So v. HP, Inc.

Background

Henry So alleged that HP periodically sent firmware updates to its printers that made third-party ink and toner cartridges incompatible. He also alleged that the updates caused false error messages and that HP’s printers recorded and transmitted information about consumers’ printing habits without their knowledge or consent.

So alleged that he purchased two HP printers in California and that one stopped working with third-party cartridges after a firmware update. He asserted claims under the federal Computer Fraud and Abuse Act, the California Comprehensive Computer Data Access and Fraud Act, California’s Unfair Competition Law, the False Advertising Law, the Consumer Legal Remedies Act, and common-law fraud by omission. He sought to represent proposed California and nationwide consumer classes.

HP moved to dismiss under Federal Rules of Civil Procedure 12(b)(1), which addresses federal jurisdiction, and 12(b)(6), which tests whether a complaint states a legally sufficient claim.

Rulings on the Claims

The court granted with leave to amend HP’s motion as to the fraud-based claims in Counts 5 through 8. These included the fraudulent-practices claim under the Unfair Competition Law, the False Advertising Law claim, the Consumer Legal Remedies Act claim, and common-law fraud by omission. The court held that So had not identified a specific consumer-facing misrepresentation that he saw and relied on. It also held that he had not adequately alleged that HP intended, when he purchased the printers, to send firmware updates that would make them incompatible with third-party cartridges.

The court granted with leave to amend HP’s motion as to So’s California computer-access claim under California Penal Code section 502(c)(1), because the claim sounded in fraud and the alleged fraud was not pleaded with the required specificity.

As to the Unfair Competition Law’s unfair-practices claim, the court granted with leave to amend the motion concerning allegations based on a unified course of fraudulent conduct. HP did not seek dismissal of the Unfair Competition Law’s unlawful-practices claim, and the opinion does not state a disposition for that claim.

The court granted with leave to amend HP’s motion concerning damages under the Consumer Legal Remedies Act because So gave HP notice only 17 days before filing the lawsuit, rather than the required 30 days. The court noted that the statute permits amendment after the required notice period.

The court granted with leave to amend HP’s motion as to the Computer Fraud and Abuse Act claim. So had not alleged the required $5,000 in damages, although the court stated that class members could aggregate damages if they arose from the same act by HP. The court also granted with leave to amend the claim under section 1030(a)(4) because it sounded in fraud and was not pleaded with sufficient specificity.

Standing and Proposed Classes

The court granted without leave to amend HP’s motion challenging So’s standing to assert fraud-by-omission claims under the laws of states other than California. Because So resided in and was injured in California, the court held that he could not assert claims under the laws of other states.

The court denied without prejudice HP’s motion challenging standing to pursue a nationwide class under California law. The court stated that the choice-of-law question might ultimately prevent a nationwide class, but held that the issue required a detailed, fact-specific inquiry that was premature at this stage.

The court granted with leave to amend HP’s motion concerning claims involving HP printers that So did not purchase. So had provided a list of printers and conclusory allegations that the alleged misrepresentations were the same for all of them. The court required more specific allegations about the statements or omissions associated with each printer.

The court denied HP’s motion challenging So’s standing to seek injunctive relief. It held that So could be harmed by future firmware updates because he alleged that he wanted to use third-party cartridges again. The requested injunction concerned restoring compatibility with third-party cartridges, stopping unauthorized collection of customer data, and stopping similar future transmissions without owners’ consent.

Disposition

The motion to dismiss was denied in part and granted in part, with leave to amend in part and without leave to amend in part. So was ordered to file an amended complaint within 60 days. The court stated that failure to meet the deadline or cure the identified deficiencies would result in dismissal of the deficient claims with prejudice, and that any amendments could not exceed the scope permitted by the order.