United States District Court, D. Minnesota
BENJAMIN HUDOCK and BREANN HUDOCK, individually and on behalf of all others similarly situated, Plaintiffs,
LG ELECTRONICS U.S.A., INC., BEST BUY CO., INC., BEST BUY STORES, L.P., and BESTBUY.COM LLC, Defendants.
M. Cialkowski, ZIMMERMAN REED, PLLP, Daniel C. Hedlund,
GUSTAFSON GLUEK PLLC, and Luke Hudock, HUDOCK LAW GROUP,
S.C., for plaintiffs.
C. Mitchell, HOGAN LOVELLS U.S. LLP, and Phoebe A. Wilkinson,
HOGAN LOVELLS U.S. LLP, for defendants.
MEMORANDUM OPINION AND ORDER ON DEFENDANTS'
MOTIONS TO DISMISS
R. TUNHEIM Chief Judge
case arises from Plaintiffs Benjamin and Breann Hudock's
(“Plaintiffs”) purchase of a television
purporting to have a 120Hz refresh rate. Plaintiffs allege
the television, in fact, has a 60Hz refresh rate. As stated
in the Complaint, Plaintiffs filed this purported class
action against Defendant LG Electronics U.S.A., Inc. (LG) and
Defendants Best Buy Co., Inc. (Best Buy Co.), Best Buy
Stores, L.P. (Best Buy LP), and BestBuy.com, LLC
(BestBuy.com) (collectively, Best Buy). Plaintiffs allege
violations of Minnesota and New Jersey consumer fraud
statutes, as well as a number of common law claims. LG and
Best Buy filed motions to dismiss the Complaint pursuant to
Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil
Procedure. For the reasons set forth below, the Court will
grant in part and deny in part Defendants' motions to
married Wisconsin residents, purchased a television
manufactured by LG on “Bestbuy.com.” (Compl.
¶¶ 6-7, 34, 37, May 9, 2015, Docket No. 1.)
Plaintiffs assert that, prior to buying the television,
Plaintiffs decided to purchase a television with a minimum of
a 120Hz refresh rate. (Id. ¶ 33.) Plaintiffs
contend they spent weeks shopping for the television and, on
November 29, 2013, Breann Hudock “viewed advertisements
and specifications” for the television they purchased
on “Bestbuy.com.” (Id. ¶¶
33-34, 37.) Plaintiffs allege the “advertisements and
specifications” indicated the television had a 120Hz
refresh rate. (Id. ¶¶ 35-36.)
to Plaintiffs, after conferring with Benjamin Hudock and
describing the specifications, Breann Hudock purchased the
television from the website “relying on the 120Hz
advertised refresh rate.” (Id. ¶ 37.)
After purchasing the television, Plaintiffs allege they
“noticed that the television's images were not as
clear as expected, ” but did not learn until later that
the television only had a 60Hz refresh rate. (Id.
¶ 38; see also Decl. of J. Christopher Mitchell
(“Mitchell Decl.”), Ex. 1, July 12, 2016, Docket
April 29, 2016, two and a half years after Plaintiffs
purchased the television, Plaintiffs notified LG and Best Buy
that the television's refresh rate did not conform to
LG's and Best Buy's representations. (Id.
¶ 88.) On May 9, 2016, Plaintiffs filed this purported
class action against LG and Best Buy, alleging eight claims:
(1) violation of Minnesota's Consumer Fraud Act (MCFA),
Minn. Stat. § 325F.68, et seq. (Count I); (2) violation
of Minnesota's Uniform Deceptive Trade Practices Act
(MDTPA), Minn. Stat. § 325D.43, et seq. (Count II); (3)
violation of Minnesota's Unlawful Trade Practices Act
(MUTA), Minn. Stat. § 325D.13 (Count III); (4) violation
of New Jersey's Consumer Fraud Act (NJCFA), N.J. Stat.
Ann. § 54:8-1, et seq. (Count IV); (5) unjust enrichment
(Count V); (6) breach of express warranty (Count VI); (7)
breach of implied warranty (Count VII); and (8) breach of
contract (Count VIII). (Compl. ¶¶ 51-102.) LG and Best
Buy filed motions to dismiss the Complaint pursuant to Rules
12(b)(1) and 12(b)(6).
first argue Plaintiffs lack standing to bring their claims
under various theories. Normally, the Court would address
Defendants' standing arguments first, before the merits,
because “standing is a jurisdictional prerequisite that
must be resolved before reaching the merits of a suit.”
Turkish Coal. of Am., Inc. v. Bruininks, 678 F.3d
617, 621 (8th Cir. 2012) (quoting City of
Clarkson Valley v. Mineta, 495 F.3d 567, 569
(8th Cir. 2007)). But in the class action context,
the Supreme Court's decisions in Amchem Prods., Inc.
v. Windsor, 521 U.S. 591 (1997), and Ortiz v.
Fibreboard Corp., 527 U.S. 815 (1999),
“‘make clear that there are situations in which a
court may defer' the standing question ‘to later in
the case.'” Roth v. Life Time Fitness,
Inc., No. 15-3270, 2016 WL 3911875, at *4 (D. Minn. July
14, 2016) (quoting In re Target Corp. Customer Data Sec.
Breach Litig., 66 F.Supp.3d 1154, 1160 (D. Minn.
2014)). Although neither created a blanket
exception, Amchem and Ortiz stand for the
proposition that standing questions may be postponed when
class certification is “logically antecedent” to
standing. See Roth, 2016 WL 3911875, at *4; In
re Anthem, Inc. Data Breach Litig., 162 F.Supp.3d 953,
970-71 (N.D. Cal. Feb. 14, 2016); In re Carrier IQ,
Inc., 78 F.Supp.3d 1051, 1068-70 (N.D. Cal. 2015).
the Court will exercise its discretion to defer consideration
of the standing issues until after class certification. There
is no question that Plaintiffs have standing to sue
Defendants under, at the very minimum, Wisconsin law. (Mem.
of Law in Supp. of LG's Mot. to Dismiss at 6, July 12,
2016, Docket No. 20 (admitting Plaintiffs have standing under
Wisconsin law).) The Court finds Defendants' standing
arguments, therefore, do not address whether Plaintiffs have
individual standing. Instead, class certification is
“logically antecedent” to the standing issues
raised by Defendants; specifically, the Court can determine
during the class certification process whether
Plaintiffs' can bring claims under the laws of states in
which no currently-named plaintiff resides or whether
Plaintiffs' injuries are sufficiently similar to those of
the proposed class to permit claims for a broader range of LG
products. Blessing v. Sirius XM Radio Inc., 756
F.Supp.2d 445, 451 (S.D.N.Y. 2010); see also Fed. R.
Civ. P. 23(a). If standing issues remain after class
certification, Defendants are free to make a motion at that
time. See Anwar v. Fairfield Greenwich Ltd., 728
F.Supp.2d 372, 402 (S.D.N.Y. 2010).
FAILURE TO STATE A CLAIM
Standard of Review
reviewing a Rule 12(b)(6) motion, the Court views a complaint
in “the light most favorable to the nonmoving
party.” Longaker v. Boston Sci. Corp., 872
F.Supp.2d 816, 819 (D. Minn. 2012). The Court considers all
facts alleged in the complaint as true to determine whether
the complaint states a “‘claim to relief that is
plausible on its face.'” Braden v. Wal-Mart
Stores, Inc., 588 F.3d 585, 594 (8th Cir.
2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
at 678. “Where a complaint pleads facts that are
‘merely consistent with' a defendant's
liability, it ‘stops short of the line between
possibility and plausibility[, ]'” and therefore
must be dismissed. Id. (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007)). Although the
Court accepts the complaint's factual allegations as
true, it is “not bound to accept as true a legal
conclusion couched as a factual allegation.”
Twombly, 550 U.S. at 555 (quoting Papasan v.
Allain, 478 U.S. 265, 286 (1986)). Therefore, to survive
a motion to dismiss, a complaint must provide more than
“‘labels and conclusions' or ‘a
formulaic recitation of the elements of a cause of
action.'” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 555).
Claims Against Best Buy Co., Best Buy LP, and
order to evaluate Defendants' motions to dismiss, the
Court must first determine how to construe the
Complaint's allegations regarding Best Buy in “the
light most favorable” to Plaintiffs. Longaker,
872 F.Supp.2d at 819. While Plaintiffs contend construing
Best Buy Co., Best Buy LP, and BestBuy.com collectively as
“Best Buy” is “in the light most
favorable” to Plaintiffs, the Court disagrees. Instead,
the Court construes Plaintiffs' allegations regarding
“Bestbuy.com” and the “Best Buy
website” to refer to the entity BestBuy.com. The
Court's construction preserves the most claims in light
of the Eighth Circuit's holding that “attribut[ing]
fraudulent representations and conduct to multiple defendants
generally in a group pleading fashion” falls short of
the Fed.R.Civ.P. 9(b) standard. Streambend Props. II LLC
v. Ivy Tower Minneapolis, LLC, 781 F.3d 1003, 1013
(8th Cir. 2015).
light of this construction, the Court will dismiss without
prejudice all claims against Best Buy Co. and Best Buy LP.
For the purpose of the motion to dismiss, only
Plaintiffs' claims, and not those of any potential class
members, are considered. Browe v. Evenflo Co., Inc.,
No. 14-4690, 2015 WL 3915868, at *4 n.1 (D. Minn. June 25,
2015). The Complaint does not set forth any relationship
between Plaintiffs' purchase of the television and Best
Buy Co. or Best Buy LP. Plaintiffs specifically alleged all
representations came from BestBuy.com and, based on those
representations, Plaintiffs purchased the television from
BestBuy.com. (Compl. ¶¶ 32-38.) Plaintiffs failed
to make any allegations that would impute liability for
BestBuy.com's actions onto Best Buy Co. and Best Buy LP.
respond that the Court may attach alter ego liability for
Plaintiffs' claims against Best Buy Co. and Best Buy LP
because Plaintiffs define the three entities as “Best
Buy.” But there is a “presumption of
separateness” between a parent and a subsidiary
corporation. Ass'n of Mill & Elevator Mutual Ins.
Co. v. Barzen Int'l, Inc., 553 N.W.2d 446, 449
(Minn.Ct.App. 1996). “Piercing the corporate veil is an
equitable remedy that may be applied in order to avoid an
injustice.” Equity Trust Co. Custodian ex rel.
Eisenmenger IRA v. Cole, 766 N.W.2d 334, 339
(Minn.Ct.App. 2009). “A court may pierce the corporate
veil to hold a party liable for the acts of a corporate
entity if the entity . . . is the alter ego of the
entity.” Id. Courts assess a number of factors
to determine whether piercing the corporate veil is
appropriate. Barton v. Moore, 558 N.W.2d 746, 749
Plaintiffs do not allege any of the facts necessary to plead
alter ego liability. All Plaintiffs allege regarding the
relationship between the entities is the use of
“(collectively, ‘Best Buy')” at the
beginning of the Complaint. (Compl. at 1.) Other than this
reference, the Complaint is silent regarding the interaction
between the three entities. Plaintiffs, thus, failed to meet
their burden of pleading alter ego liability because
Plaintiffs did “not plead any facts directly
addressing . . . the operative test.” See N. Cent.
EMS Corp. v. Bound Tree Med., LLC, No. 15-2793, 2016 WL
544472, at *5 (D. Minn. Feb. 10, 2016).
this reason, the Court will grant Defendants' motion to
dismiss all claims against Best Buy Co. and Best Buy LP
assert Plaintiffs failed to plead their fraud-based claims
with the particularity required by Rule 9(b). Rule 9(b)
provides that “[i]n alleging fraud or mistake, a party
must state with particularity the circumstances constituting
fraud or mistake.” The rule requires a plaintiff to
“identify who, what, where, when, and how.”
Streambend Properties II, 781 F.3d at 1013 (quoting
United States ex rel. Roop v. Hypoguard USA, Inc.,
559 F.3d 818, 822 (8th Cir. 2009)). It must
“specify the time, place, and content of the
defendant's false representations, as well as the details
of the defendant's fraudulent acts, including when the
acts occurred, who engaged in them, and what was obtained as
a result.” Id. (quoting Hypoguard
USA, 559 F.3d at 822). The goal of Rule 9(b), like Rule
8, “is fair notice, ” City of Wyoming v.
Procter & Gamble Co., No. 15-2101, 2016 WL 5496321,
at *6 (D. Minn. Sept. 28, 2016), and, therefore,
“[w]here multiple defendants are asked to respond to
allegations of fraud, the complaint should inform each
defendant of the nature of his [or her] alleged participation
in the fraud, ” Streambend Properties II, 781
F.3d at 1013.
argues Plaintiffs failed to allege the fraud-based claims
with particularity because they failed to identify any
misrepresentations made by LG, the date LG made any
misrepresentation, and the causal effect of any LG
misrepresentation. BestBuy.com further argues Plaintiffs
failed to allege any conduct that would amount to fraud
because Plaintiffs did not immediately recognize any problem
with the refresh rate.
contrary, Plaintiffs alleged the “who, what, where,
when, why, and how” of both LG's and
BestBuy.com's conduct. Plaintiffs alleged: on November
29, 2013 Plaintiffs viewed advertisements and specifications
for the television on BestBuy.com (Compl. ¶ 34); the
advertisements and specifications stated the television had a
120Hz refresh rate (id. ¶¶ 35-36);
BestBuy.com “adopted LG's misrepresentations”
about the 120Hz refresh rate (id. ¶¶ 23,
28); BestBuy.com and LG “joined” together to
“deceiv[e] consumers” - including Plaintiffs -
“by advertising a fraudulent 120Hz refresh rate”
(id. ¶ 28); Plaintiffs purchased the television
based on LG and BestBuy.com's representations
(id. ¶ 37); Plaintiffs received the television
and, arguably, LG advertised the 120Hz refresh rate on its
packaging (id. ¶¶ 24, 38); and Plaintiffs