13 DISTRICT OF NEVADA

Transcription

1 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 1 of 13 1 DENNIS L. KENNEDY Nevada Bar No JOSEPH A. LIEBMAN Nevada Bar No BAILEY.:.KENNEDY 8984 Spanish Ridge Avenue 4 Las Vegas, Nevada ( Telephone 5 ( Facsimile dkennedycfbaileykennedy.com 6 jliebmancfbaileykennedy.com 7 WILLIAM B. FEDERMAN (wil comply with LR fa 10-2 within 45 days FEDERMAN & SHERWOOD N. Pennsylvania Avenue Oklahoma City, Oklahoma ( Telephone ( Facsimile 10 wbfúìfedermanlaw.com 11 Attorneys for Plaintiffs 12 UNITED STATES DISTRICT COURT 13 DISTRICT OF NEVADA 14 KEVIN DROVER, individually and on behalf of all others similarly situated, v. Plaintiffs, LG ELECTRONICS USA, INC., Defendant. CASE NO. CLASS ACTION COMPLAINT JURY DEMANDED 20 Kevin Drover, by his attorneys, makes the following allegations and claims for his 21 complaint against LG Electronics USA, Inc. ("LG" or "Defendant". The following allegations 22 are made upon information and belief, except as to allegations specifically pertaining to Plaintiff, 23 which are made upon knowledge This class action is brought by Plaintiff on behalf of himself and all others 25 similarly situated in the state of Nevada who have purchased certain defective LG plasma and - 1 -

2 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 2 of 13 1 LCD television sets manufactured, marketed, distributed, and/or sold by Defendant (the 2 "Televisions". Class Televisions include, but are not limited to models 32LC2D, 37LC2D, 3 42LC2D, 42PC3D, 42PC3DV, 47LC7DF and 50PC3D. The Televisions are defective in that 4 they contain internal components called printed wiring boards (also known as printed circuit 5 boards that prematurely fail during normal operation of the Televisions (the "Defect". The 6 Defect, which was present upon delivery and which manifests itself over time, ultimately results 7 in the failure of the Televisions themselves well before the end of their expected useful life, and 8 rendering the Televisions unsuitable for their principal and intended purpose. 9 JURISDICTION AND VENUE This Court has jurisdiction over all causes of action asserted herein pursuant to U.S.c. 1332(d, because the aggregate claims of the Class exceed the sum or value of 12 $5,000,000.00, and there is diversity of citizenship between proposed class members and 13 Defendant Venue is proper in this District under 28 U.S.C. 1391(a(l and (2. Plaintiff 15 resides and Defendant conducts substantial business in this District, including conduct directed a 16 members of the Class, including the promotion, sale, and marketing of its products, suffcient to 17 render it within the jurisdiction of this Court. The events and conduct giving rise to the violations 18 of law in this action constitute interstate commerce, and a significant portion thereof occurred in this District. PARTIES Plaintiff Kevin Drover resides in Mesquite, Nevada. Plaintiff Drover purchased 22 for use in his home an LG LCT Television model number 47LC7DF that was designed, 23 manufactured, marketed, distributed and/or sold with the Defect by Defendant. His Television 24 has exhibited the Defect described herein. He contacted LG to obtain a repair, but LG refused to 25 repair his Television unless he could present the original receipt

3 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 3 of Defendant LG Electronics USA, Inc. is a Delaware corporation, with its principal 2 place of business in Englewood Cliffs, New Jersey. LG Electronics USA, Inc. is the United 3 States holding company for LG Electronics, Inc.'s U.S. based electronics and entertainment 4 businesses, through which it designs, manufactures, andlor distributes consumer electronics 5 products, and sells LG brand consumer products direct to the public, including the Televisions 6 containing the Defect forming the subject matter of this action, which it caused to be placed into 7 the stream of commerce in this State. 8 STATEMENT OF FACTS 9 6. LG is in the business of manufacturing, marketing, and distributing for sale 10 plasma and LCD Televisions to consumers throughout the United States and Nevada The Televisions contain a number of internal electronic components. These 12 components serve dedicated functions, i.e., enabling the television to power on and off, tune to a 13 paricular channel, display visual images properly, and replay audio. The printed wiring boards 14 ("PWBs" are electronic components that incorporate integrated components that include, but are 15 not limited to, circuit chips, resistors, surface capacitors and chip capacitors. The PWBs for the 16 LCD Televisions include, but are not limited to, the power supply PWB, the main PWB and 17 other associated PWBs. The PWBs for the Plasma televisions include, but are not limited to, the 18 X-sustain boards, the Y-sustain boards, control boards, digital boards and associated boards. A 19 well-designed and manufactured television wil have PWBs that wil last the expected useful life 20 ofthe Television The PWBs of the Televisions prematurely fail due to voltage overload, ripple 22 curent, and thermal fatigue. Voltage overload and thermal fatigue can be caused by insuffcient 23 cooling fans, heat sinks and other ventilation issues. The premature failure is caused by design 24 and manufacturing defects. 25 III - 3 -

4 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 4 of The Televisions are defectively designed andlor use defective materials because 2 normal operation and usage of the Televisions exposes the PWBs to excessive heat andlor 3 excessive voltage, which, in turn, causes them to fail. Therefore, the Televisions fail before 4 expiration of their expected useful life Purchasers of the Televisions have paid and continue to incur substantial parts an 6 labor fees to repair their defectively designed Televisions when they fail to operate as a result of 7 the design defect after the expiration of the one year warranty for parts and labor As a result of the design defect in the Televisions, numerous purchasers of these 9 Televisions have complained to LG about the Defect, as evidenced by the numerous complaints 10 found on the Internet. LG has had actual knowledge of the design defect in the Televisions, but 11 has failed to recall the Televisions publicly in order to cure the design defect described herein The defect described herein was a material fact related to the reliabilty and 13 normal operation of the Televisions known only to LG. Had Plaintiff and members of the Class 14 known about the defect, they would not have purchased their Televisions The Televisions include a 12 months parts and labor warranty. Despite the fact 16 that the Defect was present in the Television at the time of delivery, well within these waranty 17 limitations periods, LG has refused to pay for labor or diagnostic expenses for consumers with 18 Televisions manifesting the Defect more than a year after purchase, and LG has refused to pay 19 any part of the cost of repairing Televisions which manifest the Defect one year after purchase Consumers oflg's Televisions could reasonably expect their Televisions to 21 fuction well beyond the,12 months pars and labor warranty provided by LG's boiler-plate 22 warranties. LG knew or should have known that the defective design of the Televisions would 23 render the time limitations in its written warranty grossly inadequate to protect consumers from 24 the Defect, and would subject consumers to expensive repair costs. 25 III - 4 -

5 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 5 of Plaintiff and the members of the Class had no knowledge of the cause of the 2 Defect and did not suspect, nor did they have reason to suspect, that the Defect was caused by 3 LG's wrongdoing. Plaintiff and the members of the Class could not have known or reasonably 4 discovered, nor did they have reason to know of, the Defect created by LG. Further, they could 5 not have known or reasonably discovered that the Televisions they purchased were defective or 6 that the cause of the harm suffered by Plaintiff and the members of the Class was directly 7 attributable to the wrongdoing by LG alleged herein Plaintiff and the Class members' lack of knowledge regarding the cause of their 9 damages was due in large part to LG's concealment of material facts regarding the Defect. The 10 fraudulent acts of concealment by LG included the intentional concealment and refusal to 11 disclose facts known to LG about the Defect in the Televisions, which Plaintiff and the members 12 of the Class could not reasonably have learned, known of, or otherwise discovered. In fact, 13 Plaintiff and the members ofthe Class did not know, nor could they have had reason to know, 14 that LG's overall malfeasance in designing, manufacturing, distributing, marketing and sellng 0 15 its Televisions was a cause of their damage LG, as the designers, manufacturers, marketers, distributors and sellers of the 17 Televisions, waranted, either expressly or by implication, that the Televisions being sold to the 18 general public were not inherently defective, and were reasonably suited for their intended 19 purpose. LG breached their agreement and waranty by doing so and LG made andlor allowed 20 these misrepresentations to be made with the intent of making Plaintiff and the members of the 21 Class enter into agreements to purchase the Televisions. If Plaintiff and the members of the 22 Class had known the true facts they would not have purchased the Televisions or pàid as much as 23 they did for the Televisions. 24 III 25 III - 5 -

6 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 6 of LG has refused to recall the Televisions and continues to deny to consumers the 2 existence of the Defect. Class Members are damaged in the amount of the price paid for the 3 Televisions, as well as HDTV, cable and satellte services they are unable to utilize The Televisions were sold to distributors and consumers with the knowledge and 5 intent that the Televisions be used for the benefit of consumers. LG and its distributors sold the 6 defective Televisions to Plaintiff and the members of the Class in the course of their business The Televisions were not altered by Plaintiff, the members of the Class, LG's 8 distributors or other personnel. The Televisions were defective when they left the exclusive 9 control of LG and LG knew the Televisions would be used without additional tests for defects. 10 The Televisions were defective and unfit for their intended purpose and Plaintiff and the 11 members of the Class did not receive the goods as waranted By engaging in the above described conduct, LG committed acts and omissions 13 with actual malice and accompanied by a wanton and wilful disregard of persons, including 14 Plaintiff and members of the Class, who foreseeably might be harmed by those acts and 15 omissions As a direct result of LG' s actions set forth herein, Plaintiff and the consumers 17 who comprise the Class who have purchased the Televisions have suffered injury in fact, have 18 been damaged and have suffered a loss of money or property for having paid thousands of 19 dollars for a product that does not, canot, and wil not, work as represented and that is now 20 worth substantially less than what consumers paid and what a non-defective Television would be 21 worth. 22 CLASS ACTION ALLEGATIONS Plaintiff brings this action on behalf of himself and all other members of a class 24 consisting of all purchasers in the State of Nevada of the Televisions (the "Class". Excluded 25 from the Class are Defendant herein, and any person, firm, trust, corporation, or other entity - 6 -

7 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 7 of 13 1 related to or affiiated with Defendant, including, without limitation, persons who are directors 0 2 LG The Class is composed of no fewer than thousands of persons state-wide, and is 4 suffciently numerous for class treatment. The joinder of all Class members individually in one 5 action would be impracticable, and the disposition of their claims in a class action wil provide 6 substantial benefits to the parties and the Court Plaintiffs' claims are typical of the claims of the Class and Plaintiff has no 8 interests adverse to the interests of other members of the Class This dispute raises questions oflaw and fact that are common to all Class 10 members. Those common questions predominate over questions that arise on an individual basis 11 for Class members. The common questions of law and fact include, without limitation: 12 (a Whether LG's representations, omissions, and conduct regarding the 13 Televisions were misleading or false; 14 (b Whether LG's representations and conduct were likely to deceive 15 consumers into believing that the Televisions operated properly; 16 (c Whether LG violated the Nevada Deceptive Trade Practices Act; 17 (d Whether LG undertook a course of conduct to hide the existence of the 18 Defect from the members of the Class; 19 (e Whether the Defect constitutes a manufacturing or design defect; 20 (f Whether the Defect constitutes a breach oflg's warranties; 21 (g Whether the members ofthe Class have been injured by LG's conduct; 22 (h Whether the members of the Class have sustained damages and are 23 entitled to restitution as a result oflg's wrongdoing and, if so, what is the 24 proper measure and appropriate formula to be applied in determining such 25 damages and restitution; and - 7 -

8 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 8 of 13 1 (i Whether the members of the Class are entitled to injunctive relief Plaintiff wil fairly and adequately protect the interests of the Class and has 3 retained counsel experienced and competent in the prosecution of class action litigation A class action is superior to other methods for the fair and efficient adjudication 5 of the claims herein asserted. Plaintiff anticipates that no unusual diffculties are likely to be 6 encountered in the management of this class action A class action wil permit a large number of similarly situated persons to 8 prosecute their common claims in a single forum simultaneously, efficiently, and without the 9 duplication of effort and expense that numerous individual actions would engender. Class 10 treatment also wil permit the adjudication of relatively small claims by many Class members 11 who could not otherwise afford to seek legal redress for the wrongs complained of herein. If a 12 Class or general public action is not permitted, Class members wil continue to suffer losses and 13 LG's misconduct wil continue without proper remedy LG has acted and refused to act on grounds generally applicable to the entire 15 Class, thereby making appropriate final injunctive relief or corresponding declaratory relief with 16 respect to the Class as a whole. 17 FIRST CAUSE OF ACTION 18 Violation of the Nevada Deceptive Trade Practices Act Plaintiff restates and realleges all paragraphs above and in addition, states matters 20 as set forth below Plaintiff and the Class members are consumers who purchased an LG Television 22 from an authorized dealer The actions of Defendant constituted deceptive trade practices within the meaning 24 ofthe Nevada Deceptive Trade Practices Act, NRS et seq. 25 III - 8 -

9 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 9 of As a direct and proximate result of Defendant's unlawfl conduct, Plaintiff and 2 the Class members have suffered or wil suffer damages as a result of the defect in an amount to 3 be determined at trial Plaintiff is entitled to and prays for judgment for its damages suffered as a result 5 of Defendant's deceptive trade practices plus attorney fees and costs incurred in bringing this 6 action. 7 SECOND CAUSE OF ACTION 8 Breach of Express Warranty Plaintiff restates and realleges all paragraphs above and in addition, states matters 10 as set forth below Defendant as the designer, manufacturer, distributor andlor seller expressly 12 waranted that the Televisions being sold to the general public were not inherently defective Defendant's affirmations of fact andlor promises relating to the Televisions 14 created express warranties that the products purchased by Plaintiff and the Class would operate 15 properly and without defects. Defendant breached the express warranty in that the Televisions 16 did not conform to the promises or affirmations of fact made by Defendant to the Plaintiff and 17 members of the Class Alternatively, Defendant's descriptions of the Televisions became par of the 19 bases of the bargains between consumers and Defendant, creating express warranties that the 20' product purchased by Plaintiff and the Class would conform to Defendant's representations Further, Defendant breached its express warranty by allowing misrepresentations 22 to be made andlor omitting information concerning the true condition of the Televisions with the 23 intent of making Plaintiff and the members of the Class enter into agreements to purchase the 24 Televisions. Defendant's express warranty did not include a conspicuous statement about the 25 Defect and the unusual early failure of the PWBs

10 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 10 of If Plaintiff and the members of the Class had known the true facts, they would not have purchased the Televisions or paid as much as they did for the Televisions. 42. Despite the fact that the Defect was present in the Televisions at the time of delivery, well within the warranty limitations periods, Defendant has refused to pay for labor or diagnostic expenses for consumers with Televisions manifesting the Defect more than a year 6 7 after purchase, and Defendant has refused to pay any part ofthe cost of which manifest the Defect one year after purchase. repairing Televisions 8 9' Defendant's limits on their express warranty are in any case unenforceable as Defendant knew or should have known that the defective design of the capacitors would render the time limitations in its written warranty grossly inadequate to protect consumers from the Defect, and would subject consumers to expensive repair costs. Defendant failed to include in its warranty any disclosure regarding the existence of the known Defect, or the gross inadequacy of the limitations period contained in its written warranty. 44. The time limits contained in Defendant's written limited warranties were unconscionable because amongst other things, Plaintiffs and the members of the Class had no meaningful choice in determining those time limitations; the terms of the limited warranties unreasonably favored Defendant over members of the Class; a gross disparity in bargaining power existed as between Defendant and Class members; and Defendant knew or should have known that the Televisions were defective at the time of sale and would fail well before the end of their expected useful unconscionable. lives, thereby rendering the time limitations insuffcient, inadequate, and As a result of the foregoing, Plaintiff and the Class have suffered damages III III III

11 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 11 of 13 1 THIRD CAUSE OF ACTION 2 Breach of Implied Warranty of Merchantabilty Plaintiff restates and realleges all paragraphs above and in addition, states matters 4 as set forth below LG's affrmations of fact andlor promises relating to the Televisions created 6 implied waranties that the products purchased by Plaintiff and the Class would operate properly 7 and without defects, and would therefore portray video without extraneous artifacts that would 8 impair the viewing of the video program. 9' 48. Alternatively, LG's descriptions ofthe Televisions became par ofthe bases of the 10 bargains between consumers and LG, creating implied warranties that the product purchased by i 1 Plaintiff and the Class would conform to LG's representations In fact, the products purchased by Plaintiff and the Class did not so conform ' LG breached the implied warranty of merchantability implied in that the goods 14 could not pass without objection in the trade, the goods were not of fair average quality within 15 the description and/or were unfit for their intended and ordinary purpose in that they were 16 defective. LG cannot disclaim this implied warranty as they knowingly sold a defective product As a result of the foregoing, Plaintiff and the Class have suffered damages. 18 FOURTH CAUSE OF ACTION 19 Unjust Enrichment and Restitution Plaintiff restates and realleges all paragraphs above and in addition, states matters 21 as set forth below Defendant has received, and continues to receive, benefits at the expense of 23 Plaintiff and Class members and it is inequitable for Defendant to retain these benefits. 24 III 25 III

12 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 12 of Through their unfair and deceptive conduct, Defendant has unlawflly obtained 2 money from Plaintiff and the Class members for defective Televisions As a direct and proximate result of Defendant's unlawfl acts and practices, 4 Plaintiff and the Class have paid money to Defendant for defective Televisions, and are therefore 5 entitled to restitution and restoration of the money they paid to Defendant, along with interest 6 thereon from the date the money was converted by Defendant to the date of judgment; and any 7 such other and further relief as the Court may deem proper. 8 PRAYER FOR RELIEF 9 WHEREFORE, Plaintiff respectfully requests that this Court enter judgment as follows: loa. Declaring that this action is properly maintainable as a class action and certifying 11 Plaintiff as Class representative; 12 B. Awarding damages to Plaintiff and the other Class members for Defendant's 13 breach of express and implied warranties; 14 C. Awarding restitution and disgorgement as a result of Defendant's unfair business 15 practices and untrue and misleading advertising; 16 D. Awarding Plaintiff and the Class compensatory and punitive damages as a result 17 of Defendant's violations and enjoining the Defendant from continuing its ilegal practices set 18 out above; 19 E. Requiring Defendant to inform the public of the Defect possessed by its 20 Televisions and enjoining Defendant from refusing to perform its waranty obligations; 21 F. Awarding pre- and post-judgment interest; 22 G. Awarding attorney fees, expenses, and costs; and 23 H. Providing such other and further relief as this Court may deem just and proper. 24 III 25 III

13 Case 2:12-cv LRH -VCF Document 1 Filed 03/27/12 Page 13 of 13 I DEMAND FOR TRIAL BY JURY 2 Trial by jury is demanded. 3 Dated this 2ih day of March, Respectfully submitted, 5 BAILEY.:.KENNEDY By: /1_ (ß: v. / l/ ;YDENNIS L. KENNEDY Nevada Bar No JOSEPH A. LIEBMAN Nevada Bar No Spanish Ridge Avenue Las Vegas, Nevada ( Telephone ( Facsimile FEDERMAN & SHERWOOD WILLIAM B. FEDERMAN N. Pennsylvania Avenue Oklahoma City, Oklahoma ( Telephone ( Facsimile Attorneys for Plaintiffs