Bassaw v. United Industries Corporation

Background

Shivan Bassaw brought a proposed class action against United Industries Corporation and Spectrum Brands, Inc. He alleged that the defendants materially misled consumers by advertising Hot Shot Concentrated Deep Reach Fogger as effective against various insects, including through statements that it would kill insects on contact, control heavy infestations, keep killing for up to two months, and kill hidden bugs by penetrating cracks, crevices, and carpet fibers.

Bassaw alleged that he purchased the product online on August 21, 2016, for approximately $6, used it as directed, and found that it did not provide effective insect control as advertised. He asserted nationwide claims for unjust enrichment and breach of express warranty under New York law and the Magnuson-Moss Warranty Act. He also asserted claims for deceptive business practices and false advertising under Sections 349 and 350 of the New York General Business Law on behalf of a proposed subclass of New York residents.

Motions and analysis

The defendants moved to dismiss under Rules 12(b)(1), 12(b)(2), and 12(b)(6), and also moved under Rule 12(f) to strike allegations concerning New York General Business Law claims on behalf of a nationwide class.

The court denied the Rule 12(b)(1) motion. It held that Bassaw adequately alleged an injury because he claimed that he paid for a product that did not perform as advertised, resulting in economic harm. The court also denied the Rule 12(b)(2) motion. It did not decide whether the court had personal jurisdiction over claims of proposed class members outside New York, explaining that this issue need not be resolved before a motion for class certification. The court noted that the defendants did not dispute specific personal jurisdiction over Bassaw’s own claims.

The court denied the Rule 12(f) motion because the amended complaint did not assert New York General Business Law claims on behalf of the nationwide class.

The court dismissed Bassaw’s express-warranty claims under New York law and the related Magnuson-Moss Warranty Act claims. New York law requires a buyer to notify the seller of an alleged breach within a reasonable time after discovering or having reason to discover it. Bassaw purchased the product in August 2016 but did not notify the defendants until August 9, 2019. Because the product promised immediate and short-term results, the court presumed that he discovered or should have discovered the alleged breach shortly after purchase. It held that waiting nearly three years to provide notice was unreasonable as a matter of law. The Magnuson-Moss claims were dependent on the state-law warranty claims.

The court granted the motion on Bassaw’s unjust-enrichment claim and request for injunctive relief because Bassaw agreed not to pursue them.

The court denied the motion as to Bassaw’s New York General Business Law claims. It held that Bassaw plausibly alleged consumer-oriented conduct, materially misleading statements on the product’s packaging, and economic injury from paying a premium for the product. The court also rejected the defendants’ argument that Bassaw had to plead reasonable reliance on the labeling, explaining that justifiable reliance is not an element of claims under Sections 349 or 350.

Disposition

In Bassaw v. United Industries Corporation, Judge Jesse M. Furman granted the defendants’ motion in part and denied it in part. The court dismissed Bassaw’s unjust-enrichment claim, express-warranty claims, Magnuson-Moss Warranty Act claims, and request for injunctive relief. His New York General Business Law claims survived. The court declined to grant leave to amend the express-warranty claims, finding that the defect was substantive and that Bassaw had not identified additional facts that could cure it. The defendants were directed to answer the remaining claims within three weeks, and the initial pretrial conference was reinstated and adjourned to October 8, 2020.