United States District Court, W.D. Washington, Seattle
October 24, 2014
AMY COE, et al., Plaintiffs,
PHILIPS ORAL HEALTHCARE INC., Defendant.
ORDER ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON PLAINTIFFS' SEVENTH CAUSE OF ACTION
MARSHA J. PECHMAN, Chief District Judge.
THIS MATTER comes before the Court on Defendant's Motion for Summary Judgment on Plaintiffs' Seventh Cause of Action - violation of the New Jersey Consumer Fraud Act. (Dkt. No. 114.) Having considered the Parties' briefing and all related papers, the Court GRANTS the motion.
This putative class action seeks damages and equitable relief for purchasers of Defendant's allegedly defective Sonicare Diamond Clean, FlexCare, FlexCare, Healthy White, EasyClean, and Sonicare for Kids powered toothbrushes and related replacement parts (collectively, the "Toothbrushes"). (Dkt. Nos. 20, 90.)
The suit began when Plaintiff Amy Coe filed a class action on behalf of Toothbrush purchasers citing, among other things, breach of Washington and New Jersey state law. (Dkt. No. 1.) Approximately two months later, Plaintiffs Sam Chawla and Lance Ng filed a separate action with similar claims under Washington, Connecticut, and New York state law. Chawla v. Philips Oral Healthcare, Inc., No. 13-cv-875-MJP, Dkt. No. 1. Plaintiffs Coe, Chawla, and Ng then filed a consolidated complaint incorporating all claims. (Dkt. No. 20).
In earlier motions, the Court found Washington law inapplicable to Plaintiffs' claims, granted summary judgment for Defendant on Plaintiffs' warranty claims and Plaintiff Ng's New York claims, and dismissed Plaintiff Chawla's Connecticut claims for lack of jurisdiction. As a result, Coe is the sole remaining named Plaintiff, and violation of the New Jersey Consumer Fraud Act is the sole remaining cause of action. Defendant now seeks summary judgment on this cause of action, which would end the litigation.
I. Legal Standards
A. Summary Judgment
Summary judgment is proper where "the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986). In assessing whether a party has met its burden, the underlying evidence must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587 (1986).
B. New Jersey Consumer Fraud Act
Three elements are required for a prima facie case under the New Jersey Consumer Fraud Act ("CFA"): "1) unlawful conduct by defendant; 2) an ascertainable loss by plaintiff; and 3) a causal relationship between the unlawful conduct and the ascertainable loss." Bosland v. Warnock Dodge, Inc. , 964 A.2d 741, 749 (N.J. 2009). In a misrepresentation case, "either outof-pocket loss or a demonstration of loss in value will suffice to meet the ascertainable loss hurdle and will set the stage for establishing the measure of damages." Thiedemann v. Mercedes-Benz USA, LLC , 872 A.2d 783, 792 (N.J. 2005).
Courts have tailored the standard CFA test when plaintiffs proceed on a benefit-of-thebargain theory: "[t]he New Jersey Supreme Court has repeatedly and explicitly endorsed a benefit-of-the-bargain theory under the Consumer Fraud Act that requires nothing more than that the consumer was misled into buying a product that was ultimately worth less to the consumer than the product he was promised." Smajlaj v. Campbell Soup Co. , 782 F.Supp.2d 84, 99 (D.N.J. 2011). "A plaintiff alleging a benefit-of-the-bargain states a claim if he or she alleges (1) a reasonable belief about the product induced by a misrepresentation; and (2) that the difference in value between the product promised and the one received can be reasonably quantified." Id.
II. New Jersey Consumer Fraud Act
A. Reasonable Belief Induced by Misrepresentation
A plaintiff proceeding under the benefit-of-the-bargain theory must show "a reasonable belief about the product induced by a misrepresentation." Id . This phrasing of the test essentially combines the first and third prongs of the standard CFA test (unlawful conduct by the defendant, causal relationship between unlawful conduct and ascertainable loss). See Bosland , 964 A.2d at 749.
Defendant asserts it is entitled to summary judgment because Plaintiff Coe (1) never saw any Philips marketing regarding the Toothbrushes she purchased, and (2) could not have had a reasonable belief that the Toothbrushes would be entirely defect-free. (Dkt. No. 114 at 7, 9.) Defendant also argues that Coe had firsthand knowledge of the Toothbrushes' quality after purchasing her first Toothbrush, and thus her decision to purchase a second Toothbrush cannot be attributed to a misrepresentation of quality by Defendant. (Dkt. No. 114 at 4.)
Plaintiffs argue that Plaintiff Coe saw and relied on television advertising regarding the Toothbrushes and their quality, and that she reasonably believed the brushes would last for five years or more, a life expectancy that Philips uses internally for its products but does not advertise. (Dkt. No. 133 at 4, 10.) Plaintiffs also point to New Jersey case law explaining that CFA does not require actual reliance; rather, a consumer merely needs to demonstrate that he or she suffered an ascertainable loss as a result of' the unlawful practice. (Dkt. No. 133 at 17-18) (citing Meshinsky v. Nichols Yacht Sales, Inc. , 541 A.2d 1063, 1067 (N.J. 1988)). Finally, Plaintiffs argue that Defendant's failure to disclose the defect to American consumers while disclosing it to British consumers constitutes an actionable misrepresentation by omission, and that Coe would not have purchased the Toothbrushes, or would have paid less for them, had the defect been disclosed. (Dkt. No. 133 at 1, 4-5.)
Both Defendant and Plaintiffs cite Coe's deposition transcript, asserting that her testimony supports their respective positions. During her deposition, Coe contradicts herself, answering "no" when asked if she "relied on any Philips marketing, " but explaining that she saw and relied on television commercials when asked if she "recall[ed] reading any representations." (Dkt. Nos. 133 at 2, 134 at 5.) Defendant argues that parties cannot create triable issues of fact by submitting conflicting evidence without attempting to resolve the disparity, and that Coe's answers do not point to specific television advertisements and are thus not specific enough to create a triable issue. (Dkt. No. 134 at 6-7.) Plaintiffs do not attempt to resolve the conflict between Coe's statements; rather, they assert that Coe's testimony shows that she did rely on some representations made by Defendant. (Dkt. No. 133 at 4.)
Coe's testimony on the Philips representations she relied on, however, addresses only the Toothbrushes' ability to clean teeth well. (Dkt. No. 132-1) Coe testifies recalling representations that the brushes are "more effective at cleaning the teeth than a manual toothbrush, " and are a "more powerful toothbrush." (Id.) Coe does not testify that she saw any representations of how long the Toothbrushes would last or how quickly they would degrade. Plaintiffs' attempt to rely on internal Philips guidelines specifying a five-year product life is unavailing because that expected life is not communicated to consumers. Coe could not have suffered a loss "as a result of" a representation that was never made.
Plaintiffs' cause of action relies on the contention that Philips represented its Toothbrushes would be free from defects, when in fact they were defective in a way that caused them to degrade faster than what consumers would expect. (Dkt. No. 20 at 44-45.) But Plaintiffs have put forward no evidence that Philips represented a certain life expectancy or a certain rate at which the brushes would degrade. Plaintiffs do not allege that the defect prevents the Toothbrushes from cleaning teeth more effectively than a manual toothbrush, yet the only representations from Philips they produce concern the effectiveness of the toothbrushes when compared with a manual toothbrush. Viewing the underlying evidence in the light most favorable to the non-moving party, the Court concludes that Plaintiff Coe's claim fails as a matter of law because she has produced no evidence of a representation made by Philips as to the expected life of the products, which is the harm alleged to be caused by the defect. Even if Coe could show a material misrepresentation related to the Toothbrushes' life expectancy, however, her claim fails as a matter of law because she has not demonstrated an ascertainable loss.
B. Ascertainable Loss
CFA plaintiffs must demonstrate that they suffered an "ascertainable loss" as a consequence of the misrepresentation or omission, consisting of either an out of pocket loss or a demonstration of loss in value. Thiedemann , 872 A.2d at 792. Stated differently, plaintiffs must show that the difference in value between the product promised and the one received can be reasonably quantified. Smajlaj , 782 F.Supp.2d at 99.
Defendant contends that Plaintiff Coe has suffered no loss, or at least no loss attributable to Defendant, because Coe voluntarily chose not to invoke the two-year repair or replace warranty - had she invoked the warranty, there would be no damages. (Dkt. No. 114 at 11.) Defendant also argues that Coe's claims are too speculative to survive summary judgment because Plaintiffs have not alleged how much Plaintiffs would have paid for defective Toothbrushes, had they known about the defects. (Dkt. No. 114 at 8.) Plaintiffs argue they have alleged facts sufficient to present to a jury to determine appropriate damages, (Dkt. No. 133 at 15-17), but do not respond to Defendant's warranty arguments.
Warranties provided "as part of the contract of sale or lease [are] part of the benefit of the bargain between the parties." Thiedemann , 872 A.2d at 794. "The defects that arise and are addressed by warranty, at no cost to the consumer, do not provide the predicate "loss" that the CFA expressly requires for a private claim under the CFA." Id . However, an exception to the requirement that a plaintiff exercise her warranty exists where it would be futile because repair or replacement would not cure an underlying defect. N.J.S.A. 12A:2-719(2); Asp v. Toshiba Am. Consumer Products, LLC , 616 F.Supp.2d 721, 737 (S.D. Ohio 2008).
Plaintiff Coe's claim under CFA survived dismissal because she alleged the exact situation contemplated by the futility exception: if she had initiated a request for repair or replacement, she would have simply swapped one defective product for another. (Dkt. No. 65 at 20.) At the summary judgment stage, Plaintiffs cannot rely on allegations in the complaint, but "must make a showing sufficient to establish a genuine dispute of material fact regarding the existence of the essential elements of [their] case that [they] must prove at trial." Galen v. County of Los Angeles , 477 F.3d 652, 658 (9th Cir. 2007).
Plaintiffs have submitted no evidence whatsoever that Plaintiff Coe believed repair or replacement would be futile when she decided not to invoke the warranty. Instead, when asked why she chose not to invoke the warranty, she testified that it is not her practice to call companies and complain about defective products, and that she "figured [she] would just replace" the defective brush. (Dkt. No. 134 at 10.) Plaintiffs' experts may well be able to speculate on a product-wide design flaw that would support futility, but Plaintiffs have submitted no evidence that Coe considered futility or design flaws, in any way, when choosing whether or not to invoke her warranty. Instead, Coe testified that she believed the defect in her first toothbrush was a fluke (a "lemon"), and that she decided to purchase the second brush exactly because she thought failure was not due to an inherent defect but rather due to bad luck in selecting a "lemon" Toothbrush. (Dkt. No. 114 at 7-8.)
Plaintiff Coe chose not to invoke the warranty provided to her as part of the bargain she made with Defendant. Had Coe requested a replacement, she would have been given one. Coe decided not to seek a replacement because she found it easier to purchase a new Toothbrush than to lodge a complaint under the warranty, or because she threw away the box and was not aware of the warranty. Plaintiffs have failed to make a showing sufficient to establish a genuine dispute of material fact regarding Defendant's characterization of Coe's decision not to invoke the warranty. Viewing the evidence in the light most favorable to the non-moving party, Plaintiffs' CFA claim fails as a matter of law.
Plaintiffs survived a motion to dismiss their New Jersey Consumer Fraud Act claim by alleging futility of repair or replacement under the warranty due to underlying defect. (Dkt. No. 65 at 20.) Plaintiffs have not produced any evidence, however, that Coe believed replacement under the warranty would be futile when she decided not to seek repair or replacement. Coe's decision not to invoke the warranty, absent evidence of futility, forecloses the showing of loss required to bring a private claim under CFA. Furthermore, Plaintiffs have produced no evidence of a representation by Philips as to the life expectancy of the Toothbrushes, which is what is allegedly affected by the defect. Plaintiffs' CFA claim fails as a matter of law, and Defendant's motion for summary judgment is GRANTED.
The clerk is ordered to provide copies of this order to all counsel.