McKinney v. Corsair Gaming, Inc.
| Decision Date | 16 December 2022 |
| Docket Number | 22-cv-00312-CRB |
| Parties | ANTONIO MCKINNEY, et al., Plaintiffs, v. CORSAIR GAMING, INC., Defendant. |
| Court | U.S. District Court — Northern District of California |
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS
Plaintiffs Antonio McKinney and Clint Sundeen allege that Defendant Corsair Gaming, Inc.'s (“Corsair”) packaging of and advertisements for its computer memory products contain deceptive and misleading statements, in violation of the common law and the consumer protection laws of California and 43 other states. See SAC (dkt. 39).
In its prior order on Corsair's first motion to dismiss and motion to strike, the Court granted Corsair's motion as to (1) claims based on advertisements; (2) omissions claims (3) equitable claims; (4) negligent misrepresentation claims and (5) class claims with respect to products Plaintiffs did not purchase. See McKinney v. Corsair Gaming, Inc., No. 22-CV-00312-CRB, 2022 WL 2820097, at *1 (N.D. Cal. July 19, 2022). The Court denied Corsair's motion as to (1) misrepresentation claims based on statements on the packaging of Corsair's products; (2) breach of warranty claims; and (3) class claims brought under the laws of other states. Id. The Court allowed Plaintiffs to amend on all claims except the negligent misrepresentation claim. Id. at *14.
Plaintiffs did so, and Corsair renews its motion to dismiss and motion to strike, this time only urging dismissal of Plaintiffs' claims regarding (1) omissions; (2) products Plaintiffs did not purchase; (3) class claims brought under the laws of other states; and (4) breach of warranty claims. See Mot. (dkt. 44) at 2-4.
After hearing argument on December 9, 2022, the Court GRANTS Corsair's motion to dismiss as to omission claims, DDR-5 products that Plaintiffs did not purchase, national and multistate class claims, and breach of express warranty claims. The Court DENIES Corsair's motion as to DDR-4 products that Plaintiffs did not purchase. Plaintiffs are granted leave to amend to plead that their express warranty claims are brought under California law. Leave to amend is denied as to all other dismissed claims.
Plaintiffs' factual allegations and legal theories remain largely as discussed in the Court's prior order. See McKinney, 2022 WL 2820097, at *1-3. In their second amended complaint, Plaintiffs allege the following additional facts:
First, Plaintiffs allege which of “Corsair's deceptively labeled memory” products are at issue in this case, apart from the specific products Plaintiffs bought. See SAC ¶ 15; McKinney, 2022 WL 2820097, *13 (). Plaintiffs now specify that the following memory sticks are at issue:
They allege that each of these products includes “an unqualified statement identifying a specific ‘MHz' speed of the memory on the front of the packaging,” and that “[e]ach model of Corsair's High-Speed Memory does not operate at the advertised speed.” Id. ¶¶ 20; 41.
Second, Plaintiffs include examples of “product pages” for Corsair products on Corsair's own website and authorized resellers, where the advertised MHz speed is stated on the product page. Id. ¶¶ 21-29. Plaintiffs allege that Corsair “expressly authorizes . . . resellers to resell its products . . . and expressly identifies them as authorized resellers and announces this fact to consumers.” Id. ¶ 31.
Under Federal Rule of Civil Procedure 12(b)(6), the Court may dismiss a complaint for failure to state a claim upon which relief may be granted. Dismissal may be based on either “the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Godecke v. Kinetic Concepts, Inc., 937 F.3d 1201, 1208 (9th Cir. 2019) (cleaned up). A complaint must plead “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (cleaned up). A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. When evaluating a motion to dismiss, the court “must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the nonmoving party.” Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987).
Claims for fraud must meet the pleading standard of Federal Rule of Civil Procedure 9(b), which requires a party “alleging fraud or mistake [to] state with particularity the circumstances constituting fraud or mistake.” Rule 9(b) “requires . . . 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) (cleaned up). “This means that averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged.” In re Google Assistant Priv. Litig., 546 F.Supp.3d 945, 955 (N.D. Cal. 2021) (internal quotations omitted).
If a court dismisses a complaint for failure to state a claim, it should “freely give leave” to amend “when justice so requires.” Fed.R.Civ.P. 15(a)(2). A court has discretion to deny leave to amend due to “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendment previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.” Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008).
The Court addresses Corsair's arguments in the following order: (1) that Plaintiffs' fraudulent omission claims must again be dismissed; (2) that the Court should strike Plaintiffs' amended allegations regarding products that were not purchased by Plaintiffs; (3) that the Court should strike Plaintiffs' national and multistate class action claims; and (4) that Plaintiffs' amended express warranty claim must be dismissed.
Corsair again moves to dismiss Plaintiffs' fraud claims to the extent they allege that the statements on the packaging and in online advertisements constitute fraudulent omissions. Mot. at 7-8; Reply (dkt. 47) at 4-8.
In its prior order, the Court held that, to state an omission claim, Plaintiffs must plead either “(1) the defect at issue relates to an unreasonable safety hazard or (2) the defect is material, ‘central to the product's function,' and the plaintiff alleges one of the four LiMandri factors.” McKinney, 2022 WL 2820097, at *9 (quoting In re Toyota RAV4 Hybrid Fuel Tank Litig., 534 F.Supp.3d 1067, 1102 (N.D. Cal. 2021)). Because Plaintiffs did not “allege a defect that is central to the product's function” in the FAC, and, in fact, “concede[d] that they d[id] not plead any defect at all,” the Court granted Corsair's motion to dismiss the omission claims. Id. at *9-10. In a footnote, the Court advised Plaintiffs that they “might be able to properly allege a duty to disclose, if they sufficiently allege that the omitted fact goes to a defect (that the memory does not achieve the higher memory speed) and that this defect is material and central to the memory's function.” Id. at *10 n.5.
Plaintiffs' second amended complaint does not appear to alter their omission claims at all, apart from adding allegations relating to product pages on Corsair's and authorized resellers' websites. SAC ¶¶ 21-32. But even though the Court advised Plaintiffs to do so, they did not alter their complaint to allege that the omitted fact (that the products often do not, in reality, achieve the speeds listed on the packaging) “goes to a defect” and that it is “material and central” to the product's function. McKinney, 2022 WL 2820097, at *10 n.5. Corsair argues that, because Plaintiffs have failed to alter their complaint to allege that “any allegedly omitted fact ‘goes to a defect,' and they do not allege that an alleged defect ‘is material and central to the memory's function,'” their omissions claims must again be dismissed. Mot. at 8.
Plaintiffs argue that their claims are “standard false advertising claims; not ‘omission' claims in the sense that Corsair means,” which seemingly contends that Plaintiffs have pleaded misrepresentation claims, rather than omission claims. Opp'n (dkt. 45) at 4-5. In the alternative, Plaintiffs argue that their allegations in the SAC (largely unaltered from the FAC) suffice to plead an omission. Id. at 5-6 (citing SAC ¶¶ 2, 40-59, 65).
First, with respect to Plaintiffs' argument that they only plead misrepresentation claims, not omission claims, that is belied by the many statements in the complaint itself. See, e.g., SAC ¶ 65 (). In any case, Plaintiffs' misrepresentation allegations ) are unchallenged by Corsair in this motion and are plausibly pleaded. See McKinney, 2022 WL 2820097, at *7-9.
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