McCabe v. Conagra Foods, Inc. ( 2017 )

16-3301-cv
McCabe v. Conagra Foods, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
2nd day of March, two thousand seventeen.
Present:
JOHN M. WALKER, JR.,
DEBRA ANN LIVINGSTON,
Circuit Judges,
VINCENT L. BRICCETTI,
District Judge.*
_____________________________________
KEVIN MCCABE, individually and on behalf of all
others similarly situated,
Plaintiffs-Appellants,
v. 16-3301
CONAGRA FOODS, INC.,
Defendant-Appellee.
_____________________________________
For Plaintiffs-Appellants: TODD C. BANK, ESQ., Kew Gardens, NY.
*
Judge Vincent L. Briccetti, of the United States District Court for the Southern District of New York,
sitting by designation.
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For Defendant-Appellee: JAMES J. FROST, McGrath, North, Mullin & Kratz,
P.C., LLO, Omaha, NE; Edward L. Powers, Zukerman
Gore Brandeis & Crossman, LLP, New York, NY.
UPON DUE CONSIDERATION WHEREOF IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiff-Appellant Kevin McCabe appeals from a judgment of the United States District
Court for the Eastern District of New York (Ross, J.), entered on August 30, 2016, dismissing
his proposed class action complaint for failing to state a claim upon which relief could be
granted. McCabe also appeals from the denial of his motion for reconsideration on September
9, 2016. We assume the parties’ familiarity with the facts, procedural history, and specification
of issues on appeal.
I. Background
ConAgra Foods, Inc. (“ConAgra”) conducted an annual promotion to help end child
hunger from 2011 to 2015. The company would donate a certain amount—up to a yearly
maximum—to a non-profit organization called Feeding America for every code entered on its
website from certain ConAgra products’ packaging. Kevin McCabe filed suit in the Eastern
District of New York, alleging that ConAgra’s promotion created a contract. He brought claims
for breach of contract and violation of the District of Columbia Consumer Protection Procedures
Act (“DCCPPA”), D.C. Code §§ 28-3901-3913.1
II. Discussion
This Court reviews de novo a district court’s ruling on a motion to dismiss. Krys v.
Pigott, 749 F.3d 117, 128 (2d Cir. 2014). To survive a motion to dismiss, a plaintiff must plead
factual content that allows the court to draw the reasonable inference that the defendant is liable
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McCabe withdrew his claim for breach of the implied covenant of good faith and fair dealing.
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for the alleged misconduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell A. Corp. v.
Twombly, 550 U.S. 544, 570 (2007).
A. Contract Claim
Pursuant to New York law, on which both parties rely in connection with this contract
claim, the elements of a cause of action for breach of contract are: the existence of an agreement,
performance by the plaintiff, breach of contract by the defendant, and resulting damage.
Eternity Glob. Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 177 (2d Cir.
2004). An agreement stems from “a manifestation of mutual assent sufficiently definite to
assure that the parties are truly in agreement with respect to all material terms.” Express Indus.
and Terminal Corp. v. N.Y. State Dep’t of Transp., 715 N.E.2d 1050, 1053 (N.Y. 1999); see also
Arbitron, Inc. v. Tralyn Broad., Inc., 400 F.3d 130, 137 (2d Cir. 2005). An agreement generally
requires an offer and an acceptance. The general rule in New York is that a promotion or
advertisement is not an offer. Leonard v. Pepsico, Inc., 88 F. Supp. 2d 116, 122-23 (S.D.N.Y.
1999), aff’d, 210 F.3d 88 (2d Cir. 2000). An advertisement can constitute an offer when it is
“clear, definite, and explicit, and leaves nothing open for negotiation.” Id. at 123 (quoting
Lefkowitz v. Great Minneapolis Surplus Store, Inc., 86 N.W.2d 689, 691 (Minn. 1957));
Amalfitano v. NBTY Inc., 128 A.D.3d 743, 744 (N.Y. App. Div. 2d Dep’t 2015), leave to appeal
denied, 43 N.E.3d 375 (N.Y. 2015).
We agree with the district court that McCabe failed plausibly to allege the existence of a
unilateral contract for each year from 2011 through 2014. A unilateral contract was not formed,
inter alia, because the promotion was limited to a certain maximum donation per year. See
Amalfitano, 128 A.D.3d at 744 (promotion was an invitation for offers, not an offer, because it
expressly stated that supplies were limited). An individual entering a code would have no
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knowledge whether the maximum donation had been reached in 2011, 2012, 2013, or 2014. Cf.
Lefkowitz, 86 N.W.2d at 691 (potential customer knew that he was the first one in line for a “first
come, first served” opportunity). Thus, ConAgra’s promotion was not an offer because
McCabe and the other plaintiffs had no “power of acceptance.” See Leonard, 88 F. Supp. 2d
at 123 (quoting Mesaros v. United States, 845 F.2d 1576, 1580 (Fed. Cir. 1988)).
The district court also concluded that McCabe did not plausibly allege the existence of a
bilateral contract for each year from 2011 through 2015, and we agree. Under McCabe’s
bilateral contract theory, the terms of participation constituted an invitation for an offer. The
entry of a code by a promotion participant then was an offer which ConAgra supposedly
accepted by acknowledging the code’s receipt. ConAgra’s supposed invitation for offers,
however—made prior to any code entry—was insufficiently definite to set the terms of the
“offer” supposedly made on entry of a code, and McCabe fails to allege facts suggesting that the
code entry in any way clarified the terms on which an alleged bilateral contract was created.
McCabe alleges that, in 2015, an individual entering an online code would know whether
the yearly maximum donation had been reached because of a counter used during that year’s
promotion on the promotion website. Thus, he claims, a unilateral contract was formed at least
as to this year. But even assuming arguendo that the individual was aware of whether the
yearly maximum donation had been reached and that the terms of the offer were sufficiently
definite, McCabe fails to allege that ConAgra breached that contract. Nowhere does he state
that ConAgra did not make the 10-cent or 20-cent monetary donation to Feeding America upon
the entry of an online code—the only promotion term arguably definite enough to constitute an
offer. He merely criticizes the methodology that Feeding America used to calculate the cost of
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providing a meal. Therefore, McCabe fails to state a claim for breach of contract even as to the
2015 promotion.
B. DCCPPA Claim
The DCCPPA prohibits any person from “misrepresent[ing] . . . a material fact which has
a tendency to mislead” in connection with consumer transactions. D.C. Code § 28-3904(e).
The statute grants a cause of action to “[c]onsumer[s],” id. at § 28-3905(k)(1)(A), and
“individual[s] . . . seeking relief from the use of a trade practice in violation of a law of the
District . . . involv[ing] consumer goods or services that the individual purchased or received,”
id. at § 28-3905(k)(1)(B). The district court determined that the statute requires a plaintiff to
allege the purchase of a consumer good, not “the mere observation of a merchant’s unlawful
communication.” Sloan v. Soul Circus, Inc., 2015 WL 9272838, at *8 (D.D.C. Dec. 18, 2015)).
And the district court noted that McCabe failed to allege that any plaintiff purchased a consumer
good in connection with ConAgra’s representations.
McCabe does not point this Court to any authority that contradicts the district court’s
conclusions. Instead, McCabe argues that the district court should have granted him leave to
file a second amended complaint to comply with the DCCPPA’s pleading requirements.
McCabe requested leave to file a second amended complaint in his motion for reconsideration,
arguing that the district court’s dismissal of the DCCPPA claim for failure to allege that
purchases were made was “unfair.”
This Court reviews a district court’s denial of a request for leave to amend a pleading for
abuse of discretion. Pigott, 749 F.3d at 134. “An abuse of discretion may consist of an
erroneous view of the law, a clearly erroneous assessment of the facts, or a decision that cannot
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be located within the range of permissible decisions.” Id. (quoting Anderson News, L.L.C. v.
American Media, Inc., 680 F.3d 162, 185 (2d Cir.2012), cert. denied, 133 S. Ct. 846 (2013)).
Here, the district court gave McCabe an opportunity to amend his original complaint, and
he was on notice that he should allege that purchases were made by the class plaintiffs. First,
before he filed his amended complaint, McCabe himself acknowledged in a letter that his
“Complaint could be amended . . . in order to explicitly make th[e] allegation” that “purchases
were made by the participants in ConAgra’s promotion.” Second, the district court identified
this very issue for him at a telephone conference before McCabe filed his amended complaint.
Specifically, it stated that the D.C. statute “grants a cause of action to consumers, . . . defined as
people who purchase, lease, receive consumer goods,” and telling him that he could amend the
complaint “to state that plaintiff and class members did purchase ConAgra products.”
McCabe’s counsel “underst[oo]d” during that conference that his amended complaint would be
his “last pleading” based on information available pre-discovery.2 Nevertheless, McCabe failed
to allege that anyone purchased a ConAgra product in his amended complaint. Given these
circumstances, we conclude that the district court acted within its “wide discretion” in denying
McCabe leave to file a second amended complaint. See, e.g., Psihoyos v. John Wiley & Sons,
Inc., 748 F.3d 120, 126 (2d Cir. 2014) (stating that the district court did not abuse “the wide
discretion we accord district courts in choosing to grant or deny leave to amend” when plaintiff
was “on notice” of the complaint’s deficiencies); see generally DiVittorio v. Equidyne Extractive
2
McCabe states that he did not agree to waive his right to seek to file a second amended complaint. He
claims that he “merely stated that he would draft the Amended Complaint to the best of his ability.” No.
16-cv-00093, R. 28 at 11. But the official transcript indicates that McCabe’s counsel agreed that it
would be his “last pleading in terms of what [he was] aware of [then].” Id., R. 14 at 15. The court
acknowledged that “discovery can result in the amendment [of the complaint],” but wanted to avoid
“chip[ping] away at . . . the same pleading again and again.” Id. Counsel acknowledged: “I
understand.” Id.
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Indus., Inc., 822 F.2d 1242, 1247 (2d Cir. 1987) (stating that plaintiff’s counsel “irrevocably
waived the option offered by the district court further to amend his complaint” when he
“declared his intention to stand on the allegations of his complaint” at oral argument); D.
Penguin Bros. Ltd. v. City Nat’l Bank, 587 F. App’x 663, 669 (2d Cir. 2014) (summary order)
(holding that the district court did not abuse its discretion in effectively denying leave to amend
when, inter alia, the “[p]laintiffs . . . had ample notice of the asserted flaws in their complaints”).
III. Conclusion
We have considered McCabe’s remaining arguments and find them to be without merit.
Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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