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Normand Perron, and G. David v. Hewlett-Packard Company

May 6, 2011

NORMAND PERRON, AND G. DAVID
HATFIELD, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
HEWLETT-PACKARD COMPANY, A DELAWARE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Lucy H. Koh United States District Court United States District Judge

United States District Court For the Northern District of California

ORDER GRANTING MOTION TO DISMISS WITH PREJUDICE

Plaintiffs Normand Perron and G. David Hatfield brought this class action against Defendant Hewlett-Packard Company ("HP") for claims arising out of wireless connectivity 20 problems allegedly caused by a defective Nvidia chip used in certain HP computers. The parties 21 agree that the claims of named Plaintiffs Perron and Hatfield are extinguished by a class settlement 22 approved in a separate case known as the Nvidia GPU Litigation. HP moves to dismiss with 23 prejudice, or for summary judgment, on that ground. Plaintiffs' counsel argues that the case should 24 not be dismissed and instead seeks leave to amend to substitute new named plaintiffs, modify the 25 definition of the class, propose a new subclass, join Nvidia as a defendant, and add a new claim 26 under New York state law. The Court heard oral argument on these issues on May 5, 2011. 27 Having considered the submissions and arguments of the parties, the Court GRANTS HP's motion 28 to dismiss with prejudice.

I.Background

on behalf of a class and several subclasses, brought suit against Defendant Hewlett-Packard Nvidia chip that renders the HP computers unable to connect to the Internet through the internal 6 wireless device. Compl. ¶¶ 8-11. They claim that HP knew of the defect around the time that its 7 computers reached the market, but did not disclose the wireless connectivity problem, 8 misrepresented the computers as free from defects, and failed to offer a warranty service that 9 effectively remedied the defect. Compl. ¶¶ 2-5. Based on these allegations, Plaintiffs assert five 10 causes of action, each apparently arising under California law: (1) unfair business practices in On February 18, 2010, Plaintiffs Normand Perron and G. David Hatfield, individually and Company ("HP"). Plaintiffs allege that certain HP Notebook Computers incorporate a defective violation of California Business & Professions Code § 17200 et seq.; (2) breach of express United States District Court For the Northern District of California warranty; (3) violation of California Consumers Legal Remedies Act, California Civil Code § 1750 13 et seq.; (4) unlawful business practices in violation of California Business & Professions Code 14 § 17200 et seq. The Complaint proposes a nationwide class of all persons and entities who 16 purchased certain HP computers since August 1, 2006, as well as three subclasses. Compl. ¶ 25. 17

The three proposed subclasses include (1) a Consumer Subclass consisting of class members who 18 purchased the computers for personal, family, or household purposes; (2) a Warranty Subclass 19 consisting of class members who experienced failure of wireless capability within a year of 20 purchase; and (3) a California Subclass consisting of class members who are residents of 21 California. Id. The Court has not yet considered certification of the proposed Class or Subclasses, 22 and no motion for class certification has been filed. 23 24 separate consolidated class action brought against Nvidia Corporation for defects in its graphics 25 processing unit and media communications chip. On September 15, 2010, Judge James Ware of 26 this District issued an order preliminarily approving a class settlement in the Nvidia GPU 27 Litigation. Judge Ware's order prohibited settlement class members from prosecuting any action 28 that asserted claims released by the Nvidia settlement pending a determination of whether the § 17200 et seq.; and (5) fraudulent conduct in violation of California Business & Professions Code The Nvidia GPU litigation, Case No. 08-04312 (N.D. Cal. filed Sept. 12, 2008), is a settlement should be finally approved. Because the parties agreed that the claims asserted in the 2 instant action might be released by the Nvidia settlement, they stipulated to stay all proceedings in 3 this action until 30 days after Judge Ware ruled upon the motion for final approval of the Nvidia 4 settlement. The Court issued an order staying this case on October 7, 2010. 6 class settlement and entering final judgment. Final Judgment, No. 08-4312 JW (N.D. Cal. Dec. 20, 7 ("Henning Decl."), ECF No. 43. Judge Ware's order certified a settlement class ("Nvidia 9 America who purchased a Class Computer in the United States of America," with certain 11 Id.

On December 20, 2010, Judge Ware issued an order granting final approval of the Nvidia 2010), submitted as Ex. A to Decl. or Kristofor T. Henning in Supp. of HP's Mot. to Dismiss 8 Settlement Class") consisting of "[A]ll persons and entities resident in the United States of For the Northern District of California exclusions not relevant here. at 2. The definition of "Class Computer" includes the HP 12 products at issue in the instant litigation. See Stip. and Agreement of Settlement and Release at 4-13 5, submitted as Ex B. to Henning Decl. (defining "Class Computer" to include HP Pavilion series 14 dv6000 and dv9000 and HP Presario series 6000); Compl. ¶ 25 (defining class as purchasers of 15 same HP computers). Pursuant to the Nvidia settlement agreement, Nvidia Settlement Class Members who have not opted out are deemed to have released any claims arising out of a specified 17 defect in the Nvidia chip incorporated into the Class Computers, including Class Computers that 18 exhibit certain "Identified Symptoms." See Henning Decl. Ex. B at 8, 15-16.

The "Identified Exhibit 3 to Stip. and Agreement of Settlement and Release at 4-5, submitted as Ex B. to Henning Plaintiffs Perron and Hatfield, along with a number of other individuals known as the HP Consumer Objectors, objected to approval of the Nvidia settlement before Judge Ware. The HP Consumer Objectors argued, among other things, that the Nvidia settlement would release their 25 claims and those of the proposed class members in this case and another related class action, 26 Nygren v. Hewlett Packard, No. 07-CV-05793 (N.D. Cal.), for little or no consideration.*fn1 See HP 27

United States District Court Symptoms" include the wireless connectivity problems at issue in the instant class action. See 20Decl. 22 Consumers Objections to Final Approval of Settlement at 1, submitted as Ex. C to Henning Decl. 2

They also argued that because the Nvidia settlement provides only for chip replacement or 3 reimbursement for repairs previously paid for by the class member, the settlement provides no 4 remedy to consumers who purchased an HP computer, never made any repairs, and discarded their 5 computers due to the defect.*fn2 Id. at 12-13. This last objection apparently caused the parties to the Class Members who no longer possess their HP Class Computers.*fn3 The amendment, executed on 14.18 Other Litigation. This Agreement shall not preclude a Class Member who is also a member of a class that might be certified in Nygren v. Hewlett Packard Co., Case No. CV 07-05793 JW (N.D. Cal.), or Perron v. Hewlett Packard Co.,Case No. CV 10-00695-LHK (N.D. Cal.), but did not participate in this settlement because the Member no longer had a Class Computer, and did not pay for a repair, from participating in those actions.

Nvidia Settlement to execute an amendment to the settlement agreement directed at Settlement December 6, 2010, reads:

United States District Court For the Northern District of California Opp'n to HP's Mot. to Dismiss or for Summary Judgment. Judge Ware granted final approval of 15 the settlement over the HP Consumers' objections, and the HP Consumer Objectors, including After Judge Ware entered final judgment in the Nvidia GPU Litigation, and the stay in this case expired, HP renewed its previously filed motion to dismiss for failure to state a claim*fn4 and 19 also filed a second motion to dismiss, or for summary judgment, on grounds that Plaintiffs' claims 20 were released by the Nvidia settlement. Plaintiffs then filed a motion to stay this case pending

Amendment No. 3 to Stip. and Agreement of Settlement and Release, submitted as Ex. 2 to Pl.'s 14 Plaintiffs Perron and Hatfield, have now appealed his decision to the Ninth Circuit. 17 appeal of the Nvidia settlement. In arguing the motion to stay, Plaintiffs at no point suggested that 2 the "carve out" created by Amendment No. 3 to the settlement agreement would allow litigation of 3 this action to continue while the Nvidia settlement was being appealed. Rather, they represented 4 that a stay would conserve judicial resources because the Ninth Circuit decision in the Nvidia GPU 5 Litigation would be dispositive of the claims in this case: "If Plaintiffs lose the appeal, then their 6 claims in this case will be extinguished. If Plaintiffs win the appeal, then their claims here will not 7 be extinguished and the litigation can resume." Pls.' Mot. to Stay at 2, ECF No. 48. Because it 8 seemed that this case could be resolved without extensive litigation, and a stay appeared to be in 9 conflict with Judge Ware's Order of Final Judgment in the Nvidia case, the Court denied the 10 motion to stay. See Order Denying Motion to Stay at 4, ECF No. 55.

Plaintiffs now argue that even if the claims of Perron and Hatfield are extinguished by the Nvidia settlement, the "carve-out" amendment should allow them to amend the Complaint to 13 substitute a new plaintiff who ...


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