Wesley v. Samsung Elecs. Am., Inc.

Not for Publication

OPINION

John Michael Vazquez, U.S.D.J.

This class action lawsuit is premised on allegations that Defendant knew, but failed to disclose, that a temperature setting part in some of its gas and electronic ranges would eventually fail. Presently before the Court is a motion by Defendant Samsung Electronics America, Inc. (“Samsung”) to dismiss the Amended Complaint. D.E. 16. Plaintiffs filed a brief in opposition, D.E. 17, to which Defendant replied, D.E. 18. The Court reviewed the parties' submissions^[1] and decided the motion without oral argument pursuant to Fed.R.Civ.P. 78(b) and L. Civ. R. 78.1(b). For the reasons set forth below, Defendant's motion is GRANTED in part and DENIED in part.

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I. FACTUAL BACKGROUND^[2] & PROCEDURAL HISTORY

In this putative class action, Plaintiffs indicate that they purchased Samsung gas and electric ranges from various authorized resellers, such as Lowes and Home Depot. Am. Compl. ¶¶ 22, 30, 37, 48, 57, 65, 74, 82, 90. Plaintiffs then began to experience various problems with the temperature settings of the ovens and stovetop components of the ranges. The problems include that the oven would not maintain the set temperature, id. ¶ 26, the oven exceeded the set temperature, id. ¶ 34, and the range burners exceeded the set temperature, id. ¶ 61. Four Plaintiffs attempted to repair their ranges, but only one repair was successful. Id. ¶¶ 28, 42, 45, 95. The remaining five Plaintiffs, for different reasons, did not attempt to repair their ranges. Some continue to use the range despite the defect and others utilize a replacement appliance. Id. ¶¶ 35, 46, 55, 63, 71, 80, 88.

Plaintiffs' ranges all contain an “oven temperature sensor bearing component model number DG32-00002B, ” which Plaintiffs allege is defective and is the cause of the various temperature problems. Id. ¶ 109. Plaintiffs contend that 87 Samsung gas and electric range models contain this defective piece (the “Class Ranges”). Id. ¶¶ 109, 131. Plaintiffs further allege that Samsung knew of this defect, failed to disclose the defect, and continues to manufacture and sell ranges with the defective sensor. Id. ¶¶ 121-30. Had Plaintiffs know of the defect, they would not have purchased their ranges or would have paid a significantly lower price. Id. ¶ 133.

Plaintiff Kathy Wesley filed this putative class action on December 9, 2020. D.E. 1. Plaintiffs filed the Amended Complaint on March 3, 2021, which includes eight new named

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Plaintiffs.^[3] D.E. 15. On behalf of specific subclasses, Plaintiffs assert claims alleging violations of the New Jersey Consumer Fraud Act (Count I), ^[4] the California Consumers Legal Remedies Act (Count II), the California Unfair Competition Law (Count III), the Connecticut Unlawful Trade Practices Act (Count V), the Florida Deceptive and Unfair Trade Practices Act (Count VI), the Illinois Consumer Fraud and Deceptive Business Practices Act (Count VII), the New York Deceptive Acts and Practices Act (Count VIII), and the Texas Deceptive Trade Practices-Consumer Protection Act (Count IX). The Court refers to these claims collectively as the state consumer protection act claims. Plaintiffs also assert a breach of express warranty claim on behalf of the New Jersey and Florida subclasses (Count X), a breach of the implied warranty of merchantability of behalf of the state subclasses (Count XI), a Song-Beverly Consumer Warranty Act claim on behalf of the California subclass (Count IV), a violation of the Magnuson-Moss Warranty Act (“MMWA”) on behalf of the entire class (Count XII), and a fraud by omission claim on behalf of the entire class and state subclasses (Count XIII). D.E. 15.

Defendant filed its motion to dismiss on April 9, 2021, seeking to dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). D.E. 16.

II. LEGAL STANDARD

Rule 12(b)(6) permits a court to dismiss a complaint that fails “to state a claim upon which relief can be granted[.]” Fed.R.Civ.P. 12(b)(6). For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual allegations to state a claim that is plausible on its face.

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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Further, a plaintiff must “allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims.” Connelly v. Lane Const. Corp., 809 F.3d 780, 789 (3d Cir. 2016). In evaluating the sufficiency of a complaint, district courts must separate the factual and legal elements. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009). Restatements of the elements of a claim are legal conclusions, and therefore, are not entitled to a presumption of truth. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011). The Court, however, “must accept all of the complaint's well-pleaded facts as true.” Fowler, 578 F.3d at 210.

“Independent of the standard applicable to Rule 12(b)(6) motions, Rule 9(b) imposes a heightened pleading requirement of factual particularity with respect to allegations of fraud.” In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 216 (3d Cir. 2002). Pursuant to Rule 9(b), when “alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake . . . [m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b). A party alleging fraud must therefore support its allegations with factual details such as “the who, what, when, where and how of the events at issue.” U.S. ex rel. Moore & Co., P.A. v. Majestic Blue Fisheries, LLC, 812 F.3d 294, 307 (3d Cir. 2016). Accordingly, “[t]o satisfy the particularity standard, ‘the plaintiff must plead or allege the date, time and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation.'” Feingold v. Graff, 516 Fed.Appx. 223, 226 (3d Cir. 2013) (citing Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007)). This heightened standard is designed to “ensure that defendants are placed on notice of the precise misconduct with which they

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are charged, and to safeguard defendants against spurious charges of fraud.” Craftmatic Sec. Litig. v. Kraftsow, 890 F.2d 628, 645 (3d Cir. 1989) (internal quotation marks omitted).

III. ANALYSIS

A. Fraud Based Claims

1. Common Law Fraud (Count XIII)

Plaintiffs assert a fraud by omission claim, premised on Samsung's failure to disclose the alleged defect. Am. Compl. ¶ 312. Defendant seeks to dismiss the count on numerous grounds, including a lack of duty to disclose. Def. Br. at 9-15. An omission can amount to fraud if a party has a duty to disclose. Stockroom, Inc. v. Dydacomp Dev. Corp., 941 F.Supp.2d 537, 546 (D.N.J. 2013).^[5]

A duty to disclose may arise under several circumstances; two are relevant here. Plaintiffs first allege that Samsung had a duty to disclose the true quality of the Class Ranges because Samsung had knowledge of the defect and such knowledge was only known to Samsung. Plaintiffs next allege that Samsung had superior knowledge and access to relevant facts. Am. Compl. ¶ 315. Numerous state laws, including in New Jersey, “recognize a duty to disclose where the defendant possesses exclusive or superior knowledge or actively conceals the omitted information.” In re Volkswagen Timing Chain Prod. Liab. Litig., No. 16-2765, 2017 WL 1902160, at *19

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(D.N.J. May 8, 2017) (citing to cases applying different state laws, including California, Florida, Connecticut, and Texas). Plaintiffs plead that Samsung knew of the defect because of negative Internet reviews and direct complaints. Am. Compl. ¶ 121. As for the Internet reviews, Plaintiffs include a number of reviews in the Amended Complaint and in an appendix to the pleading. Id. ¶ 123, see also id., App. A. In the Amended Complaint, Plaintiffs highlight nine reviews that were posted before any Plaintiff purchased a range. Id. ¶ 123. The reviews were posted on Lowes.com and Compact Appliance.com. Id. ¶ 123 n.4. The remaining reviews in Appendix A, however, were largely posted after Plaintiffs purchased their ranges. See id., App. A. The reviews that post-date Plaintiffs' purchases cannot demonstrate Samsung's pre-purchase knowledge of the defect. As for the reviews that preceded Plaintiffs' purchases, these reviews were posted on multiple publicly available websites. A handful of public complaints on the third-party websites are not sufficient to establish that Samsung had exclusive or superior knowledge of the alleged defect. See, e.g., Morales v. Kimberly-Clark Corp., No. 2020 WL 2766050, at *9 (S.D.N.Y. May 27, 2020) (“[W]ithout more, the mere existence of these online consumer complaints does not raise a reasonable, or even plausible, inference that Defendant intended to deceive consumers about the existence of a defect in its product.”); In re Nexus 6P Prods. Liab. Litig., 293 F.Supp.3d 888, 909 (N.D. Cal. 2018) (concluding that “a handful of complaints” from customers to manufacturer “do not, by themselves, plausibly show that [manufacturer] had knowledge of the defects and concealed the defects from customers”).

Plaintiffs also allege that customers made direct complaints to Samsung about the purported defect. Id. ¶ 121. Plaintiffs add that Samsung had “data from pre-release testing concerning the Defect, ” warranty claims data, and repair and service...