Second Dismissal Opinion Lands in Lenovo False Reference Pricing Suit

Lenovo Inc. prevailed once again in a case arguing that the computer maker duped consumers by selling goods at artificially inflated discounts. In last Thursday’s opinion, Judge Jeffrey S. White solely considered whether the plaintiffs pleaded that they lack adequate remedy at law.

As previously reported, the 2021 suit was filed in Oakland, California by two state residents. Judge White summarized that they took issue with a purported and unlawful marketing practice, commonly known as false reference pricing, which “artificially increases demand for Lenovo’s products and induces customers to pay more for Lenovo-branded products based on a false impression of their value.”

The suit stated claims for breach of contract and various warranties, as well as California law claims including the Unfair Competition Law and False Advertising Law, which are limited to restitution and injunctive relief, and the Consumer Legal Remedies Act, which provides for damages and equitable relief.

Last November, Lenovo partly moved to dismiss and the plaintiffs opposed

The court permitted claims for prospective injunctive relief to proceed, but was concerned that the remedies for their equitable claims for restitution and disgorgement were indistinguishable from their legal claims. The plaintiffs filed an amended complaint, seeking restitution as an alternative form of relief to damages for five of their eight claims.

Lenovo once again moved for dismissal and the court agreed. Judge White ruled that the plaintiffs still had not demonstrated the inadequacy of their remedies at law, in other words, that the ultimate compensation between the equitable and legal remedies differed.

First, the opinion said that again, the plaintiffs “do not differentiate the facts that support their claims under the various prongs of the UCL, FAL, or CLRA from the facts that support their other claims.” The court was thus unpersuaded that their legal claims include elements they would not be required to prove to prevail on their equitable claims. 

Second, the court said that the plaintiffs allege “no more than they may lack an adequate remedy at law because it will be harder to prove their legal claims.” Judge White opined that conditional contentions are insufficient to satisfy the adequacy test.

However, he dismissed the claims without prejudice in the event that the plaintiffs unearth facts during discovery showing that legal remedies’ inadequacy.

The computer buyers are represented by Edge, A Professional Law Corporation and Capstone Law APC and Lenovo by Sheppard Mullin Richter & Hampton LLP.