DZIELAK et al v. WHIRLPOOL CORPORATION et al
Filing
360
OPINION. Signed by Judge Kevin McNulty on 12/5/19. (jc, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CHARLENE UZIELAK, SHELLEY
BAKER, FRANCIS ANGELONE,
BRIAN MAXWELL, JEFFREY
McLENNA, JEFFREY REID, KARl
PARSONS, CHARLES BEYER,
JONATHAN COHEN, JENNIFER
SCHRAMM, and ASPASIA CHRISTY,
Piaintiffs,
Civ. No. 12-89 (KM) (JBC)
OPINION
v.
WHIRLPOOL CORPORATION,
LOWE’S COMPANIES, INC., SEARS
HOLDING CORPORATION, THE
HOME DEPOT, INC., FRY’S
ELECTRONICS, INC., APPLIANCE
RECYCLING CENTERS OF AMERICA,
INC., LOWE’S HOME CENTER, AND
LOWE’S HOME CENTER, LLC,
Defendants.
KEVIN MCNULTY, U.S.D.J.:
Now before the Court in this class action are two motions for summary
judgment: one filed by defendants Whirlpool Corporation, Lowe’s Home
Centers, LLC, Sears Holding Corporation, and Fry’s Electronics, Inc. (DE 309);
and one filed by defendant The Home Depot, Inc. (DE 315).’ For the reasons set
forth below, the motions are GRANTED. Also before the Court is defendant
Whirlpool Corporation’s motion to decertify classes (DE 312), which is DENIED
as moot.
The named plaintiffs, purchasers of Maytag washing machines, are
Charlene Dzielak, Shelley Baker, Francis Angelone, Brian Maxwell, Jeffrey
“DE
“
refers to the docket entry number in this case.
McLenna, Jeffrey Reid, Kari Parsons, Charles Beyer, Jonathan Cohen, Jenniier
Schramm, and Aspasia Christy.
The first named defendant is the manufacturer of Maytag washing
machines, Whirlpool Corporation (“Whirlpool”).2 The remaining defendants are
the retailers from whom the plaintiffs purchased the Maytag washers: Lowe’s
Home Center (“Lowe’s”), Sears Holding Corporation (“Sears”), The Home Depot,
Inc. (“Home Depot”), Fry’s Electronics, Inc. (“Fry’s”), and Appliance Recycling
Centers of America, Inc. (“ARCA”).
The Department of Energy (“DOE”) Energy Star program authorizes
manufacturers to affix an Energy Star label signifying that an appliance meets
certain standards of energy efficiency. Each Maytag washing machine at issue
in this case bore an Energy Star label at the time of purchase. Thereafter,
however, the DOE determined that Maytag Centennial washing machine model
number C6-1 did not comply with Energy Star requirements, and the
Whirlpool is a Delaware corporation with its principal place of business in
Benton Harbor, Michigan. (DE 29 ¶ 15).
2
Lowe’s is a North Carolina corporation with its principal place of business in
Mooresville, North Carolina; Sears is a Delaware corporation with its principal place of
business in Hoffman Estates, Illinois; The Home Depot is a Delaware corporation with
its principal place of business in Atlanta, Georgia; Fry’s Electronics is a California
corporation with its principal place of business in San Jose, California; and ARCA is a
Minnesota corporation with its principal place of business in Minneapolis, Minnesota.
(DE 29 ¶916—20).
3
Via stipulation, Plaintiffs voluntarily dismissed Lowe’s Companies, Inc., a party
named in the First Amended Complaint. (DE 63). Lowes Home Center, a wholly owned
subsidiary of Lowe’s Companies, Inc., agreed to be substituted as a named defendant
in the case, as it is responsible for the sale of the appliances at issue in this action. Id.
The original complaint, which was filed on January 1, 2012 and captioned
Dzielak v. Whirlpool Corp., No. 12-cv-89, alleged claims against Whirlpool, Sears, and
Lowe’s. (DE 1). Those defendants proposed to consolidate Dzielak with a related case,
Angelone u. Whirlpool Corp., No. l2-cv-1039. The Home Depot, a defendant only in
Angelone, consented to the consolidation. (DE 28). On April 30, 2012, Plaintiffs filed
the First Amended Consolidated Complaint (“FAC”). The FAC included claims against
defendants The Home Depot, Frye’s Electronics, and ARCA, in addition to the
defendants originally named in the unconsolidated Dzielak case. (DE 29).
2
Environmental Protection Agency (“EPA”) disqualified the machine from the
Energy Star program. That noncompliance determination and disqualification
allegedly apply equally to Maytag Centennial model numbers C6-0, C6-1, and
C7-0.
According to Plaintiffs, Energy Star-qualified washing machines cost
more than others but save consumers money over time because they consume
less energy. Plaintiffs allege that they paid a price premium attributable to the
“Mislabeled Washing Machine’s supposed energy efficiency and ENERGY
STAR® qualification.” (DE 29
¶ 46). But those non-compliant machines, say
Plaintiffs, wound up costing more to operate than a truly Energy Starcompliant machine. (Id.
¶ 47).
The complaint asserts causes of action for breach of express warranty,
breach of the implied warranty of merchantability, unjust enrichment, violation
of the Magnuson-Moss Warranty Act, 15 U.S.C.
§ 2301, etseq. (“MMWA”), and
violations of California, Florida, Indiana, Michigan, New Jersey, Ohio, and
Texas consumer fraud statutes.5 Other purchasers of these washing machines,
Plaintiffs say, stand in precisely the same shoes, and Plaintiffs therefore filed
their action as a putative class action on behalf of such purchasers.
Plaintiffs allege that C6-0 is the “basic model” machine. According to Plaintiffs,
C6-1 adds an EMI/RFI filter to reduce electrical and radio interference, while C7-0
adds a glass top for cosmetic purposes. The interior and exterior parts are otherwise
virtually identical, and the machines have identical energy usage, water usage, and
load capacity. The three models share the same motor, cabinet, electric wiring, control
knobs, timer knobs, wash basket, agitator, drive tube, pump, and clutch. (DE 29 ‘ 2.
n.l).
4
Those state consumer fraud statutes are: California Consumer Legal Remedies
Act, Civil Code § 17200, et seq.; California Unfair Competition Law, Bus. & Prof. Code
17200, et seq.; California False Advertising Law, Business and Professions Code §
17500, et seq.; Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201,
et seq.; Indiana Deceptive Consumer Sales Act, md. Code Ann. § 24-5-0.5-1, et seq.;
Michigan Consumer Protection Act, Mich. Comp. Laws 445.901, et seq.; New Jersey
Consumer Fraud Act, N.J.S.A. § 56:8-1; Ohio Consumer Sales Practices Act, Ohio Rev.
Code Ann. § 1345.01, et seq.; and Texas Deceptive Trade Practices Act, Tex. Bus. Com.
Code § 17.41, et seq. The Michigan statutory (DE 78 at 40) and MMWA (DE 127 at 1)
claims were dismissed in their entirety.
5
3
Named plaintiffs Maxwell, Christy, and Baker bought their washers in
California; Reid in Florida; Beyer in Indiana; McLenna in Michigan; Dzielak and
Angelone in New Jersey; Parsons in Ohio; Cohen in Texas; and Schramm in
Virginia.
Plaintiffs moved to certify the class on two theories of harms: (1) that the
washers’ price was inflated because consumers pay a premium for Energy Starqualified machines; and (2) that each purchaser incurred greater water and
energy costs than he or she would have if the washer had been truly Energy
Star-qualified. I certified Plaintiffs’ class on the price-premium energy theory
only, against Whirlpool only (because it was Whirlpool that
was
responsible for
obtaining Energy Star certification and placing the Energy Star labels on the
washers). The class now comprises subclasses of purchasers in those seven
states: California, Florida, Indiana, New Jersey, Ohio, Texas, and Virginia.
I did not certify the class against the retailer defendants, i.e., Lowe’s,
Sears, The Home Depot, Fry’s, and ARCA. Against them, only the individual
claims of Dzielak, Angelone, Baker, Maxwell, Reid, Parsons, Beyer, Cohen,
Schramm, and Christy are currently pending.
I.
FACTS
A. Background
The Energy Policy and Conservation Act of 1975 (“EPCA”), 42 U.S.C.
§
6291, et seq., together with the National Energy Conservation Policy Act of
1978 (“NECPA”) and National Appliance Energy Conservation Act of 1987
(“NAECA”), established an energy conservation program for major household
appliances. (DE 78 at 4). These statutes and related regulations led to the
Energy Star program, “a voluntary program to identify and promote energyefficient products and buildings in order to reduce energy consumption,
improve energy security, and reduce pollution through voluntary labeling of, or
other forms of communication about, products and buildings that meet the
highest energy conservation standards.” 42 U.S.C.
4
§
6294(a). To qualify for the
Energy Star program, a product must meet certain efficiency standards
promulgated by the DOE. See C.F.R.
§
430.1, et seq.
The Energy Star program was authorized by the Energy Policy and
6291—6309. (DE 349
§
Conservation Act. 42 U.S.C.
¶
1). Energy Star is a
“voluntary program to identify and promote energy-efficient products.” 42
U.S.C.
§
6294a(a). (DE 349
1
2). Under the program, the DOE creates Energy
Star testing standards, and the EPA enforces them. (DE 349
3). Products can
¶
earn Energy Star-qualification by meeting the energy efficiency testing
standards and, if applicable, the water efficiency testing standards set by the
DOE. (DE 349
¶
4). Products that earn Energy Star-qualification may display
the Energy Star logo. (DE 349
¶
5).
Separately, the Federal Trade Commission (“FTC”) requires that all
clothes washers display an EnergyGuide label. (DE 349
¶
10). Consumers may
consult the EnergyGuide label to obtain information about a clothes washer’s
relative electricity consumption and operational costs compared to other
similar models. (DE 349
¶
11). For clothes washers, the EnergyGuide label
contains information about how many kWh per year the clothes washer will
use under certain laboraton’ conditions, and how the operational costs
compare to other, similar models, based on an assumed number of washes per
year and using national average energy costs. (DE 349
¶
12). Until 2011, there
existed no analogous federal labeling requirement that included the absolute
and relative water consumption of a clothes washer. (DE 349
13).
¶
In September 2010, the EPA published a presentation entitled “Energy
Star® Sales Associate Training
—
Clothes Washers.” (DE 325
11). The EPA’s
¶
presentation also included a slide showing the ENERGY STARg label has an
influence on 91% of consumers. (DE 325
book entitled “Energy Star® Products
—
¶
13). In 2014, the EPA published a
20 Years of Helping America Save
Energy, Save Money and Protect the Environment.” In the book, the EPA stated
that “ENERGY STAR is a global symbol for energy efficiency.
.
percent of U.S. consumers recognize and understand the label
¶
14).
3
.
More than 80
.
.
.
.
.“
(DE 325
Michael Todman, President of Whirlpool North America, explained that
ENERGY STAR qualifications essentially say that there are
significant savings from a consumer perspective. So against the
conventional appliances for electricity, okay, with an appliance
that’s ENERGY STAR qualified is on average about a 31% savings.
If you put it into real terms, there is a slight premium that
consumers will pay for [Energy Starj appliances. But they’re
looking for pay back and right now on average the payj-jback
period for [Energy Stan qualified appliances is around three, a
little over three years, 3.4 years.
(DE 325 If 16). Whirlpool’s Chairman and Chief Executive Officer, Jeff Fettig
explained that
[y]ou can see the conventional appliance, which is what I would
call a non-ENERGY STAR appliance. Although the initial purchase
price is less, the cost of ownership over a 10-year cycle is higher.
The product on the right is a comparable product with energy
efficiency ratings. You pay a little bit more on the front end, but
you save about 20% over the life of the product.
(DE 325
¶
18).
Plaintiffs now maintain that the Energy Star logo is widely recognized
and understood to be a key influencer of appliance purchase decisions. (DE
325 ¶ 19—28). Plaintiffs allege that they all understood the Energy Star label
when they purchased their Maytag washing machines. (DE 325
¶
19—28).
Defendants disagree with this characterization and that any plaintiffs
testimony- was similar to the others. (DE 325
¶
19—28). Instead, Defendants
allege that Plaintiffs gave widely disparate interpretations of what they
understood the Energy Star logo to mean. (DE 325
¶
19—28).
Tests employed by the DOE to calculate compliance with Energy Star are
the same as those used to populate the data on the EnergyGuide label. (DE
15). In fact, “[a]ll of the metrics used by the EnergyGuide and ENERGY
STAR labeling programs are based on the DOE test procedure.” (DE 349 ¶ 16).
Between 1997 and 2012, those tests were found in 10 CFR 430, Subpart B,
349
¶
AppendixJl (the ‘Ui Test Procedure”). (DE 349
6
¶
17).
B. The Ji Test Procedure
The Ji Test Procedure is designed to be repeatable between laboratories.
(DE 349
¶
18). Under the Ji Test Procedure, a clothes washer’s ener
efficiency is measured by the Modified Energy Factor (“MEF”) (DE 349
¶
21)
and a clothes washer’s water efficiency is measured by the Water Factor (“WF”)
(DE 349
¶
22). The MEF is calculated by dividing the capacity of the clothes
washer’s “clothes container” by the total electricity consumption of the clothes
washer. (DE 349
¶
23). The WF is calculated by dividing the per-cycle water
consumption (in gallons) by the capacity of the clothes washer’s “clothes
container.” (DE 349
¶
24).
Beginning in January 2007, all standard top-loading clothes washers
were required to have an MEF of no less than 1.26, and as of January 2011, a
WF no greater than 9.5. (DE 349
¶
26). Before January 2011, there was no
federal minimum WF for clothes washers. (DE 349
¶
27). Between 2009 and
2011, all Energy Star top-loading clothes washers were required to have an
MEF no less than 1.8, and a WF no greater than 7.5. (DE 349
¶
28). To
determine the capacity of a clothes washer’s “clothes container,” the J 1 Test
Procedure instructed manufacturers to “[m]easure the entire volume which a
dry clothes load could occupy within the clothes container during washer
operation” by lining the container with a plastic sheet and filling it with “the
maximum amount of water” to its “uppermost edge.” (DE 349
¶
30).
C. The DOE Instructed Whirlpool How to Measure Its Top-Loading
Washers for Energy Star Compliance
The DOE established the testing procedure waiver regulations found in
10 CFR 430.27 (DE 349
¶
45), and on March 20, 2007, Whirlpool sent a
“Petition for Waiver & Application for Interim Waiver regarding Measurement of
Clothes Container Capacity in Vertical Axis Clothes Washers” (“Petition”) to the
DOE, (DE 349
9
46). Whirlpool expressed to the DOE that the Ji Test
Procedure “does not identif or limit specific components of the clothes washer
that form the clothes container.” (DE 349
¶
49). Whirlpool further explained
that “[i]n the absence of more specific language, it is permissible and fully
7
consistent with Ithe J 1 Test Procedure] to construe clothes container to mean
the space formed by inter-related components within the clothes washer, such
as the top of the tub cover.” (DE 349
¶
50). Accordingly, Whirlpool requested
from the DOE approval “to measure the clothes container capacity to the upper
edge of the tub cover in vertical axis clothes washers containing such a
component.” (DE 349
¶
51).
11 Whirlpool Revised Its Internal Test Procedure for All TopLoading Clothes Washers in Light of the DOE’s Guidance
Whirlpool revised its internal test procedure. (DE 349
¶
64). Accordingly,
for all top-loading clothes washers, Whirlpool filled the “clothes container” to
the upper edge, or “top,” of the tub cover to determine its capacity. (DE 349
65). Specifically, the T-396 Test Procedure’s instruction were to “lmJeasure
the entire volume, which a dry clothes load could occupy within the clothes
¶
container while the machine is in operation.” (DE 349
¶
66). In the T-396 Test
Procedure, Whirlpool included several figures showing several clothes washers
and their various clothes container configurations. (DE 349
¶
67). These figures
show the wide variability of clothes washers and clothes container
configurations. (DE 349
¶
68). These differences are functions of engineering,
design, and aesthetic choices made during the design and production process.
(DE 349
¶
69).
The DOE later designated the “top of the tub cover” as “Fill Level 4.” (DE
349
¶
71).
E. The Washers Met Energy Star Requirements When Tested in
Accordance with the DOE’s May 14, 2007 Guidance
Before 2009, most Energy Star top-loading clothes washers cost
hundreds of dollars more than conventional machines. (DE 349
¶
72).
Whirlpool designed Maytag Centennial models MVWC6ESWWO (“06-0”) and
MWIC6ESWW1 (“06-1”) (together, the “CS”) and MVWC7ESWWO (“C7-0”) with
an “Auto Load Sensing” feature. (DE 349
¶
74).
To describe components and features of clothes washers that pertain to
energy and water consumption, Whirlpool uses “energy categories.” (DE 349
8
¶
75). The C6-0 was designated energy category V9Ua2H5T(3B). (DE 349
¶
76).
The C6-1 and C7-O were designated energy category V9Ua2H5W(3B). (DE 349
¶
77). To test the C6-0, Whirlpool measured the capacity of the “clothes
container” to the “top of the tub cover,” or Fill Level 4. (DE 349
¶
79). To test
the C6- 1, Whirlpool measured the capacity of the “clothes container” to the “top
of the tub cover,” or Fill Level 4. (DE 349
¶
83). The C7-0 was not separately
tested by Whirlpool because it has the same energy category as the C6- 1 and
thus should have the same results. (DE 349
¶
88).
Whirlpool started shipping the washers to retailers in April 2009. (DE
349
¶
90).
F. Nearly Every Named Plaintiff—and Most Washer Purchasers—
Bought Washers Before the DOE Changed Its Interpretation of
“Clothes Container”
Roughly twenty-three percent of all C6 sales occurred during November
2009, when The Home Depot6 and Lowe’s held Black Friday sales promotions.
(DE 349 ¶ 97). During the Black Friday sales, The Home Depot and Lowe’s
dramatically reduced the price of the C6—below the MSRP. (DE 349
¶
98).
Francis Angelone represents a New Jersey subclass of washer
purchasers. (DE 349
¶
98). On November 27, 2009, Angelone bought his
washer at The Home Depot. (DE 349
washer. (DE 349
¶
¶
100). Angelone paid $299.99 for his
101). Angelone waited until Black Friday to buy his washer
and “got a good deal on it.” (DE 349
¶
102). Angelone discussed the washer’s
price and the approaching Black Friday sale, but he did not recall discussing
the washer’s Energy Star status with the salesperson. (DE 3 15-5 at 3 1:22—
33:1).
Brian Maxwell represents a California subclass of washer purchasers.
(DE 349
¶
¶
107). On November 27, 2009, Maxwell bought his washer. (DE 349
108). Maxwell paid $399.99 for his washer. (DE 349
¶
109).
Three plaintiffs purchased their washer from Home Depot: Francis Angelone,
Aspasia Christy and Jonathan Cohen (collectively, the “Home Depot Plaintiffs”).
6
9
Jonathan Cohen represent a Texas subclass of washer purchasers. (DE
349
¶
¶
119). On November 28, 2009, Mr. Cohen bought his washer. (DE 349
120). Mr. Cohen paid $299.00 for his washer and bought his washer during a
Black Friday sale. (DE 349
¶
121). Cohen specifically waited for Black Friday to
buy his washer, and it “absolutely” affected the timing of when he bought his
washer—so he could “get a better deal.” (DE 349
¶
122). Price was “[d]efinitely
a factor” and probably Cohen’s first criteria. (DE 349
¶
123). Cohen bought his
washer because it “was priced right” and “jt]here wouldn’t have been enough
savings on a non-Energy Star to make it worth it.” (DE 349
¶
124). Cohen did
not speak to a salesperson about the washer before he bought it. (DE 3 15-9 at
32:23—33:1).
Charlene Dzielak represents a New Jersey subclass of washer
purchasers. (DE 349 9130). On November 30, 2009, Dzielak bought her
washer. (DE 349 ¶ 131). Dzielak paid $409.00 for her washer. She does not
recall who put out Energy Star advertisements. (DE 349
¶
136).
Jennifer Schramm represent a Virginia subclass of washer purchasers.
(DE 349
¶
¶
138). On January 9, 2010, Schramm bought her washer. (DE 349
139). Schramm paid $493.20 for her washer. (DE 349
¶
140). At the time
Schramm bought her washer, she had not read any technical regulations of the
Energy Star program. (DE 349 9142). She had also not read any Energy Star
test procedures. (DE 349
¶
145). Schramm did not have any specific
understanding of how the government controls the Energy Star program. (DE
349
¶
146). She also did not know whether the test procedures called for
measuring the capacity of the clothes washer. (DE 349 9147).
Charles Beyer represents an Indiana subclass of washer purchasers. (DE
349
¶
148). On March 18, 2010, Beyer bought his washer. (DE 349
Beyer paid $457.49 for his washer. (DE 349
¶
¶
149).
150).
Kari Parsons represents an Ohio subclass of washer purchasers. (DE 349
¶
156). On March 27, 2010, Parsons bought her washer. (DE 349 9157).
Parsons paid $492.99 for her washer. (DE 349
10
¶
158).
Aspasia Christy represents a California subclass of washer purchasers.
(DE 349
¶
193). On September 15, 2010, Christy bought her washer. (DE 349
¶ 194). Christy paid S464.09 for her washer. (DE 349 ¶195). Christy does not
recall discussing the Energy Star status of the washer with an employee of The
Home Depot. (DE 315-7 at 125:11—126:2)
Jeffery Reid represents a Florida subclass of washer purchasers. (DE 349
204). “[un or about October 2010,” Reid bought his washer. (DE 349 ¶ 205).
Reid paid “approximately” $549.00 for his washer. (DE 349 ¶ 206). Reid has no
¶
“specific” understanding of either “absolute numbers or percentages” of savings
that the Energy Star logo supposedly implied above what was displayed on the
Energy Guide label. (DE 349
¶
210).
Shelley Baker represents a California subclass of washer purchasers.
(DE 349
¶
¶
212). On December 1, 2010, Baker bought her washer. (DE 349
213). Baker paid $439.93 for her washer. (DE 349
¶
214).
Each Maytag washing machine at issue contains the Energy Star logo
permanently affixed to the machine’s control panel. (DE 325
¶
1). That
particular Energy Star logo is roughly the size of a postage stamp. (DE 325
¶
2). Every unit purchased by every class member had one or more Energy Star
logos affixed. (DE 3251 9).
G. The DOE and EPA Reached a Memorandum of Understanding
On September 30, 2009, the DOE and the EPA signed a Memorandum of
Understanding (“MOU”), designating the EPA as the “brand manage? for the
Energy Star program and the DOE as responsible for “monitoring and verifying
test procedure compliance and the development of Federal test procedures and
metrics.” (DE 349 ¶j 92 & 93). In late 2009, the DOE created a webpage on the
program website for “Frequently Asked Questions.” (DE 349
¶
95).
H. The DOE Changed Its Interpretation of the Term “Clothes
Container”
On May 13, 2010, the DOE issued draft guidance in FAQ form, which
contained proposed guidance about how to interpret the term “clothes
container.” (DE 349
¶
162). According to the DOE’s draft guidance, “Fill Level
11
3” corresponded to “the highest horizontal plane that a clothes load could
occupv.”(DE 349 ¶ 166). The DOE requested that industry members submit
comments on the DOE’s proposal. (DE 349
¶
167). On June 9, 2010, Whirlpool
submitted its “Response to DOE’s draft interpretation of the test procedure for
measuring the capacity of clothes washers.” (DE 349 ¶ 168). Whirlpool’s
position was that the DOE’s proposed “Fill Level 3” was inconsistent with the
text of the J1 Test Procedure, was inconsistent with actual consumer use
habits, and would undermine the certainty and reliability of the test
procedures. (DE 349 1169).
349
¶
On July 6, 2010, the DOE issued its final guidance in FAQ format. (DE
170). The DOE stated that “the upper-most edge of the clothes container
shall be considered the highest point of the inner-most diameter of the tub
cover”—what the DOE now calls “Fill Level 3.” (DE 349 ¶ 171). The DOE did
not explicitly set an effective date or phase-in period for the FAQ. (DE 349
¶
179).
Whirlpool changed its testing procedures for all new models of washers.
(DE 349 ¶ 181). Whirlpool had only a limited number of energy and water
testing labs that it could use to accomplish this effort. (DE 349 ¶ 182). This
constituted a multi-month effort, and completion required more than twothousand hours of laboratory time. (DE 349 ¶ 183). During this time, Whirlpool
kept the DOE apprised of its progress. (DE 349 1184).
1. The DOE Notified Whirlpool That a Single C6-1 Failed Stage I
Verification Testing
In August 2010, the DOE issued an “FAQ for: ENERGY STAR Verification
Testing Pilot Program.” (DE 349 ¶ 189). In that FAQ, the DOE announced that
it had “initiated a pilot testing program to ensure that products bearing the
ENERGY STAR logo deliver the efficiency consumers expect.” (DE 349 ¶ 190).
Regarding the testing process, the DOE stated that “[cjonsistent with
ENERGY STAR appliance specifications, if the results of the Stage I test
indicate that the energy consumption is no more than 5% greater than the
ENERGY STAR program requirements, the unit will be deemed to have passed
12
the screening test and no further testing will be conducted.” (DE 349 ¶ 191).
The DOE further declared that “[ijf the results of the screening test show
energy consumption exceeding the program requirements, the manufacturer
will be given 10 days to request that product be moved to Stage II testing.” (DE
349
¶
192).
On September 20, 2010, Whirlpool received a letter from the DOE
indicating that “[t]he Maytag clothes washer model [C6-1] was selected for
testing as part of the ENERGY STAR® Verification Testing Pilot Program.” (DE
349 ¶ 198). Tn this “Stage I” testing, the DOE calculated the single washer’s
MEF as 1.78 (1.1% below the minimum requirement of 1.8) and the WF as 8.3
(10.7% above the maximum requirement of 7.5). (DE 349
¶
199). Accordingly,
the DOE declared that “the clothes washer model identified below Maytag
Model C6-1] does not satisfy the ENERGY STAR Program’s energy-efficiency
specifications.” (DE 349 ¶ 200). The DOE informed Whirlpool that it could
request Stage II testing of additional units. (DE 349
¶
201). The DOE further
instructed Whirlpool that, if it did not request additional testing by September
30, 2010, “DOE will find that Maytag model [C6-1] failed testing, and refer the
matter to Environmental Protection Agency to begin the process of disqualifying
the model and its derivatives from the ENERGY STAR Program.” (DE 349
202). On September 30, 2010, Whirlpool requested Stage II testing. (DE 349
¶
¶
203).
In December 2010, Whirlpool discontinued production of the washers in
accordance with its long-term plan to replace one engineering platform with
another. (DE 349
¶
¶
221). Whirlpool manufactured no units in 2011. (DE 349
222). Whirlpool shipped only a handful of washer units to retailers in the
seven states at issue in 2011. (DE 349
¶
223).
J. The DOE Notified Whirlpool That Its Washers Would Remain
Energy Star Qualified
On January 19, 2011, the DOE notified Whirlpool that it had tested three
additional C6- 1 units plus the same unit the DOE previously tested. (DE 349
¶
224). The DOE informed Whirlpool that those units did not comply with
13
Energy Star requirements. (DE 349
¶
225). The DOE instructed Whirlpool that
it could “respond to this notification no later than February 9, 2011.” (DE 349
¶ 227). The DOE stated further, “In your response, you may present to DOE
conclusive manufacturing or design evidence or quality assurance information
on why this product did not meet the ENERGY STAR Program’s energyefficiency specifications.” (DE 349 ¶ 228). The DOE made clear that the 06iwould remain designated “ENERGY STAR qualified” in the interim: “The
product will remain designated as ENERGY STAR qualified during this twenty[
}day period.” (DE 349 229). The DOE stated further, “If you do not respond
within twenty days or your response does not adequately demonstrate to DOE’s
satisfaction that the model complies with ENERGY STAR program
requirements, DOE will find that the Maytag clothes washer model [06-1] failed
testing, and refer the matter to the U.S. Environmental Protection Agency (EPA)
to begin the process of disqualifying the model and its derivatives from the
ENERGY STAR Program.” (DE 349 ¶ 230). The DOE’s January 19, 2011 letter
included the DOE’s preliminary findings and provided notice to Whirlpool of
potential final findings, subject to Whirlpool’s actions. (DE 349
¶
231).
On February 8, 2011, Whirlpool responded to the DOE’s January 11,
2010 letter. (DE 349 ¶ 232). Whirlpool noted that while using Fill Level 4, the
clothes container of a C6-i had a measured capacity of 3.43 cubic feet,
whereas under Fill Level 3, the DOE measured the capacity of the clothes
container of a 06-1 as either 3.06 cubic feet or 3.07 cubic feet. (DE 349
¶
235).
Whirlpool informed the DOE that “Whirlpool discontinued manufacture of the
Washer in December[] 2010.” (DE 349 ¶ 237). Whirlpool also informed the DOE
that it “has none of these units remaining in inventory for sale in the United
States.” (DE 349
¶
238).
K. The Washers Failed Testing Because the Tested Capacity
Changed, but the Washers Remained the Same
The four Co-i units failed the DOE’s verification testing solely because
the measurement under Whirlpool’s tests differed from that under the DOE’s
tests. (DE 349 ¶ 239). The washers themselves did not change; between the
14
Whirlpool tests and the DOE tests, the only “feature” that changed about the
washers was their tested capacity. (DE 349
¶
241). This change in tested
capacity affected the washers’ MEF and WF values. (DE 349
¶
243).
L. The DOE Referred the Matter to the EPA for “Appropriate
Action”
On March 16, 2011, the DOE notified the EPA of its verification testing.
(DE 349
¶
255). The DOE notified the EPA that “Whirlpool explained that the
discrepancy between DOE’s test results and Whirlpool’s own testing stemmed
from the measurement of the clothes container capacity.” (DE 349
¶
256). The
DOE did not refer the matter to the EPA “to begin the process of disqualifying
the model and its derivatives from the ENERGY STAR Program.” (DE 349
¶
257). Rather, the DOE referred the matter to EPA “for appropriate action.”
(DE 349
¶
258).
On March 17, 2011, Whirlpool informed DOE that it had “undertaken
significant effort to re-rate our current washers in conformance with the new
Capacity Guidance.” (DE 349
¶
260). On March 23, 2011, the DOE wrote to
Whirlpool noting Whirlpool’s progress in “retesting and recertifying its pre
existing clothes washer models to conform” to the revised Fill Level guidance,
and that Whirlpool was expected to complete that process by the end of April
2011. (DE 349
¶
261). The DOE’s letter continued that “[i]n light of these
developments, the Department is interested in bringing this investigation to a
close.” (DE 349
¶
262).
On approximately May 7, 2012, the EPA added model C6-lto its list of
“Non-Lighting Products Disqualified from the ENERGY STAR® Program.” (DE
349
¶
263). Between March 16, 2011, the date on which the matter was
referred to the EPA, and May 7, 2012, Whirlpool had received no
communication from the EPA concerning the washers. (DE 349
¶
264).
According to the EPA’s own published disqualification procedures, when the
EPA believes a product may warrant disqualification from the Energy Star
program, the EPA should notify the manufacturer in advance and provide
15
twenty days to submit a written response to that proposed action. (DE 349
¶
266).
M. Plaintiffs’ Understanding of Energy Star
Plaintiffs hired two survey experts, Dr. J. Michael Dennis and Dr. R.
Sukumar. (DE 349
¶
267). Dr. Dennis was retained to perform a “contingent
valuation” survey to “measure the price premium, if any, attributable to the
Energy Star label” on the washers. (DE 349
¶
268). Dr. Sukumar was retained
“to estimate the price premium, if any, attributable to the Energy Star logo on
[the washers] through the use of a conjoint analysis.” (DE 349
¶
269).
Defendants engaged Dr. Carol Scott as a survey expert. (DE 349
¶
273).
Among other things, Dr. Scott was retained “to determine what the Energy Star
logo means to purchasers of top-loading washing machines, and whether or
not there is any consistent understanding among consumers of the type and
specific amount of savings they may expect to experience when purchasing a
top loading washing machine because it carries the Energy Star logo.” (DE 349
¶
274). More specifically, Dr. Scott “was asked to determine whether
consumers who purchase top-loading washing machines are aware of the
criteria used to qualify washing machines as Energy Star, whether they have
any consistent understanding of how much water, energy, or money they
expect to save because the washing machine they purchased is labeled as
Energy Star, and whether they understood the Energy Star logo as a
representation that they would save at least 37% energy and 50% water,
compared to a similar non-Energy Star washing machine.” (DE 349
¶
275).
Plaintiffs allege that their consumer-survey experts, Drs. Dennis and
Sukumar and their damages expert Cohn Weir found a common understanding
of the Energy Star logo and a price premium for products that displayed the
Energy Star logo. (See generally DE 325
¶
29—54). Defendants accept the
experts’ testimony but disagree with the experts’ characterizations of
consumers’ understanding of the logo or the price premium it carried. (See
generally DE 325
¶
29—54.)
16
II.
PROCEDURAL HISTORY
Plaintiffs brought this action, alleging that they had purchased washing
machines that were supposed to be compliant with Ener’ Star requirements,
but in fact were not. (DE 86
¶
1). They alleged various theories, including
breach of warranty and violation of state consumer fraud statutes.
On June 16, 2014, I filed an Opinion granting in part the defendants’
motion to dismiss the First Amended Complaint. (DE 78). On July 28, 2014,
the plaintiffs filed a Second Amended Complaint. (DE 86). Tn this revised
complaint, they accused the defendants of violating the Magnuson Moss
Warranty Act (“MMWA”), a federal statute dealing with warranties in consumer
products (Count I); they brought state law claims for breach of express
warranty (Count II) and the implied warranty of merchantability (Count III);
they brought a state law claim of unjust enrichment (Count IV); and they
asserted claims for violation of the consumer protection statutes of their home
states (Counts V through XIV).
Whirlpool, joined by the other defendants, moved to dismiss the Second
Amended Complaint. (DE 89 & 90). I found that the state law claims were not
preempted by federal law, but that the MMWA claim should be dismissed for
failure to state a claim and that the claim of unjust enrichment should also be
dismissed as to Whirlpool only. (DE 127 at 4).7
7
The claims that remain at this stage are as follows:
Count II:
Breach of Express Warranty
Count III:
Breach of Implied Warranty of Merchantability (for NJ, IN, TX, and VA
plaintiffs only)
Count IV:
Unjust Enrichment (asserted against retailers only; not against
Whirlpool)
Count V:
New Jersey Consumer Fraud Act, N.J. Stat. Ann.
(“NJCFA”)
Count VI:
New Jersey Truth-in-Consumer Contract, Warranty, and Notice Act, N.J.
Stat. Ann. § 56:12-14, et seq. (“TCCWNA”)
17
§
56:8-1, et seq
On February 5, 2016, Plaintiffs moved to certify the class (DE 162),
claiming two harms: (1) that the price of the washers was inflated because
consumers pay a premium for Ener Star-qualified machines; and (2) that
each purchaser “paid more money in additional water and enerT costs to
operate his or her Mislabeled Washing machine” than he or she would have if
the washer had actually met the Energy Star standards. (DE 282 at 1—2
(quoting DE 86
¶ 118)). I certified Plaintiffs’ class as against defendant
Whirlpool. (Id. at 38). I did not certify the class against defendant retailers—
ARCA, Home Depot, Fry’s, Lowe’s, and Sears. (Id.). Home Depot, a retailer, has
moved separately for summary judgment. Its position, however, is similar to
that of the other retailers—i.e., it is a defendant only as to individual, not class,
claims.
III.
DISCUSSION
A. Standard of Review
Federal Rule of Civil Procedure 56(a) provides that summary judgment
should be granted “if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. p. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
§ 1750,
Count VII:
California’s Consumer Legal Remedies Act, Cal. Civil Code
(“CLRA”)
Count VIII:
California’s Unfair Competition Law, Cal. Bus. & Prof. Code
seq. (“UCL”)
Count IX:
California’s False Advertising Law, Cal. Bus. & Prof. Code
seq. (“FAL”)
Count XI:
Florida Deceptive and Unfair Trade Practices Act, Fla. Stat.
seq. (“FDUTPA”)
Count XII:
Ohio Consumer Sales Practices Act, Ohio Rev. Code Ann.
seq. (“OCSPA”)
Count XIII:
Indiana Deceptive Consumer Sales Act, md. Code Ann.
seq. (“IDCSA”)
Count XIV:
Texas Deceptive Trade Practices Act, Tex. Bus. & Corn. Code
seq. (“DTPA”).
18
et seq.
§ 17200,
§ 17500,
et
et
§ 501.201,
et
§ 1345.01,
et
§ 24-5-0.5-I,
et
§ 17.41,
et
(1986); Kreschollek v. S. Stevedoring Co., 223 F.3d 202, 204 (3d Cir. 2000). In
deciding a motion for summary judgment, a court must construe all facts and
inferences in light most favorable to the nonmoving party. See Boyle v. Cty. of
Allegheny Pa., 139 F.3d 386, 393 (3d Cir. 1998). The moving party bears the
burden of establishing that no genuine issue of material fact remains. See
Celotex Corp. v. Catrett, 477 U.S. 317, 322—23 (1986). “[Wjith respect to an
issue on which the nonmoving party bears the burden of proof.
.
.
the burden
on the moving party may be discharged by ‘showing’—that is, pointing out to
the district court—that there is an of evidence to support the nonmoving
party’s case.” Id. at 325,
Once the moving party has met that threshold burden, the non-moving
party “must do more than simply show that there is some metaphysical doubt
as to material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475
U.S. 574, 586 (1986). The opposing party must present actual evidence that
creates a genuine issue as to a material fact for trial. Anderson, 477 U.S. at
248; see also Fed. R. Civ. p. 56(c) (setting forth the types of evidence on which
a nonmoving party must rely to support its assertion that genuine issues of
material fact exist). “[U]nsupported allegations
.
.
.
and pleadings are
insufficient to repel summary judgment.” Schoch v. First Fid. Bancorp., 912
F.2d 654, 657 (3d Cir. 1990); see also Gleason v. Nw. Moitg., Inc., 243 F.3d
130, 138 (3d Cir. 2001) (“A nonmoving party has created a genuine issue of
material fact if it has provided sufficient evidence to allow a jury to find in its
favor at trial.”). If the nonmoving party has failed “to make a showing sufficient
to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial,
.
.
.
there can be ‘no
genuine issue of material fact,’ since a complete failure of proof concerning an
essential element of the nonmoving party’s case necessarily renders all other
facts immaterial.” Katz v. Aetna Cas. & Stir. Co., 972 F.2d 53, 55 n.5 (3d Cir.
1992) (quoting Celotex, 477 U.S. at 322—23).
19
B. Choice of Law
A court generally must decide which state’s law applies to each state-law
claim as to each plaintiff-defendant pair. See Gray v. Bayer Corp., No. 08-47 16,
2011 WL 2975768 at *5 (D.N.J. July 21, 2011) (“While it might be desirable for
the sake of efficiency to settle upon one state, such as New Jersey, and apply
its law in lieu of the other 49 jurisdictions, due process requires individual
consideration of the choice of law issues raised by each class member’s case
before certification.”) (quoting Chin v. Chrysler Corp., 182 F.R.D. 448, 457
(D.N.J. 1998)).
“[l]n a diversity action, a district court must apply the choice of law rules
of the forum state to determine what law will govern the substantive issues of a
case.” Wan-iner v. Stanton, 475 F.3d 497, 499-500 (3d Cir. 2007) (citing Klaxon
Co. v. StentorElec. Mfg. Co., 313 U.S. 487, 496 (1941)). New Jersey uses the
most-significant-relationship test, which consists of two prongs. Maniscalco v.
Brother Int’l Corp. (USA), 793 F. Supp. 2d 696, 704 (D.N.J. 2011), affd sub
nom. Maniscalco v. Brother Int’l (USA) Corp., 709 F.3d 202 (3d Cir. 2013). First,
the court must determine whether a conflict actually exists between the
potentially applicable laws. P.1/. v. Camp Jaycee, 197 N.J. 132, 143, 962 A.2d
453, 460 (2008) (“Procedurally, the first step is to determine whether an actual
conflict exists. That is done by examining the substance of the potentially
applicable laws to determine whether there is a distinction between them.”)
(internal quotations omitted).
“LI]f no conflict exists, the law of the forum state
applies.” Snyderv. Famam Companies, Inc., 792 F. Supp. 2d 712, 717 (D.N.J.
2011) (quoting P.V, 197 N.J. at 143, 962 A.2d at 453).
If a conflict exists, the court then moves to the second prong: it must
determine “which state has the ‘most significant relationship’ to the claim at
issue by weighing the factors” in the applicable section of the Restatement
(Second) of Conflict of Laws. For contract claims, the applicable Restatement
section is
§ 188. Gilbert Spmance Co. v. Pennsylvania Mfrs. Ass’ii Ins. Co., 134
N.J. 96, 102, 629 A.2d 885, 888 (1993).
20
In an earlier opinion, I determined that, concerning express warranties,
there exists no true conflict between the laws of New Jersey and those of the
other relevant states. (DE 78 at 13—16). Accordingly, forum law—New
Jersey’s—applies to the express warranty claims. See Snyder, 792 F. Supp. at
717.
The parties agreed that New Jersey law governs the elements of the
implied warranty claims and did not offer a choice-of-law analysis. (DE 78 at
21). However, the states’ laws do differ as to whether privity is required. (DE 78
at 21). I conducted a choice-of-law analysis and found a false conflict between
the laws of New Jersey, Michigan, Indiana, Texas, and Virginia. (DE 78 at 21).
As to those states, I applied forum law to the implied warranty claims. (DE 78
at 21). There exists, a genuine conflict, however, between the law of New Jersey
and those of Ohio, California, and Florida. Finding that those states had the
most significant relationship to the dispute, I applied those states’ privitv
requirements to washers bought in those states. Because there was no
allegation that any plaintiff was in direct privity with Whirlpool, I dismissed the
implied warranty claims originating in Ohio, California, and Florida. (DE 78 at
2 1—23). Therefore, I now apply New Jersey law to the remaining implied
warranty claims—those originating in New Jersey, Indiana, Texas, and Virginia.
As to the unjust enrichment claim, I apply forum law. No relevant
disparity among the states’ laws has been suggested. Many courts have
suggested that there are no significant disparities in the unjust enrichment
laws of the fifty states. See Snyder, 792 F. Supp. 2d at 723 (“Numerous courts
have held that unjust enrichment laws do not vary in any substantive manner
from state to state.”); In re Mercedes—Benz Tele Aid Contract Litig., 257 F.R.D.
46, 58 (D.N.J. 2009) (finding that any differences under the laws of the various
states are “not material and do not create actual conflict”); Agostino v. Quest
Diagnostics Inc., 256 F.R.D. 437, 464 (D.N.J. 2009) (concluding that “there are
no actual conflicts among the laws of unjust enrichment”); Powers v. Lycoming
Engines, 245 F.R.D. 226, 231 (E.D. Pa. 2007) (examining the unjust
21
enrichment laws of the 50 states and concluding that, “a]lthough there are
numerous permutations of the elements of the cause of action in the various
states, there are few real differences”).
In the following sections, I first discuss the common-law claims (Section
III.C) and then the statutory claims (Section III.D).
C. Common-Law Claims
The following common-law claims remain in the case.
I certified the class only as against Whirlpool and only on the pricepremium theory. (DE 283 at 2—3). The class represented by the individual
named plaintiffs consists of California, Florida, Indiana, New Jersey, Ohio,
Texas, and Virginia purchasers of the C6-0, C6-1, and C7-0 washers. (DE 283
at 2—3).
I denied Plaintiffs’ motion to certify the class as against the retailer
defendants. (DE 282 at 2). As against Lowe’s, Sears, The Home Depot, Fry’s, or
ARCA, then, any common-law claims are asserted individually by the named
Plaintiffs. (DE 282 at 3).
Finally, I dismissed the unjust-enrichment claim against Whirlpool. (DE
127 at 4). That claim remains as against the retailer defendants. (DE 127 at 4).
1. Breach of Express Warranty (California, Florida, Indiana,
New Jersey, Ohio, Texas, and Virginia)
The named plaintiffs assert Count II (breach of express warranty) on a
class basis against Whirlpool, but only individually against the retailer
defendants. (See DE 282 at 39; see also DE 86
¶
245—50). Under New Jersey
(i.e., forum) law, a claim for breach of express warranty requires a plaintiff to
show “(1) that Defendant made an affirmation, promise or description about
the product; (2) that this affirmation, promise or description became part of the
basis of the bargain for the product; and (3) that the product ultimately did not
conform to the affirmation, promise or description.” Snyder, 792 F. Supp. 2d at
721 (citing N.J. Stat. Ann.
§
l2A:2—3l3) (other internal citation omitted); see
also Liberty Lincoln-Mercury, Tha v. Ford Motor Co., 172 F.3d 818, 824 (3d Cir.
1999). “It is not necessary to the creation of an express warranty that the seller
22
use formal words such as ‘warrant’ or ‘guarantee’ or that he have a specific
intention to make a warranty, but an affirmation merely of the value of the
goods or a statement purporting to be merely the seller’s opinion or
commendation of the goods does not create a warranty.” N.J. Stat. Ann.
§
12A:2-313(2).
Defendants argue that the express-warranty claims must fail for two
reasons: (1) there is no evidence of an affirmation, promise, or description that
constitutes a warranty; and (2) the washers did not actually breach any such
affirmation, promise, or description. (DE 309-1 at 4—12).
Plaintiffs argue that Defendants frame the affirmation issue too narrowly,
insisting that the law requires only an affirmation, promise, or description—not
a specific one. (DE 319 at 3). Plaintiffs further maintain that there exists
sufficient evidence that the Energy Star logo became the basis of the bargain
and that Defendants breached the affirmation, promise, or description upon
which Plaintiffs relied. (DE 319 at 4—11).
i.
Affirmation, promise, or description
The first element of an express warranty claim is an affirmation, promise,
or description. “A statement can amount to a warranty, even if unintended to
be such by the seller, ‘if it could fairly be understood
.
.
to constitute an
affirmation or representation that the [productj possesse[sJ a certain quality or
capacity relating to future performance.”’ L.S. Heath & Son, Inc. v. AT& TInfo.
Defendants also identify two other purported defects in the claims under the
laws of certain states: (1) that in California, Florida, Indiana, Ohio, and Texas—where
the law requires it—there is no evidence of class-wide reliance on an affirmation,
promise, or description that became the basis of their bargain; and (2) Plaintiffs have
no evidence of pre-suit notice, as required by the state laws of Florida, Ohio, and
Texas. (DE 309-1 at 4—12; DE 326 at 4—6). Plaintiffs respond that they have presented
evidence of both reliance and pre-suit notice where it is required. (DE 319 at 11—15).
8
I do not reach those issues. New Jersey express-warranty law requires neither
reliance nor pre-suit notice. See N.J. Stat. Ann. § 12A:2-313. For the reasons
discussed in Section III.C. 1, immediately following, Plaintiffs are unable to prevail even
under New Jersey’s more plaintiff-friendly standard. I therefore do not discuss whether
they meet the additional requirements of reliance and pre-suit notice.
23
Sys., Inc., 9 F.3d 561, 570 (7th Cir. 1993) (applying New Jersey law and
quoting Gladden v. Cadillac Motor Car Div., Gen. Motors Corp., 83 N.J. 320
(1980)), abrogated on other grounds by Lexmark Int’l, Inc. v. Static Control
Components, Inc., 134 5. Ct. 1377 (2014)). “[Wjhether a given statement
constitutes an express warranty is normally a question of fact for the jury.”
Snyder, 792 F. Supp. 2d at 72 1—22; see also Union Ink Co., Inc. v. AT& TCorp.,
352 N.J. Super. 617, 645 (App. Div. 2002) (Whether the advertisements
contained material misstatements of fact, or were merely puffing, as alleged by
defendants, presents a question to be determined by the trier of fact.”).
Defendants contend that that the Energy Star logo is not an express
affirmation, promise, or description about the product and that Plaintiffs fail to
identify the specific affirmations that became a part of the basis of the bargain.
Implicit in Defendants’ argument is the incorrect notion that this first element
requires an affirmation that is specific. See N.J. Stat. Ann.
§ 12A:2—3l3; see
also Snyder, 792 F. Supp. 2d at 721. Defendants assert that the only specific
affirmation alleged is one that their washers would require 37% less energy and
50% less water than standard models, and that proofs with respect to those
precise figures are lacking. But Plaintiffs’ claims do not rest on those exact
figures. In effect, Plaintiffs allege that Defendants advertised their washers as
meeting federal Energy Star efficiency standards—whatever they were—and
that the buyers did not need to have mastered those standards themselves.
I do not believe that New Jersey warranty law would require proof that
these buyers had a particular efficiency percentage figure in mind. Plaintiffs
have demonstrated that the Energy Star logo could be interpreted as a
representation of an environmentally friendlier product when compared to a
traditional washer, and one that met federal standards of efficiency. That is
enough; Plaintiffs have raised a genuine issue of material fact regarding the
existence of an affirmation, promise, or description.
As to this issue, the retailer defendants stand apart from Whirlpool. As to
them, the issue is not whether there was a representation; the issue is who
24
made it. The undisputed evidence shows that Lowe’s, Sears, The Home Depot,
Far’s, and ARCA made no representations to Plaintiffs about the Energy Star
status of their washers, because neither the Energy Star logo nor the
EnergyGuide label was attributable to the retailers. To the extent that either
represents an express warranty, that warranty was made by Whirlpool, not the
retailers. So as to them (as opposed to Whirlpool), proof of the first element of
an express-warranty claim is absent.
ii.
Basis of the bargain
The second element of an express warranty claim is that the affirmation,
promise, or description must have become the basis of the bargain:
Under New Jersey law, a representation is presumed to be part of
the basis of the bargain ‘once the buyer has become aware of the
affirmation of fact or promise’ and can be rebutted by ‘clear
affirmative proof that the buyer knew that the affirmation of fact or
promise was untrue.
Viking Yacht Co. u. Composites One LLC, 496 F. Supp. 2d 462, 469 (D.N.J.
2007) (quoting Liberty Lincoln-Mercury, Inc. v. Ford Motor Co., 171 F.3d 818,
825 (3d Cir. 1999) (internal quotation omitted)), affd in pan and denied in part
on reconsideration, No. 05-538, 2007 U.S. Dist. LEXIS 68882 (D.N.J. Sept. 18,
2007), affd, 385 F. App’x 195 (3d Cir. 2010).
Here, Plaintiffs enjoy the benefit of a presumption that the affirmation
represented by the Energy Star branding formed the basis of the bargain.
Defendants have not rebutted that presumption to the point that a genuine
issue is lacking. Plaintiffs have provided sufficient evidence to demonstrate on
a class-wide basis that Defendants’ customers understand that Energy Star
devices command an initial price premium, but over time generate savings in
the form of reduced energy and water bills. That evidence includes deposition
testimony, expert report, and statements from Whirlpool employees.
Defendants claim that Plaintiffs’ depositions demonstrate fatally
disparate interpretations of the Energy Star logo. However, each Plaintiff
testified in essence that he or she understood the Energy Star logo to symbolize
25
the exchange of upfront cost for back-end efficiency savings. Moreover,
Plaintiffs’ survey experts each testified that customers have a core common
understanding of what the Energy Star logo represents. Deposition testimony
bears this out, even if that understanding is not precisely identical from one
customer to the next.
For example, Dr. Sukumar’s survey results indicated that consumers
have a common understanding of what the Energy Star logo symbolizes. Dr.
Dennis testified that his survey results would not be impacted by whether
customers had additional knowledge of the Energy Star logo, beyond that
common-core understanding. And damages expert Cohn Weir testified that this
common understanding affected the price paid:
[Drs.] Sukumar and Dennis measure the portion of the washing
machines’ price that consumers did pay solely attributable to the
presence of the Energy Star Logo (the price premium) or stated in
the reverse, the price premium is the amount of value that they
have been denied in the Benefit of the Bargain because consumers
would have paid substantially less for the washing machines had
the Energy Star Logo not been used.
(DE 323-9
¶
5—6). Finally, the evidence
suggests
that Defendants themselves
recognized the financial value that Energy Star represented to them and their
customers. Todman told investors that “there is a slight premium that
consumers will pay for [Energy Star] appliances. But they’re looking for pay
back.
.
.
.“
(DE 328-38 at 3). And Fettig explained that, with respect to Energy
Star appliances, “[y]ou pay a little bit more on the front end, but you save
about 20% over the life of the product.” (DE 323-40 at 8).
In short, this evidence supports Plaintiffs’ contention that an Energy Star
label constituted at least some part of their motivation to purchase the washers
at issue at the price offered. Coupled with the principle that the law requires
belief only in an affirmation—without requiring a particular level of precision—
Plaintiffs’ evidence is sufficient to show that there was a class-wide
understanding of the Energy Star logo and that this understanding informed
26
Plaintiffs’ purchasing decisions. There is, then, at least an issue of fact as to
the second element.
iii.
Product conformity to the affirmation, promise or
description (breach)
The third element, breach of the affirmation, promise, or description, is
the weak point in Plaintiffs’ express-warranty claim.9 The evidence now in the
record does not demonstrate a breach under either warranty theory—ic., (a)
that the washers were improperly branded as Energy Star-qualified; or (b) that
they were generally more efficient than standard models. Here, I look to
whether the product contemporaneously conformed to any representation that
was made at the time of sale.
(a) First, the “branding” theory of liability fails because the washers were
all manufactured and purchased at a time when they were, according to the
DOE’s guidance, Energy Star-qualified. Neither side now disputes that the
Energy Star logo was authorized when the washers were sold to the class
members. Before producing the washers, Whirlpool consulted the DOE for
guidance, and the DOE confirmed to Whirlpool that its proposed design met
the current standards. Whirlpool then affixed an Energy Star logo to its
washers.
Then, in July 2010, the DOE changed the interpretation of its testing
regulations and protocols. (As noted above, the washers remained the same,
but the testing protocols—for example, the use of Fill Level 3 rather than Fill
Level 4 to measure capacity—were revised. See pp. 11—15, supra.) In January
2011, DOE notified Whirlpool that under the new testing standards its washers
To some degree, the difficulty in establishing a breach is the downside of the
first element’s relatively lax requirement of a non-specific affirmation, promise, or
description. The vaguer the statement, the more difficult to prove it false; the more
general the promise, the more difficult to prove it has been breached. Plaintiffs insist,
for purposes of the first element, that they only expected the Energy Star logo to
indicate some measure of better performance, but they must take the bitter with the
sweet. For purposes of the third element, they may not now insist that Defendants are
liable because Plaintiffs were warranted a specific measure of performance.
9
27
now no
longer qualified to carry the Energy Star brand.1° By this time,
however, each named plaintiff had purchased his or her washing machine.
Accordingly, Plaintiffs are unable to prove that that the Energy Star logo was
false or that Defendants failed to live up to their end of the bargain on the
Energy Star-branding theory of liability.
(b) Second, the plaintiffs might be pressing a more general “energy
efficiency” theory, independent of Energy Star specifics. Such an alternative
theory would fail because it is undisputed that the washers were more efficient
than a standard model would have been. The washers provided class members
a 46.1% water reduction and a 34.3% energy reduction as compared to a
traditional model. (DE 349
¶ 252). True, Energy Star required a 50% water and
37% energy reduction (however measured). Setting aside whether the washers
met that standard pursuant to one or another measuring protocol, they
represented a significant gain in efficiency. There is no genuine issue of fact
that the washers were more energy- and water-efficient than comparable
standard models. Accordingly, Defendants did not breach an express warranty
under the more general efficiency theory.
In sum, Plaintiffs have raised a triable issue of fact as to whether the
Energy Star logo carried an affirmation, promise, or description that formed the
basis of their bargain—together, the first two elements of a cause of action for a
breach of an express warranty against Whirlpool. However, they have not
established the third element—a corresponding breach of that affirmation,
The DOE reinterpreted its own guidance in July 2010. (DE 349 ¶ 170—74). At
this point, all but three named plaintiffs—plaintiffs Christy (California), Reid (Florida),
and Baker (California)—had already purchased their washers. However, the DOE did
not inform Whirlpool that the washers failed testing until January 2011, when it
notified Whirlpool that the washers would “remain designated as ENERGY STAR
qualified” until February 2011. (DE 349 ¶J 224—29). By this point, when Whirlpool
became aware of the change, all named plaintiffs had purchased their washers. The
class members do not dispute that Whirlpool tested and labeled its washers in
accordance with the DOE’s 2007 Energy Star guidance. Even assuming that the class
contains persons who purchased washers later, these Plaintiffs could not adequately
represent them.
10
28
promise, or description. Whirlpool’s washers were undisputedly Energy Star
qualified at the time they were sold, and they delivered efficiency benefits when
compared to standard machines.’1 Summary judgment is granted and
Plaintiffs’ claim for breach of an express warranty is DISMISSED.
2. Breach of Implied Warranty (Indiana, New Jersey, Texas,
and Virginia)
Count III, brought on behalf of the plaintiffs in Indiana, New Jersey,
Texas, and Virginia, alleges a breach of implied warranty because the washers
were “[un}fit for their intended purpose.” (SAC
¶
l48).12
According to Plaintiffs,
the washers did not “function properly as water and energy-efficient washing
machines within the parameters established by federal law and the ENERGY
STAR® program.” (SAC
¶ 148). Defendants argue that there is no breach
because the evidence shows that the washers—whatever their Energy Star
shortcomings—washed clothes and delivered substantial efficiency benefits.
(DE 309-1 at 12—13). In other words, Defendants maintain that the washers
were fit for their intended purpose and did not breach any implied promise that
clothes would be washed at some level of efficiency.
“IT]he UCC, as adopted by New Jersey, specifically states that an implied
warranty of merchantability ensures that goods sold are ‘fit for the ordinary
purposes for which such goods are used.” Arlandson v. Hartz Mountain Corp.,
792 F. Supp. 2d 691, 706 (D.N.J. 2011) (quoting N.J. Stat. Ann.
§ l2A:2—314(f);
*9
Henderson v. Volvo Cars of N. Am., LLC, No. 09-4 146, 2010 WL 2925913 at
2010 (D.N.J. July 21, 2010)). It “does not impose a general requirement that
goods precisely fulfill the expectation of the buyer. Instead, it provides for a
As against the retailers, the claim is also dismissed because they did not make
an affirmation, promise, or description that would subject them to express-warranty
liability. See pages 24—25, supra.
11
As with the express-warranty claim, see Section III.C. 1, the class is certified
solely as against Whirlpool. (DE 283 at 2). The claims against the retailer defendants
survive only insofar as they are prosecuted individually by the named plaintiffs in
Indiana, New Jersey, Texas, and Virginia.
12
29
minimum level of quality.” Lieberson v. Johnson & Johnson Consumer
Companies, Inc., 865 F. Supp. 2d 529, 542 (D.N.J. 2011) (internal quotations
and citations omitted). “[Mjerchantability is defined as the product sold ‘should
be of the general kind described and reasonably fit for the general purpose for
which it should have been sold.”’ Id. (quoting Ferrari v. Am. Honda Motor Co.,
Inc., A-l532-07T2, 2009 WL 211702 at *3 (N.J. Super. Ct. App. Div. Jan. 30,
2009)) (other internal quotation and citation omitted) (emphasis added).
Generally, a court will find a good to be unfit for its ordinary purpose “when [it]
can identify one of three general types of defects: manufacturing defects, design
defects, and failure to give the buyer proper instructions with respect to the
goods.” Id. This test for defects is essentially the same as that required when
the theory is strict tort liability under Section 402A of the Restatement (Second)
of Torts, except that goods may violate [the implied warranty of
merchantability] without being “unreasonably dangerous,” as is generally
required under strict tort.” Lieberson, 865 F. Supp. 2d at 542 (citing Barklev
Clark & Christopher Smith, The Law of Product Warranties
§ 5.5 (2010)).
The “ordinary purpose” of a product is one that is central to the product’s
value or function. Compare Zabriskie Chevrolet, Inc. v. Smith, 99 N.J. Super.
441, 450 (Law Div. 1968) (where the car the plaintiff purchased broke down
less than a mile from the dealership, the car was “substantially defective” and
in breach of the implied warranty of merchantability), with Green v. Green
Mountain Coffee Roasters, Inc., 279 F.R.D. 275, 283 (D.N.J. 2011) (rejecting
implied warranty of merchantability claim that a single-cup brewing system,
although it brewed beverages, failed to brew precisely one cup), and Lieberson,
865 F. Supp. 2d at 543 (finding no breach of the implied warranty of
merchantability where soap and lotion did not help babies sleep, as advertised,
because the soap was “clearly manufactured for the purpose of washing and
moisturizing babies’ skin” and it did do that).
30
Thus, Plaintiffs can sustain their implied-warranty claims only if the
washers failed to wash clothes or failed to provide the level of efficiency
consumers had a right to expect in goods of that kind.
Plaintiffs have not alleged that the washers fail to get clothes clean. There
is no triable dispute that the goods function within the parameters of any such
implied warranty. See Green, 279 F.R.D. at 283. Moreover, it is not alleged that
the washers suffer from manufacturing or design defects, and there is no
evidence that Defendants failed to properly instruct the buyers on the use of
the washers
Nor is there a genuine issue of fact as to whether the washers did so
efficiently. All agree that they provided a substantial level of efficiency
(providing 93% of the energy savings and 92% of the water savings required by
EnergyStar, even under the 2010—11 testing regime). That surely met the
standard of being fit for the ordinary intended purposes of a washer—even an
energy-efficient one—and met ordinary expectations of quality.
In my view, the implied warranty standard is not so specific as to
incorporate the changing particulars of the Energy Star program; it is a more
general one, based on consumers’ reasonable expectations of quality for goods
of that kind. New Jersey courts have never required that products be perfect to
overcome implied-warranty claims.
q
Lieberson, 865 F. Supp. 2d at 542. And
I do not see evidence that consumers’ reasonable efficiency expectations
encompassed, e.g., a measuring method that used Fill Level 4, as opposed to
Fill Level 3.
Because the washers cleaned clothes and did so efficiently, summary
judgment is granted and Plaintiffs’ claims under the implied warranty of
merchantability are DISMISSED.
3. Unjust Enrichment (California, Indiana, New Jersey,
Ohio, Texas, and Virginia)
Count IV alleges a claim of unjust enrichment. I earlier dismissed
Plaintiffs’ unjust enrichment claims against defendant Whirlpool (DE 78 at 26—
27), and for purposes of unjust enrichment I did not certify the class against
31
the retailer defendants (DE 282 at 34—37). The only unjust-enrichment claims
remaining are the individual plaintiffs’ claims against the defendant retailers.
(DE 309-1 at 29).
Under New Jersey law, to state a claim for unjust enrichment, “a plaintiff
must allege that (1) at plaintiff’s expense (2) defendant received a benefit (3)
under circumstances that would make it unjust for defendant to retain the
benefit without paying for it.” Snyder, 792 F. Supp. 2d at 723—24. Defendants
argue that summary judgment is now appropriate “because Plaintiffs have an
adequate remedy at law under both contractual (warranty) and statutory
(consumer protection) theories.” Id. (citing Copad, Inc. v. Sparta Consulting,
Inc., 339 F. Supp. 3d 959, 983—84 (E.D. Cal. 2018); Falk u. General Motors
Corp., 496 F. Supp. 2d 1088, 1099 (N.D. Cal. 2007); AIm
u. Am. Honda Motor
Co., No. 08-4825, 2010 WL 1372308 at *16 (D.N.J. Mar. 31, 2010); Nossen v.
Hoy, 750 F. Sup. 740, 744 (E.D. Va. 1990). “New Jersey law appears to
preclude recovenj
.
.
.
where, as here, there is a legally subsisting express
agreement, no rescission is sought and no contention that the express contract
is void or did not exist.” Van Onnan v. Am. Ins. Co., 680 F.2d 301, 311 (3d Cir.
1982) (emphasis added) (citing C. B. Snyder Realty Co. v. Nat’l Newark & Essex
Banking Co., 14 N.J. 146, 162—63 (1953); Moser v. Mimer Hotels, Inc., 6 N.J.
278, 280—81 (1951)).
For the reasons discussed more fully supra and infra, these retailer
defendants were not unjustly enriched by selling these washers. Equity
recognizes certain basic principles of fairness—classically, a party who made a
payment for items never received, even if not entitled to contract damages, may
recover that payment. No such general principle of justice is in play here.
Consumers paid for washers and got them. If there was any incremental
“injustice,” it must be because there was, e.g., a fraud or a breach of express or
implied warranty. I have already found, however, that there was not. Plaintiffs
received washers that were certified Ener’ Star-compliant according to the
testing protocols current at the time of purchase. Even by the more stringent
32
2010—11 standards, those washers delivered a 46.1% water reduction and a
34.3% energy reduction (as opposed to a S0% and 37% reduction, respectively,
as prescribed by the Energy Star program). I do not perceive the kind of flaw in
this transaction that would give rise to an injustice. Defendants did not, at
Plaintiff’s expense, receive a benefit “under circumstances that would make it
unjust for defendant [retailers] to retain the benefit without paying for it.” See
Snyder, 792 F. Supp. 2d at 723—24. Accordingly, summary judgment is
granted, and the unjust enrichment claim is DISMISSED.
D. Statutory Claims
Plaintiffs also allege causes of action under various consumer
fraud/consumer protection statutes of California, Florida, Indiana, New Jersey,
Ohio, and Texas.’3 (See Counts V—XIV.) A plaintiff may bring such state-law
claims under the law of the state where he or she lives or the state where the
alleged injury occurred. See, e.g., Cooper, 374 F. App’x 250, 255 (3d Cir. 2010).
I therefore consider these claims state-by-state, in relation to the relevant
plaintiffs. Like the express- and implied-warranty claims, see Sections C. 1 &
C.2, the statutory claims proceed on a class-wide basis only against Whirlpool.
(DUD 283 at 2—3). Insofar as any named plaintiff’s claim against a retailer
defendant survives, the plaintiff proceeds only on an individual basis and only
against the retailer from which he or she purchased a washer. (Id.).
1. California
Plaintiffs bring three statuton’ claims under California law: the
§ 1750, et seq. (“CLEA”), the
False Advertising Law, Cal. Bus. & Prof. Code § 17500, et seq. (“FAL”), and the
Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. (“UCL”). The
Consumer Legal Remedies Act, Cal. Civil Code
California purchaser/plaintiffs are Maxwell, Christy, and Baker. Plaintiff
Maxwell bought his washer in November 2009. (DE 349
¶
109). Plaintiff Christy
The statutory claims of the Michigan class were dismissed for failure to state a
claim (DUD 78 at 40), and the Virginia class did not plead a statutory claim (see DE 86).
13
33
bought her washer in September 2010. (flED 349
her washer in December 2010. (DE 349
i.
¶ 194). Plaintiff Baker bought
¶ 213).
Consumer Legal Remedies Act, Cal. Civil Code
et seq. (“CLRA”)
California’s Consumer Legal Remedies Act, Cal. Civil Code
§
1750,
§ 1750, et seq.
(“CLRA”), prohibits “unfair methods of competition and unfair or deceptive acts
or practices undertaken by any person in a transaction intended to result or
which results in the sale or lease of goods or services to any consumer.” Cal.
Civ. Code
§ 1770(a). Conduct that is “likely to mislead a reasonable consumer”
violates the CLRA. Colgan v. Leathennan Tool Grp., Inc., 38 Cal. Rptr. 3d 36
(Cal. Ct. App. 2006) (quoting Nagel v. Twin Labs., Inc., 134 Cal. Rptr. 2d 420
(Ct. App. 2003J).
The CLRA provisions cited by Plaintiffs are:
(5) Representing that goods or services have sponsorship, approval,
characteristics, ingredients, uses, benefits, or quantities which
they do not have or that a person has a sponsorship, approval,
status, affiliation, or connection which he or she does not have.
(7) Representing that goods or services are of a particular
standard, quality, or grade, or that goods are of a particular style
or model, if they are of another.
(9) Advertising goods or services with intent not to sell them as
advertised.
Cal. Civ. Code
§ l770(a)(5), (7) & (9). A successful CLRA claim here would
require Plaintiffs to show that the Energy Star logo was false or likely to
mislead and that Defendants knew at the time of sale that the washers did not
meet Energy Star criteria. See Wilson v. Hewlett-Packard Co., 668 F.3d 1136,
1140, 1145 (9th Cir. 2012).
The record here demonstrates that the Energy Star representation was
not false or likely to mislead when made. Instead, Defendants’ Energy Star
representation was true at the time the washers were sold (November 2009—
34
December 2010). At that time, the washers had not yet failed testing under the
new standards, and the DOE had not yet removed them from their list of
approved appliances. The CLRA requires a knowingly false statement of fact
made to induce a buyer to purchase. The evidence is clear that Defendants’
statements concerning Energy’ Star were not false when made because
Plaintiffs bought their washers while the washers remained Energy Starqualified, as per the DOE.
The claim also fails on the knowledge element. Plaintiffs have not
produced evidence that shows that Defendants knew the washers did not meet
Energy Star criteria when sold. Instead, the record reveals that Whirlpool tried
to comply with the DOE’s Energy Star criteria by seeking guidance from the
agency. Whirlpool then labeled its washers with the Energy Star logo after the
DOE responded positively to Whirlpool’s request. When Plaintiff Maxwell
bought his washer in November 2009, the DOE had not yet revised its 2007
interpretation of its regulation. And when Plaintiffs Christy and Baker bought
their washers in September and December 2010, the DOE had not yet tested
the washers, found that they fell short of the new standards, or informed
Whirlpool of the test results. Plaintiffs have not produced evidence that shows
the intent to mislead that a successful CLRA claim requires. Summary
judgment is therefore granted, and this claim is DISMISSED.
ii.
False Advertising Law, Cal. Bus. & Prof. Code
et seq. (“FAL”)
California’s False Advertising Law, Cal. Bus. & Prof. Code
§
17500,
§ 17500, et
seq., (“FAL”) prohibits misleading statements in connection with advertising
material:
to make or disseminate or cause
It is unlawful for any person
in
to be made or disseminated before the public in this state
or in any other manner or means
any advertising device
whatever, including over the Internet, any statement, concerning
personal property or services, professional or otherwise, or
performance or disposition thereof, which is untrue or misleading
and which is known, or which by the exercise of reasonable care
should be known, to be untrue or misleading.
.
.
.
.
.
.
.
35
.
.
Cal. Bus. & Prof. Code
§ 17500. Plaintiffs’ FAL claim fails for the same reason
thaf the CLRA claim did: the evidence reveals that at the time Defendants sold
Plaintiffs the washers, the statements were neither misleading nor known as
such. Summary judgment is granted, and this claim is DISMISSED.
iii.
Unfair Competition Law, Cal. Bus. & Prof. Code
§ 17200, et seq. (“UCL”)
The Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.,
(“UCL”) prohibits acts or practices that are: (1) unlawful; (2) fraudulent; or (3)
unfair. Each prong of the UCL constitutes a separate and distinct theory of
liability. Keams v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). The
UCL proscribes “unfair competition,” which includes “any unlawful, unfair or
fraudulent business act or practice and unfair, deceptive, untrue or misleading
advertising.” § 17200. The California Supreme Court has held that the UCL’s
“coverage is sweeping, embracing anything that can properly be called a
business practice and that at the same time is forbidden by law.” Cd—Tech
Communications, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180, 83 Cal.
Rptr. 2d 548, 973 P.2d 527 (1999) (internal quotations and citation omitted).
At the same time, however, the available relief is limited: “A UCL action is
equitable in nature; damages cannot be recovered.” Korea Supply Co. v.
Lockheed Martin Corp., 63 P.3d 937. 943 (Cal. 2003).
The fraudulent-practice prong of the UCL “has been understood to be
distinct from common law fraud.” In re Tobacco II Cases, 46 Cal. 4th 298, 312,
207 P.3d 20, 29 (Cal. 2009). “‘A [common law] fraudulent deception must be
actually false, known to be false by the perpetrator and reasonably relied upon
by a victim who incurs damages. None of these elements are required to state a
claim for injunctive relief’ under the UCL.” Id. (quoting Day v. AT& T Corp., 74
Cal. Rptr. 2d 55, 60 (Cal. 1998)); see also In re Sony Grand Wega KDF-E
A1O/A20 Series Rear Projection HDTV Television Litig., 758 F. Supp. 2d 1077,
1092 (S.D. Cal. 2010) (“Unlike common law fraud, a party can show a violation
of the UCL’s ‘fraudulent practices’ prong without allegations of actual
deception.”). The term fraudulent, as used in the statute, then, requires only a
36
likelihood: “a showing [that] members of the public ‘are likely to be deceived.”
Id. (quoting Puentes v. Wells Fargo Home Mong., Inc., 72 Cal. Rptr. 3d 903, 909
(Dist. Ct. App. 2008)). Claims under this prong still require a plaintiff to show
that the alleged misrepresentation was directly related to the injurious conduct
and that the plaintiff actually relied on the alleged misrepresentation. Id.
Here, Plaintiffs have not shown that Defendants’ conduct was (1)
unlawful; (2) fraudulent; or (3) unfair, each an element that constitutes a
separate and distinct theory of liability. See Keanis, 567 F.3d at 1125. The
“unlawful” prong fails because Plaintiffs have neither alleged nor proven that
Defendants committed any illegal act. The “fraudulent” prong fails because, as
discussed in connection with the CLRA and FAL claims, Plaintiffs have no
evidence that Defendants issued statements that were misleading at the time.
Accordingly, Plaintiffs were unable to show that “members of the public [were]
likely to be deceived.” Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir.
2008).
Finally, Plaintiffs have not sustained the “unfair” prong, where the
inquiry is “whether the challenged practice is ‘immoral, unethical, oppressive,
unscrupulous or substantially injurious to consumers.’” Graham v. VCA Animal
Hosps., Inc., 729 F. App’x 537, 540 (9th Cir. 2018). If the conduct is immoral,
unethical, oppressive, unscrupulous or substantially injurious, it is then
“weigh[ed against the utility of the defendant’s conduct against the gravity of
the harm.” Id. Here, Plaintiffs have not carried their burden of coming forward
with proof to establish a triable issue. The DOE-sanctioned conduct—labeling
the washers as Energy Star compliant while they were so designated—was
neither immoral, unethical, oppressive, unscrupulous nor substantially
injurious. Moreover, the gravity of the harm—purchasing a washing machine
that provided a 46.1% water reduction and a 34.3% energy reduction (instead
of a 50% and 37% reduction, respectively)—is outweighed by the utility of
Defendants’ sale of washing machines that represented an improvement in
efficiency and were excusably believed to comply with Energy Star Standards at
37
the time. Accordingly, summary judgment is granted, and the UCL claim is
DISMISSED.
2. Florida Deceptive and Unfair Trade Practices Act, Fla.
Stat. § 501.201, et seq. (“FDUTPA”)
A claim under the Deceptive and Unfair Trade Practice Act, Fla. Stat.
§ 501.201, et seq., (“FDUTPA”) has three elements:
(1) a deceptive or unfair
practice; (2) causation; (3) actual damages. Rollins, Inc. z.’. Butland, 951 So.2d
860, 869 (Fla. 2d Dist. Ct. App. 2006).
FDUTPA is intended to “protect the consuming public and
legitimate business enterprises from those who engage in unfair
methods of competition, or unconscionable, deceptive, or unfair
acts or practices in the conduct of any trade or commerce.”
§ 501.202(2). See also Delgado v. JW Courtesy Pontiac GMC-Tmck,
Inc., 693 So. 2d 602, 605—06 (Fla. 2d Dist. Ct. App. 1997)
(discussing the purpose of FDUTPA in light of its legislative
history).
Id. However, an FDUTPA claimant must prove more than a mere warranty
breach. See PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So. 2d 773, 777 n.2 (Fla.
2003) (“[T]his opinion does not operate to convert every breach of contract or
breach of lease case into a claim under the jFDUTPA]. Indeed, such a
construction would be precluded by the FDUTPA, which only reaches conduct
that is unfair or deceptive as judged by controlling case law.”). Also, a plaintiff
“cannot insert the magic words ‘deceptive’ and ‘unfair’ to state a claim without
including any further details.” Krush Commc’ns, LLC v. Network Enhanced
Telecom, LLP,2014 WL 12625758, at *4 (M.D. Fla. Apr. 29,20 14).
Under the FDUTPA, a deceptive act is one that is “likely to mislead a
consumer acting reasonably,” Zlotnick v. Premier Sales Grp., 480 F. 3d 1281,
1284 (11th Cir. 2007), and an unfair practice is one that “offends established
public policy” or is othenvise “immoral, unethical, oppressive, unscrupulous, or
substantially injurious to consumers.” PNR, 842 So. at 777 (citation and
internal quotations omitted). A deceptive act occurs when “there is a
representation, omission, or practice that is likely to mislead the consumer
38
acting reasonably in the circumstances, to the consumer’s detriment.” Gauron
v. Weather Shield Mfg., Inc., 819 F. Supp. 2d 1297, 1302 (S.D. Fla. 2011)
(quoting PAR, Inc., 842 So. 2d at 777).
Here Plaintiffs have not provided evidence of wrongdoing that would
satisfy the statute. Plaintiff Reid bought his washer around October 2010. (DE
349
¶
205). At the motion to dismiss stage, I allowed the claim to proceed
because “the mislabeling of the washers would be likely to mislead a
reasonable consumer about the energy efficiency of the washers.” (DE 78 at
41—42) The record has not developed in such a manner as to establish that
Defendants intentionally misled a reasonable consumer or offended established
public policy. To be sure, the FDUTPA covers misleading conduct, but it also
has a volitional element. The evidence in the record reveals only that
Defendants used the Energy Star logo until the DOE advised otherwise. There
is no evidence that Defendants used the logo in an unfair or deceptive way or
intended to do so. Indeed, Whirlpool itself was not informed of the logo
suspension until Januan’ 2011. Because Plaintiffs have not shown evidence of
a breach of warranty, and because they have not produced the additional
evidence required by the FDUTPA, summary judgment is granted, and the
Florida statutory claim is DISMISSED.
3. Indiana Deceptive Consumer Sales Act, Ind. Code Ann.
§ 24-5-O.S-1, et seq. (“IDCSA”)
The Indiana Deceptive Consumer Sales Act, md. Code Ann.
et seq.,
14
§
24-5-0.5-1,
(“IDCSA”) prohibits “incurable” and “uncured” deceptive acts. An
“incurable” act is one committed with intent to defraud or mislead, whereas an
“uncured” deceptive act is one the supplier failed to “cure” after receiving
notice. See Pemj u. Gulf Stream Coach, Inc., 614 N.E.2d 634, 647 (Ind. Ct. App.
2004). There is no catchall fraud category under the IDSCA; a plaintiff’s
Various sections of the IDCSA were recently amended by the Indiana Legislature.
These amendments are effective as of July 1, 2014. Therefore, the previous version of
the statute is applicable here.
14
39
allegations must fit into one of the enumerated acts proscribed under the
statute. Lawson v. Hale, 902 N.E.2d 267, 274 (md. App. 2009). This is a claim
under the incurable-act portion of the IDCSA. (Plaintiffs’ uncured-act claim has
been dismissed.) (DE 78 at 47). Thus, if Plaintiffs are to prevail, the Indiana
class must prove that Defendants intended to mislead them. See McKinney v.
State, 693 N.E.2d 65, 68 (md. 1998) (“Intent to defraud or mislead is thus
clearly an element of an incurable deceptive act.”).
Plaintiffs allege that “before marketing [the washers] and, at all times
relevant hereto, [Defendantsj knew that the models were non-compliant” or
that they affixed Energy Star labels “without testing them.” (DE 86
¶ 244).
Those allegations were sufficient to withstand Defendants’ motion to dismiss,
but mere allegations will not withstand summary judgment. Plaintiffs have not
shown evidence of an intent to mislead. Rather, the facts suggest that
Whirlpool attempted to comply with the Energy Star criteria by seeking DOE
guidance on Energy Star testing. The evidence revealed during discovery tends
to suggest that Whirlpool labeled their washers as Energy Star-compliant only
after the DOE blessed this course of conduct. Specific to the Indiana class,
Plaintiff Beyer bought his washer in March 2010. (DE 349
9 149). By that
point, the DOE had not revised its interpretation, no washer had failed the new
testing standards, the DOE had not informed Whirlpool of the test results, and
the washers remained Energy Star-qualified. Thus, Plaintiffs have not produced
evidence that shows the intent to mislead required that Indiana law requires.
Summary judgment is granted, and the IDCSA claim is DISMISSED.
4. New Jersey
Plaintiffs bring two claims under two New Jersey statutes: the Consumer
§ 56:8-1, et seq., (“NJCFA”) and the Truth-in
Consumer Contract, Warranty, and Notice Act, N.J. Stat. Ann. § 56:12-14, et
Fraud Act, N.J. Stat. Ann.
seq., (“TCCWNA”). The New Jersey purchaser/plaintiffs, Angelone and Dzielak,
both bought their washers in November 2009. (DE 349
40
¶ 100 & 131).
Consumer Fraud Act, N.J. Stat. Ann.
(“NJCFA”)
§
56:8-1, et seq.
The New Jersey Consumer Fraud Act, N.J. Stat. Ann.
§
56:8-1, et seq.,
1.
(“NJCFA”), requires a plaintiff to prove three elements: “(1) unlawful conduct by
the defendant; (2) an ascertainable loss by the plaintiff; and (3) a causal
connection between the defendant’s unlawful conduct and the plaintiff’s
ascertainable loss.” Bosland v. Wamock Dodge, Inc., 197 N.J. 543, 557 (2009)
(citations omitted).
Unlawful conduct: Unlawful conduct under the NJCFA falls into three
general categories: “affirmative acts, knowing omissions, and violation of
regulations promulgated under N.J. Stat. Ann.
§ 56:8-2, 56:8-4.”
15
Hamish v.
Widener Univ. Sch. of Law, 931 F. Supp. 2d 641, 648 (D.N.J. 2013),
reconsideration denied, 12-608, 2013 WL 1890276 (D.N.J. May 3, 2013) (citing
Cox v. Sears Roebuck & Co., 138 N.J. 2, 17 (N.J. 1994). “A plaintiff must allege
the ‘who, what, when, where, and how’ of’ a NJCFA claim. Crozier v. Johnson &
Johnson Consumer Companies, Inc., 901 F. Supp. 2d 494, 506 (D.N.J. 2012)
(quoting Lum v. Bank of Am., 361 F.3d 217, 224 (3d Cir. 2004)).
An unlawful practice under the CFA is the
use or employment by any person of any unconscionable
commercial practice, deception, fraud, false pretense, false
promise, misrepresentation, or the knowing, concealment,
suppression, or omission of any material fact with intent that
others rely upon such concealment, suppression or omission, in
connection with the sale or advertisement of any merchandise or
15
N.J. Stat. Ann. § 56:8—2.provides that:
The act, use or employment by any person of any unconscionable
commercial practice, deception, fraud, false pretense, false promise,
misrepresentation, or the knowing, concealment, suppression, or
omission of any material fact with intent that others rely upon such
concealment, suppression or omission, in connection with the sale or
advertisement of any merchandise or real estate, or with the subsequent
performance of such person as aforesaid, whether or not any person has
in fact been misled, deceived or damaged thereby, is declared to be an
unlawful practice.
41
real estate, or with the subsequent performance of such person as
aforesaid, whether or not any person has in fact been misled,
deceived or damaged thereby.
Gonzalez v. Wilshire Credit Corp., 207 N.J. 557, 576—77 (2011) (quoting
N.J.S.A.
§ 56:8-2)
Ascertainable loss and causation: “New Jersey courts have been chary
to ascribe the term [ascertainable loss] a precise meaning.” Arcand v. Brother
Int’l Corp., 673 F. Supp. 2d 282, 300 (D.N.J. 2009) (citing Thiedemann v.
Mercedes—Benz USA, LLC, 183 N.J. 234, 248 (2005)). An ascertainable loss
under the NJCFA “occurs when a consumer receives less than what was
promised.” Union Ink Co., Inc. v. AT&T Corp., 352 N.J. Super. 617, 646 (App.
Div. 2002) (citation omitted). The statute does not, however, “require that the
loss be monetary [Jor that it must be pled beyond a reasonable degree of
certainty.” Arcand, 673 F. Supp. 2d at 300.
Accordingly, a plaintiff must allege that a misrepresentation induced an
objectively reasonable expectation about a product and that this expectation
was not met. Smajlaj, 782 F. Supp. 2d at 99—100. A cognizable injury, however,
must consist of more than just any unmet expectation. Id. (citing Koronthaly v.
L’Oreal USA, Inc., 374 Fed. Appx. 257, 259 (3d Cir. 2010)). Thus, for example,
“[a] consumer who expects a car that never requires resort to its comprehensive
warranty
.
.
.
or who expects the life of a toner cartridge to be linked precisely
to the amount of toner in the cartridge
.
.
.
has not experienced a loss when
that expectation is not met.” Id. (internal citations omitted). Only a consumer
who has received a product that is worth objectively less than he or she may
reasonable expect has endured an injury under the statute. Id. Under such a
benefit-of-the-bargain theory, a plaintiff must proffer a “quantification of the
difference in the value between the product received and the product
promised.” Id.
Plaintiffs’ NJCFA claim is deficient for two reasons: (1) Defendants’
Energy Star representation was not false or misleading; and (2) the allegations
do not reflect anything more than a garden-variety warranty claim, for which
42
the NJCFA does not provide a remedy. See Cox v. Sears Roebuck & Co., 138
N.J. 2, 18 (1994) (quoting D’Ercole Sales v. Fruehauf Corp., 206 N.J. Super. 11,
25 (App. Div. 1985) (“[A] breach of warranty, or any breach of contract, is not
per se unfair or unconscionable
.
.
.
and a breach of warranty alone does not
violate a consumer protection statute.”).
A claim under the NJCFA requires “a statement of fact, found to be false,
made to induce the buyer to make the purchase.” Chaudhri v. Lumileds LLC,
No. 18-2167, 2018 WL 6322623 at *6 (D.N.J. Dec. 3, 2018). Defendants did not
make a material misrepresentation when they sold washers with the Energy
Star branding in New Jersey. As in other states, the evidence reveals that
Plaintiffs in the New Jersey class bought their washers while they carried the
Energy Star designation under the DOE’s authority. Indeed, the DOE did not
reclassify the washers until over a year after the New Jersey plaintiffs had
purchased their machines. Because Defendants—and, more importantly, the
DOE—considered the washers to be Energy Star-qualified when sold, any
statement to that effect was not misleading or false when made.
A breach-of-warranty claim—without more—does not constitute a
violation under the NJCFA. Palmucci v. Brunswick Corp., 311 N.J. Super. 607
(App. Div. 1998). Instead, there must be “substantial aggravating
circumstances” to elevate the warranty claim to a consumer fraud violation.
See S. Jersey Gas Co. v. Mueller Co., No. 09—4 194, 2011 WL 5873028 at *6
(D.N.J. Nov. 18, 2011) (quoting Suber v. Chrysler Corp., 104 F.3d 578, 587 (3d
Cir. 1997)). Here, Plaintiffs have not shown those aggravating circumstances.
Once again, Whirlpool attempted to comply with the Energy Star criteria by
seeking—and receiving—DOE guidance on Energy Star testing. Whirlpool
labeled its washers as Energy Star-compliant only after the DOE sanctioned
that decision, Plaintiffs Angelone and Dzielak bought their washers in
November 2009. (DE 349 ¶1100 & 131). At that time, the DOE had not revised
its interpretation, no washer had failed the new testing standards, the DOE
had not informed Whirlpool of the test results, and the washers remained
43
Energy Star-qualified. Plaintiffs have not produced evidence that shows the
intent to mislead that New Jersey law requires. Accordingly, summan’
judgment is granted and the NJCFA claim is DISMISSED.
ii.
Truth-in-Consumer Contract, Warranty, and Notice Act,
N.J. Stat. Ann. § 56:12-14, et seq. (“TCCWNA”)
The Truth-in-Consumer Contract, Warranty, and Notice Act, N.J. Stat.
Ann.
§ 56:12-14, et seq., (“TCCWNA”) does not “recognize any new consumer
rights but merely impose[s] an obligation on sellers to acknowledge clearly
established consumer rights and provided remedies for posting or inserting
provisions contrary to law.” Dugan v. 2131 Fridays, Inc., 231 N.J. 24, 68 (2017)
(quoting Shelton v. Restaurant corn, ma, 214 N.J. 419, 432 (2013):
It is intended “to prevent deceptive practices in consumer
contracts.” Dugan v. TOl Fridays, Inc., 231 N.J. 24, 67 (2017)
(quoting Kent Motor Cars, Inc. v. Reynolds & Reynolds Co., 207 N.J.
428, 457 (2011)). When it enacted the TCCWNA in 1981, the
Legislature acknowledged the presence of legally invalid provisions
in “[flar too many consumer contracts, warranties, notices and
signs,” which acted to “deceive[] a consumer into thinking [the
provisions] are enforceable,” and deterred consumers from
enforcing their legal rights. Sponsor’s Statement to A. 1660 at 2
(1980). In the TCCWNA, the Legislature sought not to confer new
legal rights, but to require sellers “to acknowledge clearly
established consumer rights,” and to “providef] remedies for
posting or inserting provisions contrary to law.” Shelton, 214 N.J.
at 432; see also Governor’s Statement on Signing A. 1660 (Jan. 11,
1982) (noting that TCCWNA would “strengthen[j provisions of the
Consumer Fraud Act”).
Spade v. Select Comfort Corp., 232 N.J. 504, 5 15—16 (2018). The TCCWNA
statute does not establish consumer rights or seller responsibilities; instead, it
“bolsters rights and responsibilities established by other laws.” Watkins v.
DineEquity, Inc., 591 F. App’x 132, 134 (3d Cir. 2014).
A plaintiff pursuing a TCCWNA cause of action must prove four
elements: first, that the defendant was a “seller, lessor, creditor,
lender or bailee or assignee of any of the aforesaid”; second, that
the defendant offered or entered into a “written consumer contract
or [gavej or display[ed] any written consumer warranty, notice or
44
sign”; third, that at the time that the written consumer contract is
signed or the written consumer warranty, notice or sign is
displayed, that writing contains a provision that “violates any
clearly established legal right of a consumer or responsibility of a
seller, lessor, creditor, lender or bailee” as established by State or
Federal law; and finally, that the plaintiff is an “aggrieved
consumer.”
Id. at 516 (quoting N.J.S.A. 56:12-15, -17).
Here, Plaintiffs have not sustained their burden because a TCCWNA
claim cannot survive without (in this context) a sufficient and corresponding
NJCFA claim:
TCCWNA does not establish consumer rights or seller
responsibilities. Rather, the statute bolsters rights and
responsibilities established by other laws. TCCWNA creates liability
whenever a seller presents a consumer with a covered writing that
“contains terms contrary to any established state or federal right of
the consumer.” Shelton v. Restaurant.com, 214 N.J. 419 (2013).
The rights and responsibilities to be enforced by TCCWNA are
drawn from other legislation. One such piece of legislation is the
CFA. See Bosland v. Waniock Dodge, Inc., 396 N.J. Super. 267
(App. Div. 2007) (A covered writing containing a provision that
“violates a clearly established legal right under the CFA regulations
is also a violation of the TCCWNA.”).
Watkins a DineEquity, ma, 591 F. App’x 132, 134 (3d Cir. 2014) (emphasis
added). For the reasons, discussed above, Plaintiffs have not produced evidence
sufficient to establish a violation of the NJCFA. It follows that they have failed
to support a claim under the TCCWNA. Summary judgment is granted, and the
TCCWNA claim is DISMISSED.
5. Ohio Consumer Sales Practices Act, Ohio Rev. Code
Ann. 1345.01, et seq. (“OCSPA”)
The Ohio Consumer Sales Practices Act, Ohio Rev. Code Ann. 1345.01,
et seq., (“OCSPA”) prohibits suppliers from committing “an unfair or deceptive
act or practice in connection with a consumer transaction.” Ohio Rev. Code
Ann.
§
s.
1345.02. That statute requires a showing of a material representation, a
deceptive act, or an omission that affected a plaintiffs decision to purchase an
45
item. Temple v. Fleetwood Enters., Inc., 133 P. App’x 254, 265 (6th Cir. 2005).
An OSCPA claim requires that a statement, when made, “amounted to a
deceptive, unfair, or unconscionable act,” and that the “speaker” had “prior
notice” that its statement was deceptive. See Marrone u. Philip Mon-is USA, Inc.,
850 N.E.2d 31, 34 (Ohio 2006); Tsirikos—Karapanos u. Ford Motor Co., 99
N.E.3d 1203, 1215 (Ohio Ct. App. 2017).
Plaintiffs allege that Defendants knew that the models were noncompliant and that the Energy Star labels were inappropriately affixed to the
washers. Such allegations were sufficient at the motion to dismiss stage, but
here, as elsewhere, Plaintiffs have not brought forth evidence to support their
contentions. They have not created an issue of fact that Defendants intended to
mislead them, which is an integra’ element of an OCSPA claim.
Instead, the evidence shows that that Whirlpool tested the washers in
accordance with the DOE’s 2007 Energy Star regulations; that Plaintiff Parsons
bought her washer in March 2010; and that the DOE later reinterpreted its
regulations and disqualified the washers. Accordingly, the Energy Star logo was
not inappropriately affixed at the time the washers were sold and Defendants
did not violate the OCSPA. Plaintiffs have not produced evidence that shows
the intent to mislead required that Ohio law requires. Summary judgment is
granted, and the OCSPA claim is DISMISSED.
6. Texas Deceptive Trade Practices Act, Tex. Bus. & Corn.
Code § 17.41-17.63 (“TDTPA”)
The Texas Deceptive Trade Practices Act, Tex. Bus. & Com. Code
§ 17.41-17.63, (“TDTPA”) has three essential elements: (1) the plaintiff is a
consumer; (2) the defendant violated a specific provision of the TDTPA; and (3)
the defendant’s violation caused damages to the plaintiff. The statute
specifically allows a plaintiff to pursue a claim under the TDTPA for a breach of
an express or implied warranty, as well as for an “unconscionable act.” See
Brittan Commc’ns. Int’l Coip. v. Sw. Bell Tel. Co., 313 F.3d 899, 907 (5th Cir.
2002).
46
Plaintiffs claim that “Defendants engaged in false, misleading, and
deceptive practices,” in violation of TDTPA. (DE 86
¶ 174). Specifically, they
allege that Defendants misrepresented the washers’ Enerr Star compliance.
They also allege that Defendants breached express and implied warranties and
are therefore liable under TDTPA
§ 17.50(a)(2) & 17.50(b). Finally, they allege
that Defendants violated the TDTPA because their actions constitute “an
unconscionable action or course of action” under TDTPA
§ 17.50(a)(3). (DE 86
¶ 179). The Texas purchaser/plaintiff, Cohen, bought his washer in November
2009. (DE 349 ¶ 120).
i.
Misrepresentation
Tex. Bus. & Corn. Code
§ 17.50(a)(1) creates a cause of action based on
false, misleading, or deceptive acts or practices that are relied upon to the
consumer’s detriment.
[TJhe term “false, misleading, or deceptive acts or practices”
includes, but is not limited to, the following acts:
(1) passing off goods or services as those of another;
(2) causing confusion or misunderstanding as to the source,
sponsorship, approval, or certification of goods or services;
(3) causing confusion or misunderstanding as to affiliation,
connection, or association with, or certification by, another;
(4) using deceptive representations or designations of
geographic origin in connection with goods or services;
Tex. Bus. & Com. Code
§ 17.46(b). This quoted list is merely illustrative; the
statute contains more than thirty other examples and, by its own terms, is not
exhaustive. Id.
Plaintiffs seek to establish a TDTPA misrepresentation under both an act
theory and an omission theory. The alleged bad act is that the Defendants
affirmatively represented that the washers had features they did not have. The
alleged omission is that Defendants did not disclose that the washers did not
47
meet Energy Star criteria. As with other states’ consumer fraud statutes, the
defendants’ intent is key:
Mere nondisclosure of material information is not enough to
establish an actionable DTPA claim. Head v. U.S. Inspect DFW, Inc.,
159 S.W.3d 731, 744 (Tex. App. 2005); Centhnj2l Real Estate
Corp. v. Hometown Real Estate Co., 890 S.W.2d 118, 126 (Tex. App.
1994). The plaintiff must also show that the information was
withheld with the intent of inducing the consumer to engage in a
transaction. Willowbrook Foods, Inc. v. Grinnell Corp., 147 S.W.3d
492, 507 (Tex. App. 2004).
Patterson
ii.
McMickle, 191 S.W.3d 819, 827 (Tex. App. 2006)
Plaintiffs’ “act” theory is insufficient because, as in other states, they
have not produced evidence that the Energy Star branding was incorrect at the
time of sale. Cohen bought his washer while it was designated as Energy Starqualified according to the DOE, well before the DOE reinterpreted its testing
regulations and informed Whirlpool of the results. Plaintiffs’ “omission” theory
is also inadequate, because they have not “show[n] that the information was
withheld with the intent of inducing the consumer to engage in a transaction,”
as required by Willowbrook Foods. See 147 S.W.3d at 507. Indeed, Defendants
did not yet know that at some future time the presently compliant washers
would not satisfy as-yet-unpromulgated regulatory interpretations.
Plaintiffs misrepresentation claim also fails for a failure to demonstrate
reliance, because Tex. Bus. & Com. Code
§
17.50 prohibits “the use
false, misleading, or deceptive act or practice that is
consumer
.
.
.
.“
.
.
.
.
.
.
of a
relied on by a
Cohen testified that he did not speak to a salesperson about
the washer before he bought it (DE 315-9 at 32:23—33:1), and he has produced
no other evidence of reliance of his reliance on Defendants’ representations
concerning Energy Star.
ii.
Breach of warranty
The TDTPA does more than mirror the common law: “a mere breach of
contract, without more, is not a DTPA violation.” Rocky Mountain Helicopters v.
Lubbock Cty. Hosp. Dist., 987 S.W.2d 50, 53 (Tex. 1998) (citing Crawford v. Ace
48
Sign, Inc., 917 S.W.2d 12, 14 (Tex. 1996); La Sara Grain Co. v. First JVat’l Bank
of Mercedes, 673 S.W.2d 558, 565 (Tex. 1984); Ashford Dcv., Inc. v. USLife Real
Estate Servs. Corp., 661 S.W.2d 933, 935 (Tex. 1983)). Instead, the TDTPA
provides remedies for rights created elsewhere. Because the Texas plaintiffs
have not raised a genuine issue of material fact with regard to the common-law
warranty claims, see Section III.C, supra, the statutonr warranty claims also
fail.
lii.
Unconscionable act
The TDVFA also provides a cause of action where economic damages are
caused by “any unconscionable action or course of action by any person.” Tex.
Bus. & Corn. Code
§
17.50(a)(3). In this context, an unconscionable act is one
that, to the consumer’s detriment, takes advantage of the consumer’s lack of
knowledge, ability, experience, or capacity to a grossly unfair degree. McCoy v.
Homestead Studio Suites Hotels, 390 F. Supp. 2d 577 (S.D. Tex. 2005). Again,
Plaintiffs have produced no evidence that Defendants hoodwinked them based
on an unequal balance of sophistication or knowledge. Rather, they received a
washer that provided significant energy and water savings (and was believed to
be Energy-Star compliant at the time). Plaintiffs have not shown that
Defendants behaved to a “grossly unfair degree.”
Plaintiffs have not brought forth the evidence required under the TDTPA.
Summary judgment is granted, and the Texas statutory claim is DISMISSED.
49
IV.
CONCLUSION
For the reasons set forth above, Defendants’ motions for summary
judgment (DE 309 & 315) are GRANTED. Whirlpool’s motion to decertify
classes (DE 312) is DENIED as moot, in that (a) the causes of action have been
dismissed, and (b) the named plaintiffs would not be appropriate
representatives of any hypothetical persons who retained viable claims.
A separate order will issue.
Dated: December 5, 2019
I7
C)
Kevin McNulty
Ho
United States District Judge
50
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