Pattison v. HP Inc.

1

2

3 IN THE UNITED STATES DISTRICT COURT

4 FOR THE NORTHERN DISTRICT OF CALIFORNIA

5

6 MARY PATTISON, Case No. 24-cv-02752-MMC

7 Plaintiff, ORDER GRANTING IN PART AND

DENYING IN PART DEFENDANT'S

8 v. MOTION TO DISMISS SECOND

AMENDED COMPLAINT AND STRIKE

9 HP INC., CLASS ALLEGATIONS; AFFORDING

PLAINTIFF LIMITED LEAVE TO

10 Defendant. AMEND; SETTING CASE

MANAGEMENT CONFERENCE

11

12 Before the Court is defendant HP Inc.'s ("HP") "Motion to Dismiss Plaintiff's

13 Second Amended Complaint and Motion to Strike," filed October 22, 2024. Plaintiff Mary

14 Pattison ("Pattison") has filed opposition, to which HP has replied. Having read and

15 considered the papers filed in support of and in opposition to the motion,1 the Court rules

16 as follows.2

17 In her Second Amended Complaint ("SAC"), Pattison alleges she and HP entered

18 into a contract titled "HP Care Pack Support Terms" (hereinafter, "Terms") (see Quarles

19 Decl., filed August 9, 2024, Ex. A),3 and that she did so in reliance on "false" statements

20 on HP's website that a customer who does not use the services set forth in the Terms is

21 entitled to a full refund at the end of the three-year contractual period (see SAC ¶¶ 15-16,

22 45, 50). Based thereon, Pattison asserts, on her own behalf and on behalf of a putative

23

1 Pattison's motion for leave to file a surreply, which motion HP has opposed, is

24

hereby DENIED. In the proposed surreply, Pattison argues that several cases cited in

HP's reply are distinguishable. The Court, however, has read and considered those

25

cases and does not need additional briefing to assess the authority cited by HP.

26

2 By order filed December 2, 2024, the Court took HP's motion under submission.

27

3 In connection with HP's motion to dismiss the First Amended Complaint, the

1 class, two Causes of Action titled, respectively, "Fraud" and "Violation of the Consumers

2 Legal Remedies Act," which claims she brings under California law. HP argues both

3 causes of action are subject to dismissal for failure to state a claim, or, in the alternative,

4 that Pattison's class allegations should be stricken.

5 A. Motion to Dismiss: Fraud Claim

6 HP, relying on California's "governmental interest test," see Mazza v. American

7 Honda Co., 666 F.3d 581, 590 (9th Cir. 2012), takes the position that Texas law applies

8 to Pattison's fraud claim, and that, under Texas law, her claims are subject to dismissal

9 pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a

10 claim. The government interest test, however, applies only where "there is no advance

11 agreement on the applicable law," i.e., a "contractual choice-of-law provision[ ]," see

12 Washington Mutual Bank, FA v. Superior Court, 24 Cal. 4th 906, 915 (2001), and, here,

13 the parties' contract provides that "[a]ny disputes arising in connection with this

14 [a]greement will be governed by the laws of the State of California" (see Quarles Decl.

15 Ex. A ¶ 18), broad language that HP fails to show does not encompass Pattison's fraud

16 claim, see Bernhard v. Harrah's Club, 16 Cal. 3d 313, 317-18 (1976) (holding party

17 seeking to "invoke the law" of non-forum state has burden to demonstrate other state's

18 law applies).4

19

20

4 The cases cited by HP, wherein courts found false advertising claims did not fall

within the scope of a choice-of-law provision, are distinguishable, in that each involved a

21

provision narrower than the provision in the Terms, namely, a provision limited to the

construction of the contractual terms at issue therein and/or specific events arguably

22

governed thereby. See In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 561 n.5, 578

(9th Cir. 2019) (considering contract providing "[t]he terms and conditions of this buyers

23

order . . . and any Sale/Lease hereunder will be governed by the laws of the

commonwealth of Virginia") (alteration and omission in original); Orshan v. Apple Inc.,

24

2024 WL 4353034, at **11-12 (September 30, 2024) (considering contract providing

"[t]his License will be governed by and construed in accordance with the laws of the State

25

of California"); Brown v. Madison Reed, Inc., 622 F. Supp. 3d 786, 796 (N.D. Cal. 2022)

(considering contract providing "[t]hese terms and any action related thereto will be

26

governed by the laws of the State of California"); Ochoa v. Zeroo Gravity Games, LLC,

2023 WL 4291650, at *11 (C.D. Cal. May 24, 2023) (considering contract, set forth in

27

Doc. No. 42-2, providing "[t]hese terms and our relationship will be governed by the laws

1 Alternatively, HP argues the fraud claim is subject to dismissal under California

2 law. First, HP argues, the fraud claim should be dismissed for the asserted reason that

3 Pattison fails to allege facts to support a "fraudulent concealment" claim. (See Def.'s

4 Mot. at 12:9.) The Court remains unpersuaded, as, under California law, a fraud claim

5 may be based on a theory of "false representation, concealment, or nondisclosure," see

6 Engalla v. Permanente Medical Group, 15 Cal. 4th 951, 974 (1997) (emphasis added),

7 and, here, Pattison alleges HP made false representations to her (see SAC ¶ 16);

8 consequently, she need not allege facts to support a concealment theory to state a fraud

9 claim. To the extent, however, Pattison's fraud claim can be read as asserting that HP, at

10 the time it entered into the contract, had no intent to perform a contractual duty to provide

11 a full rebate upon conclusion of a three-year contractual period, the Court, in its order

12 addressing HP's motion to dismiss the First Amended Complaint, dismissed the claim

13 (see Order, filed October 2, 2024, at 3:9-13), and, as Pattison fails to point to any

14 additional allegations in the SAC that could support such a claim, the Court again will

15 dismiss the fraud claim to the extent it is based on such theory.

16 Next, HP argues that Pattison fails to sufficiently plead that the challenged

17 statements on its website were false when made. The Court disagrees, as the HP

18 website's alleged description of the contents of the Terms is contrary to the actual Terms.

19 (Compare SAC ¶ 16 (identifying statements on website descriptive of contract terms) with

20 Quarles Decl. Ex. A (setting forth Terms).)

21 Accordingly, the fraud claim will be dismissed only to the extent it is based on a

22 theory that HP did not intend to perform a contractual promise.

23 B. Motion to Dismiss: Consumers Legal Remedies Act ("CLRA") Claim

24 To the extent HP argues California law does not apply under the government

25 interest test, and, consequently, that Pattison cannot seek relief under any California

26 statute, the Court, for the reasons stated above, disagrees.

27 To the extent HP alternatively argues the CLRA claim fails under California law,

1 and the CLRA does not have extraterritorial application, see Sullivan v. Oracle Corp., 51

2 Cal. 4th 1191, 1207 (2011) (holding "presumption against extraterritorial application" of

3 state law requires courts to determine if "proposed application of [state law] would cause

4 it to operate, impermissibly, with respect to occurrences outside the state"). Although the

5 California Supreme Court has held that where "conduct that form[s] the basis of the out-

6 of-state plaintiffs' claims (i.e., fraudulent misrepresentations made to induce consumer

7 transactions) . . . occurred in California," California law applies even where the plaintiff

8 resides out of state, see id. at 1208 n.10 (citing cases), Pattison's allegation that HP's

9 headquarters and principal place of business is located in California (see SAC ¶¶ 2, 7) is,

10 standing alone, insufficient, see Cannon v. Wells Fargo N.A., 917 F.Supp.2d 1025, 1055-

11 56 (N.D. Cal. 2013) (finding allegation that defendant's "principal place of business [is] in

12 California" insufficient to plausibly allege advertising at issue originated from California),

13 and Pattison's additional allegation that the "acts and omissions giving rise to [her] claims

14 occurred in and emanated from this District" (see SAC ¶ 7) is conclusory and,

15 consequently, likewise insufficient, see Ashcroft v. Iqbal, 556 U.S. 662, 678 (holding

16 courts "are not bound to accept as true a legal conclusion couched as a factual

17 allegation"); cf., e.g., Ehret v. Uber Technologies, Inc., 68 F. Supp. 3d 1121, 1132 (N.D.

18 Cal. 2014) (finding out-of-state plaintiff sufficiently alleged defendant's conduct

19 "emanated from California," where plaintiff alleged that the "misrepresentations [at issue]

20 were developed in California," that such misrepresentations were "contained on websites

21 and an application that are maintained in California," and that the "billing and payment of

22 services went through servers located in California").

23 Accordingly, the CLRA claim is subject to dismissal.

24 C. Motion to Strike Class Allegations

25 Pattison seeks to proceed on behalf of the following class: "All individuals and

26 entities residing within the United States and its territories who have (a) purchased

27 computer equipment along with a Care Pack from HP Inc. that covered the computer

1 three years since the purchase of the Care Pack." (See SAC ¶ 28.)

2 HP, relying on the above-referenced government interest test, contends Pattison

3 cannot proceed on behalf of a nationwide class. In support thereof, HP cites to Mazza,

4 wherein the Ninth Circuit held that, under the "government interest test," the district court

5 erred in certifying a nationwide class, where California and a number of other states had

6 "materially different consumer protection laws" and "each state ha[d] a strong interest in

7 applying its own consumer protection laws to those transactions [occurring in its state]."

8 See Mazza, 666 F.3d at 590-91. Here, however, unlike the plaintiffs in Mazza, Pattison

9 relies on a choice-of-law provision applicable to her claim; consequently, as discussed

10 above, the government interest test does not apply. Further, as the choice-of-law

11 provision is included in a form contract written by HP, a reasonable inference arises that

12 each putative class member's Terms likewise include such provision, and, consequently,

13 at the pleading stage, the government interest test would not apply to putative class

14 members.

15 HP also argues the putative class is overbroad, on the ground that such class

16 includes persons who were not harmed by the alleged misrepresentations. Pattison

17 alleges, however, that she, "like every other Class member, has suffered from virtually

18 identical conduct" (see SAC ¶ 34), which conduct she identifies as HP's statement on its

19 website that a full rebate was available at the conclusion of the three-year period, HP's

20 invoice for the Terms describing said product as "Risk Free" (see SAC ¶¶ 15-16), and

21 HP's "Claim Form," which, Pattison alleges, is available on the website to customers

22 before they purchase a Care Pack and states that, when it is submitted, a customer "will

23 receive [a] rebate check by mail within 8-10 business days" (see SAC ¶ 18). Although it

24 remains to be seen whether Pattison will be able to establish her allegation that all

25 putative class members were, prior to entry into their respective contracts, exposed to

26 HP's alleged promise to provide a rebate at the conclusion of the three-year contractual

27 //

1 period, HP's argument that the class definition is overbroad is, at this stage, premature.°

2 CONCLUSION

3 For the reasons stated above, HP's motion is hereby GRANTED in part and

4 DENIED in part, as follows:

5 1. To the extent the fraud claim is based on a failure to perform contractual

6 || obligations, the motion is GRANTED, and said claim is DISMISSED.

7 2. To the extent HP seeks dismissal of the CLRA claim, the motion is GRANTED.

8 3. In all other respects, the motion is DENIED.

9 4. lf Pattison wishes to amend for the limited purpose of amending her CLRA

10 || claim, Pattison shall file any Third Amended Complaint no later than December 30, 2024.

11 Pattison may not otherwise amend without first seeking leave of court or obtaining a

12 || stipulation from HP. See Fed. R. Civ. P. 15(a)(2).

2 13 5. A Case Management Conference is hereby SET for February 21, 2025, at

0 14 || 10:30 a.m. A Joint Case Management Statement shall be filed no later than February 14,

|| 2025.

Q 16 IT IS SO ORDERED.

Cc

17

18 || Dated: December 5, 2024 ‘ .

MAXINE M. CHESNEY

19 United States District Judge

20

21

22

23

24 > The Court also notes that, to the extent the evidence may not support a finding

that all purchasers of a Care Pack were made aware of the representations at issue, or

25, || that the putative class otherwise is overbroad, the Court, at the class certification phase,

"may redefine the overbroad class to include only those members who can rely on the

26 || Same body of common evidence to establish the common issue." See Olean Wholesale

Grocery Cooperative, Inc. v. Bumble Bee Foods LLC, 31 F.4th 651, 669 n.14 (9th Cir.

27 || 2022) (observing "the problem of a potentially over-inclusive class can and often should

be solved by refining the class definition rather than denying class certification on that

basis").

28