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Sears v. The Kroger Co.

United States District Court, S.D. West Virginia

May 23, 2018

LONNIE P. SEARS, Plaintiff,
v.
THE KROGER CO., et al., Defendants.

          PROPOSED FINDINGS AND RECOMMENDATION

          Dwane L. Tinsley, United States Magistrate Judge

         This matter is assigned to the Honorable John T. Copenhaver, Jr., United States District Judge, and it is referred to the undersigned United States Magistrate Judge for submission of proposed findings and a recommendation for disposition, pursuant to 28 U.S.C. § 636(b)(1)(B). Pending before the court are the following motions: a Motion to Dismiss filed by The Kroger Co. and Kroger Limited Partnership I (hereinafter “the Kroger entities” or “Kroger”) (ECF No. 3); a Motion to Dismiss filed by Rite Aid of West Virginia, Inc. (ECF No. 5); and a Motion to Dismiss for Lack of Jurisdiction filed by Rite Aid Corporation (ECF No. 8). For the reasons stated herein, it is respectfully RECOMMENDED that each of these motions be GRANTED and that this civil action be dismissed from the docket of the court.

         RELEVANT PROCEDURAL HISTORY

         The plaintiff initially filed the instant Complaint in the Circuit Court of Kanawha County, West Virginia on November 2, 2017. On November 22, 2017, defendant Rite Aid of West Virginia, Inc., with the consent of the Kroger entities, removed the matter to this court on November 22, 2017. (ECF No. 1). The Complaint alleges that internal policies (referred to by the plaintiff as “Corporate Compliance Policies”) of Kroger and Rite Aid restricting the sale of products containing pseudoephedrine (“PSE”) beyond the limitations imposed by federal and West Virginia law, while not doing so in other states, violates several provisions of the United States Constitution, and discriminates against people with chronic illnesses requiring daily use of PSE without a prescription. Specifically, the plaintiff alleges that these policies violate the Equal Protection Clause of the Fourteenth Amendment, the Privileges and Immunities Clause, and the Supremacy Clause of the United States Constitution.

         The Complaint further alleges that the defendants' policies violate the West Virginia Business Corporation Act, W.Va. Code § 31D-3-302, and West Virginia's statutory enactment of the Uniform Commercial Code found in Title 46 of the West Virginia Code, specifically West Virginia Code § 46-2-301. The Complaint further alleges that the defendants' policies are not being made available to the consumer upon request. Finally, the Complaint contends that Kroger's in-store signage misrepresents federal law by imposing its own policy limitations on the same sign as that required by 18 U.S.C. § 1001. The plaintiff seeks declaratory and injunctive relief.

         On November 29, 2017, the Kroger entities and Rite Aid of West Virginia, Inc. each filed Motions to Dismiss (ECF Nos. 3 and 5), asserting that the plaintiff's Complaint fails to state a claim upon which relief can be granted because the defendants are not state actors and, thus, the plaintiff cannot state plausible federal constitutional claims against them. The defendants further argue that the state statutes relied upon by the plaintiff either do not provide for a private cause of action, or are not applicable to the circumstances herein.

         On November 29, 2017, Rite Aid Corporation filed a separate Motion to Dismiss for Lack of Personal Jurisdiction (ECF No. 8), asserting that it is a parent holding company which is not incorporated in, does not do business in, and has no employees in, West Virginia. Thus, Rite Aid Corporation asserts that it has insufficient minimum contacts to support a finding that this court has personal jurisdiction over that defendant herein.

         On December 13, 2017, pursuant to the order of the court, the plaintiff filed an omnibus response to the defendants' Motions to Dismiss (ECF No. 18). On December 22, 2017, the defendants filed reply briefs. (ECF Nos. 19, 22 and 23). The undersigned will discuss the contents of the briefing as necessary infra.

         STANDARDS OF REVIEW

         The defendants' motions assert that the plaintiff's Complaint should be dismissed under Rule 12(b)(6) of Federal Rules of Civil Procedure, because it fails to state a claim upon which relief can be granted. Pro se complaints are held to less stringent standards than those drafted by attorneys, and the court is obliged to construe liberally such complaints. However, in Bell Atlantic Corp v. Twombly, 550 U.S. 544, 570 (2007), the Supreme Court observed that a case should be dismissed for failure to state a claim upon which relief can be granted if, viewing the well-pleaded factual allegations in the complaint as true and in the light most favorable to the plaintiff, the complaint does not contain “enough facts to state a claim to relief that is plausible on its face.” While the complaint need not assert “detailed factual allegations, ” it must contain “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Id. at 555.

         The Supreme Court elaborated on its holding in Twombly in Ashcroft v. Iqbal, 556 U.S. 662 (2009), a civil rights case. The Court wrote:

Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. [Twombly, 550 U.S.] at 555, 127 S.Ct. 1955 (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we “are not bound to accept as true a legal conclusion couched as a factual allegation” (internal quotation marks omitted). Rule 8 . . . does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556. * * *
In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

556 U.S. at 678-679.

         Additionally, pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, the court may dismiss a claim where the court lacks personal jurisdiction over a defendant.

         Generally, “[a] federal district court may only exercise personal jurisdiction over a foreign corporation if such jurisdiction is authorized by the long-arm statute of the state in which it sits and application of the long-arm statute is consistent with the due process clause of the Fourteenth Amendment” ESAB Group, Inc. v. Zurich Ins. PLC, 685 F.3d 376, 391 (4th Cir. 2012). The Fourth Circuit more recently addressed the standards for determining whether a federal court has personal jurisdiction over a defendant as follows:

Personal jurisdiction may be general or specific. General personal jurisdiction over a defendant arises from the defendant's “continuous and systematic” activities in the forum state. See Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Specific jurisdiction, on the other hand, depends on an “activity or an occurrence that takes place in the forum State” and is “confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) (internal quotation omitted).

PTA-FLA, Inc. v. ZTE Corp., 715 Fed.Appx. 237, 241-42 (4th Cir. Nov. 15, 2017).

         ANALYSIS

         A. The court lacks personal jurisdiction over the plaintiff's claims against Rite Aid Corporation.

         The Motion to Dismiss filed by Rite Aid Corporation, as supported by the Affidavit of Ron Chima, asserts that Rite Aid Corporation is a parent holding company of Rite Aid of West Virginia, Inc., formed under the laws of the State of Delaware, and which is headquartered and operates exclusively in the State of Pennsylvania. Further, the motion indicates that Rite Aid Corporation conducts no business in, and has no employees in, the State of West Virginia. Rather, as noted in the Chima Affidavit, each Rite Aid store located in West Virginia is owned and operated by Rite Aid of West Virginia, Inc., not Rite Aid Corporation. (ECF No. 10 at 1-2, ¶ 3). Thus, Rite Aid Corporation asserts that it does not maintain any presence in West Virginia and, thus, has insufficient minimum contacts with the State of West Virginia to support this court's exercise of personal jurisdiction over Rite Aid Corporation. (ECF No. 9 at 3-6).

         The Fourth Circuit has established a three-part test for determining whether the exercise of specific jurisdiction over a party meets due process requirements. Specifically, the district court must look at: “(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether the plaintiff['s] claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction ...


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