I PURCHASED A DEFECTIVE PRODUCT. NOW WHAT?

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Some have recently observed that across the board, consumer goods are made more cheaply and with less care.  It follows that consumer goods may not perform as advertised or hold up as long as consumers might expect.  Yet, the price of goods has continued to rise, leaving consumers paying more for less.  That can cause consumers to feel deceived, frustrated and in search of recourse, including when the item they purchased is defective.  

Fortunately, there are various state laws that may provide recourse when a company sells a defective product.  California’s primary consumer statute is the California Legal Remedies Act (“CLRA”), California Civil Code §§ 1750-1784.  The CLRA is meant “to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection.”  Section 1770(a)(9) provides that it is unlawful to advertise “goods or services with intent not to sell them as advertised.”  A consumer also has a private right of action under California’s Unfair Competition Law (“UCL”), California Business & Professions Code § 17200.  The UCL is a broadly drawn statute that prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.”

In addition to the CLRA and UCL, consumers also have a private right of action under California’s Song-Beverly Consumer Warranty Act, California Civil Code §§ 1790-1795.8.  The Song-Beverly Act sets out methods to ensure that buyers of consumer goods obtain the benefit of implied warranties as well as any express warranties that are passed along with the goods.  A defective product may implicate at least three types of warranties.

Section 1791.1(a) sets out the “implied warranty of merchantability.”  The implied warranty of merchantability means that consumer goods: “(1) pass without objection in the trade under the contract description; (2) are fit for the ordinary purposes for which such goods are used; (3) are adequately contained, packaged, and labeled; and (4) conform to the promises or affirmations of fact made on the container or label.”

Section 1791.1(b) sets out the “implied warranty of fitness.”  The implied warranty of fitness means: “(1) that when the retailer, distributor, or manufacturer has reason to know any particular purpose for which the good consumers are required, and further, that the buyer is relying on the skill and judgment of the seller to select and furnish suitable goods, then there is an implied warranty that the goods shall be fit for such purpose and (2) that when there is a sale of an assistive device sold at retail in this state, then there is an implied warranty by the retailer that the device is specifically fit for the particular needs of the buyer.”

Section 1791. concerns express warranties.  An express warranty means: “(1) a written statement arising out of a sale to the consumer of a consumer good pursuant to which the manufacturer, distributor, or retailer undertakes to preserve or maintain the utility or performance of the consumer good or provide compensation if there is a failure in utility or performance; or (2) in the event of any sample or model, that the whole of the goods conform to such sample or model.”

Consumers have raised CLRA, UCL, and warranty claims as to a variety of allegedly defective products.  For example, in Urban v. Tesla Inc., 2023 WL 6796021 (N.D. Cal. Oct. 13, 2023), a consumer brought a class action alleging that “Tesla’s 2014-2016 Model S vehicles were equipped with defective door handles that routinely failed within only a few years of normal use.”  Tesla moved to dismiss all of the plaintiff’s state law claims.  In relation to the CLRA, the court determined that “common sense makes clear that a reasonable consumer expects a new car’s door handles to function properly.”  The court held that the plaintiff sufficiently alleged a duty-to-disclose claim, as he alleged sufficient facts to show that Tesla knew of the defect before selling the cars, and that had Tesla provided a disclosure regarding the car door handles, he would have seen it.  The court thus determined that the plaintiff could advance his CLRA claim.

In relation to the consumer’s UCL claim, the court explained that “to determine whether a practice constitutes unfair competition,” it assesses whether the plaintiff has sufficiently alleged any of the three prongs, “unlawful, fraudulent, and unfair.”  The court held that the plaintiff had adequately alleged a violation of all three prongs.  The court explained the requirements for each prong:  “The unlawful prong typically requires a predicate violation (e.g., a CLRA violation), the fraudulent prong has the same deceptive practices standard as the CLRA (i.e., the defendant's knowledge of a material defect), and the unfair prong requires a showing of substantial injury not outweighed by countervailing benefits to consumers or competition that could not have been reasonably avoided by consumers.”  The plaintiff could thus advance his UCL claim because he had sufficiently alleged a fraud-based CLRA violation and that he “overpaid” for a defective car with no relevant countervailing benefit.

As to the warranty claims, the court determined that the consumer adequately alleged a breach of the implied warranty of merchantability because if “an owner is unable to enter a vehicle due to a defective door handle, it seems unlikely that the vehicle could be used reliably for transportation.”  Finally, in relation to the consumer’s claim for breach of express warranty, the court outlined Tesla’s argument that the Tesla Model S Owner’s Manual limits the express warranty to “defects in the materials or workmanship,” and excludes “design defects.”  The court held that it was “not implausible that the problem resulted from a manufacturing issue,” and that the plaintiff alleged sufficient facts “to move forward with his breach of express warranty claim.”  Ultimately, the court held that the plaintiff could advance all four California state law claims.

These state laws provide a robust framework that aims to protect consumers.  Any consumer considering legal recourse should consult a qualified attorney who can evaluate the applicable laws, relevant legal developments, and specific facts of a given case.

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