Khoday v. Symantec Corp.
| Decision Date | 19 March 2015 |
| Docket Number | Civil No. 11–180 JRT/TNL. |
| Citation | 93 F.Supp.3d 1067 |
| Parties | Devi KHODAY and Danise Townsend, individually and on behalf of the class they represent, Plaintiffs, v. SYMANTEC CORP. and Digital River, Inc., Defendants. |
| Court | U.S. District Court — District of Minnesota |
Douglas J. McNamara and Andrew N. Friedman, Cohen, Milstein, Sellers & Toll PLLC, Washington, DC, Kate M. Baxter–Kauf, Lockridge Grindal Nauen PLLP, Minneapolis, MN, for plaintiffs.
Patrick E. Gibbs, Latham & Watkins, LLP, Menlo Park, CA, Steve W. Gaskins, Gaskins, Bennett, Birrell, Schupp, LLP, Minneapolis, MN, for defendant Symantec Corp.
Charles Smith, Amy Van Gelder, Jessica Frogge, and Marcella L. Lape, Skadden, Arps, Slate, Meagher & Flom, Chicago, IL, for defendant Digital River, Inc.
AMENDED MEMORANDUM OPINION AND ORDER
Named Plaintiffs Devi Khoday and Denise Townsend bring this class action against Defendants Symantec Corporation (“Symantec”) and Digital River, Inc. (“Digital River”) (collectively, “Defendants”) for misrepresentations the Plaintiffs allege Defendants made in connection with the sale of download insurance between 2005 and 2011. The Plaintiffs allege violations of California's Unfair Competition Law (“UCL”), California's Consumers Legal Remedies Act (“CLRA”), the Minnesota Consumer Fraud Act, and unjust enrichment. This matter is now before the Court on Symantec's motion for summary judgment, the Plaintiffs' and Defendants' motions to exclude expert reports and testimony, and the Plaintiffs' unopposed motion to modify the class Order.
Viewing the facts in the light most favorable to the nonmoving party, the Court finds that genuine issues of material fact remain as to whether Defendants made misrepresentations or omissions upon which the Plaintiffs relied to their detriment. The Court also finds that the conclusions of each challenged expert are, at least in part, permissible under Rule 702 and Daubert. Finally, the Court finds that the two proposed modifications to the class certification Order are appropriate. Accordingly, the Court will deny Symantec's motion for summary judgment, deny or deny in part each of the pending Daubert motions, and grant the Plaintiffs' motion to modify the class certification Order.
Defendant Symantec is a software company that sells internet security software products under the Norton brand. Defendant Digital River is an ecommerce website designer for online retailers. From 2000 through June 2010, Digital River managed the online storefront through which Symantec sold its Norton products. (
During that time, Symantec authorized Digital River to offer a download insurance product called Electronic Download Service (“EDS”) through the Symantec storefront. (Second McNamara Decl., Tab 2 at DR–0054170.) EDS allowed customers who purchased Norton software to redownload that software for up to one year after purchase in the event they lost the original software by purchasing a new computer or if their computer crashed. (Id., Tab 10; Gibbs Decl., Ex. 18 at 197:10–25.) Beginning in October 2009, when Symantec started the transition from Digital River managing the Symantec storefront to Symantec managing its own storefront, it began offering a product called Norton Download Insurance (“NDI”), which operated very similarly to EDS. (Gibbs Decl., Ex. 4 (Dep. of James P. Renalds) at 38:15–39:3; id., Ex. 5 (Dep. of Krysten Thompson) at 21:18–22:10; id., Ex. 8 at 39.)
Named Plaintiffs Khoday and Townsend purchased download insurance from Defendants during the relevant class period, from January 2005 to March 2011. Khoday v. Symantec Corp., No. 11–180, 2014 WL 1281600, at *36 (D.Minn. Mar. 13, 2014). Townsend purchased EDS from Defendant Digital River on multiple occasions, including June 7, 2006. (Second McNamara Decl., Tab 41 at 53.) When she purchased Norton antivirus software, EDS was automatically added to her shopping cart, and she agreed to purchase it for $8.99 because she believed it would be necessary if she wanted to redownload the Norton software after the first sixty days post-purchase. (Id.; id., Tab 42 at 46:2–20.) For similar reasons, Khoday purchased NDI from Symantec in February 2010 at the time she purchased Norton 360 software. (Id., Tab 43 at 60:3–61:18; id., Tab 44 at 74.)
During the relevant time period, a customer using Symantec's online storefront to purchase Norton software would obtain a hyperlink that the customer could click to begin the software's automatic download. (Gibbs Decl., Ex. 7 at 56–57; id., Ex. 8 at 60.) Clicking on the hyperlink, which appeared as a large, electronic “Download” button, would cause the software to automatically download and install upon the customer's computer. (Id., Ex. 8 at 60, 65.) The customer would have sixty days after purchasing the product to use the hyperlink to download and install the product. (Id., Ex. 14 (Dep. of James P. Renalds) at 62:9–12; id., Ex. 15 (Dep. of Nat Maple) at 53:11–13.) During this sixty-day window, customers could redownload the product an unlimited number of times by logging in to their Norton account and reinitiating the automatic download process. (Id., Ex. 14 at 62:9–12.)
The function of a download software product like EDS or NDI was to enable customers to continue to redownload and install a purchased Norton software product even after the sixty-day window had expired. EDS allowed customers to redownload the exact version of Norton software they had originally purchased after the original sixty-day period had expired. NDI operated almost identically to EDS, except customers could select one, two, or three years of extended redownloads. (Gibbs Decl., Ex. 22 at 26:10–15; id., Ex. 26 at 281:1–10.) Additionally, NDI would download the most recent edition of the product the consumer had originally purchased, whereas EDS only redownloaded the exact version of the software the customer originally purchased. (Id., Ex. 22 at 26:6–15; id., Ex. 23 at 35.)
Download insurance was automatically added to a customer's shopping cart at the time a customer purchased Norton software through Symantec's online storefront. (See id., Ex. 8 at 74; id., Ex. 29 at 66.) To refrain from purchasing EDS or NDI, a customer would have to affirmatively “opt out” of the download insurance purchase and remove it from the cart. (Second Van Gelder Decl., Ex. 12 at 50:4–16; Second McNamara Decl., Ex. 2 at DR–0054171.) Defendants charged between $4.99 and $16.99 for the download insurance products, depending on the value Defendants believed customers would be willing to pay for download insurance for a particular type of Norton software. (Carrane Decl. ¶ 4; Second McNamara Decl., Tab 25 at 138; id., Tab 6 at 20.)
When download insurance was automatically added to a customer's shopping cart, it was generally displayed along with a link saying, “What's this” or “What is the Extended Download Service”. (Gibbs Decl., Ex. 8 at 39; id., Ex. 29 at 66; Second Van Gelder Decl., Ex. 2 at 23:14–19.) From 2004 to approximately August 2008, clicking on the “What's this” link led to a pop-up description, (Second Van Gelder Decl., Ex. 7 at 95:17–25), stating:
(Gibbs Decl., Ex. 29 at 66.) In 2008, Digital River amended the description to:
(Gibbs Decl., Ex. 29 at 67 (formatting omitted).)3
To learn more about download insurance, customers could contact customer service. (Gibbs Decl., Ex. 32 at 19:8–13; id., Ex. 33 at 19:12–25.) If customers called customer service, Digital River representatives consistently told customers to purchase download insurance if they wished to be able to download their software more than sixty days after purchase. (Second McNamara Decl., Tab 1 at 224:9–14.)
If a customer emailed customer service regarding the purchase of EDS, they would receive a form e-mail stating:
Thank you for choosing Symantec store. When you order a downloadable product from the Symantec store, you are automatically granted a 60–day window in which your purchase can be re-downloaded at any time. After the 60–day window has passed, your download will no longer be available unless the Extended Download...
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