Khoday v. Symantec Corp.
0:11-cv-00180
D. MinnesotaMar 12, 2012Background
- Khoday and Townsend sue Symantec and Digital River on fraud-based California and Minnesota claims for selling a Download Product with deceptive marketing.
- Norton software licensed for a year with re-download ability; no license details disclosed on websites.
- Download Product automatically added to cart; customers could access “What’s this?” explanations.
- Khoday (California) and Townsend (Florida) purchased the Download Product; alleged they would not have bought it if fully informed.
- Symantec stopped promoting the Download Product after the complaint; class seeks nationwide recovery; two named plaintiffs.
- Court addresses declaratory judgment claims and whether the Download Product is misrepresented or unlawful.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Download Product is a CLRA service. | Download Product may be a CLRA service under broad construction. | CLRA service status is unsettled; defenses rely on ancillary/non-service status. | Fact question; service status undecided at this stage. |
| Whether CLRA/UCL claims survive. | Misrepresentations and concealment support CLRA/UCL claims. | Arguments about applicability/scope of CLRA/UCL. | CLRA and UCL claims survive in part; dismissal limited to declaratory relief. |
| Declaratory judgment of unlawfulness. | Declaration sought to define Unlawful Download Product practices. | Declaration unnecessary given damages claims. | Declaratory judgment claims dismissed for Symantec and Digital River. |
| Whether CFA/FSAA claims against Digital River survive. | Misrepresentation and omissions affect public benefit and consumer decisions. | Statements were true or omissions insufficiently alleged. | CFA/FSAA claims survive; public benefit and misrepresentation adequately pled. |
| Whether unjust enrichment claims survive. | Digital River profited unjustly from misleading conduct. | Unjust enrichment claims survive against both defendants. |
Key Cases Cited
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) heightened pleading in fraud-related claims applied)
- Buller v. Sutter Health, 160 Cal. App. 4th 981 (Cal. Ct. App. 2008) (Deceptive practices; not disclosing discounts analogized to misrepresentation)
- Smith v. Metro. Prop. & Liab. Ins. Co., 629 F.2d 757 (2d Cir. 1980) (Declaratory relief discretion factors; alternative remedies considered)
- Gutensohn v. Kansas City S. Ry. Co., 140 F.2d 950 (8th Cir. 1944) ( Declaratory relief distinction and authority)