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Rodi v. S. New Eng. Sch. of Law - 389 F.3d 5 (1st Cir. 2004)

Rule:

In the context of fraudulent misrepresentation, a statement, though couched in terms of opinion, may constitute a statement of fact if it may reasonably be understood by the reader or listener as implying the existence of facts that justify the statement (or, at least, the non-existence of any facts incompatible with it).

Facts:

Plaintiff Joseph Rodi, a would-be law student, received a recruitment letter from the dean of Southern New England School of Law (SNESL), which stated in pertinent part that the accreditation committee of the American Bar Association (ABA) had voted to recommend SNESL for "provisional accreditation," a status that would be granted upon ratification of the recommendation by two other ABA bodies. The letter also stated that SNESL was "highly confident" of receiving the needed ratifications and that the future of the school "has never been brighter." Because Rodi intended to take the New Jersey bar examination, the prospect of accreditation was critically important to him. Rodi enrolled at SNESL that month. He received a catalogue from SNESL containing a statement. The ABA denied SNESL's application for accreditation. The acting dean assured Rodi that there should be no pessimism that the school will achieve the accreditation before Rodi’s forecasted graduation. Rodi completed his studies in June of 2000. SNESL remained unaccredited. Notwithstanding his diploma, Rodi has not been able to sit for the New Jersey bar examination. Rodi sued SNESL, the dean, and the acting dean in the United States District Court for the District of Massachusetts. Rodi alleged that the defendants' statements constituted actionable fraud or misrepresentation, and NESL's actions violated a consumer protection statute. Defendants filed a motion to dismiss, which argued that the complaint failed to state a claim upon which relief could be granted. The district court allowed the motion to dismiss. Rodi appealed.

Issue:

1. Was the complaint for fraudulent misrepresentation properly dismissed by the district court?

2. Was the complaint for the violation of the Consumer Protection Act properly dismissed by the district court?

Answer:

1. No. 2. Yes.

Conclusion:

1. The Court held that the district court erred in dismissing the complaint for fraudulent misrepresentation. Rodi’s complaint passed the screen for a claim for misrepresentation and, on its face, stated a claim for fraudulent misrepresentation against all three defendants. As to the defense that the statements of the defendants were mere statements of opinion, the Court stated that the dismissal cannot rest on the opinion defense. The district court jettisoned the fraudulent misrepresentation count at the pleading stage. Given the liberal standards of Rule 12(b)(6), dismissal cannot rest on the "opinion" defense. With regard to the defense that the complaint failed to plead with particularity the acts that entitled the plaintiff the relief, the Court resolved that such was not unavailing. The two letters are unarguably specific as to speaker, content, context, and time. These statements were sufficient to shield the fraudulent misrepresentation count from dismissal at the pleading stage. With regard to the defense that their disclaimer in the catalogue showed that there was no representation, the Court held that the said reliance was misplaced. The disclaimer did not cover the alleged misrepresentation to defeat them. Finally, for the defense that the action was already time-barred. The Court held that the filing was timely. The first action in New Jersey was dismissed with regard to its merits. According to the savings statute, a new action for the same cause of action may be filed within one year from its dismissal. The plaintiff filed the new action within the prescribed period.

2. The Court held that the district court properly dismissed plaintiff’s complaint for the violation of the Consumer Protection Act as it did not mention any written demand or relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon, as required by the law. The statutory notice requirement was not merely a procedural nicety, but, rather, a prerequisite to suit.

The Court reversed the district court's order insofar as it dismissed the fraudulent misrepresentation count. However, the Court affirmed the district court's order insofar as it dismissed the consumer protection count.

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