Tabletop Media Llc v. Citizen Systems of America Corporation et alNOTICE OF MOTION AND MOTION to Dismiss Second Amended Complaint, with PrejudiceC.D. Cal.December 28, 20161 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 1064485.03/LA Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP SCOTT J. LEIPZIG (BAR NO. 192005) MARISSA M. DENNIS (BAR NO. 245027) TIM C. HSU (BAR NO. 279208) ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP 865 South Figueroa Street, Suite 2800 Los Angeles, California 90017-2543 Phone: (213) 622-5555 Fax: (213) 620-8816 E-Mail: sleipzig@allenmatkins.com mdennis@allenmatkins.com thsu@allenmatkins.com Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION, and CITIZEN SYSTEMS JAPAN CO., LTD. STEPHANIE D. CLOUSTON ALSTON & BIRD LLP 2828 N. Harwood Street Suite 1800 Dallas, TX 75201 (Pro Hac Application granted on October 5, 2016) Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION, and CITIZEN SYSTEMS JAPAN CO., LTD. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION - LOS ANGELES TABLETOP MEDIA, LLC, Plaintiff, v. CITIZEN SYSTEMS OF AMERICA CORPORATION; CITIZEN SYSTEMS JAPAN CO, LTD., Defendants. Case No. 2:16-cv-07140-PSG-AS ASSIGNED FOR ALL PURPOSES TO Judge Philip S. Gutierrez DEFENDANTS CITIZEN SYSTEMS AMERICA CORPORATION AND CITIZEN SYSTEMS JAPAN CO., LTD.'S NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT Date: March 6, 2017 Time: 1:30 p.m. Ctrm: 6A - 6th Floor Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 1 of 32 Page ID #:917 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 1064485.03/LA -2- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP TO THE HONORABLE COURT, ALL PARTIES, AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that at 1:30 p.m. on March 6, 2017, in Courtroom 6A of the above-entitled Court, located at 350 W. 1st Street, Los Angeles, California 90012, Defendants Citizen Systems America Corporation ("CSA") and Citizen Systems Japan Co., Ltd. ("CSJ") (CSA and CSJ are together referred to herein as "Citizen"), hereby move the Court for an Order dismissing the First, Second, Third, Fourth and all causes of action alleged in the Second Amended Complaint brought by Plaintiff Tabletop Media, LLC ("Tabletop"), with prejudice, pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted. In particular, the Motion to Dismiss is made on the following grounds: 1. Tabletop's First cause of action for Common Law Fraud fails because it is not pleaded with the required particularity and because it is barred by the applicable statute of limitations. 2. Tabletop's Second cause of action for Breach of Contract fails because Tabletop has accepted the goods at issue and has not revoked its acceptance, because the claim for breach is barred by the applicable statute of limitations and, to the extent Tabletop seeks recovery of attorneys' fees or consequential damages based on this claim, its request must be dismissed because Tabletop alleges no factual or legal basis for recovery of such fees and consequential damages are expressly disclaimed. 3. Tabletop's Third and Fourth causes of action for Breach of Implied Warranty of Merchantability and Breach of Implied Warranty of Fitness for Particular Purpose should be dismissed because Tabletop's claims are barred by the applicable statute of limitations and, to the extent Tabletop seeks recovery of attorneys' fees or consequential damages based on these claims, its request must be dismissed because Tabletop alleges no factual or legal basis for recovery of such fees and consequential damages are expressly disclaimed. Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 2 of 32 Page ID #:918 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 1064485.03/LA -3- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP This Motion to Dismiss is based on this Notice, the concurrently filed Memorandum of Points and Authorities and Request for Judicial Notice in support thereof, all pleadings and papers on file in this action, and such other and further matters as may be presented to the Court at or in connection with any hearing ordered by the Court on this Motion. This Motion is made following a conference of counsel on December 21, 2016 and December 22, 2016 in accordance with Local Civil Rule 7-3. See Declaration of Tim. C. Hsu filed concurrently herewith. Dated: December 28, 2016 ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP SCOTT J. LEIPZIG MARISSA M. DENNIS TIM C. HSU By: /s/ Tim C. Hsu TIM C. HSU Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION and CITIZEN SYSTEMS OF JAPAN CO., LTD. Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 3 of 32 Page ID #:919 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 TABLE OF CONTENTS Page 1064485.03/LA (i) Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP I. INTRODUCTION ........................................................................................... 1 II. STATEMENT OF ALLEGED FACTS AND PROCEDURAL HISTORY ........................................................................................................ 2 A. Tabletop's Claims Concerning The Citizen Printer .............................. 2 B. The Parallel State Court Proceeding, The Filing Of This Action, And The Transfer Of This Action To The Central District ................................................................................................... 3 III. LEGAL STANDARD ..................................................................................... 5 IV. ARGUMENT .................................................................................................. 6 A. California Law Applies To Tabletop's Common Law Claims For Fraud and Breach Of Contract ........................................... 6 B. Tabletop's First Cause Of Action For Fraud Should Be Dismissed .............................................................................................. 8 1. Tabletop's claim for fraud fails on its face, because it had already selected the Printer for use in its Device well before the alleged misrepresentations were made ................................................................................... 8 2. The claim for fraud must also be dismissed because Tabletop fails to allege any factual representations upon which a claim for fraud may be brought ........................... 9 3. Tabletop's amended allegations fail to plead its claim for fraud with particularity as required by Rule 9(b) ................................................................................... 11 4. Tabletop's fraud cause of action is also barred by a three-year statute of limitations ................................................ 13 C. Tabletop's Second Cause of Action For Breach of Contract Should Be Dismissed .......................................................................... 15 1. Tabletop's breach of contract claim should also be dismissed because the alleged non-conforming Printers were accepted .............................................................. 15 2. Tabletop's breach of contract claim is also barred, in whole or in part, by the applicable statute of limitations ................................................................................. 17 D. Tabletop's Third And Fourth Causes Of Action For Breach Of Implied Warranties Should Be Dismissed ..................................... 18 Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 4 of 32 Page ID #:920 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 Page 1064485.03/LA (ii) Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP 1. Tabletop's implied warranty claims are barred by Delaware's statute of limitations ............................................... 18 E. Even If Tabletop's Claims Are Not Dismissed Outright, Its Requests For Attorneys' Fees And Consequential Damages Must Be Dismissed ............................................................................. 20 1. Tabletop may not recover attorneys' fees on its breach of contract claim ............................................................ 21 2. Tabletop's requests for attorneys' fees for its implied warranty claims are barred under Delaware law ...................... 21 3. Tabletop's requests for consequential damages are barred by the Specification's express disclaimer of such damages ............................................................................ 22 V. CONCLUSION ............................................................................................. 23 Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 5 of 32 Page ID #:921 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 TABLE OF AUTHORITIES Page(s) 1064485.03/LA (iii) Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Cases Agricola Baja Best v. Harris Moran Seed Co., 44 F.Supp.3d 974 (S.D. Cal. 2014) ............................................................... 22 Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009) ..................................................................................... 6 Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568 (2013) ...................................................................................... 6 Cardinal Health 301, Inc. v. Tyco Electronics Corp., 169 Cal.App.4th 116 (2008) .............................................................. 17, 18, 19 Carlson v. Brickman, 110 Cal. App. 2d 237 (1952) ..................................................................... 9, 10 Casualty Ins. Co. v. Rees Inv. Co., 14 Cal.App.3d 716 (1971) ............................................................................. 14 Caviness v. Horizon Cmty. Learning Ctr., Inc., 590 F.3d 806 (9th Cir. 2010) ........................................................................... 5 Competitive Techs. v. Fujitsu Ltd., 286 F. Supp. 2d 1118 (N.D. Cal. 2003) .......................................................... 7 Corbett v. Otts, 205 Cal. App. 2d 78 (1962) ........................................................................... 10 Decker v. Glenfeld, Inc., 42 F.3d 1541 (9th Cir. (1994)........................................................................ 12 Delmarva Power & Light Co. v. Abb Power T & D Co., 2002 Del. Super. LEXIS 311 (Del. Super. Ct. 2002) .................................... 23 Dena' Nena' Henash, Inc. v. Oracle Corp., 2007 U.S. Dist. LEXIS 39611 (N.D. Cal. 2007) ........................................... 10 Durning v. First Boston Corp., 815 F.2d 1265 (9th Cir. 1987) ......................................................................... 6 E. River Steamship Corp. v. Transamerica Delaval, 476 U.S. 858 (1986) ...................................................................................... 16 Ellis v. Great Sw. Corp., 646 F.2d 1099 (5th Cir. 1981) ......................................................................... 7 Gatz Props., LLC v. Auriga Capital Corp., 59 A.3d 1206 (Del. 2012) .............................................................................. 21 Gentry v. eBay, 99 Cal. App. 4th 816, 121 Cal. Rptr. 2d 703 (2002) ..................................... 10 Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 6 of 32 Page ID #:922 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 Page(s) 1064485.03/LA (iv) Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Gerena v. Korb, 617 F.3d 197 (2d Cir. 2010) ............................................................................ 7 Gorrell v. Sneath, 2013 U.S. Dist. LEXIS 142712 (E.D. Cal. Sept. 30, 2013) ............................ 7 Guarantee Trust Co. v. York, 326 U.S. 99 (1945) ........................................................................................ 19 Johnson v. Hockessin Tractor, Inc., 420 A.2d 154 (Del. 1980) .............................................................................. 19 Lecates v. Hertrich Pontiac Buick Co., 515 A.2d 163 (Del. Super. Ct. 1986) ...................................................... 19, 20 Mirkin v. Wasserman, 5 Cal.4th 1082 (1993) ...................................................................................... 9 Nelson v. Int'l Paint Co., 716 F.2d 640 (9th Cir. 1983) ........................................................................... 7 Nelson-Devlin v. Eli Lilly & Co., 2015 U.S. Dist. LEXIS 123124 (E.D. Cal. Sept. 15, 2015) ............................ 7 Neu v. Terminix International, Inc., 2008 U.S. Dist. LEXIS 60505 (N.D. Cal. 2008) ....................................... 9, 10 Nunes Turfgrass v. Vaughan-Jacklin Seed Co., 200 Cal.App.3d 1518 (1988) ......................................................................... 23 PAI Corp. v. Integrated Sci. Solutions, Inc., 2007 U.S. Dist. LEXIS 33819 (N.D. Cal. Apr. 25, 2007) ............................ 19 Phippin v. Delmarva Motor Acceptance Corp., 2006 Del. C.P. LEXIS 5 (Del. Com. Pl. Jan. 27, 2006) ................................ 22 Richard P. v. Vista Del Mar Child Care Serv., 106 Cal. App. 3d 860 (1980) ......................................................................... 10 S&R Assocs., L.P., III v Shell Oil Co., 725 A.2d 431 (Del. Super. Ct. 1998) ............................................................ 19 Saunders-Gomez v. Rutledge Maint. Corp., 2016 Del.C.P. LEXIS (Del. Com. Pl. Feb. 25, 2016) ................................... 21 Southwestern Bell Telephone Co. v. FDP Corp., 811 S.W.2d 572 (Tex. 1991) ......................................................................... 16 Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001) ........................................................................... 6 Starbucks Corp. v. Amcor Packaging Distrib., 2016 U.S. Dist. LEXIS 82538 (E.D. Cal. June 23, 2016) ............................. 15 Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 7 of 32 Page ID #:923 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 Page(s) 1064485.03/LA (v) Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Summers v. Newman, 20 Cal.4th 1021 (1999) .................................................................................. 21 Tarrant v. Butler, 180 Cal.App.2d 235 (1960) ........................................................................... 14 Ukai v. Fleurvil, 2006 U.S. Dist. LEXIS 81837 (D. Haw. Nov. 7, 2006) .................................. 7 Valencia v. Sharp Electronics Corp., 561 Fed. Appx. 591 (9th Cir. 2014) .............................................................. 12 Van Dusen v. Barrack, 376 U.S. 612 (1964) ........................................................................................ 7 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) ....................................................................... 12 Western Recreational Vehicles v. Swift Adhesives, 23 F.3d 1547 (9th Cir. 1994) ......................................................................... 18 Wilson v. Class, 605 A.2d 907 (Del. Super. Ct. 1992) ............................................................ 20 Statutes Cal. Code Civ. Proc. § 1021 .................................................................................... 21 Cal. Code Civ. Proc. § 338(d) ................................................................................. 13 Cal. Comm. Code § 2102 ........................................................................................ 15 Cal. Comm. Code § 2105(1) .................................................................................... 15 Cal. Comm. Code § 2606 ........................................................................................ 16 Cal. Comm. Code § 2608 ........................................................................................ 17 Cal. Comm. Code § 2711 ........................................................................................ 16 Cal. Comm. Code § 2714 ........................................................................................ 16 Cal. Comm. Code § 2719(3) .................................................................................... 22 Cal. Comm. Code § 2725(1) .............................................................................. 17, 19 Cal. Comm. Code § 2725(2) .................................................................. 17, 18, 19, 20 Cal. Comm. Code § 2725(b) .................................................................................... 19 Del. Code Ann. tit. 6, § 2-714 ................................................................................. 22 Del. Code Ann. tit. 6, § 2-715 ................................................................................. 22 Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 8 of 32 Page ID #:924 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 Page(s) 1064485.03/LA (vi) Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Del. Code Ann. tit. 6, § 2-719(3) ............................................................................. 22 Del. Code Ann. tit. 6, § 2-725(b) ............................................................................. 19 Rules Fed. R. Civ. P. 12(b)(6) ............................................................................................. 5 Fed. R. Civ. P. 9(b) .................................................................................................. 12 Treatises 17-111 Moore's Federal Practice – Civil § 111.38 (Matthew Bender 2015) ................................................................................................................ 8 Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 9 of 32 Page ID #:925 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 1064485.03/LA Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION After two failed attempts to state a valid cause of action, Plaintiff Tabletop Media, LLC ("Tabletop") has now filed its Second Amended Complaint ("SAC") against Defendants Citizen Systems America Corporation ("CSA") and Citizen Systems Japan Co., Ltd. ("CSJ") (CSA and CSJ are together referred to herein as "Citizen"). Tabletop seeks recovery under theories of fraud, breach of contract, and breach of the implied warranties of merchantability and fitness for particular purpose alleging that the MLT-289 line of thermal printer mechanism manufactured by Citizen (the "Printer"), which is integrated into Tabletop's proprietary tablet Ziosk® device for daily use in restaurants (the "Device"), is defective. Tabletop's newest allegations confirm the frivolousness of this purported defective-product lawsuit. For example, Tabletop alleges that Citizen made fraudulent representations about the Printer, which caused Tabletop to re-design the Device (SAC ¶¶ 38-40). However, the SAC conclusively demonstrates that Citizen's alleged representations in August and December 2008 (SAC ¶¶ 34, 35) came months after Tabletop's February 2008 re-design of the Device to incorporate Citizen's Printer (SAC ¶¶ 38, 41). It is impossible that Citizen's alleged representations, whether true or not, had any bearing on the re-design of the Device or Tabletop's selection of the Printer, which Tabletop had apparently already committed to do well before the alleged representations were made. Tabletop also alleges that in June 2015, which is eight years after Citizen's purported misrepresentations and approximately six years after Citizen delivered the Printers, Tabletop "first began receiving" an unalleged number of returned Devices (SAC ¶ 55). Implied in this allegation is the unstated fact that Tabletop received zero complaints of any Printer malfunction from the time Citizen first started delivering the Printers in or around 2009 to at least June 2015. The SAC fails to allege that Citizen provided an unlimited warranty or otherwise represented its Printers would Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 10 of 32 Page ID #:926 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 1064485.03/LA -2- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP function without error for any time frame. Accordingly, the allegations simply do not pass muster. Moreover, each of Tabletop's claims is barred by the applicable statute of limitations and also fails on numerous other grounds, including failing to meet the heightened pleading standard for its claim of fraud. Because Tabletop has now twice amended its allegations, but still fails to address these deficiencies, its claims should be dismissed with prejudice. Finally, even if Tabletop's claims are not dismissed outright, the Court should dismiss its improper requests for attorneys' fees, since Tabletop has completely failed to allege any contractual, statutory, or other basis for recovery of such fees, and further dismiss Tabletop's requests for consequential damages as such damages are expressly disclaimed. II. STATEMENT OF ALLEGED FACTS AND PROCEDURAL HISTORY A. Tabletop's Claims Concerning The Citizen Printer. The Device was designed by Tabletop for use in the restaurant industry, and through the development phase of the Device, Tabletop alleges it met with several manufacturers and distributors of printer mechanisms, including Citizen. SAC, ¶¶ 19, 27. Through discussions with Citizen that occurred during 2007 and 2008, Tabletop selected the Printer from Citizen to be used in its Device, allegedly based on certain representations made by Citizen in 2008 regarding the Printer's reliability and suitability for the intended use of the Device, including certain representations allegedly made by former Citizen employee Mr. Andrew Golden in August and December 2008 concerning the "robust" nature of the Printer and its suitability for "heavy use." Id. at ¶¶ 34-35. In addition to these representations, Tabletop further alleges that Citizen delivered specifications for the Printer (the "Specification") indicating that the Printer would "last for '50 km or more' of 'wear resistance.'" Id. at ¶ 36, Ex. 1. Notably, however, Tabletop's allegations reveal that it had already selected the Citizen Printer for use in its Device by as early as February 25, 2008, well before the purported representations were made by Mr. Golden, where Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 11 of 32 Page ID #:927 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 1064485.03/LA -3- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Tabletop admits it had engaged in a "re-design" effort to "accommodate the Citizen Printer," and that this "re-design" was already underway on February 25, 2008 when Tabletop's "design firm sent Citizen … a STEP model of the Citizen Printer and Device housing for said Printer …." Id. at ¶¶ 38-41. To manufacture the Device, Tabletop engaged three contract manufacturers, including SMTC Manufacturing Corporation ("SMTC"), Asteelfash USA Corp. ("Asteelflash"), and OnCore Manufacturing Services, Inc. ("OnCore") (collectively, the "Contract Manufacturers"). Id. at ¶ 45. Each of these Contract Manufacturers, at Tabletop's direction, purchased various materials and components for the Device, including the Printer from Citizen. Id. at ¶ 46. Specifically, each of the Contract Manufacturers contracted with Citizen to purchase the Printer (the "Purchase Orders"), and agreed to certain "Terms and Conditions, including a warranty that expressly 'survives any inspection, delivery, acceptance, or payment by Buyers of the materials or services.'" Id. at ¶ 47. Since then, the Contract Manufacturers have purportedly assigned their rights under the Purchase Orders to Tabletop. Id. at ¶ 48. In or around June 2015, Tabletop allegedly "first began receiving" complaints from its restaurant customers about failures of the Device, including displays of error messages indicating an issue with the Printer. Id. at ¶¶ 55-56. Tabletop alleges that its investigation of the errors revealed malfunctions with the Printer's mechanical platen switches and the presence of sulfuration on the silver plating of the platen switches. Id. at ¶¶ 58-60. Based on these alleged findings, Tabletop contends that the reported failures of the Device are the result of manufacturing defects associated with the Printer and its platen switch mechanism. Id. at 59. B. The Parallel State Court Proceeding, The Filing Of This Action, And The Transfer Of This Action To The Central District. Between July and October 2015, Tabletop engaged in communications with Citizen to discuss these failures and potential remedies. Id. at ¶¶ 64-65. Following these discussions, which achieved no resolution of the dispute, Citizen filed an Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 12 of 32 Page ID #:928 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 1064485.03/LA -4- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP action in California state court on November 12, 2015 against Tabletop and its Contract Manufacturers (the "California State Action"), seeking a declaration from the court as to the parties' respective rights and obligations regarding the Device, the Printer, and the alleged failures giving rise to the claims alleged by Tabletop against Citizen in this action. Id. at ¶ 66; Citizen's Request for Judicial Notice, Dkt. Nos. 12-13, granted on August 29, 2016, Ex. A. Despite immersing itself in defense of the California State Action, where the pleadings have been settled and the matter set for trial1, Tabletop filed this action, based on the same set of facts and transactions, in the Northern District of Texas on May 11, 2016, seeking relief on four causes of action for common law fraud, breach of contract, and breach of the implied warranties of fitness for particular purpose and merchantability. See Complaint, passim. On August 2, 2016, Citizen filed a Motion to Dismiss for Improper Venue Under Rule 12(b)(3), to Stay In Favor of a Previously Filed Action, and Alternative Motion to Dismiss under Rule 12(b)(6) ("Motion to Dismiss"). Dkt. No. 10. Rather than address the deficiencies identified in Citizen's Motion to Dismiss on the issues of improper venue and failure to state a claim under Rule 12(b)(6), Tabletop elected to file its FAC on August 23, 2016, and concurrently filed an Opposition to Defendants' Motion to Stay In Favor of a Previously Filed Action (the "Opposition"). Dkt. Nos. 22, 23. On August 29, 2016, Judge Sam Cummings of the Northern District of Texas Court issued an Order to Show Cause (the "OSC"), stating that he had reviewed the FAC and directing Tabletop (i) to show cause why the case should not be dismissed or transferred for improper venue, (ii) to not allege or reference any new facts or causes of action, and (iii) to address only why venue is proper on the face of the FAC. See Dkt. No. 26. 1 Tabletop has not just answered the California State Action, but has also filed a Cross Complaint for Damages based on the same allegations set forth in this action, which renders its pursuit of this action entirely duplicative and unnecessary as Tabletop's claims can be fully adjudicated in the California State Action. See Citizen's Request for Judicial Notice ("RJN") ¶ 1, Ex. A. Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 13 of 32 Page ID #:929 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 1064485.03/LA -5- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP After full briefing by the parties in accordance with the OSC, on September 21, 2016, Judge Cummings entered an Order finding that "the Northern District of Texas is ultimately not a proper venue for Tabletop's complaint," and that "venue for this complaint is proper in the Central District of California." Dkt. Nos. 30, 31. On that basis, this action was ordered transferred to the Central District. Id. Following the transfer to this District, Citizen filed a Motion to Dismiss the FAC on October 5, 2016, which identified multiple deficiencies with the alleged claims as set forth more fully herein, and sought dismissal of each of the claims brought by Tabletop. Dkt. No. 41. On December 1, 2016, and pursuant to Section 6 of this Court's Standing Order, the parties stipulated to allow Tabletop yet another opportunity to amend its pleadings and file the SAC, which was filed thereafter on December 7, 2016. Dkt. Nos. 47, 49. As explained herein, despite Tabletop's multiple attempts to remedy the defects of its claims by amendment, the amended allegations set forth in its SAC (which is now Tabletop's third attempt to state a proper claim for relief) nevertheless fail to adequately address the fundamental deficiencies identified in Citizen's previously filed motions to dismiss. Accordingly, and as more fully set forth herein, Tabletop's claims should be dismissed under Rule 12(b)(6) for failure to state a claim. Further, because Tabletop has already twice amended its pleadings and has still failed to correct the deficiencies identified herein, its claims should be dismissed with prejudice. III. LEGAL STANDARD In evaluating a motion to dismiss under Rule 12(b)(6), a court must accept as true the factual allegations of the complaint, but a court need not accept as true unreasonable inferences, unwarranted deductions of fact, or conclusory legal allegations cast as factual allegations. Caviness v. Horizon Cmty. Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010). Further, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 14 of 32 Page ID #:930 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 1064485.03/LA -6- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic, Corp. v. Twombly, 550 U.S. 544, 570 (2007)) (citation omitted). For the purposes of evaluating a motion to dismiss, the court may disregard allegations that contradict facts set forth in exhibits to the complaint or matters properly subject to judicial notice. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). In this case, and despite having had two opportunities to amend its pleadings and correct the deficiencies identified by Citizen, Tabletop's SAC still fails to plead facts showing entitlement to relief against Citizen on its claims and fails to state a claim to relief that is "plausible on its face." Citizen's Motion to Dismiss should thus be granted. Alternatively, because no contractual, statutory, or other basis exists to support Tabletop's requests for attorneys' fees, these requests should be dismissed from the SAC, and because consequential damages are expressly disclaimed in the Specification, Tabletop's requests for such damages should also be dismissed. IV. ARGUMENT A. California Law Applies To Tabletop's Common Law Claims For Fraud and Breach Of Contract. As a preliminary matter, Tabletop's common law claims for Fraud and Breach of Contract should be analyzed under California law following the transfer of this action to the Central District. Generally, the default rule requires that "[a] federal court sitting in diversity ordinarily must follow the choice-of-law rules of the State in which it sits." Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 134 S. Ct. 568, 582 (2013). The Supreme Court has "identified an exception to that principle for § 1404(a) transfers, requiring that the state law applicable in the original court also apply in the transferee court." Id. (citing Van Dusen v. Barrack, 376 U.S. 612, 639 Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 15 of 32 Page ID #:931 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 1064485.03/LA -7- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP (1964). But here, the transfer to the Central District was ordered under section 1406(a), not section 1404(a). Dkt. No. 32. Thus, the Van Dusen exception does not apply. See Van Dusen, 376 U.S. at 633-634 (specifically contrasting transfers under sections 1404 and 1406 and noting that transfers under section 1404 occur despite proper venue, whereas transfers under section 1406 occur where venue is improper to begin with). In particular, the consensus of federal courts, including the Ninth Circuit, holds that following a transfer for improper venue under section 1406(a), the transferee court applies the choice-of-law rules it would have applied had the action been filed there originally. Gerena v. Korb, 617 F.3d 197, 204 (2d Cir. 2010) ("If a district court receives a case pursuant to a transfer under 28 U.S.C. § 1406(a), for improper venue, . . . it logically applies the law of the state in which it sits, since the original venue, with its governing laws, was never a proper option."); Nelson v. Int'l Paint Co., 716 F.2d 640, 643 (9th Cir. 1983) ("In [§ 1406(a) transfer] cases, . . . it is necessary to look to the law of the transferee state . . . to prevent forum shopping, and to deny plaintiffs choice-of-law advantages to which they would not have been entitled in the proper forum."); Ellis v. Great Sw. Corp., 646 F.2d 1099, 1109–10 (5th Cir. 1981) ("[W]e hold that following a section 1406(a) transfer, regardless of which party requested the transfer or the purpose behind the transfer, the transferee court must apply the choice of law rules of the state in which it sits."). The district courts in the Ninth Circuit also consistently apply the law of the transferee court following a transfer under section 1406. See Gorrell v. Sneath, 2013 U.S. Dist. LEXIS 142712, at *16 (E.D. Cal. Sept. 30, 2013) (citing Nelson, 716 F.2d at 643); Nelson-Devlin v. Eli Lilly & Co., 2015 U.S. Dist. LEXIS 123124, at *16 (E.D. Cal. Sept. 15, 2015); Ukai v. Fleurvil, 2006 U.S. Dist. LEXIS 81837, at *10-11, n. 5 (D. Haw. Nov. 7, 2006); Competitive Techs. v. Fujitsu Ltd., 286 F. Supp. 2d 1118, 1157 (N.D. Cal. 2003). "Following a transfer under Section 1406(a), the transferee court should apply whatever law it would have applied had Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 16 of 32 Page ID #:932 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 1064485.03/LA -8- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP the action been properly commenced there, including the choice of law rules of the state in which the transferee court sits." 17-111 Moore's Federal Practice – Civil § 111.38 (Matthew Bender 2015) (internal quotations omitted). "The rationale for this rule is to prevent impermissible forum-shopping. If the plaintiff were allowed to benefit by 'capturing' the law of the forum by filing an action there despite improper venue and then moving to transfer to a proper venue, it would allow plaintiffs to forum shop by filing actions wherever state law was most advantageous, regardless of whether venue was proper in that district or not … ." Id. Here, the transferee Court sits in California. Tabletop cannot be awarded any advantage that may exist under the laws of Texas by its choice to bring its action in an improper venue. This Court should thus apply California law to Tabletop's common law claims for fraud and breach of contract. B. Tabletop's First Cause Of Action For Fraud Should Be Dismissed. 1. Tabletop's claim for fraud fails on its face, because it had already selected the Printer for use in its Device well before the alleged misrepresentations were made. As alleged in the SAC, each of the purported representations made by Citizen personnel regarding the quality, durability, and suitability of the Printer were made in August and December 2008. See SAC, ¶¶ 34 ("[I]n an email dated August 15, 2008, Mr. Golden wrote to Mr. Balar that ' … the Citizen parts will work as expected.'"), 35 ("On December 17, 2008, Mr. Golden described the Citizen Printer as a 'robust product' designed for 'heavy use.'"). Tabletop claims that it relied on these representations "as a material basis for selecting the Citizen Printer, 'designing in' the Citizen Printer into its Device, and causing the purchase of the Citizen Printers." Id. at ¶ 78. However, Tabletop's claim of reliance is directly contradicted by its own admission that its "re-design" was already well underway by at least February 25, 2008, on which date it contends that "as part of this re-design, … one of Tabletop's design firms sent Citizen … a STEP model of the Citizen Printer and Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 17 of 32 Page ID #:933 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 1064485.03/LA -9- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Device housing for said Printer and requested feedback from Citizen regarding the proper location and placement of the Citizen Printer in the Device." Id. at ¶ 41. These allegations prove that Tabletop had already selected and determined to incorporate Citizen's Printer into the Device by at least February 2008, and it is therefore impossible that Tabletop could have relied, as it alleges, on any representations that were made six months after it had already chosen the Citizen Printer for its Device based on its own "extensive search into which printer would be most suited for incorporation …." SAC, ¶¶ 27, 34, 35, 41. Nowhere in the SAC does Tabletop allege any specific representations, other than the ones made in August and December 2008, that were purportedly fraudulent and relied on by Tabletop in making its decision to purchase the Printer. Because Tabletop has failed to allege any such specific representations made by Citizen prior to February 2008, when Tabletop had already decided to use Citizen's Printer and incorporated it into its re-design, it cannot state a claim for fraud, as it has failed to allege any facts to show the key elements of reliance and causation. See Mirkin v. Wasserman, 5 Cal.4th 1082, 1110-1111 (1993) ("In an action for fraud, reliance is proved by showing that the defendant's misrepresentation or nondisclosure was 'an immediate cause' of the plaintiff's injury-producing conduct.") Further, because Tabletop has already had three opportunities to state a proper claim for fraud and failed to do so, its fraud cause of action must be dismissed, with prejudice. 2. The claim for fraud must also be dismissed because Tabletop fails to allege any factual representations upon which a claim for fraud may be brought. As is well established under California law, "an expression of opinion or belief, if nothing more, and if so understood and intended, is not a representation of fact, and although false, does not amount to actual fraud." Neu v. Terminix International, Inc., 2008 U.S. Dist. LEXIS 60505, *8-9 (N.D. Cal. 2008) (quoting Carlson v. Brickman, 110 Cal. App. 2d 237, 247 (1952)). A "representation is one Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 18 of 32 Page ID #:934 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 1064485.03/LA -10- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP of opinion if it expresses only (a) the belief of the maker, without certainty, as to the existence of a fact; or (b) his judgment as to the quality, value, authenticity, or other matters of judgment." Id. (quoting Gentry v. eBay, 99 Cal. App. 4th 816, 835 (2002)). In addition, "predictions of future facts are ordinarily considered nonactionable expressions of opinion." Id. (quoting Richard P. v. Vista Del Mar Child Care Serv., 106 Cal. App. 3d 860, 865 (1980). Importantly, "a seller's mere 'puff talk' is also an expression of opinion that is not actionable as fraud." Id. (quoting Corbett v. Otts, 205 Cal. App. 2d 78, 83 (1962)). Here, Tabletop's claim for fraud is based almost exclusively on two communications from Citizen personnel on August 15 and December 17, 2008, where Citizen's sales representative allegedly stated to Tabletop that "the Citizen parts will work as expected," and described "the Citizen Printer as a 'robust product' designed for 'heavy use,'" where "[t]he competitors [sic] unit is designed as a 'throw- away' for mobile printers." SAC, ¶¶ 34-35. However, nowhere in the SAC does Tabletop explain how these statements of the representative's belief in the quality of the Printer can legitimately be viewed as anything other than mere puffery, and not a statement of determinable fact upon which Tabletop's claim for fraud may be founded. Indeed, such statements regarding the quality of a particular product or a prediction as to how it will operate are precisely the type of vague or unfalsifiable statements that are viewed by the Courts as mere opinions upon which fraud claims may not be based. See, e.g., Neu, 2008 U.S. Dist. LEXIS 60505 at *8-11 (2008) (finding seller's representations that product "was the best defense against the threat of subterranean termite infestation" and that it "formulated a unique plan of action for defending Plaintiff's home against termite infestation," to be insufficient to state a claim for fraud); Dena' Nena' Henash, Inc. v. Oracle Corp., 2007 U.S. Dist. LEXIS 39611, *9-17 (N.D. Cal. 2007) (finding, among other things, representations that a software product was "fully integrated," that the implementation could be Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 19 of 32 Page ID #:935 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 1064485.03/LA -11- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP completed "within a specified budget," and that there would be a "substantial cost savings to [plaintiff]" to be insufficient to state a claim for fraud). In addition, although the Printer's Specification indicates that it has "50 km or more" of "wear resistance," this representation cannot be read in a vacuum, but must be interpreted in the context of all of the Specification's conditions under which the Printer must be stored, installed, used, maintained and operated in order for it to achieve its specified wear and other performance capabilities, including the Specification's express requirement that the buyer's designed product enclosing the Printer must be "designed to prevent liquid or any metallic foreign matter from being spilled or dropped into the printer mechanism." SAC, Ex. 1, p. ii (Dkt. No. 49-1). In other words, Tabletop cannot base its claim for fraud on this representation where it fails first to allege any facts to show that it complied fully with the requirements of the Specification and that, despite such full compliance, the Printer failed to perform to its Specification or otherwise inconsistently with such representation. But Tabletop makes no such allegation. Indeed, it fails even to allege that the Printer failure was not caused by its own (defective) design of the Device (that allows the intrusion of foreign liquids and/or other materials causing the alleged sulfuration found on the Printer's platen switch), let alone alleging that it complied fully with the Specification in making such design. Notwithstanding the fact that Tabletop has now had three opportunities to adequately plead a claim for fraud, it has failed to allege a single actionable representation upon which the claim for fraud may be based, and the claim for fraud must thus be dismissed, with prejudice. 3. Tabletop's amended allegations fail to plead its claim for fraud with particularity as required by Rule 9(b). Despite its multiple attempts to remedy the deficiencies of its allegations, Tabletop's SAC nevertheless fails to state a claim for fraud because the SAC does not plead sufficient facts to show that Citizen engaged in any fraudulent conduct as Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 20 of 32 Page ID #:936 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 1064485.03/LA -12- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP required under the heightened pleading standard required under Fed. R. Civ. P. 9(b). In particular, to properly state a claim for fraud a plaintiff must include "the who, what, when, where, and how of the fraud." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (internal citation omitted). A "plaintiff must set forth what is false or misleading about a [specific] statement, and why it is false." Decker v. Glenfeld, Inc., 42 F.3d 1541, 1548 (9th Cir. 1994). Where fraud is alleged against a corporation, the plaintiff must allege: (1) the name of the person who made the misrepresentation; (2) the person's authority to speak for the corporation; (3) to whom the person communicated; (4) what was said or written; and (5) when the communication occurred. Moreover, a plaintiff "must set forth more than the neutral facts necessary to identify the transaction. The plaintiff must set forth what is false or misleading about a statement, and why it is false." Vess, 317 F.3d at 1106 (emphasis added); Valencia v. Sharp Electronics Corp., 561 Fed. Appx. 591, 593 (9th Cir. 2014). Here, Tabletop attempts to correct this deficiency through its amended pleadings by including allegations regarding specific statements allegedly made by Mr. Golden in 2008 and 2010 concerning the characteristics of the Printer and its applicability for use in Tabletop's Device, including describing the Printer as "a 'robust product' designed for 'heavy use.'" SAC, ¶ 35. The SAC further alleges that Citizen delivered to Tabletop the Specification for the Printer, which indicates "50 km or more" of "wear resistance." Id. at ¶ 36. Notwithstanding these allegations, the SAC nevertheless fails to allege any specific facts to show that Mr. Golden's alleged statements and the indications of durability in the Specification were in fact false and/or fraudulent. Specifically, Tabletop alleges the Printer failures are caused by sulfuration occurring on the silver-plated contact pad of the Printer's platen switch. Id. at ¶¶ 56- 58. But Tabletop fails to allege anything that connects the Printer, its features or its design to the cause of the sulfuration. For example, Tabletop fails to allege any Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 21 of 32 Page ID #:937 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 1064485.03/LA -13- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP facts to show that the sulfuration occurred as a consequence of the Printer's inherent design. Rather, the SAC admits that the cause of the sulfuration leading to the Printer failure is likely a result of external contamination as the Printers "contained no environmental shielding like a grease or gel," which Tabletop was expressly warned about in the Specification. Id. at ¶¶ 61, 75. In fact, the Specification delivered to Tabletop explicitly warns that any equipment incorporating the Printer "should be designed to prevent liquid or any metallic foreign matter from being spilled or dropped into the printer mechanism …," and that the Printer has no "drip- proof" or "dust-proof" construction. SAC, ¶ 36, Ex. 1, p. ii and §§11.2(11), (12), p. 30 (Dkt. No. 49-1); Tabletop was thus put on express notice as the designer of the Device that it must account for the admonitions of the Specification not to "get it wet or operate it with wet hands" and to "avoid using it in a dusty environment" in designing its Device, and to provide in its design for the Printer to be protected accordingly. SAC, Ex. 1, §§11.2(11), (12), p. 30 (Dkt. No. 49-1). Tabletop's conclusion of fraud therefore does not follow where it admits to having had delivered to it the Specification warning against exposure of the Printer, but fails to allege that it heeded this warning in its design of the Device. In short, because Tabletop fails to allege facts to support its claim that the representations regarding the Printer's quality, including its robustness, wearability and expected performance, are in fact false or fraudulent, it fails to meet the heightened pleading standard required by Rule 9(b), and Tabletop's claim for fraud should thus be dismissed entirely. 4. Tabletop's fraud cause of action is also barred by a three-year statute of limitations. Under California law, a claim for fraud must be brought within three-years of discovery. Cal. Code Civ. Proc. § 338(d) (establishing three year limitations period for "action for relief on the ground of fraud or mistake."). Moreover, "[i]t is fundamental that a complaint based upon fraud or mistake filed after the statutory Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 22 of 32 Page ID #:938 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 1064485.03/LA -14- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP period has run is vulnerable to demurrer based upon the statutory limitation if it fails to allege the circumstances of the discovery and additional facts justifying the delay." Tarrant v. Butler, 180 Cal.App.2d 235, 239 (1960) (emphasis added). Thus, a plaintiff has a duty to exercise diligence to inquire as to the facts that could start the running of the statute of limitations, and must plead facts showing (a) lack of knowledge, (b) lack of means of obtaining knowledge in the exercise of reasonable diligence, and (c) how and when the plaintiff actually discovered the facts. Casualty Ins. Co. v. Rees Inv. Co., 14 Cal.App.3d 716, 719-20 (1971) (affirming sustained demurrer). Here, the SAC alleges that "Tabletop first began receiving a significant number of returned Devices" around June 2015 and that after removing the Printer from the Device, Tabletop discovered sulfuration on the Printer's platen switch which Tabletop claims causes the Device to malfunction. SAC, ¶¶ 56-58. Tabletop further claims, without any factual justification, that prior to this time, "Tabletop had no reason to suspect that there was any issue with this particular feature of the Citizen Printer, nor any reasonable basis to suspect that the Printer … was likely to malfunction prior to the express warranty of 50 km." Id. at ¶ 57. However, and despite Tabletop's multiple attempts to amend its allegations, the SAC conspicuously fails to allege any specific facts to show when Tabletop's Device incorporating the Printer was first sold for use by its customers, and further fails to allege fundamental facts regarding when Tabletop first received returns of its Device based on Printer errors or received other customer notifications of similar problems with the Printer that would have put it on notice of the alleged defect. Indeed, Tabletop's allegation that it did not receive a significant number of Device returns until June 2015 concedes that it did receive Device returns based on Printer errors prior to June 2015. That it did not receive a significant number of such returns is entirely irrelevant to determine when Tabletop's fraud cause of action accrued for a statute of limitations analysis. Without specific allegations of when Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 23 of 32 Page ID #:939 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 1064485.03/LA -15- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Tabletop was first put on inquiry notice of an alleged problem with the Printer, e.g., when it may have first received Device returns suggesting a problem with the Printer, Tabletop cannot allege sufficient facts to trigger application of the discovery rule. According to the SAC, the purported representations by Mr. Golden were made in 2008. SAC, ¶ 34-35. Thus, a fraud cause of action based on such representations accrued at latest in 2011, five years before this action was filed. Tabletop has failed to plead, and has further demonstrated through its amendments that it apparently cannot plead, specific facts to warrant any extension of this accrual based on the discovery rule, and its claim for fraud should thus be dismissed, with prejudice. C. Tabletop's Second Cause of Action For Breach of Contract Should Be Dismissed. 1. Tabletop's breach of contract claim should also be dismissed because the alleged non-conforming Printers were accepted. The Uniform Commercial Code (the "UCC"), as codified by statute in California, applies to "transactions in goods." Cal. Comm. Code § 2102. Under the statute, goods are defined as "all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale." Id. § 2105(1); Starbucks Corp. v. Amcor Packaging Distrib., 2016 U.S. Dist. LEXIS 82538, 9-10 (E.D. Cal. June 23, 2016). Thus, the California UCC applies to Tabletop's breach of contract cause of action which is based entirely on the Printers purchased by Tabletop and its Contract Manufacturers. As reflected in the relevant provisions of sections 2711 and 2714 of the California UCC, a claim for breach of contract is not proper when the underlying claim is actually for breach of warranty, as is the case here. A breach of contract claim is uniquely distinct from a claim for breach of warranty, as different remedies exist depending on the status of the buyer's acceptance, rejection, or revocation of Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 24 of 32 Page ID #:940 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 1064485.03/LA -16- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP the alleged non-conforming goods. See Cal. Comm. Code §§ 2711 (remedies for breach after rejection or revocation) and 2714 (remedies for breach for accepted goods). This distinction is further explained by the Texas Supreme Court in analyzing the difference between such claims under the respective Texas statutes which also adopted the identical provisions of the UCC: The UCC recognizes that breach of contract and breach of warranty are not the same cause of action. The remedies for breach of contract are set forth in section 2.711, and are available to a buyer "[w]here the seller fails to make delivery." The remedies for breach of warranty, however, are set forth in section 2.714, and are available to a buyer who has finally accepted goods, but discovers that the goods are defective in some manner. Southwestern Bell Telephone Co. v. FDP Corp., 811 S.W.2d 572, 576 (Tex. 1991) (citations omitted); see also, E. River Steamship Corp. v. Transamerica Delaval, 476 U.S. 858, 872 (1986) (recognizing that "a claim of a nonworking product can be brought as a breach-of-warranty action. Or, if the customer prefers, it can reject the product or revoke its acceptance and sue for breach of contract."). Here, it is undisputed that Tabletop and its Contract Manufacturers accepted the alleged non-conforming Printers, and the SAC does not allege otherwise. Indeed, Tabletop admits that it and the Contract Manufacturers purchased the Printer and incorporated the Printer into Tabletop's Device. SAC, ¶¶ 47, 51-52. Such actions are deemed "acceptance" under the California UCC. See Cal. Comm. Code § 2606 (setting forth when acceptance of a good occurs, including when a buyer "fails to make an effective rejection" or "does any act inconsistent with the seller's ownership"). In addition, although the SAC claims Tabletop "reached out to Citizen to inform them of the problem," and "sought replacement product," the SAC specifically does not allege that Tabletop ever expressly revoked its acceptance in the manner prescribed under the Commercial Code as required to maintain an action Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 25 of 32 Page ID #:941 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 1064485.03/LA -17- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP for breach of contract. See Cal. Comm. Code § 2608. Accordingly, because Tabletop accepted the Printers and has not alleged a proper revocation, its claim for breach of contract should be dismissed.2 As Tabletop has already had two opportunities to amend its allegations to remedy this fundamental defect but failed to do so, its claim should be dismissed, with prejudice. 2. Tabletop's breach of contract claim is also barred, in whole or in part, by the applicable statute of limitations. Under the California UCC, "an action for breach of any contract for sale must be commenced within four years after the cause of action has accrued." See Cal. Comm. Code 2725(1). Pursuant to this provision, "[a] cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach." Cal. Comm. Code § 2725(2); see also Cardinal Health 301, Inc. v. Tyco Electronics Corp., 169 Cal.App.4th 116, 135 (2008) (finding Cal. Comm. Code § 2725(2) applies to breach of contract claims based on an alleged breach of warranty). "A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance … ." Cal. Comm. Code § 2725(2). Accordingly, Tabletop's alleged claim for breach occurred each time Citizen tendered delivery of an allegedly defective Printer. Although Tabletop does not specifically allege when Citizen first tendered delivery of an allegedly defective Printer to it or its Contract Manufacturers, the SAC contends Tabletop's relationship with Citizen began in 2007. SAC, ¶ 29. Thus, to the extent Tabletop's breach of contract claim is based on any Printers delivered prior to May 11, 2012 (four years before the commencement of this action), this claim must be dismissed. 2 Tabletop appears to concede the impropriety of its breach of contract claim, as it has not alleged any breach of contract claim in its Cross Complaint filed in the parallel California State Action. See RJN ¶ 1, Ex. A. Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 26 of 32 Page ID #:942 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 1064485.03/LA -18- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP In addition, while an exception to the four-year limitations period exists for warranties concerning future performance under the California UCC (see Cal. Comm. Code § 2725(2)), Tabletop's SAC does not allege any facts to support application of this exception, as it fails to allege any warranties explicitly extending to future performance. In particular, Tabletop claims that the basis for its breach of contract claim arises from Citizen providing defective Printers, but it alleges no explicit warranties other than "that the Citizen Printers would last for '50 km or more' of 'wear resistance.'" SAC, ¶¶ 6, 36, 57, 82. However, this alleged warranty does not fall within the future performance exception under section 2725(2) because an alleged promise that product will work for a specified duration is insufficient where the promise does not indicate a defined period of time. See Cardinal Health 301, Inc., 169 Cal.App.4th at 130-133 (finding warranty did not fall within the future performance exception of 2725(2) because a promise that the parts [spring probe connectors] would work for 50,000 cycles did not specify a date or time in the future); Western Recreational Vehicles v. Swift Adhesives, 23 F.3d 1547, 1552 (9th Cir. 1994) (adopting majority rule to decline extension of four-year limitations period where warranty makes no reference to any future date). Accordingly, the four-year limitations period applies because the SAC does not allege any warranty explicitly provided for a specified period of time, and to the extent the breach of contract claim is based on any Printer delivered prior to May 11, 2012, the claim is barred and must be dismissed. D. Tabletop's Third And Fourth Causes Of Action For Breach Of Implied Warranties Should Be Dismissed. 1. Tabletop's implied warranty claims are barred by Delaware's statute of limitations. Generally, a federal court sitting in diversity applies state law on substantive issues and federal rules pertaining to procedural matters. However, California district courts find that "statutes of limitations in diversity cases are considered Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 27 of 32 Page ID #:943 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 1064485.03/LA -19- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP substantive …." PAI Corp. v. Integrated Sci. Solutions, Inc., 2007 U.S. Dist. LEXIS 33819 *14 (N.D. Cal. Apr. 25, 2007) (citing Guarantee Trust Co. v. York, 326 U.S. 99, 108-110 (1945)). Thus, the applicable statute of limitations that applies to Tabletop's breach of implied warranty claims brought under Delaware code is the four-year limitations period set forth under Delaware law. Del. Code Ann. Tit. 6, § 2-725(1)-(2). See also S&R Assocs., 725 A.2d at 435 ("Causes of action based on a breach of warranty under the Delaware Commercial Code have a four-year statute of limitations period."); Johnson v. Hockessin Tractor, Inc., 420 A.2d 154, 157-58 (Del. 1980). Even if analyzed under California law, the identical four-year limitations period also applies. See Cal. Comm. Code § 2725(1) ("An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued."). In addition, under both the California and Delaware statutes, "[a] breach of warranty occurs when tender of delivery is made" and "[a] cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach." Cal. Comm. Code § 2725(2) (emphasis added); Del. Code Ann. Tit. 6, § 2-725(2) (same). In other words, a cause of action for breach of warranty accrues upon tender of delivery and, as explained in section IV(C)(2) above, the exception for warranties explicitly extended to future performance does not apply here. See id.; see also, Cardinal Health 301, Inc., 169 Cal.App.4th at 130-133 (rejecting future performance exception of 2725(2) because a promise that the parts at issue would work for 50,000 cycles did not specify a date or time in the future). Moreover, under Delaware law, "[a]n implied warranty, by its very nature, cannot extend to future performance because it makes no explicit representations concerning longevity." S&R Assocs., 725 A.2d at 436 (citing Lecates v. Hertrich Pontiac Buick Co., 515 A.2d 163, 174 n.15 (Del. Super. Ct. 1986)). Thus, asserting only implied warranty claims, Tabletop cannot satisfy this exception and faces a strict four-year statute of limitations. Id. Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 28 of 32 Page ID #:944 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 1064485.03/LA -20- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Tabletop alleges that its relationship with Citizen began, at the latest, in 2007. SAC, ¶ 29. At some unidentified date thereafter, Tabletop engaged the Contract Manufacturers to manufacture the Device, and those manufacturers purchased the Printer at issue directly from Citizen. Id. at ¶ 47. Tabletop claims that it, along with its Contract Manufacturers, have purchased in excess of 175,000 Printers from Citizen. Id. at ¶¶ 51-52. For purposes of the statute of limitations, Tabletop's implied warranty claims accrued when Citizen tendered delivery of the Printers, not when those Contract Manufacturers delivered the Devices or any of the Printers to Tabletop. See Lecates, 515 A.2d at 175-76 (explaining that a breach of warranty claim accrues upon delivery to the original purchaser, not any subsequent purchasers); Wilson v. Class, 605 A.2d 907, 909-10 (Del. Super. Ct. 1992) (same); see also, Cal. Comm. Code § 2725(2). Consequently, Tabletop's claims for breach of implied warranty of merchantability and breach of implied warranty of fitness for particular purpose should be dismissed to the extent they are based on any Printer that Citizen tendered delivery of more than four years prior to Tabletop's commencement of this Action.3 E. Even If Tabletop's Claims Are Not Dismissed Outright, Its Requests For Attorneys' Fees And Consequential Damages Must Be Dismissed. In this action, Tabletop seeks recovery of attorneys' fees and consequential damages for its Second, Third, and Fourth causes of action for breach of contract and breach of implied warranties. However, the SAC fails to set forth any contractual, statutory, or other basis to support recovery of attorneys' fees on these claims, and Tabletop's request for such fees must be dismissed. In addition, 3 Although not determinative for purposes of this motion, Citizen provides a limited 90-day warranty for its Printer, commencing on the date of purchase for each Printer, which expressly disclaims any and all other warranties, express, implied or statutory, and further sets forth specific limitations and exclusions of liability for breach of warranty. Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 29 of 32 Page ID #:945 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 1064485.03/LA -21- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Tabletop's requests for consequential damages must be dismissed because they are expressly limited by the terms of the Specification that Tabletop admits was delivered. 1. Tabletop may not recover attorneys' fees on its breach of contract claim. Tabletop's request for recovery of attorneys' fees on its breach of contract claim should be dismissed. California follows the "American Rule," codified in Code of Civil Procedure section 1021, "under which parties to litigation pay their own attorneys' fees, unless a statute or contract provides otherwise." Summers v. Newman, 20 Cal.4th 1021, 1031 (1999); Cal. Code Civ. Proc. § 1021. Here, the SAC seeks recovery on the claim for breach of contract for damages, costs, and attorneys' fees incurred by Tabletop arising from the purchases of the Printer from Citizen. SAC, ¶ 87. However, Tabletop has not alleged any provision of the Purchase Orders, the Specification, or any other agreement that would authorize recovery of such fees and has further failed to allege any statutory or other basis for recovery of such fees on a breach of contract claim. Thus, as a matter of law, Tabletop's request for attorneys' fees on its breach of contract claim must be dismissed. 2. Tabletop's requests for attorneys' fees for its implied warranty claims are barred under Delaware law. In addition, Tabletop requests attorneys' fees based on its breach of implied warranty claims under Delaware law. FAC ¶¶ 93, 98. Yet, Tabletop does not cite any authority to support its request. Similar to California, "Delaware courts adhere to the American rule, which provides that parties bear their own costs of litigation unless there is a contractual or statutory basis for the award of attorney's fees." Saunders-Gomez v. Rutledge Maint. Corp., No. CPU4-13-003588, 2016 Del.C.P. LEXIS, at *2 (Del. Com. Pl. Feb. 25, 2016); Gatz Props., LLC v. Auriga Capital Corp., 59 A.3d 1206, 1222 (Del. 2012). Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 30 of 32 Page ID #:946 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 1064485.03/LA -22- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Here, Tabletop has not pleaded that any provision of the Purchase Orders, Specification, or Delaware statute supports an award of attorneys' fees based on a breach of implied warranty claim. In fact, because the Printers were accepted (as discussed above), any potential recoverable damages are limited to those set forth in 6 Del. C. § 2-714 (Buyer's damages for breach in regard to accepted goods) and 6 Del. C. § 2-715 (Buyer's incidental and consequential damages). Attorneys' fees are not recoverable under Delaware law and Tabletop has failed to allege any facts to suggest that there exists any other basis for its request for such fees. See Phippin v. Delmarva Motor Acceptance Corp., 2006 Del. C.P. LEXIS 5, at *5 (Del. Com. Pl. Jan. 27, 2006) (holding defendant breached the implied warranty of merchantability while rejecting plaintiff’s request for attorneys' fees, including under 6 Del. C. § 2- 714, because “there is no statute that provides for such damages”). Thus Tabletop's request for attorneys' fees based on its implied warranty claims must be dismissed. 3. Tabletop's requests for consequential damages are barred by the Specification's express disclaimer of such damages. Under both California's and Delaware's provisions of the Uniform Commercial Code governing sale of goods, "[c]onsequential damages may be limited or excluded unless the limitation or exclusion is unconscionable." See Cal. Comm. Code § 2719(3); Del. Code Ann. Tit. 6, § 2-719(3). Here, Tabletop admits that the Specification was delivered and relies on the language of the Specification noting the Printer's "wear resistance" of "50 km or more" to support its claims for breach of contract and breach of the implied warranties. See SAC, ¶¶ 36, 74, 82. However, the terms of the Specification includes an express disclaimer for "any consequential damages to property, income or time that result of the use of this product," (see, SAC, Ex. 1, p.ii) which under both California and Delaware law, bars Tabletop's recovery of any consequential damages arising from use of the Printer. See Agricola Baja Best v. Harris Moran Seed Co., 44 F.Supp.3d 974, 993- 994 (S.D. Cal. 2014) (citing Nunes Turfgrass v. Vaughan-Jacklin Seed Co., 200 Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 31 of 32 Page ID #:947 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 1064485.03/LA -23- Case No. 2:16-cv-07140-PSG-AS NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Cal.App.3d 1518, 1538 (1988) (finding California UCC "expressly allows the limitation or exclusion of consequential damages … unless … unconscionable.")); see also, Delmarva Power & Light Co. v. Abb Power T & D Co., 2002 Del. Super. LEXIS 311, *12-13 (Del. Super. Ct. 2002) ("under Delaware law, a party may limit the remedies available to the other party, provided the remedy excluding consequential damages, does not fail of its essential purpose, and is not unconscionable."). Tabletop does not allege anywhere in the SAC that the Specification or its term disclaiming consequential damages is unconscionable and thus cannot recover for any such damages. Accordingly, to the extent Tabletop's breach of contract and breach of the implied warranties seek to recover consequential damages, the claims for such damages must be dismissed. V. CONCLUSION For the reasons set forth herein, Citizen respectfully requests that this Motion be granted and that each of Tabletop's claims asserted in the SAC be dismissed under Rule 12(b)(6) for failure to state a claim, and that to the extent Tabletop's claims for breach of contract and breach of the implied warranties are not dismissed outright, that the Court dismiss Tabletop's requests for attorneys' fees and requests for consequential damages. Dated: December 28, 2016 ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP SCOTT J. LEIPZIG MARISSA M. DENNIS TIM C. HSU By: /s/ Tim C. Hsu TIM C. HSU Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION and CITIZEN SYSTEMS JAPAN CO., LTD. Case 2:16-cv-07140-PSG-AS Document 51 Filed 12/28/16 Page 32 of 32 Page ID #:948 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 1065291.01/LA Case No. 2:16-cv-07140-PSG-AS REQUEST FOR JUDICIAL NOTICE LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP SCOTT J. LEIPZIG (BAR NO. 192005) MARISSA M. DENNIS (BAR NO. 245027) TIM C. HSU (BAR NO. 279208) ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP 865 South Figueroa Street, Suite 2800 Los Angeles, California 90017-2543 Phone: (213) 622-5555 Fax: (213) 620-8816 E-Mail: sleipzig@allenmatkins.com mdennis@allenmatkins.com thsu@allenmatkins.com Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION, and CITIZEN SYSTEMS JAPAN CO., LTD. STEPHANIE D. CLOUSTON ALSTON & BIRD LLP 2828 N. Harwood Street Suite 1800 Dallas, TX 75201 (Pro Hac Application granted on October 5, 2016) Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION, and CITIZEN SYSTEMS JAPAN CO., LTD. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION - LOS ANGELES TABLETOP MEDIA, LLC, Plaintiff, v. CITIZEN SYSTEMS OF AMERICA CORPORATION; CITIZEN SYSTEMS JAPAN CO, LTD., Defendants. Case No. 2:16-cv-07140-PSG-AS ASSIGNED FOR ALL PURPOSES TO Judge Philip S. Gutierrez REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF CITIZEN SYSTEMS AMERICA CORPORATION AND CITIZEN SYSTEMS JAPAN CO., LTD.'S MOTION TO DISMISS SECOND AMENDED COMPLAINT Date: March 6, 2017 Time: 1:30 p.m. Ctrm: 6A - 6th Floor Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 1 of 60 Page ID #:949 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 1065291.01/LA -2- Case No. 2:16-cv-07140-PSG-AS REQUEST FOR JUDICIAL NOTICE LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP REQUEST FOR JUDICIAL NOTICE Pursuant to Federal Rules of Evidence Rule 201, Defendants Citizen Systems America Corporation ("CSA") and Citizen Systems Japan Co., Ltd. ("CSJ") (CSA and CSJ are together referred to herein as "Citizen"), hereby request that the Court take judicial notice of the document identify herein in support of their concurrently filed Motion for Dismiss the Second Amended Complaint filed by Plaintiff Tabletop Media, LLC ("Tabletop"). Courts may take judicial notice of generally known matters outside of the record, including judicial notice of facts supported by documents as found in prior actions or other similar actions. Bridgeport Music, Inc. v. Smith, 714 F.3d 932, 936, n. 4 (6th Cir. 2013). It is also proper to take judicial notice of documents filed and orders or decisions entered in any federal or state court. Holder v. Holder, 305 F.3d 854, 866 (9th Cir. 2002). The document submitted for judicial notice herein has been filed with the los Angeles Superior Court and is available from the official court docket. Therefore, the Court has authority to take judicial notice of the document identified below under Federal Rules of Evidence Rule 201(b) as facts that can be accurately and readily determined from sources whose accuracy cannot be reasonably questioned. See Harris v. County of Orange, 682 F.3d 1126, 1131-1132 (9th Cir. 2012). Accordingly, Citizen respectfully requests that this Court take judicial notice of the following document: 1. Cross-Complaint for Damages filed by Tabletop on December 22, 2016 in the Los Angeles County Superior Court Case entitled Citizen Systems America Corp., et al. v. SMTC Manufacturing Corp., et al., Case No. YC070952 ("Cross- Complaint"). A true and correct copy of the Cross-Complaint, sent by Tabletop's counsel to Citizen on December 22, 2016 and confirmed by counsel to have been filed on the same date, is attached hereto as Exhibit A. Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 2 of 60 Page ID #:950 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 1065291.01/LA -3- Case No. 2:16-cv-07140-PSG-AS REQUEST FOR JUDICIAL NOTICE LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP Dated: December 28, 2016 ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP SCOTT J. LEIPZIG MARISSA M. DENNIS TIM C. HSU By: /s/ Tim C. Hsu TIM C. HSU Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION, and CITIZEN SYSTEMS JAPAN CO., LTD. Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 3 of 60 Page ID #:951 EXHIBIT A Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 4 of 60 Page ID #:952 I 2 J 4 5 6 7 I 9 10 l1 l2 13 t4 15 t6 l7 l8 l9 20 2l 22 23 24 25 26 27 28 KALPANA SRTNTVASAN (237460) ksrinivasan@susmangodfrey. com DAVTDA BROOK (27s370) dbrook@susmangodfrey. com SUSMAN GODFREY L.L.P. l90l Avenue of the Stars, Suite 950 Los Angeles, CA 90067 Telephone: (310) 789-3100 Fax: (310) 789-3150 OPHELIA CAMINA (Pending Admission Pro Hac Vice) ocanina@susmangodfrey.com SUSMAN GODFREY L.L.P. 901 Main Street, Suite 5100 Dallas, T){75202-3775 Telephone : (21 4) 7 54-1900 Fax: (214) 754-1900 Attorney for Defendant and Cross-Complainant Tabletop Media, LLC SUPERIOR COURT OF THE STATE OF CALIF'ORNIA COUNTY OF LOS ANGELES CITIZEN SYSTEMS OF AMERICA CORPORATION, a California òorporation; and CITIZEN SYSTEMS JAPAN CO., LTD., Plaintiff, vs. SMTC MANUFACTURING CORPORATION OF CALIFORNIA, a Califomia Corporation, ASTEELFLASH USA CORP., a Delaware Corporation; ONCORE MANUFACTURING SERVICES [NC., a Delaware Corporation; TABLETOP MEDIA, LLC, dlblaZIOSK, a Delaware limited liability company; and Does 1 through 25, inclusive, Defendant. TABLETOP MEDIA, a Delaware limited liability company Cross-Complainant, vs. CITIZEN SYSTEMS OF AMERICA CORPORATION, a California Corporation; and CITIZEN SYSTEMS JAPAN CO., LTD., Cross-Defendants. Case No. YC070952 Assigned to the Hon. Stuart B. Rice - Dept. B Complaint Filed: Nov. 12, 2015 CROSS.COMPLAINT FOR DAMAGES 4676900v11015075 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 4 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 5 of 60 Page ID #:953 I 2 J 4 5 6 7 I 9 10 11 t2 t3 t4 l5 t6 t7 18 t9 20 2l 22 23 24 25 26 27 28 NATURE OF THE ACTION 1. Founded in 2006, Tabletop is a media technology and content management company headquartered in Dallas, Texas. Tabletop is the developer and owner of a proprietary tablet device which is distributed under the name Ziosk@ (the "Device"). The Device is used exclusively in restaurants and enables patrons to order their meals, pay their bills, and then print a receipt. Because of the receipt function, the Device requires a printer. 2. In developing the Device, Tabletop needed a printer that could be physically incorporated into the Device and could function reliably in the Device's intended environment- restaurants across the world. To this end, Tabletop identified several printer manufacturers, including Citizen. 3. Despite Citizen having a significantly higher price point than its competitors, Tabletop ultimately selected Citizen as its exclusive provider of printers for the Device. Tabletop made its selection in reliance on Citizen's assurances that it had a quality printer that met Tabletop's specific needs, and that this printer was reliable and suitable for Tabletop's intended use, including being reliable and suitable for the intended environment. Citizen also touted its brand reputation and demonstrated an unparalleled willingness to assist Tabletop in its integration of the printer into the design of the Device. 4. Tabletop sought and obtained Citizen's selection of the best printer from among Citizen's many printers. This selection by Citizen was to be based on which printer would be best suited for the Device and its intended use based on the dealings between the parties. Tabletop presented Citizen with details about the Device, ffid also informed Citizen that the Device (to include Citizen's printer) was to be used exclusively in the restaurant environment, including on tabletops and bar tops. Citizen, in turn, recommended the Citizen MLT-289 line thermal printer mechanism (the "Citizen Printer"). 5. In making the selection and recoÍrmendation, Citizen made numerous representations to Tabletop about the Citizen Printer, including but not limited to, that the Citizen Printer was a quality printer, suitable for use in the Device, and suitable for use in the intended environment (i.e., restaurants). 4676900v1/015075 I CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 5 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 6 of 60 Page ID #:954 I 2 J 4 5 6 7 8 9 10 1l t2 13 t4 l5 t6 l7 18 l9 20 2t 22 23 24 25 26 27 28 6. In addition to Citizen's representations related to the selection and recommendation of the Citizen Printer, Citizen.made various other representations about the Citizen Printer and its suitability for use in the Device. These representations included, but are not limited to, that the Citizen Printer was a "robust product;" designed for "heavy use"; and would withstand "50 km or more" of 'owear resistance." 7. Tabletop relied on Citizen's numerous representations over a period of more than a year in selecting the Citizen Printer that Citizen had recommended to Tabletop. 8. In further reliance on Citizen's representations, Tabletop worked closely with Citizen toward "designing in" the Ciiizen Printer into the Device's ultimate design. Because the CitizenPrinter was designed into the Device, each version of the Device has exclusively included the Citizen Printer. 9. But Citizen's representations proved false, and the Citizen Printers began malfunctioning. 10. Tabletop has investigated the malfunctions of the Citizen Printer and determined they were caused by various defects in the Citizen Printer, including, but not limited to, its platen switch component. The platen switch, which sends an electronic signal indicating whether the Citizen Printer is out of paper and/or whether the printer door is open, began to erroneously signal that either the printer paper was out or that the printer door was open, when in fact neither were true. Users of the Device could no longer print their receipts. Such erroneous signals caused Tabletop's restaurant customers to send the Devices back to Tabletop for repair andlor replacement. 11. Tabletop now understands thatCitizen's representations about the Citizen Printer were false, as to the quality of the printer, its reliability, and its suitability for the Device and its intended environment. On information and belief, Citizen knew about these defects in the Citizen Printer. Alternatively, Citizen should have known about the defects and acted with conscious indifference in making the affrrmative representations without knowing the truth about its statements. 24676900v11015075 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 6 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 7 of 60 Page ID #:955 1 2 J 4 5 6 7 8 9 10 1l 12 l3 l4 15 16 l7 18 T9 20 2l 22 23 24 25 26 27 28 12. Upon learning of the problems with the Citizen Printer, Tabletop promptly notified Citizen about these malfunctions and defects, but Citizen has refused to take responsibility, repair or replace the Citizen Printers, pay for the costs of recalling them, or work with Tabletop toward a resolution of the malfunctions and defects. As a result, Tabletop brings this action for fraud, breach of contract, breach of the implied warranty of merchantability, and breach of the implied warranty of fitness for particular purpose JURISDICTION AND VENUE 13. Venue is proper in this court because the action involves written instruments, agreements, and purchase orders between Cross-Complainants and Cross-Defendants which were entered into and to be performed and fulfilled in Torrance, California, Los Angeles County. PARTIES 14. Cross-Complainant Tabletop Media, LLC ("Tabletop") is a limited liability company duly organized and existing under the laws of the State of Delaware with its principal place of business located at 12404 Park Central Drive, Suite 350, Dallas, Texas 75251. 15. Cross-Defendant Citizen Systems America Corporation ("CSA") is a California corporation with its principal place of business in Torrance, California. 16. Cross-Defendant Citizen Systems Japan Co., Ltd. (ooCSJ"), a Japanese corporation, is a division of Citizen Holdings Co., LTD, the parent company of CSA. FACTUAL ALLEGATIONS 17. The Device. Tabletop is the developer, owner and distributor of the proprietary Device, registered under the tradename Ziosk@. The Device (shown below) is a small tablet with, among other parts, a touchscreen interface, credit card reader, and built-in printer. J .rl¡15h i ,,,.¡'s CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 7 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 8 of 60 Page ID #:956 I 2 ) 4 5 6 7 8 9 10 11 t2 l3 t4 l5 t6 l7 18 t9 20 2l 22 23 24 25 26 27 28 18. The Device was specifically designed for the restaurant industry, and is typically placed on restaurant tables and bar tops where patrons sit, drink, and eat. Tabletop currently has about 170,964 Devices currently in use in about 2,827 restaurant locations nationwide, including at restaurant brands like Chili's, Olive Garden, and Red Robin, ¿Ìmong others. 19. The Device has transformed and streamlined the casual dining experience. Using the Device, restaurant guests can order food or beverages directly from the Device, and they can order on their own schedule, not the schedule of the wait staff. 20. The Device also allows restaurant patrons to pay for their meal with a credit card, debit card, gift card or other payment option (see below). After payment, restaurant patrons are given the choice of emailing or printing a copy of their receipt (see above). In Tabletop's product experience, a majority of restaurant patrons choose to print their receipt. As a result, the printer in the Device is a key component and its dependability and reliability are critical to the success of Tabletop's Device. 2I. Notably, the Device is the only tabletop payment device with an onboard printer currently in the marketplace. Accordingly, the inclusion of a printer represents a strategic advaltage of the Device. 22. However, the inability to print a receipt via the Device causes significant operational issues for the managers and employees of Tabletop's restaurant customers. For example, when a receipt cannot be printed on the Device, a server is required to (1) re-open a 4 xJfcy,l. k¿rrã "ç/Ìr! ¿úi$ FÍl' W:'t H¡¡l $?J, $¡rl1 $¡¡r $irî $ur $1fi s¡ flrfi $l¡8 $¡¡ & Em tì{tÍ [fÀt 3-¡lilüTlit Jlf!Àtlùi lÍHtl t{ffi ffit( SlliÂtrftt trmtl ilitrilxf,l [tt 0Ímïm{ ümilril !ô btsl Þx lm Püt te* I - p J 4676900v11015075 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 8 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 9 of 60 Page ID #:957 I 2 J 4 5 6 7 8 9 l0 11 t2 13 T4 15 l6 17 l8 t9 20 2l 22 23 24 25 26 27 28 restaurant patron's receipt, and (2) print such receipt at the restaurant's point-of-sale system. These steps may require the assistance of a management representative. Such additional touch points introduce burdens (both time and effort) which the Device is specifically designed to avoid and which necessarily are counterproductive to reducing the average time it takes for restaurants to turn tables. As such, the value proposition of the Device is diminished when its printing function is compromised. 23. The Development of the Device. Over the past 16 years, Tabletop's Chairman and Co-Founder has taught an MBA class at SMU's Business School focusing on Entrepreneurship. In 2005, some of his students approached him about his pay-at-the table Device concept as well as the potential to incorporate other ideas into the concept. It was decided that these students would pursue the idea as their class term project. The students ultimately submitted their term project on the pay-at-the-table tablet concept and entered and won the SMU Business Competition. 24. ln 2006, Tabletop's Chairman and these students co-founded Tabletop to develop what would become known as the Device and related software solutions. From the earliest concepts of the Device, the Tabletop team recognized the importance of having an on-board printer. 25. Identi$ing Citizen and the Citizen Printer. Most users print their receipts at the end of the meal, and thus the printer is a key component to the Device's function. During development of the Device, Tabletop understood this need and sought to identi$ a suitable printer component for the Device. Tabletop conducted an extensive search into which printer would be most suited for incorporation into its Device. In addition to Citizen, Tabletop identified and met with several other manufacturers and distributers of printers. 26. Citizen manufactures and distributes a broad range of printers, including thermal printer mechanisms for customers that need to implement printing technology into their own systems and equipment. One of the printer mechanisms manufactured by Citizen is the Citizen Printer (the MLT-289 printer mechanism). 54676900v11015075 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 9 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 10 of 60 Page ID #:958 I 2 aJ 4 5 6 7 I 9 10 11 t2 l3 l4 15 t6 t7 18 t9 20 2t 22 23 24 25 26 27 28 27 . Throughout 2007 and 2008, Tabletop provided Citizen with detailed information about the needed printer and the intended use for the Device in restaurant environments. Despite being a startup that closely guarded its designs, Tabletop even provided Citizen with the CAD drawings and speciflrcations for the Device. Citizen, in turn, exhibited an interest in partnering with Tabletop to ensure that the Citizen Printer would perform as expected. 28. Based on these conversations, Citizen recommended to Tabletop that it incorporate the MLT-289 into the Device. 29. Tabletop was impressed by the MLT-289 which included various helpful features. For example, the Citizen Printer featured built-in platen switches designed to sense that the printer paper is out or that the printer door is open. In an email dated January 29, 2009, one of Tabletop's co-Founders, Viren Balar, advised Andrew Golden, then Senior Director at Citizen in charge of securing the Tabletop account, of the importance of this specific feature to restaurant operations to make it easier for restaurant staff to track such issues. (Mr. Golden originally worked from California, though at some point in 2009 or 2010 he moved to San Antonio, Texas. On information and belief, Mr. Golden still lives and works in Texas.) As Mr. Balar explained: "Vy'e would need the printer door open mechanism sensor build [sic] into the mechanism, it's a [sic] important and integral part of restaurant operations as waiters are not good at tracking these items." Although this email was directed at Mr. Golden, numerous other Citizen employees were copied including, Koji Matsuzaka, Kino Shitar, Dimitar Bakardjiev, and Herb Netal. 30. Tabletop also wanted to ensure that the Citizen Printer retained its quality and its reliability for the life of the Device, which was to be used in restaurant environments. Tabletop also wanted assurances that the Citizen Printer could be successfully "designed in" to the Device, especially given the higher price of the Citizen Printer. 31. In response to Tabletop's concems, Citizen touted its record for manufacturing printers high in both quality and reliability and which exceeded the ratings of Citizen's competitors. 32. For example, in an email dated August 15, 2008, Mr. Golden wrote to Mr. Balar that"[w]hen you deploy your product, you will have confidence that the Citizenparts will work as 6t/01 5 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 10 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 11 of 60 Page ID #:959 1 2 J 4 5 6 7 8 9 10 11 l2 l3 t4 15 t6 l7 18 l9 20 2t 22 23 24 25 26 27 28 expected." By that same email, Mr. Golden made clear to Mr. Balar the exigency of addressing the issue: "I have made every effort to remind everyone from our President down what the opportunity is here and who your customer is. The size of the opportunity is not lost on us. Believe me, we are working to get your issues resolved as quickly as possible." 33. On December 17,2008, Mr. Golden described the Citizen Printer as a oorobust product" designed for "heavy use." Once again demonstrating Mr. Golden's knowledge of Tabletop's intended use of the Device, Mr. Golden wrote: "The competitors unit is designed as a othrow-away' for mobile printers where the Citizen mechanism is a more robust product meant for POS application. I would consider your application a POS type application. The competitor's mechanism is not designed for heavy use or to be repaired." 34. Citizen further delivered to Tabletop a specification for the Citizen Printer indicating "50 km or more" of "wear resistance." That specification is attached to this Complaint as Exhibit 1. 35. Citizen also demonstrated a clear willingness to provide a level of design support to Tabletop that was unmatched by the other manufacturers. For example, Citizen eagerly reviewed all aspects of the design of the Device, including highly confidential schematics and renderings of the Device. Citizen reviewed these materials in connection with its collaboration with Tabletop about the design of the Device including helping to determine the proper placement of the Citizen Printer to minimize paper jams, assisting with testing of the Device, providing feedback to resolve software and manufacturing-related issues, and providing input and advice related to requirements for the printer driver and firmware which are unique to the Device. 36. In reliance on Citizen's numerous representations, which Mr. Golden and other Citizen employees made through a combination of emails directed at Mr. Balar and other members of the Tabletop team, as well as in telephone conversations with Mr. Balar, and in- person meetings with Mr. Balar in Dallas, Texas, Tabletop accepted Citizen's recommendations and undertook the numerous steps necessary to design-in the Citizen Printer into the Device. In connection therewith, Tabletop had to re-design significant parts of the Device so that it could accommodate the Citizen Printer. 7I /0 I 5075 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 11 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 12 of 60 Page ID #:960 I 2 J 4 5 6 7 8 9 10 11 T2 13 t4 15 t6 t7 18 t9 20 2t 22 23 24 25 26 27 28 37. This entire re-design effort was led by Tabletop's various engineering and design teams working out of Tabletop's Dallas headquarters. 38. Indeed, in reliance on Citizen's numerous representations, Tabletop revised the specifications for its Device, which now is designed to incorporate the Citizen Printer. By way of example only, based on Citizen's input and to accommodate the Citizen Printer, Tabletop modified the printer's angle of entry and exit as well as the alignment of the printer platen to minimize paper jam-related issues. 39. Notably, as part of this re-design, on February 25,2008, one of Tabletop's design firms sent Citizen, including Messrs. Golden and Bakardjiev, a STEP model of the Citizen Printer and Device housing for said Printer and requested feedback from Citizen regarding the proper location and placement of the Citizen Printer in the Device. At no time during this extensive collaboration did Citizen advise Tabletop that the Citizen Printer needed to be encased or enclosed in anything other than plastic. This is despite the fact that Citizen had provided feedback on the plastic that surrounds the Citizen Printer. 40. Citizenwas thus aware of the incredible effort undertaken by Tabletop to design-in the Citizen Printer, and even cited to it as reason why it would agree to negotiate a better price with Tabletop for the Citizen Printer. As just one example, on January 8, 2010, Mr. Golden represented to Mr. Balar: "We still can't achieve the $16.00 with this mechanism but sometime last year you committed [Tabletop] to designing in the MLT-4280. V/ith this mech we can get to your price point." 41. Ultimately, Citizen was selected for a variety of reasons, including, but not necessarily limited to, its many assurances to Tabletop regarding the reliability and suitability of the printer for the Device, with which it was by then intimately familiar. 42. Once the product was released, Citizen requested the opportunity to prominently feature the Device at Citizen's trade show-related booths. One of these was a hospitality-related trade show called Restaurant Leadership Conference. Citizen ostensibly wanted to showcase the Device to demonstrate the parties' relationship and the efficacy of using the Citizen Printer which was now designed into the Device to be used in restaurant environments. 4676900vr10r5075 8 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 12 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 13 of 60 Page ID #:961 1 2 J 4 5 6 7 8 9 10 11 T2 13 t4 15 T6 l7 18 t9 20 2T 22 23 24 25 26 27 28 43. The Manufacture of the Devices. Tabletop engaged various contract manufacturers to manufacture the Device, including: SMTC Manufacturing Corporation ("SMTC"), Asteelflash USA Corp. (o'Asteel"), and OnCore Manufacturing Services, Inc. (o'OnCore"), among others (jointly, the "Manufacturers"). Tabletop entered into Manufacturing Services Agreements with SMTC, Asteel, and OnCore to manufacture the Device (the "Manufacturing Agreements"). , 44. As provided in the Manufacturing Agreements, at Tabletop's direction, the Manufacturers purchased various materials and components to be used in building and assembling the Devices. Pursuant to the Manufacturing Agreements, these materials were and are considered Tabletop's property. According to the specifications (attached to each of the Manufacturing Agreements), Tabletop required that the Manufacturers use the Citizen Printer, as recommended by Citizen, the MLT-289. 45. Thereafter, each Manufacturer contracted with Cifizen to purchase the MLT-289 Printer (hereinafter the "Purchase Orders"). The Manufacturers and Citizen also agreed to certain Terms and Conditions, including a warranty that expressly "survive[s] any inspection, delivery, acceptance, or payment by Buyer of the materials or services." The same Terms and Conditions do not in any way prohibit the Manufacturers' ability to assign their rights under the Purchase Orders. 46. All three Manufacturers assigned their rights under these Purchase Orders to Tabletop. 47. SMTC and Asteel did this via separate assignment agreements with Tabletop. OnCore did this via its Manufacturing Agreement with Tabletop, by which it assigned to Tabletop the right to enforce any defects involving the materials - including the Citizen Printer - purchased by OnCore on Tabletop's behalf pursuant to its agreement with Tabletop. 48. At all relevant times, Citizen was aware that the Manufacturers were purchasing CitizenPrinters on behalf of Tabletop for incorporation and use in the Tabletop Device. 49. Tabletop also directly purchased Printers from Citizen. These Printers were delivered directly to Tabletop at its Dallas headquarters. 4676900vrt015075 9 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 13 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 14 of 60 Page ID #:962 I 2 3 4 5 6 7 8 9 10 il t2 13 t4 15 t6 l7 18 t9 20 2l 22 23 24 25 26 27 28 50. The Citizen Printer was incorporated into every Device. Tabletop, both on its own and through its Manufacturers, purchased in excess of 175,000 Citizen Printers which were then incorporated into at least as many Devices. 51. The Printer Failures. The Citizen Printer contains two distinct sensors: an out- of-paper sensor and a printer-door-is-open sensor. These sensors are critically important because if either the printer paper is out or if the printer door is open, the Citizen Printer will not print a receipt. The failure to print a receipt causes restaurant patrons to solicit the assistance of a server or manager. This undermines some of the intended purposes of the Device by increasing the time and decreasing the efficiency of the patron's experience, and increasing the restaurant's time to turn a table. 52. As alleged above, Tabletop made known to Citizen the importance of this particular feature, which is critical to the success of the Device. 53. Around June 2015, Tabletop first began receiving a significant number of returned Devices from its restaurant customers who complained to employees at Tabletop's Dallas headquarters-where its restaurant help desk and engineering teams are located-about the Citizen Printers installed in its Devices. 54. Specifically, Tabletop's restaurant customers were complaining that certain Devices began to intermittently display ar erroneous message indicating that either the printer door was open or that the printer was out of paper when in fact neither were true. (See above). Unable to clear the error message, the Devices were returned to Tabletop's Dallas headquarters l0 TIIT PRI]{TÍN ffi llüT ßf PåPM TR TIIE PEIIIITER OOOR IS OPEII o 4676900v11015075 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 14 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 15 of 60 Page ID #:963 I 2 J 4 5 6 7 8 9 10 1l I2 13 t4 15 I6 t7 18 t9 20 2t 22 23 24 25 26 27 28 for repair or replacement. Most of the repairs are handled in-house in a repair center located on the bottom floor of Tabletop's Dallas headquarters. 55. Prior to this time, Tabletop had no reason to suspect that there was any issue with this particular feature of the Citizen Printer, nor any reasonable basis to suspect that the Printer, which Citizen's representatives had assured Tabletop would perform as promised in the Device as well as in restaurant environments, was likely to malfunction prior to the express warranty of 50 km. 56. Upon retum to and inspection by Tabletop, no obvious problems were detected. Subsequent removal of the Citizen Printer from the Device, however, revealed a significant number of mechanical platen switches were either not working at all or were only working intermittently when connected to a multi-meter. V/hen the malfunctioning switches were opened up, a majority showed discoloration of the silver-plated contact pad. (See comparison of new and used contact pad below.) Upon visual inspection, the contact pads appeared to have large amounts of sulfuration which manifested as a range of colors, including blue, red, purple, orange and gold. This issue was confirmed by Tabletop's internal reports and third-party consulting experts. rÈ 57. Over the next several months, Devices continued to be retumed by Tabletop's restaurant customers as a result of the same effoneous printer-related door message. t1 lr,i ie':*, r¡l ' ,.1 l"' *' ,,Låi,l r *, i ,t',¡ I ,-l t 4676900v1/015075 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 15 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 16 of 60 Page ID #:964 I 2 J 4 5 6 7 8 9 10 11 l2 t3 t4 15 l6 l7 18 l9 20 2l 22 23 24 25 26 27 28 58. As a result of the increasing return of the Devices, Tabletop undertook a series of investigations, including internal and independent, third-party examination and testing of the Citizen Printer and its platen switch. Such examination confirmed the presence of sulfuration in "failed" switches and also revealed the silver platting on the platen switch's surface was being removed by the silver-coated stainless steel springs which touch the surface when the platen switch is actuated (i.e., when the printer door is closed). 59. Based on this examination and testing, Tabletop is informed and believes the Citizen Printer failures are the result of manufacturing defects associated with the Citizen Printer and its silver-platted platen switch mechanism. For example, Citizen selected a platen switch which (l) wasn't plated with a sufficient amount of silver, or a more durable metal, to ensure durability to the upper end of its rating specification, (2) contained stainless steel springs which caused the premature removal of silver from the surface pad, causing a lack of conductivity, and (3) contained no environmental shielding like a grease or gel. 60. The Citizen Printer failures are occurring well before the Citizen Printers reach the specification of 50 kilometers of printing as represented by Citizen to Tabletop. 61. Tabletop's Efforts to Address the Printer Failures. As soon as Tabletop understood that there was a defect with the Citizen Printers, it promptly reached out to Citizen on behalf of itself and the Manufactures to alert Citizen of the defect. 62. Between July and October 2015, representatives of the parties exchanged e-mails and/or participated in conference calls and in-person meetings to discuss the failures observed by Tabletop and its restaurant customers. Citizen representatives initially represented to Tabletop a willingness to help Tabletop solve and remediate the malfunctioning platen switches which had caused the Citizen Printer failures. In fact, during September and October of 2015, Citizen sent Tabletop multiple emails demonstrating its various efforts to assist Tabletop in identifuing the possible source(s) of the Citizen Printer failures. 63. On November 5,2015, Citizen's representatives traveled to Dallas, Texas to meet with Tabletop's Chief Technology Officer, ostensibly for the purpose of reviewing Citizen's analysis of the failures and to discuss steps to remediate the problems. Instead, Citizen's 4676900vt/0t5075 12 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 16 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 17 of 60 Page ID #:965 I 2 J 4 5 6 7 I 9 10 11 l2 13 t4 15 t6 T7 18 t9 20 2l 22 23 24 25 26 27 28 representatives did an about-face. After stringing Tabletop along for weeks with the promise of remediating the failures, Citizen now blamed the failures on Tabletop. 64. The day following the November 5 meeting, Tabletop sent Citizen a letter discussing the Citizen Printer failures and again asking Citizen to assist in remediating the failures. Just six days later, Citizen responded by filing its declaratory judgment action. The DJ Action was an improper anticipatory suit, filed while the parties were in discussions and trying to address and resolve the failures. 65. Despite Citizen's filing of the DJ Action, Tabletop continued to reach out to Citizen, and to diligently work toward resolving the Citizen Printer failures. The Parties engaged in continued discussions, both telephonically and in person. However, ultimately, those efforts failed and Tabletop filed a complaint in federal district court. Tabletop's federal action is numbered 2:16-cv-7140-PSG-ASx and is currently pending in the Central District of California, Western Division. 66. Tabletop now files these claims against Citizen in this matter. F'IRST CAUSE OF ACTION (COMMON LA\ry FRAUD) 67. Tabletop incorporates the allegations above. 68. Before and during the execution and performance of the Purchase Orders, Citizen, in particular Mr. Andrew Golden, made numerous material misrepresentations to Tabletop concerning the Citizen Printer including: selecting the Citizen Printer for the intended use and environment; representing the quality, durability, and reliability of the Citizen Printer; representingthe Citizen Printer was suitable for the intended use; representing the Citizen Printer was suitable for the intended environment; and representing the Citizen Printer would function reliably for at least 50 kilometers of printing. 69. Citizen was intimately familiar with the Device and had substantial knowledge about the Device, its design and its intended use. Citizen was involved in the design of the Device, and knew of and was involved with Tabletop in the "designing-in" of the Citizen Printer into the Device. By "designing-in" the Citizen Printer, Citizen ensured that Tabletop could not l346'16900v1/0 CROSS.COMPLAINT FOR DAMAGES EXHIBIT A PAGE 17 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 18 of 60 Page ID #:966 1 2 J 4 5 6 7 8 9 10 ll t2 13 l4 15 t6 l7 18 t9 20 2l 22 23 24 25 26 27 28 replace it because a competing printer could not be readily substituted in its place. Citizen was thus well aware that if the Citizen Printer malfunctioned, Tabletop would face serious and costly obstacles to replacing the Citizen Printers. 70. Citizen was also well aware of the Device's general design as well as the specific location and housing around the Citizen Printer as designed within the Device. Citizen also knew the Device was to be used exclusively in restaurant environments, on tabletops and bar tops, where food, cleaners and other solvents are constantly used. 71. Citizen's representations were material to Tabletop. The representations were material to Tabletop's selection of the Citizen Printer, decision to re-design large parts of the Device so that it could now incorporate and oodesign-in" the Citizen Printer, and cause Tabletop to order and buy the Citizen Printers. Citizen's representations were also material to Tabletop's decision to continue with the business relationship and to continue to purchase more Citizen Printers for each of the next several generations of the Device. 72. Citizen's representations to Tabletop, including, for example, that the Citizen Printer was suitable for the intended use, that the Citizen Printer was suitable for the intended environment, and that the Citizen Printer would function reliability for at least 50 kilometers of wear resistance, were false and Citizen made the representations knowing they were false or with conscious indifference to the truth. 73. These representations were false because the Citizen Printers have not "work[ed] as expected[,]" nor have they proven to be "robust product[s]" designed for o'heavy use." The Citizen Printers likewise have not been able to withstand "50 km or more" of "wear resistance." 74. Citizen has taken the position that these failures are attributable to Tabletop's design of the Device, but these failures are attributable to the design and manufacturing of the Citizen Printers, with which Citizen has always been familiar. Specifically, Tabletop is informed and believes the Citizen Printer failures are the result of manufacturing defects associated with the Citizen Printer and its silver-platted platen switch mechanism. For example, Citizen selected a platen switch which (l) wasn't plated with a sufficient amount of silver, or a more durable metal, to ensure durability to the upper end of its rating specif,rcatio n, (2) contained stainless steel 4676900v1/015075 14 CROSS.COMPLAINT FOR DAMAGES EXHIBIT A PAGE 18 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 19 of 60 Page ID #:967 1 2 J 4 5 6 7 8 9 10 11 t2 l3 t4 15 t6 l7 18 T9 20 2l 22 23 24 25 26 27 28 springs which caused the premature removal of silver from the surface pad, causing a lack of conductivity, and (3) contained no environmental shielding like a grease or gel. Looking just at the shielding, a conductive grease or gel can be applied to a silver or gold-plated surface to (1) lubricate the surface (which reduces wear and increases durability of the plated surface); and (2) mitigate against the flow of corrosive materials to the plated surface. 75. Citizen's misrepresentations on which Tabletop relied are further underscored by the position it has taken since this dispute arose. Specifically, Citizen has taken the position that it would never have recommended the Citizen Printer for use in the Device as currently designed for use in any sort of restaurant environment. Citizen, however, had knowledge of its Printer, the Device, the Device's intended use in restaurant environments, and the Device's design, when it made the representations to Tabletop at issue here. 76. V/hen Citizen made the false representations to Tabletop, Citizen thus either knew that the representations were false, or Citizen made the representations recklessly as positive assertions without knowledge of whether the representations were true or false. Citizen made those representations to Tabletop with the intent Tabletop would rely on the representations and re-design its Device such that it was dependent on Citizen for its printers, and thereafter continued with the representations with the intent that Tabletop would continue to purchase more Citizen Printers and not terminate the business relationship. 77. Tabletop relied upon the false representations of Citizen as a material basis for selecting the Citizen Printer, "designing in" the Citizen Printer into its Device, and causing the purchase of the Citizen Printers. Tabletop has continuously relied on these repeated false representations in continuing to do business with Citizen and to refrain from canceling its business with Citizen. 78. As a result of Citizen's fraud, Tabletop has suffered significant monetary damages, in an amount to be proven at trial, which Tabletop is entitled to recover from Citizen including but not limited to the benefit of the bargain that Tabletop was promised by Citizen's false representations. Additionally, because Citizen's false representations were made willfully, Tabletop is also entitled to recover exemplary damages. 15ll}t507 5 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 19 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 20 of 60 Page ID #:968 1 2 J 4 5 6 7 8 9 l0 1l t2 13 t4 15 T6 l7 18 t9 20 2l 22 23 24 25 26 27 28 SECOND CAUSE OF ACTION ßREACH OF IMPLIED WARRANTY OF MERCHANTABILITY) 79. Tabletop incorporates herein the above allegations. 80. Citizenis a printer merchant selling and distributing printers in the United States. 81. Citizen sold printers to be used in Tabletop's Device, including the Citizen Printer, knowing that Tabletop was the intended customer. 82. As a matter of law, Citizen owes Tabletop an implied warranty of merchantability pursuant to 6 Del. C. $2-314. That implied warranty includes that the Citizen Printers would be reasonably fit for their ordinary purpose and of good and merchantable quality. 83. Citizen breached the implied warranty of merchantability in that the Citizen Printers were neither merchantable nor reasonably fit for ordinary printing. 84. As a result of Citizen's breach of warranty, Tabletop suffered, and continues to suffer, direct, incidental, and consequential damages which include the price paid for the malfunctioning Citizen Printers, the cost of repairing or otherwise replacing the Citizen Printers, the impact on Tabletop's brand and commercial goodwill, the costs of this action, and attorneys' fees. THIRD CAUSE OF ACTION ßREACH OF IMPLIED \ilARRANTY OF FITNESS FOR PARTICULAR PURPOSE) 85. Tabletop incorporates the allegations above. 86. As a matter of law, Citizen also gave to Tabletop an implied warranty of fitness for particular purpose pursuant to 6 Del. C. $2-315. That implied warranty includes that the Citizen Printers sold to Tabletop would function suitably and appropriately in Tabletop's Devices. 87. Citizen was familiar with the design of the Devices, was provided with the specifications and other information about the Devices, and was informed and knew that the Devices were to be used in restaurant environments. 88. Citizen breached the implied warranty of fitness for particular purpose in that Citizen Printers were not fit to be incorporated in Tabletop's Devices. t64676900v1/015075 CROSS-COMPLAINT FOR DAMAGES EXHIBIT A PAGE 20 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 21 of 60 Page ID #:969 I 2 J 4 5 6 7 8 9 10 l1 t2 13 l4 15 t6 l7 18 t9 20 2t 22 23 24 25 26 27 28 89. As a result of Citizen's breach of warranty, Tabletop suffered, and continues to suffer, direct, incidental, and consequential damages which include the price paid for the malfunctioning Citizen Printers, the cost of repairing or otherwise replacingthe Citizen Printers, the impact on Tabletop's brand and commercial goodwill, the costs of this action, and attorneys' fees. JURY TRIAL DEMANDED 90. Cross-Complainant demands a trial by jury. PRAYER FOR RELIEF WHEREFORE Cross-Complainant prays for judgment against Cross-Defendant as follows: Tabletop respectfully requests that the Court enter judgment for those damages which it has incurred including: 1. For its actual damages; 2. For its general, incidental, and consequential damages; 3. Exemplary damages; 4. For prejudgment and post-judgment interest; 5. For its reasonable attorney's fees; 6. For costs of suit incurred; 7. For any and all other relief, at law or in equity, to which Tabletop may be entitled. Dated: December22,2016 KALPANA SRINIVASAN OPHELIA CAMINA DAVIDA BROOK SUSMAN Y .P By: Kal Attorneys for t74676900v1/015075 CROSS-COMPLAINT FOR DAMAGES Tabletop Media, LLC EXHIBIT A PAGE 21 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 22 of 60 Page ID #:970 1 2 IJ 4 5 6 7 8 9 10 11 t2 13 t4 15 l6 t7 l8 t9 20 2T 22 23 24 25 26 27 28 PROOF OF SERVICE I, the undersigned, declare: I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is 1901 Avenue of The Stars, Suite 950, Los Angeles, Californi a, 90067 . On December 22,2016,I served the foregoing document(s) described as follows: CROSS.COMPLAINT FOR DAMAGES on the interested parties in this action by placing true copies thereof enclosed in sealed envelopes addressed as follows: See Attached Service List XX BY MAIL: I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid at Los Angeles, California in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affrdavit. XX BY ELECTRONIC MAIL I caused said documents to be prepared in portable document format (PDF) for e-mailing and served by electronic mail as indicated on the above service list. Executed on December22,2016, at Los Angeles, California. XX (State) I declare under penalty of perjury under the laws of the State of California that the above is true and correct. (Federal) I declare that I am employed in the office of a member of the bar of this Court at whose direction the service was made. LauraO. Andrews (Type or Print Name) (Signature) 4676900v1/015075 18 EXHIBIT A PAGE 22 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 23 of 60 Page ID #:971 1 2 J 4 5 6 7 I 9 10 11 t2 13 l4 l5 l6 l7 l8 t9 20 2l 22 23 24 25 26 27 28 Scott J. Leipzig sleipzis@allenmatkins.com Ar.r.¡N MerrrNs L¡cr GeMeLe MRr,r,oRv & Nnrsrs LLP 1901 Avenue of The Stars, Suite 1800 Los Angeles, CA 90067 Tel: (310) 788-2400 Fax: (310) 788-2410 Marissa M. Dennis mdenni s@allenmatkins. com Ar-lBN MRrzuNs Lscr GeN¿eLB Mlr.lonv & Nersrs LLP 865 South Figueroa Street, Suite 2800 Los Angeles, CA 90017 Tel: (213) 622-ssss Fax: (213) 620-8816 Counselþr Pløintffi Citizen Systems America Corp. and Citizen Systems Japan Co., Ltd Steve Winick shwinick@blaxterlaw. com J.T. Wells Claxter wblaxter@blaxterlaw. com Blexrpn BlecruaN LLP 475 Sansome Street, Suite 1850 San Francisco, CA 94lll Counselfor Defendant AsteelFlash USA Corp. Alison K. Beanum Alison.beanum@sedgwicklaw.com Ryan E. Cosgrove Ryan. cos grove@sedgwicklaw.com SppcwrcrLLP 801 South Fisueroa Street 19th Floor Los Angeles, CA 90017-5556 C ouns el for Defendant Onc or e Manufactur ing Services, Inc. Paul T. Martin pmartin@.hgla.com Sheila Wirkus Pendergast spendereast@hgla.com HBNNBI-I.y & Gnoss¡nIp LLP 4640 Admiralty Way, Suite 850 Marina del Rey, Califomia 90292 Tel: (310) 30s-2100 Fax: (310) 305-2116 Attorneys þr Defendant SMTC Manufacturing C orpor ati on of C alifurnia SERVICE LIST l/01 5075 t9 EXHIBIT A PAGE 23 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 24 of 60 Page ID #:972 Exhibit EXHIBIT A PAGE 24 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 25 of 60 Page ID #:973 LINE THERMAL PRINTER MECHANISM MODEL MLT-289 Rev.1.01 Newly issued Jan. 15, 2002 Specifications EXHIBIT A PAGE 25 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 26 of 60 Page ID #:974 i REVISION Rev.No. Date Comment Rev.0.00 Jul. 5, 2001 First created Rev.1.00 Aug. 20, 2001 Newly issued Rev.1.01 Jan. 15, 2002 Error Correction (p.13, p.22) EXHIBIT A PAGE 26 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 27 of 60 Page ID #:975 ii 1. To ensure proper use of this product, carefully read the specifications described herein. After having read this document, keep it in a safe place for future reference. 2. The contents of this document are subject to change without prior notice for future improvement. When using the product, consult the latest edition of these specifications. 3. Transcription or reduplication of part or all of this document is prohibited without written permission from CBM Corporation. 4. For any question or addendum regarding the contents of this document, please call us. 5. CBM Corporation is not responsible for any consequential damages to property, income, or time that result from the use of this product. 6. CBM Corporation does not warrant or guarantee that the contents of this document do not infringe the industrial property of any third party, with the exception of the case where a written agreement is separately concluded between our two companies. 1. Temperature rises on thermal head: The thermal head is heated up to a dangerously high temperature while it is in use or immediately after use. The equipment designer should design the enclosure so the user is unable to gain direct access to the thermal head. Also use an appropriate warning indicator on the equipment. The enclosure should also be designed to ensure maximum heat dissipation effect to limit temperature rise on the thermal head. 2. Head cleaning: Wait for the appropriate indicator to display(showing that the head temperature has lowered to a safe level) before performing thermal head cleaning. 3. Thermal head overheating: In case a thermal head runaway (due to CPU runaway, etc.) occurred, the consequent overheating may cause a smoke, fire, or a burn injury if the user inadvertently touches the head. Be sure to use a hardware facility to detect thermal head failures so the head is shut down in the event of failure. 4. Temperature rise on paper feed motor: Part of the paper feed motor structure protrudes from the printer frame. The equipment designer should design the enclosure so the user is unable to gain direct access to that part of the motor which is heated up to a high temperature while in normal use. Also use an appropriate warning indicator on the equipment. The enclosure should also be designed to ensure maximum heat dissipation from the paper feed motor since the motor is equipped without such temperature sensors as thermistors. 5. Overheating on the paper feed motor: In case of paper feed motor failure (due to CPU runaway, etc.), the consequent overheating may cause a smoke, fire, or a burn injury if the user inadvertently touches the motor. Be sure to use a hardware facility to detect motor failures so it is shut down whenever a failure is detected. 6. Enclosure design around paper feed gears: Part of the paper feed gear assembly protrudes from the printer frame. The equipment designer should design the enclosure so the user is unable to gain direct access to that part of the paper feed gear ass'y. 7. Other cautions: The equipment's enclosure should be designed to prevent liquid or any metallic foreign matter from being spilled or dropped into the printer mechanism as it may cause a smoke, fire, or other serious hazard due to internal short circuit. The equipment designer should design the enclosure so the user is unable to gain direct access to any sharp edge on the printer structure. EXHIBIT A PAGE 27 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 28 of 60 Page ID #:976 iii CONTENTS 1 Overview ............................................................................................................................................... 1 2 General Specifications ......................................................................................................................... 2 3 Thermal Head ...................................................................................................................................... 3 3-1 Thermal Head Specifications ........................................................................................................................ 3 3-2 Thermal Head Equivalent Circuit ................................................................................................................. 4 3-3 Head Dividing Process .................................................................................................................................. 5 3-4 Printing Data and Printing Position............................................................................................................... 5 3-5 Driving Pulse width....................................................................................................................................... 6 3-6 Thermistor Specifications ............................................................................................................................. 8 3-7 Electrical Characteristics of the Thermal Head............................................................................................. 9 3-8 Timing Chart Diagram ................................................................................................................................ 10 3-9 Peak Current ................................................................................................................................................ 10 3-10 Caution When Using the Thermal Head ....................................................................................................11 4 Paper Feeder ...................................................................................................................................... 12 4-1 Characteristics of the Stepping Motor ......................................................................................................... 12 4-2 Excitation Sequence .................................................................................................................................... 13 4-3 Example of the Drive Circuit ...................................................................................................................... 13 4-4 Motor Start/Stop Timing ............................................................................................................................. 14 4-5 Cautions for Motor Driving ........................................................................................................................ 15 5 Platen Sensor ...................................................................................................................................... 17 5-1 Specifications .............................................................................................................................................. 17 5-2 Example of Circuit for Platen Sensor .......................................................................................................... 17 6 Paper End Sensor .............................................................................................................................. 18 6-1 Specifications .............................................................................................................................................. 18 6-2 Example of Circuit for Paper End Sensor ................................................................................................... 19 7 Connection Terminals ........................................................................................................................ 20 7-1 Thermal Head Connector ............................................................................................................................ 20 7-2 Motor/Sensor Connector ............................................................................................................................. 22 8 Control System ................................................................................................................................... 23 8-1 Example of Driving Method ....................................................................................................................... 23 9 External Appearance ......................................................................................................................... 25 9-1 MLT-289 - Outline Drawings ...................................................................................................................... 25 9-2 MLT-289 Printer - Outline Drawings .......................................................................................................... 26 9-3 MLT-289 Platen Ass’y - Outline Drawings ................................................................................................. 27 10 Cautions for Printer Enclosure Design ............................................................................................ 28 10-1 Securing the Printer ................................................................................................................................... 28 10-2 Connection to Frame Ground .................................................................................................................... 28 10-3 Relative Roll Paper Positioning ................................................................................................................ 28 10-4 Roll Paper Holder ...................................................................................................................................... 28 10-5 Installing Platen Ass’y............................................................................................................................... 29 10-6 Miscellaneous ............................................................................................................................................ 29 11 Cautions for Design and Handling ................................................................................................... 30 11-1 Cautions on Driver Design ........................................................................................................................ 30 11-2 Cautions for Handling ............................................................................................................................... 30 11-3 Inserting the paper/Removal of the paper ................................................................................................. 31 11-4 Cleaning the Thermal Head ....................................................................................................................... 31 EXHIBIT A PAGE 28 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 29 of 60 Page ID #:977 MLT-289 SPECIFICATIONS 1 1. OVERVIEW The MLT-289 is a compact thermal line printer emplying the thermal dot printing mechanism. It is designed primarily for use in POS terminals, measuring and analyzing instruments, medical equipment, communications devices, portable data terminals, and other similar data devices. 1.1 Features (1) Compact, light-weight design (2) Platen Release Lever for improved operability (3) High printing speed: 500 lines/sec. max. (4) High resolution: 8 dots/mm (5) Long operating life print head (6) Head drive: Single 5V supply or 2 Lithium-ion batteries (7) Simple, reliable mechanism design EXHIBIT A PAGE 29 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 30 of 60 Page ID #:978 MLT-289 SPECIFICATIONS 2 Item Printing method No. of overall dots Dot density Effective printing width Printing speed Feeding pitch Detection method Head temperature detection Paper end detection Head-Up detection Operating voltage range Current consumption Head(Vp) Motor(Vp) Recommended paper Paper width Paper thickness Recommended supplier & model Feeding force Paper retention force Life of head MCBF Life of head Pulse stress resistance Wear resistance Environmental Conditions Operating conditions Storage conditions Anti-vibration property Anti-shockness property External dimension Weight 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Remarks 5 V, head temperature=no less than 50˚C, within 64 dots 7.2 V, head temperature=no less than 30˚C, within 64 dots Motor's 2 stepping span Ni-Cd or Li-Ion, normally 7.2 V MAX 8.5 V is only allowed just after battery charging; not allowed for normal use. Vp=5V, 64 dots, 25˚C Vp=7.2V, 64 dots, 25˚C Vp=7.2V, 840PPS The outer surface of the roll paper must be the printing surface. The paper should not be bonded to the roll core. Roll diameter: No more than 60 mm ø normal temperature (25˚C), normal humidity, 12.5% printing ratio, rated energy, and on the recommended print paper Guaranteed range 5~40˚C with no dew condensation Humidity: 80%RH max. at 30˚C and below 70%RH max. at 30 to 35˚C 60%RH max. at 35 to 40˚C 50%RH max. at 40 to 45˚C Excluding the Platen Release Lever, connectors, and other projections Reliability Specifications Thermal dot line printing 384 dots/line 8 dots/mm 48 mm 200 dot lines/sec 420 dot lines/sec 0.125 mm Thermistor Photointerruptor Mechanical switch Vp DC 4.2~8.5 V Vdd DC 4.75~5.25 V 2.5 A MAX 3.5 A MAX 0.5 A MAX 0.3 A mean current 58 mm 65 μm Nippon paper : TF50KS - E2C More than 0.49N More than 0.78N 6 million lines 15 million lines No less than 100 million pulses 50 km or more Temperature : 0~45˚C Humidity : 35~80% RH Temperature : –20~60˚C Humidity : 10~90%RH 6G, Frequency 10~55 Hz 3 perpendicular axes, 1 hour 60G 11ms 6 directions, one impact in each direction 76.8(W) x 37(D) x 16(H) mm Approx. 50g 0 -1 2. GENERAL SPECIFICATIONS Table 2-1 General Specifications EXHIBIT A PAGE 30 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 31 of 60 Page ID #:979 MLT-289 SPECIFICATIONS 3 Table 3-1 Thermal Head Specifications 3. THERMAL HEAD 3.1 Thermal Head Specifications Item Effective printing width Overall No. of dots Dot density Dot centers Mean resistance value No. of strobes Data transfer method Driver configuration Voltage supply Vp Vdd 1 2 3 4 5 6 7 8 9 Specifications 48 mm 384 dots/line 8 dots/mm 0.125 mm 130 Ω 6 1 DATA input 6 drivers DC 4.2~8.5V DC 4.75~5.25V Remarks 64 dots each Max. normal voltage: 7.2 V MAX 8.5 V is only allowed just after battery charging; not allowed for normal use. EXHIBIT A PAGE 31 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 32 of 60 Page ID #:980 MLT-289 SPECIFICATIONS 4 p Figure 3-1 Themal Head Equivalent Circuit 3.2 Thermal Head Equivalent Circuit The thermal head is comprised of heating elements and the head drivers that drive the heating elements (see Fig. 3- 1). Serial print data, fed to the SI input, is shifted into the shift register synchronized with the Shift clock, then is latched into the latch register at the active edge of the LATCH signal. The Head Drive signal (Print commands STR1-6) opens the gate to energize the heating elements reflecting the print data. EXHIBIT A PAGE 32 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 33 of 60 Page ID #:981 MLT-289 SPECIFICATIONS 5 3.3 Head Dividing Process There are six strobes on the thermal head which can be divided into six cycles at maximum for printing. Table 3-2 lists the heating element positions in relation to the strobes. Table 3-2 Strobe Pin vs. Heating Elements 3.4 Printing Data and Printing Position Print data of 384-bit length, transferred by SI, is printed in the arrangement as shown in Figure 3-2. 1 2 3 4 5 6 1~64 65~128 129~192 193~256 257~320 321~384 64 64 64 64 64 64 STR.No Dot No./STRHeating Element No. Printing surface Printing data Printing paper Printer mechanism Motor Paper feeding direction Figure3-2 Printing Data and Printing Position EXHIBIT A PAGE 33 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 34 of 60 Page ID #:982 MLT-289 SPECIFICATIONS 6 =Ton(25) Ton(25) : :Eo (*) :Rav E (N x Rcom+Rav+Ric) :V :Vp :Ric :N :Rcom V x Rav Driving pulse width 25°C operating temperature (ms) o x 2 2 Typical energy applied 0.25 (mJ) Calculate V from the following formula: Supply voltage (V) Mean resistance value 130 (Ω) Number of simultaneously driven dots Common line resistance 0.65 (Ω) Driver’ ON resistance 18 (Ω) V = – 0.0321(Vp)2+1.8455(Vp)–3.8783 (*) The typical energy only applies to the specified thermal print paper, TF50KS-E2C. 3.5 Driving Pulse width 3.5.1 Compensating Pulse Width Driving Voltage Pulse width should be controlled according to the head driving voltage so as to secure constant print toning. The pulse width can be calculated with the following formula: Table 3-3 Example of Driving Pulse Width Calculation 4.2 V 5.0 V 6.0 V 7.2 V Supply voltage(Vp) 6.32 ms 1. Temperature 25˚C 2. Simultaneously driven dots 64 3. Resistance value 130 Ω 3.34 ms 1.90 ms 1.15 ms Pulse width EXHIBIT A PAGE 34 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 35 of 60 Page ID #:983 MLT-289 SPECIFICATIONS 7 3.5.2 Compensating Driving Pulse Width for Temperature Driving pulse width should be controlled according to ambient temperature which is detected with the thermal head's built-in thermistor. The thermal head must be shut down if the thermistor temperature exceeds 65°C. Use the following formula to determine driving pulse width: 3.5.3 Driving Pulse Width Calculation Example tx tx = : :t :C t : :Tx 1 100 (T25 – Tx) x C Driving pulse width (ms) at the operating temperature (Tx) Driving pulse width (ms) at 25°C operating temperature Room temperature (25°C) Operating temperature (°C) Temperature compensation coefficient: C=1.5 (less than 25°C) 25 T25 25 +[ [x C=1.2 (more than 25°C) 0 5 10 15 20 25 30 35 40 45 50 55 60 65 100.86 77.77 60.52 47.51 37.61 30.00 24.11 19.52 15.90 13.04 10.77 8.94 7.46 6.26 8.69 8.22 7.75 7.27 6.80 6.32 5.94 5.56 5.18 4.81 4.43 4.05 3.67 3.29 4.60 4.35 4.10 3.85 3.59 3.34 3.14 2.94 2.74 2.54 2.34 2.14 1.94 1.74 2.61 2.46 2.32 2.18 2.04 1.90 1.78 1.67 1.55 1.44 1.33 1.21 1.10 0.99 1.58 1.50 1.41 1.33 1.24 1.15 1.08 1.01 0.94 0.88 0.81 0.74 0.67 0.60 Temperature (°C) Thermistor resistance value(kΩ) Pulse width(μsec) Vp = 5.0 V Vp = 4.2 V Vp = 7.2 VVp = 6.0 V Table 3-4 Thermistor's Temperature Characteristic and Relationship of Driving Pulse Width vs. Temperature EXHIBIT A PAGE 35 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 36 of 60 Page ID #:984 MLT-289 SPECIFICATIONS 8 Thermistor resistance value Temperature Figure 3-3 Temperature Characteristics of Thermistor 3.6 Thermistor Specifications 1. Electrical characteristics (1) Resistance value : 30 kΩ ± 5% at 25°C (2) B constant : 3950 K ± 2% 2. Max.rate (1) Operating temperature range : – 40 ~ + 125°C (2) Heat dissipation constant : 1.5 m W/°C (3) Thermal time constant : 5 sec (4) Max. rated output power : 400 m W at 25°C 3. Relationship between the thermistor resistance value and temperature { { Rx Rx = EXP : :R :EXP(X) R :B :Tx B 1 1 Tx +273 298 Thermistor resistance value at temperature Tx (°C) Thermistor resistance value at 25°C (30 kΩ ± 5%) 3950 K ± 2% (Constant) Temperature (°C) Xth power of the exponents 25 25 x x ( ) EXHIBIT A PAGE 36 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 37 of 60 Page ID #:985 MLT-289 SPECIFICATIONS 9 3.7 Electrical Characteristics of the Thermal Head min typ max Rating Unit Item Mean resistance value Supply voltage Circuit power voltage Circuit power current Input voltage H Input voltage L Data input current H Data input current L Driver's output leakage current Max. operating frequency CLOCK pulse width Data setup time Data hold time Latch pulse width Latch setup time Latch hold time STR-DO propagation delay DO rising time DO falling time Signal Rave Vp Vdd Idd Vih Vil Iih Iil I1 t1 t2 t3 t4 t5 t6 t7 t8 t9 t10 125 4.0 4.75 0.7 Vdd 0 70 40 10 100 100 50 130 5.0 135 8.5 5.25 42 Vdd 0.3 Vdd 0.5 0.5 3.8 8 3.0 3.0 3.0 Ω V V mA V V μA μA mA MHz ns ns ns ns ns ns μs μs μs Remarks Typical printing condition ALL-HIGH Vih = Vdd = 5.0 V Vil = 0,Vdd = 5.0 V ALL-LOW See figure 3-4 T=25˚C Table 3-5 Electrical Characteristics of the Thermal Head EXHIBIT A PAGE 37 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 38 of 60 Page ID #:986 MLT-289 SPECIFICATIONS 10 3.8 Timing Chart Diagram 3.9 Peak Current The peak driving current depends on the number of simultaneously activated dots as given in the following example. Care should be exercised for voltage drops along the head drive wirings at the peak drive current. Figure3-4 Timing Chart Diagram Number of simultaneously driven dotsVp Peak current (theoretical value) Remarks 2.5 A 3.5 A 645 V 7.2 V Resistance value130 Ω 25 °C Table 3-6 Example of Peak Current EXHIBIT A PAGE 38 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 39 of 60 Page ID #:987 MLT-289 SPECIFICATIONS 11 3.10 Caution When Using the Thermal Head (1) Where the application demands continuous printing at a high printing ratio, the head driver should be designed so the thermal head is shut down whenever thermistor temperature exceeds 65°C. If printing is continued with thermistor temperature exceeding 65°C, the thermal head's operating life may be shortened significantly. (2) If a CPU runaway occurs on the host system, the software fault detection may fail to detect it, causing unrecoverable damage to the thermal head. Be sure to use hardware fault detection to protect the thermal head from possible damage. On fault detection, immediately shut down the power supply to the thermal head. The thermal head should be re-energized after the cause of the fault is removed. (3) The driver should be designed so the maximum energy applied to the thermal head does not exceed 0.37 mJ/ dot. If this limit is exceeded, the head's operating life may be shortened significantly. (4) Adhere to the following power On/Off sequence to protect the heating elements from possible damage: Power on: Vdd first, followed by Vp Power off: Vp first, following by Vdd (5) Whenever the thermal head is turned on or off, the STR signals must be left inactive. (6) Do not apply physical impact (including ingress of foreign matter) to heating element surfaces. (7) Avoid applying an excessive pulling force (20 N or more) to the thermal head's FFC cable. Also avoid physical contact with FFC cable plugs' pin contacts. A total number of mating cycles should not exceed 10. (8) If noise bypassing capacitors are required, use 0.1 μF/16 V capacitors across Vdd and GND. (9) To stabilize the COM potential to ground, use a large capacitance. It should be noted, however, that a large capacitance, if used with a lithium-ion battery, may cause the protection circuit to trip off. (10) While the printer is left inactive, leave the Vp supply to the thermal head turned off (all potentials held in capacitors must be discharged). EXHIBIT A PAGE 39 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 40 of 60 Page ID #:988 MLT-289 SPECIFICATIONS 12 4. PAPER FEEDER • The paper is fed forward if the paper feed motor is rotated counterclockwise as viewed from its gear side. • The stepping motor should be driven in 2-2 phase excitation mode. Two steps of motor driving signal feeds the paper by a 0.125 mm span (equal to dot centers). • Whenever the paper feed motor is to be started up from stop (unexcited) state, first drive it backward by 30 steps, and then forward by the same steps, so as to prevent paper feed mechanism's backlash that may cause lowered print quality. • While printing, the driving frequency must be controlled in real time according to print conditions (drive voltage, head temperature, number of energized dots, etc.). • To prevent the paper feed motor from overheating, leave it unexcited in any state other than paper feed or print operation. After the motor is driven for t seconds, allow a stationary interval of 2t seconds or more (t < 120 sec.). • Do not drive the paper feed motor intermittently by alternately starting and stopping it repeatedly, as it may cause uneven paper feed spans that will lead to lowered print quality. • The motor driver should have a fine driving voltage regulation (around 0.3 V). • Avoid backward paper feed (motor reversal). 4.1 Characteristics of the Stepping Motor Item Type No. of phases Driving system Excitation Winding resistance/phase Rating voltage Driving current Driving frequency Rating Permanent magnet type 4 phases Bipolar chopper driving 2-2 18 Ω / phase DC7.2 V Approx. 0.5 A To be determined by driving voltage Table 4-1 General Characteristics of the Stepping Motor EXHIBIT A PAGE 40 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 41 of 60 Page ID #:989 MLT-289 SPECIFICATIONS 13 4.2 Excitation Sequence The motor is driven in the forward direction if its excitation phases are switched as per the following steps: 4.3 Example of the Drive Circuit 1 ( A ) H L ( A ) H L ( B ) H L ( B ) H L dot line Figure 4-1 Excitation Voltage Waveforms Motor/sensor Connector H Figure 4-2 Example of the Drive Circuit Step 1 Step 2 Step 3 Step 4 A Low Low High High A High High Low Low B Low High High Low B High Low Low High Sequence Signal Table 4-2 Excitation Sequence EXHIBIT A PAGE 41 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 42 of 60 Page ID #:990 MLT-289 SPECIFICATIONS 14 4.4 Motor Start/Stop Timing 1. Stopped When stopping the motor, excite the same phase as the last one in the priting steps for 50 ms. 2. Stop mode To prevent the stepping motor from overheating, set the Stp (Stop) signal to High to suppress excitation whenever the motor is in Stop mode. While the motor is left unexcited, the paper won't be dislocated due to stepping motor's retention torque and platen pressure. 3. Activated (1) The motor should immediately enter the print steps after it restarts from pause mode. (2) When starting the motor, excite the same phases as those excited in the stopping step for 1 step, before proceeding with print step sequence. To absorb paper feed mechanism's backlash and consequent poor print quality, first drive the motor 10 dot rows (30 steps) backward, and then another 10 dot rows (30 steps) forward. Printing Stop mode (Unexcited) ActivatedStopped Backlash removing steps Printing Figure4-3 Motor Start/Stop Timing 1 dot line EXHIBIT A PAGE 42 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 43 of 60 Page ID #:991 MLT-289 SPECIFICATIONS 15 Start-up step 1st print step 2nd print step 3rd print step 4th print step Enlargement Figure 4-4 PWM control is activated when a single step period is equal to or more than the motor driving pulse width T1 as given in formula (1). (e.g. pulse width at 7.0 V = 1/800 = 0.00125 sec. = 1.25 ms) where T1 is the timing to start PWM control, that is, PWM control is initiated when time T1 has elapsed after an active driving step pulse is applied to the motor. The PWM frequency should be set between (and including) 10 kHz and 20 kHz. 4.5 Cautions for Motor Driving 1. Motor driving pulse rate Motor driving speed varies with driving voltage. It is drtermined with the following formula: Motor driving speed (pps) = 200 x (Vp) - 600 e.g.) When Vp = 7.0V: 800 pps = 200 x (7) - 600 2. Motor current control If the steping motor is driven at a very low rate or held up for a prolonged time span, it may produce unusual noise or heat. To prevent this, motor driving current must be PWM-controlled. T2+T3 T3 =D 1 =10 to 20 kHz (D = 0.65) T2+T3 EXHIBIT A PAGE 43 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 44 of 60 Page ID #:992 MLT-289 SPECIFICATIONS 16 3. Acceleration Control When the motor is heavily loaded during start-up or any other occasion, it must be driven under controlled acceleration scheme to secure the specified paper feed power. Individual acceleration tables are used for different driving voltage ranges. Gradually accelerate the motor until the driving frequency given in formula (1), motor driving speed, is reached while looking up the acceleration table prepared for the pertinent driving voltage. The acceleration steps are described below: 1. Activate the start-up step for the time period for acceleration step 1 (t0). 2. Drive the 1st step for the time span specified for acceleration step 1(t0). 3. Drive the 2nd step for the time span specified for acceleration step 2(t1). 4. Subsequently drive the n'th step for the time span specified for acceleration step n . 5. The motor reaches a constant speed when it is accelerated at the pulse width derived from the frequency given by formula (1), motor driving speed. t0 t1 t2 t3 t4 t5 t6 t7 t8 t9 t10 t11 t12 t13 t14 t15 t16 t17 t18 75 108 134 155 173 190 206 220 233 246 258 270 281 292 302 312 322 331 340 13.33 10.91 8.27 6.94 6.09 5.50 5.05 4.70 4.41 4.17 3.96 3.79 3.63 3.49 3.37 3.26 3.16 3.07 2.98 Step No. Vp=4.2~4.7 Step time (ms) 113 161 198 229 256 280 303 324 344 362 380 397 413 429 444 459 473 487 500 8.85 7.30 5.57 4.69 4.13 3.73 3.43 3.19 2.99 2.83 2.69 2.57 2.47 2.37 2.29 2.22 2.15 2.08 2.03 Vp=4.8~5.5 156 224 276 319 358 392 424 453 481 507 532 556 579 601 622 642 662 681 700 6.41 5.26 4.00 3.36 2.96 2.67 2.45 2.28 2.14 2.02 1.92 1.84 1.76 1.70 1.64 1.58 1.53 1.49 1.45 Vp=5.6~6.5 Motor Drive Speed (pps) Step time (ms) Motor Drive Speed (pps) Step time (ms) Motor Drive Speed (pps) Step time (ms) Motor Drive Speed (pps) Step time (ms) Motor Drive Speed (pps) 225 305 367 421 468 511 551 588 623 656 687 717 746 774 801 827 852 876 900 4.44 3.78 2.98 2.54 2.25 2.04 1.88 1.76 1.65 1.56 1.49 1.42 1.37 1.32 1.27 1.23 1.19 1.16 1.13 Vp=6.6~7.5 288 382 456 520 577 629 677 722 764 804 842 878 913 947 980 1011 1042 1071 1100 3.47 2.99 2.39 2.05 1.82 1.66 1.53 1.43 1.35 1.28 1.21 1.16 1.12 1.07 1.04 1.00 0.97 0.95 0.92 Vp=7.6~8.5 Table 4-3 Acceleration Step EXHIBIT A PAGE 44 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 45 of 60 Page ID #:993 MLT-289 SPECIFICATIONS 17 5. PLATEN SENSOR The printer is equipped with a platen sensor that detects wheter the platen ass’y is attached or not. If the thermal head is activated when the platen ass’y is detached, it may be damaged or the operating life may be shortened significantly. The driver should be designed to detect the platen sensor signal so the thermal head is never energized when the Platen Ass’y is detached. 5.1 Specifications Type Mechanical switch Platen Ass’y attached: CLOSE Platen Ass’y detached:OPEN Max. Rate DC 5V, 1mA Contact resistance less than 500 mΩ 5.2 Example of Circuit for Platen Sensor To prevent malfunction from chattering, use a capacitor in parallel with the switch contacts. CPU port GND Vdd(5V) 220Ω 10KΩ 0.001μF Figure 5-1 Example of Circuit for Platen Sensor EXHIBIT A PAGE 45 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 46 of 60 Page ID #:994 MLT-289 SPECIFICATIONS 18 6. PAPER END SENSOR The printer incorporates a paper end sensor (reflective photointerruptor). If the thermal head is energized with no roll paper loaded in the printer, the head may be damaged or its operating life may be significantly shortened. The driver should be designed so the thermal head will never be energized if no roll paper is loaded in the printer. 6.1 Specifications Table 6-1 General Specifications for the Paper End Sensor Table 6-2 Electrical Characteristics of Paper End Sensor Input Forward voltage Reverse current Collector cutoff current Collector output current Leak current Response time Signal Condition Min. Normal Max. Unit Output VF IR ICEO IC ID t r t f V μA μA μA nA μsec μsec IF=20mA VR=3V VCE=20V Vdd=2V , IF =4mA VCE=2V , IF =4mA Vdd=5V IC=0.1mA RL=1KΩ Item Transmitting characteristics 23 1.2 1.4 10 100 160 100 30 40 T=25˚C T=25˚C Output Input Item Forward current Reverse voltage Allowable loss Voltage between collector and emitter Voltage between emitter and collector Collector loss Collector current Operating temperature Storage temperature Signal Rating Unit I V PD V V P I Topr Tstg 50 6 75 35 6 75 20 -25 ~ +85 -40 ~ +100 mA V mW V V mW mA °C °C F R CEO ECO C C EXHIBIT A PAGE 46 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 47 of 60 Page ID #:995 MLT-289 SPECIFICATIONS 19 6.2 Example of Circuit for Paper End Sensor The following paper sensing electronics is recommended to ensure error-free paper sensing: CPU port Peper end sensor Photointerruptor Anode Collecter Emitter Cathode GND Vdd 10kΩ 68kΩ 33kΩ 100Ω 180Ω 0.01μF Vdd Vdd GND GND GND Figure 6-1 Example of Circuit for Paper End Sensor EXHIBIT A PAGE 47 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 48 of 60 Page ID #:996 MLT-289 SPECIFICATIONS 20 7. CONNECTION TERMINALS The printer has 2 interface connectors with the following functions: 7.1 Thermal Head Connector Figure 7-1 shows thermal head connector's pin arrangement. Printing surface Motor 24 1 Printer mechanism Figure 7-1 Thermal Head Connector's Pin Allocations Connector Thermal head connector Head-up sensor Paper end sensor Motor 24 9 1 2 No. of Pin No. Maker, Type FFC (Pitch = 1mm) Molex Japan Inc. 51021-0900 Molex Japan Inc. 53047-0910 Molex Japan Inc. 52806-2410 53048-0910 Recommended Mating Connector Table 7-1 Connector Specifications EXHIBIT A PAGE 48 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 49 of 60 Page ID #:997 MLT-289 SPECIFICATIONS 21 Table 7-2 Thermal Head Connector's Pin Allocations Caution: All the GND pins must be connected to the host system's signal ground. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Pin No. Vp Vp SI GND TM /STROBE1 /STROBE2 Vdd /LATCH GND /STROBE6 CLOCK GND /STROBE5 /STROBE3 GND GND /STROBE4 GND GND GND Vp Vp Vp Signal EXHIBIT A PAGE 49 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 50 of 60 Page ID #:998 MLT-289 SPECIFICATIONS 22 7.2 Motor/Sensor Connector Figure 7-2 contains the sensor/motor connector pin assignments. No. 1 2 3 4 5 6 7 8 9 MotorB A B A Photointerruptor Collecter Photointerruptor Emitter + LED Cathode LED Anode Platen sensor output Platen sensor output Signal Remarks_ _ Paper end sensor Platen sensor Table 7-3 Motor Connector’s Pin Allocations Figure 7-2 Motor/Sensor Connector’s Pin Diagram Paper end sensor Platen sensor Figure 7-3 Example of Sensor Connector Circuit EXHIBIT A PAGE 50 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 51 of 60 Page ID #:999 MLT-289 SPECIFICATIONS 23 8. CONTROL SYSTEM 8.1 Example of Driving Method Figure 8-1 contains the timing charts for a line divided into 2 dot rows. The following provides step-by-step description of the timing charts: 1. Stop state: The printer is in Standby mode, with the motor left unexcited. 2. Motor starts up: Apply, to the motor, the driving phase for acceleration step 1 (t0) or the driving phase applied just before the motor stopped last. Driving it forward by 30 steps (and backlash removing steps) must be executed at this point. A single line of print data is transferred to the thermal head, where it is latched into the register. 3. The thermal head is activated to print the 1st dot row: The paper feed motor steps a single step forward to be ready for printing the 1st dot row. Stepping time refers to the driving pulse width at the driving frequency given by formula (1), motor driving speed, in Section 4.5. The thermal head is activate at the STB signal (1 to 6) timings each strobing 64 dots of print data. If the driving pulse width exceeds T1 (PWM activation timing), hold (PWM control) the motor driving signal until all the head driving pulses are transferred to the head. 4. The motor steps forward: When the 1st dot row is printed, the paper feed motor steps a single step forward. If the head driving pulse width exceeds the paper feed motor driving pulse width, the motor should be driven with the longer out of the following 2 driving pulse widths: i.e. one with an acceleration step shorter than the head driving pulse width obtained from the acceleration table in Table 4-3, and the other at the driving frequency given by formula (1), motor driving speed, in Section 4.5. 5. The thermal head is activated to print the 2nd dot row: The paper feed motor steps a single step forward to be ready for printing the 2nd dot row. If the head driving pulse width exceeds the paper feed motor driving pulse width, the motor should be driven with the longer out of the following 2 driving pulse widths: i.e. one with an acceleration step shorter than the head driving pulse width obtained from the acceleration table in Table 4-3, and the other at the driving frequency given by formula (1), motor driving speed, Section 4.5. The thermal head is activate at the STB signal (1 to 6) timings each strobing 64 dots of print data. If the driving pulse width exceeds T1 (PWM activation timing), hold (PWM control) the motor driving signal until all the head driving pulses are transferred to the head. 6. The motor steps forward: When the 2nd dot row is printed, the paper feed motor steps a single step forward. If the head driving pulse width exceeds the paper feed motor driving pulse width, the motor should be driven with the longer out of the following 2 driving pulse widths: i.e. one with an acceleration step shorter than the head driving pulse width obtained from the acceleration table in Table 4-3, and the other at the driving frequency given by formula (1), motor driving speed, in Section 4.5. EXHIBIT A PAGE 51 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 52 of 60 Page ID #:1000 MLT-289 SPECIFICATIONS 24 Backlash removing stepsStop Activated 1 dot line 2 dot line Figure 8-1 EXHIBIT A PAGE 52 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 53 of 60 Page ID #:1001 MLT-289 SPECIFICATIONS 25 9. EXTERNAL APPEARANCE 9.1 MLT-289 - Outline Drawings Range of pivoting center EXHIBIT A PAGE 53 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 54 of 60 Page ID #:1002 MLT-289 SPECIFICATIONS 26 9.2 MLT-289 Printer - Outline Drawings EXHIBIT A PAGE 54 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 55 of 60 Page ID #:1003 MLT-289 SPECIFICATIONS 27 9.2 MLT-289 Platen Ass’y - Outline Drawings EXHIBIT A PAGE 55 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 56 of 60 Page ID #:1004 MLT-289 SPECIFICATIONS 28 10. CAUTIONS FOR PRINTER ENCLOSURE DESIGN 10.1 Securing the Printer (1) Use the mounting screw hole (ø2.8) and 2 printer retention holes to secure the printer mechanism within the enclosure. The enclosure’s 4 mounting surfaces should be on a horizontal plane with an error not exceeding 0.1 mm. Any part of the enclosure, other than the 4 mounting surfaces, should not interfere with the printer mechanism. Mounting surfaces, if not on a single horizontal plane, may cause a deforming or torsional stress to the printer mechanism, possibly resulting in a mechanical failure. (For the locations of mounting holes, see Section 9, “EXTERNAL APPEARANCE.” (2) The screw used in the mounting hole (ø2.8) should have a screw head diameter of ø4.5 mm or less. Also exercise care so the printer's FFC or other lead wires are not wedged between the printer and enclosure wall. When securing the printer, exercise care not to impede the FFC’s movement. The FFC moves about 1mm as the head vibrates. (3) It is advisable that vibration-proof rubber feet be used at the printer retention holes to lower audible noise. 10.2 Connection to Frame Ground To prevent ESD damage to the thermal head or other printer electronics, ground the printer's chassis to the frame ground. 10.3 Relative Roll Paper Positioning (1) The angle (θ) of paper entry should be no less than 90 deg. (2) The distance between the paper sensor and printing position is approx. 7.5 mm. 10.4 Roll Paper Holder (1) The roll paper in the paper holder must be held in a horizontal position, with its core axis properly aligned with the platen axis. (2) The paper feed force at the roll paper holder exit should not exceed 0.49 N. The cradle paper holder generally demands a greater paper feed force than the shaft holder does. In designing the roll paper holder, take this into account. ±0.5 mm or less Roll paper Roll paper Figure 10-2 Roll Paper Positioning Printing position Thermal head Paper sensor Platen Figure 10-1 Relative Roll Paper Positioning EXHIBIT A PAGE 56 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 57 of 60 Page ID #:1005 MLT-289 SPECIFICATIONS 29 10.5 Installing the Platen Ass’y (1) The Platen Ass’y has 2 positioning holes (A) and 2 mounting holes (B). For the detailed Platen Ass’y positioning and dimensions, see section 9, “EXTERNAL APPEARANCE”, Section 9.3, “MLT-289 Platen Ass’y - Outline Drawings”. (2) The screws (M2) used in mounting holes B (ø2.2) should have a screw head diameter not exceeding ø3.5 mm. (3) The Platen Ass’y should be positioned precisely with respect to the printer. A low positioning accuracy may cause poor print quality or paper jam. 10.6 Miscellaneous (1) When using the paper cutter, design its layout so the paper end does not interfere with the cutter. (2) Depending on the enclosure design, the printed paper end may be entangled into the paper insertion port or the tail end of the roll paper may be entangled with the platen roller. The enclosure should be carefully designed to prevent the problems as such. Figure 11-3 Positioning/Mounting Holes in Platen Ass’y Platen Ass’y Mounting screw Figure 11-4 Platen Ass’y Mounting Screws EXHIBIT A PAGE 57 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 58 of 60 Page ID #:1006 MLT-289 SPECIFICATIONS 30 11. CAUTIONS FOR DESIGN AND HANDLING 11.1 Cautions on Driver Design (1) The thermal head driver should be carefully designed by referring to Section 3.10, “Caution when using the Thermal Head”. (2) To prevent ESD damage to the thermal head, ground the printer's chassis to the frame ground. (3) The cables and wires that connect the power supply to the head FFC or motor connectors should be routed as short as possible. (4) Never energize the thermal head without paper loaded or Platen Ass’y attached. Otherwise lowered print quality or damage to the head may result. Use the paper end and platen sensors for adequate interlock control. (5) Use the appropriate measure to prevent static electricity buildup in the paper feed path from entering control signal terminals. (6) Special care should be exercised to prevent paper fragments or debris from getting into the paper feed gear assembly. 11.2 Cautions for Handling (1) If a roll paper outside the recommended paper specifications is used, the specified print quality or printer's operating life may not be guaranteed. Also be sure to use roll paper with its width not exceeding the specified range of paper width. (2) Do not apply physical impact (including foreign matter) on the head substrate (heating element surfaces). (3) Immediately after printing sessions, the thermal head, motors, and their peripheral components heat up to dangerous temperatures. Do not touch them with bare hand. (4) To prevent ESD damage to the heating elements and driver ICs, use the appropriate anti-static measures including wrist band. (5) If the thermal head gathers dew drops, thoroughly dry it off before using the printer again. If the thermal head is energized with dew drops left on it, the head may be damaged. (6) If the printer is used in a low temperature, humid atmosphere, the print paper may be contaminated or the printer may gather dew drops due to water vapor emitted from the print paper (especially when an all-black or checker pattern is printed). (7) Cables should be connected or disconnected with the power to the printer left turned off. (8) Do not attempt to forcibly pull print paper (in either direction) out of Platen Ass’y or manually rotate the platen roller. (9) Never attempt to remove Platen Ass’y while the printer is printing or feeding paper. (10) When removing Platen Ass’y, always use Platen Release Lever. (11) The MLT-289 Printer has no drip-proof construction. Do not get it wet or operate it with wet hands. (12) The MLT-289 Printer has no dust-proof construction. Avoid using it in a dusty atmosphere. (13) While no paper is loaded in the printer, keep its paper sensor from ambient light as it may cause malfunction. EXHIBIT A PAGE 58 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 59 of 60 Page ID #:1007 MLT-289 SPECIFICATIONS 31 11.3 Inserting the paper/Removal of the paper 1. Inserting the paper • Press down Platen Release Lever and detach Roll Paper Holder Cover from the printer together with Platen Ass’y. • Properly set a roll paper in the printer, then gently install Paper Holder Cover in the printer together with Platen Ass’y. Do not give it a hard jolt while inserting. • If the paper is skewed, either feed it until all skew is removed, or retry paper loading. 2. Removing jammed paper • When removing jammed paper, push down Platen Release Lever and then remove Paper Holder Cover from the printer together with Platen Ass’y. Do not attempt to manually pull out paper (in either direction). 11.4 Cleaning the Thermal Head • Push down Platen Release Lever and remove Platen Ass’y from the printer. • Clean the thermal head surface with a cotton swab dampened with methanol, ethanol, or isopropyl alcohol. • Avoid cleaning the thermal head immediately after printing sessions as it is still at high temperature. Figure 11-1 Removing Platen Ass’y Figure 11-2 Loading a Roll Paper Platen Ass’y Platen Release Lever Platen Ass’y Roll paper EXHIBIT A PAGE 59 Case 2:16-cv-07140-PSG-AS Document 51-1 Filed 12/28/16 Page 60 of 60 Page ID #:1008 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 1065285.01/LA Case No. 2:16-cv-07140-PSG-AS DECLARATION OF TIM C. HSU LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP SCOTT J. LEIPZIG (BAR NO. 192005) MARISSA M. DENNIS (BAR NO. 245027) TIM C. HSU (BAR NO. 279208) ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP 865 South Figueroa Street, Suite 2800 Los Angeles, California 90017-2543 Phone: (213) 622-5555 Fax: (213) 620-8816 E-Mail: sleipzig@allenmatkins.com mdennis@allenmatkins.com thsu@allenmatkins.com Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION, and CITIZEN SYSTEMS JAPAN CO., LTD. STEPHANIE D. CLOUSTON ALSTON & BIRD LLP 2828 N. Harwood Street Suite 1800 Dallas, TX 75201 (Pro Hac Application granted on October 5, 2016) Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION, and CITIZEN SYSTEMS JAPAN CO., LTD. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION - LOS ANGELES TABLETOP MEDIA, LLC, Plaintiff, v. CITIZEN SYSTEMS OF AMERICA CORPORATION; CITIZEN SYSTEMS JAPAN CO, LTD., Defendants. Case No. 2:16-cv-07140-PSG-AS ASSIGNED FOR ALL PURPOSES TO Judge Philip S. Gutierrez DECLARATION OF TIM C. HSU IN SUPPORT OF CITIZEN SYSTEMS AMERICA CORPORATION AND CITIZEN SYSTEMS JAPAN CO., LTD.'S MOTION TO DISMISS SECOND AMENDED COMPLAINT Date: March 6, 2017 Time: 1:30 p.m. Ctrm: 6A- 6th Floor Case 2:16-cv-07140-PSG-AS Document 51-2 Filed 12/28/16 Page 1 of 2 Page ID #:1009 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 1065285.01/LA -2- Case No. 2:16-cv-07140-PSG-AS DECLARATION OF TIM C. HSU LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP DECLARATION OF TIM C. HSU I, Tim C. Hsu, declare: 1. I am an attorney at the law firm of Allen Matkins Leck Gamble Mallory & Natsis LLP, counsel of record for Defendants Citizen Systems America Corporation ("CSA") and Citizen Systems Japan Co., Ltd. ("CSJ") (CSA and CSJ are together referred to herein as "Citizen"). 2. This Declaration is made in support of Citizen's Motion to Dismiss Second Amended Complaint ("Motion") 3. On December 21, 2016, I emailed Davida Brook of Susman Godfrey LLP, counsel of record for Plaintiff Tabletop Media, LLC ("Tabletop"), to provide notice to Tabletop of Citizen's intent to file its Motion and the substantive basis upon which Citizen's requests dismissal of all alleged causes of action, and further requested that Ms. Brook contact me if she wished to meet and confer in further detail regarding the substantive basis for the Motion. On December 22, 2016, Ms. Brook responded to my email and indicated that she disagrees with the appropriateness of Citizen's Motion but did not request to further and meet and confer. From Ms. Brook's email, I understand Tabletop does not agree that its causes of action should be dismissed and intends to oppose the Motion. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed this 28th day of December, 2016, at Los Angeles, California. /s/ Tim C. Hsu TIM C. HSU Case 2:16-cv-07140-PSG-AS Document 51-2 Filed 12/28/16 Page 2 of 2 Page ID #:1010 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 1065282.01/LA Case No. 2:16-cv-07140-PSG-AS [PROPOSED] ORDER LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP SCOTT J. LEIPZIG (BAR NO. 192005) MARISSA M. DENNIS (BAR NO. 245027) TIM C. HSU (BAR NO. 279208) ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP 865 South Figueroa Street, Suite 2800 Los Angeles, California 90017-2543 Phone: (213) 622-5555 Fax: (213) 620-8816 E-Mail: sleipzig@allenmatkins.com mdennis@allenmatkins.com thsu@allenmatkins.com Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION, and CITIZEN SYSTEMS JAPAN CO., LTD. STEPHANIE D. CLOUSTON ALSTON & BIRD LLP 2828 N. Harwood Street Suite 1800 Dallas, TX 75201 (Pro Hac Application granted on October 5, 2016) Attorneys for Defendants CITIZEN SYSTEMS AMERICA CORPORATION, and CITIZEN SYSTEMS JAPAN CO., LTD. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION - LOS ANGELES TABLETOP MEDIA, LLC, Plaintiff, v. CITIZEN SYSTEMS OF AMERICA CORPORATION; CITIZEN SYSTEMS JAPAN CO, LTD., Defendants. Case No. 2:16-cv-07140-PSG-AS ASSIGNED FOR ALL PURPOSES TO Judge Philip S. Gutierrez [PROPOSED] ORDER GRANTING CITIZEN SYSTEMS AMERICA CORPORATION AND CITIZEN SYSTEMS JAPAN CO., LTD.'S MOTION TO DISMISS SECOND AMENDED COMPLAINT Date: March 6, 2017 Time: 1:30 p.m. Ctrm: 6A - 6th Floor Case 2:16-cv-07140-PSG-AS Document 51-3 Filed 12/28/16 Page 1 of 2 Page ID #:1011 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 1065282.01/LA -2- Case No. 2:16-cv-07140-PSG-AS [PROPOSED] ORDER LAW OFFICES Allen Matkins Leck Gamble Mallory & Natsis LLP [PROPOSED] ORDER The motion ("Motion") of Defendants Citizen Systems America Corporation ("CSA") and Citizen Systems Japan Co., Ltd. ("CSJ") (CSA and CSJ are together referred to herein as "Citizen") for an Order dismissing the First, Second, Third and Fourth causes of action in the Second Amended Complaint ("SAC") filed by Plaintiff Tabletop Media, LLC ("Tabletop") came on regularly for hearing on the Court's motion calendar on March 6, 2017, at 1:30 p.m. The Court, having read and considered Citizen's moving and reply papers, and the opposition papers filed by Tabletop, and having heard oral argument, and good cause appearing, NOW, THEREFORE, FINDS AND ORDERS AS FOLLOWS: 1. Citizens' Motion is granted; 2. Tabletop's First cause of action for Common Law Fraud, Second cause of action for Breach of Contract, Third cause of action for Breach of Implied Warranty of Merchantability, and Fourth cause of action for Breach of Implied Warranty of Fitness for Particular Purpose are dismissed without leave to amend; and 3. This action is dismissed in its entirety. Dated: , 2017 Hon. Philip S. Gutierrez Judge, United States District Court Case 2:16-cv-07140-PSG-AS Document 51-3 Filed 12/28/16 Page 2 of 2 Page ID #:1012
