A class action lawsuit alleging that a treadmill manufacturer violated warranties and fraudulently misrepresented its horsepower capabilities outran dismissal in the Western District of Virginia.
After allowing the plaintiff to sidestep a jurisdictional roadblock, Judge Elizabeth K. Dillon refused to dismiss all but one of the claims and granted leave to amend the express warranty claim.
A treadmill’s lifetime and the duration of workouts were too imprecise to establish a written warranty for performance over time.
“Not every workout will be same amount of time, and even if that were somehow true, plaintiff has not specified what that amount of time would be,” Dillon wrote.
The opinion is Prince v. Johnson Health Tech Trading Inc. (VLW 023-3-033).
Johnson Health Tech Trading manufactured treadmills under the name “Horizon Fitness” and advertised that its Horizon 7.8 AT Treadmill could deliver 4.0 continuous duty horsepower, or CHP.
Not according to Wendy Prince, who owns one of those treadmills.
CHP is a measurement of a treadmill’s ability to maintain power over time. While possible for the Horizon treadmill to meet its advertised CHP in a lab, it would only provide a fraction of that for the average user due to its onboard circuit breaker and household electrical limits in the U.S.
Prince bought the treadmill on Horizon’s website for $1,999. Had she known its true horsepower capabilities, she either wouldn’t have bought it or would have paid less.
On behalf of herself, as well as putative state and federal classes of purchasers, Prince sued Horizon for breaches of express and implied warranties, constructive fraud and consumer protection.
Johnson Health moved to dismiss on subject matter and jurisdictional grounds.
Dillon rejected Johnson Health’s argument that Prince didn’t have standing to assert claims related to treadmills she didn’t buy.
Recent cases suggested that the 4th U.S. Circuit Court of Appeals wouldn’t follow the minority view presented by Johnson Health, which requires identical products.
“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,” Dillon wrote.
MMWA or CAFA?
Prince claimed she had jurisdiction to seek warranty damages in federal court under the Magnuson-Moss Warranty Act, or MMWA, even though she didn’t have the requisite hundred or more named plaintiffs.
Instead, she relied on the Class Action Fairness Act, or CAFA, which required only that the sum in controversy exceed $5 million and that any plaintiff be a citizen of a different state than any defendant.
“At least one court of appeals has held that the MMWA requirements must be met separately from CAFA’s jurisdictional requirements,” Dillon pointed out. “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.”
She added that congress’s purpose in enacting CAFA “was ‘to expand subject matter jurisdiction in the federal courts.’ So, once CAFA’s requirements have been satisfied, MMWA’s additional jurisdictional requirements need not also be satisfied.”
Thus, Dillon said the court had jurisdiction under CAFA.
Johnson Health argued that Prince’s MMWA express warranty allegations were deficient because they didn’t identify a warranty that specifically said the treadmill would “meet a specified level of performance over a specified period of time.”
Prince claimed the treadmill was expected to perform at a specific CHP for a particular period of time each time the machine was used.
According to Johnson Health, however, a representation of lifetime or even a single workout’s performance couldn’t create an express warranty because those are inherently imprecise measurements and not a “specified period of time” under the MMWA.
“Just like the representation of a lifetime warranty, a warranty that a specific horsepower would last the duration of a person’s workout is ‘an inherently imprecise measurement’ because people tend to work out for different amounts of time,” she wrote.
The court granted Johnson Health’s motion to dismiss, with leave to amend.
Dillon explained that warranty claims in Virginia require a plaintiff to demonstrate that they gave notice to the seller within a reasonable time after discovering a breach.
Here, even though Prince didn’t say when she discovered the treadmill’s deficiency, the judge found Prince’s allegations were sufficient and denied Johnson Health’s motion to dismiss Prince’s state-law warranty claims.
Dillon also found that Prince sufficiently pled constructive fraud and VCPA actions and rejected Johnson Health’s argument that Prince’s constructive fraud claim was barred by the economic loss rule.
“While the economic loss rule may prohibit a constructive fraud claim which ‘essentially alleges negligent performance of contractual duties,’ it will not bar a constructive fraud claim which goes beyond mere ‘disappointed economic expectations assumed only by agreement,’” the judge wrote. “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.”
Because Prince credibly asserted a claim that can’t be barred by the economic loss rule, Dillion denied Johnson Health’s motion to dismiss this claim.