Winters v. Ridgewood Industries, Ltd. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 WENDI WINTERS, on behalf of No. 2:20-cv-00092 WBS KJN herself and all others similarly 13 situated, 14 Plaintiff, MEMORANDUM AND ORDER RE: DEFENDANTS’ MOTION TO DISMISS 15 v. 16 RIDGEWOOD INDUSTRIES, LTD. and DOREL HOME FURNISHINGS, INC., 17 Defendants. 18 19 ----oo0oo---- 20 Plaintiff Wendi Winters filed this action on behalf of 21 herself and all others similarly situated against defendants 22 Ridgewood Industries, LTD. and Dorel Home Furnishings, Inc. 23 (collectively “Defendants”), alleging several consumer fraud and 24 warranty claims, arising out of plaintiff’s purchase of 25 defendants’ furniture. Before the court is defendants’ motion to 26 dismiss. (Docket No. 8.) 27 I. Relevant Allegations 28 1 At issue is the manufacture and sale of the Belmont 2 Four-Drawer Chests (hereinafter “drawers”). (Compl. ¶ 1 (Docket 3 No. 1).) Ridgewood Industries manufactures the drawers 4 throughout the United States. (Id. ¶ 6.) Dorel Home Furnishings 5 markets, distributes, and sells them. (Id. ¶ 7.) 6 In 2017, plaintiff purchased several of such drawers. 7 (Id. ¶ 3.) Shortly thereafter, one of the drawers allegedly 8 tipped over and hit one of plaintiff’s children. (Id. ¶ 4.) 9 Plaintiff alleges that she then disposed of the products because 10 they posed a safety hazard to her children. (Id.) 11 According to plaintiff, the drawers “were made 12 defectively, rendering the [p]roducts unstable and causing them 13 to tip over.” (Id. ¶ 12.) The drawers’ “defective nature” 14 allegedly poses “severe tip-over and entrapment” risks. (Id.) 15 Defendants allegedly were aware of the product’s “defective 16 nature.” (Id.) The packaging that accompanied the drawers, 17 however, “did not disclose the defect.” (Id. ¶ 5.) Defendants 18 also “failed to provide adequate warnings, instructions, or wall 19 attachment hardware.” (Id. ¶ 17.) “Had there been a disclosure, 20 [plaintiff] would not have bought” the dressers,” or “would have 21 purchased the [p]roducts at a substantially reduced price.” 22 (Id.) 23 Plaintiff’ Complaint consists of the following claims: 24 (1) violation of California’s Consumers Legal Remedies Act 25 (“CLRA”), California Civil Code § 1750, et seq.; (2) violation of 26 California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. 27 Code §§ 17200, et seq.; (3) unjust enrichment; (4) breach of 28 implied warranty of merchantability in violation of the Song- 1 Beverly Act, Cal. Civ. Code §§ 1790, et seq.; (5) breach of 2 implied warranty of merchantability; and (6) violation of the 3 Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. (See 4 generally Compl.) Defendants now move to dismiss the complaint 5 under Federal Rule of Civil Procedure 12(b)(1) for lack of 6 Article III standing. 7 II. Discussion 8 The “irreducible constitutional minimum of standing” 9 requires a showing that (1) plaintiff suffered an “injury in 10 fact” that (2) is “fairly ... trace[able] to the challenged 11 action of the defendant,” and that (3) is redressable by a 12 favorable judicial decision. Lujan v. Defs. of Wildlife, 504 13 U.S. 555, 560-61 (1992). The standing requirement applies to 14 “all claims litigated in a federal court whether based on federal 15 or state law.” In re Capacitors Antitrust Litig., 154 F. Supp. 16 3d 918, 925–26 (N.D. Cal. 2015); see also Lee v. Am. Nat’l Ins. 17 Co., 260 F.3d 997, 1001–02 (9th Cir. 2001). “The party invoking 18 federal jurisdiction bears the burden of establishing these 19 elements.” Id. at 561. “‘[A] plaintiff must demonstrate 20 standing for each claim he seeks to press.’” (Maya v. Centex 21 Corp., 658 F.3d 1060, 1068–69 (9th Cir. 2011) (quoting Davis v. 22 Fed. Elec. Comm’n, 554 U.S. 724, 734 (2008). Defendants here 23 contest only the injury-in-fact element. 24 To establish injury-in-fact, plaintiff must allege “an 25 invasion of a legally protected interest which is (a) concrete 26 and particularized, and (b) actual or imminent, not conjectural 27 or hypothetical.” Id. at 560 (internal quotation marks omitted). 28 Where multiple claims in a complaint are based on the same 1 factual allegations, the same injury-in-fact requirement applies 2 to all such claims. See, e.g., In re Capacitors, 154 F. Supp. 3d 3 at 927 n.4 (“Because the [claims] here are based on the same 4 factual allegation . . . the Article III injury-in-fact needed is 5 the same for both types of claims.”); Azoulai v. BMW of N. Am. 6 LLC, No. 16-CV-00589-BLF, 2017 WL 1354781, at *4 (N.D. Cal. Apr. 7 13, 2017); Lassen v. Nissan N. Am., Inc., 211 F. Supp. 3d 1267, 8 1274–75 (C.D. Cal. 2016). 9 Plaintiff here grounds all six of her claims in the 10 same consumer fraud allegations: she alleges that the drawers at 11 issue are defective and that defendants failed to either disclose 12 the defect or provide adequate wall attachment hardware. (Compl. 13 ¶ 39 (Count One); ¶¶ 47-49 (Count Two); ¶ 58 (Count Three); ¶ 67 14 (Count Four); ¶ 80 (Count Five); ¶ 87 (Count Six); see also 15 Compl. ¶¶ 5, 17 (general fraud allegations).) Plaintiff claims 16 that purchasers “suffered injury in fact . . . for having paid 17 more money than they otherwise would have for a dangerous and 18 defectively designed product,” and alleges overpayment as the 19 only injury under all six claims.1 (Compl. ¶ 23; see also Compl. 20 ¶ 40 (Count One); ¶ 50 (Count Two); ¶ 58 (Count Three); ¶ 71 21 (Count Four); ¶ 81 (Count Five); ¶ 89 (Count Six).) All claims 22 23 1 Although plaintiff alleges that one of the drawers she purchased tipped over and injured one of her children (Compl. ¶ 24 4), plaintiff’s child is not a party to this action and none of plaintiff’s claims are based on these allegations, nor does 25 plaintiff seek to recover for those injuries. Accordingly, “those injuries do not support standing to sue on the claims 26 asserted here.” See Azoulai v. BMW of N. Am. LLC, No. 16-CV- 27 00589-BLF, 2017 WL 1354781, at *4 (N.D. Cal. Apr. 13, 2017) (finding lack of injury-in-fact to support consumer fraud claims 28 despite allegations of bodily injury). 1 here are therefore subject to the same injury-in-fact 2 requirement. 3 For the following reasons, the court finds that the 4 Complaint fails to allege an injury-in-fact. At the outset, the 5 allegations do not identify how the drawers are defective. Where 6 the “plaintiff’s alleged economic harm centers on the[] claim 7 that the [product] has a defect,” the “fail[ure] to allege a 8 cognizable defect” deprives the plaintiff of standing. Birdsong 9 v. Apple Inc., 590 F.3d 955, 961 (9th Cir. 2009). Plaintiff 10 offers no meaningful description of the alleged “defect” at all. 11 The Complaint simply states that the drawers “were made 12 defectively, rendering [them] unstable and causing them to tip 13 over.” (Compl. ¶ 12.) The “cause” of the furniture tipping over 14 -- i.e. the defect –- is absent from the allegations. 15 The Ninth Circuit’s opinion in Birdsong v. Apple is 16 instructive here. The Birdsong plaintiffs filed suit alleging 17 that defendant’s product was capable of producing sounds that 18 could potentially cause hearing loss. 590 F. 3d at 957. 19 Plaintiffs argued that they suffered injury-in-fact because the 20 products had a defect that “caused [the products] to be worth 21 less than what they paid for them.” Id. at 961. The Ninth 22 Circuit found that plaintiffs’ allegations were insufficient to 23 find injury-in-fact because the product’s “inherent risk of 24 hearing loss” was not a “cognizable defect,” and because 25 “plaintiffs’ alleged injury in fact is premised on the loss of a 26 ‘safety’ benefit that was not part of the bargain to begin with.” 27 Id. 28 Here, just as in Birdsong, plaintiff alleges only that 1 the drawers’ “defective nature poses severe tip-over” risk, which 2 is not a “cognizable defect.” (See Compl. ¶ 12.) Further, as in 3 Birdsong, plaintiff claims the loss of a benefit to which she was 4 not entitled. Plaintiff claims that the drawers were “worth 5 substantially less than the Products they were promised and 6 expected.” (Compl. ¶ 81.) The complaint, however, does not at 7 all plead what defendants “promised” or what plaintiff 8 “expected,” and therefore does not establish that a benefit was 9 lost. Cf. Birdsong, 590 F.3d at 961 (“The plaintiffs do not 10 allege that [defendant] made any representations that [its] users 11 could safely listen to music at high volumes for extended periods 12 of time.”). Accordingly, the allegations are insufficient to 13 support a finding of injury-in-fact. 14 Indeed, because the allegations do not establish facts 15 that support plaintiff’s expectations of a heightened level of 16 safety, the allegations fail to establish that the drawer 17 malfunctioned or otherwise failed to do anything it was designed 18 to do. In Lassen v. Nissan North America, Inc., plaintiffs 19 purchased vehicles equipped with keyless fob ignition systems 20 that lacked an auto-off feature. 211 F. Supp. 3d 1267, 1271 21 (C.D. Cal. 2016). Plaintiffs filed suit asserting that the lack 22 of an auto-off feature constituted a design defect that defendant 23 had a duty to disclose. Id. The court found that plaintiff 24 “failed to plead a design defect that is actionable in the 25 consumer fraud context” because “Plaintiffs did not purchase 26 their vehicles based on any expectation that they included 27 additional safety features.” Id. at 1283-84. Instead, plaintiff 28 “merely suggest[ed] possible changes . . . which they believe[d] 1 would make the product safer.” Id. at 1283 (quoting Birdsong, 2 590 F.3d at 959). 3 Just as in Lassen, the allegations here do not 4 establish that plaintiff purchased the drawers based on any 5 expectation that they included additional or better wall 6 attachment hardware or instructions. Plaintiff’s allegations 7 instead suggest improvements to defendant’s current safety 8 measures and therefore do not sufficiently plead injury-in-fact. 9 (Compare Compl. ¶ 17 (“Defendants failed to provide adequate 10 warnings, instructions, or wall attachment hardware.”), with Mot. 11 at 11, 12 (“Owner’s Manual”) (including a “safety bracket kit” 12 and instructions for how to “anchor” the drawer to the wall in 13 the drawers’ packaging).) 14 For the same reason, plaintiff’s reliance on Maya v. 15 Centex Corp., 658 F.3d 1060 (9th Cir. 2011), Mazza v. American 16 Honda Motor Co., 666 F.3d 581, 595 (9th Cir. 2012), and In re 17 Arris Cable Modem Consumer Litigation, 327 F.R.D. 334, 352 (N.D. 18 Cal. 2018), is misplaced. In each of those cases, unlike in the 19 present matter, the plaintiffs’ allegations of economic injury 20 were supported by factual allegations that defendant represented 21 to plaintiff that the product had features or value that the 22 product ultimately did not have. In other words, plaintiffs did 23 not receive the benefit of their bargain. 24 In Maya, plaintiffs purchased homes in new developments 25 and filed suit against the developers. 658 F.3d at 1065. 26 Plaintiffs alleged that the developers’ marketing scheme 27 misrepresented the quality of the neighborhood and the 28 plaintiffs’ ability to pay. Id. Plaintiffs alleged that they 1 consequently overpaid for the homes they purchased. Id. at 1069. 2 The Maya court found that plaintiffs’ allegations of economic 3 injury satisfied the injury-in-fact requirement because 4 “defendant’s actions” –- their misrepresentations –- caused 5 plaintiffs to spend money that “they would not have spent” 6 otherwise. Id. Unlike plaintiff here, the Maya plaintiffs could 7 clearly identify defendants’ promises and plaintiffs’ 8 expectations with regard to the purchase. 9 The court in Mazza applied similar logic. In Mazza, 10 plaintiffs purchased vehicles equipped with a collision 11 mitigation system. 666 F.3d 581 at 585. Defendant advertised 12 the system’s capabilities to alert the driver of a pending 13 collision or to reduce the severity of the impact. Id. at 586. 14 Plaintiffs alleged that the system did not work as advertised 15 because, among other reasons, the system “may not warn drivers in 16 time to avoid an accident.” Id. at 587. The Mazza court found 17 that, “[t]o the extent that class members were relieved of their 18 money by [defendant’s] deceptive conduct . . . they have suffered 19 an “injury in fact.” Id. Just as in Maya, the Mazza court’s 20 standing inquiry for economic injury focused on what features or 21 value plaintiffs expected, paid for, and did not receive, as a 22 result of defendant’s misrepresentations. 23 The manufacturer’s misrepresentation similarly drives 24 the reasoning in In re Arris Cable. In In re Arris Cable, 25 consumers purchased modems that defendant repeatedly advertised 26 as “fast and reliable.” 327 F.R.D. at 344. In reality, the 27 modem caused plaintiffs to experience “severe network latency.” 28 Id. Plaintiffs filed suit alleging economic injury. Id. The 1 court found that the allegations satisfied the injury-in-fact 2 element of standing because “plaintiffs’ theory of economic 3 injury is not based on the absence of an unbargained-for safety 4 feature.” Id. at 353. Instead, “Plaintiffs alleged that 5 Defendant advertised the [product] as delivering a fast, reliable 6 internet connection, but Defendant in fact sold a [product] that 7 offered a slower and less reliable connection than advertised.” 8 Id. at 353-54. Just as in Maya and Mazza, plaintiffs identified 9 what defendant clearly promised at the time of purchase and what 10 plaintiffs subsequently did not receive. See id. (finding that 11 plaintiffs “bargain[ed] for speed and reliability” that defendant 12 did not deliver). 13 The In re Arris Cable court specifically distinguished 14 the Birdsong and Lassen line of cases in a way that is helpful to 15 the court here. “[A]t the center of the reasoning in Birdsong 16 [and] Lassen is a discomfort with no-injury products liability 17 actions being tried as consumer fraud cases.” Id. at 352; see 18 also Lassen, 211 F. Supp. 3d at 1281 (“A number of courts have 19 rejected for lack of standing or injury similar attempts to 20 recast no-injury products-liability claims (which are not 21 cognizable) as consumer fraud claims for contract-like economic 22 damages (which may be cognizable).”) Unlike in Birdsong, Lassen, 23 and the matter at hand, the In re Arris Cable plaintiff “d[id] 24 not use the term ‘defect’ in the same sense that the term is used 25 in a personal injury products liability case.” In re Arris 26 Cable, 327 F.R.D. at 353. Instead, “[p]laintiffs use[d] the term 27 ‘defect’ to identify the causes of the [product’s] alleged subpar 28 performance. Id. 1 As the complaint stands, this case amounts to an 2 attempt to recast a no-injury products liability action as a 3 consumer fraud claim and does not allege an injury-in-fact. Cf. 4 Lessen, 211 F. Supp. 3d at 1281 (characterizing the claim as a 5 “no-injury products-liability” claim where plaintiff alleged that 6 defendant “wrongfully induced Plaintiffs to purchase their 7 [product] by concealing a material fact (the alleged defect), and 8 that Plaintiffs would have paid less for their [products]”). As 9 the Lassen court explained, “products liability design defect 10 standards are not readily transferable to consumer fraud claims.” 11 Id. at 1286. Most relevant here is the fact that products 12 liability law and consumer fraud law protect different interests. 13 As evidenced by Maya, Mazza, and In re Arris Cable, “the purpose 14 of consumer fraud law . . . is to ‘prevent sellers from deceiving 15 consumers about their products or services.’” Id. at 1286. 16 “Where,” as is the case here, “[the] gravamen of the defect is 17 that the product does not malfunction but lacks certain 18 additional safety features, the claim starts to become less about 19 deception and more about consumer safety, which is not the 20 immediate concern of consumer fraud law.” Id. at 1287. 21 Considering the two distinct lines of cases alleging 22 economic injury as well as plaintiff’s failure to offer any 23 authority supporting a finding of standing in the consumer fraud 24 context, the court finds that plaintiff has not alleged injury- 25 in-fact. Because the alleged injury and the allegations of 26 fraudulent wrongdoing are virtually identical across all claims, 27 plaintiff lacks standing for all claims. See, e.g., Lassen, 211 28 F. Supp. 3d at 1274–75, 1289; Azoulai, 2017 WL 1354781, at *4; WA 2 CUVEE GOV DSDUING IN RVUs OPI ee AY tt OV tt 1 see also Maya, 658 F.3d 1060. The court will therefore dismiss 2 all claims with leave to amend. Maya, 658 F.3d at 1072. 3 IT IS THEREFORE ORDERED that defendants’ motion to 4 dismiss (Docket No. 8) be, and the same hereby is, GRANTED. 5 Plaintiff has twenty days from the date this order is 6 signed to file a First Amended Complaint, if she can do so 7 consistent with this Order. 8 Dated: June 5, 2020 A - ak. □□□□□□□□□□□□□□□□□□□□□□□□□ 10 UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11