Last Friday, a Northern District of California court issued a 24-page opinion in the case over HP Inc.’s internet-based updates that purportedly slow and reduce its printers’ capabilities. The decision leaves the complaint largely intact.
In their third amended complaint, the business and individual plaintiffs assert that HP transmits online firmware updates to printers which alters the machines’ code and renders competitors’ ink cartridges incompatible. They also accuse HP of using this firmware update process to hide its surreptitious collection of data concerning whether consumers are using HP or its competitors’ cartridges without their consent. The pleading states claims under the Computer Fraud and Abuse Act (CFAA), the Comprehensive Computer Data Access and Fraud Act (CDAFA), California false advertising and consumer protection laws, and states a claim for injunctive relief.
The lawsuit seeks to certify several classes of printer purchases. It contends that their damages include “loss of the value of the supply cartridges they purchased that are no longer compatible with their printers, loss of time and effort to diagnose the damage to their printers and to determine what remedial measures to take, the need to purchase expensive HP supply cartridges, uncertainty in the functioning of their printers and supply cartridges, and future remedial costs.”
The opinion first considered whether the plaintiffs have constitutional standing to bring the suit. Magistrate Judge Susan Van Keulen ruled that at the pleading stage, the plaintiffs have asserted particularized-enough injury, citing their alleged expenditure of time and money fixing printer problems and purchasing replacement cartridges.
The court then permitted the plaintiffs’ CFAA and CDAFA claims to proceed to the extent that they do not rest on the allegation that HP accessed their printers without consent. That contention lacked supporting facts, the order said.
Judge Van Keulen also allowed the complainants’ California False Advertising Law, Consumers Legal Remedies Act, and Unfair Competition Law claims to proceed. Those causes of action are premised on the allegation that “HP made false and misleading statements and material omissions regarding the compatibility of third-party ink cartridges with their printers,” the opinion explained.
Among other determinations, Judge Van Keulen found the omissions to be actionable and that the plaintiffs were not on notice of HP’s “dynamic security and the data collection.” The court rejected arguments that HP disclosed these practices on various webpages, noting its judicial obligation to presume the truth of all of the plaintiffs’ factual allegations in assessing a motion to dismiss.
Finally, Judge Van Keulen refused to dismiss or strike the plaintiffs’ injunctive relief claim after finding that they established sufficient likelihood that they will be wronged again in a similar way in the future. The plaintiffs have until October 29 to file a new complaint, but were reminded that they may not file new causes of action nor add parties without following the requisite procedure.
The plaintiffs are represented by Javitch Law Office and Zimmerman Law Offices P.C. HP is represented by Gibson Dunn & Crutcher LLP.
