1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JASON THOMAS Case No.: 20cv718-LAB (BLM)
12 Plaintiff, ORDER GRANTING MOTION 13 v. FOR SUMMARY JUDGMENT
14 COSTCO WHOLESALE CORPORATION, et al. 15 Defendants. 16
17 18 Plaintiff Jason Thomas filed this putative consumer class action against 19 Costco Wholesale Corporation, bringing claims based on the marketing and sale 20 of earbuds. Thomas is a California citizen and Costco is a Washington corporation; 21 jurisdiction is based on the Class Action Fairness Act. Thomas alleges he 22 purchased earbuds advertised as the latest version of the 2nd Generation Apple 23 AirPods that were capable of wireless charging. He argues that the earbuds were 24 an “unknown hybrid mix” that did not include a wireless charging case, and were 25 incapable of wireless charging. Specifically, he alleges the earbuds were 26 advertised as “Apple AirPods Wireless Headphones with Charging Case (2nd 27 Generation).” (Compl., ¶ 28.) Apple’s product description for Wireless AirPods is 28 attached as an exhibit to the complaint, as is the Costco listing Thomas relied on. 1 Costco filed a motion to dismiss, providing information from Apple showing 2 that Apple sells two different kinds of wireless AirPods for different prices, the more 3 expensive of which comes with a wireless charging case, and the less expensive 4 of which comes with a standard charging case. With the former, the AirPods can 5 be charged by putting them in the wireless charging case and placing it on a 6 charging mat. With the latter, the AirPods themselves are wireless, but the 7 charging case is not. Costco argues that Thomas bought the less expensive 8 version which was accurately advertised, and asks that the Complaint be 9 dismissed. Alternatively, Costco asks that the Court strike portions of the 10 Complaint purporting to bring claims by non-California residents who incurred no 11 injury in California. (See Compl., ¶ 7 (alleging that Costco’s nationwide sale and 12 advertising of the AirPods violates California laws).) 13 Both parties asked the Court to take notice of information on company 14 websites. While judicial notice of some websites is authorized, the websites 15 referenced by the briefing were not of the type that could properly be judicially 16 noticed, even though the parties did not dispute the websites’ authenticity or object 17 to judicial notice. The Court therefore converted the motion to a motion for 18 summary judgment and permitted the parties to file evidence. They have done so, 19 although in part they ignored the Court’s direction regarding judicial notice. Neither 20 party has sought discovery or shown a need for more information. See Fed. R. Civ. 21 P. 56(d). The motion is now fully briefed and ready for decision. 22 Judicial Notice 23 Thomas argues that the Court can properly take judicial notice of websites 24 and other documents, as long as they are “publicly accessible.” Under Fed. R. 25 Evid. 201, a fact to be noticed “must be one not subject to reasonable dispute in 26 that it is either (1) generally known within the territorial jurisdiction of the trial court 27 or (2) capable of accurate and ready determination by resort to sources whose 28 accuracy cannot reasonably be questioned.” While publicly-accessible websites 1 are sometimes reliable enough to be the proper subject of judicial notice, not all 2 such websites satisfy the Rule 201 standard. For example, Thomas asks the Court 3 to take notice of customer reviews for the AirPods on Costco’s website, as well as 4 the websites of other retailers. 5 To the extent that Thomas is asking the Court to take notice of the fact that 6 certain reviews were posted, the webpage is not reliable or accurate enough. By 7 their nature, customer reviews change over time as more people review the 8 products and reviews are voted up or down. At the time Costco’s reviews were 9 sampled, a total of 12,369 reviews had been posted, though of course not all were 10 listed in the materials Thomas submitted. 11 But if Thomas is asking the Court to take notice of the reviews for the truth 12 of their content, the material is even less appropriate for judicial notice. The 13 reviews’ opinions are not generally known within this jurisdiction, nor are they 14 accurate beyond any reasonable question. However, Costco concedes that the 15 Court can treat the materials as evidence, and argues that the result would be the 16 same either way. 17 The doctrine of incorporation by reference is similar to judicial notice, but not 18 the same. Even at the pleading stage, federal courts can consider documents or 19 other materials attached to the complaint, or on which a claim necessarily 20 depends. See Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1002–03 (9th 21 Cir. 2018) (discussing the doctrine). This doctrine applies to materials incorporated 22 into the complaint, however, not in a defendant’s motion to dismiss. Id. at 1003. 23 The Court will treat all supplemental materials as proffered evidence. The Court 24 has reviewed all the evidence, although this order discusses only the evidence that 25 is directly relevant to the Court’s analysis and ruling. 26 The parties appear to agree that Thomas bought the AirPods and was 27 confused about what he was buying. There appears to be no real dispute that 28 some other customers were also confused and thought they were buying AirPods 1 with a wireless charging case. The disputed factual issue is whether their confusion 2 was reasonable. 3 Legal Standards 4 Motion to Dismiss 5 A plaintiff must plead sufficient facts that, if true, “raise a right to relief above 6 the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007). 7 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 8 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. 9 Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 547). A claim is 10 facially plausible when the factual allegations permit “the court to draw the 11 reasonable inference that the defendant is liable for the misconduct alleged.” Id. 12 The Court need not accept legal conclusions couched as factual allegations. See 13 Twombly, 550 U.S. at 555. 14 New or expanded allegations in opposition to a motion to dismiss are 15 considered when deciding whether to grant leave to amend, but are not considered 16 when ruling on a 12(b)(6) motion. See Schneider v. Cal. Dep't of Corr. & Rehab., 17 151 F.3d 1194, 1197 n.1 (9th Cir. 1998). This is significant here, because in his 18 briefing on the motion to dismiss, Thomas both abandons some of his earlier 19 contentions based on his post-filing investigation, and proffers class definitions that 20 were not included in the Complaint. The Court is examining the Complaint as filed, 21 but will also consider changes Thomas intends to make to it. 22 Summary Judgment 23 Summary judgment is appropriate where “there is no genuine issue as to any 24 material fact and . . . the moving party is entitled to summary judgment as a matter 25 of law.” Fed. R. Civ. P. 56(a). It is the moving party’s (here, Costco’s) burden to 26 show there is no factual issue for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 27 323 (1986). If the moving party meets this requirement, the burden shifts to the 28 non-moving party to show there is a genuine factual issue for trial. Id. at 324.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JASON THOMAS Case No.: 20cv718-LAB (BLM)
12 Plaintiff, ORDER GRANTING MOTION 13 v. FOR SUMMARY JUDGMENT
14 COSTCO WHOLESALE CORPORATION, et al. 15 Defendants. 16
17 18 Plaintiff Jason Thomas filed this putative consumer class action against 19 Costco Wholesale Corporation, bringing claims based on the marketing and sale 20 of earbuds. Thomas is a California citizen and Costco is a Washington corporation; 21 jurisdiction is based on the Class Action Fairness Act. Thomas alleges he 22 purchased earbuds advertised as the latest version of the 2nd Generation Apple 23 AirPods that were capable of wireless charging. He argues that the earbuds were 24 an “unknown hybrid mix” that did not include a wireless charging case, and were 25 incapable of wireless charging. Specifically, he alleges the earbuds were 26 advertised as “Apple AirPods Wireless Headphones with Charging Case (2nd 27 Generation).” (Compl., ¶ 28.) Apple’s product description for Wireless AirPods is 28 attached as an exhibit to the complaint, as is the Costco listing Thomas relied on. 1 Costco filed a motion to dismiss, providing information from Apple showing 2 that Apple sells two different kinds of wireless AirPods for different prices, the more 3 expensive of which comes with a wireless charging case, and the less expensive 4 of which comes with a standard charging case. With the former, the AirPods can 5 be charged by putting them in the wireless charging case and placing it on a 6 charging mat. With the latter, the AirPods themselves are wireless, but the 7 charging case is not. Costco argues that Thomas bought the less expensive 8 version which was accurately advertised, and asks that the Complaint be 9 dismissed. Alternatively, Costco asks that the Court strike portions of the 10 Complaint purporting to bring claims by non-California residents who incurred no 11 injury in California. (See Compl., ¶ 7 (alleging that Costco’s nationwide sale and 12 advertising of the AirPods violates California laws).) 13 Both parties asked the Court to take notice of information on company 14 websites. While judicial notice of some websites is authorized, the websites 15 referenced by the briefing were not of the type that could properly be judicially 16 noticed, even though the parties did not dispute the websites’ authenticity or object 17 to judicial notice. The Court therefore converted the motion to a motion for 18 summary judgment and permitted the parties to file evidence. They have done so, 19 although in part they ignored the Court’s direction regarding judicial notice. Neither 20 party has sought discovery or shown a need for more information. See Fed. R. Civ. 21 P. 56(d). The motion is now fully briefed and ready for decision. 22 Judicial Notice 23 Thomas argues that the Court can properly take judicial notice of websites 24 and other documents, as long as they are “publicly accessible.” Under Fed. R. 25 Evid. 201, a fact to be noticed “must be one not subject to reasonable dispute in 26 that it is either (1) generally known within the territorial jurisdiction of the trial court 27 or (2) capable of accurate and ready determination by resort to sources whose 28 accuracy cannot reasonably be questioned.” While publicly-accessible websites 1 are sometimes reliable enough to be the proper subject of judicial notice, not all 2 such websites satisfy the Rule 201 standard. For example, Thomas asks the Court 3 to take notice of customer reviews for the AirPods on Costco’s website, as well as 4 the websites of other retailers. 5 To the extent that Thomas is asking the Court to take notice of the fact that 6 certain reviews were posted, the webpage is not reliable or accurate enough. By 7 their nature, customer reviews change over time as more people review the 8 products and reviews are voted up or down. At the time Costco’s reviews were 9 sampled, a total of 12,369 reviews had been posted, though of course not all were 10 listed in the materials Thomas submitted. 11 But if Thomas is asking the Court to take notice of the reviews for the truth 12 of their content, the material is even less appropriate for judicial notice. The 13 reviews’ opinions are not generally known within this jurisdiction, nor are they 14 accurate beyond any reasonable question. However, Costco concedes that the 15 Court can treat the materials as evidence, and argues that the result would be the 16 same either way. 17 The doctrine of incorporation by reference is similar to judicial notice, but not 18 the same. Even at the pleading stage, federal courts can consider documents or 19 other materials attached to the complaint, or on which a claim necessarily 20 depends. See Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1002–03 (9th 21 Cir. 2018) (discussing the doctrine). This doctrine applies to materials incorporated 22 into the complaint, however, not in a defendant’s motion to dismiss. Id. at 1003. 23 The Court will treat all supplemental materials as proffered evidence. The Court 24 has reviewed all the evidence, although this order discusses only the evidence that 25 is directly relevant to the Court’s analysis and ruling. 26 The parties appear to agree that Thomas bought the AirPods and was 27 confused about what he was buying. There appears to be no real dispute that 28 some other customers were also confused and thought they were buying AirPods 1 with a wireless charging case. The disputed factual issue is whether their confusion 2 was reasonable. 3 Legal Standards 4 Motion to Dismiss 5 A plaintiff must plead sufficient facts that, if true, “raise a right to relief above 6 the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007). 7 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 8 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. 9 Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 547). A claim is 10 facially plausible when the factual allegations permit “the court to draw the 11 reasonable inference that the defendant is liable for the misconduct alleged.” Id. 12 The Court need not accept legal conclusions couched as factual allegations. See 13 Twombly, 550 U.S. at 555. 14 New or expanded allegations in opposition to a motion to dismiss are 15 considered when deciding whether to grant leave to amend, but are not considered 16 when ruling on a 12(b)(6) motion. See Schneider v. Cal. Dep't of Corr. & Rehab., 17 151 F.3d 1194, 1197 n.1 (9th Cir. 1998). This is significant here, because in his 18 briefing on the motion to dismiss, Thomas both abandons some of his earlier 19 contentions based on his post-filing investigation, and proffers class definitions that 20 were not included in the Complaint. The Court is examining the Complaint as filed, 21 but will also consider changes Thomas intends to make to it. 22 Summary Judgment 23 Summary judgment is appropriate where “there is no genuine issue as to any 24 material fact and . . . the moving party is entitled to summary judgment as a matter 25 of law.” Fed. R. Civ. P. 56(a). It is the moving party’s (here, Costco’s) burden to 26 show there is no factual issue for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 27 323 (1986). If the moving party meets this requirement, the burden shifts to the 28 non-moving party to show there is a genuine factual issue for trial. Id. at 324. The 1 non-moving party must produce admissible evidence and cannot rely on mere 2 allegations. Estate of Tucker ex rel. Tucker v. Interscope Records, Inc., 515 F.3d 3 1019, 1033 n.14 (9th Cir. 2008). This can be done by presenting evidence that 4 would be admissible at trial, see Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 5 (9th Cir. 2002), or by pointing to facts or evidence that could be presented in 6 admissible form at trial. See Fraser v. Goodale, 342 F.3d 1032, 1036 (9th Cir. 7 2003). But evidence that is not admissible and could not be presented at trial in 8 admissible form is not enough to resist summary judgment. See Orr, 285 F.3d at 9 773. 10 The Court does not make credibility determinations or weigh conflicting 11 evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Rather, the 12 Court determines whether the record “presents a sufficient disagreement to require 13 submission to a jury or whether it is so one-sided that one party must prevail as a 14 matter of law.” Id. at 251–52. Not all factual disputes will serve to forestall summary 15 judgment; they must be both material and genuine. Id. at 247–49. Factual disputes 16 whose resolution would not affect the outcome of the suit are irrelevant to the 17 consideration of a motion for summary judgment. Id. at 248. If the evidence is so 18 insubstantial that jurors could not find for the plaintiff without engaging in 19 speculation, summary judgment is appropriate. Id. at 249–50 (requiring a non- 20 moving party to present “sufficiently probative” evidence to permit a jury to return 21 a verdict for that party); British Airways Bd. v. Boeing Co., 585 F.2d 946, 952 (9th 22 Cir. 1978) (“[A] jury is permitted to draw only those inferences of which the 23 evidence is reasonably susceptible; it may not resort to speculation.”). 24 Discussion 25 Legal Basis for Claims 26 Although four claims are pled, the parties agree that all claims are governed 27 by a “reasonable consumer” standard, and the briefing focuses on the issue of 28 whether Costco’s product listing could mislead a reasonable consumer. 1 A plaintiff bears the burden of showing that members of the public are likely 2 to be deceived. Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir. 2005). The 3 advertisement or listing need not be literally false to be actionable; a plaintiff can 4 recover if the advertising is misleading, or is likely to deceive or confuse the public. 5 See Kasky v. Nike, Inc., 27 Cal. 4th 939, 951 (2002). In general, the advertisement 6 itself will be the primary evidence. See Williams v. Gerber Prods. Co., 552 F.3d 7 934, 938 (9th Cir. 2008). 8 The standard requires more than a possibility that the label might be 9 misunderstood by a few consumers viewing it in an unreasonable way. Ebner v. 10 Fresh, Inc., 838 F.3d 958, 965 (9th Cir. 2016). Rather, it requires the probability 11 that a significant portion of consumers, “acting reasonably in the circumstances, 12 could be misled.” Id. (quoting Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 13 496, 508 (Cal. App. 1 Dist. 2003)). The standard does not protect unwary, 14 unreasonable consumers, and unreasonable misunderstandings are not 15 actionable. Becerra v. Dr Pepper/Seven Up, Inc., 945 F.3d 1225, 1230 (9th Cir. 16 2019); Lavie, 105 Cal. App. 4th at 508. For example, a plaintiff cannot establish a 17 claim merely by pointing to plausible misunderstandings of a product description. 18 Becerra, 945 F.3d at 1229–30. 19 Faced with a substantial amount of evidence, it can be tempting to apply the 20 principle, “Where there’s smoke, there’s fire,” and to conclude that there must be 21 a claim lurking somewhere. But the amount of relevant evidence does not change 22 the analysis; it is the quality, rather than the quantity, that counts. In Becerra, which 23 was decided at the pleading stage, the plaintiff pointed to numerous pieces of 24 evidence, including a commissioned survey of 800 consumers about their 25 understanding about what they expected of “diet” soft drinks. See Becerra, 2018 26 WL 3995832, at *6–7 (N.D. Cal., Aug. 21, 2018) (discussing the survey). But 27 because the survey and other evidence did not shed light on the key question — 28 what a “reasonable consumer” would understand the term “diet” to mean — it was 1 not enough to render the claim plausible. See 945 F.3d at 1231 (holding that the 2 survey could not render the claim plausible, because it failed to address 3 consumers’ reasonable understandings about soft drinks labeled “diet”). 4 The Product and Costco’s Representation 5 Apple’s AirPods are headphones or earbuds compatible with Apple products. 6 They offer several attractive features, including the fact that they are wireless, 7 meaning that users can simply insert them into their ears, and they will function 8 without the need for attached wires. The AirPods also offer other features, such as 9 their ability to detect whether the user is wearing them. 10 Thomas originally thought that all 2nd Generation AirPods came with 11 wireless charging cases and were capable of wireless charging. His initial 12 confusion about what he was buying was due at least in part to this. Since filing 13 the Complaint, however, Thomas learned that the AirPods Costco advertised and 14 sold were one of two 2nd Generation configurations of AirPods available from 15 Apple. (See Docket no. 13-1 at 3:8–11.) The other configuration, which was more 16 expensive, offered a wireless charging case. The parties agree that both 17 configurations are 2nd Generation Apple AirPods. Since then, Apple has also 18 begun offering a third product, “AirPods Pro.” 19 The Complaint attaches as exhibits a promotional product description from 20 the Apple website, as well as Costco’s listing for the AirPods. On the Apple 21 website, the AirPods themselves are clearly shown as being wireless, and on page 22 1 are described as “Wireless to the fullest”. (Compl., Ex. A at 2.) This last phrase 23 is accompanied by a description of the things AirPods can do wirelessly; charging 24 is not, however, mentioned. The only prominent mention of wireless charging is on 25 page 5 of Apple’s description, which mentions the new wireless carrying case and 26 provides a link customers can click on to buy it. Several footnotes also describe 27 the testing Apple conducted on its product, and mention that testing was done with 28 / / / 1 the AirPods as well as both the “Charging Case” and “Wireless Charging Case” 2 units. 3 The Complaint also attaches Costco’s listing for the AirPods, which identifies 4 them as “Apple AirPods Wireless Headphones with Charging Case (2nd 5 Generation).” Thomas’ only challenge to this listing is what he views as its 6 implication that the Charging Case is wireless. He agrees that the “2nd Generation” 7 description is accurate. The listing repeats language from Apple’s product 8 description, including its description of the AirPods as “Wireless to the fullest” and 9 surrounding text.1 The charging case is mentioned, but is not labeled either 10 wireless or wired. 11 Costco has also offered Apple’s side-by-side listing of its two AirPods 12 products. (Docket no. 13-1, Ex. A.) While Thomas disputes the significance of this 13 evidence, he does not argue that it is inauthentic or inadmissible. Apple describes 14 its first configuration as “AirPods with Wireless Charging Case” and its second as 15 “AirPods with Charging Case.” The list price for the former is $199.00, while the 16 latter is offered for $159.00. Costco offered its AirPods (the second configuration 17 with wired charging case) for $139.99. On the basis of this evidence, it is clear that 18 anyone who reviewed Apple’s own product listings would know that Apple offered 19 two different configurations of AirPods for different prices, and that the difference 20 between the two was whether they came with a wireless or wired charging case. 21 The nature of the products Apple offered for sale is significant, because 22 consumer confusion as alleged in the Complaint and as illustrated in some of the 23 proffered customer reviews is based on customers’ awareness of the products 24 25 1 As in the Apple description, this phrase is used as a heading for text describing 26 how easy the AirPods are to use. They are described as “always on and always 27 connected,” sensing whether they are in the owner’s ears and responding accordingly (e.g., pausing when removed), and compatible with other Apple 28 1 Apple sells. To a customer unfamiliar with Apple’s AirPods and depending solely 2 on Costco’s description, they appear to be earbuds or headphones compatible with 3 Apple products that also offer several attractive features. The briefing makes clear 4 that wireless charging is a feature of some but certainly not all wireless earbuds. 5 A customer with no awareness of Apple products would have no basis for believing 6 that merely because earbuds are wireless or can communicate with Apple devices 7 wirelessly, they are also capable of wireless charging. In other words, the 8 possibility of confusion only arises when buyers are aware that Apple’s AirPods 9 are available with wireless charging. 10 Thomas has proffered other Costco AirPods listings with some modifications, 11 along with customer reviews showing some customers complained publicly that 12 they were confused about what they bought. Thomas has highlighted the reviews 13 he believes support his claims. All told, he points to ten different reviews. (See 14 Docket 12-2 at 30–39.) 15 Even assuming evidence of customer reviews is competent and could be 16 offered in admissible form,2 it is not particularly helpful, though, for several 17 reasons. First, the reviews are responding to several different listings, and the 18 other listings, instead of “2nd Generation,” say “Latest Model.” (Docket 12-2, Exs. 19 C, D.) Several of the negative reviews Plaintiff highlights are based on the “Latest 20 Model” language that Thomas did not see or rely on. Second, at least half of the 21 highlighted reviews are based on the erroneous idea that all of Apple’s 2nd 22 Generation AirPods come with a wireless charging case. 23 / / / 24 25 2 This evidence in its present form would not be admissible at trial. The reviews 26 lack foundation, and are hearsay. Even assuming Thomas could locate the 27 customers and present their testimony at trial, all the reviews show is that people were confused and blamed Costco. They fail to show that the confusion was 28 1 Thomas himself erroneously believed all of Apple’s 2nd Generation AirPods 2 came with a wireless charging case and were capable of wireless charging, and 3 that because the AirPods he bought lacked this feature, they must not have been 4 true 2nd Generation AirPods. (Compl., ¶ 27.) This was contrary to Apple’s own 5 product descriptions, and was unreasonable. Some reviewers made the same 6 unreasonable error, concluding that because the charging case was not wireless, 7 the AirPods were not the “Latest Model” or were not 2nd Generation. Others refer 8 to “the wireless charging case” (or similar), showing their awareness of Apple’s 9 products. 10 The reviews have the opposite effect than Thomas intends, however. Rather 11 than showing that a substantial number of customers acted reasonably but 12 nevertheless were misled or confused, the evidence shows that dissatisfaction with 13 the AirPods description in part stemmed from reviewers’ unreasonable mistakes, 14 or other complaints that are not the subject of this action. Of the reviews Thomas 15 highlights, no more than half said they were confused by the language of the 16 listing;3 all other reviews made more general observations, or erroneously thought 17 they had been sold an older generation of product, making the same unreasonable 18 error that Thomas did. Given the large number of reviews (over 12,000), Thomas 19 has not pointed to any evidence that a “substantial number” of people, acting 20 reasonably, were confused by the language of the listing. 21 / / / 22 23 24 3 Reviewers using the screen names Elia, Frank, Allen S, and BernBoots said they 25 thought the listing mentioned a wireless charging case or wireless charging. Elia’s review is somewhat ambiguous about the cause of the confusion, however. The 26 reviewer Don D complained that the description failed to mention what kind 27 products came in the bundle. But that reviewer’s complaint is also based on the mistaken belief that only 1st Generation charging cases were wired, so the basis 28 1 Thomas also offers two declarations from purchasers, essentially saying the 2 same thing. (Docket no. 12-2, Exs. H, I.) But these add little to the analysis. They 3 merely say the declarants purchased AirPods from Costco, and after reviewing 4 Costco’s listing they believed the AirPods could be charged wirelessly. While they 5 show that some people were confused, they do not show that the confusion was 6 reasonable. 7 Thomas also argues that the frequent mention of “wireless” in the listing is 8 likely to cause reasonable confusion. In every context, however, “wireless” is 9 referring to the AirPods themselves. The AirPods’ wireless capability is one of their 10 chief selling points, so it is hardly surprising that the listing would mention it. The 11 charging case is scarcely mentioned, and neither the case nor the method of 12 charging are described as wireless. Thomas also argues that the heading of the 13 listing can reasonably be interpreted to mean that both the AirPods and the case 14 are wireless. In the description “Apple AirPods Wireless Headphones with 15 Charging Case (2nd Generation)” he suggests that “Wireless” could apply not only 16 to the Headphones but also to the Charging Case. He would be on stronger ground 17 if the listing said “and,” which might give rise to a plausible ambiguity. But the fact 18 that it says “with” makes his construction strained and untenable. 19 Thomas offers as evidence other online retailers’ listings of the same AirPods 20 that Costco sold, albeit with different descriptions, all of which sold for prices similar 21 to Costco’s. (Docket 12-2, Exs. E (Walmart.com), F (Target.com), and G 22 (Amazon.com).) Walmart.com uses the identifier “Apple AirPods with Charging 23 Case (Latest Model),” and also suggests purchase of a “lightning” cable with the 24 product. Target.com uses the identifier “Apple AirPods with Wired Charging Case.” 25 Amazon.com identifies them as “Apple AirPods with Wired Charging Case.” All 26 three listings were captured on July 24, 2020, about four months after Thomas 27 bought his AirPods from Costco, and well after he filed this action. Thomas’ 28 argument is that because other retailers either mentioned the charging case being 1 wired, or else omitted the word “wireless,” Costco’s description was misleading. 2 The fact that other retailers described the same products differently shows that 3 different descriptions were feasible, but does not show that Costco’s description 4 was improper or misleading. There is no evidence of whether they ever used 5 wording similar to Costco’s, when they adopted the wording they were using as of 6 July 24, or why they chose it. 7 It is understandable that hopeful customers might read into the listing what 8 they hope to see there. See Freeman, 68 F.3d at 289–90 (rejecting as 9 unreasonable plaintiff’s argument that language in a mailing could be read as 10 telling him he had won the sweepstakes). But given the lack of any other mention 11 of the case being wireless, such an interpretation is unreasonable. See id. 12 (emphasizing that representations must be read in context). Similarly, Costco is 13 not liable for customers’ misunderstandings based on their own unreasonable 14 beliefs about the products Apple sold. 15 The Court finds the analysis of Becerra particularly helpful here. In that case, 16 the Ninth Circuit evaluated the use of the word “diet” on soft drink labels and 17 rejected the plaintiff’s allegation that reasonable consumers might plausibly 18 understand it to promise weight loss. The opinion discussed in detail the common 19 understanding of the term. Even though claims were dismissed at the pleading 20 stage, the opinion also discussed at length supporting evidence proffered by the 21 plaintiff to show that the claims were plausible. Consumer polls and studies that 22 only hinted at consumers’ understanding did not render the claim plausible, the 23 panel held. See 945 F.3d at 1231. And unreasonable mistakes or confusion were 24 simply not enough. It bears emphasis that Becerra was decided at the pleading 25 stage. At the summary judgment stage, the Court considers the quality of the 26 evidence, including whether it could be presented in an admissible form. 27 Here, although Thomas has pointed to outside evidence in an effort to 28 establish what consumer expectations were, the evidence is similarly lacking in 1 foundation. Furthermore, because the Court is applying the summary judgment 2 standard, the proffered evidence must be substantial enough that a reasonable 3 jury could find for Thomas. While it is evident some consumers were confused by 4 Costco’s listing, evidence offered to show that these consumers were “acting 5 reasonably in the circumstances,” see Ebner, 838 F.3d at 965, is lacking. This flaw 6 means the case cannot go forward. 7 Thomas has not pointed to evidence sufficient to show that Costco’s listing 8 would mislead or confuse reasonable consumers, he has not met his burden of 9 showing a genuine issue of material fact for trial. 10 Nationwide Allegations 11 Even though the Complaint did not include a class definition, it appeared 12 Thomas was attempting to bring claims on behalf of a nationwide class. (See 13 Compl., ¶ 7 (alleging that Costco’s nationwide sale and advertising of the AirPods 14 violates California laws).) In his opposition to Costco’s motion Thomas clarified 15 that he does intend to represent a nationwide class, but only as to his negligent 16 misrepresentation claim. He provided a class definition that he intends to add to 17 an amended complaint. Even though Costco is a Washington corporation, he cites 18 California law as providing the standard for such a claim. 19 It does not appear that Thomas can represent a nationwide class as to this 20 claim, at least not under California law. A federal court sitting in diversity looks to 21 the forum state’s choice of law rules to determine the controlling substantive law. 22 Mazza v. Am. Honda Motor Co., 666 F.3d 581, 594 (9th Cir. 2012). 23 California’s three-step government interest test is outlined in Mazza, 666 24 F.3d at 590. In brief, the first two steps pertain to determining whether two states 25 have competing standards; if they do, the third step directs courts to apply the law 26 of the state with the greater interest. Without belaboring the point, California has 27 no interest in having its law of negligent misrepresentation applied to product 28 listings that originated outside California, were seen by consumers outside 1 California, led to those consumers buying products outside California, and have 2 no connection to California. See Jackson v. Gen’l Mills, Inc., 2019 WL 4599845, 3 slip op. at *4 (S.D. Cal., Sept. 23, 2019) (citing Sullivan v. Oracle Corp., 51 Cal. 4 4th 1191, 1207 (2011)). 5 Given that there are “material variations” among the states’ negligent 6 misrepresentation laws, Larsen v. Vizio, Inc., 2015 WL 13655757, at *3 (C.D. Cal., 7 Apr. 21, 2015) along with the fact that the interest of all other states would outweigh 8 California’s interest, the Court would be required to apply a diversity of laws to the 9 nationwide class’s claims. 10 The Court can apply Mazza even at the pleading stage See Larsen, 2015 11 WL 13655757 at *2–4 (finding that claims under California consumer protection 12 laws, along with negligent misrepresentation and fraud claims, could not be 13 brought on behalf of a nationwide class). 14 Because the Complaint does not include a nationwide class, there is no need 15 to strike nationwide class claims from it. However, on the showing he has made, 16 Thomas will not be allowed to add a nationwide class definition. 17 Conclusion and Order 18 Thomas cannot satisfy the “reasonable consumer” standard, because he 19 cannot show that his mistake about the AirPods he bought from Costco was 20 reasonable. Rather, his misunderstanding was based in part on his own 21 unreasonable mistake, and an unreasonable interpretation of Costco’s product 22 listing. Nor is there any evidence that a substantial number of other purchasers, in 23 spite of acting reasonably under the circumstances, were misled. The standard set 24 forth in cases such as Kasky 27 Cal. 4th 939; Lavie, 105 Cal. App. 4th 496; and 25 Williams, 552 F.3d 934 is not met. Failure to satisfy this standard is fatal to all his 26 claims. The Court therefore holds that Costco is entitled to summary judgment. 27 / / / 28 / / / 1 Thomas’ claims are DISMISSED WITH PREJUDICE and the putative class 2 ||cClaims are DISMISSED WITHOUT PREJUDICE. The Clerk is directed to close the 3 || docket. 4 5 IT IS SO ORDERED. 6 ||Dated: March 12, 2021 ( iM f 4. JB wy 8 Honorable Larry Alan Burns 9 United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28