Earlier this week, the seven named plaintiffs spearheading a suit against Intel Corporation over security vulnerabilities in certain models of its microprocessors filed an appeal with the Ninth Circuit. They lost the case in July after the District of Oregon granted Intel’s motion for reconsideration of its prior dismissal order and rejected all of their claims.
The plaintiffs, owners of Intel computers containing the allegedly defective processors, filed suit in 2018 after the security vulnerabilities became publicly known, including the exploit “Meltdown.” The plaintiffs alleged that two “hardware-level” defects render Intel’s microprocessors vulnerable to unauthorized access and that Intel’s software fixes slowed down the speed of their processors and did not completely fix the problem.
They brought unfair business practice, consumer protection, and quasi-contract claims against Intel over the alleged defects in suits that were consolidated into multidistrict litigation. After several bites at the apple, the court permitted some claims to proceed.
Thereafter, Intel filed a motion for reconsideration of the order or in the alternative for permission to file an interlocutory appeal. Amici, including the Cybersecurity Coalition and the Information Technology Industry Council, threw their weight behind Intel.
Last month, the court granted Intel’s first request and dismissed all the plaintiffs’ claims with prejudice.
In that order, the court said it previously relied on flawed allegations. In particular, it had upheld the plaintiffs’ claims on grounds that Intel delayed the embargo period, or period of time that a security flaw is known privately, prior to a deadline, after which time the details become known to the public.
However, the plaintiffs did not allege an unreasonable delay in the embargo period by holding off telling the public until after the end-of-year shopping season to buoy profits, as previously thought. Instead, they simply alleged that Intel sold products during a normal and reasonable embargo with “asymmetrical information,” the order clarified.
The opinion reasoned that the latter allegation “describes the situation during every embargoed security vulnerability—the manufacturer will always know more about any security vulnerability than consumers during an information embargo.” As such, the court said it was insufficient to state a claim for unfair conduct under California’s Unfair Competition Law.
The ruling, coupled with other findings, caused the court to ultimately reverse course on the plaintiffs’ remaining fraud, quasi-contract, and state “bellwether” claims alleging unfair or unconscionable conduct.
The case has now been docketed with the Ninth Circuit Court of Appeals.
Plaintiffs’ counsel includes Seeger Weiss LLP and Stoll Berne Lokting & Shlachter PC, among others. Intel is represented by Williams & Connolly LLP.
