Third Circuit Affirms Dismissal of Putative Nationwide Class Asserting Breach of Warranties and Fraud
The Third Circuit recently affirmed dismissal of a putative nationwide class action in a textbook decision involving Samsung televisions with a limited capability to display high-quality video signals known as 1080p (or "HDMI") signals. Cooper v. Samsung Elecs. Am. Inc., 2010 WL 1220946 (3rd Cir. Mar. 30, 2010). Plaintiff alleged that he bought the 61" TV at an Arizona retailer to watch HDMI content from "native 1080p" devices, but only learned months later that the only 1080p device his television would work with was a computer -- not HD-DVD players. Plaintiff failed to contact Samsung about his problem or give it any pre-suit notice of his claim.
Plaintiff ultimately brought a putative nationwide class action in New Jersey, asserting breach of express and implied warranties, violation of the Magnuson-Moss Warranty Act, violation of the New Jersey Consumer Fraud Act, fraudulent concealment, and unjust enrichment. The District Court dismissed plaintiffs' claims -- although for plaintiff's consumer fraud claim, the court first determined that Arizona law would apply and thus applied the law of plaintiff's residence, rather than the law of the defendant's residence. Plaintiff appealed.
The Third Circuit affirmed. As for the express warranty claim, the court held that plaintiff failed to allege a breach of contract. The warranty purported to cover "manufacturing defects in materials and workmanship," and required that "[t]o receive warranty service, a purchaser must contact SAMSUNG for a problem determination and service procedures." The court held that plaintiff's warranty claim failed on two counts: first, he failed to provide notice and ask for service. And second, he alleged a product design problem, not a manufacturing defect that would be covered by the warranty.
The court affirmed dismissal of the federal Magnuson-Moss Warranty Act because it was based on state law; if the state law warranty claims failed, then the MMWA must as well.
The fraudulent concealment claim failed for failure to plead fraud with sufficient particularity under Rule 9(b).
Plaintiff had argued forcefully that the district court had erred in applying Arizona law -- rather than the law of Samsung's residence, New Jersey -- to the consumer fraud claim. The Third Circuit analyzed the six elements of the fraud choice-of-law inquiry outlined in Restatement (Second) Conflict of Laws Section 148, and concluded that "[t]he transaction in question bears no relationship to New Jersey other than the location of Samsung's headquarters. Cooper's claim bears the most significant relationship with Arizona, the state in which the television was marketed, purchased, and used." Id. at *4. Thus, the district court had properly applied the Arizona consumer fraud statute and concluded that plaintiff had failed to state a claim. Accordingly, the court affirmed the judgment of the district court.
