Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Fitbit can’t put sleep tracking misrepresentation claims to rest, (Jul 21, 2016)

By Michael Menzhuber, J.D., LL.M.

A motion to dismiss claims that Fitbit, Inc. misled consumers about the functionality of sleep tracking on its wearable devices, in violation of state false advertising and consumer protection laws, was denied by the federal district court in San Francisco. The court reasoned that the consumer plaintiffs met the heightened pleading requirements of Federal Rule of Civil Procedure 9(b) by identifying the allegedly misleading statements, alleging pre-purchase notice and reliance on the statements, citing documents stating that the devices could not track sleep, and offering their personal experience that the devices tracked motion, not sleep (Brickman v. Fitbit, Inc., July 15, 2016, Donato, J.).

James Brickman and Margaret Clingman (collectively, "plaintiffs") each allegedly purchased a Fitbit Flex device based on Fitbit’s representation about the devices’ sleep tracking function. The devices carried a premium charge of $30 or more because of the sleep tracking functionality.

The plaintiffs later filed a purported class action which alleged that Fitbit misled consumers about the utility and efficacy of the sleep tracking function on its devices. Specifically, the plaintiffs alleged: (1) violation of California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumer Legal Remedies Act (CLRA); (2) violation of the Magnuson-Moss Warranty Act (MMWA) and the Florida Deceptive and Unfair Trade Practices Act (FDUTPA); (3) common law fraud; (4) negligent misrepresentation; and (5) unjust enrichment/restitution/quasi contract.

Fitbit sought to dismiss the UCL, FAL, CLRA, and common law misrepresentation claims on the basis that the plaintiffs’ factual averments did not plausibly show that the challenged misrepresentations could have misled a reasonable consumer and lacked the specificity required for claims sounding in fraud. The court disagreed. It determined that the heightened pleading standards of Federal Rule of Civil Procedure 9(b) were met because the plaintiffs: (1) identified statements on Fitbit’s product packaging that the Flex device would "TRACK YOUR NIGHT" and could "TRACK SLEEP"; (2) alleged pre-purchase notice and reliance on Fitbit’s statements; (3) cited specific documents stating that the devices could only measure movement and not track sleep; and (4) offered their own personal experience that the device only tracked motion and not sleep.

The court also determined that the plaintiffs’ allegations established the plausibility of their claims under Federal Rule of Civil Procedure 8. Fitbit tried arguing that the challenged statements regarding the Flex device were inactionable puffery as a matter of law. The court was not persuaded because misdescriptions of specific or absolute characteristics of a product are actionable.

The case is No. 15-cv-02077-JD.

Attorneys: Patrick J. Perotti (Dworken & Bernstein Co., LPA) for James P. Brickman. Erin McCalmon Bosman (Morrison & Foerster LLP) for Fitbit, Inc.

Companies: Fitbit, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews