Stearns v. Select Comfort Retail Corp..

Decision Date21 July 2010
Docket NumberCase No. 08–2746 JF (PVT).
Citation763 F.Supp.2d 1128
CourtU.S. District Court — Northern District of California
PartiesMolly STEARNS, et al., Plaintiffs,v.SELECT COMFORT RETAIL CORPORATION, a Minnesota Corporation; Bed Bath & Beyond, Inc. a New York Corporation; and the Sleep Train, a California Corporation, Defendants.

OPINION TEXT STARTS HERE

Robert M. Gagliasso, Andrew Vinson Stearns, Bustamante O'Hara & Gagliasso, San Jose, CA, for Plaintiffs.Dianne L. Sweeney, Vernon H. Granneman, Pillsbury Winthrop Shaw Pittman LLP, Palo Alto, CA, Andrew Scott Hansen, Heidi A.O. Fisher, Meghan M. Anzelc, Oppenheimer Wolff & Donnelly, Minneapolis, MN, Wendy L. Wilcox, Skane Wilcox LLP, Jennifer Hutcheson McCune, San Francisco, CA, for Defendants.

ORDER 1 GRANTING DEFENDANTS' MOTIONS TO STRIKE AND DISMISS, AND DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE THEIR FOURTH AMENDED COMPLAINTJEREMY FOGEL, District Judge.

I. BACKGROUND
A. Procedural history

On April 25, 2008, Plaintiff Molly Stearns (Stearns), a California resident, filed a complaint in the Santa Clara Superior Court alleging that she had found mold in a Sleep Number® bed purchased at Bed Bath & Beyond (BBB) in 2000. The complaint alleged claims for strict product liability, intentional misrepresentation, negligent misrepresentation, concealment, breach of express warranty, and breach of implied warranty. Stearns also sought to bring a class action on behalf of all original purchasers and users of Sleep Number® beds manufactured between January 1, 1987 and December 31, 2005. Defendants Select Comfort Retail Corporation (Select Comfort) and BBB removed the action to this Court and then moved to dismiss all of Stearns' claims except for the product liability claim and to strike the class allegations. On October 1, 2008, 2008 WL 4542967, the Court dismissed the complaint with leave to amend. In striking Stearns' class claims, the Court noted the inherent difficulty of maintaining a class action arising from alleged personal injuries. Dkt. No. 28 at 11–12.

On October 30, 2008, Stearns and additional named plaintiffs filed their first amended complaint (“FAC”), amending their previous claims and adding a new defendant (Sleep Train). The FAC also included new claims for relief based upon (1) negligence; (2) violation of the Magnuson–Moss Warranty Act (“MMWA”); (3) unfair competition pursuant to the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code § 17200 et seq.; (4) false advertising pursuant to the California False Advertising Law (“FAL”), Cal. Bus. & Prof.Code § 17500 et seq.; (5) violation of Section 1 of the Sherman Act; (6) violation of California's Cartwright Act; (7) violation of the California Consumers Legal Remedies Act (“CLRA”), Cal. Civ.Code § 1750; (8) violation of the Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962(c); (9) conspiracy in violation of RICO, 18 U.S.C. § 1962(d); and (10) violation of the Consumer Product Safety Act (“CPSA”), 15 U.S.C. § 2064, et seq. In addition, the claim for breach of express warranty was asserted expressly pursuant to Uniform Commercial Code (“UCC”) § 2–313. The implied warranty claim was bifurcated into separate claims for breach of the implied warranty of merchantability (UCC § 2–314) and breach of the implied warranty of fitness (UCC § 2–315). In total, Plaintiffs asserted seventeen claims for relief, none of which included claims based upon personal injuries. On June 5, 2009, 2009 WL 1635931, the Court granted Defendants' motion to dismiss with leave to amend in part. Leave to amend was limited expressly to Plaintiffs' claims based upon negligence, strict product liability, breach of express warranty, and violations of the MMWA and UCL. The Court also granted Defendants' motion to strike Plaintiffs' purported class claims. The Order stated clearly that Plaintiffs could “not add any new defendants, plaintiffs or claims for relief without leave of the Court.” Dkt. No. 59 at 29.

On July 6, 2009, Plaintiffs filed their second amended complaint (“SAC”), asserting claims for negligence, strict product liability, breach of express warranty, and violations of the MMWA and UCL. The SAC also included a new claim under Florida's unfair competition statute, and personal injuries were alleged as a basis for Plaintiffs' claims for negligence and strict product liability. On December 4, 2009, 2009 WL 4723366, the Court granted Defendants' motion to dismiss with limited leave to amend and struck Plaintiffs' class allegations and newly-asserted claims based upon Plaintiffs' failure to seek leave of Court consistent with the June 5 Order. Dkt. No. 70 at 25. The Court again clearly informed Plaintiffs that they must seek leave of Court prior to adding “any new defendants, plaintiffs or claims for relief.”

On January 4, 2010, Plaintiffs filed the operative third amended complaint (“TAC”), again asserting claims for negligence, strict product liability, breach of express warranty, and violation of the MMWA and UCL. On March 12, 2010, Defendants moved to dismiss the TAC for failure to state a claim upon which relief may be granted and to strike all of the purported class claims contained therein. On the same date, Plaintiffs moved for leave to file their proposed fourth amended complaint (“PFAC”) which purports to refine all of their claims for relief and adds class-wide and individual personal injury claims.

B. General Allegations

Select Comfort first began designing, manufacturing, distributing and selling Sleep Number® beds in 1987. TAC ¶ 29. A limited twenty-year warranty accompanied each Sleep Number® bed. Id. Plaintiffs allege that the Sleep Number® bed is defectively designed, causing it to develop mildew and mold. Id. ¶¶ 38–43, 72. They claim that the bed's frame supports one or two air chambers, also known as bladders, that are separated and surrounded by foam pieces known as inserts or toppers. Id. ¶¶ 39, 40. The inserts and toppers then are “enclosed by another level of foam and a cover which completes the enclosure ...” Id. ¶ 39. The bladders are covered with a canvas material that, along with the foam components, allegedly “absorb[s] moisture which is never naturally ventilated due in part to the construction of the bladder which is a piece of rubber or PVC sandwiched between two pieces of canvas.” Id. Plaintiffs allege that the bed's design is “inherently defective” because it “is an air bladder surrounded by forma and an upholstered topper” which “acts as a vapor barrier preventing the permeation of air or ventilation.” Id. ¶ 43. Plaintiffs allege that the “air bladder thereby allows moisture from condensation or other sources to become trapped within the system—a trait not shared by upholstered products.” Id.; see also id. ¶ 40 (alleging that [u]pholstered products have the ability for air to migrate throughout, thereby inhibiting the ability of the upholstered products to retain a wet and damp state”, while [t]he Sleep Number bed, as designed, prevents air migration in order to allow the user to adjust and maintain the exact air pressure desired ... when moisture comes into contact with the vapor barrier, through condensation or other means, it does not dry as it would with ventilated upholstered products. The moisture sits, stagnant, upon the vapor barrier as designed and creates the perfect environment for mold incubation”). Plaintiffs claim that Select Comfort has received thousands of complaints with respect to mold growth in its Sleep Number® bed prior to and since 2004. Id. ¶ 47.

Plaintiffs allege that in 2005, when Select Comfort made improvements to the Sleep Number® bed, it applied mold inhibitors only to the “mattress covers.” Id. ¶ 77. This allegation is contradicted directly by language found in Exhibit F (a Yahoo! Buzz article entitled, “The Real Deal,” posted on June 8, 2008), which Plaintiffs themselves attached as an exhibit to the FAC. FAC Ex. F at 47. In this article, Select Comfort represented publicly that, “All key components of the Sleep Number® bed—including foam, air chambers, and fabrics—are treated with a proprietary anti-microbial agent to deter the growth of mold, mildew, and bacteria.” Id.

Select Comfort's limited warranty promises repair or replacement of a defective product or component. TAC ¶ 34. The language of the limited warranty indicates that repair or replacement of the defective product or component is the exclusive remedy, in lieu of all incidental, special or consequential damages, including for negligence ... Select Comfort will bear no other damages or expenses.” Id. (emphasis not in warranty, but added in TAC). Plaintiffs allege that Defendants are unable to repair the defect and that replacements of the defective product only have led to replacement of one defective part with another defective part. Id. ¶ 33. While the limited warranty does not mention explicitly the availability of a full refund for customers who have found mold in their beds, Select Comfort in fact has offered, in addition to replacement components and replacement of the entire bed, a full refund at no charge to complaining customers. FAC, Ex. B at 17 (indicating in an online customer complaint board that a customer who has an issue with mold is entitled to a full refund and providing the Select Comfort Customer Care phone number). However, Plaintiffs claim that Select Comfort “selectively enforces the terms of the warranty and provides refunds to customers in a selective manner and customarily only to those that complain and assert injury beyond the product itself and in some cases not at all.” TAC ¶ 34.

C. Individual Allegations 2
1. Molly Stearns

Stearns alleges that she purchased a Sleep Number® bed at BBB in 2000. She claims that she discovered mold in her bed on or around April 22, 2008, contacted Select Comfort customer service that same day, and subsequently received a refund check from Select Comfort for $1,894.35 without having...

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