Jarrett v. Panasonic Corp. of North AmericaJarrett v. Panasonic Corp. of North America
OPINION AND ORDER
Plаintiff Denise Jarrett brings this proposed class action against Defendants Sa-nyo Manufacturing Corporation (Sanyo), Wal-Mart Stores, Inc., and Wal-Mart Stores Arkansas, L.L.C. (collectively, Wal-Mart), alleging the Defendants designed, manufactured, distributed or sold defective 42" and 46" Sanyo plasma televisions.
I.
Plaintiff claims that in November 2010 she purchаsed a 46" Sanyo plasma television at a Wal-Mart store in Little Rock, Arkansas, but that in October 2011, the television began to malfunction, losing partial picture resulting in the right side of the screen becoming black. Compl. ¶¶ 17-18. Plaintiff claims “[t]he 42" and 46" Sa-nyo plasma televisions have a design defect causing the screen to flicker, lose picture intermittently, lose full picture and/or lose full picture and sound, sometimes within hours of purchase.” Compl. ¶ 6. Plaintiff claims the defect she experienced is “widespread and systemic across the United States” and that “[d]espite longstanding knowledge of the problems,” Defendants have purposely concealed, suppressed, and omitted to disclose to consumers that its 42" and 46" Sanyo plasma televisions are defectively designed. Compl. ¶¶ 7, 20. Plaintiff asserts the following claims against Defendants: Count I&emdash;Breach of Implied Warranty of Merchantability; Count II&emdash;Violation of the Arkansas Deceptive Trade Practices Act (ADTPA), Ark.Code Ann. § 4-88-101 et seq.; and Count III&emdash;Unjust Enrichment. Compl. ¶¶ 42-74.
Plaintiff proposes a nationwide class that consists of “[a]ll persons and entities residing in the United States who purchased a 42" and 46" Sanyo plasma television” and an Arkansas subclass of “[a]ll persons and entities residing in the State of Arkansas who purchased a 42" and 46" Sanyo plasma television.” Compl. ¶24. Plaintiff claims that the nationwide class and Arkansas subclass “are both composed of, at least, thousands of people who purchased 42" and 46" Sanyo televisions, with the same common defect that causes similar characteristics and symptoms.” Compl. at ¶ 25.
II.
Defendants move for judgment on the pleadings under Fed.R.Civ.P. 12(c) on the following grounds: (1) Defendants properly disclaimed any implied warranty of merchantability and, separately, Plaintiff has not alleged that she provided any of the Defendants with the required pre-suit notice; (2) Plaintiffs ADTPA claim fails as she does not allege reasonable reliance and injury flowing from Defendants’ allegedly deceptive conduct and she also does not plead her ADTPA claim with particularity as required by Fed.R.Civ.P 9(b); (3) Plaintiffs unjust enrichment claim fails as a matter of law because an express contract&emdash;a written warranty&emdash;existed; and (4) even if any of Plaintiffs individual claims survive, her class allegations should not.
A.
A motion for judgment on the pleadings under Fed.R.Civ.P. 12(c) is reviewed under the same standards used to review а motion to dismiss under Fed.R.Civ.P. 12(b)(6). Ashley County, Ark. v. Pfizer, Inc.,
B.
1.
The Court first addresses Defendants’ argument that they properly disclaimed any implied warranty of merchantability. This argument has subparts which the Court will address in turn.
i.
Under the Arkansas Uniform Commercial Code (Arkansas UCC), a seller may exclude implied warranties of merchantability provided that the disclaimer mentions “merchantability” and is conspicuous. Ark.Code Ann. §§ 4-2-314 and 4-2-316. See also Perez v. Volkswagen Group of America, Inc., No. 2:12-cv-02289,
All of the television models identified in paragraph one of Plaintiffs Complaint (DP42740, DP42746, DP42647, and DP46849) came with an Owner’s Manual which contained an express one-year limited warranty. All other warranties&emdash;in-cluding merchantability&emdash;were disclaimed by Sanyo in the Owner’s Manuals as follows:
THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Owner’s Manuals (Exs. A-D).
Plaintiff does not dispute, and the Court finds, that the disclaimer in Sanyo’s Owner’s Manuals mentions “merchantability” and is conspicuous in that it is prominently featured in the middle of the page in capital letters. Accordingly, Defendants are entitled to judgment on the pleadings as to Plaintiffs breach of implied warranty of merchantability claim against Sanyo.
The same is not true of Wal-Mart, however. In their reply brief, Defendants argue in a footnote that Wal-Mart, like Sanyo, effectively disclaimed all implied warranties by providing the buyer with the Sanyo express one-year limited warranty found within the Owner’s Manual in the boxed product at the time of sale. The Court disagrees. “In the usual case, a distributor or dealer must make his own disclaimer to be free from impliеd warranty liability. He cannot rely on a disclaimer used by the manufacturer even though he passes that documentation on to the ultimate buyer.” Barkley Clark & Christopher Smith, The Law of Product Warranties § 8:14[1] (2012). See also Florists’ Mut. Ins. v. Lewis Taylor Farms, Inc., No. 7:05-cv-50,
ii.
In contesting Defendants’ argument that they properly disclaimed any implied warranty of merchantability, Plaintiff, as previously noted, does not dispute that Sa-nyo’s disclaimer of implied warranties failed to mention “merchantability” or was not conspicuous. Rather, Plaintiff argues for the first time that Defendants’ motion for judgment on the pleadings is premature because the disclaimer may be unconscionable and unconseionability raises a fact question.
The “doctrine of unconscionability has both procedural and substantive elements. Procedural unconseionability deals with the manner in which a contract was entered into; substantive unconsciona-bility, on the other hand, looks to the terms of the contract and whether they are harsh, one-sided, or oppressive.” Hughes v. Wet Seal Retail, Inc., No. 10-cv-05090,
Plaintiffs Complaint does not include specific allegations concerning un-conscionability of the disclaimer of implied warranties and the Complaint makes no specific allegations concerning the one-
year limited warranty she received from Defendants at the time of the television’s purchase. Plaintiff does not dispute that the disclaimer complies with the Arkansas UCC and she has not pled facts suggesting that the disclaimer is nevertheless proee-durally or substantively unconscionable. Merely raising the specter of unconsciona-bility is not sufficient to defeat a motion for judgment on the pleadings. Cf. White v. Volkswagen Group of America, Inc., No. 2:11-cv-02243,
iii.
The Court now turns to the question of whether Plaintiff provided any
In her Complaint, Plaintiff alleges that after her 46" Sanyo plasma television began to malfunction, she “sought to return, exchаnge or have repaired her 46" plasma television,” that certain “members of the Class (such as the Plaintiff) ... called Sanyo to complain about the defective nature of their 42" and 46" Sanyo plasma televisions,” and that “members of the Class (such as Plaintiff) ... called or otherwise complained to Wal-Mart about the defective nature of their 42" and 46" Sanyo plasma televisions.” Compl. ¶¶ 18-19, 43(c), 45. Although it is a moot point as to Sanyo (the Court having found that Sanyo properly disclaimed any implied warranty of merchantability), the Court finds that it is a question of fact whether Plaintiff seeking to return, exchange, or have repaired her 46" plasma television and her and other putative class members calling Sanyo and Wal-Mart to complain about the allegedly defective nature of their 42" and 46" Sanyo plasma televisions was sufficient pre-suit notice as required by Ark.Code. Ann. § 4-2-607(3)(a). Cf. Industrial Electronic Supply, Inc. v. Lytle Manufacturing, L.L.C.,
iv.
In sum, the Court grants Defendants’ motion for judgment on the pleadings on Plaintiffs breach of implied warranty of merchantability claim against Sanyo but denies Defendants’ motion as to Plaintiffs breach of implied warranty of merchantability claim against Wal-Mart.
2.
The Court now turns to Plaintiffs ADT-PA claim. The ADTPA prohibits persons from “knowingly making a false representation as tо the characteristics, ingredients, uses, benefits, alterations, source, sponsorship, approval, or certification of goods or services or as to whether goods
Defendants argue that Plaintiffs ADTPA claim fails as she does not allege reasonable reliance and injury flowing from Defendants’ allegedly deceptive conduct. Plaintiff does not specifically address Defendants’ argument concerning her allegations regarding reliance and injury and the Court finds that those allegations are not sufficiently pled as she fails to allege any specific advertising that she saw or heard or how she relied on such advertising in deciding to purchase her television. Cf. White,
ii.
Defendants also argue that Plaintiff does not plead her ADTPA claim with particularity as required by Fed. R.Civ.P 9(b). Rule 9(b) requires any plaintiff claiming fraud to plead with particularity the circumstances constituting fraud. Perez,
In support of her ADTPA claim, Plaintiff notes that she alleges the following: the existence of a defect; that Defendants were aware of this defect; that the existence of the defect was a material fact; that the failure tо disclose the existence of this defect would tend to cause consumers to purchase the televisions; that Defendants failed to disclose the defect with the intent that consumers would rely upon the omission and purchase the televisions; and that Plaintiff and the class have suffered injury in that they have been forced to incur repairs or purchased televisions they would not otherwise have purchased. Plaintiff argues that “[t]he clear gravamen of [her] Complaint is that Defendants were selling televisions that were known to be defective, that Defendants failed to disclose this fact, that Plaintiff and the class purchased these televisions without knowing of their defective nature, and were damaged.”
Whatever the gravamen of Plaintiffs Complaint may be, it is cleаr that Plaintiffs Complaint does not plead facts demonstrating each Defendant’s respective knowledge and purposeful concealment of any alleged defects, who knew about them and when they occurred, where the omissions should have appeared, or how the allegedly omitted facts made any representations misleading. See United States ex rel. Riley v. St. Luke’s Episcopal Hospital,
iii.
In sum, Plaintiffs ADTPA claim fails as she does not allege reasonable reliance and injury flowing from Defendants’ allegedly deceptive conduct and she fails to plead her ADTPA claim with particularity as
3.
The Court now turns to Plaintiffs unjust enrichment claim. Under Arkansas law, the doctrine of unjust enrichment does not apply when there is a valid, legal, and binding contract. Varner v. Peterson Farms,
However, the Court will allow Plaintiffs unjust enrichment claim against Wal-Mart to proceed at this time. Defendants do not assert that Plaintiff received an express warranty from Wal-Mart and the Court has determined on this record that Wal-Mart’s passing Sanyo’s express warranty with its disclaimer on to Plaintiff did not allow Wal-Mart to have benefit of Sanyo’s disclaimer. Defendants do not set fоrth any authority suggesting that Plaintiff may not assert an unjust enrichment claim against Wal-Mart in these circumstances.
4.
The Court now turns to Plaintiffs class allegations. Under Fed.R.Civ.P. 23(a), the party seeking class certification must demonstrate, first, that: (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
Plaintiff does not specify the provision of Rule 23(b) upon which she is relying but she does not dispute Defendants’ assertion that the applicable provision in this action is Rule 23(b)(3), which applies when “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” The Court agrees that Rule 23(b)(3) is the applicable provision as Plaintiff asserts in her Complaint that “[tjhere are questions of law and fact which are common to the Class and which predominate over questions affecting any individual class member,” and that “[a] class action is superior to other methods
i.
When a putative class consists of persons from numerous states pursuing common law claims, as is the case with Plaintiffs nationwide class, a court must conduct a choice-of-law analysis before considering the requirements of Rule 23. Tyler v. Alltel Corporation,
Plaintiff argues that she seeks to impose the law of a single state&emdash;Arkan-sas&emdash;to the nationwide class and that application of a single state’s law to a nationwide class of consumers is constitutionally permissible in these circumstances. In making this argument, Plaintiff does not dispute that the laws of the various states in which putative class members reside differ materially with respect to all of her claims. Cf. Powers v. Lycoming Engines,
In Tyler, the plaintiff asserted ADTPA and unjust enrichment claims and argued that Arkansas law should apply to a nationwide class of persons who were charged an early termination disconnect fee. After determining that both the consumer protection statutes and the law of unjust enrichment of the various states differed, the Court applied the choice-of law provision in the contract, Arkansas’s general contract choice-of-law principles, and Arkansas’s choice-of-law tort principles, and concluded that regardless of which choice-of-law principle governs, Arkansas law could not be applied to the claims of class members who resided outside of Arkansas.
The parties do not specifically address whether Plaintiffs claims sound in contract or tort.
ii.
Even if Arkansas law were to apply to Plaintiffs claims, there are
in.
In sum, Plaintiffs Complaint demonstrates she cannot satisfy the requirements of either Rule 23(a)(2) or Rule 23(b)(3) with respect to her proposed nationwide class and her proposed Arkansas subclass. Accordingly, the Court grants
III.
One final matter concerns Plaintiffs argument that Defendants’ motion fоr judgment on the pleadings is premature and that she should be permitted to conduct discovery. Plaintiff also requests leave to amend her Complaint should the Court find any of her claims deficient.
In the context of class action litigation, a district court has the authority to issue an order requiring “that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly.” Fed.R.Civ.P. 23(d)(1)(D). Pursuant to Rule 23(c)(1)(A), a court must determine whether to certify an action as a class action at “an early practicable time after a person sues or is sued as a class representative ....” In some instances, a Court can decide on class certification before any discovеry has yet taken place. Hall v. Equity Nat. Life Ins. Co.,
“ ‘[T]he plaintiff bears the burden of advancing a prima facie showing that ... discovery is likely to produce substantiation of the class allegations.’ ” M.S. Wholesale Plumbing, Inc. v. University Sports Publications Co., Inc., No. 4:07-cv-00730,
IV.
For the foregoing reasons, the Court grants in part and denies in part Defen
Notes
. Defendants Panasonic Corporation of North America and Sanyo North America Corpоration were recently dismissed from this action by way of a joint stipulated dismissal without prejudice [doc. #'s 46 & 49]
. Plaintiff moved to remand, arguing there was no CAFA jurisdiction. By Order entered March 27, 2013, the Court denied Plaintiff's motion. See Jarrett v. Panasonic Corporation of North America,
. When ruling on a motion to dismiss under Fed.R.Civ.P. 12(b)(6) or Fed.R.Civ.P. 12(c), a district court generally may not consider materials outside the pleadings. Noble Systems Corp. v. Alorica Central, LLC,
. Claims pursuant to Ark.Code Ann. § 4-88-108(2) do not require knowing or intentional deception. Curtis Lumber Co., Inc. v. Louisiana Pacific Corp.,
. Plaintiff's reliance on Rush v. Whirlpool Corp., No. 07-2022,
. Once removal under CAFA takes place, Fed.R.Civ.P. 23 governs certification. Smith v. Bayer Corp., - U.S. -, -,
. Tyler's claims sound in contract or tort, thе result is the same. If her claims sound in contract, then both the choice-of-law provision in the contract and general contract choice-of-law principles require that consumer transactions be governed by the law of the state in which the transaction occurred or the state in which the consumer’s billing address is located. If her claims sound in tort, then under Arkansas's tort choice-of-law principles ... the laws of twenty-five different states would still apply because the claims arise out of consumer transactions that occurred in different states.” Id. at 424.
. Where there is no effective choice of law by the parties in a cause of action arising in contract, and none has been identified here, Arkansas courts employ the "most significant relаtionship” test to determine which state's laws to apply. Tyler,
. Plaintiff states that “[t]he purchase price of the 42" and 46" Sanyo plasma televisions has been $900 to $1500” and that the defective televisions have “result[ed] in the need for costly repairs, ranging from $500 to $700 and more.” Compl. ¶¶ 5, 8.
. Even assuming that Plaintiffs are not required to show individual reliance or causation, Defendants are entitled to present evidence negating reliance and causatiоn. Id. at *12-* 13. " 'When such evidence is available, then it is highly relevant and probative on the question whether there is a causal nexus between the alleged misrepresentations and the injury.' " Id. (quoting In re St. Jude Medical, Inc.,
. The Court’s grant of judgment on the pleadings on Plaintiffs class allegations does not deprive the Court of CAFA jurisdiction. Although the Court determined in an earlier action that it lost subject jurisdiction under CAFA once it entered an order striking class allegations and accordingly dismissed the action, see M.S. Wholesale Plumbing, Inc. v. University Sports Publications Co., No. 4:07-cv-00730,
. Defendants’ motion to stay discovery and initial disclosure obligations pending resolution of dispositive motions [doc. # 43] is denied as moot.