E-Alert Case Updates

Organization is “Person” under West Virginia Consumer Credit and Protection Act

Midwestern Midget Football Club, Inc. v. Riddell, Inc.
2015 U.S. Dist. LEXIS 104426, CA No. 2: 15-00244 (W. Dist. W.V. August 10, 2015)
by Gregory Emrick, Associate
Semmes, Bowen & Semmes (www.semmes.com)

Not publicly available.

Defendant Riddell, Inc. is a corporation that designs, manufactures, markets and sells a football helmet under the name “Revolution Helmet.” As part of their marketing materials, Riddell references a study that showed the technology in the helmets reduced the incidence of concussions by up to 31 percent. Midwestern Midget Football Club, Inc. (“Midwestern”) is a non-profit organization that runs yearly football programs for approximately 150 youth participants. Midwestern brought a class action on December 2, 2014, on its own behalf and for similarly situated class members, against Riddell alleging that the concussion reduction information was knowingly false, because, among other reasons, the study was statistically unsound, funded by Riddell and co-authored by a Riddell employee. Midwestern alleged Riddell was aware that the technology made no material difference to concussion risk as compared to traditional helmets.

The claim was removed to the Federal Court for the Southern District of West Virginia. The class was defined as:

All West Virginia residents who purchased a Riddell Revolution football helmet in the State of West Virginia during the period beginning four years prior to the date of filing of this Class Action Complaint through the present . . . .

The complaint identified one cause of action: violation of the West Virginia Consumer Credit and Protection Act (“WVCCPA”), on the basis that Riddell’s marketing statements were false and intended to be relied upon by consumers in their purchasing decision. Riddell filed a motion to dismiss pursuant to Fed. R. Civ. Proc. 12(b), which was denied on June 18, 2015. The following day, the Fourth Circuit Court of Appeals ruled on a case addressing comparable claims of false statements regarding the effectiveness of supplements. The Court requested that the parties submit briefs regarding the Fourth Circuit’s ruling on the causes of action, if any.

The Court first addressed Riddell’s argument that Midwestern was an organization and could not be considered a “consumer” under the WVCCPA. The court noted that while the 2005 amendments to the WVCCPA referenced “consumer”, the provision of the statute that defined “person” had never been amended. That section provides "'Person . . . includes a natural person or an individual, and an organization." W. Va. Code, § 46A-1-102(31). The Court further noted that recent legislation had removed the references to “consumers” from the WVCCPA and replaced it with “person.” As Midwestern was an organization, and therefore a “person” under the statute, it had standing to bring the suit.

The Court then addressed the Fourth Circuit’s recent ruling on the claims. As the court noted the Fourth Circuit had held that "marketing statements that accurately describe the findings of duly qualified and reasonable scientific experts are not literally false . . . ." Based upon this holding, Midwestern abandoned its claim of literal falsity, but argued that Fourth Circuit did not address whether any of the representations made on the products were misleading and thus perhaps actionable under other consumer protection statute provisions. Riddell, however, pointed out, and the Court agreed, that the factual allegations of the Complaint were focused on literal falsity, and not misleading advertising. The Court then granted Riddell’s motion to dismiss, dismissed the Complaint without prejudice and permitted Midwestern to file an amended complaint.