Pattison v. HP Inc.

Background

Mary Pattison alleged that she and HP Inc. entered into an agreement called the “HP Care Pack Support Terms.” She alleged that she relied on false statements on HP’s website saying that a customer who did not use the covered services would receive a full refund at the end of the three-year contract period. Pattison asserted California-law claims for fraud and violation of the Consumers Legal Remedies Act, both individually and on behalf of a proposed class.

HP moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal for failure to state a legally sufficient claim. HP also moved to strike the class allegations. Pattison opposed the motion. The court denied Pattison’s motion to file a surreply because it had already considered the cases cited in HP’s reply and did not need additional briefing.

Fraud claim

HP argued that Texas law applied and that the fraud claim failed under Texas law. The court rejected that argument because the parties’ contract stated that disputes arising in connection with the agreement would be governed by California law. The court also rejected HP’s argument that Pattison had to plead fraudulent concealment. Under California law, the court explained, fraud may be based on a false representation, concealment, or nondisclosure, and Pattison alleged false representations.

The court had previously dismissed a theory that HP entered the contract without intending to perform its promise to provide a full rebate. Because Pattison identified no new allegations supporting that theory, the court again dismissed the fraud claim to the extent it was based on an alleged lack of intent to perform a contractual obligation. The court rejected HP’s argument that Pattison had not adequately alleged that the website statements were false when made, finding that the alleged website description conflicted with the actual contract terms.

Consumers Legal Remedies Act claim

The court rejected HP’s argument that California law could not apply. But it agreed that the Consumers Legal Remedies Act claim was subject to dismissal because Pattison had not adequately alleged that the relevant conduct occurred in California for purposes of applying the California statute to her claim. The court found that alleging HP’s headquarters and principal place of business were in California was not enough, and that the allegation that the relevant acts and omissions occurred in or came from the district was conclusory.

Class allegations

Pattison proposed a class consisting of individuals and entities residing in the United States and its territories who purchased computer equipment with an HP Care Pack covering the computer for three years. HP argued that the nationwide class could not proceed and was too broad.

The court rejected HP’s choice-of-law argument at the pleading stage because the contract contained a California choice-of-law provision and HP’s form contract supported a reasonable inference that the proposed class members’ contracts contained the same provision. The court also found HP’s overbreadth argument premature. Pattison alleged that she and other class members were exposed to substantially identical statements about a full rebate and a “Risk Free” product. Whether every proposed class member saw the alleged statements could be addressed at the class-certification stage.

Disposition

The court granted in part and denied in part HP’s motion. It granted the motion insofar as the fraud claim was based on failure to perform contractual obligations and dismissed that portion of the claim. It granted the motion to dismiss the Consumers Legal Remedies Act claim. In all other respects, including the request to strike the class allegations, it denied the motion.

The court gave Pattison limited permission to file a Third Amended Complaint addressing only the Consumers Legal Remedies Act claim by December 30, 2024. It stated that she could not otherwise amend without the court’s permission or HP’s stipulation. The court also set a case management conference for February 21, 2025, and required a joint case management statement by February 14, 2025.