Federal District Court Opinions
RUSSO v. NCS PEARSON, INC., (Minn. 11-9-2006) Felix Russo,
as parent and natural guardian of John Doe 1, a minor,
Steve DeLillo, as parent and natural guardian of Jake
DeLillo, a minor, Shane Fulton and Caleigh Sawicki on
behalf of themselves and all others similarly situated,
Plaintiffs, v. NCS Pearson, Inc., d/b/a Pearson Educational
Measurement, and College Entrance Examination Board, d/b/a
The College Board, Defendants. Civ. No. 06-1481
(JNE/SRN). United States District Court, D. Minnesota.
November 9, 2006
T. Joseph Snodgrass, Esq., and Shawn M. Raiter, Esq.,
Larson King LLP, and J. Gordon Rudd, Esq., Zimmerman Reed,
PLLP, appeared for Plaintiffs Felix Russo, as parent and
natural guardian of John Doe 1, a minor, Steve DeLillo, as
parent and natural guardian of Jake DeLillo, a minor, Shane
Fulton and Caleigh Sawicki on behalf of themselves and all
others similarly situated.
Stephen P. Lucke, Esq., and William R. Stoeri, Esq., Dorsey
& Whitney LLP, appeared for Defendant NCS Pearson, Inc.,
d/b/a Pearson Educational Measurement.
A. Stephen Hut, Jr., Esq., Bruce M. Berman, Esq., and
Jonathan E. Paikin, Esq., Wilmer Cutler Pickering Hale and
Dorr LLP, and Robert R. Weinstine, Esq., Winthrop &
Weinstine, P.A., appeared for Defendant College Entrance
Examination Board, d/b/a The Colle ge Board.
ORDER
JOAN ERICKSEN, District Judge
Plaintiffs are citizens of New York, Massachusetts, and
Pennsylvania who have sued the College Entrance Examination
Board (College Board) and NCS Pearson, Inc. (NCSP) for
damages allegedly caused by Defendants’ incorrect scoring
and reporting of the October 2005 Scholastic Aptitude
Reasoning Test (SAT). The College Board administers the SAT
and has retained NCSP to scan the SAT answer sheets. The
case is before the Court on Plaintiffs’ motion Page 2 for
preliminary injunctive relief. In essence, Plaintiffs
request that the reported scores of 613 students be reduced
and re-reported. Plaintiffs allege that the scores of these
613 students were incorrectly reported as too high after
the initial scanning and scoring of the October 2005 SAT
and that subsequent scanning indicated that these students
merited scores that were lower than reported. Also before
the Court are Defendants’ motions to dismiss certain counts
of the complaint for failure to state a claim upon which
relief can be granted. For the reasons set forth below, the
Court denies Plaintiffs’ motion for a preliminary
injunction, and grants in part and denies in part the
motions to dismiss by the College Board and NCSP.
I. BACKGROUND
Plaintiffs are students, or parents and guardians suing on
behalf of students, who took the October 2005 SAT. Felix
Russo is a New York citizen and brings this case on behalf
of John Doe, a minor, as his parent and guardian. Steve
DeLillo is also a citizen of New York and brings this case
on behalf of Jake DeLillo, a minor, as his parent and
guardian. Caleigh Sawicki and Shane Fulton are citizens of
Massachusetts and Pennsylvania, respectively. Plaintiffs
registered for the SAT by paying a test fee to the College
Board. The fee was paid either online or by mail, through
registration forms contained in a printed SAT Registration
Booklet. The Registration Booklet states that the “SAT
Program’s policies for testing are designed to give every
student an equal opportunity to demonstrate college
readiness and to prevent anyone from gaining an unfair
advantage.”
Founded in 1900, the College Board is a national
not-for-profit association headquartered in New York. The
College Board sponsors the SAT, which is an examination
widely used as part of the admissions process by many
colleges and universities. A new version of the SAT was
developed and first administered by the College Board in
March 2005. The new version contains Page 3 three
sections: Critical Reasoning, Math, and Writing. Each
section is scored on a scale from 200 to 800; the highest
possible combined score is 2400. To determine the score, a
raw score is first calculated based on the number of points
earned for correctly answered questions minus a calculated
fraction for each question answered incorrectly. Through a
statistical process called equating, the raw scores are
then converted to scaled scores, which are reported on a
200 to 800 scale in ten point intervals. The College Board
uses the equating process to ensure that, within reasonable
statistical certainty, a reported score reflects the same
level of achievement on the exam irrespective of the
edition of the SAT a test taker took and the level of
ability of the group of students tested at that particular
administration. In other words, equating makes it possible
to make reasonable and fair comparisons among test takers
without regard to the edition of the SAT used or when the
exam was administered. Educational Testing Service (ETS)
provides psychometric support services, including equating,
to the College Board. ETS performed the initial equating
and scaling conversion for the October 2005 SAT as part of
its normal procedures in connection with that
administration.
The SAT contains an essay question and multiple-choice
questions that test takers answer by filling in “bubbles” on
an answer sheet. To scan the SAT answer sheets, the College
Board retained NCSP, a Minnesota corporation. Under a
Services Agreement between NCSP and the College Board, NCSP
began scanning the SAT answer sheets with the March 2005
administration of the exam. According to NCSP, its role is
limited to scanning the answer sheets and reporting the raw
data on the answer sheets to the College Board or its
designees. NCSP asserts that it does not know which answers
the College Board considers to be correct, does not
tabulate the raw score, has no role in converting the raw
scores to a scaled score, and does not report scores to
students. Page 4
After receiving requests from two test takers to hand
score their exams in December 2005, the College Board
learned of scoring issues related to the October 2005
administration of the SAT. In February 2006, the College
Board asked NCSP to investigate the cause and scope of the
scoring issues. NCSP ultimately rescanned all of the
approximately 495,000 answer sheets from the October 2005
exam. As a result of the rescanning process, it was
determined that 4,411 test takers received initial scores
that were too low. The majority of these scores were
understated by less than 100 points on the SAT’s 2400-point
scale. Approximately 83 percent of the understated scores
were too low by no more than 40 points; less than 5 percent
were understated by more than 100 points; ten scores were
understated by more than 300 points too low. All of the
named Plaintiffs received scores that initially were
understated, but were re-reported before the close of the
college admissions season. The College Board refunded all
test fees paid by test takers whose scores were initially
underreported.
The College Board also asked ETS to prepare a second
equating and scaling conversion for the October 2005 test.
According to ETS, the second conversion yielded virtually
identical results to the original conversion. The only
difference appeared in the Writing section, where a raw
score of twenty-five converted to a scaled score of 490, as
opposed to a score of 500 in the initial conversion.
The rescanning process also revealed that 613 students
received scores that were higher than they should have
been. According to the College Board, 550 of the 613 test
takers had scores that were overstated by only ten points,
fifty-eight had scores that were overstated by twenty
points, three had a thirty-point difference, one had a
forty-point difference, and one had a fifty-point
difference. The College Board decided not to re-report any
score changes that decreased a test taker’s score,
rationalizing that penalizing test takers for factors
beyond their Page 5 control would be unfair.
Plaintiffs have filed a fifteen-count amended complaint
alleging: (1) negligence and strict liability against NCSP
and the College Board; (2) defamation against NCSP and the
College Board; (3) breach of contract for damages against
the College Board; (4) breach of contract for injunctive
relief against the College Board; (5) breach of contract
for damages against NCSP; (6) breach of contract for
injunctive relief against NCSP; (7) breach of the implied
warranty of merchantability against the College Board; (8)
breach of the implied warranty of fitness for a particular
purpose against the College Board; (9) breach of express
warranties against the College Board; (10) breach of the
implied warranty of merchantability against NCSP; (11)
breach of the implied warranty of fitness for a particular
purpose against NCSP; (12) breach of express warranties
against NCSP; (13) violation of the Magnuson-Moss Warranty
Act against NCSP and the College Board; (14) violation of
the Minnesota false advertising and prevention of consumer
fraud statutes against NCSP; and (15) violation of the New
York consumer protection statutes against the College
Board.
II. DISCUSSION
A. Plaintiffs’ motion for a preliminary injunction
Plaintiffs seek a preliminary injunction ordering the
College Board (1) to readjust or reduce the actual scores
of the students who took the October 2005 administration of
the SAT, and who received an improperly overstated or
inflated score due to scanning and scoring errors, and (2)
to reissue and report the corrected scores of all students
who were improperly overscored to the students and
institutions to which the students or the College Board
reported the incorrect SAT scores.
Injunctive relief may be granted only if the moving party
can demonstrate: (1) a Page 6 likelihood of success on
the merits; (2) the movant will suffer irreparable harm
absent the restraining order; (3) the balance of harms
favors the movant; and (4) the public interest favors the
movant. Dataphase Sys., Inc. v. CL Sys., Inc., 640 F.2d
109, 113 (8th Cir. 1981). Injunctive relief is an
extraordinary remedy, see Calvin Klein Cosmetics Corp. v.
Lenox Laboratories, Inc., 815 F.2d 500, 503 (8th Cir.
1987), and the party requesting the injunction bears the
“complete burden” of proving all the factors listed above.
Gelco Corp. v. Coniston Partners, 811 F.2d 414, 418 (8th
Cir. 1987). In analyzing requests for preliminary
injunction, the four Dataphase factors must be balanced to
determine whether they tilt toward or away from granting a
preliminary injunction. West Publ’g Co. v. Mead Data Cent.,
Inc., 799 F.2d 1219, 1222 (8th Cir. 1986). The likelihood
that a plaintiff will ultimately prevail is meaningless in
isolation. Dataphase, 640 F.2d at 113. As such, the Court
will examine each of the four Dataphase factors in turn.
Plaintiffs argue that they are likely to succeed on the
merits of their breach of contract claims. Under Minnesota
law, a breach of contract claim consists of four elements:
(1) a valid contract; (2) performance by the plaintiff of
any conditions precedent; (3) a material breach of the
contract by the defendant; and (4) damages. Parkhill v.
Minn. Mut. Life Ins. Co., 174 F. Supp. 2d 951, 961 (D.
Minn. 2000) (citing Briggs Trans. Co. v. Ranzenberger, 217
N.W.2d 198, 200 (Minn. 1970)). By registering for the
October 2005 SAT exam, Plaintiffs contend that they entered
into contracts of adhesion with the College Board. The
College Board does not dispute the existence of any
contracts with Plaintiffs, but argues that Plaintiffs can
establish neither a breach of a material term of the
contract, nor damages from the alleged breach.
The focal point for Plaintiffs’ breach of contract claims
is found in the SAT Registration Booklet, in which the
College Board states that the “SAT Program’s policies for
testing are designed to give every student an equal
opportunity to demonstrate college readiness and to Page
7 prevent anyone from gaining an unfair advantage.” By
refusing to readjust the scores of the 613 students with
improperly inflated scores, Plaintiffs allege that the
College Board has breached a material duty to prevent
anyone from gaining an unfair advantage. Minnesota courts
have concluded that a breach is material when “one of the
primary purposes” of a contract is violated. Steller v.
Thomas, 45 N.W.2d 537, 542 (Minn. 1950). The College
Board’s stated policy to prevent any unfair advantage
speaks to the primary purpose of the contract. Plaintiffs
paid the College Board in order to take a test that would
accurately reflect their college readiness in comparison to
all other SAT test takers. Plaintiffs have a legitimate
expectation that the College Board score and report all
test takers’ exams accurately. By refusing to readjust and
re-report the improperly inflated exam scores, the College
Board has placed Plaintiffs at a competitive disadvantage
to 613 students. Accordingly, the Court concludes that it
is likely that Plaintiffs will be able to prove that the
College Board materially breached the contract.
Whether the College Board’s breach caused any damage to
Plaintiffs is less certain. As an example of the alleged
damages, Plaintiffs have presented the case of Plaintiff
John Doe. Doe applied to the University of Virginia, but
was denied admission prior to learning of the scoring
error. Doe originally received a score of 1960 on his
October 2005 SAT, which was eventually re-reported as a
2000. It is unknown whether any of the 613 test takers who
received inflated scores were admitted to the University of
Virginia, but the College Board has revealed that seven of
the group of 613 test takers requested that their scores be
sent to the University of Virginia. The seven overstated
scores reported to the University of Virginia were 900,
1500, 1620, 1760, 1830, 1880, and 1940. Although these
scores fall below Doe’s reported score of 1960, the
differences are not so great as to allow the Court to
conclude that none of the students could have been admitted
in place of Doe. This is especially true given the fact
that an applicant’s SAT Page 8 score is but one of several
factors considered by colleges and universities in the
admissions process.
In addition to an SAT score, schools often consider a
student’s high school academic record, letters of
recommendation, personal statements, talents, personal
diversity factors, and interviews as part of the admissions
process. Although consideration of these factors increases
the possibility that Doe could have lost a spot to one of
the 613 test takers with overstated scores, their inclusion
also muddles the potential impact of reduced, re-reported
SAT scores. Because an SAT score is only one of several
factors considered in admissions, it is difficult to
predict the likelihood that the College Board’s decision to
withhold the revised SAT scores of 613 test takers damaged
Plaintiffs. Nevertheless, the fact that an SAT score is not
the sole criterion for college admissions minimizes the
likelihood that the College Board’s breach is responsible
for any damage to Plaintiffs.
Regardless of the likelihood of success of Plaintiffs’
contract claim, injunctive relief is only appropriate in
cases where the moving party demonstrates a sufficient
threat of irreparable harm. Bandag, Inc. v. Jack’s Tire &
Oil, Inc., 190 F.3d 924, 926 (8th Cir. 1999). “Irreparable”
harm is that for which there is no adequate remedy at law
in the form of damages. See Watkins, Inc. v. Lewis, 346
F.3d 841, 844 (8th Cir. 2003). Plaintiffs argue that the
failure to readjust all October 2005 scores presents
immediate and irreparable harm because students with
accurate scores are placed at a disadvantage versus the
overscored students in competing for admissions,
scholarships, and financial aid. Plaintiffs allege that
this disadvantage cannot be quantified in terms of actual
damages and is therefore harm suitable for injunctive
relief. Because Plaintiffs have brought this action on
behalf of themselves and all others similarly situated, it
is appropriate for the Court to consider the threat of
irreparable harm to the putative class members. See Page
9 Herrera v. Riley, 886 F. Supp. 45, 52 (D.D.C. 1995)
(addressing the threat of irreparable injury to the entire
proposed class, not just the named plaintiffs); Joyce v.
City of San Francisco, 846 F. Supp. 843, 854 (N.D. Cal.
1994) (“Since a determination has not yet been made whether
plaintiffs can proceed as a class, it is appropriate at
this stage that the Court considers the injuries alleged to
the individuals within the entire proposed class.”); Sharif
v. N.Y. State Educ. Dep’t, 709 F. Supp. 345, 359 (S.D.N.Y.
1989) (concluding for purposes of an irreparable harm ana
lysis that although the named plaintiffs might not receive
an award on the basis of their SAT scores, some members of
the putative class would).
Although a student’s ability is rarely measured solely on
a numerical scale, the Court recognizes the SAT’s primary
importance to certain aspects of the college admissions and
scholarship processes. Plaintiffs have presented several
examples of merit scholarships requiring minimum SAT scores
for eligibility. Additionally, Plaintiffs observe that a
ten point SAT score differential can dictate whether
students receive athletic scholarships or are eligible to
participate in athletics. To participate in Division I or
Division II athletics as a first-year student or to receive
an athletic scholarship, high school seniors must be
certified by the NCAA Initial-Eligibility Clearinghouse.
Division II athletes must receive a score of 820 on the SAT
to fully participate in athletics. To qualify for a
Division I scholarship, students must receive a minimum ACT
or SAT score. The minimum required SAT score varies
depending on the student’s high school grade point average.
For Division I athletes, the SAT sliding scale used to
determine scholarship and eligibility establishes minimum
cut-offs in ten-point increments.
The Court acknowledges that a ten-point variation in SAT
scores can affect the prospects of a student seeking a
merit scholarship or the eligibility of a student athlete;
nevertheless, Plaintiffs have failed to tie the potential
harm inherent in a ten-point variation to any concrete,
Page 10 real world consequence. Instead, Plaintiffs allege
that many of the overstated scores are held by students who
have yet to apply for college admission, scholarships, or
athletic eligibility. Additionally, Plaintiffs contend that
many of the October 2005 SAT test takers will use their
scores in the years to come in order to transfer schools or
to apply for jobs. Lacking any specific supporting
evidence, Plaintiffs’ assertions of irreparable harm are
speculative. Where “[t]he possible harm identified is
wholly speculative . . . it cannot be called irreparable
harm.” Local Union No. 884, United Rubber, Cork, Linoleum,
& Plastic Workers of Am. v. Bridgestone/Firestone, Inc., 61
F.3d 1347, 1355 (8th Cir. 1995); see also Ben-Yonatan v.
Concordia College Corp., 863 F. Supp. 983, 986 (D. Minn.
1994) (rejecting as purely speculative an argument that a
one-year suspension from college might prohibit a student’s
future admission to medical school).
Plaintiffs argue that they need merely show the possibility
of irreparable harm to some members of the putative class.
In support of this proposition, Plaintiffs cite to Sharif,
which involved a claim that the SAT and a scholarship
program based solely on SAT scores unfairly discriminated
against women. In Sharif, the court found irreparable harm
based on the fact that some members of the putative class
would qualify for a scholarship based solely on their SAT
scores. In contrast, however, Plaintiffs here have not
produced any evidence that members of the putative class
would receive admission to a school or a scholarship if the
injunction were granted.
The specter of irreparable harm absent an injunction is
further mitigated by several considerations. First, as
discussed above, SAT scores are but one factor among many
considered by schools in making admissions decisions.
Second, the difference between the initial and corrected
scores for the majority of the group of 613 test takers is
relatively slight. Of the group Page 11 of 613 test
takers, 550 had scores that were overstated by ten points;
fifty-eight had scores that were overstated by twenty
points; and the five remaining test takers received scores
that were overstated by fifty points or less. None of the
overstated scores fell outside of the SAT’s standard error
of measurement[fn1] or standard error of difference.[fn2]
Finally, a significant portion of the 613 overstated scores
is unlikely to be used in the decision-making process for
any admission spot or scholarship award. For example, 215
of the 613 test takers had higher scores on file, meaning
the October 2005 scores were unlikely to be used; 157 did
not ask the College Board to report their overstated score
to any school, although it is unclear to what extent there
is overlap between this group and the group that already
had higher scores on file; and fifty-five were not high
school seniors when they sat for the October 2005 exam,
meaning that they might retake the exam before applying to
college.
These factors make it improbable that any one of the 613
test takers with an overstated SAT score will take an
admission spot or scholarship from a putative class member
on the basis of the overstated score. Accordingly, any harm
presented by these overstated scores potentially affects
only a small percentage of putative class members.
Furthermore, even if one of the 613 test takers has been
admitted to a college class or received a scholarship award
to which one of Page 12 the putative class members had
applied, Plaintiffs have not shown that the injunctive
remedy sought would provide relief in the form of admission
to a school or the grant of a scholarship from which they
were previously denied. As such, Plaintiffs’ requested
relief — to enjoin the College Board to report the
corrected scores for the 613 test takers who received
overstated scores — is unlikely to address the
alleged irreparable harm.
In addressing the balance of harms, “[t]he essential
inquiry in weighing the equities `is whether the balance of
other factors tips decidedly toward the movant.'” ASICS
Corp. v. Target Corp., 282 F. Supp. 2d 1020, 1031 (D. Minn.
2003) (quoting General Mills, Inc. v. Kellogg Co., 824 F.2d
622, 624 (8th Cir. 1987) (emphasis in original). Plaintiffs
argue that the College Board will suffer little or no harm
in re-adjusting and re-scaling all scores. The College
Board responds in kind, arguing that Plaintiffs will suffer
little or no harm absent an injunction. The Court notes
that at this early stage of the litigation when the actual
cause of the incorrect scores remains a mystery, the
possibility exists that another round of rescoring could
yield a different round of incorrect scores. Should the
true cause of the incorrect scoring be discovered at a
later date, yet another round of rescoring could be in
order. The possibility of multiple rounds of incorrect
scores presents a potential harm to the business of both
the College Board and NCSP in the form of lost consumer
confidence.
The Court is concerned about the potential impact that an
injunction would have on the group of 613 test takers whose
scores were overstated. See DeLite Outdoor Adver. v. City of
St. Paul, 167 F. Supp. 2d 1072, 1075 (D. Minn. 2001)
(finding that the court should also consider the “injury
that granting the injunction will inflict on other
interested parties”). Although the Court accepts, as a
matter of common sense, the College Board’s argument that
it would be unlikely that admissions or scholarships would
be rescinded, it would be unfair to re-report the Page 13
613 scores at this time for several reasons. First, this
group of test takers has already relied on their scores. As
Plaintiffs press, it is possible that there is a student
athlete in the group of 613 who barely met the minimum
athletic eligibility score. That student athlete likely
would have foregone the opportunity to retest because she
believed that she had already qualified. This stands in
contrast to the hypothetical test taker who barely missed
his athletic eligibility cut-off score but had the
opportunity to retest in order to meet his goal. Second,
the potential harm to the group of 613 is exacerbated by
the potential for subsequent rounds of rescoring. Finally,
should the Court enter an injunction, the potential harm
faced by the group of 613 students whose scores were
overstated is more immediate than the potential benefit to
Plaintiffs or putative class members. In the unlikely event
that one of the group would lose an admission spot or
scholarship award, there is no guarantee that any Plaintiff
or putative class member would benefit. In other words, any
potential benefit appears one hypothetical step more
distant than the potential harm.
Plaintiffs argue that there is great public importance to
the accurate scoring and reporting of the SAT, not only to
the putative cla ss but also to the educational
institutions that rely on the test scores, scholarship
providers, and other students and parents. The College
Board counters that there is a public interest in the
finality of the college admissions process. While the Court
sees the merits in both positions, the Court questions
whether Plaintiffs’ goal of accurate reporting is best
served by issuing an injunction before the root causes of
the scoring errors are known.
Plaintiffs seek an injunction ordering the College Board
to reissue and report the corrected scores of the 613
student whose exams were improperly overscored to the
students and institutions to which the incorrect SAT scores
were reported. This is substantially the same relief Page
14 that Plaintiffs would receive after a trial on the
merits. “[T]he burden on a movant to demonstrate that an
injunction is warranted is heavier when granting the
preliminary injunction will in effect give the movant
substantially the relief it would obtain after a trial on
the merits.” Rathmann Group v. Tanenbaum, 889 F.2d 787, 790
(8th Cir. 1989). Having considered all of the factors
discussed above, the Court declines to exercise its
equitable jurisdiction to grant the extraordinary relief
requested by Plaintiffs. Accordingly, Plaintiffs’ motion for
a preliminary injunction is denied.
B. The College Board’s motion to dismiss non-contract
claims
Pursuant to Rule 12(b)(6), the College Board seeks the
dismissal of all counts against it except for the two
counts alleging breach of contract. In ruling on a motion
to dismiss a complaint for failure to state a claim upon
which relief can be granted, a court must accept the
complaint’s factual allegations as true and construe them
in the light most favorable to the plaintiff. Midwestern
Mach., Inc. v. Nw. Airlines, Inc., 167 F.3d 439, 441 (8th
Cir. 1999); Davis v. Hall, 992 F.2d 151, 152 (8th Cir.
1993). The court will not dismiss the complaint unless it
appears beyond doubt that the plaintiff cannot prove any
set of facts in support of his claim that would entitle him
to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957);
Schaller Tel. Co. v. Golden Sky Sys., Inc., 298 F.3d 736,
740 (8th Cir. 2002). The court may consider the complaint,
matters of public record, materials embraced by the
complaint, and exhibits attached to the complaint. See
Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th
Cir. 1999).
Nether the College Board nor Plaintiffs identify any
conflict of law issues. With the exception of the claim
based on the New York consumer protection statute, the
Court will apply laws of Minnesota because “[t]he operative
rule is that when neither party raises a conflict of law
issue in a diversity case, the federal court simply applies
the law of the state in which it sits.” Page 15 BBSerCo,
Inc. v. Metrix Co., 324 F.3d 955, 960 n. 3 (8th Cir. 2003)
(citing Wood v. Mid-Valley Inc., 942 F.2d 425, 426 (7th
Cir. 1991)).
1. Negligence and strict liability
In count one of the amended complaint, Plaintiffs allege
that the College Board’s actions were negligent and
rendered the College Board strictly liable for Plaintiffs’
damages. Plaintiffs contend that independent of any
contractual duties, the College Board also had a duty to
timely identify errors in scoring prior to the reporting of
scores, and to provide accurately administered, scored, and
reported exams. Specifically, Plaintiffs allege that the
College Board: (1) failed to accurately score and scale the
October 2005 SAT; (2) failed to properly identify all
persons adversely affected by the scoring errors; (3)
failed to properly re-score the examinations; (4) failed to
immediately notify test takers and institutional
authorities of incorrect scoring; (5) failed to timely
implement effective audit or quality control procedures;
and (6) failed to implement appropriate procedures to
prevent scoring errors and inaccuracies.
The College Board responds that it owes no duties to the
Plaintiffs independent of a contract. This argument is based
on the independent duty rule, which provides that when a
contract defines a relationship between two parties, a
plaintiff is not entitled to recover tort damages save for
exceptional cases in which a breach of contract
“constitutes or is accompanied by an independent tort.”
Wild v. Rarig, 234 N.W.2d 775, 789-90 (Minn. 1975).
Minnesota follows the independent duty rule, but recognizes
an exception for providers of professional services. See
City of Mounds View v. Walijarvi, 263 N.W.2d 420, 423
(Minn. 1978). This exception has been limited to a handful
of specialized professionals such as “[a]rchitects,
doctors, engineers, attorneys, and others.” Id. at 424.
Plaintiffs contend that the duties named in the amended
complaint, namely the duties to Page 16 timely identify
errors in scoring prior to the reporting of scores, and to
provide accurately administered, scored, and reported
exams, reflect duties consistent with the rendering of
professional services. Plaintiffs seek discovery on this
issue, believing that the factual record could reveal that
the professional disciplines of psychometrics and
educational measurement, which are involved in the College
Board’s administration of the SAT, will support a claim of
negligence under the professional exception to the
independent duty rule. Although the cause of the initial
reporting of incorrect scores is unknown at this early
stage, one theory involves the scoring and equating
process. Plaintiffs’ complaint suggests that the College
Board should have detected anomalies in the scoring of the
October 2005 SAT prior to and irrespective of the two
requests for hand scoring that first brought the errors to
the College Board’s attention.
The question of whether a psychometrician should be treated
the same as a doctor, lawyer, architect, or engineer for
purposes of the professional exception to the independent
duty rule is novel. To better gauge whether
psychometricians would be included by Minnesota courts in
the professional exception to the independent duty rule,
the Court turns to the Minnesota Supreme Court’s statement
of the rationale for the exception:
The reasoning underlying the general rule as it applies
both to architects and other vendors of professional
services is relatively straightforward. Architects,
doctors, engineers, attorneys, and others deal in somewhat
inexact sciences and are continually called upon to
exercise their skilled judgment in order to anticipate and
provide for random factors which are incapable of precise
measurement. The indeterminate nature of these factors
makes it impossible for professional service people to
gauge them with complete accuracy in every instance.
Thus, doctors cannot promise that every operation will be
successful; a lawyer can never be certain that a contract
he drafts is without latent ambiguity; and an architect
cannot be certain that a structural design will interact
with natural forces as anticipated. Because of the
inescapable possibility of error which inheres in these
services, the law has traditionally required, not perfect
results, but rather the exercise of that skill and
judgment which can be reasonably expected from similarly
situated professionals.
Mounds View, 263 N.W.2d at 424. Even given this guidance,
the Court remains unsure whether Page 17 psychometricians
should be included in the professional exception to the
independent duty rule. On one hand, it appears to the Court
that the “skilled judgment” of the psychometrician is
called on with each administration of the SAT exam in order
to, in the words of the Minnesota Supreme Court in Mounds
View, “anticipate and provide for random factors which are
incapable of precise measurement.” Indeed, the
psychometrician’s work product carries with it standard
errors of measurement and standard errors of difference. On
the other hand, the psychometricians involved in the
administration of the SAT have refined their craft to the
point where they can convert raw test results across
multiple administrations of the exam into scaled scores in
order to compare the abilities of millions of students
within reasonable statistical certainty. Additionally,
there is no caselaw to indicate that the professional
exception to the independent duty rule applies where there
is no direct privity between a plaintiff and the
professional whose services are at issue. Plaintiffs here
have not contracted directly with a psychometrican, nor is
the contract primarily for psychometric services.
Nevertheless, unless it appears beyond doubt that
Plaintiffs cannot prove any set of facts in support of
their claim that would entitle them to relief, the Court
will not dismiss the complaint. See Conley, 355 U.S. at
45-46; Schaller Tel., 298 F.3d at 740. Plaintiffs’ amended
complaint suggests that the College Board should have
timely identified errors in scoring prior to the reporting
of scores. At this early stage of the litigation, the Court
concludes that it would be premature to dismiss Plaintiffs’
claim for negligence. Accordingly, the Court denies the
College Board’s motion to dismiss Plaintiffs’ negligence
claim in count one of the amended complaint.
Turning to the strict liability claim, in order to succeed
under Minnesota law, a plaintiff must prove that (1) a
product was in a defective condition, unreasonably
dangerous for its intended use, (2) the defect existed when
the product left defendant’s control, and (3) the defect
Page 18 was the proximate cause of the injury sustained.
Fireman’s Fund Ins. Co. v. Canon U.S.A., Inc., 349 F.3d
1054, 1060 (8th Cir. 2005) (citing Lee v. Crookston
Coca-Cola Bottling Co., 188 N.W.2d 426, 432 (1971)).
Minnesota has adopted the theory of strict liability
presented in Restatement (Second) of Torts § 402A
(1977), which requires the “unreasonably dangerous”
condition of the product to cause some “physical harm” to
the consumer. See Hegna v. E.I. du Pont de Nemours & Co.,
806 F.Supp. 822, 831 (D. Minn. 1992) (citing McCormack v.
Hankscraft Co., 154 N.W.2d 488, 496 (Minn. 1967)).
Plaintiffs argue that they are entitled to conduct
discovery into what constitutes an unreasonably dangerous
activity and to determine whether a product defect led to
the mis-scoring of the October 2005 SAT. Generally, the
question of whether a product is defective is a matter of
fact. See Drager v. Aluminum Indus., 495 N.W.2d 879, 882
(Minn.App. 1993). Where reasonable minds cannot differ, ho
wever, the question becomes one of law. Id. (citing
Peterson v. Little-Giant Glencoe Portable Elevator Div. of
Dynamics Corp. of Am., 366 N.W.2d 111, 116 (Minn. 1985)).
Plaintiffs argue that the SAT test booklet, answer sheets,
and score reports constitute products capable of giving
rise to claims for strict liability. However, no reasonable
mind could maintain that these paper products could prove
to be unreasonably dangerous for their intended uses in any
manner so as to cause physical harm. Although the Court
recognizes that the SAT test taking experience instills
great stress in thousands of test takers, such stress does
not satisfy the physical harm requirement of Minnesota law.
Cf. Gryc v. Dayton-Hudson Corp., 297 N.W.2d 727, 741 (Minn.
1980) (concluding that manufacturer of instantaneously
combustible pajamas was strictly liable for burns suffered
by a child); Farr v. Armstrong Rubber Co., 179 N.W.2d 64,
71 (Minn. 1970) (applying strict liability standard to a
case involving the blowout of a truck tire leading to
severe physical injuries); McCormack, Page 19 154 N.W.2d
488 (imposing strict liability on the manufacturer of an
electric steam vaporizer that caused severe burns to a
child). Accordingly, the Court dismisses Plaintiffs’ claim
for strict liability against the College Board in count one
of the amended complaint.
2. Defamation
In count two of the amended complaint, Plaintiffs allege
that the College Board’s reporting of incorrect scores to
test takers, high school counselors, and college-admissions
officials constituted defamatory statements. To establish
that a statement is defamatory under Minnesota law, a
plaintiff must demonstrate that the statement is false, was
communicated to a third party, and tends to harm the
plaintiff’s reputation. Bol v. Cole, 561 N.W.2d 143, 146
(Minn. 1997). Additionally, in cases where defamation is
asserted along with a claim for breach of contract, “the
defamation must be independent of the alleged breach of
contract and not a part of the malicious conduct associated
with the breach.” Pillsbury Co. v. Nat’l Union Fire Ins.
Co., 425 N.W. 2d 244, 250 (Minn.Ct.App. 1988) (citing Wild
v. Rarig, 234 N.W.2d 775, 789 (Minn. 1975)).
Plaintiffs attempt to distinguish Pillsbury by noting that
the case involved a claim for trade defamation, which is a
separate cause of action from defamation. Nevertheless,
both Pillsbury and Wild stand for the broader proposition
that a plaintiff is typically limited to contract damages
“except in exceptional cases where the defendant’s breach
of contract constitutes or is accompanied by an independent
tort.” Wild, 234 N.W. 2d at 789. In this case, Plaintiffs
have not provided any reason that their defamation claim
should be considered independent of the alleged breach of
contract. The College Board’s reporting of scores was a
contractual duty owed to the test takers. In fact,
Plaintiffs’ breach of contract claim depends on the fact
that the College Board misreported the scores. Furthermore,
Plaintiffs have not alleged Page 20 that any malice drove
the College Board’s reporting of the scores. Accordingly,
the Court dismisses the defamation claim against the
College Board in count two of the amended complaint.
3. Implied and express warranties
In counts seven and eight of the amended complaint
respectively, Plaintiffs allege that the College Board
breached the implied warranties of merchantability and
fitness for particular purpose. In count nine, Plaintiffs
allege breach of express warranty. The implied warranty
provisions of Minn. Stat. §§ 336.2-314-.2-315
(2005), and the express warranty provision of Minn. Stat.
§ 336.2-313 are taken from Article 2 of the Uniform
Commercial Code (UCC). Like all provisions taken from
Article 2, these provisions apply only to the sale of goods,
not the sale of services. See LeSueur Creamery, Inc. v.
Haskon, Inc., 660 F.2d 342, 346 (8th Cir. 1981).
Plaintiffs characterize the SAT as a product consisting of
physical paper booklets, a physical answer sheet, and a
physical written score report. The College Board argues
that the SAT is a service, not a product; the tangible
goods they use are incidentally involved in the rendition
of a service, namely the administration, scoring, and
reporting of the exam. In fact, two of three physical goods
cited by Plaintiffs are collected by the College Board
after the administration of the test. The only physical
object retained by Plaintiffs is the score report.
Assuming without deciding that the contract is a mixed
contract for the sale of both goods and services, Minnesota
courts use the “predominant purpose” test to determine
whether Article 2 applies to such a contract. “The test
[for mixed contracts is] whether their predominant factor,
their thrust, their purpose, reasonably stated, is the
rendition of service, with goods incidentally involved
(e.g., contract with artist for painting) or is a
transaction of sale, with labor incidentally involved
(e.g., installation of a water heater in a bathroom).” AKA
Distrib. Co. v. Page 21 Whirlpool Corp., 137 F.3d 1083,
1085 (8th Cir. 1998). In the same way that an artist cannot
fill a canvas without paint, the College Board cannot
administer, score, and report SAT results without the test
booklet, answer sheet, and score report. Although the
service provided by the College Board ultimately resulted
in a score printed on a piece of paper, that piece of paper
is not the predominant factor; it is the service provided
by the College Board that predominates the transaction.
Accordingly, the Court dismisses counts seven, eight, and
nine of the amended complaint.
4. Magnuson-Moss Warranty Act
In count thirteen of the amended complaint, Plaintiffs
allege that the College Board violated the the
Magnuson-Moss Warranty Act (MMWA). The MMWA provides a
private cause of action to “a consumer,” 15 U.S.C. §
2310(d)(1) (2006). A “consumer” is defined as “a buyer . .
. of any consumer product.” Id. § 2301(3). A
“consumer product” means “any tangible personal property
which is . . . normally used for personal, family, or
household purposes.” Id. § 2301(1). Therefore, “[i]n
order for the Act to apply, there must be the sale of a
consumer product.” Kemp v. Pfizer, 835 F. Supp. 1015, 1024
(E.D. Mich. 1993).
The Federal Trade Commission has promulgated guidelines
giving examples of “consumer products” that fit the MMWA’s
definition and application. The examples include “boats,
photographic film and chemicals, clothing, appliances,
jewelry, furniture, typewriters, motor homes, automobiles,
mobile homes, vehicle parts and accessories, stereos,
carpeting, small aircraft, toys, and food.” Magnuson-Moss
Warranty Act: Implementation and Enforcement Policy, 40
Fed. Reg. 25,721, 25,722 (1975). The legislative history of
the MMWA lists similar examples of consumer products:
“washing machines and dryers, freezers, ranges,
refrigerators, water heaters, bed coverings, blenders,
broilers, can openers, coffee makers, corn poppers, floor
Page 22 polishers, frypans, hair dryers, irons, toasters,
vacuum cleaners, waffle and sandwich grills, air
conditioners, fans, radios, televisions, and tape
recorders.” H.R. Rep. No. 1107, 93d Cong., 2d Sess. 4,
reprinted in 1974 U.S.C.C.A.N. 7702, 7705-06. In contrast,
neither the services performed by the College Board, nor
the physical products (the SAT examination booklet, answer
sheet, and score report) can properly be construed as
“tangible personal property . . . normally used for
personal, family, or household purposes,” to which the MMWA
is typically directed. Accordingly, the Court dismisses
count thirteen of the amended complaint.
5. New York consumer protection statutes
In count fifteen of the amended complaint, Plaintiffs have
alleged that the College Board violated Section 349(a) of
the New York General Business Law, commonly known as the
New York Consumer Protection Act. That statute prohibits
“[d]eceptive acts or practices in the conduct of any
business, trade or commerce or in the furnishing of any
service.” N.Y. Gen. Bus. L. § 349(a) (McKinney
2005). Defendants move to dismiss this count on the ground
that the complaint does not contain sufficient
particularity and that the statute does not apply to the
facts alleged here for various reasons, including that the
events arose in the course of a contract.
The Court makes three initial observations concerning the
New York Consumer Protection Act. Notably, the Act may not
require any intent to deceive, although a finding of
intentional deception opens the door to treble damages up
to $1,000. Oswego Laborers’ Local 214 Pension Fund v.
Marine Midland Bank, 647 N.E.2d 741, 745 (N.Y. 1995); but
see Eastern Am. Trio Prod., Inc. v. Tang Elec. Corp., 97 F.
Supp. 2d 395, 423 (S.D.N.Y. 2000) (“Section 349 is a
consumer protection statute, and requires a finding of
intentional deception of consumers in order for plaintiff
to prevail.”). Second, the fact that an alleged deceptive
practice arises out of contractual relationships probably
does not, by itself, take the practice out of the ambit of
the Page 23 statute. However, the statute does not appear
to have been intended to turn a simple breach of contract
into a tort, and several decisions of the New York state
appellate courts have held as much. See, e.g., Hassett v.
N.Y. Cent. Mut. Fire Ins. Co., 753 N.Y.S.2d 788, 789
(N.Y.App.Div. 2003); Graham v. Eagle Distrib. Co., 637
N.Y.S.2d 583, 584 (N.Y.App.Div. 1996); Teller v. Bill
Hayes, Ltd., 630 N.Y.S.2d 769, 774 (N.Y.App. Div. 1995).
Third, the parties disagree about whether the statute is
subject to general or heightened specificity pleading
requirements but agree that the complaint here does not
specify the particular action that was deceptive.
Plaintiffs claim that the College Board led consumers to
believe that the scoring of the SAT would be accurate.
Plaintiffs do not, however, allege that the test as a whole
is deceptive or even that the entirety of the scoring of
the October 2005 test was erroneous. In fact, part of what
plaintiffs seek is an injunction disseminating additional
scores from that very test. This is not the sort of
situation that the consumer fraud statute in New York was
intended to cover. Regardless of any scienter requirement
that may or may not be in the statute, the “act or
practice” must surely have been deceptive at the time it was
done and not merely wrong due to subsequent events.
Section 349(a) has been invoked to address false
advertising, pyramid schemes, deceptive collection efforts,
deceptive insurance practices, “bait and switch”
operations, and alleged deceptive representations by a fast
food distributor leading to obesity and other health issues
in consumers. See Teller, 630 N.Y.S. 2d at 774; Pelman v.
McDonald’s Corp., 396 F.3d 508 (2d Cir. 2005). “The typical
violation contemplated by the statute involves an
individual consumer who falls victim to misrepresentations
made by a seller of consumer goods usually by way of false
and misleading advertising.” Genesco Enter’t v. Kock, 593
F. Supp. 743, 751 (S.D.N.Y. 1984). The allegations made by
Plaintiffs that the College Board led consumers to believe
that Page 24 the test would be scored accurately does not
indicate any deception at the time such promise was made.
Accordingly, the Court dismisses count fifteen of the
amended complaint.
C. NCSP’s motion to dismiss
1. Breach of contract
In counts five and six of the amended complaint,
Plaintiffs allege that they were the intended beneficiaries
of one or more contracts between NCSP and the College
Board. Plaintiffs also allege that NCSP breached its
contractual duty to scan the SAT answer sheets accurately
and appropriately. NCSP argues that under the terms of its
Services Agreement with the College Board, Plaintiffs
cannot be considered intended beneficiaries. The Services
Agreement states in relevant part:
No Third-Party Beneficiary Rights. No provision of this
Agreement shall in any way inure to the benefit of any
third person (including the public at large) so as to
constitute any person a third-party beneficiary of the
Agreement of any one or more of the terms hereof, or
otherwise give rise to any cause of action in any person
not a party hereto.
Plaintiffs argue that the Services Agreement should not be
considered by the Court because the full agreement was not
produced until after Plaintiffs responded to NCSP’s motion
to dismiss. As such, Plaintiffs argue that they did not
receive an adequate opportunity to respond to NCSP’s
arguments concerning the Services Agreement. Nevertheless,
Plaintiffs’ complaint refers to a contract pursuant to
which NCSP agreed to scan the SAT tests. When considering a
motion for judgment on the pleadings, a court may consider
materials necessarily embraced by the pleadings. See Porous
Media Corp., 186 F.3d at 1079. Furthermore, portions of the
Services Agreement were attached to NCSP’s motion to
dismiss with an averment that the full agreement would be
made available to Plaintiffs upon entry of a protective
order. A copy of the entire Services Agreement was then
provided to Plaintiffs following the entry of a protective
order. Page 25 Accordingly, the Court concludes that it
may appropriately consider the Services Agreement.
The Services Agreement contains a choice of law provision
that states “[t]he validity, interpretation, and
performance of this Agreement shall be governed by the laws
of the State of New York.” The choice of law clause applies
to the question of whether Plaintiffs are intended third
party beneficiaries. See Am. Patriot Ins. Co. v. Mut. Risk
Mgmt., Ltd., 364 F.3d 884, 890 (7th Cir. 2004) (“Insofar as
the plaintiff’s third-party beneficiary claim is concerned,
the plaintiff is indeed bound by the choice of law . . .
clause[] in the contract.”). In determining whether a party
can be considered an intended beneficiary of a contract,
New York law looks to the express terms of the contract.
“Under New York law, where a provision in a contract
expressly negates enforcement by third parties, that
provision is controlling.” Morse/Diesel, Inc. v. Trinity
Industries, Inc., 859 F.2d 242, 249 (2d Cir. 1988). Because
the Services Agreement explicitly provides that “[n]o
provision of this Agreement shall in any way inure to the
benefit of any third person,” Plaintiffs cannot be
considered third party beneficiaries of the Services
Agreement. Accordingly, the Court dismisses Plaintiffs’
breach of contract claims against NCSP.
2. Negligence and strict liability
In count one of the amended complaint, Plaintiffs allege
that NCSP’s actions were negligent and rendered NCSP
strictly liable for Plaintiffs’ damages. Independent of any
contractual duties, Plaintiffs allege that NCSP had a
duties to timely identify errors in scoring prior to the
reporting of scores and to provide accurately administered,
scored, and reported exams. Specifically, Plaintiffs allege
that NCSP: (1) failed to accurately score and scale the
October 2005 SAT; (2) failed to properly identify all
persons adversely affected by the scoring errors; (3)
failed to properly re-score the examinations; (4) failed to
immediately notify test takers and institutional
authorities of incorrect scoring; (5) failed to timely
implement effective Page 26 audit or quality control
procedures; and (6) failed to implement appropriate
procedures to prevent scoring errors and inaccuracies.
One theory addressing the cause of the scoring errors
suggests that the answer sheets were in some way defective.
According to this theory, the answer sheets were scanned
incorrectly because they were either inherently defective
or had been exposed to excessive moisture and humidity at
some point causing them to deform. Plaintiffs argue that
NCSP is negligent for either supplying the defective answer
sheets or damaging the answer sheets in their care.
In response, NCSP argues that Plaintiffs cannot recover in
tort based on NCSP’s contractual obligations to the College
Board. As discussed in response to the College Board’s
motion to dismiss Plaintiffs’ negligence claim, Minnesota
follows the independent duty rule. See Wild, 234 N.W.2d at
789-90. NCSP argues that none of the circumstances embraced
by Plaintiffs’ allegations of negligence are independent of
NCSP’s contractual duties under the Services Agreement. As
has been discussed, however, Plaintiffs are not third party
beneficiaries of the Services Agreement and have no claim
for breach of contract. NCSP has not cited to any Minnesota
case in which the independent duty rule has been applied to
parties not in privity. Cf. Zontelli & Sons, Inc. v. City
of Nashwauk, 353 N.W.2d 600, 604 (Minn.Ct.App. 1984)
(concluding that a general contractor’s claim against an
engineer with which it was not in privity sounded not in
negligence, but in contract under the general contractor’s
third party beneficiary claim against the engineer), rev’d
on other grounds, 373 N.W.2d 744, 756 (Minn. 1985)
(declining to decide whether the general contractor had a
direct action against the engineer for negligence because
the practical result would be the same under the contract
claim). As such, it strikes the Court as unfair to hold at
this stage, as a matter of law, that Plaintiffs lack a
tort Page 27 remedy because the alleged tort arose in the
context of the performance of a contract to which they were
strangers. Given that the cause of the scoring errors is
undetermined, the Court cannot conclude that Plaintiffs
cannot prove any set of facts in support of their claim
that would entitle them to relief. Accordingly, the Court
concludes that it would be premature to dismiss Plaintiffs’
claim for negligence and denies the NCSP’s motion to
dismiss Plaintiffs’ negligence claim.
Turning to the strict liability claim, Plaintiffs argue
that their claim for strict liability against NCSP should
survive because it is possible that NCSP supplied defective
paper products or used inferior ink in its support of the
SAT administration. For the same reasons addressed above in
response to the strict liability claim against the College
Board, the Court concludes that no reasonable person could
maintain that the paper products or ink used in association
with the SAT could prove to be unreasonably dangerous for
their intended uses in any manner as to cause physical
harm. Accordingly, the Court dismisses Plaintiffs’ claim
for strict liability against NCSP.
3. Defamation
In count two of the amended complaint, Plaintiffs allege
that NCSP defamed them by reporting incorrect scores to
parents, high school counselors, college admissions
officials, and others. In response, NCSP presents three
arguments in support of its motion to dismiss this count.
First, in an argument similar to that made by the College
Board, NCSP points out that none of the allegedly
defamatory statements were made independent of its
contractual duties. It argues that Plaintiffs cannot
identify any exceptional circumstances as required by the
independent duty rule. See Wild, 234 N.W.2d at 789-90. NCSP
argues that those circumstances that would justify a
finding of the alleged breach of contract — the
incorrect scanning, scoring, and reporting of SAT scores
— are coincident with the alleged incorrect
scanning, scoring, and Page 28 reporting that constitute
Plaintiffs’ defamation claim and are therefore not
actionable under tort. As has been discussed, however,
Plaintiffs are not third party beneficiaries of the
Services Agreement and have no claim for breach of contract.
NCSP also argues that the defamation count should be
dismissed for want of particularity in pleading. “Minnesota
law has generally required that in defamation suits, the
defamatory matter be set out verbatim.” Moreno v. Crookston
Times Printing Co., 610 N.W.2d 321, 326 (Minn. 2000); see
Pope v. ESA Servs., Inc., 406 F.3d 1001, 1011 (8th Cir.
2005) (“Minnesota law requires that a claim for defamation
must be pled with a certain degree of specificity. At a
minimum, the plaintiff must allege who made the allegedly
libelous statements, to whom they were made, and where.”
(citation and quotations omitted)). The manner of setting
forth allegations is a matter of procedure, not substance,
and although a federal court cannot be bound by a state’s
technical pleading rules, verbatim allegations of
defamation are favored. See Asay v. Hallmark Cards, Inc.,
594 F.2d 692, 699 (8th Cir. 1979). In count two of the
amended complaint, Plaintiffs allege that NCSP and the
College Board incorrectly reported SAT scores to parents,
guardians, high school counselors, and college and
university admissions officials. NCSP alleges, however,
that its role is limited to scanning the answer sheets and
reporting the raw data on the answer sheets to the College
Board or its designees. As such, NCSP denies that it
reported any scores to parents, high school counselors, or
college admissions officials. Nevertheless, Plaintiffs’
allegations that NCSP reported incorrect test results to
the College Board which then reported SAT scores to
parents, high school counselors, and college admissions
officials are sufficient to withstand a motion to dismiss.
Here, the alleged defamatory statements are not typical
oral or written assertions, but rather the nearly
half-million test results. Plaintiffs have alleged who made
the allegedly libelous statement (NCSP), to whom Page 29
(the College Board and then to parents, high school
counselors, and college admissions officials), and where
(in SAT score reports). The Court therefore concludes that
Plaintiffs have met the minimum pleading requirements for
defamation.
Finally, NCSP argues that misreported scores do not impact
Plaintiffs’ reputations in their communities, and because
such injury is a required element of a defamation claim,
the count should be dismissed. In support of its argument,
NCSP cites to Landers v. National Railroad Passenger Corp.,
345 F.3d 669, 672 (8th Cir. 2003), which affirmed a summary
judgment decision of this court holding that as a matter of
Minnesota law, a numerical job rating was not defamatory.
In that case, however, the message to any member of the
public who understood the rating system in question would
have been that the employee was performing satisfactorily.
Although the question of whether a statement may reasonably
be construed as defamatory is fact intensive, the analysis
begins with an issue of law for the trial judge. If the
statement is capable of defamatory meaning, it is for the
jury to decide if it was so understood. Id. (citing Utecht
v. Shopko Dep’t Store, 324 N.W.2d 652, 653-54 (Minn.
1982)). NCSP points to one case in which lower than
deserved test scores were deemed not to impact a
plaintiff’s reputation in the community. See Coates v. Law
School Admission Council, No. Civ. A. 105CV0641JDB2005, WL
3213960 (D.D.C. Oct. 25, 2005). In Coates, however, there
was no evidence to suggest that the test score was reported
to anyo ne other than the plaintiff. Additionally,
Plaintiffs note that Minnesota courts have permitted at
least one defamation case arising out of misscored tests to
survive a motion for summary judgment. See Kurvers v. Nat’l
Comp. Sys., Inc., No. MC-00-11010 (Minn. Dist. Ct. May 23,
2002). The Court is aware that Kurvers did not consider
whether the statements were actually defamatory, but only
addressed whether the defendant had an absolute or
qualified privilege. Nevertheless, the Court declines to
Page 30 hold that as a matter of Minnesota law, misreported
test scores can never give rise to a claim for defamation.
Accordingly, the Court denies NCSP’s motion to dismiss
Plaintiffs’ claim for defamation against NCSP.
4. Implied and express warranties
In counts ten and eleven of the amended complaint,
respectively, Plaintiffs allege that NCSP breached the
implied warranties of merchantability and fitness for
particular purpose. In count twelve of the amended
complaint, Plaintiffs allege breach of express warranty.
Plaintiffs’ implied and express warranty claims against
NCSP fail for the same reason that their implied and
express warranty claims against the College Board were
dismissed: Article 2 of the UCC applies only to the sale of
goods, not the sale of services. See LeSueur Creamery, 660
F.2d at 346. The predominant purpose of the Services
Agreement between NCSP and the College Board is for the
scanning of the SAT answer sheets and further support in
the administration of the SAT. All tangible products used
in that endeavor are incidental to the services provided by
NCSP. Furthermore, because Plaintiffs hold no third party
beneficiary rights under the Services Agreement, they
cannot seek redress for breach of warranty under the
Services Agreement. Accordingly, the Court dismisses counts
ten, eleven, and twelve of Plaintiffs’ amended complaint.
5. Magnuson-Moss Warranty Act
In count thirteen of the amended complaint, Plaintiffs
allege that NCSP violated the MMWA. Plaintiffs’ MMWA claim
against NCSP fails for the same reason that their MMWA
claim against the College Board was dismissed: neither the
services provided by NCSP nor the physical products
incidentally involved in NCSP’s support of the
administration of the SAT can be considered “consumer
products” within the meaning of the MMWA. Accordingly, the
Court Page 31 dismisses Plaintiffs’ MMWA claim against
NCSP.
6. False advertising and consumer frauds
In count fourteen of the amended complaint, Plaintiffs
allege that NCSP violated Minn. Stat. § 325F.69,
subd. 1 (2005), by committing consumer fraud, and Minn.
Stat. § 325F.67 (2005) for a false advertising. NCSP
argues that Plaintiffs failed to plead their claims with
the particularity required under Federal Rule of Civil
Procedure 9(b). In cases brought in federal court, Rule
9(b) applies to both common law and statutory fraud claims
made under Minnesota law where the gravamen of the
complaint is fraud. See Tuttle v. Lorillard Tobacco Co.,
118 F.Supp.2d 954, 963 (D. Minn. 2003); United States v.
Napco Int’l, Inc., 835 F.Supp. 493, 495 (D. Minn. 1993);
see also NCC Sunday Inserts, Inc. v. World Color Press,
Inc., 692 F. Supp. 327, 330 (S.D.N.Y. 1988) (holding that
“it is federal law which governs procedural issues of state
law raised in federal court”).
To meet the heightened pleading requirement of Rule 9(b),
a plaintiff must set forth the “who, what, when, where and
how” for each alleged fraud. Parnes v. Gateway 2000, Inc.,
122 F.3d 539, 550 (8th Cir. 1997). As such, “conclusory
allegations that a defendant’s conduct was fraudulent are
not sufficient to satisfy this rule.” Commercial Prop.
Inv., Inc. v. Quality Inns Int’l Inc., 61 F.3d 639, 644
(8th Cir. 1995). Here, Plaintiffs allege that:
Defendant’s wrongful conduct includes, by way of example
and not by limitation: Defendant’s fraudulent, misleading,
and deceptive statements and practices relating to the
quality and accuracy of Defendant’s testing and scoring
products, including misrepresentations that Defendants
have or will provide adequate quality assurance in
assessing the scoring errors associated with the October
2005 SAT.
In support of their false advertising claim, Plaintiffs
have failed to identify a single advertisement disseminated
to the public in Minnesota. Similarly, Plaintiffs have
failed to identify any specific example of consumer fraud,
relying instead on sweeping allegations of Page 32
“fraudulent, deceptive, misleading, and deceptive statements
and practices.” Having failed to plead the who, what, when,
where, and how of their consumer fraud and false
advertising claims, Plaintiffs’ amended complaint falls
short of the specificity required under Rule 9(b).
Accordingly, the Court dismisses count fourteen of the
amended complaint. Page 33
III. CONCLUSION
Based on the files, records, and proceedings herein, and
for the reasons stated above, IT IS ORDERED THAT:
1. Plaintiffs’ motion for a preliminary injunction [Docket
No. 2] is DENIED.
2. The College Board’s motion to dismiss Plaintiffs’
Amended Complaint [Docket No. 20] is GRANTED IN PART and
DENIED IN PART.
3. NCSP’s motion to dismiss Plaintiffs’ Amended Complaint
[Docket No. 24] is GRANTED IN PART and DENIED IN PART.
4. Count I of the Amended Complaint is DISMISSED insofar as
it asserts strict liability.
5. Count II is DISMISSED against the College Board.
6. Counts V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, and
XV are
DISMISSED.
[fn1] The standard error of measurement is a statistical
term that describes the extent to which a test taker’s
observed score on any single test administration might
differ from his or her “true” ability. The standard error
of measurement for the SAT is thirty points for the
Critical Reading and Math sections, and forty points for
the Writing section.
[fn2] In contrast to the standard error of measurement, the
standard error of difference is a statistical term that
describes the extent to which two test takers’ scores must
differ in order to indicate a difference of ability. The
standard error of difference for the SAT is roughly forty
points for the Critical Reading and Math sections, and
fifty points for the Writing section. The College Board
advises colleges that they can be reasonably confident that
a score differential represents a difference in ability
between two test takers when it is 1.5 times the standard
error of difference. For example, SAT Critical Reading and
Math scores must differ by 60 points (40 x 1.5) in order to
indicate true differences of ability. Page 1