Huntzinger v. Aqua Lung America, Inc.

Filing 149

ORDER. It is hereby ordered that the Motion to Dismiss filed by Defendant Suunto is granted with respect to the breach of implied warranty of merchantability against Suunto and denied in all other respects. (ECF No. 129 ). It is further ordered tha t the Motion to Strike the Third Party Amended Complaint is granted. (ECF No. 128 ). The document filed as "First Amended Third-Party Complaint Against Suunto" (ECF No. 124 ) is stricken. The Court grants Aqua Lung leave to refile the document as a cross-claim within 10 days of the date this Order is issued. Signed by Judge William Q. Hayes on 1/8/2018. (rmc) (Additional attachment(s) added on 1/8/2018: # 1 Stricken Document) (rmc).

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

SOUTHERN DISTRICT OF CALIFORNIA

10
11
12

RALPH A. HUNTZINGER and ERIC
BUSH, on behalf of himself and all
others similarly situated,

14

ORDER

Plaintiffs,
v.
AQUA LUNG AMERICA, INC. and
SUUNTO OY,

15

CASE NO. 15cv1146-WQH-AGS

Defendants.

13

16
17
18
19
20
21
22
23
24
25
26
27
28

HAYES, Judge:
The matters before the Court are the Motion to Strike Aqua Lung’s Third Party
Complaint (ECF No. 128) and the Motion to Dismiss the Second Amended Class
Action Complaint (ECF No. 129) filed by Suunto Oy.
I. BACKGROUND
On May 21, 2015, Plaintiff Ralph Huntzinger initiated this action by filing a class
action complaint alleging the following causes of action against Defendant Aqua Lung
America, Inc. (“Aqua Lung”): (1) violation of Consumers Legal Remedies Act
(“CLRA”), Civil Code section 1750 et seq.; (2) violation of the Unfair Competition
Law (“UCL”), Business and Professions Code section 17200 et seq.; and (3) breach of
implied warranty. (ECF No. 1). On December 10, 2015, the Court issued an order
granting in part and denying in part a motion to dismiss filed by Aqua Lung. (ECF No.
22). The Court dismissed the implied warranty of merchantability claim and denied the
motion to dismiss in all other respects. Id.
-1-

15cv1146-WQH-AGS

1

On January 7, 2016, Huntzinger filed the First Amended Class Action Complaint

2 (ECF No. 26) alleging the same three causes of action. (ECF No. 26). On January 21,
3 2016, Aqua Lung filed an Answer to the Amended Complaint. (ECF No. 28).
4

On August 2, 2016, Aqua Lung filed a Third Party Complaint against Suunto Oy

5 (“Suunto”). (ECF No. 45). On December 6, 2016, Suunto filed an Answer to the Third
6 Party Complaint. (ECF No. 61).
7

On March 13, 2017, Huntzinger filed a motion for leave to file a Second

8 Amended Class Action Complaint. (ECF No. 79). On June 1, 2017, the Court granted
9 leave to file the Second Amended Class Action Complaint (“SAC”). (ECF No. 111).
10

On June 9, 2017, Huntzinger and newly-added plaintiff Eric Bush filed the SAC

11 alleging the same causes of action for violations of the CLRA, violation of the UCL,
12 and breach of the implied warranty against Aqua Lung and newly-added defendant
13 Suunto. (ECF No. 117).
14

On July 5, 2017, Aqua Lung filed an Amended Third Party Complaint against

15 Suunto. (ECF No. 124).
16

On July 5, 2017, Aqua Lung filed an Answer to the SAC. (ECF No. 123).

17

On July 19, 2017, Suunto filed a motion to strike the Third Party Complaint.

18 (ECF No. 128). On August 2, 2017, Aqua Lung filed a Notice of Non-opposition.
19 (ECF No. 131). On August 4, 2017, Suunto filed a reply. (ECF No. 133).
20

On July 19, 2017, Suunto filed a motion to dismiss the SAC. (ECF No. 129).

21 On August 21, 2017, Plaintiffs filed a response in opposition. (ECF No. 137). On
22 September 5, 2017, Suunto filed a reply. (ECF No. 138).
23 II. ALLEGATIONS OF THE COMPLAINT
24

Suunto is a Finnish Company “in the business of designing and manufacturing

25 adventure sports equipment including the Dive Computers.” (ECF No. 117 at ¶ 14).
26 Suunto “designed and manufactured the Dive Computers that were distributed by
27 defendant Aqua Lung.” Id. ¶ 14. “Suunto sought out and entered into a distribution
28 agreement with Aqua Lung for the purpose of marketing and distributing the Dive
-2-

15cv1146-WQH-AGS

1 Computers in the United States for sale to consumers.” Id. ¶ 21.
2

Aqua Lung is a Delaware corporation “in the business of distributing and

3 marketing scuba diving products.” Id. ¶ 19. Until December 31, 2015, “Aqua Lung
4 was the exclusive United States distributor for Suunto-branded dive computers,
5 including the Dive Computers at issue and was a Suunto authorized repair facility for
6 the Dive Computers.” Id. ¶ 23.
7

“Dive Computers1 are devices used by underwater divers to measure various

8 aspects of a dive critical to the safety of the diver.” Id. ¶ 26. “Dive Computers are a
9 critical instrument to assist divers in avoiding decompression sickness. They are used
10 to track . . . the time and depth limits the diver should stay within to avoid
11 decompression sickness.” Id. ¶ 28. “Dive Computers also display other critical
12 information such as, water temperature . . . , air tank pressure, and estimated remaining
13 air time. A misreading of any of this information can also lead to serious injury or
14 death.” Id. ¶ 29. “The only reason to purchase a Dive Computer is to have knowledge
15 of the critical information regarding a dive. If the Dive Computer cannot reliably
16 provide that information, it is worthless.” Id. ¶ 30.
17

“Defendants advertised the Dive Computers as having the ability to provide

18 critical information regarding a dive, such as, dive depths, air pressure and remaining
19 air time.” Id. ¶ 31. “The user guides for the Dive Computers, which were created by
20 Suunto, similarly highlight the Dive Computers’ purpose. For example, in the Cobra
21 3 user guide, Suunto states: ‘The Cobra 3 simplifies your diving experience because all
22 the information you need relating to depth, time, tank pressure, decompression status,
23 and direction is available on one easy-to-read screen.’” Id. ¶ 32. Suunto owns a
24 website which “advertise[s] the Dive Computers to United States consumers” by
25
26

1

The SAC defines Dive Computers as “Suunto-branded dive computers,
including the Suunto Cobra, Suunto Cobra 2, Suunto Cobra 3, Suunto Cobra 3 Black,
27 Suunto Vyper, Suunto Vyper 2, Suunto Vyper Air, Suunto HelO2, Suunto Gekko,
Suunto Vytec, Suunto Vytec DS, Suunto D9tx, Suunto D9, Suunto D6, Suunto D6i,
28 Suunto D4i, Suunto D4, Suunto Zoop, and Suunto Mosquito.” (ECF No. 117 at ¶ 1).
-3-

15cv1146-WQH-AGS

1 “providing information about the key features and specifications of Dive Computers,
2 pictures of Dive Computers and videos on how the Dive Computers are used.” Id. ¶ 33.
3 “Aqua Lung marketed the Dive Computers using marketing materials Suunto created
4 and supplied to Aqua Lung for the purpose of marketing and selling the Dive
5 Computers to United States consumers. . . . All advertising in the United States,
6 including the product packaging for the Dive Computers, was and is created by and
7 controlled by Suunto.” Id. ¶ 36.
8

“[T]he Dive Computers are defective and prone to malfunction, resulting in the

9 Dive Computers providing inaccurate information regarding data such as dive depth,
10 dive time, tank air pressure, and remaining air time.” Id. ¶ 41. “Defendants knew the
11 Dive Computers were failing and defective and knew or should have known that the
12 failing and defective Dive Computers created a life threatening risk of harm to
13 consumers.” Id. ¶ 42.
14
15
16
17

Suunto maintains a world-wide web-based system for reporting issues
with the Dive Computers. Every time an authorized repair facility,
including Aqua Lung, repaired or repairs a Dive Computer, the
information for the repair is entered in a computerized system known as
the ‘Service Log’ that sends the information directly to Suunto in Finland.
Repair facilities obtain replacement Dive Computers and replacement
parts from Suunto based on the information input into the Service Log.

18 Id. ¶ 45. “Defendants received Dive Computers for repair from consumers who
19 experienced permanent malfunction of the dive computer due to the defective software
20 and/or hardware. This information was input into the Service Log and provided directly
21 to Suunto.” Id. ¶ 47. “When a permanent malfunction occurs, the Dive Computers
22 report incorrect depths, ‘self-dive’ or indicate that a dive is occurring when no dive is
23 in fact occurring, report incorrect air time remaining, and/or report incorrect tank
24 pressure. All of these malfunctions are the result of defective software and/or hardware
25 in the Dive Computers.” Id. ¶ 48. Aqua Lung received thousands of Dive Computers
26 suffering from the malfunction, “reported these failures to Suunto and had extensive
27 communications with Suunto about the failures and need to fix the Dive Computers.”
28 Id. ¶ 49.
-4-

15cv1146-WQH-AGS

1

“Suunto continued to manufacture Dive Computers for sale in the United States

2 with the same defective software and/or hardware.” Id. ¶ 54. “When Aqua Lung and
3 other repair facilities receive a Dive Computer that has suffered a permanent
4 malfunction as described above, the repair facilities do not conduct any repairs . . .
5 because . . . the defective software and/or hardware it is unrepairable.” Id. ¶ 55. “If the
6 Dive Computer is outside warranty, the customer is told there is no repair.” Id. ¶ 56.
7 “If the Dive Computer is within the product warranty, the defective Dive Computer is
8 replaced with a new Dive Computer.” Id. ¶ 57. “[T]he replacement Dive Computers
9 do not provide any relief because they suffer from the same hardware and/or software
10 defect.” Id. ¶ 58. “Each of the Dive Computers . . . contains materially the same
11 software and hardware that operates the Dive Computer’s critical functions.” Id. ¶ 3.
12

“None of the warning on the product packaging or in other marketing informed

13 . . . consumers that because of the Dive Computers’ inherent defect . . ordinary use of
14 the Dive Computers carries a substantial risk of serious malfunction whereby the Dive
15 Computer may quit working and/or provide incorrect information about a dive.” Id. ¶
16 59. “Instead of properly warning consumers of the hazards posed by using the Dive
17 Computers as intended, defendants continue to falsely represent that the Dive
18 Computers will provide certain accurate information during a dive and impliedly that
19 the Dive Computers are safe for use.” Id. “[D]efendants have never issued a recall of
20 the Dive Computers or otherwise notified consumers that the Dive Computers contain
21 [the] defect. . . .” Id. ¶ 53.
22

“Defendants advertised the Dive Computers as a safe product and failed to warn

23 consumers that the Dive Computers are defective, and may malfunction and cause
24 serious bodily harm or death during intended use. Plaintiffs and class members
25 purchased and used the Dive Computers reasonably believing that the product was safe
26 for its intended use.” Id. ¶ 61. “[P]laintiffs would not have purchased or used the Dive
27 Computer had they known that the product was defective and could malfunction and
28 cause serious bodily harm or death.”

Id. ¶ 62.
-5-

“Defendants’ omissions and
15cv1146-WQH-AGS

1 misrepresentations were a material factor in influencing plaintiffs’ decision to purchase
2 the Dive Computers[.]” Id. ¶ 63.
3

On May 14, 2013, Plaintiff Huntzinger “purchased a Suunto Cobra 2 dive

4 computer from leisurepro.com for $699.95” that was “designed and manufactured by
5 Suunto.” Id. ¶ 12. “Plaintiff Huntzinger purchased and used the Suunto Cobra 3 dive
6 computer believing it was safe to use during scuba dives, when in fact the Suunto Cobra
7 3 was defective, resulting in an inaccurate display of dive related information in 2014.”
8 Id. “On or about 2009, plaintiff [Bush] purchased a Suunto Cobra 3 dive computer
9 from Sport Chalet for approximately $300 to $400” that was “designed and
10 manufactured by Suunto and distributed to Sport Chalet by Aqua Lung for the purpose
11 of resale.” Id. ¶ 13. Plaintiff Bush purchased and used the Suunto Cobra 3 dive
12 computer believing it was safe to use during scuba dives, when in fact the Suunto Cobra
13 3 was defective[.]” Id. “On or about, October 2015, plaintiff Bush purchased a Suunto
14 D6i to replace the unrepairable and defective Cobra 3. Plaintiff Bush purchased and
15 used the Suunto D6i dive computer believing it was safe to use during scuba dives,
16 when in fact the Suunto D6i was defective.” Id.
17

Plaintiffs “would not have purchased or used” the Dive Computers had they

18 known that the Dive Computers were “unsafe and unfit for their intended use[.]” Id.
19 ¶¶ 12,13. Plaintiffs Huntzinger and Bush “suffered injury in fact and lost money or
20 property as a result of Suunto’s unfair business practice.” Id. ¶¶ 12,13.
21
22
23
24
25

Plaintiffs bring this action on behalf of themselves and all others similarly
situated pursuant to Rule 23(a), (b)(2), and (b)(3) of the Federal Rules of
Civil Procedure and seek certification of the following nationwide class:
All persons and entities who purchased a Suunto Cobra, Suunto Cobra 2,
Suunto Cobra 3, Suunto Cobra 3 Black, Suunto Vyper, Suunto Vyper 2,
Suunto Vyper Air, Suunto HelO2, Suunto Gekko, Suunto Vytec, Suunto
Vytec DS, Suunto D9tx, Suunto D9, Suunto D6, Suunto D6i, Suunto D4i,
Suunto D4, Suunto Zoop, and [Suunto] Mosquito (collectively “Dive
Computers”) in the United States for personal use (“Suunto Class”).

26 Id. ¶ 65. Plaintiff Bush also seeks certification of a nationwide subclass, “the Aqua
27 Lung subclass,” of individuals that purchased in the United States and for personal use
28 a Dive Computer distributed by Aqua Lung. Id. ¶ 66.
-6-

15cv1146-WQH-AGS

1 III. LEGAL STANDARDS
2

Rule 12(b)(1) of the Federal Rules of Civil Procedure allows a defendant to move

3 for dismissal on grounds that the court lacks jurisdiction over the subject matter. Fed.
4 R. Civ. P. 12(b)(1). The burden is on the plaintiff to establish that the court has subject
5 matter jurisdiction over an action. Assoc. of Med. Colleges v. United States, 217 F.3d
6 770, 778-779 (9th Cir. 2000). A jurisdictional attack pursuant to Rule 12(b)(1) may be
7 facial or factual. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). “In a facial attack,
8 the challenger asserts that the allegations contained in the complaint are insufficient on
9 their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger
10 disputes the truth of the allegations that, by themselves, would otherwise invoke federal
11 jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “In
12 resolving a factual attack on jurisdiction, the district court may review evidence beyond
13 the complaint without converting the motion to dismiss into a motion for summary
14 judgment.” Id. (citing Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2
15 (9th Cir. 2003)).
16

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for “failure to state

17 a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “A pleading that
18 states a claim for relief must contain . . . a short and plain statement of the claim
19 showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Dismissal under
20 Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or
21 sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police
22 Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).
23

To sufficiently state a claim for relief and survive a Rule 12(b)(6) motion, a

24 complaint “does not need detailed factual allegations” but the “[f]actual allegations
25 must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v.
26 Twombly, 550 U.S. 544, 555 (2007). “[A] plaintiff’s obligation to provide the grounds
27 of his entitlement to relief requires more than labels and conclusions, and a formulaic
28 recitation of the elements of a cause of action will not do.” Id. When considering a
-7-

15cv1146-WQH-AGS

1 motion to dismiss, a court must accept as true all “well-pleaded factual allegations.”
2 Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). However, a court is not “required to accept
3 as true allegations that are merely conclusory, unwarranted deductions of fact, or
4 unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th
5 Cir. 2001). “In sum, for a complaint to survive a motion to dismiss, the non-conclusory
6 factual content, and reasonable inferences from that content, must be plausibly
7 suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572
8 F.3d 962, 969 (9th Cir. 2009) (internal quotation marks omitted).
9 IV. MOTION TO DISMISS
10

A. Standing

11

Suunto contends that Plaintiffs lack standing because they have not sustained an

12 injury-in-fact under Article III, the CLRA, or the UCL. (ECF No. 129-1 at 12-19).
13 Suunto requests that the Court take judicial notice of discovery responses and discovery
14 exchanged in this case pursuant to Federal Rule of Evidence 201. Id. at 13. Suunto
15 contends that Plaintiff Huntzinger’s discovery responses contradict the allegations of
16 the SAC and establish that he has not suffered any injury. Id. at 14. Specifically,
17 Suunto contends that Plaintiff Huntzinger’s discovery response that he dove with the
18 Cobra 3 after filing the complaint contradicts his allegations as to injury. Id. at 14-15,
19 17. Suunto contends that Plaintiff Huntzinger’s “‘feeling’ that he can’t rely on his
20 replacement Cobra 3 is nothing more than a ‘hypothetical’ injury that may happen if his
21 device ever malfunctions” and is insufficient to establish Article III standing. Id. at 17.
22 Suunto contends that Plaintiff Bush’s standing allegations are insufficient because he
23 used the Cobra 3 “without incident, malfunction, or problem from 2009 to 2015” and
24 that Bush purchased a D6i Dive Computer after the public filing of the instant lawsuit.
25 Id. at 18. Suunto contends that the Cobra 3, D6i, and other Suunto Dive Computers are
26 different models and the allegation in the SAC that the devices are “exactly the same”
27 is false. Id. at 19.
28

Plaintiffs contend that the request for judicial notice should be denied because
-8-

15cv1146-WQH-AGS

1 discovery responses are not proper subjects of judicial notice on a motion to dismiss.
2 (ECF No. 137 at 15). Plaintiffs contend that judicial notice is not appropriate because
3 the discovery response at issue is in dispute. Plaintiffs assert that Huntzinger “disputes
4 Suunto’s characterization of his discovery responses and their relevance to whether
5 Huntzinger has standing.” Id. at 16. Further, Plaintiffs contend that Huntzinger’s
6 discovery responses “further confirm his allegation that the replacement Dive Computer
7 he received when his Cobra 3 malfunctioned is similarly defective and unsafe.” Id.
8 Plaintiffs contend that the allegations of the SAC sufficiently allege Article III and
9 statutory standing because Plaintiffs were injured by purchasing falsely advertised
10 products. Id. at 17. Plaintiffs contend that their reliance on a material omission in
11 deciding to purchase the Dive Computers is sufficient to confer standing. Id. at 19.
12 Plaintiffs contend that the SAC sufficiently alleges that the different types of Dive
13 Computers are similar. Id. at 21.
14
15

1. Request for Judicial Notice
Federal Rule of Evidence 201 provides that “[t]he court may judicially notice a

16 fact that is not subject to reasonable dispute because it . . . is generally known within
17 the trial court’s territorial jurisdiction; or . . . can be accurately and readily determined
18 from sources whose accuracy cannot reasonably be questioned.” Fed R. Evid. 201(b).
19 [U]nder Fed. R. Evid. 201, a court may take judicial notice of ‘matters of public
20 record.’” Lee, 250 F.3d at 689 (quoting Mack v. South Bay Beer Distrib., 798 F.2d
21 1279, 1282 (9th Cir.1986)).
22

In this case, Suunto requests that the Court take judicial notice of Plaintiff’s

23 Objections and Responses to Special Interrogatories and Plaintiff’s Objections and
24 Responses to Request for Admissions (ECF No. 129-1 at 12-13; Exhibit 1 and 2, ECF
25 No. 129-2) pursuant to Federal Rule of Evidence 201. Plaintiffs oppose this request and
26 assert that Suunto mischaracterizes the discovery responses. The Court declines to take
27 judicial notice of any discovery responses in this litigation because they are not the
28 proper subject of judicial notice.

United Safeguard Distributors Ass'n, Inc. v.
-9-

15cv1146-WQH-AGS

1 Safeguard Bus. Sys., Inc., 145 F. Supp. 3d 932, 942 (C.D. Cal. 2015), reconsideration
2 denied, No. 215CV03998RSWLAJW, 2016 WL 2885848 (C.D. Cal. May 17, 2016)
3 (“Discovery items such as requests for discovery and responses to requests for
4 discovery are not proper subjects for judicial notice because they are not
5 ‘self-authenticating’ and thus cannot be verified.”); Brown v. Allstate Ins. Co., 17 F.
6 Supp. 2d 1134, 1138 (S.D. Cal. 1998) (denying a request for judicial notice of two
7 requests for admissions and stating “[t]he court proceeds with particular caution with
8 respect to a request for judicial notice, when, as here, it is urged so to resolve a
9 fundamental, dispositive factual dispute”). To the extent that Suunto requests judicial
10 notice of Suunto’s Cobra 3 User Guide (ECF No. 129-2 at 2), that request is denied as
11 unnecessary. See, e.g., Asvesta v. Petroutsas, 580 F.3d 1000, 1010 n. 12 (9th Cir. 2009)
12 (denying request for judicial notice where judicial notice would be “unnecessary”).
13
14

2. Plaintiff’s Standing
In the absence of Article III standing, a court lacks subject matter jurisdiction to

15 entertain a lawsuit. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 109-110
16 (1998). Plaintiff must establish (1) an “injury in fact—an invasion of a legally
17 protected interest which is (a) concrete and particularized . . . and (b) actual or
18 imminent, not conjectural or hypothetical,” (2) “a causal connection between the injury
19 and the conduct complained of,” and (3) a likelihood “that the injury will be redressed
20 by a favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)
21 (citations and internal quotation marks omitted).
22

The UCL prohibits any “unlawful, unfair, or fraudulent business act or practice.”

23 Cal. Bus. & Prof. Code § 17200. A plaintiff alleging a UCL claim must satisfy UCL
24 standing requirements. See Birdsong v. Apple, Inc., 590 F.3d 955, 960 n.4 (9th Cir.
25 2009). The UCL was revised in 2004 by Proposition 64, limiting private standing “to
26 any ‘person who has suffered injury in fact or lost money or property as a result of
27 unfair competition.’” Kwikset Corp. v. Superior Court, 246 P.3d 877, 884 (Cal. 2011)
28 (citing Bus. & Prof. Code, § 17204, as amended by Prop. 64, as approved by voters,
- 10 -

15cv1146-WQH-AGS

1 Gen. Elec. (Nov. 2, 2004) § 3).
2

“To establish standing to bring a claim under the UCL, the consumer must allege

3 that (1) the defendant made a false representation about a product, (2) the consumer
4 purchased the product in reliance on the misrepresentation, and (3) he would not have
5 purchased the product otherwise.” Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1109 (9th
6 Cir. 2013) (citing Kwikset Corp., 246 P.3d at 877). Proposition 64 “imposes an actual
7 reliance requirement on plaintiffs prosecuting a private enforcement action under the
8 UCL’s fraud prong.” In re Tobacco II Cases, 207 P.3d 20, 39 (Cal. 2009).
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

The California Supreme Court has held that
Reliance is proved by showing that the defendant’s misrepresentation or
nondisclosure was an immediate cause of the plaintiff’s injury-producing
conduct. A plaintiff may establish that the defendant’s misrepresentation
is an immediate cause of the plaintiff’s conduct by showing that in its
absence the plaintiff in all reasonable probability would not have engaged
in the injury-producing conduct. . . . It is enough that the representation
has played a substantial part, and so had been a substantial factor, in
influencing his decision.
Id. (citations and internal quotation marks omitted). “[A] presumption, or at least an
inference, of reliance arises wherever there is a showing that a misrepresentation was
material. A misrepresentation is judged to be ‘material’ if a reasonable man would
attach importance to its existence or nonexistence in determining his choice of action
in the transaction in question.” Id. (citations and internal quotation marks omitted).
A plaintiff who has standing under the UCL’s “lost money or property”
requirement has also established standing under the CLRA. Hinojos, 718 F.3d at 1108
(citing Klein v. Chevron U.S.A., Inc., 137 Cal. Rptr. 3d 293, 320 (2012) (“noting that
where a plaintiff alleged an economic injury under the UCL he also adequately alleged
injury under the CLRA”)). “If a party has alleged or proven a personal, individualized
loss of money or property in any nontrivial amount, he or she has also alleged or proven
injury in fact.” Kwikset Corp., 246 P.3d at 887.
In this case, Plaintiffs allege that they purchased Dive Computers but “would not
have purchased or used” the Dive Computers had they known that the Dive Computers
were “unsafe and unfit for their intended use[.]” (ECF No. 117 at ¶¶ 12,13). Plaintiffs
- 11 -

15cv1146-WQH-AGS

1 allege that “[n]one of the warnings on the product packaging or in other marketing
2 informed . . . consumers that because of the Dive Computers’ inherent defect . .
3 ordinary use of the Dive Computers carries a substantial risk of serious malfunction
4 whereby the Dive Computer may quit working and/or provide incorrect information
5 about a dive.” Id. ¶ 59. Plaintiffs allege that Suunto “continue[d] to falsely represent
6 that the Dive Computers will provide certain accurate information during a dive and
7 impliedly that the Dive Computers are safe for use.” Id. Plaintiffs allege that all Dive
8 Computers, including replacements Dive Computers, are defective and cannot be safely
9 used for their intended and advertised purpose. Plaintiffs allege that Suunto knew or
10 should have known of the defects in the Dive Computers. Plaintiffs allege facts
11 sufficient to infer that Suunto’s nondisclosure was a material fact in causing Plaintiffs
12 to purchase Dive Computers. Plaintiffs’ allegations of a material nondisclosure are
13 sufficient to infer that Plaintiffs relied on Suunto’s nondisclosure in deciding to
14 purchase the Dive Computers. See In re Tobacco II Cases, 207 P.3d at 39. Plaintiffs
15 allege sufficient facts to establish standing under Article III, the UCL and the CLRA at
16 this stage in the proceedings.
17
18

3. Standing On Behalf of Dive Computers Not Purchased
“In the Ninth Circuit, there is ‘no controlling authority’ on whether a plaintiff in

19 a class action has standing to assert claims based on products he did not purchase.”
20 Morales v. Unilever U.S., Inc., Civ. No. 2:13-2213 WBS EFB, 2014 WL 1389613, at
21 *4 (E.D. Cal. Apr. 9, 2014) (quoting Miller v. Ghirardelli Chocolate Co., 912 F. Supp.
22 2d 861, 868 (N.D. Cal. 2012)); see also Granfield v. NVIDIA Corp., No. C 11–05403
23 JW, 2012 WL 2847575, at *6 (N.D. Cal. July 11, 2012) (“[W]hen a plaintiff asserts
24 claims based both on products that she purchased and products that she did not
25 purchase, claims relating to products not purchased must be dismissed for lack of
26 standing.”); Allen v. Similason Corp., No. 12CV0376, 2013 WL 2120825, at *4 (S.D.
27 Cal. May 14, 2013) (“[W]hether a class representative may be allowed to present claims
28 on behalf of others who have similar, but not identical, interests depends not on
- 12 -

15cv1146-WQH-AGS

1 standing, but on an assessment of typicality and adequacy of representation.”). “The
2 majority of courts . . . hold that a plaintiff may have standing to assert claims for
3 unnamed class members based on products he or she did not purchase as long as the
4 products and alleged misrepresentation are substantially similar.”

Dorfman v.

5 Nutramax Labs., Inc., No. 13-cv-873 WQH (RBB), 2013 WL 5353043, at *6 (S.D. Cal.
6 Sept. 23, 2013) (quoting Brown v. Hain Celestial Group, Inc., 913 F. Supp. 2d 881, 890
7 (N.D. Cal. 2012)). “In these . . . cases, the courts have found that analyzing the issue
8 of standing when there are similarities between the products is better accomplished
9 under Rule 23 at the time of class certification.” Dabish v. Brand New Energy, LLC,
10 No. 16CV400 BAS (NLS), 2016 WL 7048319, at *2 (S.D. Cal. Dec. 5, 2016); see, e.g.,
11 Cardenas v. NBTY, Inc., 870 F. Supp. 2d 984, 992 (E.D. Cal. 2012).
12

In this case, Plaintiffs allege that each Dive Computer “contains materially the

13 same software and hardware that operates the Dive Computer’s critical functions.”
14 (ECF No. 117 at ¶ 3). Plaintiffs allege that this software and hardware “is defective
15 because it can malfunction, causing the Dive Computers to provide inaccurate
16 information about a dive.” Id. Plaintiffs allege that the defect “exists across all models
17 of the Dive Computers.” Id. ¶ 7. Plaintiffs allege that this defect makes the Dive
18 Computers unfit for the purpose they are designed, marketed, and sold for. Plaintiffs
19 allege sufficient facts to support an inference that Suunto’s alleged practice of
20 concealing the defects in the Dive Computers was uniform across all Dive Computers.
21 Id. at ¶¶ 53-64. The Court concludes that Plaintiffs have alleged sufficient facts to
22 avoid dismissal. Contentions regarding differences among the Dive Computers are best
23 addressed at the class certification stage under Rule 23.
24

B. Failure to State a Claim: CLRA and UCL

25

Suunto contends that Plaintiffs’ CLRA and UCL claims must be dismissed for

26 failure to state a claim because Plaintiffs have failed to allege reliance on any
27 misrepresentations or omissions by Suunto. (ECF No. 129-1 at 19). Suunto contends
28 that Plaintiffs have failed to allege their claims with the specificity required by Rule
- 13 -

15cv1146-WQH-AGS

1 9(b) because the SAC fails to put Suunto on notice of the claims asserted by Plaintiffs.
2 Id. at 21. Suunto contends that the SAC contains only “broad conclusory allegations
3 of fraud” and fails to identify any misrepresentation relied on by Plaintiffs. Id. at 22.
4

Plaintiffs asserts that their “claims and corresponding allegations are not based

5 on affirmative misrepresentations, but on Defendants’ failure to inform Plaintiffs of the
6 safety defect in the Dive Computers.” (ECF No. 137 at 22). Plaintiffs contend that the
7 SAC sufficiently alleges that Plaintiffs purchased Dive Computers as a result of
8 Suunto’s omissions and that these omissions were a material factor in influencing their
9 decision to purchase. Id. Plaintiffs contend that reliance can be presumed or inferred
10 when the omission is material. Id. at 23. Plaintiffs contend that their UCL and CLRA
11 claims are not grounded in fraud and thus the heightened pleading standard of Rule 9(b)
12 is not applicable. Id. at 25. Plaintiffs contend that the allegations of the SAC are
13 sufficient to satisfy Rule 9(b). Id. at 25.
14

Rule 9(b) of the Federal Rules of Civil Procedure states that “[i]n alleging fraud

15 or mistake, a party must state with particularity the circumstances constituting fraud or
16 mistake.” Fed. R. Civ. P. 9(b). “Averments of fraud must be accompanied by the who,
17 what, when, where, and how of the misconduct charged.” Vess v. Ciba-Geigy Corp.
18 USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (citations and internal quotation marks
19 omitted). “To comply with Rule 9(b), allegations of fraud must be specific enought to
20 give defendants notice of the particular misconduct which is alleged to constitute the
21 fraud charged so that they can defend against the charge and not just deny that they
22 have done anything wrong.” Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir.
23 2001) (citation and internal quotation marks omitted).
24

“[I]n a case where fraud is not an essential element of a claim, only allegations

25 (‘averments’) of fraudulent conduct must satisfy the heightened pleading requirements
26 of Rule 9(b). Allegations of non-fraudulent conduct need satisfy only the ordinary
27 notice pleading standards of Rule 8(a).” Vess, 317 F.3d at 1104. “While fraud is not
28 a necessary element of a claim under the CLRA and UCL, a plaintiff may nonetheless
- 14 -

15cv1146-WQH-AGS

1 allege that defendant engaged in fraudulent conduct . . . . In that event, the claim is said
2 to be grounded in fraud or to sound in fraud, and the pleading as a whole must satisfy
3 the particularity requirement of Rule 9(b).” Kearns v. Ford Motor Co., 567 F.3d 1120,
4 1125 (9th Cir. 2009) (citations omitted). “Because the Supreme Court of California has
5 held that nondisclosure is a claim for misrepresentation in a cause of action for fraud,
6 it (as any other fraud claim) must be pleaded with particularity under Rule 9(b).” Id.
7 at 1127.
8

A fraud-based omission claim under the UCL and CLRA “must be contrary to

9 a representation actually made by the defendant, or an omission of fact the defendant
10 was obliged to disclose.” In re Sony Gaming Networks and Consumer Data Security
11 Breach Litigation, 996 F. Supp. 2d 942, 991 (S.D. Cal. 2014). “A duty to disclose may
12 arise: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when
13 the defendant had exclusive knowledge of material facts not known to the plaintiff; (3)
14 when the defendant actively conceals a material fact from the plaintiff; or (4) when the
15 defendant makes partial representations but also suppresses some material fact.” Id.
16

In this case, the SAC alleges that Suunto controlled the product packaging and

17 advertising of the Dive Computers sold in the United States and that the Dive
18 Computers were “advertised as a safe product.” (ECF No. 117 ¶¶ 36-37, 61). The
19 SAC alleges facts supporting an inference that representations about the Dive
20 Computers were included in product packaging, Defendant Aqua Lung’s website, user
21 guides created by Suunto, a website owned by Suunto, advertising and marketing
22 materials created by Suunto, and in-store displays. Id. ¶¶ 31-40. Plaintiffs allege that
23 Suunto knew “that the Dive Computers all contain the inherent defects, malfunction,
24 and pose a significant hazard to consumers” based on numerous reports from Aqua
25 Lung and a Service Log which documented all repairs done on Dive Computers by an
26 authorized repair facility. Id. ¶¶ 52, 45-47, 49. Plaintiffs allege that Suunto did not
27 disclose the defect or inform consumers that the defect could result in inaccurate
28 information about dive depth, dive time, tank air pressure, and remaining air time. Id.
- 15 -

15cv1146-WQH-AGS

1 ¶ 41. The factual allegations of the SAC are sufficient to support an inference that the
2 Suunto knew of the defects in the Dive Computers and failed to disclose the material
3 defect to consumers while continuing to market and distribute the Dive Computers as
4 a safe product. Further Plaintiffs allege that they purchased Dive Computers “believing
5 [they were] safe to use during scuba dives” and that they would not have purchased the
6 products had they known that the Dive Computers were “unsafe and unfit for its
7 intended use.” Id. ¶¶ 12-13. The Court has concluded that Plaintiffs allege sufficient
8 facts to support an inference that Plaintiffs relied on Suunto’s material nondisclosure
9 for purposes of its UCL and CLRA claims. See supra Part IV.A.2. The Court
10 concludes that under the requirements of Rule 9(b), the Plaintiffs have plead sufficient
11 facts to put Suunto on notice of the claims.
12

C. Failure to State a Claim: Breach of Implied Warranty

13

Suunto contends that California law does not allow a breach of implied warranty

14 claim against a manufacturer of products. Suunto contends that a plaintiff asserting
15 breach of warranty claims must “stand in vertical contractual privity with defendant”
16 and that there is no third-party beneficiary exception to the privity requirement. (ECF
17 No. 129-1 at 23-24). Suunto further contends that even if the Court determines a third
18 party beneficiary exception to the privity requirement exists, it cannot be extended to
19 allow a consumer to sue a manufacturer “merely because he is an end user of the
20 product.” Id. at 24.
21

Plaintiffs concede that Huntzinger “does not have an implied warranty claim

22 against Suunto because he did not purchase his Dive Computer from an authorized
23 retailer.” (ECF No. 137 at 26 n.2). However, Plaintiffs contend that Plaintiff Bush
24 sufficiently alleges an implied warranty claim. Plaintiffs contend that there is a third25 party beneficiary exception to the vertical privity requirement. Plaintiffs contend that
26 Bush is a third-party beneficiary of “the implied warranty made between Suunto as the
27 manufacturer and Aqua Lung as the distributor, and among Aqua Lung and the ultimate
28 retail sellers where Bush and the other Class members purchased their Dive
- 16 -

15cv1146-WQH-AGS

1 Computers.” Id. at 29.
2

“Under California Commercial Code section 2314, ... a plaintiff asserting breach

3 of warranty claims must stand in vertical contractual privity with the defendant.”
4 Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir.2008) (citation
5 omitted). “A buyer and seller stand in privity if they are in adjoining links of the
6 distribution chain.” Id. “Some particularized exceptions to the rule exist.” Id. In Gilbert
7 Fin. Corp. v. Steelform Contracting Co.,145 Cal. Rptr. 448 (Ct. App. 1978), a
8 California appellate court determined that pursuant to California Civil Code section
9 1559, the owner of a building could bring a breach of implied warranty claim as a third10 party beneficiary to a contract between a contractor and a subcontractor, despite a lack
11 of privity. Id. at 450 n.5. Relying on this decision, some district courts have
12 determined that consumers can assert implied warranty claims, despite a lack of privity,
13 as third party beneficiaries of agreements between the manufacturer and retailer. See,
14 e.g., Roberts v. Electrolux Home Prod., Inc., No. CV 12-1644 CAS VBKX, 2013 WL
15 7753579, at *10 (C.D. Cal. Mar. 4, 2013) (“Gilbert is best interpreted to establish an
16 exception to the privity requirement that applies when a plaintiff is the intended
17 beneficiary of implied warranties in agreements linking a retailer and a manufacturer,
18 and therefore a lack of privity does not bar plaintiff’s implied warranty claims.”); In re
19 MyFord Touch Consumer Litig., 46 F. Supp. 3d 936, 983 (N.D. Cal. 2014) (applying
20 the third party beneficiary exception to plaintiffs who bought a car from a dealership
21 and then sued the manufacturer for breach of implied warranty). But see In re Seagate
22 Tech. LLC Litig., 233 F. Supp. 3d 776, 787 (N.D. Cal. 2017) (“Although it appears that
23 the majority of district court decisions to consider the question have held that a
24 consumer who purchased a product from a retailer can invoke the third party
25 beneficiary exception to bring an implied warranty claim against the manufacturer, this
26 Court cannot square that outcome with Clemens.”).
27

“[W]here a plaintiff pleads that he or she is a third-party beneficiary to a contract

28 that gives rise to the implied warranty of merchantability, he or she may assert a claim
- 17 -

15cv1146-WQH-AGS

1 for the implied warranty’s breach.” In re Toyota Motor Corp. Unintended Acceleration
2 Marketing, Sales Practices, and Products Liability Litigation, 754 F. Supp. 2d 1145,
3 1185 (C.D. Cal. 2010). “Under California Civil Code § 1559, a third party beneficiary
4 can enforce a contract made expressly for his benefit . . . the only requirement is that
5 the party is more than incidentally benefitted by the contract.” Cartwright v. Viking
6 Industries, Inc., 249 F.R.D. 351, 356 (E.D. Cal. 2008). “Because third party beneficiary
7 status is a matter of contract interpretation, a person seeking to enforce a contract as a
8 third party beneficiary ‘must plead a contract which was made expressly for his [or her]
9 benefit and one in which it clearly appears that he [or she] was a beneficiary.’ ”
10 Schauer v. Mandarin Gems of California, Inc., 23 Cal. Rptr. 3d 233, 239 (Ct. App.
11 2005 ) (quoting California Emergency Physicians Medical Group v. PacifiCare of
12 California, 111 Cal. Rptr. 3d 583 (Ct. App. 2003)).
13

In this case, the SAC alleges that Plaintiff Bush purchased a Suunto Cobra 3 dive

14 computer from Sport Chalet and later purchased a Suunto D6i dive computer “to
15 replace the unrepairable and defective Cobra 3.” (ECF No. 117 at ¶13). “Aqua Lung
16 entered into distribution agreements with select retailers for the sole purpose of
17 distributing the Dive Computers so that they could be sold from the retailers. As part
18 of those distribution agreements, Aqua Lung impliedly warranted that the Dive
19 Computers are reasonably safe, effective and adequately tested for their intended use
20 and that they are of merchantable quality.” (ECF No. 117 at ¶ 102). The SAC alleges,
21 “Plaintiff Bush and members of the Aqua Lung Subclass, as purchasers of the Dive
22 Computers, were the intended beneficiaries of the distribution agreements between
23 Aqua Lung and retailers of the Dive Computers.” Id. at ¶ 103. These factual
24 allegations are specific to Defendant Aqua Lung’s distribution agreements with
25 retailers.

With respect to Suunto, Plaintiff alleges that Suunto “entered into a

26 distribution agreement with Aqua Lung for the purpose of marketing and distributing
27 the Dive Computers in the United States for sale to consumers.” Id. ¶ 21. Plaintiffs fail
28 to allege sufficient facts to support a reasonable inference that Plaintiff Bush is an
- 18 -

15cv1146-WQH-AGS

1 intended third party beneficiary to any contract involving Suunto. The motion to
2 dismiss the breach of implied warranty of merchantability claim as to Suunto is granted.
3
4 V. MOTION TO STRIKE THIRD PARTY AMENDED COMPLAINT
5

On July 5, 2017, Aqua Lung filed a document titled “Aqua Lung America, Inc.’s

6 First Amended Third-Party Complaint Against Suunto Oy.” (ECF No. 124). Aqua
7 Lung seeks to bring claims for equitable indemnity, comparative equitable indemnity,
8 implied contractual indemnity, breach of implied warranty of merchantability, and
9 declaratory relief against Suunto. (ECF No. 124).
10

Suunto filed a motion to strike the Amended Third Party Complaint on the

11 grounds that “Suunto Oy is a defendant to the underlying and operative Second
12 Amended Complaint filed by Plaintiffs, and any claim by Aqua Lung against Suunto
13 Oy must be treated as a crossclaim rather than a third-party complaint.” (ECF No. 128
14 at 2). Suunto requests that the Court strike the First Amended Third-Party Complaint
15 with leave to Aqua Lung to file its crossclaims or in the alternative, “treat Aqua Lung’s
16 third party pleading as a cross-claim and adjust the caption to reflect the proper status
17 of all parties.” (ECF No. 128-1 at 5).
18

Aqua Lung filed a Notice of Non-opposition. (ECF No. 131). Aqua Lung states

19 “Aqua Lung does not oppose Suunto’s request that the Court issue an order that the
20 First Amended Third-Party Complaint be treated as a Cross-Complaint, and the docket
21 be modified accordingly. However, in the event that the Court strikes the First
22 Amended Third-Party Complaint and orders Aqua Lung to file a Cross-Complaint,
23 Aqua Lung respectfully requests that the Court also order Suunto to file an answer to
24 such Cross-Complaint within 14 days of service pursuant to Rule 15(a)(3).” (ECF No.
25 131 at 4).
26

Pursuant to the agreement of Suunto and Aqua Lung, the motion to strike the

27 First Amended Third-Party Complaint is granted and Aqua Lung is granted leave to
28 refile the document as a cross-claim.
- 19 -

15cv1146-WQH-AGS

1 VI. CONCLUSION
2

IT IS HEREBY ORDERED that the Motion to Dismiss filed by Defendant

3 Suunto is granted with respect to the breach of implied warranty of merchantability
4 against Suunto and denied in all other respects. (ECF No. 129).
5

IT IS FURTHER ORDERED that the Motion to Strike the Third Party Amended

6 Complaint is GRANTED. (ECF No. 128). The document filed as “First Amended
7 Third-Party Complaint Against Suunto” (ECF No. 124) is stricken. The Court grants
8 Aqua Lung leave to refile the document as a cross-claim within ten (10) days of the date
9 this Order is issued.
10 DATED: January 8, 2018
11
12

WILLIAM Q. HAYES
United States District Judge

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
- 20 -

15cv1146-WQH-AGS