WILLIAM J. MARTINI, District Judge.
The Plaintiffs in this putative class action allege that a circuit board defect (the "Defect") caused their Samsung refrigerators to stop cooling. Plaintiffs assert claims for the violation of various consumer protection laws, fraudulent concealment, and breach of implied warranty. Defendants Samsung Electronics, America, Inc. ("SEA") and Samsung Electronics, Co., Ltd. ("SEC") (together "Samsung") move under Federal Rules of Civil Procedure 9(b) and 12(b)(6) to dismiss all claims. Samsung also moves under Federal Rule of Civil Procedure 12(f) to strike, among other things, Plaintiffs' class allegations. There was no oral argument. Fed. R.Civ.P. 78(b). For the foregoing reasons, Samsung's motion to dismiss is
Plaintiffs Jeff Weske, Jo Anna Frager, and Darryl Myhre, filed an original class action Complaint against Samsung on September 20, 2010. In that pleading, Plaintiffs alleged that they purchased defective Samsung refrigerators (the "Refrigerators") that stopped cooling after a certain period. For present purposes, the Refrigerators' warranty lasted for one year. Plaintiffs alleged that Samsung knew — or was reckless in not knowing — that the Refrigerators were defective. In support of this allegation, Plaintiffs pointed to customer complaints Samsung received in early 2006 from unspecified consumers, to postings on a consumer affairs website in 2009 and 2010, and to a BBC report from 2008 diagnosing cooling problems in a Samsung refrigerator sold in the United Kingdom.
The original Complaint alleged four causes of action: (1) violation of the New Jersey Consumer Fraud Act; (2) fraudulent concealment or non-disclosure; (3) breach of implied warranty; and (4) unjust enrichment. The Court dismissed all four claims. Subsequently, Plaintiffs filed a First Amended Complaint and then, before
The SAC adds claims from three new Plaintiffs: Ralph Chermak and Jeff Poslean (both from Illinois), and Maureen Kean (from California).
State of Time of Time Defect Time Samsung Plaintiff Purchase Purchase Manifested Notified Jeff Weske Minnesota December 2006 Spring 2009 Fall 2009 Jo Anna Frager Ohio February 2008 June 2010 Never Darryl Myhre Washington November 2007 Before Before November 2008 November 2008 Ralph Chermak Illinois September 2009 March 2011 March 2011 Jeff Poslean Illinois 2008 October 2011 October 2011 Maureen Kean California August/September 200 November 2010 December 2011
The SAC alleges that Samsung "obtained (or should have obtained) ... notice [of the Defect] no later than spring or summer 2006." Id. ¶ 99. In support of this allegation, the SAC confirms that two people, neither of whom are Plaintiffs, notified Samsung about cooling problems in 2006:
The SAC also cites two apparently unconfirmed internet postings from non-parties who claim to have notified Samsung about cooling problems in 2006.
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir.2005). In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most
Although a complaint need not contain detailed factual allegations, "a plaintiff's obligation to provide the `grounds' of his `entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Thus, the factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, such that it is "plausible on its face." See id. at 570, 127 S.Ct. 1955; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir.2008). A claim has "facial plausibility 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. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). While "[t]he plausibility standard is not akin to a `probability requirement' ... it asks for more than a sheer possibility." Id.
Federal Rule of Civil Procedure 12(f) allows courts to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." As motions to strike are "often sought by the movant simply as a dilatory tactic," they are extremely disfavored. F.T.C. v. Hope Now Modifications, LLC, 2011 WL 883202, at *1 (D.N.J. Mar. 10, 2011) (internal quotation and citation omitted).
Plaintiffs assert three causes of action in the SAC: (1) violation of the state consumer protection laws of each Plaintiff's home state (California, Illinois, Minnesota, Ohio, Washington)
Samsung makes three arguments in support of its motion to dismiss. First, it argues that Plaintiffs' claims for fraudulent concealment and violation of the Consumer Protection Laws do not satisfy the requirements of Federal Rule of Civil Procedure 9(b). The Court agrees. In the alternative, Samsung argues that Plaintiffs' claims under the Consumer Protection Laws of California, Illinois, and Ohio should be dismissed for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). Again, the Court agrees with Samsung. Third, Samsung argues that Plaintiffs' claims for breach of warranty under Minnesota law should be dismissed,
Counts I and II, respectively, assert claims for fraudulent concealment/non-disclosure and for violation of the Consumer Protection Laws. Samsung moves to dismiss both counts, arguing that Plaintiffs have failed to satisfy the particularity pleading requirements of Federal Rule of Civil Procedure 9(b). The Court will
Rule 9(b) provides that "[i]n alleging fraud or mistake, a party must 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." Rule 9(b) essentially requires Plaintiffs to allege the who, what, when, where, and how elements to state a claim arising in fraud. See In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1423 (3d Cir. 1997). Where plaintiffs can demonstrate that specific information is in the exclusive control of the defendant, the Court relaxes the showing required under Rule 9(b). See In re Craftmatic Secs. Litig., 890 F.2d 628, 645 (3d Cir.1989). But Plaintiffs "must still allege facts suggesting fraudulent concealment." Weske v. Samsung Elecs. Am., Inc., No. 10-4811, 2012 WL 833003, at *5 (D.N.J. Mar. 12, 2012). Furthermore, "[c]ollectivized allegations that generally allege fraud as against multiple defendants, without informing each defendant as to the specific fraudulent acts he or she is alleged to have committed, do not satisfy Rule 9(b)." See Hale v. Stryker Orthopaedics, No. 8-337, 2009 WL 321579, at *6 (D.N.J. Feb. 9, 2009).
In its earlier opinion, the Court dismissed fraudulent concealment claims because "Plaintiffs [did] not provide sufficient factual allegations to establish Samsung knew of the Defect prior to the sales at issue in this litigation." Weske, 2012 WL 833003 at *5. The Court noted that "[a]lthough Plaintiffs allege that Samsung knew of the Defect as early as 2006 because of complaints made by unspecified customers, they do not allege who at Samsung learned of these complaints and they do not identify any particular individuals who complained." Id.
Like the Complaint, the SAC fails to satisfy Rule 9(b). The SAC does not provide the "who, what, when, where, and how elements to state a claim arising in fraud." Burlington, 114 F.3d at 1423. Besides from referencing a single customer service hotline attendant, the SAC does not identify who at Samsung learned about the customer complaints. Nor does it distinguish between the two Samsung defendants, SEA and SEC. See Hale, 2009 WL 321579 at *6. Nor does the SAC provide facts suggesting fraudulent concealment beginning in 2006. Ultimately, Plaintiffs' allegation that Samsung discovered the Defect in 2006 is based on just two confirmed customer complaints and two unconfirmed reports posted on internet websites. "Awareness of a few customer complaints... does not establish knowledge of an alleged defect." Baba v. Hewlett-Packard Co., No. 9-5946, 2011 WL 317650, at *3 (N.D.Cal. Jan. 28, 2011) (dismissing fraud claims under Rule 9(b)). Accordingly, the Court will
Count I asserts a claim for violation of the Consumer Protection Laws. Samsung argues that the claims sounding in California and Illinois law, and the class claim (but not the individual claim) sounding in Ohio law should be dismissed under Federal Rule of Civil Procedure 12(b)(6). While the Court need not address Samsung's arguments given the reasoning set forth in Section III.A.1, the Court believes that Plaintiffs will benefit from the analysis should they choose to amend the SAC.
To bring a class action under the OCSPA, a plaintiff must establish that a prior rule or judicial decision has put the defendant on notice that its conduct was deceptive. O.R.C. § 1345.09(B) ("Section 1345"). Plaintiffs argue that Nessle v. Whirlpool Corp., No. 12-310, 2008 WL 2967703 (N.D.Ohio July 25, 2008) provided Samsung with the notice required by OCSPA. Plaintiffs are mistaken. Savett v. Whirlpool Corp., No. 12-310, 2012 WL 3780451, at *4 (N.D. Ohio Aug. 31, 2012) ("[Nessle] does not constitute a determination by an Ohio court that a particular act or practice violates the OCSPA.").
Samsung contends that Plaintiffs have failed to state a claim under the ICFA because there is no allegation that Samsung's representations or omissions proximately caused the two Illinois Plaintiffs (Poslean and Chermak) to purchase their Refrigerators. The Court agrees.
To state a claim under the ICFA, a Plaintiff must allege proximate causation. Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill.2d 100, 296 Ill.Dec. 448, 835 N.E.2d 801, 850 (2005). The Supreme Court of Illinois has held that in a consumer fraud action under the ICFA,
De Bouse v. Bayer, 235 Ill.2d 544, 337 Ill.Dec. 186, 922 N.E.2d 309, 316 (2009). Plaintiffs have not alleged that Poslean or Chermak ever received a communication from Samsung. Accordingly, Plaintiffs have not stated a claim under the ICFA.
Next, Samsung argues that Plaintiffs have failed to state a claim under the CLRA and the UCL because the named Plaintiff from California, Maureen Kean, began experiencing cooling problems after her warranty had expired. The Court agrees.
"Although California courts are split on this issue, the weight of authority suggests that a `manufacturer's duty to consumers [under the CLRA or UCL] is limited to its
Kean purchased her refrigerator in August or September of 2009, and she began to notice cooling problems in November 2010, more than one year later. Samsung's warranty on parts and labor lasted for one year. Accordingly, for Kean to state an omission-based claim under the CLRA or UCL, Samsung must have omitted facts relating to product safety.
Kean contends that the Samsung omitted to inform her about the Defect. She further contends that the Defect is related to product safety because it can cause food to spoil. While it is possible that a cooling problem in a refrigerator can lead a person to ingest spoiled food and become sick, the Court is reluctant to equate refrigerators with products that trigger the "safety issue" exception — products such as artificial hearts and car engines. See Oestreicher v. Alienware Corp., 544 F.Supp.2d 964, 970 n. 6 (N.D.Cal.2008); Cholakyan v. Mercedes-Benz USA, LLC, 796 F.Supp.2d 1220, 1237 (N.D.Cal.2011). Plaintiffs have not stated a claim under the UCL or the CLRA.
Count III asserts a claim for breach of warranty under Minnesota law and a claim for tortious breach of warranty under Ohio law. Samsung moves to dismiss both claims. The Court will
Plaintiffs assert a claim for breach of warranty under Minnesota law, arguing that Samsung's warranty was unconscionable.
The Court assumes without deciding that a breach of warranty claim can be grounded in unconscionability. Plaintiffs argue that Samsung's warranty was unconscionable because Samsung knew about the Defect and failed to disclose it. But failing to disclose a known defect does not, by itself, make a warranty unconscionable. See Chan v. Daimler AG, No. 11-5391, 2012 WL 5827448, at *6 (D.N.J. Nov. 9, 2012) ("The fact that a defendant may have been aware of a defect during the period of an express warranty does not ... give rise to a valid claim for breach of warranty."); Alban v. BMW of North America, No. 9-5398, 2011 WL 900114, at *9 (D.N.J. March 15, 2011) ("Alban's allegations that BMW knew that the sound insulation in his vehicle would fail after the expiration of the warranty agreement do not indicate that the time and mileage limitation clause was unconscionable."); but see Payne v. Fujifilm U.S.A., Inc., No. 7-385, 2007 WL 4591281, at *5 (D.N.J.
Samsung moves to dismiss the claim for tortious breach of warranty under Ohio law, arguing that it is barred by the economic loss doctrine. The Court disagrees with Samsung's argument.
Jo Anna Frager, the named Plaintiff from Ohio, is an ordinary consumer who lacks privity with Samsung. Under Ohio law, there is a "general rule [that] `a plaintiff who has suffered only economic loss due to another's negligence has not been injured in a manner which is legally cognizable or compensable.'" In re Whirlpool Corp. Front-Loading Washer Products Liability Litigation, 684 F.Supp.2d 942, 949 (N.D.Ohio 2009) (quoting Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. Co., 42 Ohio St.3d 40, 537 N.E.2d 624, 630 (1989)). But the rule does not apply to "`ordinary consumers' who lack privity with a product's manufacturer." Id. Accordingly, the economic loss doctrine does not bar Plaintiffs' claim for tortious breach of implied warranty under Ohio law. The Court will
Samsung moves to strike the claim for tortious breach of warranty under Ohio law. It also moves to strike the SAC paragraphs referencing internet postings and the class allegations. The Court will not strike any of this material.
Samsung moves to strike Plaintiffs' claim for tortious breach of warranty under Ohio law, arguing that the claim was filed without permission. The Court will
In its March 12, 2012 Opinion, the Court dismissed Plaintiffs' breach of implied warranty claim and allowed Plaintiffs to amend their Complaint accordingly. Plaintiffs subsequently filed the SAC, which includes a claim for tortious breach of warranty under Ohio law. Samsung argues that the Court intended only for Plaintiffs to re-plead breach of warranty claims sounding in contract, not tort. The Court never specified whether Plaintiffs' breach of warranty claim needed to sound in contract or tort. Samsung's reading of the Court's March 12, 2012 Opinion is too narrow.
Next, Samsung moves to strike SAC paragraphs 100-103, which reference internet postings about Samsung refrigerators. As this material is not "redundant, immaterial, impertinent or scandalous matter," Fed.R.Civ.P. 12(f), the Court will
Finally, Samsung also moves to strike Plaintiffs' class allegations. The Court will
Rule 12(f) permits a district court to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R.Civ.P. 12(f). Numerous "cases have affirmed that motions to strike should be used sparingly, and generally are not favored and usually will be denied unless the
Given the early stage of the proceedings, the Court finds that Samsung's request to strike the class allegations is premature. Accordingly, the motion to strike is
For the reasons stated above, Defendants' motion to dismiss is
The Plaintiffs in this putative class action allege that a circuit board defect (the "Defect") caused their Samsung refrigerators to stop cooling. In an earlier opinion, the court dismissed without prejudice Plaintiffs' fraud claims pursuant to Federal Rule of Civil Procedure 9(b). The Court also dismissed a breach of warranty claim under Minnesota law without prejudice. The only remaining claim is a putative class action claim for breach of warranty under Ohio law (the "Remaining Claim"). Plaintiffs move pursuant to 28 U.S.C. § 1292(b) to certify an interlocutory appeal on the proper standard to apply under Rule 9(b). Samsung counters with three motions of its own. Samsung moves to dismiss
For the reasons stated below, the Court will
Jeff Weske, Jo Anna Frager, and Darryl Myhre (together the "Original Plaintiffs") filed a class action Complaint against Samsung on September 20, 2010. Weske is a resident of Cloquet, Minnesota; Frager is a resident of Montville, Ohio; and Myhre is a resident of Bellevue, Washington. The Original Plaintiffs alleged that they purchased defective Samsung refrigerators (the "Refrigerators") that stopped cooling after a certain period. The Original Plaintiffs also alleged that Samsung knew — or recklessly disregarded — the fact that the Refrigerators contained a Defect that
Based on these allegations, the Complaint asserted claims for (1) violation of the New Jersey Consumer Fraud Act ("NJCFA"); (2) fraudulent concealment or non-disclosure; (3) breach of implied warranty; and (4) unjust enrichment. On March 12, 2012, the Court dismissed the NJCFA claim and the breach of implied warranty claim without prejudice. Based on a failure to plead with particularity, the Court dismissed the fraudulent concealment claims under Federal Rule of Civil Procedure 9(b) without prejudice. In so doing, the Court noted that Rule 9(b) generally "requires Plaintiffs to allege the who, what, when, where, and how elements to state a claim arising in fraud." Weske v. Samsung Elecs., America, Inc. ("Weske I"), No. 10-4811, 2012 WL 833003 (D.N.J. Mar.12, 2012) (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1423 (3d Cir.1997)). However, the Court acknowledged that the Third Circuit's decision in In re Craftmatic Secs. Litig., 890 F.2d 628, 645 (3d Cir.1989) requires courts to apply a relaxed pleading standard when "specific information ... is exclusively within [a defendant's] knowledge or control." Id. Pursuant to Craftmatic, the Court required plaintiffs to "allege facts suggesting fraudulent concealment and... explain why the additional missing information lies exclusively within Samsung's control." The Court held that plaintiffs did not satisfy this relaxed Rule 9(b) standard. Id.
On June 5, 2012, the Original Plaintiffs, along with Ralph Chermak and Jeff Poslean (both from Illinois), and Maureen Kean (from California)
After the Court dismissed Counts I and II, as well as the Minnesota breach of warranty claim under Count III, the Court granted Plaintiffs leave to file a third amended complaint by April 18, 2013. Plaintiffs did not file a third amended complaint by April 18, 2013. Instead, on April 18, 2013, Plaintiffs moved the Court to certify an interlocutory appeal pursuant to 28 U.S.C. § 1292(b). In their motion papers, Plaintiffs represented that when the Court dismissed Counts I and II of the SAC, the Court held that "Federal Rule of Civil Procedure 9(b) requires a plaintiff to plead the `time, place, content, and identity elements' of a fraud claim with particularity, even where the defendant has exclusive knowledge of the fraud." Motion to Certify Interlocutory Appeal at 1, ECF No. 82-1. This "holding," Plaintiffs explained, "raised a controlling question of law — the appropriate pleading standard under Rule 9(b) — for which substantial ground for differences of opinion exist among the federal courts." Id.
On May 17, 2013, the Honorable Mark Falk entered a consent order extending until May 31, 2013 Samsung's time to answer or respond to the Remaining Claim. ECF No. 88.
On May 31, 2013, Samsung filed a motion requesting three forms of relief. First, Samsung moved to dismiss with prejudice those claims in the SAC that the Court dismissed without prejudice. Second, Samsung moved to extend its time to answer the Remaining Claim. Third, Samsung moved to transfer this case to the Northern District of Ohio pursuant to 28 U.S.C. § 1404(a), but only if the Court grants the motion to dismiss with prejudice.
The Court begins with Plaintiffs' motion to certify an interlocutory appeal on the appropriate pleading standard under Rule 9(b). The Court then turns to Samsung's motions to dismiss, to extend the time to answer the Remaining Claim, and to transfer this case to the Northern District of Illinois.
Plaintiffs move to certify an interlocutory appeal so the Third Circuit can clarify the "appropriate pleading standard under Rule 9(b)." Motion to Certify Interlocutory Appeal at 1. Samsung argues that the appropriate pleading standard is already clear. Samsung is correct.
Leave to file an interlocutory appeal may be granted where an order "involves a controlling question of law," as to "which there is substantial ground for difference of opinion," and "an immediate appeal from the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b). "[A]ll three requirements must be satisfied for a court to certify an issue for appeal." In re Schering-Plough Corp., No. 8-397, 2010 WL 2546054, at *4 (D.N.J. June 21, 2010). "The decision whether or not to grant certification is entirely within the district court's discretion, and even if all three criteria under Section 1292(b) are met, the district court may still deny certification." Krishanthi v. Rajaratnam, No. 9-5395, 2011 WL 1885707, *2 (D.N.J. May 18, 2011) (internal quotations omitted) (quoting Morgan v. Ford Motor Co., No. 6-1080, 2007 WL 269806, *2 (D.N.J. Jan. 25, 2007)).
An interlocutory appeal in not warranted in this case because there is not a substantial difference of opinion about the correct pleading standard under Rule 9(b).
The Court cited the relaxed Rule 9(b) standard in its prior decision. Weske II, 2013 WL 1163501 at **3-4. The Court applied the relaxed Rule 9(b) standard in its prior decision. Id. Plaintiffs' argument to the contrary is simply incorrect. While Plaintiffs might challenge the Court's application of the relaxed Rule 9(b) standard, an interlocutory appeal is not the proper vehicle for that challenge. See Koken v. Pension Benefit Guar. Corp., 381 F.Supp.2d 437, 442 (E.D.Pa.2005) ("The antithesis of a proper § 1292(b) appeal is one that turns on ... whether the district court properly applied settled law to the facts or evidence of a particular case. [Any] legal question [certified] must be stated at a high enough level of abstraction to lift the question out of the details of the evidence or facts of a particular case and give it general relevance to other cases in the same area of law.") (quoting McFarlin v. Conseco Servs. LLC, 381 F.3d 1251, 1259 (11th Cir.2004)).
As Plaintiffs have failed to establish a "substantial ground for difference of opinion" regarding the proper standard under Rule 9(b), the Court need not reach the other two § 1292(b) factors. See Schering-Plough, 2010 WL 2546054 at *4. Accordingly, the Court will
Samsung moves to dismiss with prejudice those claims in the SAC that the Court has dismissed without prejudice. Samsung also moves to extend its time to answer the SAC and to transfer the case to the Northern District of Illinois.
Because Plaintiffs did not amend their complaint in accordance with the timeline the Court established, Samsung argues that the Court should dismiss with prejudice those counts that were previously dismissed without prejudice: Count I, Count II, and Count III (to the extent it asserts a claim for breach of warranty under Minnesota law). The Court is not persuaded by Samsung's argument.
"[D]ismissal with prejudice is only appropriate in limited circumstances and doubts should be resolved in favor of reaching a decision on the merits." Emerson v. Thiel College, 296 F.3d 184, 190 (3d Cir.2002). As noted by another Court in this District, the Third Circuit "frowns on dismissals with prejudice." Iwanowa v. Ford Motor Co., 67 F.Supp.2d 424, 432 n. 3 (D.N.J.1999). However, courts have transformed dismissals without prejudice into dismissals with prejudice when plaintiffs have elected to stand on their dismissed claims. See, e.g., Berke v. Bloch, 242 F.3d 131, 135 (3d Cir.2001).
In its prior opinion, the Court dismissed Counts I, II, and III (Minnesota breach of warranty claim only) without prejudice. Weske II, 2013 WL 1163501 at **3-4, 6. The Court gave Samsung until April 18,
Pursuant to the consent order signed by Judge Falk on May 17, 2013, Samsung had until May 31, 2013 to file an answer to the Remaining Claim. Rather than file an answer in the allotted time, Samsung filed the instant motion requesting an extension. Samsung asks for permission to answer the Remaining Claim no later than 30 days after the Court decides Plaintiffs' motion to certify an interlocutory appeal. Plaintiffs do not oppose Samsung's request. Accordingly, the Court will
Since Samsung's motion to transfer is contingent on the granting of Samsung's motion to dismiss with prejudice, and since the Court will deny Samsung's motion to dismiss with prejudice, the Court will
For the foregoing reasons, Plaintiffs' motion to certify an interlocutory appeal is