Lee v. Samsung Elecs. Am.

1

ADAM LEE, et al., Plaintiffs, v. SAMSUNG ELECTRONICS AMERICA, INC., Defendant.

No. 4:21-cv-1321

United States District Court, S.D. Texas, Houston Division

July 5, 2023

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION TO STRIKE

Dena Hanovice Palermo United States Magistrate Judge

Before the Court is Samsung Electronics America, Inc.'s (“Defendant”) second motion to strike class allegations. Second Mot. Strike, ECF No. 92.^[1] Plaintiffs filed a class action based on their purchases of Defendant's black stainless steel kitchen appliances, asserting claims under state consumer protection laws with six state sub-classes and claims for unjust enrichment with three state sub-classes.^[2] Pl.'s Consol. Third Am. Compl., ECF No. 87 (“complaint”). Defendant asserts that on the face of the complaint, individual issues predominate common questions for Plaintiffs' class claims, such that they cannot meet Rule 23's requirements-because the complaint's class allegations are facially deficient there is no reason to postpone deciding these issues. ECF No 92 at 8. In response, Plaintiffs contend that their complaint sufficiently shows that class treatment of their claims is appropriate, and that Defendant's motion is premature. Pls.' Resp., ECF No. 98 at 12-34. Based on a careful review of the complaint, the filings, and the law, the Court concludes individual issues predominate common questions as to the Texas DTPA, Nevada DTPA, Massachusetts Chapter 93A class claims, and all unjust enrichment class claims, but on their face, the consumer protection class claims under California, New York,^[3]and Florida law are susceptible to class-wide proof. Therefore, the Court recommends that the motion should be granted in-part and denied in-part.^[4] Because no Texas class claims remain, the Court finds it appropriate to sever the claims of the remaining non-Texas Plaintiffs and transfer them to their home states.

I. BACKGROUND.

Plaintiffs Adam Lee, Kimberly Einiger, Howard Roscoe, Anastasia Danilova, Keith Covington, Myra Mendez, Paula Murray, and Gregory Elliot (collectively “Plaintiffs”), bring this action on behalf of themselves and all others similarly situated who purchased Samsung kitchen appliances with a “black stainless steel” finish. ECF No. 87 ¶¶ 1-4, 25. The gravamen of Plaintiffs' complaint is that they each selected and paid an additional cost for the “black stainless steel” finish out of four finish options based on Defendant's representation that their appliances' finish was made of durable “black stainless steel.” Id. ¶¶ 5, 17, 20, 23, 24. Plaintiffs claim that the appliances do not have a black stainless steel finish as represented, but instead are coated with a thin plastic, which is prone to peel, chip, flake, discolor, and prematurely degrade. Id. ¶¶ 5, 21.

Plaintiffs allege that although their independent research, prior favorable experiences, and desired color scheme led them to Defendant's black stainless steel appliances, they ultimately relied on Defendant's representation that the finish was “black stainless steel” in making their selection. ECF No. 87 ¶¶ 60, 61, 74, 75, 83, 84, 90, 91, 96, 98, 119. Plaintiffs allege that “Defendant heavily promotes its Black Stainless Steel Appliances as a premium kitchen product with a superior aesthetic,” specifically advertising these appliances “as a premium, durable, luxury metal finish.” Id. ¶¶ 2-3, 16-17, 20-21. Plaintiffs allege that had they known the “black stainless steel” finish was actually a thin plastic coating, they would not have selected and paid a premium for the finish or they would not have purchased the appliance at all. Id. ¶¶ 56, 59.

A. Procedural History.

Lee originally filed this action individually and on behalf of a proposed national class and Texas subclass. Pls.' Compl., ECF No. 1. Lee amended to add Danilova, Einiger, and Roscoe and their individual and Massachusetts, Nevada, and South Carolina subclass claims. Pls.' First Am. Compl., ECF No. 13. Defendant filed a motion to dismiss the first amended complaint. Pls.' Mot. Dismiss First Am. Compl., ECF No. 23. After the Court issued the Report and Recommendation on the motion to dismiss, Plaintiffs sought leave to amend their complaint. R&R, ECF No. 47; Mot. Leave Am. Compl., ECF No. 59. Judge Ellison granted the motion for leave to amend, mooting the motion to dismiss. Order, ECF No. 60 (granting leave to amend); Order, ECF No. 71 (mooting Defendant's motion to dismiss).

At the same time, Defendant also filed its first motion to strike class allegations. First Mot. Strike, ECF No. 24. Upon review, the Court recommended striking: (1) all class claims based on fraudulent concealment and consumer fraud; (2) all national class claims; and (3) the SCUTPA class claims. R&R, ECF No. 50 at 25. The Court also recommended that Plaintiffs be given leave to amend “their Texas, Nevada, and Massachusetts Class claims” “[t]o the extent the consumer fraud claims do not require proof of reliance or causation,” noting that this issue was inadequately briefed by the parties. R&R, ECF No. 50 at 25. The recommendations were adopted. See Order Adopting R&R, ECF No. 54.

Plaintiffs again amended, adding Covington and Mendez and their individual claims and California and New York subclass claims-Plaintiffs did not include any national class or South Carolina subclass claims. Second Am. Compl., ECF No. 61. Plaintiffs thereafter filed a joint motion to consolidate Lee, et al. v. Samsung Electronics America, Inc., No. 4:21-cv-1321 (S.D. Tex.) and Murray v. Samsung Electronics America, Inc., No. 4:22-cv-0037 (S.D. Tex.) and a motion to file a consolidated complaint. Pls. Mot. Consol., ECF No. 41. The Court granted the motion to consolidate. Order, ECF No. 79. Plaintiffs again amended the complaint to add Murray and her individual and California subclass claims. ECF No. 87.

B. Class Allegations.

Plaintiffs define the sub-classes as “[a]ll persons in [the respective state] who purchased one or more Samsung-branded appliance featuring a ‘black stainless steel' finish.” Id. ¶ 122. For their class claims, Plaintiffs assert deceptive and unconscionable practices under the TDTPA, as well as deceptive and unfair practices under Chapter 93A, NDTPA, CLRA, UCL, FAL, GBL § 349, and FDUTPA, and claims for unjust enrichment under California, Florida, and New York law. In a separate Report and Recommendation, the Court recommended that Lee's inadequately pleaded TDTPA unconscionability claim and Mendez's untimely New York unjust enrichment and GBL § 349 claims be dismissed.

II. THE LEGAL STANDARD FOR A MOTION TO STRIKE CLASS ALLEGATIONS.

Rule 23(c) provides:

At an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action.

FED. R. CIV. P. 23(c)(1)(A). Under Rule 23(c), either a plaintiff or defendant may seek a ruling on the class claims; plaintiff may file a motion for class certification, and defendant may file a motion to dismiss or strike.

The Fifth Circuit has stated that “[w]here it is facially apparent from the pleadings that there is no ascertainable class, a district court may dismiss the class allegation on the pleadings.” John v. Nat'l Sec. Fire & Cas. Co., 501 F.3d 443, 445 (5th Cir. 2007); Elson v. Black, 56 F.4th 1002, 1006 (5th Cir. 2023) (“District courts are permitted to make such determinations on the pleadings and before discovery is complete when it is apparent from the complaint that a class action cannot be maintained.”). “A defendant may move to strike class allegations prior to discovery in rare cases where the complaint itself demonstrates that the requirements for maintaining a class action cannot be met.” Lee v. Samsung Elecs. Am., Inc., No. 4:21-CV-1321, 2022 WL 4663878, at *2 (S.D. Tex. Sept. 21, 2022), report and recommendation adopted, 2022 WL 7757471 (S.D. Tex. Oct. 12, 2022) (quoting Delarue v. State Farm Lloyds, No. 1:09-CV-237, 2010 WL 11530499, at *2 (E.D. Tex. Mar. 10, 2010)).

A district court has broad discretion over whether to certify a class; however, in exercising that discretion, it must rigorously analyze Rule 23's prerequisites. Prantil v. Arkema Inc., 986 F.3d 570, 574 (5th Cir. 2021). On a motion for class certification, the court's analysis may require it to go beyond the pleadings to understand the claims, defenses, relevant facts, and applicable substantive law. Id. at 574 (quoting Cole v. Gen. Motors Corp., 484 F.3d 717, 724 (5th Cir. 2007)). In contrast, when ruling on a motion to strike class allegations, the court examines, but does not go beyond, the pleadings in analyzing Rule 23's requirements. Lee, 2022 WL 4663878, at *2 (citing John, 501 F.3d at 445).

III. RULE 23'S REQUIREMENTS FOR CLASS CERTIFICATION.

Rule 23 requires that several preliminary conditions be met before a proposed class may be certified. Angell v. GEICO Advantage Ins. Co., No. 22-20093, 2023 WL 3411186, at *4 (5th Cir. May 12, 2023). Under Rule 23(a), the plaintiff must establish numerosity, commonality, typicality, and adequacy of class representation. Id. (citing FED. R. CIV. P. 23(a)).

Once Rule 23(a) is satisfied, the plaintiff must also satisfy one of three provisions within Rule 23(b). Lee, 2022 WL 4663878, at *3 (citing Cole, 484 F.3d at 723). Relevant herein, under Rule 23(b)(3), the plaintiff must demonstrate “both (1) that questions common to the class members predominate over questions affecting only individual members, and (2) that class resolution is superior to alternative methods for adjudication of the controversy.” Id. (citing Bell Atl. Corp. v. AT&T Corp., 339 F.3d 294, 301 (5th Cir. 2003)).

“The predominance requirement of Rule 23(b)(3), though...