Virginia Lawyers Weekly VA Lawyers Weekly
Where the purchaser of a treadmill alleged that manufacturers made false representations about the treadmills’ horsepower, her Virginia warranty and fraud claims survived their motions to dismiss.
Background
This is a putative class action brought by Wendy Prince, on behalf of herself and similarly situated purchasers of Horizon Fitness treadmills. The amended class action complaint alleges that the treadmills are incapable of reaching and maintaining Horizon’s continuous horsepower representations during normal designed household exercise use. Defendants Johnson Health Tech Trading Inc., Johnson Health Tech Retail Inc. and Johnson Health Tech Inc. move to dismiss for failure to state a claim and lack of subject matter jurisdiction.
Standing
Johnson Health argues that plaintiff does not have standing to assert claims related to treadmills she did not purchase. Plaintiff only bought one model of treadmill—the Horizon 7.8 AT Treadmill—but she seeks to expand her claims to encompass all Horizon treadmills. In similar treadmill cases, courts have followed the majority approach and found that treadmill models are substantially similar for horsepower misrepresentation claims.
Also, a recent case from North Carolina, Hill v. AQ Textiles LLC, 582 F. Supp. 3d 297 (M.D.N.C. 2022), suggests that the Fourth Circuit would follow the majority approach. The court agrees with the analysis in Hill that the Fourth Circuit is likely to follow the majority approach to this issue. Therefore, the court finds that plaintiff has standing to assert claims related to treadmills she did not purchase because the treadmill she purchased is substantially similar to all Horizon treadmills and her claims are substantially similar to those of the other class members.
MMWA
The Magnuson-Moss Warranty Act, or MMWA, provides that a suit cannot be brought in federal court “if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.” Although this is a class action, there is only one named plaintiff. Therefore the MMWA does not provide the court with jurisdiction over this action.
Plaintiff relies instead on the Class Action Fairness Act, or CAFA, for jurisdiction. At least one court of appeals has held that the MMWA requirements must be met separately from CAFA’s jurisdictional requirements. However, most courts, including those within Fourth Circuit, have held that a class action based on violations of the MMWA may be brought under CAFA even if it may not be brought directly under the MMWA. Therefore, the court finds that it has jurisdiction under CAFA.
Johnson Health Tech Inc.
Defendants argue that Johnson Health Tech, Inc., should be dismissed as a defendant because it does not exist. Plaintiff argues that there is an issue of fact as to whether this is an entity that may be subject to liability in this action. At this stage, the court can only conclude that plaintiff has stated a claim against an entity called Johnson Health Tech Inc. that may or may not be an existing legal entity. The status of Johnson Health Tech Inc. as a viable defendant must be resolved through the discovery process.
MMWA warranty claim
Defendants argue that plaintiff’s allegations are deficient because they do not identify a warranty that specifically identifies the duration of the warranty — i.e., that the product “will meet a specified level of performance over a specified period of time.” Because plaintiff’s allegations of duration are inherently imprecise, the court will grant defendants’ motion to dismiss this claim, with leave to amend.
Virginia warranty claim
In a breach-of-warranty action under Virginia law, a plaintiff must demonstrate that they gave notice to the seller “within a reasonable time after [s]he discover[ed] or should have discovered any breach … or be barred from any remedy.” Plaintiff has adequately pled notice simply by alleging that she provided pre-suit notice within a reasonable time of discovering the defect.
Constructive fraud
The complaint alleges, generally, that defendants made statements containing false representations about the horsepower of the treadmills, from the time the marketing of the treadmills began until the time that plaintiff gave notice of the deceptive nature of the marketing, online, in publications, through distributors and third-party retailers, and in stores, by repeatedly making the misleading statements to consumers like and including plaintiff. This is sufficient to meet the requirements of Rule 9.
Defendants also argue that plaintiff’s constructive fraud claim is barred by the economic loss rule. But the economic loss rule will not bar a constructive fraud claim which goes beyond mere “disappointed economic expectations assumed only by agreement.” Plaintiff describes herself and others similarly situated as more than disappointed consumers but, instead, as victims of an unlawful scheme of false advertising and misrepresentation. This is sufficient at this stage.
Defendants’ motion to dismiss granted in part, denied in part.
Prince v. Johnson Health Tech Trading Inc., Case No. 5:22-cv-00035, Jan. 31, 2023. WDVA at Harrisonburg (Dillon). VLW 023-3-033. 12 pp.
