Granfield v. NVIDIA Corp., 2012 WL 2847575 (N.D. Cal.)
Some of the subtler moves against class actions, along with
some of the more blatant ones, have to do with standing. This case features both. Granfield, a citizen of Massachusetts,
alleged that NVIDIA made defective graphics processing units (“GPUs”) for a
variety of manufacturers, and that her computer suffered permanent damage
because of that.
To display images, a computer’s CPU sends messages to the
GPU, connected to the motherboard. A GPU
package has a die (silicon chip) soldered onto the substrate of the circuit
board via bumps of solder that carry signals and power. When a GPU is turned on, the die becomes hot
and heats the substrate. In 2006, NVIDIA
began experiencing cracks at the substrate-to-bump interface, and began using
high-lead solder in an attempt to fix the problem, but it allegedly made the
problem worse. Also, NVIDIA allegedly
used an underfill material incapable of withstanding ordinary operating
temperatures, so it couldn’t hold the bumps in place and computers stopped
performing their ordinary functions. The
results: corrupted video images, distorted lines, garbled characters, and
complete monitor/display system failure.
HP allegedly investigated in 2006 and found the causes, but NVIDIA
refused the blame, even in 2007 when HP provided NVIDIA with “overwhelming”
evidence. Likewise, Dell allegedly
notified NVIDIA of defects by early 2007, but NVIDIA still shipped defective
GPUs.
The court dismissed Granfield’s claims under California law (following Mazza) and every state other than Massachusetts for lack of standing, since she made
her purchase in Massachusetts. She did
plead a violation of Chapter 93A. She
alleged facts indicating that NVIDIA’s sale of GPUs that it knew would cause
damage to the computers in which they were installed was an unfair business
practice. Even if NVIDIA wouldn’t have
had to disclose the defect under a common-law fraud standard, the consumer
protection law covers more than common-law fraud. She couldn’t, however,
maintain a breach of implied warranty claim, because she didn’t allege that the
GPUs at issue were “goods” as the term is used in the commercial code. Rather, they were components of a good and
not detachable from the rest of the computer at the time of sale.
Finally, and getting to the more subtle but equally
significant use of standing to constrain class actions, the court dismissed
claims “based on alleged defects in products other than the product that [Granfield]
purchased” for lack of standing. Of
course, taken literally, this idea guts the class action entirely: she only
purchased one computer; the rest of the class purchased the others. The idea is that other people purchased one
of eleven other models of NVIDIA GPU named in the claim, and so she didn’t have
standing to represent them, even though she seems to have alleged that the
defect was the same in all models. This
shouldn’t be a standing issue; it should be and previously was an issue of whether the class claims were sufficiently
unified/representative. Because of the
comparative subtlety of this standing argument, it’s not clear that courts
accepting it have understood the extent to which they’ve diverged from previous
precedent.
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