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Carter v. L'Oreal USA, Inc.

United States District Court, S.D. Alabama, Northern Division

September 6, 2017

ANGELA CARTER, et al., Plaintiffs,
v.
L'OREAL USA, INC., et al., Defendants.

          ORDER

          CALLIE V. S. GRANADE, SENIOR UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Defendants L'Oreal USA, Inc. and Soft Sheen-Carson LLC's (“Defendants”) Objection to the Magistrate Judge's Report and Recommendation Denying Motion to Dismiss Plaintiff Angela Carter's (“Plaintiff”) Second Amended Complaint. (Doc. 59). Based on the following, the Report and Recommendation (Doc. 51) of the Magistrate Judge made under 28 U.S.C. § 636(b)(1)(B) is ADOPTED, in part, as explained herein.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         The Magistrate adequately laid out the facts of this case in her report, based on Plaintiff's Second Amended Complaint (“the Complaint”) (Doc. 29). See (Doc. 51, pp. 1-4). Therefore, it is unnecessary to rehash the facts in this Order.

         Within the Complaint, Plaintiff asserts seven counts against Defendants: (Count I) Unjust Enrichment; (Count II) Violation of the Magnuson-Moss Warranty Act; (Count III) Breach of Express Warranty; (Count IV) Breach of Implied Warranty; (Count V) Violation of the Alabama Deceptive Trade Practices Act (“ADTPA”); (Count VI) Fraud; and (Count VII) Negligent Design and Failure to Warn. Id. Thereafter, Defendants moved, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dismiss the Complaint. (Doc. 30). As grounds, Defendants contend reasonable consumers would not interpret the Relaxer Kit's packaging in the “implausible” manner of Plaintiff. See (Doc. 30, pp. 5-12). Defendants also moved for dismissal of Plaintiff's ADTPA, fraud, and negligence claims, arguing that they are barred by the applicable statute of limitations. Id. at 12-15. Lastly, Defendants moved for dismissal of Plaintiff's unjust enrichment claim, arguing that it is not cognizable when brought with her breach of express warranty claim. Id. at 15-16.

         The Magistrate recommended the Motion to Dismiss be denied as to all arguments. See (Doc. 51). Now, Defendants object to the Magistrate's report and argue that the Magistrate was wrong as a matter of law regarding the cognizability of the unjust enrichment claim. (Doc. 59, pp. 2-5). Further, Defendants object and argue that the Magistrate should have recommended Plaintiff's ADTPA, fraud, and negligence claims be dismissed as they were brought outside the relevant statute of limitations period.

         II. THE RULE 12(b)(6) STANDARD

         A defendant may move to dismiss a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) if the plaintiff has failed to state a claim upon which relief may be granted. “The standard of review for a motion to dismiss is the same for the appellate court as it [is] for the trial court.” Stephens v. Dep't of Health & Human Servs., 901 F.2d 1571, 1573 (11th Cir. 1990). “When considering a motion to dismiss, all facts set forth in the plaintiff's complaint ‘are to be accepted as true and the court limits its consideration to the pleadings and exhibits attached thereto.” Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (quoting GSW, Inc. v. Long Cnty., Ga., 999 F.2d 1508, 1510 (11th Cir. 1993)). All “reasonable inferences” are drawn in favor of the plaintiff. St. George v. Pinellas Cnty., 285 F.3d 1334, 1337 (11th Cir. 2002).

         To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim, the complaint “does not need detailed factual allegations”; however, the “plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do…. Factual allegations must be enough to raise a right to relief above the speculative level …, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). The plaintiff must plead “enough facts to state a claim that is plausible on its face.” Id. at 570. Unless a plaintiff has “nudged [his] claims across the line from conceivable to plausible, ” the complaint “must be dismissed.” Id.

         “[U]nsupported conclusions of law or of mixed fact and law” will not defeat a Rule 12(b)(6) motion for dismissal. Dalrymple v. Reno, 334 F.3d 991, 996 (11th Cir. 2003) (quoting Marsh v. Butler Cnty., Ala., 268 F.3d 1014, 1036 n.16)). “[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 has not ‘show[n]'-that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (quoting Fed.R.Civ.P. 8(a)(2)). The U.S. Supreme Court has suggested that courts adopt a “two-pronged approach” when considering motions to dismiss: “(1) eliminate any allegations in the complaint that are merely legal conclusions; and (2) where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.' ” American Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 556 U.S. at 664). Importantly, “courts may infer from the factual allegations in the complaint ‘obvious alternative explanation[s], ' which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer.” Id. (quoting Iqbal, 556 U.S. at 682).

         III. ANALYSIS

         A. Unjust Enrichment and Breach of Warranty Claims

         As explained above, Plaintiff alleged a claim of unjust enrichment and a claim of breach of express warranty within the Complaint. In their Motion to Dismiss, Defendants moved for dismissal of Plaintiff's unjust enrichment claim as not cognizable when brought with her breach of express warranty claim. In her Report and Recommendation, the Magistrate recommended Defendants' Motion to Dismiss the unjust enrichment claim be denied. (Doc. 51, p. 14). The Magistrate explained that courts have found an unjust enrichment claim not cognizable when it accompanies “a classic breach of contract claim involving an express written contract between the parties.” (Doc. 51, p. 13). The Magistrate explained that no express written contract or breach of contract claim exist in this case. Id. Further, the Magistrate reasoned that it is well-settled law that a plaintiff may plead alternative theories of recovery, to wit: unjust enrichment (a quasi-contract based theory in equity) and breach of contract (a theory based in law), citing 1021018 Alberta Ltd. v. Netpaying, Inc., 2011 WL 1103635, at *6 (M.D. Fla. Mar. 24, 2011). Id. The Magistrate concluded that Plaintiff's alternative theories of recovery could proceed given the “uncertainty as to the existence of a contract between the parties.” Id. Therefore, the Magistrate continued, even if the Complaint alleged a breach of contract claim, which the Magistrate found it did not, both the unjust enrichment and beach of warranty claim could proceed at this point.

         The Court has reviewed Defendants' objections and caselaw cited on this point and DECLINES to adopt the Magistrate's recommendation that Plaintiff's unjust enrichment claim not be dismissed. To begin, in a diversity action, federal courts apply the law of the state in which they sit. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 74-77 (1938). Accordingly, Alabama law governs the cognizability of Plaintiff alleging unjust enrichment when she also alleges breach of an express warranty. Therefore, to the extent the Magistrate's report relies on 1021018 ...


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