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Rait v. Sears, Roebuck and Co.

2009 WL 3667067 (U.S. Dist. Ct. D. N.J. 2009) (Unpublished)

WARRANTIES; CONSUMER FRAUD — Absent substantial aggravating circumstances, a claim amounting to allegation of breach of warranty does not rise to the level of a Consumer Fraud Act claim.

A woman purchased a garage door opener from a major retailer’s website. When it did not work, she sued the retailer in a class action alleging violations of the New Jersey Consumer Fraud Act (CFA), common-law fraud, unjust enrichment, breach of the implied warranty of fitness for a particular purpose, and breach of the implied warranty of merchantability.

The United States District Court twice dismissed all claims but for the breach of the implied warranty of merchantability and the unjust enrichment counts. The woman filed a second amended complaint reasserting her CFA, common-law fraud, unjust enrichment, and breach of the implied warranty of merchantability claims. In connection with the second amended complaint, she alleged no new facts about her specific experience. Instead she submitted an edited compilation of anonymous internet postings and information listed on the garage opener box and in the retailer’s catalogue when she bought the garage opener. She did not allege that she relied on this information. The retailer moved to dismiss: (a) the CFA for failure to state a claim for this cause; and (b) the common-law fraud claims for failure to plead these claims with the specificity required by Federal Rules of Civil Procedure Rule 9(b).

The lower court granted the retailers motion to dismiss the CFA and common-law fraud claims. The Court rejected the purchaser’s argument that the internet postings alone were sufficient to support broad allegations that the retailer intended to deceive customers. It noted that, aside from the fact that the woman failed to assert that she relied on, or even considered, the “trade dress” on the garage opener box and catalogue information in making her decision, the new information merely described how the product was intended to work. The information did not state that the garage opener would never break nor did the information support allegations that the retailer knew the opener was defective when it was sold. The Court concluded that the woman did not provide “substantial aggravating circumstances” sufficient to elevate her claim to something more than a breach of warranty action, which she asserted and which was moving forward. Moreover, it stated that the purchaser did not show how the retailer’s actions “stood outside the norm of reasonable business practice.” It also agreed with the retailer that, if the purchaser’s position was accepted, then “virtually every consumer product company would be subject to fraud claims and extensive discovery” since nearly every product that contains a light has instructions and descriptions that indicate how and when the light should turn on. To the extent that customers disagreed with retailers when products break within warranty periods, the Court believed that breach of warranty claims were available. However, it held that New Jersey law was clear, such a situation, without more, was not enough to state a CFA claim. Additionally, because common-law fraud involves a more onerous standard than the CFA, it ruled that the purchaser did not sufficiently plead a common-law fraud claim.

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