McKinney v. Corsair Gaming, Inc.

Background

Antonio McKinney and Clint Sundeen brought a proposed nationwide class action against Corsair Gaming, Inc. They alleged that Corsair’s packaging and advertisements for computer-memory products falsely or misleadingly represented the products’ speed and reliability. Both plaintiffs purchased products labeled as operating at 3200 megahertz. They alleged that the products operated at only 2133 megahertz out of the box and might not reliably reach the advertised speed even after the consumer changed computer settings to enable overclocking.

The plaintiffs asserted claims under consumer-protection laws of 44 states, California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act, plus breach of express warranty and negligent misrepresentation. Corsair moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal for failure to state a legally sufficient claim. Corsair also asked the court to take notice of six website exhibits.

Judicial Notice

The court incorporated three exhibits by reference because the complaint relied on them, they were central to the claims, and their authenticity was not disputed. The court also granted Corsair’s request regarding the other three publicly accessible webpages, considering them for the fact of their publication rather than the truth of disputed contents.

Rulings on the Motion to Dismiss

The court held that the California consumer-protection claims alleging fraud had to satisfy Federal Rule of Civil Procedure 9(b), which requires detailed allegations identifying the who, what, when, where, and how of the alleged misconduct. The plaintiffs met that standard for the speed statements on Corsair’s packaging but did not identify their online advertisements sufficiently. The court therefore granted the motion to dismiss all claims based on online advertising.

The court denied the motion as to misrepresentation claims based on packaging statements. It held that the plaintiffs plausibly alleged that reasonable consumers could understand the listed speed to be achievable out of the box and reliably across computer platforms. The court also found the plaintiffs’ alternative theory—that even after overclocking there was a substantial risk the memory would not operate reliably at the advertised speed—plausible at the pleading stage.

The court granted the motion to dismiss both omission theories. The plaintiffs alleged that Corsair failed to disclose that overclocking was necessary and might be unreliable, but the court held that they did not allege a defect central to the product’s function, which the court required for a duty to disclose under the approach it applied.

The court granted the motion to dismiss the requests for equitable relief under the California consumer-protection statutes because the plaintiffs had not alleged that damages were inadequate. Equitable relief is a court-ordered remedy such as restitution or an injunction, available in this context only when the plaintiffs adequately plead that money damages are insufficient.

The court granted the motion to dismiss the negligent-misrepresentation claims under the economic-loss rule. It held that the exception allowing tort recovery for certain economic losses did not apply because the plaintiffs alleged neither personal injury nor exposure to independent liability. The court also noted that Sundeen’s claim had an additional statute-of-limitations problem, but the ruling rested on the economic-loss analysis.

Class Claims and Standing

The court considered Corsair’s standing arguments at the motion-to-dismiss stage. It denied the motion as to class claims under other states’ laws because Corsair had not sufficiently shown that California law materially differed from those states’ laws under the facts of this case. The court left open the possibility that Corsair could raise the issue later.

The court struck the class claims concerning memory products the plaintiffs had not purchased. Although the plaintiffs generally alleged that the products had substantially similar misrepresentations, they did not identify the other models or explain specifically how those models operated at lower speeds. The court found those allegations too conclusory to establish that proving one product’s label misleading would necessarily prove the other products’ labels misleading.

Disposition

The court granted Corsair’s motion to dismiss as to claims based on online advertising, omission claims, requests for equitable relief, negligent-misrepresentation claims, and class claims involving products the plaintiffs did not buy. It denied the motion as to packaging-based misrepresentation claims, breach-of-express-warranty claims, and class claims under other states’ laws. The court granted leave to amend all dismissed claims except the negligent-misrepresentation claims and allowed 21 days to file an amended complaint. Judge Charles R. Breyer signed the order.