Harmon v. Lenovo (United States) Inc.

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SUE HARMON, individually and on behalf of all others similarly situated, Plaintiff, v. LENOVO (UNITED STATES) INC., Defendants.

No. 3:23-CV-1643-NJR

United States District Court, S.D. Illinois

April 23, 2024

MEMORANDUM AND ORDER

NANCY J. ROSENSTENGEL, Chief U.S. District Judge.

Plaintiff Sue Harmon (“Harmon”) bought a smart clock manufactured by Defendant Lenovo (United States) Inc (“Lenovo”), and filed this class action lawsuit when the clock allegedly did not work as advertised. (Doc 1). Lenovo has moved to dismiss the Class Action Complaint for failure to state a claim. (Doc. 11). Harmon filed a response in opposition (Doc. 13), and Lenovo filed a reply in support of its position. (Doc. 15). For the reasons set forth below, Lenovo's motion to dismiss is granted.

Background

The following facts are derived from Harmon's Class Action Complaint (Doc. 1), and the Court accepts them as true for the purposes of Lenovo's motion to dismiss.

Harmon purchased a Lenovo smart clock “from stores including Amazon.com in 2022 and/or among other times,” which promised to have a “big & bold display [so] you can check out the time from across the room” as a result of its four-inch LED display. (Doc. 1 at ¶¶ 1, 27). Lenovo also allegedly advertised the clock as “a great night-time companion with its built-in nightlight that provides a small source of light.” (Id. at ¶ 6). Lenovo sells the clock for no less than $49.99, excluding tax and sales. (Id. at ¶ 26). Harmon does not identify the model number or name of the smart clock, nor does she explain where she saw these alleged representations.

Harmon alleges that she bought the clock because she believed and expected it would capably and adequately display the time and temperature, regardless of the amount of ambient light in the room. (Id. at ¶¶ 26, 28). She also believed it would not prematurely suffer from display failures. (Id.). Shortly after buying the clock however, Harmon's device suffered from LED screen display defects where the time and temperature displayed did not appear complete or readable because parts of the numbers comprising them were faded and/or non-existent. (Id. at ¶ 29). Harmon claims these defects are the result of LED lights that consistently burn out prematurely and fail to adjust to changing levels of ambient light. (Id. at ¶ 3). This means users cannot actually check the time and weather because the screen dims when the amount of ambient light dims. (Id. at ¶ 4). Harmon's Class Action Complaint contains the below images of the alleged unnamed clock, but she does not allege that either image is from her clock, nor does she provide any source for the images.

(Image Omitted)

Harmon attributes these issues to manufacturing defects and quality-control failures. (Id. at ¶ 9). The circuits in LED displays contain numerous components, and where one of these components is faulty or where quality control is lacking, the result will be a display failure for the user because of overheating, among other things. (Id. at ¶ 10). Additionally, the use of incompatible and defective LED drivers causes improper power distribution, making it more likely for the screen to suffer from display failures. (Id. at ¶ 11). Harmon alleges that because Lenovo uses low-grade materials that wear out quicker than expected, it is likely that the display will become non-functioning shortly after the clock's first use. (Id. at ¶ 12). Harmon further alleges that Lenovo consistently denies claims for warranty coverage, attributing the display failures to consumer misuse. (Id. at ¶¶ 14-15). Had she known that Lenovo's representations about its smart clock were false and misleading, Harmon asserts, she would not have bought the clock or she would have paid less for it. (Id. at ¶ 36).

On May 15, 2023, Harmon filed this suit as a putative class action under Federal Rule of Civil Procedure 23. (Doc. 1). Harmon seeks to certify two classes:

Illinois Class: All persons in the State of Illinois who purchased the Product during the statutes of limitations for each cause of action alleged; and

Consumer Fraud Multi-State Class: All persons in the States of Mississippi, Utah, Wyoming, Idaho, West Virginia, Louisiana and Kansas who purchased the Product during the statutes of limitations for each cause of action alleged.

Harmon brings claims under the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”) and the state consumer fraud acts applicable to the multi-state class; breach of contract; breach of express warranty, implied warranty of merchantability/fitness for a particular purpose and the Magnuson Moss Warranty Act; negligent misrepresentation; and fraud. As relief, she seeks statutory, compensatory, and/or punitive damages, restitution, costs and expenses, and injunctive relief. (Id.).

Subject Matter Jurisdiction

This case was filed pursuant to the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d)(2). Under CAFA, federal courts have jurisdiction to hear a class action if the proposed class has more than 100 members, the parties are minimally diverse, and the amount in controversy exceeds $5 million. Sudholt v. Country Mut. Ins. Co., 83 F.4th 621, 625 (7th Cir. 2023) (citing 28 U.S.C. § 1332(d)(2), (d)(5)(B)).

Here, Harmon is a citizen of Illinois, Lenovo is a citizen of Delaware and North Carolina, and the class that Harmon seeks to represent are citizens of states other than Delaware and North Carolina. (Doc. 1 at ¶¶ 18-20). Thus, there is minimal diversity between the parties. Harmon also alleges that the class she seeks to represent consists of more well more than 100 members, and that the aggregate claims of the proposed class exceed $5 million, including any statutory damages, but exclusive of interest and costs. (Id. at ¶¶ 17, 21). This Court, therefore, has subject matter jurisdiction over the action.

Legal Standard

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) “tests whether the complaint states a claim on which relief may be granted.” Richards v. Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012). To survive a Rule 12(b)(6) motion, the plaintiff only needs to allege enough facts to state a claim for relief that is plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A plaintiff need not plead detailed factual allegations, but must provide “more than labels and conclusions, and a formulaic recitation of the elements.” Id.

The court must also accept the complaint's well-pleaded factual allegations and draws all reasonable inferences-but not legal conclusions-in the plaintiff's favor. Burke v. 401 N. Wabash Venture, LLC, 714 F.3d 501, 504 (7th Cir. 2013). Taken together, the factual allegations contained within a complaint must “raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. at 555 (internal citations omitted).

Discussion

Lenovo moves to dismiss this action in its entirety for failure to state a claim. Lenovo argues, in sum, that Harmon based her Class Action Complaint “on an unspecified smart clock model that she claims she purchased from an unspecified place, on an unspecified date, for an unspecified price, and without explaining what (if any) advertising representations she saw beforehand, omitting this most basic information while asserting wide-ranging claims of ‘fraud.'” (Doc. 11 at pp. 9-10). Lenovo then attacks the sufficiency of each of Harmon's claims.

In response, Harmon concedes the dismissal of her express warranty, negligent misrepresentation, common-law fraud Magnuson-Moss Warranty Act, and the consumer fraud multi-state class claims, as well as her request for injunctive relief. She argues, however, that her claims related to the ICFA, breach of contract, and implied warranty of merchantability should survive Lenovo's motion to dismiss.

The Court addresses each claim in turn.

A. Deceptive Acts or Practices Under the ICFA

The ICFA protects consumers against unfair or deceptive acts or practices, including but not limited to the use of deception, fraud, false pretense, false promise, misrepresentation, or concealment, or the omission of any material fact. 815 ILL. COMP. STAT. § 505/2. A practice is deceptive “if it creates a likelihood of deception or has the capacity to deceive.” Floyd v. Pepperidge Farm, Inc., 581 F.Supp.3d 1101, 1109 (S.D. Ill. 2022) (citing Bober v. Glaxo Wellcome PLC, 246 F.3d 934, 938 (7th Cir. 2001)).

To state a claim under the ICFA, a plaintiff must plead facts demonstrating that: (1) the defendant committed a deceptive or unfair act; (2) the defendant intended that others rely on the deception; (3) the act occurred in the course of trade or commerce; and (4) the act caused actual damages. Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 646 (7th Cir. 2019) (citing Vanzant v. Hill's Pet Nutrition, Inc., 934 F.3d 730, 736 (7th Cir. 2019)). “If the claim rests on allegations of deceptive conduct, then [Federal Rule of Civil Procedure] 9(b) applies and the plaintiff must plead with particularity the circumstances constituting fraud.” Id. That is, the plaintiff must identify the “who, what, when, where, and how” of the alleged fraud. Id.

Courts apply a “reasonable consumer” standard when evaluating whether a statement is deceptive or has the likelihood to deceive. Id. Under this standard, a plaintiff must prove that “a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.” Bell v. Publix Super Markets, Inc., 982 F.3d 468, 474-75 (7th Cir. 2020).

As an initial matter, Harmon has not pleaded the circumstances constituting...