Phillips v. Royal Appliance Mfg. Co.

• Decision Date: 03 September 2021
• Docket Number: 21-cv-987-WQH-KSC
• Court: U.S. District Court — Southern District of California
• Parties: SUSAN PHILLIPS, EKATERINI CAMPOS, ROBERT JELLINEK, and JANINE HARRISON, Individually And On Behalf Of All Others Similarly Situated, Plaintiffs, v. ROYAL APPLIANCE MFG. CO. d/b/a Hoover, Defendant.

SUSAN PHILLIPS, EKATERINI CAMPOS, ROBERT JELLINEK, and JANINE HARRISON, Individually And On Behalf Of All Others Similarly Situated, Plaintiffs, v. ROYAL APPLIANCE MFG. CO. d/b/a Hoover, Defendant.

No. 21-cv-987-WQH-KSC

United States District Court, S.D. California

September 3, 2021

ORDER

Hon William Q. Hayes United States District Court

The matters before the Court are the Motion to Dismiss Class Action Complaint and Motion for a More Definite Statement filed by Defendant Royal Appliance Mfg. Co. (ECF No. 5) and the Motion to Remand filed by Plaintiffs Susan Phillips Ekaterini Campos, Robert Jellinek, and Janine Harrison (ECF No. 8). /// ///

I. BACKGROUND

On April 6, 2021, Plaintiffs Susan Phillips, Ekaterini Campos Robert Jellinek, and Janine Harrison filed a Class Action Complaint against Defendant Royal Appliance Mfg. Co. d/b/a Hoover (“Royal Appliance”) in the San Diego County Superior Court. (Compl., Ex. A to Notice of Removal (“NOR”), ECF No. 1-2 at 4). Plaintiffs bring consumer claims against Defendant Royal Appliance under California state law arising from Royal Appliance's alleged unlawful warranty practices.

On May 24, 2021, Royal Appliance removed the action to this Court under 28 U.S.C. § 1441(b) and “28 U.S.C. § 1332 . . . based on diversity of citizenship of the parties.” (NOR, ECF No. 1 ¶ 3). In the Notice of Removal, Royal Appliance asserts that each named Plaintiff is “a citizen of the State of California” and is diverse from Royal Appliance, which is “incorporated in the State of Ohio, with its principal place of business in Charlotte, North Carolina.” (Id. ¶¶ 4-8). Royal Appliance asserts that the Statement of Damages filed by Plaintiffs demonstrates that “the amount in controversy, exclusive of interest[] and costs, exceeds $75, 000.” (Id. ¶ 9).

On June 1, 2021, Royal Appliance filed a Motion to Dismiss Class Action Complaint and Motion for a More Definite Statement. (ECF No. 5). Royal Appliance moves to dismiss the Complaint pursuant to Rule 9(b) of the Federal Rules of Civil Procedure for failure to allege fraud with particularity. In the alternative, Royal Appliance moves for a more definite statement pursuant to Rule 12(e) of the Federal Rules of Civil Procedure.

On June 10, 2021, Plaintiffs filed a Motion to Remand. (ECF No. 8). Plaintiffs move to remand this case to the San Diego County Superior Court, or, in the alternative, “remand at least Plaintiffs' equitable claims.” (ECF No. 8 at 2). Plaintiffs contend that Royal Appliance fails to demonstrate that the amount in controversy exceeds $75, 000. Plaintiffs further contend that the Court lacks subject matter jurisdiction over Plaintiffs' equitable claims pursuant to the decision of the Court of Appeals for the Ninth Circuit in Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020), because “Defendant does not demonstrate, nor even allege, that Plaintiffs' legal remedies are inadequate.” (ECF No. 8-1 at 7).

On June 22, 2021, Plaintiffs filed an Opposition to the Motion to Dismiss. (ECF No. 9). On June 28, 2021, Royal Appliance filed a Reply in support of the Motion to Dismiss. (ECF No. 10).

On July 2, 2021, Royal Appliance filed an Opposition to the Motion to Remand. (ECF No. 11). Royal Appliance contends that this action meets the requirements for diversity jurisdiction under the Class Action Fairness Act (“CAFA”), because the parties are minimally diverse, there are more than 100 putative class members, and the aggregate amount in controversy exceeds $5, 000, 000. Royal Appliance further contends that Sonner is inapplicable, and it would be premature for the Court to remand Plaintiffs' equitable claims.

On July 12, 2021, Plaintiffs filed a Reply in support of the Motion to Remand. (ECF No. 12). Plaintiffs contend that Royal Appliance fails to provide sufficient evidence that the amount in controversy exceeds $5, 000, 000 under CAFA.

II. ALLEGATIONS IN THE COMPLAINT

Defendant Royal Appliance “is a manufacturer of products and advertises that its products are sold with express warranties.” (Compl., Ex. A to NOR, ECF No. 1-2 ¶ 2). Royal Appliance “makes a warranty registration form available online and includes warranty registration cards with the packaging of its products.” (Id. ¶ 3). In 2019, Plaintiffs each viewed an advertisement by Royal Appliance for a vacuum or carpet cleaner, which “advertised . . . that the Product was accompanied by Defendant's express warranties.” (Id. ¶¶ 26, 36, 43, 53). The advertisements “did not contain any other terms, conditions, exclusions or limitations with respect to the warranty availability.” (Id. ¶¶ 27, 37, 44, 54). Plaintiffs relied on the warranty promises and purchased the Royal Appliance products.

When Plaintiffs opened the product packaging, they “discovered that the Product[s] did not come with a warranty as Plaintiff[s] [] were led to believe.” (Id. ¶¶ 29, 39, 46, 56). The online warranty registration form and the warranty card registration included with the packaging “failed to inform Plaintiff[s] [] that it was for product registration only, and did not inform Plaintiff[s] [] that failure to complete the online form did not diminish Plaintiffs['] warranty rights as required by California Civil Code § 1793.1.” (Id. ¶¶ 32-33, 40, 49-50, 57). “[A]s a result of Defendant's unlawful and deceitful business practices, Defendant is able to chill warranty claims and benefit economically by duping consumers into thinking that they do not have warranty rights unless they fill out the form and provide their personal information to Defendant.” (Id. ¶ 6). “[C]onsumers actually do not have the warranties that were promised to them when they purchased their products as they must now register their warranties, a requirement that was not disclosed at the time of purchase.” (Id.). If the exterior packaging of the products Plaintiffs purchased “disclosed that the warranty was contingent on registration by Plaintiffs providing their personal information, Plaintiffs would not have purchased the Products, or alternative would not have paid a premium for the Products.” (Id. ¶ 61).

Plaintiffs seek to represent the following classes:

a. All persons who purchased one or more of Defendant's products within California during the four (4) years immediately preceding the filing of the Complaint through the date of class certification, which were accompanied by a warranty or product registration card or form, or an electronic online warranty or product registration form, to be completed and returned by the consumer, which do not contain statements, each displayed in a clear and conspicuous manner, informing the consumer that: i) the card or form is for product registration, and ii) informing the consumer that failure to complete and return the card or form does not diminish his or her warranty rights.

b. All persons who purchased one or more of Defendant's products within California during the three (3) years immediately preceding the filing of the Complaint through the date of class certification, which were advertised as being accompanied with an express warranty but which do not contain a warranty, and/or contain warranty activation, confirmation or registration cards requiring persons to provide their personal data or take additional steps in order to receive a warranty.

(Id. ¶ 64). Plaintiffs bring the following claims against Royal Appliance: (1) violation of California's Song-Beverly Consumer Warranty Act, Cal. Civ. Code §§ 1790, et seq.; (2) violation of California's Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq.; and (3) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq. Plaintiffs seek declaratory relief, actual damages, punitive damages, restitution “in an amount equal to the total amounts paid and payable for the Class products, ” a civil penalty of two times the amount of actual damages, injunctive relief, and attorneys' fees and costs. (Id. at 22).

III. LEGAL STANDARD

“Under 28 U.S.C. § 1441, a defendant may remove an action filed in state court to federal court if the federal court would have original subject matter jurisdiction over the action.” Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1243 (9th Cir. 2009). District courts have original jurisdiction over “all actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, ” and the dispute is between “[c]itizens of different States.” 28 U.S.C. § 1332(a). “Congress, in 2005, passed CAFA, which significantly expanded federal jurisdiction in diversity class actions” to include certain class actions “in which the matter in controversy exceeds the sum or value of $5, 000, 000, exclusive of interest and costs, ” and “in which . . . any member of a class of plaintiffs is a citizen of a State different from any defendant.” Lewis v. Version Commc'ns, Inc., 627 F.3d 395, 398 (9th Cir. 2010); 28 U.S.C. § 1332(d)(2)(A). However, “federal diversity jurisdiction still exists for [] class actions that satisfy the general diversity jurisdiction provision of § 1332(a).” Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1021 n.4 (9th Cir. 2007). “A class action [may] be heard in federal court under [traditional] diversity jurisdiction only if there [i]s complete diversity, i.e., all class representatives [a]re diverse from all defendants, and if at least one named plaintiff satisfie[s] the amount in controversy requirement of more than $75, 000.” Lewis, 627 F.3d at 398 (citing Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 549-51 (2005)).

“A motion to remand is the proper procedure for challenging removal.” Moore-Thomas, 553 F.3d at 1244 (citing 28 U.S.C. § 1447(c)). “[R]emand may be ordered either for lack of subject matter...