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Geis v. Nestle Waters North America, Inc.

United States District Court, D. Massachusetts

July 2, 2018

ALEXIS GEIS, individually and on behalf of all others similarly situated, KARA LYNDON, and TIFFANY MORRIS, Plaintiffs,
v.
NESTLÉ WATERS NORTH AMERICA, INC. and SCOTT KELLY, Defendants.

          MEMORANDUM AND ORDER

          Patti B. Saris Chief United States District Judge.

         INTRODUCTION

         Alexis Geis brings this class action against Nestlé Waters North America, Inc. (“NWNA”), alleging that NWNA failed to honor one-year agreements for lower prices on its products. In the First Amended Complaint (Docket No. 29) (“FAC”), Geis asserts four counts on behalf of a putative class: Count I (breach of contract); Count II (violation of Mass. Gen. Laws ch. 93A, § 11); Count III (fraud); and Count IV (violation of Mass. Gen. Laws ch. 93A, § 9). NWNA filed a motion to dismiss Counts I-IV (Docket No. 35), based on lack of personal jurisdiction, lack of subject-matter jurisdiction, and a failure to state claims upon which relief can be granted.[1] After hearing, the Court ALLOWS IN PART and DENIES IN PART NWNA's motion to dismiss.

         Geis has also moved to amend the FAC to add Bristol-Plymouth Moving and Storage, Inc. (“Bristol-Plymouth”), as another putative lead plaintiff for the class action. See Docket No. 34. The motion to amend is ALLOWED IN PART and DENIED IN PART.

         FACTUAL BACKGROUND

         The following factual background focuses on the allegations relevant to Counts I-IV and is taken from the FAC. The allegations must be taken as true at this stage. See Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014).

         I. NWNA's Massachusetts Call Center

         Geis is a resident of Florida, and NWNA is “a company with a place of business located at 375 Paramount Drive, No. 3, Raynham, Massachusetts.” FAC ¶¶ 1, 4. Geis alleges that NWNA “conducts business in Massachusetts through its sale of product in this state and through the maintenance of a call center in this state.” FAC ¶ 4. NWNA's business consists of selling and delivering bottled water, iced tea, coolers, and other items to individuals and businesses.

         At its Raynham, Massachusetts, call center, NWNA employs a group of over 200 representatives who handle customer complaints about pricing. There is no pricing consistency among customers, so two customers may pay different prices for identical products. If a customer called to say she would be terminating her contract with NWNA, the call center representatives would try to “save” the customer. To “save” the account, the representative would lower the price that the complaining customer paid for a product. The price reductions negotiated by the representative and complaining customer would remain in effect for one year, and customers were informed of the one-year term over the phone. These one-year reductions were made pursuant to company policy. Call center representatives documented the agreements for one-year reductions in more than 50, 000 “call notes.”

         II. The Price Increase

         On or before January 1, 2016, NWNA “instituted a plan to raise all prices on its water products.” FAC ¶ 31. This price increase was intended to apply to products under the one-year price reduction agreements, per NWNA Executive Vice President Henrik Jelert's instruction. Customers under these one-year agreements were not notified of the price increases. Jelert said “we will see what happens, ” when discussing the possibility of customers under one-year agreements complaining about or even noticing price increases. FAC ¶ 35.

         Nearly 50, 000 customers with one-year agreements never complained and therefore paid the increased prices. When customers with one-year agreements did call to complain, the call center representatives would lie about the reason for the price increase, as they had been instructed to do by management. Then, the representatives would always honor the one-year agreement and fix the pricing to align with it. The proposed class is described as: “All [NWNA] customers who had been provided with a one year agreement as to pricing but as to which [NWNA] raised prices during that one year period.” FAC ¶ 83. Total class damages exceed $20 million.

         The FAC includes specific facts relating to a number of putative class members, but Geis's situation will serve as an example. Geis called NWNA on July 5, 2016 (after the policy to increase prices had been implemented), and a call center representative promised her that the price of her water cooler would be reduced to $1.99 each month for one year, and that each three-gallon water bottle would be $5.99 until December 17, 2017. This agreement is reflected in the call notes. On September 27, 2016, NWNA raised the price of the water cooler to $3.49. Then, on October 31, 2016, NWNA increased the price of the three-gallon water bottle to $6.29. Geis paid the increased prices because she did not know they had been raised. She “paid a total of more than $100.” FAC ¶ 46.

         III. Bristol-Plymouth

         In their proposed Second Amended Complaint (“SAC”), Plaintiffs seek to add Bristol-Plymouth, “a Massachusetts Corporation with a place of business located at 105 Weaver Street, Fall River, Massachusetts.” Docket No. 34-1 ¶ 2. Bristol-Plymouth called NWNA's Massachusetts call center on June 18, 2015, to complain about pricing. NWNA offered to reduce the price by $5 for a period of one year, and Bristol-Plymouth agreed to remain an NWNA customer. This agreement is memorialized in the call notes.

         On January 6, 2016, NWNA increased the price of Bristol-Plymouth's coolers by $2. Bristol-Plymouth paid the increased price “not realizing that it had occurred” and has lost more than $50. Docket No. 34-1 ¶ 66.

         DISCUSSION

         NWNA moved to dismiss Geis's FAC on three grounds: (1) lack of personal jurisdiction; (2) lack of subject-matter jurisdiction; and (3) failure to state a claim upon which relief can be granted. The Court addresses NWNA's personal jurisdiction arguments first, as they apply to all of Geis's putative class action claims.

         I. Personal Jurisdiction

         A. Legal Standards

         When a district court considers a Rule 12(b)(2) motion without an evidentiary hearing, the plaintiff must meet the prima facie standard for establishing personal jurisdiction over the defendant. See A Corp. v. All Am. Plumbing, 812 F.3d 54, 58 (1st Cir. 2016). The plaintiff bears the burden of demonstrating that the court may exercise personal jurisdiction in the case and “must put forward evidence of specific facts to demonstrate that jurisdiction exists.” Id. (internal quotation marks and citation omitted). In reviewing the facts, courts “take the plaintiff's evidentiary proffers as true and construe them in the light most favorable to the plaintiff's claim.” C.W. Downer & Co. v. Bioriginal Food & Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014). Courts also “consider uncontradicted facts proffered by the defendant.” Id.

         For “specific” or “case-linked jurisdiction” to apply, the suit must arise out of or relate “to the defendant's contacts with the forum.” Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cnty., 137 S.Ct. 1773, 1780 (2017) (“BMS”) (quoting Daimler AG v. Bauman, 571 U.S. 117, 127 (2014)).[2]Whether a court has personal jurisdiction over a defendant may vary depending on the unique facts for each plaintiff. See Id. at 1781. To exercise specific jurisdiction over a defendant, the district court must “find sufficient contacts between the defendant and the forum to satisfy both that state's long-arm statute and the Fourteenth Amendment's Due Process clause.” Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995).

         B. Analysis

         1. Massachusetts Long-Arm Statute

         The Massachusetts long-arm statute permits a court to “exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's . . . transacting any business in this commonwealth.” Mass. Gen. Laws ch. 223A, § 3(a). The definition of “transacting any business” is construed broadly, and courts look to whether the defendant attempted to participate in the Commonwealth's economic life. See Cossart v. United Excel Corp., 804 F.3d 13, 18 (1st Cir. 2015). The “arising from” inquiry ultimately boils down to a “but for” causation test, which asks whether “the defendant's contacts with the Commonwealth constitute[d] ‘the first step in a train of events that result[ed] in the personal injury.'” Lyle Richards Int'l, Ltd. v. Ashworth, Inc., 132 F.3d 111, 114 (1st Cir. 1997) (quoting Tatro v. Manor Care, Inc., 625 N.E.2d 549, 553 (Mass. 1994)).

         NWNA does not attack this Court's personal jurisdiction under the long-arm statute for good reason. Geis's complaint alleges facts that easily satisfy the long-arm statute's requirements. NWNA has a call center in Raynham where more than 200 employees worked. The call center handles approximately 50, 000 calls per year. One purpose of the call center is to “save” customers who would ...


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