In re Scotts Ez Seed Litig.

• Decision Date: 22 May 2013
• Docket Number: 12 CV 4727 (VB)
• Parties: IN RE SCOTTS EZ SEED LITIGATION
• Court: U.S. District Court — Southern District of New York

IN RE SCOTTS EZ SEED LITIGATION

12 CV 4727 (VB)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

May 22, 2013

MEMORANDUM DECISION

Briccetti, J.:

Plaintiffs bring this putative class action against Scotts Miracle-Gro Company, Inc., Scotts Company LLC (collectively, "Scotts"), Lowe's Home Centers, Inc. ("Lowe's"), and Home Depot U.S.A., Inc. ("Home Depot"). The crux of plaintiffs' consolidated class action complaint is that Scotts EZ Seed, a product manufactured by Scotts and sold at Lowe's and Home Depot stores, does not grow grass as advertised. Pending before the Court are defendants' motions to dismiss. (Docs. #25, 28).¹ For the following reasons, both motions are GRANTED in part and DENIED in part.

The Court has jurisdiction pursuant to 28 U.S.C. § 1331 and the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d).²

BACKGROUND

For purposes of deciding the pending motions, the Court accepts all well-pleaded factual allegations in the complaint as true and draws all reasonable inferences in favor of plaintiffs.

Scotts produces Scotts Turf Builder EZ Seed ("EZ Seed"), a "combination mulch-grass seed product." According to its label, EZ Seed grows grass "50% thicker with half the water" compared to "ordinary seed." Additionally, EZ Seed's labeling and advertising claim the product:

• is "WaterSmart";

• "Grows Anywhere! Guaranteed!";

• "Makes the Most Of Every Drop";

• "Grows in Tough Conditions! Guaranteed!";

• is "Drought tolerant";

• is "[t]he revolutionary seeding mix that takes care of the seed for you, so you can grow thick, beautiful grass ANYWHERE," including "Dry, sunny areas," "Dense shade," and "Even grows on pavement!"; and

• is a "premium quality" product that "is developed to thrive in virtually every condition - harsh sun, dense shade, and even spreads to repair wear and tear. The result - thicker, beautiful, long lasting grass!"

EZ Seed's labeling also includes a graphic purporting to illustrate EZ Seed's superior performance compared to ordinary seed. The graphic includes two pictures: one of a patch of grass grown using EZ Seed, and one of a patch of grass grown using ordinary seed. The pictures reflect that EZ Seed clearly outperforms ordinary seed. Above the pictures are the words, "50%THICKER WITH HALF THE WATER^††." Below the pictures are the words: "^††Results 32 days after planting; each watered at half the recommended rate for ordinary seed. Results may vary. *Subject to proper care."

To back up its claims regarding EZ Seed's effectiveness, Scotts offers purchasers of EZ Seed a "No Quibble Guarantee," which provides:

If for any reason you, the consumer, are not satisfied after using this product, you are entitled to get your money back. Simply send us the original evidence of purchase and we will mail you a refund check promptly.

Home Depot and Lowe's "prominently display in-store advertising displays for EZ Seed" that contain the same statements as those made by Scotts. Additionally, Home Depot and Lowe's "review[ed] and approv[ed] false and misleading advertising materials for promoting the sale of EZ Seed, including advertisements that bore the retailers' names, logos and/or trademarks." Plaintiffs do not allege Home Depot or Lowe's was involved in the production, testing, or labeling of EZ Seed.

Contrary to defendants' representations concerning EZ seed's grass-growing prowess, plaintiffs allege EZ Seed does not grow grass when used as directed. Each of the seven named plaintiffs - all of whom reside in either New York or California - alleges he or she purchased EZ Seed and used the product as directed, but it failed to grow any grass. Additionally, plaintiffs each claim he or she relied on defendants' representations concerning EZ Seed's effectiveness in choosing to purchase EZ Seed. Plaintiffs further allege that thousands of other EZ Seed purchasers throughout the country were similarly misled by defendants' statements and, consequently, bought ineffective seed.

In support of their claims, plaintiffs cite several studies conducted by NexGen - "the largest turfgrass development institution in North America" - which suggest EZ Seed fails togrow any grass when given half the amount of water recommended for ordinary seed over a thirty-two day period. According to the studies, EZ Seed's failure to perform as advertized is the result of a "design defect."

Additionally, one plaintiff, Gwen Eskinazi, sought a refund pursuant to the "No Quibble Guarantee." Although Eskinazi purchased four canisters of EZ Seed, Scotts only refunded the purchase price of two canisters.

Based on the foregoing, plaintiffs bring claims under (1) the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301(1), et seq.; (2) the California Consumers Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq.; (3) the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq.; (4) the California False Advertising Law, Cal. Bus. & Prof. Code §§ 17500, et seq.; (5) Sections 2313 (breach of express warranty) and 2314 (breach of implied warranty of merchantability) of the California Commercial Code; (6) Sections 349 (deceptive acts or practices) and 350 (false advertising) of the New York General Business Law; and (7) Sections 2-313 (breach of express warranty) and 2-314 (breach of implied warranty of merchantability) of the New York Commercial Code. Plaintiffs also bring common law claims for unjust enrichment, breach of contract, and breach of warranty.

DISCUSSION

I. Legal Standard

"The function of a motion to dismiss is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Ryder Energy Distrib. Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984) (internal quotation marks omitted). In deciding a motion to dismiss pursuant to Rule 12(b)(6), the Court evaluates the sufficiency of the complaint under the "two-pronged approach"suggested by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). First, plaintiffs' legal conclusions and "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements," are not entitled to the assumption of truth and are thus not sufficient to withstand a motion to dismiss. Id. at 678; Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010). Second, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 556 U.S. at 679.

To survive a Rule 12(b)(6) motion, the allegations in the complaint must meet a standard of "plausibility." Ashcroft v. Iqbal, 556 U.S. at 678; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 564 (2007). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. at 678. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id.

II. Magnuson-Moss Warranty Act (Count I)

Under the Magnuson-Moss Warranty Act ("MMWA"), "a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with . . . a written warranty . . . may bring suit for damages and other legal and equitable relief." 15 U.S.C. § 2310. A "written warranty" under the MMWA is defined, in relevant part, as:

(A) any written affirmation of fact or written promise made 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, or

(B) any undertaking in writing in connection with the sale by a supplier of aconsumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking,

which written affirmation, promise, or undertaking 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) (emphasis added).

Plaintiffs claim the various statements made in EZ Seed's labeling and advertising are written warranties under the MMWA because they promise EZ Seed "will meet a specific level of performance over a specified period of time." Plaintiffs also allege the No Quibble Guaranty is actionable under the MMWA because it constitutes an undertaking "to refund . . . [a] product in the event that such product fails to meet the specifications set forth in the undertaking." Id.

Defendants contend plaintiffs have failed to state a claim under the MMWA because (1) none of the alleged statements cited by plaintiffs specifies a period of time during which EZ Seed will meet a specific level of performance; and (2) plaintiff Eskinazi has failed to allege she provided Scotts with proof of her purchase of EZ Seed as required by the No Quibble Guaranty.

A. Statements in Labeling and Advertising

Certain statements in EZ Seed's labeling and advertising arguably promise that EZ Seed will "meet a specific level of performance"; for example, the claim that EZ Seed grows grass "50% thicker with half the water." See Kelley v. Microsoft Corp., 2007 WL 2600841, at *3 (W.D. Wash. Sept. 10, 2007) (claim that computer was "Windows Vista Capable" promised "specific level of performance"). However, plaintiffs have failed to allege that any of the defendants promised EZ Seed would achieve a specific level of performance over a specific period of time.

As the Federal Trade Commission explained in its regulatory interpretation of therelevant provisions of the MMWA:

Certain representations, such as energy efficiency ratings for electrical appliances, care labeling of wearing

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