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Chad Herron, Individually, On Behalf of Himself and All Others v. Best Buy Co. Inc.

February 13, 2013

CHAD HERRON, INDIVIDUALLY, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
BEST BUY CO. INC., A MINNESOTA CORPORATION; TOSHIBA AMERICA INFORMATION SYSTEMS, INC., A CALIFORNIA CORPORATION; AND DOES 1-100, INCLUSIVE,
DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. Senior United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FIRST AMENDED COMPLAINT

Defendants Best Buy Co. Inc. ("Best Buy") and Toshiba America Information Systems, Inc. ("Toshiba") (collectively "Defendants") move to dismiss Plaintiff's complaint under Federal Rules of Civil Procedure ("Rules") 9(b) and 12(b)(6). This case is a putative consumer class action alleging violations of the California Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1770 (a)(5), (a)(7), (a)(9), and the California Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq. Plaintiff argues that Defendants affirmatively misrepresented the battery life on his Toshiba Satellite L505 laptop (the "Laptop") as "up to 3.32 hours" even though this battery life "could never be achieved when the [Laptop] was used in normal, practical, and realistic circumstances," and that Defendants concealed or failed to disclose that the battery life testing parameters Defendants employed "bear no rational or reasonable relationship to an average consumer's expected use of [the] Laptop." (Opp'n to Mot. to Dismiss ("Opp'n") ECF No. 11, 1:16-17, 4:14-15.) Defendants argue that Plaintiff fails to allege any fraudulent affirmative misrepresentations, fraudulent omissions, unlawful or unfair conduct, or that Toshiba participated in and controlled Best Buy's representations concerning the Laptop. (Mot. to Dismiss ("Mot.") ECF No. 7, 4:18-14:12.) Plaintiff opposes the motion.

I. FACTUAL ALLEGATIONS

Plaintiff alleges the following in his First Amended Class Action Complaint ("FAC"). On December 15, 2009, after looking at the product tags for various laptops, Plaintiff purchased a Toshiba Satellite L505 Laptop from a Best Buy retail store in Folsom, California. (FAC ¶ 9 & Ex. A.) Best Buy displays its laptops with a "'product tag,' which contains the price and a brief description of the features of the laptop." (FAC ¶ 43.) "One prominent feature is 'Battery.'" (Id. ¶ 43.) "Best Buy represented Plaintiff's Laptop battery life to be 'up to 3.32 hours.'" (Id. ¶ 44.) Best Buy did not provide "any explanation as to how the 'up to' hours was calculated or determined on the product tag or elsewhere" in the store, and "there was no disclaimer, qualifier, or other language." (Id. ¶¶ 45, 12.)

Plaintiff "decided to purchase the Toshiba Satellite L505 [Laptop] based substantially on his reliance on the representation that the battery life for that model was 'up to 3.32 hours.'" (Id. ¶ 11.) "Plaintiff . . . believed that the represented battery life of 'up to 3.32 hours' was reflective of how long Plaintiff could expect his Laptop to operate when being powered solely by its battery." (Id. ¶ 12.) In fact, "[i]n the years since Plaintiff purchased his Laptop, he has never once achieved even close to the represented 3.32 hours of battery life." (Id. ¶ 14.)

Toshiba uses the MobileMark 2007 ("MM07") benchmark test to measure the battery life of its Toshiba L505 Laptops. (Id. ¶¶ 24, 35.) During the test, the computer's monitor is set to 60 nits, or "the brightness of 20% to 30% of [the] normal level." (Id. ¶ 26.) Meanwhile, "the computer's Wi-Fi, Bluetooth, and other wireless functions are disabled so the computer is not drawing power from the battery to perform these functions," and the computer's "main processor chip is set to 5% to 7.5% of its normal capacity" so that it "is essentially running in an idle state." (Id. ¶¶ 27, 28.) Three separate performance tests are then administered: (1) a DVD test where "a DVD movie is played until the battery dies," (2) a productivity test where the computer "perform[s] common office activities" such as data processing, and (3) a reading test where the computer "read[s] a PDF document pausing [for] two minutes on each page." (Id. ¶ 29(a)-(c).) "MM07 does not provide an 'overall' rating; rather, the computer is given three scores, one for each category (DVD, Productivity, and Reader). The laptop manufacturer or retailer may choose which score to report to consumers." (Id. ¶ 30.)

"Toshiba conveys the results of the Laptop's MM07" test to "third party retailers, such as Best Buy . . . with the intention and desire that these third party retailers will, in turn, represent to consumers these results." (Id. ¶ 36.) Since MM07 testing bears "no resemblance to the real-life and everyday uses of laptop computers and notebooks," the Laptop's "actual battery life [i]s substantially less than that which was represented by Defendants." (Id. ¶¶ 31, 3.) On its website, Best Buy describes its computers' specifications, including their battery lives. (Id. ¶¶ 46-48.) "[E]ach

[L]aptop's battery life is represented as being 'up to' a specified number of hours." (Id. ¶ 46.) Customers can click on this battery life representation to display a pop-up box. (Id. ¶ 47.) The pop-up box states:

Battery Life

Battery life tested using MobileMark 2007. Battery life will vary depending on the product configuration, product model, applications loaded on the product, power management setting of the product, and the product features used by the customer. As with all batteries, the maximum capacity of this battery will decrease with time and usage.

(Id. ¶ 47.) "Other than the statement that the Laptop's battery life was tested using MobileMark 2007 . . . there is not any explanation [on the website] as to how the 'up to' hours was calculated or any other information." (Id. ¶ 48.)

"Plaintiff paid more for his Laptop than he would have paid had the material fact not been concealed or omitted that the battery life for his Laptop was calculated with: (i) its screen set to 60 nits; (ii) its Wi-Fi, Bluetooth, and other wireless functions disabled; and (iii) its main processor chip set to 5% to 7.5% of its normal capacity." (Id. ¶ 15.)

II. LEGAL STANDARD

Decision on a Rule 12(b)(6) dismissal motion requires determination of "whether the complaint's factual allegations, together with all reasonable inferences, state a plausible claim for relief." Cafasso, United States ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 (9th Cir. 2011) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Bell Atlantic v. Twombly, 550 U.S. 544, 556 (2007)).

When determining the sufficiency of a claim under Rule 12(b)(6), "[w]e accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the non-moving party." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (internal quotation marks omitted). However, this tenet does not apply to "legal conclusions . . . cast in the form of factual allegations." Id. (internal quotation marks omitted). "Therefore, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Id. (internal quotation marks omitted); see also Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555) ("A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'").

III. DISCUSSION

A. Toshiba's Participation and Control Over Best Buy's Representations

1. UCL

Plaintiff alleges Defendants violated the UCL by engaging in an "unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200. "Because [the UCL] is written in the disjunctive, it establishes three varieties of unfair competition-acts or practices which are unlawful, or unfair, or fraudulent. An act can be alleged to violate any or all of the three prongs of the UCL-unlawful, unfair, or fraudulent." Berryman v. Merit Prop. Mgm't, Inc., 152 Cal. App. 4th 1544, 1554 (2007); see also Klein v. Chevron U.S.A., Inc., 202 Cal. App. 4th 1342, 1374 (2012). Here, although Plaintiff's claims sound primarily in fraud, Plaintiff also alleges claims under the unlawful and unfair prongs of the UCL. (See FAC ¶¶ 89, 90, 94, 95.) Toshiba seeks dismissal of all UCL claims against it, arguing that "[t]o impose UCL . . . liability . . . [P]laintiff must allege with particularity facts demonstrating [Toshiba's] 'personal participation in the unlawful practices and unbridled control over the practices that are found to violate' the UCL." (Mot. 13:5-7 (quoting Perfect 10, Inc. v. Visa Int'l Serv. Ass'n, 494 F.3d 788, 808 (9th Cir. 2007)).) Toshiba asserts that "Plaintiff has failed to plead any representations by [Toshiba], and has failed to plead any facts demonstrating [its] participation and unbridled control over Best Buy's representations." (Mot. 14:8-10.)*fn1

Plaintiff counters that it has "sufficiently establish[ed] Toshiba's participation in the creation of [Best Buy's] product tags" since the information on the product tags "was provided directly by, and therefore controlled by, Toshiba." (Opp'n 21:21-23.) Toshiba rejoins this contention is insufficient since "Plaintiff does not allege that [Toshiba] told Best Buy what it should or should not put on its product tags or its website, nor does he allege that Best Buy was required to follow such instructions had they been given," and the "practices that are alleged to have violated the UCL . . . here are solely Best Buy practices." (Reply 11:17-19, 11:22-23.)

"A defendant's liability [under the UCL] must be based on his personal 'participation in the unlawful practices' and 'unbridled control' over the practices." Emery v. Visa Int'l Serv. Ass'n, 95 Cal. App. 4th 952, 960 (2002) (quoting People v. Toomey, 157 Cal. App. 3d 1, 15 (1984)); see also In re Firearm Cases, 126 Cal. App. 4th 959, 985, 983 (2005) (rejecting UCL claim where defendants "did not control the wrongful acts [in question] or encourage others to engage in questionable acts," even though defendants did "have a relationship with the wrongdoers"). Here, rather than "exercis[ing] control over the preparation or distribution" of Best Buy's battery life representation, Emery, 95 Cal. App. 4th at 960, Toshiba merely "convey[ed to Best Buy] the results of the Laptop's MM07 test." (FAC ΒΆ 36.) Given these allegations, "[t]he worst that can be said is that [Toshiba] did not take more aggressive corrective steps" to police Best Buy's representations concerning the Laptop's battery test results. ...


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