McAfee markets and endorses software, including software
from RPC/Capital Intellect. Bilodeau
alleged that, after she searched for software to repair her computer, she
clicked on an ad by McAfee for RPC; McAfee’s website then represented that RPC,
Registry Power Cleaner, would “accurately identify, report and repair a variety
of computer errors and other problems, enhance the performance, speed, and
security of her computer, and perform other beneficial tasks ...” Relying on these representations, she
installed RPC, which told her that her computer needed critical repairs; as a
result, she allegedly continued using the software beyond the 30-day trial
period and was charged for it. She
alleged that she was misled.
First, Bilodeau alleged that McAfee’s representation that
RPC would accurately report errors was inaccurate, because the software is
allegedly designed to invariably report errors.
A computer forensics expert tested it on “a brand new virtual computer
system” and found that RPC “still reported that numerous errors existed on the
system.” Thus, she alleged, the errors allegedly detected on her own computer
didn’t exist or pose any actual risk.
Second, she alleged that RPC’s error reports were misrepresentations
that induced her to keep the software and pay.
The court first found that Bilodeau alleged particularized
injury sufficient for Article III standing.
McAfee argued that she didn’t allege that RPC failed to fix her computer
or that the errors RPC found didn’t exist.
Though other courts have reached different results on nearly identical
complaints, the court found that Bilodeau alleged economic injury stemming from
the misrepresentations: she paid because of the error reports, and she alleged
that RPC couldn’t actually do what it promised, so she didn’t get the benefit
of her bargain.
However, the complaint failed to satisfy Rule 9(b). Initially, it needed to distinguish between
representations made by McAfee and those made by Capital Intellect, the other
defendant. Bilodeau alleged that she
downloaded the software relying on defendants’ representations, without
explicitly saying who said what, which was essential to their respective
liabilities.
More importantly, the court found paraphrasing the allegedly
false representations without citation was insufficient to provide the
necessary specificity to put defendants on notice. There were direct quotes from McAfee’s RPC
website: RPC will “[r]epair[ ] PC registry errors”; “[improve [PC] speed”;
“[s]can[ ] for hidden threats”; “[p]revent [ ] frequent crashes,” and “[s]afely
repair harmful registry errors that make your PC unstable.” But Bilodeau also alleged that defendants
represented that RPC would “accurately identify, report and repair a variety of
computer errors,” without attributing these representations to any specific defendant
at any specific time.
Rule 9(b) didn’t allow the court to evaluate these
representations “regardless of the form they took,” because McAfee argues that
it only represented that the software would repair, improve speed, scan for
hidden threats, and prevent frequent crashes, and did not represent that RPC
would accurately report errors.
Comment: I really don’t understand what an ordinary consumer
should understand distinguishes “scanning for hidden threats” from “accurately
reporting errors.” What’s the point of repair software that inaccurately
reports errors? I guess we’re all
supposed to assume that repair software is like a shady auto shop; we believe
its dire predictions at our peril?
Indeed, the court noted that the parties disputed the distinction
between scanning and reporting functions, but it concluded that neither
defendants nor the court could evaluate Bilodeau’s claims without clarity “as
to what exactly was represented by whom.”
The court was particularly troubled because the generalized
nature of the allegations paralleled complaints filed in a number of suits by
plaintiffs’ counsel against various computer scan software makers. Each complaint alleged that a forensic expert
had evaluated the program and found that it falsely reported problems. This similarity magnified the plausibility
and specificity issues with the complaint—cutting and pasting is disfavored and
undermines claims for relief.
True, Rule 9(b) can be satisfied without direct quotations,
if they’re sufficiently specific. But
here, allegations that defendants represented that RPC would “accurately report
harmful errors,” or “accurately identify, report and repair a variety of
computer errors and other problems,” were not “concrete” and “technical.” Since the lawsuit turned on how the
representations compared to the actual functionality, lack of specificity was
fatal to Bilodeau’s claims.
The same was true for RPC’s alleged misrepresentations
through falsely reporting nonexistent errors.
The allegation was that RPC inevitably and uniformly reported high-risk
errors no matter what was going on in the underlying system. But the complaint failed to allege when the
unidentified forensics expert examined RPC, what errors the software allegedly
reported, or whether the expert found that RPC reported errors existing even
after it performed its repair function.
Even if the allegation of overreporting error on new computers was
sufficiently particular, Bilodeau failed to link it to her personal experience
with RPC. She simply alleged that the
errors detected on her computer didn’t exist or didn’t pose any actual
risk. (I don’t really see why that
wasn’t enough. It might be that she
can’t ultimately prove that. But why
doesn’t it identify with sufficient specificity what’s at issue for the defendant
to prepare its defense?) She didn’t
allege which errors were reported or whether they were nonexistent or merely
harmless. It was an unwarranted logical
leap to concluded that, just because RPC allegedly reported false positives on
a new computer, the errors on her
computer weren’t a problem. But by her
own admission, her computer was malfunctioning before she saw the ad, meaning
her computer wasn’t error-free. She
didn’t allege that any expert ever examined her computer to determine whether
the reported errors were real, or whether RPC fixed them or continued to
provide false reports after performing its purported cleaning and repair
functions. This “cumulative” lack of
specificity failed to give defendants sufficient notice.
In addition, this lack of specificity raised plausibility
concerns; how could a plaintiff suffer from software deficiencies if her
computer was already functioning poorly?
Plus, the court doubted that RPC’s false reports of errors could have
induced Bilodeau to buy the software.
She had 30 days to test the software!
(I’m sure it was easy to tell what the software was doing.) She needed to allege facts explaining why
software that continuously reported critical errors would induce her to keep
the program beyond the 30-day trial period.
Finally, the court addressed objections to specific causes
of action. McAfee argued that California
law couldn’t apply because Bilodeau isn’t a California resident and
misrepresentations within RPC itself occurred out of state, as RPC was
developed in Massachusetts. But McAfee’s
website could be the source of California liability, if Bilodeau properly pled
misrepresentations thereon that were developed by a California sales and
marketing department. There were other
deficiencies in Bilodeau’s warranty and breach of contract claims that might be
correctable by better pleading; the court dismissed the complaint with leave to
amend.
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