Reporting on this case pains me greatly. I should be pleased to report on a CLRA and UCL decision that revives consumer claims. But all I feel is pain. Let me explain by quoting from the case. The very first sentence says, "In this class action alleging a failure to disclose a computer defect involving a microchip that controlled floppy disk data transmission, plaintiffs Tammy Collins and Rudolph Roma appeal from a judgment on the pleadings." Huh? Floppy disk data transmission. Rings a bell. Nope, can't place it. Must be some highfalutin, newfangled technology. I recognize "data." Anyhow, in Collins v. eMachines, Inc. (pub. ord. December 21, 2011), the Court reviewed a trial court order granting a motion for judgment on the pleadings.
It was alleged that defendant failed to disclose and actively concealed the disk controller defect from potential purchasers. Despite knowing of the defect and knowing that the defect could result in critical data corruption, executives of eMachines directed the company to continue to sell the defective computers after October 31, 1999. eMachines actively concealed the existence of the defect from purchasers by, among other practices specified in the FAC, continuing to issue the warranty knowing the computers had the defect, and engaging in misleading “customer service” practices that concealed the defect in online “customer support” guides, in customer service diagnoses of computer problems, and at call centers. The case was stayed for four years while cases in other states moved forward.
Turning first to the CLRA, the Court restated the LiMandri circumstances giving rise to actionable deceit. The Court recognized the FAC as alleging factor (2), when the defendant has exclusive knowledge of material facts not known or reasonably accessible to the plaintiff, and factor (3), when the defendant actively conceals a material fact from the plaintiff. The Court then agreed that a "reasonable" consumer would certainly find data corruption to be material information in connection with a computer.
Next, the Court distinguished Daugherty, observing that, in Daugherty, the only represetation made was the warranty, and the vehicles performed adequately as warranted. The Court was similarly dismissive of Bardin, in which it was alleged that exhaust manifolds were likely to fail after the warranty period. The Court explained that the manifolds in Bardin worked they way they were supposed to under the warranty. Contrasting the circumstances, the Court said, "Because a floppy disk, at the time of the complaint, was integral to the storage, access, and transport of accurate computer data, the floppy disk was central to the function of a computer as a computer. The exhaust manifolds at issue in Bardin, by contrast, were just blowing smoke." Slip op., at 12. That's funny. You see, the exhaust manifold vents combustion byproducts...
Regarding the UCL, the Court relied on its discussion about Daugherty and Bardin to conclude that a claim under the UCL was easily stated as well. The Court agreed that consumers certainly had an expectation about data integrity when they purchased the affected computers.
After also concluding that the allegations supported a claim for common law fraud, the Court concluded that legal remedies were adequate, rendering an unjust enrichment claim unnecessary.
I should also tag this one with "Dinosaurs," given the discussion of floppy disk drives. That reminds me that I should tell you about the time I saved data on a bent floppy disk drive by removing the casing and putting the raw disk in a disk drive. The year was 1985. Madonna, Huey Lewis, Duran Duran and Wham! were dominating the charts...
[extended period of blank stares]
...and that's how I saved all that data!