Thelen v. HP Inc.Thelen v. HP Inc.
Kelly E. Farnan, RICHARDS, LAYTON & FINGER, PA, Wilmington, DE; Michael J. Stortz, Marshall L. Baker, AKIN GUMP STRAUSS HAUER & FELD LLP, San Francisco, CA, Attorneys for Defendant.
MEMORANDUM OPINION
Dated: September 26, 2024
Wilmington, Delaware
BURKE, United States Magistrate Judge
The 30 individual named Plaintiffs in this case (“Plaintiffs“) bring this class action lawsuit on behalf of themselves and a class of similarly situated persons; they allege that Defendant, HP Inc. (“Defendant” or “HP“), misled consumers about the quality and functionality of certain laptop models it produced. (See generally D.I. 19) Before the Court is a motion filed by Defendant to dismiss Plaintiffs’ claims pursuant to
I. BACKGROUND
A. Procedural Background
On February 16, 2022, Plaintiff Deborah Thelen (“Thelen“), individually and on behalf of all others similarly situated, filed a Class Action Complaint against Defendant. (D.I. 1) Defendant, a Delaware corporation with its headquarters in Palo Alto, California, is one of the world‘s largest manufacturers and sellers of computers. (D.I. 19 at ¶ 69) Thelen, now joined by a number of additional named Plaintiffs, later filed a First Amended Complaint (“FAC“) on May 23, 2022. (D.I. 11) And after Defendant filed a motion to dismiss and to strike the FAC, (D.I. 13), the current 30 named Plaintiffs filed the operative Second Amended Complaint (“SAC“) on July 28, 2022. (D.I. 19)1
The SAC is massive, totaling 968 numbered paragraphs and 255 pages. (Id.) As might be expected with that length, at times the SAC is confusing, or difficult to parse. The Court will attempt to summarize the SAC‘s allegations briefly below.
In the SAC, Plaintiffs list various counts beginning with “Count I” and ending with “Count XLII,” which would suggest there are 42 Counts set out therein. (Id. at 145, 251) But the SAC is missing a Count XX and a Count XXXVII, so it actually only alleges 40 Counts. (Id.; D.I. 23 at 4 n.3)
As best as the Court can figure based on the briefing (though this is not always easy to discern from the briefing), the parties have tended to break these 40 Counts down in the following way:
- Therе are 20 Counts that involve claims brought pursuant to what Defendant refers to as state “‘consumer fraud’ statutes[,]” (D.I. 23 at 4), and what Plaintiffs refer to as state “consumer protection” statutes, (D.I. 25 at 4). These are as follows:
New York General Business Law, N.Y. Gen. Bus. Law §§ 349-50 (Counts I-II);Indiana Deceptive Consumer Sales Act (“IDCSA“), Ind. Code §§ 24-5-0.5-1 to 12 (Count III);Florida Deceptive & Unfair Trade Practices Act, Fla. Stat. §§ 501.201, et seq. (Count IV);Fla. Stat. § 817.41 Prohibiting Misleading Advertising (Count V);Alabama Deceptive Trade Practices Act, Ala. Code §§ 8-19-1, et seq. (Count VI);Missouri Merchandise Practices Act (“MMPA“), Mo. Rev. Stat. §§ 407.010, et seq. (Count VII);Ohio Consumer Sales Practices Act (“OCSPA“), Ohio Rev. Code Ann. §§ 1345.01, et seq. (Count VIII);California Unfair Competition Law (“CUCL“), Cal. Bus. & Prof. Code §§ 17200, et seq. (Count IX);California Consumer Legal Remedies Act (“CCLRA“), Cal. Civ. Code §§ 1750, et seq. (Count X);California False Advertising Law (“CFAL“), Cal. Bus. & Prof. Code §§ 17500, et seq. (Count XIII);Oregon Unlawful Trade Practices Act (“OUTPA“), Or. Rev. Stat. §§ 646.605-656 (Count XIV);Michigan Consumer Protection Act, Mich. Comp. Laws §§ 445.903, et seq. (Count XVI);New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8 (Count XXI);Georgia Fair Business Practices Act, Ga. Code Ann. §§ 10-1-390, et seq. (Count XXV);Georgia Uniform Deceptive Trade Practices Act, id. §§ 10-1-370, et seq. (Count XXVI);Washington State Consumer Protection Act, Wash. Rev. Code Ann. §§ 19.86.010, et seq. (Count XXVII);Arkansas Deceptive Trade Practices Act, Ark. Code Ann. §§ 4-88-101, et seq. (Count XXVIII);Massachusetts Consumer Protection Act, Mass. Gen. Laws Ch. 93A, §§ 1, et seq. (Count XXIX); and a “catch-all” claim for Violation of the Unfair Prong of Various States’ Unfair and Deceptive Trade Practices Statutes (Count XXXIX).2 The Court will refer to these as the “statutory consumer protection claims.” - There are 2 Counts that involve common law claims relating to fraud. These are: Fraud by Concealment (Count XVIII) and Fraudulent Omission or Concealment (Count XXIV).3 The Court will refer to these as the “common law fraud” claims.
- There are 3 Counts that involve statutory or common law claims regarding breach of express warranty. The statutory claims include:
California Song-Beverly Consumer Warranty Act, Cal. Civ. Code §§ 1790-95.8, et seq. (Count XII); anda statutory claim for a violation of express warranty under Massachusetts law, Mass. Gen. Laws at Ch. 106, § 2-313 (Count XXXI). The common law claim is: Breach of Express
- Warranty (Count XL). The Court will refer to these as the “express warranty claims.”4
- There are 12 Counts that involve statutory or common law claims regarding breach of implied warranty. The statutory claims include:
California Song-Beverly Consumer Warranty Act, Cal. Civ. Code §§ 1792, et seq. (Count XI); a statutory claim for breach of the implied warranty of merchantability under Oregon law,Or. Rev. Stat. §§ 72.8020, et seq. (Count XV); a statutory claim for breach of the implied warranty of merchantability under Michigan law,Mich. Comp. Laws § 440.314 (Count XVII); a statutory claim for a violation of the implied warranty of merchantability under Massachusetts law,Mass. Gen. Laws Ch. 106, § 2-314 (Count XXX); a statutory claim for breach of implied warranty under Arkansas law,Ark. Code Ann. §§ 4-2-314, et seq. (Count XXXII); a statutory claim for breach of implied warranty under Alabama law,Ala. Code §§ 7-2-314, et seq. (Count XXXIII); a statutory claim for breach of implied warranty under Florida law,Fla. Stat. Ann. §§ 672.314, et seq. (Count XXXIV); a statutory claim for breach of implied warranty under Georgia law,Ga. Code Ann. §§ 11-2-314, et seq. (Count XXXV); and a statutory claim for breach of implied warranty under Indiana law,Ind. Code §§ 26-1-2-314, et seq. (Count XXXVI).5 The common law claims are: Breach of Implied Warranty of Merchantability (Count XXII);6 Implied Warranty in Tort (Count XXXVIII);7 and Breach of Implied Warranty (Count XLI).8 The Court will refer to these as the “implied warranty” claims. (See D.I. 23 at 25 & n.25)
- There are 2 common law unjust enrichment claims. They are: Unjust Enrichment (Count XIX),9 Unjust Enrichment/Restitution (Count XXIII).10 The Court will refer to these as the “unjust enrichment” claims.
- There is 1 common law Declaratory Relief claim. It is found in Count XLII.11 (See generally id.)
(See generally D.I. 19)
Defendant filed the instant Motion on September 1, 2022. (D.I. 22) Briefing on the Motion was voluminous, in light of the
B. Factual Background
Plaintiffs bring a consumer class action suit here, alleging that Defendant misled consumers about the quality and functionality of its Envy Laptops (“Envy“), Envy 360 Laptops (“Envy 360“), Pavilion Laptops (“Pavilion“), Pavilion 360 Laptops (“Pavilion 360“), and HP 14, HP 15, and HP 17 Laptops (the “HP Laptops,” and together with the Envy, Envy 360, Pavilion and Pavilion 360, the “Class Laptops“). (D.I. 19 at ¶ 1) The claims apply to those Class Laptops purchased from 2017 tо present (the “Class Period“). (Id.) Plaintiffs allege that during the Class Period, Defendant designed, manufactured, marketed, sold and distributed the Class Laptops to tens of thousands of consumers throughout the United States. (Id. at ¶ 2) Yet the SAC asserts that the Class Laptops all possess a material defect preventing them from being used as advertised, and that Defendant concealed, failed to disclose, or otherwise engaged in deceptive marketing with respect to the defect. (Id. at ¶ 3)
The SAC provides additional information about the defect at issue. Plaintiffs allege that during ordinary use, the Class Laptops’ hinges prematurely and unexpectedly crack and fail, eventually breaking off from the plastic mounting points at the base of the device where the keyboard and internal components are located (the “Hinge Defect“). (Id. at ¶¶ 4, 6) Plaintiffs explain that the hinge is the item that provides a connection between the upper case of the laptop (containing the monitor) and the base, and is the piece of equipment that allows the laptop to open and close “like a clam shell” for ease of transport. (Id. at ¶ 5) As to Defendant‘s laptops that contain the Hinge Defect, the ordinary opening and closing of the device fractures its plastic anchors (causing them to fail) and destabilizes the hinges (often causing them to detach from the computer completely). (Id. at ¶ 6) This all renders the Class Laptops unable to be used as Plaintiffs allege they were intended to be used—that is, as a portable computer that can easily open and close (and in the case of the Envy 360 and Pavilion 360 models, as a computer that can reconfigure to multiple angles and be used as a tablet or laptop). (Id.)
Plaintiffs allege that although Defendant has known of the Hinge Defect since 2014 (i.e., preceding the Class Period), it falsely marketed the HP Laptops in the interval
The SAC asserts that the Hinge Defect dramatically reduces or eliminates the user‘s ability to open and close the laptop or to transition its configuration between those states. (Id. at ¶ 15) This, they allege, in turn renders the Class Laptops unfit for their intended purpose as functioning, compact, portable, or flexible computers; it also ensures that the Class Laptops
cannot satisfy the representations Defendant made in its marketing materials to customers. (Id. at ¶ 16)
Plaintiffs plead that there are thousands of complaints on Defendant‘s online forum from customers complaining of the Hinge Defect. (Id. at ¶ 17) Defendant has allegedly responded to these complaints in various ways, such as by informing customers that a hardware assembly issue was the cause of the hinge cracking and panel separation problems. (Id. at ¶ 20) However, Defendant has been assertedly unable or unwilling to address the true scope and pervasive nature of the Hinge Defect. (Id.)
The Class Laptops are covered by a limited warranty (the “Limited Warranty“)15; the Limited Warranty warrants that Defendant‘s products are free of defects in material and/or workmanship and that Defendant will repair a product, or if it is unable to repair a product, will replace or refund the purchase. (Id. at ¶ 21) Plaintiffs allege that Defendant has been unable to fix the Hinge Defect in the Class Laptops during the Limited Warranty period and refuses to repair the Hinge Defect free of charge outside of the Limited Warranty period. (Id. at ¶ 22) Further, Plaintiffs allege that Defendant‘s repair methods were ineffective. (Id. at ¶ 24) Defendant told consumers that the Hinge Defect could be remedied by purchasing and installing
According to Plaintiffs, because Defendant knew of the Hinge Defect in the Class Laptops, its limitations on the warranties covering the Class Laptops are procedurally unconscionable, as Plaintiffs had no other viable options for negotiating the terms of the Limited Warranty. (Id. at ¶ 25) Further, while knowing of the Hinge Defect, Plaintiffs allege that Defendant intentionally “manipulated” the Limited Warranty so that it “often expired before the [Hinge Defect] materialized and the consumer became aware of it.” (Id. at ¶ 26) Plaintiffs also assert that the limitations on the Limited Warranties are substantively unconscionable, because Defendant knew (or was reckless in not knowing) that the Class Laptops were defective, and yet it both failed to disclose these defects and made affirmative misrepresentations about the products’ capabilities in the marketplace. (Id. at ¶¶ 27, 31) Plaintiffs allege that Defendant‘s knowledge is evident from, inter alia, the numerous complaints posted by consumers on Defendant‘s online forum and from Defendant‘s engagement with Class Laptop owners who complained of the Hinge Defect. (Id. at ¶ 32)
Plaintiffs claim that as a result of Defendant‘s unlawful, unfair, fraudulent, misleading and deceptive practices, Plaintiffs purchased the Class Laptops with the mistaken belief that they were high quality products capable of normal use without incurring damage. (Id. at ¶ 33) Plaintiffs allege that the facts regarding the Hinge Laptops are material to them and to any reasonable consumer who was considering the purchase of a Class Laptop. (Id. at ¶ 34) If Plaintiffs had known of the Hinge Defect prior to purchasing one of the Class Laptops, they would have paid substantially less or purchased from another manufacturer. (Id. at ¶ 35) As a result, Plaintiffs seek redress for Defendant‘s breaches of warranties and violations of various state laws. (Id. at ¶ 37)
II. DISCUSSION
Defendant makes a tremendous number of varied challenges to Plaintiffs’ SAC via their Motion. The Court will address them each below to the extent necessary to resolve the Motion (or to otherwise provide guidance regarding future potential pleading disputes).
A. Plaintiffs’ Claims for Injunctive Relief
The Court will first address Defendant‘s argument that, to the extent Plaintiffs request injunctive relief, such a request should be dismissed for lack of subject matter jurisdiction. (D.I. 23 at 27-28; see also D.I. 19 at 251, 253) Defendant asserts that this is so because Plaintiffs lack standing to request injunctive relief. (D.I. 23 at 27-28)
Defendant‘s argument proceeds as follows: (1) In seeking injunctive relief, Plaintiffs need to be able to demonstrate that they are likely to suffer future injury from the challenged conduct; (2) Plaintiffs cannot do that, because the future injury they reference in the SAC involves injuries to class members who are unaware of any alleged defeсt in the Class Laptops and who would go on to purchase a Class Laptop and be harmed; but (3) Plaintiffs themselves will not suffer such injury, since they know of the alleged defects already. (D.I. 23 at 27-28 (citing D.I. 19 at ¶ 129)) And while the SAC alleges that certain Plaintiffs remain interested in purchasing another Class Laptop and would consider doing so in the future if Defendant corrected the problems at issue, Defendant argues that such alleged future injury is too
Article III‘s constitutional standing requirement (that is, that there be an active case or controversy between the parties), which is at issue here, is a threshold jurisdictional issue. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). The plaintiff bears the burden of persuasion to show that it has standing. United Access Techs., LLC v. Verizon Internet Servs., Inc., C.A. No. 05-866-LPS, 2021 WL 1200650, at *5 (D. Del. Mar. 26, 2021).
Article III standing has three requirements: (1) injury in fact; (2) a causal connection between the injury and the challenged conduct; and (3) a likelihood that the injury will be redressed by a favorable decision. Lujan, 504 U.S. at 560-61; see also Clapper v. Amnesty Int‘l USA, 568 U.S. 398, 409 (2013). The dispute here is over the first issue, injury in fact. When prospective injunctive relief is sought in the class action context, at least one named plaintiff must be able to demonstrate that he or she is likely to suffer future injury from the defendant‘s conduct. McNair v. Synapse Grp. Inc., 672 F.3d 213, 223 (3d Cir. 2012); see also Twardzik v. HP Inc., No. 1:21-cv-00396-SB, 2022 WL 606092, at *2 (D. Del. Jan. 25, 2022), aff‘d No. 22-2650, 2023 WL 5770999 (3d Cir. Sept. 7, 2023).16 That threat of future injury must be sufficiently real and immediate, and past exposure to illegal conduct does not itself show a present case or controversy regarding injunctive relief if unaccompanied by any continuing, present adverse effects. McNair, 672 F.3d at 223.
In Twardzik v. HP Inc., No. 1:21-cv-00396-SB, 2022 WL 606092 (D. Del. Jan. 25, 2022), aff‘d No. 22-2650, 2023 WL 5770999 (3d Cir. Sept. 7, 2023), a case cited by Defendant in its briefing, (D.I. 23 at 27-28), the plaintiff sought damages and injunctive relief on behalf of himself and a proposed class against the defendant, HP; the plaintiff argued that the computer he purchased from the defendant did not do what he expected it to do. 2022 WL 606092, at *1-2.
The Twardzik Court found that the plaintiff had sufficiently shown injury in fact, such that he had standing to seek damages for this past injury. Id. at *2. However, it concluded that the plaintiff did not have standing to seek injunctive relief. Id. at *2-3. Plaintiff‘s argument to the contrary was that he alleged that HP would continue to market, sell and lease laptops like the one he had used, and that if so “he might buy another one someday.” Id. at *3 (internal quotation marks omitted). However, the Twardzik Court found that this assertion of future injury was hypothetical, in that “no one will force [plaintiff] to buy another HP product“; the Court explained that it simply could not countenance “this sort of ‘stop me before I buy again’ claim” for injunctive relief. Id. (quoting In re Johnson & Johnson Talcum Powder Prods. Mktg. Sales Pracs. & Liab. Litig., 903 F.3d 278, 293 (3d Cir. 2018)).
For the same reasons as those set out in Twardzik, the Court agrees with Defendant that Plaintiffs’ claims for future injunctive relief must be dismissed here.
Therefore, the Motion is GRANTS with prejudice as to Plaintiffs’ claims for injunctive relief.
B. Defendant‘s Arguments Regarding Dismissal of Plaintiffs’ Claims Pursuant to Rule 12(b)(6)
Next, Defendant argues that all of Plaintiffs’ claims should be dismissed for failure to state a claim, pursuant to
In making this
1. Plaintiffs’ Statutory Consumer Protection Claims and Common Law Fraud Claims
Defendants first attack Plaintiffs’ statutory consumer protection claims and common law fraud claims. (D.I. 23 at 8-20) A preliminary question here relates to what pleading requirements apply to these claims. The Court will address that issue first. Then it will address the challenges to these claims on the merits.
a. Does Rule 8 or Rule 9(b) Apply?
Normally, in order to set out a plausible claim in a complaint, a plaintiff must only meet the bar set by
In their briefing, Plaintiffs argue that many of the statutory consumer protection claims “are immune to Rule 9(b)[] or have a scope beyоnd fraud—which allows Plaintiffs to pursue claims under the statute without invoking Rule 9(b).” (D.I. 25 at 4-5) But as Defendant counters, (D.I. 26 at 2), in this Circuit whether
Here, Plaintiffs’ common law fraud claims obviously sound in fraud. And in the Court‘s view, so too do Plaintiffs’ statutory consumer protection claims. In the first 39 paragraphs of the SAC—the part of the pleading in which Plaintiffs summarize the nature of the allegations therein—Plaintiffs assert that: (1) Defendant “knew, or was reckless in not knowing” about the Hinge Defect and its impact in the relevant period; (2) but Defendant intentionally “concealed from and/or failed to disclose” that defect to its customers; (3) at the same time, Defendant knowingly made “false and misleading” statements about the reliability of the Class Laptops (even though Defendant knew that the laptops contained this defect); and (4) Defendant‘s conduct was “fraudulent, misleading, and deceptive[.]” (D.I. 19 at ¶¶ 8-11, 27, 31, 33, 36) These amount to assertions that that Defendant knowingly and/or recklessly made false or fraudulent statements or omissions about the Hinge Defect to Plaintiffs and the classes. Each of the 20 statutory consumer protection Counts incorporate by reference these summary allegations, and they include additional language that certainly can (and in this case, does) speak to a claim of fraud (such as “deceptive[,]” “knowing and intentionally conceal[,]” “false[,]” “intended to mislead[,]” “fraudulent[,]” and the like). (Id. at ¶¶ 478-613, 641-64, 681-93, 722-30, 769-813, 935-45).17 For all of these reasons, the
conformance with
b. Discussion
With that matter settled, the Court moves on to determining whether the statutory consumer protection claims and the common law fraud claims are in fact pleaded in compliance with
In the Court‘s view, certain of Defendant‘s arguments—i.e., as to how the claims are insufficiently pleaded under
i. Failure to Sufficiently Allege Claims Pursuant to Rule 9(b) as to Reliance/Causation
As the Court noted in Section I.B., Plaintiffs’ allegations of wrongdoing, at least as they relate to the statutory consumer protection claims, essentially break down into two types of assertions: (1) that Defendant made intentional affirmative misrepresentations regarding the Class Laptops and the Hinge Defect (i.e., that Defendant knowingly, falsely advertised the reliability and durability of the laptops); and/or (2) that Defendant knowingly omitted making
important disclosures about the Class Laptops relating to the Hinge Defect (i.e., that Defendant knowingly failed to disclose the defect to customers). (D.I. 19 at ¶¶ 8-11, 17-20, 31-32, 36) It is apparent from the SAC and from the parties’ briefing that the factual allegations underlying the statutory consumer protection claims are essentially the same types of allegations one would make if one intended to plead typical state law claims for fraudulent misrepresentation and/or fraudulent omission/concealment. As a result, there is essentially no dispute that if Plaintiffs have failed to sufficiently allege an element of a fraudulent misrepresentation or a fraudulent omission/concealment claim, then they will not have sufficiently pleaded a claim under
So what is required to sufficiently set out a claim that alleges a fraudulent misrepresentation or fraudulent omission/concealment? Generally, in order to state such a claim for common law fraud, a plaintiff must establish: (1) the defendant made a false representation of or failed to disclose a material fact; (2) the defendant knows or believes that the statement is false; (3) the plaintiff believed that the representations made by the defendant were true; (4) the defendant intended the plaintiff to act upon the misstatement or omission; and (5) the plaintiff relied on the defendant‘s misstatement or omission to his or her detriment. Miller, 2018 WL 2740240, at *11 (citing 5A Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Procedure § 1297 (3d ed.)).
In assessing the Motion as to these claims, the Court will first address the claims to the extent that they are premised on Defendant making intentional fraudulent misrepresentations. Here, Defendant‘s primary argument is not that the SAC fails to call out specific purported misrepresentations that were made by Defendant. The SAC does do this, in various places.
Among these are where it is alleged that Defendant stated that certain of the Class Laptops are “reliable” and “designed for long-lasting performance” with a “compact, portable design[,]” or that they were subject to “extensive quality testing [that] ensures you can keep going . . . and going.” (D.I. 19 at ¶¶ 8-9, 28, 114, 116 (internal quotation marks and citations omitted)) Other similar alleged misstatements are identified with specificity as well. (Id. at ¶¶ 10-11, 111-13, 115)
Instead, Defendant‘s primary argument is that Plaintiffs have failed, pursuant to
Here, the Court agrees with Defendant that Plaintiffs’ allegations are insufficient. As to 27 of the 30 named Plaintiffs at issue,20 the SAC‘s allegations on this score are word-for-word identical (which is, in and of itself, a sign that
misrepresentation that each Plaintiff actually saw, or that is said tо have contributed to that Plaintiff‘s decision to buy a Class Laptop.
It makes sense why
For these reasons, Plaintiffs’ statutory consumer protection claims are dismissed to the extent that they are premised on intentional misrepresentations made by Defendant. See, e.g., Shea v. Gen. Motors LLC, 567 F. Supp. 3d 1011, 1024 (N.D. Ind. 2021) (finding that a claim based on fraudulent misrepresentations brought under the Indiana statute at issue here did not satisfy
The Court next assesses the statutory consumer protection claims and the common law fraud claims to the extent they are premised on Defendant‘s alleged fraudulent omissions. In the SAC, Plaintiffs’ allegation is that Defendant “concealed from and/or failed to disclose to Plaintiffs and the Class members the defective nature of the Class Laptops[.]” (D.I. 19 at ¶ 31)
This
To start, the Court acknowledges (as Plaintiffs note), (D.I. 25 at 5-6), that when it comes to claims that plead fraudulent omissions (as opposed to fraudulent misrepresentations),
Even still, there is no dispute that as to their fraudulent omission-based claims, Plaintiffs otherwise need to plead the “who, what, when, where and how,” in order to satisfy
However, as was noted above, the SAC does not include any such specific allegations. Instead, for 27 of the 30 Plaintiffs, it simply makes the exact same broad, general, boilerplate-type assertion: that before acquisition of the Class Laptop at issue, each Plaintiff “resеarched different laptops and viewed multiple advertisements from HP, touting HP laptops’ reliability, durability, and superiority over competitive offerings.” Again, that is a vague, unspecific allegation. And because the allegation is identical as to each Plaintiff at issue, it cannot be meant to state with particularity the actual experience of any one Plaintiff at all. This simply cannot be what
Plaintiffs push back by suggesting that, pursuant to the “relaxed” standard for pleading
Additionally, consider a Plaintiff whо browsed the internet looking for information about a laptop she might purchase, but did so only on one day for a few minutes. Then consider another Plaintiff who spent weeks looking for laptop-related information online, including by perusing HP-related websites on the subject. It could be that the former would not have a plausible claim premised on the fraudulent omissions at issue. But the latter surely would. And yet, the problem with the SAC is that there are no specific facts (that is, facts specific to each Plaintiff) pleaded on this score enabling the reader to differentiate the former Plaintiff from the latter. And again, it is possible for a plaintiff to plead these types of facts; Plaintiffs here simply did not take the time to do so.21
For these reasons, the Court concludes that Plaintiffs’ statutory consumer protection claims and common law fraud claims must also be dismissed, to the extent that they are premised upon Defеndant‘s fraudulent omissions/concealment of facts relating to the Hinge Defect. Thus, the Court has now ruled that the Motion is GRANTED as to the entirety of these claims, such that they are now dismissed.
With that said, it seems possible that as to the statutory consumer protection claims and common law fraud claims, at least some number of Plaintiffs could address the Court‘s concerns here in a renewed pleading. For that reason, because Plaintiffs have sought leave to amend if their allegations were deemed deficient, (D.I. 25 at 33-34), and because
ii. Defendant‘s Other Challenges to the Statutory Consumer Protection Claims and the Common Law Fraud Claims
The Court could stop here as to the statutory consumer protection claims and common law fraud claims. But because Defendant raised so many other challenges to them, and because it may help streamline the future pleading process to do so (assuming Plaintiffs attempt to re-plead), below the Court will provide its view as to how it likely would have ruled on Defendant‘s other challenges to these claims, had it needed to do so:
- The Court would likely have DENIED the Motion as to its argument that the SAC contains no particularized
allegations of falsity (in that it instead simply references non-actionable puffery), (D.I. 23 at 9 n.7), because the argument was made solely in a footnote in Defendant‘s opening brief. See Sage Chem., Inc. v. Supernus Pharms., Inc., Civil Action No. 22-1302-CJB, 2024 WL 2260331, at *11 n.14 (D. Del. May 9, 2024) (citing cases). - The Court would likely have DENIED the Motion as to its argument that Plaintiffs failed to sufficiently allege a defect (i.e., because there are no allegations as to why there was a materially significant failure rate as to the Class Laptops), (D.I. 23 at 12), in light of the SAC‘s allegations regarding the magnitude of the customer complaints regarding the Hinge Defect, (D.I. 19 at ¶¶ 17, 91-98).
- The Court would likely have DENIED the Motion as to its argument that Plaintiffs failed to sufficiently allege Defendant‘s knowledge of any defect, (D.I. 23 at 12-13), in light of the SAC‘s allegations regarding the magnitude of the customer complaints regarding the Hinge Defect and that many of those complaints were found on Defendant‘s own website, (D.I. 19 at ¶¶ 17, 91-98; D.I. 25 at 9-10). See In re Rust-Oleum Restore Mktg., Sales Pracs. & Prods. Liab. Litig., 155 F. Supp. 3d 772, 815-16 (N.D. Ill. 2016); Avedisian v. Mercedes-Benz USA, LLC, No. CV 12-00936 DMG (CWx), 2013 WL 2285237, at *7 (C.D. Cal. May 22, 2013); In re Sony Vaio Comput. Notebook Trackpad Litig., No. 09cv2109 BEN (RBB), 2010 WL 4262191, at *5 (S.D. Cal. Oct. 28, 2010).
- The Court would likely have DENIED the Motion as to its argument that Plaintiffs failed to sufficiently allege a duty to disclose, (D.I. 23 at 14), for essentially the reasons set out by Plaintiffs, (D.I. 25 at 10-12), and because Defendant did not do enough to “parse the different state standards for duty to disclose in its briefing[,]” Counts v. Gen. Motors, LLC, 237 F. Supp. 3d 572, 600 (E.D. Mich. 2017).
- With regard to the various additional state law-specific reasons (i.e., those reasons that are distinct from whether Plaintiffs sufficiently pleaded the above-referenced elements of a fraudulent misrepresentation and omission claim) that Defendants suggested would warrant dismissal of these counts as to some Plaintiffs, (D.I. 23 at 15-20), the Court would likely have DENIED the Motion on these grounds, with the exception of: (1) Plaintiff Carole Schauer‘s California statutory claims in Counts IX, X and XIII, and Plaintiff Terrance Graner‘s claims under the CCLRA and CFAL in Counts X and XIII, which appear to be time-barred as pleaded.22 (D.I. 23 at 17; D.I. 25 at 15; see also D.I. 19 at ¶¶ 154-55, 159, 185, 189);23 (2) Plaintiffs’ claims in Counts XXV and XXIX, for the reason set out by Defendant. (D.I. 23 at 18); (3) Plaintiff Sabine Miller‘s claim under the IDCSA in Count III, which appears to be time-barred as pleaded. (Id.; see also D.I. 19 at
¶¶ 271, 275); (4) Plaintiff Janet Purvis’ claim under the MMPA in Count VII, due to lack of standing. (D.I. 23 at 19; see also D.I. 19 at ¶ 295); see supra at 21 n.20.; (5) Plaintiff Cara Washington‘s claim under the OCSPA in Count VIII, which appears to be time-barred as pleaded. (D.I. 23 at 20; see also D.I. 19 at ¶¶ 326, 330); (6) Plaintiff Sarah Householder‘s claim under the OUTPA in Count XIV, which appears to be time-barred as pleaded. (D.I. 23 at 20; see also D.I. 19 at ¶¶ 304, 308); and (7) Plaintiff Donald Harmon‘s claim in Count IV, in that Plaintiffs have conceded that claim. (D.I. 25 at 2 n.1)24
2. Plaintiffs’ Nationwide Class Claims
The Court next addresses Defendants’ Rule 12(b)(6) challenges to what Defendants refer to as Plaintiffs’ “nationwide class claims.” (D.I. 23 at 20-27) These include Plaintiffs‘: (1) unjust enrichment claims; (2) exprеss warranty claims; and (3) implied warranty claims. The Court will take up these challenges in turn.
a. Unjust Enrichment Claims
The Court first addresses Plaintiffs’ two unjust enrichment claims: their class-wide claim for unjust enrichment/restitution (Count XXIII) and the unjust enrichment claim brought on behalf of the Michigan subclass (Count XIX). Generally, to state a claim for unjust enrichment, “a plaintiff must allege that: (1) at plaintiff‘s expense (2) defendant received a benefit (3) under circumstances that would make it unjust for defendant to retain the benefit without paying for it.” In re Volkswagen Timing Chain Prod. Liab. Litig., Civil Action No. 16-2765 (JLL), 2017 WL 1902160, at *22 (D.N.J. May 8, 2017) (internal quotation marks and citation omitted).
In Count XXIII in the SAC, Plaintiffs allege that as a result of Defendant‘s false, deceptive and misleading actions (of the type described above), Defendant received payment for the sale of the Class Laptops; however, since the products were unfit for their intended use, Plaintiffs and Class Members did not receive the goods they paid for. (D.I. 19 at ¶¶ 745-50) And Plaintiffs allege that to the extent they did not purchase a Class Laptop directly from Defendant, they are nonetheless a victim of Defendant‘s unjust enrichment. (Id. at ¶ 751) Further, they assert that the benefits Defendant received were earned at Plaintiffs’ expense and were not legitimately earned. (Id.Id. at ¶¶ 717-21)
Defendant responds by arguing that the unjust enrichment claim fails for five different reasons: (1) Plaintiffs have not sufficiently asserted the claim pursuant to
With regard to the first asserted reason for dismissal—i.e., that the claim is not sufficiently pleaded pursuant to
For the foregoing reasons, the Court GRANTS Defendant‘s Motion as to the unjust enrichment claims. As with Plaintiffs’ statutory consumer protection claims and common law fraud claims, the Court does so without prejudice.25
The Court next addresses Plaintiffs’ express warranty claims.26 As to these claims, Plaintiffs allege, inter alia, that Defendant: (1) made express warranties to the public (via its Limited Warranty) that the Class Laptops were merchantable and fit for their ordinary purposes, and that Defendant will repair the product if needed (or replace or refund the product if repairs are not feasible); and (2) breached those warranties by selling defective Class Laptops, and by insufficiently repairing defective components or by wrongly refusing to repair laptops in certain circumstances. (D.I. 19 at ¶¶ 21-27, 630-31, 633-34, 834-35, 837-38, 947-55)
Defendant argues that Plaintiffs’ breach of express warranty claims must fail, because Plaintiffs did not experience any alleged defect during the one-year Limited Warranty period, and (relatedly) because they did not permit Defendant to repair or replace the laptops at issue within that one-yеar period, as is required by the warranty. (D.I. 23 at 1, 23-24 (citing D.I. 24, ex. A at 1); D.I. 26 at 7); see also D.I. 19 at ¶ 621)27 Indeed, a manufacturer‘s liability for breach of an express warranty derives from, and is measured by, the terms of that warranty. Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 525 (1992). Thus, typically a claim for breach of express warranty under a state‘s laws will fail if the defect in question manifested after the expiration of the express warranty itself. See, e.g., Robinson, 2021 WL 3036353, at *16; Tabak v. Apple, Inc., Case No. 19-cv-02455-JST, 2020 WL 9066153, at *11 (N.D. Cal. Jan. 30, 2020); Skeen v. BMW of N. Am., LLC, No. 2:13-cv-1531-WHW-CLW, 2014 WL 283628, at *12 (D.N.J. Jan. 24, 2014).
Plaintiffs respond by arguing that their express warranty claims should not be dismissed on the ground that their claims fall outside of the warranty‘s durational limitations. To that end, they retort that it “matters not that the Hinge Defect manifested after HP‘s one-year warranty period expired . . . because Plaintiffs’ adequately allege the durational limitations in HP‘s warranty are unconscionable and unenforceable.” (D.I. 25 at 24 (emphasis added))
These claims, then, will rise or fall on whether Plaintiffs sufficiently pleaded the unconscionability (and thus, unenforceability) of the Limited Warranty.
The SAC‘s allegations about why the Limited Warranty was procedurally and substantively unconscionable are laid out in certain of its paragraphs relating to the breach of express warranty allegations. (See, e.g., D.I. 19 at ¶¶ 25, 27, 633-34, 951-53) The Court will summarize thеm here.
With regard to procedural unconscionability, Plaintiffs focus on the oppression element. There they assert that there was “unequal bargaining power between Defendant and Plaintiffs[.]” (D.I. 19 at ¶ 25; see also id. at ¶ 634) This was because at the time of purchase, Defendant had “knowledge of the Hinge Defect in the Class Laptops” while Plaintiffs did not, and because Defendant “manipulated the warranty” at issue to be a one-year warranty, all while knowing that in doing so, the durational limitation would “often expire before the defect materialized” (which Plaintiffs did not realize). (Id. at ¶¶ 25-26, 633-34, 952; D.I. 25 at 26) This practice left Plaintiffs with “no other options” to negotiate better terms for the warranty. (D.I. 19 at ¶ 25)
As to substantive unconscionability, Plaintiffs are not suggesting that a one-year warranty is per se wrongful. See, e.g., Popham v. Keystone RV Co., No. 3:15-CV-197-TLS, 2016 WL 4993393, at *7 (N.D. Ind. Sept. 19, 2016) (“A one-year durational warranty is not per se unconscionable.“); Brothers v. Hewlett-Packard Co., No. C-06-02254 RMW, 2006 WL 3093685, at *8 (N.D. Cal. Oct. 31, 2006) (finding that a time limitations in express warranties are not themselves unconscionable). Instead, Plaintiffs are alleging that what is unduly “harsh” * and shocks the conscience” is that Defendant intentionally crafted a one-year Limited Warranty in
The judicial opinions regarding what allegations are sufficient to plead unconscionability of this type are not all of like mind. Indeed, the parties cite to divergent lines of cases in this regard. One line tends to rely on the decision in Carlson v. Gen. Motors Corp., 883 F.2d 287 (4th Cir. 1989), while the other tends to cite to the decisions in Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604 (3d Cir. 1995) and Abraham v. Volkswagen of Am., Inc., 795 F.2d 238 (2d Cir. 1986). Generally, the cases cited by Plaintiffs follow Carlson, whereas the cases cited by Defendant rely on Duquesne and Abraham.
In Carlson, the case involved claims by plaintiffs that the defendant, General Motors Corporation (“GM“), produced automobile engines with certain alleged defects; the plaintiffs claimed that GM was liable in various ways for those defects. Id. at 289. One difficulty for the plaintiffs was that GM‘s express and implied warranties had two- or thrеe-year durational limitations (depending on the model year of the engine at issue). Id. at 290. Certain plaintiffs had challenged the durational limitations relating to the implied warranties as being unconscionable pursuant to federal law; the district court had denied those challenges (finding the limitations to be “‘reasonable‘” and “‘conscionable‘“) and dismissed the claims. Id. at 292-93.
However, the United States Court of Appeals for the Fourth Circuit overturned that decision, finding that the plaintiffs had adequately pleaded the unconscionability of the limitations at issue. As to procedural unconscionability, for example, the Carlson Court noted that the plaintiffs alleged that due to “unequal bargaining power” between the parties and “lack of effective warranty competition among dominant firms” in the industry, consumers “had no meaningful alternative to accepting [the defendant‘s] attempted limitation of the duration of the implied warranty.” Id. at 294 (internal quotation marks and citations omitted). The Fourth Circuit found that these facts, “if proven, clearly would establish unconscionability.” Id. (internal quotation marks and citation omitted). The Court additionally stated that “[p]erhaps most significantly, plaintiffs also alleged that GM knew of the inherent defects in its diesel engines—but failed to warn its customers of the consequential likelihood of ‘catastrophic failures.‘” Id. (citation omitted). It found that such assertions, coupled with the fact that GM imposed the durational limitations at issue on the warranties with knowledge that “the weaker party will be unable to receive substantial benefits from the contract[,]” was enough to plead unconscionability. Id. (internal quotation marks and citation omitted); see also id. at 296 (“Here, proof that GM knew of and failed to disclose major, inherent product defects would obviously suggest that its imposition of the challenged ‘durational limitations’ on implied warranties constituted ‘overreaching,’ and that the disclaimers themselves were therefore ‘unconscionable[,]’ particularly where the ‘buyer has no notice of [or] ability to detect’ the problem[.]“) (citation omitted).
The unconscionability cases that cite to and rely on Carlson generally take the following logical path: (1) if the plaintiff is able to plausibly allege that the defendant knew of the alleged defect in the product at the time of contracting, and that the defect would typically manifest after the warranty had run (but did not disclose this); and (2) if the plaintiff alleges (as to procedural unconscionability) that the defendant
Next the Court will turn to the Duquesne/Abraham line of cases. Duquesne did not address the question of unconscionability of a warranty per se. Instead, there the Third Circuit reviewed a district court‘s decision to dismiss a breach of express warranty claim—as to a warranty that required a defect to manifest itself within one year in order that it be covered. 66 F.3d at 616. The plaintiff argued that the warranty at issue should protect it against even those defects that were not discovered until after the warranty period expired, but the Duquesne Court found no reason to deviate from the “general rule” “that an express warranty does not cover repairs made after the applicable time . . . has elapsed” and that “latent defects discovered after the term of the warranty are not actionable.” Id. (quoting Abraham, 795 F.2d at 250). For these propositions, Duquesne relied on Abraham. Id.
In Abraham, the plaintiffs argued “that a defect discovered outside the time or mileage limits of the applicable written warranty, but latent before that time, may be the basis of a valid express warranty clаim if the warrantor knew of the defect at the time of sale.” 795 F.2d at 249. The United States Court of Appeals for the Second Circuit rejected this argument, explaining that “virtually all product failures discovered in automobiles after expiration of the warranty can be attributed to a ‘latent defect’ that existed at the time of sale or during the term of the warranty.” Id. at 250. Further, the Abraham Court stated that “[m]anufacturers always have knowledge regarding the effective life of particular parts and the likelihood of their failing within a particular period of time” and that “manufacturers must predict rates of failure of particular parts in order to price warranties and thus can always be said to ‘know’ that many parts will fail after the warranty period has expired.” Id. The Abraham Court concluded, in affirming the district court‘s denial of the plaintiff‘s express warranty claim, that “[a] rule that would make failure of a part actionable based on such ‘knowledge’ would render meaningless time/mileage limitations in warranty coverage.” Id.
A number of district courts addressing this issue have relied on Duquesne or Abraham; in doing so, they have tended to take a stricter approach as to what a plaintiff must allege in order to plausibly establish unconscionability. These opinions tend to conclude that it is not sufficient to simply allege that a defendant knew (while the plaintiff did not) of a defect in the product at issue at the time of sale/warranty, and that the duration of the warranty may expire before the defect manifests. In support, they note that the Duquesne Court
before the time-limit took effect” and concluding that the plaintiff‘s “bare-bones allegations that he had no meaningful choice in determining the time and mileage limitation, and that a gross disparity in bargaining power existed between him and BMW[,] are no more than conclusions [that] are not entitled to the assumption of truth“) (internal quotation marks and citations omitted); Ponzio v. Mercedes-Benz USA, LLC, 447 F. Supp. 3d 194, 257 (D.N.J. 2020) (citing Abraham and concluding that “conclusory allegations of substantive unconscionability based on a defendant[‘]s knowledge of a latent defect are insufficient to withstand a motion to dismiss“); Callen v. Daimler AG, CIVIL ACTION FILE NO. 1:19-CV-1411-TWT, 2020 WL 10090879, at *10 (N.D. Ga. June 17, 2020) (relying on Abraham for the “general rule [] that a manufacturer‘s knowledge of a defect cannot, without more, form the basis of a valid post-expiration express warranty claim“); In re Caterpillar, Inc., C13 & C15 Engine Prods. Liab. Litig., No. 1:14-cv-3722 (JBS-JS), 2015 WL 4591236, at *21 (D.N.J. July 29, 2015) (explaining that the “prevailing approach” is to “reject[] conclusory allegations of unconscionability based on knowledge of a latent defect” and pointing to cases relying on Duquesne and/or Abraham).
As noted above, Duquesne is a Third Circuit opinion, and the Third Circuit‘s law would control in this case. Therefore, the Court must look hard at what the Third Circuit was saying in Duquesne. And the Court agrees with the second line of cases discussed above that the tenor of Duquesne and its reliance on the decision in Abraham—suggest that the Third Circuit would be unlikely to deem allegations about unconscionability sufficient, if all that was alleged was that: (1) a manufacturer knew of a defect in its product; and (2) that manufacturer entered into express warranty agreements with its customers wherein the warranty‘s duration could expire before the defect began to rear its head. Dewey v. Volkswagen AG, 558 F. Supp. 2d 505, 520 (D.N.J. 2008) (concluding essentially the same).
That said, in the Court‘s view, where a plaintiff pleads not only that the manufacturer knew of the existence of the defect and offered a warranty that often expired before the defect manifested—but also that the manufacturer intentionally took steps to manipulate the durational limitation in the warranty for the very purpose of ensuring that it expired before the defect manifested, without telling unsuspecting customers—that seems like we are getting into a different, more substantive allegation. Moreover, here the allegation is that Defendant did this all while making false statements or omissions to those same customers about the product‘s performance—allegations that seem to underscore the malign intent behind the conduct at issue. These alleged acts of intentional deception could plausibly suggest substantive unconscionability—i.e., the type of behavior that, if true, could “shock the conscience.” Moreover, the Court sees how such conduct could plausibly demonstrate procedural unconscionability. The SAC describes a scenario wherein the parties had unequal bargaining power (i.e., a power disparity regarding how warranty terms
Here (as was noted above), in the SAC Plaintiffs have made just these types of allegations. That is, not only do they plead facts relating to Defendant‘s alleged pre-sale knowledge of the Hinge Defect (and Defendant‘s allegedly false statements or omissions about that subject matter), but they also assert that at the same time, Defendant took steps to “manipulate[] the warranty so it often expired before the defect materialized and the customer became aware of it.” (D.I. 19 at ¶¶ 26-27) And there are additional allegations that render this assertion more than conclusory. As was previously discussed, the SAC not only pleads that Defendant knew of the Hinge Defect, but it also includes detailed allegations suggesting that the defect was a substantial issue for Defendant that prompted an extensive number of complaints—and that many of those complaints were found on Defendant‘s own website. (Id. at ¶¶ 17, 32, 91-98; D.I. 25 at 9-10); see also supra at 29. Those facts, in turn, could render it more plausible that the Hinge Defect was such a significant problem and of such magnitude that Defendant might in fact have intentionally altered its warranty term, all in order to box out affected customers from seeking (possibly expensive) rеdress for this problem. This is enough to plead substantive unconscionability.
Additionally, the SAC pleads enough to plausibly allege procedural unconscionability. As was noted above, Plaintiffs assert that because Defendant had
For the foregoing reasons, then, the Court DENIES Defendant‘s Motion as to the express warranty claims.
c. Implied Warranty Claims
The Court next turns to Plaintiffs’ implied warranty claims (which, as noted above, are brought via 12 different counts). It will first summarize the law with regard to those claims, and will then address the merits.
The implied warranty of merchantability, which appears to be what is at issue here in all of the implied warranty claims, (D.I. 23 at 25 & n.25; D.I. 25 at 4 n.3 & 28), does not impose a general requirement that the goods at issue precisely fill the expectations of the buyer; instead it only “provides for a minimum level of quality.” Wesley v. Samsung Elecs. Am., Inc., Civil Action No. 20-cv-18629, 2021 WL 5771738, at *7 (D.N.J. Dec. 3, 2021) (internal quotation marks and citations omitted, emphasis added) (discussing the law as it relates to NJ, IL and FL state law claims); see also Stearns v. Select Comfort Retail Corp., No. 08-2746 JF, 2009 WL 1635931, at *8 (N.D. Cal. June 5, 2009) (discussing the law relating to CA state law claims). It is breached when “the product at issue [is] defective or not fit for the ordinary purpose for which it was intended[]” and where the primary use of the product is impacted by the alleged defect. Wesley, 2021 WL 5771738, at *7 (internal quotation marks and citation omitted) (distinguishing from cases where courts found that the implied warranty of merchantability was not breached because the defect impacted a use “incidental to the product‘s ordinary purpose[]“); see also Stearns, 2009 WL 1635931, at *8; cf. Stewart v. Electrolux Home Prods., Inc., 304 F. Supp. 3d 894, 913 (E.D. Cal. 2018) (stating that “as long as a car can provide safe, reliable transportation, it is generally considered merchantable even if certain features[,] such as a navigation system do not function properly[]“). At the same time, the alleged defect does not need to preclude any and all use of the product at all for the warranty to be violated; again, the question is whether the defect does not permit the product to be used for its ordinary purpose or function. Stearns, 2009 WL 1635931, at *8.30
In response, Defendant‘s primary argument for dismissal is that Plaintiffs were in fact able to use their Class Laptops “for months or years after purchase” and so “they have no viable claim for breach of implied warranty.” (D.I. 23 at 25-26) On this score, thе SAC does allege that every named Plaintiff used their laptop for many months (most for over a year and some for many years) before the Hinge Defect first manifested. (D.I. 19 at ¶ 136 (approximately 18 months of use before Hinge Defect manifested); id. at ¶ 147 (same); id. at ¶ 159 (approximately 12 months); id. at ¶ 166 (approximately 18 months); id. at ¶¶ 177-78 (approximately 24 months); id. at ¶ 189 (approximately 12 months); id. at ¶ 200 (approximately 6 months); id. at ¶ 212 (approximately 30 months); id. at ¶ 223 (approximately 6 months); id. at ¶¶ 235-39 (approximately 44 months); id. at ¶ 251 (approximately 18 months); id. at ¶ 263 (approximately 30 months); id. at ¶ 275 (approximately 6 months); id. at ¶ 287 (some unstated number of months); id. at ¶ 297 (approximately 24 months); id. at ¶ 308 (approximately 12 months); id. at ¶ 319 (approximately 32 months); id. at ¶ 330 (approximately 18 months); id. at ¶ 341 (approximately 19 months); id. at ¶ 353 (approximately 36 months); id. at ¶ 365 (approximately 13 months); id. at ¶ 376 (approximately 14 months); id. at ¶ 388 (approximately 12 months); id. at ¶ 399 (approximately 13 months); id. at ¶¶ 411-13 (approximately 18 months); id. at ¶¶ 422-23 (approximately 29 months); id. at ¶ 435 (approximately 48 months); id. at ¶ 447 (approximately 7 months); id. at ¶ 458 (approximately 11 months)) Even after the defect manifested, as to nearly every such named Plaintiff, there is no assertion that they could not or did not use the laptop for computing purposes thereafter. Instead, there is only the assertion that the laptop could not be easily transported or used in a portable manner due to the defect. (Id.) Indeed, as to those Plaintiffs, a fair reading of the allegations is that they could and did continue to use the laptop for computing purposes even after the defect reared its head. (Id.)
Assessing this issue was challenging, in that in the relevant sections of the parties’ briefs, they cite to almost no court opinions: (1) that were issued at the motion to dismiss stage; (2) that address a claim for breach of the implied warranty of merchantability; and (3) that address whether an alleged defect in a laptop rendered the product unfit for its ordinary purpose or its primary use. But plenty of opinions
These opinions almost uniformly indicate the following: (1) that the “ordinary purpose” or primary use of a laptop computer is personal computing, i.e., of permitting a user to make use of the computer‘s processing ability and/or to view various items or media on the computer; and (2) if a defect (like the loss of portability here) renders a laptop more difficult to use, but yet still usable for basic computing purposes, this will not render the laptop unfit for its ordinary purpose or primary use. See, e.g., Taleshpour v. Apple Inc., Case No. 5:20-cv-03122-EJD, 2021 WL 1197494, at *13 (N.D. Cal. Mar. 30, 2021) (concluding that a laptop‘s ordinary purpose was use for computing purposes, and finding that the defect at issue—loss of use of the display backlighting system, which severely affected the user‘s ability to view text and images on the monitors did not inhibit use of the laptop for ordinary purposes); In re MacBook Keyboard Litig., Case No. 5:18-cv-02813-EJD, 2019 WL 6465285, at *10 (N.D. Cal. Dec. 2, 2019) (agreeing that a laptop is unfit for its ordinary purpose if one cannot type on it); Thornton v. Micro-Star Int‘l Co., Case No. 2:17-cv-03231-CAS-AFMx, 2018 WL 5291925, at *10 (C.D. Cal. Oct. 23, 2018) (finding that a laptop‘s ordinary purpose was use for gaming purposes, and concluding that the laptop‘s failure to allow for “upgradeability” did not render it unfit for ordinary use); Miller v. Fuhu Inc., No. 2:14-cv-06119-CAS(ASx), 2015 WL 2085490, at *14 (C.D. Cal. May 4, 2015) (concluding that a laptop was still fit for ordinary use, where the allegations were that the laptop could be used for computing purposes, but yet still suffered problems when recharging and could not reliably be used when plugged into a power source); In re Sony Vaio Comput. Notebook Trackpad Litig., Case No. AJB 09cv2109 AJB (MDD), 2013 WL 12116137, at *16 (S.D. Cal. Sept. 25, 2013) (“Common sense indicates a purchaser‘s ordinary, intended purpose for a laptop is personal computing[.]“); Kacsuta v. Lenovo (United States) Inc., Case No.: SACV 13-00316-CJC(RNBx), 2013 WL 12126775, at *3 (C.D. Cal. July 16, 2013) (concluding that although the laptops at issue were difficult to connect to Wi-Fi and had very slow internet speeds, that did not mean that they were unfit for ordinary use, since users were still able to use the laptops to do word processing, consume non-internet-based media and connect to the internet in certain ways); Elias v. Hewlett-Packard Co., 903 F. Supp. 2d 843, 852 (N.D. Cal. 2012) (concluding that laptop computers were not unfit for ordinary use, where they may fail to boot, randomly restart, generally underperform, have software failure, overheat, crash and even catch fire, as the computers could still be used as computers as were not unmerchantable); Kent v. Hewlett-Packard Co., No. 09-5341 JF (PVT), 2010 WL 2681767, at *4 (N.D. Cal. July 6, 2010) (finding that laptops that were prone to “locking up” when turned on, which could cause a loss of data, were still fit for their ordinary purpose or use, as the plaintiffs did not allege that they were unable to use the computers).31 Moreover, these cases suggest that where a purchaser
Taleshpour, 2021 WL 1197494, at *13 (concluding that the ability to use the laptop for computing purposes for nearly three years, despite the presence of a defect, meant it was still fit for basic use); Marcus v. Apple Inc., No. C 14-03824 WHA, 2015 WL 151489, at *9 (N.D. Cal. Jan. 8, 2015) (concluding that the plaintiffs had failed to adequately plead a breach of the implied warranty of merchantability, because the complaint alleged that one plaintiff‘s logic board had not failed until 18 months after purchase, while a second plaintiff‘s logic board (having once been fixed by the defendant) did not fail until approximately two years after purchase; since both plaintiffs were “able to adequately use their computers for approximately 18 months and two years, respectively[,]” no claim was viable); Deburro v. Apple, Inc., No. A-13-CA-784-SS, 2013 WL 5917665, at *7 (W.D. Tex. Oct. 31, 2013) (concluding that the laptops were fit for their ordinary purpose, where they were able to be used for computing purposes for up to five years before failure).
In this case, as noted above, the SAC alleges that about half of the Plaintiffs did not experience any defect in their laptops until 18 months had passed. And it indicates that no matter when the alleged defects manifested, all (or very nearly all) of the Plaintiffs were still able to use their laptops as functioning computers (that is, to perform computer functions) thereafter. In light of this, and line with the guidance from the caselaw cited above, the Court concludes that the Motion should be GRANTED as to Plaintiffs’ implied warranty claims.
In terms of whether to permit amendment, as the Cоurt noted above, the SAC‘s allegations indicate that all or nearly all of the named Plaintiffs could use their laptops for computing purposes both before and after any defect manifested. That said, the allegations as to a few Plaintiffs—Plaintiffs Carole Schauer, Terence Graner, Robert DiMartino and Deborah Thelen—seem like they could be different. As to these Plaintiffs, the SAC could be read to indicate that they were only able to use their laptops for a relatively short amount of time before any defect manifested, and that once the defect manifested, they were unable to use their laptops at all (or “substantially” at all) for computing purposes. More specifically:
- Plaintiff Schauer alleges that approximately 12 months after purchase, the Hinge Defect manifested in her laptop, which caused the screen to separate from the lid of the laptop, rendering her laptop “no longer usable in any capacity.” (D.I. 19 at ¶ 159)
- Plaintiff Graner alleges that approximately 12 months after purchase, the Hinge Defect manifested in his laptop, making it difficult to open and close. Approximately five months later, the hinge snapped, rendering his laptop “substantially unusable.” (Id. at ¶ 189)
- Plaintiff Di Martino alleges that approximately 14 months after purchase of his two laptops, the Hinge Defect manifested, which resulted in the computer‘s screens separating from the base of the laptop; this rendered one of his laptops “so useless that [he] had no choice but to discard it.” (Id. at ¶ 376)
-
Plaintiff Thelen alleges that approximately 12 months after purchase, the Hinge Defect manifested in her laptop, resulting in the right hinge snapping so that now the laptop is only held together by wiring, rendering her laptop “wholly unusable.” (Id. at ¶ 388)
As to these four Plaintiffs, it seems possible they could explicitly allege that once the defect manifested, thеy were unable to use their laptops even for computing purposes. But in the SAC, Plaintiffs were not attempting to address this particular issue; instead, they were focused on explaining when they lost portability as to their laptops. Thus, it is unclear whether, given the chance to replead, these Plaintiffs would be able to make out a plausible claim (or whether it would be even viable for Plaintiffs to pursue class action-related claims regarding the implied warranty of merchantability, when so few of the named Plaintiffs’ allegations here could even possibly support such a claim).
But the Court is not certain that re-pleading as to these Plaintiffs would be a nullity. And so it will order that: (1) dismissal of the implied warranty claims as to the remainder of the Plaintiffs shall be with prejudice, but (2) dismissal of such claims as to the four Plaintiffs listed above shall be without prejudice to renew (with allegations that more explicitly speak to the legal issues regarding the implied warranty of merchantability described herein).32
C. Defendants’ Arguments Regarding the Class Allegations
Lastly, Defendant moves to strike Plaintiffs’ class allegations on various grounds. (D.I. 23 at 28-32) More specifically, Defendant argues that: (1) Plaintiffs’ allegations cannot satisfy
1. Legal Standard
Pursuant to
2. Discussion
For three reasons, the Court will DENY the Motion as it relates to the class allegations.
First, and most importantly, the Third Circuit has previously opined that in “most cases” a district court acts in a “premature” manner if it determines “whether the class could potentially fit within Rule 23 . . . on a motion to dismiss[]” when “there had been no motion
Second, some of the issues raised here by Defendant are meaty, and yet they were only addressed in a few sentences in this portion of the briefing. This did not permit a robust evaluation of the issues, which could be more substantively addressed in class certification briefing.
Third, it seems very possible that Plaintiffs may seek leave to amend. If they do, a proposed new pleading might look materially different in some regards. So even as to certain issues raised here by Defendants that appear to have merit (like the issue about how the class allegations are overbroad), (see D.I. 26 at 17), waiting to address them until a later stage might obviate the need to address them at all.
III. CONCLUSION
For the reasons set forth in this Memorandum Opinion, the Court GRANTS-IN-PART and DENIES-IN-PART the Motion.
An appropriate Order will issue.