United States District Court, D. Arizona
ORDER
James
A. Teilbrorg Senior United States District Judge
Pending
before the Court is Defendant's Motion to Dismiss
Plaintiff's Fourth Amended Complaint (“Motion to
Dismiss”), (Doc. 74).[1] Plaintiff has responded
(“Response”), (Doc. 76), and Defendant has
replied (“Reply”), (Doc. 77).
I.
Background
The
Court assumes that the facts alleged in the Fourth Amended
Complaint (“FAC”), (Doc. 72), are true for
purposes of deciding the pending Motion to Dismiss.
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). In
November of 2015, a family friend of Hussein Zeitoun
purchased two hoverboards from Super Engine, Easycredit Trade
Hongkong Co., limited dba Super Engine, and Amazon.com, Inc.
(FAC ¶ 9). After several months, this purchaser then
sold the hoverboards to the Zeitoun family. (Id.) On
June 23, 2016, while the hoverboards' batteries were
charging, they suddenly and unexpectedly exploded.
(Id.) This explosion started a fire in the
Zeitoun's home and caused severe damage. (Id.)
State Farm Fire and Casualty Company
(“Plaintiff”) paid for the Zeitouns'
investigation and damages, (id.), which amounted to
$433, 710.37. (Id. ¶ 1). Accordingly,
Plaintiff, as the subrogee of the Zeitouns, brings this
claim. (Id.) Plaintiff alleges that Defendants knew
or should have known that the batteries were
defective[2] and that they continued to use these
defective batteries up to and including the sale and delivery
date in November 2015. (Id. ¶ 10).
Additionally, Plaintiff alleges that Defendants represented
that Samsung manufactured the batteries used in the
hoverboards and that “these representations were false,
misleading, deceptive, untrue, reckless and
outrageous.” (Id.)
On
December 22, 2017, Plaintiff filed its FAC alleging seven
counts of liability against Defendants: Strict Liability,
Negligence, Breach of Express Warranties, Breach of Implied
Warranties, Negligent Misrepresentation, Consumer Fraud, and
Aiding and Abetting. (FAC at 7-11).
II.
Motion to Dismiss
Defendant
Amazon.com, Inc. (“Defendant”) now moves to
dismiss three of these seven counts from the FAC for failure
to state a claim under Federal Rule of Civil Procedure
(“Rule”) 12(b)(6). (Doc. 74 at 3-6). Defendant
argues that subsequent purchasers may not bring a claim under
the Arizona Consumer Fraud Act (“CFA”), that
Defendant owed no duty that could support a negligent
misrepresentation claim, and that Plaintiff has not
sufficiently pleaded aiding and abetting. (Id.)
A.
Legal Standard
The
Court may grant a motion to dismiss a complaint for failure
to state a claim if it either lacks a cognizable legal theory
or alleges insufficient facts under a cognizable legal
theory. Balistreri v. Pacifica Police Dep't, 901
F.2d 696, 699 (9th Cir. 1990). A complaint that satisfies
Rule 8(a)(2)'s requirement of “a short and plain
statement of the claim showing that the pleader is entitled
to relief, ” is sufficient to survive a Rule 12(b)(6)
motion. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007). Although Rule 8 “does not require
‘detailed factual allegations, '” it does
require “more than an unadorned, the
defendant-unlawfully-harmed-me accusation.”
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 555). In other words, the complaint must plead
sufficient facts to “state a claim for relief that is
plausible on its face.” Id.; see also
Twombly, 550 U.S. at 555 n.3 (stating that Rule 8
“requires a ‘showing, ' rather than a blanket
assertion, of entitlement to relief.”). A complaint
shows facial plausibility when it pleads factual content that
allows the court to draw reasonable inferences as to the
defendant's liability. Iqbal, 556 U.S. at 678
(quoting Twombly, 550 U.S. at 556). But,
when “a complaint pleads facts that are ‘merely
consistent with' a defendant's liability, it
‘stops short of the line between possibility and
plausibility of “entitlement to
relief.”'” Iqbal, 556 U.S at 678
(quoting Twombly, 550 U.S. at 557).
Finally,
the Court must accept as true all well-pleaded factual
allegations in the Complaint. Id. at 679. However,
pleadings that offer no more than legal conclusions are not
entitled to the same assumption of truth. Id.
B.
Consideration of the Exhibits Attached to the
Response
The
Court must first determine whether it can consider the
Response's exhibits. (Response at Exs. A, B). Plaintiff
relies on Exhibit A, an Amazon receipt for the purchase of
two hoverboards, to illustrate that Defendant made false
representation about the brand of battery used in the
hoverboards. (Response at 7). Plaintiff relies on Exhibit B,
an article about Amazon refunding hoverboard owners, to
demonstrate that “[t]here are numerous fires throughout
the country involving the same product, numerous lawsuits
similar to this one throughout the country in Federal Courts,
and this is established by the mandatory disclosure of both
parties in this case.” (Response at 8).
On a
motion to dismiss for failure to state a claim, the scope of
review is generally “limited to the contents of the
complaint.” Marder v. Lopez, 450 F.3d 445, 448
(9th Cir.2006) (citing Warren v. Fox Family Worldwide,
Inc., 328 F.3d 1136, 1141 n.5 (9th Cir. 2003)). The
Court may, however, consider evidence upon which the
Complaint “necessarily relies.” Id.
(citing Branch v. Tunnell, 14 F.3d 449, 453-54 (9th
Cir. 1994)). A complaint “necessarily relies” on
evidence if: “(1) the complaint refers to the document;
(2) the document is central to the plaintiff's claim; and
(3) no party questions the authenticity of the copy attached
to the [Rule] 12(b)(6) motion.” Id.
Having
reviewed the FAC and the Exhibits, the Court finds that the
FAC does not “necessarily rely” on the Exhibits
used. The FAC does not refer to Exhibit B. Furthermore, this
news story is not central to Plaintiff's claim both
because it does not support the proposition that Defendant
had prior knowledge of any defect at the time of sale and
because the story actually postdates the first hoverboard
sale in this case. (Doc. 77 at Ex. B). The FAC also does not
reference Exhibit A. The FAC generally states that Defendants
“marketed and sold [the hoverboards] . . . as including
and containing name brand, reliable, safe, tested, trusted,
and well regarded batteries and components, including, but
not limited to Samsung batteries, however these
representations were false.” (FAC ¶ 12). But, in
order to “necessarily rely” on evidence, the
complaint must specifically reference the existence
of documents as part of the factual basis for the complaint.
See Branch, 14 F.3d at 453; Townsend v. ...