Federal Court Dismisses HDTV Claims Where Product Performed Throughout the Warranty Period
In In re Sony Frand Wega KDF-E A 10/A20 Series Rear Projection HDTV Television Litigation, Lead Case No. 08-CV-2276-IEG (WVG), Slip op. (S.D. Cal. Nov. 30, 2010) (Gonzalez, J.) (Law360 subscription required), the plaintiffs alleged that the technology used in Sony's rear projection televisions was defective and tended to generate color spots and blemishes after more than a year of use. The limited warranty that came with the televisions, however, was only one year in duration. Plaintiffs sued under a variety of California statutes (the Unfair Competition Law, the False Advertising Law, the Consumer Legal Remedies Act, and the Song-Beverly Consumer Warranty Act), the consumer protection statutes of other states, the federal Magnuson-Moss Warranty Act, and breach of express warranty and breach of implied warranty. The defendant moved to dismiss, and the court granted the motion with prejudice.
The court began by analyzing the common elements of the UCL, FAL, and CLRA. It held that plaintiffs failed to allege fraud with suffidient specificity under Federal Rule of Civil Procedure 9(b). Basically, plaintiffs alleged that Sony knew its TVs would eventually exhibit color spots and blemishes, but it didn't tell customers and instead advertised the TVs as being of "high," "superior" and "excellent" quality.
The court held that the claims under the statutes -- including the consumer protection statutes of the various states -- failed "because the alleged misrepresentations are nothing more than mere puffery" that cannot form the basis for a fraud claim. Slip op. at 8-9. Moreover, the court held, a product that performs throughout its warranty period cannot form the basis of a fraud claim, because "[w]here a manufacturer has expressly warranted a product, consumers can only expect that product to function properly for the length of the manufacturer's express warranty." Third, the court held that plaintiffs failed to plead with sufficient particularity that Sony was actually aware of the alleged defect at the time the plaintiffs bought the TVs.
Going statute-by-statute, the court then explained additional reasons why the UCL claims should fail. First, it held that plaintiffs had not established that a law was broken to support an "unlawfulness" prong. Second, the unfairness prong could not be met as a mater of law where the product functioned as warranted throughout the warranty period. Slip op. at 12. Third, the fraud prong of the UCL was not satisfied because plaintiffs did not sufficiently plead that the representations were false when made, they only pled non-actionable puffery, and the representations did not relate to the claimed defect, thus meaning that plaintiffs could not sufficiently allege reliance. Id. at 13-14.
Similarly, the plaintiffs' FAL claim failed because plaintiffs failed to identify specific ads, when and where they enountered them, and why the ads were untrue or misleading. Id. at 15. And the statements identified were puffery and were not shown to be false when made.
The court also dismissed the CLRA claim because the identified representations are mere puffery and "Plaintiffs have not claimed that Sony made any representations that run counter to the allegedly omitted fact: that the televisions' optical block wore out over time." Slip op. at 16. The court also held that Sony had no independent duty to disclose: "a manufacturer's duty to disclose information related to [a] defect that manifests itself after the expiration of an Express Warranty is limited to issues related to product safety." Id. at 17.
The court dismissed the claims asserted under other states' laws for the same reasons it dismissed the UCL claim. And it dismissed the SBCWA claim because plaintiffs failed to plead that they bought their TVs at retail, and that they tendered them for repair within the express Warranty period. Id. at 20-21.
As for the express warranty claim, the court dismissed the claim because a warranty does not cover repairs that are necessary only after the warranty period has expired. Id. at 22.
Because plaintiffs did not adequately plead a Song-Beverly Act claim, vertical privity was still a requirement for the implied warranty count. And the durational limit on the express warranty applied to the implied warranty with equal vigor.
Finally, the MMWA claim failed because all of the state law claims failed, too.
