Crown Cell Inc. v. Ecovacs Robotics, Inc.

District Court, N.D. California·Decided September 6, 2022·No. 3:21-cv-07890·Unknown

Opinion

CROWN CELL INC, Case No. 21-cv-07890-SI

Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S v. MOTION TO DISMISS THE SECOND AMENDED COMPLAINT Re: Dkt. Nos. 28, 35 Defendant.

Defendant Ecovacs Robotics Inc. (“Ecovacs”), filed the instant motion to dismiss the Second Amended Complaint (“SAC”). Dkt. No. 28 (MTD). In response, plaintiff Crown Cell Inc. (“Crown Cell”), filed a Motion for Leave to file a Third Amended Complaint (“TAC”) before the Court ruled on the motion to dismiss the SAC. Dkt. No. 35 (Motion for Leave (“MFL”)). Having reviewed the parties’ submissions, the Court found these matters appropriate for resolution without oral argument and VACATED hearing pursuant to Local Rule 7-1(b). For the reasons stated below, defendant’s motion to dismiss is GRANTED IN PART and plaintiff’s motion for leave to file a third amended complaint is GRANTED.

BACKGROUND I. The Second Amended Complaint Plaintiff Crown Cell Inc. is a privately held business incorporated in New York, with its principal place of business in Florida. Dkt. No. 21 (SAC) ¶¶ 5, 11. Crown Cell’s primary business is the sale and resale of products on Amazon’s online marketplace. Id. at ¶¶ 14-16. On February 2, 2022, Crown Cell filed the SAC seeking a Declaratory Judgment of No Trademark Counterfeiting, in addition to asserting three causes of action: (1) Fraud and Misrepresentation, (2) Breach of Express Warranty, and (3) Breach of Implied Warranties. Dkt. No. 21. As alleged in the SAC, defendant “Ecovacs[,] is a manufacturer and merchant of home robotics products, including vacuum cleaners.” Id. at ¶ 18. New England Technology Inc. (“NETi”) is alleged to be Ecovacs’s distributor. Id. at ¶¶ 18-21. The SAC alleges Crown Cell, through a series of seven transactions from August 2019 to December 2020, purchased and acquired over 8,000 vacuum cleaners from Ecovacs through Ecovacs’s distributor NETi.1 Id. at ¶¶ 22, 24. Crown Cell alleges Ecovacs and NETi represented the vacuum cleaners as “authentic, refurbished units that were covered by a limited product warranty issued by Ecovacs to the end consumer which provided that the vacuum cleaners would be free from defects in materials and workmanship when used under normal conditions.”2 Id. at ¶ 23. The relevant portions of this warranty are reproduced below: CERTIFIED REFURBISHED PRODUCTS Limited Warranty – ECOVACS Robotics, Inc. warrants you, the original purchaser, that the ECOVACS product that you purchased will be free from defects in materials and workmanship when used under normal conditions for three (3) months from the product purchase date. This Limited Warranty applies only to certified refurbished products purchased and used in the United States and Canada. Some states/jurisdictions do not allow limitations on the duration of an implied warranty, so the above limitation may not apply to you. NO OTHER WARRANTIES – ECOVACS Robotics, Inc. does not warrant the functions contained in the ECOVACS product will meet your requirements. The entire risk as to the quality and performance of the ECOVACS product is with you. To the maximum extent permitted by applicable law, ECOVACS Robotics, Inc. and its suppliers disclaim all other warranties, either express or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose, with regard to the ECOVACS product and the accompanying written materials. This Limited Warranty gives you specific legal rights. You may have others which vary between states/jurisdictions. Dkt. No. 28-2 (“Exhibit A”). After Crown Cell resold the vacuum cleaners to end consumers on Amazon, it received “a

1 The invoices for these transactions were issued by NETi on “August 5, 2019, December 10, 2019, February 29, 2020, March 31, 2020, May 14, 2020, June 22, 2020, and December 10, 2020.” SAC ¶ 24.

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Crown Cell Inc. v. Ecovacs Robotics, Inc., (N.D. Cal. 2022).

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