Tait v. BSH Home Appliances Corp.
| Decision Date | 31 August 2011 |
| Docket Number | Case No. SACV 10-00711 DOC (ANx) |
| Court | U.S. District Court — Central District of California |
| Parties | DIANA TAIT et. al. v. BSH HOME APPLIANCES CORP. |
Kathy Peterson
Courtroom Clerk
Not Present
Court Reporter
ATTORNEYS PRESENT FOR PLAINTIFFS:
NONE PRESENT
ATTORNEYS PRESENT FOR DEFENDANTS:
Before the Court is a Motion to Dismiss Plaintiffs' Second Consolidated Amended Complaint filed by Defendant BSH Home Appliances Corp. ("Motion to Dismiss") (Docket 67). After reviewing the moving, opposing and replying papers, and for the reasons explained below, the Court GRANTS in part and DENIES in part the Motion to Dismiss
This case is a purported class action brought by named Plaintiffs Diana Tait, Nancy Wentworth, Beverly Gibson, and Trish Isabella ("Plaintiffs"). According to the allegations of the Second Consolidated Amended Complaint ("SCAC"), Defendant BSH Home Appliances ("Defendant") manufactures defective front-loading automatic washing machines. In particular, Plaintiffs contend that the machines fail to self-clean, resulting in an accumulation of biofilm, mold, and bacteria and the consequent emission of foul odors. Plaintiffs also allege that, as a result of the extra measures they are forced to take in order to clean their washing machines, the machines use water and energy inefficiently. Plaintiffs charge Defendants with knowingly failing to disclose these defects to consumers and instead touting their machines as "Xxtra Sanitary" and "high efficiency."
On May 12, 2011, the Court granted a motion to dismiss the previous iteration of the SCAC, dismissing all claims but allowing Plaintiffs leave to amend the majority of the complaint("Previous Motion to Dismiss Order"). Defendant now moves to dismiss Plaintiffs' amended claims.
Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a plaintiff's allegations fail to state a claim upon which relief can be granted. Dismissal for failure to state a claim does not require the appearance, beyond a doubt, that the plaintiff can prove "no set of facts" in support of its claim that would entitle it to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1968 (2007) (abrogating Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). In order for a complaint to survive a 12(b)(6) motion, it must state a claim for relief that is plausible on its face. Ashcroft v. Iqbal,129 S.Ct. 1937, 1950 (2009). A claim for relief is facially plausible when the plaintiff pleads enough facts, taken as true, to allow a court to draw a reasonable inference that the defendant is liable for the alleged conduct. Id. at 1949. If the facts only allow a court to draw a reasonable inference that the defendant is possibly liable, then the complaint must be dismissed. Id. Mere legal conclusions are not to be accepted as true and do not establish a plausible claim for relief. Id. at 1950. Determining whether a complaint states a plausible claim for relief is a context-specific task requiring the court to draw on its judicial experience and common sense. Id.
Where fraud is alleged, Federal Rule of Civil Procedure 9(b) requires parties to "state with particularity the circumstances constituting fraud or mistake," although "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed.R.Civ.P. 9(b). "Rule 9(b) ensures that allegations of fraud are specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir.1985). Providing detailed notice to defendants also prevents plaintiffs from filing complaints "as a pretext for the discovery of unknown wrongs." Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001) ).
Dismissal without leave to amend is appropriate only when the Court is satisfied that the deficiencies in the complaint could not possibly be cured by amendment. Jackson v. Carey, 353 F.3d 750, 758 (9th Cir.2003) (citing Chang v. Chen, 80 F.3d 1293, 1296 (9th Cir.1996)); Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000).
Defendant first moves to dismiss Plaintiffs' causes of action under California's Unfair Competition Law, Cal. Bus. & Prof Code § 17200 ("UCL"); California's False Advertising Law, Cal.Bus. & Prof Code § 17500 ("FAL"); and the California Consumer Legal Remedies Act, Cal. Civ. Code § 1750 ("CLRA"). In support of its motion to dismiss these claims, Defendant argues that the allegations underlying these claims do not comply with the strictures of Rule 9(b).1 Rule 9(b) applies to any claim grounded in fraud, regardless of whether the claim is explicitly labeled as a fraud cause of action. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102-05 (9th Cir.2003). As explained in the Court's Previous Motion to Dismiss Order, the allegations supporting Plaintiff's UCL, FAL and CLRA claims sound in fraud and thus must satisfy Rule 9(b).
In the latest version of their complaint, Plaintiffs explicitly disavow any claims based on affirmative misrepresentations by Defendant. SCAC, ¶ 45. Instead, Plaintiffs assert a theory of misrepresentation by omission, alleging that Defendant failed to disclose certain material information to Plaintiffs prior to the time that they purchased the washing machines. Accordingly, whereas fraud plaintiffs typically must provide an "account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations," Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir.2007), a plaintiff in a fraud-by-omission suit faces a slightly more relaxed burden, due to the fraud-by-omission plaintiff's inherent inability to specify the time, place, and specific content of an omission in quite as precise a manner. Baggett v. Hewlett Packard Co., 582 F. Supp. 2d 1261, 1267 (C.D. Cal. 2007) (citing Falk v. General Motors Corp., 496 F. Supp. 2d 1088, 1098-99 (N.D. Cal. 2007)). The Court examines the adequacy of Plaintiffs' fraudulent omission claims with these principles in mind.
A cause of action based on alleged omissions can lie only where a Defendant has a duty to make disclosures. California courts have found that such a duty exists in the following four situations: "(1) when the defendant is in fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; or (4) when the defendant makes partial representations but also suppresses some material facts." LiMandri v. Judkins, 52 Cal.App.4th 326, 337 (1997). Here, Plaintiffs have alleged sufficient facts to establish a duty to disclose under at least the second and third prong of the Judkins test. Plaintiffs aver that Defendant, both from first-hand experience and consumer complaints, knew of the machines' defects, SCAC ¶¶ 91-98, but actively concealed this information by failing to disclose it to consumers prior to the time of purchase.
Defendant's attempt to rebut this allegation by arguing that Defendant provided information on the extra efforts needed to clean the machines in its Use and Care Manual, or that complaints about the product were available on the internet, is unavailing. The Use and Care Manuals were available to consumers only after they bought the machines. Similarly, the fact that information about consumer complaints may have been available on the internet does not negate a claim for fraudulent omission. As the Northern District of California has explained, although some Falk, 496 F. Supp. 2d at 1096.2 Plaintiffs have adequately plead a duty to disclose.
Plaintiffs also sufficiently allege that the concealed information regarding the machines' mold problems and low efficiency was material to their decision to purchase Defendant's product. SCAC ¶¶ 49, 129. See also Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 322 (2011) (). Finally, the SCAC includes pictures of the washing machines and points to places on the labels, as well as locations on Defendant's website, where the omitted information could have been provided. SCAC, ¶¶ 49-49, 60. Taken as a whole, Plaintiffs' allegations in support of their UCL, FAL and CLRA causes of action are sufficiently particular to satisfy Rule 9(b).
Defendant's Motion to Dismiss Plaintiffs' UCL, FAL and CLRA claims is accordingly DENIED.
Defendant next moves to dismiss Plaintiffs' breach of express warranty claims under Uniform Commercial Code § 2-313, as incorporated in California, New York and Maryland law. Defendant advances a variety of arguments in support of its request to dismiss these claims, but only one is necessary: Plaintiffs are not in privity of contract with Defendant and they have not sufficiently alleged an exception to the privity requirement.
Under the laws of all three states, privity generally functions as a prerequisite to any breach of express warranty...
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...taken steps to secure information but failed to disclose security deficiencies), and Tait v. BSH Home Appliances Corp ., No. SACV 10–00711 DOC (ANx), 2011 WL 3941387, at *2 (C.D.Cal. Aug. 31, 2011) (denying a motion to dismiss where the defendant marketed a washing machine as “sanitary” but......