Scott Miller v. Fuhu Inc et al

Filing 45

MINUTES OF Motion Hearing held before Judge Christina A. Snyder: The Court GRANTS in part and DENIES in part defendants' motion to dismiss plaintiff's first amended complaint 42 . Specifically, the court GRANTS without prejudice defendants' motion to dismiss plaintiff's claim for breach of the implied covenant of merchantability. Defendants' motion is otherwise DENIED. Court Reporter: Laura Elias. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

Present: The Honorable

Date

May 4, 2015

CHRISTINA A. SNYDER

Catherine Jeang
Deputy Clerk

Laura Elias
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Seth Safier

Ivo Labar

Proceedings:

I.

DEFENDANTS’ MOTION TO DISMISS PLAINTIFF’S FIRST
AMENDED COMPLAINT (filed April 1, 2015, dkt. 42)

INTRODUCTION

On July 7, 2014, plaintiff Scott Miller filed a putative class action against
defendants Fuhu, Inc. and Fuhu Holdings, Inc. (collectively, “defendants”) in Los
Angeles County Superior Court. Dkt. 1. Defendants removed the action to this Court on
August 5, 2014, asserting diversity jurisdiction. Id. On March 5, 2015, plaintiff filed the
operative first amended complaint (“FAC”). Dkt. 31. The FAC alleges claims for (1)
violation of California’s Consumers Legal Remedies Act, Cal. Civil Code § 1750, et seq.
(“CLRA”); (2) violation of California’s False Advertising Law, Cal. Bus. Prof. Code §
17500, et seq. (“FAL”); (3) common law fraud, deceit, and/or misrepresentation; (4)
breach of express warranty, in violation of Cal. Com. Code § 2100, et seq.; (5) breach of
the implied covenant of merchantability, in violation of the Song-Beverly Consumer
Warranty Act, Cal. Civil Code § 1790, et seq. (“Song-Beverly Act”); and (6) violation of
California’s Unfair Competition Law, Cal. Bus. Prof. Code §§ 17200, et seq. (“UCL”).
Id.
On April 1, 2015, defendants filed a Rule 12(b)(6) motion to dismiss plaintiff’s
FAC. Dkt. 42. Plaintiff filed an opposition on April 15, 2015, dkt. 43, and defendants
replied on April 20, 2015, dkt. 44. The Court held a hearing on May 4, 2015. Having
carefully considered the parties’ arguments, the Court finds and concludes as follows.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

2:14-cv-06119-CAS(ASx)

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

II.

Date

‘O’

May 4, 2015

BACKGROUND

Defendants manufacture electronic tablets for children. FAC ¶ 20. Among these
products are the Nabi XD, Nabi 2, Nabi 2 S, Nabi Jr., and Disney and Nickelodeon
special edition Nabi 2 tablets (referred to collectively as the “Nabi tablets”). Id. To
promote the sales of Nabi tablets, defendants provide advertising materials and
information to their retail partners, and also communicate such information directly to
consumers through their website (http://www.nabitablet.com). Id. ¶ 21. As is relevant
here, defendants market, advertise, and represent to retailers, and on their website, that
each Nabi tablet includes a “power adapter,” is “rechargeable,” and has “rechargeable
batteries.” Id. Similar representations also appear in Nabi tablet user manuals. Id. ¶¶ 2425. Among other things, the manuals represent that the tablets may be used while
connected to an external power source, i.e., while recharging. Id. ¶ 28.
According to plaintiff, defendants’ representations are false because the Nabi tablets
have defective power adapters that fail to reliably recharge the tablets. Id. ¶ 22. In
particular, consumers attempting to recharge the Nabi tablets using the provided power
adapters experience intermittent recharging failures, well within the first year of operation,
including the following: “(i) failure of the tablets to begin recharging (i.e., the charging light
indicator will not display an orange light and the battery will not recharge); (ii) failure of the
tablets to power on after recharging; and/or (iii) failure of the tablets to function while
recharging.” Id. Plaintiff alleges that defendants have not informed potential consumers or
instructed retailers to inform potential consumers that the Nabi tablets are not rechargeable
or that they cannot be used while charging or plugged in; instead defendants “knowingly
and intentionally failed to disclose [this information] to consumers.” Id.
Each Nabi tablet also includes defendants’ written product warranty, which provides,
“in pertinent part, in similar or identical terms,” as follows:
Fuhu warranties for one year from the date of sale to the consumer that the
nabi is of merchantable quality and that it conforms to applicable
specifications. Applicable specifications mean the specification for the
Processor, the CPU (Central Processing Unit). The applicable specifications
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

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Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.
exclude and no warranty is provided for the specifications for any other
components or for any performance that can degrade naturally with normal use
for one year . . . If you discover that your nabi is not of merchantable quality
and fails to conform to its applicable specifications, as defined above, we will,
at our option, refund the purchase price, or repair or replace the product,
using new or refurbished components within a reasonable time during the
warranty period.

Id. ¶ 26. This written warranty is also available on defendants’ website. Id. ¶ 27.
According to plaintiff, the Nabi tablets are not of merchantable quality because they are
sold with defective power adapters that fail to reliably recharge the tablets. Id. ¶ 28.
Plaintiff further alleges that “when consumers complain to Defendants during the warranty
period that the Nabi tablets do not recharge and/or cannot be used while they are
recharging, defendants have failed to either (i) refund the purchase price of the Nabi
tablets, or (ii) adequately repair or replace the Nabi tablets or the power adapters.” Id.
Plaintiff alleges that defendants have been aware that the Nabi tablets contain
defective power adapters that fail to reliably recharge the tablets since at least December
2011. See id. ¶ 29. Defendants have received hundreds of complaints from third-party
retailers and consumers, in addition to requests from consumers for warranty service and/or
replacement power adapters. Id.; see also Id. ¶¶ 44-67 (a “small sample of hundreds of
consumer complaints” appearing on defendants’ Facebook page and ranging in date from
December 31, 2011 to February 27, 2015). In response to these initial consumer
complaints, defendants investigated the recharging problem and determined that the power
adapters included with the tablets were defective. Id. Defendants announced this in a
December 31, 2011 Facebook post, and stated that they had remedied the problem. Id.
According to plaintiff, although defendants initially sent replacement power adapters
to consumers who complained, these replacements were also defective. Id. ¶ 30. Plaintiff
further alleges that, for a period of time, defendants refused to send replacement power
adapters to consumers who complained within the warranty period. Id. Instead,
defendants directed these consumers to purchase another power adapter from defendants
or from a third party, despite defendants’ express warning in the Nabi tablet user manual
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

that a non-Nabi brand power adapter could damage the tablet. Id. Plaintiff alleges that
defendants resumed sending replacement power adapters to complaining consumers on July
9, 2014. Id. ¶ 31. However, plaintiff alleges that defendants continue to send defective
replacement adapters and “cryptically communicate this replacement program to Nabi tablet
owners on their website and Facebook page.” Id.
On or about July 27, 2012, plaintiff Scott Miller purchased a Nabi 2 tablet from Best
Buy for $199.99 for his grandson. Id. ¶¶ 37, 39. Before making his purchase, plaintiff
researched his options, compared multiple brands of tablets, and reviewed defendants’
website and the representations that defendants made to retailers that Nabi tablets are
“rechargeable” with an included “power adapter.” Id. ¶ 37. Plaintiff specifically wanted to
purchase a tablet that was both rechargeable and could be used while it was recharging,
such as during a car ride or while plugged directly into a wall outlet. Id. Moreover, plaintiff
alleges that he read and relied upon each of defendants’ affirmative misrepresentations and
omissions before completing his purchase. Id. ¶ 38.
Shortly after his purchase, and within the first year of ownership, plaintiff alleges that
he began experiencing problems recharging the Nabi tablet. Id. ¶ 40. In particular,
plaintiff’s Nabi tablet would not enter into charging mode when it was plugged into a power
source using the supplied power adapter, and would not turn on after it had been plugged
in and had purportedly been recharged, even when the tablet’s charging light indicated that
recharging was complete. Id. Plaintiff alleges that he contacted defendants at least twice
during the first year of ownership regarding his recharging problems, but that he did not
receive any response. Id. ¶ 41. Plaintiff was able to connect with defendants on his third
attempt, and they sent plaintiff a replacement power adapter on or about September 16,
2013. Id. Plaintiff, however, alleges that the replacement adapter was also defective,
because plaintiff is still unable to use his Nabi tablet while it is plugged into a power source.
Id. ¶ 42.
Defendants contend that the plaintiff can remedy the issue he is currently
experiencing by installing a software update, provided by defendants, on his Nabi tablet.
Id. According to plaintiff, defendants promise to provide and do provide free software
updates for the Nabi tablets. Id. ¶ 68. When defendants release such an update, a
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

notification is “pushed” to all Nabi tablets that are connected to the Internet, notifying users
that a software update is available to download. Id. These “over-the-air” software updates
provide Nabi users with vital updates to the tablet’s functionality, including updates to the
operating system, and fixes to known errors or bugs in the software. Id.
Plaintiff, however, has declined to install these over-the-air updates on his Nabi tablet
since, in order to do so, he and all other Nabi owners are required to agree to defendants’
amended Terms of Use. Id. ¶ 71. Plaintiff alleges that in September 2014—after plaintiff
filed his original complaint—defendants amended the Terms of Use to include both an
arbitration clause and a class action waiver provision. Id. ¶ 72 (setting forth relevant
language of Terms of Use). Plaintiff alleges that this presents consumers with a Hobson’s
Choice. Id. ¶ 74. Plaintiff further alleges that defendants have attempted to conceal these
amendments by intentionally indicating on their website that the Terms of Use were “last
updated” on August 16, 2013, even though they were actually revised in September 2014.
Id. ¶ 75.
III.

LEGAL STANDARD
A.

Fed. R. Civ. P. 12(b)(6)

A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency
of the claims asserted in a complaint. Under this Rule, a district court properly dismisses
a claim if “there is a ‘lack of a cognizable legal theory or the absence of sufficient facts
alleged under a cognizable legal theory.’ ” Conservation Force v. Salazar, 646 F.3d
1240, 1242 (9th Cir. 2011) (quoting Balisteri v. Pacifica Polic Dep’t, 901 F.2d 696, 699
(9th Cir. 1988)). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does
not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of
his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). “[F]actual allegations must be enough to raise a
right to relief above the speculative level.” Id.
In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all
material allegations in the complaint, as well as all reasonable inferences to be drawn
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

from them. Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be
read in the light most favorable to the nonmoving party. Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001). However, “a court considering a motion to
dismiss can choose to begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth. While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.”
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); see Moss v. United States Secret Service,
572 F.3d 962, 969 (9th Cir. 2009) (“[F]or a complaint to survive a motion to dismiss, the
non-conclusory ‘factual content,’ and reasonable inferences from that content, must be
plausibly suggestive of a claim entitling the plaintiff to relief.”). Ultimately,
“[d]etermining whether a complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw on its judicial experience
and common sense.” Iqbal, 556 U.S. at 679.
Unless a court converts a Rule 12(b)(6) motion into a motion for summary
judgment, a court cannot consider material outside of the complaint (e.g., facts presented
in briefs, affidavits, or discovery materials). In re American Cont’l Corp./Lincoln Sav. &
Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other grounds sub nom
Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). A court
may, however, consider exhibits submitted with or alleged in the complaint and matters
that may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon
Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999); Lee v. City of Los Angeles,
250 F.3d 668, 689 (9th Cir. 2001).
As a general rule, leave to amend a complaint which has been dismissed should be
freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when “the
court determines that the allegation of other facts consistent with the challenged pleading
could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture
Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see Lopez v. Smith, 203 F.3d 1122, 1127 (9th
Cir. 2000).

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

2:14-cv-06119-CAS(ASx)

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.
B.

Date

‘O’

May 4, 2015

Fed. R. Civ. P. 9(b)

Federal Rule of Civil Procedure 9(b) requires that the circumstances constituting a
claim for fraud be pled with particularity. Rule 9(b) applies not just where a complaint
specifically alleges fraud as an essential element of a claim, but also where the claim is
“grounded in fraud” or “[sounds] in fraud.” Vess v. Ciba-Geigy Corp. U.S.A., 317 F.3d
1097, 1103–04 (9th Cir. 2003). A claim is said to be “grounded in fraud” or “ ‘sounds in
fraud’ ” where a plaintiff alleges that defendant engaged in fraudulent conduct and relies
solely on that conduct to prove a claim. Id. “In that event, . . . the pleading of that claim
as a whole must satisfy the particularity requirement of [Fed. R. Civ. P.] 9(b).” Id.
However, where a plaintiff alleges claims grounded in fraudulent and non fraudulent
conduct, only the allegations of fraud are subject to heightened pleading requirements.
Id. at 1104.
A pleading is sufficient under Rule 9(b) if it “[identifies] the circumstances
constituting fraud so that the defendant can prepare an adequate answer from the
allegations.” Walling v. Beverly Enters., 476 F.2d 393, 397 (9th Cir. 1973). This
requires that a false statement be alleged, and that “circumstances indicating falseness” be
set forth. In re GlenFed Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994). Thus, Rule 9(b)
requires a plaintiff to “identify ‘the who, what, when, where and how of the misconduct
charged,’ as well as ‘what is false or misleading about [the purportedly fraudulent
conduct], and why it is false.’ ” Cafasso, ex rel. United States v. Gen. Dynamics C4 Sys.,
Inc., 637 F.3d 1047, 1055 (9th Cir. 2011) (quoting Ebeid ex rel. United States v.
Lungwitz, 616 F.3d 993, 998 (9th Cir. 2010)).
III.

DISCUSSION
A.

Whether Defendants’ Rule 12(b)(6) Motion is Timely

As a preliminary matter, plaintiff contends that the instant motion to dismiss the
FAC should be rejected as untimely, since defendants previously filed an answer to
plaintiff’s original complaint in state court on August 1, 2014. Opp’n Mot. Dismiss at 9.
Defendants counter that their motion is timely, because it seeks dismissal of the FAC
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

filed on March 5, 2015, and in the alternative, assert that the Court should treat the instant
motion as a motion for judgment on the pleadings under Rule 12(c). Reply at 2-6.
In support of his position, plaintiff directs to the Court to a leading treatise, which
explains that “[t]he filing of an amended complaint will not revive the right to present by
motion defenses that were available but were not asserted in timely fashion prior to the
amendment of the pleading; conversely, a Rule 12 defense that becomes available
because of new matter in the amended complaint may be asserted by motion.” Charles A.
Wright et al., 5C Federal Practice and Procedure, § 1388 (3d ed.). According to plaintiff,
because the arguments presently asserted by defendants were available to them in
response to the original complaint, “which they answered and have defended for
months,” Opp’n Mot. Dismiss at 9, the Court should “reject [defendants’] request for
more particularity as untimely and inappropriate,” id. at 10.
Plaintiff is correct that, typically, “[a] Rule 12(b)(6) motion must be made before
the responsive pleading.” Elvig v. Calvin Presbyterian Church, 375 F.3d 951, 954 (9th
Cir. 2004) (emphasis in original). However, failure to state a claim “is a nonwaivable
defect and can be raised any time.” Schwarzer et al., Federal Civil Procedure Before
Trial, § 9:1999 (9th Cir. ed., The Rutter Group 2008) (citing Fed. R. Civ. P. 12(h)(2)).
Moreover, “[a]s a general rule, when a plaintiff files an amended complaint, ‘[t]he
amended complaint supercedes the original, the latter being treated thereafter as nonexistent.’ ” Rhodes v. Robinson, 621 F.3d 1002, 1005 (9th Cir. 2010) (quoting Loux v.
Rhay, 375 F.2d 55, 57 (9th Cir. 1967)). In light of these principles, the Court declines to
deny defendants’ motion as untimely. See Trachsel v. Buchholz, 2009 WL 86698, at *2
(N.D. Cal. Jan. 9, 2009) (relying on Rule 12(h)(2) to reject plaintiffs’ argument that “the
court cannot even reach substantive issues of law because defendants have already
waived their Rule 12(b)(6) claims by failing to timely file a responsive pleading to the
amended complaint and by failing to raise them in connection with the original
complaint.”); see also Contreras v. JPMorgan Chase, 2014 WL 5786244, at *4 (C.D. Cal.
Nov. 6, 2014) (considering defendants’ arguments made on a successive 12(b)(6) motion
“for the sake of judicial economy,” even though motion was technically improper under
Rule 12(g)(2)).

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

Furthermore, the two cases relied upon by plaintiff, Brain Life, LLC v. Elekta Inc.,
2012 WL 48024 (S.D. Cal. Jan. 6, 2012) and In re Morrison, 421 B.R. 381 (Bankr. S.D.
Tex. 2009), do not require a different outcome. In Brain Life, plaintiff sued four
defendants; as is relevant here, one defendant, Varian, moved to dismiss the complaint
and another defendant, Medtronic, answered. 2012 WL 48024 at *1. The court granted
Varian’s motion to dismiss without prejudice, and plaintiff subsequently filed an
amended complaint addressing the deficiencies in its allegations against Varian. Id.
Medtronic then moved to dismiss the amended complaint, and plaintiff argued that
Medtronic should be bound by its original answer. Id. The court framed the question
before it accordingly: “Can Medtronic change course and move to dismiss a complaint
that it previously answered when the factual allegations against it in the amended
complaint are the same?” Id. at *2. Noting a lack of caselaw addressing the issue, the
court ruled in favor of plaintiff, since “[i]f Medtronic were to get its way, defendants in
multiple-defendant cases could repeatedly revise their tactical approach when,
fortuitously, the claims against another defendant are dismissed without prejudice and a
plaintiff is granted leave to amend.” Id. Although here, as in Brain Life, the factual
allegations contained in the FAC are substantially similar to those contained in the
complaint, the procedural posture of the instant case differs significantly. Namely, no
prior motion to dismiss has been brought and defendants are jointly represented; thus,
there is no risk that defendants will “repeatedly revise their tactical approach” in response
to motions brought by co-defendants.
In re Morrison, 421 B.R. 381 (Bankr. S.D. Tex. 2009), is more on point, and
similarly supports reaching the merits of the instant motion. There, defendants answered
plaintiff’s original complaint, but filed a Rule 12(b)(6) motion to dismiss plaintiff’s
subsequently filed amended complaint. The court concluded that the 12(b)(6) motion
was technically untimely, since defendant’s “right to assert the failure to state a claim
defense arose at the time of the original complaint,” and the “new matter” added to the
FAC was not of the “type . . . that revives Defendants’ right to file a post-answer motion
to dismiss.” Id. at 386. However, the court went on to acknowledge that the defense of
failure to state a claim “is particularly preserved from the waiver rule,” and thus could be
presented by defendants through a Rule 12(c) motion for judgment on the pleadings once
the pleadings had closed. Collecting cases, the court then explained that courts are
divided on the issue of how to treat a Rule 12(b)(6) motion brought after an answer to an
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

original complaint—some courts treat it as a Rule 12(c) motion, while others maintain it
under Rule 12(b)(6). Id. at 388-89. Ultimately, because “both motions carr[y] identical
analyses under the same standard of review,” id. at 389, and because the pleadings were
not yet closed, the court decided “the present motion [to dismiss] is ready to review
despite the procedural technicalities,” id.
The Court reaches the same conclusion here. However, plaintiff’s arguments as to
the plausibility of defendants’ Rule 9(b) contentions—namely, that defendants, after
litigating this case since August 2014 are not “on notice” of the substance of plaintiff’s
claims—are well-taken, and inform the analysis set forth infra.
A.

Claims Sounding in Fraud
1.

Misrepresentations

Plaintiff’s claims for violation of the CLRA, FAL, and UCL, as well as for
common law fraud, are premised upon the allegation that defendants fraudulently
misrepresented to consumers that their Nabi tablets were “rechargeable” and contained
“rechargeable batteries,” when, in fact, the tablets failed to reliably recharge. Defendants
contend that all of these claims fail because plaintiff has failed to allege the
misrepresentations with the particularity required by Rule 9(b), failed to allege facts
showing that defendants’ representations were false, and failed to adequately allege
reliance. Mot. Dismiss at 5-9.
Defendants’ arguments fall flat. At bottom, “Rule 9(b) demands that the
circumstances constituting the alleged fraud be specific enough to give defendants notice
of the particular misconduct . . . so that they can defend against the charge and not just
deny that they have done anything wrong.” Kearns v. Ford Motor Co., 567 F.3d 1120,
1124 (9th Cir. 2009) (internal quotations omitted) (emphasis added). The allegations in
the FAC, which defendants contend “totally fail to inform [them] of the basis of
[plaintiff’s] claims,” Mot. Dismiss at 1, are practically identical to allegations contained
in plaintiff’s original complaint. Compare, FAC ¶¶ 21, 24, 37, 92, 97, 104, 115, 147 with

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

Compl. ¶¶ 21, 30, 69, 72, 79, 90, 123.1 As noted above, plaintiff filed the original
complaint in July 2014 and defendants answered on August 1, 2014. Since that time, the
parties have engaged in discovery, even submitting discovery disputes to the Court for
resolution, and plaintiff has taken multiple days of Rule 30(b)(6) depositions of
defendants. Opp’n Mot. at 7; see also dkts. 20-29. Simply put, defendants’ contention
that they lack notice of plaintiff’s charges—which they have been defending for more
than six months—strains credulity.
In any event, as defendants’ actions plainly indicate, plaintiff has adequately
pleaded the “the who, what, when, where and how” of the alleged deceptions. See
Kearns, 567 F.3d at 1124. Plaintiff specifically pleads that in the summer of 2012 (the
“when”), he viewed defendants’ (the “who”) statements that the Nabi tablet was
“rechargeable” and came with an included “power adapter” to recharge the tablet (the
“what”) on defendants’ website and in the representations that defendants’ made to
retailers (the “where”). FAC ¶¶ 37-42. Plaintiff further alleges that the Nabi tablets are
not actually rechargeable because defendants do not provide working power adapters, and
adapters provided by third-party manufacturers cannot be used (the “how”). Id. These
allegations satisfy the particularity requirements of Rule 9(b). Cf. Astiana v. Ben & Jerry’s
Homemade, Inc., 2011 WL 2111796 (N.D. Cal. May 26, 2011) (“The ‘who’ is Ben &
Jerry's . . . The ‘what’ is the statement that [the challenged] ice cream [ingredient] . . . is
‘all natural.’ The ‘when’ is . . . ‘since at least 2006,’ . . . The ‘where’ is on the ice cream
package labels. The ‘how the statements were misleading’ is the allegation that defendants
did not disclose that [the challenged ingredient] . . . is a ‘synthetic.’ ”).
1

Plaintiff represents that the FAC differs from the complaint in that it added a
single claim for declaratory relief relating to the alleged unenforceability of defendants’
amended Terms of Use, broadened plaintiff’s existing CLRA claim to allege violation of
section 1770(a)(19) for inserting an unconscionable provision into a contract, and added a
prayer for damages. Opp’n Mot. Dismiss at 8. With regard to the existing claims
regarding defendants’ alleged misrepresentations, omissions, and breaches of warranty,
“the FAC did not change the claims but merely included additional facts, learned in
discovery, to support the claims.” Id. The Court has carefully reviewed both the FAC
and the complaint and concludes that plaintiff’s representations are accurate.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

Similarly, plaintiff has adequately pleaded reliance on defendants’ alleged
misrepresentations. Defendants are correct that, under California law, justifiable reliance is
a required element of a fraud claim. Kearns, 567 F.3d at 1126; In reTobacco II Cases, 46
Cal. 4th 298, 326 (2009) (“Reliance is an essential element of . . . fraud . . . [and] is
proved by showing that the defendant's misrepresentation or nondisclosure was ‘an
immediate cause’ of the plaintiff's injury-producing conduct.”). Here, however, plaintiff
has identified the specific representations concerning the ability to recharge the Nabi
tablets, which he saw on defendants’ website, FAC ¶ 37, and has expressly alleged that
these representations were material to his purchase and that he relied upon them, id. ¶¶
37, 38. Plaintiff need not allege more. Cf. Garcia v. Sony Computer Entm't Am., LLC,
859 F. Supp. 2d 1056, 1063 (N.D. Cal. 2012) (finding pleading inadequate where plaintiff
“generally assert[ed] that the statements to be found on the [product’s] packaging and
[defendants’] website are misleading . . . [but] d[id] not specifically aver that [he] relied
on those particular statements, or even expressly state that he was aware of them.”).
Finally, defendants’ contention that plaintiff has failed to plead facts indicating
defendants’ representations that the Nabi tablets are “rechargeable” are false misses the
mark. Claims under the FAL, UCL, and CLRA are not limited to untrue statements;
instead, those laws prohibit advertisements and representations that are untrue, misleading,
or likely to deceive reasonable consumers. See, e.g., Colgan v. Leatherman Tool Grp.,
Inc., 135 Cal. App. 4th 663, 683 (2003) (Section 17500 proscribes “not only advertising
which is false, but also advertising which[,] although true, is either actually misleading or
which has a capacity, likelihood or tendency to deceive or confuse the public”) (internal
quotations omitted); Nagel v. Twin Laboratories, Inc., 109 Cal. App. 4th 39, 54 (2003)
(“Conduct that is likely to mislead a reasonable consumer . . . violates the CLRA.”)
(internal quotations omitted); In re Vioxx Class Cases, 180 Cal. App. 4th 116, 130
(2009) (“In order to obtain a remedy for deceptive advertising, a UCL plaintiff need only
establish that members of the public were likely to be deceived by the advertising” under
the fraud prong.). Plaintiff has expressly alleged that defendants’ statements concerning the
Nabi tablets’ ability to recharge were misleading because they were incomplete—i.e.,
because they did not disclose the existence of the charging deficiencies alleged by plaintiff
throughout the FAC. See, e.g., FAC ¶¶ 1-3 and 21-23. Moreover, that the standard for
determining whether an advertisement is misleading is judged by its effect on the reasonable
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

consumer does not render plaintiff’s allegations inadequate, as defendants appear to
contend. See Reply at 8-9. Indeed, plaintiff expressly alleges that defendants have misled
“reasonable consumers, including plaintiff.” FAC ¶ 5. More to the point, however, plaintiff
need not prove that a reasonable consumer would likely be deceived by defendants’
advertising at this juncture—he must simply plead it. Plaintiff has done so here, and
defendants have not established that plaintiff’s belief was unreasonable as a matter of law.
Thus, insofar as defendants seek dismissal of plaintiff’s claims to the extent that they
are predicated on alleged misrepresentations, defendants’ motion is DENIED.
2.

Omissions

Defendants also contend that, insofar as plaintiff’s claims for violation of the
CLRA, UCL, FAL, and common law fraud are predicated on alleged fraudulent
omissions, plaintiff has failed to adequately plead defendants’ duty to disclose. Mot.
Dismiss at 9-11. As a preliminary matter, the Court again notes that defendants’
assertion that plaintiff has not pled omissions with the particularity required to apprise
them of their alleged misconduct is not credible. Nonetheless, the Court addresses the
merits of defendants’ disclosure arguments.
To state a claim for fraudulent omission under the CLRA, “the omission must be
contrary to a representation actually made by the defendant, or [be] an omission of a fact
the defendant was obliged to disclose.” Daugherty v. Am. Honda Motor Co., 144 Cal.
App. 4th 824, 835 (2006), as modified (Nov. 8, 2006). A claim for fraudulent
concealment under California law similarly requires that “defendant must have been
under a duty to disclose the fact to the plaintiff,” Davis v. HSBC Bank Nevada, N.A., 691
F.3d 1152, 1163 (9th Cir. 2012), as does a claim for violation of the “fraud” prong of the
UCL, Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544, 1557 (2007).
As is relevant here, a duty to disclose may arise under California law when, inter alia,
“the defendant had exclusive knowledge of material facts not known to the plaintiff; [or]
when the defendant makes partial representations but also suppresses some material
facts.” Smith v. Ford Motor Co., 749 F. Supp. 2d 980, 987 (N.D. Cal. 2010) aff'd, 462 F.
App'x 660 (9th Cir. 2011). A defendant possesses exclusive knowledge giving rise to a
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

duty to disclose a defect when “according to the complaint, [defendant] knew of this
defect while plaintiffs did not, and, given the nature of the defect, it was difficult to
discover.” Collins v. eMachines, Inc., 202 Cal. App. 4th 249, 256 (2011). Finally, “[a]
manufacturer's duty to consumers is limited to its warranty obligations absent either an
affirmative misrepresentation or a safety issue.” Oestreicher v. Alienware Corp., 322 F.
App'x 489, 493 (9th Cir. 2009) (citing Daugherty, 144 Cal. App. 4th at 835-37).
The Court concludes that plaintiff has adequately alleged the existence of
defendants’ duty to disclose. Specifically, plaintiff alleges that defendants possessed
exclusive knowledge of the material fact that the power adapters did not reliably recharge
the Nabi tablets, which were contrary to defendants’ affirmative representations that the
Nabi tablets were “rechargeable.” FAC ¶ 98. Although defendants contend that
plaintiff’s allegations of “exclusive” knowledge are belied by plaintiff’s allegations that
defendant publicly addressed the charging defects on its Facebook page in December
2011, as well as the existence of numerous consumer complaints on the internet, Mot.
Dismiss at 12-14, plaintiff expressly alleges that he was unaware of the charging defect,
FAC ¶¶ 38-40, and that defendants continued to sell defective Nabi tablets even after its
2011 Facebook announcement, id. ¶ 30. Moreover, plaintiff has not alleged that he
visited defendants’ Facebook page. See Falk v. Gen. Motors Corp., 496 F. Supp. 2d
1088, 1097 (N.D. Cal. 2007) (finding exclusive knowledge was adequately pleaded and
noting that “[m]any customers would not have performed an Internet search before
beginning a car search. Nor were they required to do so.”).
Defendants also direct the Court to Herron v. Best Buy Co. Inc., 924 F. Supp. 2d
1161 (E.D. Cal. 2013), where the court concluded that plaintiffs failed to allege exclusive
knowledge concerning deficiencies in a laptop’s battery life. The Herron court reasoned
that “plaintiff could have readily recognized any deficiencies in his Laptop’s battery life,
and [p]laintiff purchased [his Laptop] more than [nine months] after information
[criticizing the alleged defect] was disseminated.” Id. at 1175 (internal quotations and
citations omitted). In Herron, however, plaintiff expressly alleged that the Best Buy
website disclosed the defect, and that Newsweek published an article publicly criticizing
the same defect. Id. Here in contrast, the alleged defects with the Nabi tablets have not
been covered by a national magazine, and were allegedly posted on defendants’ Facebook
page. Moreover, unlike in Herron, plaintiff alleges that defendants’ concealment of the
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Page 14 of 21

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

defect is ongoing, in that defendants “continue to sell Nabi tablets with defective power
adapters that fail to reliably recharge the tablet,” FAC ¶ 30, and “cryptically communicate
[the charger] replacement program” on their website and Facebook page, id. ¶ 31.
Although it is admittedly a close call, construing the complaint in the light most favorable
to plaintiff, the Court concludes that he has adequately pleaded exclusive knowledge and
thus the existence of a duty to disclose.2
Thus, insofar as defendants seek dismissal of plaintiff’s claims to the extent that they
are predicated on alleged omissions, defendants’ motion is DENIED.
B.

Claim for Breach of Express Warranty

Plaintiff’s fourth claim is for breach of express warranty under California
Commercial Code § 2313. Plaintiff alleges that defendants made the following express
warranty to purchasers of Nabi tablets:
Fuhu warranties for one year from the date of sale to the consumer that the
nabi is of merchantable quality and that it conforms to applicable
specifications. Applicable specifications mean the specification for the
Processor, the CPU (Central Processing Unit). The applicable specifications
exclude and no warranty is provided for the specifications for any other
components or for any performance that can degrade naturally with normal use
for one year… If you discover that your nabi is not of merchantable quality and
fails to conform to its applicable specifications, as defined above, we will, at
our option, refund the purchase price, or repair or replace the product, using
new or refurbished components within a reasonable time during the warranty
period.

2

In any event, plaintiff also contends that defendants had a duty to disclose the
charging defect because defendants made partial representations while suppressing some
material facts. Opp’n Mot. Dismiss at 14. The allegations in the complaint amply
support this theory and defendants do not appear to challenge it.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

FAC ¶ 127. Plaintiff alleges that these representations were “part of the basis of the
bargain,” and that defendants breached the express written warranty because the Nabi
tablets were not of merchantable quality during the warranty period. Id. ¶¶ 128, 129. In
particular, plaintiff alleges that the Nabi tablets were no of merchantable quality because,
during the first year of use, “Nabi tablets: (i) were not rechargeable; (ii) had defective
power adapters that failed to reliably recharge the tablets; and/or (iii) could not be used
while connected to a power source.” Id. ¶ 129. Plaintiff alleges that “[f]ailures to reliably
recharge are not a symptom of a normally functioning tablet.” Id.
“A warranty is a contractual promise from the seller that the goods conform to the
promise. If they do not, the buyer is entitled to recover the difference between the value
of the goods accepted by the buyer and the value of the goods had they been as
warranted.” Daugherty, 144 Cal. App. 4th at 830. To prevail on a breach of express
warranty claim under California law, a plaintiff must show that defendants “(1) made an
affirmation of fact or promise or provided a description of its goods; (2) the promise or
description formed part of the basis of the bargain; (3) the express warranty was
breached; and (4) the breach caused injury to the plaintiff.” Keegan v. Am. Honda Motor
Co., 838 F. Supp. 2d 929, 949 (C.D. Cal. 2012) (citation omitted).
Defendants contend that plaintiff’s claim fails because he has not alleged breach.
Specifically, defendants argue that plaintiff “ignores the second part of the warranty,
which limits Defendants’ obligation to curing any such defect upon request.” Mot.
Dismiss at 15. According to defendants, the FAC demonstrates that they complied with
this contractual obligation, since plaintiff admits that defendants sent him a replacement
power adapter, FAC ¶ 41, and there is “no allegation . . . that the replacement power
adapter does not work,” Mot. Dimiss at 15. Although defendants acknowledge that
plaintiff has alleged “that the replacement power adapter ‘was also defective’ because he
‘is unable to use his Nabi tablet while it is plugged into a power source,’ ” id. (quoting
FAC ¶ 42), defendants contend that this problem is not a defect in the tablet but rather, is
software related and can be remedied through a free update. Id. Further, defendants
contend that, under California law, plaintiff is required to demonstrate that he provided
defendants with notice of the defect in the replacement charger, as well as an opportunity
to remedy the defect. Mot. Dismiss at 14 (citing Orichan v. BMW of N. Am., LLC, 226
Cal. App. 4th 1322, 1333-34 (2014)). According to defendants, by refusing to download
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Page 16 of 21

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

the software that purportedly allows the Nabi tablet to be used while charging, he has not
given defendants this opportunity, and plaintiff’s claim for express breach of warranty
fails. Id.; see also Reply at 11-12.
In response, plaintiff first contends that he does not plead that the defect in the
replacement charger is software related—rather, he alleges that defendants merely
“contend” it is software related, FAC ¶ 42—and that the Court must treat defendants’
contention as such, not as the truth. Opp’n Mot. Dismiss at 17. Plaintiff also argues that,
contrary to defendants’ assertions, he “sought warranty support three times, was ignored
twice, and on the third attempt was sent another defective adapter.” Id. Plaintiff further
notes that it is not clear from the case law whether the presentment requirements in
Orichan apply in the instant case, since plaintiff and the proposed class members
purchased their Nabi tablets from third-party retailers. Id. at 18, n4 (citing Keegan, 838
F. Supp. 2d at 947; Sanders v. Apple, Inc., 672 F. Supp. 2d 978, 989 (N.D. Cal.
2009)). Finally, plaintiff asserts that his refusal to download the purported software fix
“cannot support a motion to dismiss,” since downloading the fix requires plaintiff to
accept defendants’ amended Terms of Use, thus waiving his right to bring a class action
and litigate in court—conditions that plaintiff alleges are unconscionable and a violation
of section 1770(a)(19) of the CLRA. Id. at 17.
In reply, defendants argue that plaintiff alleges “two distinct problems with his
tablet,” and that he “conflates that first charger-related problem with his second (selfinflicted) ‘problem,’ which Defendants have identified as a software issue.” Reply at 12.
By failing to download the software fix, defendants contend that plaintiff “pleads facts
showing that he failed to give Defendants an opportunity to remedy the alleged defect as
called for in the express warranty.” Id.
The Court concludes that plaintiff has stated a claim for breach of express
warranty. Defendants are correct that plaintiff conflates his three requests for support
from defendants—requests directed towards obtaining a replacement charger—with
requests for assistance with the allegedly defective replacement charger itself—requests
that plaintiff does not allege he made. However, plaintiff correctly points out that courts
in this circuit have concluded that a consumer need not provide notice to the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

manufacturer before filing suit where, as here, the plaintiff purchased the product from a
third-party retailer.
In Alvarez v. Chevron Corp., the Ninth Circuit affirmed the general rule that “[t]o
avoid dismissal of a breach of contract or breach of warranty claim in California, [a]
buyer must plead that notice of the alleged breach was provided to the seller within a
reasonable time after discovery of the breach.” 656 F.3d 925, 932 (9th Cir. 2011)(internal
quotations omitted). However, in Keegan v. Am. Honda Motor Co., 838 F. Supp. 2d 929,
949 (C.D. Cal. 2012), a court in this district persuasively distinguished Alvarez from the
case at hand:
A pre-Alvarez case, Sanders v. Apple, Inc., 672 F. Supp. 2d 978 (N.D. Cal.
2009), concluded that “timely notice of a breach of an express warranty is
not required where the action is against a manufacturer and is brought ‘by
injured consumers against manufacturers with whom they have not dealt.’ ”
Id. at 989 (quoting Greenman v. Yuba Power Prods., 59 Cal. 2d 57, 61, 27,
Cal. Rptr. 697, 377 P.2d 897 (1963)). The Sanders court observed that this
rule was “designed to protect a consumer who ‘would not be aware of his
rights against the manufacturer . . . [A]t least until he has had legal advice it
will not occur to him to give notice to one with whom he has had no
dealings.’ ” Id. (quoting Greenman, 59 Cal. 2d at 61 []); see also Toyota
Motor Corp., 754 F.Supp.2d at 1180 (“Except as to those relatively few
Plaintiffs (such as at least one non-consumer Plaintiff) who allege they
purchased their vehicles directly from Defendants, this requirement is
excused as to a manufacturer with which the purchaser did not deal”);
Aaronson v. Vital Pharmaceuticals, Inc., 09-CV-1333 W(CAB), 2010 WL
625337, *5 (S.D. Cal. Feb. 17, 2010) (citing Greenman for the proposition
that “[i]n claims against a manufacturer of goods, however, California law
does not require notice”). In contrast to these cases, Alvarez was a suit
brought by individual retail customers of gas directly against the sellers; it
did not address the type of situation at issue in Sanders and Greenman.
Id. at 950. The Court agrees with the reasoning of the Keegan court and “follows
Greenman, Sanders, Toyota, and Aaronson in concluding that under California law, a
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

consumer need not provide notice to a manufacturer before filing suit against them.” Id.
at 951. Moreover, even assuming the charging defect is software related as defendants
contend, defendants cite no authority for the proposition that a manufacturer may
condition its compliance with its obligations under a warranty on a consumer’s waiver of
rights.
Accordingly, the Court DENIES defendants’ motion to dismiss plaintiff’s claim for
breach of express warranty.
C.

Claim for Violation of Song-Beverly Consumer Warranty Act

Plaintiff’s fifth claim is for breach of the implied covenant of merchantability in
violation of the Song-Beverly Act, Cal. Civil Code § 1790. Plaintiff alleges that
defendants “breached the implied warranty of merchantability by selling defective
tablets—i.e., tablets that were not rechargeable and/or could not be used while they were
connected to a power source and/or recharging.” FAC ¶ 137. As a result, plaintiff alleges
that the tablets “were unfit for their ordinary purpose . . . because[] regular use for their
ordinary purpose would drain the rechargeable batteries’ power which would need to be
recharged.” Id.
The Song–Beverly Act “was enacted to regulate warranties and strengthen
consumer remedies for breaches of warranty.” Keegan, 838 F. Supp. 2d at 944 (citing
National R.V., Inc. v. Foreman, 34 Cal. App. 4th 1072, 1077 (1995)). Pursuant to the act,
an implied warranty of merchantability guarantees that “consumer goods meet each of the
following: (1) Pass without objection in the trade under the contract description; (2) Are
fit for the ordinary purposes for which such goods are used; (3) Are adequately
contained, packaged, and labeled; (4) Conform to the promises or affirmations of fact
made on the container or label.” Cal. Civ. Code § 1791.1(a). This warranty “does not
impose a general requirement that goods precisely fulfill the expectation of the buyer.
Instead, it provides for a minimum level of quality.” Am. Suzuki Motor Corp. v.
Superior Court, 37 Cal. App. 4th 1291, 1296 (1995) (internal quotation marks omitted).
A “breach of the implied warranty of merchantability means the product did not possess
even the most basic degree of fitness for ordinary use.” Mocek v. Alfa Leisure, Inc., 114
Cal. App. 4th 402, 406 (2003).
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Page 19 of 21

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

Defendants first contend that plaintiff’s Song-Beverly Act claim fails because Cal.
Civ. Code section 1793.2 requires consumers to provide merchants with “a reasonable
number of opportunities” to remedy a defect before bringing suit for a breach of warranty,
and plaintiff has not done so here. Mot. Dismiss at 16-17. Defendants’ contention is
without merit. Section 1793.2 applies only to express warranties. Cal. Civ. Code §
1793.2(d)(2) (“If the manufacturer or its representative in this state is unable to service or
repair a new motor vehicle . . . to conform to the applicable express warranties after a
reasonable number of attempts . . .” (emphasis added)); see also, Mocek,114 Cal. App.
4th at 406–08 (2003) (“The Act’s provisions requiring repairs after breach of an express
warranty are lengthy and detailed. There is no reason to believe failure to set out the same
process in case of a breach of the implied warranty of merchantability was an oversight.”).
Thus, plaintiff was not required to provide defendants any opportunity to remedy their
alleged breach of the implied warranty of merchantability.
In their reply brief, defendants contend that plaintiff has failed to allege facts
supporting a claim for breach of implied warranty. Defendants assert that “an electronic
component that breaks—and is then replaced for free by the manufacturer—hardly
violates the ‘minimum level of quality’ an implied warranty of merchantability is
intended to protect.” Reply at 15. Defendants further contend that the “alleged defect
that Plaintiff cannot use his tablet while it is plugged into a power source is an
inconvenience, but it does not render the tablet unfit for ordinary use as Plaintiff can still
use and enjoy his tablet when it is charged.” Id. at 16.
The Court concludes that plaintiff has failed to state a claim for breach of the implied
covenant of merchantability. A case cited by defendants, Marcus v. Apple Inc, 2015 WL
151489 (N.D. Cal. Jan. 8, 2015), is instructive. There, plaintiffs alleged that their Apple
laptops were not merchantable because “the logic board fails and disables the laptop,
rendering the device useless.” Id. at *9. The Marcus court concluded that plaintiffs had
failed to state a claim because, despite the failure of the logic board, “[b]oth plaintiffs
were able to adequately use their computers for approximately 18 months and two years,
respectively.” Id. Here, plaintiff alleges that, before receiving a replacement charger, his
Nabi tablet “suffered intermittent problems recharging,” FAC ¶ 40, and that upon receipt
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Page 20 of 21

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:14-cv-06119-CAS(ASx)

May 4, 2015

Title

SCOTT MILLER, AN INDIVIDUAL, ON BEHALF OF HIMSELF, THE
GENERAL PUBLIC AND THOSE SIMILARLY SITUATED V. FUHU
INC., ET AL.

of the replacement charger, plaintiff was “unable to use his Nabi tablet while it is plugged
into a power source . . . [thus] substantially decreas[ing] the usefulness of the Nabi tablet,”
id. ¶ 42. Plaintiff’s use of the term “intermittent” to describe his charging issues implies
that he was able to use his Nabi tablet successfully for significant periods of time, like the
Marcus plaintiffs. Further, a substantial decrease in a product’s usefulness is not
tantamount to a lack of “basic degree of fitness for ordinary use.”
Accordingly, the Court GRANTS without prejudice defendants’ motion to dismiss
plaintiff’s claim for breach of the implied covenant of merchantability.
D.

Plaintiff’s Derivative Claims

Finally, defendants contend that plaintiff’s claims for violation of the CLRA and
UCL fail because they “purport to arise out of both misrepresentations and the breach of
warranty.” Mot. Dismiss at 17. As discussed above, the Court concludes that plaintiff
has stated a claim for breach of express warranty, and has adequately pleaded
misrepresentations. Thus, plaintiff’s CLRA and UCL claims are properly derivative of
these alleged unlawful acts, and defendants’ motion to dismiss these claims is DENIED
accordingly.
IV.

CONCLUSION

In accordance with the foregoing, the GRANTS in part and DENIES in part
defendants’ motion to dismiss plaintiff’s first amended complaint. Specifically, the court
GRANTS without prejudice defendants’ motion to dismiss plaintiff’s claim for breach of
the implied covenant of merchantability. Defendants’ motion is otherwise DENIED.
IT IS SO ORDERED.
00
Initials of Preparer

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:

04

CMJ

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