Elias v. Hewlett-Packard Co.

• Decision Date: 11 October 2012
• Docket Number: Case No. 12–CV–00421–LHK.
• Citation: 903 F.Supp.2d 843
• Parties: David ELIAS, individually and on behalf of all others similarly situated and general public, Plaintiff, v. HEWLETT–PACKARD COMPANY, et al., Defendants.
• Court: U.S. District Court — Eastern District of California

903 F.Supp.2d 843

David ELIAS, individually and on behalf of all others similarly situated and general public, Plaintiff,

v.HEWLETT–PACKARD COMPANY, et al., Defendants.

Case No. 12–CV–00421–LHK.

United States District Court,

N.D. California,

San Jose Division.

Oct. 11, 2012.

Adam Gutride, Kristen Gelinas Simplicio, Seth Adam Safier, Todd Michael Kennedy, Gutride Safier LLP, San Francisco, CA, for Plaintiff.

Brandon S. Dimond, Samuel G. Liversidge, Timothy William Loose, Gibson Dunn & Crutcher LLP, Los Angeles, CA, for Defendants.

ORDER GRANTING MOTION TO DISMISS

LUCY H. KOH, District Judge.

Plaintiff David Elias (“Plaintiff” or “Elias”) brings this putative class action against Hewlett–Packard Co. and Does 1 through 50 (“Defendants” or “HP”) alleging: (1) violation of the Consumers Legal Remedies Act (“CLRA”), California Civil Code §§ 1750, et seq.; (2) violation of California's False Advertising Law (“FAL”), California Business and Professions Code §§ 17500, et seq.; (3) fraud; (4) breach of express warranty pursuant to California Commercial Code §§ 2101, et seq.; (5) violation of the Song–Beverly Consumer Warranty Act, Civil Code §§ 1790, et seq.; and (6) violation of California's Unfair Competition Law (“UCL”), California Business and Professions Code §§ 17200, et seq. Having considered the submissions of the parties and the relevant law, the Court hereby GRANTS Defendants' Motion To Dismiss without prejudice.

I. BACKGROUND

A. Factual Allegations

Plaintiff, on behalf of himself and those similarly situated, brings suit against Defendants for allegedly selling computers with inadequate power supplies. First Am. Compl. (“FAC”) ¶ 1, ECF No. 1–3. Defendants offer two lines of desktop computers which are at issue here, known as the HP Pavilion Slimline series (“Slimline”) and the HP Pavilion series (“Pavilion”). FAC ¶ 17. Customers are able to customize numerous components of these computers, including the operating system, RAM or hard drive memory, graphics cards, monitor, speakers, or software. FAC ¶ 18. The computers are also equipped with a power supply unit that is not customizable. FAC ¶¶ 19–20. All Slimline computers are shipped with a 220–watt power supply unit, and most Pavilioncomputers are shipped with a 300–watt power supply unit. FAC ¶ 19.

Among the customizable options, HP offers a number of graphics cards for which the manufacturers recommend a minimum power supply of 300 or 400 watts. FAC ¶ 22. HP does not disclose when a particular computer is configured such that the minimum recommended power supply for the graphics card exceeds the power supply of the computer, nor does it prevent a customer from buying such a computer. FAC ¶ 23. When the computers are configured as such, Plaintiff alleges that they “may fail to boot, freeze, randomly restart, and generally underperform. They also may experience hardware and software failure, overheat, crash, and can even catch fire, resulting in permanent damage and a complete loss of the computer.” FAC ¶ 26.

HP provides written product warranties, which state, “in similar or identical terms,” that “the HP Hardware Products that you have purchased or leased from HP are free from defects in materials or workmanship under normal use.” FAC ¶ 77. HP's website also makes several statements which, according to Plaintiff, “affirmatively market and advertise that their Slimline and Pavilion computers have sufficient power to operate the touted components.” FAC ¶ 24. For example, the website states that the Pavilion computers provide “[u]ltra-reliable performance delivered in a classic desktop PC,” and that the Slimline computers “deliver full power and performance without a towering presence.” FAC ¶ 24. Plaintiff further alleges that HP “is well aware of the need for an adequate power supply,” referencing a page on HP's website entitled “Troubleshooting Power Supply Issues” and an online forum hosted by HP in which customers discuss issues with power supplies. FAC ¶¶ 27–28.

Plaintiff purchased a Slimline computer with a 220–watt power supply on or about June 10, 2010, and opted to include a graphics card for which the manufacturer recommended a minimum 300–watt power supply. FAC ¶¶ 29–31. His computer malfunctioned in November of 2011, and the computer's motherboard was damaged beyond repair. FAC ¶ 32. Plaintiff contacted Defendants for assistance, but they “would not replace the computer or even agree to repair it.” Id.

B. Procedural History

Plaintiff filed a putative class action complaint against Defendants in the Superior Court of California for the County of Santa Clara on December 9, 2011, ECF No. 1–2, and subsequently filed his first amended complaint (“FAC”) on December 22, 2011. See ECF No. 1–3. The complaint was filed on behalf of any person who, between December 7, 2007, and the present, “purchased, in the United States, an HP computer with an included power supply unit having a rated capacity lower than (1) the total combined wattage of all internal PC components and peripherals or (2) the capacity recommended by the manufacturer of any included component or peripheral.” FAC ¶ 33. Plaintiff's complaint alleges six causes of action: (1) violation of the Consumers Legal Remedies Act (“CLRA”), California Civil Code §§ 1750, et seq.; (2) violation of California's False Advertising Law (“FAL”), California Business and Professions Code §§ 17500, et seq.; (3) fraud; (4) breach of express warranty pursuant to California Commercial Code §§ 2101, et seq.; (5) violation of the Song–Beverly Consumer Warranty Act, Civil Code §§ 1790, et seq.; and (6) violation of California's Unfair Competition Law (“UCL”), California Business and Professions Code §§ 17200, et seq.

Defendants removed the case to this Court on January 26, 2012. ECF No. 1. HP then filed a motion to dismiss Plaintiff's FAC based on Federal Rules of Civil Procedure 12(b)(6) and 9(b). Mot. to Dismiss Pl.'s FAC (“Mot.”), ECF No. 11. Plaintiff filed a response to the motion, see Pl.'s Opp. to Defs.' Mot. to Dismiss FAC (“Opp'n”), ECF No. 19, to which Defendants filed a reply, see Defs.' Reply Supp. Mot. to Dismiss Pl.'s FAC (“Reply”), ECF No. 20.

II. LEGAL STANDARDS

A. Rule 12(b)(6)

Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss an action for failure to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citation omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir.2008).

Nonetheless, the Court need not accept as true allegations contradicted by judicially noticeable facts, and the “[C]ourt may look beyond the plaintiff's complaint to matters of public record” without converting the Rule 12(b)(6) motion into one for summary judgment. Shaw v. Hahn, 56 F.3d 1128, 1129 n. 1 (9th Cir.1995); see Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir.2002); Shwarz v. United States, 234 F.3d 428, 435 (9th Cir.2000). Nor is the Court required to “ ‘assume the truth of legal conclusions merely because they are cast in the form of factual allegations.’ ” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir.2011) (per curiam) (quoting W. Min. Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981)). Mere “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir.2004); accord Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Furthermore, “ ‘a plaintiff may plead [him]self out of court’ ” if he “plead[s] facts which establish that he cannot prevail on his ... claim.” Weisbuch v. Cnty. of L.A., 119 F.3d 778, 783 n. 1 (9th Cir.1997) (quoting Warzon v. Drew, 60 F.3d 1234, 1239 (7th Cir.1995)).

B. Rule 9(b)

Claims sounding in fraud or mistake are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), which requires that a plaintiff alleging fraud “must state with particularity the circumstances constituting fraud.” Fed.R.Civ.P. 9(b); see Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir.2009). Courts in the Ninth Circuit have held that claims for both fraud and negligent misrepresentation are subject to Rule 9(b). See Meridian Project Sys., Inc. v. Hardin Const. Co., LLC, 404 F.Supp.2d 1214, 1219 (E.D.Cal.2005); Neilson v. Union Bank of Cal., N.A., 290 F.Supp.2d 1101, 1141 (C.D.Cal.2003); Glen Holly Entm't, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086, 1093 (C.D.Cal.1999). To satisfy the heightened standard under Rule 9(b), the allegations must be “specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir.1985). Thus, claims sounding in fraud must allege “an account of the ‘time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.’ ” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir.2007) (per curiam). “The plaintiff must set forth what is false or misleading about a statement, and why it is false.” Decker v. GlenFed, Inc. (In re GlenFed, Inc. Sec. Litig.), 42 F.3d 1541, 1548 (9th Cir.1994) (en banc), superseded by sta...