Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_06-cv-03361/USCOURTS-cand-5_06-cv-03361-3/pdf.json

Nature of Suit Code: 195
Nature of Suit: Contract Product Liability
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

---

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 1

 This disposition is not designated for publication and may not be cited.

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

**E-Filed 12/4/2006**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

CARL K. RICH, et al.,

 Plaintiff,

 v.

HEWLETT-PACKARD COMPANY, et al.,

 Defendants.

Case Number C 06-3361 JF (HRL)

ORDER1 GRANTING MOTION TO

DISMISS WITH LEAVE TO AMEND

[re: docket no. 26]

Defendant Hewlett-Packard Company (“HP”) moves to dismiss the First Amended

Complaint (“FAC”). Plaintiff Carl K. Rich (“Rich”) opposes the motion. For the reasons

discussed below, the motion will be granted with leave to amend.

I. BACKGROUND

This case concerns allegations that HP gains improper profits by designing its printers

and printer cartridges in such a way that its printers use ink from both the black ink cartridge and

the more expensive color ink cartridge when printing black text and images. On May 22, 2006,

Rich filed the original complaint in this action on behalf of himself and others similarly situated. 

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 1 of 15
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

2

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

The original complaint asserted five claims for relief: (1) breach of contract; (2) breach of

implied warranty; (3) unjust enrichment; (4) fraudulent concealment; and (5) violation of

California Business & Professions Code §§ 17200 et seq.

Rich filed the operative FAC on September 29, 2006. The FAC asserts seven claims for

relief: (1) breach of contract; (2) breach of express warranty; (3) breach of implied warranty; (4)

unjust enrichment; (5) fraudulent concealment; (6) breach of the covenant of good faith and fair

dealing; and (7) violations of California Business & Professions Code §§ 17200 et seq. Rich

brings this action on behalf of all individuals who purchased color inkjet printers and

replacement cartridges between May 22, 2002 and the present. FAC ¶ 1. 

Rich alleges the following facts in the FAC: HP manufactures and sells inkjet printers

throughout the United States. FAC ¶ 11. HP has a very profitable printing and imaging

business, with almost all of the profits generated by the sale of ink cartridges. FAC ¶ 3. HP

recommends that consumers use only genuine HP inkjet cartridges with HP printers. FAC ¶ 11. 

Color inkjet printers use both color inkjet cartridges and black inkjet cartridges. FAC ¶ 13. HP

sells black inkjet cartridges that are substantially less expensive than color cartridges. FAC ¶ 14. 

When printing black and white images and text, HP color inkjet printers are designed to use

substantial amounts of color ink in addition to the significantly less expensive black ink. FAC ¶

16. Consumers have no way of knowing from the printed page that color ink is used to produce

black text and images. FAC ¶ 17. HP does not disclose that its color inkjet printers use color ink

when printing black text and images anywhere in its promotional materials, packaging materials,

reference materials, or warranty materials. FAC ¶ 17. HP states on its website that it wants

“customers to have meaningful information on all the factors involved to help them make the

best choices for their needs,” FAC ¶ 20, but does not inform consumers that HP printers will

consume a substantial amount of color ink in printing the number of pages that HP claims that its

black ink cartridges will yield. FAC ¶ 21-23. As a result, printing costs are higher than

consumers would expect from a printer that used exclusively black ink to print black text and

images. FAC ¶ 24. HP does not provide consumers with the option to print black text and

images by using only black ink. FAC ¶ 19. Rich purchased and owns an HP OfficeJet 6210

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 2 of 15
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

3

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

printer, which utilizes the HP 64 black inkjet cartridge and the HP 95 color inkjet cartridge. FAC

¶ 27. Rich has purchased numerous black and inkjet replacement cartridges since purchasing this

printer. Id.

On October 20, 2006, HP moved to dismiss the FAC for failure to state a claim upon

which relief can be granted (“Motion”). See Fed. R. Civ. P. 12(b)(6). Rich opposes the motion. 

The Court heard oral argument on December 1, 2006. 

II. LEGAL STANDARD

A complaint may be dismissed as a matter of law pursuant to Rule 12(b)(6) for one of two

reasons: (1) Lack of a cognizable legal theory or (2) insufficient facts under a cognizable legal

theory. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Robertson v. Dean Witter Reynolds,

Inc., 749 F.2d 530, 533-34 (9th Cir. 1984). For purposes of a motion to dismiss, all allegations

of material fact in the complaint are taken as true and construed in the light most favorable to the

non-moving party. Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995);

Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994).

“A complaint should not be dismissed unless it appears beyond doubt the plaintiff can

prove no set of facts in support of his claim that would entitle him to relief.” Clegg, 18 F.3d at

754. The court, however, “is not required to accept legal conclusions cast in the form of factual

allegations if those conclusions cannot reasonably be drawn from the facts alleged.” Id. at

754-55. A court’s review is limited to the face of the complaint, documents the complaint

references, and matters of which the court may take judicial notice. Anderson v. Clow (In re Stac

Elecs. Sec. Litig.), 89 F.3d 1399, 1405 n.4 (9th Cir. 1996); Levine v. Diamanthuset, Inc., 950

F.2d 1478, 1483 (9th Cir. 1991).

Motions to dismiss generally are viewed with disfavor under this liberal standard and are

granted rarely. See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997). Leave to

amend must be granted unless it is clear that amendments cannot cure the complaint’s

deficiencies. Lucas v. Dep’t of Corr., 66 F.3d 245, 248 (9th Cir. 1995). Nevertheless, when

amendment would be futile dismissal may be ordered with prejudice. Dumas v. Kipp, 90 F.3d

386, 393 (9th Cir. 1996); Albrecht v. Lund, 845 F.2d 193, 195-96 (9th Cir. 1988); Beezley v.

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 3 of 15
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

2

 A corresponding allegation of the breach of this warranty does not appear in the first

claim of the FAC, but does appear in the sixth claim. See FAC ¶ 71.

Rich alleges in the FAC that “HP has an obligation of good faith and fair dealing,”

pursuant to the contract between itself and Rich. FAC ¶ 40. Rich also alleges that “Those HP

color inkjet printers which unnecessarily use color ink (in addition to black ink) when printing

black text and graphics, deprive Plaintiff and the Class of the benefit of their bargain with HP

and is also a breach of HP’s obligation of good faith and fair dealing.” FAC ¶ 41. Rich’s

arguments in opposition to this motion appear to move away from any theory based on an

implied covenant of good faith and fair dealing. Such a theory would appear duplicative of

Rich’s sixth claim. This uncertainty as to the import of Rich’s allegations provides grounds for

dismissal of the claim. Rich should state this claim with greater clarity in an amended complaint.

3

 The Ninth Circuit found that there are at least two dictionary meanings to the term

“workmanship”: (1) something effected, made, or produced – WORK; and (2) the art or skill of a

workman – CRAFTMANSHIP. Id.

4

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

Fremont Indem. Co., 804 F.2d 530, 531 (9th Cir. 1986) (per curiam). 

III. DISCUSSION

1. Breach of Contract

HP contends that the Court should dismiss the breach of contract claim because Rich’s

allegations do not state the specific terms of the alleged contract. Motion 1-2. 

 Rich alleges that HP offered its printers and cartridges for sale, and that he accepted this

offer. FAC ¶ 38-39. Rich argues that a contract arose from this acceptance. Rich does not allege

that HP breached a contractual obligation to sell him cartridges after he accepted that offer. 

Instead, Rich argues that HP breached the contract when its products did not satisfy HP’s alleged

warranty that they would be free of “defects in material and workmanship.”2 Opposition to

Motion to Dismiss (“Opposition”) 18. Rich argues that the term “workmanship” is ambiguous

under Ninth Circuit authority and suggests that any ambiguity should be resolved against HP. 

Opposition 18. However, ambiguity in the term does not allow Rich to proceed on the basis of

an unreasonable interpretation. In its one reported case involving the term “workmanship,” the

Ninth Circuit noted that one “definition supports a product interpretation, while the [other]

definition supports a process interpretation.” Allstate Ins. Co. v. Smith, 929 F.2d 447, 450 (9th

Cir. 1991).3 Neither definition supports the allegation that HP’s alleged decision to use color and

black inks to print black text constitutes a flaw in workmanship. When an HP printer and

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 4 of 15
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

4

 The Court need not decide at this time whether the alleged warranty may form the basis

of a different breach of contract claim.

5

 See also Cal. Com. Code § 2313(1)(c) (“Any sample or model which is made part of

the basis of the bargain creates an express warranty that the whole of the goods shall conform to

the sample or model.”).

5

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

cartridge work as HP allegedly intended, they reveal no flaw in the product or the process by

which HP manufactured them. Accordingly, even if Rich may base a breach of contract claim on

the alleged warranty, the alleged conduct would not amount to a breach of the warranty against

defects in workmanship.4 

Accordingly, the breach of contract claim will be dismissed with leave to amend. 

2. Breach of Express Warranty

HP next argues that the Court should dismiss Rich’s claim for breach of express warranty

for three reasons: (a) a breach of express warranty claim cannot be premised on an alleged

omission; (b) Rich fails to specify the terms of the alleged express warranty; and (c) HP

disclaimed the express warranties alleged by Rich.

a. Breach of Express Warranty Premised on an Alleged Omission

The California Commercial Code provides that an express warranty is created by:

(a) Any affirmation of fact or promise made by the seller to the buyer which

relates to the goods and becomes part of the basis of the bargain creates an express

warranty that the goods shall conform to the affirmation or promise.

(b) Any description of the goods which is made part of the basis of the bargain

creates an express warranty that the goods shall conform to the description.

Cal. Com. Code § 2313(1)(a)-(b).5 HP argues that this section requires a positive act, rather than

an omission, and points to supporting authority from courts applying the corresponding section of

the UCC. Motion 7. Rich does not cite contrary authority, and apparently concedes that he may

not base an express warranty claim on an omission. See Opposition 19-20. Instead, Rich argues

that the breach of warranty claim is not based on a “tangential omission.” Id. Accordingly, the

adequacy of Rich’s allegations turns upon his allegations of express warranties articulated by a

positive act, not by an omission. 

b. Failure to Specify Terms of the Alleged Express Warranty that has Been Breached

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 5 of 15
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

6

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

HP argues that Rich has failed to allege the specific terms of the express warranty that he

alleges that HP has breached. Rich’s response simply is, “[a]s demonstrated above, plaintiff has

sufficiently alleged the terms of HP’s express warranty and the breach of the express warranty.” 

Opposition 19. 

“In order to plead a cause of action for breach of express warranty, one must allege the

exact terms of the warranty, plaintiff’s reasonable reliance thereon, and a breach of that warranty

which proximately causes injury.” Williams v. Beechnut Nutrition Corp., 185 Cal.App.3d 135,

142 (Cal. Ct. App. 1986). The FAC contains limited allegations regarding the terms of the

express warranty. Rich alleges: “HP issued written warranties to Plaintiff and the Class wherein

it warranted that its printer cartridges would be free of defects in materials and workmanship

during the warranty period.” FAC ¶ 44. “On its website, labels and marketing materials, HP

represents that its printer cartridges would be free of defects in materials in workmanship for the

duration of the warranty period. HP also represents that its black inkjet cartridges will produce

black text and graphics.” FAC ¶ 45. Rich argues in his papers that these allegations are

sufficient to withstand a motion to dismiss and that it is not fatal to his claim that he “couched

the breach” in terms of a concealment of HP’s printer’s use of substantial amounts of color ink

when printing black text and graphics. Opposition 20. However, as discussed above in the

breach of contract section, the intentional use of colored ink to produce black text and images is

not equivalent to a defect in materials or workmanship. Accordingly, if Rich wishes to state a

claim for breach of express warranty on the basis of the use of color ink to print black text and

images, he must allege an express warranty that has more relevant terms than a simple promise

that the products will be free from defects in material or workmanship.

Accordingly, because Rich has failed to allege the specific terms of the warranty that has

been breached, this claim will be dismissed with leave to amend. 

c. Disclaimer of Express Warranties

HP argues additionally that it disclaimed any express warranties and seeks to introduce a

copy of an HP warranty. Rich argues that the existence of the disclaimer at the time of purchase

is a factual matter that may not be addressed at the pleading stage. The Court need not decide

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 6 of 15
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

6

 HP argues that the Court should dismiss the implied warranty claim because Rich failed

to allege a particular purpose of the printer and printer cartridges as required under Cal. Com.

Code § 2315. Motion 10-11. Rich responds that he rests his claim on allegations that the

product was not fit for its ordinary purpose. Opposition 22. As HP argues in its reply (“Reply”),

the viability of this claim therefore turns upon the sufficiency of Rich’s allegations of the

unfitness of the product for its ordinary purpose.

7

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

whether it may take judicial notice of the disclaimer because the claim may be dismissed on other

grounds. 

3. Breach of Implied Warranty

HP next contends that Rich fails to state a claim for breach of implied warranty for three

reasons: (a) Rich fails to allege unfitness for the products’ ordinary purpose;6 (b) Rich fails to

allege privity with HP; and (c) HP specifically disclaimed the implied warranty alleged by Rich. 

a. Fitness for Ordinary Purpose

HP argues that Rich has not alleged sufficiently that his printer and ink cartridges are

unfit for their ordinary purpose. Merchantable goods “[a]re fit for the ordinary purposes for

which such goods are used.” Cal. Com. Code § 2314(2)(c). Rich alleges that HP “made an

implied warranty . . . that HP’s color inkjet printers are fit for their intended purpose,” FAC ¶ 52,

and that “HP breached the warranties by undertaking the wrongful acts herein alleged.” FAC ¶

55. HP argues that Rich has not alleged any wrongful acts amounting to a failure to perform the

products’ intended purpose. HP notes correctly that Rich has not alleged that his printer: “(1)

failed to produce color and black text and images; (2) rendered low quality or unusable text and

images; or (3) malfunctioned and failed to print.” Reply 8. In fact, the FAC requires HP and the

Court to guess which of the “wrongful acts herein alleged” constitute a breach of the implied

warranty of fitness for ordinary use. See FAC ¶ 55. Nor does Rich indicate in his opposition

which wrongful acts constitute a breach of the implied warranty. This leaves HP to speculate

that Rich perceives a breach of the implied warranty in HP’s alleged design of its printers and

cartridges to use a significant amount of colored ink in printing black text or images. See Reply

8. However, the Court may not engage in speculation and thus it will dismiss this claim for lack

of sufficient particularity and specificity. The Court will grant leave to amend so that Rich may

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 7 of 15
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

7

 The Court need not decide whether Rich’s claim is barred because he may not bring a

claim for breach of an implied warranty where the challenged “defect” was part of the product

design intended by HP. See Reply 8. If correct, HP’s argument would support a finding that

amendment would be futile. However, the Court is not certain at this point that Rich cannot state

a claim that an HP product did not do what it was supposed to do for as long as it was supposed

to do so. See American Suzuki Motor Corp. v. Superior Court, 37 Cal.App.4th 1291, 1298-99

(Cal. Ct. App. 1995). Accordingly, the Court will grant Rich leave to amend this claim. 

8

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

allege clearly which actions constitute the breach of the implied warranty that HP’s products are

“fit for the ordinary purposes for which such goods are used.”7 

b. Failure to Allege Privity With HP

HP argues alternatively that the Court should dismiss the implied warranty claim because

Rich lacks privity with HP. Rich responds that he does not need to allege privity with HP

because he relied on promotional materials, packaging information, driver software, reference

materials, warranty materials, marketing and advertising, and HP’s website. Opposition 23. HP

replies that such an exception to the privity requirement applies to cases involving express

warranty claims, not implied warranty claims. Reply 7. The Court need not decide whether Rich

must allege privity with HP in his implied warranty claim because it dismisses the claim on other

grounds. 

c. HP’s Disclaimer of the Implied Warranty Alleged by Rich

Finally, HP argues that the Court should dismiss the implied warranty claim because HP

expressly disclaimed any implied warranties. Rich contends that the existence of the warranty at

the time of purchase is a factual matter that may not be addressed at the pleading stage. The

Court need not decide whether it may take judicial notice of the asserted disclaimer because it

dismisses the claim on other grounds.

4. Unjust Enrichment

HP argues that Rich may not bring an unjust enrichment claim while also alleging breach

of contract. Rich contends that he may bring these two claims in the alternative. This argument

implicates the holding of another court in this district. See Gerlinger v. Amazon.com, 311

F.Supp.2d 838 (N.D.Cal. 2004). That court wrote:

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 8 of 15
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

8

 This Court’s unpublished order in the HP Inkjet Printer Litigation, 2006 WL 563048

(N.D.Cal. Mar. 7, 2006), is not to the contrary. There, the Court found that the plaintiff could

proceed in the alternative because in the alternative claim, the plaintiff asserted expressly that a

valid contract did not exist. Id. at *7. 

9

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

It should be noted that plaintiff contends that he should nevertheless be permitted

to plead unjust enrichment in the alternative. Such an alternative claim might be

stated if in count eight plaintiff alleged that no express agreement existed between

plaintiff and either defendant. Instead, plaintiff has pleaded the opposite and relies

on that contract as the basis for standing in the case at bar. Even though Rule

8(e)(2) of the Federal Rules of Civil Procedure allows a party to state multiple,

even inconsistent claims, it does not alter a substantive right between the parties

and accordingly does not allow a plaintiff invoking state law to an unjust

enrichment claim while also alleging an express contract. As a result, plaintiff

cannot assert his unjust enrichment claim in the alternative.

Because plaintiff cannot allege in good faith, while maintaining his other claims,

that no contract exists between himself and either Amazon or Borders, this court

dismisses plaintiff's unjust enrichment claim without leave to amend.

Id. at 856 (citations omitted). The Court agrees with the holding in Gerlinger and will apply its

analysis to the instant claim.8 

Here, Rich states that “to the extent necessary, [he] pleads this cause of action in the

alternative.” FAC ¶ 57. If this alternative pleading amounts to a pleading that no contract

existed between Rich and HP, the unjust enrichment action would not necessarily be barred by

Gerlinger. See 311 F.Supp.2d at 856 (“Such an alternative claim might be stated if in count eight

plaintiff alleged that no express agreement existed between plaintiff and either defendant.”)

(emphasis added). However, it is not clear from the current pleadings whether Rich can allege in

good faith that no contract existed between himself and HP. The cryptic allegation that “to the

extent necessary, [Rich] pleads this cause of action in the alternative,” does not give the Court or

HP notice of the theory on which Rich brings the unjust enrichment action or allow the Court to

decide whether Gerlinger bars his claim. Accordingly, the Court will dismiss the unjust

enrichment claim with leave to amend. 

5. Fraudulent Concealment

HP contends that Rich does not state his claim for fraudulent concealment with sufficient

particularity under Federal Rule of Civil Procedure 9(b), and specifically, that Rich has failed to

allege “any of the circumstances surrounding his purchase, such as when, where, and from whom

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 9 of 15
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

9

 In Cooper, the Ninth Circuit found sufficient detail, writing: “In this case, the

complaint identified who (eight of Merisel's customers), what (four types of improper revenue

recognition), when (last two quarters of 1993 and first quarter of 1994), and where (reported in

financial statements).” Id. 

10

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

he [purchased replacement cartridges] . . . ; or how and when HP should have conveyed the

allegedly concealed information.” Reply 10. Rich argues that he need not plead from whom,

when, and where he purchased replacement cartridges, Opposition 5, and that he has satisfied the

Rule 9(b) pleading requirements by identifying the circumstances of the fraud such that HP can

prepare a defense and frame its answer.

 “To comply with Rule 9(b), allegations of fraud must be specific enough to give

defendants notice of the particular misconduct which is alleged to constitute the fraud charged so

that they can defend against the charge and not just deny that they have done anything wrong.” 

Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001) (finding lack of sufficient

particularity where complaint “alleged that ‘Lungren concealed the fraudulent submission of

false claims . . . to avoid repayment of funds to the United States’ and that Lungren conspired

with the CDR and the OAG to ‘defraud the United States by obtaining payment of fraudulent

claims.’ These broad allegations included no particularized supporting detail.”). “Averments of

fraud must be accompanied by ‘the who, what, when, where, and how’ of the misconduct

charged.” Vees v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (citing Cooper v.

Pickett, 137 F.3d 616, 627 (9th Cir.1997)). However, it “is not fatal to [a] complaint that it does

not describe in detail a single specific transaction (i.e. shipment) in which [Defendant]

transgressed . . . , by customer, amount, and precise method. Comparable precedent does not

require [such] detail.” Cooper, 137 F.3d at 627.9 

The Court concludes that the FAC fails to allege fraud with sufficient particularity. 

Unlike the complaint in Cooper, the FAC alleges no facts regarding the circumstances of Rich’s

purchase of the ink cartridges or the printer. The relevant section of the FAC does not allege

where, when, or for what amount the purchase was made. See FAC ¶¶ 61-69. Accordingly, the

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 10 of 15
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

10

 Accord Snyder v. Ford Motor Co., 2006 WL 2472187 (N.D.Cal. Aug. 24, 2006) (slip

copy) (dismissing the action after finding: “As to the ‘who,’ ‘where,’ ‘when,’ and ‘how’

requirements, plaintiffs’ allegations are wholly deficient. Plaintiffs fail to plead any facts

indicating the circumstances surrounding the acquisition of their respective vehicles. Plaintiffs do

not allege, for example, from whom, where, and when they acquired such vehicles, nor do they

allege how and when Ford should have conveyed to them the claimed concealed information.”).

11 Rich must point to a contractual provision that forms the basis of his claim for breach

of the implied covenant of good faith and fair dealing: “An implied covenant of good faith and

fair dealing arises only from a contractual relationship, not a statutory one.” Isaacson v.

California Ins. Guarantee Assn., 44 Cal.3d 775, 789 (1988). “It is universally recognized that

the scope of conduct prohibited by the covenant of good faith is circumscribed by the purposes

and express terms of the contract. . . . [U]nder traditional contract principles, the implied

covenant of good faith is read into contracts in order to protect the express covenants or promises

of the contract, not to protect some general public policy interest not directly tied to the contract's

purpose.” Carma Developers, Inc. v. Marathon Development California, Inc., 2 Cal.4th 342, 373

(1992) (citations and internal quotation marks omitted); see also Pasadena Live, LLC v. City of

Pasadena, 114 Cal.App.4th 1089, 1094 (Cal. Ct. App. 2004) (citing 1 Witkin, Summary of Cal.

Law (2003 supp.) Contracts, § 743, p. 449) (“The implied covenant of good faith and fair dealing

is limited to assuring compliance with the express terms of the contract, and cannot be extended

to create obligations not contemplated by the contract.”). Because Rich has not sufficiently

alleged a breach of contract claim, he has not sufficiently alleged a claim for breach of the

implied covenant of good faith and fair dealing. 

11

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

Court will dismiss the fraudulent concealment claim with leave to amend.10

6. Breach of the Covenant of Good Faith and Fair Dealing

HP argues that Rich’s sixth claim stands or falls with his first claim.11 Rich does not

respond to this argument in his opposition and instead defends his first and sixth claims in one

combined section. See Opposition 17-19. Accordingly, the Court will dismiss Rich’s sixth claim

for the same reasons that it dismisses the first claim. The Court will grant leave to amend. 

7. Violation of California Business and Professions Code Section 17200

HP asserts that the claim for a violation of California’s unfair competition law (“UCL”),

Cal. Bus. Prof. Code § 17200, fails because: (a) Rich seeks relief not authorized by the statute;

and (b) Rich fails to allege facts sufficient to establish violations of any of the substantive prongs

of the UCL. 

a. Relief Authorized by the Statute

HP first argues that Rich’s allegations establish that he is not entitled to any relief under

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 11 of 15
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

12 Rich makes various allegations about the profit HP gains from the use of colored inks

in printing black text and images, but does not connect this profit with any particularity or

specificity to the facts of his UCL claim.

13 “As used in this chapter, unfair competition shall mean and include any unlawful,

unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading

advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of

Division 7 of the Business and Professions Code.” Cal. Bus. Prof. Code § 17200.

12

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

the UCL. HP argues that Rich may recover only monies that he paid directly to HP and points

out that Rich has made no allegations to this effect. Rich responds that the UCL allows recovery

from HP in a situation where Rich paid money to a third party that, in turn, paid that money to

HP. However, as HP notes in its Reply, Rich does not allege this chain of payment theory in the

FAC.12 Moreover, HP contends that even if Rich had alleged this theory in the FAC, California

law prohibits recovery from any party other than those to whom the plaintiff directly gave funds. 

Although it concludes that such a chain of payment theory might support a UCL claim under

certain circumstances, the Court cannot determine whether such circumstances exist in the

absence of specific allegations by Rich. Accordingly, the UCL claim will be dismissed with

leave to amend in order that Rich may attempt to allege an adequate chain of payment theory.

b. Sufficiency of Alleged Facts to Establish Violations of Any of the Three

Substantive Prongs of the UCL

13

HP contends that Rich fails to state a claim for fraudulent business acts or practices. HP

argues that Rich provides only conclusory allegations of fraudulent practices and that he does not

satisfy the requirement that he actually have relied upon false or misleading advertisements. 

Motion 17-18 (citing Pfizer Inc. v. Superior Court, 141 Cal.App.4th 290, 296, 304 (Cal.Ct.App.

2006)). Rich responds that Pfizer is no longer citable precedent because review has been granted

by the California Supreme Court. Rich also argues that he has alleged sufficient facts to

withstand a motion to dismiss. 

HP also contends that Rich fails to state a claim under the “unlawful” prong of the UCL

because he alleges no violation of any law. HP argues that the breach of contract and breach of

warranty claims cannot constitute the necessary predicate conduct for a claim under the UCL. 

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 12 of 15
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

13

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

Moreover, HP argues that Rich may not use the UCL to revive other causes of action that cannot

be sustained independently. Rich responds that his breach of express warranty and unjust

enrichment claims may serve as the necessary predicate violations for unlawful UCL liability. 

Finally, HP contends that Rich’s claim fails under any reasonable definition of the term

“unfair.” HP argues that Rich fails to allege conduct that meets the definition of “unfair” adopted

by the California Supreme Court in Cel-Tech Communications, Inc. v. Los Angeles Cellular Tel.

Co., 20 Cal.4th 163, 187 (1999) (“When a plaintiff who claims to have suffered injury from a

direct competitor's ‘unfair’ act or practice invokes section 17200, the word ‘unfair’ in that section

means conduct that threatens an incipient violation of an antitrust law, or violates the policy or

spirit of one of those laws because its effects are comparable to or the same as a violation of the

law, or otherwise significantly threatens or harms competition.”). HP claims that Cel-Tech

applies equally to consumer actions and that Rich has not cited any specific constitutional,

statutory, or regulatory provision that forms a basis for concluding that HP’s actions offend

public policy. Alternatively, HP argues that even if Cel-Tech’s definition of “unfair” does not

apply to the instant case, the claim still fails under the earlier definition of “unfair” because Rich

alleges only speculative harm and the alleged practices are not within the reach of the statute. 

Rich responds that courts generally do not resolve claims under the “unfairness” prong on a

motion to dismiss because such claims are intensely factual. Rich also argues that he need allege

only that any utility of HP’s deceitful conduct is outweighed by the gravity of the harm to him. 

Rich contends that he has pled sufficient facts to state the UCL cause of action under the “unfair”

prong because HP has failed to disclose to consumers that HP printers use color ink during the

printing of black text and images, and because HP provides no mechanism by which consumers

can choose to use only black ink on such occasions. 

The Court need not decide whether Rich alleges sufficient facts to state a violation of any

of the substantive prongs of the UCL because it will grant the motion to dismiss on other

grounds. The Court will grant leave to amend because it is not clear that amendment would be

futile.

IV. ORDER

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 13 of 15
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

14

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

Good cause therefor appearing, IT IS HEREBY ORDERED that the motion to dismiss is

GRANTED with leave to amend.

DATED: December 4, 2006.

 

JEREMY FOGEL

United States District Judge

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 14 of 15
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

15

Case No. C 06-3361 JF (HRL)

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

(JFLC1)

This Order has been served upon the following persons:

Christopher Chorba cchorba@gibsondunn.com, evarela@gibsondunn.com;

mblanco@gibsondunn.com; mjenkins@gibsondunn.com 

Brian S. Kabateck bsk@kbklawyers.com

Richard L. Kellner rlk@kbklawyers.com, rs@kbklawyers.com

John Patrick McNicholas , IV pmc@mcnicholaslaw.com, cmi@mcnicholaslaw.com 

Bruce Lee Simon bsimon@cpsmlaw.com, jlein@cpsmlaw.com 

Alfredo Torrijos at@kbklawyers.com, rp@kbklawyers.com

Notice will be delivered by other means to: 

Stephen M. Garcia 

The Garcia Law Firm

One World Trade Center, Suite 1950

Long Beach, CA 90831

Sarina M. Hinson 

The Garcia Law Firm

1 World Trade Center

Suite 1950

Long Beach, CA 90831

shinson@lawgarcia.com, jmobley@lawgarcia.com

Case 5:06-cv-03361-JF Document 32 Filed 12/04/06 Page 15 of 15