By Gerald L. Maatman, Jr., Jennifer A. Riley, and Elizabeth G. Underwood
Duane Morris Takeaways: On July 6, 2026, in Shellenberger v. AIG WarrantyGuard, Inc., et al., No. 25-1448 (9th Cir. July 6, 2026), Judges Christen, Hurwitz, and Bade of the U.S. Court of Appeals for the Ninth Circuit reversed a district court’s dismissal of a putative class action alleging that AIG WarrantyGuard, Inc. and Whirlpool Corporation violated the Washington Consumer Protection Act (“CPA”) in connection with a KitchenAid service plan. The Ninth Circuit held that the named Plaintiff plausibly alleged that the Defendants’ offer letter and service contract, taken together, had the capacity to deceive a reasonable consumer, and that the district court erred in resolving that fact-intensive question at the motion to dismiss stage.
This ruling serves as a cautionary tale for companies that market service plans, particularly where buyout provisions or qualifiers in the fine print may be read as cutting against the offerings set out in consumer offer letters.
Case Background
Plaintiff Hadassah Shellenberger (“Plaintiff”) filed a putative class action against AIG WarrantyGuard, Inc. and Whirlpool Corporation (collectively, “Defendants”), asserting a claim under the CPA, Wash. Rev. Code §§ 19.86.020, 19.86.093. Id. at 1. Plaintiff alleged that Defendants’ offer letter created the impression “that the KitchenAid Service Plan would provide repairs or replacements for covered malfunctions, with repairs performed by KitchenAid-certified technicians, at no out-of-pocket expense to her.” Id. at 3. Plaintiff further alleged that this impression was inconsistent with the terms of the service contract, which included a buyout option, exercisable at Defendants’ sole discretion, allowing Defendants to technically satisfy all obligations under the contract without ever providing a repair or replacement. Id.
The district court dismissed Plaintiff’s CPA claim, finding that she had failed to plausibly allege the first element of a CPA claim, namely, “whether the defendant has engaged in an unfair or deceptive act or practice.” Id. at 2. Plaintiff appealed the ruling to the Ninth Circuit. Id. at 1.
The Ninth Circuit’s Decision
The Ninth Circuit reversed and remanded, finding that the district court erred in dismissing Plaintiff’s CPA claim. Id. at 7. The Ninth Circuit determined that Plaintiff’s interpretation of the offer letter was “facially plausible” because the offer letter mentioned only repairs and replacements as modes of performance, while the buyout option in the service contract provided an alternative manner of performance that was “inconsistent with the advertised benefits.” Id. at 3.
The Ninth Circuit rejected Defendants’ arguments that caveats in the offer letter and a fine-print disclaimer made Plaintiff’s interpretation implausible, finding the disclaimer language “insufficiently clear to change the apparent meaning of the offer letter’s representations.” Id. at 4 (internal quotation marks omitted). In addition, the Ninth Circuit similarly rejected the argument that qualifiers, such as “covered” and “where applicable”, defeated Plaintiff’s reading, concluding that those terms plausibly limited only the specific representations immediately next to them. Id. at 5.
Finally, the Ninth Circuit highlighted that whether a representation is misleading to a reasonable consumer is “a fact-intensive question not typically susceptible to resolution at the motion to dismiss stage.” Id. at 7.
Implications For Companies
This decision underscores that companies cannot avoid liability at the motion to dismiss stage under the CPA and other similar consumer protection statutes by simply pointing to fine-print disclaimers or qualifying words like “covered” or “where applicable.” Instead, courts will look to whether that fine print is clear enough to actually change the overall impression created by a company’s offer letter.
Overall, companies should audit consumer-facing offer letters and relevant marketing materials against discretionary provisions in service contracts to ensure consistency and compliance, especially where materials promise specific modes of performance, such as repair or replacement by certified technicians as seen in this case, that could be undercut by a seller’s discretion to satisfy its obligations through a different mechanism.