Date: 07-17-2023

Case Style:

Henry So v. HP, Inc.

Case Number: 22-CV-02327

Judge: Beth Lab Son Freeman

Court: United States District Court for the Northern District of California (San Clara County)

Plaintiff's Attorney: Mike Ram and Maire Appel

Defendant's Attorney: Megan O'Neill, David Ramirez-Galvez, Justin Tyler Goodwin, Nicole G. Malick

Description: San Jose, California consumer law lawyers represented Plaintiff who sued Defendant on consumer fraud theories.


In this case, Plaintiffs Henry So and Daniel Dyke allege that Defendant HP, Inc. (“HP”) remotely transmits firmware updates to HP printers that make third-party ink and toner supply cartridges incompatible with those HP printers. They bring common law and state and federal statutory claims, and they seek to represent various classes of consumers who purchased identified HP printers.

Now before the Court is HP's motion to dismiss. ECF No. 38 (“MTD”); see also ECF No. 42 (“Reply”). Plaintiffs oppose the motion. ECF No. 40 (“Opp.”). The Court held a hearing on the motion on June 29, 2023. See ECF No. 44. For the reasons discussed on the record and explained below, the Court DENIES IN PART and GRANTS IN PART WITH LEAVE TO AMEND IN PART and WITHOUT LEAVE TO AMEND IN PART the motion to dismiss the First Amended Complaint.

I. BACKGROUND

As alleged in the First Amended Complaint, Defendant HP sells both printers and associated HP-branded ink and toner cartridges for use in its printers. ECF No. 32 (“FAC”) ¶¶ 2122. For a cartridge to be compatible with a printer, both the hardware and the software must align.

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Id. ¶ 26. Each model of HP printer is compatible only with the associated cartridge model. Id. ¶ 25. HP has competitors in the market for cartridges, as consumers can choose to buy cartridges from HP (“HP cartridges”) or a different company (“third-party cartridges”). Id. ¶ 36. Third-party cartridges can be 25%-75% less expensive than HP cartridges. Id. ¶ 35.

Plaintiffs allege that HP periodically pushes out firmware updates to its printers that prevent consumers from using third-party cartridges. FAC ¶¶ 66-71. They claim that the firmware also causes the printer to “display a (false) error message” stating there is a “supply problem, cartridge communication error, or cartridge problem.” Id. ¶ 69. Further, Plaintiffs allege that HP installs technology in its printers that records data about the consumer's printing habits and transmits it back to HP without the consumer's knowledge or consent. Id. ¶¶ 52, 55-58. They assert that this happens with “all models of HP printers that use ink supply cartridges,” and they provide a “non-exhaustive list” of models that they allege were affected (“Class Printers”). Id. ¶ 91.

So purchased a new HP OfficeJet Pro 6978 All-in-One Printer on November 22, 2018, and he purchased a new HP ENVY 7885 All-in-One Printer on April 10, 2021, both in California. FAC ¶¶ 101-04. So alleges that nothing on the box informed him that these printers would not work with third-party cartridges, nor that information would be collected from the printer. Id. He had previously owned an HP OfficeJet 6962 All-in-One Printer, with which he used both HP cartridges and third-party cartridges. Id. ¶ 105. So alleges that in or around December 2021, HP sent out a malicious firmware update intended to affect printers using HP95X, 90X, 63, and 65 series of cartridges. Id. ¶ 108. The firmware allegedly altered the code and data of the Class Printers such that third-party cartridges would no longer work. Id. On or around December 16, 2021, So's OfficeJet Pro 6978 stopped working and indicated it had a supply problem. Id. ¶ 110. So then purchased replacement HP cartridges to use with the printer. Id.

Dyke purchased an HP OfficeJet Pro 6978 All-in-One Printer from HP in or around January 2020. FAC ¶ 94. Approximately three or four months prior to the filing of the FAC, Dyke inserted a third-party cartridge and the printer stopped working. Id. ¶ 96. He alleges that he spent about ten hours trying to determine why the printer was not working, and he states that he

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updated the firmware as part of his troubleshooting process. Id. Dyke alleges that the printer will not print or scan, and he receives an “error message indicating non-HP cartridges are detected.” Id. ¶ 97.

The FAC was filed on January 13, 2023. See FAC. The FAC asserts claims for (1) violation of the federal Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. §§ 1030(a)(5)(A), 1030(a)(2)(C), and 1030(a)(4), FAC ¶¶ 127-53; (2) violation of the California Comprehensive Computer Data Access and Fraud Act (“CDAFA”), Cal. Penal Code § 502 et seq., FAC ¶¶ 15469; (3) violation of the unlawful prong of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq., FAC ¶¶ 170-78; (4) violation of the unfair prong of the UCL, Cal. Bus. & Prof. Code § 17200 et seq., FAC ¶¶ 179-89; (5) violation of the fraud prong of the UCL, Cal. Bus. & Prof. Code § 17200 et seq., FAC ¶¶ 190-200; (6) violation of the California False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500 et seq., FAC ¶¶ 201-15; (7) fraud by omission, FAC ¶¶ 216-31; (8) violation of the California Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1770(a)(5) et seq., FAC ¶¶ 232-46; and (9) violation of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat. § 50.201 et seq., FAC ¶¶ 24765.

Plaintiffs seek to represent one class and five subclasses. FAC ¶¶ 114-26. The Device Owner Class includes all persons and entities in the United States who own a Class Printer or similar HP InkJet Printer. Id. ¶ 115. The California Device Owner Subclass and Florida Device Owner Subclass are for individuals who reside in California and Florida, respectively. Id. The Damages Subclass is a nationwide class of all persons and entities who own a Class Printer that displayed a diagnostic error due to HP's transmission of a firmware update. Id. The California Subclass includes all persons and entities residing in California and states with similar consumer protection statutes who own a Class Printer that displayed a diagnostic error due to HP's transmission of a firmware update. Id. And the Florida Subclass includes all persons and entities residing in Florida who own a Class Printer that displayed a diagnostic error due to HP's transmission of a firmware update. Id.

Defendant HP filed a motion to dismiss the FAC. See MTD.

Outcome: In this case, Plaintiffs Henry So and Daniel Dyke allege that Defendant HP, Inc. (“HP”) remotely transmits firmware updates to HP printers that make third-party ink and toner supply cartridges incompatible with those HP printers. They bring common law and state and federal statutory claims, and they seek to represent various classes of consumers who purchased identified HP printers.

Now before the Court is HP's motion to dismiss. ECF No. 38 (“MTD”); see also ECF No. 42 (“Reply”). Plaintiffs oppose the motion. ECF No. 40 (“Opp.”). The Court held a hearing on the motion on June 29, 2023. See ECF No. 44. For the reasons discussed on the record and explained below, the Court DENIES IN PART and GRANTS IN PART WITH LEAVE TO AMEND IN PART and WITHOUT LEAVE TO AMEND IN PART the motion to dismiss the First Amended Complaint.

I. BACKGROUND

As alleged in the First Amended Complaint, Defendant HP sells both printers and associated HP-branded ink and toner cartridges for use in its printers. ECF No. 32 (“FAC”) ¶¶ 2122. For a cartridge to be compatible with a printer, both the hardware and the software must align.

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Id. ¶ 26. Each model of HP printer is compatible only with the associated cartridge model. Id. ¶ 25. HP has competitors in the market for cartridges, as consumers can choose to buy cartridges from HP (“HP cartridges”) or a different company (“third-party cartridges”). Id. ¶ 36. Third-party cartridges can be 25%-75% less expensive than HP cartridges. Id. ¶ 35.

Plaintiffs allege that HP periodically pushes out firmware updates to its printers that prevent consumers from using third-party cartridges. FAC ¶¶ 66-71. They claim that the firmware also causes the printer to “display a (false) error message” stating there is a “supply problem, cartridge communication error, or cartridge problem.” Id. ¶ 69. Further, Plaintiffs allege that HP installs technology in its printers that records data about the consumer's printing habits and transmits it back to HP without the consumer's knowledge or consent. Id. ¶¶ 52, 55-58. They assert that this happens with “all models of HP printers that use ink supply cartridges,” and they provide a “non-exhaustive list” of models that they allege were affected (“Class Printers”). Id. ¶ 91.

So purchased a new HP OfficeJet Pro 6978 All-in-One Printer on November 22, 2018, and he purchased a new HP ENVY 7885 All-in-One Printer on April 10, 2021, both in California. FAC ¶¶ 101-04. So alleges that nothing on the box informed him that these printers would not work with third-party cartridges, nor that information would be collected from the printer. Id. He had previously owned an HP OfficeJet 6962 All-in-One Printer, with which he used both HP cartridges and third-party cartridges. Id. ¶ 105. So alleges that in or around December 2021, HP sent out a malicious firmware update intended to affect printers using HP95X, 90X, 63, and 65 series of cartridges. Id. ¶ 108. The firmware allegedly altered the code and data of the Class Printers such that third-party cartridges would no longer work. Id. On or around December 16, 2021, So's OfficeJet Pro 6978 stopped working and indicated it had a supply problem. Id. ¶ 110. So then purchased replacement HP cartridges to use with the printer. Id.

Dyke purchased an HP OfficeJet Pro 6978 All-in-One Printer from HP in or around January 2020. FAC ¶ 94. Approximately three or four months prior to the filing of the FAC, Dyke inserted a third-party cartridge and the printer stopped working. Id. ¶ 96. He alleges that he spent about ten hours trying to determine why the printer was not working, and he states that he

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updated the firmware as part of his troubleshooting process. Id. Dyke alleges that the printer will not print or scan, and he receives an “error message indicating non-HP cartridges are detected.” Id. ¶ 97.

The FAC was filed on January 13, 2023. See FAC. The FAC asserts claims for (1) violation of the federal Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. §§ 1030(a)(5)(A), 1030(a)(2)(C), and 1030(a)(4), FAC ¶¶ 127-53; (2) violation of the California Comprehensive Computer Data Access and Fraud Act (“CDAFA”), Cal. Penal Code § 502 et seq., FAC ¶¶ 15469; (3) violation of the unlawful prong of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq., FAC ¶¶ 170-78; (4) violation of the unfair prong of the UCL, Cal. Bus. & Prof. Code § 17200 et seq., FAC ¶¶ 179-89; (5) violation of the fraud prong of the UCL, Cal. Bus. & Prof. Code § 17200 et seq., FAC ¶¶ 190-200; (6) violation of the California False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500 et seq., FAC ¶¶ 201-15; (7) fraud by omission, FAC ¶¶ 216-31; (8) violation of the California Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1770(a)(5) et seq., FAC ¶¶ 232-46; and (9) violation of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat. § 50.201 et seq., FAC ¶¶ 24765.

Plaintiffs seek to represent one class and five subclasses. FAC ¶¶ 114-26. The Device Owner Class includes all persons and entities in the United States who own a Class Printer or similar HP InkJet Printer. Id. ¶ 115. The California Device Owner Subclass and Florida Device Owner Subclass are for individuals who reside in California and Florida, respectively. Id. The Damages Subclass is a nationwide class of all persons and entities who own a Class Printer that displayed a diagnostic error due to HP's transmission of a firmware update. Id. The California Subclass includes all persons and entities residing in California and states with similar consumer protection statutes who own a Class Printer that displayed a diagnostic error due to HP's transmission of a firmware update. Id. And the Florida Subclass includes all persons and entities residing in Florida who own a Class Printer that displayed a diagnostic error due to HP's transmission of a firmware update. Id.

Defendant HP filed a motion to dismiss the FAC. See MTD.
So v. HP, Inc. (N.D. Cal. 2023)

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