1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MARK DUVALL, Case No. 25-cv-02794-JSC
8 Plaintiff, ORDER RE: DEFENDANT’S MOTION 9 v. TO DISMISS THE THIRD AMENDED COMPLAINT 10 HAIER US APPLIANCE SOLUTIONS, INC., dba GE Appliances, Re: Dkt. No. 49 11 Defendant.
12 13 Plaintiff Mark Duvall brings this putative class action, alleging Defendant failed to 14 disclose defects in two-in-one combination washer dryer appliances (“Class Appliances”) 15 manufactured by Defendant GE Appliances. (Dkt. No. 45.)1 In his Third Amended Complaint 16 (“TAC”) Plaintiff alleges there are two defects, one in the Appliances’ lint trap and another in the 17 duct system, which cause excessive lint buildup and cause the Appliances to fail to dry clothes. 18 Plaintiff also alleges Defendant breached its Limited Warranty by failing to repair the defects. 19 Plaintiff brings seven causes of action: 1) violation of California’s Consumer Legal 20 Remedies Act (“CLRA”), 2) violation of the California False Advertising Law (“FAL”), 3) 21 violation of the California Unfair Competition Law (“UCL”), 4) breach of the implied warranty of 22 merchantability under California’s Song-Beverly Act, 5) breach of express warranty under the 23 Uniform Commercial Code § 2-313, 6) breach of the implied warranty of merchantability under 24 California Commercial Code §§ 2314 and 10212, and 7) unjust enrichment. Defendant moves to 25 dismiss the equitable claims in Counts I-III and VII, as well as Counts V-VI, under Federal Rule 26
27 1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the 1 of Civil Procedure 12(b)(6). 2 After considering the parties’ submissions, and with the benefit of oral argument on April 3 9, 2026, the Court GRANTS in part, and DENIES in part, Defendant’s motion as set forth below. 4 BACKGROUND 5 The following allegations are taken from Plaintiff’s TAC. 6 I. The Class Appliances and their Defects 7 Defendant manufactures “the GE Profile Ultrafast 2-in-1 Washer/Dryer Combo.” (Dkt. 8 No. 45 ¶ 2.) The Appliance washes and dries clothes in one continuous cycle, and its “two-in-one 9 design is especially attractive to consumers because it appears to save space that would normally 10 be taken up by two different appliances.” (Id. ¶ 3.) “However, the Class Appliances suffer from 11 two defects. Each of these defects independently causes the drier [sic] to fail to dry clothes.” (Id. ¶ 12 33.) The “heating system in the Class Appliances consists of a drum, a heat pump, and a lint 13 filtration system.” (Id. ¶ 27.) Additionally, there is a “duct through which airflow and debris pass 14 from the dryer before contacting the lint filter.” (Id. ¶ 35) These two systems–the lint filter system 15 and the duct system–contain the two alleged defects which “individually render the appliance unfit 16 for its intended purpose of drying laundry” and which Defendant failed to disclose. (Id. ¶ 26.) 17 A. The Lint Filter System Defect 18 The “lint filtration system,” the source of the first defect, “consists of three functional 19 components: a lint trap screen (consisting of both a lint filter mesh and a foam backing), a 20 condensation module, and a water pump and drainage system.” (Id. ¶ 29.) That first component, a 21 “screen,” is “positioned in the airflow pathway that connects the drum to the condenser coil and 22 the condensation module.” (Id.) 23 The lint filter’s defect lies in the screen. “[I]f the dryer’s lint filtration system is free of 24 defects,” lint and debris will be “remove[d],” “capture[d]” by the screen, and “prevent[ed] … from 25 reaching the dryer’s condenser … coil.” (Id. ¶ 32.) However, the screen “does not form a seal 26 onto the casing in which the lint trap screen is held.” (Id. ¶ 34.) The failure to “form a seal,” in 27 turn, causes “lint and other debris” to build up and become “encased” onto the lint traps’ 1 the dryer to turn off.” (Id.) 2 After identifying the lint trap screen’s failure to form a seal, Plaintiff alleges the failure is 3 rooted in either a design defect or a manufacturing defect; these theories “are pled in the 4 alternative” to one another “[p]ursuant to Fed. R. Civ. P. 8.” (Id. ¶¶ 39.) Alleged as a design 5 defect:
6 GE designed the lint trap screen to be removable by the consumer for purposes of cleaning the screen. The lint trap screen is designed to 7 slide out of the casing in which the screen is held in its position in the drier between the duct leading from the drum and the condensation 8 module. However, the design of the lint trap screen leaves space open between the screen and the casing[.] 9 (Id. ¶ 42.) Due to that open space between the screen and the casing, lint bypasses the filter and 10 accumulates. (Id.) Alternatively, alleged as a manufacturing defect: 11 GE designed the Appliances so that the lint trap filters and the casing 12 that houses the filters are molded so that the filters, when inserted, will join together sufficiently tightly to prevent lint from 13 circumventing the filters. However, during the manufacturing process, the lint trap filters and casing are not molded to achieve this 14 aspect of the Appliance’s design. As a result of this failure in the manufacturing process to correctly mold the filters and casing 15 according to the Appliance’s design, the lint trap filter does not engage with the surrounding casing that holds it in place sufficiently 16 tightly to prevent lint from circumventing the filters. 17 (Id. ¶ 47.) 18 In other words, Plaintiff alleges two different lint trap system designs. Alleged as a design 19 defect, the lint trap screen was “designed … to be removable by the customer[.]” (Id. ¶ 42.) This 20 “design … leaves space open between the screen and the casing,” thereby causing lint to bypass 21 the filter and accumulate. (Id.) Alleged as a manufacturing defect, “the lint trap filters and the 22 casing are … molded so that the filters, when inserted, will join together sufficiently tightly,” but 23 there was a “failure in the manufacturing process to correctly mold” those pieces. (Id. ¶ 47.) 24 Under both sets of allegations, lint accumulates, which causes the dryer to fail to dry clothes. 25 B. The Duct System Defect 26 The duct system’s defect lies in the way the system regulates airflow. “In a dryer that is 27 free of defects, this duct will allow free passage of air from the drum to the […] lint filter.” (Id. ¶ 1 series of sharp turns before it reaches the filter.” (Id.) “The angle of the duct at each of these 2 turns slows the rate of airflow, which causes wet lint from the drum compartment to accumulate at 3 the bends of the duct.” (Id.) The accumulation of lint, in turn, “restricts airflow[,] … which 4 decreases the rate at which air … removes moisture from the clothes[.]” (Id.) “Because the defect 5 … causes the dryer to fail to remove moisture … the defect … causes the dryer to fail to dry 6 clothes.” (Id.) In other words, the root of the duct system defect lies in the “the angle[s]” of the 7 duct’s “sharp turns.” 8 For the duct system defect, Plaintiff alleges a design defect and, in the alternative, a 9 manufacturing defect. Alleged as a design defect, the duct is designed to have “sharp angles,” and 10 these angles “too sharp to allow sufficient airflow to avoid wet lint accumulating at the ‘turns.’ As 11 a result, wet lint accumulates, preventing airflow from reaching the dryer sufficient to remove 12 moisture from the drum.” (Id. ¶ 44.) By contrast, as a manufacturing defect, the duct system’s 13 design:
14 calls for the duct connecting the drum to the condensation module and condenser coil to be aligned to accomplish two purposes: first, to 15 regulate airflow through the duct so that air does not travel too quickly, which would cause the drier to blow excessive amounts of 16 lint through the lint filter; second, to create sufficient rates of airflow to remove moisture from the drum compartment while avoiding lint 17 accumulation in the duct system. 18 (Id. ¶ 48.) Allegedly, a deviation from this design occurred “during the manufacturing process,” 19 when Defendant “attaches the duct … in a manner that runs the duct at sharp angles” which 20 “impede airflow,” causing excessive lint accumulation. (Id. ¶ 49.) Under either set of allegations, 21 the root of the duct system’s problem still lies with “angles.” The manufacturing defect theory, 22 though, is these “angles” balance two competing “purposes”: air must not “travel too quickly” and 23 spread too much unfiltered lint, but at the same time, there must be “sufficient airflow to remove 24 moisture.” (Id. ¶ 48.) 25 II. Defendant’s Limited Warranty and Product Advertising 26 Plaintiff attaches Defendant’s Limited Warranty to the TAC. The warranty makes two 27 promises. First, “for the period of[ o]ne year [f]rom the original date of purchase[,] we will 1 limited one-year warranty, we will also provide, free of charge, all labor and related service to 2 replace the defective part.” (Dkt. No. 45-3 at 2.) Second, “for the period of[ f]ive years [f]rom the 3 original date of purchase[,] we will replace[] [t]he sealed heat pump drying system (compressor, 4 condenser, evaporator, and all connecting tubing) which fails due to a defect in materials or 5 workmanship. During this additional four-year limited warranty, you will be responsible for any 6 labor and related service costs.” (Id.) The warranty then states:
7 EXCLUSION OF IMPLIED WARRANTIES
8 Your sole and exclusive remedy is product repair as provided in this Limited Warranty. Any implied warranties, including the implied 9 warranties of merchantability or fitness for a particular purpose, are limited to one year or the shortest period allowable by law. 10 This limited warranty is extended to the original purchase and any 11 succeeding owner for products purchased for home use within the USA. […] 12 Some states do not allow the exclusion or limitation of incidental or 13 consequential damages. This limited warranty gives you specific legal rights, and you may also have other rights which vary from state to 14 state. To know what your legal rights are, consult your local or state consumer affairs office or your state’s Attorney General. 15 (Id.) 16 Plaintiff also alleges Defendant concealed and omitted the defect in its “drying capacity 17 representations,” which Defendant made through two mediums: a “product website” and 18 “specification sheet.” (Id. ¶ 64.) Defendant’s website, hyperlinked in the TAC, “advertises” 19 various things about the Appliance, like how the Appliance is a “‘2-in-1 washer/dryer’ that ‘lets 20 you wash and dry a large load of laundry in about two hours* without needing to transfer the 21 load.’” (Dkt. No. 45 ¶ 64, n.19.) The specification sheet, attached as an exhibit to the TAC, 22 essentially repeats these representations and refers to the Limited Warranty without repeating the 23 warranty’s verbatim terms. (Id. ¶ 65; Dkt. No. 45-4.) For example, the sheet has a 2x2 table about 24 the Limited Warranty: 25
26 27 1 WARRANTY
4 || (Dkt. No. 45-4.) Plaintiff alleges the sheet is “specifically addressed to consumers who are end- 5 || users” because “[i]t contains instructions to the consumer as to how to install the Appliances and 6 || other requirements for in-home use of the Dryer.” (Dkt. No. 45 75.) 7 Plaintiff also alleges Defendant’s statements are still available online: 8 Plaintiff continues to see the Appliance available for purchase on GE’s website and product specification sheet, which continue to 9 contain the Drying Capacity Representations. However, Plaintiff Duvall is and continues to be unable to rely on the truth of the Drying 10 Capacity Representations, because he does not know the meaning or import of these representations, including whether GE has corrected 11 the Lint Trap Defect and the Duct System Defect, such that the Drying Capacity Representations are no longer false. Plaintiff Duvall would 12 buy a new Appliance if he could rely on the Drying Capacity Representations. 13 14 Ud. 9113.) 2 15 III. Plaintiff’s Experience with His Appliance A 16 Plaintiff alleges he bought his appliance on “October 27, 2023.” (Ud. 498.) The Appliance
17 || cost $2,199 and Plaintiff “paid $2,417.24 to buy it.” Ud. §§ 37, 98.) “Plaintiff Duvall decided to Z 18 || buy the Appliance after viewing, and on the basis of, the Drying Capacity Representations on 19 || GE’s website and in its product Specification Sheet” and he “would not have bought the 20 || Appliance if the GE website or product specification sheet had contained information about the 21 Defects.” (/d. Jf] 99, 102.) “Had GE Appliances disclosed the Defects and their effects on the 22 || Appliance’s dryer system, Plaintiff Duvall would not have purchased his Class Appliance.” □□□□ 23 110.) 24 The Appliance “came with” defects which “began to manifest” in “June 2024.” □□□□ § 98.) 25 That same month, “Plaintiff Duvall stopped using the dryer function of the Appliance” but 26 || “continued to use the wash setting of the Appliance.” (/d. § 104.) Later, Plaintiff “requested a 27 || service call from GE on September 20, 2024,” which led to the following interaction: 28 The service technician visited Duvall’s home in late September and
said, upon seeing the Class Appliance, “oh, you have the monster?” 1 and described problems that other consumers had encountered with it. The service technician disassembled the dryer and, using 2 professional cleaning equipment, proceeded to scrape lint out of the Appliance’s duct system, the lint trap area, and off of the condenser 3 and evaporator coils, in addition to lint that had accumulated in other parts of the Appliance. These areas would not have been accessible 4 without disassembling the dryer. The technician performed no other service or repair aside from removing the lint. The technician did not 5 replace any component of the Appliance. Instead, he encouraged Plaintiff Duvall to buy a home warranty to offset future issues with 6 the Appliance. 7 (Id. ¶¶ 105.) “Two months later, in November 2024, the dryer again stopped drying clothes[.]” 8 (Id. ¶ 108.) Plaintiff’s TAC includes “an image of the quantity of lint that had accumulated behind 9 the lint filter screen in” his Appliance. (Id. ¶ 47.) 10 DISCUSSION 11 I. Express Warranty Claims (Count V) 12 Count V asserts two theories as to why Defendant violated an express warranty: 1) 13 Defendant failed to replace parts, in violation of the product’s Limited Warranty, and 2) the 14 Appliances’ failure to dry clothes violated Defendant’s advertising and product information. The 15 Court previously dismissed Plaintiff’s express warranty claims under both theories, with leave to 16 amend, because Plaintiff did not plausibly allege a manufacturing defect to which the Limited 17 Warranty applies and Plaintiff did not specify what statements they relied upon. (Dkt. No. 28 at 3- 18 5.) Defendant again moves to dismiss both theories. The motion asserts the same basis for both 19 theories: “Plaintiff shows no failure … to comply with the Limited Warranty[] … and thus he has 20 no claim based on statements outside the Limited Warranty either.” (Dkt. No. 49 at 25.) So, both 21 theories hinge on the Limited Warranty. 22 “A manufacturer’s liability for breach of an express warranty derives from, and is 23 measured by, the terms of that warranty.” Cipollone v. Liggett Group., Inc., 505 U.S. 504, 525– 24 526 (1992). Here, Defendant provided an express Limited Warranty to “replace … any part of the 25 unit which fails due to a defect in materials or workmanship. During this limited one-year 26 warranty, we will also provide, free of charge, all labor and related service to replace the defective 27 part.” (Dkt. No. 45-3 at 2 (emphasis added).) Defendant asserts the TAC does not plausibly 1 a part of the unit that failed due to said defect. The Court disagrees on both points. 2 A. Plaintiff Plausibly Alleges a Manufacturing Defect 3 The parties agree a warranty covering defects in “materials or workmanship” applies to 4 manufacturing defects under California law. “California recognizes two distinct categories of 5 products defects: manufacturing defects and design defects.” McCabe v. Am. Honda Motor Co., 6 100 Cal. App. 4th 1111, 1119 (2002).
7 A manufacturing defect exists when an item is produced in a substandard condition. Such a defect is often demonstrated by 8 showing the product performed differently from other ostensibly identical units of the same product line. A design defect, in contrast, 9 exists when the product is built in accordance with its intended specifications, but the design itself is inherently defective. 10 11 Id. at 1119–20. The contrasting definitions of manufacturing defects and design defects, as 12 explained in Horvath v. LG Electronics Mobilecomm U.S.A., Inc., 2012 WL 2861160 (S.D. Cal. 13 Feb. 13, 2012), mean a warranty covering “defects in materials and workmanship” applies to 14 manufacturing defects, as opposed to design defects which make a product “inherently defective.” 15 Id. at *5 (citing McCabe, 100 Cal. App. 4th at 1119-20 and collecting federal district court cases). 16 Here, Plaintiff alleges facts that plausibly support an inference of a defect in materials or 17 workmanship. Under the lint trap system’s manufacturing defect theory, the lint trap was 18 designed so the casing and filter “join together sufficiently tightly,” but there was a “failure in the 19 manufacturing process to correctly mold the filters and casing” such that these components are not 20 joined “sufficiently tightly.” (Dkt. No. 45 ¶ 47.) In that sense, the “item is produced in a 21 substandard condition” and plausibly supports an inference of a defect in workmanship. McCabe, 22 100 Cal. App. 4th at 1119–20. Similarly, alleged as a manufacturing defect, the duct system’s 23 design must balance two seemingly competing “purposes:” air must not “travel too quickly” to 24 “blow excessive amounts of lint,” but at the same time, there must be “sufficient … airflow to 25 remove moisture … while avoiding lint accumulation.” (Dkt. No. 45 ¶ 48.) As alleged, 26 Defendant balanced these interests by designing the duct system to have certain “angles” through 27 which air travels, yet, the Appliance deviates from this intended purpose because “during the 1 which “impede airflow.” (Id. ¶ 49.) So, under Plaintiff’s manufacturing defect theory, and 2 drawing all reasonable inferences in Plaintiff’s favor, the “substandard condition” or faulty 3 workmanship lies in the “sharp angles,” which impedes the Appliance’s intended purpose with 4 respect to balancing airflow, lint accumulation, and removal of moisture. (See id.) Plaintiff also 5 alleges his unit “came with” these two defects and experienced symptoms of the defects (lint 6 accumulation and failure to dry clothes) beginning in June 2024. (Id. ¶ 98.) His allegations 7 include a photo showing “the quantity of lint that had accumulated behind the lint filter screen” in 8 his Appliance. (Id. ¶ 47.) 9 Additionally, drawing inferences in Plaintiff’s favor, the allegations of varying consumer 10 complaints are consistent with a manufacturing defect. Plaintiff alleges, and attaches as exhibits, 11 “hundreds of complaints related to the Class Appliances’ poor drying performance.” (Dkt. No. 45 12 ¶ 60; see generally id. ¶¶ 55-63; Dkt. No. 45-1.) Across these complaints, consumers experienced 13 varying times and intensities at which the lint accumulated and failure to dry clothes. (See 14 generally Dkt. No. 45-1.) Drawing inferences in Plaintiff’s favor, these variations plausibly 15 support an inference there are manufacturing defects. In particular, Plaintiff alleges the lint trap’s 16 molding was not “sufficiently tight[],” and the duct system’s angles were too “sharp,” which 17 caused air to travel “too quickly.” (Dkt. No. 45 ¶¶ 48-49.) Whether something is too “tight[]”or 18 too “sharp” is consistent with a manufacturing error because design specifications often require 19 certain angles or degrees of tightness, which inherently can vary by degree. For instance, suppose 20 two customers have appliances that were defectively manufactured, but each appliance varied in 21 the lint trap’s tightness or the duct system’s angles. Drawing inferences in Plaintiff’s favor, these 22 variations in the defect are consistent with the variations in time and severity experienced by other 23 customers; perhaps a dryer takes longer to malfunction based on the rate of lint accumulation, 24 which is a function of the degree of “tightness” or “sharpness” in the defect. (See, e.g., id. ¶ 34 25 (alleging “the rate at which lint bypasses the filter” increases as lint accumulates because lint 26 “pushes the lint trap further off the casing, thus widening the gap through which lint and debris 27 pass[.]”), ¶ 35 (alleging “[t]he angle of the duct at each of these turns slows the rate of airflow, 1 defects are alleged as matters of degree (tightness and sharpness), so it is plausible the resulting 2 failures to dry also vary by degree (severity and timing). 3 For that reason, Defendant’s argument Plaintiff has not alleged facts about “any 4 manufacturing process, any purported manufacturing error, or to show how his unit deviated from 5 any others” (Dkt. No. 49 at 20) is unavailing. True, Plaintiff does not allege any facts about the 6 manufacturing process, except issues with the “manner” in which Defendant “attache[d] the duct 7 … at sharp angles,” which impedes airflow. (Dkt. No. 45 ¶ 49.) But unlike Defendant’s cited 8 cases, Plaintiff’s allegations of a manufacturing defect are not boilerplate because he alleges 9 designs (sufficiently tight molding and angles that sufficiently balance airflow) from which the 10 actual products deviated. See In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales 11 Pracs. & Prods. Liab. Litig., 754 F. Supp. 2d 1208, 1222–23 (C.D. Cal. 2010) (plaintiff alleging 12 “systems and their components were defectively designed and manufactured in that they were 13 highly susceptible to malfunction” and the product “failed to conform with its manufacturing 14 specifications …”); Trabakoolas v. Watts Water Techs., Inc., 2012 WL 2792441, at *4 (N.D. Cal. 15 July 9, 2012) (Plaintiffs alleging only the “‘selection of a low-grade plastic for the coupling's 16 material’ and the manner in which threading was cut into the sidewall of the plastic nuts,” and 17 Plaintiffs did not “articulate[] how [this] … distinguishes the [product] at issue from either the 18 manufacturer’s intended result or other seemingly identical product models.”); Mercado v. Audi of 19 Am., LLC, 2020 WL 5413835, at *9 (C.D. Cal. May 15, 2020) (“Plaintiffs expressly allege that 20 ‘[t]he Vehicles were unfit for their intended uses by reason of the Brake Defect in their 21 manufacture, design, testing, components, and constituents, so that they would not safely serve 22 their ordinary and intended purpose’ and that ‘Defendant designed and/or manufactured the 23 Vehicles defectively, causing them to fail to perform as safely as an ordinary customer would 24 expect.’”); State Farm Gen. Ins. Co. v. Gen. Electric. Co., 2025 WL 2937533, at *4 (C.D. Cal. 25 Sep. 8, 2025) (“[N]owhere does Plaintiff alleges that this defect deviated in any way from the 26 intended design.”); Sater v. Chrysler Grp. LLC, 2015 WL 736273, at *4 (C.D. Cal. Feb. 20, 2015) 27 (Plaintiff alleging “inherent design and/or manufacturing defects,” but other allegations Defendant 1 the [intended] manner.”) Whether the defects in sharpness or tightness are by design or by 2 manufacturing is a question of fact that cannot be resolved at the motion to dismiss stage. 3 B. Plaintiff Plausibly Alleges a Breach of the Limited Warranty 4 Plaintiff alleges facts sufficient to support an inference Defendant breached the Limited 5 Warranty. The one-year warranty provides “we will replace[] [a]ny part of the unit which fails 6 due to a defect in materials or workmanship.” (Dkt. No. 45-3 at 2.) Given Plaintiff has plausibly 7 alleged manufacturing defects that impair various component parts of the lint trap system and the 8 duct system, there is at least “one part of the unit which fail[ed] due to a defect in materials or 9 workmanship.” (Id.; see generally Dkt. No. 45 ¶¶ 27-49.) The Limited Warranty’s terms 10 therefore require Defendant to “replace” any part which failed within the applicable warranty 11 period. (Dkt. No. 45-3 at 2.) Drawing inferences in Plaintiff’s favor, Defendant did not do so 12 because Plaintiff “requested a service call from GE on September 20, 2024,” then a technician 13 “disassembled the dryer and[ …] scape[d] lint out of the Appliance’s duct system, the lint trap 14 area, and off of the … coils[.]” (Dkt. No. 45 ¶ 105.) Crucially, “[t]he technician did not replace 15 any component of the Appliance.” (Id.) “Two months later, in November 2024, the dryer again 16 stopped drying clothes[.]” (Id. ¶ 108.) 17 Under Rutledge v Hewlett-Packard Co., 238 Cal. App. 4th 1164 (2015), allegations of an 18 inadequate repair within the warranty period are sufficient to permit an inference Defendant 19 breached the warranty. There, the plaintiff purchased a laptop, experienced problems with the 20 display screen due to a defect with the laptop’s “inverter,” then submitted the laptop to the 21 defendant, HP, for repair within the one-year warranty period. Id. at 1171. “HP replaced the 22 inverter” and returned the laptop to the plaintiff, who stated the laptop “worked ‘great’” at the 23 time. Id. at 1182. However, the screen problems eventually manifested again, roughly two years 24 later and outside the warranty period. Id. Ultimately, the California Court of Appeal held, on 25 those facts, a reasonable trier of fact could find HP breached the warranty by performing an 26 inadequate repair: HP “did not return her computer to her in a condition as warranted, namely, to 27 be free from defect. In fact, the computer was returned to her in a defective condition, which was a 1 Defendant’s technician did not re-assemble the Appliance and return it “to [him] in a condition as 2 warranted, namely to be free from defect. In fact, the [Appliance] was returned … in a defective 3 condition, which was a breach of warranty.” Id. at 1182-83. 4 Defendant’s arguments to the contrary are unavailing. First, Defendant emphasizes there is 5 no allegation Defendant “[d]eclined a request for warranty service” or “failed or refused to provide 6 coverage.” (Dkt. No. 49 at 21.) But Rutledge did not hinge on whether the plaintiff re-presented 7 the laptop for repair after the warranty period; the court held “the breach of warranty” “was” that 8 “the computer was returned to her in a defective condition.” 238 Cal. App. 4th at 1182–83. So, 9 drawing inferences in Plaintiff’s favor, Plaintiff has plausibly alleged a breach of the express 10 warranty. 11 Second, Defendant distinguishes this case from Rutledge, and likens Plaintiff’s allegations 12 to two other cases: Cadena v. Am. Honda Motor Co., Inc., 2018 WL 8130613 (C.D. Cal. Nov. 14, 13 2018) and Lyman v. Gen. Motors LLC, 2025 WL 2080654 (C.D. Cal. Mar. 19, 2025). Neither 14 case is persuasive. The Cadena court did not discuss California case law, let alone Rutledge. 15 Instead, the court there rejected allegations of an inadequate repair following a single visit because 16 “nowhere does the [warranty] guarantee that the initial repair will resolve that issue such that a 17 follow-up visit will not be necessary.” 2018 WL 8130613, at *5. Cadena did not cite California 18 authority for its holding a warranty must contain that level of specificity for a plaintiff to allege an 19 inadequate-repair theory of breach. That approach is inconsistent with Rutledge, which interpreted 20 a warranty “to you, the end consumer, that [the product] will be free from defects in materials and 21 worksmanship,” and held it “was a breach of warranty” to return a product in a defective 22 condition. 238 Cal. App. 4th at 1179, 1182–83. Similarly, Lyman merely relied on Cadena, 23 instead of California law. See 2025 WL 2080654, at *5. 24 So, the Court denies Defendant’s motion to dismiss Plaintiff’s express warranty claims. 25 Given Plaintiff has plausibly alleged a breach of the limited warranty within the one-year period, 26 the Court does not reach Plaintiff’s argument the warranty’s remedial limitations are 27 unconscionable. 1 Defendant moves to dismiss Plaintiff’s California Commercial Code implied warranty 2 claim on two grounds. First, “Plaintiff’s inability to allege denial of express warranty coverage 3 also bars the implied warranty claim.” (Dkt. No. 49 at 26.) Given Plaintiff plausibly alleges a 4 violation of the express warranty, Defendant’s first argument fails. Defendant’s second basis for 5 dismissing the implied warranty claim is Plaintiff has not alleged vertical privity between Plaintiff 6 and Defendant. The Court agrees. “Under California Commercial Code section 2314, … a 7 plaintiff asserting breach of [implied] warranty claims must stand in vertical contractual privity 8 with the defendant.” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir. 2008) 9 (internal citations omitted). “Thus, an end consumer such as [Plaintiff] who buys from a retailer is 10 not in privity with a manufacturer,” and therefore cannot state an implied warranty claim. Id. at 11 1023-24 (holding a lack of vertical privity required dismissal of the plaintiff’s California implied 12 warranty claim). 13 Plaintiff opposes on the grounds there is an intended beneficiary exception to the vertical 14 privity requirement. In particular, in Gilbert Financial Corp. v. Steelform Contracting Co., 82 15 Cal. App. 3d 65 (1978), the California Court of Appeal held in a construction defect case that 16 California’s third-party beneficiary statute—Civil Code § 1559—“permit[s] a third party to bring 17 an action even though he is not specifically named as a beneficiary, if he is more than incidentally 18 benefitted by the contract.” Id. at 69; see also Cal. Civ. Code § 1559 (“A contract, made expressly 19 for the benefit of a third person, may be enforced by him at any time before the parties thereto 20 rescind it.”). Plaintiff also cites Spinks v. Equity Residential Briarwood Apartments, 171 Cal. 21 App. 4th 1004 (2009), which held a tenant who is an intended beneficiary of a lease may bring 22 claims against her landlord under the lease, tort theories, and California Civil Code sections 23 governing landlord-tenant relationships. Id. at 1021–27. So, argues Plaintiff, given he is a third- 24 party beneficiary of Defendant’s “sales”, he need not allege vertical privity. (Dkt. No. 50 at 22- 25 23.) 26 But Clemens—binding Ninth Circuit precedent—holds otherwise. In Clemens, the Ninth 27 Circuit affirmed dismissal of a plaintiff’s implied warranty claim against a car manufacturer for 1 warranty under California law “must stand in vertical contractual privity with the defendant,” the 2 court observed “[s]ome particularized exceptions to the [privity requirement] exist.” Id. at 1023. 3 “The first arises when the plaintiff relies on written labels or advertisements of a manufacturer.” 4 Id. “The other exceptions arise in special cases involving foodstuffs, pesticides, and 5 pharmaceuticals, and where the end user is an employee of the purchaser.” Id. (collecting three 6 California Court of Appeal decisions). The Clemens court then noted the appellant argued the 7 exceptions identified by the Ninth Circuit “are exemplary rather than exhaustive, and that similar 8 equities support an exception for his case.” Id. The Ninth Circuit disagreed: “California courts 9 have painstakingly established the scope of the privity requirement under California Commercial 10 Code section 2314, and a federal court sitting in diversity is not free to create new exceptions to 11 it.” Id. at 1024. So, the lack of privity in the plaintiff’s consumer product case “require[d] 12 dismissal of Clemens’s implied warranty claims” under California Commercial Code section 13 2314. Id.; see also Wong v. Am. Honda Motor Co., 2024 WL 612939, at *1 (9th Cir. Feb. 14, 14 2024) (affirming dismissal of California implied warranty claims arising from defective vehicles 15 because California law requires “that a buyer establish contractual privity with a manufacturer”). 16 Plaintiff’s insistence Clemens does not apply because it did not consider Gilbert Financial 17 Corp. and an intended beneficiary exception later applied in the landlord-tenant context is 18 unpersuasive. First, district courts, as well as Ninth Circuit three-judge panels, are bound by Ninth 19 Circuit prior decisions interpreting state law “in the absence of intervening controlling authority.” 20 F.D.I.C. v. McSweeney, 976 F.2d 532, 535 (9th Cir. 1992). As this Court has previously held, 21 “Gilbert was decided before Clemens, so it cannot be the basis for a different interpretation of 22 California law.” Biederman v. FCA US LLC, 765 F. Supp. 3d 920, 949 (N.D. Cal. 2025). Plaintiff 23 does not identify any California authority holding the long-standing vertical privity requirement of 24 the implied warranty of merchantability under Commercial Code section 2314 has a third-party 25 beneficiary exception; Spinks addressed claims arising under tort, a real estate lease, and 26 California’s Civil Code. So, there is no intervening authority. 27 Second, we do not know whether Clemens considered Gilbert Financial and the intended 1 oral argument but the Ninth Circuit did not consider it worth mentioning in its opinion. 2 Third, Plaintiff in any event, does not cite any case that says a district court can disregard 3 Ninth Circuit binding precedent on a question of a law based on an argument that was not made to 4 the Ninth Circuit. The existing law from other circuits is to the contrary. See Hoskins v. Withers, 5 92 F.4th 1279, 1286 n.3 (10th Cir. 2024), cert. denied, 145 S. Ct. 1468 (2025); Tippitt v. Reliance 6 Standard Life Ins., 457 F.3d 1227, 1234 (11th Cir. 2006) (stating the court of appeals was bound 7 by panel precedent even when the appellant makes arguments not considered by the prior panel); 8 Harris v. Epoch Grp., 357 F.3d 822, 826 (8th Cir. 2004) (stating “precedents do not cease to be 9 authoritative merely because counsel in a later case advance a new argument”) (quoting United 10 States v. Hill, 48 F.3d 228, 232 (7th Cir. 1995)); In re Penn Central Transp. Co., 553 F.2d 12, 15 11 (3d Cir. 1977) (stating a precedent controls even when an appellant makes an argument not 12 considered by the prior panel). Such precedent is unsurprising given Plaintiff’s version of what is 13 binding authority would require courts to scour appellate briefs and oral argument transcripts and 14 then make a finding as to whether a panel considered a particular argument. Such a stare decisis 15 rule is unworkable. 16 Accordingly, the Court grants Defendant’s motion as to Plaintiff’s Commercial Code 17 implied warranty claim (Count VI). 18 III. Plaintiff’s Equitable Claims (Counts I-III and Count VII) 19 Defendant moves to dismiss Plaintiff’s equitable claims (Counts I-III and VII) “because 20 Plaintiff seeks money damages, [so] an adequate legal remedy exists on the face of the TAC” and 21 Plaintiff “alleges no facts showing that its legal remedies are inadequate.” (Dkt. No. 49 at 15) 22 (emphasis in original). To explain why he lacks an adequate remedy at law, Plaintiff alleges:
23 Plaintiff seeks equitable relief that is more certain than damages and that cannot (at this time in the litigation) be determined to be 24 equivalent to damages. In particular, Plaintiff seeks restitutionary relief, including rescission. See, e.g., Spann v. J.C. Penney Corp., 25 2015 WL 1526559, at *6 (C.D. Cal. Mar. 23, 2015) (holding “rescission with complete restitution” available under FAL and UCL; 26 citing California authorities). The Court may award restitution in the full amount of Plaintiff’[s] purchase price if the factfinder finds that 27 Plaintiff would not have bought the Appliances but-for GE’s restored purchase amounts must be offset by any value received, the 1 offset to the purchase price would be equal to value received for the period prior to Plaintiff’s return of his Appliances in rescission; in 2 contrast, a damages award would not involve return of the Appliances, and so the value-received offset would calculate the value 3 to be deducted from the purchase price for a greater time period (up to and including the anticipated useful life of the functional 4 components of the Appliances). Thus, even if a rescission remedy includes a deduction for value received, the amount of the deduction 5 from purchase price will be less in the case of rescission with restitution than it would for damages. 6 (Dkt. No. 45 ¶ 97.) So, Plaintiff’s allegations clarify his damages remedy is inadequate because 7 his equitable claims seek a full refund or, alternatively, rescission and restitution paired with a 8 return of the product. 9 Defendant’s motion responds (1) Plaintiff is not entitled to a full refund because “he 10 received value from using his Combo for at least several months” and (2) “rescission is a contract 11 remedy, and it does not apply because Plaintiff bought his combo from a third-party retailer, not 12 GE appliances.” (Id. at 16-17) (cleaned up). The Court agrees on both points. 13 A. A Full Refund is Unavailable 14 Under California law, a full refund is available as a restitution measure only “when the 15 plaintiffs prove the product had no value to them.” In re Tobacco Cases II, 240 Cal. App. 4th 779, 16 795 (2015) (italics in original). Rather, “the proper measure of restitution” is “the difference 17 between the price paid and the actual value received.” Id. at 787, 794 (citing the measure of 18 restitution set forth in In Re Vioxx Class of Cases, 180 Cal. App. 4th 116, 131 (2009)). Although 19 “Vioxx does not purport to set forth the exclusive measure of restitution potentially available in a 20 UCL case[, …] plaintiffs ha[ve] the burden of proving entitlement to an alternative measure 21 proper under all the circumstances.” Tobacco II, 240 Cal. App. 4th at 792 (italics in original). 22 And when the “circumstances” show plaintiff “obtain[s] value from [the product] apart from the 23 deceptive advertising,” a “full refund theory does not provide a[] … basis for restitution.” Id. at 24 794. 25 Here, drawing all inferences in Plaintiff’s favor, a full refund is unavailable because 26 Plaintiff’s allegations compel the inference he obtained value from his product. Plaintiff does not 27 allege he obtained no value from his Appliance; instead, he alleges the defects “diminished the 1 value” of his unit. (Dkt. No. 45 ¶ 109.) Plaintiff alleges he purchased the product in October 2 2023, then in June 2024 he “stopped using the dryer function of the Appliance” and “continued to 3 use the wash setting.” (Id. ¶¶ 103, 104.) Plaintiff’s express allegation he “continued to” wash his 4 clothes means he cannot “prove the product had no value” to him, and therefore, a “full refund 5 theory does not provide an alternative basis for restitution.” Tobacco II, 240 Cal. App. 4th at 794- 6 95 (emphasis in original). 7 Plaintiff’s authority to the contrary is unavailing because it does not address the portion of 8 Tobacco II that expressly ruled a full refund is unavailable to plaintiffs who obtain value from the 9 deceptively advertised product. Plaintiff’s primary case, Spann v. J.C. Penney Corp., 2015 WL 10 1526559 (C.D. Cal. Mar. 23, 2015), reasoned it could not find California “authority indicating that 11 [difference in value] is the only way restitution can be calculated,” but that decision was published 12 six months before Tobacco II. 2015 WL 1526559 at *6. Therefore, Spann’s analysis of California 13 law is unpersuasive because it is outdated. Similarly, Pulaski & Middleman, LLC v. Google, Inc., 14 802 F.3d 979 (9th Cir. 2015), was issued before Tobacco II and expressed “no opinion” about a 15 full refund theory for calculating restitution. See 802 F.3d at 989 & n.9. For that same reason, 16 Abbit v. ING USA Annuity, 2015 WL 7272220 *7 (S.D. Cal. Nov. 16, 2015), which relied on 17 Pulaski, is unpersuasive. Plaintiff’s other Ninth Circuit cases did not address a full refund theory 18 or restitution, either. See Mier v. CVS Health, 2023 WL 4837851, at *2 (9th Cir. July 28, 2023); 19 Nguyen v. Nissan North Am., Inc., 932 F.3d 811, 821 (9th Cir. 2019) (noting the plaintiff “was not 20 seeking a full refund”). 21 Another case, Krueger v. Wyeth, Inc., 396 F. Supp. 3d 931 (S.D. Cal. 2019), held a full- 22 refund model is available because the plaintiff, like Plaintiff here, alleged “she would not have 23 purchased the [product], despite its benefits, had it been marketed accurately.” Id. at 952. 24 Krueger’s discussion of Tobacco II is unpersuasive. The Krueger court highlighted the quote “the 25 difference in price paid and value received is [not] the only proper measure of restitution,” then 26 observed Tobacco II’s holding was “not because of a categorical ban on alternative measures of 27 restitution but because the plaintiffs failed to adduce sufficient evidence to support their theory.” 1 restitution, but Krueger did not address why the Tobacco II plaintiffs failed to support a full refund 2 theory: the plaintiffs could not “prove the product had no value” to them. 240 Cal. App. 4th at 3 794–95. The same is true of Plaintiff here, albeit under a pleading standard: drawing all inferences 4 in Plaintiff’s favor, Plaintiff’s allegations compel the inference he obtained value from the 5 product, and he therefore fails to adduce facts sufficient “to support his full refund theory.” 6 Finally, Plaintiff’s reliance on Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310 (2011) is 7 misplaced because Kwikset cannot reasonably be interpreted to suggest a full refund is available 8 under Plaintiff’s allegations here. The plaintiffs in Tobacco II cited Kwikset to argue restitution 9 was available for deterrence purposes, but as Tobacco II aptly explained, Kwikset “is a[] standing 10 case” and therefore “does not suggest restitution is available for” that purpose. See 240 Cal. App. 11 4th at 798; see also Kwikset, 51 Cal. 4th at 330 (noting “[a] consumer who relied on a product 12 label and challenges a misrepresentation contained therein can satisfy the standing requirement 13 [for UCL claims] by alleging … he or she would not have bought the product but for the 14 misrepresentation.”) (emphasis added). Additionally, Tobacco II emphasized Kwikset’s 15 procedural history: the trial court in Kwikset had previously “denied restitution,” then the plaintiffs 16 later “filed an amended complaint”; “[c]onsistent with the trial court’s denial of restitution, the 17 amended complaint did not pray for such relief.” See 240 Cal. App. 4th at 798–99. Consequently, 18 Kwikset cannot be read to suggest Plaintiff may be entitled to a full refund. 19 So, Plaintiff’s allegations, read with the required liberality, do not permit the Court to order 20 a full refund under the UCL. Because Plaintiff has not pleaded his entitlement to a full refund 21 measure of restitution, he cannot show his available damages remedy is inadequate. 22 B. Rescission With Restitution and Product Return is Unavailable 23 Plaintiff’s alternative prayer, rescission coupled with return of his product, is also 24 unavailable. Plaintiff has “the burden of proving entitlement” to this measure of restitution. 25 Tobacco II, 240 Cal. App. 4th at 792. Plaintiff relies on People v. Superior Court (“Jayhill”), 9 26 Cal. 3d 283 (1973), which held the UCL authorizes restitution remedies such as an order requiring 27 “defendants … to offer each customer … the opportunity to rescind his contract, return the 1 and refund, except Plaintiff asks to rescind his contract with the third-party retailer who is not a 2 party to the case and to return his product to either the non-party retailer or to Defendant, from 3 whom he did not purchase the product. 4 Plaintiff has thus failed to show he is entitled to his alternative prayer because none of 5 Plaintiff’s cases ordered either (1) rescission between a plaintiff and a non-party to the case, (2) 6 rescission between a plaintiff and a non-contracting party, or (3) return of a product to a non- 7 contracting party. Of Plaintiff’s cited cases which ordered restitution in the absence of contractual 8 privity, none ordered rescission. See generally Shersher v. Sup. Ct., 153 Cal. App. 4th 1491 9 (2007); Troyk v. Farmers Grp. Inc., 171 Cal. App. 4th 1305, 1340 (2009); Schramm, 2014 WL 10 7869336 at *9-10. And every case that addressed rescission of contract did so between 11 contracting parties. See Jayhill, 9 Cal. 3d at 286; Cortez v. Purolator Air Filtration Prods. Co., 23 12 Cal. 4th 163, 177 (2000); In re PFA Ins. Mktg. Litig., 696 F. Supp. 3d 788, 810 (N.D. Cal. 2021). 13 So, Plaintiff’s cases merely show a court can order restitution in the absence of contractual privity, 14 but that does not mean the UCL authorizes a court to order rescission and return to non-parties 15 and/or to non-contracting parties because “[t]he two remedies are distinct.” See People ex rel. 16 Kennedy v. Beaumont Inv., Ltd., 111 Cal. App. 4th 102, 133 (2003), as modified on denial of reh’g 17 (Sept. 9, 2003). 18 So, as Plaintiff’s CLRA, Song-Beverly implied warranty, and express warranty legal 19 claims are proceeding, and Plaintiff has not alleged facts or law that plausibly suggest the 20 remedies for these claims are inadequate, the Court grants Defendant’s motion and dismisses 21 Plaintiff’s monetary equitable claims without prejudice to pursuing the claims in state court.2 See 22 Guzman v. Polaris Indus. Inc., 49 F.4th 1308, 1313-14 (9th Cir. 2022) (holding the federal court 23 did not have equitable jurisdiction in light of the plaintiff’s CLRA damages claim and so the 24 plaintiff’s California UCL claim had to be dismissed without prejudice to refile the same claim in 25
26 2 The Court’s dismisses Plaintiff’s unjust enrichment claim (Count VII) for this reason as well. Plaintiff’s unjust enrichment claim requests disgorgement of “profits, benefits, and other 27 compensation wrongfully obtained by GE Appliances” (Dkt. No. 45 ¶ 218), but Plaintiff’s 1 state court). 2 IV. Injunctive Relief 3 Plaintiff’s request for injunctive relief asks “to prevent GE from” (1) “continuing to market 4 and sell its appliances using the Drying Capacity Representations on its website and product 5 specification sheet […] unless and until the Defects are corrected by GE,” and (2) “enforcing the 6 undisclosed remedial limitations in its ‘Limited Warranty’ document.” (Dkt. No. 45 ¶ 94.) 7 Defendant moves to dismiss Plaintiff’s request for injunctive relief because Plaintiff has not 8 sufficiently alleged an injury-in-fact to support Article III standing. 9 To invoke Article III standing, “a plaintiff bears the burden of demonstrating that her 10 injury-in-fact is ‘concrete, particularized, and actual or imminent.’” Davidson v. Kimberly-Clark 11 Corp., 889 F.3d 956, 967 (9th Cir. 2018) (quoting Monsanto Co. v. Geertson Seed Farms, 561 12 U.S. 139, 149 (2010)). “For injunctive relief, which is a prospective remedy, the threat of injury 13 must be ‘actual and imminent, not conjectural or hypothetical.’” Davidson, 889 F.3d at 967 14 (quoting Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009)). “[T]he ‘threatened injury must 15 be certainly impending to constitute injury in fact’ and ‘allegations of possible future injury are 16 not sufficient.’” Davidson, 889 F.3d at 967 (quoting Clapper v. Amnesty Int’l USA, 568 U.S. 398, 17 409 (2013)) (emphasis in Davidson). For CLRA, FAL, and UCL claims seeking injunctive relief, 18 Davidson held:
19 a previously deceived consumer may have standing to seek an injunction against false advertising or labeling, even though the 20 consumer now knows or suspects that the advertising was false at the time of the original purchase, because the consumer may suffer an 21 “actual and imminent, not conjectural or hypothetical” threat of future harm. Summers, 555 U.S. at 493[.] Knowledge that the advertisement 22 or label was false in the past does not equate to knowledge that it will remain false in the future. In some cases, the threat of future harm may 23 be the consumer's plausible allegations that she will be unable to rely on the product's advertising or labeling in the future, and so will not 24 purchase the product although she would like to. […] In other cases, the threat of future harm may be the consumer's plausible allegations 25 that she might purchase the product in the future, despite the fact it was once marred by false advertising or labeling, as she may 26 reasonably, but incorrectly, assume the product was improved. […] Either way, […] we are not persuaded that injunctive relief 27 is never available for a consumer who learns after purchasing a ] 889 F.3d at 969-70. Although the issue is close, drawing reasonable inferences in Plaintiffs 2 || favor, he sufficiently alleges Article III standing to pursue injunctive relief. He alleges he 3 continues to see “the Appliance available for purchase on GE’s website and product specification 4 || sheet,” which supports an inference he is interested in purchasing the Appliance if he knew the 5 || representations about its drying capacity were true. (Dkt. No. 45 § 113.) And, he specifically 6 || alleges he would purchase a new Appliance if he could rely on the drying representations. (/d.) 7 || Discovery may show that he does not have standing to obtain injunctive relief, but at this juncture, 8 and given this demand does not materially change how the case will proceed, the Court denies 9 || Defendant’s motion to dismiss. 10 CONCLUSION 11 For the reasons set forth above, the Court grants in part and denies in part Defendant’s 12 || motion to dismiss. The Court denies Defendant’s motion as to Plaintiff's express warranty claim 13 || because Plaintiff has plausibly alleged a manufacturing defect and breach of the Limited 14 || Warranty, but grants the motion as to Plaintiffs implied warranty claim with prejudice and 2 15 || without leave to amend based on lack of contractual privity. The Court also grants the motion to a 16 || dismiss the equitable claims without leave to amend, but without prejudice to Plaintiff pursuing 2 17 || those claims in state court. Z 18 The Court sets a case management conference for May 6, 2026 at 2:00 p.m. by Zoom 19 || video. An updated joint statement that reflects the parties’ current scheduling proposals, as well as 20 || the status of any proposed amended complaint that includes claims from the New York case, must 21 be filed one week in advance. 22 This Order disposes of Docket No. 49. 23 IT IS SO ORDERED. 24 || Dated: April 13, 2026
26 AC@UELINE SCOTT CORLE 27 United States District Judge 28