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Dzielak v. Whirlpool Corp.

United States District Court, D. New Jersey

June 16, 2014

CHARLENE DZIELAK, SHELLEY BAKER, FRANCIS ANGELONE, BRIAN MAXWELL, JEFFREY MCLENNA, JEFFERY REID, KARI PARSONS, CHARLES BEYER, JONATHAN COHEN, and JENNIFER SCHRAMM, Plaintiffs,
v.
WHIRLPOOL CORPORATION, LOWE'S COMPANIES, INC., SEARS HOLDINGS CORPORATION, the HOME DEPOT, INC., FRY'S ELECTRONICS, INC., APPLIANCE RECYCLING CENTERS of AMERICA, INC., and LOWE'S HOME CENTER, Defendants

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For CHARLENE DZIELAK, SHELLEY BAKER, on behalf of themselves and all others similarly situated, Plaintiffs: ANDREA CLISURA, LEAD ATTORNEY, ANTONIO VOZZOLO, FARUQI & FARUQI, LLP, NEW YORK, NY; AUDRA ELIZABETH PETROLLE, JAMES E. CECCHI, LINDSEY H. TAYLOR, CARELLA BYRNE CECCHI OLSTEIN BRODY & AGNELLO, P.C., ROSELAND, NJ; CAROLINE F. BARTLETT, CARELLA BYRNE, ROSELAND, NJ; YITZCHAK KOPEL, BURSOR & FISHER PA, NEW YORK, NY.

For FRANCIS ANGELONE, BRIAN MAXWELL, JEFFERY MCLENNA, JEFFERY REID, KARI PARSONS, CHARLES BEYER, JONATHAN COHEN, JENNIFER SCHRAMM, Plaintiffs: ANDREA CLISURA, LEAD ATTORNEY, FARUQI & FARUQI, LLP, NEW YORK, NY; JAMES E. CECCHI, LEAD ATTORNEY AUDRA ELIZABETH PETROLLE, LINDSEY H. TAYLOR, CARELLA BYRNE CECCHI OLSTEIN BRODY & AGNELLO, P.C., ROSELAND, NJ; CAROLINE F. BARTLETT, CARELLA BYRNE, ROSELAND, NJ; YITZCHAK KOPEL, BURSOR & FISHER PA, NEW YORK, NY.

For WHIRLPOOL CORPORATION, SEARS HOLDINGS CORPORATION, Defendants: DAVID R. KOTT, MCCARTER & ENGLISH, LLP, NEWARK, NJ.

For THE HOME DEPOT,INC., Defendant: NICHOLAS STEVENS, LEAD ATTORNEY, STARR, GERN, DAVISON & RUBIN, PC, ROSELAND, NJ.

For FRY'S ELECTRONICS, INC., LOWE'S HOME CENTER, LHC, Defendants: DAVID R. KOTT, LEAD ATTORNEY, MCCARTER & ENGLISH, LLP, NEWARK, NJ.

OPINION

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KEVIN MCNULTY, United States District Judge.

This matter comes to the Court on Defendants' motions (Docket Nos. 37 and 38),

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pursuant to Fed. R. Civ. 12(b)(6), to dismiss the First Amended Consolidated Complaint (" FAC," Docket No. 29) in this putative class action. For the reasons set forth below, the motions to dismiss will be granted in part and denied in part. These dismissals are without prejudice to the filing of a Second Amended Complaint.

The named plaintiffs, purchasers of Maytag washing machines, are Charlene Dzielak, Francis Angelone, Shelley Baker, Brian Maxwell, Jeffrey McLenna, Jeffery Reid, Kari Parsons, Charles Beyer, Jonathan Cohen, and Jennifer Schramm. The first named defendant is the Maytag washing machines' manufacturer, Whirlpool Corporation (" Whirlpool" ).[1] The remaining defendants are the retailers from whom the plaintiffs purchased the Maytag washers: Lowe's Home Center [2] (" Lowe's" ), Sears Holding Corporation (" Sears" ), The Home Depot, Inc. (" Home Depot" ), Fry's Electronics, Inc. (" Fry's" ), and Appliance Recycling Centers of America, Inc. (" ARCA" ).[3]

The Department of Energy (DOE) Energy Star program authorizes manufacturers to affix an Energy Star label signifying that an appliance meets certain standards of energy efficiency. Each Maytag washing machine at issue in this case bore an Energy Star label at the time of purchase. Thereafter, however, DOE determined that Maytag Centennial washing machine model number MVWC6ESWW1 did not comply with Energy Star requirements, and EPA disqualified the machine from the Energy Star program. That noncompliance determination and disqualification allegedly apply equally to Maytag Centennial model numbers MVWC6ESWW0, MVWC6ESWW1, and MVWC7ESWW0.[4]

According to the FAC, Energy Star-qualified washing machines cost more than

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others, but save consumers money over time because they consume less energy. The FAC alleges that Plaintiffs paid a price premium attributable to " their Mislabeled Washing Machine's supposed energy efficiency and ENERGY STAR® qualification." FAC ¶ 46. But those non-compliant machines, say Plaintiffs, wound up costing more to operate than a truly Energy Star-compliant machine. Id. ¶ 47.

Plaintiffs assert causes of action for breach of express warranty, breach of the implied warranty of merchantability, unjust enrichment, violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq. (" MMWA" ), and violations of New Jersey, California, Michigan, Florida, Ohio, Indiana, and Texas consumer fraud statutes.[5] Other purchasers of these washing machines, they say, stand in precisely the same shoes, and Plaintiffs have therefore filed their action as a putative class action on behalf of such purchasers. Named plaintiffs Dzielak and Angelone bought their washers in New Jersey; Baker, Maxwell in California; McLenna in Michigan; Reid in Florida; Parsons in Ohio; Beyer in Indiana; Cohen in Texas; and Schramm in Virginia. The putative class comprises subclasses of purchasers in those states--New Jersey, California, Michigan, Florida, Ohio, Indiana, Texas, and Virginia--eight subclasses in all.

The first motion to dismiss is filed jointly by Whirlpool, Fry's, Lowe's, and Sears, Docket No. 37. The second is filed by Home Depot, Docket No. 38. Defendants argue that that the Complaint's allegations are insufficient as a matter of law. Defendants deny that they have engaged in any wrongful conduct or otherwise misrepresented any information in connection with the sales of the washers in question. They also allege that Plaintiffs have failed to plead claims sounding in fraud with the requisite particularity.

Defendants' motions to dismiss will be granted. The dismissals are without prejudice to the filing of a Second Amended Complaint that corrects the pleading deficiencies of the First.

I. BACKGROUND[6]

A. The Energy Star Program

The Energy Policy and Conservation Act of 1975 (" EPCA" ), 42 U.S.C. § § 6291, et seq., together with the National Energy Conservation Policy Act of 1978 (" NECPA" ) and National Appliance Energy Conservation Act of 1987 (" NAECA" ), established an energy conservation program for major household appliances. These statutes and related regulations led to the Energy Star program, " a voluntary program to identify and promote energy-efficient products and buildings in order to reduce energy consumption, improve energy security, and reduce pollution through voluntary labeling of, or other forms of communication about, products and buildings that meet the highest energy conservation

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standards." 42 U.S.C. § 6294(a). To qualify for the Energy Star program, a product must meet certain efficiency standards promulgated by the Department of Energy (" DOE" ). See 10 C.F.R. § § 430.1, et seq.

For the Energy Star program, DOE has established minimum standards for energy and water efficiency. Qualified machine models must use approximately 37% less energy and 50% less water than standard models. FAC ¶ 2. The DOE has instituted a pilot program under which it tests retail products to ensure conformity with Energy Star program guidelines. DOE and the Environmental Protection Agency (" EPA" ) jointly administer the program. 42 U.S.C. § 6294a.

Energy Star program participants may affix the trademarked and federally-owned Energy Star logo to qualifying products. FAC ¶ 26. The Energy Star logo is an important marketing tool. Energy Star labeled machines are more expensive than standard models, but " come with the promise of reduced energy and water bills that, over time, will generate enough saving to recoup the higher price." Id. ¶ 2. As characterized by Plaintiffs, the Energy Star program rests on a fundamental bargain: pay more up front, but save on energy bills in the long run. Id.

B. Disqualification from the Energy Star Program

As of 2009, certain Maytag washing machines (the FAC calls them " the Mislabeled Machines" ) were already on the market with the Energy Star label. As part of the pilot program, DOE tested the efficiency of Maytag washing machine model number MVWC6ESWW1. On September 20, 2010, DOE informed Whirlpool that model number MVWC6ESWW1 did not meet the Energy Star efficiency requirements. Id. ¶ 40. After consultation with Whirlpool, DOE agreed to test additional units. Id. ¶ 41. From January 3 to January 12, 2011, Springboard Engineering laboratories tested four additional units of the Maytag Centennial MVWC6ESWW1 model. These units, too, failed to comply with DOE standards. Id. at ¶ 42. On January 19, 2011, DOE notified Whirlpool of the results of that second round of testing. Id. ¶ 43. Thereafter, on March 16, 2011 DOE referred the matter to the EPA, which is the brand manager for Energy Star.

According to the FAC, " Whirlpool avoided a formal disqualification from the Energy Star program by representing" to the EPA " that it had discontinued the sale or manufacture of the Mislabeled Washing Machines, and that none were remaining in inventory--rendering a formal disqualification moot by the time the issue was presented to the EPA." Id. ¶ 45. Whirlpool and the EPA " reached an informal and private agreement whereby Whirlpool agreed to cease and desist from the manufacture or sale of the Mislabeled Washing Machines." Id. The FAC alleges that " persons who had already purchased these Mislabeled Washing Machines, including Plaintiffs, were given no notice of this agreement, or of the Mislabeled Washing Machines' noncompliance with the Energy Star standard." Id.

That situation apparently has changed to some extent. According to an exhibit attached to Plaintiffs' Opposition Brief (" Non-Lighting Products Disqualified from the ENERGY STAR® Program" ), the EPA did in fact disqualify machine model number MVWC6ESWW1 on May 7, 2012. Docket No. 47-3 at 2. That issue is discussed below.

C. The Plaintiffs' Washing Machine Purchases

The named plaintiffs purchased washers in their home states, and purport to represent

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subclasses of purchasers in those eight states: New Jersey, California, Michigan, Florida, Ohio, Indiana, Texas, and Virginia. The washers at issue are alleged to be Maytag Centennial model numbers MVWC6ESWW0, MVWC6ESWW1, and MVWC7ESWW0.

As to each plaintiff, the FAC identically alleges the following: The washing machine bore the Energy Star logo in two places. The purchaser saw the logo before and at the time of purchase. The purchaser understood the logo to be a representation and warranty by both the manufacturer and retailer that the machine met Energy Star standards of efficiency. The plaintiff purchaser would not have bought the machine if he or she had known it did not in fact comply. Thus each plaintiff allegedly relied on the Energy Star logo when making the purchase.

As to the specific purchases by each named plaintiff, the FAC separately alleges the following:

On November 27, 2009, Francis Angelone purchased a " Maytag Centennial MVWC6ESWW* washing machine at a Home Depot retail store in Delran, New Jersey." Angelone paid $299.00, plus tax. FAC ¶ 29.

On November 27, 2009, Brian Maxwell purchased a " Maytag Centennial MVWC6ESWW* washing machine at a Fry's Electronics retail store in Roseville, California." Maxwell paid $399.00, plus tax. Id. ¶ 30.

On November 28, 2009, Jonathan Cohen purchased a " Maytag Centennial MVWC6ESWW* washing machine at a Home Depot retail store in Houston, Texas." She paid $299.00, plus tax. Id. ¶ 31.

On November 30, 2009, Charlene Dzielak purchased a " Maytag Centennial MVWC6ESWW* washing machine at a Lowe's retail store near her home in Middlesex County," New Jersey. She paid $409.00, plus tax. Id. ¶ 32.

In January 2010, Jennifer Schramm purchased a " Maytag Centennial MVWC6ESWW* washing machine" at a Lowe's retail store in Alexandria, Virginia. Id. ΒΆ 33. ...


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