Antitrust Law Daily Wrap Up, ADVERTISING—E.D. Cal.: HVAC manufacturer blows cold air on homeowner’s claims after honoring air conditioner warranty, (Aug 17, 2015)

By Linda O’Brien, J.D., LL.M.

A homeowner was unable to pursue unfair business practices claims against an air conditioning system manufacturer after the manufacturer adequately performed under its warranty to replace defective parts at no charge and the homeowner was not misled about any information regarding the unit when purchasing his home, the federal district court in Sacramento, California has decided (Grassi v. International Comfort Products, LLC, August 13, 2015, Mendez, J.).

International Comfort Products (ICP) manufactures and markets heating, venting, and cooling (HVAC) systems for residential and commercial buildings. Brett Grassi bought a new home containing an air conditioning unit manufactured by ICP. The unit worked properly for two years but then stopped blowing cold air. It was discovered that the failure was the result of a leak in the unit’s copper coil that was corroded. The unit was covered by ICP’s parts warranty, which provided for replacement at no charge for defective parts within the warranty period.

The homebuilder reimbursed Grassi for half the cost of the service call and labor, while ICP replaced the coil with an aluminum coil less susceptible to corrosion for no charge. Although Grassi experienced no further issues with the unit, he filed a class action complaint against ICP, alleging, in part, violations of California’s Consumers Legal Remedies Act (CLRA), False Advertising Law (FAL), and Unfair Competition Law (UCL). ICP moved for dismissal of the complaint.

CLRA. The court determined that the plaintiff did not allege what statements by the defendant he saw before his purchase and did not plead reliance. The CLRA prohibits unfair methods of competition and unfair or deceptive acts or practices. The plaintiff contended that ICP advertised its products to be of a particular quality that they were not and that it failed to disclose the corrosion issue. However, none of the alleged misrepresentations in the complaint related to the defective coil, but instead were general statements about the air conditioning unit.

Furthermore, Grassi did not allege what information he reviewed about this particular air conditioning unit before he purchased his home. The complaint stated that Grassi received homeowner’s information from the builder at the time of purchase. In the court’s view, even if the homeowner information disclosed the copper coil’s susceptibility to corrosion, such disclosure would not have changed Grassi’s decision to buy the house or how much to pay for it.

FAL. A FAL claim fails if the alleged advertising statements were puffery. According to the court, the statements in the homeowner’s information that the air conditioning unit was “manufactured to some of the industry’s toughest standards” and “covered by some of the best warranties in the industry” were nonactionable puffery. Thus, the plaintiff’s FAL claim failed.

UCL. The plaintiff’s unfair practices claim based on alleged promises that the unit was durable, reliable, and easier to install and maintain was also rejected. The alleged promise was puffery that could not support a UCL claim. Moreover, the plaintiff’s allegation that the coil replacement was ineffective and delayed the ultimate complete failure of the unit was contradicted by the complaint’s other allegations—namely, that ICP provided an aluminum coil which solved the corrosion issue. Thus, the UCL failed in its entirety, the court concluded.

The case is No. 1:15-cv-00253-JAM-JLT.

Attorneys: Glen L. Abramson (Berger & Montague, PC) for Brett Grassi. Bart Lee Kessel (Tucker Ellis LLP) and Daniel Aaron Bress (Kirkland & Ellis, LLP) for International Comfort Products, LLC.

Companies: International Comfort Products, LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews