Julian v. TTE Technology, Inc.

Background

Four individual consumers brought a class action against TTE Technology, Inc., alleging false advertising concerning TTE televisions. The plaintiffs alleged that TTE advertised the televisions as having a “120Hz CMI effective refresh rate,” even though the televisions had a 60Hz refresh rate. Their second amended complaint asserted claims under California Business and Professions Code sections 17200 and 17500, the California Consumer Legal Remedies Act, California unjust-enrichment law, the New Jersey Consumer Fraud Act, and New Jersey unjust-enrichment law.

The plaintiffs sought several forms of relief, including a permanent injunction barring TTE from continuing the alleged advertising practices and monetary relief described as restitution. TTE moved to dismiss the second amended complaint. In an earlier order, the court had granted in part and denied in part TTE’s motion to dismiss the first amended complaint and had given the plaintiffs limited permission to amend.

Injunctive Relief

TTE argued that the plaintiffs had not adequately pleaded standing to seek an injunction. Standing is the requirement that a plaintiff show a concrete injury that the court can address. For prospective relief such as an injunction, the threatened future injury must be actual and imminent rather than hypothetical.

The court applied the Ninth Circuit’s decision in Davidson v. Kimberly-Clark Corp., which held that a consumer who was previously deceived may still have standing to seek an injunction if the consumer plausibly alleges a future injury. In that case, the consumer wanted to buy the product again but could not determine from the product’s packaging whether the defendant had corrected the alleged misrepresentation.

Two plaintiffs, Mr. Julian and Mr. Pacano, alleged that they would like to buy a TTE television in the future if they could trust TTE’s refresh-rate advertising. They also alleged that they would not have bought their televisions, or would have paid less, if the advertising had been truthful. The court found those allegations plausible and concluded that the plaintiffs did not necessarily need to reject TTE televisions altogether merely because of the alleged misrepresentation.

The court nevertheless held that the allegations did not establish an actual or imminent threat of future harm. The plaintiffs alleged only a general intention to purchase another TTE television and supplied no facts suggesting that such a purchase was likely in the relatively near or foreseeable future. The court distinguished cases involving products purchased repeatedly, such as wipes, because televisions are durable goods that are not ordinarily purchased on a regular basis.

The court therefore dismissed the request for injunctive relief, but gave the plaintiffs one final opportunity to correct this deficiency in good faith. The amended complaint was due within three weeks of the order, and TTE would have three weeks to respond.

Restitution and Unjust Enrichment

The court had previously ruled that the plaintiffs could not seek restitution as an equitable remedy unless they showed that legal remedies, such as damages, were inadequate. The earlier dismissal of restitution requests was without prejudice, allowing the plaintiffs to seek permission to amend if discovery revealed a basis for showing that damages were inadequate.

Although the plaintiffs removed the word “restitution” from their claims under California Business and Professions Code sections 17200 and 17500, the court found that their requests to restore money acquired by TTE still sought restitution. The court treated TTE’s challenge to those allegations as moot because the plaintiffs said at the hearing that they included the allegations only to preserve their rights on appeal. The court adhered to its prior ruling: those restitution requests were dismissed without prejudice, but without leave to amend at that point.

The plaintiffs also removed express references to restitution from their California and New Jersey unjust-enrichment claims, but alleged that TTE had unjustly retained profits and should be required to make them whole. The court rejected the argument that these claims sought legal, rather than equitable, relief. It held that the plaintiffs had not identified any difference between the damages they sought and the restitution they sought. The court dismissed both unjust-enrichment claims without prejudice. It stated that the plaintiffs could seek leave to amend if they later discovered a basis for showing a difference between damages and restitution.

Disposition

The court granted TTE’s motion to dismiss. It dismissed the request for injunctive relief with leave to amend, dismissed the unjust-enrichment claims without prejudice, and dismissed the restitution requests without prejudice and, at that point, without leave to amend. The order disposed of Docket No. 66.