943 F. Supp. 2d 222
D. Mass.2013Background
- Rottner, a California resident, purchased PC TuneUp licensed from AVG CZ after downloading a free trial from avg.com.
- Auslogics designed PC TuneUp; AVG CZ licensed it and markets it in the U.S.; AVG US handles U.S. sales and website maintenance.
- Rottner alleges PC TuneUp misrepresented capabilities (speed, freezing, disk optimization, privacy, etc.) and that weekly scans after purchase were ineffective.
- Trial version allegedly exaggerated errors and pushed weekly scans as the cure; an update caused a total PC failure requiring reformatting.
- Rottner sues for six claims (express warranty, implied warranty, fraudulent inducement, breach of contract, implied covenant, unjust enrichment) and the defendants move to dismiss under Rule 12(b)(6).
- The EULA states Delaware law governs the contract, raising choice-of-law questions given Massachusetts public policy and California purchase/usage facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What law governs the contract and warranties? | Massachusetts policy favors consumer protections. | Delaware law per EULA § 10f should apply. | Massachusetts choice-of-law governs unless Delaware clause survives; court ultimately applies Delaware law. |
| Are AVG US claims viable given contract solely with AVG CZ? | AVG US ties to marketing and site reviews; alter-ego theory possible. | AVG CZ contract defines rights; AVG US not party to EULA; unjust enrichment dismissed. | Claims against AVG US dismissed; no viable misrepresentation/contract claims against AVG US. |
| Is PC TuneUp a good or service under the UCC for Delaware law? | Software may be dictated by UCC-related warranties. | Sale of PC TuneUp is predominantly a good; UCC applies. | Under predominance test, PC TuneUp is a good; UCC warranty provisions apply. |
| Are the express and implied warranties adequately pled? | EULA disclaimer not fully controlling; advertisements form express warranty. | EULA disclaims implied warranties; delivery medium not defective. | Implied warranties disclaimed; express warranty claim survives to extent pled; notice issue factual. |
| Does the fraud claim meet Rule 9(b) particularity? | Rottner relied on website and forensics expert; statements false. | Not pled with sufficient particularity. | Fraud claim survives; adequately pled with particularity. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must plead plausible entitlement to relief)
- Ashcroft v. Iqbal, 129 S. Ct. 1937 (U.S. 2009) (pleading requires more than labels and conclusions)
- Shipley Co., Inc. v. Clark, 728 F. Supp. 818 (D. Mass. 1990) (choice-of-law ties to Restatement § 187(2)(b))
- Neilson Bus. Equip. Ctr., Inc. v. Italo V. Monteleone, M.D., P.A., 524 A.2d 1172 (Del. 1987) (UCC Article 2 applicability; goods vs. services)
- Olcott Int’l & Co. Inc. v. Micro Data Base Sys., Inc., 793 N.E.2d 1063 (Ind. App. 2003) (software as good vs. service under UCC)
- Architectronics, Inc. v. Control Sys., Inc., 935 F. Supp. 425 (S.D.N.Y. 1996) (case applying UCC to software context)
- RRX Indus., Inc. v. Lab-Con, Inc., 772 F.2d 543 (9th Cir. 1985) (case-by-case software goods/services analysis)