Kerkorian v. Samsung Electronics America, Inc.

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS (DOC. NO. 13)

         This matter is before the court on a motion to dismiss brought on behalf of defendant Samsung Electronics America, Inc. (“Samsung” or “defendant”). (Doc. No. 13.) A hearing on the motion was held on October 2, 2018.^[1] Attorney Christopher Nichols appeared telephonically for plaintiff Paul Kerkorian, individually and on behalf of all others similarly situated (“plaintiff”). Attorney Michael Adams appeared for defendant. Having reviewed the parties' briefing and heard oral argument, and for the reasons set forth below, the court grants defendant's motion to dismiss with leave to amend.

         BACKGROUND

         Plaintiff's first amended complaint, (Doc. No. 8 (“FAC”)), alleges as follows. Samsung sells a line of “smart” remotely-operable, robotic vacuum cleaners called POWERbots. (Id. at ¶ 2.) Plaintiff purchased a POWERbot model SR1AM7040WG on or around January 18, 2018. (Id. at ¶ 1.) Samsung advertises its POWERbot as “reliably” working with Amazon's Alexa as well as iOS and Android devices through two smartphone applications called Samsung Connect and Smart Home (collectively referred to as the “Remote Applications”). (Id. at ¶ 11.)

         According to plaintiff, the POWERbot does not work as advertised in several ways. Although Samsung advertised the POWERbot as “reliably” remotely operational through the use of Alexa or Samsung's Remote Applications, the POWERbot “cannot reliably connect to” and is “not reliably remotely operable through the use of” Alexa, “as advertised” by Samsung. (Id. at ¶¶ 16, 17.) Additionally, the POWERbot's “remote functionality” and compatibility with Alexa and the Remote Applications “do[] not function as advertised by [Samsung].” (Id. at ¶¶ 14-15; see also Id. at ¶ 18) (alleging that the POWERbot devices “do not have usable Samsung Connect, Smart Home, or Alexa features.”) Samsung's Remote Applications also “do not save credentials for users as advertised.” (Id. at ¶ 16.) The Remote Applications “only work[] on certain router bands (forcing users to change their home internet settings), ” “periodically delete[] [themselves] from the user's mobile device, ” and do not “reliably connect to Samsung's servers or the POWERbot device as advertised.” (Id.) Lastly, Samsung's “Smart Hub” product “may improve the functionality of the POWERbot vacuums with the [Remote Applications], ” but Samsung “does not advertise that one needs to purchase the ‘Smart Hub' in order to use the remote functionality features of the POWERbot.” (Id. at ¶ 19.)

         Plaintiff filed suit on June 22, 2018. (Doc. No. 2.) In response to this court's order to show cause why this matter should not be dismissed for lack of jurisdiction, (Doc. No. 6), plaintiff filed the FAC on July 3, 2018. The FAC asserts eight causes of action: (1) False Advertising under California Business and Professional Code § 17500 (“false advertising law”); (2) Unfair Business Practices under California Business and Professional Code § 17200 (“UCL”); (3) unjust enrichment; (4) breach of implied warranty of fitness for a particular purpose; (5) breach of implied warranty of merchantability; (6) negligent misrepresentation; (7) intentional misrepresentation; and (8) strict liability. Plaintiff seeks damages, attorneys' fees, and “an order enjoining Defendant to repair the remote operability and compatibility issues” with the POWERbot. (Id. at 21-22.)

         LEGAL STANDARD

         The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 676 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Moreover, it is inappropriate to assume that the plaintiff “can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

         A complaint alleging fraud, as does the plaintiff's, must satisfy heightened pleading requirements. Fed.R.Civ.P. Rule 9(b) (“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”). “Fraud can be averred by specifically alleging fraud, or by alleging facts that necessarily constitute fraud (even if the word fraud is not used).” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (internal quotations omitted). “When an entire complaint, or an entire claim within a complaint, is grounded in fraud and its allegations fail to satisfy the heightened pleading requirements of Rule 9(b), a district court may dismiss the complaint or claim.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003) (citing Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001)).

         Under Rule 9(b), the “circumstances constituting the alleged fraud [must] be specific enough to give defendants notice of its particular misconduct . . . so they can defend against the charge and not just deny that they have done anything wrong.” Kearns, 567 F.3d at 1124 (internal quotations omitted) (citing Bly-Magee, 236 F.3d at 1019). To satisfy the particularity standard of Rule 9(b), the plaintiff “must set forth more than the neutral facts necessary to identify the transaction” at issue. Id. (internal quotations omitted) (citing In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc), superseded by statute on other grounds as stated in SEC v. Todd, 642 F.3d 1207, 1216 (9th Cir. 2011)); see also Vess, 317 F.3d at 1106 (“Averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged.”) (internal quotations omitted).

         DISCUSSION

         A. Request for Judicial Notice

         As a preliminary matter, the court first considers defendants' request for judicial notice. (Doc. No. 14.) Specifically, defendant requests that judicial notice be taken of the following documents: (1) the express warranty for the Samsung POWERbot model (SR1AM7040WG) purchased by plaintiff, which is available on Samsung's website; (2) plaintiff's April 16, 2018 letter to Samsung pursuant to the California Legal Remedies Act (the “CLRA Letter”), which is referenced by plaintiff in paragraphs 71 and 85 of the FAC; (3) Samsung's initial response to plaintiff's CLRA Letter, dated May 17, 2018; (4) Samsung's second response to plaintiff's CLRA Letter, dated May 22, 2018 (collectively with Samsung's May 17, 2018 response letter, the “CLRA Response Letters”). (Id. at 2.)

         Ordinarily, the court considers only the complaint and attached documents in deciding a motion to dismiss; however, the court may also take judicial notice of matters of public record without converting the motion into a motion for summary judgment. Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Pursuant to the Federal Rule of Evidence 201(b), a court may “judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b).

         Here, defendant requests judicial notice “because the viability of plaintiff's claims for breach of implied warranties hinge on the existence and terms of the express warranty and Samsung's efforts to honor the remedies provided therein.” (Doc. No. 14 at 5.) The court does not consider plaintiff's breach of implied warranty claims substantively and therefore will not take judicial notice of plaintiff's letter to Samsung and the CLRA Response Letters. However, the court will take judicial notice of the existence of Samsung's express warranty. This express warranty is accessible on Samsung's website and is relevant in considering defendant's motion to dismiss plaintiff's unjust enrichment claim and request for injunctive relief. See Datel Holdings Ltd. v. Microsoft Corp., 712 F.Supp.2d 974, 984 (N.D. Cal. 2010) (taking judicial notice of limited warranty and return information, documents which were either available online or could be obtained from purchase of the relevant product).

         B. The False Advertising Law, UCL, Misrepresentation, and Breach of Implied Warranty Claims Fail under Rule 9(b).

         First, plaintiff asserts breach of implied warranties, misrepresentation, and claims under the false advertising law and UCL. Defendant argues that the allegations upon which these claims rely fail to satisfy the requirements of Rule 9(b). As defendant puts it, plaintiff fails to identify with particularity “(i) any statement by Samsung that he reviewed and relied upon, much less a false one, (ii) who made the statement(s), (iii) when ...