Judge short-circuits nationwide class action vs Logitech over its home video security systems

By Scott Holland | Mar 8, 2018

By Coolcaesar, Public Domain, https://commons.wikimedia.org/w/index.php?curid=2282693

A Chicago federal judge has deactivated a nationwide class action against Logitech concerning its home video security systems.

Plaintiff James Anderson, of suburban Orland Park, filed a complaint Aug. 22 in federal court in Chicago, saying the cameras in Logitech’s high-definition Alert systems routinely failed and the proprietary software was “rife with bugs and glitches that made the systems reliable and inoperable.” He further alleged the Newark, Calif., company took several illegal steps to keep customers from making warranty claims.

In an opinion issued March 7, Judge Harry D. Leinenweber granted Logitech’s motion to dismiss the nationwide class action, while also dismissing a claim concerning the Illinois Consumer Fraud Act and one of unjust enrichment, as well as an unfair competition and consumer remedies claim under California law. Leinenweber denied motions to dismiss breach of express warranty and breach of implied warranty claims.

According to Anderson’s complaint, Logitech decided in the last quarter of 2012 to stop making and selling Alert systems by 2014, but kept that decision from customers until July 22, 2014, meaning the company “knew internally for nearly two full years that it had given up on the defective alert systems but continued to sell its remaining stock to unsuspecting customers who would eventually be stuck with significant investments in defective products.”

In moving for class certification, Anderson referenced other litigation involving Logitech for similar reasons in federal court in California and New Jersey. Logitech wanted to stay Anderson’s complaint until the New Jersey court ruled on its own motion to dismiss, but Leinenweber denied the stay because of his larger consideration of jurisdiction, noting Logitech is neither incorporated nor headquartered nor registered to do business in Illinois.

Logitech argued for dismissal with reliance on the 2017 U.S. Supreme Court opinion in Bristol-Meyers Squibb v. Superior Court. Anderson argued “that case was not a class action, but a series of individual claims filed together in state court,” Leinenweber wrote.

However, he said, in other recent similar cases, including a recent decision also authored by Leinenweber, federal judges had similarly applied the Bristol-Meyers Squibb decision to cut short attempts at nationwide class actions, as well, noting questions over whether courts can exercise general jurisdiction over out of state litigants.

As such, Leinenweber said Anderson’s attempt to argue around Bristol-Meyers attempted to create an insubstantial difference. He dismissed the nationwide class action claim with prejudice.

In looking at the ICFA claim, Leinenweber said “the most credible allegation of fraud” is the alleged concealment of the decision to discontinue the Alert line while still selling it for two years. However, he noted Anderson didn’t say when he bought his system, “a significant failure. … If he purchased his system prior to the 2012 decision to discontinue, the decision itself could not be an act of fraud.”

Leinenweber dismissed the ICFA claim, but allowed Anderson time to amend the filing to strengthen his case with more specific details. Less specificity was needed for Anderson’s implied and warranty claims, which allowed them to survive. Anderson “clearly alleged” he bought goods that did not perform to advertised standards, that he notified Logitech of his problem and that the company did not offer suitable response. Further, Leinenweber wrote, Anderson sufficiently alleged the “warranty was ‘illusory’ because the product was so problem ridden and defective that the product would not work.”

However, Leinenweber also explained Anderson’s unjust enrichment claim and a claim for declaratory judgment failed because they are “duplicative of the underlying fraud claim” he’d already dismissed for lacking specificity. All those dismissals were without prejudice.

Representing Anderson in the matter is Gary L. Specks, of Highland Park, and attorney Linda M. Fong, and others from the San Francisco firm of Kaplan Fox & Kilsheimer LLP.

Logitech is defended by attorney David M. Holmes and others from the firm of Wilson, Elser, Moskowitz, Edelman & Dicker, of Chicago and Los Angeles.

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Organizations in this Story

Kaplan Fox & Kilsheimer LLP Logitech U.S. District Court for the Northern District of Illinois Wilson Elser Moskowitz Edelman and Dicker LLP

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