Parziale v. HP, Inc.
| Decision Date | 24 April 2020 |
| Docket Number | Case No. 5:19-cv-05363-EJD |
| Citation | 445 F.Supp.3d 435 |
| Parties | John PARZIALE, Plaintiff, v. HP, INC., Defendant. |
| Court | U.S. District Court — Northern District of California |
Adrian Bacon, Todd Michael Friedman, Law Offices of Todd M. Friedman, P.C., Woodland Hills, CA, for Plaintiff.
Samuel G. Liversidge, Ilissa S. Samplin, Gibson Dunn & Crutcher LLP, Los Angeles, CA, for Defendant.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS AND/OR STRIKE
Re: Dkt. No. 25
This putative nation-wide class action suit arises out of Defendant HP Inc.’s ("HP" or "Defendant") implementation of a remote firmware update that allegedly incapacitated Plaintiff John Parziale's ("Plaintiff") HP printers and thirty-three other models of HP printers by preventing the use of certain non-HP ink cartridges in those printers.
On November 13, 2019, Plaintiff filed the First Amended Class Action Complaint (Dkt. No. 19, "FAC"). HP now moves to dismiss the FAC pursuant to Rules 8(a)(2), 9(b), 12(b)(6), and 12(f) of the Federal Rules of Civil Procedure (Dkt. No. 25, "Motion"). The Court took the matter under submission for decision without oral argument pursuant to Civil Local Rule 7-1(b). For the reasons below, Defendant's motion is GRANTED in part and DENIED in part .
On or around September 12, 2017, Plaintiff purchased an HP Officejet Pro 7740 printer from an Office Depot in Jacksonville, Florida. FAC ¶ 22. On June 6, 2018, Plaintiff purchased another HP Officejet Pro 7740 printer from Amazon.com. Id. at ¶ 23. When shopping for a printer, it was important to Plaintiff that the printer be compatible with third-party ink cartridges and refilled HP ink cartridges because these non-HP cartridges were less expensive than their HP brand counterparts. Id. at ¶¶ 25-27. Indeed, Plaintiff repeatedly alleges that he would not have purchased the printers had he known that he would be unable to use non-HP cartridges with the printer. See, e.g., id. at ¶¶ 27, 33, 58, 100. Plaintiff did not see any representations by HP that he would only be able to use HP brand cartridges, so Plaintiff bought the HP printers. Id. at ¶¶ 25-27. The packaging on the printers Plaintiff bought included the statement: "Please use genuine HP ink cartridges for best results." Id. at ¶ 34.
Though Plaintiff did not know it at the time of purchase, certain HP printers are configured to perform automatic updates to the software embedded in the device—known as firmware—without user intervention. Id. at ¶ 35. This means that HP can remotely update the firmware in its printers without users’ knowledge. Ibid. HP's online support page for the Officejet Pro 7740 (the "Support Page") contains a brief description of this remote update ability, which HP calls "dynamic security."1 Id. at ¶ 37. The Support Page states:
Reminder: Dynamic security enabled printer. This Firmware includes dynamic security measures, which may prevent supplies with non-HP chips or circuitry from working now or in the future.
Ibid. The Support Page further states: "HP cannot guarantee the quality or reliability of non-HP cartridges." Id. at ¶ 38.
On or around April 12, 2019, HP used dynamic security technology to implement a firmware update that modified the firmware on many models of HP printers, including Plaintiff's printers, without alerting users.2 Id. at ¶ 31. The update caused affected printers to cease functioning with certain third-party and refilled cartridges. Id. at ¶ 32. HP printers and compatible ink cartridges contain chips that allow the printer and the cartridge to communicate with each other. Id. at ¶ 74, p. 16.3 The printer chip contains a master key code and the cartridge chip contains a base key code that allows the printer to authenticate that the cartridge is compatible. Ibid. The April firmware update changed the communication protocol between printer chips and cartridge chips so that certain varieties of non-HP cartridge chips were no longer able to communicate with the HP printers. Id. at ¶ 82, p. 18. Because the firmware update blocked these non-HP cartridge chips, any cartridge with such a chip no longer functioned with an HP printer. Ibid.
As a result of the update, Plaintiff's printer ceased working with the refilled cartridges that were installed in his printers at the time. Id. at ¶ 40. When Plaintiff attempted to print, he received a series of error messages stating that he needed to replace empty cartridges and that there was a "cartridge problem." Id. at ¶¶ 42-44. He replaced the refilled cartridges with other third-party cartridges and received another error message directing him to remove and reinstall the cartridge to make sure it was correctly installed. Id. at ¶ 45. Plaintiff was not able to use his printers unless and until he bought HP brand cartridges. Id. at ¶ 32. At the time of the firmware update, Plaintiff had purchased and was in possession of at least nine refilled cartridges, which no longer functioned with his printer following the update. Id. at ¶ 33. As of the date the FAC was filed, Plaintiff's printers still did not work unless they were loaded with original HP cartridges. Id. at ¶ 83, p. 18. Plaintiff alleges that this limited functionality devalued his printers. Id. at ¶ 32.
Plaintiff alleges that HP has engaged in this type of conduct before. Id. at ¶ 84, p. 18. For example, firmware updates in March 2016 and September 2017 similarly altered the communication protocol between HP printers and certain non-HP cartridges. Ibid. One prior remote firmware update gave rise to a class action lawsuit filed in this Court involving very similar claims against HP. See San Miguel v. HP Inc. , 317 F. Supp. 3d 1075 (N.D. Cal. 2018). In San Miguel , this Court granted in part and denied in part HP's motion to dismiss the plaintiffs’ claims. Id. Following the Court's order on the motion to dismiss, the parties reached a settlement by which HP agreed not to reinstall or reactivate Dynamic Security in the printers at issue in that case. FAC ¶ 70, p. 20. While the parties agree that HP has not violated the settlement agreement, Plaintiff alleges that HP has continued to engage in a pattern of pushing firmware updates in other printer models, including the Class Printers in this case. Id. at ¶¶ 71-72, p. 20.
Based on the foregoing, Plaintiff seeks to represent "[a]ll United States Citizens who, between the applicable statute of limitations and the present, purchased or owned one [or] more Class Printers" (the "Class") as well as "all persons in Florida who purchased or owned one or more Class Printers" (the "Florida Subclass"). Id. at ¶ 75, p. 21.
On behalf of the Florida Subclass, Plaintiff asserts claims for violation of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA") (Claim 1) and the Florida Misleading Advertisement Law ("FMAL") (Claim 2). On behalf of the Class, Plaintiff asserts claims for violations of the Computer Fraud and Abuse Act ("CFAA") (Claim 3), trespass to chattels (Claim 4), and tortious interference with contractual relations and/or prospective economic advantage (Claim 5).
HP now moves to dismiss all of Plaintiff's claims, asserting that HP is not under any legal duty to make its printers compatible with non-HP ink cartridges. Motion, p. 1. HP reasons that all of Plaintiff's claims start from the underlying and deficient premise that HP had some duty to make its printers compatible with non-HP ink cartridges, even those containing cloned security chips that infringe on HP's intellectual property. Ibid. HP argues that it was under no such legal obligation, did not make any misleading representations as to the compatibility of non-HP cartridges with its printers, and generally did nothing unlawful. Ibid
In his Opposition to HP's Motion (Dkt. No. 29, "Opposition"), Plaintiff represented that he would voluntarily withdraw his claim for tortious interference with contractual relations. Opp., p. 3. Therefore, the Court does not address HP's arguments for dismissal of Claim 5.
Federal Rule of Civil Procedure 12(b)(6) provides that a party may seek dismissal of a suit for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). The complaint "must contain 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). When deciding whether to grant a motion to dismiss, the court "must accept as true all factual allegations in the complaint and draw all reasonable inferences in favor of the nonmoving party."
Retail Prop. Trust v. United Bhd. of Carpenters & Joiners of Am. , 768 F.3d 938, 945 (9th Cir. 2014) (citation omitted). However, "courts are not bound to accept as true a legal conclusion couched as a factual allegation." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. Dismissal "is proper only where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory." Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001).
Plaintiff alleges that HP violated the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"). Fla. Stat. §§ 501.201 et seq. FDUTPA prohibits "[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce." Fla. Stat. § 501.204(1). "A consumer claim for damages under FDUTPA has three elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages." Rollins, Inc. v. Butland, 951 So.2d 860, 869 (Fla. Dist. Ct. App. 2006), review denied , 962 So.2d 335 (Fla. 2007). "Whether an alleged act or practice is deceptive or unfair may be decided as a matter of law." Casey v. Fla. Coastal Sch. of Law, Inc. , No....
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