Launched in 1965 by the Miracles, “The Tracks of My Tears” is ranked by Rolling Stone because the “Best Motown Track of All Time.” Smokey Robinson’s lead vocals are pure silk, the harmonies ooze soul, and  the guitar licks and strings tie all of it collectively.  The track and the Miracles helped unfold Motown across the globe.  At this time’s resolution about a man-made tears product received’t stack up towards Smokey and the Miracles, nevertheless it hits just a few chords price sharing.

Mosley v. EzriCare, 2024 WL 1342615 (E.D. Ky. Mar. 29, 2024) is a putative financial loss class motion arising from the acquisition of allegedly contaminated synthetic tears merchandise.  The grievance named two plaintiffs—one from Kentucky and one from South Carolina—who allegedly bought the merchandise from three completely different defendant distributors, every of whom obtained the product from the identical abroad producer (who had not been served).  The choice addresses the distributors’ motions to dismiss for lack of private jurisdiction, lack of subject material jurisdiction, and failures to state sure claims below Rule 12(b).

Plaintiffs didn’t pursue a basic jurisdiction concept, so the choice targeted first on private jurisdiction over two of the distributors.  The primary distributor, Delsam, was a New York LLC headquartered in New York.  The plaintiff from South Carolina alleged to have bought certainly one of Delsam’s merchandise in South Carolina, however the plaintiff from Kentucky didn’t. The Kentucky plaintiff bought a unique distributor’s product, and the lawsuit was filed in Kentucky.  How might the courtroom have jurisdiction over an out-of-state defendant with an out-of-state plaintiff alleging the one connection to the product in one other state?  Plaintiffs tried to reply this query by arguing that consultant plaintiffs at school actions can carry “consultant claims” on behalf of residents of states aside from their very own. The courtroom acknowledged this for what it was—a plain misstatement of the legislation.  In school actions the courtroom “should not less than have private jurisdiction over the defendant vis-à-vis every named plaintiff.” Id. at *4. For the reason that solely plaintiff who bought Delsam’s product resided in South Carolina and any damage would have occurred in South Carolina, there was no private jurisdiction over Delsam in Kentucky.

The second distributor, EzriRx, was a Delaware firm headquartered in New Jersey. EzriRx contended that it was an “on-line market platform that assists pharmacies in buying prescription medicines and over-the-counter medicine.” Id. at *8.  The Kentucky plaintiff bought EzriRx’s synthetic tears product from a Wal-Mart in Kentucky. Since EzriRx didn’t promote on to shoppers, it claimed that plaintiff’s claims didn’t come up from any actions that EzriRx took in Kentucky—significantly since a shopper couldn’t buy merchandise straight from EzriRx.  The Kentucky plaintiff claimed that the EzriCare synthetic tears he bought bore a trademark licensed from EzriRx to EzriCare, and that via its enterprise dealings EzriRx had contracted to produce items in Kentucky. The courtroom discovered these allegations sufficient for the plaintiff to fulfill his “comparatively slight” prima facie displaying of particular, private jurisdiction.

The burden then shifted to EzriRx to defeat plaintiff’s prima facie case of particular jurisdiction.  The courtroom famous that EzriRx introduced “scant proof” in its affidavit opposing jurisdiction and located it inadequate to rebut plaintiffs’ claims.  Plaintiff alleged that EzriRx labeled, marketed and distributed the product in Kentucky, and the courtroom was not capable of decide the precise relationship between EzriRx, EzriCare and the distribution chain for the EzriCare Synthetic Tears product.  Because it was EzriRx’s burden to rebut plaintiff’s declare of jurisdiction and the courtroom discovered the affidavit proof sparse, it declined to dismiss EzriRx on the pleadings stage.

The third distributor, EzriCare, didn’t problem jurisdiction in Kentucky.  As a substitute it claimed (1) that the South Carolina plaintiff lacked standing, (2) a lot of the plaintiffs’ claims had been inappropriate for decision by a multi-state class motion, and (3) plaintiffs’ request for injunctive reduction (prohibiting additional sale of the allegedly contaminated product and requiring affirmative discover to purchasers) didn’t allege enough threat of future hurt.

As to standing, the South Carolina plaintiff bought the Delsam synthetic tears product in South Carolina. The plaintiff didn’t buy any synthetic tears product from EzriCare. Consequently the plaintiff couldn’t present any damage the truth is brought on by EzriCare, so the South Carolina plaintiff lacked standing to sue EzriCare.  Straightforward resolution on that subject.

The courtroom then turned to EzriCare’s assertion that the remaining Kentucky plaintiff lacked standing to carry a multi-state class motion claims for unjust enrichment, fraud, guarantee and merchandise legal responsibility due to huge variations in state legislation on these claims.  Though the courtroom famous that some courts have resolved this query on the movement to dismiss stage, it declined to dismiss absent further briefing on class certification. The courtroom, nevertheless, cited various selections figuring out the hurdles plaintiff would face at certification of a multi-state class. See, e.g., Forsher v. J.M. Smucker Co., 612 F. Supp. 3d 714, 726 (N.D. Ohio 2020) (holding certification of lawsuit for breach of categorical guarantee in 44 states was “unmanageable and deadly even on the pleading stage as a result of breach of categorical guarantee varies broadly from state to state”); Chesner v. Stewart Title Guar. Co., 2008 WL 553773, at *14 (N.D. Ohio Jan. 23, 2008) (discovering certification of unjust enrichment claims “untenable”); Rosen v. Chrysler Corp., 2000 WL 34609135, at *12 (E.D. Mich. July 18, 2000) (declining to certify class of fraud claims as a result of “the courtroom would want to instruct a jury on the buyer safety legal guidelines of fifty jurisdictions,” which is an “unacceptable state of affairs”).

Lastly, the courtroom addressed EzriCare’s competition that injunctive reduction by the Kentucky plaintiff was inappropriate since “he didn’t allege any intention to purchase [EzriCare Artificial Tears] sooner or later.”  Id. at *11. The product had been recalled, EzriCare had ceased operations, and plaintiff was nicely conscious of statements issued by the FDA and CDC relating to potential contamination within the product. As a part of his declare for injunctive reduction, plaintiff sought an order requiring EzriCare to have interaction in a corrective promoting marketing campaign.  Plaintiff additionally sought to enjoin EzriCare from making any statements suggesting the product was “secure and efficient” and to require EzriCare to cease promoting the product. For the reason that product was already off the market and the grievance didn’t allege any continued promoting, the courtroom discovered any injunctive reduction inappropriate and dismissed the declare.

The courtroom additionally addressed two particular counts price noting. EzriCare moved to dismiss plaintiff’s declare for violation of the Kentucky Shopper Safety Act as a result of there was no privity of contract (a requirement below the Kentucky statute). Plaintiff bought the substitute tears product from Wal-Mart, so there was no direct buyer-seller relationship, and no privity. The courtroom agreed and dismissed the declare. EzriCare additionally moved to dismiss plaintiff’s strict product legal responsibility declare since plaintiff didn’t endure any bodily hurt.  The courtroom agreed. Kentucky’s strict legal responsibility legislation requires a declare of bodily hurt—not financial loss. Missing the required displaying of bodily hurt, the courtroom dismissed this depend.

Though it’s disappointing to see one more OTC financial loss class motion declare proceed, not less than this one was topic to vital narrowing on the pleading stage. And naturally Smokey and the Miracles will put a smile in your face if any a part of this resolution leaves you feeling blue.