Opinion
Case No. 05-CV-2229 W (AJB).
April 11, 2006
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
On January 17, 2006 Plaintiffs Kim Koch, Malik Akram, Khola Herbert, David W. Mahy, Sheryl DeMarco Gregorius, James Perkins, Julie Lenz and Dusty K. Brower (collectively "Plaintiffs") commenced this putative class action against Defendant Gateway, Inc. ("Defendant"). Plaintiffs assert claims for unlawful, unfair and deceptive business practices, false and misleading advertising, breach of express warranty, breach of implied warranty, and violations of California's Consumer Remedies Act and Song-Beverly Consumer Warranty Act. Defendant now moves to dismiss all of Plaintiffs' claims pursuant to Federal Rule of Civil Procedure 12(b)(6). All parties are represented by counsel. The Court decides the matter on the papers submitted and without oral argument. See Civil Local Rule 7.1(d.1). For the reasons outlined below, the Court GRANTS Defendant's motion.
I. BACKGROUND
Plaintiffs are consumers who purchased various models of high-end Gateway televisions between August 2003 and March 2004. (FAC at ¶¶ 6-12.) Plaintiffs live throughout the United States and purchased their televisions through Gateway's website or at Gateway retail stores in their home states. (FAC at ¶¶ 6-13.) Each Plaintiff alleges that they reviewed Gateway advertisements prior to purchasing their televisions. ( Id.) Additionally, Plaintiffs seek class certification to bring this action on behalf of all persons in the United States who purchased Gateway televisions under the same or similar circumstances. (FAC at ¶¶ 4, 16-23.)
These dates are based on Plaintiffs Koch's, Akram's, Herbert's, Mahy's, Gregorius', Perkins' and Lenz's purchases. (FAC at ¶¶ 6-12.) The FAC does not provide the date Plaintiff Brower purchased his television. (FAC at ¶ 13.) Should Plaintiffs elect to remedy the deficiencies the Court notes below, the Court expects such omissions to be corrected.
Defendant is a Delaware corporation with its principal offices in Irvine, California. (FAC at ¶ 15.) Defendant manufactures and distributes a variety of consumer electronics, including the televisions at issue in this action. ( Id.) Defendant also produced the advertising materials Plaintiffs allegedly reviewed before purchasing the televisions. ( Id.)
According to the FAC, Defendants manufactured, marketed and sold various models of High Definition televisions ("HDTV") and Enhanced Definition televisions ("EDTV") over the last several years (collectively "GTW televisions"). (FAC at ¶¶ 24-25.) Because of their high degree of resolution and picture quality, consumers pay significant premiums for HDTV and EDTV televisions. ( Id.)
From the FAC, it appears that most of the Plaintiffs paid roughly $3000 to $6000 for their GTW televisions. (FAC at ¶¶ 6-12.) Although Plaintiff Brower's television allegedly cost "$3,3399.99," the Court ignores this figure as it is almost certainly a typo. (FAC at ¶ 13.)
To promote GTW television sales, Defendant allegedly made several representations concerning the GTW televisions' quality. (FAC at ¶¶ 25, 29.) As allegedly advertised, GTW televisions offered consumers "Exceptional Value and Brilliant Picture Quality." (FAC at ¶ 25.) Consumers were apparently encouraged to "toss their bulky old TVs and enjoy all the viewing and space-saving benefits of [GTW]" televisions." ( Id.) Dave Russell ("Russell"), Defendant's representative, allegedly proclaimed that "[GTW televisions] set new standards for quality and value." ( Id.)
To assure buyers that Defendant provided their GTW televisions with adequate customer support, Defendant allegedly made two representations concerning the GTW televisions' service and warranty guarantees. (FAC at ¶ 29.) Specifically, Defendant allegedly promised consumers "highly trained sales professionals" and support staff and warranty plans "designed to assure peace of mind." ( Id.)
Plaintiffs allege that Defendant's representations do not accurately describe Defendant's GTW televisions' and customer support. (FAC at ¶¶ 26, 28.) Specifically, Plaintiffs contend that GTW televisions have defective "power supply units" which fail soon after purchase, making the televisions unusable. (FAC at ¶¶ 26-27.) Plaintiffs also contend that Defendant failed to repair/replace broken GTW televisions as promised or refund customer money. (FAC at ¶¶ 28-29.)
On December 7, 2005 Plaintiffs commenced this action against Defendant. ( Doc. No. 1.) Amongst other theories, Plaintiffs plead violations of the California Legal Remedies Act ("CLRA") and California's Unfair Competition Law ("UCL"). (FAC at ¶¶ 36-54.) On December 8, 2005 Plaintiffs' counsel sent Defendant notice that its GTW televisions were allegedly defective and demanded that Defendant take action. (FAC at ¶ 31.) On January 17, 2006 Plaintiffs filed a First Amended Complaint ("FAC"). ( Doc. No. 3.) Currently before the Court is Defendant's motion to dismiss for failure to state a claim upon which relief may be granted. ( Motion at 1.)
Plaintiffs' original complaint was only filed on behalf of named Plaintiffs Koch, Akram, and Herbert as well as Others Similarly Situated. ( Doc. No. 1.)
II. LEGAL STANDARD
A motion to dismiss under Rule 12(b)(6) tests the complaint's sufficiency. See North Star Int'l. v. Arizona Corp. Comm'n., 720 F.2d 578, 581 (9th Cir. 1983). Dismissal of a claim according to this rule is appropriate only where it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Levine v. Diamanthuset, Inc., 950 F.2d 1478, 1482 (9th Cir. 1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
A complaint may be dismissed as a matter of law for two reasons: (1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party.Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002). The complaint and all reasonable inferences therefrom are construed in the plaintiff's favor. Walleri v. Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th Cir. 1996). Nevertheless, conclusory legal allegations and unwarranted inferences are insufficient to defeat a motion to dismiss. Ove v. Gwinn, 264 F.3d 817, 821 (9th Cir. 2001). Legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). III. DISCUSSION A. PLAINTIFFS LACK STANDING BECAUSE THEY HAVE NOT ALLEGED THAT THEY PERSONALLY SUFFERED AN INJURY IN FACT
Defendant first argues that Plaintiffs have not alleged an injury in fact and thus do not have standing to bring claims on behalf of themselves, much less an entire class of consumers. ( Motion at 4-5.) Specifically, Defendant contends that Plaintiffs do not allege that their GTW televisions failed; rather, the FAC only alleges that other customers' televisions have failed. ( Id.) Without alleging a redressable injury, Defendant argues, Plaintiffs' FAC must be dismissed. ( Id.) Plaintiffs contend that their FAC alleges sufficient facts to find that their GTW televisions failed and that more detailed information is unnecessary at this stage of the proceedings. ( Opposition at 5-6.)
The Court disagrees.
The standing doctrine ensures that a plaintiff's claims arise in a "concrete factual context" appropriate to judicial resolution. Arakaki v. Lingle, 423 F.3d 954, 965 (9th Cir. 2005), citing Valley Forge Christian Coll. v. Ams. For Separation of Church State, Inc., 454 U.S. 464, 472 (1982). The "irreducable constitutional minimum of standing" requires that a plaintiff allege that he has suffered a concrete injury, that there is a causal connection between his injury and the conduct complained of, and that the injury will likely be redressed by a favorable decision. Arakaki, 423 F.3d at 965-66. Plaintiffs who purport to represent a class must allege and show that they personally have been injured, not that the injury has been suffered by other, unidentified members of the class. Warth v. Seldin, 422 U.S. 490, 502 (1975).
Nowhere in the FAC do Plaintiffs allege that their GTW televisions have actually failed. Rather, the FAC generally alleges that "Plaintiffs and other consumers have found" that GTW televisions are subject to a host of infirmities. (FAC at ¶ 26.) The FAC does not allege whether Plaintiffs acquired this knowledge through personal experience, word of mouth, browsing consumer reports or by some other means. Simply put, without alleging some sort of individualized harm, such as the fact that their GTW televisions failed, Plaintiffs allege no injury for which this Court can provide redress.
The FAC continuously pairs Plaintiffs with "other consumers" and "other class members" when alleging injury. (FAC at ¶¶ 26, 52.) However, aside from a few conclusory allegations, the FAC identifies nothing indicating that Plaintiffs themselves personally suffered injury. (FAC at ¶ 52.) UnderWarth, Plaintiffs may not seek relief by relying on unidentified parties' injuries. Accordingly, because Plaintiffs allege no specific injury in fact, Defendant's motion to dismiss is GRANTED WITHOUT PREJUDICE on all claims. B. DEFENDANT'S ALLEGED REPRESENTATIONS ARE MERE PUFFERY AND ARE NOT ACTIONABLE AS A MATTER OF LAW
Although Plaintiffs argue that FED. R. CIV. P. 8 only requires that Defendant be put "on notice" of Plaintiffs' claims, Plaintiffs ignore the nature of their claims. For example, Plaintiffs have pled two warranty claims, and the viability of both presumably depends on when and how Plaintiffs' GTW televisions failed. See, e.g., CAL. CIV. CODE § 1791.1 (stating that the duration of an implied warranty parallels that of a express warranty and in any event has a maximum life of one year). Certainly, these types of facts are not peculiarly within the knowledge of the defendant.
Plaintiffs' CLRA claims are also subject to dismissal because Plaintiffs have not met section 1780(c)'s jurisdictional affidavit requirement. Notwithstanding the fact that the Court dismisses all of Plaintiffs' claims on unrelated matters, the Court cautions Plaintiffs to heed all of the CLRA's procedural mandates should Plaintiffs elect to file a Second Amended Complaint.
Defendant contends that the representations upon which Plaintiffs base a number of their claims amount to nothing more than non-actionable puffery under California law. ( Motion at 7.) Plaintiffs argue that they relied on Defendant's statements, which specifically induced them and others to purchasing allegedly defective GTW televisions. ( Opposition at 8-9.)
District courts may determine, as a matter of law, whether a statement is puffery when considering a Rule 12(b) (6) motion to dismiss. Cook, Perkiss, Liehe, Inc. v. Northern California Collection Service, Inc., 911 F.2d 242, 245 (9th Cir. 1990). In California, courts use the "reasonable consumer standard" in analyzing claims brought under the CLRA and UCL. Consumer Advocates v. Echostar Satellite Corp., 8 Cal. Rptr. 3d 22, 29 (Cal.Ct.App. 2003). Under this standard, plaintiffs must show that defendant's statements were likely to mislead the public. Haskell v. Time, 965 F. Supp. 1398, 1406-07 (E.D. Cal. 1997). Mere anecdotal evidence is insufficient to prove that the public is likely to be misled.Id., citing William H. Morris Co. v. Group W, Inc., 66 F.3d 255, 258 (9th Cir. 1995) (per curiam).
Advertising which merely states that one product is superior is not actionable. Cook, 911 F.2d at 246, quoting Smith-Victor Corp. v. Sylvania Electric Products, Inc., 242 F. Supp. 302, 308-09 (N.D. Ill. 1965). Rather, actionable statements improperly describe specific or absolute product characteristics. Cook, 911 F.2d at 246. For example, statements such as "crystal clear" or "CD quality" are not factual representations that a given standard is met and therefore cannot support tort liability.Consumer Advocates, 8 Cal. Rptr. at 29-30; See also Glen Holly Entertainment, Inc. v. Tektronix, Inc., 100 F. Supp. 2d 1086, 1093, 1096-97 (C.D. Cal. 1999) (holding statement that product had "superior interface" was puffery). Rather, such statements are boasts, or "all-but-meaningless superlatives[.]"Consumer Advocates, 8 Cal. Rptr. at 29-30. Courts have also found generalized advertisements emphasizing product value to be non-actionable puffery. See Pacesetter Homes, Inc. v. Brodkin, 85 Cal. Rptr. 39, 42 (Cal.Ct.App. 1970) (finding defendant's statement that property was an "excellent investment" puffery). Finally, a statement that is "but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty." See CAL. COMM. CODE § 2313(2).
Plaintiffs' FAC references five specific statements that allegedly induced them and others to purchase GTW televisions: (1) GTW televisions had "Exceptional Value and Brilliant Picture Quality" (FAC at ¶ 25;) (2) consumers could "toss their bulky old TVs and enjoy all the viewing and space-saving benefits of [GTW] televisions." ( Id.); (3) "[GTW televisions] set new standards for quality and value." ( Id.); (4) GTW televisions were serviced by "highly trained sales professionals" (FAC at ¶ 29;) and (5) the warranties were "designed to assure peace of mind." ( Id.)
The FAC alleges no specific statements likely to mislead a reasonable consumer into purchasing a GTW television. Rather, each statement is a generalized boast that Defendant's products and services are superior to competitors. Indeed, such advertisements are textbook examples of puffery or opinion, not improper descriptions of specific or absolute characteristics.See, e.g., Consumer Advocates, 8 Cal. Rptr. at 29-30 (holding "crystal clear" and "CD quality" puffery); see also CAL. COMM. CODE § 2313(2). As such, the Court finds as a matter of California law that such statements are not actionable. Insofar as Plaintiffs' claims rely upon these specific statements, Defendant's motion to dismiss is GRANTED WITH PREJUDICE. IV. CONCLUSION
Since Plaintiffs fail to allege an injury in fact entitling them to relief, Defendant's entire motion to dismiss for failure to state a claim is GRANTED WITHOUT PREJUDICE. However, the Court also concludes that the five specific statements Plaintiffs allege in support of their putative class claims are non-actionable puffery. To the extent that Plaintiffs' claims rely upon these specific statements, Defendant's motion to dismiss is GRANTED WITH PREJUDICE. Should Plaintiffs elect to remedy the deficiencies noted above, they may file a Second Amended Complaint by no later than May 5, 2006.
IT IS SO ORDERED.