Crocs dodges fraud claims over 'shrinking' shoes

(CN) — Although a class of Crocs customers sufficiently claimed that some Crocs shoes shrink when exposed to heat and the company should have disclosed their deficiencies, they can’t claim they were defrauded, a federal judge in Northern California ruled.

U.S. District Judge Trina Thompson said that the customers didn’t specify what marketing misrepresented the shoes or where they saw them, so there wasn’t enough to proceed on their fraud-based claims.

“Although the complaint provides the general time frames for when plaintiffs saw the misrepresentations, the complaint fails to allege ‘what’ ads, marketing materials, or online representations that plaintiffs actually saw and ‘where’ the alleged representations were seen,” Thompson, a Joe Biden appointee, said in her order.

The plaintiffs filed their complaint last year and claimed that they purchased the shoes to use in warm, sunny weather or at the beach but after wearing the shoes, they shrank to the point of being unusable.

The plaintiffs say they relied upon advertising from Crocs showing people wearing the shoes at the beach or engaging in warm-weather activities, and they would have paid less for the shoes had they known they could shrink.

Crocs argued in a motion to dismiss that complaint does not sufficiently state fraud allegations, that the plaintiffs haven’t shown that there is a substantial likelihood that the shoes can shrink with regular use in sunny weather or that the plaintiffs had even seen the advertisements in the complaint.

Thompson also granted the company’s motion to dismiss based on express warranty claims because express warranty claims are based on claims the shoes were defective at the time someone bought them, which the plaintiffs do not claim.

But Thompson didn’t let the company off the hook completely.

Thompson denied the company’s motion to dismiss based on express warranty claims to the extent the plaintiff’s claims are based on the company’s advertisement, since the company’s advertisements “warrant” that the products were suitable for ordinary heat, direct sunlight and water.

Thompson said in her Friday order partially dismissing and partially granting the motion that, “The court finds that these allegations sufficiently allege that the products lacked a basic degree of fitness and did not meet the minimum level of quality for similar shoes.”

The plaintiffs, she added, have sufficiently alleged that the company knew about the shrinkage of their shoes because they invest heavily in research and development of the materials the shoes are made of, especially “Croslite,” the company’s proprietary material.

“Defendant allegedly received thousands of complaints regarding the shrinkage problems and is aware of customer complaints posted on defendant’s website. The court finds that these allegations are sufficient to allege a duty to disclose,” Thompson wrote.

In their motion, Crocs argued that the complaints class period exceeded the maximum four years statute of limitations under California’s Unfair Competition law and the three-year statute of limitations for other state laws.

Thompson agreed with the company’s argument, granting their motion to strike the proposed class period.

“The court will review the class period at class certification. Accordingly, defendant’s motion to strike is granted and plaintiffs shall amend their proposed class from ‘November 22, 2018 to the present’ to ‘December 13, 2020’ to the present,” Thompson wrote.

The proposed class is suing Crocs for fraud, deceit, and/or misrepresentation; violation of the Consumer Legal Remedies Act; false advertising; negligent misrepresentation; unfair, unlawful, and deceptive trade practices; breach of express and implied warranties; and violation of the Magnuson-Moss Warranty Act. They’re requesting a jury trial and damages.

Attorneys for both parties did not immediately respond to requests for comment.