In Re: Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation

Filing 4227

OPINION AND ORDER #105670 re: (81 in 1:14-cv-06228-SAS) MOTION to Dismiss (1) Counts V (trespass) and VI (Unfair Trade Practices & Consumer Protection Law) in their entirety, and (2) dismissing Count III (public nuisance) to the extent it is premised on the manufacture and/or distribution of MTBE or MT filed by Exxon Mobil Corporation. For the foregoing reasons, defendants' motion to dismiss is GRANTED. The Clerk of Court is directed to close this motion (Dkt. No. 81) and enter judgment in favor of the moving defendants. SO ORDERED. (As further set forth in this Order.) (Signed by Judge Shira A. Scheindlin on 7/2/2015) Filed In Associated Cases: 1:00-cv-01898-SAS-DCF, 1:14-cv-06228-SAS(ajs) Modified on 7/20/2015 (soh).

USDCSDNY
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

----------------------------------------------------- ~
IN RE: METHYL TERTIARY BUTYL
ETHER ("MTBE") PRODUCTS
LIABILITY LITIGATION

OoctJMENT
ELECTRONICAU.Y FILED
DOC,#:
DATE Fl-LE-D:-.-..j~\~2..-,-t
'-:>-

OPINION AND ORDER
Master E'ile No. 1:00-1898
MDL 13$8 (SAS)
M21-88

This document relates to:

Commonwealth ofPennsylvania v. Exxon
Mobil Corporation, et al., 14 Civ. 6228

----------------------------------------------------- ~
SHIRA A. SCHEINDLIN, U.S.D.J.:
I.

INTRODUCTION
This is a consolidated multi-district litigation ("MDL") relating to

contamination - actual or threatened - of groundwater from various defendants'
use of the gasoline additive methyl tertiary butyl ether ("MT8E") and/or tertiary
butyl alcohol, a product formed by the breakdown of MTBE in water. On
December 23, 2014, certain defendants (collectively, "defendants") moved
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Proce~ure to dismiss
Counts V and VI of the Commonwealth of Pennsylvania's (the "Commonwealth")
Amended Complaint, as well as Count III to the extent it seeks to hold defendants
liable based on their alleged manufacture and/or distribution of MTBE or MTBE

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gasoline.1 For the reasons stated below, defendants’ motion to dismiss is
GRANTED.
II.

BACKGROUND
The Commonwealth seeks to recover for alleged injury and threat of

future injury to the waters of the Commonwealth caused by MTBE.2 At issue in
this motion are claims of public nuisance (Count III), trespass (Count V), and
violations of the Pennsylvania Unfair Trade Practice and Consumer Protection Law
(“UTPCPL”) (Count VI).
A.

Count III: Public Nuisance
The Commonwealth alleges that defendants, who did not own or

operate MTBE release sites, nevertheless participated and assisted in the creation
of a nuisance by “intentionally and fraudulently promot[ing] MTBE for use as an
additive in gasoline despite their knowledge it had latent and far-reaching adverse
environmental consequences.”3 The Commonwealth further alleges that
defendants “knew, or reasonably should have known, that (i) gasoline containing
MTBE would be placed into leaking gasoline storage and delivery systems; and (ii)

1

See MTBE Defendants’ Notice of Motion to Dismiss at 1.
For a complete list of moving defendants, see id. at 2.
2

See Amended Complaint (“Am. Compl.”) ¶ 1.

3

Id. ¶ 268.
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when released into the subsurface . . . [would] be difficult and costly to remove
from the water.”4 Critical to this motion, the Commonwealth seeks to hold
defendants liable based on “refin[ing], compound[ing], formulat[ing], market[ing],
and/or otherwise supply[ing]” MTBE or MTBE gasoline.5 These defendants are
not owners of stations or sites where MTBE was released, but are instead refiners,
manufacturers, marketers, distributors, or suppliers of the released product.6
B.

Count V: Trespass
The Commonwealth also alleges that defendants are liable for trespass

to the “waters of the Commonwealth.”7 In bringing this claim, the Commonwealth
asserts that it is “the possessor and owner of rights and interests in the waters of the
Commonwealth . . . which [it] holds in trust for the benefit of its citizens.”8 The
Amended Complaint does not allege that the Commonwealth “exclusively
possess[es] the water at issue in this case.”9

4

Id.

5

Id. See also Memorandum of Law in Support of MTBE Defendants’
Motion to Dismiss (“Def. Mem.”) at 1.
6

See Def. Mem. at 6.

7

Am. Compl. ¶ 283.

8

Id. ¶ 282.

9

Def. Mem. at 7.
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C.

Count VI: UTPCPL Claim
The Commonwealth contends that defendants violated the UTPCPL

because they allegedly engaged in “unfair and deceptive actions” in their sale and
marketing of MTBE gasoline.10 In support of this claim, the Commonwealth
alleges generally that defendants “disseminated, marketed, advertised and
otherwise distributed information to gasoline refiners, distributors, jobbers,
retailers and consumers that MTBE was a safe . . . gasoline additive when in fact

10

Am. Compl. ¶ 292. The Amended Complaint alleges that defendants
violated four specific UTPCPL provisions:
(v) Representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits or
quantities that they do not have or that a person has a
sponsorship, approval, status, affiliation or connection that
he does not have;
...
(vii) Representing that goods or services are of a particular
standard, quality, or grade, or that goods are of a particular
style or model, if they are of another;
...
(ix) Advertising goods or services with intent not to sell
them as advertised;
...
(xxi) Engaging in any other fraudulent or deceptive conduct
which creates a likelihood of confusion or of
misunderstanding.
Id. ¶ 291; 73 Pa. Stat. §§ 201-2(4)(v), (viii), (ix), (xxi).
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its environmental risks and hazards outweighed any benefits . . . .”11 In addition,
the Amended Complaint states that defendants’ use of MTBE did not have the
“characteristics, benefits or qualities it was represented to possess in that when
released into the environment it caused far reaching damage to air, property, water
supplies and other natural resources of the Commonwealth . . . .”12
Despite accusing defendants of false advertising, the Amended
Complaint references only one specific advertisement – a 1999 advertisement that
Getty placed in the New York Times – which the Commonwealth acknowledges
was true.13 The Amended Complaint identifies the following allegedly false
statements: (1) comments about an MTBE study made by the American Petroleum
Institute (“API”) (of which some, but not all, defendants belonged);14 (2)
comments made by ARCO, Exxon, and a multi-company committee including
certain defendants (the “MTBE Committee”) in lobbying and regulatory
proceedings;15 (3) comments made by the MTBE Committee at an oil industry

11

Am. Compl. ¶ 292(a).

12

Id. ¶ 292(b).

13

See id. ¶ 198.

14

See id. ¶¶ 174-178.

15

See id. ¶¶ 179-188, 190.
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event;16 (4) a product bulletin issued by ARCO;17 and (5) a pamphlet issued by the
Oxygenated Fuels Association (“OFA”), a “captive entity” of defendants.18
Finally, the Commonwealth seeks an order from the Court pursuant to
Section 4.1 of the UTPCPL requiring defendants “to restore to the Commonwealth
and other persons in interest any moneys or property, real or personal, lost as a
result of defendants’ violations of the UTPCPL.”19
III.

LEGAL STANDARD
A.

Motion to Dismiss Under Rule 12(b)(6)
In deciding a motion to dismiss pursuant to Rule 12(b)(6), the court

must “accept[] all factual allegations in the complaint as true and draw[] all
reasonable inferences in the plaintiff’s favor.”20 The court evaluates the
sufficiency of the complaint under the “two-pronged approach” set forth by the
Supreme Court in Ashcroft v. Iqbal.21 Under the first prong, a court may “begin by
identifying pleadings that, because they are no more than conclusions, are not
16

See id. ¶ 189.

17

See id. ¶¶ 191-193.

18

Id. ¶ 194.

19

Id. ¶ 298. See also 73 Pa. Stat. § 201-4.1.

20

Grant v. County of Erie, 542 Fed. App’x 21, 23 (2d Cir. 2013).

21

See 556 U.S. 662, 678-79 (2009).
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entitled to the assumption of truth.”22 For example, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not
suffice.”23 Under the second prong of Iqbal, “[w]hen there are well-pleaded factual
allegations, a court should assume their veracity and then determine whether they
plausibly give rise to an entitlement for relief.”24 A claim is plausible “when the
plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”25 Plausibility
requires “more than a sheer possibility that a defendant has acted unlawfully.”26
Additionally, “[w]here a complaint names multiple defendants, that complaint
must provide a plausible factual basis to distinguish the conduct of each of the
defendants.”27
B.

Leave to Amend
Federal Rule of Civil Procedure 15(a)(2) provides that, other than

22

Id. at 679.

23

Id. at 678 (citation omitted).

24

Id. at 679.

25

Id. at 678 (citation omitted).

26

Id. (quotation marks omitted).

27

Ochre L.L.C. v. Rockwell Architecture Planning & Design, P.C., No.
12 Civ. 2837, 2012 WL 6082387, at *6 (S.D.N.Y. Dec. 3, 2012), aff’d, 530 Fed.
App’x 19 (2d Cir. 2013).
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amendments as a matter of course, “a party may amend [its pleading] only by leave
of court or by written consent of the adverse party.”28 Although “[t]he Court
should freely give leave when justice so requires,”29 it is “within the sound
discretion of the district court to grant or deny leave to amend.”30 When a motion
to dismiss is granted, “‘[i]t is the usual practice . . . to allow leave to replead.’”31
Where a plaintiff inadequately pleads a claim and cannot offer additional
substantive information to cure the deficient pleading, granting leave to replead is
futile.32
IV.

APPLICABLE LAW
A.

Public Nuisance
Pennsylvania law provides for both statutory and common law causes

of action for public nuisance.33 Pennsylvania courts generally apply Section 821B
28

Slayton v. American Express Co., 460 F.3d 215, 226 n.10 (2d Cir.
2006) (citation and quotation marks omitted).
29

Fed. R. Civ. P. 15(a)(2).

30

McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir.
2007) (citation omitted).
31

Schindler v. French, 232 Fed. App’x 17, 19 (2d Cir. 2007) (quoting
Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991)).
32

See Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000).

33

See 35 Pa. Stat. § 6021.1304 (“A violation of [the Pennsylvania
Storage Tank and Spill Prevention Act (“PSTSPA”)] . . . shall constitute a public
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of the Restatement (Second) of Torts to “guide [their] determinations as to whether
a use of property constitutes a public nuisance.”34 The Restatement defines a
public nuisance as “an unreasonable interference with a right common to the
general public.”35
Pennsylvania law does not explicitly limit public nuisance liability to
property owners or users, but the PSTSPA and the PCSL evince such an intent.
For instance, Section 6021.1303(b) of the PSTPSA provides that “[a]ny owner or
operator of a storage tank who affects or diminishes a water supply as a result of a
release shall restore or replace the affected supply.”36 Similarly, Section 691.401
of the PCSL states that “[i]t shall be unlawful for any person . . . [to] allow or
permit [a] discharge[] from property owned or operated by such person.”37
nuisance.”); 35 Pa. Stat. § 691.3 (noting that under the Pennsylvania Clean Stream
Law (“PCSL”), “[t]he discharge of sewage or industrial waste or any substance
into the waters of this Commonwealth, which causes or contributes to pollution . . .
is hereby declared . . . to be against public policy and to be a public nuisance”);
Commonwealth v. MacDonald, 374 A.2d 290, 303 (Pa. 1975) (“A thing may be a
public nuisance because it is so declared by statute . . . alternatively, it may be
declared a nuisance as a matter of common law . . . if it unreasonably interferes
with the rights of the public.”).
34

Machipongo Land & Coal Co. v. Commonwealth, 799 A.2d 751, 773

(Pa. 2002).
35

Restatement (Second) of Torts § 821B.

36

35 Pa. Stat. § 6021.1303(b) (emphasis added).

37

Id. § 691.401 (emphasis added).
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Pennsylvania courts have repeatedly constrained liability for public
nuisance specifically to an owner or operator of a nuisance source.38 In City of
Philadelphia v. Beretta, the court declined to hold gun manufacturers liable in
public nuisance based on their product distribution practices.39 This principle has
been upheld in the environmental context, as well.40 In Diess v. Pennsylvania
Department of Transportation, the court agreed with defendant that plaintiff must
“establish that the party charged with creating a public nuisance had possession or
control over the site from which the nuisance [(here, an environmental
contaminant)] originates.”41
B.

Trespass
Under Pennsylvania law, trespass – exclusively a common law cause

of action – “is defined as an ‘unprivileged, intentional intrusion upon land in

38

See, e.g., City of Phila. v. Beretta U.S.A. Corp., 126 F. Supp. 2d 882,
910 (E.D. Pa. 2000), aff’d, 277 F.3d 415 (3d Cir. 2002) (“The refusal of many
courts to expand public nuisance law to the manufacturing, marketing, and
distribution of products conforms with the elements of public nuisance law.”).
39

See id. at 910-11 (“If I must choose between an interpretation of
Pennsylvania law which reasonably restricts liability, and another which expands
it, prudence dictates I choose the narrower path.”).
40

See, e.g., Diess v. Pennsylvania Dep’t of Transp., 935 A.2d 895, 90405 (Pa. Commw. Ct. 2007) (relying on Beretta to dismiss a public nuisance claim
against the generator of fly ash, an environmental contaminant).
41

Id. at 904.
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possession of another.’”42 “In order to maintain an action in trespass, ‘a plaintiff
must have had exclusive use and possession of the property at issue.’”43
Pennsylvania courts have clearly conferred on private litigants the right to bring
trespass claims for damage to groundwater under their land.44 But neither the
parties nor the Court can identify any reported cases granting the Commonwealth
the right to sue for trespass to groundwater, or stating that the Commonwealth has
“exclusive possession” of such water as a trustee. In another case in this MDL, the
Court rejected a similar argument raised by New Jersey as a state trustee, holding
that the state’s lack of exclusive possession of groundwater foreclosed its claim for
trespass.45

42

Boring v. Google Inc., 362 Fed. App’x 273, 280 (3d Cir. 2010)
(quoting Graham Oil Co. v. BP Oil Co., 885 F. Supp. 716, 725 (W.D. Pa.1994)).
43

Roth v. Cabot Oil & Gas Corp., 919 F. Supp. 2d 476, 492 (M.D. Pa.
2013) (quoting Graham, 885 F. Supp. at 725).
44

See, e.g., Dombrowski v. Gould Elec., Inc., 954 F. Supp. 1006, 1013
(M.D. Pa. 1996) (noting that groundwater contamination may support a private
party’s trespass claim); Burr v. Adam Eidemiller, Inc., 126 A.2d 403, 408 (Pa.
1956) (holding defendant liable in trespass for contaminating private landowners’
spring). Article I, Section 27 of the Pennsylvania Constitution states that
“Pennsylvania’s public natural resources are the common property of all the
people,” and “as trustee of these resources, the Commonwealth shall conserve and
maintain them for the benefit of the people.”
45

In re MTBE, No. 08 Civ. 312, 2014 WL 840955, at *3 (S.D.N.Y. Mar.

3, 2014).
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C.

UTPCPL
At issue in this motion are four alleged violations of the UTPCPL.

Specifically, the UTPCPL proscribes the following “[u]nfair methods of
competition” and “unfair or deceptive acts or practices”:
(v) Representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits or
quantities that they do not have or that a person has a
sponsorship, approval, status, affiliation or connection that
he does not have;
...
(vii) Representing that goods or services are of a particular
standard, quality, or grade, or that goods are of a particular
style or model, if they are of another;
...
(ix) Advertising goods or services with intent not to sell
them as advertised;
...
(xxi) Engaging in any other fraudulent or deceptive conduct
which creates a likelihood of confusion or of
misunderstanding.46
46

73 Pa. Stat. §§ 201-2(4)(v), (viii), (ix), (xxi). There is some conflict
in Pennsylvania federal courts regarding whether UTPCPL claims are governed by
the heightened pleading requirements of Rule 9(b), as opposed to the Twombly
plausibility standard under Rule 8(a)(2). Compare, e.g., Kee v. Zimmer Inc., 871 F.
Supp. 2d 405, 412 (E.D. Pa. 2012 (applying Rule 9(b)); with Goleman v. York Int’l
Corp., No. 11 Civ. 1328, 2011 WL 3330423 (E.D. Pa. Aug. 3, 2011) (dismissing
claim for lack of sufficient factual allegations under Rule 8(a)(2)). I find that the
better approach is to apply Rule 8(a)(2) for two principal reasons. First, in 1996,
the Pennsylvania legislature amended the so-called “catchall” provision of the
UTPCPL – subsection 2(4)(xxii) – to add “deceptive conduct” as a ground for
finding a violation, relieving plaintiffs of the burden to allege plainly fraudulent
conduct. See Plaintiff’s Memorandum of Law in Opposition to MTBE
Defendants’ Motion to Dismiss (“Pl. Mem.”) at 16 n.14. As several courts have
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“Deception . . . is defined as intentional misleading by falsehood spoken or acted.”47
Separately, Section 4.1 of the UTPCPL contains a restoration
provision, which provides that
[w]henever any court issues a permanent injunction to
restrain and prevent violations of this act as authorized in
section 4 [], the court may in its discretion direct that the
defendant or defendants restore to any person in interest
any moneys or property, real or personal, which may have
been acquired by means of any violation of this act, under
terms and conditions to be established by the court.48

recently observed, this amendment counsels in favor of applying the lesser Rule
8(a)(2) pleading standard to allegations of deceptive conduct under the catchall
provision. See, e.g., Fingles v. Continental Cas. Co., No. 08 Civ. 05943, 2010 WL
1718289, at *7 (E.D. Pa. Apr. 28, 2010) (noting that “[f]rom a procedural
standpoint, Rule 9(b) is not implicated by allegations of deceptive conduct”).
Second, some of the cases applying the Rule 9(b) standard after the passage of the
amendment predate Twombly or otherwise fail to consider its impact in requiring
plaintiffs to plead with particularity. See, e.g., Grant v. Kingswood Apts., No. 01
Civ. 1523, 2001 WL 1178796 (E.D. Pa. Oct. 2, 2001) (applying Rule 9(b) six years
before Twombly was decided). Because the Rule 8(a)(2) standard under Twombly
and Iqbal imposes a higher bar than it once did during the “notice pleading”
regime, it can be applied more appropriately to claims similar to, but not sounding
in, fraud. Accordingly – and without objection by defendants, who note the
conflict but insist that the Commonwealth cannot satisfy the lesser standard – the
Court applies Rule 8(a)(2) to the UTPCPL claim.
47

Montanez v. HSBC Mortgage Corp. (USA), 876 F. Supp. 2d 504, 519
(E.D. Pa. 2012).
48

73 Pa. Stat. § 201-4.1 (emphasis added). Section 4 permits the
Attorney General to “bring an action in the name of the Commonwealth” to
restrain violations of the statute.
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“Person” is defined in the UTPCPL to mean “natural persons, corporations, trusts,
partnerships, incorporated or unincorporated associations, and any other legal
entities.”49
V.

DISCUSSION
A.

Count III: The Commonwealth’s Public Nuisance Claim Fails
Because Defendants Did Not Own or Operate the Release Sites
The Commonwealth’s public nuisance claim fails against these

defendants because they did not have “possession or control over the site[s] from
which the nuisance originate[d].”50 In Pennsylvania, courts do not impose liability
for public nuisance “in the context of injuries caused by defective product design
and distribution.”51 In fact, the Commonwealth’s expansive interpretation of
nuisance liability is contradicted by the very cases on which it relies.52 This Court

49

Id. § 201-2(2).

50

Diess, 935 A.2d at 904.

51

See Beretta, 126 F. Supp. 2d at 909 (citing Tioga Pub. Sch. Dist. v.
U.S. Gypsum Co., 984 F.2d 915, 920 (8th Cir. 1993) (noting that such an extension
of public nuisance law would make it “a monster that would devour in one gulp the
entire law of tort”))).
52

See Machipongo Land & Coal v. Commonwealth, 799 A.2d 751, 775
(Pa. 2002) (imposing liability on property owners); Commonwealth v. Barnes &
Tucker Co., 319 A.2d 871 (Pa. 1974) (imposing liability on a former mine
operator); William J. McIntire Coal Co. v. Department of Envtl. Res., 530 A.2d
140 (Pa. Commw. Ct. 1987) (same).
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has ruled repeatedly in this MDL that nuisance actions cannot lie against
defendants who allegedly contribute to MTBE contamination merely as refiners,
manufacturers, marketers, distributers, or suppliers.53 Because Pennsylvania’s law
is no different, the result is the same. The Commonwealth’s public nuisance claim
is dismissed with prejudice to the extent it is premised on defendants’ manufacture
or distribution of MTBE or MTBE gasoline.54
B.

Count V: The Commonwealth Cannot Sustain a Trespass Claim
Because It Lacks Exclusive Possession of the Groundwater
To prevail on a trespass claim, the Commonwealth must allege that it

exclusively possessed the groundwater at issue. But it has not made such an
allegation, nor could it as a matter of law. Indeed, no Pennsylvania court has
permitted the Commonwealth to sue for trespass to groundwater, or stated that the
Commonwealth has “exclusive possession” of such water. Trespass claims for

53

See, e.g., In re MTBE, No. 04 Civ. 4968, 2014 WL 7232280
(S.D.N.Y. Dec. 18, 2014) (dismissing public nuisance claim brought by Orange
County Water District where defendants “did not own or have any significant
control over the stations”); In re MTBE, 980 F. Supp. 2d 425 (dismissing public
nuisance claims brought by the town of Fresno where plaintiff “essentially
described a product liability action . . . not a nuisance action”); In re MTBE, 379 F.
Supp. 2d 348, 417 (S.D.N.Y. 2005) (dismissing nuisance claim under New
Hampshire law where “plaintiffs [sought] to recover from defendants in their
capacity as manufacturers, and not as property owners or users”).
54

The Commonwealth remains free to litigate its public nuisance claim
against owners, operators, or users of the MTBE release sites.
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damage to groundwater belong instead to private plaintiffs in exclusive possession
of that water.55 Lacking the requisite exclusive possession, the Commonwealth’s
trespass claim is futile and therefore dismissed with prejudice.
C.

Count VI: Violations of the UTPCPL
1.

The Allegations in the Amended Complaint Are Insufficient
to Support a Claim Under the UTPCPL

The allegations in the Amended Complaint forming the basis of the
Commonwealth’s UTPCPL claim lack specificity and fail to differentiate among
defendants.56 The Commonwealth defends its vague group-wide allegations as
sufficient under Rule 8(a)(2), insisting that the Court allowed “virtually the same”
allegations to survive in two prior MTBE MDL rulings regarding consumer
protection statutes.57 But both of those rulings predated the heightened pleading
standard established by Twombly and Iqbal, under which, in multiple-defendant

55

See, e.g., Dombrowski, 954 F. Supp. at 1013; Burr, 126 A.2d at 408;
Gambo v. Commw., No. 04 Civ. 3318, 2005 WL 4346598, at *3 (Pa. Com. Pl. Aug.
26, 2005). As defendants point out in their reply brief, none of the cases on which
the Commonwealth relies actually held that it could bring claims for trespass to
groundwater. See Reply Memorandum of Law in Further Support of MTBE
Defendants’ Motion to Dismiss at 4 n.4. The Commonwealth’s argument that it
“controls” the groundwater for trespass purposes is not supported by Pennsylvania
case law. Pl. Mem. at 11.
56

See Am. Compl. ¶¶ 172-198.

57

See Pl. Mem. at 14.
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cases, “the complaint [(1)] must provide a plausible factual basis to distinguish the
conduct of each of the defendants,”58 and, more generally, (2) set forth allegations
that “plausibly give rise to an entitlement for relief.”59
The Amended Complaint fails to satisfy either of these intertwined
requirements. The only specific defendant the Amended Complaint almost
plausibly alleges to have violated any section of the UTPCPL is ARCO, which is
accused of having published a bulletin containing allegedly false statements
regarding the proper handling of MTBE during storage and shipping.60 It is
conceivable that the publication of this bulletin could constitute “deceptive
conduct” under the catchall provision, but to “nudge[] the[] claim across the line
from conceivable to plausible,”61 the Commonwealth would also need to allege
specific information about how the bulletin “create[d] [for consumers,
Pennsylvania residents, or the Commonwealth] a likelihood of confusion or of
misunderstanding” under the catchall provision.62 The other defendant-specific
allegations in the Amended Complaint relate to comments made in lobbying and
58

Ochre L.L.C., 2012 WL 6082387, at *6.

59

Iqbal, 556 U.S. at 679.

60

See Am. Compl. ¶ 191.

61

Twombly, 550 U.S. at 570.

62

73 Pa. Stat. § 201-2(4)(xxi).
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regulatory proceedings, which alone cannot give rise to a UTPCPL claim, and
which the Commonwealth does not allege were directed at consumers.63 Further,
while at least two of the four UTPCPL provisions at issue require allegations of
false advertising, the Amended Complaint references only one advertisement,
which the Commonwealth admits does not contain any false information.64
The remaining allegations accusing defendants – as a group – of
engaging in deceptive conduct or otherwise violating the UTPCPL are simply too
vague as to each defendant under Twombly and its progeny to state a claim.
However, leave to replead the UTPCPL claim is merited because, unlike with the
public nuisance and trespass claims, “additional substantive information [could]
cure the deficient pleading” with respect to the UTPCPL.65 Accordingly, the
UTPCPL claim is dismissed without prejudice.
2.

The Commonwealth Is Not Entitled to Restoration Under
the UTPCPL

63

See Zwiercan v. General Motors Corp., No. 3235, 2002 WL
31053838, at *6 (Pa. Com. Pl. Sept. 11, 2002) (“[I]n so far as Plaintiff’s UTPCPL
claim seeks redress for misstatements to [a federal agency], it is a ‘fraud on the
agency’ claim, which is properly preempted by federal law.”).
64

See Am. Compl. ¶ 198. Subsections 2(4)(v) and (ix) of the UTPCPL
“apply only to false advertising.” Seldon v. Home Loan Servs., Inc., 647 F. Supp.
2d 451, 566 (E.D. Pa. 2009) (emphasis added).
65

Cuoco, 222 F.3d at 112.
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The Commonwealth’s entitlement to restoration under the UTPCPL
turns on whether it qualifies as a “person” under the restoration provision of the
statute. The Pennsylvania courts have not provided a clear answer to this question.
In Commonwealth v. TAP Pharmaceutical Products, the trial court analyzed the
term “person” and concluded that the Commonwealth was a public entity entitled
to restoration under the statute.66 This decision was later vacated and remanded by
the Pennsylvania Supreme Court because the Commonwealth failed at trial to
provide a rational accounting of the relevant state agency’s damages.67 The
Pennsylvania Supreme Court did not, in remanding TAP, address the
Commonwealth’s entitlement to restoration as a “person” under the statute.68
The very day that it remanded TAP, the Pennsylvania Supreme Court
issued a decision in another case, Meyer v. Beaver County Community College,
holding that “political subdivision agencies” do not constitute “persons” under the
UTPCPL.69 In Meyer, the court confronted the definition of “person” under the
UTPCPL in a slightly different context: whether a public entity was a “person”

66

See 36 A.3d 1112, 1158-59 (Pa. Comm. Ct. 2011), vacated and
remanded, 94 A.3d 350 (Pa. 2014).
67

See 94 A.3d 350.

68

See id.

69

93 A.3d 806 (Pa. 2014).
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that could be sued under the statute, not whether a public entity was a “person”
entitled to restoration.70 Context aside, the statutory provision the Meyer court
interpreted – which defines “person” under the UTPCPL – was the same one at
issue in TAP.
The Commonwealth urges the Court to ascribe different meanings to
the word “person” across different sections of the UTPCPL, arguing principally
that the Commonwealth’s broad enforcement power under the statute militates in
favor of an expansive definition of “person” in the context of recovering damages,
and a narrower definition of “person” in deciding whether to hold a public entity
liable under the statute.71 For additional support, the Commonwealth juxtaposes
section 4 of the statute, which permits the Attorney General to “bring an action in
the name of the Commonwealth” to restrain violations of the statute, with the
restoration provision – section 4.1 – which gives the court discretion to direct that
defendants “restore any person in interest” whenever a court “issues a permanent
injunction . . . as authorized in section 4.”72 Reading these contiguous provisions
of the statute together and accounting for its overall purpose of “policing the

70

Id. at 815.

71

See Pl. Mem. at 21-23.

72

73 Pa. Stat. §§ 201-4, 4.1 (emphasis added); see also Pl. Mem. at 21.
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marketplace and remedying unfair and deceptive conduct,” the Commonwealth
concludes that restoration must be available to it as a remedy under the statute.73
This is a fair interpretation – and perhaps a more appealing one from a
policy perspective – but still remains at odds with the Pennsylvania Supreme
Court’s pronouncement in Meyer. Further, as defendants point out, counting the
Commonwealth as a “person in interest” would stretch the statutory definition
beyond its plain meaning. It is even more troubling to give “person” different
meanings in different sections of the same statute, especially after the Pennsylvania
Supreme Court recently defined the term without explicitly limiting its meaning.74
After considering various statutory interpretation arguments, the Meyer Court
excluded the Commonwealth and its agencies as “persons” under the UTPCPL and
gave no indication that the result would or should be different in the enforcement

73

Pl. Mem. at 22 n.18.

74

See, e.g., King v. Burwell, No. 14-114, 2015 WL 2473448, at *8 (U.S.
June 25, 2015) (Roberts, C.J.) (noting, in interpreting ambiguous language in a
statute, that “[o]ur duty, after all, is ‘to construe statutes, not isolated provisions.’”)
(quoting Graham Cnty. Soil and Water Conservation Dist. v. United States ex rel.
Wilson, 559 U.S. 280, 290 (2010))); Auburn Hous. Auth. v. Martinez, 277 F.3d
138, 144 (2d Cir. 2002) (Katzmann, C.J.) (“The preferred meaning of a statutory
provision is one that is consonant with the rest of the statute.”); Board of Revision
of Taxes v. City of Phila., 4 A.3d 610, 622 9 (Pa. 2010) (noting that when a term
has a particular meaning in one section of a statute, that word “will be construed to
mean the same thing in another section of the same statute”).
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context.75 A contrary ruling in this case would appear to defy Meyer and do
violence to the UTPCPL’s statutory scheme. Accordingly, I hold that the
Commonwealth is not entitled to restoration under the statute.
However, this issue is an important one that the Pennsylvania
Supreme Court should squarely address. Only adding to the confusion of the
conflict in authorities is the court’s decision to remand TAP on unrelated grounds
on the same day it issued Meyer, without any mention in TAP of the overlapping
issue at the heart of Meyer.76 The upshot is two rulings, issued on the same day,
that may contradict each other. I would certify this issue to the Pennsylvania
Supreme Court if I could, but it will not accept certification petitions from federal
district courts.77 What I may be willing to do, at the request of one or more of the
parties, is certify this order for interlocutory appeal pursuant to 28 U.S.C. §
1292(b), as the Pennsylvania Supreme Court does entertain certification petitions

75

See Meyer, 93 A.3d at 815 (“In sum, we hold the UTPCPL is
ambiguous as to whether political subdivision agencies constitute ‘persons.’
However, based on our consideration of the law prior to the UTPCPL’s enactment,
the UTPCPL’s purpose, and the consequences of a holding that it applies to such
agencies, we conclude the legislature did not intend for the definition of ‘person’ to
include political subdivision agencies.”).
76

This is likely because the definition of “person” under the statute was
not – for reasons unknown to me – an issue before the court on appeal in TAP.
77

See 210 Pa. Code § 63.8.
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from the federal courts of appeals. 78

V.

CONCLUSION
For the foregoing reasons, defendants' motion to dismiss is

GRANTED. The Clerk of Court is directed to close this motion (Dkt. No. 81) and
enter judgment in favor of the moving defendants.

Dated:

78

New York, New York
July 2, 2015

See id.
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- Appearances Liaison Counsel for Plaintiffs:
Robert J. Gordon, Esq.
Robin L. Greenwald, Esq.
William A. Walsh, Esq.
Weitz & Luxenberg, P.C.
180 Maiden Lane
New York, NY 10038
[phone]
Counsel for the Commonwealth:
Daniel Berger, Esq.
Tyler Wren, Esq.
Berger & Montague, P.C.
Special Counsel to the Commonwealth
1622 Locust Street
Philadelphia, PA 19103
[phone]
Michael Axline, Esq.
Duane C. Miller, Esq.
Tracey L. O’Reilly, Esq.
Miller, Axline & Sawyer
1050 Fulton Avenue, Suite 100
Sacramento, CA 95825
[phone]
Stewart L. Cohen, Esq.
Robert L. Pratter, Esq.
Michael Coren, Esq.
Cohen, Placitella & Roth, P.C.
Special Counsel to the Commonwealth
Two Commerce Square, Suite 29000
Philadelphia, PA 19103
[phone]
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James A. Donahue, III
Executive Deputy Attorney General
Pennsylvania Office of Attorney General
Strawberry Square
Harrisburg, PA 17120
[phone]
Linda C. Barrett
Deputy General Counsel
Pennsylvania Governor’s Office of General Counsel
333 Market Street
Harrisburg, PA 17101
[phone]
Liaison Counsel for Defendants and on behalf of Defendants:
Peter J. Sacripanti, Esq.
James A. Pardo, Esq.
Stephen J. Riccardulli, Esq.
Lisa A. Gerson, Esq.
McDermott Will & Emery LLP
50 Rockefeller Plaza, 11th Floor
New York, NY 10020
[phone]

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