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In re Scotts EZ Seed Litigation

United States District Court, S.D. New York

January 26, 2015

IN RE SCOTTS EZ SEED LITIGATION

For Michael Arcuri, individually and on behalf of all others similarly situated, David A. Browne, individually and on behalf of all others similarly situated, Lance Moore, individually and on behalf of all others similarly situated, Vance Smith, individually and on behalf of all others similarly situated, Nancy Thomas, individually and on behalf of all others similarly situated, Plaintiffs: Antonio Vozzolo, LEAD ATTORNEY, Faruqi & Faruqi, LLP, New York, NY; Scott A. Bursor, LEAD ATTORNEY, Bursor & Fisher, P.A., New York, NY; Joseph Ignatius Marchese, Bursor & Fisher, P.A., New York, NY.

For Gwen Eskinazi, On behalf of themselves and others similarly situated, Stacy D. Lonardo, On behalf of themselves and others similarly situated, Consolidated Plaintiffs: Antonio Vozzolo, LEAD ATTORNEY, Faruqi & Faruqi, LLP, New York, NY; Scott A. Bursor, LEAD ATTORNEY, Bursor & Fisher, P.A., New York, NY; Joseph Ignatius Marchese, Bursor & Fisher, P.A., New York, NY.

For The Scotts Miracle-Gro Company, Inc., The Scotts Company LLC, Lowe's Home Centers, Inc., Defendants: Jason Bennett Sherry, LEAD ATTORNEY, Samuel Alberto Danon, PRO HAC VICE, Hunton & Williams (Miami Fl), Miami, Fl; Joshua Mark Kalb, LEAD ATTORNEY, PRO HAC VICE, Hunton & Williams LLP, Atlanta, GA; Joshua Seth Paster, Shawn Patrick Regan, LEAD ATTORNEYS, Hunton & Williams, LLP(NYC), New York, NY.

MEMORANDUM DECISION

Vincent L. Briccetti, United States District Judge.

Lead plaintiffs Michael Arcuri, David Browne, Gwen Eskinazi, Stacy Lonardo, Lance Moore, Vance Smith, and Nancy Thomas (collectively, " plaintiffs" or " lead plaintiffs") bring this putative consumer class action against defendants The Scotts Miracle-Gro Company, Inc., and The Scotts Company LLC (collectively, " Scotts" or " defendants"). Plaintiffs allege numerous causes of action for false advertising, breach of warranty, and unjust enrichment under New York and California law.[1]

Now pending is plaintiffs' motion for class certification. (Doc. #72). For the following reasons, the motion is GRANTED in part and DENIED in part. Also pending are defendants' motion to exclude the opinions of plaintiffs' damages expert (Doc. #88), and plaintiffs' motions to strike certain evidence offered by defendants (Docs. ##103, 105). Those motions are DENIED.

The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(d).

BACKGROUND

The parties have submitted briefs, and declarations with supporting exhibits, which reflect the following factual background.

Scotts produces and sells Scotts Turf Builder EZ Seed (" EZ Seed"), which combines " premium grass seed with an innovative mulch and slow release fertilizer as an all-in-one product." (Faust Decl. ¶ 5). According to Scotts, " [i]n addition to protecting the [grass] seeds and helping to keep moisture in the underlying soil, the mulch in EZ Seed acts as an absorbent growing medium to promote seed germination and seedling establishment." (Id. ¶ 7). EZ Seed comes in six varieties, called " flavors": EZ Seed Sun & Shade, EZ Seed Tall Fescue, EZ Seed Bermudagrass, EZ Seed Dog Spot Repair for Sun & Shade, EZ Seed Dog Spot Repair for Tall Fescue, and EZ Seed Ultimate Winter Lawn Mix. (Sass Decl. ¶ 5). All six flavors are distributed to retailers in California, and all but EZ Seed Bermudagrass and EZ Seed Ultimate Winter Lawn Mix are distributed to retailers in New York. From EZ Seed's launch in January 2009 through the end of 2013, 1, 524, 812 packages of EZ Seed were sold in California, and 992, 338 packages were sold in New York.

According to a previous version of the packaging on all six flavors, EZ Seed grows grass " 50% thicker with half the water" compared to " ordinary seed" (the " 50% thicker claim").[2] (Marchese Decl. Ex. J). To back up its claims regarding EZ Seed's effectiveness, Scotts offers purchasers of EZ Seed a " No Quibble Guarantee, " which provides:

If for any reason you, the consumer, are not satisfied after using this product, you are entitled to get your money back. Simply send us the original evidence of purchase and we will mail you a refund check promptly.

(Regan Decl. Ex. 12). Additionally, Scotts has discretion to award a " goodwill" refund to individuals who cannot or choose not to comply with the terms of the No Quibble Guarantee. (Taubler Decl. ¶ 12).

The crux of plaintiffs' complaints is that EZ Seed does not grow grass at all or, in the alternative, does not grow grass as advertised by the 50% thicker claim. Plaintiffs now seek the certification of two classes, defined as follows:

(i) All persons who purchased EZ Seed in the state of California containing the label statement " 50% Thicker With Half the Water, " excluding persons who purchased for purpose of resale (the " California Class").
(ii) All persons who purchased EZ Seed in the state of New York containing the label statement " 50% Thicker With Half the Water, " excluding persons who purchased for purpose of resale (the " New York Class").

Plaintiffs Browne and Smith purchased EZ Seed in California and seek to represent the California Class. The California Class brings claims under California's Unfair Competition Law (" UCL"), False Advertising Law (" FAL"), and Consumer Legal Remedies Act (" CLRA"), in addition to claims for breach of warranty and unjust enrichment. Plaintiffs Arcuri, Eskinazi, Lonardo, Moore, and Thomas purchased EZ Seed in New York and seek to represent the New York Class. The New York Class brings claims under New York's General Business Law (" GBL"), in addition to claims for breach of warranty and breach of contract.

DISCUSSION

I. Legal Standard

To qualify for certification, plaintiffs must demonstrate by a preponderance of the evidence that the putative classes meet the four requirements set forth in Rule 23(a):

(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a); see Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2548, 180 L.Ed.2d 374 (2011). Plaintiffs must also demonstrate the proposed classes " satisfy at least one of the requirements listed in Rule 23(b)." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. at 2548.

The Supreme Court has recently cautioned that " Rule 23 does not set forth a mere pleading standard." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. at 2551. Instead, " [t]he party seeking 'class certification must affirmatively demonstrate . . . compliance with the Rule, ' and a district court may only certify a class if it 'is satisfied, after a rigorous analysis, ' that the requirements of Rule 23 are met." In re Am. Int'l Grp., Inc. Sec. Litig., 689 F.3d 229, 237-38 (2d Cir. 2012) (quoting Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. at 2551). " Such an analysis will frequently entail overlap with the merits of the plaintiff's underlying claim . . . because the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action." Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432, 185 L.Ed.2d 515 (2013) (internal quotation marks and citations omitted).

II. Rule 23(a) Factors

A. Numerosity

Rule 23(a)(1) requires a finding that " the class is so numerous that joinder of all members is impracticable." Courts in the Second Circuit have found this requirement met by a class consisting of forty or more members. See Consol. Rail Corp. v. Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995).

Defendants do not contest the numerosity requirement. From EZ Seed's launch in January 2009 until the end of 2013, 1, 524, 812 packages of EZ Seed were sold in California, and 992, 338 packages were sold in New York. These numbers suggest far more than 40 individuals comprise each class; therefore, the numerosity requirement is met.

B. Commonality

Rule 23(a)(2) requires a showing of " questions of law or fact common to the class." " Commonality is satisfied where a single issue of law or fact is common to the class." In re IndyMac Mort.-Backed Sec. Litig., 286 F.R.D. 226, 233 (S.D.N.Y. 2012) (citing Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. at 2556 (" [E]ven a single common question will do.") (internal quotation marks and brackets omitted)). However, class certification requires not only " common questions, " but " the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. at 2551.

To decide whether commonality is satisfied, the Court must identify the theories of liability upon which plaintiff proceeds. Although it is not entirely clear from plaintiffs' briefing, the Court determines they propose two theories of liability. The first theory is that EZ Seed does not grow grass at all and thus is worthless. (Pls.' Reply at 1; see also id. at 11 (" [G]rass seed that does not grow is worthless.")). The second theory is that " EZ Seed was mislabeled because the statement that it grows '50% Thicker With Half the Water' is both false and misleading." (Id. at 4).[3]

A common question with respect to the first theory of liability is whether EZ Seed grows grass. If plaintiffs can prove EZ Seed " does not grow at all" and thus is worthless, plaintiffs will be entitled to relief. See Allen v. Hyland's Inc., 300 F.R.D. 643, 660 (C.D. Cal. 2014) (finding commonality satisfied where plaintiff argues defendants' product is worthless because if defendants' " products . . . uniformly do not perform as advertised, then the putative class will be entitled to relief under Plaintiffs' warranty and false advertising claims").

A common question with respect to the second theory of liability is whether the 50% thicker claim is false and/or misleading. The answer to this question is common to all class members, and is apt to drive the resolution of this litigation. See, e.g., Ebin v. Kangadis Food Inc., 297 F.R.D. 561, 565 (S.D.N.Y. 2014) (holding a common question in a consumer class action brought under the GBL is whether a product's manufacturer " defrauded purchasers" by making a specific claim on the product's label); Brazil v. Dole Packaged Foods, LLC, 2014 WL 2466559, at *7 (N.D. Cal. May 30, 2014), class decertified in part, 2014 WL 5794873 (N.D. Cal. Nov. 6, 2014) (holding California UCL, FAL, and CLRA claims depend on the common question of " whether the labels at issue are unlawful, unfair, deceptive, or misleading to reasonable consumers").

C. Typicality

Rule 23(a)(3) requires " the claims of the class representatives be typical of those of the class, and is satisfied when each class member's claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant's liability." Robinson v. Metro-North Commuter R.R., 267 F.3d 147, 155 (2d Cir. 2001), abrogated on other grounds by Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. at 2551, as recognized in Amara v. Cigna Corp., 2014 WL 7272283 (2d Cir. Dec. 23, 2014). " Minor variations in the fact patterns underlying the individual claims do not preclude a finding of typicality." Id. (internal quotation mark and brackets omitted). Instead, Rule 23(a)(3) requires " only that the disputed issues of law or fact occupy essentially the same degree of centrality ...


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