WESKE et al v. SAMSUNG ELECTRONICS AMERICA, INC. et al
Filing
50
OPINION. Signed by Judge William J. Martini on 3/12/12. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
JEFF WESKE, JO ANNA FRAGER, and
DARRYL MYHRE,
Civ. No. 2:10-4811 (WJM)
Plaintiffs,
v.
OPINION
SAMSUNG ELECTRONICS AMERICA,
INC. and SAMSUNG ELECTRONICS
CO., LTD.,
Defendants.
WILLIAM J. MARTINI, U.S.D.J.:
This matter comes before the Court on a motion by Defendants Samsung
Electronics America, Inc. (“SEA”) and Samsung Electronics Co., LTD. (“SEC”)
(collectively, “Samsung”) to dismiss the Complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be
granted.
For the reasons stated below, the Court GRANTS the motion IN PART and
DENIES it IN PART.
I.
Factual and Procedural Background
Since 2005, Samsung has engaged in the business of designing,
manufacturing, and selling refrigerators in the United States. Plaintiffs Jeff Weske,
Jo Anna Frager, and Darryl Myhre, residents of Minnesota, Ohio, and Washington,
respectively, filed a purported class-action complaint against Samsung on
September 20, 2010. Defendant SEA is based in Ridgefield Park, New Jersey.
Defendant SEC is based in Seoul, South Korea. Plaintiffs allege that certain
consumer refrigerators manufactured by Samsung (the “Refrigerators”) have a
defect that causes the Refrigerators coils to freeze over, resulting in the
1
Refrigerators failing to keep food cold (the “Defect”). Plaintiffs further allege that
an exterior temperature display on the outside of the Refrigerators does not
properly display the resulting rise in temperature caused by the Defect. The
Refrigerators come with a one-year warranty on parts and labor and a five-year
warranty limited to certain portions of the cooling-system apparently not involved
with the Defect.
Each Plaintiff purchased a new Samsung refrigerator from a department
store in his or her home state. None of Plaintiffs purchased a Refrigerator in New
Jersey. Each of the Plaintiffs alleges that the Defect caused their Refrigerator to
fail more than a year after the purchase, ostensibly outside the period of the express
warranty coverage. Plaintiffs allege that they were damaged by the loss of the
value of their Refrigerator, costs incidental to attempting to repair the Refrigerator,
and the loss of groceries that were in the Refrigerator when it failed.
The Complaint alleges that Samsung knew – or was reckless in not knowing
– that the Refrigerators contained the Defect and that the Defect would cause the
Refrigerators to cease to be useful earlier than their customers expected. Plaintiffs
allege that Samsung received customer complaints about the problem in early
2006, and the BBC reported on a similar defect in a Samsung refrigerator sold in
the United Kingdom in 2008. And yet, Samsung continued to sell the Refrigerators
without disclosing the Defect in any of its marketing materials or on its website.
The Complaint alleges four claims: (1) violation of the New Jersey
Consumer Fraud Act, N.J.S.A. § 56:8-2 et seq. (the “NJCFA”); (2) fraudulent
concealment or non-disclosure; (3) breach of implied warranty; and (4) unjust
enrichment. Samsung argues that the Complaint fails to adequately state a claim as
to any of the four counts and asks the Court to dismiss the Complaint in its entirety
with prejudice.
II.
Legal Analysis
A. The Motion to Dismiss Standard
In deciding a motion to dismiss under Rule 12(b)(6), a court must take all
allegations in the complaint as true and view them in the light most favorable to the
plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino
Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998). This
assumption of truth is inapplicable, however, to legal conclusions couched as
factual allegations or to “[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements.” Ashcroft v. Iqbal, 556 U.S. 662, 129
S.Ct. 1937, 1949 (2009).
2
Although a complaint need not contain 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 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Thus, the factual allegations must be sufficient to raise a plaintiff’s right to relief
above a speculative level, such that it is “plausible on its face.” See id. at 570; see
also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). A claim
has “facial plausibility when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 129 S.Ct. at 1949 (2009) (citing Twombly, 550 U.S. at
556). While “[t]he plausibility standard is not akin to a ‘probability requirement’ . .
. it asks for more than a sheer possibility.” Iqbal, 129 S.Ct. at 1949 (2009).
B. Choice-of-Law Analysis
The Court must first determine which state’s law applies to Plaintiffs’ claims
using New Jersey’s choice of law rules. See, e.g., Arlandson v. Hartz Mountain
Corp., 792 F. Supp. 2d 691, 699 (D.N.J. 2011) (citing Klaxon Co. v. Stentor Elec.
Mfg. Co., 313 U.S. 487, 496 (1941)). New Jersey has adopted the “most significant
relationship” test of the Restatement (Second) of Conflict of Laws. P.V. v. Camp
Jaycee, 962 A.2d 453, 460 (N.J. 2008). This analysis, which must be performed on
an issue-by-issue basis, is a two-step process. Id. at 460-61. First, the Court must
determine whether an actual conflict of law exists – if no conflict exists, the law of
New Jersey, the forum state, applies. Id. Second, if a conflict does exist, the Court
must determine which state has the “most significant relationship” to the claim, by
“weigh[ing] the factors set forth in the Restatement section corresponding to the
plaintiff’s cause of action.” Nikolin v. Samsung Elecs. Am., Inc., Civ. No. 10-1456,
2010 WL 4116997, at *3 (D.N.J. Oct. 18, 2010).
Plaintiffs argue that it is premature to conduct a proper choice of law
analysis, as the Court does not yet have a full factual record. Plaintiffs are
generally correct that due to the factual inquiry that may be necessary to properly
weigh certain Restatement factors, “it can be inappropriate or impossible for a
court to conduct that analysis at the motion to dismiss stage when little or no
discovery has taken place.” In re Samsung DLP Television Class Action Litig., Civ.
No. 07–2141, 2009 WL 3584352, at *3 (D.N.J. Oct. 27, 2009). But “[s]ome choice
of law issues may not require a full factual record and may be amenable to
resolution on a motion to dismiss.” Harper v. LG Elecs. USA, Inc., 595 F.Supp.2d
486, 491 (D.N.J. 2009). Recognizing that the factual allegations may provide a
sufficient basis for certain choice-of-law determinations but not for others, courts
in this Circuit assess the propriety of making choice-of-law determinations on a
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claim-by-claim basis. See, e.g., Arlandson, 792 F. Supp. 2d at 699-700 (citing
cases determining propriety of resolving choice-of-law issues on motion to
dismiss). Using this framework, the Court will address each of the four counts in
turn. Should the choice of law determination for that issue require a fuller factual
record, the Court will defer its decision until such factual record is available. See
id.1
C. Claim for Violation of the NJCFA
First, there are substantial conflicts between the consumer fraud laws of
New Jersey, Minnesota, Ohio, and Washington. To state a claim under the
NJCFA, a person must show: “(1) unlawful conduct by the defendants; (2) an
ascertainable loss on the part of the plaintiff; and (3) a causal relationship between
the defendants’ unlawful conduct and the plaintiff’s ascertainable loss.”
International Union of Operating Eng’rs Local No. 68 Welfare Fund v. Merck &
Co., Inc., 192 N.J. 372, 929 A.2d 1076, 1086 (N.J. 2007). Notably absent is any
need to show reliance. See id. (“Our statute essentially replaces reliance, an
element of proof traditional to any fraud claim, with the requirement that plaintiff
prove ascertainable loss.”). This puts the NJCFA in direct conflict with the
Minnesota Consumer Fraud Act, Minn. Stat. § 325F.69. See 301 Clifton Place
L.L.C. v. 301 Clifton Place Condominium Ass’n, 783 N.W.2d 551, 563 (Minn.
App. 2010) (construing Minnesota Consumer Fraud Act and holding that “a
successful claimant must prove that he or she relied on the falsehood to show
causation.”). 2 Also absent is any need to show that the defendant’s actions affected
the public interest, which puts the NJCFA in conflict with Washington’s Consumer
1
Plaintiffs also claim that the Third Circuit’s recent en banc decision in Sullivan v. DB Invs., ___ F.3d ____, No. 082784, 2011 WL 6367740 (3d Cir. Dec. 20, 2011), stands for the proposition that a district court should not consider
choice-of-law issues when assessing a motion to dismiss for failure to state a claim. But Sullivan did not involve a
Federal Rule of Civil Procedure 12(b)(6) motion – Sullivan was about the district court’s certification of two
nationwide settlement classes under Federal Rule of Civil Procedure 23(b). Id. at *1. The Third Circuit refused to
find that Rule 23 requires a district court considering a settlement class to conduct an inquiry into the validity of the
underlying claims. Id. at *20-22. In so holding, the Third Circuit drew a clear distinction between Rule 23 and Rule
12(b)(6) motions: “the Rule 23 inquiry does not, and should not, involve a Rule 12(b)(6) inquiry.” Id. at *20.
Plaintiffs selectively quote from the opinion to make it appear as though the Third Circuit somehow held that district
courts should reserve judgment on choice-of-law issues until later in the proceedings to avoid introducing legal
uncertainty into the litigation. But even this selective quotation – standing alone – does not support that argument
because the opinion makes clear that the Third Circuit is concerned about legal uncertainty being introduced to the
certification process: “By requiring district courts to assess the validity of unsettled state law claims at the
certification stage, we would needlessly introduce additional legal uncertainty into a certification process that does
not demand it.” Id. at *22.
2
The fact that a plaintiff may not need to plead reliance in order to survive a motion to dismiss for failure to state a
claim, see Group Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2, 13 (Minn. 2001), does not mean that no
conflict exists. If the proceedings continue, a plaintiff must still prove reliance under Minnesota’s Consumer Fraud
Act in order to succeed on a claim under that statute. Id. at 13-14; see also 301 Clifton Place L.L.C., 783 N.W.2d at
563.
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Protection Act, West’s RCWA 19.86.010, et seq. See, e.g., Kelley v. Microsoft
Corp., 251 F.R.D. 544, 550-51 (W.D. Wash. 2008) (holding conflict of law exists
between Washington Consumer Protection Act and Illinois Consumer Fraud Act
because latter does not have public interest requirement). And, as other decisions
in this district have recognized, there are substantial conflicts between the NJCFA
and Ohio’s Consumer Sales Protection Act, Ohio Rev. Code Ann. § 1345.09. See,
e.g., Agostino v. Quest Diagnostics Inc., 256 F.R.D. 437, 461-62 (D.N.J. 2009)
(holding actual conflict exists between NJFCA and Ohio consumer protection
laws).
Second, Section 148(2) of the Restatement (Second) of Conflict of Laws
provides the appropriate analytical framework. Section 148 generally applies to
claims involving fraud and misrepresentation. Arlandson, 792 F. Supp. 2d at 708.
But Section 148 is also divided into two subsection: Section 148(1) applies to
claims where the “plaintiff’s action in reliance took place in the state where the
false representations were made and received”, and Section 148(2) applies to
claims where the “plaintiff’s action in reliance took place in whole or in part in a
state other than that where the false representations were made.” Here, Plaintiffs
allege that Samsung’s misconduct, including the alleged misrepresentations and
omissions, emanated from its New Jersey office. Plaintiffs also allege that each
Plaintiff purchased their Refrigerator in their respective home state. That is, the
representations and reliance occurred in different states, and so Section 148(2)
applies. See Arlandson, 792 F. Supp. 2d at 708 (holding Section 148(2) applies
under similar facts). Section 148(2) requires courts to weigh the following
contacts: (a) the place, or places, where the plaintiff acted in reliance upon the
defendant’s representations; (b) the place where the plaintiff received the
representations; (c) the place where the defendant made the representations; (d) the
domicil, residence, nationality, place of incorporation and place of business of the
parties; (e) the place where a tangible thing which is the subject of the transaction
between the parties was situated at the time; and (f) the place where the plaintiff is
to render performance under a contract which he has been induced to enter by the
false representations of the defendant.
Third, looking at this framework, there is a sufficient factual basis for the
Court to make a choice-of-law determination because the allegations of the
Complaint provide the Court with adequate information regarding each contact it
must weigh under Section 148(2).
Fourth, analysis under Section 148(2) makes clear that each plaintiff has
more contacts with his or her home state than with the state of New Jersey. Of the
enumerated factors, only the place where the defendant made the representations
and the place of business of Defendant SEA weigh in favor of applying New
Jersey law. Indeed, each Plaintiff received the alleged misrepresentations and
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purchased their Refrigerator in his or her home state, where each Plaintiff resides
and where each Plaintiff’s Refrigerator allegedly failed. On balance, these factors
weigh against application of New Jersey law with regards to the consumer fraud
claims and in favor of application of the law of each Plaintiff’s home state. See,
e.g., Maniscalco v. Brother Int’l Corp., 793 F. Supp. 2d 696, 710 (D.N.J. 2011)
(weighing Section 148(2) factors and finding law of plaintiff’s home states applied
to claims for violation of consumer protection statute rather than law of forum);
Arlandson, 792 F. Supp. 2d at 709 (same); Penn. Emp., Benefit Trust Fund v.
Zeneca, Inc., 710 F. Supp. 2d 458, 471-72 (D. Del. 2010) (same).
Viewing these contacts through the lens of Section 6 makes it clear that the
law of each Plaintiff’s home state should apply to their consumer fraud claims.
Under Section 6(2), the relevant factors the Court must consider are: (a) the needs
of the interstate and international systems; (b) the relevant policies of the forum;
(c) the relevant policies of other interested states and the relative interests of those
states in the determination of the particular issue; (d) the protection of justified
expectations; (e) the basic policies underlying the particular field of law; (f)
certainty, predictability and uniformity of result; and (g) ease in the determination
and application of the law to be applied. Many of the factors are a wash. While
uniformity, ease of legal application, justified expectations, and the needs of the
interstate system are all clearly important in a case like this involving interstate
consumption of goods and a corresponding national class action, neither applying
the law of New Jersey or the laws of each consumer’s home state appears to better
serve those interests. While application of the law of the forum state would create
uniformity as to this particular litigation, it would not necessarily create uniformity
on a larger scale nor would it serve these other important issues, because the
particular law that would be applied would depend entirely on the forum of the
litigation and would vary depending on where plaintiffs chose to sue. Expectations
would be nearly impossible. And a narrower rule holding that the law of the
defendant’s home state always applied would directly defeat the ability of states to
protect their own citizens and would further encourage states to adopt limited
consumer protections statutes in hopes of providing a safe and inviting business
environment to manufacturers. But the policy factors of the states and this
particular field of law – viewed in the context of the factual contacts at issue in this
case – encourage application of the law of each Plaintiff’s home state. Consumer
protection statutes are largely intended to do just that – protect the consumer
residents of each state, and thus each state has an inherent policy interest in having
its consumer protection laws applied to its resident. See, e.g., In re Sigg Switz.
(USA), Inc. Aluminum Bottles Mktg. & Sales Practices Litig., MDL No. 2137,
2011 WL 64289, at *8 (W.D. Ky. Jan. 7, 2011); Agostino v. Quest Diagnostics
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Inc., 256 F.R.D. 437, 463 (D.N.J. 2009). And because no New Jersey resident is
suing, New Jersey’s interest in having its own law apply in this litigation is limited.
Thus, each Plaintiff’s home state has the most significant relationship to
each Plaintiff’s consumer fraud action. The Court will dismiss Plaintiffs’ claim for
relief under the NJFCA and grant Plaintiffs leave to amend the Complaint to plead
claims under the law of each Plaintiff’s home state.
D. Claim for Fraudulent Concealment/Non-Disclosure
With respect to Plaintiffs’ claim for fraudulent concealment and/or nondisclosure, Samsung argues only that Plaintiffs’ allegations fail to meet the
heightened pleading standard of Federal Rule of Civil Procedure 9(b). 3 Rule 9(b)
requires that “[i]n alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake,” although “[m]alice, intent,
knowledge, and other conditions of a person’s mind may be alleged generally.”
Allegations of a cause of action for fraudulent concealment are subject to Rule
9(b)’s requirements. See, e.g., Arcand v. Brother Intern. Corp., 673 F. Supp. 2d
282, 305 (D.N.J. 2009). Rule 9(b) essentially requires Plaintiffs to allege the who,
what, when, where, and how elements to state a claim arising in fraud. See in re
Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1423 (3d Cir. 1997).
Samsung does not argue that Plaintiffs have failed to allege any particular
element of a claim for fraudulent concealment under New Jersey law but rather
that the allegations are merely conclusory and do not provide Samsung with
sufficient notice of the basis for the alleged fraud. Specifically, Samsung claims
the allegations do not identify who at Samsung was aware of the Defect, when or
how they learned of the Defect, and how the decision was made to conceal the
Defect from customers. Plaintiffs argue that at this point in the proceedings – prior
to discovery – these types of facts would be wholly within the control of Samsung.
Plaintiffs are correct that they need not allege specific information that is
exclusively within Samsung’s knowledge or control, but they must still allege facts
suggesting fraudulent concealment and must still explain why the additional
missing information lies exclusively within Samsung’s control. See In re
Craftmatic Secs. Litig., 890 F.2d 628, 645 (3d Cir. 1989).
While the allegations of the Complaint are not nearly as sparse as Samsung
claims, Plaintiffs have failed to meet the particularity requirements of Rule 9(b).
3
In Complaint, Plaintiffs appear to allege that New Jersey law applies to all of their claims. Because the parties have
not contested this issue, the Court may assume that no conflict of law exists between the laws of the relevant states
with regard to fraudulent concealment and may apply New Jersey law. See Simon v. United States, 341 F.3d 193,
198 (3d Cir. 2003); MK Strategies, LLC v. Ann Taylor Stores Corp., 567 F. Supp. 2d 729, 734 n.8 (D.N.J. 2008).
7
First, Plaintiffs do not provide sufficient factual allegations to establish Samsung
knew of the Defect prior to the sales at issue in this litigation. Although Plaintiffs
allege that Samsung knew of the Defect as early as 2006 because of complaints
made by unspecified customers, they do not allege who at Samsung learned of
these complaints and they do not identify any particular individuals who
complained. Nor do Plaintiffs even allege the manner in which these complaints
were made. Plaintiffs do not explain how such knowledge would be exclusively
within Samsung’s control – indeed, if Plaintiffs are aware of these customers and
their early complaints, why would they not also have some beliefs or knowledge
about the specific complaints made or who the customers targeted? And although
Plaintiffs point to a BBC report in 2008 regarding an allegedly similar defect in
Samsung refrigerators sold in the United Kingdom and postings on a consumer
affairs website in 2009 and 2010, those events all appear to have occurred after the
purchases at issue in this litigation. Thus, they would not establish that Samsung
knew of the Defect prior to making any alleged omissions upon which Plaintiffs
may have relied in making their purchases.
For these reasons, the Court will dismiss Plaintiffs’ fraudulent concealment
claims.
E. Claims for Breach of Implied Warranties
First, as the parties concede, New Jersey law and Minnesota law relating to
causes of action for breach of an implied warranty appear to be substantially
similar; but New Jersey law conflicts with Ohio and Washington law on this same
claim. But the Court need not resolve this conflict because regardless of which
state’s law applies, Plaintiffs have failed to state a claim and the Court can dismiss
all claims for breach of implied warranty without conducting choice-of-law
analysis.
Under New Jersey law, an implied warranty cannot temporally exceed an
express warranty under New Jersey law. The operative statute is N.J.S.A. 12A:2317, which states:
Warranties whether express or implied shall be construed as
consistent with each other and as cumulative, but if such construction
is unreasonable the intention of the parties shall determine which
warranty is dominant. In ascertaining that intention the following rules
apply: (a) Exact or technical specifications displace an inconsistent
sample or model or general language of description. (b) A sample
from an existing bulk displaces inconsistent general language of
description. (c) Express warranties displace inconsistent implied
8
warranties other than an implied warranty of fitness for a particular
purpose.
The Complaint alleges that each Plaintiff’s Refrigerator failed after the one-year
period of the primary warranty had expired. Pointing to N.J.S.A. 12A:2-317,
Samsung argues that any implied warranty could not have lasted longer than that
same one-year period, and therefore any claim for breach of warranty under New
Jersey law must necessarily fail. See Nobile v. Ford Motor Co., 2011 WL 900119,
at *4 (D.N.J. Mar. 14, 2011) (relying on N.J.S.A. 12A:2-317 and dismissing claims
for breach of implied warranty where latent defect discovered after the expiration
of express warranty period).
Plaintiffs do not dispute Samsung’s interpretation of N.J.S.A. 12A:2-317,
but they instead argue that the fact that the defect manifested after the one-year
express warranty period is irrelevant because the warranty is unconscionable. 4
Plaintiffs argue that the one-year warranty period is unconscionable because
Samsung was aware of the cooling system defect and knew – or should have
known – that the products were not fit to serve their general purpose of keeping
food cool.
But Plaintiffs’ allegations fall far short of what would be necessary to makea
prima facie case for unconscionability. New Jersey law generally recognizes two
kinds of unconscionability: procedural unconscionability, that is, unfairness in the
formation of the contract; and substantive unconscionability, that is, excessively
disproportionate terms. Sitogum Holdings, Inc. v. Ropes, 800 A.2d 915, 921-22
(N.J. Super. Ch. 2002). Plaintiffs’ allegations are so sparse that it is difficult to
ascertain which kind of unconscionability is allegedly at issue. Plaintiffs’
allegations regarding unconscionability are, in total, that “[a]ny express limitation
or negation of Samsung’s implied warranties that the Refrigerators were fit to
perform their essential purpose, when such was not the case, would be
unreasonable and unconscionable and, accordingly, is unenforceable.” This is
precisely the kind of legal conclusion that the Court need not accept as true. The
allegations do not even begin to explain how exactly the warranty period is
unconscionable, and so Plaintiffs claim must fail under New Jersey law.
Plaintiffs’ claim also fails under either Ohio or Washington law. Both states’
laws require the plaintiff to show privity of contract with the defendant in order to
succeed on a claim for breach of implied warranty. See Curl v. Volkswagen of Am.,
Inc., 871 N.E.2d 1141, 1147-48 (Ohio 2007); Tex Enterprises, Inc. v. Brockway
Standard, Inc., 66 P.3d 625, 628-29 (Wash. 2003). But the Complaint contains no
4
And although the Court does not reach the issue, Plaintiffs may be correct that unconscionability is an exception to
the general rule that a party may not succeed on a claim for breach of warranty where the product failed outside the
express warranty period. See, e.g., In re Samsung DLP Television Class Action Litig., No. 07-2141, 2009 WL
3584352, at *5 (D.N.J. Oct. 27, 2009).
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allegations that any plaintiff purchased a product directly from Samsung, and so
Plaintiffs cannot state a claim under either state’s laws.
For these reasons, the Court will dismiss Plaintiffs’ claim for breach of
implied warranty, but will make no final determination as to which state’s law
applies to that claim should Plaintiffs choose to amend their complaint.
F. Unjust Enrichment
The parties agree – and review of the law shows – that no conflict of law
exists between the laws of New Jersey, Minnesota, Ohio, and Washington for the
purposes of Plaintiffs’ unjust enrichment claim. As such, the Court will apply New
Jersey law, the law of the forum, in its rulings related to this claim. See Rowe, 917
A.2d at 771 (N.J. 2007).
Under New Jersey law, an indirect purchaser cannot succeed on a claim for
unjust enrichment. When an individual purchases a consumer product from a thirdparty store and not the manufacturer, the purchaser has not conferred a benefit
directly to the manufacturer such that the manufacturer could be found to have
been unjustly enriched. Under substantially similar facts, the Court has frequently
dismissed such claims in class-action cases. See, e.g., Hughes v. Panasonic
Consumer Electronics, Co., 2011 WL 2976839, at *27 (D.N.J. July 11, 2011)
(dismissing unjust enrichment claim on Rule 12(b)(6) motion where plaintiffs in
purported class action purchased allegedly defective product from third-party
sellers and citing cases reaching similar outcome under similar facts); Arlandson,
792 F. Supp. 2d at 711-12 (same). Here, because Plaintiffs purchased their
Refrigerators through retailers and not directly from Samsung, they are indirect
purchasers and may not succeed on a claim for unjust enrichment.
Plaintiffs state – with almost no elaboration – that the New Jersey Supreme
Court’s decision in Lee v. Carter-Reed Co., L.L.C., 4 A.3d 561 (N.J. 2010) is
contrary to this authority. But Lee does not involve a motion to dismiss for failure
to state a claim; rather, in Lee, the New Jersey Supreme Court reversed the
holdings of lower courts that had denied the plaintiff’s motion for class
certification under New Jersey state law. See id. at 582-83. Granted, the named
plaintiff in Lee was an indirect purchaser and did raise a claim for unjust
enrichment, see id. at 567, but the New Jersey Supreme Court never even
considered whether the plaintiff could have stated a claim for unjust enrichment,
nor does it appear that the lower courts reached that issue. Lee focused solely on
class certification issues relating to the NJFCA, and explicitly declined to decide
those same issues as they relate to the plaintiff’s claim for unjust enrichment. Id. at
10
583 (“[W]e decline to resolve whether class certification should be granted on the
unjust-enrichment and express- and implied-warranty claims.”). 5
Thus, the Court will dismiss Plaintiffs’ claim for unjust enrichment. In light
of the fact that an indirect purchaser cannot succeed on a claim for unjust
enrichment against the manufacturer, further amendment would be futile, and so
the dismissal will be with prejudice. See Grayson v. Mayview State Hosp., 293
F.3d 103, 108 (3d Cir. 2002)
III.
Conclusion
For the reasons stated above, Defendants’ Rule 12(b)(6) motion is
GRANTED IN PART and DENIED IN PART. Counts One, Two, and Three will
be dismissed without prejudice, and the Court will grant Plaintiffs leave to make
specific amendments to address the deficiencies described above. Count Four will
be dismissed with prejudice. An appropriate order follows.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
5
The only other case Plaintiffs cite is In re Ford Motor Co. E-350 Van Prods. Liab. Litig., No. 03-4558, 2011 WL
601279 (D.N.J. Feb. 16, 2011), but In re Ford actually stands for the exact opposite proposition for which Plaintiffs
cite it. See id. at *9 (“Unlike California and Pennsylvania law, courts in New Jersey have consistently required the
showing of a direct benefit to establish a claim for unjust enrichment.”). Plaintiffs selectively quote from the portion
of In re Ford relating to California and Pennsylvania law while completely excluding the holding regarding New
Jersey law. Plaintiffs should be more careful of their representations in legal briefs.
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