Churchill Village, L.L.C. v. General Elec. Co.
| Decision Date | 10 May 2000 |
| Docket Number | No. 99-CV-5073.,99-CV-5073. |
| Citation | 169 F.Supp.2d 1119 |
| Court | U.S. District Court — Northern District of California |
| Parties | CHURCHILL VILLAGE, L.L.C.; Barbara Dorsett; and Al Dorsett, individually and on behalf of the public, Plaintiffs, v. GENERAL ELECTRIC COMPANY, a New York corporation, Defendant. |
George Donaldson, Daniel B. Harris, Law Offices of George Donaldson, San Francisco, CA, Joseph J. Tabacco, Jr., Christopher T. Heffelfinger, Berman DeValerio Pease Tabacco Burt & Pucillo, San Francisco, CA, Mike Peacock, James, Hoyer, Newcomer & Smilhanich, P.A., Tampa, FL, for Churchill Village, L.L.C., Barbara Dorsett, Al Dorsett.
Dennis Stewart, Susan G. Taylor, Milberg Weiss Bershad Hynes & Lerach, LLP, San Diego, CA, George Donaldson, Daniel B. Harris, Law Offices of George Donaldson, San Francisco, CA, Joseph J. Tabacco, Jr., Christopher T. Heffelfinger, Berman DeValerio Pease Tabacco Burt & Pucillo, San Francisco, CA, for Seymour Lazar.
Dennis Stewart, Susan G. Taylor, Milberg Weiss Bershad Hynes & Lerach, LLP, San Diego, CA, George Donaldson, Daniel B. Harris, Law Offices of George Donaldson, San Francisco, CA, Joseph J. Tabacco, Jr., Christopher T. Heffelfinger, Berman DeValerio Pease Tabacco Burt & Pucillo, San Francisco, CA, John A. Yanchunis, James Hoyer, Newcomer & Smiljanich, P.A., Tampa, FL, for Joan Chalmers, Judith Saporta.
Timothy P. Crudo, James L. Day, Latham & Watkins, San Francisco, CA, Beth A. Wilkinson, Latham & Watkins, Washington, DC, for General Elec. Co.
Clinton A. Krislov, William M. Sweetman, Krislov & Associates, Ltd., Chicago, IL, John W, Pillette, Beverly C. Moore, Jr., Moore & Brown, Washington, DC, for Beckwith Place Ltd. Partnership, Susan E. Glatter Kamman.
Mila F. Bartos, Tracy D. Rezvani, Finkelstein Thompson & Loughran, Washington, DC, J. Daniel Sagarin, Elias A. Alexiades, Hurwitz & Sagarin, Milford, CT, Lawrence D. Levit, Lester L. Levy, Wolf Popper LLP, New York City, for Harriet Skurman, Norman Hickman, Phyllis Hickman, Craig Rosenfield.
In November 1999, plaintiffs Churchill Village, Barbara Dorsett, and Al Dorsett, individually and on behalf of the public ("plaintiffs"), brought this action against General Electric Company ("defendant"), premised on this court's diversity jurisdiction. Plaintiffs allege two causes of action: (1) violation of unlawful, fraudulent, and unfair business acts and practices under California Business and Professions Code sections 17200 et seq. ("UCL"); and (2) violation of false advertising acts under California Business and Professions Code Sections 17500 et seq. ("FAA"). Now before the court is plaintiffs' motion for the issuance of a preliminary injunction.
Between April 1983 and January 1989, defendant manufactured approximately 3.1 million "low end" dishwasher units. Approximately 900,000 units remain in the market today. Plaintiffs allege that defendant first learned of fires in the subject dishwashers in the late 1980s but did not report them until 1998. In November 1998, defendant filed a voluntary report with the United States Consumer Product Safety Commission ("CPSC"), the federal agency responsible for "protect[ing] the public against unreasonable risks of injury associated with consumer products." 16 C.F.R. § 1000.1(a)(1). Defendant alleges that this report was prompted by a hotel customer complaint and a fire investigation both of which occurred in late 1998, and through which defendant first became aware of a potential product failure. The CPSC thereafter began an investigation of the dishwashers.
In October 1999, the CPSC and defendant entered into a formal settlement agreement ("Settlement"), as part of which defendant publicly announced that it was recalling the dishwashers.1 By October 1999, the CPSC knew of fifty incidents of fires relating to the dishwashers. Of those, seven spread beyond the dishwasher, and in three cases a house or apartment was damaged. However, the CPSC expressly acknowledged that there were no reports that a single person had ever been injured by the fires. The allegedly defective part is a slide switch that allows consumers to choose between heat drying and energy saver functions. Over time, the slide switch can melt and ignite, presenting a fire hazard. The CPSC and defendant urged consumers to immediately stop using the dishwashers and to keep the doors unlatched to prevent any electrical current from going to the defective heating switch.
Under the terms of the Settlement, the CPSC and defendant agreed to a rebate program designed "to protect the public from a potential product hazard allegedly posed" by the dishwashers.2 The Settlement offers consumers two options: (1) a $75-$125 cash rebate towards the purchase of a new GE brand dishwasher; or (2) a $25 cash refund toward the purchase of any new non-GE brand dishwasher, plus a free one-year service agreement from defendant, effective after the expiration of the manufacturer's express warranty. In addition, defendant agreed to provide free replacement dishwashers to owners whose units were still under GE's extended service agreements. The CPSC and defendant also agreed that defendant could reach a separate accommodation with owners and operators of commercial or rental properties who did not elect to participate in the recall program. That accommodation could include discounted bulk pricing and instructions to maintenance staff to safely rewire the control circuitry.
Plaintiffs point to several gaps in the Settlement. First, the Settlement does not offer repair of the dishwashers as an option. If individual consumers wish to retain and repair the dishwashers, they must do so independent of any assistance from defendant. Second, the Settlement does not offer individual consumers the "separate accommodation" offered to property owners and operators. Plaintiffs allege that these decisions are part of defendant's marketing campaign to launch a new generation of GE dishwashers. Defendant claims that both these decisions were based on practical considerations. Defendant also claims that the Settlement meets the standards laid out under section 15(d) of the Consumer Product Safety Act ("CPSA"), the statute governing the Settlement. See 15 U.S.C. § 2064(d).
The Settlement also requires defendant to provide a variety of notices regarding the rebate program. Defendant has issued a joint press release with the CPSC sent notices to potential past customers, arranged for the transmission of a video news release to all U.S. television stations, sent a radio news release to radio stations across the country, and provided a telephone line and interactive web site for consumers. Plaintiffs contend that defendant has made a number of false and misleading statements to both consumers and property owners in these notices. In particular, plaintiffs allege that defendant misled consumers on the subject of repair by sending out notices which clearly imply that a repair option is not feasible. Defendant responds that the CPSC has expressly approved all elements of the notices it has prepared. Defendant also offers evidence that, since the initiation of the recall notification, it has received more than 685,000 telephone calls in connection with the rebate. Of those calls, approximately 220,000 consumers have requested rebate coupons; 46,000 have requested refund checks; and 125,000 dishwashers have been rewired or replaced in management properties. Plaintiffs respond that these numbers reveal that at least 500,000 defective dishwashers remain in commerce, posing a serious safety hazard to consumers and the general public.
In November 1999, plaintiffs filed this action, alleging violations of California's unfair competition and false advertising statutes. Three weeks after filing this action, plaintiffs filed the instant motion for a preliminary injunction. The relief plaintiffs seek is that defendant be required to fully disclose to and offer consumers all available options for remedying the safety defect, including the same rework option it has offered property managers and payment of the costs for all who accept this option.3
Ordinarily, the standard for a preliminary injunction balances the plaintiff's likelihood of success on the merits against the relative hardships to the parties. See Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1119 (9th Cir.1999). A court may also issue a preliminary injunction if it determines that either (1) the moving party is likely to succeed on the merits and a possibility of irreparable injury exists, or (2) the moving party raises serious questions on the merits and the balance of hardships tips sharply in its favor. See id. (citing Sega Enters. v. Accolade, Inc., 977 F.2d 1510, 1517 (9th Cir.1992)). This framework does not consist of two independent tests, but rather represents the extremes of the continuum of equitable discretion. See id. (citing Benda v. Grand Lodge of Int'l Ass'n of Machinists & Aerospace Workers, 584 F.2d 308, 315 (9th Cir.1978)). Thus, "the greater the relative hardship to the moving party, the less probability of success must be shown." Id. (citing National Ctr. for Immigrants Rights v. INS, 743 F.2d 1365, 1369 (9th Cir.1984)). Depending on the nature of the case, the court may also consider whether the public interest favors granting relief. See Johnson v. California State Bd. of Accountancy, 72 F.3d 1427, 1430 (9th Cir.1995); Environmental Protection Info. Center, Inc., v. Pacific Lumber Co., 67 F.Supp.2d 1090, 1103 (N.D.Cal. 1999).
A preliminary injunction is an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion. See Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997)(per curiam). This already substantial burden is subject to ...
To continue reading
Request your trial
-
Solid Host, Nl v. Namecheap, Inc.
...of non-California residents injured by conduct occurring beyond California's borders." See also Churchill Village, L.L.C. v. General Elec. Co., 169 F.Supp.2d 1119, 1126 (N.D.Cal.2000) ("[S]ection 17200 does not support claims by non-California residents where none of the alleged misconduct ......
-
Rlh Industries v. Sbc Communications
... ... who paid commissions to the park]; Carl Sandburg Village Condo. Ass'n. v. First Condo. (7th Cir.1985) 758 F.2d 203, ... distilled commerce clause jurisprudence to a few general principles for reviewing price affirmation statutes, it ... California, rejecting commerce clause argument]; Churchill Village, L.L.C. v. General ... 35 Cal.Rptr.3d 480 ... ...
-
Heighley v. J.C. Penney Life Ins. Co.
...under section 17500 or a claim of fraudulent conduct under 17200, the above analysis applies. See Churchill Village, L.L.C. v. General Electric Co., 169 F.Supp.2d 1119, 1130 (N.D.Cal.2000). In order to succeed on a claim of fraud, a plaintiff must assert that "members of the public are like......
-
Benson v. Kwikset Corp., G030956.
...an unfair competition law claim be based on extrinsic evidence such as a consumer survey. (See Churchill Village L.L.C. v. General Electric Co. (N.D.Cal.2000) 169 F.Supp.2d 1119, 1131; Haskell v. Time, Inc. (E.D.Cal.1997) 965 F.Supp. 1398, 1407.) Since plaintiff did not present any such evi......