Brady v. Basic Research, L.L.C. et al

Filing 86

ORDER denying 64 Motion to Dismiss for Lack of Jurisdiction. SO ORDERED that Defts' motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(h)(3) of the Federal Rules of Civil Procedure is denied. The stay of discovery p ending resolution of this motion is lifted. The parties shall confer and jointly submit a proposed revised scheduling order for the Court's consideration by no later than April 8, 2016. Ordered by Judge Sandra J. Feuerstein on 3/31/2016. (Florio, Lisa)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

----------------------------------------------------------)[

ASHLEY BRADY and STEPHANIE DALLI
CARDILLO, on behalf of themselves and
all others similarly situated,
Plaintiffs,

ORDER
13-CV-7169 (SJF)(ARL)

-againstBASIC RESEARCH, L.L.C., ZOLLER
LABORATORIES, L.L.C., NICOLE E.
POLIZZI a/k/a SNOOK!, DENNIS W. GAY,
DANIEL B. MOWREY, and MITCHELL K.
FRIEDLANDER,
Defendants.

----------------------------------------------------------}[

FILED
IN CLERK'S OFFICE
U S DISTRICT COURT E 0 N y

*

MAR 312016

LOfvG ISLAND OFFICE

FEUERSTEIN, J.
Defendants Basic Research, L.L.C., Zoller Laboratories, L.L.C., Dennis W. Gay,
Mitchell K. Friedlander, and Nicole E. Polizzi (collectively, "Defendants") move to dismiss
plaintiffs Ashley Brady's and Stephanie Dalli Cardillo's (together, "Plaintiffs") First Amended
Complaint (Dkt. 19) ("PAC") for lack of subject matter jurisdiction pursuant to Federal Rule of
Civil Procedure 12(h)(3). For the following reasons, Defendants' motion is denied.

I.

BACKGROUND
The factual and procedural background of this case is set forth in greater detail in the

Court's March 31,2015 Opinion and Order addressing Defendants' motions to strike portions of
the FAC and dismiss the FAC for lack of subject matter and personal jurisdiction, and for failure
to state a claim. See Bradyv. Basic Research, L.L.C., 101 F. Supp. 3d 217,224-25 (E.D.N.Y.
20 15). The relevant background for present purposes is as follows.

*

Plaintiffs purchased Zantrex-3 and Zantrex-3 High Energy Fat Burner, products that
Defendants marketed as clinically-proven weight control supplements. (FAC ~~ I, 16-17).
Plaintiffs filed a proposed class action on behalf of purchasers of these products and Zantrex-3
Power Crystals (collectively, "Zantrex"), alleging that Defendants: (I) violated the MagnusonMoss Warranty Act, 15 U.S. C. §§ 2301 et seq. ("MMWA''); (2) breached express warranties; (3)
violated New York's General Business Law§ 349; (4) violated the Maryland Consumer
Protection Act; (5) negligently misrepresented Zantrex's effectiveness; (6) fraudulently
misrepresented Zantrex's effectiveness; and (7) were unjustly enriched. (Id ~~I, 140-94).
On March 31,2015, the Court granted Defendants' motion to dismiss Plaintiffs' claims

three (3) through seven (7) pursuant to Federal Rule of Civil Procedure 12(b)(6}, and denied
Defendants' motion to dismiss Plaintiffs' MMWA and breach of express warranty claims. See

Brady, 101 F. Supp. 3d at 234-38. 1 On Apri110 and 14,2015, Defendants transmitted to
Plaintiffs an offer ofjudgment pursuant to Federal Rule of Civil Procedure 68, whereby
Defendants, without admitting liability, proposed that judgment would be taken against them in
the sum of one hundred dollars ($1 00) per plaintiff, per remaining claim (i.e., four hundred
dollars ($400) total). (See Declaration of Gerald E. Arth, dated May 12, 2015 ("Arth Decl.")
(Dkt. 65) at~~ 3-4, Exs. B, C). According to Defendants, this amount exceeds the maximum that
Plaintiffs could possibly recover on their extant claims. (See Def s Br. (Dkt. 67) at 15).
Plaintiffs did not accept or respond to Defendants' Rule 68 offer. (See Arth. Decl. at 5).
Defendants then filed this motion, arguing that the Court lacks subject matter jurisdiction based

1
The Court also granted former defendant Daniel Mowrey's motion to dismiss for lack of personal
jurisdiction under Rule 12(b)(2) and defendant Nicole Polizzi's motion to dismiss plaintiff Ashley
Brady's claims against her for lack of subject matter jurisdiction under Rule 12(b)(l). See id. at 229, 232.

2

upon their unaccepted offer ofjudgment, which mooted Plaintiffs' claims. (See Def's Br. (Dkt.
67) at 5-17).

II.

DISCUSSION
On January 20, 2016, after the present motion was fully briefed, the Supreme Court

issued a decision in Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016). In that decision, the
Court "resolve[d] a disagreement among the Courts of Appeals" by holding that an unaccepted
offer of judgment made to a named plaintiff who is seeking relief on behalf of a class of similarly
situated people does not render a case moot. Gomez, 136 S.Ct. at 669, 672. "[A]n unaccepted
settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or
obligation. With the offer off the table, and the defendant's continuing denial ofliability,
adversity between the parties persists." Jd. at 666.
Plaintiffs filed a putative class action and have yet to file their motion for class
certification. 2 Defendants' Rule 68 offer "was neither an admission of liability nor an admission
that Plaintiffs suffered any damages." (Def's Br. (Dkt. 67) at 4). And Plaintiffs did not accept
Defendants' offer. Accordingly, Gomez is directly on point and mandates denial of Defendants'
motion to dismiss for lack of subject matter jurisdiction.

2

The deadline for Plaintiffs to file a class certification motion was February 15, 2016. (See Scheduling
Order (Dkt. 53) at 2). On May 15, 2015, the Court granted Defendants' motion to stay discovery pending
resolution of this motion. (Dkt. 57). Accordingly, all deadlines following the originally ordered close of
discovery, including the deadline for Plaintiffs to file a class certification motion, were also stayed
pending resolution of this motion.

3

ill.

CONCLUSION
For the foregoing reasons, Defendants' motion to dismiss for lack of subject matter

jurisdiction pursuant to Rule 12(h)(3) of the Federal Rules of Civil Procedure is denied. The stay
of discovery pending resolution of this motion is lifted. The parties shall confer and jointly
submit a proposed revised scheduling order for the Court's consideration by no later than April
8, 2016.
SO ORDERED.

s/ Sandra J. Feuerstein
Sandra J. Feuerstein
United States District Judge

Dated: March 31,2016
Central Islip, New York

4