Ware et al v. Best Buy Stores, LP et al

Filing 116

MEMORANDUM Opinion and Order: Best Buy's motion to dismiss 39 and renewed motion to dismiss 95 are granted and the Wares claims against Best Buy Stores, L.P. are dismissed. Best Buy Stores, LP terminated. Signed by the Honorable Sharon Johnson Coleman on 1/31/2019. Mailed notice. (ym, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TAWANNA AND ANTHONY WARE, on
behalf of themselves and all others similarly
situated,
Plaintiffs,
v.
SAMSUNG ELECTRONICS AMERICA,
INC., SAMSUNG ELECTRONICS CO.,
LTD., BEST BUY STORES, L.P. (d/b/a Best
Buy, Geek Squad, and Magnolia Home
Theater) and BEST BUY CO. INC., (d/b/a
Geek Squad and Magnolia Home Theater),
Defendants.

)
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) Case No. 18-cv-886
)
) Judge Sharon Johnson Coleman
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MEMORANDUM OPINION AND ORDER
The plaintiffs, Tawanna and Anthony Ware, brought this action arising from their purchase
of a defective television against defendants Samsung Electronics America, Inc., Samsung Electronics
Co., Ltd., Best Buy Stores, L.P., and Best Buy Co. Inc. As is relevant here, the plaintiffs allege that
Best Buy Stores, L.P. (“Best Buy”) has violated the Magnuson-Moss Warranty Act through its Geek
Squad Protection Plan service package. Best Buy now moves to dismiss the portion of the
complaint against it for failure to state a claim. For the reasons set forth herein that motion is
granted.
Background
The following facts are taken from the Wares’ complaint and supporting documents and are
accepted as true for the purpose of the present motion. On June 8, 2013, the Wares purchased a
sixty-four-inch Samsung 3-D plasma television from a Magnolia Home Theater location in a
Chicago, Illinois Best Buy store. They also purchased a five-year Geek Squad Protection Plan (“the
plan”). Best Buy sells Geek Squad Protection Plans to consumers for coverage of consumer
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products. Such plans are serviced through Best Buy’s Geek Squad service or other authorized
service providers.
At the time of their purchase, Best Buy’s employees represented to the Wares that the plan
was a “warranty” and that, if there were any issues, Best Buy would replace the TV or refund the
Wares money. Within a few months of their purchase, however, the Wares’ TV began to suffer
from repeated problems. In May 2017, one of these problems rendered the TV unrepairable due to
the unavailability of replacement parts.
Legal Standard
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal
sufficiency of the complaint, not the merits of the allegations. The allegations must contain
sufficient factual material to raise a plausible right to relief. Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 569 n.14, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Although Rule 8 does not require a plaintiff
to plead particularized facts, the complaint must assert factual “allegations that raise a right to relief
above the speculative level.” Arnett v. Webster, 658 F.3d 742, 751–52 (7th Cir. 2011). When ruling
on a motion to dismiss, the Court must accept all well-pleaded factual allegations in the complaint as
true and draw all reasonable inferences in the plaintiff’s favor. Boucher v. Fin. Sys. of Green Bay, Inc.,
880 F.3d 362, 365 (7th Cir. 2018).
Discussion
The plaintiffs’ complaint alleges that the Geek Squad Protection Plan violates the
requirements of the Magnuson-Moss Warranty Act. Best Buy challenges the Magnuson-Moss Act’s
applicability to the Geek Squad Protection Plan based on the Act’s definition of “warranty.” Under
the Magnuson-Moss Act, a written warranty is defined as:
(A) any written affirmation of fact or written promise made in
connection with the sale of a consumer product by a supplier to a
buyer which relates to the nature of the material or workmanship and
affirms or promises that such material or workmanship is defect free
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or will meet a specified level of performance over a specified period
of time, or
(B) any undertaking in writing in connection with the sale by a
supplier of a consumer product to refund, repair, replace, or take
other remedial action with respect to such product in the event that
such product fails to meet the specifications set forth in the
undertaking,
which written affirmation, promise, or undertaking becomes part of
the basis of the bargain between a supplier and a buyer for purposes
other than resale of such product.
15 U.S.C. § 2301(6). The Act separately defines “service contract” as “a contract in writing to
perform, over a fixed period of time or for a specified duration, services relating to the maintenance
or repair (or both) of a consumer product.” 15 U.S.C. § 2301(8).
One distinction between these definitions is whether the agreement in question is a separate
agreement, as in the case of a service contract, or a part of the basis of the bargain between the seller
and the buyer of the underlying product. The Magnuson Moss Act’s interpreting regulations further
clarify that a written warranty “must be conveyed at the time of sale of the consumer product and
the consumer must not give any consideration beyond the purchase price of the consumer product
in order to benefit from the agreement.” 16 C.F.R. § 700.11(b).1 A service contract, by contrast,
“calls for some consideration in addition to the purchase price of the consumer product” or “is
entered into at some date after the purchase of the consumer product to which it applies.”
16 C.F.R. § 700.11(c).
Here, the Geek Squad Service Package was not part of the purchase contract for the Wares’
television. The Wares complaint expressly admits that their television cost $3,119.00, and that they
separately purchased the five year Geek Squad Protection Plan for an addition $519.00. The Wares

1 The Wares, in a footnote, assert that 16 C.F.R. § 700.11(c) was not codified until 2015, after they purchased their
television. Identical interpretations, however, have been published in the Federal Register since 1977, and the Wares
have failed to establish legal support for any conflicting interpretations of the statutory language.

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also allege that Best Buy “sells GSPPs to consumers for coverage of commercial products.” On
these facts, it is clear that the Geek Squad Service Package constituted a service contract and not a
warranty. Although it is true that the Wares purchased the Geek Squad Protection Plan at the same
time as their television and as part of a “bundle” for purposes of a discount, it is undisputed that
they paid for it separately and had the option not to pay for it. The Wares’ supplemental exhibits,
moreover, show that the Geek Squad Protection Plan is sold as a separate item from televisions on
Best Buy’s website and that, on their receipt, the Geek Squad Protection Plan was listed as a separate
item from their television, further establishing that it was not part of the same bargain as the
television purchase. Accordingly, it cannot be considered part of the “basis of their bargain” to
purchase a television.
In responding to this argument, the Wares assert that Best Buy repeatedly characterized the
Geek Squad Protection Plan as a warranty. That might well be the case, but it is irrelevant to this
Court’s determination of whether the Geek Squad Protection Plan satisfies the express statutory
definition of the term “warranty” for the purpose of the Magnuson Moss Act. See Touche v. Best Buy
Stores, LP, Case No. 1:17cv259-RH/GRJ (N.D. Fla. Feb. 13, 2018) (reaching the same conclusion in
an identical case).
The Wares further assert that the Geek Squad Protection Plan was “part of the basis of the
bargain” because it was purchased as part of a “bundle” that earned them a price reduction. The
fact that the Wares were offered a discounted price for a consolidated purchase, however, is not
indicative of whether their television purchase and their purchase of the Geek Squad Protection Plan
were part of the same bargain. 16 C.F.R. § 700.11(b). To the contrary, the Wares’ repeated
allegations that they paid separate amounts for the “bundled” television and Geek Squad Protection
Plan purchases clearly indicate that the Geek Squad Protection Plan was not a part of the “bargain”
for the television’s purchase, even if an overall discount was offered. The Wares, tellingly, have
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offered no authority establishing that “bundled” purchases are part of the same bargain for purposes
of the Magnuson Moss Act or its interpreting regulations, and this Court therefore rejects their
arguments based on that conclusory and unsupported premise.
The Geek Squad Protection Plan, moreover, is not limited to matters of materials or
workmanship, but instead covers failures caused by wear and tear, dust and other environmental
conditions, power fluctuations, or failed pixels, addresses a wide variety of potentially covered
products, and provides for limited preventative maintenance. In light of these provisions, it is
abundantly clear, that the Geek Squad Protection Plan is best characterized as requiring the
performance of maintenance and repair services rather than guaranteeing the material and
workmanship of the Wares’ television. Compare 15 U.S.C. § 2301(8) (defining a service contract as an
agreement to perform “services relating to the maintenance or repair (or both) of a consumer
product”) with 15 U.S.C. § 2301(6) (defining a warranty as an affirmation relating to the “nature of
the material or workmanship” or a promise of repair in the event a product “fails to meet the
specifications set forth”).
The Wares’ cause of action against Best Buy requires the existence of a warranty. 15 U.S.C.
§ 2310(d)(1); 15 U.S.C. § 2303(a); 15 U.S.C. § 2304(a)(4). The Wares have failed to adequately allege
the existence of a warranty, and therefore have failed to state a claim against Best Buy.
Conclusion
For the foregoing reasons, Best Buy’s motion to dismiss [39] and renewed motion to dismiss
[95] are granted and the Wares claims against Best Buy Stores, L.P. are dismissed.

Date: 1/31/2019
Entered: _____________________________
SHARON JOHNSON COLEMAN
United States District Court Judge

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