Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Frompovicz v. Niagara Bottling, LLC

United States District Court, E.D. Pennsylvania

May 24, 2018

STANLEY F. FROMPOVICZ, Plaintiff,
v.
NIAGARA BOTTLING, LLC, ICE RIVER SPRINGS WATER CO, INC., CROSSROADS BEVERAGE GROUP AND JAMES J. LAND, JR., Defendants.

          OPINION

          WENDY BEETLESTONE, J.

         Percolating through this case is the question of who is selling genuine bottled “spring” water and who is not. Plaintiff, a spring water extractor, alleges that Defendants have violated the Lanham Act, 15 U.S.C. § 1125(a), and Pennsylvania's unfair competition law by mislabeling their water as “spring water.” One of the Defendants extracts water and three of them bottle, sell, and label the extracted water as “spring water.” Plaintiff, who is “in the spring water business, ” possessed a license from the Pennsylvania Department of Environmental Protection (“DEP”) to operate a spring water extraction site. He alleges that Defendants' labeling of their water as “spring water” has damaged his business because the labels are designed to entice purchasers to buy Defendants' products under the false belief that their “spring water” is at least equal, if not superior, to Plaintiff's true spring water. Plaintiff brings this case as a putative class action for “[a]ll persons in the United States who, within the applicable statute of limitations preceding the filing of this action through class certification, extract and/or bottle spring water for sale in the United States, ” as well as a Pennsylvania subclass.

         Defendants have filed Motions to Dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons below, Defendants' motions are granted in part and denied in part.

         I. FACTS

         Stanley Frompovicz, doing business as Far Away Springs, [1] brings this putative class action under the federal Lanham Act, 15 U.S.C. § 1125(a), and for unfair competition under Pennsylvania law, against James Land, [2] who is engaged in the business of extracting and marketing water, as well as three water bottlers and distributors who purchase Land's water (collectively, “Defendants”). Those bottlers are Niagara Bottling Co., LLC (“Niagara”), Ice River Springs Water Co. Inc. (“Ice River”), and Crossroads Beverage Group (“Crossroads”) (collectively “Bottler Defendants”). The crux of Plaintiff's Complaint is that Defendant Land sells “well water” and the Bottler Defendants market it as more desirable “spring water, ” thereby diminishing Plaintiff's market to sell spring water.

         The following facts are taken from the Complaint. Bottled water is the second largest beverage category by volume in the United States. The success of bottled water is attributable to several factors, including consumer's perceptions about taste, healthfulness, convenience, safety, and value as compared to other bottled beverages. There are many types of bottled water, including, as relevant here, “spring water” and “well” or “tap water.” Spring water typically sells at a premium compared to other bottled water, such as well water or tap water, because customers recognize and prefer the taste of spring water to other types of bottled water. However, spring water sites require substantially more resources to locate, develop, and maintain because of the unique characteristics necessary to extract the water to ensure that it remains “spring water” throughout the extraction process.

         The Bottler Defendants source their water from Defendant Land's facility and label their water as “spring water.” Plaintiff asserts that the labels are misleading for four reasons. First, Pennsylvania's DEP does not recognize Defendant Land's facility as a “spring water” source. In fact, a DEP permit for Land's facility, attached as an exhibit to the Complaint, clearly identifies the site as a “well water” site, and not a “spring water” site. Second, the Complaint alleges that the raw water extracted from Land's facility does not satisfy the Food and Drug Administration's (“FDA”) definition of “spring water.” Third, water extracted from Land's facility has been extracted, handled, or treated with equipment or techniques that are inconsistent with a “spring water” classification. Last, water from Land's facility has tested as containing more particulates or trace elements than are otherwise permissible or recommended under industry standards for spring water.

         II. LEGAL ANALYSIS

         Defendants seek to dismiss Plaintiff's complaint on the grounds that: (1) he lacks standing under Article III of the United States Constitution; and (2) because he does not have a “right to sue” under the Lanham Act. Defendants also contend that Plaintiff's Lanham Act claims are precluded, by the Food, Drug, and Cosmetics Act.

         A plaintiff must demonstrate standing in order to avail itself of the jurisdiction of federal courts. See Common Cause of Pennsylvania v. Pennsylvania, 558 F.3d 249, 257 (3d Cir. 2009). In the context of a class action - as is the case here - if the class representative lacks standing, the court “must dismiss . . . for lack of subject matter jurisdiction.” Finkelman v. Nat'l Football League, 810 F.3d 187, 195 (3d Cir. 2016) (citing Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353, 362 (3d Cir. 2015)). Standing is, thus, a “bedrock requirement” that must be met before a court can reach the merits of a suit. In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 244 (3d Cir. 2012); see also Hartig Drug Co. v. Senju Pharm. Co., 836 F.3d 261, 269 (3d Cir. 2016) (holding that Article III standing is a “threshold issue”).

         A. Standard of Review

         A motion to dismiss for lack of Article III standing comes in the form of a “facial” or “factual” attack on the Court's subject-matter jurisdiction. The distinction is important because it determines how the pleading must be reviewed. See In re Schering Plough, 678 F.3d at 243. “[A] facial attack ‘contests the sufficiency of the pleadings' ‘whereas a factual attack concerns the actual failure of a [plaintiff's] claims to comport [factually] with the jurisdictional prerequisites.'” See Constitution Party of Pennsylvania v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014) (internal citations omitted). Moreover, a defendant may mount a factual attack only after filing an answer. See Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 892 (3d Cir. 1977) (“A factual jurisdictional proceeding cannot occur until plaintiff's allegations have been controverted.”). Defendants here have not yet answered the Complaint. Therefore, each of their Motions to Dismiss is “by definition, a facial attack.” Aichele, 757 F.3d at 358.

         A facial attack calls for a district court to apply the same standard of review it would use in considering a motion to dismiss under Rule 12(b)(6).” Id. Thus, in reviewing a facial attack, “the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff.” Id.[3]

         B. Article III standing

          Turning, first to Defendants' challenge to Article III standing: A plaintiff has Article III standing if he has “(1) suffered an injury-in-fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). Defendants' position is that Plaintiff cannot meet prongs one and two of the standing inquiry, which will be addressed, seriatim.

         i. Injury-in-fact

         The injury-in-fact element requires that the party seeking relief “be himself among the injured.” Lujan, 504 U.S. at 562 (internal quotation mark omitted). At the motion to dismiss stage, “[t]he contours of the injury-in-fact requirement, while not precisely defined, are very generous, requiring only that claimant allege[] some specific, identifiable trifle of injury.” Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 278 (3d Cir. 2014) (emphasis omitted) (citation and internal quotation marks omitted). “[G]eneral factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss we presum[e] that general allegations embrace those specific facts that are necessary to support the claim.” Lujan, 504 U.S. at 561. Thus, while a plaintiff must eventually prove an injury, he need only allege the existence of such an injury at this stage.

         “[T]he Supreme Court has repeatedly recognized that financial or economic interests are ‘legally protected interests' for purposes of the standing doctrine.” Cottrell v. Alcon Labs., 874 F.3d 154, 164 (3d Cir. 2017). In Lexmark v. Static Control Components Inc., a watershed opinion in the analysis of this case, it considered whether a supplier of printer toner replacement parts had standing to challenge a toner cartridge manufacturer's allegedly false and misleading marketing and found that “allegations of lost sales and damage to its business reputation [confer] standing under Article III.” 134 S.Ct. 1377, 1386 (2014). Plaintiff's Complaint alleges that “Defendants' marketing and sale of their deceptively marketed ‘spring water' is damaging to the reputation and goodwill of Plaintiff, ” and that Defendants' actions hindered his sales. Thus, Plaintiff has sufficiently alleged a legally protected interest, and, thus, an injury-in-fact sufficient to confer standing.

         While all parties agree that the DEP suspended Plaintiff's license to extract water in 2015, that fact is water under the bridge on the question of standing on the facts alleged here. The statute of limitations for a claim under the Lanham Act is six years. See Santana Prod., Inc. v. Bobrick Washroom Equip., Inc., 401 F.3d 123, 135 (3d Cir. 2005). Plaintiff filed this action on January 8, 2018. And the Bottler Defendants admit that Plaintiff sold water at least until 2015. Therefore, Plaintiff has adequately alleged an actual injury within the statute of limitations at least from January 8, 2012 until the DEP suspension in 2015. Further, the fact that Plaintiff's license has been suspended is not dispositive: a closed company is not necessarily precluded from maintaining an action under the Lanham Act. See Lexmark, 134 S.Ct. at 1391. Thus, notwithstanding the license suspension, Plaintiff has adequately alleged an injury-in-fact.

         The DEP suspension does, however, affect Plaintiff's access to injunctive relief. A “plaintiff must demonstrate standing separately for each form of relief sought.” Friends of the Earth, Inc. v. Laidlaw Envt'l Servs., 528 U.S. 167, 185 (2000). Where a party seeks injunctive relief, past exposure to illegal conduct is insufficient to establish standing. The party must also assert “continuing, present adverse effects.” Lujan, 504 U.S. at 564. In this case, Plaintiff has admitted that he is not currently selling water, and though he stated during oral argument that he intends to re-enter the industry, there ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.