United States District Court, N.D. California, San Francisco Division
ORDER REGARDING THE PARTIES' JOINT DISCOVERY DISPUTE LETTER DATED JUNE 3, 2014 [Re: ECF No. 31]
LAUREL BEELER, Magistrate Judge.
The complaint at ECF No. 1 is a putative class action case by a New York plaintiff on behalf of a New York class alleging false advertising in violation of New York state law by Defendant Toshiba America Information Systems, Inc., about its "LED TVs, " which were marketed as superior to LCD TVs. See Complaint, ECF 1; see also Joint Letter Brief, ECF No. 31 at 1. The parties stipulated to an extension of time for Toshiba to answer the complaint, see ECF Nos. 9, 24, and Toshiba filed a motion to transfer the action either to the Central District of California, where Toshiba is headquartered, or to the Southern District of New York, which has a nexus to the class, the Plaintiff, and the sale that gave rise to the lawsuit. See ECF No. 2 at 2. The parties agreed to engage in discovery that is relevant to the motion to transfer and to file a letter brief if they could not work things out themselves. See Joint CMC Statement, ECF No. 29 at 2. The discovery at issue here is about certain representations made by Scott Ramirez, Toshiba's Vice President of Product Marketing and Development for Visual Products, in support of the motion to transfer. See Joint Letter Brief, ECF No. 31 at 1, 4; Ramirez Decl., ECF No. 23-1. The parties disagree about whether a short deposition about limited issues is enough (which is Toshiba's position), or whether Toshiba must respond to broader interrogatories before the deposition (which is Plaintiff's position). See Joint Letter Brief, ECF No. 31.
On June 11, 2014, the court set a hearing on the joint discovery letter brief. See ECF No. 34. On June 18, 2014, before the hearing, Plaintiffs filed a first amended complaint that adds named plaintiffs from Florida and Texas. See ECF No. 36. Plaintiffs now allege violations of California false advertising laws on behalf of a nationwide class, and they allege violations of New York, Florida, and Texas false advertising laws on behalf of New York, Florida, and Texas subclasses. Id. at 24-36
The court held a hearing on June 18, 2014 and orders the discovery discussed below.
I. ALLEGATIONS IN COMPLAINT
The fact allegations in the two complaints are substantially the same. Given the filing of the first amended complaint earlier today, the order generally cites to the original complaint and adds in relevant allegations from the first amended complaint.
Plaintiff Stacey Pierce-Nunes purchased a Toshiba-brand "LED TV" for personal use. See Complaint, EFC No. 1. Pierce-Nunes selected the "LED TV"over an LCD TV. See id. ¶ 7. The "LED TV" was more expensive. Id. LCD TVs, like Plasma TVs, have a flat and light panel. Id. ¶ 30. But LCD TVs use a different display technology called liquid crystal displays (LCD). Id. Liquid crystals do not emit light themselves and must be lit by a separate light source. Id. ¶ 31. Originally, the light source primarily used was cold cathode florescent lights (CCFLs). Id. ¶ 34. Then TV manufacturers then introduced light emitting diodes (LED), instead of CCFLs, that illuminated the LCD panel. Id. at ¶ 35. This did not change the way the LCD panels generated the screen image. Id.
In 2009, Toshiba was the first to introduce an LCD TV with an LED light, and it was followed by generations of the LED-lit LCD TV. Id. ¶ 37. At first, only a small fraction of Toshiba's total LCD TV and flat panel sales were represented by LED-lit LCD TVs. Id. At the time the original complaint was filed, all TVs listed on Toshiba's website consisted of LED-lit LCD TVs. Id.
Initially, Toshiba marketed the LCD TV as an LED-lit LCD TV. Id. ¶ 38. No effort was made to conceal that although LED lighting was used, the TVs still utilized liquid crystal displays. Id. Months after distributing LED-lit LCD TVs, Toshiba dropped all references to the TVs as being LCD TVs and marketed the LED-lit LCD TVs as a new, advanced, technologically superior TV, an "LED TV." Id. ¶ 42. The "LED TV" allegedly was different from and better than LCD TVs, although both TVs used the same liquid crystal displays to generate images. Id. This marketing scheme resulted in the product suddenly becoming the leader of the industry. Id. ¶ 44. Prior to the false advertising, CCFL-lit LCD TVs dominated LCD TV sales in the U.S., with over 97% sales. Id.
For years Toshiba's website prompted customers to choose between LED TVs, LCD TVs, and Plasma TVs. Id. ¶ 47. The LCD Category described the applicable display technology, while the "LED" category identified only the light source, falsely implying that "LED, " not LCD, was the display technology. Id. The clickable images online for "LED TVs" made no reference to LCD display TVs. See Complaint, ECF No. 1.
LED TVs are currently available for sale but use technology that is years away from being available to mainstream purchasers at a reasonable price. Id. ¶ 51. Actual LED TVs use LED displays instead LCD or plasma displays. Id. The LED displays are self-illuminating and do not require an independent source of light and do not contain liquid crystal technology. Id.
Pierce-Nunes alleges she was misled into believing that she purchased an LED TV and as a result, suffered damage in the form of paying a premium price. Id. ¶ 57. But for Toshiba's deceptive advertising, Pierce Nunes and other class members would have purchased a comparable CCFL LCD TV. Id. ¶ 58. On behalf of a New York class of consumers, Pierce-Nunes, a New York state resident, alleges that Toshiba falsely ...