Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—M.D. Pa.: Wet/dry vacuum claims could support consumer fraud allegations, (Jul 21, 2014)

By Edward L. Puzzo, J.D.

In a class action alleging unfair trade practices by Shop-Vac concerning the horsepower and tank capacity of its wet/dry vacuums, it was not unreasonable as a matter of law for consumers to interpret the term “peak horsepower” as indicative of horsepower achieved in actual use, the federal district court in Harrisburg, Pennsylvania has ruled (In Re: Shop-Vac Marketing and Sales Practices Litigation, July 17, 2014, Kane, Y.).

In this multidistrict putative class action, named plaintiffs from Florida, Missouri and California alleged that Shop-Vac misrepresented the horsepower of its wet/dry vacuums, by using a peak horsepower level impossible to attain in actual use by consumers, and further misrepresented the vacuums’ tank capacities, because in actual operation the vacuums stop working when their tanks reached between 47% and 83% of their stated capacity.

Standing. As an initial matter, defendants alleged that plaintiffs had no injury in fact, because they paid for and received a vacuum that they used without harm, and therefore lacked standing to sue. The court disagreed, finding that plaintiffs’ allegations—that they purchased a product with power and tank size less than promised and bargained for and that they would not have purchased the products but for these misrepresentations—was a sufficient allegation of injury. The court therefore declined to find a lack of standing.

Consumer fraud claims. Plaintiffs alleged that defendants violated state consumer protection statutes by committing deceptive and unfair trade practices. Defendants responded that no reasonable consumer could have been misled by the representations because plaintiffs’ expectations were unreasonable as a matter of law. Specifically, defendants argued, consumers could not reasonably believe that the “peak horsepower” levels cited were indicative of “operational horsepower” levels. The court ruled that at this stage in the litigation, it could not conclude that a reasonable consumer would understand that the term “peak horsepower” did not mean horsepower achieved in actual use.

Defendants also argued that they accurately disclosed the peak horsepower and tank size of their vacuums, and plaintiffs did not argue otherwise. Thus, according to the defendants, the plaintiffs failed to allege unfair conduct in support of their unfair trade practices claims. Accepting plaintiffs’ allegations as true for purposes of the motion to dismiss, the court ruled that plaintiffs adequately alleged that the vacuums’ horsepower and tank capacity did not comport with defendants’ representations. Accordingly, unfair conduct was adequately alleged. The court therefore denied defendants motion to dismiss the consumer fraud claims.

The case is Civil Action No. 4:12-md-2380.

Attorneys: Brian F. Fox (Levin, Fishbein, Sedran & Berman) for Emanuele DiMare. Michael Lawrence Mallow and Michael Brian Shortnacy (Loeb & Loeb LLP) for Shop-Vac Corporation, Lowe's Home Centers, Inc., and Lowe's HIW, Inc.

Companies: Shop-Vac Corporation; Lowe's Home Centers, Inc.; Lowe's HIW, Inc.

Cases: StateUnfairTradePractices PennsylvaniaNews