Intel Wins Dismissal of Microprocessor Security Vulnerability Suit

On Monday, Judge Michael H. Simon of the District of Oregon issued an opinion and order granting Intel Corporation’s motion to dismiss the plaintiffs’ amended complaint finding the plaintiffs failed to state an actionable claim.

According to the opinion, the plaintiffs in the multidistrict litigation (MDL) proceeding brought a putative nationwide class action against Intel “relating to certain security vulnerabilities in Intel’s microprocessors.” The plaintiffs alleged that Intel knew that there were “certain design defects in its microprocessors that created security vulnerabilities and that Intel failed to disclose or mitigate these vulnerabilities.” The plaintiffs claimed that the ways that these vulnerabilities could be exploited were publicly known starting in January 2018, and more revelations unfolded.

The opinion reviewed the procedural history, noting that Intel previously moved to dismiss the action, which the court granted with leave to amend. There were five nationwide claims against Intel and several claims for most of the subclasses.

Intel claimed that for the nationwide claims (counts 1 – 5), the plaintiffs failed to state a claim, and that the plaintiffs cannot pursue equitable remedies under the relevant statutes because they have not purported that legal remedies are inadequate. In regards to the state subclass claims, Intel contended that the plaintiffs failed to state a claim for any of the bellwether counts.

Addressing the nationwide fraud claims, the court noted that the plaintiffs only alleged concealment and omission, not an affirmative misrepresentation. Furthermore, the court found that the plaintiffs have not alleged a duty to disclose, “which is required for claims alleging concealment or omission.” Specifically, the court stated that “(i)nformation that was known in the industry is not information that the Court finds under the facts of this case that Intel fraudulently concealed or suppressed.”

The court added that the plaintiffs failed to satisfy the baseline requirement because the “defect must be central and important to the product’s function (not to a reasonable consumer).” In particular, the court held “The fact that Intel’s chips have for years allegedly been vulnerable to novel side-channel attacks, that were never exploited, does not go to the central function of the microprocessors.”

As a result, the court concluded there is no actionable omission or concealment. Since the court previously provided the plaintiffs with an analysis of the deficiencies and an opportunity to amend, the court dismisses these claims with prejudice.

In regards to the state subclass claims for misrepresentations, the court rejected the plaintiffs’ contention that the speed or performance representations “‘implicitly’ contain a representation related to security.” The court dismissed these claims without prejudice. The court claims that since the plaintiffs failed to allege actionable omission, they also failed to allege bellwether deceptive trade practices claims based on omissions. The court dismissed these and the remaining bellwether claims with leave to amend. As for the Ohio claim, the court did not dismiss the claims at this time.

In sum, the court granted Intel’s motion to dismiss the amended complaint. The plaintiffs have 28 days to file their amendments.

Intel is represented by Stoel Rives LLP and Williams & Connolly LLP.