Hayley Amiel v. EVO Brands, LLC d/b/a Puff Bar, and PVG2, LLC d/b/a Puff Bar

Background

Hayley Amiel brought a proposed class action based on her alleged purchases of Defendants’ Puff Bar electronic cigarettes. She asserted claims under Sections 349 and 350 of the New York General Business Law, claims under “other state consumer protection statutes,” and breach of the implied warranty of merchantability. She sought certification of a nationwide class, and possibly a New York subclass.

Defendants were served but did not answer or otherwise appear by the deadline set by the Court. The Clerk entered certificates of default. After the Court ordered briefing about class certification and default judgment, Defendants responded and sought relief under Federal Rule of Civil Procedure 55(c), which allows a court to set aside an entry of default for good cause.

Class certification

The Court denied Plaintiff’s motion for class certification. It held that default did not eliminate the Court’s independent duty to determine whether the proposed class satisfied Federal Rule of Civil Procedure 23.

The Court found that Plaintiff failed to establish ascertainability, meaning that the class was not defined clearly enough for the Court to determine objectively who belonged in it. The proposed class descriptions differed between the Complaint, proposed order, and supporting declaration, including differences about whether there would be a New York subclass and the relevant time period. Plaintiff also did not explain adequately how purchasers could prove that they bought qualifying products or that the products had the nicotine labeling at issue.

The Court also found that Plaintiff had not provided sufficient evidence of numerosity, meaning that the proposed class was large enough to make individual lawsuits impractical. Her statements that the class numbered in the thousands were speculative and were not supported by a reliable estimate or evidence.

The Court further held that Plaintiff had not shown commonality or typicality. She identified common questions but did not show that those questions could produce common answers resolving the litigation. She also offered only conclusory statements that her claims were typical of the class, and the Court noted that some claims concerned marketing and sales to people under 21, while Plaintiff claimed to have been 21 during the class period. The Court did not decide whether Plaintiff satisfied the adequacy requirement because she had already failed to satisfy other requirements.

The Court also concluded that Plaintiff had not met Rule 23(b)(3)’s predominance requirement. Plaintiff did not analyze the elements of her four claims or explain how common evidence would prove them. In addition, the Court found that individual questions—including why each consumer purchased the products—could affect the New York consumer-protection claims. The Court therefore denied class certification without reaching the separate superiority requirement.

Individual default judgment

The Court granted in part and denied in part Plaintiff’s motion for default judgment on liability only and as to Plaintiff individually. Because Defendants were in default, the Court accepted well-pleaded factual allegations as true for purposes of deciding liability, but it still examined whether those allegations established the claimed legal violations.

For Counts I and II, involving Sections 349 and 350 of the New York General Business Law, the Court held that Plaintiff established the required elements: consumer-oriented conduct, materially misleading conduct, and resulting injury. The Court therefore granted default judgment in Plaintiff’s favor on liability for both claims.

For Count III, involving “other state consumer protection statutes,” the Court noted that Plaintiff identified purchases in New York and New Jersey. The Court’s analysis stated that Plaintiff established the elements of the New Jersey and New York consumer-protection claims. The Conclusion, however, stated that default judgment was granted only to the extent Count III was based on New Jersey’s consumer-protection statute and was otherwise denied. The Court denied default judgment under the other state statutes listed in the Complaint.

For Count IV, the implied-warranty claim, the Court denied default judgment to the extent the claim was based on New York law because Plaintiff did not allege that she bought the products directly from Defendants and alleged only economic injury. Under the law applied by the Court, New York requires contractual privity for an implied-warranty claim involving only economic loss. The Court granted default judgment on the implied-warranty claim for Plaintiff’s purchases in New Jersey because New Jersey law does not require privity between the purchaser and manufacturer. The judgment was limited to liability only.

Rule 55(c) request

The Court held that Defendants’ default was willful. Defendants had been served, knew about the lawsuit, did not respond despite extensions, and did not appear until shortly before their response to the Court’s order to show cause was due. The Court rejected Defendants’ explanations based on settlement communications, financial circumstances, and other lawsuits. Because the default was willful, the Court did not need to consider prejudice or whether Defendants presented a meritorious defense. Defendants were therefore not entitled to relief under Rule 55(c).

Disposition

The Court denied class certification. It granted in part and denied in part Plaintiff’s motion for individual liability-only default judgment: it granted judgment on Counts I and II; granted Count III to the extent stated in the Conclusion under New Jersey’s consumer-protection statute, while otherwise denying it; and granted Count IV only for purchases in New Jersey, while otherwise denying it. The Court directed Plaintiff to submit a proposed liability-only judgment and scheduled an in-person proceeding to determine damages.