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Gs Tiffany Boundas and Dorothy Stojka, Individually and On Behalf of A Class v. Abercrombie & Fitch Stores

May 2, 2011

GS TIFFANY BOUNDAS AND DOROTHY STOJKA, INDIVIDUALLY AND ON BEHALF OF A CLASS, PLAINTIFFS,
v.
ABERCROMBIE & FITCH STORES, INC., AN OHIO CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Judge Feinerman

MEMORANDUM OPINION AND ORDER

Plaintiffs Tiffany Boundas and Dorothy Stojka brought this putative class action against Defendant Abercrombie & Fitch Stores, Inc., alleging breach of contract and violation of the Ohio Consumer Sales Practices Act ("OCSPA"), Ohio Rev. Code Ann. § 1345.01 et seq. Abercrombie has moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss Stojka's breach of contract claim and both Plaintiffs' OCSPA claims. The motion is granted as to the OCSPA claims and denied as to Stojka's contract claim.

Background

The facts alleged in the complaint (Doc. 33) are assumed true on a Rule 12(b)(6) motion. See Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). Also pertinent at this stage are exhibits attached to the complaint. See Fed. R. Civ. P. 10(c); Witzke v. Femal, 376 F.3d 744, 749 (7th Cir. 2004). To the extent an exhibit contradicts the complaint's allegations, the exhibit takes precedence. See Forrest v. Universal Sav. Bank, F.A., 507 F.3d 540, 542 (7th Cir. 2007). The following sets forth the facts as favorably to Plaintiffs as the complaint and its exhibits permit.

Abercrombie is a clothing retailer with stores across the United States. In December 2009, Abercrombie conducted a Christmas promotion, promising a $25 gift card to customers who bought at least $100 of merchandise in a single transaction. Stojka purchased approximately $300 of merchandise at an Abercrombie store in Oak Brook, Illinois, and received gift cards with a cumulative value of $75. The gift cards state: "This gift card is redeemable at all Abercrombie & Fitch . locations, Abercrombie.com and abercrombiekids.com. . No expiration date." Stojka gave her gift cards to Boundas as a gift. Boundas attempted to redeem the cards at the Oak Brook store in April 2010, but the store declined, explaining that Abercrombie had voided the cards on or around January 30, 2010, eliminating all remaining value on them. Despite the refusal of her gift cards, Boundas bought about $100 worth of Abercrombie merchandise.

The decision to void the remaining value on the gift cards, despite the "No expiration date" term, was made at Abercrombie's corporate headquarters in Ohio, and the decision was implemented by Abercrombie through a central computer system located in or directed from Ohio. Abercrombie voided more than 200,000 unredeemed gift cards, which together had a face value exceeding $5 million.

Plaintiffs filed this action in the Circuit Court of DuPage County, Illinois. Abercrombie timely removed the case to this court. The operative complaint has four counts: Count I is a breach of contract claim by Stojka; Count II is a breach of contract claim by Boundas; Count III is an OCSPA claim by Stojka; and Count IV is an OCSPA claim by Boundas. Abercrombie has moved to dismiss all but Count

II. Discussion

To survive a Rule 12(b)(6) motion, a complaint must overcome "two easy-to-clear hurdles": (1) "the complaint must describe the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds on which it rests"; and (2) "its allegations must plausibly suggest that the plaintiff has the right to relief, raising that possibility above a speculative level." Tamayo v. Blagojevich, 526 F.3d 1074, 1084 (7th Cir. 2008) (citation and internal quotation marks omitted). The court need not accept as true "abstract recitations of the elements of a cause of action or conclusory legal statements." Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). Where the well-pleaded facts "do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (internal quotation marks omitted).

I. Counts III-IV: OCSPA Claims

Abercrombie contends that Plaintiffs have no viable claim under the OCSPA because the transactions at issue-Stojka's acquisition of the gift cards from Abercrombie, and Boundas's failed attempt to redeem the cards-took place outside Ohio. Plaintiffs respond that the OCSPA extends to consumers like themselves who were injured outside Ohio by an Ohio business. Under the circumstances of this case, Ohio law resolves this dispute in Abercrombie's favor.

The OCSPA provides a private right of action for a consumer against a supplier that "commit[s] an unfair or deceptive act or practice in connection with a consumer transaction." Ohio Rev. Code Ann. § 1345.02(A). A "consumer transaction" is defined as "a sale, lease, assignment, . or other transfer of an item of goods, a service, a franchise, or intangible, to an individual for purposes that are primarily personal, family, or household, or solicitation to supply any of these things." Id. § 1345.01(A). The OCSPA grants jurisdiction to the Ohio Court of Common Pleas and to municipal and county courts "with respect to any act or practice in this state covered by [certain provisions of the OCSPA]." Id. § 1345.04 (emphasis added).

This jurisdictional provision has been interpreted to impose a territorial limitation on the statute's reach. In Chesnut v. Progressive Cas. Ins. Co., 850 N.E.2d 751 (Ohio App. 2006), the plaintiff, a Louisiana resident, sued Progressive after purchasing a used car in Louisiana from a Louisiana dealer; previously, Progressive had acquired the car from its insured, declared it a total loss, repaired it, and then sold it with a clean title, rather than a salvage title, to the used car dealer. Id. at 753-54. The Ohio Court of Appeals held that the plaintiff's claim against Progressive fell outside the OCSPA's territorial scope. The court noted that although Progressive's titling policy and procedures "emanate[d]" from its Ohio headquarters, the operative events themselves-Progressive's adjustment of the previous owner's insurance claim, and the repair, titling, and sale of the car-took place in Louisiana. Id. at 756. The court concluded that the plaintiff had no OCSPA claim because "[t]he majority of the circumstances relating to the sale of the salvage vehicle in this case occurred primarily and substantially in Louisiana." Id. at 757 (quoting Gridley v. State Farm Mut. Auto. Ins. Co., 840 N.E.2d 269, 275 (Ill. 2005)).

In Pilgrim v. Universal Health Card, LLC, 2010 WL 1254849 (N.D. Ohio Mar. 25, 2010), the district court cited Chesnut broadly (though not inevitably) for the proposition that "Ohio courts have found that the OCSPA cannot apply to consumers outside the state of Ohio." Id. at *3 (citing Chesnut, 850 N.E.2d at 755-57). At least two other federal district court decisions from Ohio, and a decision from the Supreme Court of Oklahoma, likewise have held categorically that the OCSPA does not apply to consumers outside Ohio, even where an Ohio business bears some responsibility for the alleged misconduct. See Harvell v. Goodyear Tire & Rubber Co., 164 P.3d 1028, 1037 (Okla. 2006) ("While Goodyear may have developed the shop supply fees from its corporate offices in Ohio, in our view any unfair, deceptive or unconscionable conduct toward a consumer occurred where the transaction occurred-when a customer brought an automobile in for service to a service center and was charged a shop supply fee. Accordingly, the Ohio Act is inapplicable to transactions occurring in states other than Ohio."); Loreto v. Proctor & Gamble Co., 737 F. Supp. 2d 909, 917 (S.D. Ohio 2010) (purported class representatives who purchased products in New Jersey "have no standing to pursue claims under the OCSPA," even though ...


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