Class Action

Class Action Defense Cases–Martinelli v. Petland: Arizona Federal Court Dismisses RICO Class Action Alleging Sale Of "Mill Bred" Puppies As "Finest Available" But Grants Leave To Amend Class Action Complaint

By Michael J. Hassen

Class Action Complaint Alleging RICO and State Consumer Protection Law Violations Arising from Sale of “Mill Bred” Puppies to “Unsuspecting Consumers” who Believed they were Acquiring the “Finest Available” Puppies Failed to State Claims Against Defendants Arizona Federal Court Holds

Plaintiffs filed a putative class action against Petland and Hunte Corporation, purportedly on behalf of a class of “residents of various states who bought a Petland puppy, alleging violations of Racketeer Influenced and Corrupt Organizations Act (RICO) [“predicated on alleged violations of the federal mail and wire fraud statutes”], conspiracy, violations of various state consumer protection laws, and violation of Ohio’s Consumer Sales Practices Act.” Martinelli v. Petland, Inc., ___ F.R.D. ___ (D.Ariz. August 7, 2009) [Slip Opn., at 1-2]. According to the allegations underlying the class action, Petland, “a large national retailer of pets,” and Hunte, which “supplies many of the puppies sold at Petland stores,” promised to sell puppies that were “bred under safe and humane conditions by a reputable breeder with proper canine husbandry practices” but were, instead, bred at a “puppy mill,” described by the class action complaint as “a dog breeding operation in which the health of the dogs is disregarded in order to maintain a low overhead and maximize profits.” Id., at 1. The class action alleged that, because of the manner in which they were bred, “their puppies were sick at the time of purchase or became ill shortly thereafter.” Id. The class action alleged a “scheme” to sell mill-bred puppies to “unsuspecting consumers” who believed they were buying “the finest available” puppies from USDA-approved “professional and hobby breeders who have years of experience in raising quality family pets.” Id., at 2. Plaintiffs also claimed that an 8-month investigation by the Humane Society “confirm[ed] Petland’s practice of misrepresenting and concealing the origin of puppy mill puppies.” Id. Defense attorneys moved to dismiss the class action, id., and the district court granted the motion but with leave to amend.

The federal court first addressed Petland’s motion. Petland, at 3. Defense attorneys argued the RICO and state consumer protection claims failed because “ (i) the alleged misrepresentations are mere puffery, rather than actionable statements of material fact, (ii) the allegations of non-disclosure…fail to state a claim for relief, and (iii) the allegations of fraud have not been pled with particularity.” Id. Also, Petland argued that the class action failed to allege injury or causation, and that as a matter of law the unjust enrichment claim failed. Id. The district court agreed. As to the RICO claim, plaintiffs argued that Petland failed to disclose the origins of its puppies, but plaintiffs failed to allege “that Petland has an independent duty to disclose to consumers the origin of Petland puppies.” Id. Similarly, the RICO claims predicated on alleged misrepresentations failed because plaintiffs failed to plead with particularity the manner in which the “finest available” statements were made. Id., at 4-6. The federal court further agreed that plaintiffs failed to adequately allege proximate cause for their alleged damages, id., at 6-8, and because “proximate causation is an essential element of claims brought under state consumer protection statutes,” id., at 8, the district court granted the motion to dismiss those class action claims as well, id., at 9. Finally, because the unjust enrichment claim is also premised on fraud, that claim failed as well, id.

Full post as published by Class Action Defense Blog on August 27, 2009 (boomark / email).