Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—DNJ: Washing Machine Purchasers’ Claims Not Pled with Sufficient Particularity , (May 1, 2013)

By Jody Coultas, J.D.

Washing machine purchasers failed to state consumer protection claims against General Electric Company for allegedly failing to disclose that its washing machines were defective, the federal district court in Newark has held (Fishman v. General Electric Co., April 30, 2013, Martini, W.).

The purchasers alleged that GE’s front-loading washer machines had defective drums, doors, and door seals that caused mold, mildew, and foul odors. GE allegedly concealed the design defects and made express representations about the quality of its washing machines, and misrepresented that the machines were energy efficient. The purchasers sought to represent a nationwide class action and a putative sub-class comprised of all Missouri, New Jersey, and Pennsylvania residents that bought a GE machine for personal, family, or household purposes.

The court held that the Product Liability Act (PLA) did not apply to the claims. GE alleged that the New Jersey, Missouri, and Pennsylvania consumer protection laws were subsumed by the New Jersey PLA. The PLA is the exclusive statutory cause of action for claims falling within its purview. A PLA action is any claim for harm caused by a product, irrespective of the theory underlying the claim, except actions for harm caused by breach of an express warranty.GE argued that the issue was the mold problems in the washing machines causing damage to property. However, the purchasers’ claims were based on the harm to the washing machines, rather than harm to the purchasers.

The purchasers’ New Jersey, Pennsylvania, and Missouri consumer protection law claims were dismissed for failure to plead fraud with the particularity required by Federal Rule of Civil Procedure 9(b). The purchasers failed to provide basic information about key aspects of their claims, including model numbers, dates of manufacture, or any other identifying information. The purchasers also failed to identify what representations were made or when they were made.

GE also argued that the nationwide class allegations should be dismissed based on the differences in the consumer fraud laws of the various states across the country. The proper procedural mechanism for making this argument was a motion to strike under Federal Rule of Civil Procedure 12(f), the court explained. Even if the argument had been properly filed, the request would have been denied as premature.

The case is No. 2:12-cv-00585 (WJM).

Attorneys: Caroline F. Bartlett (Carella Byrne) for Stanley Fishman. Charles J. Falletta (Sills Cummis & Gross) for General Electric Co.

Companies: General Electric Co.

Cases: StateUnfairTradePractices NewJerseyNews