Monday, June 04, 2018

isn't it good? mahogany wood isn't always mahogany

Golden v. Home Depot, U.S.A, Inc., 2018 WL 2441580, No. 18-cv-00033-LJO-JLT (E.D. Cal. May 31, 2018)

According to the complaint, authentic mahogany is prized for its beauty, durability, color, and ease of use in woodworking. It has a reddish-brown color, darkens over time, and displays a reddish sheen when polished, and is the wood of several species of trees in the Meliaceae family. Home Depot advertises, markets, and sells as mahogany some species of eucalyptus from the Myrtaceae family, commonly known as “Swamp mahogany.” Swamp mahogany is denser and more difficult to work with than authentic mahogany. Home Depot also markets Ecualyptus resinifera wood as “Red mahogany” and wood of the Myroxylon balsamum, a tree in the Fabaceae family, as “Santos mahogany,” and this is heavier than authentic mahogany and more difficult to work with.

Home Depot discloses the species of some types of wood that it sells online, but not the species of its mahogany products. “Knowing the species is important in determining the quality of the wood, and influences factors including workability, durability, and resistance to rot.” Home Depot instead advertises that the mahogany board it sells online and in stores is “premium” and “finest grade.”

Golden bought wood sold as mahogany board. Unnamed employees of Home Depot told him that he was purchasing “authentic, genuine mahogany,” but they were in fact made of less valuable Swamp mahogany. He brought the usual California claims.

The court declined to take judicial notice of definitions used in various websites submitted by Home Depot.  Although the complaint quoted Woodworkers Source, a website primarily selling mahogany and other hardwoods and also hosting FAQs, a blog, and other informational resources for lumber buyers, citing one page of that site didn’t open the door to treating unrelated portions of the website as subject to judicial notice.  “The meaning of a disputed term in trade or common usage is precisely the factual question that is at the heart of this matter, that is, whether Defendant’s lumber labeling practices were false or misleading to consumers.”  At the motion to dismiss stage, the court declined to look to dictionaries or trade and industry usage to determine the meaning of words.

The court found that the complaint satisfied Rule 9(b) with sufficiently detailed allegations about the characteristics of wood from different trees to conclude that genuine mahogany was a different product in important ways from Swamp, Santos, and Red mahogany; thus, labeling such species as “mahogany” was false.  The allegations of oral representations were also specific enough; a plaintiff alleging fraud “need not name the specific employee who made the misleading representation when it would be unrealistic to expect a customer to recall that detail,” and he alleged the approximate time and place of the transaction, as well as the nature of the misrepresentation.  He also alleged reliance on written representations in stores and online.  He was not required to allege justifiable reliance, which is an element of common law fraud but not consumer protection claims, defeating Home Depot’s argument that the wood was too cheap for him to have believed he was buying real mahogany.

Home Depot argued no law or regulation required it to label its wood otheriwse, that its use of the word conformed with common usage, and that the lumber industry commonly labels and sells a variety of woods as mahogany. And its descriptions of its lumber as “premium” and “finest grade” were, it argued, mere puffery.

But the alleged differences between genuine mahogany and Swamp, Santos, and Red mahogany were extensive, and it was plausible that a reasonable consumer could be deceived.  As for “premium” and “finest grade,” they might be puffery in some contexts, but Golden wasn’t claiming deception based only on the use of those adjectives. His argument was that, in this context, the words “premium” and “finest grade” supported consumers’ impressions that they were purchasing a more valuable or useful type of wood than they actually did, which could have misled a reasonable consumer.

Likewise, Golden pled an actionable omission under the CLRA because of the related affirmative representation that the products were mahogany, without disclosing the actual species. However, negligent misrepresentation claims failed because those require more than economic loss, which was all that Golden pled.

The court also rejected Home Depot’s argument that Golden lacked standing as to unpurchased products made of other species but also labeled mahogany. The court applied a “substantially similar” standard, as the majority of 9th Circuit courts do.  “Even though Swamp, Santos, and Red mahoganies are alleged to come from different trees, and the purchased and unpurchased products are therefore not identical in composition, the type of misrepresentation alleged is common to all three products. The types of harm are also the same for all of the named products.” Thus, Golden had standing.

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