consumers not required to know details of tech, but no duty to disclose efficiency

O'Shea v. Epson America, Inc., 2011 WL 3299936 (C.D. Cal.)

Plaintiffs’ putative class action claimed that Epson affirmatively misrepresented and failed to disclose material information regarding the performance and/or value of Epson inkjet printers and ink cartridges, violating the California UCL, FAL, and CLRA as well as committing common law fraud.

Under the ISO standard used by Epson, ink yield is measured by continuous printing: printing without interruption until all ink is exhausted from the cartridge. Plaintiffs argued that this does not reflect typical printing practices and minimizes the actual inefficiency of Epson cartridges. “Epson discloses that its printers are tested in accordance with ISO standards, and makes available to consumers detailed information about how ink yields are calculated, including the fact that testing is conducted based on continuous printing.” Epson also cautions on its website that “since no single yield standard can duplicate a customer's actual printer usage, Epson recommends that customers also consider print yield comparisons from reputable independent sources,” and on the package states that actual cartridge yields may “vary considerably for reasons including images printed, print settings, temperature and humidity” or a statement much like that.

Plaintiffs argued that they were misled and that their cartridges don’t last as long as they expected, nor do they last as long as comparable printer/cartridge pairings from other manufacturers.

They relied on (1) an omission theory as well as (2) an affirmative misrepresentation theory from one plaintiff about a statement on the packaging of Epson’s NX series printers that reads: “Replace only the color that you need with individual ink cartridges.”

What did Epson allegedly omit? The court accepted Epson’s argument that plaintiffs were complaining that Epson didn’t compare its features to those of competitors’ products. So, for example, plaintiffs argued that “[t]he Class claims are based on the fact that Defendants knew that the printers they manufactured, marketed and sold to consumers were significantly less efficient than other brands, resulting in a material difference between the 'real life' page yields provided by Defendants' printers and the 'real-life' page yields provided by other brands.” Plaintiffs tried to recharacterize that as a failure to disclose that the printers (unlike other printers) don’t operate efficiently under non-continuous printing conditions. But efficiency, the court said, is inherently relative to something. “As Plaintiffs' own statements confirm, in this particular context, the two are one and the same: a consumer's reasonable expectation about ink yields can (and usually does) derive from his or her prior experiences with printers manufactured by competitive brands.”

Epson did not have a duty to disclose its “inefficient” ink yields. Actionable omissions require either some affirmative representation that creates a duty to clarify via disclosure, or some independent duty to disclose. Here, there was no allegation that the omitted information was contrary to an actual representation. A duty to disclose can arise when, for example, “a defendant has exclusive knowledge of material facts not known to the plaintiff and/or when the defendant conceals a material fact from the plaintiff.” Plaintiffs argued that Epson had exclusive knowledge that its technology was highly inefficient in real-world conditions, that this was material (supported by declarations that consumers expected yields comparable to similar printers and wouldn’t have bought the printers had they known the truth), and that Epson concealed this by failing to disclose it.

The court disagreed. No case has required a manufacturer to disclose that its products performed less efficiently than reasonable consumer expectations (as set by the other products in the marketplace). Other cases finding a duty involved safety-related issues. Thus, the omission claims were dismissed.

One plaintiff claimed that the “[r]eplace only the color you need with individual ink cartridges” statement misled consumers into believing that the printers would print even if an ink cartridge is expended or not installed, allowing them to, for example, print in black and white even though the magenta cartridge is empty. In fact, the NX series wouldn’t work under such conditions, as all cartridges are required for the printer to work.

Epson argued that its statement was unquestionably true, immaterial, and did no harm to the plaintiff. The court found that none of these arguments merited summary judgment for Epson. Literal truth doesn’t foreclose liability under the UCL, FAL, or CLRA if the statement is likely to mislead consumers. “Although Plaintiff's understanding of this statement was not correct as a matter of fact, neither was it unreasonable as a matter of law…. Epson errs in assuming that the average consumer is familiar enough with printer technology and operations to know that small amounts of colored ink are used when printing black-and-white documents to ‘keep the print head clear.’ It follows, then, that if a reasonable consumer might not know that all colors of ink are ‘needed’ to print, he or she could reasonably understand the statement ‘replace only the color you need’ to mean he or she would only ‘need’ to replace whatever ink cartridge matches the color that appears on the printed page.”

As for materiality, Epson argued that the fact that color ink was used during black printing was not material to the plaintiff because she did not "disabuse" herself of her misperception even though correct information was available on Epson's website. This was “too high a bar.” Materiality means a reasonable consumer would attach importance to the existence or nonexistence of the fact in determining her choice. Here, the plaintiff testified that she made her decision based on the claims on the box in the store and that she wouldn’t have purchased the printer otherwise. At a minimum, she created an issue of fact.

As to injury: Epson argued that, because the plaintiff printed in color about 25% of the time, she would have eventually needed to replace all her color cartridges to print in color anyway. That’s not the nature of her injury: she spent money on an allegedly mislabeled product that she testified she wouldn’t have bought if she’d known the truth. That’s classic economic injury.

The common-law fraud claims fared similarly.