Steigerwald v. BHH, LLC et al
Filing
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Memorandum of Opinion and Order: Defendants' Motion to Dismiss Plaintiff's Class Action Complaint is granted as to Count One and denied as to Counts Two and Four. Judge Patricia A. Gaughan on 9/21/15. (LC,S) re 12
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
Jeanne Steigerwald,
individually and on behalf of
all others similarly situated,
Plaintiff
vs.
BHH, LCC, Van Hauser, LLC,
and E. Mishan and Sons, Inc.
Defendants.
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CASE NO. 1:15 CV 741
JUDGE PATRICIA A. GAUGHAN
Memorandum of Opinion and Order
Introduction
This matter is before the Court upon defendants’ Motion to Dismiss Plaintiff’s Class
Action Complaint (Doc. 12). This case involves consumer sales of electronic pest control
devices. For the following reasons, the motion is GRANTED IN PART and DENIED IN PART.
Facts
Plaintiff Jeanne Steigerwald filed this Class Action Complaint against defendants BHH,
LLC; Van Hauser, LLC; and E. Mishan and Sons, Inc dba EMSON, Inc. The Complaint alleges
the following.
Defendants manufacture, market, and distribute electronic pest control devices that
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allegedly repel pests from the user’s home. Despite defendants’ advertisements stating that the
devices repel mice, ants, spiders, and other pests by electromagnetic/ultrasonic power using
wiring within the walls to emit a signal, the devices do not repel pests.
In order to expel pests from her house, plaintiff went to a Wal-Mart in May 2013 and
purchased a Bell+Howard-trademarked electronic/ultrasonic pest control device manufactured
and marketed by defendant. Defendant BHH licenses the Bell+Howard trademark to defendants
Van Hauser and EMSON for the purpose of designing, manufacturing, distributing, marketing,
and selling the ultrasonic pest control device purchased by plaintiff. The device’s packaging
labels it as an “electronic pest repeller” and states that it uses “ultrasonic sound waves [to] help
to eliminate mice, rats, roaches, spiders, and ants.” Defendants’ website also states that the
device uses ultrasonic power to emit a signal to drive away insects and rodents. Plaintiff
purchased the device based on defendants’ representations. Although plaintiff used the device as
instructed, it did not repel pests in and/or around plaintiff’s home. The scientific literature
indicates that these products have no effect on pests. Defendants had reason to know that their
claims and representations were false and contrary to scientific evidence, but they continued to
advertise the devices as effectively controlling pests.
Five claims are asserted. Count One alleges a violation of the Ohio Consumer Sales
Practices Act (O.R.C. § 1345, et seq.) (OCSPA). Count Two alleges fraud. Count Three alleges
breach of contract. Count Four alleges breach of express warranty. Count Five alleges unjust
enrichment. In her brief, plaintiff states that she is not pursuing her breach of contract and unjust
enrichment claims and, therefore, does not oppose dismissal of those claims.
This matter is now before the Court defendants’ Motion to Dismiss Plaintiff’s Class
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Action Complaint.
Standard of Review
“Dismissal is appropriate when a plaintiff fails to state a claim upon which relief can be
granted. Fed.R.Civ.P. 12(b)(6). We assume the factual allegations in the complaint are true and
construe the complaint in the light most favorable to the plaintiff.” Comtide Holdings, LLC v.
Booth Creek Management Corp., 2009 WL 1884445 (6th Cir. July 2, 2009) (citing Bassett v.
Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir.2008) ). In construing the complaint
in the light most favorable to the non-moving party, “the court does not accept the bare assertion
of legal conclusions as enough, nor does it accept as true unwarranted factual inferences.”
Gritton v. Disponett, 2009 WL 1505256 (6th Cir. May 27, 2009) (citing In re Sofamor Danek
Group, Inc., 123 F.3d 394, 400 (6th Cir.1997). As outlined by the Sixth Circuit:
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.” “Specific facts are not necessary; the
statement need only give the defendant fair notice of what the ... claim is and the grounds
upon which it rests.”Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007)). However, “[f]actual allegations must be
enough to raise a right to relief above the speculative level” and to “state a claim to relief
that is plausible on its face.” Twombly, 550 U.S. at 555, 570. A plaintiff must “plead[ ]
factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir.2012). Thus, Twombly and Iqbal require that
the complaint contain sufficient factual matter, accepted as true, to state a claim for relief that is
plausible on its face based on factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged. Twombly, 550 U.S. at 570;
Iqbal, 556 U.S. at 678. The complaint must contain “more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.
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Discussion
(1) Ohio Consumer Sales Practices Act
Defendants argue that this claim must be dismissed because it does not sufficiently allege
that defendants had prior notice that their alleged conduct was “deceptive or unconscionable.”
O.R.C. § 1345.09(B). This Court has previously stated,
To pursue a class action claim under the OCSPA, plaintiff must allege that defendant had
prior notice that its conduct was ‘deceptive or unconscionable.’ O.R.C. § 1345.09(B);
Johnson v. Microsoft Corp., 155 Ohio App.3d 626, 636 (Ct.App.2003). To adequately
plead prior notice under O.R.C. § 1345.09(B), plaintiff must allege either that ‘a specific
rule or regulation has been promulgated [by the Ohio Attorney General] under R.C.
1345.05 that specifically characterizes the challenged practice as unfair or deceptive,’ or
that ‘an Ohio state court has found the specific practice either unconscionable or
deceptive in a decision open to public inspection.’ Johnson, 155 Ohio App.3d at 636.
Lack of prior notice requires dismissal of class action allegations. Bower v. International
Business Machines, Inc., 495 F.Supp.2d 837, 841 (S.D.Ohio 2007).
To qualify as sufficient notice, the defendant's alleged violation of the OCSPA must be
‘substantially similar to an act or practice previously declared to be deceptive by one of
the methods identified in R.C. 1345.09(B).’ Marrone v. Philip Morris USA, Inc., 110
Ohio St.3d 5, 6 (2006). ‘Substantial similarity means a similarity not in every detail, but
in essential circumstances or conditions.’ Id. at 10. ‘Cases that involve industries and
conduct very different from the defendant's do not provide meaningful notice of specific
acts or practices that violate the CSPA.’ Id. at 9.
Pattie v. Coach, Inc., 29 F.Supp.3d 1051 (N.D.Ohio 2014).
Count One of the Complaint alleges defendants represented through packaging of the
devices, online statements, and further advertising that the devices are effective in repelling pests
when there was no substantial basis for such claims. (Compl. ¶ 47) Further,
These specific practices have already been found to be a violation of the CSPA in the
following cases, inter alia : See State ex rel. Fisher v. Advanced Automotive
Technologies, Inc. et al., Case No. 91CVH021633, PIF No. 10001279; State ex rel
DeWine v. Foster, Case No. 12CV010630, PIF No. 10003069.
(Compl. ¶ 51)
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Defendants contend that the two cases1 cannot serve as the basis for prior notice because
they involve default judgments, and the industries and conduct involved are very different from
the alleged conduct herein.
This Court has previously found that default judgments cannot serve as the basis for prior
notice. Pattie, 29 F.Supp.3d at 1057. Plaintiff recognizes that both cases are default judgments
and that this Court previously found, in Pattie, that default judgments do not provide sufficient
notice under the OSCPA. But, plaintiff “respectfully requests this Court reach a different
conclusion here, because there is no language in R.C. 1345.09 that prevents consent judgments,
or default judgments, from constituting notice.” (Doc. 13 at 5-6) Plaintiff points out that the
language of the Ohio statute states only that there is sufficient notice where the act or practice
has been “determined by a court of this state to violate section 1345.02, 1345.03, or 1345.031 of
the Revised Code” and the decision is contained in the Attorney General’s public inspection file.
There is no restriction in the language of the statute as to what form the decision must be in to
provide notice. The legislature could have included language preventing the use of default
judgments, but did not do so. Accordingly, plaintiff maintains that the plain language of the
statute does not prevent the use of default judgments.2
Defendants contend that there is no reason for this Court to depart from its ruling in
Pattie and that the absence of a specific prohibition against the use of default judgments in the
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The two cases are 1991 and 2012 Franklin County Court of Common Pleas orders
available in the Ohio Public Inspection File.
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The plaintiff in Pattie was represented by the same counsel as representing the
plaintiff herein. The plaintiff in Pattie made the same argument that “[t]here is no
language in R.C. 1345.09 that prevents consent judgments, or default judgments,
from constituting notice.” Case No. 1:14 CV 628, Doc. 7 at 5.
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statute cannot be extrapolated to signify the legislature’s deliberate intent not to exclude them.
This Court agrees. There is no basis for this Court to change its previous conclusion that ‘it is
clear that the reference to a court’s ‘determination’ in § 1345.09(B) is a reference to a court’s
final determination, i.e, a judgment with supporting reasoning.” Pattie, 29 F.Supp.3d at 1056
(citations omitted). Thus, default judgments cannot serve as the basis for prior notice.
Defendants additionally argue that the two cases cannot serve as the basis for prior notice
because they involve different industries and conduct. Although the Court need not address this
issue, it agrees that, at a minimum, the cases involve different industries. The herein case
involves the home pest control industry. State ex rel. Fisher v. Advanced Automotive
Technologies, Inc. et al. involved a device called a “PetroMizer” which defendants represented
in full page newspaper advertisements would increase fuel mileage, reduce emissions, and
increase horsepower on gasoline and diesel powered engines in motor vehicles although the
device had no such positive results. State ex rel DeWine v. Foster involved misrepresentations
by a seller of water purification systems including statements regarding customer service, health
benefits of the systems, warranties, and refund policies.
The Court additionally notes that the conduct herein differs from those two cases. Here,
defendants’ representations are alleged to have been made on a website and the device
packaging. Advanced Automotive involved full page newspaper advertisements and Foster
involved misrepresentations made to consumers when entering into a contract with defendant to
purchase the water purification system.
Plaintiff asserts the herein case and Advanced Automotive both involve statements of a
product for which there was no reasonable basis given the existence of contrary evidence. But,
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Advanced Automotive involved misrepresentation of test results or the representation of test
results that did not exist. Likewise, plaintiff asserts that Foster is analogous because defendant’s
representations to his customers about the benefits of the purification systems and its warranties
are similar to the herein defendants’ false representations about the benefits of the pest devices.
That case, however, was based on defendant’s misconduct in, inter alia, failing to install the
systems, installing the systems in a shoddy manner, and failing to provide refunds although the
contracts provided for such. Thus, the Court does not find the case to be analogous.
For these reasons, the OCSPA claim is dismissed for failure to allege prior notice. 3
(2) Fraud
Defendants assert that the Complaint does not meet the heightened pleading standard for
fraud. Defendants contend that plaintiff fails to identify the specific Wal-Mart from which she
purchased the device, the time and date of purchase, the individual making the representations,
the fraudulent scheme, and the resulting injury. Nor does she allege details about the surrounding
circumstances of the alleged fraud with respect to the putative class members. The Complaint
does not allege when the class members purchased the product.
“Fed. R. Civ. Proc. 9(b) requires plaintiffs to plead the circumstances of the fraud with
particularity; at a minimum they must plead the time, place and content of the alleged
misrepresentation, the defendant's fraudulent intent, and the resulting injury.” Starkey v. JP
Morgan Chase Bank, N.A., 2013 WL 6669268 (S.D.Ohio Dec.18, 2013).
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To the extent plaintiff maintains that O.R.C. §§ 1345.02(B)(1) and 1345.02(B)(2)
constitute sufficient notice, the Ohio Supreme Court has ruled that general
prohibitions of this type do not constitute the required notice. Marrone v. Philip
Morris USA, Inc., 110 Ohio St.3d 5 (2006).
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Plaintiff counters that her Complaint alleges she purchased the device at a Wal-Mart
store in May 2013, and the exact time and place of purchase is unnecessary. She further alleges
that the device’s packaging contained the knowingly false representation that the ultrasonic
sound waves would drive the pests away. Plaintiff would not have purchased the device but for
these representations. The Complaint alleges generally that “plaintiff has suffered injury” and
that the putative class members “were similarly injured.” Plaintiff states in her brief that she and
the other purchasers “were damaged in the amount of the purchase price.” (Doc. 13 at 11)
The Court finds that the Complaint alleges enough to survive a motion to dismiss given
that it alleges plaintiff purchased the device in May 2013 at a Wal-Mart store with defendants’
packaging containing the false representations.4
For these reasons, the fraud claim survives dismissal.
(3) Breach of express warranty
Defendants assert that this claim must be dismissed for failure to notify and because
marketing campaigns and advertisements about a product are not sufficient to create an express
warranty. Plaintiff disputes both bases.
Under Ohio law, to state a claim for breach of express warranty, plaintiff must provide
the defendant with reasonable notice of the defect. Failure to plead pre-litigation notice requires
dismissal of a breach of warranty claim. St. Clair v. Kroger Co., 581 F.Supp.2d 896 (N.D.Ohio
2008). Defendants point out that plaintiff has not alleged that it notified defendants that the
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This Court found the Complaint in Pattie, supra, to insufficiently plead fraud
where plaintiff only alleged that she received the fraudulent coupons “in Spring
2013 at a Coach factory store.” The Court noted that “Spring of 2013" would
encompass a several month time span.
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product did not repel pests as advertised. Plaintiff disagrees, relying on Chemtrol Adhesives, Inc.
v. Am. Mfrs. Mut. Ins. Co., 42 Ohio St.3d 40 (1989).
This Court previously recognized in The Lincoln Electric Co. v. Technitrol, 718
F.Supp.2d 876 (N.D.Ohio 2010), that although the Ohio Supreme Court stated in Chemtrol that
“in a proper case the filing of a civil complaint could serve as notice of breach,”
[s]ince Chemtrol, Ohio courts and federal courts applying Ohio law have continued to
hold that a plaintiff must notify a defendant of the alleged breach prior to the complaint...
The Court recognizes that under Chemtrol, Ohio does not have a per se rule that the filing
of a complaint cannot constitute notice under § 1302.65(C)(1), but the Ohio Supreme
Court was clear that a complaint could only constitute notice in “a proper case.” The
circumstances in this case are similar to the circumstances described by the court in
Chemtrol that would preclude the complaint from constituting sufficient notice:
defendant had no prior knowledge of the defects, and the complaint was filed a long
period of time after plaintiff’s damages were sustained.
Lincoln Electric, 718 F.Supp.2d at 843.
Plaintiff asserts that this is a “proper case” and, unlike in Lincoln Electric where
defendant had no prior knowledge of the defects, the Complaint herein alleges that defendant
knew of the defects:
23. Defendants had reason to know that their claims and representations about the
essential purpose of the product were false and contrary to scientific evidence.
25. Even though defendants have known that these devices do not work, they have
continued to advertise these devices as effectively controlling pests.
60. These representations were false, and defendants made these representations with
knowledge that these claims were false, or, in the alternative, with utter disregard and
recklessness as to whether these representations were false, at the time the defendants
marketed and advertised the product.
Plaintiff also contends that unlike cases of broken products where notice could give a defendant
an opportunity to resolve an issue, notice here would have been futile given that none of the
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devices worked.
Defendants note that plaintiff cites no authority that constructive knowledge (as alleged
in ¶ 23) is sufficient to constitute prior knowledge of the defect. Defendants also assert that this
is not the “proper case”where the filing of the Complaint constitutes notice given the time that
lapsed between plaintiff’s purchase (May 2013) and the filing of the Complaint (April 2015).
The Court determines that this claim is not subject to dismissal on the Motion to Dismiss
as it generally involves issues of fact. Lincoln Electric, supra (citing Chemtrol, supra).5 Finally,
plaintiff points out that under Ohio law, it is required only to notify the immediate seller, i.e.,
Wal-Mart, which is not a party herein. Defendants do not address this assertion. Additionally,
the issue of the existence of an express warranty is also a factual inquiry.
For these reasons, the breach of express warranty claim survives dismissal.
Conclusion
For the foregoing reasons, defendants’ Motion to Dismiss Plaintiff’s Class Action
Complaint is granted as to Count One and denied as to Counts Two and Four.
IT IS SO ORDERED.
Dated: 9/21/15
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/s/ Patricia A. Gaughan
PATRICIA A. GAUGHAN
United States District Judge
Similarly, in Galoski v. Stanley Black & Decker, Inc., Case No. 1:14 CV 553
(N.D.Ohio August 14, 2014) (Doc. 23 at 10), the district court denied the motion
to dismiss the breach of express warranty claim for insufficient pre-litigation
notice given that the Ohio Supreme Court has recognized that whether adequate
notice was timely provided is a question of fact and the complaint had alleged that
defendant was aware that the pest repelling devices did not work when it
advertised and offered them for sale.
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