The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS (ECF. No. 28.)
Presently before the Court is Defendants Sony Corporation of America, Sony Electronics Inc., and Sony Corporations' (Defendants or Sony) motion to dismiss Plaintiffs' consolidated amended complaint. (Mot. to Dismiss, ECF No. 17.) Also before the Court are Plaintiffs' opposition, (Opp'n, ECF No. 30), and Defendants' reply, (Reply, ECF No. 31). After consideration, the Court GRANTS Defendants' motion to dismiss.
Laura Marchante, Phrank Ochoa, Dragan Sefo, and Melissa Solis (Plaintiffs) filed a putative class action suit against Defendants. (CAC, ECF No. 27.) The suit seeks damages and equitable relief for those who purchased Sony televisions with model designations KF-42WE610, KF-50WE610, KF60WE610, KDF-60XBR950, KDF-70XBR950, KF-42WE620, KF-50WE620, KDF-42WE655, and KDF-50WE655. (Id. ¶ 3.)
Plaintiff Laura Marchante presents a representative example of the alleged problem. In December 2005, Marchante purchased one of the model televisions. More than four years later, she "began experiencing a discoloration on the screen of her television." (Id. ¶ 6.) Marchante contacted Sony, and Sony offered to replace her television or repair the television's optical block. After some research, Marchante discovered "that her television had a known issue with melting and warping of the lamp access door." (Id.) Concerned, she performed "her own visual inspection and found her lamp access door to be scorched." (Id.) And again she contacted Sony. After some wrangling, Sony inspected her television for free. At inspection's close, Sony advised Marchante to stop using the television: further use could render the television irreparable. Six days later, Sony offered Marchante a refurbished different-model television. Marchante researched the model and discovered that "it too had quality control issues." She declined Sony's offer and requested a new television or a full refund. Sony refused. Marchante bought a replacement, non-Sony television.
Plaintiffs allege that certain Sony television models were delivered by Sony with "an identical characteristic and inherent safety defect." (Id. ¶ 3.) Plaintiffs allege that the defect renders the televisions "unsafe and unsuitable for their principal and intended purpose" because it "causes the Televisions to overheat, causing melting and/or combustion of the internal components and chassis." (Id.) In some cases, the defect discolors the screen. (Id.)
Plaintiffs also allege that Sony was aware of the defect but it failed to "actively alert consumers to the existence of the safety defect." (Id. ¶ 4) Instead, Plaintiffs allege, Sony responded to the problem by providing an extended warranty. (Id.)
Plaintiffs' consolidated amended complaint asserts eight causes of action: (1) Violation of California Business and Professional Code § 17200, et seq. (Unfair Competition Law); (2) Violation of California Business and Professional Code § 17500, et seq. (False Advertising Law); (3) Violation of California Consumers Legal Remedies Act, Cal. Civ. Code § 1750, et seq.; (4) Strict Liability; (5) Violation of the Song Beverly Consumer Warranty Act, Cal. Civ. Code. § 1792, et seq.; (6) Violation of Magnuson-Moss Act, 15 U.S.C. § 2301, et seq.; (7) Breach of Express Warranty; and (8) Breach of Implied Warranty.
Federal Rule of Civil Procedure 12(b)(6) allows a party to assert by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted," generally known as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim" showing that the pleader is entitled to relief. Although Rule 8 "does not require 'detailed factual allegations,' . . . it [does] demand more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, - U.S.- , 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, "a plaintiff's obligation to provide the 'grounds' for his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 557).
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts pleaded "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts "'merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 1950. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged- but it has not 'show[n]'- 'that the pleader is entitled to relief.'" Id.
When a motion to dismiss is granted, "leave to amend should be granted 'unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.'" DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, the Court may deny leave to amend if amendment would be futile. See id.; Schreiber Distrib., 806 F.2d at 1401.
1. California Business and Professional Code § 17200
Plaintiffs allege that Sony violated § 17200 (the UCL) by selling, promoting, and recalling the television models at issue. (CAC ¶ 38--45.) Plaintiffs argue that Sony engaged in unfair business acts by selling televisions containing a safety defect which negatively and materially impacted the televisions' merchantability and fitness for the purposes of watching video programming. (Id. ¶ 41.) Sony also engaged in allegedly unfair business acts by promoting televisions to customers without disclosing its knowledge of the safety defect. (Id. ¶ 42.) And finally, Sony engaged in allegedly unfair business acts by conducting a "secret" product recall and warranty extension which was designed to inform as few customers of the safety defect as possible. (Id. ¶ 43.)
"An act or practice is unfair if the consumer injury is substantial, is not outweighed by any countervailing benefits to consumers or to competition, and is not an injury the consumers themselves could reasonably have avoided." Daugherty v. American Honda Motor Co., Inc., 144 Cal. App. 4th 824, 839 (Cal. Ct. App. 2007). Here, the Court finds that the consumer injury, if any, is not substantial. In Daugherty, "[t]he failure to disclose a defect that might, or might not, shorten the effective life span an automobile part that functions precisely as warranted throughout the term of its express warranty cannot be characterized as causing substantial injury to consumers." Id. Plaintiffs here do not allege that the televisions exhibited any problems during the one-year limited warranty period; every alleged problem surfaced several years after purchase. Any failure to disclose relates to a defect that arose years after the express warranty expired. And any failure to disclose therefore does not constitute substantial injury. Thus, the Court finds that any UCL unfairness claim arising from the alleged defect necessarily fails. This claim is DISMISSED WITHOUT PREJUDICE.
2. California Consumers Legal Remedies Act, California Civil Code § 1750
The Consumers Legal Remedies Act (CLRA) proscribes "unfair methods of competition and unfair or deceptive acts or practices" in transactions for the sale or lease of goods to consumers. Cal. Civ. Code § 1770. The unlawful acts include: 1) "Representing that goods . . . have . . . characteristic . . . which they do not have," Cal. Civ. Code § 1770(a)(5); 2) "Representing that goods . . . are of a particular standard, quality, or grade . . . if they are of another," Cal. Civ. Code § 1770(a)(7); and 3) "Advertising goods or services with intent not to sell them as advertised," Cal. Civ. Code § 1770(a)(9).
Plaintiffs allege violations of the CLRA center around one affirmative
representation-that Sony advertised the televisions as being safe-and
five failures to disclose related to the alleged safety defect. (CAC ¶
51(a)--(f).) Sony allegedly advertised the televisions "as being safe
and providing high quality video playback with the intent not to sell
the [them] as advertised." (CAC ¶ 52(e).) Moreover, Plaintiffs allege, Sony failed to disclose that
the televisions would ...