). Counts two
through five and count seven, alleging common law negligence; breach of express
warranty; breach of the implied warranty of merchantability; breach of the implied warranty
of fitness for a particular purpose; and fraud, do not invoke state specific theories of
recovery. Count six, brought under an Illinois statute, requires revision if plaintiff seeks to
assert a claim under Michigan statutory law.
Accordingly, the court grants plaintiff’s request to amend her complaint as set forth
above. The amended complaint must be filed within 30 days of this order.
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CONCLUSION
For the reasons stated above, defendants’ motion to dismiss is hereby
GRANTED IN PART and DENIED IN PART.
IT IS SO ORDERED.
Dated: December 5, 2012
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
December 5, 2012, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk
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