Eberhart v. LG Electronics USA, Inc.

188 F. Supp. 3d 401, 2016 U.S. Dist. LEXIS 68381, 2016 WL 3014400
CourtDistrict Court, D. New Jersey
DecidedMay 24, 2016
DocketCivil Action No. 15-1761
StatusPublished
Cited by10 cases

This text of 188 F. Supp. 3d 401 (Eberhart v. LG Electronics USA, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eberhart v. LG Electronics USA, Inc., 188 F. Supp. 3d 401, 2016 U.S. Dist. LEXIS 68381, 2016 WL 3014400 (D.N.J. 2016).

Opinion

OPINION

John Michael Vazguez, United States District Judge.

This matter comes before the Court by way of the Motion to Dismiss the First Amended Class Action Complaint (“Amended Complaint” or “FAC”) filed by Defendant LG Electronics USA, Inc. (“LG”). D.E. ,37. Plaintiff William Eberhart opposed the motion (D.E. 47) and LG filed a reply (D.E, 50). For the reasons stated below, the motion is granted in part and denied in part.

I. BACKGROUND

A. Factual Background1

This is a proposed class action against a major television manufacturer for deceptively marketing its televisions’ frame or refresh rates. The essence of Plaintiffs complaint is that LG deceives consumers as to the refresh rates for its televisions. Television consumers perceive motion on a television screen by observing a display of numerous still images in rapid succession. FAC ¶ 2, D.E. 33. The number of unique [404]*404still images that are displayed on a television screen during each second is referred to as the “refresh rate.” Id. Because electricity in the United States runs at 60 hertz (“Hz”), televisions here generally have a 60 Hz refresh rate, meaning the television displays sixty unique images per second. Id. Through a technology called “motion interpolation,” television manufacturers can increase the refresh rates by adding a unique image or images in between the original sixty images. Id. at ¶¶ 35-38. As a result, sixty new and unique images are interspersed with the original sixty images thereby creating an accurate refresh rate of 120 Hz. Id. at ¶ 38. However, LG allegedly used a less expensive and inferior technology which did not actually create or insert new and unique images between the original images. Id. at ¶39.

Plaintiff alleges that LG created two ratings systems, the Motion Clqrity Index (“MCI”) and “TruMotion,” which purport to measure refresh rates for its LCD televisions with the aim of misleading consumers and commanding a higher price for its products.2 Id. ¶¶ 3-4, 6. Although televisions only have a native refresh rate of 60 Hz, LG uses a technology called “backlight scanning” to make it appear that its televisions have a refresh rate of 120 Hz or higher. Id. ¶¶ 31-34. LG, however, intentionally fails to provide customers with access to the actual, native refresh rates of its televisions and utilizes ratings numbers of 120, 240, and 480, which are traditionally associated with hertz measurements, to confuse customers. Id. ¶¶6, 11, 33, 46. Plaintiff alleges that LG uses these ratings to “deceive customers into believing that their televisions can somehow increase the true refresh rates to levels above the standard 60 Hz.” Id. ¶¶ 5. In actuality, customers pay an inflated price to purchase televisions “with an actual refresh rate of 60 Hz and a built-in, cheap industry trick.” Id. ¶ 34.

Plaintiff, William Eberhart, bought a 60 inch LG 60LB5200 television at a Walmart near his home in Toms River, New Jersey. Id. ¶¶ 17-18. Plaintiff sought out a television that had a minimum of 120 Hz and purchased the specific LG model because he believed that it “well exceeded] his 120 Hz floor.” Id. ¶ 20. Plaintiff alleges that he relied upon LG’s website and the television packaging, “which listed the television’s refresh rate as MCI [480].”3 Id. ¶¶ 19-21. Plaintiffs television has a native refresh rate of 60 Hz. Id. ¶22. Consequently, Plaintiff alleges that he was damaged because he paid a premium that is attributable to LG’s misstatements about the television’s refresh rate. Id. ¶ 23.

B. Procedural History

Plaintiff filed his complaint on March 9, 2015, seeking to represent a class of purchasers of LG LCD televisions from March 1, 2011 to the present. Plaintiffs complaint contained the following counts: (1) violations of the New Jersey Consumer Fraud Act (“CFA”), N.J. Stat. Ann. § 56:8-2; (2) breach of the covenant of good faith and fair dealing; (3) common law fraud; (4) negligent misrepresentation; (5) breach of express warranty; and (6) unjust enrichment. D.E. 1. LG filed a motion seeking to dismiss all six counts of the Complaint on May 21, 2015. D.E. 13. On December 30, 2015, Judge Arleo granted [405]*405Defendant’s Motion to Dismiss in its entirety. Judge Arleo dismissed Plaintiffs unjust enrichment claim with prejudice and the remaining five counts were dismissed without prejudice, providing Plaintiff leave to file an amended complaint. See Dec. 30, 2015 Opinion (“Opinion”) and Order, D.E. 29-30. Plaintiff filed his Amended Complaint on January 15, 2016, asserting causes of action under the OF A, common law fraud, and negligent misrepresentation. D.E. 33. Defendant subsequently filed this motion to dismiss the Amended Complaint on February 26, 2016.4 Defendant seeks for the Court, to dismiss Plaintiffs Amended Complaint in its entirety. D.E. 37.

II. LEGAL STANDARD

LG argues for dismissal pursuant to Fed. R. Civ. P. 12(b)(6). For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Further, 'a plaintiff must “allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims.” Connelly v. Lane Const. Corp., 809 F.3d 780, 789 (3d Cir.2016). A complaint that only pleads facts that are consistent with a defendant’s liability, however, “stops short of the line between possibility and plausibility of entitlement to relief.” Id. at 786.

In evaluating the sufficiency of a complaint, district courts must separate the factual and legal elements. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir.2009). Restatements of the elements of a claim are legal conclusions, therefore, they are not entitled to an assumption of truth. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir.2011). The Court, however, “must accept all of the complaint’s well-pleaded facts as true.” Fowler, 578 F.3d at 210. Moreover, the Court must consider the complaint as a whole. Argueta v. U.S. Immigration & Customs Enforcement, 643 F.3d 60, 74 (3d Cir.2011).

For allegations sounding in fraud, Rule 9(b) imposes a heightened pleading standard.

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188 F. Supp. 3d 401, 2016 U.S. Dist. LEXIS 68381, 2016 WL 3014400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eberhart-v-lg-electronics-usa-inc-njd-2016.