Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_08-cv-00096/USCOURTS-azd-4_08-cv-00096-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Fraud

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1

 On the same day that Qualxserv moved for dismissal, Defendants Dell, Inc., Dell

Products L.P., Dell Marketing L.P. and Dell USA L.P. ("Dell Defendants") also filed a Motion

to Dismiss. (Doc. No. 44.) The two Motions present similar arguments and Qualxserv moves to

dismiss in part for the reasons stated in Dell Defendants’ Motion. In a Report and

Recommendation filed on August 21, 2008, this Court recommended that Dell Defendants’

Motion to Dismiss be granted in part and denied in part. (Doc. No. 62.) 

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Pamela Newport, 

Plaintiff, 

vs.

Dell, Inc., et al., 

Defendants. 

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CV-08-00096-TUC-CKJ(JCG)

REPORT AND RECOMMENDATION

Pending before the Court is a Motion to Dismiss filed by Defendant Qualxserv, LLC

on April 29, 2008.1

 (Doc. No. 43.) Plaintiff filed a response on June 2, 2008. (Doc. No.

51.) Qualxserv filed a reply on June 9, 2008. (Doc. No. 52.)

 Pursuant to the Rules of Practice in this Court, the matter was assigned to Magistrate

Judge Guerin for a report and recommendation. The Magistrate declined to hear oral

argument in this matter. See Mahon v. Credit Bureau of Placer County, Inc., 171 F.3d 1197,

1200 (9th Cir. 1999) (explaining that if the parties provided the district court with complete

memorandum of law and evidence in support of their positions, ordinarily oral argument

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2

 The document attached to the Amended Complaint which Plaintiff claims is a copy of

her invoice – although it states in large capital letters “THIS IS NOT AN INVOICE” – lists

August 31, 2000 as the order date and September 1, 2000 as the invoice date (Doc. No. 33, Ex.

1.) 

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would not be required). After review, the Magistrate recommends the District Court, after

its independent review of the record, enter an order granting Defendant’s Motion.

FACTUAL AND PROCEDURAL BACKGROUND

Defendant Qualxserv seeks dismissal of a class action complaint filed by Plaintiff on

November 8, 2007. According to Plaintiff’s Amended Complaint, Plaintiff is a resident of

Yavapai County, Arizona who purchased a Dell computer from Dell Inc. in September,

2000.2

 (Doc. No. 33, pg. 3.) At the time of purchase, Dell, Inc., on behalf of itself and the

other Defendants, represented to Plaintiff that the purchase price of her computer included

next business day onsite warranty repair service with a live technician for the first year of her

warranty period. (Id.) Dell, Inc. also represented to Plaintiff that the purchase price of her

computer included next business day warranty replacement parts. (Id.) Dell, Inc. further

warranted that the replacement parts would be new and of the same quality as the parts being

replaced. (Id., pg. 9.) Dell, Inc. sold Plaintiff a two-year extension of these warranties at a

cost of $60-70 per year. (Id., pgs. 3, 5.) 

Plaintiff alleges that Defendants Dell, Inc., BancTec and Qualxserv provide the onsite

warranty repair work and replacement parts and components contemplated by these

warranties. (Id., pg. 5.) Defendant Qualxserv is a limited liability company engaged in the

business of making, marketing, selling, maintaining, repairing, servicing and providing

warranty and warranty services, parts and labor to purchasers of Dell computer systems. (Id.,

pg. 6.) Although Qualxserv was not a party to Plaintiff’s warranty, Plaintiff alleges that

Qualxserv was obligated to provide warranty repair service and replacement parts and

components to other members of the plaintiff class. Plaintiff further alleges that each of the

Defendants has been or is the principal, agent, employee, representative, partner, joint

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3

 According to Plaintiff, Dell Defendants, as a matter of business practice, customarily

extend the warranty period for three months for pending warranty issues of which they had

notice prior to the expiration of the warranty period, and did so for Plaintiff. (Doc. No. 33, pg.

7.)

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venturer and/or co-conspirator of each of the other Defendants and in such capacity or

capacities participated in the acts or conduct alleged in the Amended Complaint.

Beginning in June, 2003, Plaintiff notified Defendants orally and in writing of her

need for next day onsite warranty repair service and parts. (Id., pg. 7.) Defendants assisted

Plaintiff with her computer repair through November, 2003,3

 but failed to provide next day

onsite warranty repair service or next day new replacement parts. (Id.) Instead, Defendants

told Plaintiff that the warranties entitled her to next business day onsite warranty repair only

if Dell could determine ahead of time that a part needed to be replaced. (Id., pg. 8.)

Defendants also informed Plaintiff that she could not receive next-day service and repair

because no service technician was located near her residence. (Id., pg. 10.) Defendants used

refurbished replacement parts for warranty repairs and charged Plaintiff for the cost of a new

part if the part being replaced was not timely returned to Defendants. (Id., pg. 9.) In the fall

of 2007, Plaintiff discovered – through an unrelated legal proceeding involving Dell, Inc. –

that at the time of purchase, Defendants failed to disclose to Plaintiff that she had the option

to purchase her computer for less money without the first year of onsite warranty service.

(Id.) 

On November 8, 2007, Plaintiff filed a class action suit against Defendants in Pima

County Superior Court. (Doc. No. 1.) Dell Defendants removed the action to federal court

on February 1, 2008, alleging federal jurisdiction under the Class Action Fairness Act of

2005 (“CAFA”). (Id.) Plaintiff moved to remand the case back to state court; that motion

was denied. (Doc. Nos. 31, 55.) On March 13, 2008, Plaintiff amended her Complaint

(“Amended Complaint”). (Doc. No. 33.) Plaintiff’s Amended Complaint alleges that all

plaintiff class members received substantially identical warranties from Defendants and, like

Plaintiff, did not receive the full benefit of their warranties. (Doc. No. 33, pgs. 7, 10.) The

Amended Complaint further alleges that the class members were absent from two other

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4

 Arizona law does not recognize a free-standing claim for false advertising. Rather, the

claim is an element of a claim brought under Arizona’s Consumer Fraud Act, A.R.S. § 44-1521,

et seq. See Parks v. Macro-Dynamics, Inc., 591 P.2d 1005, 1008 (Ariz. App. 1979). Count 2 of

Plaintiff’s complaint will therefore be considered part of Count 1 for purposes of this Report and

Recommendation.

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nationwide class action lawsuits filed against Defendants and alleging similar warrantyrelated claims. (Id.) The Amended Complaint alleges nine claims; each claim is alleged

against all Defendants: (1) consumer fraud in violation of Arizona’s Consumer Fraud Act,

A.R.S. § 44-1521, et seq.; (2) false advertising;4

 (3) breach of express warranty; (4) breach

of express warranty in violation of A.R.S. § 47-2313; (5) breach of contract; (6) fraud; (7)

fraud by nondisclosure; (8) restitution for unjust enrichment; and (9) declaratory judgment.

STANDARD OF REVIEW

The dispositive issue raised by a Rule 12(b)(6) motion is whether the facts as pleaded,

if established, support a valid claim for relief. See Neitzke v. Williams, 490 U.S. 319, 328-

329 (1989). In reviewing a motion to dismiss for failure to state a claim, this Court’s review

is limited to the contents of the complaint. See Clegg v. Cult Awareness Network, 18 F.3d

752, 754 (9th Cir. 1994). All allegations of material fact in the complaint are taken as true

and construed in the light most favorable to the nonmoving party. Id. A complaint should

not be dismissed unless it appears beyond doubt that a plaintiff can prove no set of facts in

support of his claim that would entitle him to relief. Id. 

DISCUSSION

Qualxserv argues that Plaintiff’s Amended Complaint should be dismissed in its

entirety pursuant to Rule 12(b)(6) because (1) Plaintiff has not alleged a contractual

relationship with Qualxserv, (2) Plaintiff has not pled her fraud claims with particularity as

required by Rule 9(b), Fed. R. Civ. P., and (3) the arguments presented in Dell Defendants’

Motion to Dismiss also apply to Qualxserv.

A. Qualxserv is entitled to dismissal of Plaintiff’s contract claims because Plaintiff

admits that she had no contractual relationship with Qualxserv

Counts 3, 4 and 5 of Plaintiff’s Amended Complaint sound in contract. Qualxserv

contends that it is entitled to dismissal of these counts because Plaintiff only alleges a

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contractual relationship with Dell Defendants and Banctec, not Qualxserv. Plaintiff’s contract

claims against Qualxserv hinge on Plaintiff’s allegation that other, unnamed class members

received warranties promising service by Qualxserv. According to Qualxserv, Plaintiff has

no standing to sue Qualxserv. In response, Plaintiff admits that she has no contractual

relationship with Qualxserv but that she has alleged a conspiracy between Dell Defendants,

Banctec and Qualxserv. Therefore, according to Plaintiff, the juridical link doctrine and Rule

20, Fed. R. Civ. P. permit Plaintiff to pursue Counts 3, 4 and 5 on behalf of other class

members.

1. The juridical link doctrine does not apply in this case

The juridical link doctrine was first recognized in La Mar v. H&B Novelty & Loan

Co., 489 F.2d 461, 466 (9th Cir. 1973), when the Court suggested in dicta that the named

plaintiff in a class action might be able to assert claims against defendants with whom

plaintiff has had no dealings in “situations in which all injuries are the result of a conspiracy

or concerted schemes between the defendants at whose hands the class suffered injury” or

situations “in which all defendants are juridically related in a manner that suggests a single

resolution of the dispute would be expeditious.” 

There are several problems with Plaintiff’s attempt to invoke the juridical link

doctrine in this case. First, United States Supreme Court case law demonstrates that the

juridical link doctrine does not obviate the standing requirement. The question of standing

ultimately asks whether litigants are “entitled to have the court decide the merits of the

dispute.” Warth v. Seldin, 422 U.S. 490, 498 (1975). Only if plaintiffs have standing to sue

do they present a case or controversy between themselves and the defendants within the

meaning of Article III of the Constitution. Steel Co. v. Citizens for a Better Env't, 523 U.S.

83, 102 (1998). “That a suit may be a class action ... adds nothing to the question of

standing, for even named plaintiffs who represent a class ‘must allege and show that they

personally have been injured, not that injury has been suffered by other, unidentified

members of the class to which they belong and which they purport to represent.’ ” Lewis v.

Casey, 518 U.S. 343, 357 (1996) (citing Simon v. Eastern Ky. Welfare Rights Organization,

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5

 Furthermore, In re Gap discusses the juridical link doctrine only as it relates to Rule 23,

Fed. R. Civ. P., not as an exception to Article III standing.

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426 U.S. 26, 40, n. 20 (1976)). La Mar did not consider the juridical link doctrine as an

exception to Article III standing. Instead, La Mar noted that one of the prerequisites for class

actions set forth under Rule 23, Fed. R. Civ. P. requires that “the claims or defenses of the

representative parties are typical of the claims or defenses of the class.” La Mar

contemplated application of the juridical link doctrine as an exception to this requirement.

La Mar, 489 F.2d at 466. 

Second, the juridical link doctrine is rarely applied. The cases cited by Plaintiff in

support of her claim that the doctrine is “widely accepted and recognized” discuss the

doctrine (typically in response to a plaintiff’s argument that it should be applied), but do not

actually apply it. See La Mar, 489 F.2d at 466; Cashman v. Nationwide Ins. Co. of America,

2006 WL 908760 at *4 (D. Ariz. 2006); Fernandez v. Takata Seat Belts, Inc., 108 P.3d 917,

921 (Ariz. 2005); In re Enron Corp. Securities, Derivative & ERISA Litigation, 2004 WL

405886 at *2 (S.D. Tex. 2004); Canady v. Allstate Insurance Co., 1997 WL 33384270 at *5-

6 (W.D. Mo. 1997). 

Third, the few cases cited by Plaintiff which have applied the juridical link doctrine

are not applicable in this case. In In re Gap Stores Securities Litigation, 79 FRD 283 (N. D.

Cal. 1978), the court permitted a plaintiff class to proceed against a defendant class on a

claim arising under section 11 of the Securities Act, 15 U.S.C. § 77k, noting that there was

no “La Mar problem” because the statute did not require privity between purchaser and

underwriter and because, due to the structure of the statute, “all the defrauded purchasers can

be ‘made whole’ on their cause of action only when they succeed in bringing all of the

underwriters to court.” Id. at 298. The court did not invoke the doctrine with respect to

claims under section 12(2) of the Securities Act because those claims require privity between

purchaser and underwriter.5

 Thus, the court’s application of the juridical link doctrine

depended upon the fact that plaintiffs did not need to be in privity with defendants in order

to pursue a statutory claim. Such is not the case here, where Plaintiff must allege privity of

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6

 A plain reading of Rule 20, Fed. R. Civ. P. suggests that Plaintiff has failed to comply

with the Rule’s requirements. On its face, Rule 20 requires Plaintiff to allege a "right to relief." 

Plaintiff's Amended Complaint does not allege a contractual relationship with Qualxserv, and

therefore does not claim a legal right to relief.

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contract with Qualxserv in order to pursue her contract-based claims. Thillens, Inc. v.

Community Currency Exchange Ass'n of Illinois, Inc., 97 F.R.D. 668, 676 (D.C. Ill. 1983)

adopted the juridical link doctrine as grounds for certifying a defendant class of highly

cohesive and self-organized currency exchanges and their individual owners. In re Itel

Securities Litigation, 89 F.R.D. 104 (N.D. Cal. 1981) also considered La Mar’s application

solely as it related to certification of a defendant class in a securities case. Thillens and Itel

have no bearing on whether Plaintiff can proceed with contract claims against a party with

whom she had no contract. In sum, Plaintiff’s case is not akin to the any of the limited types

of cases in which courts have actually applied the juridical link doctrine.

2. Rule 20 does not create an exception to standing

Rule 20, Fed. R. Civ. P. states that “Persons . . . may be joined in one action as

defendants if: (A) any right to relief is asserted against them jointly, severally, or in the

alternative with respect to or arising out of the same transaction, occurrence, or series of

transactions or occurrences; and (B) any question of law or fact common to all defendants

will arise in the action.” Plaintiff contends that she has complied with the requirements of

Rule 20 and therefore should be permitted to proceed with her contract claims against

Qualxserv.6

The Ninth Circuit has not considered the application of Rule 20, Fed. R. Civ. P.

proposed by Plaintiff, and thus this Court is left to consider case law from other jurisdictions

cited by the parties. Plaintiff relies on an Eleventh Circuit case, Moore v. Comfed Sav. Bank,

908 F.2d 834 (11th Cir. 1990) and a district court case adopting Moore’s reasoning. See In

re Tri-State Crematory Litigation, 215 FRD 660 (N.D. Ga. 2003). In Moore, the plaintiffs'

class borrowed money from Land Bank Equity Corporation. Moore, 908 F.2d at 836. Land

Bank packaged the loans and sold them to savings and loan institutions around the country.

Id. at 837. Plaintiffs then sued the savings and loan institutions who had purchased their

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loans (but not Land Bank, who had declared bankruptcy) under federal and state RICO

statutes, alleging that the loans were usurious. Id. at 836. The court entered an order sua

sponte joining as additional named defendants all other institutions which held Land Bank

loans secured by real property in the state. Id. Because none of these additional named

defendants held any paper signed by any of the named class plaintiffs, they complained that

they should not have been joined as defendants. Id. at 837. In considering defendants’

argument, the court declined to apply the juridical link doctrine, holding that the only cases

to apply it presented a situation in which there was either a contractual obligation among all

defendants or a state or local statute requiring common action by the defendants. Id. at 838.

The court then held, with little explanation or reasoning, that “we are of the view that a

proper construction of [Rule 20, Fed. R. Civ. P.] would permit the joinder of all these

defendants which acquired their loans from Land Bank.” Id. at 839. 

The Court declines to follow Moore in this case, for several reasons. First, Moore

provides no rationale for its decision to apply Rule 20, Fed. R. Civ. P. to permit joinder of

the defendants. Second, Moore does not consider the standing question, and instead focuses

on whether jurisdiction was proper under the Federal Rules of Civil Procedure addressing

joinder of parties. See Dash v. FirstPlus Home Loan Owner Trust 1996-2, 248 F.Supp.2d

489, 503 (M.D.N.C. 2003). Third, as other courts have noted in declining to apply Moore,

“procedural rules, such as the joinder rules, do not expand the jurisdictional boundaries of

federal courts beyond the Article III limitations.” Id.; see also Christiansen v. Beneficial

Nat'l Bank, 972 F.Supp. 681, 683 n. 2 (S.D.Ga.1997). Standing is a Constitutional

requirement, it cannot be overcome by a federal procedural rule. See Owen Equipment &

Erection Co. v. Kroger, 437 U.S. 365, 370 (1978) (“it is axiomatic that the Federal Rules of

Civil Procedure do not create or withdraw federal jurisdiction”). 

In sum, this Court concurs with other Circuits which have held that named class

representatives must demonstrate standing through a requisite case or controversy between

themselves personally and defendants, not merely allege that injury has been suffered by

other, unidentified members of the class to which they belong and which they purport to

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7

 For the reasons stated in this Court’s Report and Recommendation re: Dell Defendants’

Motion to Dismiss, Qualxserv is also entitled to dismissal of Plaintiff’s claim for declaratory

relief.

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represent. See Jackson v. Resolution GGF Oy, 136 F.3d 1130 (7th Cir.1998); Cent. Wesleyan

Coll. v. W.R. Grace & Co., 6 F.3d 177, 188 (4th Cir.1993).

B. Qualxserv is entitled to dismissal of Plaintiff’s fraud claims because Plaintiff has

failed to plead those claims with specificity

Qualxserv argues that Plaintiff has failed to plead her fraud claims with specificity as

required by Rule 9(b), Fed. R. Civ. P. Plaintiff does not respond to that argument in her

response and therefore apparently concedes it. To the extent that Plaintiff implicitly argues

that she has adequately alleged fraud claims against Dell Defendants and therefore, pursuant

to the juridical link doctrine, has also adequately alleged fraud claims against Qualxserv,

Plaintiff is incorrect. First, for the reasons stated in this Court’s Report and Recommendation

re: Dell Defendants’ Motion to Dismiss, Plaintiff has not stated her fraud claims against Dell

Defendants with specificity. (Doc. No. 62.) Second, for the reasons stated in Section A,

above, the juridical link doctrine does not apply in this case.

C. Plaintiff has failed to state a claim for unjust enrichment

Qualxserv did not expressly argue for dismissal of Plaintiff’s claim for unjust

enrichment, but incorporated by reference the arguments presented in Dell Defendants’

Motion to Dismiss. (Doc. No. 43, pg. 6.) In their Motion to Dismiss, Dell Defendants’ argue

that Plaintiff cannot state a claim for unjust enrichment against Dell Defendants because

Plaintiff’s remedy lies in contract. This argument does not apply to Qualxserv, but

Qualxserv is nonetheless entitled to dismissal of Plaintiff’s unjust enrichment claim.7

In order to state a claim for unjust enrichment, Plaintiff must show: (1) an enrichment;

(2) an impoverishment; (3) a connection between the enrichment and the impoverishment;

(4) the absence of justification for the enrichment and the impoverishment; and (5) the

absence of a legal remedy. See Trustmark Ins. Co. v. Bank One, Arizona, NA, 48 P.3d 485

(Ariz. App. 2002). In the present case, Plaintiff has not alleged that Qualxserv was enriched

as a result of Plaintiff’s impoverishment. Instead, Plaintiff alleges that Qualxserv was

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unjustly enriched when it received an enrichment at the expense of other, unnamed class

members. Plaintiff cannot invoke other class members’ alleged entitlement to relief in order

to save a claim. If a plaintiff is not entitled to the relief sought, the plaintiff has failed to

allege an actual case or controversy and the Court need not consider whether the action may

be maintained on behalf of a class. See Boyle v. Madigan, 492 F.2d 1180, 1182 (9th Cir.

1974). Accordingly, Plaintiff has failed to state a claim against Qualxserv for unjust

enrichment.

D. The pleading deficiencies identified in this Court’s Report and Recommendation

re: Dell Defendants’ Motion to Dismiss also apply to Plaintiff’s claims against

Qualxserv

For the reasons stated in sections A and B, above, Plaintiff has failed properly to state

her claims against Qualxserv. The Magistrate recommends that Plaintiff be afforded an

opportunity to amend her complaint for a second time in order to correct the aforementioned

deficiencies. In amending, Plaintiff should be mindful of the pleading deficiencies identified

in this Report and Recommendation and the Court’s Report and Recommendation re: Dell

Defendants’ Motion to Dismiss. (Doc. No. 62.) The deficiencies related to the timeliness

of Plaintiff’s action and the merits of Plaintiff’s contract, fraud and declaratory relief claims

apply with equal weight to Plaintiff’s claims against Qualxserv.

RECOMMENDATION

The Magistrate Judge recommends the District Court, after is independent review of

the record, enter an order GRANTING the Motion to Dismiss filed by Defendant Qualxserv,

LLC on April 29, 2008. (Doc. No. 43.) 

The Magistrate Judge further recommends that Plaintiff be permitted to file an

amended complaint consistent with this Report and Recommendation, Rule 8, Fed. R. Civ.

P. and any subsequent order by the district court.

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Pursuant to 28 U.S.C. § 636(b), any party may serve and file written objections within

10 days of being served with a copy of this Report and Recommendation. If objections are

not timely filed, they may be deemed waived. If objections are filed, the parties should use

the following case number: CV-08-0096-TUC-CKJ.

DATED this 21st day of August, 2008.

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