In re: HP Power Plug and Graphic Card Litigation

Memorandum in Opposition re First MOTION to Dismiss Second Amended Complaint

N.D. Cal.January 12, 2007

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW Robert S. Green (State Bar No. 136183) Jenelle Welling (State Bar No. 209480) Charles D. Marshall (State Bar No. 236444) GREEN WELLING LLP 595 Market Street, Suite 2750 San Francisco, CA 94105 Telephone: (415) 477-6700 Facsimile: (415) 477-6710 cand.uscourts@classcounsel.com Attorneys for Plaintiffs UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA San Jose Division Michael Brothers, an individual; Gregory McDaniel, an individual, on behalf of themselves and all others similarly situated, Plaintiffs, v. Hewlett-Packard Co., Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. C-06-2254 RMW PLAINTIFFS’ OPPOSITION TO DEFENDANT HEWLETT-PACKARD COMPANY’S MOTION TO DISMISS Date: February 2, 2007 Time: 9:00 a.m. Place: Courtroom 6, 4th Floor Judge: Honorable Ronald M. Whyte Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page1 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW i TABLE OF CONTENTS PAGE STATEMENT OF THE ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SUMMARY OF FACTS AND ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 LEGAL STANDARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 I. Plaintiff Brothers States Claims for HP’s Breach of the Written, Express Limited Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A. Plaintiff Brothers Pleads Two Breaches Occurring During the Warranty Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 B. Plaintiff Brothers’ Breach of Written Limited Warranty Claims are Not Time Barred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 C. Privity of Contract is Not Required Here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 II. Plaintiffs Brothers and McDaniel State Claims under Magnuson-Moss . . . . . . . . . . . . . . 7 A. The 100 Named Plaintiff Requirement Does Not Apply Because Jurisdiction is Under the Class Action Fairness Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 B. Plaintiff Brothers Properly States a Magnuson-Moss Claim Premised On a Breach of Written Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 C. Plaintiff McDaniel Properly States a Magnuson-Moss Claim on a Breach of the Service Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 1. Plaintiff McDaniel is Damaged By HP’s Failure to Meet Its Three-Day Repair/Replace Promise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2. Whether HP’s Delay Was Reasonable is a Question of Fact Not Properly Decided on a Motion to Dismiss . . . . . . . . . . . . . . . . . . . . . . . . 11 III. Plaintiffs State a Claim for Breach of Express Warranty of Description . . . . . . . . . . . . 11 A. HP Created Express Warranties by Description by Describing Plaintiffs’ Computers as Being Compatible with the Advanced NVIDIA GeForce FX Go5700 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 B. HP’s Affirmations Form an Express Warranty Regardless of Scienter as to Falsity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 C. HP’s Written Warranty Cannot Disclaim HP’s Express Warranties by Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page2 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW ii D. Plaintiffs Need Only Notify HP that its Product Does Not Conform to its Description Within a Reasonable Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 E. Plaintiff Brothers Need Not Allege Privity of Contract . . . . . . . . . . . . . . . . . . . 17 IV. Plaintiffs Sufficiently State Claims For Relief Under The UCL . . . . . . . . . . . . . . . . . . . 18 A. Plaintiffs Properly Plead "Unlawful" Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . 18 B. Plaintiffs Properly Plead "Unfair" Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 V. The UCL Applies Nationwide to Wrongful Conduct Emanating from California . . . . . 20 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page3 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW iii TABLE OF AUTHORITIES PAGE(S) FEDERAL CASES Ab Avnet EMG v. Sierra Semiconductor Corp., No. C-93-0087, 1993 WL 280504 (N.D. Cal. July 9, 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Allen v. City of Beverly Hills, 911 F.2d 367 (9th Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Anunziato v. eMachines, Inc., 402 F. Supp.2d 1133 (C.D. Cal. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336 (9th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Cellars v. Pacific Coast Packaging, Inc., 189 F.R.D. 575 (N.D. Cal. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 17 Chavis v. Fidelity Warranty Serv., Inc., 415 F. Supp.2d 620 (D.S.C. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 9 Cmty. Tel. Servs., Inc. v. Dresser Indus., Inc., 586 F.2d 637 (8th Cir. 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Conley v. Gibson, 355 U.S. 41 (1957) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Dance v. U.S. Intern. Motors, 647 F. Supp. 1205 (D.D.C.1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Estate of Wood v. C.I.R., 909 F.2d 1155 (8th Cir.1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 F.T.C. v. Sperry & Hutchison Co., 405 U.S. 233 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Gilligan v. Jamco Develop. Corp., 108 F.3d 246 (9th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 3, 11 Graham v. Connor, 490 U.S. 386 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Jamil v. U.S. Postal Service, No. C 05-5121 RS, 2006 WL 988825 (N.D. Cal. Apr. 14, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Maxim Integrated Prods., Inc. v. Analog Devices, Inc., No. 94-16744, 1996 WL 117425 (9th Cir. Mar. 15, 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 McDonnell Douglas Corp. v. Thiokol Corp., 124 F.3d 1173 (9th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page4 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW iv McKnelly v. Sperry Corp., 642 F.2d 1101 (8th Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Pareto v. F.D.I.C., 139 F.3d 696 (9th Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Potler v. MCP Facilities Corp., 471 F. Supp. 1344 (D.C.N.Y. 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Rios v. City of Fresno, No. CVF-05*644REC/SMS, 2005 WL 1829614 (E.D. Cal. Jul. 25, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 17 Salyards v. Metso Minerals Indus., Inc., No. 1:04 CV 05798 OWW LJ, 2005 WL 3021959 (E.D. Cal. Nov. 10, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Standfacts Credit Servs., Inc. v. Experian Info. Solutions, Inc., 405 F. Supp.2d 1141 (C.D. Cal. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Telluride Mgmt. Solutions, Inc. v. Telluride Inv. Group, 55 F.3d 463 (9th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 United States v. Langley, 62 F.3d 602 (4th Cir.1995) (en banc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 United States v. Redwood City, 640 F.2d 963 (9th Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Western Recreational Vehicles, Inc. v. Swift Adhesives, Inc., 23 F.3d 1547 (9th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Witt v. United Cos. Lending Corp. (In re Witt), 113 F.3d 508 (4th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 STATE CASES A & M Produce Co. v. FMC Corp., 135 Cal. App. 3d 473 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Amelco v. City of Thousand Oaks, 27 Cal. 4th 228 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Burr v. Sherwin Williams Co., 42 Cal. 2d 682 (1954) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Camacho v. Automobile Club of So. Cal., 142 Cal. App. 4th 1394 (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Cel-Tech Comm., Inc. v. Los Angeles Cellular Tele. Co., 20 Cal. 4th 163 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Clothesrigger v. GTE Corp., 191 Cal. App. 3d 605 (1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page5 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW v Daugherty v. American Honda Motor Co., Inc., 144 Cal. App. 4th 824 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Daugherty v. Ashe, 413 S.E.2d 336 (Va. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Diamond Multimedia Systems v. Sup. Ct., 19 Cal. 4th 1036 (1999), . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Evraets v. Intermedics Intraocular, Inc., 29 Cal. App. 4th 779 (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Fieldstone Co. v. Briggs Plumbing Servs., 54 Cal. App. 4th 357 (1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Fundin v. Chicago Pneumatic Tool Co., 152 Cal. App. 3d 951 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 17 Hauter v. Zogarts, 14 Cal. 3d 104 (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 15, 17 Hewlett v. Squaw Valley Ski Corp., 54 Cal. App. 4th 499 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Kasky v. Nike, Inc., 27 Cal. 4th 939 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Keith v. Buchanan, 173 Cal. App. 3d 13 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13, 17 Klein v. Asgrow Seed Co., 246 Cal. App. 2d 87 (1966) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 17 Klein v. Earth Elements, Inc., 59 Cal. App. 4th 965 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 McKell v. Washington Mutual, Inc., 142 Cal. App.4th 1457 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Metowski v. Traid, 28 Cal. App. 3d 332 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 17 Norwest Mortgage, Inc. v. Sup. Ct., 72 Cal. App. 4th 214 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 People v. Ruhl, 168 Cal. App. 3d 311 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Porter v. Arthur Murray, Inc., 249 Cal. App. 2d 410 (1967) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Seely v. White Motor Company, 63 Cal. 2d 9 (1965) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page6 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW vi Stop Youth Addition, Inc. v. Lucky Stores, Inc., 17 Cal.4th 553 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Taylor v. Alfama, 481 A.2d 1059 (Vt. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 FEDERAL STATUTES 15 U.S.C. § 2301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 15 U.S.C. § 2310(d)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 15 U.S.C. § 2310(d)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 15 U.S.C. § 2310(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 28 U.S.C. § 1332 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 9 28 U.S.C. § 1337 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2005 U.S.C.C.A.N. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Pub. L. 109-2 § 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 STATE STATUTES Cal. Com. Code § 2313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-15 Cal. Com. Code § 2607 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 OTHER AUTHORITIES Fed. R. Civ. Proc. 15(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Fed. R. Civ. Proc. 8(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Matter of Fedders Corp., 93 F.T.C. 949 (1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page7 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 1 STATEMENT OF THE ISSUES 1. Where Plaintiffs allege HP warranted a product would be “free from defect” but sold the product containing a defect, does a claim for breach of warranty lie? 2. Where Plaintiffs allege HP warranted that it would repair or replace a product if it is not “free from defect,” but failed to adequately repair or replace the defective product during the warranty term, does a claim for breach of warranty lie? 3. Where HP made factual assertions about its computers which were the basis of the bargain, do those descriptions create express warranties? 4. Are allegations that HP produced a defective product, knowingly sold it in a defective condition, provided inadequate repairs or replacement under the terms of its express warranty, and charged consumers for repairs outside of warranty actionable under the UCL? 5. Whether this Court has jurisdiction over Plaintiffs’ Magnuson-Moss Warranty Act claims under the Class Action Fairness Act, regardless of whether the Magnuson-Moss jurisdictional requirements are met. SUMMARY OF FACTS AND ARGUMENT HP’s motion to dismiss ignores the claims and allegations as plead in the Second Amended Class Action Complaint, recasting and muddling them with each other and with Plaintiffs’ prior complaint. This approach is fatal to HP’s motion. HP misstates the basis for Plaintiffs’ written warranty claims. First, HP argues that Plaintiff Brothers’ claim arises from a repair request made after the Limited Warranty expired. To the contrary, Plaintiff alleges the breach is HP’s failure to adequately repair his computer when submitted during the warranty period. HP springboards from this factual error into an empty pool and argues that the claim is time barred. Clearly it is not. HP also argues that Plaintiff McDaniel cannot state a claim for failure to repair; however, McDaniel’s written warranty claims are not based on the repair, but rather HP’s failure to meet a promised, expedited repair deadline. McDaniel purchased an HP Care Pack Service Agreement promising three-day repairs under which he submitted his computer twice. The first time HP kept the computer for 29 days and the second time for 8 days. McDaniel paid extra for expedited service, but because of HP’s breach, he did not receive the benefit of that bargain. HP also argues that both Plaintiffs’ written warranty claims fail for lack of privity, but prevailing authority excepts written, express warranties from the privity requirement. Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page8 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 2 HP further muddles Plaintiffs’ claims in its approach to the warranty by description count, arguing that such claims cannot be established because scienter and reliance have not been met. This argument confuses the allegations of the current complaint with the previous, ignoring that Plaintiffs’ claims are for breach of warranty, not fraudulent conduct. Below, Plaintiffs clear the fog and show that HP’s factual assertions are, in fact, express warranties; that scienter is not an element for breach; and that reliance in this instance is presumed. HP next argues that because the complaint does not have 100 plaintiffs, this Court has no jurisdiction over the Magnuson-Moss Warranty Act claim; however, even HP acknowledges that the only court to have examined the question reached the opposite conclusion. Below, Plaintiffs provide a jurisdictional road map reconciling Magnuson-Moss with the Class Action Fairness Act, demonstrating Congress’ intent that this Court have jurisdiction over these claims. Finally, HP reiterates many of the arguments above with respect to Plaintiffs’ Unfair Competition Law claims, and adds an argument that Plaintiffs do not plead pre-sale knowledge of the alleged defect. These arguments must be denied for the same reasons stated above, and additionally, because HP simply ignores Plaintiffs’ allegations of pre-sale knowledge. HP’s efforts to argue the particulars of pre-sale knowledge raises factual questions which are not properly decided on a motion to dismiss. Plaintiffs properly allege each claim in their Second Amended Complaint, and HP’s does not show otherwise. Moreover, HP raises several issues of fact, but those issues are not properly resolved at the pleading stage, and cannot be the basis for dismissal. Because HP fails to show that Plaintiffs’ allegations do not state a claim, HP’s motion to dismiss must be denied. LEGAL STANDARD The Ninth Circuit disfavors granting Rule 12(b)(6) motions. Gilligan v. Jamco Develop. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (“The motion to dismiss for failure to state a claim is viewed with disfavor and is rarely granted.”). Indeed, the Ninth Circuit says dismissal is proper only in “extraordinary” circumstances. United States v. Redwood City, 640 F.2d 963, 966 (9th Cir. 1981). Accord Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (“A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page9 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 3 no set of facts in support of his claim which would entitle him to relief.”). “A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in the complaint.” See October 31, 2006 Order (Docket # 44) (“Order”) at 6:12-13. “The issue is not whether the non-moving party will ultimately prevail but whether it is entitled to offer evidence to support the claims asserted.” See Order at 6:15-16 (citing Gilligan, 108 F.3d at 249). Further, in evaluating HP’s motion, this Court must construe the complaint in the light most favorable to Plaintiffs (Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 338 (9th Cir. 1996)), and accept as true all allegations in the complaint and the reasonable inferences drawn therefrom. Pareto v. F.D.I.C, 139 F.3d 696, 699 (9th Cir. 1998). As long as Plaintiffs have pled a “short and plain” statement of their claims, the complaint should be upheld. See Fed. R. Civ. P. 8(a). In the unlikely event this Court finds Plaintiffs fail to state a claim, leave to amend should be “freely given.” Fed. R. Civ. Proc. 15(a); Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990). This is true even if this Court finds subject matter jurisdiction lacking. Telluride Mgmt. Solutions, Inc. v. Telluride Inv. Group, 55 F.3d 463, 466 (9th Cir. 1995). ARGUMENT I. Plaintiff Brothers States Claims for HP’s Breach of the Written, Express Limited Warranty As noted in this Court’s Order, “[u]nder California law, the elements required to establish a breach of contract are the existence and terms of the contract, plaintiff’s performance, defendant’s breach, and damages therefrom.” See Order at 12:8-10 (citing Amelco v. City of Thousand Oaks, 27 Cal. 4th 228, 243 (2002)). HP solely challenges the sufficiency of Plaintiff Brothers’ allegations describing HP’s breach, and thus, concedes the remaining elements. None of HP’s three arguments about Plaintiff’s breach allegations support dismissing the claims. Plaintiff sufficiently alleges a short and plain statement of these elements showing his entitlement to relief. See Fed. R. Civ. P. 8. Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page10 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 4 A. Plaintiff Brothers Pleads Two Breaches Occurring During the Warranty Period Plaintiff Brothers’ claims for HP’s breach of the Limited Warranty arise from HP’s promise to provide a product “free from defects in material or workmanship under normal use during the Limited Warranty Period,” and its promise that “[d]uring the Limited Warranty Period, HP will repair or replace the defective component parts or the hardware product.” See SAC ¶¶ 129, 130. Plaintiff alleged that HP breached its promises by (a) failing to provide a product free from defect (see SAC ¶¶ 16-19, 118), and (b) failing to adequately repair the defect as required by the Limited Warranty. See SAC ¶¶ 44, 45, 135. Ignoring the Rule 12(b)(6) standard requiring a defendant to accept as true all well-plead facts, HP recasts these facts to favor dismissal. First, HP incorrectly asserts that Plaintiff’s claims arise from a single event - HP’s refusal to repair his notebook after the expiration of the warranty. See HP Mem. at 3:7-8; 8:5-8. While that event is plead in the Second Amended Complaint, it is not the basis for Plaintiff’s claim. Rather, it demonstrates that the in-warranty repair was indeed inadequate as alleged in paragraphs 44, 45 and 135, and supports Plaintiffs’ Unfair Competition Law claim. The basis of Plaintiff’s claim is that HP’s in-warranty repair was inadequate such that HP breached its promise to “repair or replace” Plaintiff Brothers’ computer. Specifically, Brothers alleges that in August 2005, during the warranty period, his display appeared corrupt, began showing vertical red lines, went blank, and ultimately the notebook computer would not turn on. See SAC ¶ 42. Plaintiff contacted HP and requested a repair or replacement. See SAC ¶ 43. HP accepted the warranty request, but instead of repairing the computer, HP replaced the defective motherboard with another identically defective motherboard. See SAC ¶ 44. This “repair” was inadequate because the computer still suffered from the same defect - an inability to dissipate the heat generated by its own components. See SAC ¶¶ 30 n. 2, 44, 45. HP’s inadequate repair is a breach of the Limited Warranty. See SAC ¶ 135. Because the Court was unclear whether Plaintiff complained of inadequate repairs in the initial complaint (see Order at 12:14-15), Plaintiff clarified in the Second Amended Complaint Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page11 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HP cites Daugherty v. American Honda Motor Co., Inc., 144 Cal. App. 4th 824 (2006)1 to support its assertion that Plaintiffs’ warranty claims are contractually time-barred. Because Daugherty is currently on appeal, the opinion is no longer citable precedent. See Declaration of Charles D. Marshall ("Marshall Decl."), Ex. 2; L.R. 3-4(e); Cal. R. Ct. 24; People v. Ruhl, 168 Cal. App. 3d 311, 318 n.8 (1985). In fact, it was not citable prior to HP filing its motion. In any PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 5 that his claim is indeed for inadequate repairs. See SAC ¶ 20(a) (“HP simply swaps the old one out with a new one, resetting the defect. This is not an adequate repair under the warranty.”); ¶ 30 n. 2 (“If HP replaces the nVidia 5700 motherboard with another nVidia 5700 motherboard, the defect has not been fixed and will continue. Replacing the motherboard only masks and resets the defect . . . .”); ¶ 45 (“Replacing Plaintiff’s or any other Class members’ motherboard with another identical motherboard is not an adequate repair under the warranty.”); ¶ 73 (“HP breached the written warranty by . . . failing to adequately repair or replace the computers . . . .”). These allegations must be taken as true. Pareto, 139 F.3d at 699. Conversely, HP’s summary declaration that it “repaired” Plaintiff’s computer must be rejected. The adequacy of HP’s repair is not a matter that can be declared via fiat, but is a factual question. Porter v. Arthur Murray, Inc., 249 Cal. App. 2d 410, 421 (1967) (“Whether or not there is a material breach of contract is generally a question of fact.”). Simply put, repair means repair; not inadequately repair, temporarily repair, or partially repair, but the question of whether HP’s actions - replacing a defective part with another defective part - constitutes a repair to satisfy its warranty obligation must be decided by a finder of fact. For this reason, HP’s motion must be denied. B. Plaintiff Brothers’ Breach of Written Limited Warranty Claims are Not Time Barred As discussed above, Plaintiff Brothers asserts two breaches of HP’s Limited Warranty: (a) that HP failed to provide a product free from defect at purchase (see SAC ¶¶ 16-19, 118), and (b) that HP breached its Limited Warranty because it failed to provide an adequate repair during the warranty period. See SAC ¶¶ 44, 45, 135. Both claims clearly arise from HP’s conduct occurring during the warranty period, but surprisingly, HP argues that Plaintiff’s claims are time barred as arising outside the warranty. HP relies on Anunziato v. eMachines, Inc., 402 F.1 Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page12 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 event, Daugherty is readily distinguishable because the plaintiffs there discovered their defects well after the limited warranty expired. Contrastingly, Plaintiffs here discovered HP's breach during the warranty period and promptly notified HP, but HP did not adequately or timely repair their computers as promised. See SAC ¶¶ 32, 43, 44, 45, 46, 52, 54, 56, 57. The California Supreme Court holds that when a manufacturer fails to correct a defect in the manner promised it is liable for breach of warranty. Seely v. White Motor Co., 63 Cal. 2d 9, 14 (1965). PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 6 Supp.2d 1133 (C.D. Cal. 2005) for the premise that “a breach of express warranty claim is contractually time barred when a malfunction occurs after the expiration of the warranty term.” See HP Mem. at 7:16-19. Plaintiffs do not agree with Annunziato or that premise. See section VI(A) of Plaintiff’s opposition to HP’s first motion to dismiss, Docket # 34. Regardless, for the reasons discussed, HP’s reliance is misplaced, as the breaches occurred prior to the expiration of the Limited Warranty. Accordingly, HP’s time-bar arguments fail. C. Privity of Contract is Not Required Here As a threshold matter, it is important to note that HP’s privity argument is only directed at Plaintiff Brothers. Plaintiff McDaniel purchased his computer directly from HP. See SAC ¶ 49. While there is room to debate whether California dispensed with the privity requirement in actions for breach of express warranty (compare Seely v. White Motor Company, 63 Cal. 2d 9, 14 (1965) (“Since there was an express warranty to plaintiff in the purchase order, no privity of contract was required.”) and Hauter v. Zogarts, 14 Cal. 3d 104 n. 8, 115 (1975) (“Privity is not required for an action based upon an express warranty.”) with Cellars v. Pacific Coast Packaging, Inc., 189 F.R.D. 575, 580 (N.D. Cal. 1999)(“[T]he Court concludes that privity of contract remains a requirement in express warranty actions.”)), resolving this debate in Plaintiff’s favor is not necessary to overrule HP’s motion because Plaintiff’s action falls within an exception that HP’s own authorities respect. Both Cellars and Burr v. Sherwin Williams Co., 42 Cal. 2d 682 (1954), acknowledge that privity is not required where a writing by the manufacturer forms the basis of the express warranty. See Burr, 42 Cal. 2d at 696 (recognizing privity exception where manufacturer makes representations in labels or advertising material); Cellars, 189 F.R.D. at 579 (“written warranties Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page13 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HP attached what it purports to be a true and correct copy of the Service Contract to its2 motion; however, HP only included part of the Service Contract. See a true and correct copy of the entire Service Contract attached as Exhibit 1 to the Declaration of Charles D. Marshall. HP’s Exhibit A leaves out several important clauses such as those stating the Service Contract is for “repair or replacement” (see Ex. 1 at 5, ‘Service Overview”), under which HP would arrange a “repair or exchange to meet the service level response time” (see Ex. 1 at 1, “How Do I Get Support ,” ¶ 3), defined as “3-business days . . . measured from the time of logging the call to delivering the repaired unit to the customer.” See Ex. 1 at 2, (“Service Description”); see also SAC ¶ 84. PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 7 similar to advertisements and labels . . . arguably fall within Burr’s exception to the privity rule.”). HP’s Limited Warranty Statement, which is included with every computer, fits the category of a writing by the manufacturer sufficient to negate the privity requirement. Accord Ab Avnet EMG v. Sierra Semiconductor Corp., No. C-93-0087, 1993 WL 280504, * 5 (N.D. Cal. July 9, 1993) (noting privity exception when purchaser is consumer). Moreover, the Service Contracts are unquestionably directly entered into between consumers and HP.2 II. Plaintiffs Brothers and McDaniel State Claims under Magnuson-Moss HP argues that Plaintiffs’ Magnuson-Moss Warranty Act (“Mag-Moss”) claims should be dismissed because Plaintiffs do not meet the 100 named plaintiffs Mag-Moss jurisdictional requirement, and because Plaintiffs are unable to maintain state law breach of warranty claims. These arguments fail because (1) this Court’s jurisdiction is pursuant to the Class Action Fairness Act, and (2) Plaintiffs do sufficiently plead state law breach of warranty claims. A. The 100 Named Plaintiff Requirement Does Not Apply Because Jurisdiction is Under the Class Action Fairness Act Mag-Moss provides for federal subject matter jurisdiction only if the total amount in controversy is at least $50,000, with a minimum of $25 for each individual claim, and the number of named plaintiffs is at least 100. See 15 U.S.C. 2310(d)(3). The Act's jurisdictional provisions generally serve two purposes: (1) to avoid trivial or minor actions being brought as class actions in the federal district courts; and, (2) to overcome the absence of an amount in controversy requirement in 28 U.S.C. § 1337, since the Mag-Moss is an act regulating commerce. Dance v. U.S. Intern. Motors, 647 F. Supp. 1205, 1207 (D.D.C.1986) (quoting Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page14 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 8 Novosel v. Northway Motor Car Corp., 460 F. Supp. 541 (N.D.N.Y.1978) (citing H.R.Rep. No. 1107, 93d Cong., 2d Sess. 42 (1974), reprinted in 1974 U.S.C.C.A.N., 7702, 7724)). The Class Action Fairness Act (“CAFA”), on the other hand, “amends 28 U.S.C. § 1332, the federal diversity statute, and vests original jurisdiction for class actions in federal court where there is minimal diversity and the amount in controversy exceeds $5,000,000.” Chavis v. Fidelity Warranty Serv., Inc., 415 F. Supp.2d 620, 625 (D.S.C. 2006) (citing 29 U.S.C § 1332(d)). CAFA became effective for all actions “commenced on or after” February 18, 2005. Pub. L. 109-2 § 9. In passing CAFA, Congress found that, “[o]ver the past decade, there have been abuses of the class action device that have . . . undermined public respect for our judicial system . . . [and] adversely affected interstate commerce.” Chavis, 415 F. Supp.2d at 625 (quoting Pub. L. 109-2 110 Stat. 4). The Senate Judiciary Committee noted CAFA's tremendous impact: Pursuant to new subsection 1332(d)(6), the claims of the individual class members in any class action shall be aggregated to determine whether the amount in controversy exceeds the sum or value of $5,000,000 (exclusive of interest and costs). The Committee intends this subsection to be interpreted expansively. If a purported class action is removed pursuant to these jurisdictional provisions, the named plaintiff(s) should bear the burden of demonstrating that the removal was improvident (i.e., that the applicable jurisdictional requirements are not satisfied). And if a federal court is uncertain about whether “all matters in controversy” in a purported class action “do not in the aggregate exceed the sum or value of $5,000,000,” the court should err in favor of exercising jurisdiction over the case. By the same token, the Committee intends that a matter be subject to federal jurisdiction under this provision if the value of the matter in litigation exceeds $5,000,000 either from the viewpoint of the plaintiff or the viewpoint of the defendant, and regardless of the type of relief sought (e.g., damages, injunctive relief, or declaratory relief). Chavis, 415 F. Supp.2d at 625-26 (quoting S. Rep. No. 109-14 at 42 (2005), 2005 U.S.C.C.A.N. 3, 40 (emphasis added)). The Committee continued by summarizing, “[o]verall, new section 1332(d) is intended to expand substantially federal court jurisdiction over class actions . . . [and] its provisions should be read broadly, with a strong preference that interstate class actions should be heard in a federal court if properly removed by any defendant.” Id. at 626. Reconciling CAFA jurisdiction with Mag-Moss, the Chavis court made the following analysis: Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page15 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 9 It is firmly entrenched that Congress is presumed to enact legislation with knowledge of the law. Witt v. United Cos. Lending Corp. (In re Witt), 113 F.3d 508, 513 (4th Cir. 1997) (citing United States v. Langley, 62 F.3d 602, 605 (4th Cir.1995) (en banc). The practical effect of this canon of statutory interpretation is that “absent a clear manifestation of contrary intent, a newly-enacted or revised statute is presumed to be harmonious with existing law and its judicial construction.” Id. (quoting Estate of Wood v. C.I.R., 909 F.2d 1155, 1160 (8th Cir.1990)). CAFA was passed with the clear intention of expanding “federal court jurisdiction over class actions . . . .” S. Rep. No. 109-14 at 42 (2005), 2005 U.S.C.C.A.N. 3, 40. Under the established framework for statutory interpretation, it is to be assumed that Congress was aware of [CAFA’s] strict provisions for maintaining a class-action in federal court. Congress was also presumed to be aware of section 2310(d)(1)(A) of the [Mag-Moss] Act and its recognition that jurisdiction is appropriate under the [Mag-Moss] Act “in any court of competent jurisdiction in any State or the District of Columbia.” 15 U.S.C. § 2310(d)(1)(A). Accordingly, CAFA's grant of federal jurisdiction over any class-action in which the matter in controversy exceeds the sum or value of $5,000,000 and where any member of a class of plaintiffs is a citizen of a state different from any defendant necessarily includes qualifying class-actions filed pursuant to the [Mag-Moss] Act that fail to meet the strict provisions of 15 U.S.C. § 2310(d)(1)(B). CAFA provides an alternate basis by which federal courts may become courts of “competent jurisdiction” under 15 U.S.C. § 2310(d)(1)(A). Chavis, 415 F. Supp.2d at 626 (emphasis in added). Thus, this Court has jurisdiction over Plaintiffs’ claims under CAFA, given that “the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interests and costs, and is a class action in which the Plaintiffs are citizens of states different from Defendant,” and “[b]ased on the nature of the product and its distribution, Plaintiffs are informed and believe that less than one-third of the members of the proposed class are citizens of California.” See SAC ¶ 4; 28 U.S.C. § 1332. Accordingly, Plaintiffs’ claims cannot be dismissed for a failure to meet the Mag-Moss jurisdictional requirements. B. Plaintiff Brothers Properly States a Magnuson-Moss Claim Premised On a Breach of Written Warranty Defendant’s only remaining argument against Plaintiff Brothers’ Mag-Moss claim is that he fails to state a breach of warranty claim under California state law. For the reasons discussed in Section I above, Brothers does state claims for breach of warranty under California law, and Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page16 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Instead, HP offered to downgrade Plaintiff’s computer without any compensation for3 the loss in value. See SAC ¶¶ 54, 58. PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 10 thus, also states claims under 15 U.S.C. § 2301 et seq. C. Plaintiff McDaniel Properly States a Magnuson-Moss Claim on a Breach of the Service Contract Plaintiff McDaniel sufficiently alleges a cause of action for HP’s breach of its Care Pack Service Agreement (“Service Contract”). Plaintiff McDaniel, and members of the Service Contract Subclass, purchased a three-year Service Contract from HP in which HP promised to repair and/or replace and return defective products within three business days. See SAC ¶¶ 39, 50, 84. In purchasing the Service Contract, McDaniel and the Subclass bargained for expedited repairs, but HP did not honor its promise to repair or replace the defective zd7000 computers within the three-day period. See SAC ¶¶ 85, 86. HP argues that Plaintiff McDaniel has not plead any injury or damage, and that HP is excused from breaching its three-day repair or replace promise due to circumstances “beyond its reasonable control.” See HP Mem. 9-10. HP is wrong on both counts. 1. Plaintiff McDaniel is Damaged By HP’s Failure to Meet Its Three- Day Repair/Replace Promise HP argues that Plaintiff McDaniel lacks injury or damage because his “computer now functions free of problems.” See HP Mem. at 9:14-16. Plaintiff McDaniel does not agree that his computer functions problem free; however, that issue is irrelevant because the injury of which Plaintiff complains is HP’s failure to meet the benefit of the bargain - repairing or exchanging his defective computer within three business days. SAC ¶¶ 50 - 60, 86, 87, 89. Plaintiff submitted his computer to HP twice under the Service Contract. The first time, HP did not return the computer for 29 days. SAC ¶ 56. The second time, HP did not return the computer for 8 days. SAC ¶ 60. HP neither met the three day repair deadline, nor offered to replace the computer to meet the deadline as required under the Service Contract. SAC ¶¶ 85, 86. Plaintiff3 was entitled to a repair or exchange within three business days, but Plaintiff did not receive the Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page17 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 11 benefit of this bargain. He, thus, states a claim for breach of the Service Contract. 2. Whether HP’s Delay Was Reasonable is a Question of Fact Not Properly Decided on a Motion to Dismiss HP next argues that the terms of the Service Contract excuse HP from its three-day repair obligation due to a “parts shortage.” See HP Mem. at 10:10-14. HP points to a Service Contract provision stating “HP will not be liable for performance delays or for nonperformance due to causes beyond its reasonable control.” See HP Mem. at 10:14-17 (emphasis added). Whether a parts shortage existed is a factual matter outside the four-corners of the Complaint, and not a proper basis for dismissal. Gilligan,108 F.3d at 249. Similarly, whether HP’s failure to meet its obligation was “beyond its reasonable control” is an issue of fact, and not a proper basis for dismissal. Rios v. City of Fresno, No. CVF-05*644REC/SMS, 2005 WL 1829614 at *7 (E.D. Cal. Jul. 25, 2005) (“Reasonableness traditionally is a question of fact for the jury” (citing Graham v. Connor, 490 U.S. 386, 297 (1989)). If, in fact, there was a parts shortage, Plaintiffs allege that HP caused it and impermissibly bootstrapped the shortage to avoid its obligations. See ¶ 152 (c) (“Using a self-created shortage of nVidia 5700 equipped motherboards to force the Plaintiff and Class members into downgraded GPUs”); ¶ 152([d] (“Using a self-created shortage of nVidia 5700 equipped motherboards to excuse itself from its own three-day repair or replace promise under the HP Care Pack Service Contract.”). Regardless, whether HP’s delay was reasonable or whether the delay was of HP’s own making is not a dispute amenable to a motion to dismiss. Discovery is needed to determine the full scope of HP’s influence in the parts shortage, and as such HP’s motion to dismiss must be denied. III. Plaintiffs State a Claim for Breach of Express Warranty of Description A. HP Created Express Warranties by Description by Describing Plaintiffs’ Computers as Being Compatible with the Advanced NVIDIA GeForce FX Go5700 Under California Commercial Code § 2313(b), “[a]ny description of goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.” Manufacturers create express warranties through descriptions in brochures, invoices, owner’s manuals, advertisements, as well as in “technical specifications, blueprints, Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page18 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 12 and the like.” Cal. Com. Code § 2313, Official Commentary, Cmt. 5. An express warranty by description not only promises that the product is what it is described to be, but also that the product works as described. See, e.g., Metowski v. Traid, 28 Cal. App. 3d 332, 336 (1972) (“electronic color camera” warrants that camera takes color pictures); McKnelly v. Sperry Corp., 642 F.2d 1101, 1106 (8th Cir. 1981) (“general purpose winch” warrants that winch is suitable for lifting persons and materials); Taylor v. Alfama, 481 A.2d 1059, 1060 (Vt. 1984) (car described as being in “mint condition” warrants that car functions in “mint condition”); Potler v. MCP Facilities Corp., 471 F. Supp. 1344, 1351 (D.C.N.Y. 1979) (manufacturer breached express warranty that paint could be applied underwater when it adhered for only a few months). A seller’s description “is presumptively part of the basis of the bargain, and the burden is on the seller to prove that the resulting bargain does not rest at all on the representation.” Keith v. Buchanan, 173 Cal. App. 3d 13, 23 (1985). See also Cal. Com. Code § 2313, Official Commentary, Cmt. 3, 8 (seller’s statements form basis of the bargain “unless good reason is shown to the contrary” . . . any fact “which is to take such affirmations, once made, out of the agreement requires clear affirmative proof.”). Here, Plaintiffs allege that HP expressly warranted, through its technical and product specifications, that Plaintiffs’ computers are compatible with the “NVIDIA GeForce FX Go5700," an advanced GPU offering “the most cinematic graphics and special effects” - capabilities typically only found in desktop systems at the time. See SAC ¶¶ 9, 95-97. It is understood in HP’s trade that “the most cinematic graphics and special effects” describes a GPU’s ability to render 2D and 3D graphics, utilize advanced frame rates for smooth play back and process information fast enough to provide the promised multi-media experience in a way that is superior to a lesser GPU. Thus, HP creates an objectively verifiable express warranty as to Plaintiffs’ computers’ cinematic capabilities. While it is true that Plaintiffs do not allege that their computers were not truly equipped with the GPU in question, they do allege that, contrary to HP’s express warranty, the GPU is not compatible with their computers, fails to function as warranted, and eventually causes “repeated and unexpected shutdowns, crippled graphics capabilities, and/or permanent damage to the motherboard resulting in a dead computer.” See Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page19 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 13 SAC ¶¶ 18, 100. Additionally, Plaintiffs allege that HP created an express warranty by describing Plaintiffs’ computers as “notebook PCs” featuring “mobile freedom,” meaning that the computers will function in a variety of settings. See SAC ¶¶ 12, 101, 102. HP breached this warranty because the defective GPU renders Plaintiffs’ computers incapable of being used as functional portable notebooks. See SAC ¶ 104. Plaintiffs also allege that HP described the zd7000 series Intel Premium 4 processor and an 800 MHZ system bus as ensuring “improved responsiveness and performance.” See SAC ¶ 106. HP breached this warranty because Plaintiffs’ computers do not have improved responsiveness and performance promised, as Plaintiffs cannot utilize the processor and system bus due to the defect. See SAC ¶ 109. HP argues that it cannot be liable for these express warranties because “neither Mr. Brothers nor Mr. McDaniel allege that they have read” the statements giving rise to the warranty, implying that Plaintiffs must prove reliance. See HP Mem. at 13:4. HP also asserts that Plaintiffs must allege “how the[] statements formed the basis of the bargain.” See HP Mem. at 13:5. The Official Commentary to § 2313, however, makes clear that “no particular reliance on such statements need be shown in order to weave them into the fabric of the agreement.” Cal. Com. Code § 2313, Official Commentary, Cmt. 3. Instead, it is presumed that the statements “formed the basis of the bargain, or merely a factor or consideration inducing the buyer to enter the bargain.” Keith, 173 Cal. App.3d at 23. See also Daugherty v. Ashe, 413 S.E.2d 336, 339 (Va. 1992) (a seller’s technical description of jewelry is part of the basis of the bargain even though buyer was not aware of it at purchase). Thus, it is HP’s burden to prove that statements did not form the basis of the bargain. See Keith, 173 Cal. App.3d at 23. (“the burden is on the seller to prove that the resulting bargain does not rest at all on the representation”). Furthermore, the question of “whether representations formed a part of the basis of the parties’ bargain is a question of fact,” which cannot be resolved pursuant to a motion to dismiss. McDonnell Douglas Corp. v. Thiokol Corp., 124 F.3d 1173, 1176 (9th Cir. 1997). See also Cal. Com. Code § 2313, Official Commentary, Cmt. 3 (the issue of whether a seller’s statement is not Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page20 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 14 part of the basis of bargain “normally is one of fact”). Moreover, under the liberal pleading requirements of Rule 8, Plaintiffs need not allege “how” the statements form a part of the basis of the bargain; instead, Plaintiffs need only allege that the statements did form a part of the basis of the bargain. See Jamil v. U.S. Postal Service, No. C 05-5121 RS, 2006 WL 988825 at *1 (N.D. Cal. Apr. 14, 2006) (citing Jackson v. Marion County, 66 F.3d 151, 153 (7th Cir. 1995) (“the Federal Rules of Civil Procedure do not draw distinctions between pleading facts, ultimate facts, or conclusions of law so long as the conclusions provide defendant with at least minimal notice of the claim”)). Plaintiffs have clearly done so. See SAC ¶¶ 98, 103, 107. B. HP’s Affirmations Form an Express Warranty Regardless of Scienter as to Falsity HP muddles Plaintiffs’ prior UCL claims with their current breach of warranty claims in arguing that the Court held (1) that HP’s representations constitute “non-actionable puffery” and (2) that Plaintiffs have not plead allegations “supporting an inference of falsity at the time made.” See HP Mem. at 12:1. HP’s first assertion is simply false: Plaintiffs base their claim on representations that the Court specifically found to be factual assertions. See Order at 8:15 (“that the Pavilion contained a NVIDIA GeForce card is a factual assertion;” and Order at 8:17 (“the improved responsiveness and performance of the processor and system bus . . . is a factual assertion.”). As factual assertions, HP’s representations create express warranties. See Cal. Com. Code § 2313. Further, the Court’s determination that Plaintiffs had not plead allegations “supporting an inference of falsity” was made in connection with Plaintiffs’ prior UCL claim alleging that HP’s statements were false representations. See Order at 9 n.4. There is no scienter requirement, however, in breach of warranty claims. That is, a manufacturer’s factual representations create express warranties whether it knows those representations to be true or not. Thus, HP’s arguments are without merit. C. HP’s Written Warranty Cannot Disclaim HP’s Express Warranties by Description Contrary to HP’s assertions, HP cannot create an express warranty, promising that Plaintiffs’ computers are compatible with one of the highest performing graphics cards available, Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page21 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 15 and then subsequently negate that warranty. In Fundin v. Chicago Pneumatic Tool Co., 152 Cal. App. 3d 951, 957 (1984), defendant expressly warranted in its sales brochure that its drill rig would drill to depths of 1,800 feet. Defendant argued that this warranty was effectively disclaimed by a clause in the brochure providing “[t]he only warranty applicable is our standard written warranty.” Id. The court disagreed, explaining that “when a product has been expressly described by its manufacturer as having certain detailed capacities under certain conditions, it would be both unfair and unreasonable to construe the [disclaimer] language . . . as negating the express description . . . .” Id. at 958. Likewise, in A & M Produce Co. v. FMC Corp., 135 Cal. App. 3d 473, 484 n.10 (1982), defendant expressly warranted that its weight-sizing machine would pack 1200-1250 cartons per hour. The court determined that defendant’s conspicuous warranty disclaimer did not invalidate defendant’s warranty because “an express warranty takes precedence over an attempted disclaimer.” Id. See also Cmty. Tel. Servs., Inc. v. Dresser Indus., Inc., 586 F.2d 637, 640, 642 (8th Cir. 1978) (express warranties provided in promotional materials are not cancelled or superceded by technical specifications in a contract notwithstanding disclaimers). The California Commercial Code supports this view. Section 2316 provides “[w]ords or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but . . . negation or limitation is inoperative to the extent that such construction is unreasonable.” The Official Commentary explains that this section is designed to protect buyers “from unexpected and unbargained language of disclaimer by denying effect to such language when inconsistent with language of express warranty . . . .” The Commentary makes clear that disclaimers of express warranty are strongly disfavored. See Cal. Com. Code § 2313, Official Commentary, Cmt. 1, 4 (express warranties “go so clearly to the essence of the bargain that words of disclaimer in form are repugnant” to them and thus “cannot be given literal effect”). Pursuant to § 2316, California courts hold that “any disclaimer or modification [of an express warranty] must be strictly construed against the seller.” Hauter, 14 Cal.3d at 119. See also Fundin, 152 Cal. App. 3d at 958 (“[s]trict construction against the person who has both Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page22 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 16 warranted a particular fact to be true and then attempted to disclaim the warranty is especially appropriate in light of the fact that a disclaimer of express warranty is essentially contradictory”). Further, unless the disclaimer is actually negotiated or is at least brought to the consumer’s attention prior to sale, a form contract disclaimer is invalid. See, e.g., Western Recreational Vehicles, Inc. v. Swift Adhesives, Inc., 23 F.3d 1547, 1554 (9th Cir. 1994) (explaining “disclaimer made after a sale is completed cannot be effective because it was not part of the bargain between the parties” and the parties “never discussed, much less negotiated, the disclaimers”); Klein v. Asgrow Seed Co., 246 Cal. App. 2d 87, 93 n.3 (1966) (finding a disclaimer invalid in part because it was “never brought to the attention of the buyer prior to the completion of the sale”). Here, Plaintiffs allege that HP created express warranties by describing Plaintiffs’ computers as having special graphics features as a result of being compatible with a high performance graphics card; through its description of Plaintiffs’ computers as being mobile notebook PCs; and through its statement that the processor and system bus ensured improved responsiveness and performance. See SAC ¶¶ 9, 12, 95, 96, 97, 101, 102, 106. HP broke its promise when the graphics cards proved to be incompatible with Plaintiffs’ computers, rendering them inoperable. See SAC ¶¶ 18, 100, 104, 109. HP’s subsequent disclaimers do not invalidate its express warranties, for such a result would undermine the purpose of § 2316 to protect Plaintiffs from unexpected, unfair, and unbargained for language that, if construed the way HP insists, would essentially deny Plaintiffs the benefit of their bargains with HP. Defendant relies on Salyards v. Metso Minerals Indus., Inc., No. 1:04 CV 05798 OWW LJ, 2005 WL 3021959 (E.D. Cal. Nov. 10, 2005), wherein the court states that § 2316 allows for limitations of express or implied warranties. Id. at *9. That case, however, did not involve an express warranty that was irreconcilably inconsistent with a unilateral written disclaimer. See id. Instead, the court found the disclaimer inapplicable because it was not part of the contract between the defendant and the end-user plaintiff. Id. at *10. Thus, Salyards has no bearing on this case. Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page23 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 See, e.g., Fundin, 152 Cal. App. 3d at 957.4 SAC ¶ 105. 5 PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 17 D. Plaintiffs Need Only Notify HP that its Product Does Not Conform to its Description Within a Reasonable Time HP’s express warranty by description exists apart from its Limited Warranty, and the written warranty has no bearing on it. See, e.g., Klein, 246 Cal. App. 2d at 97 (written warranty with delivered products does not relieve seller of liability for breach of a previously formed warranty by description). Therefore, neither Plaintiffs nor class members are required to notify HP of the product’s failure to conform within one year. Rather, notice need only be given “within a reasonable time” after discovery of HP’s breach. See Cal. Com. Code § 2607; Metowski, 28 Cal. App. 3d at 339. This is a question of fact unless reasonable minds cannot differ. Fieldstone Co. v. Briggs Plumbing Servs., 54 Cal. App. 4th 357, 370 (1997). As a question of fact, whether Plaintiff Brothers’ notice was provided within a reasonable time cannot be resolved on a motion to dismiss. Rios, 2005 WL 1829614 at *7 (“Reasonableness traditionally is a question of fact for the jury.”). If this issue were resolved, however, it should be resolved in Plaintiff Brothers’ favor because, both times, he promptly contacted HP after his computer failed. See SAC ¶¶ 43, 47. E. Plaintiff Brothers Need Not Allege Privity of Contract Privity is not required where a manufacturer creates a warranty by description. Cellers, 189 F.R.D. at 579 (citing Burr, 42 Cal.2d at 696); Evraets v. Intermedics Intraocular, Inc., 29 Cal. App. 4th 779, 789 n.4 (1994) (citing Seely, 63 Cal.2d at 9); Hauter, 14 Cal.3d at 115 n.8. Some courts hold that a buyer must rely on the manufacturer’s representations to fall under this exception, but actual reliance on a manufacturer’s express warranties need not be shown by the4 buyer and instead is presumed. See Keith, 173 Cal. App. 3d at 18. Thus, even if Plaintiff Brothers were required to show that he relied on HP’s product descriptions, such reliance is reflected through Plaintiff Brothers’ purchase of his computer, which is presumed to have been5 based on HP’s descriptions. See id., at 23. Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page24 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Maxim Integrated Prods., Inc. v. Analog Devices, Inc., No. 94-16744, 1996 WL 1174256 (9th Cir. Mar. 15, 1996) is not inconsistent with this holding. There, the court simply held that Maxim could not avoid summary judgment by recasting insufficient antitrust claims against a competitor as UCL claims. UCL jurisprudence has since evolved to allow such "antitrust lite" claims. See Cel-Tech Comm., Inc. v. Los Angeles Cellular Tele. Co. 20 Cal. 4th 163, 186-87 (1999). PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 18 IV. Plaintiffs Sufficiently State Claims For Relief Under The UCL A. Plaintiffs Properly Plead "Unlawful" Conduct HP's arguments as to Plaintiffs' "unlawful" claims can be rejected in short order. First, for the reasons discussed in Section II above, Plaintiffs sufficiently state claims under Mag-Moss. Thus, they sufficiently state "unlawful" claims predicated on Mag-Moss. Second, it is well- established that a private right of action under a predicate statute is not necessary to rely on that statute to state a claim for "unlawful" conduct. See Kasky v. Nike, Inc., 27 Cal. 4th 939, 950 (2002). Thus, even if HP is correct that the California Commercial Code does not create an independent cause of action (a proposition for which HP cites no authority), violation of the Commercial Code can, nonetheless, form the basis of an "unlawful" claim. Cf Stop Youth Addition, Inc. v. Lucky Stores, Inc., 17 Cal.4th 553, 573 (1998) (violation of criminal statute sufficient predicate for "unlawful" violation); Hewlett v. Squaw Valley Ski Corp., 54 Cal. App. 4th 499, 526 (1997) (violation of administrative regulation sufficient predicate for "unlawful" violation). Third, engaging in deceptive and unfair practices vis-a-vis consumers in violation of Section 5 of the FTC Act is "unlawful," even in the absence of an allegation of an unreasonable restraint of trade. As the United States Supreme Court held, Section 5 may proscribe practices as unfair or deceptive in their effect upon consumers regardless of their nature or quality as competitive practices or their effect on competition. See F.T.C. v. Sperry & Hutchison Co., 405 U.S. 233, 239-245 (1972). In fact, the F.T.C. has used its power, for example, to require a6 manufacturer who knew or had reason to know of a latent defect to undertake a comprehensive remedial program of the sort Plaintiffs seek here, even though the manufacturer was not alleged to have restrained competition. See In the Matter of Fedders Corp., 93 F.T.C. 949 (1979) Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page25 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Moreover, Plaintiffs sufficiently plead the elements of a Section 5 violation. Compare7 Camacho, 142 Cal. App. 4th at 1403 (setting forth elements) with SAC ¶ 144-46. HP also urges the Court to dismiss Plaintiffs' UCL claims for their failure to plead pre-8 sale knowledge of the defect, relying solely on Klein v. Earth Elements, Inc., 59 Cal. App. 4th 965 (1997). See HP Mem. at 16:9-10. First, Klein is a summary judgment opinion, not a test of PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 19 (requiring manufacturer to offer non-defective replacement parts without charge, extend a full warranty on the replacement part, reimburse those who paid to repair the defect, notify all current and past owners to alert them of the defect and remedial program, and advertise the remedial program). Underscoring the propriety of Plaintiffs' use of Section 5 as a predicate statute, one California Court of Appeal recently adopted the elements of a Section 5 violation for evaluating "unfair" conduct under the UCL. See Camacho v. Automobile Club of So. Cal., 142 Cal. App. 4th 1394, 1403 (2006). Because HP solely challenges the propriety of Plaintiffs using Section 5 as an "unlawful" predicate and not the sufficiency of Plaintiffs' allegations satisfying its elements, and its position clearly is not well-taken, Plaintiffs' pleading must be upheld.7 B. Plaintiffs Properly Plead "Unfair" Conduct HP attacks Plaintiffs' "unfair" claims by declaring that it repaired Plaintiff Brothers' computer, so there was nothing "unfair" about its conduct. See HP Mem. at 17:17. As discussed, Plaintiffs specifically plead that HP did not repair Plaintiff Brothers' computer. See SAC ¶¶ 44, 45, 135 It simply swapped one defective part with another. See id. As such, HP's first argument must fail. HP's second argument is that Plaintiff McDaniel's computer is currently functioning, so HP has done nothing "unfair." See HP Mem. at 17:20. This is a non-sequitur to the conduct Plaintiffs challenge as unfair, however. See SAC ¶ 152. HP simply posits no basis for dismissing Plaintiffs challenge to HP downgrading motherboards without compensating for the difference in value (see id., ¶ 152(b)), using a self-created shortage of parts to avoid contractual obligations (see id., ¶152[d]), conducting a secret warranty program (see id., ¶ 152[e]), or any of the conduct Plaintiffs allege is unfair (see, generally, id., ¶ 152). In fact, HP completely disregards Plaintiffs' allegations. Its failure to address Plaintiffs' theories and allegations is fatal to its motion.8 Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page26 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the sufficiency of plaintiffs' allegations. If Klein is relevant at all, it makes plain that unfair business practices under the UCL may only be judged on a complete record and should rarely be dismissed at the pleading stage. See also McKell v. Washington Mutual, Inc., 142 Cal. App.4th 1457, 1473 (2006) ("[T]he determination whether [a practice] is unfair is one of fact which requires a review of the evidence from both parties."). Second, Plaintiffs specifically plead "HP knew . . . about the nonconformance prior to selling the Subject Computers." See SAC ¶ 34. The cases upon which HP relies are readily distinguishable. In Norwest Mortgage, Inc.9 v. Sup. Ct., 72 Cal. App. 4th 214 (1999), the key factor in the court’s decision was that the defendant - unlike HP - was not headquartered in California. Similarly, in Standfacts Credit Servs., Inc. v. Experian Info. Solutions, Inc., 405 F. Supp.2d 1141 (C.D. Cal. 2005), the court PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 20 V. The UCL Applies Nationwide to Wrongful Conduct Emanating from California HP wrongly focuses on Plaintiffs’ residences in arguing that the UCL cannot protect them form harmful conduct emanating from California. The proper focus, however, is on HP’s misrepresentations, its knowing concealment of material facts, its failure to adequately repair its defective computers, and its breach of express promises. These practices took place in California, where HP is headquartered. In Diamond Multimedia Systems v. Sup. Ct., 19 Cal. 4th 1036 (1999), the California Supreme Court determined that California law applied to out-of-state purchasers who bought or sold stock, the price of which was affected by market manipulation, even though the purchases took place outside of California. Id. at 1041. The court did so because the alleged fraudulent conduct took place in California, holding that “California has a legitimate and compelling interest in preserving a business climate free of fraud and deceptive practices.” Id. at 1064. Likewise, in Clothesrigger v. GTE Corp., 191 Cal. App. 3d 605 (1987), the court determined that applying the UCL to non-California citizens was appropriate because defendant’s principal place of business was located in California and the alleged fraudulent misrepresentations forming the basis of the claims emanated from California. Id. at 613. Here, HP’s headquarters is located in Palo Alto, California. This is where HP approved the representations in its warranties and marketing, where HP decided to keep silent about the defect, and where HP directed inadequate repairs be done. Because Plaintiffs’ claims center on HP’s conduct in light of a known defect, and that conduct emanated from California, Plaintiffs’ UCL claims are entirely proper.9 Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page27 of 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 dismissed claims against two co-conspirator defendants not headquartered in California because the plaintiffs did not allege that the defendants committed unlawful conduct in California. In Speyer v. Avis Rent A Car System, Inc., 415 F. Supp.2d 1090 (S.D. Cal. 2005), the court’s holding was predicated on the legislative intent to the contrary expressed in the underlying statute upon which plaintiffs’ UCL claims were based. PLTFS’ OPP. TO DEF.’S MOT. TO DISMISS CASE NO. C-06-2254 RMW 21 CONCLUSION Plaintiffs respectfully request that the Court deny HP’s Motion to Dismiss Plaintiffs’ Second Amended Complaint. DATED: January 12, 2007 Respectfully submitted, GREEN WELLING LLP By: /s/ Jenelle Welling Robert S. Green Charles D. Marshall 595 Market Street, Suite 2750 San Francisco, CA 94105 Telephone: (415) 477-6700 Facsimile: (415) 477-6710 cand.uscourts@classcounsel.com Attorneys for Plaintiffs Case5:06-cv-02254-RMW Document55 Filed01/12/07 Page28 of 28