Opinion
Civil Action No. 3:03-CV-1961-D
January 8, 2004
MEMORANDUM OPINION AND ORDER
Defendant Vail Products, Inc. ("Vail") moves under Fed.R.Civ.P. 12(b)(6) and 9(b) to dismiss plaintiffs' fraud claim alleged in their second amended original complaint. For the reasons that follow, the court grants the motion.
I
This lawsuit arises from the death of plaintiffs' son in a Vail 2000 bed, an enclosed hospital-type bed that plaintiffs allege Vail designed, manufactured, marketed, and sold. Plaintiffs assert strict liability, warranty, and negligence claims against Vail stemming from the death of their son, a special-needs child. They also allege a claim for fraud/negligent misrepresentation. This claim states, in its entirety:
Defendant Vail, by and through its employees and representatives, and by and through its own instructional training videos, made material misrepresentations as to the quality of care and services provided by Defendant including the quality of the bed in question. Pleading pursuant to Fed.R.Civ.P. 9a, Plaintiffs further state that specifically Defendant misrepresented the ability of the bed to act as a safe environment for children and individuals with special needs in its own training video. Additionally, Plaintiffs further state that the Defendant's failure to timely notify all owners regarding the recall of the product in question was a knowing misrepresentation of the product's continued ability to provide a safe environment for children and individuals with special needs. These representations were made to induce Plaintiffs to purchase these beds, and Plaintiffs relied upon these representations. These representations were not accurate and additionally, Defendant knew or should have known of the falsity of its representations.
2d Am. Compl. ¶ 23.
Vail moves to dismiss the fraud claim, contending that it remains vague and conclusory. Plaintiffs maintain that they have complied with Rule 9(b). Reduced to its essence, their responsive argument is that they have pleaded with requisite specificity the facts that they know, and what they do not know specifically (e.g., the identity of the narrator in the training video that accompanied the bed, in which they contend Vail misrepresented the bed's ability to act as a safe environment) is the result of the fact that this case is in the early stages of litigation and discovery. They state that "[a]s Plaintiffs receive additional information through written and oral discovery, Plaintiffs will be able to provide further information as to even more particulars of the specific fraud allegations." Ps. Br. at 5. Plaintiffs request in the alternative that, if the court concludes that the complaint is insufficient, they be permitted at least minimal discovery before the court requires a more definite statement. Id.
II
Rule 9(b) requires that a complaint alleging fraud specify the "time, place and contents of the false representations, as well as the identity of the person making the misrepresentations and what [the person] obtained thereby." Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1068 (5th Cir. 1994). The purpose of Rule 9(b) is not "to procure punctilious pleading detail." Steiner v. Southmark Corp., 734 F. Supp. 269, 273 (N.D. Tex. 1990) (Fitzwater, J.). Rather, Rule 9(b) must be read in light of Rule 8, which requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Corwin v. Marney, Orton Inv., 788 F.2d 1063, 1068 n. 4 (5th Cir. 1986) (quoting Rule 8(a)). It serves neither "as a throwback to the hypertechnical pleading requirements of the Field Code nor requires needlessly repetitive pleading." Steiner, 734 F. Supp. at 273 (citing In re Commonwealth Oil/Tesoro Petroleum Corp. Sec. Litig., 467 F. Supp. 227, 251 (W.D. Tex. 1979) (Higginbotham, J.)). The specificity that Rule 9(b) requires varies according to the context of the fraud claimed. See Williams v. WMX Techs., Inc., 112 F.3d 175, 178 (5th Cir. 1997) (noting that "courts have emphasized that Rule 9(b)'s ultimate meaning is context-specific.").Nevertheless, one function of Rule 9(b) is to "alert defendants to the precise misconduct with which they are charged and protect defendants against spurious charges of immoral and fraudulent behavior." United States ex rel. Clausen v. Lab. Corp., 290 F.3d 1301, 1310 (11th Cir. 2002) ( qui tam case) (quoting Ziemba v. Cascade Int'l Inc., 256 F.3d 1194, 1202 (11th Cir. 2001)). Plaintiffs appear to assume that it is permissible to assert fraud and, through discovery, attempt to prove it. While this may be allowed in other contexts, it is not when fraud is alleged. This is so because Rule 9(b) functions to deter spurious charges of fraudulent behavior. Fraud claims must be averred with specificity before discovery is undertaken. As the Fifth Circuit recently explained,
pursuant to Rule 9(b), articulating the elements of fraud with particularity requires a plaintiff to specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent. . . .Put another way, pleading fraud with particularity in this circuit requires time, place and contents of the false representations, as well as the identity of the person making the misrepresentation and what that person obtained thereby. We have thus noted that, although the requirement for particularity in pleading fraud does not lend itself to refinement, and it need not in order to make sense, nevertheless, directly put, the who, what, when, and where must be laid out before access to the discovery process is granted.ABC Arbitrage Plaintiffs Group v. Tchuruk, 291 F.3d 336, 349 (5th Cir. 2002) (Private Securities Litigation Reform Act of 1995 case) (internal quotation marks, brackets, and footnotes omitted).
In the present case, plaintiffs have met some but not all the requirements of Rule 9(b). Apparently, some aspects of their fraud claim are based on statements made by unidentified "employees and representatives." 2d Am. Compl. ¶ 23. They allege that "Defendant Vail, by and through its employees and representatives . . . made material misrepresentations as to the quality of care and services provided by Defendant including the quality of the bed in question." Id. But they provide no details concerning the who, what, when, and where of these alleged misrepresentations.
Plaintiffs also complain about the contents of Vail's instructional training videos. "[T]he particularity demanded by Rule 9(b) differs with the facts of each case[.]" United States ex rel. Wilkins v. N. Am. Constr. Corp., 173 F. Supp.2d 601, 613 (S.D. Tex. 2001) (quoting Hart v. Bayer Corp., 199 F.3d 239, 248 n. 6 (5th Cir. 2000)). Because plaintiffs rely on the contents of a videotape — a permanent medium — they should be able to allege specifically what was said, even if the court concludes that they have adequately asserted who (a person chosen or approved by Vail), and when and where (in Vail instructional videotapes that accompanied Vail 2000 beds), the statements were made.
Concerning plaintiffs' contention that Vail failed to give timely notification to all owners regarding the recall of the product, and that this was a knowing misrepresentation "of the product's continued ability to provide a safe environment for children and individuals with special needs[,]" 2d Am. Compl. ¶ 23, they have not pleaded specifically when Vail failed to provide such notice. Because plaintiffs assert that Vail's motive-i.e., what Vail obtained thereby-in not providing notice was "to induce Plaintiffs to purchase these beds," id., the timing of the failure to give notice is essential to their claim. They allege that they received the Vail 2000 bed in September 2001. Id. at ¶ 7. If Vail failed to give notice of a recall after plaintiffs purchased the bed, this failure could not have motivated Vail concerning the sale to plaintiffs.
* * *
Accordingly, the court concludes that plaintiffs' fraud claim fails to satisfy all the requirements of Rule 9(b), and it grants Vail's November 25, 2003 partial motion to dismiss. If plaintiffs later obtain through discovery or other means the factual grounds that would permit them to allege fraud, they may move for leave to amend, provided they do so by the scheduling order deadline. They are not entitled, however, to assert fraud with the mere hope or anticipation of being able to prove it at trial.
SO ORDERED