Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—E.D. Cal.: Laptop purchaser may proceed with California consumer protection law claims over battery life, (Aug 19, 2013)

By Tobias J. Gillett, J.D., LL.M.

A consumer may proceed with class claims under the California Consumers Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) that laptop manufacturer Toshiba America Information Systems, Inc. and electronics retailer Best Buy Stores, LP misleadingly advertised the battery life of a Toshiba laptop, the federal district court in Sacramento has ruled (Herron v. Best Buy Stores, LP, February 13, 2013, Burrell, G.).

The court denied Toshiba’s motion to dismiss because the purchaser did not have to have engaged in a direct transaction with Toshiba, Toshiba had failed to raise an argument that it had not made any representations to the purchaser in a prior motion to dismiss, and Toshiba did not show that the UCL’s “participation and control” standard applied to the purchaser’s CLRA claim, and denied Best Buy’s motion to strike the purchaser’s class allegations.

According to the purchaser’s complaint, Toshiba used the MobileMark 2007 (MM07) benchmark test to measure the battery life of its Toshiba L505 laptops. Under this test, the laptops would perform various tasks until the battery ran out, while the laptop’s screen was set to 20 or 30 percent of its normal level of brightness, “the computer’s Wi-Fi, Bluetooth, and other wireless functions [were] disabled so the computer [was] not drawing power from the battery to perform these functions,” and the computer’s “main processor chip [was] set to 5% to 7.5% of its normal capacity” so that it “[was] essentially running in an idle state.”

Toshiba then conveyed the results of the test to retailers with the intent that the retailers would represent the results to consumers. On its website, Best Buy advertised that the laptops would possess “up to” a certain amount of battery life, and that the battery life was tested using MM07, but failed to disclose “how the ‘up to’ hours was calculated or any other information.”

However, the purchaser alleged that, since the MM07 testing was conducted under conditions that bore “no resemblance to the real-life and everyday uses of laptop computers and notebooks,” the laptop’s actual battery life was “significantly less” than the amount represented by Toshiba and the retailers. The purchaser filed a class action against Toshiba and Best Buy, asserting claims for violation of the CLRA against both defendants and for violation of the UCL against Best Buy. Toshiba filed a motion to dismiss, and Best Buy filed a motion to strike the class allegations.

Motion to Dismiss.

Transactions with Toshiba. The court rejected Toshiba’s argument that the purchaser’s CLRA claim failed because the purchaser had not engaged in any transactions with Toshiba. The court explained that the CLRA prohibited unfair or deceptive practices arising from “a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” Therefore, the CLRA did not require that the plaintiff engaged in a direct transaction with the defendant, according to the court.

Representations by Toshiba. The court declined to consider Toshiba’s argument that the purchaser failed to allege that “Toshiba made any representation to plaintiff, as required to establish direct liability for fraudulent affirmative misrepresentations under the CLRA.” Toshiba had not raised this argument in a prior motion to dismiss, and Federal Rule of Civil Procedure 12(g) provided that “a party that makes a motion under Rule 12 must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.”

Participation and control. The purchaser’s alleged failure to satisfy the UCL’s “participation and control” standard also did not require dismissal of the purchaser’s claims, according to the court. The court explained that a plaintiff asserting a claim under the UCL must allege the defendant’s “personal participation in the unlawful practices and unbridled control over the practices.” The court noted that, with very limited exceptions, the “participation and control” standard had been limited to UCL claims. The court observed that the CLRA “must be liberally construed and applied,” and that it had “more extensive remedies and provisions” than the UCL. The court concluded that Toshiba had not shown at the present stage of the litigation “that the personal participation and unbridled control standard applies to plaintiff’s CLRA claim.”

Motion to strike. The court denied Best Buy’s motion to strike the purchaser’s class allegations. The court observed that Best Buy had not shown that the allegations constituted “redundant, immaterial, impertinent or scandalous matter,” or “an insufficient defense.” Moreover, a motion to strike could not be read “in a manner that allow[ed Best Buy] to use it as a means to dismiss some or all of a pleading,” and that “the better and more advisable practice for a District Court to follow is to afford the litigants an opportunity to present evidence as to whether a class action was maintainable.”

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

Attorneys: Gene Joseph Stonebarger for Chad Herron. Andrew D. Muhlbach (Morrison & Foerster LLP) for Toshiba America Information Systems, Inc. Jill S. Casselman (Robins, Kaplan, Miller & Ciresi) for Best Buy Stores, LP.

Companies: Toshiba America Information Systems, Inc.; Best Buy Stores, LP

Cases: StateUnfairTradePractices Advertising CaliforniaNews