Jason Thomas v. Costco

• Court: Court of Appeals for the Ninth Circuit
• Decided: March 4, 2022
• Docket: 21-55335
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 4 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

JASON THOMAS, individually and on No. 21-55335 behalf of all others similarly situated, D.C. No. Plaintiff-Appellant, 3:20-cv-00718-LAB-BLM

v. MEMORANDUM* COSTCO WHOLESALE CORPORATION,

Defendant-Appellee.

Appeal from the United States District Court for the Southern District of California Larry A. Burns, District Judge, Presiding

Argued and Submitted February 16, 2022 Pasadena, California

Before: OWENS and MILLER, Circuit Judges, and CHRISTENSEN,** District Judge.

Plaintiff-Appellant Jason Thomas appeals the district court’s decision

granting summary judgment for Defendant Costco Wholesale Corporation

(“Costco”). Because the parties are familiar with the facts of this case, we need not

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Dana L. Christensen, United States District Judge for the District of Montana, sitting by designation. recount them here. We review for abuse of discretion the district court’s

conversion of Costco’s motion to dismiss to a motion for summary judgment, and

we review the grant of summary judgment de novo. Hamilton Materials, Inc. v.

Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). We affirm.

1. Thomas alleges that the district court abused its discretion by converting

Costco’s motion to dismiss to a motion for summary judgment under Federal Rule

of Civil Procedure 12(d). But the conversion was necessary for the court to

consider the product reviews that Thomas submitted in his response to Costco’s

motion. Those reviews were not subject to judicial notice because there was a

reasonable dispute about whether those consumers were misled by Costco’s

product listing or whether they were simply confused and unreasonably blamed

Costco. See Fed. R. Evid. 201; Khoja v. Orexigen Therapeutics, Inc., 899 F.3d

988, 1000 (9th Cir. 2018). Nor could those reviews have been considered under

the incorporation-by-reference doctrine because Thomas’s complaint did not

necessarily rely upon them or allege their contents. See Coto Settlement v.

Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010).

Thomas also contends that the district court’s briefing schedule—a little

over one month—provided too little time for discovery. However, Thomas never

opposed the court’s Rule 12(d) conversion or requested additional time for

discovery. And, as explained below, no amount of discovery would have justified

2 denying Costco’s motion, given what the product listing itself states. See Williams

v. Gerber Products Co., 552 F.3d 934, 938 (9th Cir. 2008). Accordingly, the

district court did not abuse its discretion.

2. The district court properly granted summary judgment to Costco because,

even viewing the evidence in the light most favorable to Thomas and drawing all

justifiable inferences in his favor, there was no triable issue whether the challenged

advertising would mislead a reasonable consumer into believing that the AirPods

sold by Costco included a charging case capable of wireless charging.

Thomas argues that Costco’s product listing was misleading “in both its

graphics and the text it employed (especially regarding its repeated use of the word

‘wireless’); as well as in its omission of information essential to clarify which

AirPods model it offered.” But “[i]n the absence of any statement or other

depiction” that the AirPods Costco sold included a charging case capable of

wireless charging, no reasonable consumer relying solely on Costco’s advertising

would be misled. See Ebner v. Fresh, Inc., 838 F.3d 958, 965–66 (9th Cir. 2016)

(rejecting a plaintiff’s claim that a lip product manufacturer misled reasonable

consumers by failing to affirmatively disclose that some of the lip product could

not be accessed using the container’s screw mechanism because there was no

deceptive act to be dispelled). As the district court correctly observed, “the

possibility of confusion only arises” for the consumer who is already “aware that

3 Apple’s AirPods are available with wireless charging.”

And in any event, the fact that a small proportion of consumers were

confused does not prove that such confusion was reasonable. See Becerra v. Dr

Pepper/Seven Up, Inc., 945 F.3d 1225, 1229–31 (9th Cir. 2019). Thomas

incorrectly believed that all Second Generation AirPods or later generations came

with a case capable of wireless charging, and so did the authors of several of the

customer reviews on Costco’s website that Thomas submitted as evidence. But a

reasonable consumer in the market for AirPods could not reasonably believe that

Costco was selling AirPods with a wireless charging case—which retail for $199,

representing a $40 premium over the $159 standard retail cost of AirPods with a

wired charging case—for $139.99, let alone believe that Costco was offering this

remarkable $59.01 discount without calling any attention to an obviously desirable

product feature.

Thus, Thomas and any other consumers who believed Costco was selling the

Second Generation AirPods with wireless charging were not deceived because of

Costco’s advertising, but rather were confused because of their own unreasonable

assumptions. See id.; Moore v. Trader Joe’s Co., 4 F.4th 874, 883 (9th Cir. 2021).

California’s consumer protection laws do not require Costco to anticipate and

affirmatively dispel these shoppers’ idiosyncratic assumptions or wholly incorrect

interpretations of its advertising. See Lavie v. Procter & Gamble Co., 129 Cal.

4 Rptr. 2d 486, 495 (Cal. Ct. App. 2003); Moore, 4 F.4th at 882–84.

As there is no evidence that “a significant portion of the general consuming

public or of targeted consumers, acting reasonably in the circumstances, could be

misled” to believe that Costco promised AirPods with a charging case capable of

wireless charging, Lavie, 129 Cal. Rptr. 2d at 495, the district court did not err in

granting summary judgment in Costco’s favor.

AFFIRMED.