Hermanson v. Lenovo Group Limited

Background

Mark Hermanson, Chun-Yu Chen, and Shuang Lin sued Lenovo, alleging that it practiced advertising false and misleading price reductions on its website. Their claims included intentional and negligent misrepresentation and alleged violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law. They sought actual and punitive damages, prospective injunctive relief, equitable monetary relief, and certification of proposed nationwide and California classes.

Lenovo moved to dismiss the action or stay it in favor of two related cases: Axelrod and Ham. The opinion states that those cases also challenged Lenovo’s website price advertising. The court evaluated whether the parties, proposed classes, claims, and underlying facts were sufficiently similar to justify a stay under principles governing duplicative actions and the first-to-file rule.

Rulings

Standing for an injunction

The court denied Lenovo’s motion to dismiss based on lack of standing. It held that the plaintiffs sufficiently alleged a likelihood that they could be misled again because they alleged they could not rely on Lenovo’s advertising when making future purchases. The court also rejected Lenovo’s argument that Hermanson and Lin lacked standing because the specific pricing they challenged no longer appeared on Lenovo’s website, noting that the plaintiffs alleged Lenovo’s advertising continued to be misleading.

Equitable monetary relief

The court dismissed, without prejudice, the plaintiffs’ claims for equitable monetary relief. It concluded that they had not adequately alleged that they lacked an adequate remedy at law, while allowing them to seek prospective injunctive relief.

Chen’s section 17501 claim

The court granted Lenovo’s motion to dismiss Chen’s claim under section 17501 of California’s False Advertising Law. Lenovo argued that “Est Value” was not a “former price” under that statute. Because the plaintiffs did not respond to that argument, the court treated it as conceded and dismissed Chen’s section 17501 claim. The opinion does not add a prejudice qualifier to this dismissal.

Stay of some claims

The court concluded that staying Hermanson’s and Lin’s claims was warranted because their proposed classes and claims substantially overlapped with those in the Axelrod and Ham cases. The court found that Hermanson and Lin had not shown that their proposed classes were narrower in a way that avoided the overlap. It also found that the cases challenged the same alleged practice of misleading Lenovo price advertising and involved the same or substantially similar claims, apart from breach-of-contract and warranty claims asserted in the other litigation.

The court allowed Chen’s claims to continue. It noted differences involving Chen’s purchase date and the extent of overlap between Chen’s claims and the Ham case. The parties were ordered to meet and confer and submit a stipulation and proposed order concerning a case-management conference for Chen’s claims by March 8, 2024.

Disposition and scope

The court granted in part and denied in part Lenovo’s motion to dismiss and/or stay. It denied dismissal based on standing, dismissed without prejudice the equitable-monetary-relief claims, dismissed Chen’s section 17501 claim, stayed Hermanson’s and Lin’s claims, and permitted Chen’s remaining claims to continue. The opinion did not decide the underlying question whether Lenovo’s advertising was false or misleading.