Hawes v. Macy's Inc.
Hawes v. Macy's Inc.
Opinion of the Court
This civil action is before the Court upon Defendant Macy's Inc. ("Macy's")'s motion to dismiss for lack of standing and failure to state a claim (Doc. 17) and the parties' responsive memoranda (Docs. 25 and 34).
I. FACTS AS ALLEGED BY THE PLAINTIFF
For purposes of this motion to dismiss, the Court must: (1) view the complaint in the light most favorable to Plaintiffs; and (2) take all well-pleaded factual allegations as true. Tackett v. M & G Polymers ,
Plaintiffs Sara Hawes and Amy Hill are unsatisfied customers who claim that the bed sheets they purchased in California and Missouri, respectively, were labeled with inflated thread counts. Plaintiff Hawes claims that her 900 thread-count sheets were actually 249 thread-count and Plaintiff Hill claims that her 1000 thread-count sheets were "far less." (Doc. 1 at ¶¶ 11-12). Plaintiffs claim that Defendants Macy's, AQ Textiles LLC ("AQ"), and Creative Textile Mills Pvt. Ltd. ("Creative") are responsible for deceiving, misleading, and inducing them - and the American consumer public - into buying these bed sheets with false, inflated thread counts. (Id. at ¶¶ 1, 3-5, 24-29, 34-35, 47).
Plaintiffs claim that Macy's was aware that consumers associate higher thread counts with being higher in quality, being softer, and being more comfortable. (Id. at ¶¶ 1-2, 11-12, 21-23). Macy's allegedly made misleading statements regarding the bedding products on its website and in its retail stores. (Id. at ¶ 42). Plaintiffs claim Macy's knew or should have known that thread counts were being inaccurately reported. (Id. at ¶¶ 46, 50). Plaintiffs allege they have suffered because the products they purchased with inaccurate thread counts did not perform with the same characteristics as sheets with the thread counts as advertised, and that the products were not fit for use. (Id. at ¶¶ 80, 160).
Plaintiffs assert ten claims against Macy's: (1) violation of the Magnuson-Moss Warranty Act ("MMWA"); (2) violation of the Missouri Merchandising Practices Act ("MMPA"); (3)-(5) violations of the California Unfair Competition Law ("UCL"), (6) violation of California's Fair Advertising Law ("FAL") (California Business and Professions Code); (7) violation of the California Consumer Legal Remedies Act ("CLRA"); (8) breach of the implied warranty of merchantability; (9) breach of *1090express warranty; and (10) fraud. (Id. at ¶¶ 68-182).
II. STANDARD OF REVIEW
A. Lack of Standing
Under Federal Rule of Civil Procedure (12)(b)(1), a court may dismiss a case for lack of subject matter jurisdiction. Standing to sue is a threshold jurisdictional requirement in every federal action. Sicom Sys., Ltd. v. Agilent Techs., Inc.,
Where a defendant raises the issue of lack of subject matter jurisdiction under Rule 12(b)(1), the plaintiff has the burden of proving jurisdiction in order to survive the motion to dismiss. Moir v. Greater Cleveland Reg'l Transit Auth.,
B. Failure to State a Claim
A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) operates to test the sufficiency of the complaint and permits dismissal of a complaint for "failure to state a claim upon which relief can be granted." To show grounds for relief, Fed. R. Civ. P. 8(a) requires that the complaint contain a "short and plain statement of the claim showing that the pleader is entitled to relief."
While Fed. R. Civ. P. 8"does not require 'detailed factual allegations,' ... it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal ,
Accordingly, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Iqbal ,
III. ANALYSIS
A. Lack of Standing
Defendants urge the Court to dismiss for lack of standing all of Plaintiffs' claims that are based on products that the named Plaintiffs did not actually purchase. Here, Plaintiffs Hawes and Hills each only purchased one set of AQ sheets at Macy's. However, Plaintiffs seek to assert claims on behalf of all persons who purchased *1091sheets from Macy's "that [were] manufactured or supplied by [AQ] and/or [Creative] and that [were] packaged or advertised with a representation regarding thread count." (Doc. 1 at ¶ 51).
"Courts are split as to whether plaintiffs have standing to assert claims relating to products they themselves did not purchase, but which are substantially similar to products they did purchase." Quinn v. Walgreen Co. ,
However, "[t]he majority of the courts that have carefully analyzed the question hold that a plaintiff may have standing to assert claims for unnamed class members based on products he or she did not purchase so long as the products and alleged misrepresentations are substantially similar." Brown v. Hain Celestial Group, Inc. ,
In evaluating whether purchased and unpurchased products are substantially similar, courts consider both physical similarities between the products and similarities between the alleged misrepresentations. See Mednick v. Precor. Inc. , No.
Here, the Court finds that Plaintiffs have adequately alleged that the purchased and unpurchased products are substantially similar physically (bed sheets made/imported by AQ/Creative and sold at Macy's) and the alleged misrepresentations are similar (inflated thread counts). Thus, under the majority approach, Plaintiffs' claims based on products they did not purchase should not be dismissed at this point.
Moreover, the Court agrees with Plaintiffs that the analysis of whether Plaintiffs have standing to bring claims on behalf of other purchasers is more appropriate at the class certification stage, not upon a motion to dismiss. See *1092Quinn v. Walgreen Co. ,
Accordingly, Macy's argument that Plaintiffs lack standing is put to bed until the class certification stage.
B. Motion to Dismiss for Failure to State a Claim
Next, Macy's contends that Plaintiffs' complaint itself suffers from inflated counts and seeks to dismiss all claims.
1. Magnuson-Moss Warranty Act (Count I)
First, Macy's moves to dismiss claims under the MMWA. To adequately plead a violation of the MMWA, a plaintiff must allege "(i) the item at issue was subject to a warranty; (ii) the item did not conform to the warranty; (iii) the seller was given reasonable opportunity to cure any defects; and (iv) the seller failed to cure the defects within a reasonable time or a reasonable number of attempts." Temple v. Fleetwood Enterprises, Inc. , 133 Fed. App'x 254, 268 (6th Cir. 2005).
The MMWA provides that "a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief."
A written warranty is defined as "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 and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time."
The stated thread counts on sheets do not constitute a written warranty under the MMWA. Even if thread count provides a certain character and quality over time as Plaintiffs argue, the thread count listed on the bedsheets does not list a specified level of performance over a specified period of time. See Beautiful Home Textiles (USA) v. Burlington Coat Factory Warehouse Corp. ,
Accordingly, Macy's motion to dismiss Count I is granted.
2. Breach of Warranty of Merchantability (Count VIII)
Macy's contends that Plaintiffs have failed to state a claim for breach of implied warranty of merchantability.
To state a claim for breach of implied warranty of merchantability under Missouri law, a plaintiff must demonstrate "(1) that a merchant sold goods, (2) which were not 'merchantable' at the time of the sale, (3) injury and damages to the plaintiff or his property (4) which were caused proximately or in fact by the defective nature of the goods, and (5) notice to the seller of the injury." Hope v. Nissan N. Am., Inc. ,
Under both California and Missouri law, in order to adequately plead a breach of the implied warranty of merchantability, a plaintiff must show that "the product lacks even the most basic degree of fitness for ordinary use," Birdsong v. Apple, Inc. ,
Plaintiffs contend that the sheets lack "the most basic degree of fitness for ordinary use" because they allege that sheets with higher thread counts are of better quality, softer, and more comfortable for sleeping than products with lesser thread counts. (Doc. 1 at ¶ 1). Notably, the complaint contains no allegations that Plaintiffs attempted to use the sheets and were harmed because the sheets were unfit for ordinary use.
While the complaint blanketly alleges that the sheets were "unfit for the ordinary purpose for which they are used," (Id. at ¶ 160), the ordinary use of a bed sheet is for the purpose of sleeping. No juror, except possibly the heroine of The Princess and the Pea , could reasonably find that 249-count bed sheets are entirely unfit for sleeping.
Here, Plaintiffs' disappointment in the quality of the bed sheets is insufficient to establish a breach of the implied warranty of merchantability. Stearns ,
Accordingly, Macy's motion to dismiss Count VIII is granted.
3. Fraud Claims (Counts II, III, IV, V, VI, VII, X)
Macy's argues that Plaintiffs' fraud claims should be dismissed for failure to plead those claims with particularity. (Doc. 17-1 at 11-14).
Defendant contends that seven of Plaintiffs' claims sound in fraud. Count X is for fraud under Missouri and California law. Plaintiffs also bring claims under the MMPA (Count II); the UCL (Counts III, *1094IV, V); the FAL (California Business and Professions Code) (Count VI); and the CLRA (Count VII).
Violations of the UCL, CLRA, and FAL all sound in fraud and thus are governed by Fed. R. Civ. P. 9(b)'s heightened pleading standing. See Kearns v. Ford Motor Co.,
Rule 9(b) provides that a party alleging fraud "must state with particularity the circumstances constituting" the fraud. "Averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged," such that defendants are given sufficient "notice of the particular misconduct" to enable them to "defend against the charge and not just deny that they have done anything wrong." Vess ,
Who: The complaint specifies that Macy's misrepresented the thread count of sheets that it sold. (Doc. 1 at ¶ 170)
What : Bed sheets manufactured/imported by AQ and Creative and sold at Macy's. (Id. at ¶¶ 12-13, 38-39, 42).
When: Plaintiff Hawes alleges she purchased the sheets at issue in or around May 2017. (Id. at ¶ 12). Plaintiff Hill alleges she purchased the sheets in the summer or fall of 2016. (Id. at ¶ 11).
Where: Plaintiff Hawes purchased the sheets at Macy's retail store located at 8500 Beverly Blvd. in Los Angeles, CA. (Id. at ¶ 12). Plaintiff Hill purchased her sheets at a Macy's in St. Louis County, MO. (Id. at ¶ 11).
How: Plaintiffs allege that Macy's was aware or should have been aware that its representations regarding thread count were not truthful. (Id. at ¶¶ 25-29). Plaintiffs allege that Macy's misrepresentations were intended to induce Plaintiffs to purchase the sheets. (Id. at ¶ 178). Plaintiffs allege that they relied on the thread count misrepresentation in purchasing the sheets. (Id. at ¶¶ 11-12, 21, 47, 57-58, 115).
Allegations such as these have been found to give "ample notice of the particular circumstances underlying Plaintiffs' claims against [the Defendant]." Strumlauf v. Starbucks Corp. ,
For these reasons, the Court finds that Plaintiffs have alleged facts demonstrating that a reasonable consumer could be misled by Macy's thread count misrepresentations, and Plaintiffs have alleged those facts with sufficient specificity.
*1095Accordingly, Macy's motion to dismiss Counts II, III, IV, V, VI, VII, X for failing to plead with particularity is denied.
4. Timely Notice (Counts VII, VIII, IX)
Next, Defendants argue that Plaintiffs' claim for damages under the CLRA and Plaintiffs' breach of warranty claims
The CLRA requires a plaintiff to provide notice to a party allegedly violating the Act "[t]hirty days or more prior to the commencement of an action for damages pursuant to [the CLRA]."
Under California law, a buyer alleging a breach of warranty must "within a reasonable time after he or she discovers or should have discovered any breach, notify the seller of breach or be barred from any remedy."
First, in Plaintiffs' opposition to the motion to dismiss, they state that they did provide notice to Macy's on June 27, 2017, over four months before filing the complaint. (Doc. 25 at 13-14). However, the complaint contains no such allegation. Both the CLRA and breach of warranty claims require the plaintiff to plead pre-suit notice. Minkler ,
Second, Plaintiffs argue that prelitigation notice was not necessary because it would have been futile. (Doc. 25 at 12-14). But Plaintiffs do not cite any case law indicating that the notice requirement can be waived for futility. Therefore, the Court finds that Plaintiffs have failed to adequately plead a claim for breach of express warranty and violation of the CLRA because they failed to properly plead notice.
Yet, courts in California have explained that dismissal with prejudice is *1096unnecessary where California's notice requirement has not been met. The notice "requirement exists in order to allow a defendant to avoid liability for damages if the defendant corrects the alleged wrongs within 30 days after notice, or indicates within that 30-day period that it will correct those wrongs within a reasonable time." Morgan v. AT&T Wireless Serv., Inc. ,
Accordingly, Defendants' motion to dismiss Counts VII and IX is granted and those counts are dismissed without prejudice.
IV. CONCLUSION
For the foregoing reasons:
1) Defendant Macy's motion to dismiss (Doc. 17) is GRANTED IN PART and DENIED IN PART as follows:
a. Defendant's motion to dismiss for lack of standing as to products not actually purchased by Plaintiffs is DENIED;
b. Defendant's motion to dismiss Counts I and VIII is GRANTED , and those claims are DISMISSED with prejudice ;
c. Defendants' motion to dismiss Counts VII and IX is GRANTED , and those claims are DIMISSED without prejudice ; and
d. Defendants' motion to dismiss Counts II, III, IV, V, VI, X is DENIED , and those claims shall proceed.
IT IS SO ORDERED.
Dismissal of state law implied warranty claims requires "the same disposition with respect to an associated MMWA claim." Stearns v. Select Comfort Retail Corp. , No. 08-2746,
Macy's additionally argues that Plaintiffs' fraud claims should be dismissed because they are barred by the economic loss rule. (Doc. 17-1 at 16-17). This argument is not well-taken. California and Missouri recognize an exception to the economic loss doctrine in instances of fraudulent inducement. See, e.g. , Erlich v. Menezes ,
As noted supra , Plaintiffs' breach of the implied warranty of merchantability (Count VIII) is dismissed.
Reference
- Full Case Name
- Sara HAWES v. MACY'S INC.
- Cited By
- 4 cases
- Status
- Published