Obertman v. Electrolux Home Care Prods., Inc., No. 2:19-cv-02487-KJM-AC

• Decision Date: 28 August 2020
• Docket Number: No. 2:19-cv-02487-KJM-AC
• Citation: 482 F.Supp.3d 1017
• Parties: Felix OBERTMAN, Plaintiff, v. ELECTROLUX HOME CARE PRODUCTS, INC. Defendant.
• Court: U.S. District Court — Eastern District of California

482 F.Supp.3d 1017

Felix OBERTMAN, Plaintiff,

v.ELECTROLUX HOME CARE PRODUCTS, INC. Defendant.

No. 2:19-cv-02487-KJM-AC

United States District Court, E.D. California.

Signed August 28, 2020

Filed August 31, 2020

Lawrence Timothy Fisher, Bursor and Fisher, PA, Walnut Creek, CA, for Plaintiff.

Alexandrea H. Young, Phillip J. Eskenazi, Hunton & Williams LLP, Los Angeles, CA, Eric Michael Zisk, Pro Hac Vice, James Joseph Nally, Pro Hac Vice, Gordon Rees Scully Mansukhani, LLP, New York, NY, for Defendant.

ORDER

Kimberly J. Mueller, CHIEF UNITED STATES DISTRICT JUDGE

In this putative class action over allegedly defective dehumidifiers, defendant moves to dismiss several of plaintiff's claims under Rule 12(b)(6). Mot., ECF No. 14. For the reasons discussed below, the court GRANTS defendant's motion in part and DENIES it in part.

I. BACKGROUND

This putative class action arises from one central claim: certain Frigidaire Dehumidifiers including model numbers FFAD3033R1, FFAD5033R1 and FFAD7033R1 (collectively, the "products" or "dehumidifier"), suffer from a design defect that causes them to display an "F0" error message on the products’ control panel, rendering the products "completely useless." First Am. Compl. ("FAC") ¶ 1, ECF No. 12. Plaintiff alleges in 2017 he purchased a Frigidaire dehumidifier, manufactured by Electrolux, from Best Buy for roughly $400. Id. ¶ 3. According to the complaint, prior to purchase plaintiff reviewed the packaging, which advertised the product was a dehumidifier, and relied on the packaging to decide whether to purchase the product. Id. ¶ 5. Roughly a year after he purchased the dehumidifier, an "F0" error message appeared on the product's screen, and it stopped working. Id. ¶ 4. Plaintiff then disposed of the product because it was "useless." Id. Plaintiff contends defendant knew of the defect at the time plaintiff purchased the product. Id. ¶ 88.

Plaintiff filed this action on December 12, 2019. Defendant filed a motion to dismiss on March 4, 2020, ECF No. 7, and, in response, plaintiff filed the operative first amended complaint, FAC, ECF No. 12. Defendant filed the instant motion to dismiss the first amended complaint on April 8, 2020, Mot., plaintiff filed an opposition, Opp'n, ECF No. 16, and defendant replied, Reply, ECF No. 18.

Plaintiff asserts six claims against defendant individually and on behalf of a class of all other similarly situated purchasers for: (1) violation of California's Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750, et. seq. ; (2) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 – 17210 ; (3) unjust enrichment; (4) breach of implied warranty under the Song-Beverly Act, Cal. Civ. Code § 1790 et seq. and Cal. Com. Code section 2314 ; (5) violation of California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500, and (6) violations of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq. See generally FAC. Defendant moves to dismiss claims one through five. See generally Mot. For the reasons below, the court GRANTS defendant's motion in part and DENIES it in part.

II. LEGAL STANDARD

A party may move to dismiss for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Although "detailed factual allegations" are not required at the pleading stage, Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the complaint must contain more than conclusory or formulaic recitations of elements, Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). The complaint must contain "sufficient factual matter" to make the alleged claim at least plausible. Ashcroft , 556 U.S. at 678, 129 S.Ct. 1937 ; see also Hartmann v. Cal. Dep't of Corr. & Rehab. , 707 F.3d 1114, 1122 (9th Cir. 2013) (explaining plausibility requires that the complaint depict a cognizable legal theory and sufficient factual allegations to support that theory) (citation omitted). Aside from external facts properly subject to judicial notice, the court restricts its analysis to the face of the complaint, construing the complaint in plaintiff's favor and accepting well-pled factual allegations as true. Erickson v. Pardus , 551 U.S. 89, 93–94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007).

III. ANALYSIS

A. Fraud and Consumer Protection Claims

Plaintiff's UCL, CLRA and FAL claims are premised on the allegation that defendant knew of an alleged defect in the Frigidaire dehumidifier, but knowingly concealed that information from consumers. See FAC ¶¶ 14–17. "Accordingly, the complaint must satisfy the heightened pleading standards of Rule 9(b)." Eisen v. Porsche Cars N. Am., Inc. , No. CV 11-9405 CAS FEMX, 2012 WL 841019, at *3 (C.D. Cal. Feb. 22, 2012) (citing Kearns v. Ford Motor Co., 567 F.3d 1120, 1125–27 (9th Cir. 2009) ) (CLRA and UCL claims must satisfy Rule 9(b) where premised on allegations a defendant knew of a defect in its product, took steps to conceal defect from consumers, and failed to disclose defect). Defendant argues the court should dismiss plaintiff's CLRA, UCL and FAL claims, because plaintiff has not adequately pled defendant "knew of the alleged defect at the time he bought the dehumidifier," Mot. at 12, a requirement for UCL, CLRA and FAL claims, see Wilson v. Hewlett-Packard Co. , 668 F.3d 1136, 1145 (9th Cir. 2012) ; VP Racing Fuels, Inc. v. Gen. Petroleum Corp. , 673 F. Supp. 2d 1073, 1088 (E.D. Cal. 2009), and because "plaintiff has not pled his fraud-based claims with the requisite particularity," Mot. at 17. As set forth below, the court finds plaintiff has sufficiently alleged defendant's pre-sale knowledge of the defect at this stage and has pled his fraud claims with the requisite particularity under Rule 9(b).

1. Defendant's Knowledge of Defect

Rule 9(b) provides "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). Therefore, defendant's "knowledge need only be alleged generally, with non-conclusory, plausible allegations." Luong v. Subaru of Am. Inc. , 2018 WL 2047646, at *5 (N.D. Cal. May 2, 2018) ; 5A C. Wright & A. Miller, Fed. Prac. & Proc. Civ. § 1301 (4th ed. 2020) ("A rigid rule requiring the detailed pleading of a condition of mind ... would run counter to the general ‘short and plain statement of the claim’ mandate in [F.R.C.P.] 8(a) ....").

Courts disagree on whether consumer complaints "in and of themselves adequately support an inference that a manufacturer was aware of a defect[.]" Wilson v. Hewlett-Packard Co. , 668 F.3d 1136, 1147 (9th Cir. 2012). In Williams v. Yamaha Motor Co. Ltd. , 851 F.3d 1015 (9th Cir. 2017), however, the Ninth Circuit clarified that consumer complaints may support an allegation of presale knowledge of a defect in some circumstances. Id. at 1027. The court clarified that its previous holding in Wilson , did not foreclose the use of consumer complaints to show knowledge, but "absent dates to indicate that the complaints were made pre-sale, and some evidence that defendant actually received the complaints, it would be speculative at best to find that the defendant knew of the alleged defect." Id. at 1027.

District courts have also found consumer complaints sufficient where plaintiff alleges facts indicating defendant was aware of the complaints at the time plaintiff purchased the item. Compare Resnick v. Hyundai Motor Am., Inc. , No. CV 16-00593-BRO (PJWx), 2017 WL 1531192, at *15 (C.D. Cal. Apr. 13, 2017) (finding plaintiffs did not adequately allege knowledge when plaintiffs did not plead facts indicating defendant was aware of particular complaints or monitored particular websites), with Borkman v. BMW of N. Am., LLC , No. CV 16-2225 FMO (MRWx), 2017 WL 4082420, at *5 (C.D. Cal. Aug. 28, 2017) (finding plaintiff sufficiently alleged defendant's knowledge of defect through consumer complaints to defendant's dealers and on third-party websites, aggregate data from dealers, consumer complaints to the National Highway Traffic Safety Administration (NHTSA) and resulting notice from NHTSA, dealership repair orders, and other internal sources of aggregate information about defect); Long v. Graco Children's Prods. Inc. , No. 13-cv-01257-WHO, 2013 WL 4655763, at *6 (N.D. Cal. Aug. 26, 2013) (finding plaintiff sufficiently alleged defendants’ knowledge of defects because consumers had complained directly to defendants, defendants had responded, and defendants had told NHTSA they were "keenly aware" of issue).

Here, the FAC quotes specific complaints about the F0 error causing the products to cease functioning that both pre-date his purchase and were submitted directly to defendant's own website, Frigidaire.com. See FAC ¶¶ 18–45. The majority of these pre-purchase customer complaints, as pled, confirm the customer spoke with an employee of defendant over the phone concerning the defect, or they confirm an agent of defendant specifically responded to the complaint shortly after it was posted, if not both. See Opp'n at 8–9; see, e.g. , FAC ¶ 19 (customer spoke to defendant over phone concerning defect), ¶ 22 (defendant responded to complaint shortly after it was posted). Furthermore, plaintiff alleges specific examples of a significant number of similar complaints about the issue on the websites of the products’ top retailers and alleges defendant would have been aware of the issue due to product returns, replacements or requests for refunds as a result of these complaints. Opp'n at 13 (citing FAC ¶¶ 48–88). The significant number of complaints pre-dating plaintiff's purchase, the alleged responses by defendants’ agents to those complaints, the fact many of the complaints were posted on defendants’ own website, and the many similar complaints on top...