OPINION
This mаtter comes to the Court on Defendants’ motions (Docket Nos. 37 and 38),
The named plaintiffs, purchasers of Maytag washing machines, are Charlene Dzielak, Francis Angelone, Shelley Baker, Brian Maxwell, Jeffrey McLenna, Jeffery Reid, Kari Parsons, Charles Beyer, Jonathan Cohen, and Jennifer Schramm. The first named defendant is the Maytag washing machines’ manufacturer, Whirlpool Corporation (“Whirlpool”).
The Department of Energy (DOE) Energy Star program authorizes manufacturers to affix an Energy Star label signifying that an appliance meets certain standards of energy efficiency. Each Maytag washing machine at issue in this case bore an Energy Star label at the time of purchase. Thereafter, however, DOE determined that Maytag Centennial washing machine model number MVWC6ESWW1 did not comply- with Energy Star requirements, and EPA disqualified the machine from the Energy Star program. That noncompliance determination and disqualification allegedly apply equally to Maytag Centennial model numbers MVWC6ESWW0, MVWC6ESWW1, and MVWC7ESWW0.
According to the FAC, Energy Star-qualified washing machines cost more than
Plaintiffs assert causes of action for breach of express warranty, breach of the implied warranty of merchantability, unjust enrichmеnt, violation of the Magnu-son-Moss Warranty Act, 15 U.S.C. § 2301 et seq. (“MMWA”), and violations of New Jersey, California, Michigan, Florida, Ohio, Indiana’, and Texas consumer fraud statutes.
The first motion to dismiss is filed jointly by Whirlpool, Fry’s, Lowe’s, and Sears, Docket No. 37. The second is filed by Home Depot, Docket No. 38. Defendants argue that that the Complaint’s allegations are insufficient as a matter of law. Defendants deny that they have engaged in any wrongful conduct or otherwise misrepresented any information in connection with the sales of the washers in question. They also allege that Plaintiffs have failed to plead claims sounding in fraud with the requisite particularity.
Defendants’ motions to dismiss will be granted. The dismissals are without prejudice to the filing of a Second Amended Complaint that corrects the pleading deficiencies of the First.
I. BACKGROUND
A. The Energy Star Program
The Energy Policy and Conservation Act of 1975 (“EPCA”), 42 U.S.C. §§ 6291 et seq., together with the National Energy Conservation Policy Act of 1978 (“NEC-PA”) and National Appliance Energy Conservation Act of 1987 (“NAECA”), established an energy conservation program for major household appliances. These statutes and related regulations led to the Energy Star program, “a voluntary program to identify and promote energy-efficient products and buildings in order to reduce energy consumption, improve energy security, and reduce pollution through voluntary labeling of, or other forms of communication about, products and buildings that meet the highest energy conser
For the Energy Star program, DOE has established minimum standards for energy and water efficiency. Qualified machine models must use approximately 37% less energy and 50% less water than standard models. FAC ¶ 2. The DOE has instituted a pilot program under which it tests retail products to ensure conformity with Energy Star program guidelines. DOE and the Environmental Protection Agency (“EPA”) jointly administer the program. 42 U.S.C. § 6294a.
Energy Star program participants may affix the trademarked and federally-owned Energy Star logo to qualifying products. FAC ¶26. The Energy Star logo is an important marketing tool. Energy Star labeled machines are more expensive than standard models, but “come with the promise of reduced energy and water bills that, over time, will generate enough saving to recoup the higher price.” Id. ¶2. As characterized by Plaintiffs, the Energy Star program rests on a fundamental bargain: pay more up front, but save on energy bills in the long run. Id.
B. Disqualification from the Energy Star Program
As of 2009, certain Maytag washing machines (the FAC calls them “the Mislabeled Machines”) were already on the market with the Energy Star label. As part of the pilot program, DOE tested the efficiency of Maytag washing machine model number MVWC6ESWW1. On September 20, 2010, DOE informed Whirlpool that model ■ number MVWC6ESWW1 did not meet the Energy Star efficiency requirements. Id. ¶ 40. After consultation with Whirlpool, DOE agreed to test additional units. Id. ¶ 41. From January 3 to January 12, 2011, Springboard Engineering laboratories tested four additional units of the Maytag Centennial MFVWC6ESWW1 model. These units, too, failed to comply with DOE standards. Id. at ¶ 42. On January 19, 2011, DOE notified Whirlpool of the results of that second round of testing. Id. ¶43. Thereafter, on March 16, 2011 DOE referred the matter to the EPA, which is the brand manager for Energy Star.
According to the FAC, “Whirlpool avoided a formal disqualification from the Energy Star program by representing” to the EPA “that it had discontinued the sale or manufacture of the Mislabeled Washing Machines, and that none were remaining in inventory — rendering a formal disqualification moot by the time the issue was presented to the EPA.” Id. ¶ 45. Whirlpool and the EPA “reached an informal and private agreement whereby Whirlpool agreed to cease and desist from the manufacture or sale of the Mislabeled Washing Machines.” Id. The FAC alleges that “persons who had already purchased these Mislabeled Washing Machines, including Plaintiffs, were given no notice of this agreement, or of the Mislabeled Washing Machines’ noncompliance with the Energy Star-standard.” Id.
That situation apparently has changed to some extent. According to an exhibit attached to Plaintiffs’ Opposition Brief (“Non-Lighting Products Disqualified from the ENERGY STAR® Program”), the EPA did in fact disqualify machine model number MVWC6ESWW1 on May 7, 2012. Docket No. 47-3 at 2. That issue is discussed below.
C. The Plaintiffs’ Washing Machine Purchases
The named plaintiffs purchased washers in their home states, and purport to repre
As to each plaintiff, the FAC identically alleges the following: The washing machine bore the Energy Star logo in two places. The purchaser saw the logo before and at the time of purchase. The purchaser understood the logo to be a representation and warranty by both the manufacturer and retailer that the machine met Energy Star standards of efficiency. The plaintiff purchaser would not have bought the machine if he or she had known it did not in fact comply. Thus each plaintiff allegedly relied on the Energy Star logo when making the purchase.
As to the specific purchases by each named plaintiff, the FAC separately alleges the following:
On November 27, 2009, Francis Ange-lone purchased a “Maytag Centennial MVWC6ESWW* washing machine at a Home Depot retail store in Delran, New Jersey.” Angelone paid $299.00, plus tax. FAC ¶ 29.
On November 27, 2009, Brian Maxwell purchased a “Maytag Centennial MVWC6ESWW* washing machine at a Fry’s Electronics retail store in Roseville, California.” Maxwell paid $399.00, plus tax. Id. ¶ 30.
On November 28, 2009, Jonathan Cohen purchased a “Maytag Centennial MVWC6ESWW* washing machine at a Home Depot retail store in Houston, Texas.” She paid $299.00, plus tax. Id. ¶ 31.
On November 30, 2009, Charlene Dzie-lak purchased a “Maytag Centennial MVWC6ESWW* washing machine at a Lowe’s retail store near her home in Mid-dlesex County,” New Jersey. She paid $409.00, plus tax. Id. ¶ 32.
In January 2010, Jennifer Schramm purchased a “Maytag Centennial MVWC6ESWW* washing machine” at a Lowe’s retail store in Alexandria, Virginia. Id. ¶ 33. The purchase price is not given.
On February 27, 2010, Jeffery McLenna purchased a “Maytag Centennial MVWC6ESWW* washing machine” at a Home Depot retail store in Lapeer, Michigan.” He paid $476.10, plus tax. Id. ¶ 34.
On March 27, 2010, Kari Parsons purchased a “Maytag Centennial MVWC6ESWW* washing machine” at an ApplianceSmart Factory Outlet retail store in Columbus, Ohio.” She paid $492.99, plus tax. Id. ¶ 35.
On March 18, 2010, Plaintiff Charles Beyer purchased a “Maytag Centennial MVWC6ESWW* washing machine at a Sears retail store in Martinsville, Indiana.” He paid $457.49, plus tax. Id. ¶ 36.
On December 1, 2010, Plaintiff Shelly Baker purchased a “Maytag Centennial MVWC6ESWW* washing machine” at a Sears retail store in Ontario, California.” She paid $439.93, plus tax and delivery. Id. ¶ 37.
In 2010, Plaintiff Jeffrey Reid, who lives in Florida, purchased a “Maytag Centennial MVWC6ESWW1 washing machine from nearby Air Force base.” He paid for the machine in cash. Id. ¶ 38.
II. LEGAL STANDARDS
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if it fails to state a claim upon which relief can be granted. The moving party, ordinarily the defendant, bears thé burden of showing that no claim has been stated. Hedges v. United States,
In recent years, the United States Supreme Court has elaborated on the standards that a court is to apply in analyzing a Rule 12(b)(6) motion to dismiss, particularly in light of the pleading requirements of Federal Rule of Civil Procedure 8(a)(2). Although a complaint need not contain detailed fáctual allegations, “a plaintiffs obligation to provide the ‘grounds’ of his ‘entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly,
The United States Court of Appeals for the Third Circuit has explicated the Twombly/Iqbal standard on several occasions. See, e.g., Argueta v. U.S. Immigration & Customs Enforcement,
To determine whether a complaint meets the pleading standard, our analysis unfolds in three steps. First, we outline the elements a plaintiff must plead to a state a claim for relief. See [Iqbal, 556 U.S.] at 675,129 S.Ct. 1937 ; Argueta,643 F.3d at 73 . Next, we peel away those allegations that are no more than conclusions and thus not entitled to the assumption of truth. See Iqbal,556 U.S. at 679 ,129 S.Ct. 1937 ; Argueta,643 F.3d at 73 . Finally, we look for well-pled factual allegations, assume their veracity, and then “determine whether they plausibly give rise to an entitlement to relief.” Iqbal,556 U.S. at 679 ,129 S.Ct. 1937 ; Argueta,643 F.3d at 73 . This last step is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal,556 U.S. at 679 ,129 S.Ct. 1937 .
Bistrian v. Levi,
Defendants assert that the state consumer protection law claims sound in fraud and therefore must be pleaded with heightened particularity. For claims of fraud, Federal Rule of Civil Procedure 9(b) imposes a heightened pleading requirement, over and above that of Rule 8(a). Specifically, it requires that “in all aver-' ments of fraud or mistake, the circumstances constituting the fraud or mistake shall be stated with particularity.” Fed. R.Civ.P. 9(b). “Malice, intent, knowledge, and other conditions of a person’s mind,” however, “may be alleged generally.” Id. That heightened pleading standard re
In general, “[t]o satisfy this heightened standard, the plaintiff must plead or allege the date, time, and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation.” Id. “Plaintiff must also allege who made the misrepresentation to whom and the gеneral content of the misrepresentation.” Lum v. Bank of Am.,
[Plaintiffs] need not, however, plead the “date, place or time” of the fraud, so long as they use an “alternative means of injecting precision and some measure of substantiation into their allegations of fraud.” The purpose of Rule 9(b) is to provide notice of the “precise misconduct” with which defendants are charged and to prevent false or unsubstantiated charges. Courts should,'however, apply the rule with some flexibility and should not require plaintiffs to plead issues that may have been concealed by the defendants.
Rolo v. City Investing Co. Liquidating Trust,
III. LEAVE TO AMEND/JUDICIAL NOTICE
Both motions to dismiss assert that the FAC does not properly plead that plaintiffs have suffered an injury in fact. To look at the issue another way, defendants assert that the FAC does not state a cause of action unless it is supplemented by judicial notice in a manner that is at least awkward, if not wholly unwarranted.
Judicial notice is a discretionary doctrine. See Fed.R.Evid. 201; Buck v. Hampton Twp. Sch. Dist.,
Some doubt surrounds the specific model number(s) of Maytag washers that are the subject of this action. Only one plaintiff, Reid, is squarely alleged to have purchased model number MVWC6ESWW1, the one actually tested by DOE and found noncompliant. The remaining nine plaintiffs are alleged to have purchased model number MVWC6ESWW*. That asterisk designation leaves some ambiguity as to precisely what model was purchased. (And it may implicitly rest on plaintiffs assertion that three models (not just one) should be considered disqualified, see infra.)
Plaintiffs have invоked judicial notice as to subsequent developments that may significantly alter the basis or scope of their
Plaintiffs have also invoked judicial notice in an attempt to establish that the EPA’s disqualification of model number MVWC6ESWW1 should be deemed to include the MVWC6ESWW0 and MVWC7ESWW0 models (assuming that any plaintiff bought them, which is unclear). In a Joint Status Report, Plaintiffs asserted that this was so “because disqualifications and noncompliance determinations affect all units of the same Basic Model.’ ” Docket No. 54 at 5. In a request for judicial notice, Docket No. 53, Plaintiffs cite a federal regulation, 10 C.F.R. § 430.2, which defines the term “basic model.” Defendants respond that the version of the regulation provided by Plaintiffs has been ineffective since April 6, 2011. Docket No. 62-1 at 3.
I could opine about these legal issues but I am not confident that judicial notice can straighten this out. The briefing has not adequately explored the effect of the amendments to the regulations. And even if I had a clear picture of the law, I,would still lack a clear set of allegations to which to apply that analysis. In short, a properly pleaded complaint must tell the reader which plaintiff purchased exactly which
Were I to update and supplement the allegations of the complaint in the manner suggested, I would be shadowboxing. The better course is to grant the Plaintiffs leave to amend the FAC so they can re-frame their allegations in their currently operative form. Any amended pleading should allege exactly who bought which washer and should plausibly allege how the particular machine was affected by the EPA/DOE noncompliance and disqualification determinations.
IV. DISCUSSION OF THE CLAIMS
In the interests of judicial economy, I will discuss Defendants’ other asserted grounds for dismissal of claims as if I had not entered the blanket dismissal in Part III, supra. My disposition of the other asserted grounds for dismissal of Plaintiffs’ claims may guide the drafting of any amended pleading. I here assume for purposes of discussion that each plaintiff purchased a “mislabeled” washing machine (although only Reid has clearly alleged that he did so).
I note also that the FAC tends to lump all plaintiffs and claims together. Each plaintiff may, for example, sue the retailer from whom she bought the washer under the consumer protection laws of the state where the purchase occurred. As it currently reads, however, the FAC could be interpreted to assert claims by each plaintiff against all defendants under the laws of all eight states. The following discussion proceeds on the assumption that this was not intended. See Section IV.E, infra. In the inevitable Second Amended Complaint, this should be clarified.
A. Breach of Express Warranty (Count II)
I find that the FAC sufficiently alleges that the Energy Star logo constitutes an express warranty, which defendants breached. Any disclaimer in the user manual’s Limited Warranty is ineffective; at any rate, such a disclaimer cannot be presumed effective as a matter of law for purposes of a motion to dismiss.
1. Choice of state law as to privity
I must decide which state’s law applies to each state-law express warranty claim as to each plaintiff-defendant pair. See Gray v. Bayer Corp., Civ. No. 08-4716,
“[I]n a diversity action, a district court must apply the choice of law rules of the forum state to determine what law will govern the substantive issues of a case.” Warriner v. Stanton,
If a conflict exists, the court then moves to the second prong: it must determine “which state has the ‘most significant relationship’ to the claim at issue by weighing the factors” in the applicable section of the Restatement (Second) of Conflict of Laws. For contract claims, the applicable Restatement section is § 188. Gilbert Spruance Co. v. Pennsylvania Mfrs. Ass’n Ins. Co.,
The parties agree that New Jersey law does not require direct privity to support an express warranty claim. Defendants contend that California, Indiana, and Michigan law conflict with the New Jersey no-privity rule because those three states require that a plaintiff stand in direct privity with a defendant to bring a claim of breach of express warranty. See Docket No. 37 at 34 (citing Garcia v. M-F Athletic Co., Inc., No. Civ. 11-2430,
California: No conflict. Privity is not a requirement where the express warranty appears on the product’s label or advertising. “Privity is generally not required for liability on an express warranty because it is deemed fair, to impose responsibility on one who makes affirmative claims as to the merits of the product, upon which the remote consumer presumably relies.” Cardinal Health 301, Inc. v. Tyco Electronics Corp.,
Indiana: No conflict. The Indiana authorities cited by Defendants do not address the privily requirement as it relates to express warranties. And the state’s intermediate court of appeals, reversing summary judgment for defendant, has allowed a purchaser to assert an express warranty claim against a manufacturer despite the absence of privity. Prairie Prod., Inc. v. Agchem Div.-Pennwalt Corp.,
The Sixth Circuit has held that “it seems clear to us that Michigan’s rejection of privity is not limited to tort actions as opposed to actions based on warranty whether express or implied.” Reid v. Volkswagen of Am., Inc.,
Michigan’s intermediate appellate court, writing in 2009, concluded that privity is required:
Our Supreme Court in Piercefield [v. Remington Arms Co., Inc.,375 Mich. 85 ,133 N.W.2d 129 (1965)] and Spence [v. Three Rivers Builders & Masonry Supply, Inc.,353 Mich. 120 ,90 N.W.2d 873 (1958)] considered the issue of privity in the context of implied warranties. Our research has revealed no modern case in' which the Supreme Court has ever held that privity of contract is unnecessary to enforce and express warranty. Indeed, because an express warranty is a term of the contract itself, MCL 440.2313; 1 Hawkland, Uniform Commercial Code Series, § 2-313:2, pp. 526-527, we conclude that privity of contract is necessary for a remote purchaser to enforce a manufacturer’s express warranty.
Heritage Res., Inc. v. Caterpillar Fin. Servs. Corp.,
Heritage Resources is the best guide I can find as to the law of Michigan on this question. I will not disregard this authoritative statement of the Court of Appeals based on more generalized impressions about the “better” view or the “emerging trends” in the law. I conclude that, under Michigan law, an express warranty claim requires privity.
The FAC does not clearly allege that plaintiff McLenna, who purchased a washer from a retail intermediary, was in privity with the manufacturer, Whirlpool. McLenna’s express warranty claim, as against Whirlpool only, is dismissed for lack of privity.
I therefore set aside the Michigan express warranty claims against Whirlpool for purposes of the rest of this discussion. Otherwise, the parties have not identified any other potential conflict as to the elements of an express warranty claim. Accordingly, I find that there is no true conflict between the laws of the various states (except Michigan) as to a claim for breach of express warranty based on a manufacturer’s advertisement. Snyder,
Under New Jersey law, to state a claim for breach of express warranty, “Plaintiffs must properly allege: (1) that Defendant made an affirmation, promise or description about the product; (2) that this affirmation, promise or description became part of the basis of the bargain for the product; and (3) that the product ultimately did not conform to the affirmation, promise or description.” Snyder,
a. Energy Star logo as an affirmation or promise
The New Jersey UCC Section 12A:2-313(1) defines an “еxpress warranty” as:
(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.
(b) Any description of-the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.
(c)Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.
“A statement can amount to a warranty, even if unintended to be such by the seller, ‘if it could fairly be understood ... to constitute an affirmation or representation that the [product] possessed] a certain quality or capacity relating to future performance.’ ” L.S. Heath & Son, Inc. v. AT & T Info. Sys., Inc.,
The FAC alleges that DOE requires that Energy Star-qualified washers exceed certain minimum standards for energy efficiency. In particular, qualified
In an earlier opinion, I distinguished certain cases holding that the Energy Star logo, standing alone, did not support a claim for breach of express warranty. See Avram v. Samsung Elecs. Am., Inc., No. 11-CV-6973 KM,
Applying New Jersey law, I find that the Amended Complaint adequately alleges that the Energy Star logo would be understood by consumers as an affirmation of fact or a promise regarding the energy efficiency of the washing machines — namely, that the machines met the efficiency standards set forth as part of the Energy Star program. The Rossi Court reasoned that it could not “fathom any other reason to affix an Energy Star logo to a product
b. Basis of the bargain and breach
“Under New Jersey law, a representation is presumed to be part of the basis of the bargain ‘once the buyer has become aware of the affirmation of fact or promise’ and can be rebutted by ‘clear affirmative proof that the buyer knew that the affirmation of fact or promise was untrue.’ ” Viking Yacht Co. v. Composites One LLC,
Here, Plaintiffs allege that they saw and relied on the Energy Star labels, that they understood the labels to be a representation and warranty that the machines met the Energy Star program efficiency standards, and that they would not have purchased the machines if they had known the washers did not comply. FAC ¶¶ 29-38. And they allegedly did not comply. FAC ¶ 1 (“In fact, the Mislabeled Washing Machines do not meet the Energy Star standards.”). Those allegations adequately set forth a claim that the warranty was part of the basis of the bargain, and that Defendants breached it.
c. The one-year “Limited Warranty”
Finally, Defendants argue that a written one-year “limited warranty,” confined to the cost of “factory specified parts and repair labor to correct defects in materials or workmanship,” effectively precludes any broader express warranty claim based on Energy Star. Docket No. 37 at 33. The limited warranty, say Defendants, is exclusive, and it operates as a disclaimer of any broader warranty regarding energy efficiency.
A disclaimer of express warranty is qualitatively different from a disclaimer of an implied warranty. The courts have been particularly wary of disclaimers that take away with one hand what was given with the other. Thus a disclaimer of an express warranty must be “clear and conspicuous.” Viking Yacht Co.,
I agree with Plaintiffs that this limited warranty, which does not so much as mention energy efficiency, does not con
To summarize, then, I apply New Jersey law and deny the motion to dismiss the express warranty claims, with one exception. The Michigan express warranty claim of plaintiff McLenna is dismissed as against defendant Whirlpool only, on grounds of lack of privity.
B. Breach of Implied Warranty of Merchantability (Count III)
Defendants argue that the implied warranty of merchantability claims should be dismissed. The motion is granted in part, and the implied warranty claims of plaintiffs Maxwell, Baker, Parsons, and Reid are dismissed as against Whirlpool only. Under applicable Ohio, California, and Florida law, privity is required, and these plaintiffs are not in privity with the manufacturer, Whirlpool (as opposed to the retail seller). The motion is otherwise denied.
1. Choice of law and privity
The parties do not offer a choice of law analysis and generally agree that New Jersey law governs the elements of the implied warranty claims. Defendants do point out, however, that the states’ laws differ as to whether privity is required. The analysis is parallel to, but not identical with, the analysis of express warranty. See Section IV.A.1., supra.
As to privity, the laws of New Jersey, Michigan, Indiana, Texas, and Yir-ginia are similar; privity is not required. As to those five states, the privity issue presents a nonexistent or “false conflict,” wherein “the laws of the jurisdictions would produce the same result on the particular issue presented.” Williams v. Stone,
There is a genuine conflict, however, between the law of New Jersey and that of Ohio, California, and Florida (potentially affecting plaintiffs Maxwell, Baker, Parsons, and Reid). Courts in those three states have held that, under local law, privity of contract is required to assert a claim for breach of implied warranty of merchantability. See McKinney v. Bayer Corp.,
A court that is presented with a genuine conflict must determine “which state has the ‘most significant relationship’ to the claim at issue by weighing the factors” in Section 188 of the Restatement (Second) of Conflict of Laws. Gilbert Spruance Co.,
Those five Restatement factors dictate that the law of the state in which the Plaintiffs purchased their machines (Ohio, California, or Florida) should govern their implied warranty of merchantability claims against the manufacturer, Whirlpool. The Plaintiffs shopped for, purchased, .installed and used their washing machines in their home states. They, live there, and presumably continue to use their washing machines there. Those facts imply that the first four factors favor their home states. The fifth at best balances evenly as between plaintiffs and defendants.
The plaintiffs are plausibly alleged to be in privity with the retailers who sold them the washers, but there is no allegation that any plaintiff is in direct privity with the manufacturer, Whirlpool. Accordingly, the privity requirement of Ohio, California, and Florida law would preclude an implied warranty of merchantability claim against defendant Whirlpool.
The privity requirement of applicable Ohio, California, and Florida law bars the implied warranty claims of Maxwell, Baker, Parsons, and Reid as against defendant Whirlpool. Those claims are therefore dismissed for failure to statе a legal cause of action.
2. Analysis of the Remaining Claims
The rest of the implied warranty claims are not barred by any privity requirement. Maxwell, Baker, and Parsons (whose warranty claims against Whirlpool I have just dismissed) nevertheless may assert implied warranty claims against the retail sellers, with whom they are in privity.
Defendants move to dismiss the implied warranty claims because the FAC fails to allege that the washers were not fit for their “intended and ordinary purpose.” That ordinary purpose, say Defendants, is to clean clothes, not to operate at any particular level of efficiency.
Plaintiffs respond that this appliance had a more particular “ordinary purpose”: it was sold as a high-efficiency washer that would wash clothes in compli-
“[T]he UCC, as adopted by New Jersey, specifically states that an implied warranty of merchantability ensures that goods sold are ‘fit for the ordinary purposes for which such goods are used.’ ” Arlandson v. Hartz Mountain Corp.,
An “ordinary purpose” of a product is one that is central to the product’s value or function. Compare Zabriskie Chevrolet, Inc. v. Smith,
I think that the Energy Star label is more analogous to the core transportation function of the car in Zabriskie, and less analogous to the incidental qualities of the coffeemaker in Green or the soap in Lie-berson. As I noted in Avram,
Plaintiffs argue in the alternative that, even assuming that the washers’ ordinary purpose is limited to cleaning, they still flunk the implied warranty test. That is, they would not “pass without objection in the trade under the contract description,” or “conform to the promises or affirmations of fact made on the container or label,” and that they are not “adequately ... labeled.” Docket No. 47 at 12 (quoting N.J.S.A. § 12A:2-314). In short, according to Plaintiffs, they were not just promised that their clothes would be
The FAC adequately states a claim for breach of the implied warranty of merchantability. The motion to dismiss on these grounds, except as to the claims requiring privity, see Section B.l, above, is denied.
C. Unjust Enrichment (Count IV)
1. Choice of Law
The parties seemingly agree that there is no genuine conflict among the eight states’ laws as to unjust enrichment.
2. Analysis
Under New Jersey law, to state a claim for unjust enrichment, “a plaintiff must allege that (1) at plaintiffs expense (2) defendant received a benefit (3) under circumstances that would make it unjust for defendant to retain benefit without paying for it.” Snyder,
I will dismiss the unjust enrichment claim as against Whirlpool only, because the Plaintiffs conferred no direct benefit on Whirlpool. The requirement that a plaintiff must confer a benefit on the defendant “has been interpreted by New Jersey courts as a requirement that ‘the plaintiff allege a sufficiently direct relationship with the defendant to support the claim.’ ” Snyder,
I find, however, that Plaintiffs have adequately stated unjust enrichment claims as against the defendants other than Whirlpоol. The FAC alleges that Plaintiffs conferred a direct benefit on the retailer-defendants. Plaintiffs allegedly paid those retail defendants “a price premium due to the mislabeling of the washing machines as Energy Star-qualified. They further allege that Defendants have been unjustly enriched by retaining the revenues derived from Plaintiffs’ purchases.” FAC ¶¶ 88, 89. That, I believe, sets forth the elements of an unjust enrichment claim.
Unjust enrichment is a backstop cause of action that often turns out to be superfluous if, for example, a breach of contract is shown. But Plaintiffs plead this claim in the alternative, as they are permitted to do. See Fed.R.Civ.P. 8(d)(2) (“A party may set out two or more statements of a claim or defense alternatively or hypothetically, either in a single count or defense or in separate ones.”) At this stage, it would be premature to dismiss an unjust enrichment claim simply because it may later be eclipsed by some other cause of action. See Palmeri,
The unjust enrichment claims against Whirlpool will be dismissed for failure to state a legal cause of action. As to the other defendants, the motion to dismiss the unjust enrichment claims on these grounds is denied.
D. Magnuson-Moss Warranty Act (Count I)
Magnuson-Moss is “a remedial statute designed to protect the purchasers of consumer goods from deceptive warranty practices.” Miller v. Willow Creek Homes, Inc.,
Plaintiffs allege that the machines are consumer products as defined under 15 U.S.C. Section 3301(1); that Plaintiffs and class members are consumers as defined under Section 2301(3); thаt Defendants are suppliers and warrantors under Section 2301(4), (5); that Defendants issued written warranties as defined under Section 2301(6); and that Defendants violated Plaintiffs and putative class members’ statutory rights under the MMWA when the machines did not meet the energy efficiency requirements of the Energy Star program, as warranted by the Energy Star logo.
As discussed in Sections IV.A and B, above, all of the state-law causes of action for breach of express and implied warranties are legally sufficient, except for the express warranty claim brought by McLenna against Whirlpool and for the implied warranty claims brought by Maxwell, Baker, Parsons, and Reid against Whirlpool. The MMWA claim stands with them, and the motion to dismiss is denied on this ground.
As to Defendants’ second argument, I look to the statutory definition of a “written warranty.” A “written warranty” is:
(A) any written affirmation of fact or written promise njade in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time ...
which ..,( becomes part of the basis of the bargain between a supplier and a buyer for purposes other than resale of such product.
15 U.S.C. § 2301(6).
As discussed above in Section IV.A, the FAC adequately' alleges that the Energy Star logo constitutes a written affirmation of fact relating to the washers’ performance that became part of the basis of the bargain. Accordingly, the FAC states claims under MMWA, and the motions to dismiss Count I for failure to state a legal cause of action are denied.
E. State Consumer Protection Statutes
A Plaintiff may bring state law claims only under the law of the state where he or she lived and the alleged injury occurred. See, e.g., Cooper,
To state a prima facie case under the New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A. § 56:8-1 et seq., a plaintiff must allege three elements: “(1) unlawful conduct by the defendant; (2) an ascertainable loss by the plaintiff; and (3) a causal connection between the defendant’s unlawful conduct and the plaintiffs ascertainable loss.” Bosland v. Warnock Dodge, Inc.,
a. Unlawful conduct
Unlawful conduct under the. NJCFA falls into three general categories: “affirmative acts, knowing omissions, and violation of regulations promulgated under N.J. Stat. Ann. §§ 56:8-2, 56:8-4.” Harnish v. Widener Univ. Sch. of Law, 931 F.Supp.2d
Plaintiffs maintain that they have sufficiently pleaded unlawful conduct by alleging that Whirlpool promoted' the washing machines as Energy Star-compliant and labeled the machines with the Energy Star logo. FAC ¶ 1. In addition, the retailers allegedly “acted with knowledge and approval of Whirlpool and/or as the agent of Whirlpool.” FAC ¶¶ 21, 29-38. In particular, the retailers adopted Whirlpool’s misrepresentations as their own by promoting and selling the machines as Energy Star-compliant. Id. at 8-16, ¶¶29-38.
Defendants’ arguments are by now familiar. They dispute that the Energy Star logo constituted a specific representation of energy efficiency; that Plaintiffs understood such representations;' and that such representations were factually false. See Viking Yacht Co., Inc. v. Composite One LLC,
As I say, the foregoing is sufficient to sustain the claim.
“A plaintiff must allege the ‘who, what, when, where, and how’ of’ a NJCFA claim. Crozier v. Johnson & Johnson Consumer Companies, Inc.,
b. Ascertainable loss and causation
“New Jersey courts have been chary to ascribe the term [ascertainable loss] a precise meaning.” Arcand v. Brother Int'l Corp.,
Accordingly, a plaintiff must allege that a misrepresentation induced an objectively reasonable expectation about a product and that this expectation was not met. Smajlaj,
Here, Plaintiffs allege that, in the belief that the washer was Energy Star-compliant, they paid a premium price. Because the washer is not in fact Energy Star-compliant, they pay higher electricity bills. As Plaintiffs allege, the “fundamental bargain” of the Energy Star program is that “consumers pay a higher up-front price initially but save more on energy bills.” FAC ¶ 2. It is thus plausible to assert that the value of that bargain would be subverted by a false statement that a washer is Energy-Star compliant.
The FAC alleges facts that would allow the Court to quantify a difference in value and even suggests a means to calcu
Finally, I consider whether the FAC adequately pleads a causal nexus between the unlawful conduct and ascertainable loss. Plaintiffs saw the Energy Star logo before and at the time of purchase, understood the logo to signify that the machine was compliant with Energy Star standards, and purchased the machine at a premium with the understanding that they would save in energy costs over time. The machines allegedly did not comply with Energy Star standards and, as a result, Plaintiffs paid a price premium for the machines and increased energy costs. That is a sufficient allegation of causation.
Accordingly, the New Jersey purchasers, Dzielak and Angelone, have stated a claim under the NJCFA.
2. California Consumer Protection Statutes
a. Consumer Legal Remedies Act
California’s Consumer Legal Remedies Act (“CLRA”) prohibits “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” Cal. Civ.Code § 1770(a). Conduct that is “likely to mislead a reasonable consumer” violates the CLRA. Colgan v. Leatherman Tool Grp., Inc.,
The CLRA provisions cited by Plaintiffs are:
(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he or she does not have.
(7) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another.
(9) Advertising goods or services with intent not to sell them as advertised.
Cal. Civ.Code § 1770(a)(5), (7), (9).
Defendants first argue that the Energy Star logo contains no specific representation regarding a machine’s relative energy use or efficiency. I disagree. As previously discussed, see IV.A.2, supra, Plaintiffs have sufficiently pleaded that the Energy Star logo represents that a machine is compliant with the program requirements with regard to energy use and efficiency. See Rossi
Defendants also submit that the FAC fails to allege that Defendants knew the washers were non-compliant at the time of sale, and that any knowledge attributable to Whirlpool should not be attributed to the retailer-Defendants. “California federal courts have held that under the CLRA, plaintiffs must sufficiently allege that a defendant was aware of a defect at the time of sale to survive a motion to dismiss.” Rossi,
Plaintiffs argue that the FAC allegations fall within Rossi Thus Baker purchased her machine on December 1, 2010, seventy-two days after DOE notified Whirlpool that the appliance failed testing on September 20, 2010. FAC ¶¶ 37, 40. The same cannot be said for Maxwell, who purchased his machine on November 27, 2009, before Springboard Engineering ever completed DOE efficiency testing of the Maytag machine. FAC ¶ 39. Therefore, Maxwell’s CLRA claim must be dismissed.
Plaintiffs argue that “from the allegations of the Complaint it can be inferred” that Defendants tested washers and knew . they were non-compliant, or else that they failed to perform adequate testing. Docket No. 47 at 20. I will not “infer” what is not properly pleaded.
Finally, I will address Defendants’ contention that any knowledge possessed by Whirlpool cannot be attributed to the retailer-Defendants. Here, Plaintiffs allege
The CLRA claim of Maxwell is dismissed. The motion to dismiss the CLRA claim of Baker for failure to state a claim is denied.
b. Unfair Competition Law
The Unfair Competition Law (“UCL”) prohibits acts or practices that are: (1) unlawful; (2) fraudulent; or (3) unfair. Cal. Bus. & Prof.Code § 17200. Each prong of the UCL constitutes a separate and distinct theory of liability. Kearns v. Ford Motor Co.,
Plaintiffs allege that Defendants violated each of the three UCL prongs. Defendants argue that Plaintiffs fail to allege facts supporting any of the three prongs and, accordingly, move to dismiss the claim in its entirety.
The fraudulent practice prong of the UCL “has been understood to be distinct from common law fraud.” In re Tobacco II Cases,
As discussed above, the FAC allegеs that the Energy Star logo carries with it a representation that the washing machine meets certain energy efficiency standards, a representation that was not
Accordingly, the allegations of fraudulent conduct “likely to deceive” the public are adequate. The motion to dismiss the UCL claim for failure to state a cause of action will therefore be denied.
c. False Advertising Law
Plaintiffs also allege that Defendants’ misrepresentations about the washing machines’ Energy Star compliance violate California’s False Advertising Law (“FAL”). The FAL provides that it is:
unlawful for any person ... to make or disseminate or causé to be made or disseminated before the public in this state ... in any advertising device ... or in any other manner or means whatever, including over the Internet, any statement, concerning ... personal property or services, professional or otherwise, or performance or disposition thereof, which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.
Cal. Bus. & Prof.Code § 17500.
Defendants contend that the FAC fails to identify with particularity “specific advertisements, when and where they were shown, [and] how they were untrue or misleading.” Docket No. 37 at 17-18 (quoting In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Television Litig.,
Brian Maxwell allegedly purchased his washing machine at a Fry’s Electronics retail store in Roseville, California on November 27, 2009. FAC ¶ 30. Plaintiff Shelly Baker purchased her machine at a Sears retail store in Ontario, California, on December 1, 2010. Id. ¶ 37. Each alleges that the machine bore the Energy Star logo in two places, that he or she saw the logo, that he or she understood it to be a representation by the manufacturer and retailer that the washer met Energy Start standards of energy efficiency, and that the washer was not, in fact, Energy Star compliant. Id. ¶ 1.
The Rossi Court found similar pleadings to be sufficient to state a claim under the FAL. Rossi,
The Michigan Consumer Protection Act (“MPCA”) proscribes thirty-seven discrete acts. Mich. Comp. Laws § 445.903. To state a claim under the MPCA, a complaint must identify which proscribed act or acts the defendant has allegedly committed. The FAC alleges that, through “misleading and deceptive statements and false promises,” Defendants violated the MPCA by misrepresenting the energy efficiency of the washing machines “after learning of the defects with the intent that Plaintiffs relied on such representations in their decision re-
Defendants submit that the claim fails because the Complaint contains no factual allegations that Plaintiff McLenna’s washer is primarily used for “personal, family, or household services,” as required by Mich. Comp. Laws § 445.902(g). The FAC does, however, allege that the washer is a “consumer product” as defined under 15 U.S.C. § 2302(1). Moreover, the natural inference raised by this ordinary retail purchase of a single- unit by a private individual is that McLenna bought the washer for home use.
Defendants argue with more force that the FAC fails to specify any particular MCPA section that Defendants allegedly violated. Plaintiffs concede this, but contend that the FAC alleges violations of CLRA § 1770(a)(5) and § 1770(a)(7), “which are identical to Mich. Comp. Laws § 445.903(c) and § 445.903(e).” They also attempt to supplement their allegations in their briefs.
The FAC fails to state a claim under the MCPA with the required specificity. See Muneio v. Fed. Nat. Mortgage Ass’n, 09-12973,
The Court will not draw on statement in briefs or make unwarranted inferences to remedy deficient pleadings. Supplementation of the existing allegations must be done, if anywhere, in an amended pleading. The motion to dismiss the MCPA claims is granted on this basis.
4. Florida’s Deceptive and Unfair Trade Practices Act
I find that Reid has adequately stated a claim under Florida’s Deceptive and Unfair Trade Practice Act (“FDUT-PA”) Fla. Stat. § 501.204(1). Such a FDUTPA claim has three elements: (1) a deceptive or unfair practice; (2) causation; (3) actual damages. Defendants maintain that Plaintiffs have failed to plead these elements. Rollins, Inc. v. Butland,
a. Reid’s standing to pursue a FDUPTA claim
Defendants argue that Plaintiff Reid lacks standing because he fails to allege that he bought the machine in Florida. The FAC alleges that Reid “resides in Tampa, Florida,” and purchased the machine “from a nearby Air Force base.” FAC ¶¶ 38, 10. I take judicial notice that Tampa is 200 miles from the Georgia border and that there is an air force base four miles from Reid’s home. Reading the Complaint in the light most favorable to the non-moving party, I will deny the motion to dismiss on this.basis.
Defendants also contend that the FAC fails to allege that Defendants employed a deceptive or unfair act. Under the FDUTPA, a deceptive act is one that is “likely to mislead a consumer acting reasonably,” Zlotnick v. Premier Sales Grp.,
A deceptive act occurs when “there is a representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s detriment.” Gavron v. Weather Shield Mfg., Inc.,
For the reasons amply set forth above, the mislabeling of the washers would be likely to mislead a reasonable •consumer about the energy efficiency of the washers. See Zlotnick v. Premier Sales Grp.,
c. Actual damages
Defendants argue that Plaintiffs fail to allege actual damages. As discussed above in the context of other claims, the FAC adequately alleges that plaintiffs paid a price premium for an Energy Star certified washer, and paid higher energy bills because the machine did not in fact comply with efficiency standards. That is enough.
The motion to dismiss the FDUTPA claims is denied.
5. Ohio Consumer Sales Practices Act
Plaintiff Parsons brings a claim under the Ohio Consumer Sales Practices Act (“OCSPA”), which prohibits suppliers from committing “an unfair or deceptive act or practice in connection with a consumer transaction.” Ohio Rev.Code Ann. § 1345.02. That statute requires a showing of a material representation, deceptive act, or omission that affected a plaintiffs decision to purchase an item. Temple v. Fleetwood Enters., Inc.,
The viability of the class claim is better addressed at the class certification stage. The parties will then be asked to address, inter alia,' the effect of OCSPA’s limita
Defendants, here as elsewhere, contend that the Energy Star logo makes no specific representation to energy efficiency and that the FAC does not identify specific, relevant marketing statements. They cite Savett v. Whirlpool Corp., which held that the Energy Star logo was not specific enough to constitute an express warranty under Ohio law: “[T]he logo itself contains no assertion of fact or promise. Unlike traditional express warranties where unambiguous promises or factual assertions are made, which are clearly understood on their own footing, any meaning conveyed by the logo requires independent knowledge.”. Savett, 12 CV 310,
Savett itself appears to have at least tacitly acknowledged the limits of that rationale when it turned to an individual plaintiffs rescission claim under the OCS-PA. Savett dismissed that OCSPA claim, not because the Energy Star logo is not a representation, but on the following basis: “[P]laintiff fails to allege that he saw the ENERGY STAR logo or any advertisement at any point. Nor does he allege that he had any understanding of the meaning of the ENERGY STAR logo. Absent such allegations, the Court finds that plaintiff fails to state an individual claim for rescission under the .OCSPA.” Id. at *6
Savett is not persuasive here, because the allegations “absent” in that case are present here. The FAC alleges that each Plaintiff, including Parsons, saw the Energy Star label around the time of purchase. FAC ¶¶ 29-38. Each understood the logo “as a representation and warranty ... that the machine met the standards of energy efficiency established by the Energy Star program, and that the machine would help him maximize his energy savings while helping to protect the environment.” Id. Each is alleged to have relied on those representations when purchasing the machines. Id. Unlike the Savett plaintiff, Cohen allegedly “saw” and “understood” the “purported meaning” of the logo. Savett, 12 CV 310,
Plaintiff Cohen’s allegations sufficiently make a “showing of a material representation ... that impacted” his “decision to purchase the item at issue.” See Temple,
6. Indiana Deceptive Consumer Sales Act
Plaintiff Beyer asserts a claim under the Indiana Deceptive Consumer Sales Act (“IDCSA”),
The FAC alleges that Defendants violated the statute by nondisclosure and active concealment of the washers’ failure to meet Energy Star standards. Accordingly, it alleges, “Defendants engaged in unlawful trade practices,” including representations that the machines have qualities that they do not have. FAC at 39.
a. Failure to Plead with Particularity.
First, Defendants submit that Plaintiffs have failed to plead any misconduct with the requisite particularity under Fed.R.Civ.P. 9(b). Relatedly, they contend that the statute requires an oral or written act or representation, and that the FAC alleges only non-disclosures, which are not actionable. See Lawson,
Plaintiffs respond that the allegations of the FAC fall within the following portions of Indiana Code subsection 24-5-0.5-3:
(a) The following acts or representations as to the subject matter of a consumer transaction, made either orally or in writing by a supplier, are deceptive acts:
(1) That such subject of a consumer transaction has sponsorship, approval, performance, characteristics, accessories, uses, or benefits it does not have which the supplier knows or should reasonably know it does not have.
(2) That such subject of a consumer transaction is of a particular standard, quality, grade, style, or model, if it is not and if the supplier knows or should reasonably know that it is not.
(7) That the supplier has a sponsorship, approval, or affiliation in such ■ consumer transaction the supplier does not have, and which the supplier knows or should reasonably know that the supplier does not have.
b) Any representations on or within a product or its packaging or in advertising or promotional materials which would constitute a deceptive act shall be the deceptive act both of the supplier who places such representation thereon or therein, or who authored such materials, and' such other suppliers who shall state orally or in writing that such representation is true if such other supplier shall know or have reason to know that such representation was false.
Ind.Code Ann. § 24-5-0.5-3.
Beyer contends that he relied on alleged affirmative misrepresentations as to the energy efficiency and Energy Star compliance of the machines; nondisclosures of certain information are not essential to his claims. In short, he does not allege an omission, but instead alleges an affirmative misrepresentation. As discussed above, see Section IV.E.l.a, I find that such allegations are sufficient and I will not dismiss on this ground.
Defendants argue that Plaintiffs have failed to plead an “incurable” or “uncured” deceptive act as required under the statute.
As to an “incurable” act, the FAC bases its claim of “intent to deceive” on the following allegations: “Defendants were first notified on September 20, 2010 that the Mislabeled Washing Machines failed to meet Energy Star standards.” Docket No. 47 at 27 (citing FAC ¶ 40). Despite this notification, “Defendants did not recall the Mislabeled Washing Machines.” And Defendants thereafter “knowingly sold the Washing Machine to Plaintiff Baker with intent to defraud after receiving notice of the noncomplianee.” Id. Baker, howevep, is not Beyer; Baker is the California plaintiff who did indeed buy the washer after September 20, 2010. Beyer, in Indiana, bought his washer at a Sears retail store on March 18, 2010, long before the September 20, 2010 notification. Id. ¶ 36. Any intent to deceive with respect to Beyer’s purchase cannot rest on the September 20, 2010 notification, which occurred afterward. The FAC does not otherwise specifically allege that the relevant Defendants knew or should have known of the defect at the time of Beyer’s purchase. It fails to allege the required intent to deceive, and therefore fails to allege a deceptive incurable act as defined under the Indiana statute.
As to the “uncured” deceptive act claim, the FAC alleges that Defendants failed to correct the defect after receiving notification in September 2010, but instead “reached an informal agreement with the EPA.” Plaintiffs were not given notice of this agreement or of the noncompliance. Docket No. 47 at 27 (citing FAC ¶ 45).
Here, Beyer’s failure to allege that he provided notice to Defendants is fatal to his claim. An “uncured deceptive act” under the statute is specifically defined as a deceptive act
(A) with respect to which a consumer who has been damaged by such act has given notice to the supplier under section 5(a) of this chapter; and
(B) either:
(i) no offer to cure has been made to such consumer within thirty (30) days after such notice; or
(ii) the act has not been cured as to such consumer within a reasonable time after the consumer’s acceptance of the offer to cure.
Ind.Code Ann. § 24-5-0.5-2. Furthermore, Section 5(a) states that:
No action may be brought under this chapter ... unless (1) the deceptive act is incurable or (2) the consumer bringing the action shall have given notice in writing to the supplier within the sooner of (i) six (6) months after the initial discovery of the deceptive act, (ii) one (1) year following such consumer transaction, or (iii) any time limitation, not less than thirty (30) days, of any period of warranty applicable to the transaction, which notice shall state fully the nature of the alleged deceptive act and the actual damage suffered therefrom, and unless such deceptive act shall have become an uncured deceptive act.
Ind.Code Ann. § 24-5-0.5-5.
The FAC does not allege that Plaintiff Beyer complied with the statutorily-mandated notice provision. See Jasper v. Abbott Labs., Inc.,
The motion to dismiss the IDCSA claims for failure to state a legal cause of action is granted.
7. Texas Deceptive Trade Practices Act
The Texas Deceptive Trade Practices Act (“TDTPA”), Tex. Bus. & Com. Code § 17.41-17.63, has three essential elements: (1) the plaintiff is a consumer; (2) the defendant violated a specific provision of the TDTPA; and (3) the defendant’s violation caused damages to the plaintiff. The statute specifically allows a plaintiff to pursue a claim under the TDTPA for a breach of an express or implied warranty, as well as for an “unconscionable act.” See Brittan Communications Int’l Corp. v. Sw. Bell Tel. Co.,
The FAC alleges that “Defendants engaged in false, misleading, and deceptive practices,” in violation of TDTPA. FAC ¶ 174. Cohen, individually and on behalf of the putative Texas subclass, alleges that Defendаnts made misrepresentations as to the Energy Star compliance of the washing machine purchased. He also alleges that Defendants breached express and implied warranties to Cohen and the subclass, and are therefore liable under Sections 17.50(a)(2) and 17.50(b) of the TDTPA. Finally, he alleges that Defendants violated the TDTPA because their actions constitute “an unconscionable action or course of action” under § 17.50(a)(3) of the TDTPA. FAC ¶ 179. a. Statute of limitations
Defendants argue that these claims are barred by the applicable statute of limitations. A TDTPA claim must be brought within two years from the date of the false, misleading, or deceptive act “or within two years after the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading, or deceptive act or practice.” Tex. Bus. & Com.Code Ann. § 17.565. Cohen purchased the machine from Home Depot on November 28, 2009. FAC ¶ 31. This action was filed more than two years later, on January 5, 2012. The parties therefore agree that the claim is time-barred unless the “discovery rule” exception applies.
The discovery rule acts to defer “accrual of certain causes of action until the plaintiff knew or exercising reasonable diligence should have known of the wrongful act causing injury.” Salinas v. Gary Pools, Inc.,
Plaintiffs respond first that the discovery rule — not a common law doctrine but an explicit element of the Texas statute — always applies to TDTPA claims. See Salinas v. Gary Pools, Inc.,
That is true as far as it goes, but I think a complaint must still put the defendant on notice that the accrual of the cause of action is potentially delayed under the circumstances of the particular case. Plaintiff Cohen replies that the FAC does just that. It alleges that Whirlpool learned of the DOE’s determination of noncompliance on September 20, 2010, but provided consumers with “no notice of ... the Mislabeled Washing Machines’ noncompliance with the Energy Star standard.” FAC ¶¶ 40, 45. The allegation is that Defendants gave no actual notice, and the facts pleaded do not suggest that Plaintiffs, through the exercise of reasonable diligence, should have discovered on their own that the washers were not Energy Star-compliant.
I therefore agree with Plaintiffs that the discovery rule should apply to this TDTPA claim, and that the TDTPA claims cannot be dismissed on statute of limitations grounds based on the face of the FAC.
b. Adequacy of the Breach of Warranty and Unconscionable Action Allegations
Under the TDPTA, Tex. Bus. & Com. Code Ann. § 17.50(a)(2), a plaintiff may pursue a claim under the TDTPA for breach of an express or implied warranty. Defendants argue that the TDTPA claim must be dismissed because the underlying breach of express and implied warranty claims must be dismissed. I have already found that the FAC adequately plead express and implied warranty claims, see Sections IV.A & B, supra, so the premise of this argument fails.
c. Failure to provide pre-litigation notice
At least 60 days before filing a suit for damages under the TDTPA, a consumer provide a putative defendant with written notice advising the defendant of the nature of the suit and the amount of any damages and expenses. See Tex. Bus 8b Com. Code Ann. § 17.505(a).
The Fifth Circuit has held that a plaintiff “has the burden to plead and prove compliance with this notice requirement .... ” Keith v. Stoelting, Inc.,
The parties dispute whether Cohen’s claims were already barred by the statute of limitations when he filed the complaint (rendering the 60-day grace period moot). Cohen purchased his washer on November 28, 2009. He filed his complaint against Home Depot on February 16, 2012, more than two years later. But he maintains that the statute of limitations did not being to run until May 7, 2012, the date the washing machines were formally disqualified.
The dispute is not consequential. Cohen does not assert that pre-suit notice was ever tendered, whether sixty days before or sixty days after the Plaintiffs filed suit.
The question of a remedy remains. The Supreme Court of Texas confirms that, under the TDTPA, pre-suit notification is a prerequisite to a DTPA action for damages. Hines,
Serious consequences, it turns out, may be easily averted. As Cohen points out, the TDTPA states that failure to provide pre-suit notice is grounds for abatement, not for automatic dismissal. See id. § 17.505(d). In Hines, supra, the Supreme Court of Texas held that “[w]hen a plaintiff fails to comply with the requirement, abatement of the action for the statutory notice period is more consistent with the purpose of notice,” which is to encourage settlement and discourage litigation.
I find, moreover, that Defendants have waived their objection to the lack of notice by failing to make a “timely request for abatement.” Soto v. Vanderbilt Mortgage, CIV.A. C-10-66,
If a plaintiff files an action for damages under the DTPA without first giving the required notice and a defendant timely requests an abatement, the trial court must abate the proceedings if it determines that notice was not provided as required. [Tex. Bus. 8b Com.Code] § 17.505(c), (d) (Vernon 2002). To be timely, the request for an abatement must be filed not later than the 30th day after the date the person files an original answer. Id. § 17.505(c). A defendant who fails to make a timely request for abatement waives his objection to the lack of notice. Hines v. Hash,843 S.W.2d 464 , 469 (Tex.1992).
Y2K Enterprises, Inc. v. Garriere, 01-06-00476-CV,
Accordingly, for all of these reasons, I will deny the motion to dismiss the TDTPA claim on the basis of failure to provide pre-suit notification.
CONCLUSION
For the reasons stated above, Defendants’ Motions to Dismiss are GRANTED IN PART and DENIED IN PART. Because the Court cannot conclude at this stage that amendment would be futile, such dismissals are without prejudice, and Plaintiffs are GRANTED leave to amend their First Amended Consolidated Complaint. Plaintiffs shall have 40 days from the filing of this Opinion and accompanying Order to file an amended pleading, which should be deemed the Second Amended Complaint. Defendants will have 30 days thereafter to respond via answer or dispositive motion. An appropriate order follows.
Notes
. Whirlpool is a Delаware corporation with its principal place of business in Benton Harbor, Michigan; Lowe’s is a North Carolina corporation with its principal place of business in Mooresville, North Carolina; Sears is a Delaware corporation with its principal place of business in Hoffman Estates, Illinois; The Home Depot is a Delaware corporation with its principal place of business in Atlanta, Georgia; Fry’s Electronics is a California corporation with its principal place of business in San Jose, California; and ARCA is a Minnesota corporation with its principal place of business in Minneapolis, Minnesota. FAC ¶¶ 4-6.
. Via stipulation, Plaintiffs voluntarily dismissed Lowe’s Companies, Inc., a party named in the First Amended Complaint. Docket No. 63. Lowes Home Center, a wholly owned subsidiary of Lowe’s Companies, Inc., agreed to be substituted as a named defendant in the case, as it is responsible for the sale of the appliances at issue in this action. Id.
. The original complaint, filed January 1, 2012, Dzielak, et al. v. Whirlpool Corp., et al., No. 12-cv-0089, alleged claims against Whirlpool, Sears, and Lowe's. Docket No. 1. Those Defendants proposed to consolidate Dzielak with a related case, Angelone v. Whirlpool Corporation, et al., 12-cv-1039. Home Depot, a defendant only in Angelone, consented to the consolidation. Docket No. 28. On April 30, 2012, Plaintiffs filed the First Amended Consolidated Complaint (i.e., the FAC that is the subject of these' motions to dismiss). The FAC includes claims against defendants Home Depot, Frye’s Electronics, and ARCA, in addition to the defendants originally named in the unconsolidated Dzielak case. Docket No. 29. ARCA has not, to date, filed a motion to dismiss, and it does not appear to have been served.
.Plaintiffs allege that MVWC6ESWW1 is the “basic model” machine. According to Plaintiffs, MVWC6ESWW1 adds an EMI/RFI filter to reduce electrical and radio interference, while MVWC7ESWW0 adds a glass top for cosmetic purposes. The interior and exterior parts are otherwise virtually identical and the machines have identical energy usage, water usage, and load capacity. The three models share the same motor, cabinet, electric wiring, control knobs, timer knobs, wash basket, agitator, drive tube, pump, and clutch. FAC ¶ 2, n. 1.
. Those state consumer fraud statutes are: New Jersey Consumer Fraud Act, N.J.S.A. § 56:8-1; California Cоnsumer Legal Remedies Act, Civil Code § 17200 et seq.; California Unfair Competition Law, Bus. & Prof. Code § 17200 et seq.; California False Advertising Law, Business and Professions Code § 17500 et seq.; Michigan Consumer Protection Act, Mich. Comp. Laws § 445.901 et seq.; Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq.; Ohio Consumer Sales Practices Act, Ohio Rev.Code Ann. § 1345.01 et seq.; Indiana Deceptive Consumer Sales Act, Ind.Code Ann. § 24-5-0.5-1 et seq.; and Texas Deceptive Trade Practices Act, Tex. Bus. Com.Code § 17.41 et seq.
. The allegations of the .Complaints have not yet been tested by any fact finder. Solely for the purpose of analyzing the Rule 12(b)(6) motions, the Court, as it must, assumes their truth.
. This exhibit is a public document, seemingly created by the DOE and EPA and accessible on the federal government’s Energy Star website. See www.energystar.gov/ia/partners/ downloads/DisquaIified_Non-Lighting_ Products.pdf.
. The current version of 10 C.F.R. § 430.2 (eff. May 21, 2014) defines “basic model” as follows:
“Basic model means all units of a given type of covered product (or class thereof) manufactured by one manufacturer, having the same primary energy source, and which have essentially identical electrical, physical, and functional (or hydraulic) characteristics that affect energy consumption, energy efficiency, water consumption, or water efficiency.
Plaintiffs have requested that the Court take judicial notice of a prior version of the regulation; which defines basic model as follows:.
Basic model means all units of a given type of covered product (or class thereof) manufactured by one manufacturer and — ... (10) With respect to clothes washers, which have the same primary energy source, which have electrical characteristics that are essentially identical, and which do not have any differing physical or functional characteristics that affect energy consumption.
This version appears to have been effective from January 18 through April 5, 2011.
.Plaintiffs also submit a screen shot of the homepage of the Energy Star website and a copy of "National Awareness of Energy Star for 2011: Analysis of CEE Household Survey.” The intent seems to be to support Plaintiffs express warranty claim that the energy star logo, standing alone, signifies certаin specific representations regarding energy efficiency.
. Before going forward, I briefly address Defendants’ argument that the claims for both breach of express warranty and breach of implied warranty of merchantability must be dismissed for failure to provide pre-suit notice. Pre-litigation notice, a requirement of New Jersey, Florida, Indiana, Michigan, Ohio, Texas, and Virginia law, would potentially affects Plaintiffs Dzielak, Angelone, Reid, Beyer, McLenna, Parsons, Cohen, and Schramm.
Plaintiffs maintain that two Plaintiffs, Baker and Maxwell, provided notice to Whirlpool (and Sears, in the case of Baker) in letters attached to the Complaint. Plaintiffs main
For purposes of a motion to dismiss (and because the issue might be better handled in connection with an amended pleading, on summary judgment, or at the class certification stage), I find the allegation of notice adequate.
. Defendants argue that the limited warranty is relied on by Plaintiffs in the Amended Complaint and is, therefore, properly before the Court on these motions. Plaintiffs do not appear to contest this point. It is worth noting that the paragraphs Defendants refer to (FAC ¶¶ 62-75) do not appear to rely on the limited warranty, but instead rely on what Plaintiffs allege to be the express warranty invoked here-the Energy Star logo. If the limited warranty is not referred to in the Amended Complaint, it would not ordinarily be considered as part of a motion to dismiss. I nevertheless consider it here and find it ineffective to the extent that Defendants argue that the limited warranty precludes the finding of an express warranty.
. Defendants cite Cooper v. Samsung Electronics Am., Inc.,
. Whatever special circumstances may undermine the privity requirement as to an express warranty made by the manufacturer, see IV.A.l, supra, are not urged here with regard to implied warranty.
. Plaintiff Reid, who purchased the washer on a military base, does not sue any retailer, but only the manufacturer, Whirlpool.
. Defendants note, however, that by analyzing this claim under New Jersey law, they do not intend to waive any argument that another jurisdiction’s law should apply to the non-New Jersey Plaintiffs.
. Plaintiffs argue that only implied warranty claims are dependent on state law, while express warranty claims under the MMWA can be brought independent of state law. The issue is not consequential to my denial of the motion to dismiss; one way or the other, the FAC states a claim.
. "Consumer product” is defined as any tangible personal property which is distributed in commerce and which is normally used
. The reason for this approach should be clear. Article III standing requires that a plaintiff demonstrate that he or she suffered an " ‘injury in fact,’ that the injury is ‘fairly traceable’ to the actions of the defendant, and that the injury will likely be redressed by a favorable decision.” Conte Bros. Auto., Inc. v. Quaker State-Slick 50, Inc.,
Thus, in Hemy v. Perdue Farms, Inc.,
To be sure, courts have sometimes sidestepped Article III standing questions when simultaneously faced with dispositive class certification issues. See Amchem Prods. Inc. v. Windsor,
“Amchem and Ortiz stand for the proposition that, in cases where a court is presented with class certification and Article III standing issues simultaneously, and the class certification issues are dispositive in that they pertain to statutory standing — i.e. whether a statute authorizes a given party to sue in the first place, the certification issues are "logically antecedent” to the standing issues and the court may therefore elect to address the certification issues first in the interest of judicial restraint.”
. Dzielak and Angelone are deemed to have asserted this NJCFA claim against Whirlpool, Lowe's, and Home Depot.
. The statute provides that
The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice.
N.J. Stat. Ann. § 56:8-2.
. The subsequent disqualification of model number MVWC6ESWW1 on May 7, 2012 lends additional plausibility, but is not necessary.
. There are certain arguments in the alternative that the Court need not address at this time.
Plaintiffs assert that the unlawful conduct prong is satisfied because Defendants are in violation of pertinent New Jersey regulations. Docket No. 47 at 15.
Defendants assert that Plaintiffs have not alleged with specificity the marketing and 'promotional efforts (other than the Energy Star label) on which they rely. I agree that Plaintiffs cannot base their unlawful conduct allegation on "general statements and advertising” regarding the Energy Star program or the machines' energy efficiency unless they tie those representations to the Plaintiffs and their buying decisions. See Lieberson,
. And, of course, unqualified is not the same • as unquantifiable. “The amount of the price premium can be reasonably quantified by an appropriate market study of the prices for comparable washing machines sold with and without the Energy Star logo, or through a contingent variation study, or through other means regularly employed by economic and valuation experts.” FAC ¶ 46.
. The California consumer protection statutory claims may properly be brought by Cali-purchasers Baker and Maxwell against Whirlpool, Sears, and Fry's Electronics.
. Compare Rossi, where Plaintiffs specifically pleaded:
As such, Whirlpool either (a) tested the Mislabeled Refrigerators before marketing them and, at all times relevant hereto, knew that the models were non-compliant with the requirements of the ENERGY STAR® program or, in the alternative (b) affixed ENERGY STAR® labels to the Mislabeled Refrigerators without testing them, and thus knew the representation concerning their energy efficiency was baseless. This information is solely within Whirlpool's possession.
Rossi,
. McLenna, a Michigan plaintiff, may assert this claim against Whirlpool and Home Depot.
. Plaintiffs also allege that Defendants violated "the EPCA, NECPA, NAECA, and regulations promulgated thereunder FAC ¶¶ 25, 108. Defendants argue that Plaintiffs do not state a claim because these statutes do not impose an obligation on Defendants regarding the use of the Energy Star logo. I do not reach this issue, as I find that Plaintiffs have sufficiently alleged a deceptive act under the FDUPTA.
. Parsons, on Ohio purchaser, may properly bring this claim against Whirlpool and ARCA. As noted above, however, it does not appear that ARCA has been properly served. In any event, ARCA has not moved to dismiss the claims brought against it.
Defendants also move to dismiss an Ohio Deceptive Trade Practices Act claim because it does not j to consUmer transactions. . ,.™ , , , . . , Plaintiff has. conceded the point and withdrawn this claim. Docket No. 47 at 26 n. 9. Accordingly, the Ohio Deceptive Trade Practices Act is dismissed.
.Defendants acknowledge that there is a split of authority as to whether Rule 9(b) or ordinary Rulе 8 pleading standards apply to these claims. My decision does not turn on the distinction, as it would be the same under either standard.
. Beyer, an Indiana purchaser, may properly bring this claim against Whirlpool and Sears.
. Various sections of the IDCSA were recently amended by the Indiana Legislature. These amendments are effective as of July 1,
. Cohen, a Texas purchaser, may properly bring this claim against Whirlpool and Home Depot.
. A TDPTA claim may also be sustained by a showing on an "unconscionable action,” which is defined as "an act or practice which, to a consumer’s detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.” Tex. Bus. & Com.Code Ann. § 17.45(5). Having determined that the breach of express and breach of implied warranty claims are sufficient to sustain this claim, I do not reach the issues as to an unconscionable act.
. Specifically, this provision provides that:
(a) As a prerequisite to filing a suit seeking damages under Subdivision (1) of Subsection (b) of Section 17.50 of this subchapter against any person, a consumer shall give written notice to the person at least 60 days before filing the suit advising the person inreasonable detail of the consumer’s specific complaint and the amount of economic damages, damages for mental anguish, and expenses, including attorneys' fees, if any, reasonably incurred by the consumer in asserting the claim against the defendant. During the 60-day period a written request to inspect, in a reasonable manner and at a reasonable time and place, the goods that are the subject of the consumer’s action or claim may be presented to the consumer.
Tex. Bus. 8b Com.Code Ann. § 17.505.
. In full, the provision provides:
(b) If the giving of 60 days’ written notice is rendered impracticable by reason of the necessity of filing suit in order to prevent the expiration of the statute of limitations or if the consumer’s claim is asserted by way of counterclaim, the notice provided for in Subsection (a) of this section is not required, but the tender provided for by Subsection (d), Section 17.506 of this subchapter may be made within 60 days after service of the suit or counterclaim.