In re Intel Corp. CPU Marketing, Sales Practices & Prods. Liab. Litig.

• Decision Date: 27 March 2020
• Docket Number: Case No. 3:18-md-2828-SI
• Parties: IN RE: INTEL CORP. CPU MARKETING, SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION This Document Relates to All Actions.
• Court: U.S. District Court — District of Oregon

IN RE: INTEL CORP. CPU MARKETING, SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION This Document Relates to All Actions.

Case No. 3:18-md-2828-SI

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

March 27, 2020

OPINION AND ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

Christopher A. Seeger, SEEGER WEISS LLP, 55 Challenger Road, Ridgefield Park, NJ 07660; Rosemary Rivas, LEVI & KORSINSKY LLP, 44 Montgomery Street, Suite 650, San Francisco, CA 94104; Steve D. Larson and Jennifer S. Wagner, STOLL STOLL BERNE LOKTING & SHLACHTER PC, 209 SW Oak Street, Suite 500, Portland, OR 97204; Gayle M. Blatt, CASEY GERRY SCHENK FRANCAVILLA BLATT & PENFIELD LLP, 110 Laurel Street, San Diego, CA 92101; Stuart A. Davidson, ROBBINS GELLER RUDMAN & DOWD LLP, 120 East Palmetto Park Road, Suite 500 Boca Raton, FL 33432; Melissa R. Emert, STULL, STULL & BRODY, 6 East 45th Street, New York City, NY 10017; Richard M. Hagstrom, HELLMUTH & JOHNSON PLLC, 8050 West 78th Street, Edina, MN 55439; Jennifer L. Joost, KESSLER TOPAZ MELTZER & CHECK LLP, One Sansome Street, Suite 1850, San Francisco, CA 94104; Adam J. Levitt, DICELLO LEVITT & CASEY LLC, Ten North Dearborn Street, 11th Floor, Chicago, IL 60602; and Charles E. Schaffer, LEVIN SEDRAN & BERMAN LLP, 510 Walnut Street, Suite 500, Philadelphia, PA 19106. Of Attorneys for Plaintiffs.

Daniel F. Katz, David S. Kurtzer-Ellenbogen, and Rachel Rodman, WILLIAMS & CONNOLLY LLP, 725 Twelfth Street NW, Washington, D.C. 20005; and Steven T. Lovett and Rachel C. Lee, STOEL RIVES LLP, 760 SW Ninth Avenue, Suite 3000, Portland, OR 97205. Of Attorneys for Defendant.

Michael H. Simon, District Judge.

In this multidistrict proceeding, Plaintiffs bring a putative nationwide class action against Defendant Intel Corporation ("Intel") relating to certain security vulnerabilities in Intel's microprocessors. Those vulnerabilities have become generally known as "Spectre," "Meltdown," and "Foreshadow." Intel has moved to dismiss this lawsuit. Intel first argues that Plaintiffs lack standing. Intel also argues that Plaintiffs fail to state any nationwide class claim or any state subclass claim. For the reasons stated below, the Court grants Intel's motion to dismiss, finding that Plaintiffs lack standing. The Court also gives Plaintiffs leave to amend. Because Plaintiffs may choose to file an amended pleading, the Court, in the interest of efficiency for all parties, also resolves many of the substantive arguments raised by Intel relating to the sufficiency of Plaintiffs' allegations.

In their Consolidated Class Action Allegation Complaint ("Consolidated Complaint") (ECF 115), Plaintiffs allege that Intel knew about certain defects in its computer processors but failed to disclose them. Plaintiffs contend that Intel's processors have two primary design defects. First, the design of the processors heightens the risk of unauthorized access to protected memory secrets. Second, the design does not completely delete, or undo, the memory's recent retrieval of those secrets, also increasing the risk of unauthorized access. Plaintiffs further assert that Intel knew about the first design flaw since at least 2006, when Intel moved to multi-core processors, and that Intel knew about the second design flaw since at least 1995. Plaintiffs state that these design defects create security vulnerabilities that could lead to a breach of confidential data. Plaintiffs also allege that the "patches" created or distributed by Intel to fix these defects substantially diminish the speed of Intel's processors.

Based on these alleged defects and Intel's allegedly inadequate and untimely disclosures and responses, Plaintiffs assert the following nationwide class claims: (1) breach of implied warranty; (2) fraud by concealment or omission; (3) constructive fraud; (4) breach of California's Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750, et seq.; (5) breach of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200, et seq.; (6) breach of California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code §§ 17500, et seq.; and (7) unjust enrichment, or quasi-contract. Plaintiffs also assert separate state subclass claims for each state except California and Massachusetts, plus the District of Columbia and the U.S. Virgin Islands, under each jurisdiction's deceptive or unfair trade practices act or consumer protection law. Plaintiffs seek both money damages and injunctive relief. As noted above, Intel has moved to dismiss this lawsuit.

STANDARDS

A. Standing

The United States Constitution confers limited authority on federal courts to hear only active cases or controversies brought by persons who establish standing. See Spokeo, 136 S. Ct. 1540, 1546-47 (2016); Already, LLC v. Nike, Inc., 568 U.S. 85, 89-90 (2013). Standing "limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong." Spokeo, 136 S. Ct. at 1547.

To have constitutional standing under Article III, a plaintiff must have "personal interest . . . at the commencement of the litigation." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189 (2000). The required personal interest must satisfy three elements: (1) an injury in fact, i.e., an invasion of a legally protected interest that is concrete and particularized, as well as actual or imminent; (2) a causal connection between the injury-in-fact and the defendant's challenged behavior; and (3) a likelihood that the injury-in-fact will beredressed by a favorable ruling. Id. at 180-81, 189; see also Spokeo, 136 S. Ct. at 1547 (reiterating that the "irreducible constitutional minimum" of standing consists of "an injury in fact . . . fairly traceable to the challenged conduct of the defendant, and . . . likely to be redressed by a favorable judicial decision").

An injury is "particularized" if it "affect[s] the plaintiff in a personal and individual way." Spokeo, 136 S. Ct. at 1548 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 n.1 (1992)). An injury is "concrete" if it is "'de facto'; that is, it must actually exist," meaning that it is "'real' and not 'abstract.'" Id. "'Concrete' is not, however, necessarily synonymous with 'tangible.' Although tangible injuries are perhaps easier to recognize, [the Supreme Court has] confirmed in many . . . previous cases that intangible injuries can nevertheless be concrete." Id. at 1549.

A plaintiff also "must show standing with respect to each form of relief sought." Ellis, 657 F.3d at 978. To establish Article III standing to seek prospective injunctive relief, a plaintiff must "allege either 'continuing, present adverse effects'" of a defendant's past illegal conduct, "or 'a sufficient likelihood that [he] will again be wronged in a similar way." Villa v. Maricopa Cty., 865 F.3d 1224, 1229 (9th Cir. 2017) (quoting O'Shea v. Littleton, 414 U.S. 488, 495-96 (1974), and City of L.A. v. Lyons, 461 U.S. 95, 111 (1983)). Further, standing to seek equitable relief requires "a showing of an inadequate remedy at law and . . . a serious risk of irreparable harm." Pulliam v. Allen, 466 U.S. 522, 537 (1984); see also O'Shea, 414 U.S. at 499.

In the context of a class action, "standing is satisfied if at least one named plaintiff meets the requirements." Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007). A plaintiff carries this burden by showing "the manner and degree of evidence required" bywhatever stage of litigation the case has reached. Lujan, 504 U.S. at 561.¹ "At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss we 'presum[e] that general allegations embrace those specific facts that are necessary to support the claim.'" Id. at 561 (alteration in original) (quoting Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 889 (1990)); see also Barnum Timber Co., 633 F.3d at 899 (noting that at the motion to dismiss stage, a plaintiff establishes Article III standing through allegations of "specific facts plausibly explaining" why the standing requirements are met).

B. Failure to State a Claim

A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint "may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The court must draw allreasonable inferences from the factual allegations in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

A complaint must contain sufficient factual allegations to "plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Starr, 652 F.3d at 1216. "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." Iqbal, 556 U.S. at...