Prince v. Johnson Health Tech Trading, Inc.

653 F.Supp.3d 307

Wendy PRINCE, individually, and on behalf of all others similarly situated, Plaintiff, v. JOHNSON HEALTH TECH TRADING, INC., Johnson Health Tech Retail, Inc., and Johnson Health Tech, Inc., Defendants.

Civil Action No. 5:22-cv-00035

United States District Court, W.D. Virginia, Harrisonburg Division

Signed January 31, 2023

Bill Markovits, Justin C. Walker, Terence Coates, Markovits, Stock & DeMarco, LLC, Cincinnati, OH, Gary M. Klinger, Pro Hac Vice, Milberg Coleman Bryson Phillips Grossman PLLC, Chicago, IL, Malissa Lambert Giles, Tracy Allen Giles, Giles & Lambert, PC, Roanoke, VA, Mark B. Holland, Danville, VA, for Plaintiff.

John Benjamin Rottenborn, Woods Rogers PLC, Roanoke, VA, John Scheller, Tanya Salman, Michael Best & Friedrich LLP, Madison, WI, Joseph L. Olson, Michael Best & Friedrich LLP, Milwaukee, WI, for Defendants.

MEMORANDUM OPINION

Elizabeth K. Dillon, United States District Judge

This is a putative class action brought by plaintiff Wendy Prince, on behalf of herself and similarly situated purchasers of Horizon Fitness treadmills. (First Am. Class Action Compl. (Compl.), Dkt. No. 7.) Defendants Johnson Health Tech Trading, Inc., Johnson Health Tech Retail, Inc., and Johnson Health Tech, Inc. (collectively referred to as Johnson Health or Horizon), move to dismiss for failure to state a claim and lack of subject matter jurisdiction. (Dkt. No. 16.) The court held a hearing on this motion on December 15, 2022. (Dkt. No. 42.)

For the reasons stated below, defendants' motion will be granted in part and denied in part.

I. BACKGROUND

The amended class action complaint alleges that the subject treadmills are incapable of reaching and maintaining Horizon's continuous horsepower (CHP) representations during normal designed household exercise use. (Compl. ¶ 1.) Treadmill horsepower rating is a prevalent and recognized specification used by consumers when purchasing a treadmill. (Id. ¶ 2.) Horizon misled consumers into believing that the treadmills generate and maintain the represented CHP, even though the represented horsepower can never be obtained during actual household use by plaintiff and the class and subclass members. (Id. ¶ 3.)

Horizon marketed and sold the treadmills as maintaining a certain "continuous horsepower" or "continuous duty horsepower." CHP is a measurement of the motor's ability to maintain and continuously produce power over an extended period of time without exceeding the current rating of the motor. (Id. ¶ 36.) Horizon's treadmills are only capable of producing a fraction of the misrepresented CHP due to the treadmill's onboard electrical circuit breaker, as well as the electrical limits commonly found in households throughout the United States. (Id. ¶ 34.)

Plaintiff purchased a Horizon 7.8 AT Treadmill online directly from Horizon's website on or about November 9, 2020, for the purpose of using the treadmill at her home located in Shenandoah, Virginia. (Id. ¶ 19.) Horizon's website noted that the 7.8 AT Treadmill delivered 4.0 CHP, but plaintiff has not received the CHP that Horizon represented. (Id.) Plaintiff paid $1,999.00 for the treadmill. (Id. ¶ 21.) Plaintiff would not have purchased her treadmill, or would have paid considerably less, if she had known its true horsepower capabilities. (Id. ¶ 20.)

Plaintiff brings this action on behalf of herself and a nationwide class defined as follows:

All persons in the United States who purchased a Horizon treadmill, during the maximum period of time permitted by law, for personal, family, or household purposes, and not for resale.

(Id. ¶ 61.) Plaintiff also brings this action on behalf of a Virginia-statewide class (Virginia subclass) defined as follows:

All persons in the State of Virginia who purchased a Horizon treadmill, during the maximum period of time permitted by law, for personal, family, or household purposes, and not for resale.

(Id. ¶ 62.) Plaintiff brings claims for (1) breach of express warranty (nationwide class); (2) breach of express warranty—Magnuson-Moss Warranty Act (MMWA); (3) breach of express warranty (Va. Code § 8.2-313) (Virginia subclass); (4) breach of implied warranty (nationwide class or alternatively, Virginia subclass pursuant to Va. Code § 8.2-314); (5) breach of implied warranty—Magnuson-Moss Warranty Act; (6) constructive fraud (Virginia subclass); and (7) Virginia Consumer Protection Act (VCPA) (Va. Code § 59.1-198, -200) (Virginia subclass).

II. ANALYSIS

A. Rule 12(b)(1)—Motion to Dismiss for Lack of Subject Matter Jurisdiction

When a motion is filed pursuant to Federal Rule of Civil Procedure 12(b)(1), the plaintiff bears the burden of proving, by a preponderance of the evidence, that subject matter jurisdiction exists. Demetres v. E. W. Constr., Inc., 776 F.3d 271, 272 (4th Cir. 2015). In considering a facial challenge to subject matter jurisdiction, the court accepts all of the facts alleged in the complaint as true. Kenny v. Wilson, 885 F.3d 280, 287 (4th Cir. 2018). A district court should grant a motion to dismiss for lack of subject matter jurisdiction "only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law." Upstate Forever v. Kinder Morgan Energy Partners, L.P., 887 F.3d 637, 645 (4th Cir. 2018).

1. Standing¹

To establish standing, a plaintiff must first demonstrate an "injury-in-fact," which is "an invasion of a legally protected interest" that is "concrete and particularized," and is "actual or imminent, not conjectural or hypothetical." Lujan v. Defs. of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Second, "there must be a causal connection between the injury and the conduct complained of," meaning that the injury must be "fairly traceable to the challenged action of the defendant." Id. Third, "it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Id.

Johnson Health argues that plaintiff does not have standing to assert claims related to treadmills she did not purchase. Plaintiff only bought one model of treadmill—the Horizon 7.8 AT Treadmill—but she seeks to expand her claims to encompass all Horizon treadmills. See, e.g., Dapeer v. Neutrogena Corp., 95 F. Supp. 3d 1366, 1373 (S.D. Fla. 2015) ("Plaintiff lacks Article III standing to bring claims on behalf of the Neutrogena products he did not purchase because he cannot conceivably allege any injuries from products that he never purchased or used."). The cases cited by Johnson Health represent the minority approach to this issue. There are three approaches. First, the majority view holds that a plaintiff has standing to represent a class where the products and alleged misrepresentations are substantially similar. See, e.g., Brown v. Hain Celestial Grp., Inc., 913 F. Supp. 2d 881, 890 (N.D. Cal. 2012) (collecting cases and describing this as the "majority" approach). Second, the minority view holds that there is no standing to seek relief for a product not identical to the one the named plaintiff purchased. See, e.g., Kelly v. Cape Cod Potato Chip Co., 81 F. Supp. 3d 754, 763 (W.D. Mo. 2015) (holding that a plaintiff had standing to challenge an allegedly false "all natural" label on four different flavors of chips that she purchased, but not on twelve other flavors that she did not purchase). Lastly, a third view holds that the issue is one appropriate at class certification with regard to typicality, not standing. See Barclay v. ICON Health & Fitness, Inc., File No. 19-cv-2970 (ECT/DTS), 2020 WL 6083704, at *6 (D. Minn. Oct. 15, 2020) (Barclay I). One court explains that the majority approach is "more nuanced." Id.

In similar treadmill cases, courts have followed the majority approach and found that treadmill models are substantially similar for horsepower misrepresentation claims. See, e.g., Bechtel v. Fitness Equip. Servs., LLC, 339 F.R.D. 462, 474-75 (S.D. Ohio 2021); Barclay I, 2020 WL 6083704, at *6. Also, a recent case from North Carolina suggests that the Fourth Circuit would follow the majority approach. See Hill v. AQ Textiles LLC, 582 F. Supp. 3d 297, 310-11 (M.D.N.C. 2022). The plaintiff in Hill challenged the defendant's alleged practice of advertising its sheets at higher thread counts than the sheets actually possessed. Id. at 311. The court rejected the defendant's argument that the plaintiff could not represent class members who bought different products as "inconsistent with Supreme Court and Fourth Circuit precedent." Id. at 310. The fact that the products purchased by the class members were of different names or sizes was immaterial, the court reasoned, because "the alleged injury and challenged conduct" was "uniform across the classes." Id. at 311.

The court agrees with the analysis in Hill that the Fourth Circuit is likely to follow the majority approach to this issue. Therefore, the court finds that plaintiff has standing to assert claims related to treadmills she did not purchase because the treadmill she purchased is substantially similar to all Horizon treadmills and her claims are substantially similar to those of the other class members.

2. Jurisdictional requirements of Magnuson-Moss Warranty Act (MMWA)

A plaintiff may file a MMWA suit for damages for certain breaches of warranty obligations in either state or federal court. Such a suit cannot be brought in federal district court under the following circumstances:

(A) if the amount in controversy of any individual claim is less than the sum or value of $25;

(B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or

(C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.

15 U.S.C. § 2310(d)(3). Although this is a class action, there is only one named plaintiff. Therefore, under § 2310(d)(3)(C), the MMWA does not provide the court...