Dunham v. The Sherwin-Williams Company

CourtDistrict Court, N.D. New York
DecidedOctober 24, 2022
Docket1:22-cv-00300
StatusUnknown

This text of Dunham v. The Sherwin-Williams Company (Dunham v. The Sherwin-Williams Company) is published on Counsel Stack Legal Research, covering District Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dunham v. The Sherwin-Williams Company, (N.D.N.Y. 2022).

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

MAUREEN E. DUNHAM,

Plaintiff,

-v- 1:22-CV-300

THE SHERWIN-WILLIAMS COMPANY,

Defendant.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

APPEARANCES: OF COUNSEL:

SHAMIS & GENTILE, P.A. ANDREW J. SHAMIS, ESQ. Attorneys for Plaintiff 14 N.E. 1st Avenue, Suite 705 Miami, FL 33132

KALIEL GOLD PLLC JEFFREY D. KALIEL, ESQ. Attorneys for Plaintiff 1100 15th Street NW – 4th Floor Washington, DC 20005

NEMATZADEH PLLC JUSTIN S. NEMATZADEH, ESQ. Attorneys for Plaintiff 101 Avenue of the Americas – Suite 909 New York, NY 10013

KALIEL GOLD PLLC SOPHIA GOREN GOLD, ESQ Attorneys for Plaintiff 950 Gilman Street – Suite 200 Berkeley, CA 94710 JONES, DAY LAW FIRM SHARYL A. REISMAN, ESQ. Attorneys for Defendant 250 Vesey Street New York, NY 10281

JONES, DAY LAW FIRM CALLAND FERRARO, ESQ. Attorneys for Defendant LOUIS CHAITEN, ESQ. North Point 901 Lakeside Avenue Cleveland, OH 44114

DAVID N. HURD United States District Judge MEMORANDUM-DECISION and ORDER

I. INTRODUCTION On March 30, 2022, named plaintiffs Maureen Dunham (“Dunham” or “plaintiff”) and Frank Novak (“Novak”), brought this action on behalf of themselves and others similarly situated, alleging that defendant, The Sherwin-Williams Company (“Sherwin-Williams” or “defendant”), engaged in

a deceptive bait-and-switch scheme of covertly tacking on a hidden 4% “Supply Chain Charge” to every sales transaction. Dkt. No. 1. The complaint asserted four claims: (1) deceptive acts or practices in violation of the New York General Business Law § 349; (2) violation of the Michigan Consumer

Protection Act; (3) breach of contract; and (4) unjust enrichment. Id. On May 31, 2022, Sherwin-Williams moved to dismiss the complaint under Rules 12(b)(6) and 12(b)(2) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted and lack of personal

jurisdiction. Dkt. No. 12. On June 21, 2022, in lieu of an opposition, Dunham filed a First Amended Complaint. Dkt. No. 21. The amended pleading removes Novak as a named plaintiff and no longer asserts a violation of the Michigan Consumer

Protection Act. Id. Accordingly, plaintiff’s operative complaint now asserts three claims: (1) deceptive acts or practices in violation of the New York General Business Law § 349; (2) breach of contract; and (3) unjust enrichment. Id.

On July 5, 2022, Sherwin-Williams moved under Rule 12(b)(6) to dismiss the First Amended Complaint. Dkt. No. 22. The motion has been fully briefed and will be considered on the basis of the submissions without oral argument.

II. BACKGROUND On September 28, 2021, Sherwin-Williams’ Chairman, President, and Chief Executive Officer, John G. Morikis, made a public statement to Sherwin-Williams investors that manufacturing costs were rising due to a

limited availability of raw materials. First Am. Compl. ¶ 14. In response to the rise in costs, defendant began imposing a 4% “Supply Chain Charge” to all items purchased by customers. Id. ¶ 16. On November 9, 2021, Dunham, in reliance “upon price tags and displays

provided in-store,” purchased two gallons of paint for $119.59 at a Sherwin- Williams store located in Amsterdam, New York. First Am. Compl. ¶¶ 37– 38. As part of this transaction, plaintiff was charged a 4% “Supply Chain Charge” for each gallon of paint, amounting to $4.65. Id. ¶ 39. According to

plaintiff, she did not realize that Sherwin-Williams would affix a price increase on her transaction and was first made aware of the surcharge upon examining her purchase receipt. Id. ¶¶ 41–42. Plaintiff asserts that “[h]ad [she] known that the surcharge would be assessed on her purchase, she would not have purchased her paint from Sherwin-Williams.” Id. ¶ 43.

III. LEGAL STANDARD To survive a Rule 12(b)(6) motion to dismiss, the complaint’s factual allegations must be enough to elevate the plaintiff’s right to relief above the level of speculation. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). So

while legal conclusions can provide a framework for the complaint, they must be supported with meaningful allegations of fact. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). In short, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570.

To assess this plausibility requirement, the court must accept as true all of the factual allegations contained in the complaint and draw all reasonable inferences in the non-movant’s favor. Erickson v. Pardus, 551 U.S. 89, 94 (2007). In doing so, the court generally confines itself to the facts alleged in

the pleading, any documents attached to the complaint or incorporated into it by reference, and matters of which judicial notice may be taken. Goel v. Bunge, Ltd., 820 F.3d 554, 559 (2d Cir. 2016). IV. DISCUSSION

Dunham’s three-count amended complaint alleges: (1) deceptive acts or practices in violation of New York General Business Law § 349; (2) breach of contract; and (3) unjust enrichment. First Am. Compl. ¶¶ 54–74. A. New York General Business Law § 349 Dunham first asserts that Sherwin-Williams committed deceptive acts or

practices in violation of New York General Business Law § 349 by “failing to disclose to customers the existence of the 4% Surcharge applied to all purchases made at Sherwin-Williams stores.” First Am. Compl. ¶ 57. New York General Business Law § 349 is a “consumer protection

measure.” Dimond v. Darden Rests., Inc., 2014 WL 3377105, at *4 (S.D.N.Y. July 9, 2014). It prohibits “[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state.” N.Y. GEN BUS. Law § 349(a). The purpose of the statute is “to empower

customers, especially the disadvantaged, and to even the playing field of their disputes with better funded and superiorly situated fraudulent businesses.” Mendez v. Bank of Am. Home Loans Servicing, LP, 840 F. Supp. 2d 639, 657 (E.D.N.Y. 2012) (cleaned up). The statute’s reach is broad “in order to

‘provide [the] needed authority to cope with the numerous, ever-changing types of false and deceptive business practices which plague customers in [New York] State.’” Dimond, 2014 WL 3377105, at *4 (citation omitted). “To establish a violation of Section 349, the plaintiff must prove the

defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result.” Chery v. Conduent Educ. Servs., LLC, 581 F. Supp. 3d 436, 449 (N.D.N.Y. 2022) (citation omitted). For purposes of this motion to dismiss, Dunham has plausibly alleged that Sherwin-Williams violated Section 349.

1. Consumer-Oriented First, Dunham has adequately alleged that Sherwin-Williams’ application of a 4% surcharge to all purchases made at its stores amounts to consumer- oriented conduct.

“Section 349 on its ‘face appl[ies] to virtually all economic activity, and [its] application has been correspondingly broad.’” Chery, 581 F. Supp. 3d at 449 (citation omitted). As such, the consumer-orientated element merely requires a plaintiff to demonstrate “that the [defendant’s] acts or practices

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