Singh v. Lenovo (U.S.) Inc.

• Decision Date: 04 January 2021
• Docket Number: Civil Action No. CCB-20-1082
• Citation: 510 F.Supp.3d 310
• Parties: Neha SINGH, et al. v. LENOVO (UNITED STATES) INC.
• Court: U.S. District Court — District of Maryland

510 F.Supp.3d 310

Neha SINGH, et al.

v.LENOVO (UNITED STATES) INC.

Civil Action No. CCB-20-1082

United States District Court, D. Maryland.

Signed January 4, 2021

James P. Ulwick, Kramon and Graham PA, Baltimore, MD, Christopher Tourek, Pro Hac Vice, Daniel O. Herrera, Pro Hac Vice, Cafferty Clobes Meriwether and Sprengel LLP, Chicago, IL, Joseph George Sauder, Pro Hac Vice, Sauder Schelkopf LLC, Berwyn, PA, for Neha Singh, Sandra Cox.

David B. Hamilton, Hillary Victoria Colonna, Womble Bond Dickinson (US) LLP, Baltimore, MD, Christina N. Goodrich, Pro Hac Vice, Daniel J. Stephenson, Pro Hac Vice, K and L Gates LLP, Los Angeles, CA, Meredith D.M. Bateman, Pro Hac Vice, K&L Gates LLP, Portland, OR, for Lenovo (United States) Inc.

MEMORANDUM

Catherine C. Blake, United States District Judge

This putative class action raises claims related to a line of "Yoga" computer devices manufactured and sold by Lenovo United States, Inc. ("Lenovo"). The plaintiffs allege Lenovo knowingly sold the Yoga devices with defective hinges in violation of various states’ consumer fraud statutes and in breach of express and implied warranties. Before the court is Lenovo's motion to dismiss (ECF 20). The matter has been fully briefed, and oral argument was heard on December 2, 2020. For the reasons discussed herein, the motion will be denied.

FACTS AND PROCEDURAL HISTORY

This suit concerns an allegedly defective series of "Yoga" two-in-one tablet and laptop computer devices manufactured by Lenovo, a North Carolina corporation. It covers all 700-series models, including models 700, 710, 720, and 730, all of which use the same "dual-hinge system" to flex into different positions to function at times like a laptop and at times like a tablet. (ECF 1, Compl. ¶¶ 1 n1, 2–3). The hinge system is supposed to sustain at least 25,000 "open-close cycles," which equates to approximately eight to ten years of use. (Id. ¶ 46).

The plaintiffs contend that the devices are defective "in that [they] prematurely and unexpectedly crack[ ] and fail[ ], rendering the hinges inoperable[.]" (Id. ¶ 4). When the hinges fail, this causes optical cables to come loose, the screen to flicker, and the plastic surrounding the screen—and sometimes the screen itself—to crack, rendering the devices inoperable. (Id. ¶ 5).

The plaintiffs allege Lenovo knew of the problem before it sold the products and chose to conceal the defect. (Id. ¶ 6). This knowledge purportedly came to Lenovo through multiple sources, including Lenovo's own durability testing, repair data, replacement data, and consumer complaints. (Id. ¶ 53). Additionally, the plaintiffs assert that Lenovo's redesign of the hinge on its Yoga 900 series model, which uses a watchband hinge, indicates Lenovo knew the hinge system used in the 700-series was defective. (Id. ¶¶ 77–78).

Lenovo provides an express one-year warranty, limited to product replacement or repair, that its products will be "free from defects in materials and workmanship under normal use[.]" (Id. ¶¶ 84–85). The plaintiffs argue that this warranty "fails of its essential purpose," as at best it allows consumers to replace one defective hinge with another, and is therefore "unconscionable and unenforceable." (Id. ¶¶ 86, 89).

On March 27, 2020, plaintiffs Neha Singh of Maryland and Sandra Cox of Missouri filed this class action pursuant to the Class Action Fairness Act against Lenovo, asserting seven causes of action: (1) violation of the Magnuson-Moss Warranty Act ("MMWA"), 15 U.S.C. § 2301 ; (2) breach of express warranty; (3) breach of implied warranty; (4) violation of the Maryland Consumer Protection Act ("MCPA"), Md. Ann. Code, Com. Law § 13-301 ; (5) violation of the Missouri Merchandise Practices Act ("MMPA"), Mo. Rev. Stat. § 407.010 ; (6) unjust enrichment; and (7) fraudulent omission or concealment. (Id. ¶¶ 103–183).

The plaintiffs seek to certify a nationwide class under Fed. R. Civ. P. 23(b)(2) or (b)(3). Should the court not approve a nationwide class, the plaintiffs would then seek to certify statewide classes representing consumers in Maryland and Missouri, where the named plaintiffs reside. (Id. ¶ 94). The plaintiffs seek damages, injunctive relief, and declaratory relief, as well as an award of attorneys’ fees and costs.

On August 12, 2020, Lenovo moved to dismiss the claims against it. (ECF 20). The plaintiffs have responded (ECF 23) and Lenovo has replied (ECF 24). A motions hearing was held on December 2, 2020. (ECF 26).

STANDARD OF REVIEW

To survive a motion to dismiss, the factual allegations of a complaint "must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citations omitted). "To satisfy this standard, a plaintiff need not ‘forecast’ evidence sufficient to prove the elements of the claim. However, the complaint must allege sufficient facts to establish those elements." Walters v. McMahen , 684 F.3d 435, 439 (4th Cir. 2012) (citation omitted). "Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is ‘probable,’ the complaint must advance the plaintiff's claim ‘across the line from conceivable to plausible.’ " Id. (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). Additionally, although courts "must view the facts alleged in the light most favorable to the plaintiff," they "will not accept ‘legal conclusions couched as facts or unwarranted inferences, unreasonable conclusions, or arguments’ " in deciding whether a case should survive a motion to dismiss. U.S. ex rel. Nathan v. Takeda Pharm. North Am., Inc. , 707 F.3d 451, 455 (4th Cir. 2013) (quoting Wag More Dogs, LLC v. Cozart , 680 F.3d 359, 365 (4th Cir. 2012) ).

DISCUSSION

I. STANDING

Courts have an independent obligation to assure that standing exists. See Summers v. Earth Island Inst. , 555 U.S. 488, 499, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009). An "irreducible constitutional minimum," standing requires that a plaintiff have suffered (1) an injury in fact, (2) caused by the defendant, and (3) redressable by a favorable decision of the court. Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In this case, Lenovo argues that the plaintiffs—who purchased only the model 710 Yoga—lack standing to pursue the class claims relating to Yoga models 700, 720, and 730. (See ECF 20-2- at 15).

Some jurisdictions do follow the "standing approach," which Lenovo urges this court to employ, in which courts evaluate at the motion to dismiss stage whether a proposed class representative has standing to pursue relief suffered by proposed class members that differ from the named plaintiff's own injuries. See Williams v. Potomac Family Dining Group Operating Co. , No. GJH-19-1780, 2019 WL 5309628, at *4 (D. Md. Oct. 21, 2019) (discussing the different approaches).¹ Most jurisdictions, however, have adopted a "class certification" approach, allowing an action to proceed once the named plaintiff demonstrates her individual standing to bring a claim, leaving for the Rule 23(a) analysis questions about commonality, typicality, and adequacy of representation. Id. ; see also Melendres v. Arpaio , 784 F.3d 1254, 1262 (9th Cir. 2015). The Fourth Circuit Court of Appeals has not mandated either approach, but several district courts in this circuit have endorsed or applied the class certification approach. See, e.g., Hendrick v. Caldwell , 232 F. Supp. 3d 868, 882 (W.D. Va. 2017), vacated on other grounds by Manning v. Caldwell for City of Roanoke , 930 F.3d 264 (4th Cir. 2019) ; In re Mutual Funds Inv. Litig. , 519 F. Supp. 2d 580, 586–87 (D. Md. 2007) ; Williams , 2019 WL 5309628, at *4 ; Henderson v. Corelogic Nat'l Background Data, LLC , No. 3:12CV97, 2016 WL 4611570, at *3 (E.D. Va. Sept. 2, 2016).

Indeed, since standing is "primarily concerned with ensuring that a real case or controversy exists," questions about the "relationship between the class representatives and the class" are best resolved in a Rule 23 analysis. WILLIAM B. RUBENSTEIN , NEWBERG ON CLASS ACTIONS § 2:6 (5th ed. December 2020 update). As previously noted, Supreme Court precedent indicates that a plaintiff has Article III standing to assert a claim in a putative class action "where she plausibly alleges that (1) she has suffered an injury in fact traceable to a defendant and redressable by the court, and (2) her claimed injury is shared in common with others who have been similarly harmed by the same defendant's actions." In re Mutual Funds Inv. Litig. , 519 F. Supp. 2d at 586. In this case, the plaintiffs allege that all of the 700-series Yoga models used the same defective hinge, which Lenovo mispresented in the same way: specifically, their complaint states the "defective" dual-hinge system is "identical" across all 700-series models "with respect to design, form, assembly, and function" and the hinges are all "assemble[d]" in "the exact same manner[.]" (ECF 1 ¶¶ 3–4, 45). By characterizing the plaintiffs’ injuries as ones uniquely stemming from certain models—rather than commonly from a single hinge system—Lenovo obscures the similarities between the named plaintiffs’ injuries and the class injuries in a manner that may prematurely limit the size of the class and that does not address whether a real case or controversy exists. Though it is difficult, based on the pleadings alone, for the court to envision certifying a nationwide class, the court today draws no conclusions as to the proper scope of the putative class, the adequacy of the named plaintiffs to represent such a class, or whether such a class is likely to be certified.² But for the purposes of ruling on the pending motion to dismiss, the court concludes that the plaintiffs allege they suffered concrete injuries—shared with others similarly harmed by the same defective hinge system—which...