Of Styx, Starbucks and A Drink Is Not A Beverage (??)

I remember being frantic one weeknight in the Fall of 1978. In a good way. My dad had picked me up from school (St. Thomas Aquinas – East Wichita, KS) in his Ice Blue Monte Carlo and together we trekked to David’s, the long shuttered department store in Wichita’s Parklane shopping mall. (I still recall the store’s ultra-catchy “D! A-V-I-D! Apostrophe S! – Come on into David’s!” ad jingle saturating local radio and television at the time.)

Nearing David’s and nearly hyperventilating with excitement, I was on the verge of buying my very first record album. Over the next few decades, I would accumulate well over a thousand records, cassettes, CDs and .mp3 singles. But Styx’s Pieces of Eight – the “Blue Collar Man” album, was my first record buy. And I do remember the event (to me it was an event given my life-long love of rock music and its history) like it was yesterday: the album’s plastic packaging, its glossy texture, the lemony smells of the store. All of it.

I had been on a mission to buy PoE ever since I heard “Renegade” on a Fourth Grade classmate’s K-Tel 8-track tape (showing my age alert!) a few weeks prior. The song was sandwiched between Amy Stewart’s “Knock on Wood” cover and Kansas’ “Point of No Return.” (That’s how much I listened to “Renegade” on my friend’s 8-track machine – I still remember – almost forty years later – the songs that both preceded and followed it with the same vividness as the song itself.)

PoE did not disappoint. Besides the mighty “Renegade,” some other choice PoE cuts include “Queen of Spades”, “Great White Hope,” and the title track. The aforementioned “Blue Collar Man,” still a rock radio staple and one of the most prominent in the Styx catalog, is yet another of PoE’s high-octane offerings. And so Styx became my favorite band. And I wore PoE out; listening to it on all days and at all hours.

Fast forward to the early 1980s and I was introduced to heavier fare like Maiden, Priest and Dio. My interest in Styx waned. I suspected, and peer pressure confirmed, that the band just wasn’t metal enough. Jump ahead a year or two when another classmate’s older brother played Into the Void‘s menacing and atonal intro and Black Sabbath (or “Sab” as metal aficianados are want to call them) quickly became (and would later become) my all-time favorite music group regardless of genre. Styx and bands like it were relegated to afterthought status.

But not before 1981’s Paradise Theater and one of its top tracks, “Too Much Time on My Hands” burst into the pop music consciousness. An FM stalwart and iconic Early MTV offering, TMTOMH’s vaguely disco-tinged beat and catchy hand claps still trigger nostalgia pangs. I remember roller skating (!!) to the song at Skate East and Traxx – two venerable Wichita roller skating venues that long ago succumbed to the wrecking ball and internal detonations.

In the song, Tommy Shaw, the diminutive lead guitarist and Alabaman (I think), laments the perils of idle time and fair-weather compadres (“I got! dozens of friends and the fun never ends, that is as long as I’m buying…”) and even sprinkles in an incongruous Commander-in-Chief aspiration. (“Is it any wonder I’m not the President?“) So memorable is TMTOMH’s video that even Jimmy Fallon, erstwhile SNL castmember and current Tonight Show host, gushed over it and did a verbatim sendup of the song with actor Paul “I Love You Man” Rudd.

I mention all this because today’s featured case – Forouzesh v. Starbucks Corp., (unfairly or not) reminds me of someone who clearly had…..tick tick tick (you guessed it)…. too much time on his hands.

The plaintiff, on his own and on behalf of all California residents who purchased a Starbucks cold drink in the past decade, sued the Seattle coffee titan for systemic fraud. He claimed Starbucks misrepresented the amount of fluid ounces in its cold drink offerings. Specifically, he claimed the coffee giant lied on its on-line menu about the amount of liquid in its drinks by underfilling its cups and adding ice to make the cups appear full. The plaintiff brought various common law and statutory fraud and breach of warranty claims in his lawsuit.

The California District Court dismissed the suit on Starbucks’ Rule 12(b)(6) motion. The Court noted that under Rule 8(a), a complaint must give a defendant fair notice of what a claim is and its basis. The complaint must meet a “plausibility standard” in which a complaint’s factual allegations are enough to raise a right to relief above the speculative level. A plaintiff must do more than simply allege labels, conclusions and a “formulaic recitation” of the elements of a given cause of action.

An action for fraud is subject to a more exacting pleading standard. Rule 9(b) requires a fraud plaintiff to allege underlying fraud facts with sharper specificity, including the time, place, persons involved, and content of the false statement.

Rejecting the plaintiff’s statutory consumer fraud and unfair competition claims, the Court found that a “reasonable consumer” would not likely be deceived by Starbucks’ website description of its cold drink measurements. Indeed, the Court held “but as young children learn, they can increase the amount of beverage they receive if they order “no ice.” Ouch?

And since young children could figure out that more ice means less liquid, the Court concluded that a reasonable consumer would not be deceived by Starbucks’ stated fluid ounce stats. Added support for the Court’s holding lay in the fact that Starbucks’ cold drink containers are clear. A consumer can clearly see that a given drink consists of both ice and liquid. If a consumer wants more liquid, he can simply order with “no ice.”

The Court’s finding of no deception also doomed the plaintiff’s common law fraud claims. It held that since a reasonable consumer would comprehend that Starbucks’ cold drinks contain both ice and liquid, the plaintiff could not establish either a misrepresentation by Starbucks or plaintiff’s justifiable reliance on it – two required fraud elements.

Lastly, the Court rejected the plaintiff’s state law breach of warranty claims. The Court found that Starbucks did not specifically state that its cold drinks contained a specific amount of liquid. All the coffee maker said – via its web page – was that it offered cold drinks for sale in various cup sizes (12 oz – Tall; 16 oz. – Grande, 24 oz. – Venti). Absent any specific allegations that Starbucks expressly or impliedly warranted that its cold drinks contained a specific amount of liquid, the plaintiff couldn’t make out a valid breach of warranty claim.

Afterwords: The plaintiffs’ failed fraud suit against Starbucks illustrates that while Federal pleading standards normally more relaxed than their State court counterparts, this isn’t so with fraud claims.

The plaintiff’s failure to pin a specific misstatement concerning Starbucks’ cold drink contents doomed his claims. The court also gives teeth to the reasonable consumer standard that applies to state law consumer protection statutes. Since the plaintiff was unable to show a reasonable consumer would have been deceived by Starbucks’ published cold drink measurements, the plaintiff’s unfair competition and consumer fraud actions failed.

Oh, and to bring things full-circle, I suppose I should report that neither Renegade norBlue Collar Man nor Too Much Time on My Hands is my favorite Styx tune. That honor goes to “Castle Walls” – the second or third song on Side 2 of 1977’s Grand Illusion album. Give it a listen. It’ll definitely cure what ails ya.

Exclusivity Provision in Lease Permits Landlord to Rent to ‘McD’s’ In NJ Shopping Mall (Much to ‘Sbux’s’ Chagrin)

Exclusivity provisions are staples of some commercial leases, particularly in the shopping mall setting.

The purpose of these so-called “exclusives” is to protect a tenant from a competing business renting in the same shopping center and potentially undercutting the tenant’s pricing. The larger the tenant (think “anchor” tenant) in terms of resources, the more leverage it has in insisting on an exclusivity term.

Delco, LLC v. Starbucks (see https://casetext.com/case/delco-llc-v-starbucks-corp) pits a New Jersey commercial landlord suing the coffee giant for a court declaration that the landlord’s renting to McDonald’s in the same shopping center did not violate an exclusive in Starbucks’ lease that prohibited plaintiff from leasing space to any tenant (other than Starbucks) who would sell “coffee, espresso and tea drinks.”  The one qualification to the exclusive was that the landlord could rent to “any tenant [who occupies] twenty thousand contiguous square feet or more…and operating under a single trade name.”

The appeals court affirmed the trial court’s finding that the landlord could lease 40,000 square feet to McDonald’s (which sells coffee) without violating the Starbucks lease exclusive.

Applying the plain language of the exclusivity term under basic New Jersey contract interpretation rules, the court found that McDonald’s easily qualified as a tenant who is “operating under a single trade name.”  And since the McDonald’s lease encompassed over 20,000 square feet, the McDonald’s lease qualified for the exclusivity exception.

Afterwords:

It’s not clear from the short opinion why Starbucks put up such a fight on what seems like an obvious exception to the exclusivity term. So vigorous were Starbucks litigation efforts here, that the plaintiff was awarded over $113K in lawyer fees litigating whether the McDonald’s lease ran afoul of the exclusive term in the Starbucks’ lease.

The appeals court reversed the fee award though since the trial judge didn’t delineate its specific findings that support its fee award. The case will now go back to the NJ trial court for further litigation of the plaintiff-landlord’s attorneys’ fees.