GRISAFI v. SONY ELECTRONICS, INC.

Filing 23

OPINION. Signed by Judge John Michael Vazquez on 4/30/2019. (sm)

Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

RICHARD GRISAFI, on behalf of himself
and the Putative Class,

Flaintiffr,

Civil Action No. 18-8494 (JMV) (JBC)

v.

OPINION

SONY ELECTRONICS INC.,

Defendants.

John Michael Vazguez. U.S.D.J.
This putative class action concerns a software update that intentionally rendered a personal
internet viewing device, the Sony Dash, nonfunctional. D.E. 1. Plaintiff alleges eight counts
against Defendant Sony Electronics Inc. (“Sony”) relating to the software update: (I) violation of
the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C.
Jersey Consumer Fraud Act (“CFA”), N.J.S.A.

§

§

1030 ci seq.; (II) violation of the New

56:8-2 ci seq.; (III) breach of express warranty;

(IV) breach of implied warranty; (V) violation of the Magnuson-Moss Warranty Act (“MMWA”),
15 U.S.C.

§ 230 ci seq.;

(VI) violation of the New Jersey Truth in Consumer Contract, Warranty,

and Notice Act (“TCCWNA”), N.J.S.A.

§

56:12-15 ci seq.; (VII) trespass to chattels; and (VIII)

unjust enrichment. Id. Currently pending before this Court is Defendant’s motion to dismiss
Plaintiffs Complaint pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim. D.E. 15. The

Court reviewed the parties’ submissions in support and in opposition) and considered the motion
without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons
stated below, Defendant’s motion to dismiss is denied in part and granted in part.
I.

INTRODUCTION2

Sony released the Dash in 2010 and described it as a “personal application viewer”
featuring “built-in Wi-Fi, stereo speakers, a USB port, and a 7-inch touch screen.” Compl.

¶

17.

A senior vice president with Sony explained that the Dash “empower[ed] consumers with a fun,
interactive way to stay connected with their news, entertainment, interests and ultimately, their
lives.” Id.

¶

18. The Dash supported over 1,000 free applications, including those that allow

access to Facebook, YouTube, Pandora, Flickr, Netflix, and more. Id. ¶11 18, 21, 22,25. The Dash
came with a one-year limited warranty for hardware repair or replacement. Id.

¶

74. As for

software, consumers accepted Sony’s End User License Agreement (“EULA”) by using the
product, which stated in pertinent part:
From time to time, Sony. may automatically update or otherwise
modify the Software, for example, but not limited to for purposes of
error connection, improvement of features, and enhancement of
security features. Such updates or modifications may change or
delete the nature of features or other aspects of the Software,
including but not limited to features you may rely upon. You hereby
.

.

Defendant’s brief in support of its motion will be referred to as “Del Br.,” D.E. 15-1; Plaintiffs
opposition will be referred to as “P1. Opp’n,” D.E. 19; Defendant’s reply will be referred to as
“Def. Reply,” D.E. 22.
2

The facts are derived from Plaintiffs Complaint (“Compl.”), D.E. 1, and documents relied upon
therein. When reviewing a motion to dismiss, the Court accepts as true all well-pleaded facts in
the complaint. Fowler i’. UPMCShadvside, 578 F.3d 203, 210 (3d Cir. 2009). A court may also
consider any document integral to or relied upon in the complaint and matters of public record. In
re Burlington Coat Factoiy Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997); see also In re Donald
.1 Trump Casino Sec. Litig.-Taj Mahal Litig., 7 F.3d 357, 368 (3d Cir. 1993) (“a court may consider
an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss
if the plaintiffs claims are based on the document.”).
2

agree that such updates and modifications may occur at Sony’s sole
discretion, and that Sony may condition continued use of the
Software upon your complete installation or acceptance of such
updates or modifications.
Id.

¶ 27,

Ex. A. Plaintiff alleges that the EULA came inside of the Dash packaging, therefore the

EULA could only be viewed once the consumer “purchase[d] the Dash, br[oughtj it home[,] and
t[ook] it out of the box.” Id.

¶ 27.

Plaintiff purchased five Dashes. Id.

¶{ 30-34.

On July 20, 2011 he purchased two HID

ClO Dashes (the original model) from Amazon.com for $104.96 each. Id.

¶

30-32. He later

purchased an additional HID-Cl 0 Dash because of how pleased he was with the product. Id.

¶ 33.

Less than a year later, he purchased an HID-B70 Dash (an updated model that featured a backup
battery) from Woot.com for $79.99, and subsequently purchased a final HID-870 Dash from
eBay.3 Id.

¶ 34.

In July 2017, Sony released a software update,4 version 1.7.1604 (the “Update”). Id.

¶ 28.

On July 12, a pop-up appeared on Plaintiffs HID-C 10 Dashes indicating that the Update was
available for download. Id.

¶ 37.

Plaintiff was unable to opt out of the Update. Instead, he had to

press “OK,” which allowed the device to download the Update, in order to continue using the
device. Id. ¶J 28, 37. When the Update completed, the device restarted to a screen that reads
“SONY,” with the “SONY” light flashing at the bottom. Id.
do not deny that this is the intended

and only

—

¶ 37.

Plaintiff alleges and Defendants

capability of the HID-C 10 Dash post-Update. Id.

In his Complaint, Plaintiff does not include dates or prices for the purchases other than those
stated.
Plaintiff uses the terms firmware update and software update interchangeably in his Complaint.
See Compl. ¶ 59 (“[t]he firmware/software update SONY intentionally transmitted to the SONY
Dash caused damage to it, resulting in a bricked product.”).
3

Given that the Update rendered the device nonftinctional,5 Plaintiff alleges that Sony “bricked” the
Dash. Id. Plaintiff explains that “bricking” refers to a software update that renders the hardware
“useless.” Id.

¶3

n. I (citation omitted).

Plaintiff filed his Complaint on April 27, 2018, alleging the eight counts mentioned above.
Compl. ¶j 53-127. Defendant moved to dismiss on July 27, 2018 pursuant to Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim. D.E. 15. Plaintiff opposed the motion, D.E. 19,
and Defendant replied, D.E. 22.
II.

LEGAL STANDARD

Rule l2(b)(6) of the Federal Rules of Civil Procedure permits a defendant to move to
dismiss a count for “failure to state a claim upon which relief can be granted[.]” To withstand a
motion to dismiss under Rule 12(b)(6), a plaintiff must allege “enough facts to state a claim to
relief that is plausible on its face.” Bell iUL Corp.

Twombly, 550 U.S. 544, 570 (2007). A

complaint is plausible on its face when there is enough factual content “that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” AshcroJ? i’.
Iqbal, 556 U.S. 662, 678 (2009). Although the plausibility standard “does not impose a probability
requirement, it does require a pleading to show more than a sheer possibility that a defendant has
acted unlawfiilly.” Connelly v Lane Const Corp., 809 F.3d 780, 786 (3d Cir. 2016) (internal
quotation marks and citations omitted). As a result, a plaintiff must “allege sufficient facts to raise
a reasonable expectation that discovery will uncover proof of [his] claims.” Id. at 789.
In evaluating the sufficiency of a complaint, a district court must accept all factual
allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff.

Plaintiff notes that since his HID-B70 Dash models run on backup battery power, they still have
been able to thnction as “a passive alarm clock” but once their batteries drain, they too will be
bricked from the update. Id. ¶ 38.
4

Phillips

i

Civ. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). A court, however, is “not

compelled to accept unwarranted inferences, unsupported conclusions or legal conclusions
disguised as factual allegations.” Baraka v. McGreevev, 481 F.3d 187, 211 (3d Cir. 2007). If,
after viewing the allegations in the complaint most favorable to the plaintiff; it appears that no
relief could be granted under any set of facts consistent with the allegations, a court may dismiss
thc complaint for failure to state a claim. DeFazio v. Leading Edge Recove,y Sols.. 2010 WL
5146765, at *1 (D,N.J. Dec. 13, 2010).
“Independent of the standard applicable to Rule I 2(b)(6) motions, Rule 9(b) imposes a
heightened pleading requirement of factual particularity with respect to allegations of fraud.” In
re Rockefeller Or. Props., Inc. Sec. Litig., 311 F.3d 198, 216 (3d Cir. 2002). Thus, pursuant to
Rule 9(b), when “alleging fraud or mistake, a party’ must state with particularity the circumstances
constituting fraud or mistake

.

.

.

[m]alice, intent, knowledge, and other conditions of a person’s

mind may be alleged generally.” Fed. R. Civ. P. 9(b). A party alleging fraud must therefore
support its allegations with factual details such as “the who, what, when, where and how of the
events at issue.” U.S. cx rd. Moore & Co., PA. v. Majestic Blue Fisheries, LLC, 812 F.3d 294,
307 (3d Cir. 2016). Accordingly, “[tjo satisfy the particularity standard, ‘the plaintiff must plead
or allege the date, time and place of the alleged fraud or otherwise inject precision or some measure
of substantiation into a fraud allegation.” Feingold i’. Graft; 516 F. App’x 223, 226 (3d Cir. 2013)
(citing Frederico v Home Depot, 507 F.3d 188, 200 (3d Cir. 2007)). This heightened pleading
standard is designed to “ensure that defendants are placed on notice of the precise misconduct with
which they are charged, and to safeguard defendants against spurious charges of fraud.”

Crafimatic Sec. Litig. v. Kraflsow, 890 F.2d 628, 645 (3d Cir. 1989) (internal quotation marks
omitted).

5

HI. ANALYSIS
CFAA (Count I’)
Plaintiff first alleges a violation of the CFAA. Compl. ¶T 53-60. The CFAA provides that
a defendant is liable for “knowingly caus[ing] the transmission of a program, information, code,
or command, and as a result of such conduct, intentionally caus[ing] damage without authorization,
to a protected computer.” In re Apple & AT & TM Antitrust Litig., 596 F. Supp. 2d 128$, 1308
(N.D. Cal. 200$) (“hi reApple”) (quoting 1$ U.S.C.

§

1030(a)(5)(A)(i)). “A plaintiff must also

demonstrate that the defendant’s action caused over $5,000 in damage over a one-year period.” Id.
(citing 18 U.S.C.

§

1030(a)(5)(B)).

Defendant first argues that Plaintiff failed to plausibly allege that the Dash is a “protected
computer” within the meaning of the statute. DeE Br. at 13; Def. Reply at 2-3. The CFAA defines
a protected computer as an “electronic

.

.

.

or other high speed data processing device.

used in or affecting interstate or foreign commerce or communication[.]” 18 U.S.C.

§

.

.

which is

I 030(e)( 1),

(e)(2)(B). Here, Plaintiff alleges that the Dash was a “personal application viewer” featuring
1,500+ apps available to deliver weather, traffic, social networking,
movies, music, and more[;] 7-inch touchscreen with gesture support
and WVGA [Wide Video Graphics Array] (800x480) pixel
resolution[;] 802.1 lb/g Wi-Fi to easily connect to your wireless
home network[;] 500Mhz processor with 32kB lID L2 cache
[storage]; [and] 256 MB, 667MHz DDR2 DRAM [memory].
Id.

¶T

17-19. Plaintiff therefore plausibly pled that the Dash is a “high speed processing device,”

or a “computer.” Further, Plaintiff sufficiently alleges that the Dash is a “protected computer”
because it uses the Internet to engage in interstate communication, accessing over 1,500
applications that deliver a wide variety of information stemming from various locations. Id.

¶

17-19; see United States v. Trotter, 478 F.3d 918, 921 (8th Cir. 2007) (finding that a computer
connected to, and used to access, the Internet is a “protected computer” under the CFAA); United
6

States v. Roque, No. 12-540, 2013 WL 2474686, at *2 (D.N.J. June 6, 2013) (finding the same).
Plaintiff plausibly pled that the Dash is a “protected computer” within the meaning of the CFAA.
Defendant next asserts that the Update was not “without authorization” given the language
of the EULA. Def. Br. at 14-15; Def. Reply at 3-6. Specifically, Defendant argues that the “EULA
authorizes Sony to ‘modify’ the Software at any time, and warns that such modifications ‘may
change or delete the nature of features or other aspects of the Software, including but not limited
to the features [the consumer] may rely upon.” Def. Br. at 14 (quoting the EULA). A similar
argument was addressed injure Apple, 596 F. Supp. 2d at 1308. In that case, Apple, the defendant,
relied on the following language to argue that it acted “with authorization” for purposes of the
CFAA when bricking iPhones that has been “unlocked” to access third-party applications: “IF
YOU HAVE MODIFIED YOUR IPHONE’S SOFTWARE, APPLYING THIS SOFTWARE
UPDATE MAY RESULT IN YOUR IPHONE BECOMING PERMANENTLY INOPERABLE.”

Id. at 1296, 1307. The district court concluded that usage of the term “may” (as in “may result”
in damage) created too much “ambiguity surrounding Apple’s warning” and found the plaintiff’s
allegations as to its CFAA claim sufficient to defeat Apple’s motion to dismiss. Id. at 1307.
Here, Sony used the same ambiguous “may” (as in “may change or delete the nature of
features”) and even more uncertain language than in In re Apple. Unlike in In re Apple, Sony did
not explicitly warn that a subsequent software update could render the Dash “permanently
inoperable.” The EULA does not say that Sony can delete all features. Instead, it vaguely warns
consumers that Sony “may change or delete the nature of features” that a consumer “may rely
upon.” Def. Br. at 14 (emphasis added); Compl.

¶ 27,

Ex. A (emphasis added). This sentence is

also prefaced by the following: “From time to time, Sony

...

may automatically update or

otherwise modify the Software, for example, but not limited to for purposes of error connection,

7

improvement of features, and enhancement of security features.” Compl. ¶ 27, Ex. A. This preface
implies that automatic software updates will improve or enhance the Dash

not destroy its

functionality. The Court cannot say at this stage in the proceedings that by using the Dash and
thus implicitly agreeing to the EULA, Plaintiff authorized Sony to render his Dashes inoperable.
Plaintiff plausibly pled that Sony acted “without authorization” in bricking the Dash.
Defendant next argues that Plaintiff has not plausibly pled the CFAA loss threshold of
$5,000. Def Br. at 15-16; Def. Reply at 6-10. Defendant argues that Plaintiff paid $289.91 total
for three of his Dashes and fails to state how much he paid for the other two Dashes. Def. Br. at
15 n.1 1 (citing Compl. ¶ffll 30-34). The Court agrees that Plaintiff failed to plausibly establish that
he meets the $5,000 on his own. However, Plaintiff argues that the loss requirement is not limited
to his losses but can be aggregated over all United States consumers whose Dashes were bricked
by Sony’s Update (his purported class). P1. Opp’n at 24.
In reAm. Online, Inc., 168 F. Supp. 2d 1359 (S.D. Fla. 2001), the court addressed this

aggregation issue and analyzed the legislative history behind the CFAA. The district court quoted
the Senate Report to the 1986 amendments to the CFAA, which stated that
[t]he Committee does not intend that every victim of acts proscribed
under (a)(5) must individually suffer a loss of$ 1,000,6 Certain types
of malicious mischief may cause smaller amounts of damage to
numerous individuals, and thereby collectively create a loss of more
than $1,000. By using “one or more others,” the Committee intends
to make clear that losses caused by the same act may be aggregated
for purposes of meeting the $1,000 threshold.
Id. at 1373-74 (quoting S. Rep. No. 99-474, 99th Cong. 2nd Sess., U.S. Code Cong. & Admin.
News 1986, at p. 2483, Oct. 6, 1986). The district court then concluded as follows:

6

The threshold amount was $1,000 at that time but has since been increased to $5,000. In re
Am. Online, Inc., 168 F. Supp. 2d at 1373 n.10.
8

The legislative history of the CFAA actually contravenes [the
defendantj AOL’s argument that Congress intended for damage to
be measured by only one computer. In fact, the predecessor versions
of the CFAA make it clear that damage is to be measured as it stems
from one act, not a single computer, and thereby affects several
individuals.

Id. at 1373; see also In re Apple, 596 F. Supp. 2d at 1308 (permitting aggregation of damages to
meet the $5,000 threshold because “the legislative history of the CFAA reveal[sJ that Congress
intended to pennit aggregation of damages, so long as those damages arose from the same act by
a defendant.” (citing In re Toys R Us, Inc., Privacy DUg, No. 00-2746,2001 WL 34517252, at * I
(N,D. Cal. Oct 9,2001) (“In re Toys A Us”))). The Court agrees,
Here, Plaintiff claims of damage from a single act: the Update. Compl. ‘160. Defendant
argues that each acceptance of the Update was a separate act Def Reply at 10. The Court
disagrees, Damage results from a “single act” when the defendants “caused an identical file to be
implanted in each of the plaintiffs’ computers, resulting in damages of a uniform nature.” In re
Apple, 596 F. Supp. 2d at 1308 (quoting In re Toys A Us, 2001 WL 34517252, at *11). In In re
Apple, the district court found Apple’s software update bricking of “unlocked” iPhones to be a
single act sufficient to aggregate claims even though users had to individually agree to install the
update. Id. The same is true here. Defendant’s single act of releasing the Update caused the
identical Update to be installed on all Dashes, resulting in uniform damage (bricking) to each Dash.
Therefore, Plaintiff plausibly pled a single act sufficient to aggregate claims for purposes of
meeting the $5,000 threshold.
Defendant also argues that even if a single act caused the damage, Plaintiff’s CFAA claim
still fails because Plaintiffmust rely on damages to other unnamed putative class members to meet
the $5,000 threshold requirement. Def. Br. at 15-16. Defendant cites to Klein v. Gen. Nutrition
Companies, Inc., 186 F.3d 338 (3d Cir. 1999), and Lewis v. Casey, 518 U.S. 343(1996), in support.
9

DeE Br. at 16. However, neither Klein nor Lewis involved a CFAA claim. Moreover, both cases
indicate that a plaintiff himself must suffer damage, in other words, the named plaintiff may not
rely solely on damage to other unnamed members of the purported class. See Klein, 186 F.3d at
345 (“[Named plaintiffs who represent a class must allege and show that they personally have
been injured, not that injury’ has been suffered by other, unidentified members of the class to which
they belong and which they purport to represent.” (quoting Lewis, 518 U.s. at 357)). Here, Plaintiff
has sufficiently alleged that he suffered damage when Defendant bricked his Dashes, rendering
them nonfunctional. Compl. j 37. Plaintiff has plausibly pled that the Update resulted in over
$5,000 of uniform damages to Plaintiff and other putative class members. The Court denies
Defendant’s motion to dismiss as to Plaintiff’s CFAA claim (Count I).
CFA (Count II)
Plaintiff next alleges a violation of New Jersey’s CFA. Compl.

¶

61-71. New Jersey’s

CFA prohibits “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.” N.J.S.A. 56:8-1. To state a New
Jersey CFA claim, a plaintiff must plead with particularity: “(1) an unlawful practice; (2) an
ascertainable loss on the part of the plaintiff; and (3) a causal relationship between the defendant’s
unlawffil conduct and the plaintiffs ascertainable loss.” Mehnert

1.

U.S. Bank Nat’l Ass’n. No. 17-

4985, 2018 WL 1942523, at *7 (D.NJ. Apr. 23. 2018) (quoting Dabush v. Mercedes—Benz USA,
LLC. 378 N.J. Super. 105, 114 (App. Div. 2005)). An unlawftil practice can fall into three general
categories: affirmative acts, knowing omissions, or regulatory’ violations. Id.

10

Plaintiff alleges (1) an affirmative misrepresentation; and (2) a knowing omission. Compl.
¶3165, 68. As for the affirmative misrepresentation, Plaintiff alleges that Sony represented that the
Dash is a “personal application and br internet viewer which would utilize SONY’s dedicated
servers to operate and that SONY would stand behind the product for the anticipated useful life of
the product.” Compl.

¶ 65. Defendant argues that the first part of the clause is not misleading and

“not false—the [D]ash was a personal application and/or viewer and it used Sony’s servers.” Def.
Br. at 18. Defendant instead argues that it never represented that Dash users would have access to
Sony’s servers for a particular period of time. Id. at 18-19.

Defendant denies that it ever

guaranteed access to Sony’s servers for a Dash’s “useflil life.” Def. Br. at 18-19. The Court
agrees. Plaintiffhas not pled with any particularity who made this alleged representation regarding
usethl life, when the representation was made, or where the representation was made. None of
Sony’s promotional language included in the Complaint represents that Sony would support the
product for its anticipated useffil life.

Plaintiff fails to plead with particularity the alleged

affirmative misrepresentation.
As for a knowing omission, Plaintiff alleges that Sony “did not inform Plaintiff or the
members of the Class that it had designed the product so that [Sony] had the ability to brick the
product at will,” “long before the end of its anticipated and reasonable useful life,” because “the
advertised function of the SONY Dash was no longer profitable.” Id. ¶3166-68. Defendant argues
that this allegation is conclusory, and Plaintiff has not alleged with particularity facts supporting a
knowing omission. Def. Br. at 2 1-22.
Under the knowing omission theory, a defendant is liable for failing to inform consumers
of a known defect in a product. Glass

1’.

BMIVofN Am., LLC, No. 10-5259, 2011 WL 6887721,

at *8 (D.N.J. Dec. 29, 2011). In Glass, the power steering in the plaintiffs MINI Cooper failed.

11

2011 WL 6887721, at *1. The plaintiff brought a New Jersey CFA claim against BMW of North
America, LLC, the manufacturer, for allegedly knowing about the defect and failing to inform
consumers. Id. at *8. The district court explained that the plaintiff did not specifically allege the
following:
(1) who at BMW NA possessed knowledge of the defect; (2) when
or how the decision was made to conceal the defect from customers;
(3) that all, or even substantially all, MINI Cooper vehicles have a
defective power steering system; and (4) that BMW NA knew that
the power steering was certain to fail.
Id. The district court accordingly found that the plaintiff failed to plead with particularity her CFA
knowing omission claim. Id.
A similar conclusion is warranted here. Plaintiff alleges that the “defect” in the Dash is
that Sony would “brick the Dash prior to the end of its usdIil life in the event expected profits
were not realized.” Compl.

¶ 40(a).

Plaintiff ftirther alleges that Sony’s “senior vice president of

the personal imaging and audio business, Brennan Mullin,” knew and “concealed the intention.”
Id. However, Plaintiffs very allegation weighs against his argument. By stating that Sony would
shut down the servers “in the event that profits were not realized,” Plaintiff implicitly admits that
Sony (and Mullin) did not know whether the Dash would be profitable at the time of the
promotional statements cited in the Complaint. In other words, Plaintiff does not allege with
particularity that Sony knew the Dash was defective

or “certain to fail”

prior to April 2017,

when Sony informed consumers that it would stop supporting the device. If the Dash continued
to be profitable (which it appeared to be for a number of years) and Sony continued to support the
device, then the Dash would not be defective; it would ffinction exactly as advertised. Given the
uncertainty of the Dash’s profitability at the time of Defendant’s statements, the Court cannot say
that Defendant concealed information regarding a known defect in the product. In other words,

12

Plaintiff has not adequately alleged that Defendant knew when it sold the Dashes that it would be
disabling the devices’ functionality. And, based on the time lapse between the advertising and
sales, when compared with the date of the Update, it is not reasonable to infer that Defendant had
such knowledge. Plaintiff fails to plead with particularity a knowing omission.7 Plaintiff’s New
Jersey CFA claim (Count II) is dismissed without prejudice.
Express Warranty (Count Ill)
Plaintiff next alleges a breach of an express warranty. Compl.

¶[ 72-86. To state a claim

for breach of an express warranty under New Jersey law, a plaintiff must allege “(I) 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.” Francis E. Parker Meni?
Home, Inc. v. Georgia-Pac. LLC, 945 F. Supp. 2d 543, 568 (D.N.J. 2013) (citing N.J.S.A.

§ 12A:2-

313). As for guarantees of the future performance of a product, the Supreme Court of New Jersey
has recognized the following:
Of course, the circumstances can be such that the seller will make a
warranty as to the future condition or future performance of the
article sold, as by guaranteeing the article for a stated period of time.
It would seem, however, that such a warranty of future condition or
performance must be explicit.
Herbstrnan v Eastman Kodak C’o., 68 N.J. 1, 12(1975).

The Court notes that Plaintiff would also have to sufficiently allege causation: that Defendant
knew that the Dash would fail and omitted this information at the time Plaintiffpurchased his
Dashes, causing Plaintiff to purchase his Dashes at the price he did and suffer a loss. Yet, because
the Court finds that Plaintiff did not plead with particularity an unlawM practice, the Court does
not reach the causation issue. The Court also does not reach the ascertainable loss issue for the
same reason.
13

Here, Plaintiff does not plausibly plead that Defendant expressly warranted the
functionality of the Dash’s software for the device’s anticipated useful life or for any stated period
of time.8 Instead, Defendant stated in the EULA that it may delete functions that consumers may
rely on, Compl.

¶ 27,

Ex. A

seemingly negating Plaintiffs argument that Defendant made an

express warranty to the contrary. Plaintiff did not plausibly plead breach of an express warranty.’1
Plaintiff alternatively argues that Defendant’s express warranty (or lack thereof) was
substantively and procedurally unconscionable. Compl.

¶

83, 84. “It is well-settled that courts

‘may refuse to enforce contracts that are unconscionable or violate public policy.” Argabrighr v.
Rheem Mfg. Co., 201 F. Supp. 3d 578, 595 (D.N.J. 2016) (quoting Saxon Constr, & Mgint. Corp.
v. Masterclean fN.C. Inc., 273 N.J. Super. 231, 236 (App. Div. 1994)). “Unconscionabilitymay

be either substantive or procedural.” Id. Procedural unconscionability “refers to unfairness in the
formation of the contract, and may be shown by a variety of inadequacies, such as age, literacy,
lack of sophistication, hidden or unduly complex contract terms, bargaining tactics, and the
particular setting existing during the contract formation process.” Id. (quoting Muhammad v. Ctv.
Bank of Rehoboth Beach, 189 N.J. 1, 15 (2006)) (internal quotations omitted).

Substantive

unconscionability occurs when a contract term is “excessively disproportionate and involves an
exchange of obligations so one-sided as to shock the court’s conscience.” Id. (quoting Delta
Funding Corp. v. Harris, 189 N.J. 28, 55 (2006)) (internal quotations omitted).
First, the Court does not find procedural unconscionability under the allegations of the
Complaint. The EULA appears to be a contract of adhesion. “The essential nature of a contract

Plaintiff’s Dashes appear to have functioned properly for years. See Compl.

¶ 30-38.

o Plaintiff does not allege that the device’s hardware caused injury; therefore, the one-year
hardware warranty is inapplicable to this breach of express warranty claim or the related arguments
of procedural and substantive unconscionability.
14

of adhesion is that it is presented on a take-it-or-leave-it basis, commonly in a standardized printed
form, without opportunity for the adhering party to negotiate except perhaps on a few particulars.”
Moore v. Woman To Woman Obstetrics & Gynecology, L.L.C, 416 N.J. Super. 30, 38 (App. Div.

2010) (quoting Rudbart v. N. Jersey DisL Water Supply Comm’n, 127 N.J. 344, 353 (1992)).
However, contracts of adhesion are not per se procedurally unconscionable. Id. Instead, courts
are to “us[e] a sliding scale analysis,” applying the abovementioned factors. Id.
Here, Plaintiff alleges that Sony delivered the EULA to consumers in the Dash’s packaging
after a consumer already purchased the product, and that the consumer could either accept the
terms or return the product. Compl.

¶ 27.

This is a contract of adhesion. Yet, Plaintiff appears to

be an affluent and sophisticated consumer; he maintained two residences, purchased five Dashes,
and engaged in online research of competing products prior making his purchases. Compl.

¶ 30-

34. Nothing in the Complaint indicates that Plaintiff was of insufficient age or sophistication to
appreciate these terms. The conclusory allegation that Sony had superior bargaining power, or the
fact that Sony delivered the EULA in the product’s packaging, are both insufficient to carry the
claim. See Arga bright, 201 F. Supp. 3d at 596 (“Of course, there is a disparity in bargaining power
in nearly all consumer contracts executed between a purchaser and a manufacturer, and Plaintiffs’
conclusory assertion is by itself insufficient to render a contract unconscionable.”). The Court
finds that Plaintiff has not plausibly pled procedural unconscionability.
Similarly, the Court does not find that substantive unconscionability is supported by the
Complaint. As explained above, at this stage, the Court does not read the EULA to authorize
Defendant to terminate all flrnctionality of the device. A reasonable reading of the EULA allows
Defendant to alter certain features as it sees fit, presumably to enhance or improve the consumer’s
experience. The Court does not find these terms to be excessively disproportionate, or so one-

15

sided as to the shock the conscience. Plaintiffs breach of an express warranty claim (Count Ill)
is dismissed without prejudice.
Implied Warranty (Count IV)
Plaintiff next alleges a breach of implied warranties of merchantability and fitness for a
particular purpose. Compl. ¶j 87-97. New Jersey law provides for an implied warranty of
merchantability and implied warranty of fitness for a particular purpose, see N.J.S.A.

§

12A:2-

314 (merchantability). 315 (fitness for a particular purpose), however, “[tihe complete exclusion
of implied warranties, including warranties of merchantability and of fitness for a particular
purpose, is specifically permitted.” Gladden v. Cadillac Motor Car Dii’., Geix. Motors Corp., 83
N.J. 320, 330-31 (1980) (citing N.J.S.A.

§

12A:2-316). To disclaim these warranties, the written

“language must be clear and conspicuous.” Id. (citing N.J.S.A.

§

12A:2-3l6). For example, the

disclaimer could say that “[tjhere are no warranties which extend beyond the description on the
face hereof.” N.J.S.A.

§

l2A:2-316.

Here, Sony stated in its limited warranty that “A1Y IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ON THIS PRODUCT
IS LIMITED IN DURATION TO THE DURATION OF THIS WARRANTY.” D.E. 15-5.
Elsewhere in the limited warranty, Sony set the duration of the warranty for “a period of one (I)
year from the original purchase of the product.” Id. Thus, Sony conspicuously limited its implied
warranties to one-year. Plaintiff has not alleged that the bricking occurred within one year of his
purchase of a Dash. Therefore, Plaintiff fails to plausibly allege a breach of implied warranties.
Plaintiffs breach of implied warranties claim (Count IV) is dismissed without prejudice.

16

WA Count V
Plaintiff next alleges a violation of the MMWA.

Compi.

.

98-108.

“The MMWA

provides a private right of action in federal court for consumers who are ‘damaged by the failure
of a supplier, warrantor, or service contractor to comply with any obligation
warranty. [or] implied warranty.”

...

under a written

Guardavacarm v. Home Depot, No. 16-8796, 2017 WL

3393812, at *9 (D.N.J. Aug. 8, 2017) (quoting 15 U.S.C. § 2310(d)(I)). “MMWA claims are
coextensive with underlying state law breach of warranty claims and are therefore, dependent on,
and derivative ot said state claims for survival in a motion to dismiss.” Id. (citing Cooper v.
SamsungElees. Am., Inc., 374 Fed. Appx. 250, 254 (3d

Cir.

2010)); see also Volin v. Gen. Elec.

Co., 189 F. Supp. 3d 411, 421-22 (D.N.J. 2016), as amended (May 31, 2016) (“Thus, this

[MMWA] claim will go forward to the extent that the breach of warranty claims remain viable.”).
Here, the Court dismissed Plaintiffs state law express and implied warranty claims, therefore the
Court also dismisses Plaintiffs MMWA claim (Count V) without prejudice.
TCCWA (Count VI)
Plaintiff next alleges a violation of TCCWNA. Compl. ¶j 109-17. TCCWNA provides as
follows:
No seller, lessor, creditor, lender or bailee shall in the course of his
business offer to any consumer or prospective consumer or enter
into any written consumer contract or give or display any written
consumer warranty, notice or sign after the effective date of this act
which includes any provision that violates any clearly established
legal right ofa consumer or responsibility ofa seller, lessor, creditor.
lender or bailee as established by State or Federal law at the time the
offer is made or the consumer contract is signed or the warranty,
notice or sign is given or displayed.
Spade v. Select Confort Corp., 232 N.J. 504, 516 (2018) (quoting N.J.S.A. 56:12-15). In other
words, plaintiff must establish that (I) the plaintiff is a consumer, (2) the defendant is a seller, (3)

17

they entered into a contract, and (4) the contract violates a state or federal law. IcL; see also Watkins
i

DineEqiim. Inc.. 591 F .Appx 132, 135 (3d Cir. 2014). “TCcWcA does not establish consumer

rights or seller responsibilities,” instead, it “bolsters rights and responsibilities established by other
laws.” Watkins. 591 F. App’x at 134. “The rights and responsibilities to be enforced by TCCWNA
are drawn from other legislation.” lit
Here, Plaintiff draws its TCCWNA claim from Defendant’s alleged CFA violation.
Compl.

¶J

114, 116. The Court has dismissed Plaintiffs CFA claim, therefore the TCCWNA

claim based on the alleged CFA violation also fails. Sec J[ilson v KiaMotorsAin., Inc., No. 131069. 2015 WL 3903540, at *5 (D.N.J. June 25, 2015) (“Plaintiff cannot establish a violation ofa
‘clearly established legal right’ under the CFA and therefore cannot, by proxy. establish a violation
of the TCCWNA.”).
Plaintiff also seems to base his TCCWNA claim on a violation of”[w]ell established New
Jersey decisional law [that] holds that exculpatory provisions which purport to release businesses
from liability for their own negligent. willfUl, or intentional conduct are unenforceable.” Compl.
¶ 116 (citing Martinez-Santiago

Public Storage. 38 F. Supp. 3d 500 (D.N.J. 2014)). Plaintiff’

quotes a portion of the EULA which Limits Sony’s liability, but then also quotes a portion of the
EULA that makes the limitations applicable only in the jurisdictions that allow them. Compl. ¶
115. Therefore, any limitations in the EULA will not apply if New Jersey does not allow them.
Plaintiff has not plausibly pled a violation of this “[w]ell established New Jersey decisional law”
for purposes ofmaintaining his TCCWNA claim. The Court dismisses Plaintiffs TCC WNA claim
(Count VI) without prejudice.

I8

Trespass to Chattel (Count VII)
Plaintiff next alleges trespass to his chattel. Compl.

¶1,

118-12 I. Under New Jersey law,

“[a] co nizable claim for trespass occurs ‘when personal property. in the actual use of the owner.
is injured or taken by a trespasser. so that the owner is deprived of the use of it.” :lrcand v.
Brother Int’l Corp., 673 F. Supp. 2d 282, 312 (D.N.J. 2009) (quoting Lose

Jones, 39 N.J. L. 707,

709 (N.J. 1877)). “[P]hysical contact with the chattel, for instance, where a person kicks another’s
ear bumper, is not required.” Id. “All that is required

.

.

.

is interference with the chattel as a direct

or indirect result of an act done by the actor.” Id.
Here, on July 12, 2017, Sony released the, in effect mandatory Update that bricked
Plaintiffs Dash. Compl.

¶TJ

120. Contrary to Sony’s assertions. Def. Br. at 43. Plaintiff did not

consent to Sony rendering his device wholly nonfunctional by agreeing to the EULA, as discussed
above. Sony also argues that Plaintiff never owned the software used by the Dash (pursuant to the
EULA) and therefore Sony cannot be liable for altering that software in the Update. DeE Br. at
42. Regardless of whether Plaintiff owned the software. Sony, at a minimum, indirectly injured
Plaintiffs physical Dash by rendering it completely nonfunctional through the Update. See in re
Apple, 596 F. Supp. 2d at 1307 (finding that the plaintiffs plausibly pled trespass to chattel by
alleging that the defendant, Apple, released a software update that rendered the plaintiffs’ iPhones
permanently inoperable); Miguel r. I/P Inc., 317 F. Supp. 3d at 1088 (finding that the plaintiffs
plausibly pled trespass to chattel by alleging that the defendant, HP, released a firmware update
that disabled the thnctionality of the plaintiffs’ printers).’° Plaintiff plausibly pled his trespass to
chattel claim and the Court denies Defendant’s motion to dismiss as to this claim (Count VII).

The Court recoizes that both of these eases applied California trespass law but notes that
New Jersey and California common law are similar regarding trespass to chattel.
19

Unjust Enrichment (Count VIII)
Finally, Plaintiff alleges unjust enrichment. Compl. ¶1122-127, “To establish a claim for

unjust enrichment under New Jersey law, a plaintiff must allege ‘both that defendant received a
benefit and that retention of that benefit without payment would be unjust.’” Adamson v. Onho
McNeil Pharm., Inc., 463 F. Supp. 2d 496,505 (D.N.J. 2006) (quoting VRG Corp.

ic

GKNReal’

Corp., 135 NJ. 539, 554 (1994)). However, “[r]estitution for unjust enrichment is an equitable
remedy, available only when there is no adequate remedy at law.” Id. Additionally, “[u]nder New
Jersey law, an indirect purchaser cannot succeed on a claim for unjust enrichment.” Spera v.
SamsungElecs. Am., Inc, No. 1245412,2014 WL 1334256, at *9 (D.NJ. Apr. 2,2014) (quoting
Wake v. SamsungElecs. Am., Inc., No. 104811,2012 WL 833003, at *7 (D.NJ. Mar. 12,2012)).

‘When an individual purchase a consumer product from a third-party store and not the
manufacturer, the purchaser has not conferred a benefit directly to the manufacturer such that the
manufacturer could be found to have been unjustly enriched.” Id. (quoting Wake, 2012 WL
833003, at *7) Here, Plaintiff has not alleged that he purchased any of his Dashes directly from
Sony. Therefore, he cannot maintain an unjust enrichment claim against Sony. The Court

dismisses Plaintiff’s unjust enrichment claim (Count VIII) without prejudice.

20

IV.

CONCLUSION
In sum, the Court denies in part and grants in part Defendant’s motion to dismiss Plaintiffs

Complaint (D.E. 15). The Court denies Defendant’s motion to dismiss as to Counts I and VII.
Counts II, III, IV, V, VI, and VIII are dismissed without prejudice. Plaintiff has thirty (30) days
to file an amended complaint as to the counts dismissed without prejudice, if he so chooses,
consistent with this Opinion. If Plaintiff fails to file an amended complaint, the dismissal as to
these counts will be with prejudice. An appropriate Order accompanies this Opinion.
Dated: April 30, 2019

John Michael Va4jU.S.DJ.

21