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?

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