Mongalo v. Crocs, Inc.

Background

Plaintiffs Jacqueline Mongalo, Garland, Werner, and Harmon alleged that Crocs’s classic and bayaband clogs contain a plastic material that shrinks when exposed to ordinary heat or direct sunlight. They alleged that Crocs marketed the products as suitable for pools, beaches, gardens, and other hot or sunny environments without warning about shrinkage. Each plaintiff allegedly bought products, saw Crocs marketing before purchasing, and later found that the products had shrunk enough not to fit.

Plaintiffs asserted claims for breach of express warranty, breach of implied warranty of merchantability, fraudulent concealment, fraud or misrepresentation, violation of California’s Consumers Legal Remedies Act, false advertising, negligent misrepresentation, and unfair, unlawful, and deceptive trade practices. They proposed a class of California purchasers from November 22, 2018, to the present, plus a subclass of people who bought directly from Crocs.

Crocs moved to dismiss the warranty and fraud-based claims under Federal Rule of Civil Procedure 12(b)(6), which concerns whether a complaint states a legally sufficient claim. Crocs also moved under Rule 12(f) to strike the class allegations. The court granted Plaintiffs’ request for judicial notice of a proposed complaint from a prior related proceeding.

Motion to dismiss

The court granted Crocs’s motion to dismiss the warranty claims to the extent the complaint failed to sufficiently allege that Plaintiffs gave Crocs notice of the alleged breaches before filing suit. The complaint said that Crocs received a notice and demand in July 2022, but did not allege facts showing that Plaintiffs provided that notice.

The court denied the motion as to express-warranty claims based on Crocs’s advertisements. It concluded that advertisements describing the shoes as suitable for pools, beaches, and gardens plausibly alleged an express warranty that the shoes would remain wearable when exposed to ordinary heat, direct sunlight, or water. The court granted the motion as to express-warranty claims based on the products’ size labeling because the complaint did not allege that the products were defective when purchased.

The court denied the motion as to implied-warranty claims based on the allegation that the shoes lacked a basic level of fitness and quality because they shrank in ordinary sun or heat. But it granted the motion as to Plaintiff Garland’s implied-warranty claim because Plaintiffs did not address Crocs’s argument that Garland lacked the required direct buyer-seller relationship, known as vertical privity.

The court granted the motion as to the fraud-based claims to the extent they failed to identify the alleged misrepresentations with the particularity required by Rule 9(b). The complaint generally alleged that each plaintiff saw advertisements or marketing materials saying the products were suitable for hot or sunny conditions, but did not identify what specific materials each plaintiff saw or where they saw them.

The court denied the motion as to the fraud-based omission claims. It found that allegations about Crocs’s knowledge of the material’s chemical properties and thousands of shrinkage complaints plausibly supported a duty to disclose. The court also denied the motion to the extent Crocs argued that a reasonable consumer would not have been deceived, finding that resolving how consumers would interpret the advertisements was premature on a motion to dismiss.

Motion to strike class allegations

The court denied the motion to strike to the extent Crocs argued that Plaintiffs had not alleged a concrete injury for constitutional standing. The complaint alleged that the plaintiffs’ products shrank until they no longer fit and that they would not have bought the products, or would have paid less, had they known about the shrinkage.

The court also denied the motion to strike to the extent Crocs argued that the court’s earlier denial of class certification in a prior related proceeding barred Plaintiffs’ current class allegations. The court stated that the earlier decision did not bind these Plaintiffs and that discovery had not yet begun, making it premature to strike the allegations.

The court granted the motion to strike to the extent the proposed class period extended beyond the applicable statutes of limitations. Plaintiffs’ proposed period began November 22, 2018, but Plaintiffs conceded that a period beginning December 13, 2020, was acceptable. The court ordered Plaintiffs to amend the proposed class period to December 13, 2020, through the present and stated that it would review the period at class certification.

Leave to amend and disposition

The court granted Plaintiffs leave to amend their warranty and fraud claims and to revise their class allegations. Plaintiffs may not add new claims, and no new claims or parties may be added without the court’s prior approval. The opinion states that failure to meet the court’s deadline will result in dismissal with prejudice under Rule 41(b), although the deadline itself is not legible in the provided text.

The final order grants in part and denies in part Crocs’s motion to dismiss and grants in part and denies in part Crocs’s motion to strike. The opinion identifies the judge only as a United States District Judge; the judge’s name is not readable in the provided text.