2nd Mot Dismiss Kyle Dei Rossi V Whirlpool

Case 2:12-cv-00125-TLN-JFM Document 72 Filed 05/21/13 Page 1 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
1 DEFENDANTS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT CASE NO. 2:12-cv-00125-TLN-JFM
Galen D. Bellamy (pro hac vice) Sean G. Saxon (SBN 230054) Wheeler Trigg ODonnell LLP 370 Seventeenth Street, Suite 4500 Denver, Colorado 80202 Telephone: (303) 244-1800 Facsimile: (303) 244-1879 Email: bellamy@wtotrial.com saxon@wtotrial.com Bradley A. Benbrook (SBN 177786) Benbrook Law Group, PC 400 Capitol Mall, Suite 1610 Sacramento, California 95814 Telephone: (916) 447-4900 Facsimile: (916) 447-4904 Email: brad@benbrooklawgroup.com Attorneys for Defendant
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA KYLE DEI ROSSI and MARK LINTHICUM, on behalf of themselves and those similarly situated, Plaintiffs, vs. WHIRLPOOL CORPORATION, Defendant. Date: Time: Courtroom: Judge: July 25, 2012 2:00 p.m. 2, 15th Floor Honorable Troy L. Nunley CASE NO. 2:12-cv-00125-TLN-JFM DEFENDANTS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED CLASS ACTION COMPLAINT
TO THE CLERK OF THE ABOVE-CAPTIONED COURT, AND TO PLAINTIFFS AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that on July 25, 2013, at 2:00 p.m., in Courtroom 2 of the above-titled Court, located at 501 I Street, Sacramento, California, 95814, Defendant Whirlpool Corporation (Defendant) will and hereby does move to dismiss the Second Amended Class Action Complaint filed by Plaintiffs in this action pursuant to Federal Rule of Civil Procedure 12(b)(6). As shown in the accompanying motion and memorandum of

law, each of Plaintiffs claims should be dismissed with prejudice because it is either legally deficient or fails to offer a sufficient factual basis to show that Plaintiffs are entitled to relief. Plaintiffs claims for breach of express warranty fail because any claims under the manufacturers written express limited warranty have expired. Plaintiffs also have not adequately alleged the existence of any separate express warranty, and even if Plaintiffs could show a separate express warranty, Plaintiffs have not alleged facts to show any such warranty was breached, or that they sustained damages as a result. Plaintiffs claims for breach of the implied warranty of merchantability fail because the ENERGY STAR sticker contains no factual information from which any such warranty could be implied, because any implied warranty expired long before Plaintiffs asserted their claims, and because Plaintiffs cannot allege that the refrigerators do not meet a minimum level of quality or are inadequate for their ordinary intended use. Plaintiffs claims under the Magnuson-Moss Warranty Act, 15 U.S.C. 2301, et seq., fail because those claims are based on state law warranty claims that are themselves factually and legally insufficient, and because the ENERGY STAR sticker on which Plaintiffs rely is not a written warranty as that term is defined in the Act. Plaintiffs claims for violation of the Consumer Legal Remedies Act, Civil Code 1750, et seq., fail because Plaintiffs were not parties to any transaction with Whirlpool, because Plaintiffs reliance on the ENERGY STAR sticker is insufficient to state a claim, because Plaintiffs cannot allege any knowing misrepresentation by Whirlpool, and cannot allege sufficient facts to bridge the gap between the disqualification in September 2011 of two KitchenAid refrigerators from the ENERGY STAR program and Plaintiffs purchases in December 2008 of the subject refrigerators. Plaintiffs claim for violation of Californias Unfair Competition Law, Bus. & Prof. Code 17200, et seq., fail because Plaintiffs present no factual allegations to suggest that Whirlpool violated any law, because they have not pleaded the necessary elements of an

unfairness claim, and because Plaintiffs have not alleged fraud with the required level of particularity. Plaintiffs claims for violation of Californias False Advertising Law, Bus. & Prof. Code 17500, et seq., fail because Plaintiffs have not alleged a false advertisement with the required specificity, and because there is too great of a factual gap between Plaintiffs purchases in December 2008 of the subject refrigerators and the subsequent disqualification of two KitchenAid refrigerators from the ENERGY STAR program in September 2011. Whirlpools Motion is based upon this Notice of Motion and Motion and the Memorandum of Points and Authorities filed and served herewith, and on such further documents and arguments as the Court may permit at the hearing on the Motion. Dated: May 21, 2013 Respectfully submitted,
By:s/ Galen D. Bellamy Galen D. Bellamy (pro hac vice) Sean G. Saxon (SBN 230054) Wheeler Trigg ODonnell LLP 370 Seventeenth Street, Suite 4500 Denver, Colorado 80202 Telephone: (303) 244-1800 Facsimile: (303) 244-1879 Email: bellamy@wtotrial.com saxon@wtotrial.com Bradley A. Benbrook (SBN 177786) Benbrook Law Group, PC 400 Capitol Mall, Suite 1610 Sacramento, California 95814 Telephone: (916) 447-4900 Facsimile: (916) 447-4904 Email: brad@benbrooklawgroup.com Attorneys for Defendant

CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on May 21, 2013, I electronically filed the foregoing Defendants Notice of Motion and Motion to Dismiss Second Amended Class Action Complaint with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the email addresses listed on the Electronic Mail Notice List, and I hereby certify that I have mailed the foregoing document via the United States Postal Service to the non-CM/ECF participants indicated on the Manual Notice List. s/ Galen D. Bellamy Galen D. Bellamy
Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 1 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

DEFENDANTS MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2ND AMENDED COMPLAINT CASE NO. 2:12-cv-00125-TLN-JFM
Galen D. Bellamy (pro hac vice) Sean G. Saxon (SBN 230054) Wheeler Trigg ODonnell LLP 370 Seventeenth Street, Suite 4500 Denver, Colorado 80202 Telephone: (303) 244-1800 Facsimile: (303) 244-1879 Email: bellamy@wtotrial.com saxon@wtotrial.com Bradley A. Benbrook (SBN 177786) Benbrook Law Group, PC 400 Capitol Mall, Suite 1610 Sacramento, California 95814 Telephone: (916) 447-4900 Facsimile: (916) 447-4904 Email: brad@benbrooklawgroup.com Attorneys for Defendants UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA KYLE DEI ROSSI and MARK LINTHICUM, on behalf of themselves and those similarly situated, Plaintiffs, vs. WHIRLPOOL CORPORATION Defendants. CASE NO. 2:12-cv-00125-TLN-JFM DEFENDANTS MEMORANDUM IN SUPPORT OF MOTION TO DISMISS SECOND AMENDED CLASS ACTION COMPLAINT Date: Time: Courtroom: Judge: July 25, 2013 2:00 p.m. 2, 15th Floor Honorable Troy L. Nunley

i DEFENDANTS MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2ND AMENDED COMPLAINT CASE NO. 2:12-cv-00125-TLN-JFM
TABLE OF CONTENTS Page TABLE OF AUTHORITIES .......................................................................................................... ii INTRODUCTION ........................................................................................................................... 1 FACTUAL ALLEGATIONS AND BACKGROUND OF LITIGATION ..................................... 4 ARGUMENT ................................................................................................................................... 8 I. II. III. LEGAL STANDARD ......................................................................................................... 8 PLAINTIFFS AGAIN FAIL TO PLEAD BREACH OF ANY EXPRESS WARRANTY ...................................................................................................................... 9 PLAINTIFFS FAIL TO PLEAD A BREACH OF IMPLIED WARRANTY .................. 11 A. B. IV. V. The Refrigerators are Merchantable ...................................................................... 12 Any Alleged Breach Would Fall Outside the One-Year Implied Warranty Period ..................................................................................................... 13
PLAINTIFFS FAIL TO STATE A CLAIM UNDER THE MAGNUSON-MOSS WARRANTY ACT ........................................................................................................... 16 PLAINTIFFS DO NOT PLEAD ANY CALIFORNIA STATUTORY CLAIMS ........... 16 A. B. The ENERGY STAR Sticker is Not a Misrepresentation of Any Fact and Did Not Create a Likelihood of Deception ............................................. 17 Plaintiffs Fail to State a CLRA Claim ................................................................... 19 1. 2. 3. C. Plaintiffs have not alleged any misrepresentation of fact .......................... 19 Plaintiffs have not adequately alleged any knowing misrepresentation ....................................................................................... 20 Plaintiffs have not alleged a transaction with Whirlpool ....................... 21
Plaintiffs Fail to State a UCL Claim ...................................................................... 22 1. 2. 3. Plaintiffs fail to plead an unlawful UCL claim ...................................... 22 Plaintiffs fail to plead an unfair UCL claim ........................................... 22 Plaintiffs fail to plead a fraudulent UCL claim ...................................... 23
D. VI.
Plaintiffs Fail to State a FAL Claim ...................................................................... 23
FURTHER LEAVE TO AMEND WOULD BE FUTILE ................................................ 24
CONCLUSION.............................................................................................................................. 25
Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 3 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cases Am. Suzuki Motor Corp. v. Super. Ct., 37 Cal. App. 4th 1291 (1995) ........................................................................................................ 11 Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149 (9th Cir.1989) ........................................................................................................ 24 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .............................................................................................................. 3, 8, 21 Avago Techs. U.S., Inc. v. Venture Corp., No. C 08-03248 JW, 2008 WL 5383367 (N.D. Cal. Dec. 22, 2008) ............................................ 11 Balistreri v. Pacifica Police Dept, 901 F.2d 696 (9th Cir. 1990) ........................................................................................................... 8 Baltazar v. Apple, Inc., No. CV-10-3231-JF, 2011 WL 3795013 (N.D. Cal. Aug. 26, 2011) ............................................ 12 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .............................................................................................................. 3, 8, 21 Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544 (2007) ...................................................................................................... 23 Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009) ......................................................................................................... 13 Blennis v. Hewlett-Packard Co., No. C 07-00333 JF, 2008 WL 818526 (N.D. Cal. Mar. 25, 2008) ............................................ 9, 11 Castagnola v. Hewlett-Packard Co., No. C 11-05772 JSW, 2012 WL 2159385 (N.D. Cal. June 13, 2012) .......................................... 18 Cattie v. Wal-Mart Stores, Inc., 504 F. Supp. 2d 939 (S.D. Cal. 2007) ........................................................................................... 20 Cholakyan v. Mercedes-Benz USA, LLC, 796 F. Supp. 2d 1220 (C.D. Cal. 2011) ......................................................................................... 20 Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008) ....................................................................................................... 16 Cooper v. Pickett, 137 F.3d 616 (9th Cir. 1998) ..................................................................................................... 9, 20 Dei Rossi v. Whirlpool Corp., No. 12-CV-125-JAM-JFM, 2013 WL 1312105 (E.D. Cal. Mar. 28, 2013) ........................... passim East v. San Bernardino Cnty. Sheriffs Dept, No. ED CV 09-655-GW(E), 2011 WL 6000847 (C.D. Cal. Nov. 28, 2011) ................................ 25 Freeman v. Time, Inc., 68 F.3d 285 (9th Cir. 1995) ........................................................................................................... 18 Hauter v. Zogarts, 14 Cal. 3d 104 (1975) .................................................................................................................... 11
ii
TABLE OF AUTHORITIES Page
Hovsepian v. Apple, Inc., Nos. 08-5788 JF (PVT), 09-1064 JF (PVT), 2009 WL 2591445 (N.D. Cal. Aug. 21, 2009) .................................................................. 11, 12, 15 In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Television Litig., 758 F. Supp. 2d 1077 (S.D. Cal. 2010) ................................................................................... 21, 24 In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prods. Liab. Litig., 754 F. Supp. 2d 1145 (C.D. Cal. 2010) ..................................................................................... 8, 11 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) ......................................................................................................... 8 Kelley v. Microsoft Corp., No. C07-0475MJP, 2007 WL 2600841 (W.D. Wash. Sept. 10, 2007) ......................................... 16 Kent v. Hewlett-Packard Co., No. 09-5341 JF (PVT), 2010 WL 2681767 (N.D. Cal. July 6, 2010) ..................................... 12, 13 Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522 (9th Cir. 2008) ......................................................................................................... 24 Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir. 2001) ......................................................................................................... 14 Marchante v. Sony Corp. of Am., 801 F. Supp. 2d 1013 (S.D. Cal. 2011) ......................................................................................... 15 McKinniss v. Gen. Mills, Inc., No. CV 07-2521 GAF (FMOx), 2007 WL 4762172 (C.D. Cal. Sept. 18, 2007) .................... 18, 19 Metzler Inv. GmBH v. Corinthian Colleges, Inc., 540 F.3d 1049 (9th Cir. 2008) ............................................................................................... 3, 9, 25 Osborne v. Subaru of Am., Inc., 198 Cal. App. 3d 646 (1988) .................................................................................................... 15-16 Reid v. Johnson & Johnson, Civil No. 11cv1310 L(BLM), 2012 WL 4108114 (S.D. Cal. Sept. 18, 2012) ........................ 18, 19 Savett v. Whirlpool Corp., No. 12 CV 310, 2012 WL 3780451 (N.D. Ohio Aug. 31, 2012) ........................................ 3, 10, 13 Skelton v. Gen. Motors Corp., 500 F. Supp. 1181 (N.D. Ill. 1980) ................................................................................................ 11 Stearns v. Select Comfort Retail Corp., No. 08-2746 JF, 2008 WL 4542967 (N.D. Cal. Oct. 1, 2008) ...................................................... 11 Tietsworth v. Sears, Roebuck & Co., No. C 09-00288 JF (HRL), 2009 WL 1363548 (N.D. Cal. May 14, 2009) .................................. 15 Tietsworth v. Sears Roebuck & Co., 720 F. Supp. 2d 1123 (N.D. Cal. 2010) ......................................................................................... 15 Tomek v. Apple, Inc., No. 2:11-cv-02700-MCE-DAD, 2012 WL 2857035 (E.D. Cal. July 11, 2012) ........................... 12 U.S. Roofing, Inc. v. Credit Alliance Corp., 228 Cal. App. 3d 1431 (1991) ....................................................................................................... 15
iii

iv
Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) ......................................................................................................... 8 Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135 (1986) ........................................................................................................... 9 Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012) ....................................................................................................... 20 Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981 (9th Cir. 2009) ......................................................................................................... 24 Statutes, Rules and Regulations 15 U.S.C. 2301 ........................................................................................................................... 16 15 U.S.C. 2301(6) ....................................................................................................................... 16 Cal. Bus. & Prof. Code 17200 ............................................................................................. passim Cal. Bus. & Prof. Code 17500 ............................................................................................. passim Cal. Civ. Code 1750 ............................................................................................................ passim Cal. Civ. Code 1761(e) ............................................................................................................... 21 Cal. Civ. Code 1770 ................................................................................................................... 21 Cal. Civ. Code 1770(a) ............................................................................................................... 20 Cal. Civ. Code 1770(a)(5) .......................................................................................................... 19 Cal. Civ. Code 1770(a)(7) .......................................................................................................... 19 Cal. Civ. Code 1770(a)(9) .......................................................................................................... 19 Cal. Civ. Code 1780(a) ............................................................................................................... 21 Cal. Comm. Code 2314 .............................................................................................................. 13 Cal. Comm. Code 2316 .............................................................................................................. 15 Fed. R. Civ. P. 8(a) .......................................................................................................................... 8 Fed. R. Civ. P. 9(b) .......................................................................................................................... 8 Fed. R. Civ. P. 12(b)(6) ................................................................................................................... 8 Other Authorities Energy Policy and Conservation Act, Pub. L. No. 94-163, 89 Stat. 871 (1975) ........................... 22 National Appliance Energy Conservation Act of 1987, Pub. L. No. 100-12, 101 Stat. 103 (1987) ..................................................................................... 22 National Energy Conservation Policy Act, Pub. L. No. 95-619, 92 Stat. 3206 (1978) ................. 22

1 DEFENDANTS MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2ND AMENDED COMPLAINT
INTRODUCTION This is the third attempt by Plaintiffs Kyle Dei Rossi (Dei Rossi) and Mark Linthicum (Linthicum) to plead a putative nationwide class action complaint against Whirlpool Corporation (Whirlpool) based on their claim that the KitchenAid KSRG25FVMT and KSRS25RVHR model refrigerators they bought in 2008 were mislabeled with the ENERGY STAR sticker. The Court has twice dismissed Plaintiffs warranty and consumer fraud claims because the Energy Star sticker itself . . . contains no affirmation of any specific fact that could form the basis of any warranty (see Dkt. # 53 (Sept. 5, 2011 Hrg. Tr.) at 12:9-12), and conveys no specific information (id. at 26:2) upon which a consumer could reasonably rely and be misled.1 See also Dei Rossi v. Whirlpool Corp., No. 12-CV-125-JAM-JFM, 2013 WL 1312105, at *3-4 (E.D. Cal. Mar. 28, 2013) (Plaintiffs fail to explain how their allegation regarding the express warranty that [the refrigerators at issue] would function properly as energy efficient refrigerators within the parameters established by federal law and the ENERGY STAR program satisfies California's requirement that a plaintiff plead the exact terms of the warranty) (alteration in original). There is nothing in the Second Amended Class Action Complaint (SAC) that cures these deficiencies. The first two complaints were deficient because they did not plead what allegedly false or misleading information Plaintiffs personally understood the ENERGY STAR sticker to convey prior to purchasing their KitchenAid refrigerators. Consistent with Judge Mendez prior observation that the ENERGY STAR sticker, by itself, conveys no specific information, neither Plaintiff claims to have understood the sticker to constitute a promise or guarantee that their refrigerators would achieve any particular level of energy consumption or efficiency, either relative to other appliances or in absolute terms. They simply reiterate
For the Courts convenience, a true and correct copy of the September 5, 2012 hearing transcript is attached hereto as Exhibit A.

2
that they believed when they bought their refrigerators in 2008 that they would be more energy efficient than an appliance that [did] not have the sticker. (Compare First Amend Complaint (FAC) 42, with SAC 71.) As before, these allegations are too general to support either a warranty or consumer fraud claim. Plaintiffs attempt to plead around this problem amounts to dressing up the same allegations that were insufficient to state a claim in the FAC: they continue to allege that the ENERGY STAR logo is intended to convey a generic message of efficiency. (Compare e.g., FAC 13 (The message conveyed by the ENERGY STAR logo is that the consumer can maximize his or her energy savings while helping to protect the environment.), with SAC 18 (The message and promise conveyed by the ENERGY STAR logo is that the appliance is ENERGY STAR-qualified and thus complies with the strict energy efficiency level required by the ENERGY STAR program. Because the product is ENERGY STAR qualified, it will enable consumers to maximize their energy savings while helping to protect the environment.).) Plaintiffs new allegations add no facts to portray the ENERGY STAR logo as a particular representation or warranty by Whirlpool (and, after three tries, it is apparent they cannot do so). Further, Plaintiffs still do not allege that either of them ever saw, read, heard or were otherwise exposed to any of these generic efficiency messages prior to purchase. (Id. 71-72.) To the contrary, both Plaintiffs admit, as they did previously, that their pre-purchase understanding of the ENERGY STAR sticker was based solely on alleged personal conversations and unidentified news reports. (Compare FAC 42-43, with SAC 71-72.) Further still, the SAC expressly incorporates images of Energy Guide labelsas opposed to ENERGY STAR stickersthat were affixed to Plaintiffs refrigerators, and which they admit they saw prior to purchase. (SAC 67, 71-72.) Quite unlike the ENERGY STAR sticker, the Energy Guide label conveyed specific information about the estimated annual energy consumption and resulting annual operating cost of each refrigerator, as well as how that operating cost compared to similar refrigerator models. (See

3
id. 67) As before, Plaintiffs do not allege that any of these specific representations were false or inaccurate. Instead, they claim that the ENERGY STAR sticker created a general warranty of efficiency that is independent of, and purportedly trumps, the very specific representations of the refrigerators relative and absolute annual energy consumption contained on the Energy Guide labels. However, courts have rejected similar attempts to claim reliance on information purportedly implied by product logos and images while ignoring specific representations on the same topic. With respect to the balance of the pleading failures identified by the Court, Plaintiffs again attempt to fill those gaps with bald, conclusory allegations that are unsupported by any well-pled facts. Under the governing pleading standards, however, naked assertion[s] devoid of further factual enhancement are plainly insufficient to survive a motion to dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (a complaint must set forth sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face) (internal quotation marks omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (internal quotation marks omitted) (alternation in original). In short, Plaintiffs claims cannot survive dismissal unless the Court accepts their premise that the ENERGY STAR sticker, by itself, conveys specific factual representations sufficient to create a warranty or that can support a consumer fraud claim; propositions that have been squarely rejected by this Court and by the only other court to have considered the issue. See Dei Rossi, 2013 WL 1312105, at *2-8; Savett v. Whirlpool Corp., No. 12 CV 310, 2012 WL 3780451, at *9 (N.D. Ohio Aug. 31, 2012) (Upon review, the Court finds that use of the ENERGY STAR logo is not an affirmation of fact or promise as alleged in this case.). After three failed attempts to plead their claims, Plaintiffs have demonstrated that any further leave to amend would be futile. See Metzler Inv. GmBH v. Corinthian Colleges, Inc., 540 F.3d 1049, 1060 n.4 (9th Cir. 2008) (dismissal with prejudice is appropriate when

4
a party has multiple opportunities to amend and [is] unable to cure the defects that required dismissal of previous complaints.) FACTUAL ALLEGATIONS AND BACKGROUND OF LITIGATION Plaintiffs filed this breach of warranty and consumer fraud case in January 2012, claiming that the two KitchenAide refrigerators they purchased in 2008 were mislabeled with the ENERGY STAR logo because, three years later in 2011, refrigerators sharing the same model numbers were found to be non-compliant with ENERGY STAR program requirements. Plaintiffs core allegation is that the ENERGY STAR logowhich contains only those two words and an image of star on a blue background (see SAC 18)created express and implied warranties and constituted a misleading representation of fact. On September 14, 2012, Judge Mendez granted Whirlpools motion and dismissed the original complaint in its entirety. (Dkt. # 55.) During oral argument on Whirlpools motion, Judge Mendez observed that Plaintiffs breach of warranty claim was fundamentally flawed because the ENERGY STAR stick itself contains no affirmation of any specific fact that could form the basis of any warranty (Ex. A at 12:9-12), and conveys no specific information (id. at 26:2) upon which a reasonable consumer could rely and be misled. Plaintiffs filed the FAC, dropping certain retailer defendants from the case, but otherwise asserting the same core allegations. Plaintiffs failed for a second time to state claims in the FAC. Judge Mendez stressed in his opinion dismissing the FAC that plaintiffs had failed to connect their central allegationthat the KitchenAid refrigerators here allegedly failed to satisfy each portion of the federal governments EnergyStar programto their understanding of the EnergyStar logo or anything Defendant expressed. Dei Rossi, 2013 WL 1312105, at *3. Despite this, and despite swelling the number of paragraphs from 110 to 162, the SAC still dedicates only two paragraphs to describing the alleged experiences of the named Plaintiffs, including what they understood the ENERGY STAR logo to convey. These two

5
paragraphs remain largely unchanged from the dismissed FAC. (Compare SAC 71-72, with FAC 42-43.) Plaintiff Kyle Dei Rossi alleges that he purchased a KitchenAid KSRG25FVMT refrigerator from a Best Buy store in Stockton, California, on December 8, 2008. (SAC 71.) Dei Rossi repeats his prior allegation that he is very familiar with the ENERGY STAR program and learned about it from numerous news reports that explained the program and from talking to his wife, parents and in-laws. (Id.) He again alleges that he decided to look only at ENERGY STAR models because he wanted to do the right thing for the environment . (Id.) He again alleges that he would not have bought his KitchenAid refrigerator if he had known that it was not, in fact, ENERGY STARqualified. (Id.) He again alleges that he understood that the ENERGY STAR logo indicates that the appliance is more energy efficient than an appliance that does not have the ENERGY STAR label. (Id.) However, Dei Rossi still does not allege how much more energy efficient he understood his refrigerator was supposed to be, or how much more energy he understood a refrigerator without the label was expected to use. He also does not allege that he understood the ENERGY STAR logo to promise any specific level of energy consumption. (Id.) Plaintiff Mark Linthicum alleges that he purchased a KitchenAid KSRS25RVHR model refrigerator from a retail store in Los Angeles, California, on December 31, 2008. (Id. 72.) Linthicum again alleges that the refrigerator he purchased was labeled with the ENERGY STAR logo on the door, on the Energy Guide label, and inside the refrigerator next to the temperature panel. (Id.) He also alleges that the ENERGY STAR label appeared on internet advertisements he looked at. (Id.) He also repeats his prior allegation that he would not have bought his KitchenAid refrigerator if he had known that it was not, in fact, ENERGY STAR-qualified. (Id.) Linthicum again alleges that he is very familiar with the ENERGY STAR program via hearing about it on the news and from speaking to salespeople at stores. (Id.) Linthicum again alleges that he understood that the ENERGY

6
STAR logo indicates that the appliance is more energy efficient than an appliance that does not have the ENERGY STAR label. (Id.) Like Dei Rossi, Linthicum still does not allege how much more energy efficient he understood his refrigerator was supposed to be, or how much more energy he understood a refrigerator without the label was expected to use, nor does he allege that he understood the ENERGY STAR logo to promise any specific level of energy consumption. (Id.) Both Plaintiffs also again acknowledge that they saw the Energy Guide labels that were affixed to the refrigerators prior to making their purchases. (Id. 71-72.) These labels contain information concerning: (1) the brand, model and significant features of the refrigerator; (2) an estimate of the annual operating cost of the refrigerator (here, $62); (3) a range of the annual operating cost of similar models of refrigerator (here, between $60 and $78); and (4) an estimate of the yearly electrical use of the refrigerator (here, 580 kilowatt-hours (kWh) for Dei Rossis model and 581 kWh for Linthicums model). (Id. 67.) The Energy Guide labels also informed Plaintiffs that the estimated annual operating cost was based on a 2007 national average electricity cost of 10.65 cents per kWh, and makes clear that their actual operating cost will depend on their local utility rates and use. (Id.) As they did in prior complaints, Plaintiffs claim that, in 2011, refrigerators sharing the same model numbers as the KitchenAid refrigerators they bought in 2008 were determined by the U.S. Department of Energy (DOE) to be non-compliant with the requirements of the ENERGY STAR program, and were subsequently disqualified. (SAC 74-86). Based on this disqualification, Plaintiffs allege that Whirlpool misrepresent[ed] the energy efficiency of Plaintiffs 2008 model-year refrigerators when they were sold three years earlier, by promoting them as ENERGY STAR-qualified and labeling them with the ENERGY STAR logo. (Id. 4.) The SAC repeatedly claims that ENERGY STARqualified refrigerators are required to use 20% less energy than standard models (Id. 5; see also 16, 17, 56, 111, 117, 119, 125), and that the refrigerators at issue allegedly do

7
not meet the ENERGY STAR standards because they consume significantly more energy than their labels state. (E.g., id. 4.) Plaintiffs do not allege that they were personally aware of those alleged ENERGY STAR program requirements at the time of their purchases, nor do they specifically allege how much more energy their 2008 KitchenAid refrigerators supposedly used than they now claim the logo implied. Plaintiffs also again allege they paid a higher purchase price for their refrigerators as a result of the ENERGY STAR designation, and they claim to have incurred higher energy bills because the actual energy consumption of their refrigerators is allegedly substantially higher than what was promised. (Id. 9.) Again, Plaintiffs allege no facts in support of those conclusory assertions, such as how much higher their energy bills are than supposedly promised or how much more energy was consumed than supposedly promised. (Id. 1-162.) Many of the new allegations in the SAC concern general statements regarding the ENERGY STAR program that Plaintiffs attribute either to Whirlpool or to third parties. By way of example, Plaintiffs allege that: (1) Whirlpool described the ENERGY STAR program on its website (id. 5); (2) Whirlpool engaged in an unidentified long-term advertising campaign for its refrigerators involving the ENERGY STAR program (id. 8; see also 43, 51); (3) Whirlpool received various awards related to the ENERGY STAR program (id. 45-49); and (4) Whirlpool expressed its commitment to the ENERGY STAR program (id. 50, 70). Plaintiffs do not allege that they ever saw, heard, or relied upon any of these descriptions, advertisements, or statements in connection with their purchases. (Id. 1-162.) Plaintiffs also plead various statements allegedly made by third parties, including the National Association of Home Builders (id. 7, 33), www.energystar.gov (id. 16, 20), a former Environmental Protection Agency official (id. 23), a representative of the U.S. Department of Energys Office of Energy Efficiency and Renewable Energy (id. 25), and the Consortium for Energy Efficiency (id. 32). None of these statements are alleged to

8
have been made by Whirlpool, and Plaintiffs do not claim that they saw, heard, or relied upon any of them in connection with their purchases. (Id. 1-162.) ARGUMENT I. LEGAL STANDARD Dismissal of a complaint pursuant to Rule 12(b)(6) is proper where there is a lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dept, 901 F.2d 696, 699 (9th Cir. 1990). Under Rule 8(a), a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Twombly, 550 U.S. at 555 (alteration in original). A complaint must set forth sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570) (internal quotation marks omitted). That standard asks for more than a sheer possibility that a defendant has acted unlawfully and requires more than facts that are merely consistent with a defendants liability. Id. A pleading that contains [t]hreadbare recitals of the elements of a cause of action or naked assertion[s] devoid of further factual enhancement will not survive a motion to dismiss. Id. (alteration in original) (internal quotation marks omitted). In addition, claims sounding in fraud are subject to Rule 9(b)s heightened pleading standard. See Fed. R. Civ. P. 9(b); see also Kearns v. Ford Motor Co., 567 F.3d 1120, 1122 (9th Cir. 2009) (applying Rule 9(b) to UCL and CLRA claims); In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, & Prods. Liab. Litig., 754 F. Supp. 2d 1145, 1172 (C.D. Cal. 2010) ([I]t is clear that Rule 9(b) applies to the allegations under the CLRA, the fraud prong of the UCL, and the FAL). Fraud claims must be accompanied by the who, what, when, where, and how of the fraudulent conduct charged. Vess v. CibaGeigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003). Additionally, to satisfy Rule 9(b),

9
a plaintiff must set forth more than the neutral facts necessary to identify the transaction. The plaintiff must set forth what is false or misleading about a statement, and why it is false. In other words, the plaintiff must set forth an explanation as to why the statement or omission complained of was false or misleading. Cooper v. Pickett, 137 F.3d 616, 625 (9th Cir. 1998) (emphasis in original) (citation omitted). Plaintiffs continuing failure to meet this heightened pleading standard after three attempts weighs heavily in favor of dismissal with prejudice. Metzler, 540 F.3d at 1060. II. PLAINTIFFS AGAIN FAIL TO PLEAD BREACH OF ANY EXPRESS WARRANTY An express warranty [relates] to the title, character, quality, identity or condition of the sold goods. Blennis v. Hewlett-Packard Co., No. C 07-00333 JF, 2008 WL 818526, at *2 (N.D. Cal. Mar. 25, 2008). To state a claim for breach of express warranty, Plaintiffs must allege the exact terms of the warranty, [Plaintiffs] reasonable reliance thereon, and a breach of that warranty which proximately causes [Plaintiffs] injury. Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135, 142 (1986). Count II of the SAC alleges a breach of express warranty that is substantially identical to the warranty claim that the Court dismissed in the FAC. Plaintiffs allege that Whirlpool, [b]y including the ENERGY STAR logo on the refrigerators, expressly warranted that the refrigerators were ENERGY STAR-qualified and had greater efficiency than conventional refrigerators or standard models that did not display the ENERGY STAR logo. (SAC 117.) Thus, as in the prior complaints, Plaintiffs claim that this alleged warranty arose from their observation of the ENERGY STAR sticker prior to purchase. Plaintiffs also claim that Whirlpool, in a separate unidentified representation, defined the ENERGY STAR logo to mean that the refrigerators were at least 20% more efficient than models that simply meet the federal minimum standard for energy efficiency. (Id.) However, Plaintiffs do not allege that they ever saw or were exposed to this supposed separate definition, and they conspicuously do not claim that this separate definition constituted a warranty independent of the logo. (Id. at 1-161.) Thus,

10
the only allegations that are tied to Plaintiffs alleged experiences demonstrate that the content of the alleged warranty derives not from any separate definition supposedly provided by Whirlpool, but from their vague understanding of the ENERGY STAR program based on unidentified news reports and conversations with retail salespersons and family members. (Id. 71-72.) However, as this Court held when it dismissed the breach of warranty claim in the FAC, Plaintiffs cannot premise a breach of express warranty claim on a logo that itself conveys no specific factual information, particularly when Plaintiffs themselves admit that they had only a vague understanding of the ENERGY STAR program. Dei Rossi, 2013 WL 1312105, at *3. Specifically, in dismissing this claim from the FAC, the Court reasoned: Plaintiffs allege the refrigerators at issue were not, are not, and never have been at least 20% more efficient than the minimum energy standards mandated by federal law. However, Plaintiffs do not connect this allegation to the named Plaintiffs understanding of the ENERGY STAR logo or anything Defendant expressed, nor do they attempt to explain how their allegation regarding the express warranty that [the refrigerators at issue] would function properly as energy efficient refrigerators within the parameters established by federal law and the ENERGY STAR program satisfies Californias requirement that a plaintiff plead the exact terms of the warranty. Id. (alteration in original).2 See also Savett, 2012 WL 3780451, at *9 ([T]he [ENERGY STAR] logo itself contains no assertion of fact or promise. Unlike traditional express warranties where unambiguous promises or factual assertions are made, which are clearly understood on their own footing, any meaning conveyed by the logo requires independent
Judge Mendez commented on the same fundamental problem with Plaintiffs breach of warranty claim during oral argument on the motion to dismiss the original complaint: If you are relying on the Energy Star sticker itself, as a matter of law youre going to have problems with that. The sticker itself contains no affirmation of any specific fact. (Ex. A at 12:9-12.)

11
knowledge). Thus, because the ENERGY STAR logo conveys no specific information, Plaintiffs have not and cannot plead the exact terms of any warranty they claim that logo created. See, e.g., Avago Techs. U.S., Inc. v. Venture Corp., No. C 08-03248 JW, 2008 WL 5383367, at *4-5 (N.D. Cal. Dec. 22, 2008) (dismissing warranty claim where the plaintiffs failed to allege what specific provisions were not met and instead made only the conclusory allegation that the express warranty was breached because the goods did not meet the contracts specifications and quality requirements); Blennis, 2008 WL 818526, at *2 (dismissing express warranty claim where the plaintiffs failed to identify any specific warranty provision upon which they allegedly relied).3 III. PLAINTIFFS FAIL TO PLEAD A BREACH OF IMPLIED WARRANTY The implied warranty of merchantability arises by operation of law, Hauter v. Zogarts, 14 Cal. 3d 104, 117 (1975), and provides for a minimum level of quality, Am. Suzuki Motor Corp. v. Super. Ct., 37 Cal. App. 4th 1291, 1296 (1995) (quoting Skelton v. Gen. Motors Corp., 500 F. Supp. 1181, 1191 (N.D. Ill. 1980)). To state a claim for breach of an implied warranty, a defect must be sufficiently serious so as to render the product unfit for its ordinary purpose. Hovsepian v. Apple, Inc., Nos. 08-5788 JF (PVT), 09-1064 JF (PVT), 2009 WL 2591445, at *6 (N.D. Cal. Aug. 21, 2009). Additionally, manufacturers may impose limitations on implied warranties by restricting the duration of any implied
The SAC also fails to cure two additional fundamental flaws. First, as Judge Mendez previously observed (Ex. A at 12:19-25), Plaintiffs do not plead any breach of warranty that allegedly occurred during the one-year warranty term. See In re Toyota, 754 F. Supp. 2d at 1179 (granting motion to dismiss express warranty claims where plaintiffs did not seek remedies within warranty period); Stearns v. Select Comfort Retail Corp., No. 08-2746 JF, 2008 WL 4542967, at *5 (N.D. Cal. Oct. 1, 2008) (same). Second, Plaintiffs still allege no facts to support their claims that their 2008 KitchenAid refrigerators consume more energy than promised, including what specific level of energy consumption they were promised, and by whom, or what their actual level of energy consumption has been. Thus, they have no alleged facts identifying any of the specific warranty terms allegedly created by the logo, or that any such terms were breached here.

12
warranty of merchantability to one year after the sale. Id. Here, not only do Plaintiffs fail to plead an alleged breach that would render the product unfit for its ordinary purpose, Plaintiffs also fail to plead that any such breach occurred within the one-year warranty period. A. The Refrigerators are Merchantable
The SAC alleges, in relevant part, that Whirlpool impliedly warranted that the Mislabeled Refrigerators were fit for their intended purpose in that they were ENERGY STAR-qualified and had greater energy efficiency than conventional refrigerators or standard models that did not display the ENERGY STAR logo. (SAC 125.) Plaintiffs do not allege anywhere that the refrigerators failed to perform the ordinary function of a refrigerator; namely, keeping food cold. Instead, Plaintiffs claim the refrigerators were unmerchantable because they allegedly consumed more energy than the ENERGY STAR logo implied. However, the law is clear that product performance of this nature is not what the implied warranty of merchantability is intended to cover. See Baltazar v. Apple, Inc., No. CV-10-3231-JF, 2011 WL 3795013, at *3 (N.D. Cal. Aug. 26, 2011) (to state a claim for breach of the implied warranty of merchantability, plaintiff must show more than that the alleged defect was inconvenient) (citing Kent v. Hewlett-Packard Co., No. 09-5341 JF (PVT), 2010 WL 2681767, at *4 (N.D. Cal. July 6, 2010)).4 Indeed, Judge Mendez
See also, e.g., Birdsong v. Apple, Inc., 590 F.3d 955, 958 (9th Cir. 2009) (affirming dismissal of implied warranty of merchantability claim where plaintiffs alleged that the iPod could cause hearing loss because it fulfilled the ordinary purpose of listening to music); Tomek v. Apple, Inc., No. 2:11-cv-02700-MCE-DAD, 2012 WL 2857035, at *7 (E.D. Cal. July 11, 2012) (dismissing implied warranty claim where the plaintiff alleged that his computers battery and charger failed to adequately power his computer because the plaintiffs allegations of inconvenience were insufficient to show computer is not fit for ordinary use); Kent, 2010 WL 2681767, at *4 (dismissing implied warranty claim where plaintiffs alleged that their computers were rendered unusable by []lock-up, freeze, and blue screen errors on the grounds that [c]omputers that routinely lock-up may be inconvenient . . but the question is whether the computers are unfit for their ordinary purpose).

13
dismissed Plaintiffs implied warranty claim from the FAC for precisely this reason. Dei Rossi, 2013 WL 1312105, at *4 (dismissing implied warranty claim because Plaintiffs presented no allegations substantiating a claim that the refrigerators at issue did not meet a minimum level of quality). See also Savett, 2012 WL 3780451, at *11 (dismissing implied warranty claim where the plaintiff alleged that clothes washer successfully washes clothes, but requires more energy to do so). Plaintiffs also attempt to shoehorn their implied warranty claim into California Commercial Code 2314, baldly alleging that the refrigerators at issue could not pass without objection in the trade under the contract description, the goods were not of fair average quality within the description, and the goods were unfit for their intended and ordinary purpose in that they did not function properly as energy efficient refrigerators within the parameters established by federal law and the ENERGY STAR program, and they are not adequately labeled and do not conform to the promises and affirmations of fact made on their labels. (SAC 126.) This paragraph is a rote recitation of subsections of California Commercial Code 2314, unsupported by any facts suggesting how any of these subsections would apply here. Plaintiffs do not, for example, identify the contract description under which these refrigerators allegedly would not pass muster, do not state how their vague complaints regarding efficiency equate to the refrigerators not being of fair average quality, and do not identify any alleged promises and affirmations of fact that their refrigerators allegedly did not conform to. To the contrary, as the Court previously held, the ENERGY STAR sticker contains no such promises or affirmations. (Ex. A at 12:9-12.) Nor do Plaintiffs explain how Section 2314 purportedly elevates the implied warranty of merchantability beyond guaranteeing a minimal level of quality. Indeed, it does not; as courts routinely cite to Section 2314 while still applying the minimal level of quality standard. See, e.g., Birdsong, 590 F.3d at 958; Kent, 2010 WL 2681767, at *4. B. Any Alleged Breach Would Fall Outside the One-Year Implied Warranty Period Even assuming greater-than-expected energy consumption could render an otherwise

14
functional refrigerator unmerchantable, Plaintiffs nevertheless fail to show how this alleged breach occurred within the one-year implied warranty term. The Limited Warranty for Plaintiff Dei Rossis refrigerator expressly states: DISCLAIMER OF IMPLIED WARRANTIES; LIMITATION OF REMEDIES CUSTOMER'S SOLE AND EXCLUSIVE REMEDY UNDER THIS LIMITED WARRANTY SHALL BE PRODUCT REPAIR AS PROVIDED HEREIN. IMPLIED WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE LIMITED TO ONE YEAR OR THE SHORTEST PERIOD ALLOWED BY LAW. (Dkt. # 18-2, Ex. A at 14.) The Limited Warranty for Plaintiff Linthicums refrigerator provides: DISCLAIMER OF IMPLIED WARRANTIES IMPLIED WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, ARE LIMITED TO ONE YEAR OR THE SHORTEST PERIOD ALLOWED BY LAW. (Id., Ex. B at 15.)5 As Judge Mendez observed, absent from the [FAC] are allegations regarding Plaintiffs discovery of the alleged defect, Dei Rossi, 2013 WL 1312105, at *4, and those allegations remain absent here. Indeed, Plaintiffs do not claim to have discovered the alleged defect before November 23, 2011, when the DOE allegedly found refrigerators sharing the same model number non-compliant with ENERGY STAR program requirements. (SAC 85.) Plaintiffs admit that they bought their KitchenAid refrigerators in
Plaintiffs acknowledge the existence of the Limited Warranty in the SAC. (SAC 132 (The Mislabeled Refrigerators are packaged with a separate Limited Warranty).) Whirlpool previously submitted copies of the one-year Limited Warranty that accompanied each Plaintiffs KitchenAid refrigerator. (See Dkt. # 18-2, Exs. A-B.) The actual terms of the Limited Warranty are properly before the Court because Plaintiffs refer to it in their pleading, and because the exact terms of the warranty are central to the validity of Plaintiffs implied warranty claims. See, e.g., Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001).

15
December 2008, three years earlier. (Id. 71-72.) Thus, Plaintiffs still fail to plead any facts showing either that a breach occurred or that they became aware of any such breach during the one-year implied warranty period. This failure mandates dismissal of Plaintiffs implied warranty claims. See, e.g., Cal. Comm. Code 2316; Hovsepian, 2009 WL 2591445, at *8 (dismissing implied warranty claim brought outside one-year limitation contained in the written express warranty).6 Further, Plaintiffs attempt to invoke the so-called delayed discovery rule by pleading that they could not have discovered that their refrigerators were not ENERGY STAR compliant until the DOEs disqualification order was issued on November 21, 2011, is unavailing. (SAC 98.) The delayed discovery rule, which operates to toll the statute of limitations, cannot extend the length of the warranty period itself. See Marchante v. Sony Corp. of Am., 801 F. Supp. 2d 1013, 1021 (S.D. Cal. 2011) (There are two timing issues when it comes to warranties: the duration of the warranty and the statute of limitations. To properly assert a breach of warranty claim, a Plaintiff must allege a breach of warrantyoccurring while the warranty is still validand bring suit within the limitations period. (emphasis added)); Tietsworth v. Sears, Roebuck & Co., 720 F. Supp. 2d 1123, 1143 (N.D. Cal. 2010) (granting motion to dismiss implied warranty claim where the plaintiff fails to plead facts demonstrating that the Machine failed to serve its ordinary purpose within one year of purchase.) (emphasis added).7
Plaintiffs new allegation that the breach occurred at the time of sale is merely a repackaging of language they included in the FAC. (Compare FAC 82, with SAC 126.) 7 Plaintiffs implied warranty claim should be dismissed for the independent reason that they admit they purchased their refrigerators from third-party retailers, not Whirlpool. (SAC 71-72.) Vertical privity is a prerequisite in California for recovery on a theory of breach of the implied warranties of fitness and merchantability. U.S. Roofing, Inc. v. Credit Alliance Corp., 228 Cal. App. 3d 1431, 1441 (1991); see also Tietsworth v. Sears, Roebuck & Co., No. C 09-00288 JF (HRL), 2009 WL 1363548, at *3 (N.D. Cal. May 14, 2009) (dismissing implied warranty claim against Whirlpool because the plaintiff purchased her machine from Sears, and thus she does not have vertical privity with Whirlpool.); Osborne v. Subaru
(Footnote contd on next page.)

16
DEFENDANTS MEMORANDUM IN SUPPORT OF MOTION TO DISMISS 2ND AMENDED COMPLAINT CASE NO. 2:12-cv-00125-TLN-JFM (Footnote contd from previous page.)
IV.
PLAINTIFFS FAIL TO STATE A CLAIM UNDER THE MAGNUSON-MOSS WARRANTY ACT Count I of the SAC alleges breach of written warranties under the Magnuson-Moss
Warranty Act, 15 U.S.C. 2301, et seq. (MMWA). This claim must be dismissed because the underlying state warranty claims fail. See Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008); see also Dei Rossi, 2013 WL 1312105, at *5 ([S]ince this Court dismissed Plaintiffs Express and Implied Warranty claims, it must dismiss Plaintiffs MMWA claim too).8 V. PLAINTIFFS DO NOT PLEAD ANY CALIFORNIA STATUTORY CLAIMS Counts IV, V and VI of the SAC allege violations of Californias Consumer Legal Remedies Act (CLRA), Unfair Competition Law (UCL), and False Advertising Law (FAL), respectively. With the exception of a few definitional and conclusory allegations (e.g., SAC 136, 140, 148, 151-52, 160), these three counts remain unchanged from how they were pled in the FAC, which this Court held insufficient to state a claim.
of Am., Inc., 198 Cal. App. 3d 646, 656 n. 6 (1988) (noting that a retail buyer is not in vertical privity with manufacturer). 8 Plaintiffs MMWA claims also fail because the ENERGY STAR sticker does not qualify as a written warranty as that term is defined in the MMWA. See 15 U.S.C. 2301(6) (The term written warranty means any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship . . . or . . . any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product) (emphasis added); Kelley v. Microsoft Corp., No. C07-0475MJP, 2007 WL 2600841, at *5 (W.D. Wash. Sept. 10, 2007) ([T]o be a written warranty, the warrantors guarantee must contain language that specifically identifies the duration of the warranty. Because that type of language is absent here, the Court cannot conclude that the words Windows Vista Capable are a written guarantee under the [MMWA]).

17
A.
The ENERGY STAR Sticker is Not a Misrepresentation of Any Fact and Did Not Create a Likelihood of Deception
As before, Plaintiffs CLRA, UCL and FAL claims are premised on the allegation that Plaintiffs were misled by a vague message of efficiency allegedly conveyed to them by the ENERGY STAR sticker. (See, e.g., SAC 140.) However, as Judge Mendez noted during the hearing on Plaintiffs original complaint, the ENERGY STAR sticker itself conveys no specific factual information that could mislead a reasonable consumer. (Ex. A at 26:2.) Plaintiffs make no attempt to rectify this pleading deficiency in the SAC, still adhering to a general discussion of Defendants advertisements as they did in the FAC. Dei Rossi, 2013 WL 1312105, at *6. Plaintiffs still fail to connect the supposed failure of the refrigerators to be more efficient to any standard they understood at the time of sale, including how much more energy efficient they believed their ENERGY STAR refrigerator would be, how much less energy they believed it would consume, how much less efficient it supposedly is, how much more energy it allegedly uses, or how much more they allegedly spend in energy costs than they expected to pay. Thus, Plaintiffs allegations about what information the ENERGY STAR sticker supposedly conveyed to themuntethered to any standard by which to judge their truth or falsitystill lack the requisite definitiveness to support a claim under any of the statutes listed in the SAC. Moreover, as noted above, both named Plaintiffs admit that they also saw the Energy Guide labels affixed to their respective refrigerators. Unlike the ENERGY STAR sticker, the Energy Guide label supplies specific factual information, including (i) the annual estimated operating cost of the refrigerator (here, $62); (ii) how that compares to a range of the annual estimated operating cost of similar models of refrigerator (here, between $60 and $78); and (ii) the estimated yearly electrical use of the refrigerator (here, 580 kWh and 581 kWh). (SAC 67.) Plaintiffs do not allege that any of these specific representations are inaccurate or misleading. (Id. 1-162.) They instead continue to insist that the ENERGY STAR logos generic message of relative efficiency trumps the specific representations regarding

18
the refrigerators absolute and relative energy use and efficiency on the Energy Guide label. In similar situations alleging a misleading communication through an image, logo or other minimal-content communicationlike the ENERGY STAR logo at issue herecourts have routinely held that a reasonable consumer would be expected, as a matter of law, to read the more specific, truthful disclosures, and cannot maintain a claim that is inconsistent with those specific representations: [T]he depiction of fruit on a product label is not an affirmation that the product contains a particular amount of fruit or any fruit whatsoever . . . [a] reasonable consumer would then be expected to peruse the product's contents simply by reading the side of the box containing the ingredient list . . . All of these actions, which a reasonable consumer would be expected to take, would insure that the consumer was not deceived. The FAC, which acknowledges that Defendant truthfully disclosed the ingredients for its product and that Plaintiffs did not inspect these specific ingredients, thus demonstrates that Plaintiffs have not and cannot state a claim under the UCL, FAL, or the CLRA. McKinniss v. Gen. Mills, Inc., No. CV 07-2521 GAF (FMOx), 2007 WL 4762172, at *3 (C.D. Cal. Sept. 18, 2007). The reasoning of these courts is that [a]ny ambiguity that [plaintiff] would read into any particular statement is dispelled by the promotion as a whole. Freeman v. Time, Inc., 68 F.3d 285, 289-90 (9th Cir. 1995) (affirming dismissal of CLRA claims where allegedly misleading statement that plaintiff won a sweepstakes appeared next to qualifying language that clarified the steps that plaintiff must take to be eligible for chance to win sweepstakes); see also, e.g., Reid v. Johnson & Johnson, Civil No. 11cv1310 L(BLM), 2012 WL 4108114, at *4-5 (S.D. Cal. Sept. 18, 2012) (dismissing UCL, FAL, and CLRA claims regarding trans fat content of food product where phrase No Trans Fat appeared on same package with ingredient list that disclosed small amounts of trans fats); Castagnola v. Hewlett-Packard Co., No. C 11-05772 JSW, 2012 WL 2159385, at *910 (N.D. Cal. June 13, 2012) (dismissing UCL claim where allegedly misleading statements concerning the identity of the entity that ran an internet program occurred along with clarifying language that correctly identified the entity administering the program). Similarly, Plaintiffs cannot maintain an action based on the vague notion of energy efficiency

19
9
conveyed by the ENERGY STAR logo when they do not allege that the Energy Guide labelthe more specific disclosure of the products energy use and relative efficiencyis also misleading. Thus, because the ENERGY STAR sticker does not constitute a representation of any fact, and, in light of the specific factual information included on the Energy Guide label that both Plaintiffs admit they saw prior to purchasing their refrigerator, Plaintiffs have pled no misrepresentation and no likelihood of deception arising from their exposure to the generic efficiency message they claim was implied by the ENERGY STAR sticker.9 B. Plaintiffs Fail to State a CLRA Claim
Plaintiffs allege that Whirlpool violated Sections 1770(a)(5), (7) and (9) of the CLRA by representing the [KitchenAid refrigerators] as ENERGY STAR-qualified and by misrepresenting the energy efficiency of the [refrigerators]. (SAC 136-38.) For several reasons, Plaintiffs still fail to plead a CLRA claim. 1. Plaintiffs have not alleged any misrepresentation of fact
The Court dismissed Plaintiffs first attempt to state a CLRA claim on the grounds that Plaintiffs made sweeping allegations of deceit, but failed to tie that [misconduct] to any specific behavior by Whirlpool. (Ex. A at 25:14-16.) The Court dismissed Plaintiffs second attempt to state a CLRA claim on the same grounds: Plaintiffs have failed to cure the defect by citing any misrepresentation that Defendant conveyed to them, and there are no specific facts in the [FAC] regarding a misrepresentation directly related to Plaintiffs refrigerators. The allegations in Plaintiffs [FAC] fall well below the pleading requirements of Rule 9.
McKinniss, 2007 WL 4762172, at*2 (As a threshold matter, to state a claim under the UCL or CLRA, a plaintiff must allege that the alleged false and misleading statements were likely to deceive a reasonable consumer.) (citation omitted); Reid, 2012 WL 4108114, at *2 (to state a claim under the UCL, FAL, and CLRA, a plaintiff must allege that the allegedly false and misleading statements were likely to deceive a reasonable consumer.) (citation omitted).

20
Dei Rossi, 2013 WL 1312105, at *6. Plaintiffs have not cured this deficiency in the SAC. Plaintiffs still have not explained what is false or misleading about any representations they claim to have received concerning the 2008 model-year KitchenAid refrigerators they bought, or why such representations are allegedly false. See Cooper, 137 F.3d at 625.10 2. Plaintiffs have not adequately alleged any knowing misrepresentation Even assuming that Plaintiffs have pleaded a false or deceptive statement, because the CLRA prohibits unfair or deceptive acts intended to result in the sale or lease of goods or services to any consumer, Cal. Civ. Code 1770(a) (emphasis added), plaintiffs must sufficiently allege that a defendant was aware of a defect at the time of sale to survive a motion to dismiss. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1145 (9th Cir. 2012). The SAC still fails to allege any facts that, if true, would show that Whirlpool was aware, in December 2008, that either of the subject KitchenAid refrigerator models allegedly did not comply with the ENERGY STAR program requirements. Instead, the SAC contains a lengthy narrative regarding the DOE testing allegedly performed in 2011, followed by a conclusory allegation that Whirlpool knew or should have known that the 2008 models could be disqualified in the future. (See generally SAC 74-85 and 95.) Plaintiffs cannot simply point to the 2011 disqualification and their December 2008 purchases and expect the
Moreover, Plaintiffs must plead facts that, if true, showed that they relied on an alleged misrepresentation. Cholakyan v. Mercedes-Benz USA, LLC, 796 F. Supp. 2d 1220, 1228 (C.D. Cal. 2011) ([A] plaintiff suing under the CLRA for misrepresentations in connection with a sale [must] plead and prove she relied on a material misrepresentation. (citation omitted)). Although the SAC alleges that the Plaintiffs would not have bought their KitchenAid refrigerators if they had known that the refrigerators were not ENERGY STAR qualified (SAC 71-72), this shows, at most, that ENERGY STAR compliance was material; it does not show reliance. See Cattie v. Wal-Mart Stores, Inc., 504 F. Supp. 2d 939, 946 (S.D. Cal. 2007) (distinguishing reliance and materiality under CLRA and defining the latter as being of sufficient importance that the plaintiff would not have acted as she did but for alleged misrepresentation). Further, as noted above in Section V.A, the specific and accurate disclosures contained in the Energy Guide label would render any reliance on the representation implied by the ENERGY STAR sticker inherently unreasonable.
10

21
Court to fill in the material gaps between them (e.g., whether the 2011 models and 2008 models were identical in relevant respects from an engineering standpoint). See Iqbal, 556 U.S. at 678 (complaint must set forth sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face) (internal quotation marks omitted) (quoting Twombly, 550 U.S. at 570). Plaintiffs attempt unsuccessfully to bolster their prior allegation that the 2011 disqualification would retroactively apply to their 2008 model-year refrigerators, but Plaintiffs plead no separate findings or statements by the DOE about those earlier machines, nor do they identify any applicable rule or regulation that states that such disqualifications are automatically retroactive. (SAC 89-94.) In any event, Plaintiffs still fail to adequately plead their conclusory assertion that Whirlpool knew of the alleged defect in 2008, three years before the DOE made its determination. See In re Sony Grand Wega KDFE A10/A20 Series Rear Projection HDTV Television Litig., 758 F. Supp. 2d 1077, 1089 (S.D. Cal. 2010) (dismissing UCL, CLRA, and FAL claims because the plaintiffs have not sufficiently alleged that [any] representations were untrue or misleading at the time they were made). 3. Plaintiffs have not alleged a transaction with Whirlpool
Plaintiffs CLRA claims against Whirlpool also fail because they have not alleged any facts to show that they entered into an agreement or transaction with Whirlpool. A transaction is an agreement between a consumer and another person. Cal. Civ. Code 1761(e). Plaintiffs admit that they bought their KitchenAid refrigerators from retail vendors. (SAC 71-72.) Whirlpool was not a party to those transactions. Consequently, Plaintiffs cannot sue Whirlpool under the CLRA. See Cal. Civ. Code 1780(a) (Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person . . . (emphasis added)).

22
11
C.
Plaintiffs Fail to State a UCL Claim
As demonstrated below, Count V of the SAC, like its predecessors, still fails to state a claim under either the unlawful, unfair, or fraudulent prongs of Californias UCL. 1. Plaintiffs fail to plead an unlawful UCL claim
In his Order dismissing the FAC, Judge Mendez noted Plaintiffs unlawful UCL claim was little more than a bald allegation that Whirlpool violated a panoply of other federal laws in unidentified ways: [T]o state a claim under the UCL, the plaintiff must not only cite violations of other laws, but plead facts to substantiate those violations. As discussed by Defendant, Plaintiffs allege Defendant violated the EPCA, NECPA, NAEDA, but do not plead any facts in the [First Amended Complaint] to support their conclusory assertion that these laws were, in fact, violated by Defendant under the circumstances of this case. Dei Rossi, 2013 WL 1312105, at *6. The SAC simply re-alleges Plaintiffs prior bald allegation that Whirlpool violated EPCA, NECPA, [and] NAECA11 in unspecified ways (SAC 148), and adds an equally conclusory allegation that Whirlpool also violated the MMWA (id. 147). As shown above, Plaintiffs have not pled an MMA claim, so their additional citation to that statute does not create a basis for UCL liability in this case. In short, there are no new facts alleged in the SAC that would support an unlawful UCL claim. 2. Plaintiffs fail to plead an unfair UCL claim
The entirety of Plaintiffs unfair UCL claim is set forth in a single paragraph alleging that Whirlpool somehow violated the policy or spirit of the EPCA, NECPA, NAECA, and regulations promulgated thereunder, governing the energy efficiency of
See Energy Policy and Conservation Act, Pub. L. No. 94-163, 89 Stat. 871 (1975); National Energy Conservation Policy Act, Pub. L. No. 95-619, 92 Stat. 3206 (1978); National Appliance Energy Conservation Act of 1987, Pub. L. No. 100-12, 101 Stat. 103 (1987).

23
refrigerators. (SAC 148.) Judge Mendez dismissed this exact allegation in the FAC, holding that Plaintiffs must clearly identify the unfair practice, as they bear the burden in establishing why Defendant is not permitted to engage in the allegedly unfair practice. Dei Rossi, 2013 WL 1312105, at *7. Plaintiffs did not heed Judge Mendez direction; they still do not identify any specific alleged unfair practice. Thus, they still have not stated an unfair UCL claim. See Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544, 1555 (2007). 3. Plaintiffs fail to plead a fraudulent UCL claim
As with Plaintiffs unfair UCL claim, the fraudulent UCL claim comprises one paragraph vaguely alleging that Whirlpool violated the fraudulent prong by representing the Mislabeled Refrigerators as ENERGY STAR-qualified and by misrepresenting the energy efficiency of the Mislabeled Refrigerators. (SAC 149.) In addressing this same allegation in the FAC, Judge Mendez noted that Plaintiffs have failed to plead facts clearly identifying a misrepresentation by Defendant, and Plaintiffs have not identified knowledge by Defendant, at the time any representation was conveyed to them, that the representation was misleading or false. Dei Rossi, 2013 WL 1312105, at *7. As with the prior complaint, the SAC contains no specific facts related to a misrepresentation that can be imputed to Defendant. Id. As this Court has repeatedly held, simply labeling the ENERGY STAR sticker a misrepresentation is not sufficient to state a claim. D. Plaintiffs Fail to State a FAL Claim
Count VI of the SAC is not materially different from Count VI of the FAC; the only apparent change is one new paragraph that states, in conclusory fashion, that [t]he misrepresentations and non-disclosures by Defendant of the material facts detailed above constitutes false and misleading advertising and therefore constitutes a violation [of] Californias FAL. (SAC 159.) As Judge Mendez correctly pointed out in dismissing the FAL claim, Plaintiffs failed to specify the time, place, or medium in which any allegedly false advertisement was communicated to them, nor do they offer any specific allegations

24
concerning the content of any allegedly false advertisement that they saw or were otherwise exposed to. Dei Rossi, 2013 WL 1312105, at *8. The SAC does nothing to address these deficiencies. Further, although Plaintiffs repeatedly allege that Whirlpool engaged in an unidentified long-term advertising campaign (SAC 8; see also 43, 51), Plaintiffs do not specify what parts, if any, of this alleged campaign they actually saw or heard, when or where they saw or heard these alleged advertisements, or what any specific advertisement they may have seen or heard said. See In re Sony, 758 F. Supp. 2d at 1089 (dismissing FAL claim because the plaintiffs have not sufficiently alleged that [any] representations were untrue or misleading at the time they were made). Simply put, pointing to a general advertising campaign and claiming that something, somewhere within the alleged campaign was false, does not state a FAL claim. VI. FURTHER LEAVE TO AMEND WOULD BE FUTILE As noted above, the SAC represents Plaintiffs third attempt to state a claim. Leave to amend may be properly denied where repeated amendments have failed to cure deficiencies, and further amendments would be futile. See Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 1007 (9th Cir. 2009) (citing Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008)). Discretion to deny leave to amend is particularly broad if the plaintiff previously has amended the complaint. Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir.1989). Here, Judge Mendez was clear, both during oral argument on Whirlpools motion to dismiss the original complaint and in his Order dismissing the FAC, as to what additional facts Plaintiffs would need to allege to state a claim. Judge Mendez also cautioned Plaintiffs that their SAC would likely be their last: The Court notes that this is the second chance it has given Plaintiffs to properly plead their claims in this action and it is unlikely that the Court will permit any further chances to amend in order to avoid a dismissal with prejudice of this case.

25
Dei Rossi, 2013 WL 1312105, at *8. As explained above, the deficiencies identified by the Court remain unresolved in the SAC. Plaintiffs inability to correct these deficiencies after three attempts demonstrates the futility of permitting further amendment. See, e.g., Metzler, 540 F.3d at 1060 n.4 (dismissal without leave to amend is appropriate when a party has multiple opportunities to amend and [is] unable to cure the defects that required dismissal of previous complaints); East v. San Bernardino Cnty. Sheriffs Dept, No. ED CV 09655-GW(E), 2011 WL 6000847, at *4 (C.D. Cal. Nov. 28, 2011) (denying leave to amend where the Court previously advised Plaintiff, on multiple occasions, of the deficiencies of his pleading and the plaintiff proved himself unwilling or unable to allege facts stating any claim on which relief can be granted in this action) (emphasis in original). CONCLUSION For all of the foregoing reasons, the Second Amended Complaint should be dismissed in its entirety with prejudice. Dated: May 21, 2013 Respectfully submitted, By: s/ Galen D. Bellamy Galen D. Bellamy (pro hac vice) Sean G. Saxon (SBN 230054) Wheeler Trigg ODonnell LLP 370 Seventeenth Street, Suite 4500 Denver, Colorado 80202 Telephone: (303) 244-1800 Facsimile: (303) 244-1879 Email: bellamy@wtotrial.com saxon@wtotrial.com and Bradley A. Benbrook (SBN 177786) Benbrook Law Group, PC 400 Capitol Mall, Suite 1610 Sacramento, California 95814 Telephone: (916) 447-4900 Facsimile: (916) 447-4904 Email: brad@benbrooklawgroup.com Attorneys for Defendants

26
CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on May 21, 2013, I electronically filed the foregoing Defendants Memorandum in Support of Motion to Dismiss Second Amended Class Action Complaint with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the email addresses listed on the Electronic Mail Notice List, and I hereby certify that I have mailed the foregoing document via the United States Postal Service to the non-CM/ECF participants indicated on the Manual Notice List.
s/ Galen D. Bellamy Galen D. Bellamy
Case 2:12-cv-00125-TLN-JFM Document 72-2 Filed 05/21/13 Page 1 of 34
EXHIBIT A
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page12of of33 34 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA ---oOo--BEFORE THE HONORABLE JOHN A. MENDEZ, JUDGE ---oOo--KYLE DEI ROSSI and MARK LINTHICUM, on behalf of themselves and those similarly situated, Plaintiffs, vs. WHIRLPOOL CORPORATION, PACIFIC SALES KITCHEN AND BATH CENTERS, INC., and BEST BUY COMPANY, INC., Defendants. _________________________/ ---oOo--REPORTER'S TRANSCRIPT DEFENDANTS' MOTION TO STRIKE DEFENDANTS' MOTION TO DISMISS WEDNESDAY, SEPTEMBER 5, 2012 ---oOo---
No. 2:12-cv-00125
Reported by: DIANE J. SHEPARD, CSR 6331, RPR
DIANE J. SHEPARD, OFFICIAL COURT REPORTER, USDC -- (916) 554-7460
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page23of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 For the Plaintiffs: BURSOR & FISHER BY: L. TIMOTHY FISHER, Esq. 1990 North California Boulevard, Suite 940 Walnut Creek, California 94596 and FARUQI & FARUQI BY: DAVID E. BOWER, Esq. 10866 Wilshire Boulevard Los Angeles, California 90024 APPEARANCES
For the Defendants: WHEELER TRIGG O'DONNELL LLP BY: GALEN D. BELLAMY, Esq. CEDRIC D. LOGAN, Esq. 370 Seventeenth Street, Suite 4500 Denver, Colorado 80202 and BENBROOK LAW GROUP, PC BY: BRADLEY A. BENBROOK, Esq. 400 Capitol Mall, Suite 1610 Sacramento, California 95814
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page34of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE CLERK: SACRAMENTO, CALIFORNIA WEDNESDAY, SEPTEMBER 5, 2012 ---oOo--Civil S12-125, DeiRossi, et al., versus
Whirlpool Corporation, et al. please. MR. FISHER: Fisher for plaintiffs. MR. BOWER: plaintiffs. MR. BELLAMY:
Counsel state their appearances,
Good morning, Your Honor.
Timothy
David Bower, Faruqi and Faruqi, for
Good morning, Your Honor.
Galen
Bellamy at Wheeler Trigg O'Donnell for defendants Whirlpool Corporation, Best Buy Stores, LP and Pacific Sales Kitchen and Bath. MR. BENBROOK: Good morning, Your Honor. Bradley
Benbrook for the defendants. MR. LOGAN: Good morning, Your Honor. Cedric Logan,
Wheeler, Trigg O'Donnell, for defendants. THE COURT: Mr. Benbrook, are you local counsel now? I am.
MR. BENBROOK: THE COURT: local counsel? MR. BENBROOK: THE COURT: MR. BOWER:
Back in March I guess Boutin Jones was
Correct.
And Mr. Bower, what firm are you from? Faruqi and Faruqi. I'm from their Los
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page45of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 matters. complaint. MR. BOWER: THE COURT: on the opposition. That's correct. And then Mr. Fisher's firm is mentioned see -MR. BOWER: You might have had Vahn Alexander from Angeles office. THE COURT: I'm sorry I look confused, but I don't
our office previously, but he's no longer -THE COURT: Well, Mr. Fisher's firm is listed on the
So have you been in from the beginning? Yes. Is the firm listed on CM/ECF? Which firm is it? What firm is it? Faruqi, F-a-r-u-q-i. Yes. It's listed on the docket.
MR. BOWER: THE COURT: THE CLERK: THE COURT: MR. BOWER: THE CLERK: THE COURT:
You just haven't put your name on the
captions, is that right, Mr. Bower? MR. BOWER: THE COURT: That's correct. Let's start with some housekeeping
This is on for a motion to dismiss and a motion to The operative complaint that I'm working It's a
strike the complaint.
from was filed in January, January 17, 2012.
presumptive class action involving refrigerators. In terms of housekeeping matters, the parties entered
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page56of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
into a stipulation -- it's at the docket, document number 30 -back in May. Under that stipulation, the plaintiffs agreed to
substitute Best Buy Stores, LP for Best Buy Company, Inc. Apparently, the defendants actually want them to file a motion to dismiss even though the stipulation makes it clear that they are dismissing. Is there some reason? You put a
footnote in your reply, in your papers.
I thought the
stipulation covered it, but is there something that you think the plaintiffs haven't done with respect to Best Buy, Inc.? MR. BELLAMY: Yes, Your Honor. My impression was
they had not actually substituted Best Buy Stores, LP for Best Buy Company, Inc. But if that's been done to Your Honor's
satisfaction, then that's fine with us. THE COURT: your satisfaction. you need? MR. BELLAMY: As long as the caption is changed, and I'm just wondering if it's been done to
If not, is there something more you think
there's an agreement that Best Buy Stores Company, Inc. is out of the case, then I think we're satisfied. THE COURT: Are plaintiffs ok with that? Do you
think you need to file anything more, or do you think the stipulation covers it? MR. FISHER: I thought the stipulation covered it,
Your Honor, but I'm happy to meet and confer with counsel if there is an issue.
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page67of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: For what it's worth, I think the Court I understand why you asked
agrees the stipulation covers it.
that out of an abundance of caution, but according to that stipulation they had agreed to dismiss within the stipulation, then I signed it as an order that Best Buy Company, Inc. had been dismissed as a defendant, and that Best Buy Stores, LP is now the proper defendant. clarified. So it's on the record. It's been
If you still want something out of an abundance of
caution, that's fine. Let me take up also, there was two requests for judicial notice filed by the plaintiffs. One is at document
number 37 in which the plaintiffs asked the Court to judicially notice the Department of Energy and the EPA's, quote, Key Product Criteria, and then the Department of Energy and the EPA's 2011 analysis of a survey regarding Energy Star. Those are not proper documents for which the Court can take judicial notice, particularly on a motion to dismiss. If there's a motion to dismiss, we're really limited to the four corners of the complaint. And so the Court denies the
request for judicial notice filed by the plaintiffs with respect to those documents. And then, Mr. Fisher, you filed another request for judicial notice. it. MR. FISHER: I think it's 45, Your Honor. And that was document number -- let me grab
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page78of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: 45, that's right. And that one was
specifically opposed by the defendants in document number 46. In document number 45 you asked me to take judicial notice of a federal regulation and a November 5th, 2004 letter. Again, these aren't, at this stage of the proceedings, even in the summary judgment stage, proper documents for which the Court can take judicial notice. And I
also question whether there is any relevance with respect to a motion to dismiss on these documents. But setting that aside, these aren't proper documents for which the Court can take judicial notice. The Court
sustains the defendants' objections, and the Court will not take judicial notice of those documents either. There was a notice of supplemental authority filed by the defendants on August 31st. That's document number 48.
This morning I got the plaintiffs' objection to the supplemental authority. Mr. Bellamy, you did fudge the rule somewhat in that you argued rather than just provide the supplemental authority to me. I have disregarded, as plaintiffs have requested, any You can
argument with respect to that supplemental authority.
supply it to me, but you can't argue it because then it constitutes a surreply brief, and it's unfair to the plaintiffs. MR. BELLAMY: Of course, Your Honor. Just briefly, I
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page89of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 only submitted that argument because we had the three-day holiday in between when I submitted and when we had this
hearing, so I was really providing for the Court's convenience. THE COURT: can't argue. You can submit the case to me. You just
You could argue it at today's hearing if I
thought it was important. Frankly, this case, although it deals with similar issues, deals with an Ohio statute, and it's based primarily on Ohio law, which interestingly is the only state that you didn't include in your eighth claim for relief. So it's not going to
make much of a difference at all in terms of this motion to dismiss. Particularly because of the reliance, the heavy
reliance on Ohio law, and it's from a district court in Ohio, which has little if any persuasive authority to a district court in California. So that will have little if no effect on
the Court's decision on the motions to dismiss and to strike. All right. housekeeping matters. I think that takes care of the Let's take up the motion to dismiss.
Mr. Fisher, as I look at the complaint and then your opposition, basically this is a case in which you have located two individuals who purchased refrigerators in 2008. The
refrigerators had a sticker on them or a label that said that they were Energy Star refrigerators, and then three years later the model, Kitchen Aid model, was disqualified. why. I don't know
You don't explain that in the complaint, but that's the
Case Case 2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document 72-2 53 Filed Filed 09/06/12 05/21/13 Page Page 9 10 ofof 33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 basic facts. And then there is one allegation that your client, Mr. DeiRossi, bought his refrigerator because he wanted to be energy conscious or environmentally conscious. gist. That's the
You're relying heavily on that label or that sticker,
correct? MR. FISHER: THE COURT: That's correct, Your Honor. I think there's problems with the
complaint as pointed out by the defendants, and we'll go through each cause of action, and I'll give you a chance to respond to what's in the reply brief. But let's start -- I'll come back to the Magnuson-Moss claim, but let's start with the breach of express warranty claim. The problem I have with that cause of action
as currently pled is the same problems that the defendants have pointed out. And that is, I don't see anything other than your
clients' reliance on a sticker as the basis for your argument that that creates an express warranty. against that. And so is there something else that I'm missing that -- I read through this complaint two or three times, but I don't see it, and maybe you can point it out. express warranty that they made? the sticker. But what's the The cases seem to cut
Because there's nothing on
All it says is Energy Saver. Your Honor, what our --
MR. FISHER:
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page10 11of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sticker. THE COURT: You can remain seated, or you can stand
10
as long as the court reporter can hear you. more comfortable doing. to you. MR. FISHER:
Whatever you feel
Just make sure the microphone is close
We think the sticker is more than just a
We think it's something that's very important, and
something the consumers recognize as something that says something to them. THE COURT: Well, what you think and what's alleged
are two different things, so that's sort of a dangerous path to go down. I want to know what your clients thought, relied upon, saw, all the arguments that defendants raise. is that your clients went into a store. All I have
One client went into a
Best Buy, and one client went into Pacific Sales and bought a refrigerator because they wanted a refrigerator that -- well, actually, the claim doesn't even say this, but I guess I'm to infer that they wanted a refrigerator that was an Energy Saver, energy efficient, and that's it. There is no allegation, which I see in a lot of these complaints, along the lines of: Prior to purchasing, the
plaintiff read the following advertisements, the plaintiff went on the web, onto Whirlpool's website or Kitchen Aid and read the following representations. complaint. None of that's in this
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page11 12of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
11
And I know in part maybe you wanted to make it short and simple. But after Iqbal and Twombly, that's a really
dangerous way to plead complaints. So, do you agree that none of those types of allegations are in this complaint at this time? MR. FISHER: Well, I think what's in the complaint is
paragraphs 18 and 19 of the complaint where we say that Mr. DeiRossi only was going to look at Energy Star models, and he said he did that because he wanted to do the right thing for the environment. THE COURT: MR. FISHER: What does that mean? Your Honor, we're happy to add details
about the plaintiffs' state of mind and other things they saw, and more detail about that if the Court would like that. can and will do that. THE COURT: You're going to have to. Right now this I can We
doesn't properly plead a claim for express warranty. tell you that. And I am, probably over the dismay of
defendants, but I'm obligated, I think, to give you an opportunity to file -- at least attempt to file an amended complaint. They've given you a big hint as to what's missing.
But if it's not properly pled the second time around, you're going to be hit with another motion to dismiss. I think it's a difficult case if all you're relying upon is that sticker. Based on the cases that they've cited
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page12 13of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and the cases that I've read in connection with this motion, stickers don't do it. complaint. So there has got to be more in this
12
It's a bare-bones complaint right now, and you're
going to have to add some meat to that claim. There is the other issue that's been raised with respect to that claim in the reply brief. respond to this, too. Here it is. So I'm going to need exact terms of the If you are I wanted you to
warranty, reasonable reliance, and then the breach.
relying on the Energy Star sticker itself, as a matter of law you're going to have problems with that. The sticker itself You do make
contains no affirmation of any specific fact.
mention in your opposition of statutes, regulations, press releases, survey data. None of that's in your complaint, and I I've got
can't add that just because it's in your opposition. to see it in the complaint.
There's one other argument that was raised with respect to the express warranty that I wanted to ask you about. It's the argument that even assuming that there was some type of express warranty, the warranty applied only for a period of one year after purchase. And that by your clients' own
admissions they bought the refrigerators more than three years before filing the lawsuit, which is well outside the express warranty period. I wasn't clear in your opposition how you
were getting around that argument.
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page13 14of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. FISHER: Your Honor, I think there is a
13
difference between the warranty that is for the refrigerator that the company provides. You know, it's in the manual and We're talking about a
describes what the warranty is there. different warranty.
The warranty that is created by putting
the Energy Star sticker on the refrigerator and on the display models in the store. So I think it's a different issue that we're talking about here. So they try to limit the other warranty by the But there's no way our clients or any
warranty that they have.
class member could possibly have known that the refrigerators were not Energy Star compliant until the Department of Energy did its testing and disqualified the refrigerators. So we ask the Court to apply the discovery rule and say that there is no way that a consumer could know until the Department of Energy disqualified the refrigerator in November of 2011. THE COURT: Well, here's the other thing that's
missing and comes up in the other causes of action, and that is the next argument, which is you haven't tied the 2011 disqualification to a 2008 model. In your opposition I know you argue there is no difference between the 2008 model and the 2011 model. not alleged in the complaint. That's
And I'm not sure, even if you And it's brought up,
allege it, how you're going to show that.
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page14 15of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 show that?
14
as you saw, in their opening brief and in their reply that just because the government for some reason disqualified a 2011 Kitchen Aid refrigerator, that doesn't mean that the 2008 model that your clients bought weren't energy efficient, that there was a misrepresentation. complaint. And then I'm starting to think, how are you going to It's going to be difficult. And I'm wondering why All that's missing from this
you didn't try to find plaintiffs that purchased refrigerators in 2011 as opposed to 2008. And I know we get into this
argument that the Energy Star regs changed in April of 2008, but, you know, your clients purchased their refrigerators seven months after that. But then there is the argument back, well,
how do I know that those refrigerators weren't made before April of 2008? And we go back and forth in terms of what might
or might not have to be proven. But the basic point is, how are you going to show that those 2008 refrigerators weren't energy efficient or didn't meet the Energy Star requirements at that time? MR. FISHER: THE COURT: MR. FISHER: Well, because -At least it's not alleged right now. And we can allege that, Your Honor,
because they are the same refrigerators as were disqualified in 2011. Refrigerators are not like cars where, you know, the These are
2013 model comes out, and it's different somehow.
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page15 16of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to you. the same refrigerators, and they use the same system. And we
15
will allege that, Your Honor, and we'll make that clear to the Court so that that's explicit. THE COURT: Let me just stop on that point.
Mr. Bellamy, I have a feeling you're going to tell me that's not true. MR. BELLAMY: THE COURT: That's correct. Why don't you move the microphone closer
That's usually what I get in these cases, that that's not true, and that you'll be able to show me that the 2011 model has a lot more bells and whistles than the 2008. MR. BELLAMY: That's correct. Well, whether it's
more bells and whistles or not, I represent Whirlpool in a number of cases. And an appliance manufacturer -- I'm not sure
how it compares to the automobile industry -- but makes dozens of cost-and-quality improvements to small or large components in systems within their machines that don't require changing the model number of the machine but can impact whether or not the machine uses more or less energy. And so from an engineering design perspective there is no reason right now, based on this record, certainly, to say that the 2008 machines and the 2011 machines are the same from the perspective of energy consumption, or water consumption, or efficiency in general.
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page16 17of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT:
16
That's what I anticipate, but that may be
down the road at summary judgment, but we're still very, very early in this case. But, again, that's one of the issues, I think, that you're going to have to address when you start thinking about trying to amend this complaint. In terms of the implied warranty claim, I know that you argue this tolling of the one-year statute and delayed discovery. I don't necessarily disagree with you, but the And that is, delayed It only extends the
response is an interesting response.
discovery doesn't extend the warranty. statute of limitations.
And that's the argument in the reply.
And I'm wondering, how can you plead around that problem? MR. FISHER: warranties. Again, we're talking about two different
I think they're talking about the warranty they We're talking about
have for the parts in the refrigerator.
the implied warranty of merchantability, which is different than the warranty that they provide for the refrigerator. So
again, I think it's a different issue than what they're trying to raise in their reply. MR. BELLAMY: Your Honor, if I may. We are in fact,
with respect to the implied warranty claim, talking about the one-year limitation on that warranty that's contained in our limitation of warranties, and that's consistent with California law.
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page17 18of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: But your argument is the delayed
17
discovery rule would only toll the statute of limitations.
It
doesn't extend your -- even if there was an implied warranty, it wouldn't extend it for three years. MR. BELLAMY: THE COURT: That's correct.
There is no -- in effect, there is no
implied warranty on which they can file a lawsuit. MR. BELLAMY: After the one year expires, if they
have not had a problem that constitutes a breach of implied warranty, then they have not stated a claim for breach of implied warranty. THE COURT: How do you plead around that? Why should
I give you leave to amend facing that issue?
Because you think
that you can plead facts that will show that there were problems with the refrigerator within the first year? MR. FISHER: We think, Your Honor, that asking a
consumer who bought a refrigerator in 2008 to be able to determine within one year that that refrigerator is not energy compliant, not compliant with the Energy Star program is an impossible standard. There is just no way a consumer could
know that that refrigerator was not compliant with the program. THE COURT: That's not the argument, though. The
argument is that, in effect, the implied warranty was breached somehow, but the breach has to occur within that one-year period, and there is no allegations in this complaint.
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page18 19of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 There is the argument in the reply brief. give you a chance to respond. And I'll
18
But plaintiffs claim that the
refrigerators are unmerchantable because they fail to, quote: Keep food cold in a manner that meets rigorous DOE test conditions for energy efficiency. Plaintiffs do not allege
that their refrigerators have ever needed repair or otherwise exhibited any defect that interfered with their normal operation as refrigerators, or that they failed to keep food cold. Plaintiffs' novel theory of merchantability is contrary
to the law and would render the concepts of minimum level of quality and basic degree of fitness for ordinary purpose meaningless. That's their reply. MR. FISHER: How do you respond to that?
Because I think the implied warranty of
merchantability is more than just fitness for keeping food cold, which is the argument that they make. The argument that we make, and which we believe is consistent with the law and is consistent with case law -- we cited several cases regarding automobiles where courts have held that it's not -- the implied warranty of merchantability is just not limited to a car being able to drive from Point A to Point B. It's that the car has to -- if the car smells or
is clunky or has other problems, that that violates the warranty of merchantability. And we make the same argument here that the warranty
19
of merchantability requires that the refrigerator not only keep food cold, but that it work in the manner that it was described. That it would be Energy Star compliant. That it
would not use more energy than is permitted under the Energy Star program. THE COURT: You agree that the breach has to occur
within this one-year period, right? MR. FISHER: THE COURT: MR. FISHER: The breach is ongoing, Your Honor. That's not alleged, but -We can allege that. These refrigerators
continue to use more energy even as they are in my clients' homes today. THE COURT: So let's assume they allege that. You're
going to get an amended complaint that says from January 1st, 2009 to the present the refrigerator has never been energy efficient, hasn't worked properly, etcetera, etcetera. not in this complaint now. the implied warranty. Why is that then not going to be sufficient? anticipating another motion to dismiss from you. want to tell me now, you can wait. MR. BELLAMY: Well, I will say if that implied I'm That's
Thereby constituting a breach of
If you don't
warranty claim is plead along those lines, then, yes, you will probably see another motion to dismiss. warranty -The implied
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page20 21of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: What raises the question in my mind is
20
whether that's more appropriate for a summary judgment motion as opposed to a motion to dismiss. allegation? Would that be a sufficient But
Not saying they can prove the allegation.
wouldn't that be a sufficient allegation to maintain the implied warranty claim? I guess I'm sort of asking you, is
there a reason why I shouldn't give them leave to amend? MR. BELLAMY: Yes, Your Honor. I believe there is.
I think the law is fairly clear that the implied warranty of merchantability is limited to some minimum level of fitness and doesn't have layered on top of it extra performance requirements. So, for example, the automobile example that counsel provided earlier where the car -- you know, if the argument was if the car gets you from Point A to Point B, it's merchantable, and the Court rejected that and said, no, it's belching and stalling and having all these problems. There is no
allegations that there is any other problems with these machines. There is no quality problems. They're saying we I think
didn't save as much energy as we were supposed to.
that stretches the concept of the implied warranty of merchantability beyond what I've seen any other court endorse. And I would respectfully dismiss (sic) with an earlier statement Your Honor made with respect to the relevance of the Northern District of Ohio decision where this specific
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page21 22of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 case. MR. BELLAMY: I gathered. issue, albeit under Ohio law, was discussed. But the basic
21
concept of what is a merchantable product, what does the law require, and Judge Gaughan in that case said -THE COURT: Do you have some other case other than
that Ohio case that you want to point me to? MR. BELLAMY: THE COURT: Just the case --
Because I don't really like that Ohio
The cases we cited in our
brief that set out what minimum level of quality means as a general rule and rejected the notion that you can layer on top of that other performance requirements. THE COURT: MR. BELLAMY: Your Honor. THE COURT: MR. BELLAMY: Is there one involving an appliance? I'm not sure if we cited the Tietsworth American Suzuki Motor Corp. That would be one of the cases, yes,
case in that connection or not, but a similar argument was rejected there. THE COURT: MR. BELLAMY: Which case? The Tietsworth v. Sears Roebuck. We've
cited it elsewhere in the complaint. THE COURT: Is there a case that you think,
Mr. Fisher, does capture your view of what minimum level of quality means under this implied warranty?
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page22 23of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. FISHER: our brief, Your Honor. We cited the Keegan and Isip cases in We also referred to California
22
Commercial Code 2314 -- I believe it's (2)(f) -- saying that the implied warranty of merchantability requires that the product not just be fit for its ordinary purpose but also be produced in a manner that's consistent with promises and affirmations made on the label or on the container. THE COURT: Mr. Bellamy, you cited Keegan also. We did. The statement in Keegan is
MR. BELLAMY:
that the implied warranty of merchantability requires only a basic degree of fitness for its ordinary purpose. And, again,
we would submit the ordinary purpose of a washing machine is to clean dirty clothes, and there is no allegation that it fails to do that or has any other problems in connection with cleaning clothes. THE COURT: MR. BELLAMY: THE COURT: This is a refrigerator. Sorry. Getting your appliances mixed up.
On the Magnuson-Moss, coming back to your first claim, I think the defendants are correct, Mr. Fisher. That as
a matter of law if you can't maintain those state express warranty and state implied warranty claims, you're not going to be able to maintain your Magnuson-Moss claim. don't need a lot of discussion. I don't want and
I think the defendants'
discussion of the law under Magnuson-Moss is correct.
23
So if your state law claims for breach of express and implied warranty fail, the Magnuson-Moss claim is going to fail. And you'll have to properly allege those claims if
you're going to maintain the Magnuson-Moss. Let me move on to the fourth claim, unjust enrichment. Again, the defendants are correct. You're not
going to be allowed to maintain a separate unjust enrichment claim. It's not a valid cause of action. There are a number
of cases, for example, Melchoir, M-e-l-c-h-o-i-r, versus New Line Products is one of many cases that don't allow for a separate claim for unjust enrichment. You're going to be able But I am
to recover damages through other claims in any event. going to dismiss that one. I'll dismiss that one with
prejudice because as a matter of law you just can't maintain it. On your fifth claim, the Consumer Legal Remedies Act, let me talk about this and also just go back quickly. One of
the other problems I had with the complaint, as the defendants point out, is that you did what a lot of plaintiffs do, and that is you lumped all three defendants. to do that in these types of complaints. It's really dangerous You've got to be more
specific as to what each defendant did wrong as opposed to simply saying -- you have one paragraph in here: At all times
relevant, defendants Whirlpool, Pacific Sales, and Best Buy acted in concert with the knowledge and approval of the other
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page24 25of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 defendants and/or as the agent of the other defendants within the course and scope of the agency regarding the acts and omissions alleged. It's too general and too broad for a federal complaint, particularly after Iqbal and Twombly. especially when you start alleging fraud. real specificity in fraud claims now. landscape. And
24
There's got to be
It's changed the
I know there's been hundreds of law review
articles, but those two cases have really changed the way that we look at complaints, particularly in district court now. So think about that when you look, again, at the warranty claims. But on the Consumer Legal Remedies Act claim This is the -- I think this is
there is a number of problems. the one. Yes.
This is the one that requires notice.
You
didn't plead in the complaint that your clients complied with the notice requirements as to Pacific Sales and Best Buy. Now,
you submitted a declaration, which I can't consider in terms of a motion to dismiss. the complaint itself. You're going to have to include that in And you allege that -- it's Linthicum --
Mr. Linthicum, who is the plaintiff from Los Angeles, right? MR. FISHER: THE COURT: Yes, Your Honor. That he sent a letter of some type to That was in a declaration. And
Pacific Sales and Best Buy.
then I didn't see anything -- maybe I'm missing something --
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page25 26of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that said that Mr. DeiRossi actually satisfied the notice
25
requirements as to -- he bought his from Best Buy -- as to Best Buy. So if there are actually letters that satisfy the notice requirement, you're going to have to include those in the complaint and in the allegations. That's clearly missing So what you may
as a first attempt to maintain this claim.
have submitted to me as part of the declaration obviously gives me reason to allow you an opportunity to amend, but make sure that you satisfy at least that element. MR. FISHER: THE COURT: We will do that, Your Honor. And then the argument is, with respect to
Whirlpool, that you haven't pled with sufficient particularity how Whirlpool violated the Consumer Legal Remedies Act. You do
attempt to identify the who, what, where, when, and how, but you don't tie that to any specific behavior by Whirlpool. For example, you didn't plead any facts regarding any knowledge on the part of Whirlpool. And again, there is a
number of arguments raised in the reply that have to be addressed and that you need to consider when you attempt to amend this cause of action. Here's the argument in the reply brief: Plaintiffs
include a chart that purports to detail the required elements of their CLRA misrepresentation claim, but it actually shows why this claim fails. Plaintiffs made clear that the only
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page26 27of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 alleged misrepresentation was the Energy Star sticker itself. As argued above, the sticker conveys no specific information. Plaintiffs have made no allegation concerning what they understood Energy Star to mean at the time of purchase. The
26
chart also alleges that defendants -- you don't specify -- it just says defendants aggressively marketed the refrigerators. There is no allegations that plaintiffs ever saw, read, or were exposed to any marketing materials, nor what the specific information those materials allegedly contained. You need to take those arguments to heart in concerning whether you can maintain this claim, particularly against each defendant. I'm not going to allow you in an You're going
amended complaint to simply lump them together.
to have to be specific, and I'll look at that if you attempt to include this claim in your amended complaint. The next is count six, the violation of the unfair competition law. that. Your argument -- there's three prongs to
There is an unlawful, an unfair, and a fraudulent prong. In terms of your fraudulent prong and your arguments,
again this complaint right now lacks specificity particularly on fraud. claim. On fraud claims I really look for specificity in the
Particularly as to what each defendant did. So it's really difficult to try to maintain a fraud
claim when you simply allege defendants generically and plural. You're going to have to specify. And so that lacks specificity
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page27 28of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 as part of this UCL claim.
27
In terms of the unlawful prong, your argument, I took it, was that there are these federal statutes. what Energy Star or energy efficient means. They define
And because the
government disqualified Whirlpool's refrigerator, I'm supposed to jump from that to that makes this unlawful. And I don't know why those refrigerators were disqualified. I know they were. But I think, as the
defendants argue, you need to tell me more as to why they were disqualified, and why that then qualifies as an unlawful act on the part of the defendants or each defendant. lump them all together. But their argument is correct. There is no basis for Again, you can't
me, and there is not enough facts alleged for me to make that leap that simply because a refrigerator is disqualified that makes selling that refrigerator three years earlier an unlawful act under the UCL. And the problem with the unfair element of this claim is, as the defendants argue, there is no facts in the complaint that show an injury suffered by your clients. So again, all these arguments raised by the defendants I found to have merit, and that you'll have to take into consideration to see if you can allege facts sufficient to maintain this type of claim. Mr. Bellamy, I haven't stopped after each cause of
Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Case Filed09/06/12 05/21/13 Page Page28 29of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 defendants. action, but is there a reason why I shouldn't give them leave to amend, at least one more shot to try to plead a UCL claim? I'm letting you make a record, but it's pretty difficult at this stage of the proceedings. MR. BELLAMY: Based on what Your Honor just said, I
28
don't know that there is a single dispositive argument I can make that would dispose of all three at this stage. THE COURT: advertising law. Seventh claim is under the false
Again, the defendants correctly argue that
the plaintiffs have failed to plead the specificity required to support a claim under the false advertising law. Plaintiffs
have failed to clarify what their understanding or perception of the sticker was in the complaint. omission. There are a number of other arguments raised by the That the complaint failed to specify the time, That's just a glaring
place, or medium in which the false advertisement was communicated, the content of the allegedly false advertising. Again, if you're going to rely just simply on the fact that your clients looked at the sticker, you're going to have problems maintaining this claim. And again, be very careful
about trying to lump all three defendants together in this type of claim. And then finally, the eighth cause of action, the laundry list of state consumer protection acts. I have a lot
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page29 30of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of concerns about that complaint -- or about that claim as defendants point out. to strike. I don't necessarily disagree that the motion to strike may be premature. It may be better presented at the
29
And it's the basis of a separate motion
motion to certify the class. it.
But I'm not sure why you included
Because it just, I think, is going to cause you a lot of
problems in terms of trying to certify a class. There is a footnote in here that got me to thinking, how can your two clients, for example, have standing to assert a claim under Virginia law, some Virginia statute that I know nothing about? Just simply citing a statute from a state and then telling me: Based on all the other allegations in this
complaint, the defendants have violated these 49 other statutes. It doesn't meet the pleading requirements under It's the classic conclusory allegation.
Iqbal or Twombly.
If you really are going to try to maintain a cause of action that says that they violated statutes in 49 states, this complaint is going to be 300 pages long. to have some specificity in there. You're going to have
And I'm not sure, even if
you do that, that's not going to cause problems for you down the road with your motion to certify the class. And then this whole standing issue, I don't know if you thought about that, and maybe you can explain to me, but
30
how can someone who lives in the Eastern District of California sue for a violation of a statute in Virginia, or Utah, Nebraska? MR. FISHER: We cited to the Court several cases
where courts have allowed claims like this to go forward and didn't require class representatives who were from each of the various states that were alleged. THE COURT: You cited a case from the Eastern
District of New York and a case from the Southern District of Ohio. You know how much I like district courts in Ohio, and I
almost like the Eastern District of New York as much. Are there any Ninth Circuit cases, even cases within our court, or the Central District, Northern District of California? Because if there's not, I think you're going to
have real problems with this type of claim in this type of case. MR. FISHER: We have another case in the Central
District of California which we cite in our briefs, the Forcellati versus Hyland's case where a court permitted -denied a motion to dismiss of a similar claim. But we'll take
Your Honor's comments seriously and give serious thought to whether this is an appropriate claim. THE COURT: I would also look at the standing issue.
Again, it's just raised in the reply brief in a footnote, but that causes me some concerns.
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page31 32of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 So what I'm going to do is as follows: the motion to dismiss in its entirety.
31
I'm granting
I am granting
plaintiffs leave to amend on all the claims except for the unjust enrichment claim. That is claim number four. And that
is dismissed with prejudice. In terms of the motion to strike, I'm just denying it at this point as moot in light of my ruling on the motion to dismiss. I'm sure I may see that again and those arguments
again if you re-plead that eighth claim in the amended complaint. I'm going to give you 20 days to think about the Court's comments and then get your amended complaint on file. Mr. Bellamy, actually if you want an order reflecting the Court's ruling today, go ahead and prepare one, submit it to me within ten days, and then we'll have the order on the docket. But I'm going to give you 20 days from today to file an amended complaint, and then you'll have the normal period of time to respond to the amended complaint, whether it be simply an answer or a second motion to dismiss. I have one question out of curiosity, and I know sometimes it puts lawyers in a difficult position because it may involve strategy, and if that's the answer to my question, it's fine. It's really asked more out of curiosity, Mr. Fisher. But out of all the districts in the United States, why did you
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page32 33of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it. choose -- and I know one plaintiff lives in the Eastern District of California -- and other than Mr. Benbrook, who is local counsel -- although this isn't a factor -- but there aren't any lawyers from the Eastern District of California involved in this case, none of the defendants have their principal place of business in the Eastern District of California, and we're the busiest court in the country.
32
So why
would a lawyer choose to file this type of lawsuit in the busiest district in the country right now? MR. FISHER: Your Honor, honestly, I was not aware
that this is the busiest court in the country, and my hat's off to you for having to deal with that. It really was because Mr. DeiRossi lives in Stockton, which is in this district. This district is proximate to -It's not that far from me. And
I'm in the Northern District.
that was the thought process there, Your Honor. THE COURT: Okay. Well, it's here. We'll deal with
I just want to give you a heads up that we're a little
slower than other districts right now just given our caseload, but we'll deal with these. gentlemen. (Court adjourned. 10:20 a.m.) Questions? Answers? Thank you,
Case Case2:12-cv-00125-TLN-JFM 2:12-cv-00125-TLN-JFM Document Document72-2 53 Filed Filed09/06/12 05/21/13 Page Page33 34of of33 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 /s/ DIANE J. SHEPARD DIANE J. SHEPARD, CSR #6331, RPR Official Court Reporter United States District Court CERTIFICATION
33
I, Diane J. Shepard, certify that the foregoing is a correct transcript from the record of proceedings in the above-entitled matter.

2nd Mot Dismiss Kyle Dei Rossi V Whirlpool

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

2nd Mot Dismiss Kyle Dei Rossi V Whirlpool

Încărcat de

Drepturi de autor:

Formate disponibile

Case 2:12-cv-00125-TLN-JFM Document 72 Filed 05/21/13 Page 1 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72 Filed 05/21/13 Page 2 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72 Filed 05/21/13 Page 3 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72 Filed 05/21/13 Page 4 of 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 1 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 2 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Plaintiffs Fail to State a FAL Claim ...................................................................... 23

FURTHER LEAVE TO AMEND WOULD BE FUTILE ................................................ 24

TABLE OF AUTHORITIES Page

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 4 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 5 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 6 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 7 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 8 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 9 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 10 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 11 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 12 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 13 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 14 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 15 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 16 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 17 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 18 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 19 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 20 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 21 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 22 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 23 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 24 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 25 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 26 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 27 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Plaintiffs Fail to State a UCL Claim

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 28 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 29 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 30 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:12-cv-00125-TLN-JFM Document 72-1 Filed 05/21/13 Page 31 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

s/ Galen D. Bellamy Galen D. Bellamy

Case 2:12-cv-00125-TLN-JFM Document 72-2 Filed 05/21/13 Page 1 of 34

Reported by: DIANE J. SHEPARD, CSR 6331, RPR

DIANE J. SHEPARD, OFFICIAL COURT REPORTER, USDC -- (916) 554-7460

DIANE J. SHEPARD, OFFICIAL COURT REPORTER, USDC -- (916) 554-7460

Counsel state their appearances,

Good morning, Your Honor.

David Bower, Faruqi and Faruqi, for

Good morning, Your Honor.

Back in March I guess Boutin Jones was

DIANE J. SHEPARD, OFFICIAL COURT REPORTER, USDC -- (916) 554-7460

You just haven't put your name on the

strike the complaint.

from was filed in January, January 17, 2012.

DIANE J. SHEPARD, OFFICIAL COURT REPORTER, USDC -- (916) 554-7460

footnote in your reply, in your papers.

If not, is there something more you think

DIANE J. SHEPARD, OFFICIAL COURT REPORTER, USDC -- (916) 554-7460

agrees the stipulation covers it.

If you still want something out of an abundance of

DIANE J. SHEPARD, OFFICIAL COURT REPORTER, USDC -- (916) 554-7460

argument with respect to that supplemental authority.

DIANE J. SHEPARD, OFFICIAL COURT REPORTER, USDC -- (916) 554-7460

You could argue it at today's hearing if I

You don't explain that in the complaint, but that's the