Farmer v. Walmart Inc.
2:23-cv-00397
D.N.M.Apr 9, 2024Background
- Walmart sold “Onn” Surf Tablet Pro tablets (7", 8", 10.1") beginning in 2019; Plaintiff purchased two 8" units (Oct 2019 and Mar 2020) that developed display/touchscreen failures rendering them unusable.
- Plaintiff alleges a latent “Display Defect”: touchscreens made of poly(ethyl acrylate) and polystyrene cases that are brittle/insufficiently rigid, causing cracking/black blotching under ordinary use.
- Walmart marketed the tablets emphasizing display quality, offered 30‑day returns and a one‑year limited warranty that expressly excluded display damage.
- Plaintiff alleges Walmart knew of the defect by late 2019 (warranty claims, returns, online reviews) but did not disclose it; he filed a putative nationwide class action and a New Mexico subclass.
- Walmart moved to dismiss for lack of standing, lack of personal jurisdiction, and failure to state claims; Plaintiff abandoned two counts (N.M. False Advertising Act and Magnuson‑Moss), and the court issued the ruling summarized below.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to assert claims for models Plaintiff did not buy (7"/10.1"/2021) | Farmer contended models are substantially similar so he can represent purchasers of those models. | Walmart argued Farmer lacks Article III injury for products he didn’t buy; substantial‑similarity cannot confer standing. | Dismissed for lack of standing as to models Plaintiff did not purchase. |
| Personal jurisdiction over nationwide class claims (unnamed out‑of‑state class members) | Farmer: federal Rule 23 class action structure distinguishes this from Bristol‑Myers and supports nationwide class in federal court. | Walmart relied on Bristol‑Myers line to argue lack of specific jurisdiction for out‑of‑state claims. | Denied 12(b)(2). Court follows Lyngaas/Mussat: specific jurisdiction over Walmart based on representative’s New Mexico claims is sufficient to proceed with nationwide Rule 23 class. |
| UPA (New Mexico Unfair Practices Act) – false/misleading statements and nondisclosure | Farmer alleged affirmative misrepresentations about display quality and a duty to disclose the latent defect. | Walmart argued challenged marketing statements are puffery and not actionable; UPA disclosure duty limited. | Count I (UPA) dismissed without prejudice: court finds the advertising statements alleged are non‑actionable puffery. |
| Breach of express warranty – warranty excluded display damage; unconscionability challenge | Farmer alleged the exclusion is unconscionable because Walmart knowingly sold a latent defect and concealed it (procedural and substantive unconscionability). | Walmart argued courts should not rewrite warranty terms and exclusions are permitted under UCC; plaintiff alleges no authority to expand warranty. | Survives dismissal: court finds allegations plausibly plead procedural and substantive unconscionability at pleading stage; Count IV survives. |
| Implied warranty of merchantability | Farmer alleged tablets were unfit for ordinary use because displays failed under normal stress/drops. | Walmart argued merchantability does not guarantee indefinite durability and alleged failures occurred after time inconsistent with merchantability claim. | Survives dismissal: pleadings plausibly allege design defect causing failures during ordinary use; Count V survives. |
| Fraudulent concealment / common‑law fraud (duty to disclose) | Farmer alleged Walmart had superior knowledge (warranty claims, returns, internal feedback) not within consumers’ reach and therefore had duty to disclose. | Walmart argued information was publicly available (online reviews) and no duty absent fiduciary relationship. | Survives dismissal: court finds Plaintiff plausibly pleaded superior knowledge and a duty to disclose; fraud claim meets particularity. |
| Unjust enrichment (nationwide) | Farmer pleaded unjust enrichment in the alternative and challenged contract unconscionability; nationwide application is premature pre‑certification. | Walmart argued unjust enrichment barred by privity and varying state laws make nationwide claim inappropriate. | Survives dismissal: court allows unjust enrichment claim to proceed (pled in the alternative); choice‑of‑law and manageability addressed at certification. |
Key Cases Cited
- Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992) (Article III standing requires concrete, particularized injury)
- Blum v. Yaretsky, 457 U.S. 991 (1982) (plaintiff injured by one kind of conduct lacks automatic standing to litigate different, though similar, conduct)
- Bristol‑Myers Squibb Co. v. Superior Court, 582 U.S. 255 (2017) (specific jurisdiction requires connection between forum and the underlying controversy)
- Lyngaas v. Ag, 992 F.3d 412 (6th Cir. 2021) (federal Rule 23 class actions distinguishable from Bristol‑Myers; representative’s forum contacts can support class claims)
- Mussat v. IQVIA, Inc., 953 F.3d 441 (7th Cir. 2020) (similar reasoning: the representative’s contacts control specific jurisdiction analysis in federal class actions)
- Daimler AG v. Bauman, 571 U.S. 117 (2014) (general jurisdiction requires corporation to be at home in the forum)
- Renfro v. Champion Petfoods USA, Inc., 25 F.4th 1293 (10th Cir. 2022) (discussion of puffery and when marketing statements are nonactionable)