failure to allege comparative performance dooms falsity claim

Ruiz v. Owlet Baby Care, Inc., 2021 WL 3370259, No. 2:19-cv-00252 (D. Utah Aug. 3, 2021)

A proposed class action against Owlet’s Smart Sock pulse oximeter sought to cure earlier defects by alleging that other pulse oximeters were used differently (and not on babies’ feet). Nonetheless, plaintiffs sought to allege, “Owlet deliberately and misleadingly aligns itself with both medical grade devices and consumer wellness products, seemingly whenever it was convenient for sales.”  Owlet’s representations thus allegedly led “consumers to reasonably expect the Owlet Smart Sock to be at least as accurate as hospital grade pulse oximeters” and that Owlet took advantage of “consumer expectations by their use of hospital grade and similar terminology in their advertisements.”

Amendment would be futile. Plaintiffs didn’t sufficiently allege differences in accuracy and reliability between medical pulse oximeters and consumer products incorporating pulse oximeter technology—let alone between medical pulse oximeters and the Smart Sock or between other consumer products incorporating pulse oximeter technology and the Smart Sock. They also failed to allege that Owlet’s failure to disclose “frequent and unnerving false alarms, inaccurate readings, and complete failure to detect and alert to abnormal oxygen levels and heart rates” was material, “because it is not clear what the disclosure means, and thus whether it differs from what a reasonable consumer would expect from a consumer product incorporating pulse oximeter technology.” The magnitude and persistence of alleged problems with accuracy and reliability were not specified. Was the Smart Sock inaccurate twice in two weeks, twice in one week, or something else? Based on the allegations, it was impossible to compare that with what a reasonable consumer would expect from pulse oximeter devices.

Cherry-picking consumer reviews didn’t help. Most of the reviews didn’t distinguish among false alerts and other errors, or indicate expectations about medical pulse oximeters—although plaintiffs sought to omit one reviewer’s statement that “[p]ulse oximeters in the hospital also have false alarms all the time, not sure why I thought this would be any different.” Anyway, the reviews were “far from a representative sample.” On Owlet’s own site, the Smart Sock had more than 3,226 reviews, with 2,489 five-star reviews and an average rating of 4.6 stars. On Amazon.com, the version of the Smart Sock used by Ruiz has more than 5,250 ratings, with 4,013 5-star ratings, 1,658 5-star reviews, and an average rating of 4.5 stars. The court said it would’ve taken judicial notice of these facts, which strikes me as troubling, given the well-known problems with fake reviews. What would the judicial notice be, exactly?