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Smith v. Washington Post Co.

United States District Court, District Circuit

August 23, 2013

RICARDO SMITH, on behalf of himself and all others similarly situated, Plaintiff,
v.
THE WASHINGTON POST COMPANY, Defendant.

MEMORANDUM OPINION

ROYCE C. LAMBERTH, District Judge.

Plaintiff[1] Ricardo Smith is a former independent newspaper distributor who had contracted with defendant Washington Post Company to deliver periodicals to retailers. He brings suit on behalf of himself and others similarly situated, alleging that defendant unilaterally changed contract terms and refused to reimburse distributors for unsold product. Compl., Oct. 26, 2012, ECF No. 1. Defendant has moved to dismiss the complaint, or alternatively strike the class action allegations and plaintiff's prayer for declaratory and injunctive relief. Def.'s Mot. to Dismiss or Strike Class Action Allegations, Dec. 21. 2012, ECF No. 8. Upon consideration of defendant's motion, the plaintiff's Opposition, Pl.'s Opp'n, Jan. 29, 2013, ECF No. 11, the defendant's Reply thereto, Def.'s Reply, Feb. 12, 2013, ECF No. 12, the record herein, and the applicable law, this Court will deny defendant's motion. The plaintiff has stated a plausible claim. Plaintiff's class action allegations are facially plausible and plaintiff should have an opportunity to move for class certification after discovery.

I. BACKGROUND

Plaintiff Ricardo Smith brings a suit on behalf of himself, and others similarly situated, against defendant Washington Post Company. Compl. ¶ 1. Smith performed services for the Washington Post Company from 2002 to July 2011. Id. ¶ 13. The defendant contracts with self-employed individuals to distribute the Washington Post and other newspapers along a prescribed delivery route. These independent distributors pick up copies of the periodicals from the Post's distribution center and deliver them to various local retailers for single-copy sale. The distributors pick up any unsold copies from the retailers and return them to the Washington Post Company for a refund. Id. ¶ 10.

Smith alleges that the newspaper distributors perform their duties pursuant to form contracts and oral agreements incorporating the terms of those written form contracts. Id. ¶¶ 11-12. According to Smith, the form contracts governing the distribution of the Post required the defendant "to refund the purchase price of Newspapers that were not sold by retailers that Plaintiffs returned in any week, '" id. ¶ 15, and "specifically prohibit[ed] changes unless agreed to in writing by both parties, " id. ¶ 17. Smith and other distributors delivered newspapers other than the Post through oral agreements that "adopted the terms set out in the standard form contract for Post distribution to govern the distribution of other newspapers." Id. ¶ 12.

According to the complaint the Washington Post Company, beginning in 2008, "began to inaccurately record and account for Plaintiffs' returned Newspapers." Id. ¶ 16. Smith alleges that the defendant violated the written and oral contracts "by repeatedly and unilaterally changing the deadline by which Plaintiffs had to return Newspapers in order to receive a credit or refund for their purchase price." Id. ¶ 17. As a result, Smith alleges, "Defendants failed to appropriately credit and/or pay Plaintiffs for properly and timely returned Newspapers, " breached contractual obligations with Smith and putative class members, and owes an amount to be determined at trial. Id. ¶¶ 18-20.

Smith brought a four-count class action complaint on October 26, 2012. In Count I, "Breach of Contract, " id. ¶¶ 29-34, Smith alleges that the defendant breached its written agreements to distribute the Washington Post with Smith and other putative class members by "failing to pay for returned Newspapers, or by refusing to accept the return of Newspapers, promised under the terms of the Contracts, " id. ¶ 32, and failing to negotiate in good faith, id. ¶ 33. Under this Count, plaintiff requests compensatory damages, "declaratory judgment imposing the proper interpretation of the Contracts, injunctive relief requiring Defendant to convey to the class the rights, privileges, and benefits owed to them under the Contracts, and any other and further relief this Court deems appropriate." Id. ¶ 34. In Count II, "Implied Contract, " id. ¶¶ 35-44, Smith alleges that defendant breached its oral agreements to distribute other periodicals in the same way as it breached its written contracts, and-with the addition of asking for a declaration that a binding implied agreement exists between the parties-asks for the same relief as Count I. In Count III, "Unjust Enrichment/Promissory Estoppel, " id. ¶¶ 45-49, Smith alleges that the "Plaintiffs rendered valuable goods and services to Defendant in reliance of Defendant's promise to pay Plaintiffs for returned unused copies of the Newspapers, " id. ¶ 46, and relied to their detriment on the defendant's promise to reimburse the purchase price of returned newspapers. In this Count, plaintiff requests compensatory, declaratory, and injunctive relief. Id. ¶ 49. In Count IV, "Accounting, " id. ¶¶ 50-52, Smith requests that the defendant "be ordered to fully and completely account for all Newspapers that were returned (including credit for all Newspapers that were refused for return in violation of the Contracts or implied contracts), all monies that are and were due, all deductions made from such owed monies, as well as all sums due to Plaintiffs, during the relevant statutory period." Id. ¶ 51.

The complaint defines the potential class as: "All persons who, since October 19, 2009 until the present, serve as distributors for Defendant and its newspaper, The Washington Post, ' and other newspapers similarly distributed." Id. ¶ 22. Smith claims there are approximately sixty putative class members and the "class is so numerous that joinder of all the members is impracticable." Id. ¶ 23. Smith lists the common issues of law or fact as including, inter alia:

a. Whether Plaintiffs are entitled to declaratory relief regarding the proper interpretation of the Contracts, which are form contracts, between them and Defendant;
b. Whether Defendant was permitted to change a material term of its Contract, the requirements for accepted returned, undelivered Newspapers;
c. Whether Defendant paid Plaintiffs for Newspapers that were delivered in accordance with the Contract;
d. Whether Defendant has otherwise violated or unilaterally altered its Contract(s) with Plaintiffs; and
e. Whether Plaintiffs are entitled to injunctive relief requiring Defendant to convey to the class the rights, privileges, and benefits owed to them under the Contract(s).

Id. ¶ 24. Smith alleges that the defendant has injured the putative class by homogenous or similar acts or omissions, and has acted and refused to act on grounds generally applicable to the class. Id. ¶¶ 25-26. Smith claims adjudication of separate claims carries the risk of inconsistent or varying adjudications and a class action is superior to other available methods. Smith states that he will fairly and adequately protect the interests of the class. Id. ¶¶ 27-28.

II. LEGAL STANDARD

A. Motion to ...


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