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August 23, 2007

Sexual Orientation Meets Contracts and Torts

In Bubbles'n'Bows, LLC v. Fey Publishing Co., 2007 U.S. Dist. Lexis 60790 (D. N.J., Aug. 20, 2007) (designated "not for publication"), the court dismissed all of the Counts in the initial complaint, but instructed the plaintiff to refile the complaint after correcting it according to the opinion.  Id. at *1-*2. 

What makes this case fascinating for present purposes is how the abstract issue of sexual orientation enters into a business transaction and becomes the basis for a complaint that combines a discrimination claim with a contract claim and a tort claim.  The court held that Bubbles'n'Bows could pursue a discrimination claim against Fey Publishing because the threshold for standing is much lower in discrimination cases than in most cases, but that to pursue the discrimination claim, Bubbles'n'Bows must at least clarify in its complaint who were the potential members of the protected class who suffered from Fey Publishing's allegedly discriminatory act. 

Bubbles'n'Bows is a designer and seller of greeting cards.  Fey Publishing is a printing company.  Bubbles'n'Bows contracted with Fey Publishing to produce a line of cards that included a "traditional lifestyle" component and an "alternative lifestyle" component.  In February 2006, after entering the contract, the proprietor of Bubbles'n'Bows reminded the sales representative at Fey Publishing that she needed samples of the cards in question in time for the National Stationery Show on May 21, 2006.  As late as May 18, 2006, the sales representative at Fey repeatedly assured the proprietor of Bubbles'n'Bows that Fey would provide the samples in time. 

On May 20, 2006, however, the day before the Show, Fey delivered only some of the samples, and had failed to print even those according to the standards Bubbles'n'Bows had stipulated. The sales representative called Bubbles'n'Bows' proprietor to explain that the chairman of Fey Publishing had decided that he did not wish to publish the "alternative lifesyle" line for fear that it would "tarnish the reputation of Fey Publishing."  2007 U.S. Dist. Lexis 60790 at *3-*5.   

The sales representative at Fey did help the Bubbles'n'Bows proprietor find another printer, but he failed to discuss the mechanics of transferring the work from one company to another, adding to Bubbles'n'Bows' monetary loss.  Id. at *5-*6.

The initial complaint contained six counts: I) Breach of contract for defendants' failure to print the cards; II) violation of the New Jersey Law against Discrimination (NJLAD) for refusing to print the "alternative lifestyle" cards; III) a claim for punitive damages for the NJLAD violation; IV) violation of the New Jersey Consumer Fraud Act (CFA) for falsely promising to print the cards; V) negligent misrepresentation that defendants would print the cards, on which plaintiff relied to its detriment; and VI) a claim for attorneys' fees and costs.  Id. at *1-*2, *7.   

Defendant moved to dismiss all of the claims against the chairman of Fey Publishing and all but the first count against Fey Publishing itself.  After defendants filed their motion, the parties agreed to dismiss counts I, IV, and V against the chairman.  "For the reasons herein stated, Counts IV and V are dismissed; and Counts II, III, and VI are dismissed without prejudice.  However, Plaintiff shall have ten days to amend its Complaint to reflect the decision of this Court herein with regards to Counts II, III, and VI against Defendants."  Id. at *2.

The court dismissed the consumer fraud claim (IV) because the assertions guaranteeing customer satisfaction at the Fey Publishing website, which plaintiff adduced as its sole basis for fraud, were mere "puffery" of the sort that definitionally cannot give rise to a fraud claim.  Id. at *23-*28.   Similarly, the court dismissed the negligent misrepresentation claim (V).  Id. at *28-*31.  This complaint defines the difference between a contract claim and a tort claim.  The complaint offers no reason to believe that anyone at Fey Publishing was negligent in agreeing to print the cards.  Rather, they genuinely intended to fulfill the contract until an 11th hour review of the cards' content by the chairman.  Further, plaintiff alleges only a breach of contractual duty, not a breach of any legal duty that exists independently of the contract.  Finally, the money damages plaintiff claims under the negligent misrepresentation count are the same as under the breach of contract count.  Therefore, the court found no legal basis for a tort claim in addition to the breach of contract claim.

The most interesting parts of the opinion involve the claim of discrimination in violation of the New Jersey Law Against Discrimination (NJLAD).  Id. at *9-*23.  Defendants' motion to dismiss rested largely on their assertions that the plaintiff lacked standing to bring the suit, and that she had failed to identify any members of a protected class who suffered any injury from Fey Publishing's action.  These might seem to be different ways of stating the same point -- who could have standing to sue under an antidsicrimination statute except members of a protected class who had suffered discrimination first-hand?  The court explained otherwise, however. 

The court acknowledged that Bubbles'n'Bows's standing was dubious in this case by ordinary standards, but cited both U.S. and New Jersey Supreme Court precedents, and findings of the New Jersey legislature, for the holding that the standing threshold is lower where the claim involves invidious discrimination.  Id. at *12-*13.  Even so, defendants assert that Bubbles'n'Bows cannot complain of discrimination under NJLAD because it is not a person for purposes of the Law, indeed it cannot have any of the personal characteristics, including sexual orientation, that give rise to protected classifications.  Id. at *15. 

The court replied: "however, pursuant to established case law, NJLAD clearly does not require the discriminatory act to be directed at Plaintiff.  Instead, it is sufficient, for the purpose of determining standing, that Plaintiff shows it suffered an injury due to the discriminatory act, regardless of whether the act was directed at Plaintiff."  Id. at *15-*16.  This conclusion rested in part on the proposition that "[t]he victims of a discriminatory act are not just the people such an act is directed at, but also the community as a whole."  Id. at *15 (citation omitted). 

Still, the court agreed that, while Bubbles'n'Bows could have standing to pursue a discrimination claim under NJLAD, "it has failed to identify in its Complaint any individual or group of individuals within the protected class who have been discriminated against.  Although it is not necessary for Plaintiff to explicitly identify these customers in the Complaint, Plaintiff must plead sufficient allegations to state a claim for causation and damages."  Id. at *17. 

Finally, the court held that the chairman of Fey Publishing could not be directly liable for discrimination under NJLAD, but he might be liable for "aiding and abetting" discrimination.  Id. at *18-23.  Questions about the chairman's personal liability were questions of fact, not of law, such that they could proceed to trial if the Plaintiff pled them properly. 

August 23, 2007 in Other | Permalink


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Welcome to the blogosphere! It's great to have you and I'm certain to enjoy your blog (blawg?)! I used to operate the blawg "Life Law and Gender" but have since shuttered it (http://musingsonlifelawandgender.typepad.com/). Now, I mostly just read blogs, (although I occassionally post at the Rainbow Law Center blog). I look forward to your postings.

Posted by: Denise | Aug 24, 2007 6:22:08 AM

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