Ham v. Lenovo (U.S.) Inc.

664 F.Supp.3d 562

Anthony HAM, individually and on behalf of all others similarly situated, Plaintiff, v. LENOVO (UNITED STATES) INC., Defendant.

22-cv-05131 (ALC)

United States District Court, S.D. New York

Signed March 28, 2023

Nick Suciu, III, Milberg Coleman Bryson Phillips Grossman, PLLC, Bloomfield Hills, MI, Russell Busch, Milberg Coleman Bryson Phillips Grossman PLLC, Knoxville, TN, for Plaintiff.

Colleen Gulliver, DLA Piper U.S. LLP, New York, NY, for Defendant.

OPINION AND ORDER

ANDREW L. CARTER, United States District Judge:

Plaintiff Anthony Ham ("Plaintiff") brings this putative class action¹ suit against Defendant Lenovo (US) Inc. ("Lenovo" or Defendant)² alleging (1) deceptive acts or practices in violation of the New York Deceptive Practice Act, N.Y.G.B.L. § 349 et seq.; (2) false advertising in violation New York Deceptive Practice Act, N.Y.G.B.L. § 350 et seq.; (3) breach of express warranty; (4) breach of implied warranty; (5) fraud; and (6) unjust enrichment. Defendant moved to dismiss Plaintiff's complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons discussed below, the Court finds that Plaintiff lacks standing to seek injunctive relief. The Court dismisses Plaintiff's other causes of action for failure to state a claim. Defendant's Motion is GRANTED.

BACKGROUND

I. Procedural Background

Plaintiff Anthony Ham ("Plaintiff") commenced this action on June 17, 2022. ECF No. 1. The Complaint alleges, inter alia, that the Defendant violated N.Y.G.B.L. §§ 349 and 350. Defendant filed its motion to dismiss, (the "Motion"), pursuant to Fed. R. Civ. P. 12(b)(1) and Fed. R. Civ. P. 12(b)(6) on August 18, 2022. ECF Nos. 21-22. Defendant also filed supplementary declarations. ECF Nos. 23-24. Plaintiff filed his opposition on September 15, 2022 ("Opp."). ECF No. 25. Defendant's reply memorandum was filed on October 17, 2022 ("Reply"), ECF No. 28, alongside a third declaration. ECF No 29. On February 23, 2023 Defendant filed a Notice of Supplemental Authority. ECF No. 30.³ The motion is deemed fully briefed. After careful consideration, Defendant's motion to dismiss is GRANTED.

II. Factual Background

The following facts are taken from the allegations contained in Plaintiff's Complaint, which are presumed to be true for purposes of this motion to dismiss.

Plaintiff Ham is a resident of Champaign, Illinois and is a citizen of Illinois. Compl. ¶ 13. Defendant Lenovo is a Delaware corporation with its headquarters in Morrisville, North Carolina. Id. ¶ 17. The Defendant designs, manufactures advertises, and sells the "Products" at issue.⁴ Lenovo is the single largest manufacturer of notebook computers in the world and one of the largest desktop computer manufacturers. Id. ¶ 2. Lenovo operates a retail website, Lenovo.com, ("the Website") where it offers its laptop computers, desktop computers, and computer peripherals for sale directly to consumers. Id. ¶ 3.

Plaintiff asserts that Defendant deceives its customers through a "years-long policy of fabricating fictitious valuations for its laptop and desktop computers, falsely representing those valuations as the "estimated value" of their products, and then advertising purported discounts based on those fictitious valuations." Id. ¶ 1. The Plaintiff alleges that Lenovo "fabricates a fictious original price," sometimes called the "Web Price" or an "explicit representation of a particular value or level of quality," referred to as the "Estimated Value", "promises users substantial 'savings' with a significant discount off the fictitious price," and "presents users with a comparatively lower price to pay at the point of sale ('Sale Price')." Id. ¶ 5. Plaintiff alleges that these representations "induce reasonable consumers to believe that the "Web Price"⁵ or "Estimated Value" represents either the product's normal price on Defendants' website and/or the prevailing price in the market" and that it "also induce consumers to believe the List Price or Estimated Value is the true value of the PC being advertised and that, therefore, the quality and value of the Product, in whole, is commensurate with the List Price or Estimated Value." Id. ¶¶ 6-7.

Plaintiff alleges that these advertised List Prices and purported Discounts are "completely illusory or grossly overstated," that Defendant "fabricate[s] a number using undisclosed formulas bearing no resemblance to the market, and they use the fictitious List Price or Estimated Value to create the appearance of a significant price discrepancy and the impression of significantly better quality, higher value Products and greater savings for their customers." Id. ¶¶ 9-10.

In support of these allegations, Plaintiff points to his own experience purchasing a Product, id. ¶¶ 37-54, and the Complaint includes descriptions of the Website alongside screengrabs of the checkout process on the Website. Id. ¶¶ 23-36.

A. Alleged Misrepresentations to Consumers

Plaintiff alleges that when a consumer visits Lenovo.com to shop for PCs, they are immediately greeted with a banner claiming savings on current sales. Id. ¶ 23. The Lenovo website also highlights some of the company's flagship PC models with significant purported savings. Id. ¶ 25. For example, on June 7, 2022, Lenovo represented on its website that the ThinkPad X1 Carb Gen 9 (14-inch Intel) Laptop had an Estimated Value of $2,469.00 but a current Sale Price starting at $1,401.60, and more than $1,000 in savings. Id. ¶ 25. The Website includes a "starting at" price because each model has various configurations with different specifications for CPU, RAM, hard drive capacity, and other factors. Id. ¶ 26. "Estimated Value" is defined on the Website as "Lenovo's estimate of product value based on industry data, including the prices at which Lenovo and/or third-party retailers and e-tailers have offered or valued the same or comparable products. Third-party data may not be based on actual sales." Id. ¶ 6, 27. (emphasis in complaint). Plaintiff asserts that this Estimated Value is an express warranty and leaves reasonable consumers "with the impression that these models offer quality and value commensurate with their high Estimated Values." Id. ¶ 27.

Plaintiff explains that personal computers are "complex" products with more than a dozen relevant components and that for each component, there are multiple metrics that gauge the quality and value. Id. ¶ 28. Because these products are complex and because the average consumer cannot take into account the myriad variables that determine the quality and value of computers, Plaintiff asserts that consumers necessarily rely on representations like the Estimated Value. Id.

For example, Plaintiff explains that when the Defendant represents to consumers that a particular configuration of its ThinkPad X1 Carbon PC has an estimated value of $3,589, consumers "reasonably believe that all of the components and the boundless specifications thereof, taken together comprise a product with quality and value commensurate with a $3,589 computer." Id. ¶ 29. However, Plaintiff claims that the Products' Estimated Values are completely unrepresentative of those Products' quality and value as compared to similar computers and that the Estimated Values don't have any relationship whatsoever with the actual sales price of that same model on the Lenovo.com website or at any other retailer. Id. ¶ 30. Ultimately, Plaintiff contends that the Defendant's policy is applied uniformly "to virtually all of its Products." Id. ¶ 33-34.

Plaintiff points to three examples to explain this. First, the Complaint points to the "X1 Carbon" with an "Estimated Value" of $2,469.00, "with an Intel i7-1185G7 Processor, 32GB of LPDDR4X memory, and a 512GB solid state hard drive." Id. ¶ 31. Plaintiff asserts that an "X1 Carbon" with the same specifications can be purchased for $1,159.99 on Lenovo's amazon.com store. Id. This is $1,300 less than the Estimated Value on Lenovo's website and $300 less than the Sale Price on Lenovo's website. Id. Thus, Plaintiff explains, a consumer who "reasonably trusts Lenovo's false representation would be led to believe they were receiving a laptop of quality approximating $987 discount when, in reality, they are receiving a laptop of far lesser quality and value at a $300 premium over the same or comparable models sold elsewhere." Id. ¶ 32. Second, Plaintiff points to the "ThinkPad T15 Gen 2 Intel" PC with an "i5 CPU, 8 GB of RAM, and a 256 solid state hard drive," which has an "Estimated Value" of $2,190.00 on Lenovo.com and a Sale Price of $1,313.40 with $875.60 in purported "savings." Id. ¶ 33. The "same computer with twice the hard drive capacity and otherwise identical specifications" sells for $1,279.00 on Amazon. Id. Third, the Plaintiff explains that the "Lenovo Yoga 6" is a "New Arrival" on Lenovo.com with no prior sales history whatsoever but yet these brand-new Yoga 6 configurations all have "Estimated Values" hundreds of dollars above Lenovo's asking price. Id.

B. Plaintiff Ham's Purchase

Plaintiff Anthony Ham purchased one of the Products from Lenovo's website. Id. ¶ 37. In June 2020 when Plaintiff visited Lenovo.com, the site prominently advertised "All Think on Sale!" and promised that consumers could "[s]ave up to 65% on ThinkPad laptops" with several flagship Lenovo laptops purportedly Discounted below the banner. Id. ¶ 38.

One June 17, 2020, Plaintiff purchased a "T495 (14') AMD 3700U with 8GB of RAM and a 256GB capacity solid state hard drive" (the "T495" or the "Laptop") on Lenovo.com for a Sale Price of $969. Id. ¶ 39. When Plaintiff purchased the Laptop, the computer's product page advertised a "Web Price," which the page suggested was the original price or actual value of the product, a substantially lower Sale Price of $969, and significant purported "Savings."⁶ Id. Around the time Plai...