California Consumer Protection Laws May Impose A Duty to Disclose Even Absent Safety Issue

In re Lenovo Adware Litigation is multi-district litigation concerning Lenovo laptops which (Plaintiffs allege) were pre-installed with malicious software. A federal district court in California recently denied a motion to dismiss in part and granted class certification of California claims. 2016 WL 6277245 (N.D. Cal. Oct. 27, 2016).

We’ll refrain from commenting on the Court’s orders due to our role as class counsel, but we wanted to summarize the Court’s ruling declining to dismiss UCL and CLRA claims which were based on the alleged failure to disclose material information that was exclusively known by the defendant.

In an nutshell, the court held that, under California law, a duty to disclose may arise where the defendant has exclusive knowledge of material information, even absent any affirmative misrepresentation or safety defect. The court based its understanding of California on a recent California Court of Appeal decision in Rutledge v. Hewlett-Packard Co., 238 Cal. App. 4th 1164, 1174 (2015), as modified on denial of reh’g (Aug. 21, 2015). According to the Lenovo court, Rutledge cast new light on this question and it is controlling because there is no clear and convincing evidence suggesting the California Supreme Court would decide Rutledge differently.