Wedra v. Cree, Inc.
| Decision Date | 20 March 2020 |
| Docket Number | 19 CV 3162 (VB) |
| Parties | STEPHANIE WEDRA, on behalf of herself and all others similarly situated, Plaintiff, v. CREE, INC., Defendant. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff Stephanie Wedra, on behalf of herself and all others similarly situated, brings claims against defendant Cree, Inc. ("Cree"), under New York General Business Law Sections 349 and 350, and for breach of warranty, fraudulent misrepresentation and concealment, and unjust enrichment.
Now pending is Cree's motion to dismiss the complaint under Rule 12(b)(6). (Doc. #9).
For the following reasons, the motion is GRANTED IN PART and DENIED IN PART.
The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(d).
For the purpose of ruling on the motion to dismiss, the Court accepts as true all well-pleaded allegations in the complaint and draws all reasonable inferences in plaintiff's favor, as summarized below.
Defendant manufactures, advertises, and sells light emitting diode ("LED") bulbs. LED bulbs are energy-saving alternatives to incandescent bulbs and compact fluorescent lamps ("CFLs"). LED bulbs have lifespans of 25,000 to 50,000 hours, compared to incandescent bulbs' lifespans of 1,000 to 2,000 hours, and CFLs' lifespans of 10,000 hours. Defendant manufactures three categories of LED bulbs: (i) Standard A-Type; (ii) Reflector; and (iii) Specialty.
Plaintiff alleges she purchased defendant's 60-Watt and 75-Watt LED bulbs from Home Depot "during the class period."1 She claims she reviewed and relied on the packaging and advertising as she made her purchases. Specifically, plaintiff alleges she relied on defendant's packaging and advertising, which noted: "(1) the bulbs would last 22+ or 45+ years"; (2) she would "save upwards of hundreds of dollars per bulb over the lifetime of the bulbs"; and (3) "the bulb would perform better than less expensive LED and non-LED bulbs." (Compl. ¶ 41). According to the complaint, plaintiff relied on Internet advertisements that said, "the bulbs would last longer, use a fraction of the energy of incandescent bulbs, and save [her] money." (Id.). Moreover, plaintiff claims defendant's packaging contains a "10 Year Warranty and/or [a] '100% Satisfaction Guarantee[].'" (Id. ¶ 22). Finally, she alleges the light bulbs "burned out within six months" of her purchase. (Id. ¶ 42).
In deciding a Rule 12(b)(6) motion, the Court evaluates the sufficiency of the operative complaint under the "two-pronged approach" articulated by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).2 First, a plaintiff's legal conclusions and "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements," are not entitled to the assumption of truth and are thus not sufficient to withstand a motion to dismiss. Id. at 678;Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010). Second, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 556 U.S. at 679.
To survive a Rule 12(b)(6) motion, the complaint's allegations must meet a standard of "plausibility." Ashcroft v. Iqbal, 556 U.S. at 678; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 564 (2007). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. at 678. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 556).
In considering a motion to dismiss pursuant to Rule 12(b)(6), courts "may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint." DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). Courts may also consider matter of which judicial notice may be taken, including public documents and records. Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002).
Defendant requests the Court take judicial notice of documents relating to: (i) Young v. Cree, a lawsuit alleging similar claims against defendant in the United States District Court for the Northern District of California; (ii) Nguyen v. Cree, a lawsuit alleging similar claims against defendant in the United States District Court for the District of Oregon; and (iii) two of defendant's packages that were partially depicted in plaintiff's complaint. (Docs. ##11, 12). Plaintiff has not opposed the request.
"The court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201.
Specifically, a "court may take judicial notice of a document filed in another court not for the truth of the matters asserted in the other litigation, but rather to establish the fact of such litigation and related filings." Global Network Commc'ns, Inc. v. City of New York, 458 F. 3d 150, 157 (2d Cir. 2006). Here, the Court takes judicial notice of defendant's exhibits 1 through 5 (Docs. ##11-1 through 11-5), as these are documents filed in other lawsuits comprising similar allegations against defendant.
Moreover, the Court may take judicial notice of documents referenced in the complaint, even if the documents are not physically attached to the complaint, so long as their authenticity is not contested. See Smith v. Westchester County, 769 F. Supp. 2d 448, 458 n.7 (S.D.N.Y. 2011). For this reason, the Court takes judicial notice of defendant's exhibits 6 and 7. (Docs. ##11-6, 11-7). These exhibits are: (i) the Complete Packaging for Cree 60W 2700K Two Bulb Multi-Pack; and (ii) the Complete Packaging for Cree 75W 4" Recessed Downlight. Here, plaintiff partially depicted the documents in the complaint (see Compl. ¶¶ 7-8), and thus these documents are incorporated by reference. The authenticity of these documents is supported by a declaration of Phil Primato, the Senior Manager of Consumer Marketing in Cree's Lighting Division. (See Doc. #12 ("Primato Decl.") ¶¶ 8, 9).
Accordingly, the Court takes judicial notice of the following documents:
Plaintiff alleges defendant's labeling, marketing, and advertising of its LED bulbs give rise to liability. Specifically, plaintiff complains of statements concerning: (i) defendant's bulbs' minimum estimated lifespan, (ii) comparative savings with respect to its competitors, and (iii) defendant's 100% satisfaction guaranteed warranty.
Defendant argues plaintiff's claims are preempted by the Energy Policy and Conservation Act (the "EPCA"). See 42 U.S.C. § 6297. Defendant contends federal law requires bulb manufacturers and sellers, like defendant, to make certain statements on its product labeling, and that the EPCA explicitly preempts any state law claims respecting such statements.
The Court agrees with defendant inasmuch as plaintiff's claims are based on representations made pursuant to the EPCA-required disclosures on the Lighting Facts label, but disagrees to the extent defendant made representations in its advertising and labeling beyond what is required by the EPCA.
"A fundamental principle of the Constitution is that Congress has the power to preempt state law." Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363, 372 (2000). Thus, "[w]here state and federal law directly conflict, state law must give way." PLIVA, Inc. v. Mensing, 564 U.S. 604, 617-18 (2011). In determining whether federal preemption applies, "[c]ourts must 'start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act.'" Utts v. Bristol-Myers Squibb Co., 251 F. Supp. 3d 644, 660 (S.D.N.Y. 2017) (quoting Wyeth v. Levine, 555 U.S. 555, 565 (2009)).
"Express preemption is present when Congress's intent to preempt state law is explicitly stated in the statute's language." In re PepsiCo., Inc., Bottled Water Mktg. & Sales Practices Litig., 588 F. Supp. 2d 527, 530 (S.D.N.Y. 2008). To determine whether Congress intended to preempt state law, courts consider whether "the statute contains an express pre-emption clause," then "the task of statutory construction must in the first instance focus on the plain wording of the clause, which necessarily contains the best evidence of Congress' pre-emptive intent." CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993).
To reduce energy use, the EPCA establishes requirements pursuant to a national energy conservation program. The statute and corresponding regulation require LED bulbmanufacturers to make certain disclosures respecting energy use, efficiency, and estimated annual operating costs:
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