Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Motion to dismiss state consumer protection claims against fitness tracker wristband manufacturer partially granted, (Jul 9, 2015)

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

A motion to dismiss an individual’s amended complaint that, as a result of misrepresentations made by the manufacturer, he was fraudulently induced to purchase its fitness tracker wristband, was granted in part and dismissed in part by the federal district court in San Francisco (Frenzel v. Aliphcom, July 7, 2015, Orrick, W.).

Background. Robert Frenzel purchased a second generation Jawbone UP fitness tracker (JUP) that was manufactured by Jawbone, a consumer technology company. In selecting the JUP for purchase, Frenzel relied on a representation that it had a battery life of 10 days and would perform certain tracking and measurement functions. The JUP did not maintain a charge for 10 days and did not accurate record Frenzel’s movement, sleep patterns, and calorie intake. After contacting Jawbone to report the problems, he was issued a replacement JUP. Frenzel encountered the same problems with the replacement JUP but, because it reported these issues to JUP after the three-month warranty period had expired, he was not issued another replacement.

Frenzel filed a complaint, seeking to represent a national class, against Jawbone that alleged: (1) violations of California’s Consumer Legal Remedies Act (CLRA); (2) violations of California’s Unfair Competition Law (UCL); (3) violations of California’s False Advertising Law (FAL); (4) breach of express warrant; (5) breach of the implied warranty of merchantability; and (6) breach of the implied warranty of fitness for a particular purpose. The court dismissed each cause of action with leave to amend. It also denied Jawbone’s motion to strike certain aspects of the proposed class definition.

Frenzel filed an amended complaint (FAC) which included the same causes of action in the original complaint except the breach of the implied warranty of fitness for a particular purpose. He also narrowed his class definition to include only persons who had purchased the second generation JUP. Jawbone motioned to dismiss the complaint and to strike class allegations.

Choice of Law. The court held that California’s choice of law rules required the dismissal of each cause of action in Frenzel’s original complaint and prohibited him from representing a national class asserting claims under the CLRA, UCL, and FAL. Frenzel continued to assert California state law claims on behalf of a national class and, in support, asserted that Jawbone’s Website and Service and Software Terms of use made the application of California Law proper.

The court noted that the Website Terms of Use (WTU) required that California law be applied to any terms of use themselves or action related to the WTU. Frenzel made several allegations that attempted to establish a connection between his claims and the WTU. However, the court determined that none of his consumer protection or his warranty claims were based on the WTU themselves.

The court noted that the scope of the Service and Software Terms of Use (SSTU) was significantly broader than the WTU and extended the application of California law to the use of the Jawbone service. Frenzel alleged that the JUP software directly impacted the JUP and that the Jawbone service and software were responsible for the inaccurate recording information. While the court found the connection between his claims and the Jawbone service were thin, it was persuaded that the choice of law provision in the SSTU raised factual issues that made the choice of law issue better suited for resolution at class certification.

California’s Consumer Legal Remedies Act (CLRA); California’s Unfair Competition Law (UCL); California’s False Advertising Law (FAL). Frenzel based his amended consumer protection claims on: (1) a “battery life theory” that Jawbone misrepresented that the JUP would retain a battery charge for 10 days when fully charged; and (2) a “product functionality theory” that Jawbone misrepresented that the JUP would accurately track and measure a user’s movement, sleep patterns, and calorie intake. Jawbone contended that these theories were both defective under the Federal Rule of Civil Procedure 9(b) heightened pleading standard.

The court dismissed Frenzel’s CLRA, UCL, and FAL claims, to the extent that they were based on the allegation that Jawbone misrepresented that the JUP would retain a charge for 10 days, because Jawbone only advertised a battery life of “up to” 10 days. However, the court determined that Frenzel’s allegations that, from the first day, the JUP did not maintain a charge of 10 days and that subsequent charges were dramatically shorter, and sometimes for only a few hours a day, were sufficient to allege that the “up to” representation may have been misleading.

The court found that Frenzel mischaracterized the alleged misrepresentation underlying his product functionality theory. It noted that Frenzel claimed that Jawbone misrepresented that the JUP would provide “accurate” tracking and measurements. However, the representations that he alleged he relied on referred on only to the JUP’s tracking and measurement capabilities and did not make any claims regarding accuracy.

Frenzel subsequently alleged that the JUP did not function as advertised in that it did not perform the promised tracking and measurement functions. However, Frenzel never alleged that JUP did not measure or track or record his sleep patterns; only that it did not do so accurately. The court noted several cases from the same district that held that general statements about a product’s quality do not become actionable on an affirmative misrepresentation theory merely because the product fails to work perfectly. It, therefore, dismissed Frenzel’s CLRA, UCL, and FAL claims arising from the product functionality theory.

Warranty Claims. The court dismissed Frenzels’ breach of express warranty and breach of the implied warranty of merchantability because he did not allege that Jawbone failed to repair or replace either of his JUP’s during the applicable warranty period.

Motion to Strike. The court denied Jawbone’s motion to strike the class allegation because: (1) Frenzel had substantially narrowed his proposed class definition in his FAC; and (2) it determined that modification of the proposed class definition was inappropriate at this time.

The case is No. 14-cv-03587-WHO

Attorneys: Julia A. Luster (Bursor and Fisher, PA) for Robert Frenzel. Mortimer H. Hartwell (Vinson & Elkins LLP) for AliphCom.

Companies: Alphicom

Cases: Advertising StateUnfairTradePractices FloridaNews