Wedra v. Cree, Inc.

Background

Stephanie Wedra sued Cree, Inc. on behalf of herself and others similarly situated. She alleged that she bought Cree 60-watt and 75-watt LED bulbs from Home Depot after reviewing Cree’s packaging and advertising. According to the complaint, Cree represented that the bulbs would last 22 or more years or 45 or more years, save consumers substantial amounts of money, perform better than less expensive bulbs, and come with a ten-year warranty or a 100% satisfaction guarantee. Wedra alleged that the bulbs burned out within six months.

She asserted claims under New York General Business Law Sections 349 and 350, for breach of express and implied warranties, fraudulent misrepresentation and concealment, and unjust enrichment. Cree moved to dismiss under Rule 12(b)(6), which tests whether a complaint states legally sufficient claims.

Federal preemption

Cree argued that the Energy Policy and Conservation Act, or EPCA, blocked Wedra’s state-law claims. The court agreed only in part. EPCA requires certain disclosures on LED-bulb packaging, including the bulb’s life in years, estimated annual energy cost, and light output. The court held that claims based on the required estimated lifespan disclosure were preempted, meaning federal law displaced those state-law claims.

The court held that EPCA did not preempt claims based on statements that went beyond the required disclosures. In particular, claims concerning Cree’s representations about comparative cost savings and the ten-year satisfaction guarantee could proceed past the preemption issue. The court also took judicial notice of documents from two other lawsuits involving similar allegations against Cree and of the Cree packages referenced in the complaint.

New York consumer-protection claims

The court rejected Cree’s argument that the claims surviving federal preemption were protected by New York’s safe-harbor provisions. The court also found that Wedra plausibly alleged that the statements about cost savings and product quality were material and influenced her purchase decision.

The court agreed, however, that the phrase “100% satisfaction guarantee” was non-actionable puffery—an opinion-like or commendatory statement that a reasonable consumer would not treat as a specific factual promise. The court distinguished that phrase from the alleged cost-savings statements and ten-year warranty, which it viewed as factual assertions at the pleading stage. The court declined to decide whether Cree’s statements were actually truthful before discovery. The claims under Sections 349 and 350 therefore survived to the extent stated in the court’s ruling.

Warranty claims

The court dismissed the express-warranty claim because Wedra did not allege that she asked Cree to refund or replace the bulbs. The court reasoned that the alleged warranty represented that Cree would provide a remedy if the bulbs failed to meet the promised duration.

The court dismissed the implied-warranty claim because Wedra alleged only economic loss and did not allege contractual privity with Cree. She alleged that she bought the bulbs from Home Depot, which the court found insufficient under New York law to establish the required direct contractual relationship with Cree.

Fraud claims

The court held that Wedra adequately pleaded fraudulent misrepresentation and concealment. She identified the alleged false statements, Cree as the speaker, the locations and general circumstances in which the statements appeared, and why she believed they were false. She also alleged that the bulbs failed within six months, that she paid a premium, and that Cree’s statements induced her purchase.

Unjust enrichment and leave to amend

The court dismissed the unjust-enrichment claim because it duplicated the statutory, contract, and fraud theories based on the same alleged misrepresentations and sale of the bulbs.

The court denied Wedra’s request for permission to amend. It concluded that the defects in the dismissed claims were substantive rather than problems that better pleading could fix, and noted that she had already had an opportunity to amend.

Disposition

The court granted in part and denied in part Cree’s motion to dismiss. Wedra’s claims under New York General Business Law Sections 349 and 350 and her claims for fraudulent misrepresentation and concealment were allowed to proceed. All other claims were dismissed. The court ordered Cree to answer by April 3, 2020, and directed the clerk to terminate the motion.