CASSANDRA GESKE, on behalf of herself and all others similarly situated, v. PNY TECHNOLOGIES, INC.,
Case No. 19-cv-05170
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
November 30, 2020
Hon.
PageID #:349
MEMORANDUM OPINION AND ORDER
This case involves a weak power bank. Plaintiff Cassandra Geske bought a portable power bank at the grocery store so that she could charge her electronic devices on the go. She purchased a PowerPack 5200, manufactured by Defendant PNY Technologies. The packaging prominently declared that it offered “5200 mAh” of available power for “3x CHARGES*.” She thought that the power bank would deliver “5200 mAh” of power to her cell phone.
But the power bank was not as powerful as she had expected. She had to recharge the power bank more often than she thought. She later discovered that the power bank was never capable of delivering 5200 mAh of power at all. The power bank itself consumes a significant portion of the power. So PNY charges too much for a product that charges too little.
Geske sued PNY on behalf of herself and a putative class of purchasers of PNY power banks. She claims that PNY misrepresented the power of its products. She alleges an economic injury measured by the difference in value between the product as promised and the product as delivered. She seeks an injunction, too, even though there is no reason to believe that she is going to buy another weak power bank.
PNY moved to dismiss for lack of standing, and for failure to state a claim for which relief can be granted. For the reasons explained below, the motion is granted in part and denied in part.
Background
At the motion to dismiss stage, the Court must accept as true the well-pleaded allegations of the complaint. See Lett v. City of Chicago, 946 F.3d 398, 399 (7th Cir. 2020). The Court “offer[s] no opinion on the ultimate merits because further development of the record may cast the facts in a light different from the complaint.” Savory v. Cannon, 947 F.3d 409, 412 (7th Cir. 2020).
Portable electronic devices, especially cell phones, are omnipresent in modern American life. See Am. Cplt., at ¶ 1 (Dckt. No. 39); see also Carpenter v. United States, 138 S. Ct. 2206, 2211 (2018) (stating that in 2018 there were 396 million cellphone service accounts in a country of 326 million people). As any user is all too aware, electronic devices need power to function. See Am. Cplt., at ¶ 2. To help consumers charge their devices on the go, technology companies created portable chargers, otherwise known as power banks. Id. at ¶¶ 3–4.
A power bank is made up of an internal battery cell and a circuit board. Id. at ¶ 34. The circuit board converts the battery‘s power into voltage, and then transfers that power to a connected electronic device. Id. at ¶¶ 34–35. So energy flows from the power bank to the device, giving it a charge (and giving the user a boost).
But it takes power to send power. The power bank must use some of the power to
A power bank‘s capacity to charge another device is measured in milliampere-hours (“mAh“). Id. at ¶ 5. The unit of measurement is an ampere-hour, meaning a current of one ampere flowing for one hour. So, as the name (“milli“) suggests, an mAh is one thousandth of an ampere-hour.
A higher number means more power. A higher mAh means that the power bank can provide more energy. Id. And more power means that the power bank has a greater ability to charge electronic devices. Id.
The amount of power that a power bank can provide is important to consumers. In fact, the amount of power is “the material factor in making a purchasing decision, because the function of the power bank is to provide power, and more is better.” Id. at ¶ 70 (emphasis in original); id. at ¶ 6 (“The main point of buying a power bank is to have the ability to get more power.“). Consumers buy power banks for power, not looks. Id. at ¶ 6. They prefer power banks with higher mAh, and pay more for them. Id. at ¶ 7. More power is more valuable. The higher the power, the higher the price.
Defendant PNY Technologies, Inc. (“PNY“) is a global technology company and a major manufacturer of power banks. Id. at ¶¶ 3, 8, 21–22. The company makes power banks with a range of mAh, from 1500 mAh up to 10400 mAh. Id. at ¶¶ 9, 23. PNY informs consumers about the amount of mAh offered by a power bank through the name of the product and the label on the packaging. Id. at ¶¶ 24, 30–31; see generally Pictures (Dckt. No. 43-2, at 2–4 of 10) (showing the packaging).
In 2018, Plaintiff Cassandra Geske purchased a PNY power bank, the PowerPack 5200. See Am. Cplt., at ¶¶ 13, 45 (Dckt. No. 39). She allegedly read and relied on the representation that the PowerPack 5200 could actually deliver 5200 mAh to her devices. Id. at ¶¶ 13, 45. In her view, the product‘s very name – PowerPack 5200 – said it all. Id. at ¶ 24.
A picture of the packaging for the PowerPack 5200 appears in the amended complaint. Id. at ¶ 30. The top of the packaging included the following name and description: “PNY 5200 mAh POWERPACK,” with “3x CHARGES*” appearing right below. Id. at ¶ 30; see also id. at ¶ 46 (“On PNY‘s package, PNY said that the PowerPack 5200 had ‘5200 mAh.‘“). The bottom of the power bank repeated that figure: “Capacity: 5200mAh.” Id. at ¶ 32.1
Geske paid $12.99 for the power bank. Id. at ¶ 47. But at some point, she began to feel that she didn‘t get what she paid for. She had to recharge the power bank more often than she expected. Id. at ¶ 48.
But Geske didn‘t return the device to the store. Instead, she hired a laboratory to figure out if her $12.99 power bank underperformed. Id. at ¶ 40.
The lab ran tests on two PNY PowerPack 5200s (although not the actual power bank that she had purchased) and two PNY PowerPack 1800s. Id. at ¶¶ 40–41. The lab measured the amount of mAh delivered by the power packs. Id. And sure enough, the two PowerPack 5200s delivered 3399 and 3522 mAh, respectively, about a third less than 5200 mAh. Id. at ¶ 43. The two PowerPack 1800s underperformed, too. They delivered about 1005
Geske ultimately sued PNY on behalf of herself and a putative class of buyers of PNY power banks in Illinois and other states. See Cplt. (Dckt. No. 1). She later filed an amended complaint that advanced claims on behalf of herself and buyers in Illinois and 20 other states (plus the District of Columbia). See Am. Cplt. (Dckt. No. 39)
Geske believes that her PowerPack 5200 did not pack enough punch. It did not provide as much juice as advertised. And she alleges that her problems weren‘t an isolated occurrence.
Her power bank wasn‘t a lemon. Instead, she believes that all power banks sold and marketed by PNY suffer from a similar deficiency. Specifically, she claims that all PNY power banks deliver a “substantially lower” amount of mAh than PNY represents. Id. at ¶ 25.
The amended complaint includes three counts. Count I alleges a violation of the
In Geske‘s view, PNY is not delivering what consumers expect. Consumers expect that the mAh on the packaging refers to the amount that their electronic devices will receive, not the amount of power that a power bank has before consuming some of the power itself. Id. at ¶ 38. That is, buyers read the label and expect the product to deliver the listed mAh. Id.; see also id. at ¶ 5 (“[A] label that represents that a power bank has a certain mAh conveys to reasonable consumers that the power bank is capable of delivering that amount of mAh.“).
In reality, the power banks aren‘t as powerful as consumers expect. PNY‘s labels are misleading – they refer to the mAh capacity of the internal battery, not the amount of mAh that the power banks actually deliver. Id. at ¶ 36. Unwitting consumers have no idea that the power banks are consuming a big percentage of their own power. Id. at ¶ 37.
According to the complaint, the overstatement is no accident. PNY intentionally overstates the amount of power that its power banks actually provide. Id. at ¶¶ 12, 32–33, 36, 39. The company “intentionally deceives consumers by misrepresenting the amount of power its Products can transfer” to electronic devices. Id. at ¶ 11.
PNY misrepresents the amount of power because the company knows that consumers pay more for more power. Id. at ¶¶ 7–8, 26. PNY “exploits consumers’ preferences for power banks with higher mAh.” Id. at ¶ 11. “By deceiving consumers about the Products’ mAh, PNY is able to sell more of, and charge more for, the Products than it could if they were labeled accurately.” Id. at ¶ 26.
Geske alleges that she suffered an economic injury. That is, she paid a premium based on her belief that the 5200 mAh PowerPack would actually deliver 5200 mAh. Id. at ¶ 13. She suffered an injury based on the difference in value between the product as advertised and the product as delivered. Id. at ¶ 27. “Consumers are willing to pay more for the Products based on their belief that they are capable of delivering the promised mAh than they would pay if the Products were truthfully advertised and labelled.” Id. If she had known that she was buying a weak power pack, she might not have bought it in the first place. Id. at ¶ 88.
Legal Standard
PNY moved to dismiss Geske‘s complaint for lack of standing under
A party can bring either a facial challenge or a factual challenge to a plaintiff‘s Article III standing. See Apex Digital, 572 F.3d at 443. A facial challenge means that the complaint does not sufficiently allege that the plaintiff has standing. Id. A factual challenge, on the other hand, involves an argument about real-world facts, not the allegations of the complaint. That is, the complaint may be “formally sufficient,” but “there is in fact no subject matter jurisdiction.” Id. at 444 (citing United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003)) (emphasis in original). A facial challenge looks to the face of the pleadings, and a factual challenge looks to the facts.
A court reviews facial and factual challenges differently. A facial challenge is like an ordinary motion to dismiss. The court must “accept as true all material allegations of the complaint, drawing all reasonable inferences therefrom in plaintiff‘s favor,” and cannot rely on evidence outside the pleadings. Remijas v. Neiman Marcus Grp., LLC, 794 F.3d 688, 691 (7th Cir. 2015) (citing Retired Chicago Police Assoc. v. City of Chicago, 76 F.3d 856, 862 (7th Cir. 1996)). But in a factual challenge, a court may consider “whatever evidence has been submitted” on the issue of standing. Apex Digital, 572 F.3d at 444; see also Reid L. v. Illinois State Bd. of Educ., 358 F.3d 511, 515 (7th Cir. 2004) (explaining that the court may “find the facts” in a factual challenge).
PNY brings a facial challenge to Geske‘s standing. See Def. Mtn. to Dismiss, at 6 (Dckt. No. 43). So the Court will “accept as true all material allegations of the complaint, drawing all reasonable inferences therefrom in plaintiff‘s favor,” and will not consider outside evidence. Remijas, 794 F.3d at 691.
In addition to standing, PNY also argues that the complaint fails to state a claim. A motion to dismiss for failure to state a claim challenges the sufficiency of the complaint itself, not the merits of the case. See
To survive, a complaint must give the defendant fair notice of the basis for the claim, and it must be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable
Analysis
PNY‘s standing argument focuses on remedies. PNY argues that Geske lacks Article III standing to seek (1) damages on behalf of herself, (2) damages on behalf of a class, and (3) an injunction. See Def. Mtn. to Dismiss, at 7–13 (Dckt. No. 43).
In the motion to dismiss for failure to state a claim, PNY basically marches through each of the counts, and puts together an argument that the allegations of the complaint are insufficient. PNY challenges the demand for punitive damages, too.
I. Standing
Article III vests federal courts with the power to decide “Cases” and “Controversies.”
Courts use a three-prong test to determine whether a party has standing to bring a claim. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992); Lewis v. Casey, 518 U.S. 343, 349 (1996). The plaintiff must have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016); see also Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180–81 (2000) (citing Lujan, 504 U.S. at 560); Casillas v. Madison Ave. Assocs., Inc., 926 F.3d 329, 333 (7th Cir. 2019).
The plaintiff – as the party invoking federal jurisdiction – has the burden to demonstrate standing. See Spokeo, 136 S. Ct. at 1547. The plaintiff must “clearly... allege facts demonstrating” each of the three elements. Warth v. Seldin, 422 U.S. 490, 518 (1975).
Remedies are no exception. The plaintiff must establish standing for each kind of requested relief. See City of Los Angeles v. Lyons, 461 U.S. 95, 109 (1983) (holding that even though plaintiff had standing to pursue damages, he lacked standing to pursue injunctive relief); see also Lewis, 518 U.S. at 358 n.6 (“[S]tanding is not dispensed in gross.“); Friends of the Earth, 528 U.S. at 185 (“[A] plaintiff must demonstrate standing separately for each form of relief sought.“). When it comes to remedies, there is no such thing as in-for-a-penny, in-for-a-pound standing.
Here, Geske seeks three kinds of relief: damages on behalf of herself, damages on behalf of a class, and an injunction. PNY challenges them all. So the Court will address her standing to seek each type of relief. See Am. Cplt., at 17 (Dckt. No. 39).
A. Standing on her Own Behalf
PNY argues that Geske lacks standing to seek damages on her own behalf because she did not allege an injury in fact. See Def. Mtn. to Dismiss, at 7–11 (Dckt. No. 43). An injury in fact is the “[f]irst and foremost” of standing‘s three requirements. See Spokeo, 136 S. Ct. at 1547 (quoting Steel Co., 523 U.S. at 103).
PNY argues that Geske‘s alleged injury is neither “concrete” nor “particularized.” Id. An injury is concrete if it is “de facto,” that is, “real,” and not “abstract.” Spokeo, 136 S. Ct. at 1548. That is, the injury must “actually exist.” Id. An injury is “particularized” when it “affect[s] the plaintiff in a personal and individual way.” Id. That is, standing requires that the plaintiff has “personally suffered some real or threatened injury.” Gibson v. Quaker Oats Co., 2017 WL 3508724, at *2 (N.D. Ill. 2017) (emphasis in original); see also Lujan, 504 U.S. at 560 n.1.
First, PNY claims that Geske merely alleges disappointment with the product‘s performance, and disappointment is too abstract to be a concrete injury. See Def.‘s Mtn. to Dismiss, at 8 (Dckt. No. 43). PNY‘s argument ignores what the complaint actually says. Geske alleges that she suffered an economic injury by overpaying for a product that underdelivers. See Am. Cplt., at ¶¶ 13, 48, 51, 79.
Geske alleges that she didn‘t get what she paid for. That‘s an injury. The Supreme Court has recognized that economic injuries may support standing. See Sierra Club v. Morton, 405 U.S. 727, 733 (1972) (“[P]alpable economic injuries have long been recognized as sufficient to lay the basis for standing.“). “The injury-in-fact necessary to support standing may be an economic injury.” 15 James Wm. Moore et al., Moore‘s Federal Practice § 101.40[5][c] (3d ed. 2019). “Under the benefit-of-the-bargain theory, the economic injury is calculated as the difference in value between what was bargained for and what was received.” Id.
The Seventh Circuit has recognized that financial injuries give rise to standing. In In re Aqua Dots Products Liability Litigation, 654 F.3d 748 (7th Cir. 2011), the plaintiffs represented a class of consumers who had purchased a toy called Aqua Dots. The toy, made up of small beads that looked like candy, could cause serious physical damage to children who ate the beads. Id. at 750. The company issued a recall and provided refunds. Id. The Aqua Dots plaintiffs were purchasers who did not ask for a refund and whose children were not harmed. Id. The toy manufacturer argued that the plaintiffs lacked standing because the children did not swallow the beads and thus suffered no harm. Id. at 750–51.
The financial harm from buying a defective product gave rise to standing. “[P]laintiffs’ loss is financial: they paid more for the toys than they would have, had they known of the risks the beads posed to children. A financial injury creates standing.” Id. at 751; see also Lexmark Int‘l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 132 (2014) (“A consumer who is hoodwinked into purchasing a disappointing product may well have an injury-in-fact cognizable under Article III.“).
Geske‘s allegation of an economic injury is sufficient to support standing. She alleges that she purchased a power bank that underdelivered. She overpaid for an unpowerful power pack. See Am. Cplt., at ¶¶ 11, 51, 74–75, 88. That is enough to establish a concrete injury. See, e.g., Remijas, 794 F.3d at 694–95 (“[W]e have held that financial injury in the form of an overcharge can support Article III standing.“); In re Testosterone Replacement Therapy Prods. Liab. Litig., 159 F. Supp. 3d 898, 909 (N.D. Ill. 2016) (“Plaintiff has
In its reply, PNY doubles down on its argument that Geske has not alleged a real economic injury. See Def.‘s Reply, at 4–8 (Dckt. No. 45). The company argues that Geske has improperly conflated the concept of injury with the issue of deception. Id. at 5. But PNY cites cases that address the sufficiency of pleadings under the
Second, PNY contends that Geske has not suffered a “particularized” injury because she hasn‘t alleged that the power bank that she actually purchased was defective. See Def.‘s Mtn. to Dismiss, at 8–9 (Dckt. No. 43). According to PNY, Geske only alleges that two other power banks she didn‘t purchase – the ones tested by the lab – were defective. Id. Therefore, she didn‘t personally suffer the injury at the center of her complaint.
Once again, PNY closes its eyes to what the complaint actually says. Geske claims that she bought a PowerPack 5200, believing that it would provide a certain amount of charging power. See Am. Cplt., at ¶¶ 46–47 (Dckt. No. 39). But when she used it, she found that the PowerPack 5200 needed to be charged more frequently than she expected. Id. at ¶ 48.
The complaint does not merely allege that PNY power banks in general are deficient. Instead, Geske alleges that her own power bank was too weak. She bought a product that “did not work as represented and warranted.” Id. at ¶ 13. The complaint expressly cites her own “experiences.” Id. at ¶ 49. She purchased product that did not live up to its billing. Id. at ¶¶ 45–49, 86–87.
PNY then points to the fact that Geske hired a lab to conduct tests on other PNY products. PNY seems to think that this case rests on testing in a lab (only), not real-world life experience by the putative class representative.
PNY relies heavily on a case from outside this district to support its motion to dismiss. See Def.‘s Mtn. to Dismiss, at 9–10 (Dckt. No. 43). In Gaminde v. Lan Pharma Nutrition, Inc., 2019 WL 1338724, at *1 (N.D.N.Y. 2019). Gaminde sued the krill oil manufacturer, alleging that, despite the 300 mg label, the bottle actually contained far less krill oil. Id. He based his allegations on a study by the U.S. Department of Agriculture which found that, after testing two bottles of CVS Krill Oil, the bottles contained only 60 percent of the promised 300 mg. Id. at *2. In concluding that Gaminde lacked standing to sue, the Northern District of New York emphasized that “it is speculation to allege that because two CVS Krill Oil bottles in a USDA study were found to have less than the stated amount of Omega-3 Krill Oil, the bottle that Gaminde purchased must as well.” Id.
That case is not similar to this one. Gaminde relied on the USDA study – not
B. Standing as a Class Representative
PNY also raises two challenges to Geske‘s ability to sue on behalf of a class composed of purchasers of all power banks that PNY markets and sells. See Def.‘s Mtn. to Dismiss, at 11–12 (Dckt. No. 43).
First, PNY argues that Geske does not have standing to sue on behalf of any class because she herself lacks standing. See Def.‘s Mtn. to Dismiss, at 11 (Dckt. No. 43). But she has standing, so that argument packs no punch.
Second, PNY argues that, even if Geske has standing to sue, her standing as class representative is limited to representing the class of persons who sustained an identical injury. Id. Specifically, the company argues that she can bring a claim (if at all) only on behalf of consumers who purchased the PowerPack 5200, not a class of consumers who purchased other power banks sold by PNY. Id.
As PNY points out, courts in this district – and around the country – are split on whether class representatives have standing to make claims about products that they did not personally purchase. See id. at 12 n.6; Kubilius v. Barilla America, Inc., 2019 WL 2861886, at *3 (N.D. Ill. 2019). There is widespread agreement that a class representative lacks standing to represent class members who sustained injuries that are fundamentally different than the injuries suffered by the proposed class representative. But there is disagreement about whether consumers who purchase two different products necessarily sustain fundamentally different injuries.
A small number of courts apply a strict rule: a class representative who purchased product X lacks standing to represent a class member who purchased product Y, because their injuries are necessarily different in kind. See Pearson v. Target Corp., 2012 WL 7761986, at *1 (N.D. Ill. 2012) (“[H]ow could [a class representative] possibly have been injured by representations made on a product he did not buy?“).
But a growing majority of courts apply a different standard: a class representative who purchased product X has standing to represent a class member who purchased product Y if the injuries are “substantially similar.” See Ulrich v. Probalance, Inc., 2017 WL 3581183, at *6 (N.D. Ill. 2017); see also Kubilius, 2019 WL 2861886, at *3 (collecting cases); Smith-Brown v. Ulta Beauty, Inc., 2019 WL 932022, at *5 (N.D. Ill. 2019); Carrol v. S.C. Johnsons & Son, Inc., 2018 WL 1695421, at *4 (N.D. Ill. 2018); Wagner v. Gen. Nutrition Corp., 2017 WL 3070722, at *5 (N.D. Ill. 2017); see also 1 McLaughlin on Class Actions § 4:28 (13th ed. 2016) (“A substantial number of courts have decided that a plaintiff may have standing to assert claims on behalf of class members based on products he or she did not purchase as long as the products and alleged misrepresentations about a purchased product are substantially similar. In those cases, the substantial similarity determination is a context-specific analysis, but frequently entails reference
Allowing a named plaintiff to bring claims on behalf of others with substantially similar injuries allows courts to bundle cases about the same basic practice. See, e.g., Quinn v. Walgreen Co., 958 F. Supp. 2d 533, 541 (S.D.N.Y. 2013) (collecting cases). And later, when considering a motion for class certification, courts can weed out claims if the class representative is not sufficiently similar to members of the putative class. Id.
This Court joins the majority and holds that a plaintiff has standing to sue on behalf of purchasers who sustained a substantially similar injury. Whether Geske is an adequate class representative and can satisfy
More specifically, Geske has standing to sue on behalf of a class of consumers who purchased PNY power banks that involve the same type of alleged misrepresentations. First, as the complaint alleges, PNY‘s power banks operate in the same manner. They consist of an internal battery cell and a circuit board that converts the internal battery‘s charge into power conveyed to another electronic device. See Am. Cplt., at ¶¶ 34–36 (Dckt. No. 39). Geske alleges that PNY markets all of its products in the same way, by placing “prominent representations” about the power banks’ mAh on the packaging, and using the mAh in the products’ names. Id. at ¶¶ 30–32. Second, Geske‘s lab testing demonstrated that multiple power banks are unable to distribute the total capacity of the internal battery. The devices underperform when compared to the mAh stated on the packaging. Id. at ¶¶ 39, 41–44. According to Geske, consumers of all PNY power banks suffer the same injury. They purchased a product that provides less power than represented on the packaging. The only difference among PNY‘s power banks is the capacity of the internal battery cell (and presumably the price). Id. at ¶ 9. But the power banks consume about the same percentage of the total battery capacity (about a third of the power), regardless of the starting point.
Other courts in this district have found products to be substantially similar based on a comparable analysis. See Kubilius v. Barilla America, Inc., 2019 WL 2861886, at *3 (N.D. Ill. 2019) (finding substantial similarity between two kinds of pasta sauce that contain preservatives despite a “no preservatives” label); Carrol v. S.C. Johnsons & Son, 2018 WL 1695421, at *4 (N.D. Ill. 2018) (finding lotion-based and spray-based sunscreen products with less SPF than advertised to be substantially similar); Ulrich, 2017 WL 3581183, at *6 (finding substantial similarity because “all of the Products are protein supplements sold by Probalance,” and the “alleged misrepresentations are the same, they all relate to the Products’ quantity of protein“); Wagner v. General Nutrition Corp., 2017 WL 3070722, at *5 (N.D. Ill. 2017) (finding substantial similarity among multiple dietary supplements that “have the same key ingredient” and “all of the Products contain misrepresentations for the same reason“); Mednick v. Precor, Inc., 2014 WL 6474915, at *3 (N.D. Ill. 2014) (finding that all claims “rely on the same misrepresentation – that the Touch Sensors are accurate“).
Geske has alleged that the internal battery cells “fill the same function [in] every machine, and they are used in the same
C. Injunctive Relief
Finally, PNY argues that Geske lacks standing to seek injunctive relief. See Def.‘s Mtn. to Dismiss, at 13 (Dckt. No. 43). The gist of the argument is that there is no risk of future harm and thus no need for an injunction.
Again, a plaintiff bears the burden of demonstrating standing to seek each form of relief. See Friends of the Earth, 528 U.S. at 185; Simic, 851 F.3d at 738. The fact that Geske has standing to seek damages does not mean that she has standing to seek an injunction. See Lyons, 461 U.S. at 109; Kenseth v. Dean Health Plan, 722 F.3d 869, 890 (7th Cir. 2013) (“[A] plaintiff must demonstrate standing for each form of relief sought. A plaintiff may have standing to pursue damages but not injunctive relief, for example, depending on the circumstances.“).
PNY argues that Geske has not demonstrated that a future injury in fact is likely. See Def.‘s Mtn. to Dismiss, at 13 (Dckt. No. 43); Lujan, 504 U.S. at 560. “Unlike with damages, a past injury alone is insufficient to establish standing for purposes of prospective injunctive relief. ‘Past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects.‘” Simic, 851 F.3d at 738 (quoting Lyons, 461 U.S. at 95–96).
To establish injury in fact when seeking prospective injunctive relief, “a plaintiff must allege a ‘real and immediate’ threat of future violations of their rights.” Scherr v. Marriott Int‘l, Inc., 703 F.3d 1069, 1074 (7th Cir. 2013) (citing Lyons, 461 U.S. at 102); see also 15 James Wm. Moore et al., Moore‘s Federal Practice § 101.61[6][b] (3d ed. 2019). PNY argues that Geske‘s complaint fails that test because she has not alleged that she or the members of the class will be harmed in the future. See Def.‘s Mtn. to Dismiss, at 13 (Dckt. No. 43).
There is a “split of authority on the question of whether consumer plaintiffs claiming [only that] they were deceived can pursue injunctive relief when they are aware of the deceptive practice at issue.” See In re Herbal Supplements Mktg. and Sales Practices Litig., 2017 WL 2215025, at *7 (N.D. Ill. 2017) (collecting cases).
Most courts in this district have held that a plaintiff who alleges only past deception cannot pursue injunctive relief because they have not alleged a “‘real and immediate threat’ of future violations of their rights.” Scherr v. Marriott Int‘l, 703 F.3d 1069, 1074 (7th Cir. 2013) (citing Lyons, 461 U.S. at 102) (emphasis added); see also Benson v. Fannie May Confections Brands, Inc., 2018 WL 1087639, at *5 (N.D. Ill. 2018) (“Most courts to address similar circumstances have held that absent some concrete basis to conclude that the plaintiffs will or must purchase the product again in the future and be deceived, they cannot meet the standing requirements for injunctive relief claims.“); 1 McLaughlin on Class Actions § 4.28 (13th ed. 2016) (“Though a minority view disagrees, most courts to address the question have ruled that a plaintiff who is a former customer who provides no concrete basis to conclude that he or she will purchase the product at issue in the future
Once a plaintiff knows that a product is deficient, he or she is unlikely to purchase it again, and therefore unlikely to sustain future harm. A “fool me once” plaintiff does not need an injunction if he or she is not going to buy the product again anyway. There is no risk of “fool me twice,” so there is no basis for an injunction.
For example, in Mednick v. Precor, Inc., plaintiffs purchased exercise equipment with a touch sensor monitoring feature, only to find that the feature didn‘t work as advertised. See Mednick, 2016 WL 5390955, at *8 (N.D. Ill. 2016). One plaintiff alleged that he “would not have purchased the treadmill had he known the Touch Sensor Monitoring feature . . . was actually unreliable and inaccurate.” Id. The court determined that it seemed “clear from the allegations in the complaint that Plaintiffs [had] no plans to purchase the same product as to which [they] [sought] prospective relief.” Id. (internal quotation marks omitted.). The court concluded that, without an allegation of risk of future harm, there was no injury in fact to support standing for injunctive relief. Id. at *9.
Although the Seventh Circuit hasn‘t directly addressed standing for injunctive relief in this context, it has offered instructive dicta.2 See Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732
Notes
“Most courts to address similar circumstances have held that absent some concrete basis to conclude that the plaintiffs will or must purchase the product again in the future and be deceived, they cannot meet the standing requirements for injunctive relief claims.” Benson v. Fannie May Confections Brands, Inc., 2018 WL 1087639, at *5 (N.D. Ill. 2018); see also Ulrich, 2017 WL 3581183, at *7 (“If plaintiff is aware of Probalance‘s allegedly deceptive practice, then he faces no real and immediate threat that Probalance‘s misleading labels will deceive him again in the future.“) (internal quotations omitted); In re Herbal Supplements Mktg. and Sales Practices Litig., 2017 WL 2215025, at *8 (“Plaintiffs make clear in their complaint that they would not have purchased the Affected Products had they known the truth about them. . . . Plaintiffs cannot pursue injunctive relief because they face no real immediate threat of future injury.“); Bohn, 2013 WL 3975126, at *3 (finding no standing for injunctive relief when plaintiff alleged that she “had she known the truth,” she “would not have purchased Defendants’ Product.“) (emphasis in original) (cleaned up). “As many courts have explained, because a plaintiff in a false advertising case has necessarily become aware of the alleged misrepresentations, ‘there is no danger that they will again be deceived by them.‘” See Hesse v. Godiva Chocolatier, Inc., 463 F. Supp. 3d 453, 465 (S.D.N.Y. 2020) (emphasis in original).
Geske points to a case from this district to argue that it creates a “public policy conundrum” if plaintiff cannot seek an injunction based on a past deception. See Pls.’ Resp. to Def.‘s Mtn. to Dismiss, at 13 (Dckt. No. 44); Leiner v. Johnson & Johnson Consumer Companies, Inc., 215 F. Supp. 3d 670 (N.D. Ill. 2016). She rests her argument on the following line from the Leiner opinion: “the injunctive provisions of consumer protection statutes such as
Plaintiff‘s argument fails for three reasons. First, “public policy concerns do not confer Article III standing on a plaintiff who fails to allege an individual injury in fact.” Id. Second, public agencies like the Federal Trade Commission could fill the void. Third, requiring a likelihood of future deception does not render meaningless the injunctive portions of the consumer protection statutes. It simply requires them to plead a cognizable future harm.
Geske does not have standing to request an injunction. Geske hasn‘t alleged that she or potential class members — likely will suffer future harm from PNY‘s deceptive labels. Geske alleges a past harm: overpaying for a product that didn‘t meet her expectations. See Am. Cplt., at ¶¶ 13, 48, 51, 79. But she does not allege that she or any of the class members are likely to purchase the product again. Id. at ¶ 88; see also id. at ¶¶ 73, 74.
The threat of future injury must be imminent, not conjectural. See Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009); Lyons, 461 U.S. at 111 (holding that a plaintiff must show a “sufficient likelihood that he will again be wronged in a similar way“); ACLU v. Clapper, 785 F.3d 787, 800 (2d Cir. 2015) (“The Supreme Court has repeatedly reiterated that the threatened injury must be certainly impending to constitute injury in fact, and that allegations of possible future injury are not sufficient.“). Raw “allegations of possible future injury” are not enough. See Hesse, 463 F. Supp. 3d at 465 (quoting Clapper, 785 F.3d at 800).
Here, Geske doesn‘t even do that. There is nothing in the complaint about a possible future purchase. A conclusory allegation wouldn‘t cut it, but here, Geske doesn‘t even make a conclusory allegation. There is nothing about a possible future harm.
Plaintiffs like Geske who allege that they were deceived in the past — but have not alleged any likelihood of being deceived in the future — do not have standing to seek an injunction under Article III. No risk of future harm means no basis for an injunction. In sum, Geske has not alleged a risk of future harm sufficient to support standing to seek an injunction, and therefore may not seek prospective injunctive relief against PNY.
II. Failure to State a Claim
PNY also moves to dismiss each count for failure to state a claim. See
A. Illinois Consumer Fraud and Deceptive Business Practices Act Claim
First, PNY asserts that Geske fails to state a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act (the ”
The
A claim under the
PNY argues that Geske‘s complaint fails to allege a deceptive act, intent, or damages. See Def.‘s Mtn. to Dismiss, at 14-23 (Dckt. No. 43). PNY also contends that the complaint fails to satisfy the heightened pleading standard under
”
1. Deceptive Act
PNY begins by arguing that Geske has not alleged a deceptive act. The complaint says otherwise.
“A practice is deceptive ‘if it creates a likelihood of deception or has the capacity to deceive.‘” Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 646 (7th Cir. 2019) (quoting Bober v. Glaxo Wellcome PLC, 246 F.3d 934, 938 (7th Cir. 2001)). To determine the likelihood of deception, courts apply a “reasonable consumer” standard. Id. “This requires more than a mere possibility that [a] label might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner. Rather, the reasonable consumer standard requires a probability that a significant portion of the general consuming public . . . acting reasonably in the circumstances, could be misled.” Ebner v. Fresh, Inc., 838 F.3d 958, 965 (9th Cir. 2016); Beardsall v. CVS Pharmacy, Inc., 2019 WL 1168103, at *3 (N.D. Ill. 2019) (citing Ebner).
Context matters, too. “[W]hen analyzing a claim under the
PNY moves to dismiss by offering its own, competing interpretation of the meaning of its packaging. See Def.‘s Mtn. to Dismiss, at 15-16 (Dckt. No. 43). The company argues that the labeling of the PowerPack 5200 never made a representation about the amount of power that the product could deliver to another device. Instead, the 5200 mAh referred to the capacity of the battery. Id. PNY points to the picture of the bottom of the power bank, circling in red (in its brief) a key phrase: “Capacity: 5200mAh.” Id. at 16.
As PNY sees it, there is no false or deceptive statement. Consumers get what PNY advertises: a power bank with an internal battery of a certain capacity, exactly what is represented on the packaging. Id.
PNY essentially asks for a declaration, as a matter of law, that Geske is an unreasonable consumer. In its view, any reasonable consumer would understand that the reference to mAh on the packaging referred to the capacity of the battery, not the power transferred to another device. See Def.‘s Mtn. to Dismiss, at 16, 18-21 (Dckt. No. 43). PNY points to Department of Energy regulations that explain a battery‘s capacity is usually given in mAh.3 Id. at 16. And, PNY says, reasonable consumers understand that “it takes energy to transfer energy.” Id.
At best, PNY offers a different gloss on the meaning of its packaging. But at the motion to dismiss stage, the inferences flow in favor of the plaintiff. Geske offers a plausible reading of the packaging, and PNY offers another. That‘s not a reason to dismiss the claim. “Overall, ‘the determination [] whether an ad has a tendency to deceive is an impressionistic one more closely akin to a finding of fact than a conclusion of law.‘” Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 762 (7th Cir. 2014) (quoting Kraft, Inc. v. Fed. Trade Comm‘n, 970 F.2d 311, 317 (7th Cir. 1992)).
In some cases, the allegation of a misrepresentation is outside the field of play, meaning that no reasonable consumer could have been deceived. In that case, a court can dismiss the claim on a motion to dismiss. See, e.g., Bober v. Glaxo Wellcome PLC, 246 F.3d 934, 938-39 (7th Cir. 2001); Fuchs v. Menard, Inc., 2017 WL 4339821, at *5 (N.D. Ill. 2017). In other cases, the packaging itself provides other information that dispels any inference of a false statement. There, too, a court can dismiss the claim because the context as a whole shows that there was no deception. See In re 100% Grated Parmesan Cheese Mtg. and Sales Practices Litig., 275 F. Supp. 3d 910, 921-22 (N.D. Ill. 2017) (“[T]he ‘context of the packaging as a whole’ must be considered in evaluating whether deception has occurred.“) (citation omitted).
That‘s not this case. PNY simply offers another way to read the packaging. But it‘s not the only way to read the packaging. The existence of a competing narrative, without more, is not enough to defeat a claim when plaintiff‘s theory of the case is plausible. It is.
PNY argues that its product packaging, taken as a whole, cures any confusion. See Davis v. G.N. Mortg. Corp., 396 F.3d 869, 884 (7th Cir. 2005) (“[T]he allegedly deceptive act must be looked upon in light of the totality of the information made available to the plaintiff.“); In re 100% Grated Parmesan Cheese, 275 F. Supp. 3d at 921-22 (“[T]he ‘context of the packaging as a whole’ must be considered in evaluating whether deception has occurred.“) (citation omitted). Consumers “who interpret ambiguous statements in an unnatural or debatable manner do so unreasonably if an ingredient label would set them straight.” In re 100% Grated Parmesan Cheese, 275 F. Supp. 3d at 922.
The company points out that its PowerPack 5200‘s packaging clarifies that the power bank offers “3x CHARGES*.” See Am. Cplt., at ¶ 30 (Dckt. No. 39); Def.‘s Ex. A., at 2 (Dckt. No. 43-2) (all caps in original). That explanation appears prominently, front and center, in all caps. Id. The side of the box clarifies that the power banks offers “UP TO 3x CHARGES*.” See Def.‘s Ex. A., at 4. That representation, though, comes with an asterisk. See id. at 2, 4. Turning the power bank‘s box over to the back of the packaging reveals that the potential “3x CHARGES*” actually “varies by device.” Id. at 3.
In Parmesan, the court found that a reasonable consumer looking at a cheese product‘s packaging as a whole could not believe that the product was 100 percent natural cheese. See In re 100% Grated Parmesan Cheese, 275 F. Supp. 3d at 923. The ingredient label explicitly identified non-cheese ingredients. Id. What‘s more, the cheese remained “shelf-stable at room temperature,” which is unnatural for a dairy product. Id.
PNY‘s packaging did provide a plain English explanation. Any consumer surely can understand “3x CHARGES*.” See Am. Cplt., at ¶ 30 (Dckt. No. 39). That phrase provided down-to-earth information. A consumer would understand “3x CHARGES*,” but presumably would not understand the relationship between the number of charges and the number of mAh.
Even so, the phrase “3x CHARGES*” does not fully explain the reference to the number of mAh. Unlike an ingredient list on a package of cheese, there is no obvious connection between the number of charges and the amount of mAh.
If anything, there is a disconnect. The phrase “3x CHARGES*” refers to what a consumer‘s electronic device will receive. But PNY is arguing that 5200 mAh refers to the power bank‘s capacity, not what the electronic device will receive. So “3x CHARGES*” provides a simple, user-friendly explanation of what the device can do, but it does not fully explain the reference to 5200 mAh. One is about delivery, and the other is about capacity.4
Common sense probably comes into play with unrefrigerated cheese more than the electrical capacity of charging devices. Consumers have intuitions about room temperature dairy products. They‘re less likely to have a gut feeling about what it means for a charging device to offer mAh. Unlike a package of cheese sitting out on a room-temperature shelf in a grocery store, a power bank lacks “commonsense, observable” facts that would allow a reasonable consumer to contextualize representations that a power bank offers 5200 mAh. See Al Haj v. Pfizer Inc., 2019 WL 3202807, at *6 (N.D. Ill. 2019) (quoting Al Haj v. Pfizer Inc., 338 F. Supp. 3d 741, 756 (N.D. Ill. 2018) (“It is reasonable to expect that a consumer would [examine the entire packaging], at least where something about the observable context of that product‘s retail presentation . . . should prompt suspicion that the product might not be 100% cheese or fresh-squeezed juice.“)).
To survive a
The complaint also satisfies the particularity requirements of
2. Intent
PNY also argues that Geske did not sufficiently allege intent to deceive. See Def.‘s Mtn. to Dismiss, at 21-22 (Dckt. No. 43). The company demands “factual enhancement” to support Geske‘s claim that it “intentionally deceives consumers by misrepresenting the amount of power its Product can transfer to” other devices. Id. at 21 (quoting Am. Cplt., at ¶ 11).
The complaint adequately alleges an intent to deceive. PNY knows that its power banks are “technologically incapable of delivering the amount of mAh [included] in the product name, in advertising for the Product, and on the Products and their packaging.” Id. at ¶¶ 33, 39. But PNY creates an impression about the amount of power that the power banks will deliver because it knows that consumers will pay more for more power. Id. at ¶¶ 7-8. PNY “intentionally deceives consumers by misrepresenting the amount of power its Products can transfer,” and does so for “profit and a higher market share.” Id. at ¶ 11. “PNY is incentivized to mislead consumers to take away market share from competing products, thereby increasing its own sales and profits.” Id. at ¶ 26.
Viewed as a whole, the allegations of the complaint are more than enough to put PNY on notice of a claim of deception. See Ulrich, 2017 WL 3581183, at *8 (collecting cases). After discovery, maybe Geske‘s claim won‘t pan out. Maybe there will be evidence that there is an applicable industry standard of some kind. Or maybe PNY will present other evidence that it had no intention to deceive anyone. But in the meantime, the pleading includes enough to survive.
3. Damages
PNY also challenges the sufficiency of Geske‘s damages allegations. To the extent that PNY incorporates its argument that Geske failed to allege an Article III injury in fact, the Court has already found that Geske alleged an injury that supports standing. See Def.‘s Mtn. to Dismiss, at 22 (Dckt. No. 43).
As PNY sees it, alleging an injury in fact is not enough: “Plaintiff must show more than an Article III Injury.” See Def.‘s Mtn. to Dismiss, at 22 (Dckt. No. 43). “The actual damage element of a private
The company argues that Geske has not pled with particularity that she was deprived of the benefit of her bargain. See Def.‘s Mtn. to Dismiss, at 22 (Dckt No. 43). Again, PNY closes its eyes to what the complaint actually says. Geske alleges quite plainly that she paid for a device that underperformed, and thus did not get what she paid for. See Am. Cplt., at ¶¶ 13, 48-49, 51, 60, 75, 86, 90. That allegation appears generously in the complaint, but PNY ignores it all.
And even then,
PNY analogizes Geske‘s damages to those found insufficient in Camasta v. Jos. A. Bank Clothiers, Inc., 2013 WL 474509 (N.D. Ill. 2013), aff‘d 761 F.3d 732 (7th Cir. 2014). That case involved a claim that a plaintiff would not have bought certain clothes from a retailer if he had known that the “advertised ‘sale’ price was the normal retail price.” Camasta, 2013 WL 474509, at *1. The district court found that allegation insufficient to support actual damages under the
Camasta is not like this case. Camasta was a “deceptive price comparison case[], in which the court[] held that there was no ‘actual pecuniary loss’ when plaintiffs failed to allege that their products were not ‘actually worth the price’ they had paid.” See Hobbs, 2018 WL 3861571, at *9. Plaintiffs based their damages on defendants’ misrepresentations of the “amount the buyers would save buying at putative sale prices rather than any claim that the products purchased were not worth the prices that consumers had paid.” Id. (emphasis in original). Camasta found no actual damages where the plaintiff alleged inadequate savings but did not allege that his purchases were actually worth less than what he paid.
Here, Geske alleges that she paid more than the value of her PowerPack 5200. See Am. Cplt., at ¶¶ 13, 27, 51, 73-74, 79 (Dckt. No. 39). Unlike Camasta, Geske did not get the benefit of her bargain. PNY misled Geske into believing that she was buying a power bank capable of transferring 5200 mAh. Instead, she bought a power bank that transferred something less.
“When a plaintiff alleges that it purchased something because of a fraudulent misrepresentation, there is actual injury when the plaintiff suffers a pecuniary loss by receiving goods that are worth less than was promised.” Aliano v. Louisville Distilling Co., LLC, 115 F. Supp. 3d 921, 931 (N.D. Ill. 2015). This case fits the mold. Geske alleges that she bought something that was less valuable than what she paid because she relied on a misrepresentation. “Geske and the other members of the Classes were damaged in the amount of the purchase price they paid for the Products, or the difference between the value of the Products if they had the actual warranted mAh.” See Am. Cplt., at ¶ 86; see also id. at ¶¶ 27, 73-74; id. at ¶ 75 (“Geske and the other class members have overpaid for the Products . . . .“).
Other courts in this district have found similar allegations enough to satisfy the
The Court denies PNY‘s motion to dismiss Geske‘s claim under the
B. Breach of Express Warranty and Unjust Enrichment Claims
PNY also moves to dismiss the breach of express warranty claim (Count II) and the unjust enrichment claim (Count III). PNY makes a bootstrap argument based on the
That argument doesn‘t get PNY anywhere. The complaint states a claim under the
C. Punitive Damages
Finally, PNY challenges the request for punitive damages. “[I]t is undisputed that punitive damages are available for a violation of the Consumer Fraud Act.” Dubey v. Pub. Storage, Inc., 395 Ill. App. 3d 342, 356, 335 Ill. Dec. 181, 918 N.E.2d 265 (2009); see also
The statutory text grants courts the power to award broad relief. “The court, in its discretion may award actual economic damages or any other relief which the court deems proper.” See
Under Illinois law, punitive damages “may be awarded only if the defendant‘s tortious conduct evinces a high degree of moral culpability, that is, when the tort is committed with fraud, actual malice . . . or when the defendant acts willfully.” Saccameno v. U.S. Bank Nat‘l Ass‘n, 943 F.3d 1071, 1082 (7th Cir. 2019) (quoting Slovinski v. Elliot, 237 Ill. 2d 51, 58, 340 Ill. Dec. 210, 927 N.E.2d 1221 (2010)) (cleaned up); Frank P. v. New York Life Ins. Co., 2005 WL 8179400, at *9 (N.D. Ill. 2005). Whether a defendant‘s conduct merits punitive damages is usually a question for the trier of fact. Slovinski, 237 Ill. 2d at 58; see also Wendorf, 755 F. Supp. 2d at 981 (“Although judgment in favor of the defendant may be appropriate on the summary judgment or judgment as a matter of law during trial, the court allows the plaintiffs to proceed to proof of defendant‘s conduct meriting such damages.“).
PNY argues that Geske needed to allege that the company acted “maliciously or with deliberate indifference” to seek punitive damages. See Def.‘s Mtn. to Dismiss, at 24 (Dckt. No. 43) (quoting Wendorf v. Landers, 755 F. Supp. 2d 972, 981 (N.D. Ill. 2010)).
Geske has alleged that PNY deceived customers about the amount of power provided by the power banks. The allegations sound in fraud, and a fraud claim can give rise to punitive damages. A motion to dismiss is not the right time to decide whether punitive damages are appropriate. It depends on the facts, and the Court does not weigh the facts on a motion to dismiss.
Conclusion
For the foregoing reasons, the Court grants in part and denies in part Defendant PNY‘s Motion to Dismiss (Dckt. No. 42). The motion is granted as to Geske‘s demand for injunctive relief. The motion is otherwise denied.
Date: November 30, 2020
Steven C. Seeger
United States District Judge