Court Issues Mixed Ruling in Computer Buyers’ Pricing Suit Against HP

Late last week Judge Beth Labson Freeman issued an opinion in a consumer class action against HP Inc., dismissing most of the nine-count complaint. The dispute questions whether prices displayed on the computer and electronics manufacturer’s website are accurate or whether they “create[] an illusion of savings.”

The opinion recounted the California consumers’ argument that HP displays inflated reference or “strikethrough” prices for its products that it then offers to consumers at a corresponding discounted price. The amended complaint argues the strikethrough prices do not represent the actual prices at which computers were sold or offered for sale for “a reasonably substantial length of time,” thereby giving the impression that consumers are saving more than they actually are.

Further, the court noted the buyers’ additional contention that HP falsely advertises that discounts are available only for a limited time when in fact those discounts continue beyond their advertised expiration date. Seeking redress from the allegedly misleading conduct, the buyers brought breach of contract and warranty claims, as well as causes of action under California’s Consumer Legal Remedies Act (CLRA), False Advertising Law (FAL), and Unfair Competition Law (UCL).

In last week’s opinion, Judge Freeman first dismissed the warranty and contract claims without leave to amend because the plaintiffs did not oppose HP’s bid to oust them from the case. As to the consumer law causes of action under the CLRA, FAL, and UCL, the court said that only the limited-time offer claims withstood scrutiny. Judge Freeman opined the allegations were sufficient, pointing to the Labor Day code coupon one plaintiff used to purchase a computer that was not really a limited time coupon in reliance on HP’s representations about “the limited-time nature of the advertised discounts.” 

Otherwise, the consumer claims were dismissed because the complaint lacked allegations that the strikethrough prices displayed on HP’s website were inflated or explaining why they did not accurately reflect computers’ market price. Reaching this conclusion, Judge Freeman classified the case as a “non-exclusive product” suit in which “more than one retailer offers the product at issue for sale.”  Without allegations showing that HP’s strikethrough prices were above the prevailing market price, not just HP’s historical prices, the court said it could not permit those claims to proceed.

The plaintiffs, represented by  Edge, A Professional Law Corporation and Capstone Law APC, have three weeks to amend their complaint. HP is represented by Morgan, Lewis & Bockius LLP.