Dash v. Seagate Technology (U.S.) Holdings, Inc.
27 F. Supp. 3d 357
E.D.N.Y2014Background
- Plaintiff Matt Dash, an amateur photographer, purchases a LaCie Rugged Thunderbolt Series 1 TB Orange External Hard Drive for about $200 to store large files, prioritizing transfer speed.
- LaCie is a manufacturer of external hard drives and related devices; it is a wholly owned subsidiary of Seagate Technology (US) Holdings, Inc.; the case arises under diversity jurisdiction.
- Plaintiff alleges the Drive did not transfer data at the rates claimed on packaging and that LaCie/Seagate engaged in deceptive marketing to induce purchases.
- Plaintiff’s complaint asserts claims for breach of implied warranty of merchantability and fitness for a particular purpose, violation of NY General Business Law §§ 349 and 350, and common law fraud.
- The packaging allegedly depicted a bar chart claiming speeds up to 10 Gb/s, a dial speedometer graphic, and a claim the Drive is at least twice as fast as USB 3.0—asserted as false and misleading.
- Seagate moves to dismiss under Rule 12(b)(6); the court grants in part and denies in part, and allows amendment of the fraud claim.
- Court notes the relevant standard for plausibility, and that the 9(b) pleading requirements apply to fraud with particularity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the warranty claim survives or is abandoned | Dash preserves implied warranty claim pleadings. | Dash abandons the warranty claim; should be dismissed. | Implied warranty claim dismissed. |
| Whether NY GBL §§ 349 and 350 claims are adequately pleadable as to material deception | Packaging statements were misleading and consumer-oriented. | Statements not materially misleading given disclosures on defendant’s site. | Claims sufficiently pleadable; denial of dismissal. |
| Whether the packaging statements causally and injuriously affected the purchase | Plaintiff saw the packaging representations and paid a premium. | Disclosures on website undermine causation/injury. | Causation and injury adequately pled. |
| Whether common law fraud is pled with sufficient particularity and intent | Fraud claim relies on concealment of true facts to induce purchase. | Conjectural, conclusory; lacks strong inference of intent. | Fraud claim dismissed for failure to plead intent; leave to amend granted. |
| Whether leave to amend the fraud claim should be granted | Amendment should be allowed to cure pleading deficiencies. | Amendment may be futile; dismiss should stand. | Leave to amend fraud claim within 30 days granted. |
Key Cases Cited
- Fink v. Time Warner Cable, 714 F.3d 739 (2d Cir. 2013) (fraud pleading standard; 'up to' speeds discussed)
- Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 623 N.Y.S.2d 529, 647 N.E.2d 741 (N.Y. 1995) (deceptive practices standard under New York law)
- Gale v. International Business Machines Corp., 9 A.D.3d 446, 781 N.Y.S.2d 45 (2d Dep’t 2004) (reasonable consumer deception framework)
- Nakahata v. New York-Presbyterian Healthcare System, Inc., 723 F.3d 192 (2d Cir. 2013) (Rule 9(b) specificity for fraud must be pled)
- Premium Mortgage Corp. v. Equifax, Inc., 583 F.3d 103 (2d Cir. 2009) (fraud injury and reliance considerations in pleading)
- Connecticut National Bank v. Fluor Corp., 808 F.2d 957 (2d Cir. 1987) (fraud intent and knowledge elements)