Wallace v. Sharkninja Operating, LLC,, No. 5:2018cv05221 - Document 83 (N.D. Cal. 2020)
Court Description: ORDER GRANTING IN PART, WITHOUT LEAVE TO AMEND, AND DENYING IN PART 69 MOTION TO DISMISS THIRD AMENDED COMPLAINT. Signed by Judge Beth Labson Freeman on 11/23/2020.(blflc1S, COURT STAFF) (Filed on 11/23/2020)
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Wallace v. Sharkninja Operating, LLC, Doc. 83 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 1 of 15 1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 8 KRYSTAL WALLACE, individually, and on behalf of a class of similarly situated individuals, Plaintiff, 9 v. United States District Court Northern District of California 10 11 SHARKNINJA OPERATING, LLC, a Massachusetts limited liability company, 12 Defendant. Case No. 18-cv-05221-BLF ORDER GRANTING IN PART, WITHOUT LEAVE TO AMEND, AND DENYING IN PART MOTION TO DISMISS THIRD AMENDED COMPLAINT [Re: ECF 69] 13 14 Defendant SharkNinja Operating, LLC (“SharkNinja”) has filed a motion to dismiss in part 15 16 the third amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The motion is 17 opposed by Plaintiff Krystal Wallace (“Wallace”). The Court previously determined that the 18 motion is appropriate for decision without oral argument and vacated the hearing. See Order 19 Vacating Hearing, ECF 79. For the reasons discussed below, the motion is GRANTED IN PART, WITHOUT LEAVE 20 21 22 23 TO AMEND, and DENIED IN PART. I. BACKGROUND This putative class action arises from an alleged design defect in blenders manufactured 24 and distributed by SharkNinja. The blenders in question have a unique “Stacked Blade Assembly” 25 consisting of multiple sharp blades mounted at different heights inside the blender pitcher. The 26 Stacked Blade Assembly is separate from, and does not lock to, the blender base, pitcher, or lid. 27 Wallace’s definition of the alleged defect in this blender design has evolved over the life of this 28 lawsuit, as described below. Dockets.Justia.com Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 2 of 15 1 Original Compliant and First Amended Complaint 2 Wallace alleged in both her original complaint and first amended complaint (“FAC”) that 3 the blenders are defective because the Stacked Blade Assembly does not lock into place, such that 4 consumers are at an increased risks of lacerations during use and cleaning of the blender. See 5 Compl. ¶ 2, ECF 1; FAC ¶ 2, ECF 20. There is no dispute that this is by design – the Stacked 6 Blade Assembly is separate from, and does not lock to, the blender base, pitcher, or lid. See 7 Compl. ¶¶ 3-4; FAC ¶¶ 3-4. 8 United States District Court Northern District of California 9 SharkNinja successfully moved to dismiss the FAC under Rule 12(b)(6), asserting that Wallace cannot maintain a lawsuit simply because she would prefer a different design in which the 10 blade assembly locks into place. See Mot. to Dismiss FAC, ECF 23. At the motion hearing, the 11 Court advised Wallace that more specificity was required as to the nature of the defect. The Court 12 also noted that the FAC excluded from the class anyone who suffered personal injuries from the 13 blender, but it also alleged that Wallace was cut by the blender. The Court made an oral ruling 14 dismissing the FAC in its entirety with leave to amend, and issued a brief written order. See Order 15 Memorializing Oral Ruling, ECF 47. 16 Second Amended Complaint 17 Wallace filed a second amended complaint (“SAC”) refining her defect allegations as 18 follows: “the Ninja Stacked Blade Blenders contain one or more design defects whereby the 19 Stacked Blade Assembly improperly dislodges while blending (the “Stacked Blade Defect” or 20 “Defect”). SAC ¶ 2 (emphasis added), ECF 45. Wallace alleged that “the Stacked Blade Defect 21 can result in the Stacked Blade Assembly cracking, shattering, or otherwise damaging the 22 blending pitcher when it detaches while blending.” Id. (emphasis added). 23 SharkNinja again moved to dismiss under Rule 12(b)(6), but this time with only limited 24 success. The Court determined that although “[e]arlier versions of Wallace’s complaint were not 25 clear as to what constituted the alleged defect,” that problem had “been remedied.” See Order 26 Granting in Part Mot. to Dismiss SAC at 9, ECF 67. The Court found that Wallace had clarified 27 that she was not alleging merely that a locked blade assembly would be a safer alternative to the 28 subject blenders’ design, but was alleging that the Stacked Blade Assembly dislodges in an unsafe 2 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 3 of 15 1 manner during normal operation of the blenders. See id. at 10. The Court rejected SharkNinja’s 2 argument that Wallace must identify the cause of the defect, stating “Wallace alleges that the 3 mechanism holding the Stacked Blade Assembly in place during blending is flawed, resulting in 4 the Stacked Blade Assembly coming dislodged.” Id. at 11. The Court concluded that, “[h]aving 5 pointed SharkNinja to the defective component of the blender, Wallace need not plead whether the 6 shaft is not quite long enough, or the materials from which [the shaft is] made were not strong 7 enough, or any particular cause of the defect.” Id. (quotation marks omitted). United States District Court Northern District of California 8 In light of Wallace’s clarification regarding the alleged defect, the Court found that most 9 claims in the SAC were adequately alleged. The Court denied SharkNinja’s motion to dismiss 10 Claim 2 for violation of California’s unfair competition law (“UCL”), Cal. Bus. & Prof. Code § 11 17200 et seq., to the extent that claim is brought under the unlawful prong; Claim 3 for breach of 12 implied warranty under the Song-Beverly Consumer Warranty Act, Cal. Civ. Code §§ 1792 and 13 1791.1, et seq.; Claim 4 for breach of implied warranty under the Magnuson-Moss Warranty Act, 14 15 U.S.C. § 2303 et seq.; and Claim 5 for unjust enrichment. See Order Granting in Part Mot. to 15 Dismiss SAC at 26, ECF 67. 16 The Court found the SAC lacking, however, with respect to Claim 1 for violation of 17 California’s Consumers Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750, et seq.; Claim 2 18 for violation of the UCL to the extent brought under the fraud and unfair prongs; and the claim for 19 injunctive relief. See Order Granting in Part Mot. to Dismiss SAC at 26. The Court dismissed 20 Claim 1, portions of Claim 2, and the claim for injunctive relief, with leave to amend. See id. 21 Third Amended Complaint 22 The operative third amended complaint (“TAC”) reiterates the definition of the defect set 23 forth in the SAC: “the Ninja Stacked Blade Blenders contain one or more design defects whereby 24 the Stacked Blade Assembly improperly dislodges while blending (the “Stacked Blade Defect” or 25 “Defect”).” TAC ¶ 2, ECF 68. The TAC also repeats the allegation that “the Stacked Blade 26 Defect can result in the Stacked Blade Assembly cracking, shattering, or otherwise damaging the 27 blending pitcher when it detaches while blending.” Id. However, the TAC contains the following 28 new allegations regarding the cause of the Stacked Blade Defect: 3 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 4 of 15 1 On information and belief, this defect occurs as a result of over-pressurization in the pitcher while blending thicker materials, such as ice or frozen fruit, that results in the blade assembly pushing the lid up such that the stacked blade assembly dislodges and/or the pitcher exploding from the pressure. This issue is exacerbated by SharkNinja’s use of plastic components, including the shaft of the Stacked Blade Assembly, the entirety of the pitcher and lid, and the blending gears, which wear down quickly. Additionally, because the Stacked Blade Assembly is not locked in place while blending, larger particles such as ice or frozen fruit force the Stacked Blade Assembly to move during use and cause severe stress cracks around the base of the pitcher, as evidenced by consumer complaints, some of which are copied below. 2 3 4 5 6 7 TAC ¶ 31, ECF 68. Wallace also adds new allegations of customer complaints regarding the 8 defect. See TAC ¶¶ 39, 41-42. SharkNinja argues that the new allegations in the TAC do not cure the pleading United States District Court Northern District of California 9 10 deficiencies that resulted in the Court’s earlier dismissal of the CLRA claim, portions of the UCL 11 claim, and the claim for injunctive relief. Wallace asserts that the CLRA and UCL claims are 12 pleaded with adequate specificity in the TAC. She does not address the claim for injunctive relief. 13 II. LEGAL STANDARD “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a 14 15 claim upon which relief can be granted tests the legal sufficiency of a claim.” Conservation Force 16 v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quotation marks and citation omitted). While 17 a complaint need not contain detailed factual allegations, it “must contain sufficient factual matter, 18 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 19 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is 20 facially plausible when it “allows the court to draw the reasonable inference that the defendant is 21 liable for the misconduct alleged.” Id. When evaluating a Rule 12(b)(6) motion, the district court is limited to the allegations of 22 23 the complaint, documents incorporated into the complaint by reference, and matters which are 24 subject to judicial notice. Louisiana Mun. Police Employees’ Ret. Sys. v. Wynn, 829 F.3d 1048, 25 1063 (9th Cir. 2016) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 26 (2007)). 27 28 III. DISCUSSION SharkNinja challenges five aspects of the TAC. First, SharkNinja contends that Wallace 4 United States District Court Northern District of California Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 5 of 15 1 has waived or abandoned any claims based on a theory of fraudulent misrepresentation, but the 2 TAC nonetheless refers to “misrepresentations.” SharkNinja asks the Court to dismiss any 3 misrepresentation-based claims. Second, SharkNinja seeks dismissal of the fraudulent omission- 4 based claims brought under the CLRA and the fraud prong of the UCL. SharkNinja asserts that 5 Wallace still has not pled that SharkNinja knew of the Stacked Blade Defect prior to Wallace’s 6 purchase of the blender. Third, SharkNinja seeks dismissal of the claim under the unfair prong of 7 the UCL. Fourth, SharkNinja seeks dismissal of the claim for injunctive relief, pointing out that 8 Wallace has not made any changes to that claim. Fifth, SharkNinja asks the Court to dismiss or 9 strike numerous allegations on the grounds that they are either “irrelevant holdovers” from prior 10 pleadings or “improper attempts to exceed the scope of the Court’s order granting leave to 11 amend.” Mot. to Dismiss at 1, ECF 69. 12 In opposition, Wallace contends that her allegations regarding SharkNinja’s 13 misrepresentations give context to her fraudulent omission-based claims. She also asserts that she 14 has pled SharkNinja’s pre-sale knowledge of the Stacked Blade Defect, such that her claims under 15 the CLRA and fraud prong of the UCL should go forward. Wallace additionally argues that she 16 has made out a claim under the unfair prong of the UCL. She does not respond to SharkNinja’s 17 motion to dismiss her claim for injunctive relief. Finally, Wallace disputes SharkNinja’s 18 characterization of certain allegations in the TAC as irrelevant or improper. 19 A. Misrepresentation-Based Claims 20 In its prior ruling on SharkNinja’s motion to dismiss the SAC, the Court noted that 21 Wallace’s CLRA claim was based on a theory of fraudulent omission rather than fraudulent 22 misrepresentation. See Order Granting in Part Mot. to Dismiss SAC at 8-9, ECF 67. The Court 23 cited California law for the proposition that “[a]n actionable fraudulent omission is either an 24 omission that is contrary to a representation actually made by the defendant, or an omission of a 25 fact the defendant was obliged to disclose.” See id. at 8 (quotation marks and citation omitted). 26 The Court determined that Wallace was proceeding only under the latter theory, that is, that 27 SharkNinja had a duty to disclose the Stacked Blade Defect but failed to do so. See id. at 8-9. 28 SharkNinja asserts that Wallace nonetheless includes several paragraphs in the TAC alleging that 5 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 6 of 15 1 SharkNinja made affirmative misrepresentations. SharkNinja seeks dismissal of any claim based 2 on misrepresentations rather than omissions. United States District Court Northern District of California 3 In response, Wallace states that she “has previously conceded that she is only pursuing a 4 fraudulent omission theory of liability.” Opp. at 2, ECF 73. She contends that the challenged 5 allegations regarding SharkNinja’s representations are relevant to her fraudulent omission theory. 6 She asserts that SharkNinja was obligated to disclose the Stacked Blade Defect both because it 7 was a known safety hazard and because it was contrary to representations actually made by 8 SharkNinja. Under California law, a duty to disclose may arise “when the defendant makes partial 9 representations but also suppresses some material facts.” Bigler-Engler v. Breg, Inc., 7 Cal. App. 10 5th 276, 311 (2017). As SharkNinja points out in its reply, however, this Court has construed 11 Wallace’s CLRA claim narrowly to encompass only a theory that SharkNinja had an obligation to 12 disclose a known safety hazard but failed to make such a disclosure. See Order Granting in Part 13 Mot. to Dismiss SAC at 8-9. In reviewing the briefing on SharkNinja’s prior motion to dismiss 14 the SAC, as well as this Court’s prior order, the Court concludes that Wallace previously 15 abandoned any fraudulent omission claim based on SharkNinja’s partial representations. 16 Moreover, Wallace has failed to identify any representations in the TAC that are contrary 17 to the existence of the Stacked Blade Defect. She points to paragraph 17, which alleges that 18 “Plaintiff further relied on Defendant’s representation that the Ninja Blender’s ‘Total Crushing 19 Pitcher pulverizes ice to snow in seconds for creamy frozen drinks and smoothies,’ which 20 indicated to Plaintiff that the pitcher and blades were secured together as one unit.” TAC ¶ 17. 21 The representation that the blender has the “total crushing” power to pulverize ice to snow says 22 nothing about the blender’s design. No reasonable consumer would believe that this 23 representation indicates that the pitcher and blades are secured together as one unit. See Becerra 24 v. Dr. Pepper/Seven Up, Inc., 945 F.3d 1225, 1229 (9th Cir. 2019) (“[N]o reasonable consumer 25 would assume that Diet Dr. Pepper’s use of the term ‘diet’ promises weight loss or 26 management.”). 27 Accordingly, the Court finds that Wallace has abandoned, or failed to allege facts to 28 support, any claims based on a theory of fraudulent misrepresentation or on a theory of fraudulent 6 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 7 of 15 1 omission grounded in partial representations. The Court GRANTS SharkNinja’s motion to 2 dismiss any claims based on alleged misrepresentations. 3 B. 4 SharkNinja next asks the Court to dismiss Wallace’s fraudulent omission-based claims 5 with prejudice, asserting that she again has failed to plead SharkNinja’s pre-sale knowledge of the 6 Stacked Blade Defect. The fraudulent omission-based claims – the CLRA claim and the UCL 7 claim based on the fraud prong – are discussed below. 8 United States District Court Northern District of California Fraudulent Omission-Based Claims under CLRA and UCL Fraud Prong 1. CLRA Claim (Claim 1) 9 In evaluating Claim 1 under the CLRA in its prior dismissal order, the Court held that 10 Wallace must plead the following elements: (1) the existence of the Defect; (2) that the Defect 11 posed an “unreasonable safety hazard”; and (3) SharkNinja’s knowledge of the Defect prior to 12 Wallace’s purchase. See Order Granting in Part Mot. to Dismiss SAC at 9, ECF 67. The Court 13 determined that Wallace had pled the first two elements, but not the third. See id. at 9-17. 14 With respect to the third element, SharkNinja’s knowledge of the Stacked Blade Defect, 15 the SAC alleged on information and belief that “since at least 2012, SharkNinja knew about the 16 Stacked Blade Defect through sources not available to consumers, including pre-release testing 17 data, early consumer complaints, high failure rates and replacement part sales data, and other 18 internal sources, including warranty data and private messages via social media and call places to 19 customer support.” SAC ¶ 38. The Court found those allegations inadequate to show knowledge, 20 as they were merely conclusory. See Order Granting in Part Mot. to Dismiss SAC at 13-14. The 21 Court determined that the only facts in the SAC relevant to SharkNinja’s pre-sale knowledge were 22 customer complaints. See Order Granting in Part Mot. to Dismiss SAC at 13-14. 23 Knowledge may be inferred from customer complaints under some circumstances. 24 Williams v. Yamaha Motor Co., 851 F.3d 1015, 1028 (9th Cir. 2017). In Williams, the Ninth 25 Circuit reversed the district court’s dismissal of consumer fraud claims where knowledge was 26 based on customer complaints, finding allegations of a “unusually high volume of complaints 27 specific to” the alleged defect, along with a description of the defendants’ consumer response 28 system, sufficient to show the defendants’ knowledge of the defect for pleading purposes. See id. 7 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 8 of 15 1 Williams acknowledged that the plaintiffs had not alleged specific names and dates with respect to 2 the customer complaints, noting that some district courts have dismissed consumer fraud claims as 3 speculative absent specific allegations that customer complaints were made pre-sale and that the 4 defendant actually received the complaints. See id. at 1027. However, Williams distinguished 5 those decisions from the case before it, finding adequate plaintiffs’ allegations of the approximate 6 timing of the customer complaints and explanation that the defendants maintained “a private 7 internal complaint system” such that the details of the complaint were not available to the public. 8 Id. at 1027-28. United States District Court Northern District of California 9 Applying Williams to the SAC, this Court found that the customer complaints upon which 10 Wallace relied either did not describe the Stacked Blade Defect or did not involve the Ninja 11 Professional Blender model number BL660 purchased by Wallace. See Order Granting in Part 12 Mot. to Dismiss SAC at 16. The Court indicated that Wallace could have relied on customer 13 complaints regarding other models if she had alleged that they were sufficiently similar to the 14 purchased BL660 model. Id. The Court found Wallace had not alleged such similarity or any 15 other facts from which SharkNinja’s pre-sale knowledge could be inferred. Id. at 16-17. 16 SharkNinja contends that the TAC has not cured these pleading deficiencies. SharkNinja 17 first addresses Wallace’s new allegation that “unbeknownst to consumers, sometime between 18 January and June 2018, SharkNinja modified the Stacked Blade Assembly to include a metal tip as 19 opposed to a plastic tip where the Stacked Blade Assembly supposedly ‘connects’ with the lid.” 20 TAC ¶ 38. This allegation apparently is intended to suggest that SharkNinja recognized and 21 corrected a design defect relating to the plastic tip. SharkNinja argues that the allegation regarding 22 the switch to a metal tip in 2018 is implausible in light of other allegations in the TAC suggesting 23 earlier versions of the blender had a metal tip. SharkNinja also points out that it is unclear 24 whether the asserted design modification occurred before Wallace’s March 2018 purchase, 25 because the alleged time frame for the asserted modification runs from January to June 2018. 26 After completion of the briefing on the present motion to dismiss, Wallace withdrew the allegation 27 regarding the asserted design modification. See Stipulation, ECF 78; Def.’s RJN, ECF 80. She 28 filed a stipulation stating, “Plaintiff, without averring as to or denying the accuracy of such 8 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 9 of 15 1 statement, hereby withdraws the following allegation at paragraph 38 of her Third Amended 2 Complaint (Rec. Doc. 68): ‘In fact, unbeknownst to consumers, sometime between January and 3 June 2018, SharkNinja modified the Stacked Blade Assembly to include a metal tip as opposed to 4 a plastic tip where the Stacked Blade Assembly supposedly ‘connects’ with the lid.’” Id. The 5 Court therefore has not considered that allegation. United States District Court Northern District of California 6 SharkNinja next challenges Wallace’s new allegation that “SharkNinja heavily relies on its 7 social media platforms and relationships with its authorized retailers to provide feedback on 8 consumer experiences.” TAC ¶ 39. Wallace alleges that SharkNinja monitors its own social 9 media accounts and the websites of retailers, including Target and Amazon.com, and responds to 10 customers’ questions and complaints. See id. The TAC contains screenshots of several customer 11 complaints posted on SharkNinja’s Facebook page and on the websites of Target and 12 Amazon.com as evidence that SharkNinja had pre-sale knowledge of the Stacked Blade Defect. 13 See TAC ¶¶ 39, 42. SharkNinja argues that these complaints were posted after Wallace purchased 14 her blender in March 2018, do not relate to the Stacked Blade Assembly dislodging during 15 operation, and/or do not relate to the BL660 model purchased by Wallace. 16 Taking these arguments in reverse order, Wallace alleges on information and belief that 17 “all Ninja Stacked Blade Blenders utilize the same or substantially identical Stacked Blade 18 Assemblies and the Stacked Blade Defect is the same for all Ninja Stacked Blade Blenders.” TAC 19 ¶ 33. SharkNinja points out that the same allegation was included in the SAC and, apparently, 20 found by the Court to be inadequate to allege similarity between SharkNinja’s products. Compare 21 TAC ¶ 33 with SAC ¶ 33. However, the Court did not expressly address paragraph 33 or the 22 allegation of similarity contained therein when it ruled on the SAC. See Order Granting in Part 23 Mot. to Dismiss SAC at 16. Considering the matter now, the Court finds Wallace’s allegation in 24 paragraph 33 sufficient to show, for pleading purposes, that the Stacked Blade Assembly and 25 Stacked Blade Defect are the same across all Ninja Stacked Blade Blenders. The Court therefore 26 considers all customer complaints regarding Stacked Blade blenders regardless of model number. 27 See Deras v. Volkswagen Grp. of Am., Inc., No. 17-CV-05452-JST, 2018 WL 2267448, at *4 28 (N.D. Cal. May 17, 2018) (“VW argues that the Court should only consider complaints made on 9 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 10 of 15 1 2013 Volkswagen Jettas, the same vehicle purchased by Deras, but the Court considers all of the 2 complaints based on Deras’s allegation that all Class Vehicles had sunroofs of similar design.”). 3 SharkNinja may, of course, argue on a more developed record that Wallace’s allegation regarding 4 the similarity between models is untrue. United States District Court Northern District of California 5 With respect to the subject matter of the complaints, SharkNinja asserts that the alleged 6 defect is limited to the dislodging of the Stacked Blade Assembly during blending, and therefore 7 that complaints regarding other defects such as exploding blenders are irrelevant. As discussed 8 above, Wallace has broadened her definition of the Stacked Blade Defect to explain that the 9 dislodging of the Stacked Blade Assembly is caused by over-pressurization in the pitcher while 10 blending thicker materials, such as ice or frozen fruit. See TAC ¶ 31. Wallace now alleges that 11 the over-pressurization can cause the Stack Blade Assembly to dislodge, the blender to explode, 12 and stress cracks around the base of the pitcher. See id. SharkNinja argues that the Court did not 13 grant Wallace leave to amend the definition of the Stacked Blade Defect, and it asks the Court to 14 strike those allegations. Wallace responds that she expanded on the definition of the Stacked 15 Blade Defect to show that customer complaints disregarded by the Court in its prior order actually 16 do relate to the defect at issue in this case. 17 It is a close call whether Wallace’s additional allegations regarding the defect are outside 18 the scope of the leave to amend granted in the Court’s prior order. The additional allegations do 19 not add new parties or claims, and they do relate to the viability of Wallace’s fraudulent omission- 20 based claims, which she was granted leave to amend. However, the new allegations also change 21 the nature of the defect previously alleged in the SAC and accepted by the Court. After careful 22 consideration, the Court concludes that the new allegations in paragraph 31 are within the scope of 23 the leave to amend previously granted. Even if the Court were to find to the contrary, Wallace 24 would be entitled to file a motion for leave to amend under Federal Rule of Civil Procedure 15(a) 25 to add the new defect allegations. Given the procedural posture of the case and the liberal 26 standard for amendment under Rule 15(a)(2), such motion almost certainly would be granted. 27 Accordingly, there would be little point in granting SharkNinja’s request to strike the allegations 28 from the TAC. The Court continues its analysis based on the expanded defect definition. 10 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 11 of 15 United States District Court Northern District of California 1 The Court finds that the TAC alleges multiple customer complaints about the BL660 2 model or other models, addressing the Stacked Blade Defect as defined in the TAC, that pre-date 3 Wallace’s March 2018 purchase of her blender. The relevant customer complaints include several 4 filed with the Consumer Product Safety Commission (“CPSC”) that previously were alleged in the 5 SAC but not considered by the Court in its prior dismissal order because they did not relate 6 specifically to the BL660 model or the dislodging of the Stacked Blade Assembly. Among the 7 customer complaints allegedly made to the CPSC are: 2012 complaint that the blender cracked 8 and popped during blending, sending smoothie mixture all over, TAC ¶ 36.a; 2013 complaint that 9 the blender blade flew off the axis during use, TAC ¶ 36.c; 2015 complaint that the blender 10 exploded during use, TAC ¶ 36.d; 2015 complaint that the top of the blender and sharp blades flew 11 off the blender and went 12 feet, TAC ¶ 36.e; 2015 complaint that the blender shattered during 12 use, TAC ¶ 36.h; and February 2018 complaint that the blender exploded during use, TAC ¶ 36.n. 13 Among the customer complaints posted online are: 2015 complaint that blender exploded and 14 sent blade flying, TAC ¶ 39; 2017 complaint that the blade went crazy and sliced the pitcher, TAC 15 ¶ 42; 2017 complaint that blade came off the assembly into the user’s smoothie, TAC ¶ 42; 2017 16 complaint that the blender broke during use, TAC ¶ 42; 2015 complaint that the blade scraped the 17 inside of the pitcher, TAC ¶ 42; 2017 complaint that blender pitcher cracked, and the replacement 18 cracked, TAC ¶ 42; 2017 complaint that black plastic from the inside of the blender was shredded 19 into a smoothie, TAC ¶ 42; and 2017 complaint that the blender exploded during use, TAC ¶ 42. 20 Most of the online complaints show online responses from SharkNinja, and several of the 21 responses direct the customer to communicate with SharkNinja via private message. See TAC ¶ 22 42. Wallace alleges that SharkNinja’s practices of requesting private messages, and of removing 23 older posts, prevent customers from knowing about the defect. See TAC ¶ 39. 24 The Court finds that these allegations are adequate to satisfy the pre-sale knowledge 25 pleading requirement for a CLRA claim. In making this determination, the Court is guided by the 26 Ninth Circuit’s comments in Williams when reversing the district court’s dismissal of consumer 27 fraud claims for failure to allege pre-sale knowledge. The Ninth Circuit stated that, “Importantly, 28 [the defendants] have filed a motion to dismiss, not a motion for summary judgment. Discovery 11 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 12 of 15 1 has not yet occurred.” Williams, 851 F.3d at 1028. The court went on to say that “[p]re- 2 discovery, when the court must take [the plaintiffs’] factual allegations as true, [the plaintiffs’] 3 description of a separate consumer response system dedicated to handling an unusually high 4 volume of complaints specific to” the alleged defect supported the plaintiffs’ claim of presale 5 knowledge. Id. This Court likewise must credit Wallace’s factual allegations of numerous pre- 6 sale customer complaints, SharkNinja’s responses to complaints, SharkNinja’s actions in moving 7 conversations regarding complaints offline into private messages, and SharkNinja’s removal of 8 older complaint posts. The Court concludes that these factual allegations give rise to a reasonable 9 inference that SharkNinja knew of the Stacked Blade Defect prior to Wallace’s March 2018 10 United States District Court Northern District of California 11 purchase. The Court has considered the cases cited by SharkNinja, and finds them to be factually 12 distinguishable from the present case. In Espineli v. Toyota Motor Sales, Inc., USA, the plaintiffs 13 alleged thirteen customer complaints about a claimed defect in Lexus vehicles, but they did not 14 allege “how or where these complaints were made, or otherwise allege how defendants could have 15 been aware of them.” Espineli v. Toyota Motor Sales, U.S.A., Inc., No. 2:17-cv-00698-KJM- 16 CKD, 2019 WL 2249605, at *6-7 (E.D. Cal. May 24, 2019). In the present case, Wallace has 17 alleged the dates and other specifics of the customer complaints, and other facts showing 18 SharkNinja’s knowledge of the complaints prior to Wallace’s purchase of her blender. 19 In Deras v. Volkswagen Grp. of Am., Inc., the plaintiff alleged fifty-six customer 20 complaints over a seven-year period in which the defendant, VW, sold “hundreds of thousands of 21 vehicles.” Deras, 2018 WL 2267448, at *4. The district court held the complaints were so few in 22 number compared to the volume of total sales that it could not be inferred that the complaints 23 would have put VW on notice of the defect. See id. The district court found that the plaintiff’s 24 allegations regarding VW’s internal monitoring of defects was insufficient because the plaintiff 25 did “not provide any allegations regarding the method by which complaints were recorded and 26 transmitted to management, or otherwise reviewed or received.” See id. at *5. These facts are 27 distinguishable from those in the present case, in which there is no suggestion that SharkNinja 28 sold hundreds of thousands of blenders, or so many that the alleged complaints would not catch its 12 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 13 of 15 1 notice; and Wallace has alleged specific facts showing how the complaints were made and that 2 SharkNinja received notice of them. 3 4 complaints were not sufficient to establish GM’s pre-sale knowledge of an alleged oil-ring defect, 5 where “none of the complaints explicitly states that the cause of the excessive oil consumption 6 was the Low-Tension Oil Ring Defect,” and most of the complaints were posted after the 7 marketing and sales of the subject vehicles had ended. Sloan v. Gen. Motors LLC, No. 16-CV- 8 07244-EMC, 2017 WL 3283998, at *7 (N.D. Cal. Aug. 1, 2017). In the present case, Wallace has 9 alleged complaints regarding the alleged defect that were received by SharkNinja prior to the date 10 11 United States District Court Northern District of California In Sloan v. General Motors LLC, the district court determined that eighty-one customer Wallace purchased her blender. The Court emphasizes that its only task at this stage in the proceedings is to determine 12 whether Wallace has alleged a plausible CLRA claim based upon a fraudulent omission theory. 13 The Court previously dismissed the CLRA claim on the sole basis that Wallace had not alleged 14 SharkNinja’s pre-sale notice of the defect. The Court concludes that Wallace has cured that 15 pleading deficiency by adding factual allegations sufficient to give rise to a reasonable inference 16 that SharkNinja had notice of the asserted defect prior to Wallace’s purchase of her blender. 17 Accordingly, the motion to dismiss the CLRA claim is DENIED. 2. 18 UCL Fraud Prong Claim (Claim 2) 19 The Court previously dismissed the UCL claim asserted under the fraud prong on the basis 20 that it was grounded in the same fraudulent omission theory underlying its CLRA claim, which the 21 Court found to be inadequately alleged in the SAC. See Order Granting in Part Mot. to Dismiss 22 SAC at 21-22. SharkNinja contends that the fraud prong claim fails once again because Wallace 23 has not cured this pleading deficiency. As discussed above, however, the Court concludes that 24 Wallace has stated a claim under the CLRA based on a fraudulent omission theory. Thus, 25 SharkNinja’s motion to dismiss the fraud prong claim is without merit. 26 Accordingly, the motion to dismiss the UCL fraud prong claim is DENIED. 27 C. 28 The Court previously dismissed the UCL claim to the extent it is asserted under the unfair Claim under UCL Unfair Prong (Claim 2) 13 Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 14 of 15 1 prong, holding that “Wallace’s theory appears to be premised on the same fraudulent omission as 2 its CLRA claim.” See Order Granting in Part Mot. to Dismiss SAC at 22. SharkNinja seeks 3 dismissal of the unfair prong claim on the ground that Wallace has not cured the deficiencies in 4 her fraudulent omission theory. The Court has concluded that Wallace adequately has alleged that 5 theory in the TAC. 6 Accordingly, the motion to dismiss the UCL unfair prong claim is DENIED. 7 D. 8 The Court previously dismissed Wallace’s claim for injunctive relief, with leave to amend, United States District Court Northern District of California 9 Claim for Injunctive Relief on the basis that she had not alleged a likelihood of future injury, a requirement for obtaining an 10 injunction. See Order Granting in Part Mot. to Dismiss SAC at 24-25. SharkNinja moves to 11 dismiss the claim once again, pointing out that the TAC contains no new allegations regarding the 12 likelihood of future injury. Wallace has not responded to this aspect of SharkNinja’s motion. The 13 Court therefore finds that Wallace has waived her claim for injunctive relief. See Sciacca v. 14 Apple, Inc., 362 F. Supp. 3d 787, 801-02 (N.D. Cal. 2019) (“Therefore, because Plaintiff has failed 15 to respond to Apple’s arguments, the Court GRANTS Apple’s motion to dismiss the breach of the 16 implied warranty of merchantability claim with prejudice because Plaintiff has waived the issue.”). 17 18 The motion to dismiss Wallace’s claim for injunctive relief is GRANTED WITHOUT LEAVE TO AMEND. 19 E. 20 Finally, SharkNinja asks the Court to strike certain allegations that SharkNinja contends 21 exceed the scope of leave to amend or bear no relevance to Wallace’s claims. Wallace responds 22 that the allegations in question are properly included in the TAC and should not be stricken. 23 Particular Allegations “The court may strike from a pleading an insufficient defense or any redundant, 24 immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). Motions to strike are 25 generally disfavored and “should not be granted unless the matter to be stricken clearly could have 26 no possible bearing on the subject of the litigation.” Platte Anchor Bolt, Inc. v. IHI, Inc., 352 F. 27 Supp. 2d 1048, 1057 (N.D. Cal. 2004) (citations omitted). A court should not strike allegations 28 supplying background or historical material unless it is unduly prejudicial to the opponent. See 14 United States District Court Northern District of California Case 5:18-cv-05221-BLF Document 83 Filed 11/23/20 Page 15 of 15 1 LeDuc v. Ky. Cent. Life Ins. Co., 814 F. Supp. 820, 830 (N.D. Cal. 1992). Indeed, if there is any 2 doubt whether the challenged matter might bear on an issue in the litigation, the motion to strike 3 should be denied, and assessment of the sufficiency of the allegations left for adjudication on the 4 merits. Rees v. PNC Bank, N.A., 308 F.R.D. 266, 271 (N.D. Cal. 2015). A court should view the 5 pleading in the light most favorable to the nonmoving party. Id. Whether to grant a motion to 6 strike lies within the sound discretion of the district court. Id. 7 SharkNinja contends that the new allegations in paragraph 31 that expand the definition of 8 the defect should be stricken as outside the scope of the leave to amend granted by the Court upon 9 dismissal of the SAC. That argument has been considered and rejected, above. 10 Next, SharkNinja contends that allegations regarding the 2015 recall and consumer 11 complaints are not relevant. The basis for this contention seems to be SharkNinja’s position that 12 the fraudulent-omission based claims are not viable. However, for the reasons discussed above, 13 the Court takes a different view. The Court concludes that the allegations in question are relevant 14 to Wallace’s fraudulent omission-based claims and/or provide relevant background to her claims. The motion to strike is DENIED. 15 16 17 IV. ORDER (1) SharkNinja’s motion to dismiss is GRANTED IN PART, WITHOUT LEAVE TO 18 AMEND, as to any claims based on a theory of fraudulent misrepresentation and as 19 to the claim for injunctive relief; 20 (2) The motion to dismiss is DENIED as to Claim 1 for violation of the CLRA and Claim 2 for violation of the UCL; 21 22 (3) SharkNinja SHALL file an answer to the TAC on or before December 7, 2020; and 23 (4) This order terminates ECF 69. 24 25 26 27 Dated: November 23, 2020 ______________________________________ BETH LABSON FREEMAN United States District Judge 28 15
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