Shane Galitski et al v. Samsung Telecommunications America LLC

Filing 91

MEMORANDUM OPINION AND ORDER denying 51 Motion to Compel Arbitration filed by Samsung Telecommunications America LLC; granting in part, denying in part 54 Motion to Dismiss filed by Samsung Telecommunications America LLC; and granting 84 MOTION for Leave to File Supplemental Appendix in Support of Its Motion to Compel Arbitration. (Ordered by Chief Judge Sidney A Fitzwater on 12/5/2013) (Chief Judge Sidney A Fitzwater)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
SHANE GALITSKI, et al.,

§
§
Plaintiffs,
§
§ Civil Action No. 3:12-CV-4782-D
VS.
§
§
SAMSUNG TELECOMMUNICATIONS §
AMERICA, LLC,
§
§
Defendant.
§
MEMORANDUM OPINION
AND ORDER
In this putative class action arising from allegedly defective Galaxy S mobile phones
manufactured by defendant Samsung Telecommunications America, LLC (“Samsung”) and
sold to plaintiffs by non-parties Sprint and Verizon Wireless (“Verizon”), Samsung moves
under the doctrine of arbitration by estoppel as a third-party nonsignatory to plaintiffs’
contracts with Sprint and Verizon to compel plaintiffs to arbitrate their claims. Alternatively,
Samsung moves for partial dismissal of plaintiffs’ claims under Fed. R. Civ. P. 12(b)(6). For
the reasons that follow, the court denies the motion to compel arbitration and grants in part
and denies in part the motion for partial dismissal.
I
Plaintiffs Shane Galitski (“Galitski”), Richard Taliaferro (“Taliaferro”), and Brian
Newbold (“Newbold”) bring this putative class action against Samsung on behalf of a class
of California residents who purchased allegedly defective Galaxy S mobile phones. Plaintiffs
allege that Galaxy S phones—smartphones using the Google Android operating system that

are marketed, distributed, and warranted by Samsung—frequently freeze, shutdown, and
power-off randomly while in standby mode, rendering the phones inoperable.1 The
complaint refers to these problems collectively as “[t]he defect.” E.g., Compl. ¶ 17.2
Plaintiffs allege that, although Galaxy S phones are sold under different names by various
wireless carriers, they are essentially the same phones with different names and experience
the defect regardless which carrier distributes the phone.
The complaint alleges that Galitski and Newbold purchased their Galaxy S phones

1

As explained in more detail below, see infra § III, in deciding Samsung’s Rule
12(b)(6) motion, the court accepts as true all of the well-pleaded facts of plaintiffs’ complaint
and views them in the light most favorable to plaintiffs.
In deciding Samsung’s motion to compel arbitration, the court applies a
preponderance of the evidence standard. See, e.g., Grant v. Houser, 469 Fed. Appx. 310, 315
(5th Cir. 2012) (per curiam) (“The party seeking to compel arbitration need only prove the
existence of an agreement to arbitrate by a preponderance of the evidence.”) (applying
Federal Arbitration Act (“FAA”)). The standard for deciding whether the movant’s evidence
is admissible is akin to the one applied when deciding a summary judgment motion,
including the requirement that evidence in a declaration be admissible and based on personal
knowledge. See id. (holding that declaration was sufficient evidence on motion to compel
to establish assignment of rights by a preponderance of the evidence considering strong
presumption under FAA in favor of arbitration, summary nature of motion to compel
arbitration, and Fifth Circuit’s prior decision in Doddy v. Oxy USA, Inc., 101 F.3d 448 (5th
Cir. 1996)).
Plaintiffs object to the declaration of Michael Pennington (“Pennington”), on which
Samsung relies in support of its motion to compel. They contend that most of Pennington’s
declaration is inadmissible because it is not based on personal knowledge, and that the
exhibits to his declaration—the Verizon Wireless Customer Agreement and the Sprint
Service Agreement—constitute inadmissible hearsay and lack of authentication. Without
suggesting that the court agrees in whole or in part with plaintiffs’ objections, the court
overrules them as moot given its decision to deny the motion to compel.
2

Other or more specific allegations concerning the defect are found elsewhere in the
complaint. See, e.g., ¶¶ 22-26, and 28.
-2-

from Sprint, their wireless carrier. When making the purchase, each entered into a Sprint
Service Agreement that contains a clause requiring binding arbitration.3 According to the
complaint, Galitski began experiencing the defect within a few months of purchasing a
Galaxy S phone from Sprint; and after he experienced a problem with the headphone jack
as well, he contacted Samsung for assistance with the headphone jack problem and also
informed Samsung of the defect, but he was not given any assistance regarding the defect.
Although Sprint provided Galitski a replacement Galaxy S phone due to the headphone jack
problem, that phone experienced the defect more frequently than did his original phone.
Galitski’s replacement phone later suffered from a significant screen burn-in, resulting in his
obtaining a second replacement Galaxy S phone from Sprint. When contacting Sprint
regarding this problem, he informed Sprint about the defect, but again received no assistance.
Galitski continues to use the second replacement phone, but plaintiffs allege that it, too,
experiences the defect. Galitski has attempted unsuccessfully to resolve the defect by
changing the operating system.

3

The Sprint Service Agreement provides, in relevant part: “[w]e each agree to finally
settle all disputes (as defined and subject to any specific exceptions below) only by
arbitration.” D. App. 15. The agreement defines “disputes” as
any claims or controversies against each other related in any
way to our Services or the Agreement, including, but not limited
to, coverage, Devices, privacy, or advertising, even if it arises
after Services have been terminated—this includes claims you
bring against our employees, agents, affiliates or other
representatives, or that we bring against you.
Id.
-3-

Newbold also purchased his Galaxy S phone from Sprint. Shortly after the purchase,
his phone experienced the defect. Newbold attempted to resolve the problem by changing
the operating system and installing the newest version of Android. When these changes
failed to repair his phone, Newbold returned it to the factory settings and installed a software
update that Samsung provided. After the update was installed, his phone experienced the
defect more frequently. Although Newbold contacted Sprint customer service several times
about the defect, Sprint refused to offer a replacement; instead, it attempted on multiple
occasions to repair the phone by asking Newbold to reset the device. Although Newbold
followed this direction, he continued to experience the same defect. After contacting Sprint
several times in unsuccessful attempts to repair or replace his phone, he finally purchased a
new phone, receiving no credit for his initial purchase of Galaxy S.
Taliaferro purchased his Galaxy S phone at an electronics store that is an authorized
Samsung agent and reseller, and his wireless carrier is Verizon. When making the purchase,
he entered into a Verizon Wireless Customer Agreement (“Verizon Customer Agreement”)
that provided for binding arbitration of claims arising out of or relating to the agreement.4

4

The Verizon Customer Agreement provides, in relevant part:
ANY CONTROVERSY OR CLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY PRIOR
AGREEMENT FOR WIRELESS SERVICE WITH US OR
ANY OF OUR AFFILIATES OR PREDECESSORS IN
INTEREST, OR ANY PRODUCT OR SERVICE PROVIDED
UNDER OR IN CONNECTION WITH THIS AGREEMENT
OR SUCH A PRIOR AGREEMENT, OR ANY
ADVERTISING FOR SUCH PRODUCTS OR SERVICES,
-4-

Shortly after Taliaferro purchased his Galaxy S phone, he began experiencing the defect.
After he contacted Verizon several times, Verizon replaced his phone with another Samsung
Galaxy S, but he continued to experience the same defect with the replacement phone. When
Taliaferro contacted Verizon again, it recommended that he install a software update
intended to fix the defect. But the new software update instead exacerbated the problem,
causing the phone to experience the defect more often. After contacting Verizon several
more times and continuing to experience the defect with his replacement phone, Taliaferro
finally discontinued using the phone and purchased a new phone, receiving no credit for the
purchase of his Samsung phone.
In 2011 Taliaferro and Barbara McKinney (“McKinney”), a Georgia resident, filed
in this court a putative nationwide class action against Samsung asserting claims arising from
their purchases of allegedly defective Galaxy S phones. See Taliaferro v. Samsung
Telecomms. Am., LLC, 2012 WL 169704 (N.D. Tex. Jan. 19, 2012) (Fitzwater, C.J.).5 They
alleged claims under federal, California, and Georgia law for breach of express warranty,
breach of implied warranty, money had and received, and violations of the Magnuson-Moss

WILL BE SETTLED BY ONE OR MORE NEUTRAL
ARBITRATORS BEFORE THE AMERICAN ARBITRATION
ASSOCIATION (“AAA”) OR BETTER BUSINESS BUREAU
(“BBB”).
D. App. 7.
5

The complaint also included claims by Iowa citizen Chris Sodey, but Sodey was
omitted from the amended complaint.
-5-

Warranty Act (“MMWA”), 15 U.S.C. § 2301 et seq. Taliaferro, 2012 WL 169704, at *1.
Samsung filed a motion to dismiss under Rule 12(b)(6), which the court granted as to all but
one of plaintiffs’ claims (Taliaferro’s claim for breach of implied warranty under the SongBeverly Consumer Warranty Act (“SBA”), Cal. Civ. Code § 1792 (West 2009)). Taliaferro,
2012 WL 169704, at *12. In dismissing the breach of express warranty claims, the court held
that, because plaintiffs did not allege that they returned their phones to a Samsung
“authorized phone service facility,” as required by the Samsung warranty, they did not satisfy
a contractual precondition to recovery under the express warranty. Id. at *3, *6. The court
granted Taliaferro and McKinney leave to replead. Id. at *12.
Taliaferro and McKinney filed a second amended class action complaint in which they
re-pleaded their dismissed claims, added Newbold as a plaintiff, and asserted two new claims
under California law. Samsung filed a motion to compel arbitration, but plaintiffs voluntarily
dismissed the suit without prejudice before the court ruled on the motion.
In June 2012 Taliaferro and Newbold, joined by Galitski, sued Samsung in the Central
District of California alleging claims under federal and California law for breach of express
warranty, breach of implied warranty, violations of the SBA, violations of the MMWA,
violations of the Consumers Legal Remedies Act (“CLRA”), Cal. Civ. Code §§ 1750 et seq.
(West 2009), violations of the California Unfair Competition Law (“UCL”), Cal. Bus. &
Prof. Code § 17200 et seq. (West 2008), and common law claims for assumpsit and quasicontract. Samsung filed a motion to transfer to this court, which the Central District of
California granted. Samsung now moves as a third-party nonsignatory to compel arbitration
-6-

pursuant to the arbitration agreements signed between plaintiffs and their wireless carriers.6
If the court denies the motion to compel arbitration, Samsung moves in the alternative to
dismiss all of plaintiffs’ claims other than the SBA implied warranty claims of plaintiffs
Taliaferro and McKinney.
II
The court turns first to Samsung’s motion to compel arbitration.
A
Samsung is not a signatory either to the Sprint Service Agreement or the Verizon
Customer Agreement. It argues, however, that it is entitled as a third-party nonsignatory
under principles of equitable estoppel to compel arbitration pursuant to the arbitration
provisions contained in these agreements because plaintiffs’ complaint raises allegations of
substantially interdependent and concerted misconduct by Samsung, Sprint, and Verizon.
Samsung maintains that, although plaintiffs are suing Samsung, they are complaining
of the failure of Sprint and Verizon to repair or replace their Samsung phones; that is, they
are seeking to hold Samsung responsible for the conduct of Sprint and Verizon, and it is
impossible to consider their claims against Samsung without considering the alleged failures
of Sprint and Verizon to repair their phones. Samsung contends that, after the court
dismissed plaintiffs’ warranty claims in Taliaferro (in part based on their failure to plead that

6

Samsung has filed a September 18, 2013 motion for leave to file supplemental
appendix in support of its motion to compel arbitration, which plaintiffs oppose. Because
the supplemental appendix does not affect the court’s decision, the motion is granted.
-7-

they had satisfied the condition precedent of the Samsung warranty that they attempt to
service their phones at an authorized phone service facility), plaintiffs revised their claims
to allege that they attempted to service their phones through Sprint and Verizon, Samsung’s
authorized agents. Citing various allegations of the complaint, including some that group
Samsung, Verizon, and Sprint as “Defendants,” Samsung posits that plaintiffs’ claims are
wholly dependent on the conduct of Sprint and Verizon, acting as Samsung’s alleged agents,
in failing to perform Samsung’s contractual duties. Samsung reasons that plaintiffs’ claims
involve substantially interdependent and concerted misconduct among Sprint, Verizon, and
Samsung because the claims not only implicate the alleged conduct of these entities, they
wholly depend on allegations that Verizon and Sprint acted as Samsung’s agents when they
breached the Samsung warranty by failing to repair plaintiffs’ phones. According to
Samsung, plaintiffs’ claims are founded in the contractual relationship between Verizon and
Sprint and plaintiffs because plaintiffs attempted to service their phones at their wireless
carriers based on their contractual relationships with the carriers. Samsung argues that it is
especially inequitable not to compel arbitration in this case, because plaintiffs are seeking to
avoid the binding arbitration provisions in their agreements with Verizon and Sprint by suing
Samsung alone, despite the fact that their claims fall squarely within the scope of their
wireless service contracts.

-8-

B
Although Samsung relies on federal law, the court will apply California law, which
plaintiffs contend controls,7 and which Samsung acknowledges does not conflict with
California law.8 Under the California law of equitable estoppel, “a nonsignatory defendant
may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when
the causes of action against the nonsignatory are intimately founded in and intertwined with
the underlying contract obligations.” Jones v. Jacobson, 125 Cal.Rptr.3d 522, 538 (Cal. Ct.
App. 2011) (citations and internal quotation marks omitted).
This requirement comports with, and indeed derives from, the
very purposes of the doctrine: to prevent a party from using the
terms or obligations of an agreement as the basis for his claims
against a nonsignatory, while at the same time refusing to

7

See Ps. Br. 4 (“California law controls whether Samsung can invoke any provisions
in the Sprint and Verizon agreements.”)
8

In Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009), “the Supreme Court made
clear that state law controls whether an arbitration clause can apply to nonsignatories.” Todd
v. Steamship Mut. Underwriting Ass’n (Bermuda), 601 F.3d 329, 336 (5th Cir. 2010) (citing
Carlisle, 556 U.S. at 330-31); see also Carlisle, 556 U.S. at 630 (while the FAA “creates
substantive federal law regarding the enforceability of arbitration agreements, . . .
background principles of state contract law” control the interpretation of the scope of such
agreements, “including the question of who is bound by them.”). Accordingly, this court
looks to California law to determine whether Samsung, as a third-party nonsignatory to the
Sprint and Verizon agreements, can compel arbitration under the agreements.
In moving to compel arbitration, Samsung cites primarily federal law and maintains
that the doctrine of arbitration by equitable estoppel is part of the “body of federal
substantive law of arbitrability.” D. Br. 13 (quoting Moses H. Cone Mem’l Hosp. v. Mercury
Const. Corp., 460 U.S. 1, 24 (1983)). Samsung does not appear to object, however, to the
application of California law, noting in a footnote in its brief that “there is no conflict
between federal and California law” on this issue. Id. at 13 n.7.
-9-

arbitrate with the nonsignatory under another clause of that same
agreement.
Id. (quoting Goldman v. KPMG LLP, 92 Cal.Rptr.3d 534, 543-44 (Cal. Ct. App. 2009)).
When a nonsignatory seeks to enforce an arbitration clause, the doctrine of equitable estoppel
applies in two circumstances: (1) “when the signatory to a written agreement containing an
arbitration clause must rely on the terms of the written agreement in asserting [its] claims
against the nonsignatory,” and (2) when the signatory alleges interdependent and concerted
misconduct by the nonsignatory and another signatory and “the allegations of interdependent
misconduct [are] founded in or intimately connected with the obligations of the underlying
agreement.” Goldman, 92 Cal.Rptr.3d at 541 (citations and internal quotation marks
omitted). “[E]quitable estoppel applies only if the plaintiffs’ claims against the nonsignatory
are dependent upon, or inextricably bound up with, the obligations imposed by the contract
plaintiff has signed with the signatory defendant.” Id. at 550. “[M]erely ‘mak[ing] reference
to’ an agreement with an arbitration clause is not enough. Equitable estoppel applies ‘when
the signatory to a written agreement containing an arbitration clause “must rely on the terms
of the written agreement in asserting [its] claims” against the nonsignatory.’” Id. at 541
(quoting MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947 (11th Cir. 1999)).

- 10 -

C
The court holds that Samsung cannot rely on the doctrine of equitable estoppel to
compel plaintiffs to arbitrate their claims.9 It is not necessary for plaintiffs to rely on the
terms of their service agreements with Sprint and Verizon to assert their claims against
Samsung, and plaintiffs’ claims are not intimately founded in and intertwined with these
contracts. Further, assuming that plaintiffs allege substantially interdependent and concerted
misconduct by Samsung, Sprint, and Verizon, the allegations of interdependent misconduct
are not founded in or intimately connected with the obligations of the service agreements.
The complaint does not rely on any of the terms of the Verizon and Sprint agreements
as a foundation for any claim. As in Goldman, 92 Cal.Rptr.3d at 540-41, the complaint does
not even mention these agreements. By their terms, the Verizon and Sprint agreements
govern the wireless carriers’ relationships with plaintiffs. Plaintiffs do not rely on these
agreements to establish Samsung’s liability under any alleged cause of action. To the extent
the complaint contains allegations about the conduct of Sprint and Verizon, the assertions do
not function as predicates for alleging claims against them (neither is a party to this lawsuit).
Instead, it is apparent that these allegations are included so that plaintiffs can satisfy their
obligation to plead plausible claims against Samsung, such as by showing that they complied

9

Plaintiffs maintain that their claims do not fall within the scope of the arbitration
provisions in the Sprint and Verizon service agreements. The court will assume in deciding
Samsung’s motion that plaintiffs’ claims are covered by the arbitration clauses at issue. The
court will also assume that plaintiffs’ other grounds for opposing Samsung’s motion, e.g.,
waiver, lack force.
- 11 -

with the precondition of the Samsung warranty that they return their phones to an “authorized
phone service facility.” Taliaferro, 2012 WL 169704, at *2. “In California, equitable
estoppel is inapplicable where a plaintiff’s ‘allegations reveal no claim of any violation of
any duty, obligation, term or condition imposed by the’ [agreement containing the arbitration
provision].” Murphy v. DirecTV, Inc., 724 F.3d 1218, 1230 (9th Cir. 2013) (quoting
Goldman, 92 Cal.Rptr.3d at 551). Plaintiffs’ complaint contains no such allegation.
And even if the court assumes that plaintiffs allege substantially interdependent and
concerted misconduct by Samsung, Sprint, and Verizon, these allegations are not founded
in or intimately connected with the obligations of the service agreements. Samsung
maintains that plaintiffs’ claims depend on allegations that Verizon and Sprint acted as
Samsung’s agents when plaintiffs contacted them about repairing or replacing their phones,
that the defect in their phones is only actionable because Verizon and Sprint failed to correct
the defect, and that plaintiffs cannot bring an action against Samsung without considering the
actions of Verizon and Sprint. Samsung also argues that, by alleging that Samsung and
Verizon and Sprint are unified as principal and agent, plaintiffs implicitly seek to hold
Samsung responsible for the conduct of Verizon and Sprint.10 But plaintiffs’ allegations are

10

As noted, Samsung argues that, according to the allegations of plaintiffs’ complaint,
Verizon and Sprint acted as Samsung’s agent. Although this argument may bear upon
whether plaintiffs allege substantially interdependent and concerted misconduct by Samsung,
Sprint, and Verizon, it does not establish that plaintiffs’ allegations are founded in or
intimately connected with the obligations of the service agreements. In other words, even
if the court assumes that plaintiffs rely on the conduct of Verizon and Sprint, as Samsung’s
agent, in failing to repair or replace their phones to establish that Samsung is liable, such
liability is based on Samsung’s warranty, not on the Verizon and Sprint service agreements.
- 12 -

not founded in or intimately connected with the obligations of the underlying agreements.
This is illustrated by the allegations of the complaint that Samsung cites in its brief. See D.
Br. 17-18. None relies on an obligation that arose under the Sprint or Verizon service
agreement. Instead, it is clear from the complaint that plaintiffs rely on these allegations to
establish that they fulfilled a condition precedent of the Samsung warranty. See Compl. ¶¶
58-62 (cited, in part, at D. Br. 17-18).11
Stated simply, even assuming that plaintiffs are relying on the conduct of Sprint and
Verizon to establish Samsung’s liability, they are doing so to establish Samsung’s liability
by contract, by statute, or under common law; they are not relying on the Sprint and Verizon
agreements to establish that liability. As in Goldman, plaintiffs “are not relying in any way
on the [Sprint and Verizon agreements] to make their claims against [Samsung], while at the
same [time] avoiding the arbitration clauses of those agreements—and, at bottom, that is the
only basis upon which they may be equitably stopped from refusing to arbitrate when they
have not agreed to do so.” Goldman, 92 Cal.Rptr.3d at 553.
Accordingly, Samsung’s motion to compel arbitration is denied.

11

In its reply brief, Samsung contends that plaintiffs’ allegations of interdependent
conduct between Samsung and Verizon and Samsung and Sprint are founded on plaintiffs’
underlying contractual relationships with the wireless carriers because their warranty claims
depend on allegations that they returned their defective phones to a Samsung-authorized
repair facility. Samsung maintains that plaintiffs are relying on their service agreements with
Verizon and Sprint to satisfy this precondition. This assertion is misplaced. Plaintiffs are
relying on these allegations to establish that they satisfied a precondition of the Samsung
warranty, not to address an obligation founded in or intimately connected with the Verizon
and Sprint agreements.
- 13 -

III
The court now turns to Samsung’s motion for partial dismissal under Rule 12(b)(6).12
Samsung maintains that plaintiffs’ refusal to grant Samsung, as opposed to Sprint and
Verizon, an opportunity to repair or replace their phones precludes all of their warranty
claims except their SBA implied warranty claim. Samsung therefore maintains that
plaintiffs’ claims for breach of express and implied warranties under the Uniform
Commercial Code (“UCC”), breach of express warranty under the SBA, violations of the
MMWA, violations of the CLRA, violation of the UCL, and claim for common counts must
all be dismissed. Samsung also contends that Galitsky’s SBA implied warranty claim must
be dismissed based on his failure to plead facts plausibly showing that his phone is not fit for
its ordinary purpose.
“In deciding a Rule 12(b)(6) motion to dismiss, the court evaluates the sufficiency of
plaintiffs’ amended complaint by ‘accepting all well-pleaded facts as true, viewing them in
the light most favorable to the plaintiff.’” Bramlett v. Med. Protective Co. of Fort Wayne,
Ind., 855 F.Supp.2d 615, 618 (N.D. Tex. 2012) (Fitzwater, C.J.) (quoting In re Katrina Canal
Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (internal quotation marks and alteration

12

Despite denying the motion to compel arbitration, the court has jurisdiction to decide
the motion for partial dismissal because the scope of Samsung’s appeal, if any, from the
denial of the motion is limited to whether plaintiffs’ actions must be arbitrated. Weingarten
Realty Investors v. Miller, 661 F.3d 904, 908-09 (5th Cir. 2011) (holding that “because
answering the question of arbitrability does not determine the merits of the case, the merits
are not an aspect of the case that is involved in the appeal on arbitrability,” and the district
court therefore had jurisdiction to proceed with litigation despite appeal of ruling on motion
to compel arbitration).
- 14 -

omitted)). To survive Samsung’s motion to dismiss under Rule 12(b)(6), plaintiffs must
plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff[s]
plead[ ] factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than
a sheer possibility that a defendant has acted unlawfully.” Id.; see also Twombly, 550 U.S.
at 555 (“Factual allegations must be enough to raise a right to relief above the speculative
level[.]”). “[W]here the well-pleaded facts do not permit the court to infer more than the
mere possibility of misconduct, the complaint has alleged—but it has not ‘shown’—‘that the
pleader is entitled to relief.’” Iqbal, 556 U.S. at 679 (quoting Rule 8(a)(2)) (alteration
omitted). “Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. at 678 (citation omitted).
IV
Samsung moves to dismiss plaintiffs’ express warranty claims, contending that they
have failed to plead satisfaction of the contractual precondition that they returned their
phones to a Samsung-authorized phone service facility for repair or replacement.
A
As the court explained in Taliaferro:
Under California law, to plead a claim for breach of express
warranty, the buyer must allege that the seller (1) made an
affirmation of fact or promise or provided a description of its
- 15 -

goods; (2) the promise or description formed part of the basis of
the bargain; (3) the express warranty was breached; and (4) the
breach caused injury to the plaintiff. A manufacturer’s liability
for breach of an express warranty derives from, and is measured
by, the terms of that warranty. Therefore, a plaintiff cannot state
a claim for breach of express warranty unless he meets the
conditions precedent prescribed by the express warranty.
Taliaferro, 2012 WL 169704, at *2 (alteration, citations, and internal quotation marks
omitted). The Samsung warranty provides, in relevant part:
To obtain service under this Limited Warranty, Purchaser must
return Product to an authorized phone service facility in an
adequate container for shipping, accompanied by Purchaser’s
sales receipt or comparable substitute proof of sale showing the
original date of purchase, the serial number of Product and the
sellers’ name and address. To obtain assistance on where to
deliver the Product, call Samsung Customer Care at [telephone
number]. Upon receipt, SAMSUNG will promptly repair or
replace the defective Product.
D. App. 3 (bracketed material added; other alterations omitted).13 The parties dispute
whether the complaint adequately alleges that plaintiffs satisfied this precondition by
returning their phones to an “authorized phone service facility.” Id.
To demonstrate that they have satisfied this precondition, plaintiffs allege that they
each informed their wireless carriers of the defect, that Galitski’s and Taliaferro’s wireless
carriers replaced their defective phones with another Galaxy S phone, and that Galitski’s and

13

Samsung has attached the warranty to its motion to dismiss. The court may consider
documents attached to a motion to dismiss if they are “referred to in the plaintiff’s complaint
and are central to the plaintiff’s claim.” Scanlan v. Tex. A&M Univ., 343 F.3d 533, 536 (5th
Cir. 2003) (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir.
2000)). Neither side disputes the existence or terms of the warranty, nor its centrality to
plaintiffs’ claims.
- 16 -

Taliaferro’s replacement phones also experienced the defect.14 Plaintiffs also assert that
Samsung does not have a direct repair facility in California and does not provide a list of
such facilities on its website or to its retail sellers. They also aver that the Samsung warranty
does not specify what constitutes an “authorized phone service facility,” and that it was
Samsung’s custom to inform customers to take their phones to their local phone carriers for
service. The complaint alleges that an AT&T service bulletin directed AT&T retail segments
to exchange the device if a customer experienced the defect, and that the Verizon website
directed customers who experienced a defect during the warranty period to contact Verizon
customer service for repair or a replacement. The complaint then alleges that
[a]s Samsung fails to provide service and repair facilities
in this state, and because its written warranty does not specify
what constitutes an “authorized phone service facility,”
Samsung’s and the retail seller’s actions show[] that under all
applicable laws and as a reasonable construction of such
warranties, these phone carrier entities are phone service
facilities authorized by Samsung for purposes of compliance
with any express warranty obligations. By contacting or
sending their phones to their respective phone carriers for
service or repair of the defect, plaintiffs complied with any
warranty’s preconditions based on how the term “authorized
phone service facility” has been applied and used by Samsung.

Compl. at ¶ 61.
Samsung argues that, according to the warranty, consumers can find “authorized
phone service facilities” by calling Samsung’s customer care number, and that because none

14

Plaintiffs also allege that Galitski “also informed Samsung of the defect.” Compl.

¶ 33.
- 17 -

of the plaintiffs alleges that he called this number and that his wireless carrier was thereby
identified as an authorized phone service facility for repair under the warranty, plaintiffs have
failed to allege sufficient facts showing that they satisfied the condition precedent.
Moreover, to the extent plaintiffs allege that Verizon and Sprint constituted “authorized
phone service facilities” based on an internal AT&T bulletin and a statement on Verizon’s
website, the warranty provides that dealers of Samsung devices are not authorized to make
modifications to the warranty and that any additional statements made by the dealers should
not be relied upon. See D. App. 4-5 (“The agents, employees, distributers, and dealers of
SAMSUNG are not authorized to make modifications to this Limited Warranty, or make
additional warranties binding on SAMSUNG. Accordingly, additional statements such as
dealer advertising or presentation, whether oral or written, do not constitute warranties by
SAMSUNG and should not be relied upon.”). Thus Samsung argues that, even if the
allegations regarding the representations by AT&T and Verizon could be construed as
assertions that these entities are “authorized phone service facilities ” under the warranty, the
warranty expressly provides that such representations cannot alter its terms.
B
The court held in Taliaferro that the Samsung express warranty requires as a
precondition that a phone purchaser return his phone to an “authorized phone service
facility.” Taliaferro, 2012 WL 169704, at *3. The warranty does not list the specific
locations of Samsung’s “authorized phone service facilities,” but it provides that customers
can obtain assistance on where to deliver defective products by calling the Samsung customer
- 18 -

care telephone number. The warranty does not state that Samsung customers’ wireless
carriers are “authorized phone service facilities.”
The complaint alleges that “it was Samsung’s custom to inform customers to take their
phones to their local phone carriers for service.” Compl. ¶ 59. But plaintiffs neither plead
the basis for asserting such a custom nor do they allege that they contacted the Samsung
customer care telephone number and were ever told that they could obtain warranty repair
or replacement by returning their phones to their wireless carriers. Nor can they rely on
statements in an internal AT&T bulletin and on Verizon’s website to support their allegation
that their wireless carriers constituted “authorized phone service facilities” because the
Samsung warranty explicitly prohibits dealers of its products from modifying the terms of
its warranty.
Because plaintiffs have failed to plausibly allege that Sprint and Verizon constituted
“authorized phone service facilities” under the terms of the Samsung warranty, the court
grants Samsung’s motion to dismiss plaintiffs’ breach of express warranty claim.
V
Samsung moves to dismiss plaintiffs’ breach of implied warranty claim under the
UCC, contending that, under the UCC and the terms of Samsung’s warranty, plaintiffs’ sole
remedy for breach of implied warranty is repair or replacement of the defective phones, and
plaintiffs have failed to plead that Samsung failed to repair or replace their phones.

- 19 -

A
Under the California UCC, if a remedy “is expressly agreed to be exclusive . . . it is
the sole remedy.” Cal. Com. Code § 2719(1)(b) (West 2002). The warranty provides that
Samsung is obligated, “[d]uring the applicable warranty period” to “repair or replace . . . any
defective component part of Product.” D. App. 3. Samsung therefore argues that plaintiffs’
implied warranty claim under the UCC must be dismissed because they have not alleged that
Samsung failed to repair or replace their phones after being provided an opportunity to do
so, and have not alleged sufficient facts to show that Sprint and Verizon acted as agents for
Samsung such that Samsung can be held vicariously liable for their conduct.
Plaintiffs respond that Samsung has not limited its warranty to “repair and
replacement” because, under California law, for a limitation of remedies to be effective, it
must have been “bargained for” or made known to the consumers before their purchase; that
Samsung’s default was total and fundamental, and that Samsung cannot limit its warranty
remedy if the available remedy fails of its essential purpose or is unconscionable; and that,
even if Samsung effectively limited its warranty to replacement and repair, plaintiffs gave
Samsung ample opportunity to cure its breach: in the case of Galitski, by informing Samsung
about the defect, and, in the cases of Newbold and Taliaferro, by informing their wireless
carriers of the defect in their Galaxy S phones. Plaintiffs maintain, as they did in response
to Samsung’s arguments relating to their breach of express warranty claim, that Sprint and
Verizon were “authorized phone service facilities” under Samsung’s warranty because
Samsung’s custom was to inform customers to take their phones to their local phone carriers
- 20 -

for service and because an internal AT&T bulletin directed AT&T retailers to exchange
defective devices.
B
The court first addresses plaintiffs’ argument that the warranty is not confined to
“repair and replacement” because this limitation was not bargained for. Plaintiffs cite
Dorman v. International Harvester Co., 46 Cal.App.3d 11, 20 (1975), in support of this
proposition, but their reliance is misplaced. The court in Dorman held that a manufacturer’s
disclaimer of implied warranties was not effective because it was not included in the contract
the parties signed but was instead printed on the reverse side of a purchase order sent to the
plaintiff at a later date. Id. at 20. In the instant case, the complaint does not contain similar
allegations that plead a plausible claim that the limitation of remedies in the Samsung
warranty was not bargained for.15
Plaintiffs also argue that they gave Samsung an opportunity to cure its breach. Yet
the allegations of the complaint permit the court to draw only the reasonable inference that
plaintiffs gave their wireless carriers, not Samsung, the opportunity to “cure” the alleged
defect in their phones. Plaintiffs allege that when Galitski contacted Samsung to complain

15

Additionally, unlike in Dorman, Samsung is not attempting to disclaim an implied
warranty; rather, it is seeking to limit the available warranty remedies to repair or
replacement, which it is entitled to do under California law. See Cal. Com. Code §
2719(1)(a) (“The agreement may . . . limit or alter the measure of damages recoverable under
this division, as by limiting the buyer’s remedies to . . . repair and replacement of
nonconforming goods or parts”); id. at § 2719(1)(b) (if a remedy “is expressly agreed to be
exclusive . . . it is the sole remedy”).
- 21 -

about a headphone jack issue, he “also informed Samsung of the defect” and that he “got no
assistance from Samsung regarding either problem with his phone.” Compl. ¶ 33. Yet they
do not assert that Galitski requested that Samsung repair or replace his phone due to the
defect. Instead, they allege that Galitski received a replacement phone from Sprint “due to
the headphone jack problem.” Id. at ¶ 34. And concerning Newbold and Taliaferro,
plaintiffs do not allege that either informed Samsung that he was experiencing the defect,
much less that either one gave Samsung an opportunity to replace or repair his defective
phone. The court has already held above that neither Samsung’s alleged “custom” of
informing other customers to return their defective phones to their wireless carriers nor the
statements of wireless carriers regarding repair of the defective Galaxy S phones are
sufficient to plausibly allege that the wireless carriers were “authorized phone service
facilities” under Samsung’s warranty or that the wireless carriers were acting as Samsung’s
agents for purposes of warranty claims.
Accordingly, because plaintiffs do not plausibly allege that, upon being given the
opportunity, Samsung failed to repair or replace their defective phones—the only remedies
available under the terms of Samsung’s warranty—plaintiffs’ UCC implied warranty claim
is dismissed. See Taliaferro, 2012 WL 169704, at *5 (dismissing plaintiff Taliaferro’s
“breach of implied warranty claim under the UCC because Taliaferro does not allege that
Samsung failed to repair or replace his phone”).

- 22 -

VI
Samsung moves to dismiss plaintiffs’ SBA express warranty claim, arguing that they
have failed to allege that they delivered their phones to Samsung or a Samsung-authorized
service facility for repair.
The SBA “ is a remedial statute designed to protect consumers who have purchased
products covered by an express warranty.”

Martinez v. Kia Motors Am., Inc., 122

Cal.Rptr.3d 497, 498 (Cal. Ct. App. 2011).
A plaintiff pursuing an action under the [SBA] has the burden
to prove the following elements: (1) the product had a defect or
nonconformity covered by the express warranty; (2) the product
was presented to an authorized representative of the
manufacturer for repair; and (3) the manufacturer or its
representative did not repair the defect or nonconformity after
a reasonable number of repair attempts.
Robertson v. Fleetwood Travel Trailers of Cal., Inc., 50 Cal.Rptr.3d 731, 741 (Cal. Ct. App.
2006) (citing Oregel v. Am. Isuzu Motors, Inc., 109 Cal.Rptr.2d 583, 588 (Cal. Ct. App.
2001)).
Plaintiffs allege that Samsung “maintains no direct repair facilities in [California], or
in any state other than Texas.” Compl. ¶ 58. Under the SBA, if a manufacturer does not
maintain its own service and repair facilities in California, it must “designate and authorize”
independent repair or service facilities located in that state. Cal. Civ. Code § 1793.2(a)
(“Every manufacturer of consumer goods sold in this state and for which the manufacturer
has made an express warranty shall . . . [m]aintain in this state sufficient service and repair
facilities reasonably close to all areas where its consumer goods are sold to carry out the
- 23 -

terms of those warranties or designate and authorize in this state as service and repair
facilities independent repair or service facilities . . . to carry out the terms of the
warranties.”). Plaintiffs argue that they have satisfied the requirements of the SBA by
alleging that their wireless carriers are “authorized phone service facilities,” and that they
presented their defective phones to their wireless carriers for repair. But plaintiffs’
conclusory allegations that Sprint and Verizon are “authorized phone service facilit[ies]” do
not support the reasonable inference that Samsung “designate[d] and authorize[d]” either
Sprint or Verizon to act as an independent service facility in California. Nor do plaintiffs’
allegations that it was Samsung’s “custom to inform customers to take their phones to their
local phone carriers for service” or that Verizon and AT&T represented that they would
repair or replace defective Galaxy S phones permit such an inference. Compl. ¶ 59.
Plaintiffs argue that, if Samsung is allowed to “evade all responsibility under its
express warranties so long as it fails, in violation of California law, to ‘maintain service and
repair facilities within the state,’ [this] would turn [the SBA] on its head.” Ps. Br. 11-12
(citation omitted). They maintain that Samsung’s interpretation of the SBA “would leave
consumers with no remedy for breaches of warranty so long as the manufacturer could shift
blame to the retailer for not repairing or replacing the defective product.” Id. at 12. The
court disagrees.
First, a manufacturer such as Samsung is not required to maintain a service and repair
facility within California. It can instead designate and authorize independent repair or
service facilities in California to carry out the terms of its warranties. Samsung’s contention
- 24 -

that retail sellers are not “authorized phone service facilities” is not a concession that it did
not designate and authorize independent repair or service facilities in California to carry out
the terms of its warranties
Second, Samsung does not evade liability by failing to maintain service and repair
facilities within California. Rather, a manufacturer who fails to provide service and repair
facilities within California “shall be liable . . . to every retail seller of such manufacturer’s
goods who incurs obligations in giving effect to the express warranties that accompany such
manufacturer’s consumer goods.” Cal. Civ. Code § 1793.5.
Third, even assuming that Samsung failed to maintain service and repair facilities in
California, consumers are permitted under Cal. Civ. Code § 1793.3 to return nonconforming
goods to the retail seller or to any retail seller of like goods of the same manufacturer for
repair or replacement. Id.
Because plaintiffs have failed to plausibly allege that they presented their defective
Galaxy S phones to Samsung or an “authorized representative” of Samsung for repair, their
express warranty claim under the SBA is dismissed.
VII
Samsung moves to dismiss Galitski’s implied warranty claim under both the UCC and
the SBA, contending that the complaint fails to plead that his phone is not merchantable.
Under the SBA, [t]o be merchantable, consumer goods must “(1) [p]ass without
objection in the trade under the contract description[,] (2) [be] fit for the ordinary purposes
for which such goods are used[,] (3) [be] adequately contained, packaged, and labeled[, and]
- 25 -

(4) [c]onform to the promises or affirmations of fact made on the container or label.” Cal.
Civ. Code § 1791.1(a).16 The implied warranty of merchantability “provides for a minimum
level of quality.” Am. Suzuki Motor Corp. v. Superior Court, 44 Cal.Rptr.2d 526, 529 (Cal.
Ct. App. 1995) (citations and internal quotation marks omitted).

“The core test of

merchantability is fitness for the ordinary purpose for which such goods are used.” Mexia
v. Rinker Boat Co., 95 Cal.Rptr.3d 285, 289 (Cal. Ct. App. 2009) (quoting Isip v. MercedesBenz USA, LLC, 65 Cal.Rptr.3d 695, 700 (Cal. Ct. App. 2007)). “Such fitness is shown if
the product is in safe condition and substantially free of defects[.]” Id. (internal quotation
marks and citations omitted).
Samsung posits that the complaint fails to plausibly allege that Galitski’s phone was
unfit for its ordinary purpose. According to the complaint, although Galitski twice received
replacement phones to rectify other problems (the headphone jack problem and screen burnin problem), “Galitski continues to use his replacement phone.” Compl. ¶ 37. Samsung
therefore maintains that it cannot be plausibly inferred that Galitski is unable to use his phone
for its ordinary purpose due to the defect.
Plaintiffs respond that the defect “forces Galitski ‘to remove and replace his battery
. . . causing him to drop calls and lose data.’” Ps. Br. 16-17 (quoting Compl. ¶ 35). They
maintain that “[a] defect that causes Galitski’s phone to randomly freeze, shut down, and
power-off while in standby mode, thereby making it impossible to receive or deliver calls,

16

Similarly, under the UCC, to be “merchantable,” goods must “at least” be “fit for the
ordinary purposes for which such goods are used.” Cal. Com. Code § 2314.
- 26 -

messages or data and requiring him to remove the battery, reinsert it, and re-power the phone
just for it to work again renders his Galaxy phone inoperable and unfit for its intended use
and purpose.” Id.
The court agrees with plaintiffs that they have plausibly pleaded that Galitski’s phone
is unmerchantable for purposes of his implied warranty claims under the UCC17 and the SBA.
This ground of Samsung’s motion to dismiss is denied.
VIII
Defendants move to dismiss plaintiffs’ MMWA claim, arguing that plaintiffs have
failed to plead that they gave Samsung an opportunity to cure the alleged defect. Plaintiffs
respond, inter alia, that, under the MMWA, before the defendant is afforded an opportunity
to cure, plaintiffs bringing an MMWA class action can file suit for the limited purpose of
establishing the representative capacity of the named plaintiffs.18 The court agrees.
“[T]he MMWA creates a statutory cause of action for consumers damaged by the
failure of a supplier, warrantor, or service contractor to comply with any obligation [imposed

17

This conclusion does not alter the court’s holding that plaintiffs have failed to
adequately plead a claim for breach of implied warranty under the UCC.
18

Plaintiffs also contend that they made “numerous requests” to Samsung or to
Samsung’s “authorized phone service facilities,” seeking a cure for their defective phones.
Ps. Br. 17. But plaintiffs’ allegation that Galitski “also informed Samsung of the defect,”
Compl. ¶ 33, does not plausibly allege that Galitski gave Samsung an opportunity to cure,
because plaintiffs allege that Galitski also informed Sprint of the problem and received a
replacement phone from Sprint “due to the headphone jack problem.” Id. at ¶ 34. And, for
the reasons discussed above, plaintiffs have failed to plausibly allege that their wireless
carriers constituted agents of Samsung or “authorized phone service facilities,” as provided
under the Samsung warranty.
- 27 -

by the Act] or [established by] a written warranty, implied warranty, or service contract.”
Walton v. Rose Mobile Homes LLC, 298 F.3d 470, 474 (5th Cir. 2002) (citing 15 U.S.C. §
2310(d)(1)) (internal quotation marks omitted). Before a plaintiff can bring a claim under
the MMWA for breach of warranty, he “must give persons obligated under the warranty a
reasonable opportunity to ‘cure’ their failure to comply with the obligations at issue.”
Walton, 298 F.3d at 474 (quoting 15 U.S.C. § 2310(e)). Under the MMWA,
[n]o action (other than a class action . . . ) may be brought under
subsection (d) of this section for failure to comply with any
obligation under any written or implied warranty or service
contract, and a class of consumers may not proceed in a class
action under such subsection with respect to such a failure
except to the extent the court determines necessary to establish
the representative capacity of the named plaintiffs, unless the
person obligated under the warranty or service contract is
afforded a reasonable opportunity to cure such failure to
comply. In the case of such a class action . . . , such reasonable
opportunity will be afforded by the named plaintiffs and they
shall at that time notify the defendant that they are acting on
behalf of the class.
15 U.S.C. § 2310(e).
“The plain language of the statute imposes different requirements on individual
plaintiffs and class action plaintiffs regarding the time at which they must satisfy the
opportunity to cure requirement.” In re Porsche Cars N. Am., Inc. Plastic Coolant Tubes
Prods. Liab. Litig., 880 F.Supp.2d 801, 824 (S.D. Ohio 2012); see also In re Shop-Vac
Marketing & Sales Practices Litig., ___ F.Supp.2d ___, 2013 WL 4049728, at *4 (M.D. Pa.
Aug. 9, 2013) (“While Section 2310(e) requires that sellers be afforded an opportunity to
cure before an individual consumer may bring an action under the MMWA, classes of
- 28 -

consumers are prohibited only from proceeding in a class action unless the seller is afforded
a reasonable opportunity to cure the defect.” (emphasis in original; bold font omitted)). In
the present case, plaintiffs are bringing their MMWA claim on behalf of a class of California
consumers. Accordingly, they are not required at this juncture to plead that they have given
Samsung an opportunity to cure the defect. If this court certifies a class, the plaintiffs must
give Samsung notice and an opportunity to cure under the MMWA. See In re Porsche, 880
F.Supp.2d at 824 (“Once a court [certifies a class under Rule 23], but before the class action
can proceed, the defendant must be afforded an opportunity to cure the alleged breach of
warranty and the named plaintiffs must at that point inform the defendant that they are acting
on behalf of a class.”).19
Accordingly, the court denies Samsung’s motion to dismiss plaintiffs’ claim under the
MMWA.

19

Samsung argues that § 2310(e) does not relieve plaintiffs of MMWA’s requirement
of providing Samsung with a reasonable opportunity to cure prior to filing their individual
claims; rather, § 2310(e) merely excuses a “class” from providing the seller notice and an
opportunity to cure before the court determines the representative capacity of the named
plaintiffs. Samsung has not cited, and the court not found on its own, any case that reaches
this conclusion. Cases interpreting the statute have instead held that “plaintiffs bringing a
class action may file suit before the defendant is afforded an opportunity to cure for the
limited purpose of establishing the representative capacity of the named plaintiffs.” In re
Porsche, 880 F.Supp.2d at 824; see also In re Shop-Vac, 2013 WL 4049728, at *4
(dismissing MMWA claim for failure to properly plead such a claim, but also rejecting, in
dicta, argument that named plaintiffs’ MMWA claim should be dismissed under § 2310(e)
for failure to afford notice and opportunity to cure). If the case law develops favorably to
Samsung’s position, the court will reconsider this holding in future cases.
- 29 -

IX
Samsung moves to dismiss plaintiffs’ CLRA claim on the ground that plaintiffs have
failed to satisfy the CLRA notice requirements.
A
Samsung maintains that plaintiffs sent written notice of the claim on February 10,
2012 and filed their second amended complaint in Taliaferro on March 1, 2012, fewer than
30 days after sending the notice to Samsung. It posits that plaintiffs’ voluntary dismissal of
the Taliaferro lawsuit and subsequent filing of the instant case does not change the fact that
they filed their CLRA damages claim against Samsung without providing adequate pre-filing
notice. Samsung posits that, because plaintiffs cannot cure the failure to provide the
statutorily-mandated notice by amending their complaint, they likewise cannot cure their
failure by dismissing their lawsuit and filing the same CLRA claim in another suit.
Plaintiffs respond that the court should not consider materials outside the complaint,
but should accept as true the allegation that plaintiffs provided Samsung the required notice.
They argue that, even if the court considers documents outside the complaint, the documents
demonstrate that plaintiffs sent letters to Samsung that satisfy the CLRA’s “purpose and
effect” more than one year before filing this case. Ps. Br. 20 n.8. Plaintiffs also contend that
the February 10, 2012 notice, which Samsung acknowledges receiving, is sufficient to meet
the notice requirements, especially for plaintiff Galitski, because notice in one case satisfies

- 30 -

the CLRA notice requirement in a separate litigation.20
B
The CLRA makes unlawful various unfair methods of competition and unfair or
deceptive acts or practices undertaken by any person in a transaction intended to result or that
results in the sale or lease of goods or services to any consumer. Cal. Civ. Code § 1770. It
provides that any consumer who suffers damages as a result of an act or practice declared
unlawful in the CLRA may seek to recover actual damages, punitive damages, or injunctive
relief. Id. The CLRA includes a pre-filing notice requirement on actions seeking damages.
At least 30 days before filing a claim for damages under the CLRA, the consumer must
notify the prospective defendant of the “particular alleged violations of Section 1770” and
“[d]emand that the person correct, repair, replace, or otherwise rectify the goods or services
alleged to be in violation” thereof. Id. § 1782. The notice must be in writing and sent by
certified or registered mail. Id. “If, within this 30-day period, the prospective defendant
corrects the alleged wrongs, or indicates that it will make such corrections within a
reasonable time, no cause of action for damages will lie.” Kagan v. Gibraltar Sav. & Loan
Assn., 676 P.2d 1060, 1063 (Cal. 1984), disapproved on other grounds in Meyer v. Sprint
Spectrum L.P., 200 P.3d 295, 301 n.3 (Cal. 2009). California courts have held that the

20

Plaintiffs also argue that, under the court’s decision in Morgan v. AT&T Wireless
Services, Inc., 99 Cal.Rptr.3d 768, 789 (Cal. Ct. App. 2009), even if they have failed to
satisfy the CLRA notice requirement, the proper procedure is to permit them 30 days to
provide notice and then order Samsung to answer the complaint. Because the court holds
that the plaintiffs have satisfied the CLRA notice requirement, it need not address this
argument.
- 31 -

purpose of the notice provision is “to provide and facilitate pre-complaint settlements of
consumer actions wherever possible and to establish a limited period during which such
settlement may be accomplished,” and that this purpose “may only be accomplished by a
literal application of the notice provisions.” Outboard Marine Corp. v. Superior Court, 124
Cal.Rptr. 852, 859 (Cal. Ct. App. 1975) (emphasis added). “Substantial compliance” is
insufficient. Id. at 858.
C
Plaintiffs allege that Samsung violated the CLRA by misrepresenting or not disclosing
to plaintiffs and the class the known defects in the Galaxy S phones, in violation of Cal. Civ.
Code § 1770 (a)(5), (7), (14), & (16). On May 5, 2011 plaintiffs’ attorney sent Samsung a
letter informing it of the defect and stating that plaintiffs believed Samsung was “already
aware of the defective condition from the myriad of customer complaints over approximately
the last year,” and that Samsung’s practices constituted violations of federal and state laws,
and requesting that Samsung “immediately correct and rectify the violations.”21 D. App. 6.
In a May 13, 2011 letter, plaintiffs’ attorney again requested a “true remedy” for the

21

Plaintiffs allege that, “[u]nder California Civil Code § 1782, plaintiffs’ counsel sent
Samsung a CLRA demand letter via certified mail.” Compl. ¶ 142. They also allege that
“beginning on May 5, 2011, prior to filing this lawsuit, plaintiffs, through their counsel and
for themselves and all class members, sent several letters by certified mail to Samsung’s
Chief Executive Officer . . . and to Samsung’s counsel.” Id. at ¶ 67. Accordingly, the court
is permitted to consider the May 5, 2011 letter because it is referenced in the complaint. See,
e.g., Hoffman v. L & M Arts, 774 F.Supp.2d 826, 829 n. 2 (N.D. Tex. 2011) (Fitzwater, C.J.)
(“‘[T]he court may review the documents attached to the motion to dismiss . . . where the
complaint refers to the documents and they are central to the claim.’” (quoting Kane Enters.
v. MacGregor (USA) Inc., 322 F.3d 371, 374 (5th Cir. 2003))).
- 32 -

defective phones. Id. at 10-11. Plaintiffs argue that these letters “provided [Samsung] with
the facts that form the basis of the CLRA claims and requested Samsung offer appropriate
relief to Plaintiffs and the class.” Id. at 19. Samsung replies that strict adherence to the
CLRA notice provisions is required and that the court should reject plaintiffs’ “substantial
compliance” argument.
Although substantial compliance with the CLRA notice requirement is legally
insufficient, Samsung does not identify anything technically noncompliant about the May
2011 letters. While these letters do not specifically reference the CLRA, they clearly apprise
Samsung of the alleged violations (knowingly selling defective Galaxy S phones) and give
Samsung an opportunity to rectify the violations. They therefore fulfill the purpose of the
§ 1782 notice requirement by giving Samsung the opportunity to cure the alleged violations
before being held liable for damages. See Outboard Marine Corp., 124 Cal.Rptr. at 859.
These letters, sent more than 30 days before the plaintiffs in Taliaferro asserted the CLRA
claim in their second amended complaint, satisfy the notice provision of § 1782. See Lafferty
v. Wells Fargo Bank, 153 Cal.Rptr.3d 240, 255 (Cal. Ct. App. 2013) (holding sufficient to
satisfy CLRA notice requirement letter informing manufacturer that plaintiffs told seller
about problems with their recreational vehicle and explaining that mechanical and electrical
failures were never remedied even though seller repeatedly assured them the problems would
be fixed); see also Stearns v. Ticketmaster Corp., 655 F.3d 1013, 1023 (9th Cir. 2011)
(noting that “it is pellucid that [plaintiff] gave [defendants] a thirty-day notice under the
CLRA . . . [by] expressly set[ting] forth the nature of the dispute and declar[ing] that
- 33 -

damages would be sought if the appropriate corrections were not made.”).
Even assuming that the May 2011 letters do not constitute sufficient notice under §
1782, Samsung does not appear to dispute that the February 10, 2012 notice meets the
technical requirements of the statute and that the February 10, 2012 notice was mailed to
Samsung more than 30 days before plaintiffs filed their June 7, 2012 complaint in this suit.
Samsung argues that plaintiffs cannot “cure” their failure to provide the mandated notice and
settlement period by voluntarily dismissing their suit and filing their CLRA claim in another
action 30 days after providing notice. The court disagrees. As explained in Colucci v.
ZonePerfect Nutrition Co., 2012 WL 6737800 (N.D. Cal. Dec. 28, 2012), under very similar
facts:
The first case only matters to the second . . . if it has some sort
of preclusive effect. Here, it does not, whether one looks to
federal preclusion law or to the preclusion rules of the California
state court where the instant case was initially filed.
Accordingly, the Court gives no preclusive effect to the first,
voluntarily dismissed lawsuit. The CLRA notice letter was sent
eight months before commencement of the case now before this
Court and thus was not untimely for purposes of section
1782(a).
Id. at *9.
Because plaintiffs provided Samsung with the statutorily-required pre-suit notice four
months before they filed the complaint in this suit and Samsung does not argue any other
basis for dismissing plaintiffs’ CLRA claim, the court denies Samsung’s motion to dismiss

- 34 -

this claim.22
X
Samsung moves to dismiss plaintiffs’ UCL claim, contending that it must be
dismissed because plaintiffs base their UCL allegations on the acts of their phone carriers,
and, even if plaintiffs had adequately pleaded an agency relationship between the phone
carriers and Samsung, a UCL claim cannot be predicated on vicarious liability. Samsung
also maintains that plaintiffs’ UCL claim relies entirely on their other statutory claims, and
because plaintiffs fail to state a claim under the UCC for breach of implied and express
warranties, the SBA for breach of express warranty, the MMWA, and the CLRA, plaintiffs’
UCL claim based on these “unlawful” acts should also be dismissed. Finally, Samsung
contends that plaintiffs have not pleaded that Samsung acted “unfairly” because they have

22

In its motion, Samsung seeks to dismiss plaintiffs’ CLRA claim only on the basis
that their pre-suit notice under the CLRA was untimely. Samsung does not argue that its
May 11, 2011 offer to repair or replace plaintiffs’ allegedly defective headsets defeats
plaintiffs’ CLRA claim under Cal. Civ. Code § 1782(b) (“no action for damages may be
maintained under Section 1780 if an appropriate correction, repair, replacement, or other
remedy is given, or agreed to be given within a reasonable time, to the consumer within 30
days after receipt of the notice). See Kagan, 676 P.2d at 1063 (“If, within this 30-day period,
the prospective defendant corrects the alleged wrongs, or indicates that it will make such
corrections within a reasonable time, no cause of action for damages will lie.” (emphasis
added)). Accordingly, the court does not consider the effect of Samsung’s offer to repair or
replace plaintiffs’ defective phones in deciding Samsung’s motion to dismiss.
Additionally, the court’s rejection above of certain of plaintiffs’ arguments for why
they gave adequate notice under the MMWA, see supra note 18, is not inconsistent with this
ruling. In moving to dismiss plaintiffs’ MMWA claim, Samsung argued that plaintiffs failed
to give it an opportunity to cure under the terms of the warranty; in connection with the
CLRA claim, Samsung focuses on the timing of plaintiffs’ notice, as required under the
CLRA.
- 35 -

failed to plead facts showing that Samsung, as opposed to the wireless carriers, refused to
repair or replace their defective phones and because plaintiffs have failed to show that their
injuries could not reasonably have been avoided.
Under the UCL, any person or entity that has engaged, is engaging, or threatens to
engage “in unfair competition may be enjoined in any court of competent jurisdiction.” Cal.
Bus. & Prof. Code § 17203 (West 2008). “Unfair competition” includes “any unlawful,
unfair or fraudulent business act or practice.” Id. § 17200. The Supreme Court of California
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.” Cel-Tech
Commc’ns, Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527, 539 (Cal. 1999) (citation and internal
quotation marks omitted). The UCL “borrows violations of other laws and treats them as
unlawful practices that the unfair competition law makes independently actionable.” Id. at
539-40 (citation and internal quotation marks omitted). Further, the UCL creates “three
varieties of unfair competition—acts or practices which are unlawful, or unfair, or
fraudulent.” Id. at 540. Accordingly, one unlawful act or practice suffices to state a claim
under the UCL.
Plaintiffs allege that defendants engaged in “unlawful” business acts and practices by
violating the MMWA, violating the SBA, breaching implied and express warranties, and
violating the CLRA. Because some of plaintiffs’ claims, and Galitski’s SBA claim, survive
Samsung’s motion to dismiss, the court holds that plaintiffs have stated a claim under the
“unlawful” prong of the UCL. Having concluded that plaintiffs have stated a UCL claim,
- 36 -

the court need not consider plaintiffs’ allegations or Samsung’s arguments related to the
“unfair” prong. See, e.g., EMC Corp. v. Sha, 2013 WL 4399025, at * 5 (N.D. Cal. Aug. 13,
2013) (denying motion to dismiss UCL claim and declining to address “unfair” or
“fraudulent” prongs of UCL where plaintiff successfully stated UCL claim under “unlawful”
prong).
XI
Finally, Samsung moves to dismiss plaintiffs’ common counts for assumpsit and
quasi-contract. It argues that, under California law, an action in quasi-contract (such as
unjust enrichment, money had and received, or assumpsit) does not lie when an enforceable,
binding agreement exists, and because neither plaintiffs nor Samsung disputes the existence
of the warranty that governs their relationship, plaintiffs cannot state an alternative quasicontract claim under California law.
Under California law,
[a] common count is proper whenever the plaintiff claims a sum
of money due, either as an indebtedness in a sum certain, or for
the reasonable value of services, goods, etc., furnished. It makes
no difference in such a case that the proof shows the original
transaction to be an express contract, a contract implied in fact,
or a quasi-contract.
Kawasho Int’l (U.S.A.), Inc. v. Lakewood Pipe Serv., Inc., 201 Cal.Rptr. 640, 644 (Cal. Ct.
App. 1983). “The only essential allegations of a common count are (1) the statement of
indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3)
nonpayment.” Farmers Ins. Exch. v. Zerin, 61 Cal.Rptr.2d 707, 715 (Cal. Ct. App. 1997)

- 37 -

(citations and internal quotation marks omitted). A common count is not a specific cause of
action, however. McBride v. Boughton, 20 Cal.Rptr.3d 115, 127 (Cal. Ct. App. 2004).
[R]ather, it is a simplified form of pleading normally used to
aver the existence of various forms of monetary indebtedness
. . . . When a common count is used as an alternative way of
seeking the same recovery demanded in a specific cause of
action and is based on the same facts . . . [the] common count
must stand or fall with [the specific] cause of action.
Id.23
In their common count, plaintiffs seek restitution “through an action derived from the
common-law claim of assumpsit by implying a contract at law, or a quasi-contract as an
alternative to a claim for breach of contract.” Compl. ¶ 157. Under California law, “an
action based on an implied-in-fact or quasi-contract cannot lie where there exists between
the parties a valid express contract covering the same subject matter.” Lance Camper Mfg.
Corp. v. Republic Indem. Co. of Am., 51 Cal.Rptr.2d 622, 628 (Cal. Ct. App. 1996). And
“although certain situations permit plaintiffs to pursue an unjust enrichment claim as an
alternative to a breach of contract claim, this alternative pleading theory is not available
where a plaintiff expressly pleads, and relies on, the existence of an express agreement
between the parties relating to the same issues.” Tait v. BSH Home Appliances Corp., 2011
WL 1832941, at *6 (C.D. Cal. May 12, 2011) (citing cases); see also Lance Camper Mfg.,
51 Cal.Rptr.2d at 628 (noting that plaintiff “must allege the express contract is void or was

23

Samsung attached the warranty to its motion to dismiss. The court may consider this
document. See supra note 13.
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rescinded in order to proceed with its quasi-contract claim”). Because neither plaintiffs nor
Samsung disputes that Samsung’s warranty governs the parties’ relationship, plaintiffs cannot
recover under an alternative quasi-contract claim under California law. And because
plaintiffs’ common count is predicated on a quasi-contract theory, plaintiffs’ common count
must also be dismissed.
*

*

*

For the foregoing reasons, the court grants Samsung’s motion for leave to file
supplemental appendix in support of its motion to compel arbitration, denies Samsung’s
motion to compel arbitration, and grants in part and denies in part Samsung’s alternative
motion for partial dismissal.
SO ORDERED.
December 5, 2013.

_________________________________
SIDNEY A. FITZWATER
CHIEF JUDGE

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