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Weske v. Samsung Elecs., America, Inc.

United States District Court, D. New Jersey

August 26, 2014

JEFF WESKE, et al., Plaintiffs,
v.
SAMSUNG ELECTRONICS, AMERICA, INC. & SAMSUNG ELECTRONICS, CO., LTD., Defendants

As Amended August 27, 2014.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For JEFF WESKE, JO ANNA FRAGER, DARRYL MYHRE, individually and on behalf of all others similarly situated, Plaintiffs: JAMES E. CECCHI, LEAD ATTORNEY, LINDSEY H. TAYLOR, CARELLA BYRNE CECCHI OLSTEIN BRODY & AGNELLO, P.C., ROSELAND, NJ; LAUREN S. BRANTZ, LEAD ATTORNEY, MICHAEL COREN, Cohen, Placitella & Roth, P.C., PHILADELPHIA, PA; JASON LOUIS LICHTMAN, LIEFF CABRASER HEIMANN & BERNSTEIN LLP, NEW YORK, NY.

For Ralph Chermak, Maureen Kean, Beverly Burns, Jeff Polsean, Plaintiffs: JAMES E. CECCHI, CARELLA BYRNE CECCHI OLSTEIN BRODY & AGNELLO, P.C., ROSELAND, NJ.

For SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG ELECTRONICS CO., LTD., Defendants: GEORGE C. JONES, JOHN MALONEY, LEAD ATTORNEY, JOSEPH CHRISTOPHER BRENNAN, GRAHAM CURTIN, PA, MORRISTOWN, NJ.

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AMENDED OPINION

WILLIAM J. MARTINI, United States District Judge.

The Plaintiffs in this putative class action purchased Samsung refrigerators that stopped cooling, allegedly because of a circuit board defect (the " Defect" ). Plaintiffs allege that Samsung knew about the Defect but failed to disclose it. Defendants Samsung Electronics, America (" SEA" )

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and Samsung Electronics, Co., Ltd (" SEC" ) (jointly " Samsung" ) now move pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiffs' Third Amended Complaint, which the Court refers to as the " TAC." There was no oral argument. Fed.R.Civ.P. 78(b). For the reasons set forth below, Samsung's motion is GRANTED IN PART, and DENIED IN PART.

I. FACTUAL AND PROCEDURAL BACKGROUND[1]

A. The Parties

There are two Defendants in this case: SEA and SEC. SEA is a New York corporation that manufactures and sells consumer appliances. TAC ¶ 73, ECF No. 100. SEC is a Korean corporation that conducts substantial business operations from SEA's New Jersey offices. Id. ¶ 74.

There are seven named Plaintiffs in this case: Jeff Weske, Jo Anna Frager, Daryl Myhre, Ralph Chermak, Jeff Polsean, Maureen Kean, and Beverly Burns. Weske is from Minnesota; Frager is from Ohio; Myhre is from Washington; Chermak and Polsean are from Illinois; and Keans and Burns are from California.[2] TAC ¶ ¶ 13, 21, 30, 36, 47, 55.

B. The Refrigerators

The Plaintiffs purchased Samsung refrigerators (the " Refrigerators" ) in their home states. Id. Weske purchased a Samsung Side-by-Side Refrigerator (model # RS262BBWP) in December 2006; Frager purchased a Samsung French Door Refrigerator (model # RF266AASH) in February 2008; Myhre purchased a Samsung Side-by-Side Refrigerator (model # RS2630WW) in November 2007; Chermak purchased a Samsung Bottom Mount Refrigerator (model # RF265ABBP); Polsean purchased a Samsung Side-by-Side Refrigerator (model # RS267LBBP); and Kean purchased a Samsung French Door Refrigerator (model # RF266AERS). Id. ¶ ¶ 13, 21, 30, 36, 47, 56. The Refrigerators all came with a warranty. Id. ¶ 98. The warranty for each Refrigerator (the " Warranty" ) covers:

manufacturing defects in materials and workmanship for a limited warranty period of:
One (1) Year Parts and Labor on Refrigerator
Five (5) Years Parts and Labor on Sealed Refrigeration System Only*
(*Compressor, evaporator, condenser, drier, connecting tubing)

Ex. A to Declaration of James O'Hara, ECF No. 107-2. The Warranty also provides that:

NO WARRANTIES WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, SHALL APPLY AFTER THE EXPRESS WARRANTY PERIODS STATED ABOVE . . . .

Id. (emphasis in original).

C. The Alleged Defect

Plaintiffs allege that their Refrigerators stopped cooling because of a circuit board defect. TAC ¶ 6 (" While the Refrigeration Defect has caused hundreds of dollars of damage to each Plaintiff in parts, labor,

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and spoiled food, the Defect stems from a relatively inexpensive part: a faulty circuit board inside the Refrigerators." ); ¶ 84 (" Preliminary expert analysis has determined that the control board inside Samsung's Refrigerators was not designed and/or manufactured properly." ); ¶ 172 (" Samsung knew or was reckless in not knowing at the time of sale that the Refrigerators contain a defective control board, which makes the Refrigerators substantially certain to fail well in advance of their anticipated useful life." ); ¶ 173 (" Samsung knew or was reckless in not knowing prior to the time that the Defect manifested in any of Plaintiffs' Refrigerators that the Refrigerators contain a defective control board, which makes the Refrigerators substantially certain to fail well in advance of their anticipated useful life." ). This Defect " caused the condenser. . . to develop an encasement of ice." Id. ¶ 85. When the condenser gets covered in ice, it stops dissipating heat, id. ¶ 86, and the Refrigerator stops cooling.

Depending on the Plaintiff, the loss of cooling occurred within months or years of purchase:

Plaintiffs' Refrigerator Purchases

Plaintiff

Time of Purchase

Time Defect Manifested

Time Samsung Notified

Jeff Weske

December 2006

Spring 2009

Fall 2009

Jo Anna Frager

February 2008

June 2010

Never

Darryl Myhre

November 2007

Before November 2008

Before November 2008

Ralph Chermak

September 2009

March 2011

March 2011

Jeff Polsean

2008

October 2011

October 2011

Maureen Kean

August/September 2009

November 2010

December 2011

Id. ¶ ¶ 13-72.

In identifying a faulty circuit board as the source of the cooling problems, the TAC relies on the Declaration of Dr. Aris Silzars, who holds a Ph.D in electrical engineering. Id. ¶ 6 (citing Silzars Declaration ¶ ¶ 9-12, ECF No. 100-1). Dr. Silzars examined a Samsung refrigerator model that was not one of the models purchased by Plaintiffs. Id. ¶ 5. Dr. Silzars was informed by counsel that the refrigerator he examined would stop cooling because ice would form on the refrigerator's evaporation coils. Id. ¶ 7. Dr. Silzars was further informed that unplugging the refrigerator, allowing the ice to melt, and plugging the refrigerator back in would restore cooling function for a period of months. Id. ¶ 8. Dr. Silzars was further informed that the " owners of the refrigerators at issue here" -- presumably Plaintiffs and putative class members--were able to restore cooling function with the same procedure. Id. ¶ 9.

Besides from examining a Samsung refrigerator, Dr. Silzars also reviewed service manuals for several Samsung refrigerators, including the model purchased by Myhre. Id. ¶ 4. Dr. Silzars states that the service manuals describe a circuit board that controls the defrosting of the coils. Id. ¶ 10. Dr. Silzars explains that it has been " demonstrated repeatedly" --though he does not say how--that when the defrost cycle fails, and defrosting does not occur, the problem can be remedied by unplugging the unit, letting the ice melt, and plugging the unit back in. Id. ¶ 10. According to Dr. Silzars, unplugging the Refrigerators resets the circuit board, which allows the Refrigerators to operate normally again. Id. ¶ 10. Based on this

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remedial measure, Dr. Silzars concludes that the Refrigerators do not suffer from " mechanical issues such as a faulty compressor or low refrigerant level." Id.

D. Samsung's Knowledge of the Alleged Defect

The TAC alleges that Samsung knew about the Defect but failed to disclose it. For example, the TAC alleges that Mary Johnston called Samsung's customer service line in August 2006 to report cooling problems with her Refrigerator. Id. ¶ 101. The TAC further alleges that a Samsung authorized repair technician diagnosed a faulty control board in Johnston's Refrigerator and said that he would notify Samsung. Id. The TAC also alleges that a Samsung service person was dispatched to help Eugene Rata in August 2006. Id. The TAC alleges that the service person said that he would tell Samsung about frozen outer-exchange pipes in Rata's refrigerator. Id. Additionally, the TAC alleges that Starla Gilmore's Refrigerator stopped cooling because of ice-buildup. Id. ¶ 102. While the TAC claims that Gilmore had reported Refrigerator problems to Samsung in 2006 and/or 2007, it is unclear whether Gilmore reported problems that could be linked to the Defect. Id.

The TAC further alleges that Samsung Authorized Service Centers were required to report in-warranty service to SEA. Id. ¶ 99-100. These reports, which allegedly put SEC on notice of the Defect, id. ¶ 104, included a " detailed description of the repair, the customer's complaint, the model and serial number of the product being serviced, and the type of product." Id. ¶ 100.

Additionally, the TAC alleges that Samsung knew about the Defect based on a " sudden and disproportionate increase in certain part orders" for the Refrigerators. Id. ¶ 107. These parts orders were allegedly known to SEA and SEC. Id.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, ...


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