Brady v. Anker Innovations Ltd.

PHILIP BRADY and DUNCAN SMITH individuallyand on behalf of other similarly situated individuals, Plaintiffs, v. ANKER INNOVATIONS LIMITED; ANKER TECHNOLOGY CORPORATION;POWER MOBILE LIFE, LLC; and FANTASIA TRADING,LLC D/B/A ANKER DIRECT, Defendants.

No. 18-cv-11396 (NSR)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

January 13, 2020

OPINION & ORDER

NELSON S. ROMÁN, United States District Judge

Plaintiffs Philip Brady ("Brady") and Duncan Smith ("Smith") (together, "Plaintiffs"), on behalf of themselves and all others similarly situated, bring this putative class action against Defendants Anker Innovations Limited, Anker Technology Corporation, Power Mobile Life, LLC, and Fantasia Trading, LLC, d/b/a Anker Direct ("Fantasia") (collectively, "Defendants"). (First Amend. Compl. ("FAC"), ECF No. 20.) Plaintiffs assert claims under California's Consumer Legal Remedies Act ("CLRA"), Cal. Civ Code §§ 1750-85, California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500 et seq., California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof Code §§ 17200-17210, New York's General Business Law ("GBL") §§ 349-350, and several other materially identical state consumer protection statutes. (Id.) Plaintiffs also bring claims for beach of express warranty and unjust enrichment. (Id.)

Presently before this Court is Defendants' motion to dismiss the FAC for lack of personal jurisdiction and for failure to state a claim. (ECF No. 26.) For the following reasons, Defendants motion is GRANTED in part and DENIED in part.

BACKGROUND

The following facts are taken from the FAC and deemed true for purposes of the motion.

A. The Emergence of Power Banks and Their Uses

In recent years, consumers have become increasingly dependent on portable electronic devices ("PEDs"), such as phones, tablets, and laptop computers. (FAC ¶¶ 1, 24.) Like any other electronic devices, PEDs require power and periodic recharging. (Id. ¶ 1.) Thus, the portable charger industry emerged. (Id. ¶¶ 2, 25.)

A portable charger, often called a power bank ("Power Bank"), is a small, portable power source that consumers can use to recharge PEDs. (Id. ¶¶ 2, 26.) In general, the greater the capacity of a Power Bank, which is expressed in milliampere-hours ("mAh"), the more times the Power Bank can be used to recharge PEDs before the Power Bank itself must be recharged. (Id. ¶¶ 2, 26.) For this reason, consumers purportedly have a strong preference, and are willing to pay a premium for, Power Banks with higher mAh ratings. (Id. ¶¶ 2, 26.) Because of this preference, most companies prominently feature the mAh rating of Power Banks in the products' advertising. (Id. ¶ 26.) It is Defendants' representations about the mAh rating of their Power Banks that is at the heart of this lawsuit. (Id. ¶¶ 3-5.)

B. Defendants Alleged Misrepresentations

Defendants manufacture, market, and distribute Power Banks. (Id. ¶ 27.) Their Power Banks are sold directly from Defendants' website, from Amazon.com, and from other retailers. (Id.) At both the point of sale and on their Power Banks' packaging, Defendants prominently represent their Power Banks' power capacity as measured in mAh. (Id.)

Plaintiffs frequently use PEDs during travel and when they do not have access to an electrical outlet. (Id. ¶¶ 10, 12.) Therefore, Plaintiffs each purchased a Power Bank on Amazon.com from Defendants. (Id. ¶¶ 9, 11, 28.) Specifically, on February 25, 2017, Bradypurchased an A1211 Astro E1 model Power Bank, which had an expressly advertised "5200 mAh" capacity, and, on June 6, 2016, Smith purchased an A1371 Powercore + model Power Bank, which had an expressly advertised "20100 mAh." (Id. ¶ 28.) Plaintiffs believed that the Power Banks they purchased could deliver a charge to their PEDs that was reflective of the advertised capacity. (Id. ¶ 29.)

Despite their expectations, however, Plaintiffs came to realize that the Power Banks they had purchased were incapable of delivering the capacity that had been represented to them. (Id.) As such, with the aid of a skilled and experienced testing company, Plaintiffs' tested the Power Banks. (Id. ¶ 30.) That testing revealed that Defendants had substantially inflated their Power Banks' mAh ratings. (Id.) For example, testing showed that Brady's Power Bank, which had been advertised as having a "5200 mAh" capacity, had an "Actual Capacity" of 3285 mAh. (Id.) Similarly, testing revealed that Smith's Power Bank, which had been advertised as having "20100 mAh," had an "Actual Capacity" of 12088 mAh. (Id.)

Plaintiffs contend that Defendants knew the Power Banks' true capacity was substantially lower than advertised. (Id. ¶ 31.) Nevertheless, according to Plaintiffs, Defendants misrepresented the true capacity to get customers to pay a premium. (Id.) Through these false and misleading misrepresentations, Defendants have profited enormously. (Id. ¶ 32.) Even so, Defendants' conduct notwithstanding, Plaintiffs would consider purchasing Defendants' Products again if they could trust that the representations about the mAh rating were correct going forward, which could include redesigning their Power Banks or changing prices to reflect the actual mAh capacity of the battery. (Id. ¶¶ 10, 12.)

LEGAL STANDARDS

I. Rule 12(b)(2)

A court must dismiss an action against any defendant over whom it lacks personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). On a Rule 12(b)(2) motion to dismiss, the plaintiff bears the burden of establishing, by a preponderance of the evidence, that the court has jurisdiction over the defendant. In re Methyl Tertiary Butyl Ether ("MTBE") Prod. Liab. Litig., 399 F. Supp. 2d 325, 330 (S.D.N.Y. 2005). "Where, as here, a court relies on pleadings and affidavits, rather than a full-blown evidentiary hearing, the plaintiff need only make a prima facie showing that the court possesses personal jurisdiction over the defendant." Id. (quoting Distefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001)). In ruling on a 12(b)(2) motion, a court may consider materials outside the pleadings, including affidavits and other written materials. MacDermid, Inc. v. Deiter, 702 F.3d 725, 727 (2d Cir. 2012); Bensusan Rest. Corp. v. King, 937 F. Supp. 295, 298 (S.D.N.Y. 1996), aff'd, 126 F.3d 25 (2d Cir. 1997). The court assumes the verity of the allegations "to the extent they are uncontroverted by the defendant's affidavits." MacDermid, Inc., 702 F.3d at 727 (internal quotations omitted). Nonetheless, all factual doubts and disputes are resolved in the plaintiff's favor. See A.I. Trad Fin., Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).

II. Rule 12(b)(6)

Under Rule 12(b)(6), courts must assess whether a complaint "contain[s] sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); accord Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). A court must take all material factual allegations as true and draw reasonable inferences in the non-moving party's favor, but a court is "'not bound to accept as true a legal conclusion couched as a factual allegation,'" or to credit "mere conclusory statements" or "[t]hreadbare recitals of the elements of a cause of action." Iqbal, 556 U.S. at 678(quoting Twombly, 550 U.S. at 555). In determining whether a complaint states a plausible claim for relief, a district court must consider the context and "draw on its judicial experience and common sense." Id. at 662. A claim is facially plausible when the facts pleaded allow a court to make "a reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678.

DISCUSSION

I. Motion to Dismiss for Lack of Personal Jurisdiction

Defendants have moved to dismiss the FAC on the basis that the Court lacks personal jurisdiction as to each of the Defendants. (Defs. Mem. of Law in Support of Mot. to Dismiss ("Defs. Mot."), ECF No. 27, at 5-12.) In opposing Defendants' motion, Plaintiffs have informed the Court that they do not oppose dismissal of Defendants Anker Innovations Limited, Anker Technology Corporation, and Power Mobile Life, LLC, for want of personal jurisdiction. (Pls. Mem. of Law in Opp. to Defs. Mot. to Dismiss ("Pls. Opp."), ECF No. 29, at 2.) Accordingly, the Court GRANTS this portion of Defendants' motion, thereby dismissing Anker Innovations Limited, Anker Technology Corporation, and Power Mobile Life, LLC, from the case, without prejudice. See Smith v. United States, 554 F. App'x 30, 32 n.2 (2d Cir. 2013) ("[A] dismissal for want of personal jurisdiction is without prejudice." (citing Elfenbein v. Gulf & Western Indus., Inc., 590 F.2d 445, 449 (2d Cir. 1978)). The below analysis is thus only applicable to Fantasia, the only remaining defendant.

A. Relevant Facts Regarding Fantasia

Fantasia, doing business as AnkerDirect, is a subsidiary of Anker Innovations and is organized under the laws of the state of Delaware. (FAC ¶ 13; Decl. of Romeo Luo in Support of Defs. Mot. to Dismiss ("Luo Decl."), ECF No. 28, at ¶¶ 29-30.) Its principal place of business is in the state of California. (FAC ¶ 13; Luo Decl. ¶ 29.) Fantasia does not have any property, offices, or employees in New York, and it does not manufacture or store any goods in New York.(Luo Decl. ¶¶ 31-33.) During the purported class period, Fantasia marketed, imported, distributed, warranted, and sold Defendants' Power Banks throughout the United States. (FAC ¶ 13.) And, at all relevant times, Fantasia was the account holder for the AnkerDirect Amazon storefront on Amazon.com. (Luo Decl. ¶ 34.)

AnkerDirect is listed as the "sole authorized seller of authentic Anker products (other than Amazon) on the Amazon platform." (FAC ¶ 14.) To this end, Fantasia, doing business as AnkerDirect, functions as the Anker distributor in the United States. (Id. ¶ 15.) It ships its products in bulk to Amazon's warehouses in Washington state, in...