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Moore v. Mack's Sport Shop LLLP

United States District Court, E.D. Arkansas, Western Division

September 29, 2017

JAMES MOORE, on behalf of himself and all similarly situated persons and entities PLAINTIFF


          Kristine G. Baker, United States District Judge

         Plaintiff James Moore brings this action on behalf of himself and a putative class alleging that defendants engaged in purportedly deceptive trade practices, as well as other unlawful conduct (Dkt. No. 2). Before the Court is a motion for summary judgment filed by separate defendants Mack's Sport Shop, LLLP, and Mack's Prairie Wings, LLLP (collectively “Mack Defendants”) (Dkt. No. 18). Mr. Moore has responded in opposition to the motion (Dkt. No. 29), and the Mack Defendants have filed a reply (Dkt. No. 31). Separate Defendant Yeti Coolers, LLC (“Yeti”), filed a motion to join in the Mack Defendants' motion for summary judgment (Dkt. No. 32), to which Mr. Moore responded in opposition (Dkt. No. 33).

         The Mack Defendants move for summary judgment on Mr. Moore's claims under the Arkansas Deceptive Trade Practices Act (“ADTPA”), Ark. Code Ann. §§ 4-88-101, et seq. (Counts I and III), making several arguments in support. The Mack Defendants claim that Mr. Moore does not have actual damages or injury required under the ADTPA. They also argue that Mr. Moore does not come forward with evidence sufficient to show proof of the Mack Defendants' intent to deceive, as required under the false advertising provision of the ADTPA and that Mr. Moore has not, and cannot, prove that he reasonably relied on the alleged misrepresentations. The Mack Defendants contend reliance is a necessary element to false advertising claims under the ADTPA. They also maintain that the “catch-all” provision of the ADTPA, Ark. Code Ann. § 4-88-107(a)(10), does not apply on these facts and that, even if that provision did apply, Mr. Moore cannot satisfy the elements of the claim. The Mack Defendants contend that, under the circumstances presented, reliance is required to prove causation under the ADTPA. Finally, the Mack Defendants contend that Mr. Moore is not entitled to the injunctive relief he seeks under the ADTPA.

         The Mack Defendants also move for summary judgment on several of Mr. Moore's remaining claims, including his common law fraud or deceit claim (Count II), negligence and gross negligence claim (Count VI), his unjust enrichment claim (Count IV), his request for a constructive trust (Count V), and his breach of contract claim (Count VII). Mr. Moore opposes the Mack Defendants' motion.

         The Mack Defendants failed to address Mr. Moore's claims for breach of express warranties (Count VIII), breach of implied warranty of merchantability (Count IX), and breach of implied warranty to conform with usage of trade (Count X) in their motion for summary judgment. However, the Mack Defendants do brief the issue of summary judgment on these claims in their reply (Dkt. No. 31). By this Order, the Court directs Mr. Moore to respond to the Mack Defendants arguments regarding his warranty claims within 14 days from the entry of this Order. The Mack Defendants will then have 7 days from Mr. Moore's filing of his response to file a reply, should they choose to do so. If appropriate, the Yeti defendants may move to join in this portion of the motion, and Mr. Moore may timely respond to that request.

         I. Background Facts

         These facts are taken from the Mack Defendants' brief in support of motion for summary judgment, unless otherwise noted (Dkt. No. 19, at 1-3). In his response, Mr. Moore does not dispute these facts (Dkt. No. 30).

         The Mack Defendants operate a retail store headquartered in Stuttgart, Arkansas, that sells hunting products and apparel in store, online, and through a catalog. They are an authorized dealer of Yeti® coolers. Yeti® coolers are premium coolers known for keeping ice and other cold products cold for days. Mr. Moore purchased a Yeti® Tundra® cooler online from Mack's. He alleges that the advertised volume of the Tundra® model was not accurate. Specifically, he contends that the cooler holds 37.6 quarts, rather than 45 quarts.

         Mack's has sold Yeti® coolers since 2006. Product descriptions and specifications, including the size and dimensions of the various Yeti® cooler models are provided to Mack's by Yeti. Likewise, pricing is determined by Yeti. Mack's provides this product information to customers on its website and in store.

         The cooler Mr. Moore purchased was called a “Yeti® 45 Quart Tundra Cooler” on his order confirmation. Mr. Moore alleges that his cooler holds 37.6 quarts, not 45 quarts. However, the actual dimensions of the Yeti® Tundra® model Mr. Moore purchased are available on Mack's website, Mr. Moore produced documents through discovery showing that the dimensions were available at the time of his purchase.

         All of the information included in Mack's online product descriptions and specifications was provided by Yeti. Mack's did not independently determine the volume of the Yeti® Tundra® cooler. Mr. Moore's order confirmation contains the following disclaimer relating to product specifications on Mack's website: “Mack's Prairie Wings is not responsible for typographical errors in pricing or product specification inaccuracies in our web site. Prices are subject to change without notice.” Mr. Moore complains that his Yeti® cooler volume is slightly smaller than described and, therefore, the Mack Defendants violated the ADTPA and committed fraud, as well as other unlawful acts. He also seeks declaratory relief and temporary and permanent injunctive relief, and he makes claims for negligence, unjust enrichment, constructive trust, breach of contract, breach of express warranties, breach of the implied warranty of merchantability, and breach of the implied warranty to conform with usage of trade.

         II. Summary Judgment Standard

         Summary judgment is proper if the evidence, when viewed in the light most favorable to the nonmoving party, shows that there is no genuine issue of material fact and that the defendant is entitled to entry of judgment as a matter of law. Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A factual dispute is genuine if the evidence could cause a reasonable jury to return a verdict for either party. Miner v. Local 373, 513 F.3d 854, 860 (8th Cir. 2008). “The mere existence of a factual dispute is insufficient alone to bar summary judgment; rather, the dispute must be outcome determinative under the prevailing law.” Holloway v. Pigman, 884 F.2d 365, 366 (8th Cir. 1989).

         However, parties opposing a summary judgment motion may not rest merely upon the allegations in their pleadings. Buford v. Tremayne, 747 F.2d 445, 447 (8th Cir. 1984). The initial burden is on the moving party to demonstrate the absence of a genuine issue of material fact. Celotex Corp., 477 U.S. at 323. The burden then shifts to the nonmoving party to establish that there is a genuine issue to be determined at trial. Prudential Ins. Co. v. Hinkel, 121 F.3d 364, 366 (8th Cir. 1997). “The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

         III. Analysis

         A. ADTPA Claims

         Mr. Moore brings two counts against defendants under the ADTPA (Counts I and III). Specifically, Mr. Moore brings his ADTPA claims under Arkansas Code Annotated §§ 4-88-107 and 108. Separate Mack Defendants move for summary judgment on both counts, asserting several arguments. Generally, to prevail on a private action under the ADTPA based on an affirmative misrepresentation, a plaintiff must show that: “(1) the plaintiff has sustained damages; (2) the defendant used a deception, fraud, or false pretense in connection with the sale or advertisement of services; and (3) the defendant's conduct was a proximate cause of the plaintiff's damages.” Ramthun v. Bryan Career Coll. Inc., 93 F.Supp.3d 1011, 1023-24 (W.D. Ark. 2015) (citing Ark. Code Ann. § 4-88-108; Ark. Model Jury Instr.-Civ. 2902; Ashley Cnty., Ark. v. Pfizer, Inc., 552 F.3d 659, 666 (8th Cir. 2009)). “To prevail on a private action under the ADTPA based on omission, a plaintiff must show that: (1) the plaintiff has sustained damages; (2) the defendant concealed, suppressed, or omitted a material fact in connection with the sale or advertisement of services; (3) the defendant intended that others rely upon the concealment, suppression, or omission; and (4) the defendant's conduct was a proximate cause of the plaintiff's damages.” Id. (citing Ark. Code Ann. § 4-88-113(f); Wallis v. Ford Motor Co., 208 S.W.3d 153, 161 (Ark. 2005)).

         1. Actual Damages Or Injury

         Under the ADTPA, on the type of claim Mr. Moore alleges, with respect to the issue of damages, the parties agree that a plaintiff must show that he has sustained “actual damage or injury.” Ark. Code Ann. § 4-88-113(f); Yazdianpur v. Safeblood Technologies, Inc., 779 F.3d 530 (8th Cir. 2015); Ramthun v. Bryan Career Coll.-Inc., 93 F.Supp.3d 1011, 2023-24 (W.D. Ark. 2015); Wallis v. Ford Motor Co., 208 S.W.3d 153, 161 (Ark. 2005)). Here, Mr. Moore alleges the Mack Defendants violated the ADTPA because they allegedly “misrepresented the volume” of Yeti® coolers in advertising and, as a result, Mr. Moore and the putative class members “suffered an ascertainable loss of money, namely that the payment of monies” for a Yeti® cooler that was purportedly misrepresented by the Mack Defendants (Dkt. No. 1, at 33, ¶ 29; 34, ¶ 32). In his complaint, Mr. Moore pleads for both rescission of his payment for the Yeti® cooler and pro rata reimbursement based on actual volume (Dkt. No. 1, at 34-35, ¶ 36). In his discovery responses, Mr. Moore states that he and the putative class “will have the option to rescind the purchase or to be paid a pro rata amount based on the purchased price.” (Dkt. No. 18, Exhibit B). The Mack Defendants maintain that these are not actual damages under the ADTPA and, therefore, that Mr. Moore's ADTPA claims fail as a matter of law.

         The Arkansas Supreme Court first examined this issue in Wallis v. Ford Motor Company, 208 S.W.3d at 154 (“The instant appeal involves an issue of first impression. This court is asked to determine whether the circuit court erred in dismissing a class-action fraud and statutory deceptive trade practices lawsuit arising out of the purchase or lease of an allegedly defective vehicle where the only injury complained of is a diminution in value of the vehicle. We hold that the complaint was properly dismissed by the circuit court.”). In Wallis, D.R. “Buddy” Wallis filed a class-action lawsuit against Ford Motor Company alleging violations of the ADTPS and common-law fraud. Id. at 154. He sought to certify a class consisting of “all persons and entities in the State of Arkansas who now own or lease, or owned or leased, model year 1991 through 2001 Ford Explorer sport utility vehicles (‘Explorers') purchased or leased in the State of Arkansas.” Id.

         Specifically, he claimed that Ford Motor Company knowingly concealed the fact that the Explorer had a dangerous design defect that caused it to roll over under normal operations. Id. Mr. Wallis alleged in the complaint that Ford Motor Company's alleged “cover up of the inherent design problems and resulting accidents, combined with its Explorer brand imaging, led millions of consumers to purchase or lease Ford Explorers at prices far in excess of the values which would have been assigned to such vehicles had these dangers been disclosed. Furthermore, thousands of Arkansas residents still own or lease Explorers, which are of substantially diminished value solely as a result of Ford's fraudulent and deceptive scheme.” Id. Mr. Wallis did not allege any personal injury or property damage caused by the design defect, nor did he allege that the Explorer malfunctioned in any way. Id.

         Determining that his entire damage claim rested on the assertion that the design defect “substantially diminished” the value of the Explorer, the Arkansas circuit court dismissed Mr. Wallis's complaint concluding that he failed to “state a legally cognizable cause of action. . . . [and that, because he had] not experienced a cognizable injury or damages as a result of the alleged defect, he ha[d] no cause of action.” Id. at 155. The Arkansas Supreme Court affirmed. Id.

         Since Wallis, other courts have examined what constitutes actual damages sufficient to state a private action under this provision of the ADTPA and have rejected plaintiffs' claims. See Yazdianpour v. Safeblood Techs., Inc., 779 F.3d 530, 538 (8th Cir.2015) (alleging inability to patent technology); Ramthun, 93 F.Supp.3d 1011, 1031 (W.D. Ark. 2015) (alleging inability to transfer educational credits); Craig v. Twinings N. Am., Inc., No. 5:14-CV-05214, 2015 WL 505867, at *9 (W.D. Ark. Feb. 5, 2015) (alleging that tea did not include the antioxidants represented). One court determined that the actual damages alleged by plaintiff sufficed to state an ADTPA claim. In M.S. Wholesale Plumbing, Inc. v. University Sports Publications Co., the court determined that paying for a product that was “not at all what [defendant] represented” alleged sufficient facts to satisfy the ADTPA's actual damage requirement. 2008 WL 90022, at *3-4 (E.D. Ark. Jan. 7, 2008). The court reasoned that, “[u]nlike the plaintiff in Wallis, who suffered a purely pecuniary loss, M.S. [was] not alleging that it purchased a product with less economic value than represented by the seller. Instead, M.S. claim[ed] that it paid for a product that was not at all what USP represented-that is, an advertisement sold on behalf of ATU.” Id. at *4. The M.S. Wholesale court allowed the claim to proceed. Id.

         Here, Mr. Moore argues that the diminution in value cases do not control and that Wallis is inapposite. 362 Ark. 317. He argues that defendants sold to Mr. Moore a Yeti┬« Tundra┬« 45 Quart Cooler for $349.99 and that this equates to an actual cost to Mr. Moore of $7.78 per quart that defendants represented Mr. Moore was purchasing. However, Mr. Moore contends that the cooler was only 37.6 quarts, which he maintains means he should have only paid $292.53 for the volume cooler that he received. Mr. Moore contends that volume exclusively determines the price of the coolers and that defendants knowingly marketed the cooler at a larger volume so that they could charge Mr. Moore more for the cooler. The ...

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