Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—E.D. Cal.: Best Buy subsidiary remains in lawsuit over representations regarding laptop battery life, (Feb 5, 2014)

By Jody Coultas, J.D.

A laptop purchaser stated California Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA) claims against a subsidiary of Best Buy Co. Inc. for allegedly misrepresenting the battery life of its laptops, the federal district court in Sacramento has decided (Herron v. Best Buy Co. Inc., February 3, 2014, Burrell, G.). Claims against BestBuy.com, LLC were dismissed.

The purchaser alleged that Best Buy and Toshiba misrepresented the battery life of its laptops, and that his laptop never achieved even close to the represented 3.32 hours of battery life.

On February 13, 2013, the court held that the purchaser could proceed with certain claims under the UCL and CLRA against Best Buy and Toshiba America Information Systems, Inc. BestBuy.com, LLC and Buy Stores, L.P. (BBS) moved for dismissal of claims.

BestBuy.com, LLC. BestBuy.com’s motion to be dismissed as a party was granted by the court. BestBuy.com argued that the purchaser could not show an injury caused by BestBuy.com. The purchaser argued that the misrepresentations were the result of a uniform policy and practice implemented by the California brick-and-mortar stores and the website. The purchaser did not allege that he ever viewed a representation on the website or purchased any products from the website. Therefore, the purchaser could not show an injury fairly traceable to BestBuy.com.

Best Buy Stores, L.P. BBS could not show that the CLRA statute of limitation barred the purchaser’s claim, according to the court. CLRA claims must be commenced not more than three years from the date of the commission of the CLRA violation. In this case, the limitations period expired in January 2013 because the purchaser bought the laptop about January 2010, but BBS was not added as a party until March 2013. The purchaser originally sued fictitious Doe defendants in his first amended complaint. In a diversity case, California’s fictitious name rule allows claims against later-added defendants to relate back to the filing date of an earlier complaint where the plaintiff was ignorant of the defendant. BBS failed to support its argument that the purchaser knew of BBS’s connection to the claim.

The damages component of the CLRA claim against BBS was dismissed without prejudice for failure to give notice required by the CLRA, according to the court. Prior to filing the suit, the purchaser sent the CLRA’s mandated pre-suit notice to Best Buy Co., Inc., the parent company of BBS. However, BBS was a separate corporate entity and should have been provided a separate CLRA pre-suit notice before it was added in the second amended complaint. The purchaser also failed to show that Best Buy’s answer to the original complaint acted as a waiver by BBS to the notice requirement. BBS argued that the CLRA claim should be dismissed with prejudice. A dismissal with prejudice of a damages claim filed without the requisite notice is not required to satisfy the purpose of the CLRA notice requirement. BBS could not cite to a case that would require dismissal with prejudice.

The purchaser stated UCL and CLRA claims against BBS, according to the court. BBS argued that the purchaser lacked standing to assert the CLRA and UCL claims on behalf of class members that purchased other types of laptops. Several courts have allowed a plaintiff to assert claims for unnamed class members based on products he or she did not purchase where the products and alleged misrepresentations were substantially similar. Because the purchaser alleged that BBS has standing to bring claims on behalf of purchasers of other laptops since he alleged BBS engaged in a common practice of misrepresentation on the same kind of laptops with the same basic mislabeling practice, the purchaser had standing. The allegations also met the heightened pleading requirements of Federal Rule of Civil Procedure 9(b).

The case is No. 2:12-cv-02103-GEB-JFM.

Attorneys: Gene Joseph Stonebarger (Stonebarger Law) for Chad Herron. Andrew D. Muhlbach (Morrison & Foerster LLP) for Best Buy Co. Inc.

Companies: Best Buy Co. Inc.; Toshiba America Information Systems, Inc.; BestBuy.com, LLC; Best Buy Stores, L.P.

Cases: StateUnfairTradePractices CaliforniaNews