Ray v. Samsung Electronics America, Inc. et al

Filing 47

OPINION AND ORDER.....SEAs March 14, 2016 motion to dismiss is granted. SECs June 6, 2016 motion to dismiss is granted. The plaintiffs May 27, 2016 motion to appoint interim class counsel is denied as moot. The Clerk of Court shall enter judgment for the defendants and close the case. (Signed by Judge Denise L. Cote on 6/17/2016) (gr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------- X
:
CHARLENE KAY RAY, on behalf of herself :
and all others similarly situated,
:
:
Plaintiff,
:
:
-v:
:
SAMSUNG ELECTRONICS AMERICA,
:
INC., and SAMSUNG ELECTRONICS CO.,
:
LTD,
:
Defendants.
:
--------------------------------------- X
APPEARANCES:
For the plaintiff:
Amy E. Keller
Edward A. Wallace
Wexler Wallace LLP
55 West Monroe St., Suite 3300
Chicago, IL 60603
Charles LaDuca
Cuneo, Gilbert & LaDuca, LLP
8120 Woodmont Avenue, Suite 810
Bethesda, MD 20814
Ben Elga
Cuneo, Gilbert & LaDuca, LLP
16 Court St., Suite 1012
Brooklyn, NY 11241
Clayton D. Halunen
Melissa Wolchansky
Amy E. Boyle
Halunen Law
1650 IDS Center
80 South Eighth Street
Minneapolis, MN 55402

15cv8540 (DLC)
OPINION AND ORDER

For the defendants:
Ingo Sprie, Jr.
Maggie C. Maurone
Arnold & Porter LLP
399 Park Avenue
New York, NY 10022
DENISE COTE, District Judge:
This putative class action is brought by Charlene Kay Ray
(“Ray”) on behalf of those who purchased or otherwise acquired
in the United States washing machines designed or manufactured
by Samsung Electronics America, Inc. (“SEA”) and Samsung
Electronics Co., Ltd. (“SEC”).

SEA moved to dismiss the amended

complaint in its entirety under Rule 12(b)(6), Fed. R. Civ. P.
SEC has joined that motion.

For the reasons that follow, the

motion is granted.
Background
These facts are taken from the complaint or documents
integral to the complaint.

In early November 2012, Ray paid

$594.99 for a Samsung washing machine, model number WA456, that
she purchased from a Best Buy in Garner, North Carolina.

She

used the washing machine for its undisputed intended purpose
(washing clothes) until May 2015.

At that time, Ray’s washing

machine stopped mid-cycle and she received an error message that
referenced a “balancing issue.”

The machine began to leak water

on Ray’s floor and the washing machine was not usable without
repairs.

Ray contacted Samsung about this problem and Samsung
2

informed her that the washing machine was no longer covered by
its limited warranty.

On June 4, 2015, a Sears technician came

to Ray’s home and installed a new Pump Kit on the machine.

The

technician allegedly told Ray that the rods in Samsung washing
machines were not sufficiently strong to hold their drums in
place; this problem causes damage to the machines and their
component parts.

Ray paid a total of $278.21 to have the new

Pump Kit installed.

This cost was not reimbursed by Samsung.

Ray does not allege that the machine continues to malfunction;
presumably, therefore, the repair was successful and she was
able to resume using the washing machine.
Ray alleges that the following facts are common to the
members of putative national and North Carolina classes.

Since

at least 2011, Samsung has received complaints concerning
certain models of its top-loading washing machines.

Samsung

elected to continue selling defective washing machines and did
not issue a recall or warn consumers about the possible dangers
associated with using the machines.

For example, Samsung’s top-

loading washing machines contain powerful motors that allow the
machines to achieve a fast spin cycle.

If the wash drum becomes

detached during the spin cycle, it may strike the bracket that
supports the discharge pump, and cause a leak or flood a home
with water.

A detached drum may even cause the washing machine

to “explode,” meaning that the washing machine moves from its
3

original position and expels debris.

According to the

complaint, the washing machines are unfit for their ordinary
purpose at the time of sale and have caused class members
personal injury and property damage.

The plaintiff reproduces

several online complaints from putative class members who had
issues with their Samsung washing machines.

Many of these

online consumer complaints involve washers that have different
model numbers from the one that Ray purchased.

The complaint

also alleges that stories about latent defects in Samsung
washing machines have been documented in the news media.
Samsung offers original purchasers a limited warranty on
the model of washing machines at issue in this litigation.

The

warranty protects against manufacturing defects in materials and
workmanship for one year for both parts and labor.

It also

provides a limited warranty for control board parts for two
years, for the stainless tub part for three years, and for the
motor for ten years.

Samsung disclaims all other warranties,

whether implied or express. 1

According to Ray, Samsung routinely

denies warranty claims based on the defective parts at issue
1

Although the complaint does reproduce the limited warranty, it
omits a description of Samsung’s notice to consumers that there
is no implied warranty. SEA provided a copy of the disclaimer
of implied warranty claims with its motion to dismiss papers and
a copy of the manual that accompanied Ray’s machine with its
reply brief. As discussed below, these documents are properly
considered as integral to the complaint.
4

even though the warranty for the relevant part has not yet
expired.

The plaintiff also claims that the limitations on

Samsung’s limited warranty are unconscionable.
The plaintiff alleges that Samsung has knowledge of a
defect in the design of the location of the drain pump.

In

support of this allegation, the plaintiff points to Samsung’s
issuance of at least two “Service Bulletins” in 2013 for WA456
washing machines that contained instructions for repairing
problems with the drain pump system.

The second bulletin

instructed service providers to change the position of
components of the drain pump to improve quality.

The

instructions do not apply, however, to units like the
plaintiff’s that were manufactured before December 23, 2012.
Ray also points to the fact that, in 2012, the Consumer Product
Safety Commission (“CPSC”) recalled LG’s high-efficiency washing
machines because consumers submitted complaints involving
defects and injuries.

That recall was initiated by the CPSC.

Samsung has not issued such a recall.
Ray brings the following claims on behalf of herself and
putative national and North Carolina classes: (1) breach of
implied warranty of merchantability; (2) breach of express
warranty; (3) violation of the Magnuson-Moss Warranty Act, 15
U.S.C. § 2301 et seq.; (4) injunctive relief; and (5) a
declaration that the common defects identified in the complaint
5

pose serious safety risks to consumers and the public pursuant
to 28 U.S.C. § 2201(a).

Ray brings one cause of action for

unfair and deceptive trade practices, N.C. Gen. Stat. § 75-1.1
et seq., on behalf of herself and the North Carolina class only.
The complaint in this action was originally filed on
October 30, 2015, over four months after the repair to the
plaintiff’s machine.
motion to dismiss.
this Court.

On January 4, 2016, SEA filed its first
On January 14, the case was reassigned to

The plaintiff was given an opportunity to file

either an opposition to the motion to dismiss or an amended
complaint.

On February 22, the plaintiff filed an amended

complaint.

SEA filed its renewed motion to dismiss on March 14,

which became fully submitted on May 6.

On June 6, SEC joined

SEA’s motion. 2
Discussion
When deciding a motion to dismiss under Rule 12(b), Fed. R.
Civ. P., a court must “accept all allegations in the complaint
as true and draw all inferences in the non-moving party’s
favor.”

LaFaro v. New York Cardiothoracic Group, PLLC, 570 F.3d

471, 475 (2d Cir. 2009).

“To survive a motion to dismiss under

Rule 12(b)(6), a complaint must allege sufficient facts which,
On May 27, the plaintiff filed a motion to appoint interim
class counsel. The defendants filed their opposition on June
10. Because this motion to dismiss is granted in full, the
motion to appoint interim class counsel is denied as moot.
2

6

taken as true, state a plausible claim for relief.”

Keiler v.

Harlequin Enters. Ltd., 751 F.3d 64, 68 (2d Cir. 2014); Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (“[A] complaint must contain
sufficient factual matter, accepted as true, to state a claim
for relief that is plausible on its face.”).

“A claim has

facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”

Parkcentral

Global Hub Ltd. v. Porsche Auto. Holdings SE, 763 F.3d 198, 208
(2d Cir. 2014) (citation omitted).
In deciding a motion to dismiss, documents outside the
pleadings may be considered in certain circumstances.

For

example, documents “that the plaintiffs either possessed or knew
about and upon which they relied in bringing suit” may be
considered.

Smith v. Hogan, 794 F.3d 249, 254 (2d Cir. 2015)

(citation omitted).

Moreover, “a court may consider an

‘integral’ document where the complaint relies heavily upon its
terms and effect.”

Id. (citation omitted).

The defendant

attached exhibits to its motion to dismiss, including the
implied warranty disclaimer that was included with the
plaintiff’s washing machine.
complaint.

That document is integral to the

The amended complaint recites portions of the

Samsung warranty and its validity is central to at least one of
Ray’s claims.
7

I.

Implied Warranty of Merchantability
Under North Carolina law, 3 “a warranty that the goods shall

be merchantable is implied in a contract for their sale if the
seller is a merchant with respect to goods of that kind.”
Gen. Stat. § 25-2-314(1).

In order to qualify as

“merchantable,” goods must meet various requirements.
2-314(2)(a)-(f).

N.C.

Id. § 25-

Those requirements include fitness for “the

ordinary purposes for which such goods are used,” which is the
key characteristic of merchantable goods at issue in this
litigation.

Id. § 25-2-314(2)(c).

To state a claim for a breach of the implied warranty of
merchantability, a plaintiff must plausibly plead: “(1) that the
goods in question were subject to an implied warranty of
merchantability; (2) that the goods were defective at the time
of the sale and as such did not comply with the warranty; (3)
that the resulting injury was due to the defective nature of the
goods; and (4) that damages were suffered.”

Williams v.

O’Charley’s, Inc., 728 S.E.2d 19, 21 (N.C. Ct. App. 2012);
DeWitt v. Eveready Battery Co., 565 S.E.2d 140, 147 (N.C. 2002)
The Court must determine what substantive law governs the
dispute. The defendant argues that North Carolina law applies,
and the plaintiff impliedly indicated her consent to the
application of North Carolina law by failing to address the
issue and citing North Carolina law in her brief. Chau v.
Lewis, 771 F.3d 118, 126 (2d Cir. 2014) (“The parties’ briefs
assume that New York law controls, and such implied consent is
sufficient to establish choice of law.” (citation omitted)).
3

8

(same four elements).

“The burden is upon the purchaser to

establish a breach by the seller of the warranty of
merchantability by showing that a defect existed at the time of
the sale.”

Morrison v. Sears, Roebuck & Co., 354 S.E.2d 495,

497 (N.C. 1987) (citation omitted).

A plaintiff ultimately may

demonstrate that a product was defective at the time of sale
through circumstantial evidence, such as proof that the accident
would not have occurred absent a manufacturing defect.

Evans v.

Evans, 569 S.E.2d 303, 307-08 (N.C. Ct. App. 2002).
The implied warranty of merchantability can be excluded or
modified.

“[T]o exclude or modify the implied warranty of

merchantability . . . the language must mention merchantability
and in case of a writing must be conspicuous.”
§ 25-2-316(2).

N.C. Gen. Stat.

General disclaimers that “there are no

warranties which extend beyond the description on the face
hereof” are effective.

Id.

A written disclaimer is

“conspicuous” when it is “written, displayed, or presented that
a reasonable person against which it is to operate ought to have
noticed it.”

N.C. Gen. Stat. § 25-1-201(10).

Disclaimers that

are conspicuous include “[a] heading in capitals equal to or
greater in size than the surrounding text, or in contrasting
type, font, or color to the surrounding text of the same or
lesser size.”

Id.

Disclaimers in capitalized print that

contrasts with surrounding text have been found to be effective
9

under North Carolina law.

Lee v. R & K Marine, Inc., 598 S.E.2d

683, 685-86 (N.C. Ct. App. 2004).
The plaintiff’s claim for a breach of the implied warranty
of merchantability is dismissed.

Ray has failed to plead

plausibly that her washing machine was defective (or not
merchantable) at the time of sale.

She used the washing machine

without incident for more than two years.

A part broke outside

its warranty period and she had to get it repaired.

The

complaint does not contain any facts that suggest that the
repair was ineffective due to some underlying defect.

Thus, she

has not plausibly pleaded that her washing machine was not fit
for its ordinary purpose when sold or that some latent defect
rendered it unable to wash her clothes.
In any event, the defendants effectively disclaimed
liability for the implied warranty of merchantability under
North Carolina law.

The disclaimer of the implied warranty of

merchantability is in all capital letters, in contrast with the
limited warranty’s print, and appears in the section of the
document that alerts consumers in bold print and capital letters
to the “LIMITED WARRANTY TO ORIGINAL PURCHASER.”

This

disclaimer reads: “EXCEPT AS SET FORTH HEREIN, THERE ARE NO
WARRANTIES ON THIS PRODUCT EITHER EXPRESS OR IMPLIED, AND
SAMSUNG DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT LIMITED TO,
ANY IMPLIED WARRANTIES OF MERCHANTABILITY, INFRINGEMENT OR
10

FITNESS FOR A PARTICULAR PURPOSE.”

The disclaimer is therefore

conspicuous under North Carolina law.
The first amended complaint acknowledges that Samsung
“provides for a limitation on the customer’s ability to bring
implied warranty claims against Samsung.”

The plaintiff argues,

however, that it is too early to determine whether the implied
warranty disclaimer was effective because the exhibits that SEA
submitted with its motion may not be the actual warranty
disclaimer that accompanied her washing machine.

Given that

Ray’s pleading acknowledges receipt of some implied warranty
disclaimer in her complaint, this argument borders on the
misleading.

Beyond speculation, Ray does not provide any basis

to find that the copy of the warranty SEA submitted was not the
warranty she received with her machine.
The plaintiff’s other arguments against dismissal are not
persuasive.

Ray points to particular passages in the complaint

in arguing that she has adequately alleged defects at the time
the product was sold.

These passages are conclusory or relate

to alleged defects in Samsung machines that are untethered to
the defect in the plaintiff’s machine that required the pump kit
repair.

For instance, the plaintiff has not pleaded that the

rods in her machine are insufficient to hold the washing machine
drum in place or that the drum became detached, which is what
occurred when other putative class members’ machines “exploded.”
11

Her machine required repairs to its pump after two and a half
years of use.

The pump was successfully repaired, and the

machine continued to perform its intended function.
Ray also argues that the implied warranty disclaimer is
unconscionable, even if it is sufficiently conspicuous and meets
the other legal requirements.

Under North Carolina law,

A court will find a contract to be unconscionable only
when the inequality of the bargain is so manifest as
to shock the judgment of a person of common sense, and
where the terms are so oppressive that no reasonable
person would make them on the one hand, and no honest
and fair person would accept them on the other.
Tillman v. Commercial Credit Loans, Inc., 655 S.E.2d 362, 369
(N.C. 2008) (citation omitted).

“A party asserting that a

contract is unconscionable must prove both procedural and
substantive unconscionability.”

Id. at 370.

Procedural

unconscionability “involves bargaining naughtiness in the form
of unfair surprise, lack of meaningful choice, and an inequality
of bargaining power.”

Id. (citation omitted).

“Substantive

unconscionability . . . refers to harsh, one-sided, and
oppressive contract terms.”

Id.

See Wilner v. Cedars of Chapel

Hill, LLC, 773 S.E.2d 333, 337 (N.C. Ct. App. 2015)
(“[P]laintiffs alleged only that defendants were more
sophisticated and drafted the contracts to their own benefit.
This alone does not rise to the level of procedural
unconscionability. . . . Otherwise, procedural unconscionability

12

would exist in most contracts between corporations and
consumers.” (citation omitted)).
The implied warranty disclaimer is not unconscionable under
these standards.

The plaintiff has not pled any facts that, if

true, indicate that disclaiming the implied warranty is unduly
harsh or so oppressive a contract term that no reasonable person
would enter into such an agreement.

Indeed, North Carolina law

explicitly allows the implied warranty of merchantability to be
disclaimed as long as certain conditions are met.

A finding of

unconscionability here would render any such disclaimer,
permissible under North Carolina law and other states that have
adopted the Uniform Commercial Code, void.
II.

Express Warranty

A claim for breach of express warranty under North Carolina
law requires proof of “(1) an express warranty as to a fact or
promise relating to the goods, (2) which was relied upon by the
plaintiff in making his decision to purchase, (3) and that this
express warranty was breached by the defendant.”

Harbor Point

Homeowners’ Ass’n, Inc. ex rel. Bd. of Directors v. DJF
Enterprises, Inc., 697 S.E.2d 439, 447 (N.C. Ct. App. 2010)
(citation omitted).

The “element of reliance can often be

inferred from allegations of mere purchase or use if the natural
tendency of the representations made is such as to induce such

13

purchase or use.”

Bernick v. Jurden, 293 S.E.2d 405, 413 (N.C.

1982).
The plaintiff’s theory of liability is that the defendants
breached the express written warranty to repair defects in the
washing machine motor for ten years.

Specifically, Ray alleges

that the 2015 repair to her washing machine pump was covered by
the longer warranty period for the motor rather than the oneyear warranty period for parts and labor.
Ray’s express warranty cause of action is dismissed.

She

has not pled a plausible claim that the defendants wrongfully
denied her warranty claim when they refused to finance the
repair to her washing machine.

Ray has not pled that the motor

in her machine caused her machine’s tub to become detached and
damage her pump.

The Sears technician who fixed her machine’s

pump did not have to repair either the motor or the tub.

The

technician’s opinion that the “rods” in Samsung machines
generally are insufficient to “hold the drum in place” is
unconnected to any repair he performed on the pump.
The plaintiff’s arguments to the contrary are not
persuasive.

Ray points to several paragraphs of her complaint

that she claims plausibly allege a breach of the express limited
warranty.

In those passages, which are alleged as facts common

to all class members, Ray describes some issues that other
owners of Samsung machines have experienced.
14

They include the

washing machine drum detaching, causing the machine to
“explode,” flooding a consumer’s home with water and causing
personal injuries.

This, of course, did not happen to Ray. 4

Ray also claims that she is entitled to discovery to
determine whether the motor part contributed to her washing
machine’s malfunction.

If the motor part was a factor, she

argues, the repairs should have been covered under that ten-year
warranty.

According to the first amended complaint, however,

the “Pump Kit” was replaced, and neither the tub nor the motor
was repaired.

Her inability to allege plausibly that the

repairs should have been covered under the longer warranty for
the motor defeats her claim.
Ray next contends that, if the one-year warranty for parts
and labor prevents her from recovering from Samsung for the cost
of the repair to the pump, such a limitation is void because it
is unconscionable.
outlined above.

This argument fails under the standards

The complaint’s allegations of

unconscionability are conclusory and entitled to no weight.
There is no allegation that suggests “bargaining naughtiness” or
that the limited warranty terms are so harsh, one-sided, or
manifestly unreasonable that they are unconscionable.

“The mere

The other section of the complaint to which Ray directs the
Court involves complaints about “[o]ther manufacturers’ washing
machines,” such as LG.
4

15

fact that plaintiffs lacked the ability to negotiate contract
terms does not create substantive unconscionability.”

Wilner,

773 S.E.2d at 337.
The plaintiff also argues that she is entitled to an
opportunity to present evidence before the Court can rule on her
claim that a one-year warranty period for parts is
unconscionable.

North Carolina law provides that: “When it is

claimed or appears to the court that the contract or any clause
thereof may be unconscionable the parties shall be afforded a
reasonable opportunity to present evidence as to its commercial
setting, purpose and effect to aid the court in making the
determination.”

N.C. Gen. Stat. § 25-2-302(2).

The plaintiff

also relies on a pre-Iqbal Fourth Circuit case cautioning that
unconscionability claims should rarely be determined at the
pleadings stage.

Carlson v. Gen. Motors Corp., 883 F.2d 287,

292 (4th Cir. 1989).

Although acknowledging that the issue of

unconscionability may be decided as a matter of law, the Fourth
Circuit observed that “[t]rial courts obviously cannot apply
[the unconscionability] standards without carefully examining
all relevant evidence of the setting in which the parties struck
their bargain -- and thus cannot resolve bona fide questions of
unconscionability before the litigants have had an opportunity
to present such evidence.”

Id. at 293.

16

Federal pleading standards require Ray to plead a plausible
claim of both substantive and procedural unconscionability under
North Carolina law to survive a motion under Rule 12(b)(6), Fed.
R. Civ. P.

As described above, her conclusory allegations

concerning unconscionability are insufficient.

The plaintiff’s

suggestion that a more forgiving pleading standard should be
applied to unconscionability claims, and that they must be
allowed to proceed to discovery, is rejected.

The plaintiff has

not plausibly pleaded that a one-year warranty for parts and
labor for a standard consumer item such as a washing machine is
unconscionable.
III. Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. § 2301
et seq., provides consumers with a private cause of action for
violations of implied and express warranties in certain
circumstances.

Wilbur v. Toyota Motor Sales, U.S.A., Inc., 86

F.3d 23, 26 (2d Cir. 1996).

The MMWA provides that “a consumer

who is damaged by the failure of a supplier, warrantor, or
service contractor to comply with any obligation under this
chapter, or under a written warranty, implied warranty, or
service contract, may bring suit for damages and other legal and
equitable relief” in federal court.

15 U.S.C. § 2310(d)(1). 5

The MMWA also limits the subject matter jurisdiction of the
federal courts to adjudicate such claims. For example, there is
5

17

The MMWA specifically defines “written warranty” and “implied
warranty.” 6

Implied warranties “may be limited in duration to

the duration of a written warranty of reasonable duration,” but
may not be permanently disclaimed if there is “any written
warranty” made to the consumer.
id. § 2304(a)(2)-(3).

Id. § 2308(a)-(b). 7

See also

In addition to damages, a successful

plaintiff may recover attorney’s fees.

Id. § 2310(d)(2).

In general, the MMWA “is a remedial statute designed to
protect consumers against deceptive warranty practices.”
Anderson, 662 F.3d at 780.

Under the MMWA, limited and implied

warranties can be enforced in federal court, “borrowing state

a $50,000 amount in controversy requirement for individual
claims. 15 U.S.C. § 2310(d)(3)(B). It further provides that
“no claim shall be cognizable . . . if the action is brought as
a class action, and the number of named plaintiffs is less than
one hundred.” Id. § 2310(d)(3)(C). Moreover, in a class
action, the “person obligated under the warranty” must be
“afforded a reasonable opportunity to cure such failure to
comply” with the warranty. Id. § 2310(e). The defendants do
not argue that the plaintiff fails to meet these requirements.
There is a further distinction in the MMWA between “full”
written warranties and “limited” written warranties. See 15
U.S.C. §§ 2303(a) and 2304(a); Anderson v. Gulf Stream Coach,
Inc., 662 F.3d 775, 781 (7th Cir. 2011). The written warranty
at issue here is labeled a “limited” warranty, so this
distinction need not be addressed in resolving the motion to
dismiss. The parties do not appear to dispute that the limited
warranty accompanying Ray’s washer qualifies as a written
warranty under the MMWA.
6

The MMWA also provides that “[a] disclaimer . . . made in
violation of this section shall be ineffective for purposes of
this chapter and State law.” 15 U.S.C. § 2308(c).
7

18

law causes of action.”

Id. at 781 (citation omitted).

Thus,

“for all practical purposes, the MMWA operates as a gloss on the
[plaintiff’s] state law breach of warranty claims.”

Id.; see

Sipe v. Workhorse Custom Chassis, LLC, 572 F.3d 525, 530 (8th
Cir. 2009) (“The MMWA grants the holder of a limited warranty a
federal cause of action for a breach of warranty under the
applicable state law.”); Birdsong v. Apple, Inc., 590 F.3d 955,
958 n.2 (9th Cir. 2009) (noting that the parties agreed that the
MMWA “require[s] the plaintiffs to plead successfully a breach
of state warranty law”).
The parties do not provide detailed arguments concerning
the merits of the plaintiff’s MMWA claim.

They do agree,

however, that the MMWA claim depends on the plaintiff
successfully pleading a breach of written or implied warranties
under state law, even though the MMWA does in some ways modify
or restrict certain state law warranty claims.

For the reasons

described above, the plaintiff’s state law claims for breach of
an express warranty and the implied warranty of merchantability
are dismissed.

Accordingly, the MMWA claim is dismissed as

well.
IV.

Unfair and Deceptive Trade Practices Claim

Ray brings a state law claim under North Carolina’s Unfair
and Deceptive Trade Practices Act (“UDTPA”) on behalf of herself
and the putative North Carolina class.
19

The UDTPA provides that:

“Unfair methods of competition in or affecting commerce, and
unfair or deceptive acts or practices in or affecting commerce,
are declared unlawful.”

N.C. Gen. Stat. § 75-1.1(a); Id. § 75-

16 (providing for a civil cause of action for those injured by
violations of the UDPTA and treble damages for such injuries).
In order to state a claim under the UDTPA, a plaintiff must
plead that the “(1) defendant committed an unfair or deceptive
act or practice; (2) the action in question was in or affecting
commerce; and (3) the act proximately caused injury to the
plaintiff.”

Ellis v. Louisiana-Pac. Corp., 699 F.3d 778, 787

(4th Cir. 2012) (citation omitted).
“Whether conduct is ‘unfair’ or ‘deceptive’ is a legal
issue for the court to decide.”

Id.

“A practice is unfair when

it offends established public policy as well as when the
practice is immoral, unethical, oppressive, unscrupulous, or
substantially injurious to consumers.”

Sain v. Adams Auto Grp.,

Inc., 781 S.E.2d 655, 661 (N.C. Ct. App. 2016) (citation
omitted).

For a claim to be considered deceptive, “it is not

necessary to show fraud, bad faith, deliberate or knowing acts
of deception, or actual deception.”

Wells Fargo Bank, N.A. v.

Corneal, 767 S.E.2d 374, 377 (N.C. Ct. App. 2014) (citation
omitted).

A plaintiff must, however, “show that the acts

complained of possessed the tendency or capacity to mislead, or
created the likelihood of deception.”
20

Id. (citation omitted).

Claims under the UDTPA that “stem[] from an alleged
misrepresentation [do] . . . require a plaintiff to demonstrate
reliance on the misrepresentation in order to show the necessary
proximate cause.”

Bumpers v. Cmty. Bank of N. Virginia, 747

S.E.2d 220, 226 (N.C. 2013).
Moreover, “[i]t is well recognized that actions for unfair
or deceptive trade practices are distinct from actions for
breach of contract.”

Heron Bay Acquisition, LLC v. United Metal

Finishing, Inc., 781 S.E.2d 889, 892 (N.C. Ct. App. 2016)
(citation omitted).

Thus, “some type of egregious or

aggravating circumstances must be alleged and proved before the
Act’s provisions may take effect.”

Id. (citation omitted).

In

other words, “simple breach of contract does not qualify as
unfair or deceptive acts” absent such aggravating circumstances.
Supplee v. Miller-Motte Bus. Coll., Inc., 768 S.E.2d 582, 598
(N.C. Ct. App. 2015) (citation omitted); Ellis, 699 F.3d at 787
(holding that “breach of contract, even if intentional, is not
sufficiently unfair or deceptive to sustain a UDPTA claim”
(citation omitted)).

Courts have thus dismissed claims where a

consumer alleged that the defendant “knew that [the product]
would not live up to the terms of the warranty and should have
disclosed this fact to consumers” because “this is simply
another way of claiming that [the defendant] breached its
express warranty.”

Ellis, 699 F.3d at 787.
21

The defendants argue that, because the UDPTA claim sounds
in fraud, it is subject to the heightened pleading requirements
in Rule 9(b), Fed. R. Civ. P., which requires that fraud claims
be “stated with particularity.”

See Topshelf Mgmt., Inc. v.

Campbell-Ewald Co., 117 F. Supp. 3d 722, 731 (M.D.N.C. 2015)
(applying Rule 9(b) to a UDTPA claim based on a deceptive
misrepresentation).

Ray does not contest SEA’s conclusion and

applies Rule 9(b) in her brief.

Rule 9(b) requires that the

complaint must “(1) detail the statements (or omissions) that
the plaintiff contends are fraudulent, (2) identify the speaker,
(3) state where and when the statements (or omissions) were
made, and (4) explain why the statements (or omissions) are
fraudulent.”

Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo

Sec., LLC, 797 F.3d 160, 171 (2d Cir. 2015) (citation omitted).
“[T]hough mental states may be pleaded generally, Plaintiffs
must nonetheless allege facts that give rise to a strong
inference of fraudulent intent.”

Id. (citation omitted).

Ray’s claim under the UDTPA is dismissed, even if the more
lenient pleading standards in Rule 8 apply.

She has not

plausibly pled that the defendants engaged in unfair or
deceptive trade practices, in part because she has not alleged
any facts that demonstrate egregious or aggravating
circumstances.

Even accepting Ray’s conclusory allegations as

true, she has not shown that the defendants’ conduct in
22

manufacturing or selling the washing machine was immoral,
oppressive, or created the likelihood of deception.

Ray bought

her washing machine in November of 2012, and pleads on
information and belief that the defendants “knew that certain
models of its top-loading washing machines were uniformly
defective” and unsafe for their ordinary use.

Not only is this

insufficient to plead a claim for an unfair or deceptive
practice, Ray has failed to plead that any injuries she suffered
were proximately caused by the alleged misrepresentations and
omissions about the washing machines.

As described at length

above, her washing machine broke after two and a half years of
use, she had the “Pump Kit” replaced, and then it worked.
Nothing suggests that she experienced any injury beyond
incurring the cost of the repair.

That injury is a contractual

one, and thus it is not actionable under the UDTPA, which is
distinct from claims arising under contract.

See Ellis, 699

F.3d at 787.
The plaintiff’s arguments fail to persuade.

She contends

that Samsung knowingly sold defective washing machines without
disclosing their defects and affirmatively represented that they
were safe for their intended purpose.
unfair and deceptive under the statute.

This, she claims, was
The plaintiff cites

several passages in her complaint, but primarily focuses on a
2012 recall of LG washing machines that was initiated by the
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CPSC and two 2013 service bulletins issued by Samsung.

She

argues that these two facts demonstrate the defendants’
knowledge of the defect and sufficiently allege an unfair or
deceptive trade practice under North Carolina law.

A 2012

recall of LG machines is not relevant to Ray’s claim, however,
because a CPSC-initiated recall of machines manufactured by a
different entity does not demonstrate that the defendants knew
of defects in Samsung’s own products.

Moreover, the 2013

service bulletins as described in the complaint do not provide
information about what the defendants knew, if anything, about
the defects in Ray’s washing machine when she purchased it a
year before they were released. 8
V.

Declaratory and Injunctive Relief
Ray seeks both declaratory and injunctive relief,

enumerating each as a separate cause of action.

Declaratory

relief under 28 U.S.C. § 2201(a) and a request for an injunction
are not separate causes of action; they are remedies that may be
available if a plaintiff is entitled to relief based on one or
more causes of action.

Because none of Ray’s claims survive

this motion to dismiss, she cannot seek injunctive relief.

See

Caronia v. Philip Morris USA, Inc., 715 F.3d 417, 438 (2d Cir.

It is also not entirely clear that the issues covered by the
service bulletins relate to the defect that caused some washing
machines -- but not Ray’s -- to “explode.”
8

24

2013) (in general, an “equitable remedy” does not constitute an
“independent cause[] of action”); Williams v. Walsh, 558 F.2d
667, 671 (2d Cir. 1977) (finding that “the independent remedies
of a damage award and injunctive relief do not constitute
separate ‘causes of action’”).

Moreover, having dismissed all

of the plaintiff’s substantive claims, she has no basis for
seeking a court declaration that the washing machines have
common defects that pose a safety risk to the public.
Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct.
843, 849 (2014) (holding that the Declaratory Judgment Act is
“only procedural, leaving substantive rights unchanged”
(citation omitted)).
VI.

Request to Amend the Complaint

Ray requests that, in the event that the motion to dismiss
is granted, she be afforded an additional opportunity to amend
her complaint under Rule 15, Fed. R. Civ. P.

“When a party

requests leave to amend its complaint, permission generally
should be freely granted.”

Grullon v. City of New Haven, 720

F.3d 133, 139 (2d Cir. 2013) (citation omitted); Fed R. Civ. P.
15(a)(2) (“The court should freely give leave [to amend] when
justice so requires.”).

“Leave to amend may properly be denied

if the amendment would be futile,” however.
F.3d 117, 134 (2d Cir. 2014).

Krys v. Pigott, 749

“A proposed amendment to a

complaint is futile when it could not withstand a motion to
25

dismiss.”

Balintulo v. Ford Motor Co., 796 F.3d 160, 164-65 (2d

Cir. 2015) (citation omitted).
Ray’s request to amend her complaint a second time is
denied.

She has not proposed any specific amendments to the

first amended complaint that would cure the defects identified
in this Opinion.

She merely generally requests an opportunity

to amend if further factual allegations would allow her
complaint to survive a motion to dismiss.

See Loreley Fin.

(Jersey) No. 3 Ltd., 797 F.3d at 190 (noting that leave to amend
has been properly denied “where the request gives no clue as to
how the complaint’s defects would be cured.” (citation
omitted)).

Ray has already amended her complaint once in

response to SEA’s initial motion to dismiss, which contained
substantially the same arguments advanced in its renewed motion.
Based on the allegations in the complaint and Ray’s substantive
causes of action, an amendment would be futile.

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Conclusion
SEA’s March 14, 2016 motion to dismiss is granted.
June 6, 2016 motion to dismiss is granted.

SEC’s

The plaintiff’s May

27, 2016 motion to appoint interim class counsel is denied as
moot.

The Clerk of Court shall enter judgment for the

defendants and close the case.

Dated:

New York, New York
June 17, 2016
____________________________
DENISE COTE
United States District Judge

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