A New Jersey Court has held that unsubstantiated and non-specific allegations of fraud and breach of warranty are not enough to maintain a cause of action brought by purchasers of baseball bats against bat manufacturers, distributors, and baseball leagues. The decision highlights the requirement for plaintiffs to meet the pleading criteria outlined in the New Jersey Consumer Fraud Act and stands as a favorable decision for manufacturers and others who may face class-action lawsuits involving similarly vague allegations.

 In Pappalardo v. Combat Sports, Inc., 11-cv-1320, a composite barreled baseball bat marketed as having the bat performance factor (BPF) compliant with children’s baseball league standards was later prohibited to be used by children in certain baseball leagues. Four plaintiffs filed an action against various manufacturer defendants and Little League Inc. and Babe Ruth League defendants (league defendants). The amended complaint alleged that the plaintiffs “purchased composite barreled bats manufactured by the manufacturer defendants and licensed, approved and endorsed by the League Defendants.”  The plaintiff claimed that after they purchased the bats, which were marketed as being suitable for use in the Little League and Babe Ruth League, the leagues issued a moratorium on using the bats. The defendants filed motions to dismiss plaintiffs’ complaint.

On December 23, 2011, United States District Judge Mary L. Cooper held that the vague and generalized claims in plaintiffs’ amended complaint were insufficient and granted the defendants’ motion to dismiss.

New Jersey Consumer Fraud Act

The court noted that in order to maintain an action against the manufacturer defendants under the New Jersey Consumer Fraud Act (NJCFA), plaintiffs were required to allege “(1) unlawful conduct by defendant; (2) an ascertainable loss of plaintiff(s); and (3) a causal relationship between the unlawful conduct and the ascertainable loss.” The judge noted that that the allegations in the amended complaint against the manufacturer defendants lacked “the requisite specificity — who, what, and where — “to sustain that cause of action. The court noted that the plaintiffs had failed to make any specific allegations regarding the relevance and meaning of the BPF that wad advertised regarding the bat or why it was misleading. The court went on to note that the plaintiffs’ allegation that their ascertainable loss of the purchase price did not meet their burden. Finally, the court held that plaintiffs’ allegations that the manufacturers’ conduct has rendered the bats unusable had absolutely no support.

With regard to the plaintiffs’ claims under the NJCFA as to the league defendants, they failed for many of the same reasons that the claim against the manufacturers failed. The court noted that there was a total lack of any allegation that raised the claim from a simple breach of warranty to one sounding in fraud. The court noted that the amended complaint was filed after the moratorium on the composite barreled bats had been lifted, and that the plaintiffs in the current pleading had not satisfied their pleading burden.

Breach of Warranty Claims

A. Breach of Express Warranties

The court held that the plaintiffs’ claims for breach of express warranties also failed to meet the pleading burden. The court noted that the plaintiffs needed more of a factual basis to meet the burden and so that the manufacturer defendants would be put on notice as to which warranties the plaintiffs allege were breached.

With regard to the league defendants, the court noted that since the league defendants did not sell the composite barrel bats, the claim was dismissed.

B. Breach of Implied Warranty of Merchantability

The court held that plaintiffs’ causes of action based upon implied warranty of merchantability also failed. The court noted that nothing in the amended complaint suggested that the composite bats were defective or unfit for their ordinary purpose of hitting baseballs. In addition, the plaintiffs claim that the bats were in compliance with their BPF when sold but not after a “break in” period was illogical.

C. Breach of Implied Warranty of Fitness for a Particular Purpose Claims

Plaintiffs claimed that the manufacturer defendant had reason to know the purpose for which the composite bats were being purchased, i.e., for use by children in Little League and Babe Ruth League. With regard to the manufacturer defendants, the court held that the plaintiffs’ assertions were far too vague and generalized. With regard to the league defendants, plaintiffs’ claim failed because the league defendants were not sellers of the baseball bats.

Unjust Enrichment

Plaintiffs claimed unjust enrichment against the defendants and sought restitution from the manufacturer defendants for the profits earned from the sale of the bats, and from the league defendants for earned licensing fees/royalties. The court noted that New Jersey did not recognize the tort of unjust enrichment as an independent tort. Further, the court noted that the amended complaint did not contain any fact that could support an inference that plaintiffs had any expectation of remuneration from any of the defendants when they purchased the bats. As a result, for these reasons and others, the plaintiffs’ unjust enrichment claims were dismissed.

Negligence

Plaintiffs also alleged claims of negligence against the defendants. The court dismissed this claim pursuant to the economic loss doctrine. That doctrine precludes the buyer of a product from asserting a negligence or strict product liability claim from seeking damages for economic loss. The court dismissed this claim with prejudice.

Summary

In the end, the court did give the plaintiffs leave to prepare and file a second amended complaint with a motion that explains why the amended would not be futile. However, the decision shows that plaintiffs cannot proceed with an action alleging consumer fraud without specific allegations that meet the plaintiffs’ pleading requirement and will be beneficial to manufacturers and defendants in the future who are sued for vague allegations of fraud and breach of warranties.

If you have questions about how this may impact your business, please contact a member of the Goldberg Segalla Product Liability Practice Group.

Author: Lisa M. Robinson (315.413.5430; lrobinson@goldbergsegalla.com)