CISER et al v. NESTLE WATERS NORTH AMERICA INC.

Filing 15

OPINION. Signed by Judge William J. Martini on 1/31/13. (gh, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
GARY CISER and CISER COMPUTER
CONSULTING, on behalf of themselves
and all other similarly situated,

11-CV-5031
OPINION

Plaintiffs,
v.
NESTLÉ WATERS NORTH AMERICA,
INC.,
Defendant.

Plaintiffs Ciser Computer Consulting (“CCC”) and Gary Ciser bring this
putative class action against Defendant Nestlé Waters North America, Inc. (“Nestlé
Waters”) alleging violations of the New Jersey Consumer Fraud Act (“NJCFA”),
and an unnamed common law, as well as unjust enrichment. This matter comes
before the Court on Nestlé Waters’ motion to dismiss pursuant to Federal Rules of
Civil Procedure 9(b) and 12(b)(6) for lack of standing and failure to state a claim
upon which relief can be granted. 1 There was no oral argument. Fed. R. Civ. P.
78(b). For the reasons discussed below, Nestlé Waters’ motion is GRANTED.
I.

BACKGROUND

Gary Ciser owns CCC. Am. Compl. ¶ 10, ECF No. 11. From 2006 through
2009, Nestlé Waters provided CCC with bottled Poland Spring water on a monthly
basis. Id. ¶ 14. Though the contract was in CCC’s name, Ciser paid the bills with
his own money. Id. ¶ 10. He did not always pay on time. When he was late,
Nestlé Waters charged late fees. Some of those fees are reflected in the following
chart:

1

The Court does not reach the Rule 9(b) arguments in this decision. The Court analyzes Nestlé
Waters’ standing arguments under Federal Rule of Civil Procedure 12(b)(1), not Federal Rule of
Civil Procedure 12(b)(6). See Farmer v. Hayman, No. 6-3084, 2007 WL 2066380, at *2 n.4
(D.N.J. July 13, 2007).

1

Monthly Charge

Late Fee

$ 31.01
$ 48.94
$ 53.94
$ 83.15
$ 170.94

Late Fee As Percentage of
Monthly Charge
48.4%
30.6%
27.8%
18%
8.8%

$ 15
$ 15
$ 15
$ 15
$ 15

See Compl. ¶¶ 24-25, 30-31, ECF No. 1; Elliot Declaration, ECF No. 8-1. Ciser
argues that these late fees were so excessive as to be unenforceable under New
Jersey law.
II.

LEGAL STANDARD
A.

Federal Rule of Civil Procedure 12(b)(1)

When a defendant brings a “facial” challenge to plaintiff’s standing, the
Court “must accept all allegations in the complaint as true and draw reasonable
inferences in favor of the plaintiff.” Lawrence v. Emigrant Mortg. Co., No. 113569, 2012 WL 1108532, at *4 (D.N.J. Mar. 30, 2012).
B.

Federal Rule of Civil Procedure 12(b)(6)

In deciding a motion to dismiss under Rule 12(b)(6), a court must take all
allegations in the complaint as true and view them in the light most favorable to the
plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino
Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998). This
assumption of truth is inapplicable, however, to legal conclusions couched as
factual allegations or to “[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).
Although a complaint need not contain 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.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Thus, the factual allegations must be sufficient to raise a plaintiff’s right to relief
above a speculative level, such that it is “plausible on its face.” See id. at 570; see
also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). A claim
has “facial plausibility when the plaintiff pleads factual content that allows the
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court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556).
While “[t]he plausibility standard is not akin to a ‘probability requirement’ . . .
it asks for more than a sheer possibility.” Id. at 678.
“As a general matter, a district court ruling on a motion to dismiss may not
consider matters extraneous to the pleadings.” In re Burlington Coat Factory Sec.
Litig., 114 F.3d 1410, 1426 (3d Cir.1997)). But courts may consider indisputably
authentic documents referenced in a complaint. See Pryor v. Nat’l Coll. Athletic
Ass’n, 288 F.3d 548, 560 (3d Cir. 2002). Nestlé Waters provided the Court with
bills referenced in Plaintiffs’ complaint. Plaintiffs do not dispute the authenticity
of the bills. Accordingly, the Court will consider the bills for purposes of the
instant motion.
III.

STANDING

Nestlé Waters argues that CCC and Ciser lack standing to bring their claims.
The Court finds that Ciser has standing but CCC does not.
Article III Standing consists of: “(1) injury-in-fact, which is an invasion of a
legally protected interest that is (a) concrete and particularized, and (b) actual or
imminent, not conjectural or hypothetical; (2) a causal connection between the
injury and the conduct complained of; and (3) it must be likely that the injury will
be redressed by a favorable decision.” McCray v. Fid. Nat. Title Ins. Co., 682 F.3d
229, 243 (3d Cir. 2012) (quoting Danvers Motor Co., Inc. v. Ford Motor Co., 432
F.3d 286, 290-91 (3d Cir. 2005)). The Court must conduct a separate standing
analysis for each claim. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352
(2006).
Plaintiffs do not even attempt to argue that CCC has standing. Indeed, it is
difficult to imagine what argument they could make. Ciser paid CCC’s bills, so
CCC did not suffer an injury that could be redressed by a favorable decision of this
Court. Accordingly, CCC lacks standing, and the Court will DISMISS its claims
WITHOUT PREJUDICE.
Ciser, on the other hand, has standing to bring his claims. First, Ciser
alleges an injury-in-fact under the NJCFA. The NJCFA protects consumers who
suffer an ascertainable loss. Barrows v. Chase Manhattan Mortg. Corp., 465 F.
Supp. 2d 347, 360-61 (D.N.J. 2006) (“[T]he only prerequisite for maintenance of a
private action to remedy a violation of the Consumer Fraud Act is that a plaintiff
must present a claim of ascertainable loss.”). Ciser incurred an ascertainable loss
when he paid allegedly unenforceable late fees. Second, Ciser alleges causation.
For purposes of the standing analysis, a plaintiff establishes causation when he
demonstrates an injury “traceable to the challenged actions of the defendants.”
3

Hospital Council of Western Pennsylvania v. City of Pittsburgh, 949 F.2d 83, 87
(3d Cir. 1991) (internal quotation and citation omitted). Ciser’s alleged injury can
be traced to the late charges on Nestlé Waters’ bills. Third, because Ciser’s
alleged injuries are purely monetary, his injuries can be redressed. Accordingly,
Ciser has standing to bring his NJCFA claim. Ciser has standing to bring his
common law claims for the same reasons.
IV.

DISCUSSION

Ciser’s Amended Complaint contains three counts: NJFCA (Count I), an
unidentified “common law” (Count II), and unjust enrichment (Count III).
Underlying each of these counts is an argument that Nestlé Waters’ late fees were
unenforceable. See Am. Compl. ¶¶ 26, 33, 39. On the facts alleged, this argument
fails.
Under New Jersey law, “[a] term fixing unreasonably large liquidated
damages is unenforceable on grounds of public policy as a penalty.” MetLife
Capital Fin. Corp. v. Washington Ave. Assocs. L.P., 159 N.J. 484, 494 (1999)
(quoting Restatement (Second) of Contracts § 356)). Late fees are liquidated
damages. See id. at 505. In Metlife, the Supreme Court of New Jersey assessed
the reasonableness of late fees by considering “[the] difficulty in assessing
damages, intention of the parties, the actual damages sustained, and the bargaining
power of the parties,” as well as “common practice in a competitive industry.” Id.
at 495, 497. Though Metlife’s holding “applies only to commercial loan
transactions,” id. at 502, the Court will assume, along with Ciser, that Metlife
controls in this case. See Pl.’s Br. 18-19, 21, ECF No. 13.
As far as the Court can tell, Ciser paid a $15 late fee regardless of whether
his underlying bill was $31.01 or $170.94. See Elliot Declaration. Ciser argues
that the $15 late fees were
unreasonable as a matter of law because [they] bear[] no reasonable
relationship to the anticipated or actual costs Nestlé Waters incurs as a
result of a customer’s untimely monthly payment, and/or [are] far
beyond the boundaries of late charge rates customarily utilized by
other bottled water and similar-type delivery companies in the nation.
Am. Compl. ¶ 4. Ciser’s allegations are conclusory and will be disregarded for
purposes of the motion to dismiss. Iqbal, 556 U.S. at 678. Ciser says nothing
about the “anticipated or actual costs Nestlé Waters incurs as a result of a
customer’s untimely monthly payment.” And he says nothing about rates charged
by “other bottled water and similar-type delivery companies in the nation.”
4

Because Ciser’s allegations are conclusory, the Court will DISMISS his claims
WITHOUT PREJUDICE. See Edlow v. RBW, LLC, 688 F.3d 26, 38 (1st Cir.
2012) (dismissing claim for excessive liquidated damages where plaintiff offered
“[the] conclusory assertion that the liquidated damages amount is not reasonably
related to anticipated damages . . . [and plaintiff] allege[d] no facts to support that
conclusion.”).
V.

CONCLUSION

For the foregoing reasons, Defendants’ motion to dismiss is GRANTED.
CCC’s claims are DISMISSED WITHOUT PREJUDICE for lack of standing.
Ciser’s claims are DISMISSED WITHOUT PREJUDICE for failure to state a
claim upon which relief can be granted. The Court will grant Ciser leave to file a
Second Amended Complaint within 30 days. An appropriate order follows.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Dated: January 30, 2013

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