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Stefanie Mlejnecky v. Olympus Imaging America Inc

April 18, 2011

STEFANIE MLEJNECKY, PLAINTIFF,
v.
OLYMPUS IMAGING AMERICA INC.,
DEFENDANT.



ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT‟S MOTION TO DISMISS

This matter comes before the Court on Defendant Olympus Imaging America Inc.‟s ("Defendant") Motion to Dismiss (Doc. #17) Plaintiff Stefanie Mlejnecky‟s ("Plaintiff") First Amended Complaint ("FAC")(Doc. #16). Plaintiff opposes the motion.*fn1

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff purchased a new Stylus 1030 SW camera in July 2008 after viewing an advertisement in Parents Magazine. The advertisement stated that the cameras were "the world‟s toughest digital cameras -- waterproof to 33 feet [and] shockproof from 6.6 feet. . . ." FAC at 3:3-4. In July 2008, after viewing 2 the advertisement in Parents Magazine, Plaintiff visited 3 Defendant‟s website, which allegedly contained the same 4 statements regarding the cameras. Based on the advertisement 5 and statements on Defendant‟s website, Plaintiff purchased the 6 Stylus 1030 SW. Plaintiff did not see a copy of the camera‟s 7 warranty or know its provisions until after she received the 8 camera and opened the package.

On September 2, 2010, Plaintiff dropped her camera. Plaintiff claims that although she dropped the camera from about 3 feet above the ground, the plastic latch for the battery/card cover broke, preventing the cover from closing. The message "card cover open" appeared, and the cover would not close, making the camera inoperative. Soon after the incident, Plaintiff called Defendant to report the camera‟s defect and obtain repair or replacement of her camera. An Olympus representative informed her that she would have to pay around $150 for repairs.

Plaintiff brings this lawsuit as a class action. The Complaint alleges five causes of action: 1) Violation of California‟s Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code section 1750 et seq.; (2) Unlawful business practices, violation of California‟s Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code section 17200, et seq.; (3) Unfair business practices, violation of UCL; (4) Fraudulent business practices, violation of UCL; and (5) False advertising, violation of UCL. The Court has jurisdiction under 28 U.S.C. § 1332.

II. OPINION

A. Legal Standard 3

1. Standing

The Article III case or controversy requirement limits 5 federal courts' subject matter jurisdiction by requiring that 6 plaintiffs have standing. Allen v. Wright, 468 U.S. 737, 750 7 (1984). The party asserting federal subject matter jurisdiction 8 bears the burden of proving its existence. Kokkonen v. Guardian 9 Life Insurance Co., 511 U.S. 375, 377 (1994). Standing addresses whether the plaintiff is the proper party to bring the matter to the court for adjudication. Chandler v. State Farm Mutual Automobile Insurance Co., 598 F.3d 1115, 1122 (9th Cir. 2010). Because standing pertains to federal courts‟ subject matter jurisdiction, it is properly raised in a 12(b)(1) motion to dismiss. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000).

2. Motion to Dismiss

A party may move to dismiss an action for failure to state a claim upon which relief can be granted pursuant to Federal Rules of Civil Procedure 12(b)(6). In considering a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1975), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a plaintiff needs to plead "enough facts to state a claim to relief that is plausible 2 on its face." Twombly, 550 U.S. at 570. Dismissal is 3 appropriate where the plaintiff fails to state a claim 4 supportable by a cognizable legal theory. Balistreri v. 5 Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1990). 6

Upon granting a motion to dismiss for failure to state a 7 claim, the court has discretion to allow leave to amend the 8 complaint pursuant to Federal Rules of Civil Procedure 15(a). 9

"Dismissal with prejudice and without leave to amend is not appropriate unless it is clear . . . that the complaint could not be saved by amendment." Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).

B. Claims for Relief

1. Injury Sufficient to Confer Standing

Defendant characterizes Plaintiff‟s lawsuit as a post-warranty action and argues that she generally lacks standing because her camera broke more than a year beyond the expiration of the warranty and she does not allege that there was a safety issue or a representation about the lifespan of the product that would give her standing to assert a post-warranty claim. Defendant further argues that the challenged representations reiterate the terms of the express warranty, which warrants the camera‟s ability to operate in water at depths of up to 10 meters and sustain accidental impact for one year. Defendant also contends that in the absence of representations contradicting the terms of the warranty, "the only expectation buyers could have had about the [product] was that it would function properly for the length of [the] express warranty, and it did." Daugherty v. American Honda Motor Co., Inc., 144 2 Cal.App.4th 824, 838 (Cal.App.Ct.2d 2006). Thus, by framing 3

Plaintiff‟s lawsuit as a post-warranty action, Defendant argues 4 that Plaintiff‟s claims are barred because she has no standing 5 to assert an injury for a defect arising after the warranty 6 expired. 7

Plaintiff counters that this is not a post-warranty action, 8 but an affirmative misrepresentation lawsuit. Plaintiff argues 9 that Defendant‟s representations that the Stylus SW cameras are waterproof and shockproof are untrue and that Defendant‟s failure to disclose the defects inherent in its Stylus SW cameras run counter to those affirmative misrepresentations. Plaintiff also avers that Defendant‟s express warranty excludes defects and damage caused by shock and water exposure. Thus, Plaintiff contends that Defendant cannot point to the expiration of a warranty that never covered the defects in the first place to insulate it from liability for fraudulent misrepresentations regarding the cameras‟ characteristics. See Fundin v. Chicago Pneumatic Tool Co., 152 Cal.App.3d 951, 958 (Cal.App.Ct.4d 1984) (finding that where a product has been described by its manufacturer as having certain detailed capacities under certain conditions, it would be both unfair and unreasonable to disclaim those features in the express warranty); see also In re Toyota Motor Corp., No. 8:10ML 021515, 2010 WL 4867562, *13 (C.D. Cal. Nov. 30, 2010) (concluding warranty based defenses do not preclude standing even if the warranty covered the defect in question).

Under California law, where a manufacturer of consumer goods has warranted a product for a limited period, the 2 manufacturer is liable under the CLRA or UCL for failing to 3 disclose information about a defect that manifests itself 4 outside the express warranty period when (1) the omitted fact 5 runs counter to a representation made by the defendant, or 6 (2) the ...


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