Lucas v. Breg, Inc.

• Decision Date: 30 September 2016
• Docket Number: Case No. 15-cv-00258-BAS-NLS
• Citation: 212 F.Supp.3d 950
• Court: U.S. District Court — Southern District of California
• Parties: Stacy LUCAS, an individual, Tarek Albaba, an individual, Rigoberto Vindiola, an individual, David Gamma, an individual, Sarah Fisher, an individual, on behalf of themselves and all other similarly situated consumers, Plaintiffs, v. BREG, INC., a California corporation; Gary Losse, an individual; Mark Howard, an individual; and Does 1 through 50, inclusive, Defendants.

212 F.Supp.3d 950

Stacy LUCAS, an individual, Tarek Albaba, an individual, Rigoberto Vindiola, an individual, David Gamma, an individual, Sarah Fisher, an individual, on behalf of themselves and all other similarly situated consumers, Plaintiffs,

v.BREG, INC., a California corporation; Gary Losse, an individual; Mark Howard, an individual; and Does 1 through 50, inclusive, Defendants.

Case No. 15-cv-00258-BAS-NLS

United States District Court, S.D. California.

Signed September 30, 2016

Chase Stern, William A. Lemkul, Morris, Sullivan & Lemkul LLP, San Diego, CA, Marc O. Stern, Law Offices of Marc O. Stern, La Jolla, CA, for Plaintiffs.

David Jeffrey Duke, Randall L. Christian, Susan Elizabeth Burnett, Bowman and Brooke, Austin, TX, Eden Darrell, Bowman and Brooke LLP, San Diego, CA, Marion V. Mauch, Bowman & Brook LLP, Torrance, CA, Mary Novacheck, Bowman and Brooke LLP, Minneapolis, MN, Paul Gerard Cereghini, Bowman and Brook LLP, Phoenix, AZ, Robert Latane Wise, Bowman and Brooke LLP, Richmond, VA, for Defendants.

ORDER:

(1) GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT; AND

(2) DENYING DEFENDANT'S MOTION FOR CLASS CERTIFICATION

[ECF Nos. 55, 76]

Hon. Cynthia Bashant, United States District Judge

This case arises out of alleged misrepresentations and omissions made by Defendant Breg in connection with the marketing and sale of its Polar Care 500 cold therapy device (" PC 500"). Plaintiffs assert claims for violations of California's consumer protection laws, common law fraud, and breach of warranty, and now move to certify a nationwide class and California subclass of consumers who purchased or rented the product. (ECF No. 55.) Defendants oppose and move for summary judgment. (ECF NO. 76.) Both motions have been fully briefed.

The Court finds the motions suitable for disposition on the papers submitted and without oral argument. See Civ. L.R. 7.1(d)(1). For the reasons that follow, the Court GRANTS IN PART and DENIES IN PART Defendants' motion for summary judgment and DENIES Plaintiffs' motion for class certification.

I. BACKGROUND

Defendant Breg is a California corporation that markets and sells a variety of cold therapy devices throughout the United States.¹ Since 1992, Breg has marketed its PC 500 as a prescription-only device particularly suited for orthopedic patients recovering from surgery.² (Third Amended Complaint ("TAC") ¶ 23.) The PC 500 is a portable, motorized device—similar in appearance to a small ice cooler—that circulates ice cold water through a pad. Users set the device to a desired temperature and place the pad on the site of their injury to reduce pain and swelling. (Id. ¶ 28, 29.)

Since placing the PC 500 on the market, Breg has included with the device a "Use Instruction" that states: "Desired temperature is typically between 45 to 55 degrees Fahrenheit for continuous use and below 45 degrees Fahrenheit for sessions of 20 minutes or less." (Id. ¶ 28.) Continuous use for purpose of the Use Instruction is defined as 20 minutes or longer. Over time, Breg has supplemented the Use Instruction with additional information and warnings, but the Use Instruction itself has remained largely unchanged in both form and substance. (Id. ¶ 31; ECF No. 55 ("Mot. for Class Cert.") 4–5.)

Named Plaintiffs Stacey Lucas, Tarek Albaba, David Gamma, and Sarah Fisher (collectively, "Plaintiffs")³ are consumers who purchased or rented the PC 500 following surgery. (TAC 5–9.) Plaintiffs allege that Defendants misrepresented the benefits and concealed the risks associated with using the PC 500 from prescribing physicians and consumers alike. (Id. ¶ 3.) Specifically, Plaintiffs allege that using the PC 500 in accordance with the Use Instruction—that is, continuous use between 45 and 55 degrees Fahrenheit—poses a risk of serious bodily injury, including frostbite

and permanent damage to skin and nerve tissue. (Id. ¶¶ 25, 31.) Plaintiffs allege that Defendants have known about these risks since introducing the device into commerce yet have refused to warn physicians and consumers.⁴ None of the Plaintiffs suffered bodily injury in connection with their use of the PC 500, but they allege that they never would have purchased, rented, or used the device had they known about the risks associated with continuous use. (Id. ¶¶ 4, 36, 38.)

Based on Breg's alleged misrepresentations and omissions, Plaintiffs' Third Amended Complaint asserts claims for (1) violation of California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code §§ 17500 et seq. ; (2) violation of California's Consumers Legal Remedies Act ("CLRA"), Cal. Bus. & Prof. Code §§ 1770 et seq. ; (3) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 et seq. ; (4) common law fraud, and (5) breach of express and implied warranty. Among other relief, Plaintiffs seek rescission, restitution, actual and punitive damages, costs, and attorney's fees, as applicable. (TAC 51–52.)

Plaintiffs now seek to certify a nationwide class and California subclass of all consumers who, before purchasing or renting the PC 500, were exposed to a statement or instruction from Breg or a health care provider that the PC 500 was safe and effective for continuous use, or who were not told there was a material risk of bodily injury if the device was used continuously.⁵ (Mot. for Class Cert. ¶ 10.) The proposed classes specifically exclude any person who suffered bodily injury as a result of using the device. Defendants oppose, and move for summary judgment. (ECF No. 76 ("Mot. Summ. J.").)

II. DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

The Court first considers Defendants' motion for summary judgment before turning to Plaintiffs' motion for class certification. See Wright v. Schock , 742 F.2d 541, 543–44 (9th Cir. 1984) ("[W]here it is more practicable to do so and where the parties will not suffer significant prejudice ... the district court has discretion to rule on a motion for summary judgment before it decides the certification issue."). Defendants' move for summary judgment on the grounds that all of Plaintiffs' claims are time-barred. (Mot. Summ. J. 1.) In the alternative, Defendants seek partial summary judgment that (1) Plaintiffs lack standing to seek injunctive relief; (2) Plaintiffs cannot recover for breach of warranty; and (3) Plaintiffs are not entitled to restitution. (Id. 2.)

A. Legal Standard for Summary Judgment

Under Federal Rule of Civil Procedure 56, summary judgment is proper when there is no genuine dispute as to any material fact, and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A fact is "material" if it might affect the outcome of the suit under the governing law, and a dispute is "genuine" if there is sufficient evidence for a reasonable trier of fact to decide in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court may grant summary judgment on each claim or defense, "or the part of each claim or defense," on which summary judgment is sought. Fed. R. Civ. P. 56(a).

The moving party has the initial burden of demonstrating the absence of a genuine factual dispute. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "A movant satisfies the initial burden by either affirmatively negating the nonmoving party's claim, or by demonstrating that the nonmoving party is unable to prove an essential element of that claim." J. Friedenthal, M. Kane, & A. Miller, Civil Procedure § 9.3, p. 457, n.81 (5th ed. 2015). To meet this burden, a party usually cites to depositions, affidavits or declarations, interrogatory answers, or other materials in the record. Fed. R. Civ. P. 56(c)(1)(A). If the moving party fails to carry its initial burden, the nonmoving party has no obligation to produce evidence in response, and summary judgment will be denied. See Adickes v. S.H. Kress & Co. , 398 U.S. 144, 160–61, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) ; Great Haw. Fin. Corp. v. Aiu , 863 F.2d 617, 619 (9th Cir. 1988) (per curiam). However, if the moving party meets its initial burden, the nonmoving party must then go beyond the pleadings and by its own evidence, or by citing to appropriate materials in the record, show that there is a genuine factual dispute for trial. Celotex , 477 U.S. at 324, 106 S.Ct. 2548 ; see also S.A. Empresa de Viacao Aerea Rio Grandense v. Walter Kidde & Co., Inc. , 690 F.2d 1235, 1238 (9th Cir. 1982) ("[A] party cannot manufacture a genuine issue of material fact merely by making assertions in its legal memoranda.") (citations omitted).

In deciding a motion for summary judgment, the court does not make credibility determinations or weigh conflicting evidence, but instead views the evidence and draws all reasonable inferences in favor of the party opposing the motion. See Anderson , 477 U.S. at 255, 106 S.Ct. 2505. At this stage of the litigation, the court's role is simply to determine whether a genuine dispute exists for trial, not to resolve the dispute itself. SeeTree of Life Christian Schools v. City of Upper Arlington , 823 F.3d 365, 367 (6th Cir. 2016) ("Federal courts may not resolve genuine issues of material fact on motions for summary judgment[.]"); Albino v. Baca , 747 F.3d 1162, 1173 (9th Cir. 2014). Thus, a party whose case appears weak on the merits can still survive summary judgment so long as the evidence presented would allow a jury to reasonably find in that party's favor. See Anderson , 477 U.S. at 254–55, 106 S.Ct. 2505 ; Am. Int'l Grp., Inc. v. London Am. Int'l Corp. Ltd. , 664 F.2d 348, 351 (2d Cir. 1981) ("[S]ummary judgment is improper when the court merely believes that the opposing party is unlikely to prevail on the merits after trial.").

B. Statute of Limitations and the Delayed Discovery Rule

Defendants first argue that Plaintiffs' claims are time-barred. There is no dispute that Plaintiffs' claims—which are governed by a three- or four-year st...