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Winn-Dixie Stores, Inc. v. Eastern Mushroom Marketing Cooperative

United States District Court, E.D. Pennsylvania

January 8, 2020

WINN-DIXIE STORES, INC., et al., Plaintiffs,
v.
EASTERN MUSHROOM MARKETING COOPERATIVE, et al., Defendants.

          MEMORANDUM

          SCHILLER, J.

         Now before this Court is Defendant-Franklin Organic Mushrooms, Inc.'s motion to dismiss pursuant to Rule 12(b)(5) and Plaintiff-Winn-Dixie's cross-motion for enlargement of time to serve Franklin. Franklin's motion will be denied and Winn-Dixie's cross-motion will be granted. While Franklin has not been served in the timeframe prescribed by Rule 4, the Court will allow Winn-Dixie addition time to serve Franklin.

         I. BACKGROUND

         Franklin was a Connecticut company that once grew and sold mushrooms. (Mem. In Supp. of Mot. to Dismiss Franklin Organic Mushrooms, Inc. Pursuant to Rule 12(b)(5) [Def.'s Mem.] at 7.) Franklin once did business in Pennsylvania. (Id. at 6.). Pursuant to Pennsylvania's requirement that foreign companies designate an in-state registered address, 15 Pa.C.S.A. § 109, Franklin designated the corporate service company “CT Corporation Philadelphia” as its in-state address. (Id.)

         In 2006 Franklin ceased production of agaricus mushrooms and sold its customer list. In 2008, Franklin sold its brand name. In 2010, it ceased all operation. (Id. at 7.)

         Since 2006, Franklin has been a defendant in a class action lawsuit alleging that Eastern Mushroom Marketing Collective - of which Franklin was once a member - and various affiliated organizations conspired to raise the price of agaricus mushrooms. Several plaintiffs also filed their own antitrust lawsuits. The most recent of these lawsuits- this one - was filed on December 7, 2015. (Compl., Dec. 7, 2015, ECF No. 1.)

         On March 22, 2016, Winn-Dixie's process server attempted to serve Franklin at CT Corperation in Harrisburg by handing process documents to CT Corporation Senior Corporate Operations Specialist Bob Sersh. (Proof of Service, March 28, 2016, ECF. 6.) That same day, CT Corporation forwarded the summons and complaint to Milton Jacobson at the Connecticut Law firm of Brown & Jacobson, PC via Federal Express 2-day service. (Pl.'s Suppl. in Further Supp. of Pl.'s Cross-Mot. for Enlargement of Time to Serve Process on Franklin Farms and in Opp'n to Mot. to Dismiss [Pl.'s Suppl.], Ex. 1, at 4.). On April 4, 2016, Michael D. Colonese, an attorney at Brown & Jacobson, forwarded the materials to Franklin's president Wilhem Meya via overnight delivery. (Id., Ex. 1, at 4.)

         This was not the end of the matter, and Franklin would not enter an appearance in this lawsuit for another three years. In the meantime, this case was consolidated with the class action and other individual actions for pre-trial purposes between April 12, 2017 and September 29, 2018; Winn-Dixie filed its First Amended Complaint - again naming Franklin as a defendant - on January 29, 2019; this Court granted in part and denied in part motions by various defendants to dismiss the complaint - including dismissing the complaint against seven defendants due to improper service - on April 8, 2019.

         On April 10, 2019, chambers contacted Franklin's counsel by email to request an entry of appearance. According to Franklin, this was the first time James Rodgers, who represented Franklin in the other antitrust cases, became aware of Winn-Dixie's complaint. Rodgers entered his appearance on April 15, 2019. Franklin answered Winn-Dixie's complaint on July 12, 2019 and filed the instant motion on August 8, 2019.

         II. DISCUSSION

         A. Waiver and Timeliness

         The crux of Franklin's argument is that Winn-Dixie did not perfect service when it served process at CT Corporation in Harrisburg, therefore Franklin has never actually been served in this lawsuit. Winn-Dixie counters that Franklin waved this argument, and that Franklin's motion is untimely. The Court finds neither of Franklin's argument availing.

         First, Winn-Dixie argues that, under Rule 12(h), Franklin waived the argument that service was improper because CT Corporation was not authorized to accept process on Franklin's behalf. (The Winn-Dixie Pl.'s Resp. In Opp'n To Franklin Organic Mushrooms, Inc.'s Mot. To Dismiss Pursuant to Rule 12(b)(5) And Pl.'s Cross-Mot. For Enlargement of Time to Serve Process on Franklin Farms [Winn-Dixie's Resp.] at 7-8.) Under Rule 12(h), a party waives the defense of improper service if it “fails to raise it by motion and does not include it in a responsive pleading.” Barzanty v. Verizon PA, Inc., 361 Fed.Appx. 411, 415 (3d Cir. 2010) (citing Fed.R.Civ.P. 12(h)); see also McCurdy v. Am. Bd. of Plastic Surgery, 157 F.3d 191, 194 (3d Cir. 1998) (“[I]f a defendant seeks dismissal of the plaintiff's complaint pursuant to Rule 12(b)(5) on the ground that service of process was insufficient or ineffective, it must include that defense either in its answer or together with any other Rule 12 defenses raised in a pre-answer motion.”). In Franklin's answer to Winn-Dixie's amended complaint, Franklin argued that it had been improperly served, because its instate agent was CT Corporation in Philadelphia rather than CT Corporation in Harrisburg. (Answer to the First Am. Compl. by Franklin Farms, at 21.) It did not, however, argue that service was improper because CT Corporation was not authorized to accept process on Franklin's behalf.

         The Court disagrees with Winn-Dixie's reading of Rule 12(h). Under Rule 12(h), waiver is triggered by a party's “failing to . . . include [a defense listed in rule 12(b)(2)-(5)] in a responsive pleading.” When a party raises the relevant defense in their answer, however an opposing party cannot invoke waiver under 12(h) on the grounds that the moving party did not articulate the precise legal theory it would ultimately use in its motion. For instance, in Veverka v. Royal Caribbean Cruises Ltd., a personal injury plaintiff argued that the defendant cruise company had waived a statute of limitations defense by failing to include the defense in its answer. 649 Fed.Appx. 162, 166 n.2 (3d Cir. 2016). The Third Circuit rejected this argument because the company's answer had “claim[ed] all rights, immunities, exonerations and limitations of liability provided in the terms and conditions of the cruise ticket”, and that the ticket contained a statute of limitations provision. Id. Like the defendant in ...


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