SUSAN WEBBER WRIGHT, District Judge.
Plaintiff Denise Jarrett brings this proposed class action against Defendants Sanyo Manufacturing Corporation (Sanyo), Wal-Mart Stores, Inc., and Wal-Mart Stores Arkansas, L.L.C. (collectively, Wal-Mart), alleging the Defendants designed, manufactured, distributed or sold defective 42" and 46" Sanyo plasma televisions.
Now before the Court is Defendants' motion for judgment on the pleadings under Fed.R.Civ.P. 12(c) [doc. # 38]. Plaintiff has responded in opposition to Defendants' motion and Defendants have filed a reply to Plaintiff's response. For the reasons that follow, the Court grants in part and denies in part Defendants' motion for judgment on the pleadings.
Plaintiff claims that in November 2010 she purchased a 46" Sanyo plasma television at a Wal-Mart store in Little Rock, Arkansas, but that in October 2011, the television began to malfunction, losing partial picture resulting in the right side of the screen becoming black. Compl. ¶¶ 17-18. Plaintiff claims "[t]he 42" and 46" Sanyo plasma televisions have a design defect causing the screen to flicker, lose picture intermittently, lose full picture and/or lose full picture and sound, sometimes within hours of purchase." Compl. ¶ 6. Plaintiff claims the defect she experienced is "widespread and systemic across the United States" and that "[d]espite long-standing knowledge of the problems," Defendants have purposely concealed, suppressed, and omitted to disclose to consumers that its 42" and 46" Sanyo plasma televisions are defectively designed. Compl. ¶¶ 7, 20. Plaintiff asserts the following claims against Defendants: Count I—Breach of Implied Warranty of Merchantability; Count II—Violation of the Arkansas Deceptive Trade Practices Act (ADTPA), Ark.Code Ann. § 4-88-101 et seq.; and Count III—Unjust Enrichment. Compl. ¶¶ 42-74.
Plaintiff proposes a nationwide class that consists of "[a]ll persons and entities residing in the United States who purchased a 42" and 46" Sanyo plasma television" and an Arkansas subclass of "[a]ll persons and entities residing in the State of Arkansas who purchased a 42" and 46" Sanyo plasma television." Compl. ¶ 24. Plaintiff claims that the nationwide class and Arkansas subclass "are both composed of, at least, thousands of people who purchased 42" and 46" Sanyo televisions, with the same common defect that causes similar characteristics and symptoms." Compl. at ¶ 25.
Defendants move for judgment on the pleadings under Fed.R.Civ.P. 12(c) on the following grounds: (1) Defendants properly disclaimed any implied warranty of merchantability and, separately, Plaintiff has not alleged that she provided any of the Defendants with the required pre-suit notice; (2) Plaintiff's ADTPA claim fails as she does not allege reasonable reliance and injury flowing from Defendants' allegedly deceptive conduct and she also does not plead her ADTPA claim with particularity as required by Fed.R.Civ.P 9(b); (3) Plaintiff's unjust enrichment claim fails as a matter of law because an express contract—a written warranty—existed; and (4) even if any of Plaintiff's individual claims survive, her class allegations should not.
A motion for judgment on the pleadings under Fed.R.Civ.P. 12(c) is reviewed under the same standards used to review a motion to dismiss under Fed. R.Civ.P. 12(b)(6). Ashley County, Ark. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir.
The Court first addresses Defendants' argument that they properly disclaimed any implied warranty of merchantability. This argument has subparts which the Court will address in turn.
Under the Arkansas Uniform Commercial Code (Arkansas UCC), a seller may exclude implied warranties of merchantability provided that the disclaimer mentions "merchantability" and is conspicuous. Ark.Code Ann. §§ 4-2-314 and 4-2-316. See also Perez v. Volkswagen Group of America, Inc., No. 2:12-cv-02289, 2013 WL 1661434, *6 (W.D.Ark. April 17, 2013)
All of the television models identified in paragraph one of Plaintiff's Complaint (DP42740, DP42746, DP42647, and DP46849) came with an Owner's Manual which contained an express one-year limited warranty. All other warranties—including merchantability—were disclaimed by Sanyo in the Owner's Manuals as follows:
Owner's Manuals (Exs. A-D).
Plaintiff does not dispute, and the Court finds, that the disclaimer in Sanyo's Owner's Manuals mentions "merchantability" and is conspicuous in that it is prominently featured in the middle of the page in capital letters. Accordingly, Defendants are entitled to judgment on the pleadings as to Plaintiff's breach of implied warranty of merchantability claim against Sanyo.
The same is not true of Wal-Mart, however. In their reply brief, Defendants argue in a footnote that Wal-Mart, like Sanyo, effectively disclaimed all implied warranties by providing the buyer with the Sanyo express one-year limited warranty found within the Owner's Manual in the boxed product at the time of sale. The Court disagrees. "In the usual case, a distributor or dealer must make his own disclaimer to be free from implied warranty liability. He cannot rely on a disclaimer used by the manufacturer even though he passes that documentation on to the ultimate buyer." Barkley Clark & Christopher Smith, The Law of Product Warranties § 8:14[1] (2012). See also Florists' Mut. Ins. v. Lewis Taylor Farms, Inc., No. 7:05-cv-50, 2008 WL 875493, *12 (M.D.Ga. March 27, 2008) ("a manufacturer's disclaimer of warranties does not run with the goods so as to protect any subsequent seller of them; thus, each subsequent seller must make his own independent disclaimer in order to be protected from warranty liability") (quoting 63 Am. Jur. Prods. L. § 801). Defendants cite no Arkansas law to the contrary. The one case cited by Defendants, Graham Hydraulic Power, Inc. v. Stewart & Stevenson Power, Inc., 797 P.2d 835 (Colo.App. 1990), is distinguishable. In that case, the Colorado Court of Appeals held that where the buyer knew the seller was the manufacturer's exclusive distributor and the buyer received the disclaimer directly from the seller and not from the manufacturer, the manufacturer's disclaimer became a part of the basis of the bargain between the buyer and the seller and therefore the seller was not required to restate the manufacturer's disclaimer in order to disclaim warranty liability. Here, in contrast, Defendants do not assert that Wal-Mart was Sanyo's exclusive distributor or that Plaintiff was aware of any such fact and they do not make any argument
In contesting Defendants' argument that they properly disclaimed any implied warranty of merchantability, Plaintiff, as previously noted, does not dispute that Sanyo's disclaimer of implied warranties failed to mention "merchantability" or was not conspicuous. Rather, Plaintiff argues for the first time that Defendants' motion for judgment on the pleadings is premature because the disclaimer may be unconscionable and unconscionability raises a fact question.
The "doctrine of unconscionability has both procedural and substantive elements. Procedural unconscionability deals with the manner in which a contract was entered into; substantive unconscionability, on the other hand, looks to the terms of the contract and whether they are harsh, one-sided, or oppressive." Hughes v. Wet Seal Retail, Inc., No. 10-cv-05090, 2010 WL 4750216, *2 (W.D.Ark. Nov. 16, 2010) (internal quotations and citation omitted). Plaintiff must prove both procedural and substantive unconscionability for an agreement to be unenforceable. Id.
Plaintiff's Complaint does not include specific allegations concerning unconscionability of the disclaimer of implied warranties and the Complaint makes no specific allegations concerning the one-year limited warranty she received from Defendants at the time of the television's purchase. Plaintiff does not dispute that the disclaimer complies with the Arkansas UCC and she has not pled facts suggesting that the disclaimer is nevertheless procedurally or substantively unconscionable. Merely raising the specter of unconscionability is not sufficient to defeat a motion for judgment on the pleadings. Cf. White v. Volkswagen Group of America, Inc., No. 2:11-cv-02243, 2013 WL 685298, *4-*5 (W.D.Ark. Feb. 25, 2013) (granting motion to dismiss unconscionabilty claim where "vague claim, unsupported by any factual allegation" failed to meet the pleading standards set forth in Twombly and there was nothing facially unconscionable about warranty); Ochman v. Wyoming Seminary, No. 3:12-cv-88, 2012 WL 5987133, *5 (M.D.Pa. Nov. 29, 2012) (granting motion to dismiss claim of substantive unconscionability where claim was supported by conclusory statements instead of factual allegations); Santos v. SANYO Mfg. Corp., Civil Action No. 12-11452, 2013 WL 1868268, *3-*4 (D.Mass. May 3, 2013) (granting motion to dismiss claim that warranty was unconscionable where amended complaint lacked factual support for such a claim); Moulton v. LG Electronics USA, Inc., Civil Action No. 11-4073, 2012 WL 5555496, *3 (D.N.J. Nov. 14, 2012) (rejecting plaintiff's argument that determination of unconscionability was better suited for summary judgment and instead holding that the Supreme Court's pleading standards decision in Iqbal requires that claims of unconscionability be held at a higher level of scrutiny). Accordingly, Defendants are entitled to judgment on the pleadings with respect to any claim of unconscionability Plaintiff is asserting.
The Court now turns to the question of whether Plaintiff provided any
In her Complaint, Plaintiff alleges that after her 46" Sanyo plasma television began to malfunction, she "sought to return, exchange or have repaired her 46" plasma television," that certain "members of the Class (such as the Plaintiff) ... called Sanyo to complain about the defective nature of their 42" and 46" Sanyo plasma televisions," and that "members of the Class (such as Plaintiff) ... called or otherwise complained to Wal-Mart about the defective nature of their 42" and 46" Sanyo plasma televisions." Compl. ¶¶ 18-19, 43(c), 45. Although it is a moot point as to Sanyo (the Court having found that Sanyo properly disclaimed any implied warranty of merchantability), the Court finds that it is a question of fact whether Plaintiff seeking to return, exchange, or have repaired her 46" plasma television and her and other putative class members calling Sanyo and Wal-Mart to complain about the allegedly defective nature of their 42" and 46" Sanyo plasma televisions was sufficient pre-suit notice as required by Ark.Code. Ann. § 4-2-607(3)(a). Cf. Industrial Electronic Supply, Inc. v. Lytle Manufacturing, L.L.C., 94 Ark.App. 81, 85-86, 226 S.W.3d 1, 5 (2006) (telephone calls from buyer to sales representative of seller about product not being what was ordered could be considered notice). Accordingly, the Court denies Defendants' motion for judgment on the pleadings on the adequacy of Plaintiff's pre-suit notice.
In sum, the Court grants Defendants' motion for judgment on the pleadings on Plaintiff's breach of implied warranty of merchantability claim against Sanyo but denies Defendants' motion as to Plaintiff's breach of implied warranty of merchantability claim against Wal-Mart.
The Court now turns to Plaintiff's ADTPA claim. The ADTPA prohibits persons from "knowingly making a false representation as to the characteristics, ingredients, uses, benefits, alterations, source, sponsorship, approval, or certification of goods or services or as to whether goods
Defendants argue that Plaintiff's ADTPA claim fails as she does not allege reasonable reliance and injury flowing from Defendants' allegedly deceptive conduct. Plaintiff does not specifically address Defendants' argument concerning her allegations regarding reliance and injury and the Court finds that those allegations are not sufficiently pled as she fails to allege any specific advertising that she saw or heard or how she relied on such advertising in deciding to purchase her television. Cf. White, 2013 WL 685298, *7 (in dismissing the ADTPA claim, the court found, inter alia, that plaintiff failed to plead reliance: "Beginning with [plaintiff's] false representations and false advertising claims, the Court observes that at no point in the Amended Complaint does [plaintiff] specify what false representations were affirmatively made to her by Defendant, nor does she state that she relied on particular false representations in making her decision to purchase her vehicle. These facts are fatal to [plaintiff's] ADTPA claims.") (emphasis in original).
Defendants also argue that Plaintiff does not plead her ADTPA claim with particularity as required by Fed. R.Civ.P 9(b). Rule 9(b) requires any plaintiff claiming fraud to plead with particularity the circumstances constituting fraud. Perez, 2013 WL 1661434, *8. Rule 9(b)'s pleading standard applies with equal force to state consumer fraud statutes as to common law fraud claims. Id. (citations omitted). "This pleading standard `demands a higher degree of notice than that required for other claims. The claim must identify who, what, where, when, and how.'" Id. (quoting United States ex rel. Costner v. United States, 317 F.3d 883, 888 (8th Cir.2003)). "The pleading must discuss `the time, place[,] and contents of false representations, as well as the identity of the person making the misrepresentation and what was obtained or given up thereby.'" McNeil v. Metropolitan Nat. Bank, No. 4:13cv00076, 2013 WL 2099815, *2 (E.D.Ark. May 14, 2013) (quoting Schaller Tel. Co. v. Golden Sky Sys., 298 F.3d 736, 746 (8th Cir.2002)). "Conclusory allegations of fraud and deception are insufficient." Id. "`Rule 9(b) is to be read in the context of the general principles of the Federal Rules, the purpose of which is to simplify pleading.'" Perez, 2013 WL 1661434, *8 (quoting Costner, 317 F.3d at 888). "The reason for requiring particularity in pleading for fraud claims, such as those established under the ADTPA, is `to enable the defendant to respond specifically
In support of her ADTPA claim, Plaintiff notes that she alleges the following: the existence of a defect; that Defendants were aware of this defect; that the existence of the defect was a material fact; that the failure to disclose the existence of this defect would tend to cause consumers to purchase the televisions; that Defendants failed to disclose the defect with the intent that consumers would rely upon the omission and purchase the televisions; and that Plaintiff and the class have suffered injury in that they have been forced to incur repairs or purchased televisions they would not otherwise have purchased. Plaintiff argues that "[t]he clear gravamen of [her] Complaint is that Defendants were selling televisions that were known to be defective, that Defendants failed to disclose this fact, that Plaintiff and the class purchased these televisions without knowing of their defective nature, and were damaged."
Whatever the gravamen of Plaintiff's Complaint may be, it is clear that Plaintiff's Complaint does not plead facts demonstrating each Defendant's respective knowledge and purposeful concealment of any alleged defects, who knew about them and when they occurred, where the omissions should have appeared, or how the allegedly omitted facts made any representations misleading. See United States ex rel. Riley v. St. Luke's Episcopal Hospital, 355 F.3d 370, 381 (5th Cir.2004) (in actions involving alleged omissions, "Rule 9(b) typically requires the claimant to plead the type of facts omitted, the place in which the omissions should have appeared, and the way in which the omitted facts made the representations misleading.") (quoting 2 James W. Moore et al., Moores Federal Practice § 9.03[1][b], at 9-18 (3d ed.2003)). Rather, Plaintiff's Complaint only alleges that Defendants violated the ADTPA by "concealing, suppressing, or omitting material facts in connection with the sale or advertisement of the 42" and 46" Sanyo plasma televisions...." Compl. ¶ 59. Such allegations are conclusory and do not satisfy Rule 9(b)'s pleading requirements. Cf. Santos, 2013 WL 1868268, *6 (plaintiff did not satisfy Rule 9(b) where he failed to allege specific facts that made it reasonable to believe that Sanyo knew that a statement or omission was materially false or misleading); Moulton v. LG Electronics USA, Inc., Civil Action No. 11-4073, 2012 WL 3598760, *3 (D.N.J. Aug. 21, 2012) (in finding that Plaintiff failed to meet the pleading requirements of Rule 9(b), court noted that "Plaintiff does not plead dates, times or places of the alleged fraud. Plaintiffs further do not plead the circumstances surrounding how LG came to know of the alleged defects and [ ] affirmatively concealed them."); Hughes v. Panasonic Consumer Electronics Co., Civil Action No. 10-846, 2011 WL 2976839, 14-*15 (D.N.J. July 21, 2011) (conclusory allegations of television manufacturer's knowledge and failure to disclose "fail to satisfy the Rule 9(b) heightened pleading standard" or under Iqbal).
In sum, Plaintiff's ADTPA claim fails as she does not allege reasonable reliance and injury flowing from Defendants' allegedly deceptive conduct and she fails to plead her ADTPA claim with particularity as
The Court now turns to Plaintiff's unjust enrichment claim. Under Arkansas law, the doctrine of unjust enrichment does not apply when there is a valid, legal, and binding contract. Varner v. Peterson Farms, 371 F.3d 1011, 1018 (8th Cir.2004). Here, Plaintiff does not dispute that there was a valid and binding express one-year limited warranty contract as to Sanyo. Accordingly, the Court grants Defendants' motion for judgment on the pleadings on Plaintiff's unjust enrichment claim against Sanyo. Cf. Peace v. Bank of America, No. 4:10cv00058, 2010 WL 996005, *3 (E.D.Ark. March 17, 2010) (noting that under Arkansas law, the doctrine of unjust enrichment has no application when an express, written contract exists and dismissing Plaintiff's unjust enrichment claim pursuant to Fed.R.Civ.P. 12(b)(6) as there was a remedy available in contract); Humphrey v. Electrolux Home Products Inc., No. 4:12-cv-157, 2012 WL 3257664, *3 (E.D.Ark. Aug. 9, 2012) (finding Plaintiff's unjust enrichment claim failed as a matter of law where the parties agreed she received a warranty and she sought to recover on it).
However, the Court will allow Plaintiff's unjust enrichment claim against Wal-Mart to proceed at this time. Defendants do not assert that Plaintiff received an express warranty from Wal-Mart and the Court has determined on this record that Wal-Mart's passing Sanyo's express warranty with its disclaimer on to Plaintiff did not allow Wal-Mart to have benefit of Sanyo's disclaimer. Defendants do not set forth any authority suggesting that Plaintiff may not assert an unjust enrichment claim against Wal-Mart in these circumstances.
The Court now turns to Plaintiff's class allegations. Under Fed.R.Civ.P. 23(a), the party seeking class certification must demonstrate, first, that: (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
Plaintiff does not specify the provision of Rule 23(b) upon which she is relying but she does not dispute Defendants' assertion that the applicable provision in this action is Rule 23(b)(3), which applies when "the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." The Court agrees that Rule 23(b)(3) is the applicable provision as Plaintiff asserts in her Complaint that "[t]here are questions of law and fact which are common to the Class and which predominate over questions affecting any individual class member," and that "[a] class action is superior to other methods
When a putative class consists of persons from numerous states pursuing common law claims, as is the case with Plaintiff's nationwide class, a court must conduct a choice-of-law analysis before considering the requirements of Rule 23. Tyler v. Alltel Corporation, 265 F.R.D. 415, 421 (E.D.Ark.2010). "[I]n nationwide class actions, choice-of-law constraints are constitutionally mandated because a party has a right to have her claims governed by the state law applicable to her particular case." Id. (quoting In re Prempro, 230 F.R.D. 555, 561-562 (E.D.Ark.2005)). Plaintiff "must show, prior to class certification, that the differences in state laws... are nonmaterial" as to her Rule 23(b)(3) class. Id.
Plaintiff argues that she seeks to impose the law of a single state—Arkansas—to the nationwide class and that application of a single state's law to a nation-wide class of consumers is constitutionally permissible in these circumstances. In making this argument, Plaintiff does not dispute that the laws of the various states in which putative class members reside differ materially with respect to all of her claims. Cf. Powers v. Lycoming Engines, 272 F.R.D. 414, 425-426 (E.D.Pa.20011) (common questions of law or fact did not predominate in actions against engine manufacturer for breach of implied warranty of merchantability and thus certification of nationwide class was not warranted; there were various differences among states' laws affecting entitlement to disclaim warranty, extent of warranty, limitation of liability defenses, and damages, and there were multiple defenses, such as assumption of risk, hindrance of contract, misuse of product, and validity of warnings, that existed in some states and not others); In re St. Jude Medical, Inc., 425 F.3d 1116, 1120 (8th Cir.2005) ("[s]tate consumer protection laws vary considerably, and courts must respect these differences rather than apply one state's law to sales in different states with different rules") (quoting In re Bridgestone/Firestone, Inc., 288 F.3d 1012, 1018 (7th Cir. 2002)); Thompson v. Bayer Corp., No. 07-00017, 2009 WL 362982, *4 (E.D.Ark. Feb. 12, 2009) (finding after "an extensive review of the law ... that the states' different approaches to, or elements of, unjust enrichment are significant"). The Court agrees that the laws of the various states in which putative class members reside differ materially with respect to all of Plaintiff's claims. Therefore, the Court must decide whether Arkansas law would apply to the claims of all the putative class members, including those who reside in states other than Arkansas. Tyler, 265 F.R.D. at 423.
In Tyler, the plaintiff asserted ADTPA and unjust enrichment claims and argued that Arkansas law should apply to a nationwide class of persons who were charged an early termination disconnect fee. After determining that both the consumer protection statutes and the law of unjust enrichment of the various states differed, the Court applied the choice-of law provision in the contract, Arkansas's general contract choice-of-law principles, and Arkansas's choice-of-law tort principles, and concluded that regardless of which choice-of-law principle governs, Arkansas law could not be applied to the claims of class members who resided outside of Arkansas. 265 F.R.D. at 427. Rather, the court concluded that "the law
The parties do not specifically address whether Plaintiff's claims sound in contract or tort.
Even if Arkansas law were to apply to Plaintiff's claims, there are individual
In sum, Plaintiff's Complaint demonstrates she cannot satisfy the requirements of either Rule 23(a)(2) or Rule 23(b)(3) with respect to her proposed nationwide class and her proposed Arkansas subclass. Accordingly, the Court grants
One final matter concerns Plaintiff's argument that Defendants' motion for judgment on the pleadings is premature and that she should be permitted to conduct discovery. Plaintiff also requests leave to amend her Complaint should the Court find any of her claims deficient.
In the context of class action litigation, a district court has the authority to issue an order requiring "that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly." Fed.R.Civ.P. 23(d)(1)(D). Pursuant to Rule 23(c)(1)(A), a court must determine whether to certify an action as a class action at "an early practicable time after a person sues or is sued as a class representative...." In some instances, a Court can decide on class certification before any discovery has yet taken place. Hall v. Equity Nat. Life Ins. Co., 730 F.Supp.2d 936, 941 (E.D.Ark.2010) (citation omitted). Where class allegations are insufficient to support certification, a district court has the authority and discretion to strike those allegations under Rule 23(d)(1)(D). Id. at 941-942.
"`[T]he plaintiff bears the burden of advancing a prima facie showing that... discovery is likely to produce substantiation of the class allegations.'" M.S. Wholesale Plumbing, Inc. v. University Sports Publications Co., Inc., No. 4:07-cv-00730, 2008 WL 90022, *6 n. 4 (E.D.Ark. Jan. 07, 2008) (quoting Mantolete v. Bolger, 767 F.2d 1416, 1424 (9th Cir.1985)). Plaintiff does not identify what discovery she could obtain that would eliminate the individual issues of fact and law raised by her claims, and given the nationwide class and Arkansas subclass Plaintiff seeks to represent and the nature of her claims, she cannot satisfy her prima facie burden with either of her proposed classes. Thus, while Plaintiff may amend her Complaint with respect to her individual claims, any effort to amend her Complaint with respect to her class allegations would be futile as any such amendment would not survive a motion to dismiss under Rule 12(b)(6) or a motion for judgment on the pleadings under Rule 12(c). See U.S. ex rel. Raynor v. Nat'l Rural Utilities Co-op. Fin., Corp., 690 F.3d 951, 958 (8th Cir. 2012) (futility constitutes valid reason for denial of motion to amend). Accordingly, no discovery on Plaintiff's class allegations is necessary and Plaintiff may not amend her Complaint with respect to her class allegations. Should Plaintiff desire to amend her Complaint with respect to her individual claims (including those upon which the Court has granted judgment on the pleadings), she must do so within ten (10) days of the date of entry of this Opinion and Order.
For the foregoing reasons, the Court grants in part and denies in part Defendants'