`
`Mark L. Javitch (CA SBN 323729)
`JAVITCH LAW OFFICE
`480 S. Ellsworth Ave
`San Mateo, CA 94401
`Telephone: (650) 781-8000
`Facsimile: (650) 648-0705
`mark@javitchlawoffice.com
`Attorney for Plaintiffs
`and the Putative Classes
`
`[Additional attorneys listed on signature page]
`
`MOBILE EMERGENCY HOUSING CORP.,
`and TRACK RAT ENTERPRISES, INC. d/b/a
`PERFORMANCE AUTOMOTIVE & TIRE
`CENTER, and DAVID JUSTIN LYNCH,
`individually and on behalf of all others similarly
`situated,
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`
` Case No.: 5:20-cv-09157-SVK
`
`THIRD AMENDED
`CLASS ACTION COMPLAINT
`
`DEMAND FOR JURY TRIAL
`
`
`
`
`
`
`
`
`Plaintiffs,
`
`v.
`HP, INC. d/b/a HP COMPUTING AND
`PRINTING INC., a Delaware Corporation,
` Defendant.
`
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 2 of 34
`
`
`
`Plaintiffs MOBILE EMERGENCY HOUSING CORP., TRACK RAT ENTERPRISES, INC.
`d/b/a PERFORMANCE AUTOMOTIVE & TIRE CENTER, and DAVID JUSTIN LYNCH (collectively,
`“Plaintiffs”), individually and on behalf of others similarly situated, bring this Third Amended Class
`Action Complaint against Defendant HP, INC. d/b/a HP COMPUTING AND PRINTING INC. (“HP” or
`“Defendant”) and make the following allegations based on personal knowledge as to facts pertaining to
`their own experiences and on information and belief as to all others:
`
`NATURE OF THE ACTION
`
`HP wrongfully compels users of its printers to buy and use only HP ink and toner supplies
`1.
`by transmitting firmware updates without authorization to HP printers over the Internet that lock out its
`competitors’ ink and toner supply cartridges. HP’s firmware “updates” act as malware—adding, deleting
`or altering code, diminishing the capabilities of HP printers, and rendering the competitors’ supply
`cartridges incompatible with HP printers. Further, HP uses the firmware update process to conceal that it
`is actually collecting data on whether consumers are using HP or its competitors’ cartridges.1 HP can use
`this information to punish its customers for not being loyal and refusing assistance and support for its
`customers who bought non-genuine HP cartridges. As a result, and by HP’s design, Plaintiffs and the
`Class members who reasonably and lawfully buy competitors’ much less costly and equally effective
`supplies are left with useless printers and supply cartridges.
`HP’s malware transmission is unannounced, automatic (on the part of printer owners), and
`2.
`unsolicited. The firmware update, or the portion of the firmware update that renders third-party ink and
`toner incompatible with HP printers, serves no legitimate business purpose. Even if other portions of the
`transmission had some arguable security or quality benefit, the secretive, automatic, and misleading
`manner in which the firmware updates are carried out unlawfully deprive Plaintiffs and the Class of the
`
`
`
`1 See Gibbons, David. “HP Tries to Hide the Truth About Consumer Data” RTM World, March 30,
`2021, https://www.rtmworld.com/news/hp-tries-to-hide-the-truth-about-consumer-data/ (last accessed
`Apr. 2, 2021).
`
`1
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 3 of 34
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`fully informed choice of either choosing to accept the firmware update and the represented benefits
`accompanying it, or to decline the update and receive the benefits of using ink or toner of their choice.
`As a result of HP’s malware, HP printer owners who lawfully use significantly less
`3.
`expensive ink or toner purchased from third parties are forced to buy HP cartridges, which HP sells at
`substantial premiums, or they are deprived of the use of their printers until third parties can develop work
`arounds to again offer products in competition with HP. HP harms competition because it deprives its
`printer users of the choice whether to purchase more expensive HP supplies or the less expensive supplies
`of lawful competitors.
`Even though HP sells ink and toner at substantial premiums over its competitors, HP is
`4.
`able to maintain its market share in the HP printer-compatible ink and toner supply markets only because
`it has the exclusive ability to install firmware updates to the printers it sells that are connected to the
`Internet.
`In furtherance of the unlawful scheme, HP falsely represents and omits material facts
`5.
`regarding the reason for the sudden inability of its printers to function without HP ink and toner. HP
`printers using third party ink and toner cartridges display an error message stating that the printer had a
`“supply problem.” In fact, there was no supply problem until HP intentionally caused one by sending
`malware to its printers to render third-party supplies incompatible with its products.
`The incompatibility was not an unintended consequence of HP pursuing or implementing
`6.
`its legitimate business interests or conducting lawful quality assurance, security updates, or product
`improvements. The incompatibility was the point of the firmware update, or the portion of the firmware
`update that caused the incompatibility to prevent its printers from working with competitors’ products.
`Third-party supplies are not collateral damage; they are the target.
`Due to the transmission and by HP’s design, Plaintiffs’ and Class members’ Class Printers
`7.
`and supply cartridges were rendered incompatible and inoperable. Plaintiffs would continue to use their
`Class Printers with non-HP toner supply cartridges if given the opportunity to do so without the risk of
`future malware transmissions from HP. Plaintiffs would not have purchased an HP printer had they known
`HP was engaged in and would engage in such conduct. As a direct and proximate result of HP’s
`misconduct, Plaintiffs and Class members sustained damages, including but not limited to the loss of the
`2
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 4 of 34
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`value of the supply cartridges they purchased that are no longer compatible with their printers, loss of time
`and effort to diagnose the damage to their printers and to determine what remedial measures to take, the
`need to purchase expensive HP supply cartridges, uncertainty in the functioning of their printers and
`supply cartridges, and future remedial costs.
`HP’s malware transmission and false statements injured and will continue to injure its
`8.
`customers. HP’s conduct is unlawful under federal and state laws prohibiting hacking and other computer
`crimes, state statutory prohibitions against deceptive and unfair trade practices, and trespass to chattels.
`Plaintiffs therefore seek actual, statutory, and exemplary damages, restitution, and an
`9.
`injunction requiring HP to reverse the effects of its malware transmissions insofar as they render once-
`compatible ink and toner cartridges obsolete, and prohibiting HP from sending such transmissions in the
`future without obtaining the fully informed prior consent of each printer owner.
`PARTIES
`Plaintiff MOBILE EMERGENCY HOUSING CORP. (“Mobile Emergency”) is a
`10.
`domestic business corporation registered to do business and existing under the laws of the State of New
`York, with its principal place of business in Farmingdale, New York.
`Plaintiff TRACK RAT ENTERPRISES, INC. d/b/a Performance Automotive & Tire
`11.
`Center (“Performance Automotive”) is a domestic corporation registered and existing under the laws of
`the State of Arizona, with its principal place of business in Mesa, Arizona.
`Plaintiff DAVID JUSTIN LYNCH (“Lynch”) is an individual residing in Palm Springs,
`12.
`California, and is a citizen of California.
`Defendant HP, INC. d/b/a HP Computing and Printing Inc. is a Delaware corporation with
`13.
`its principal place of business located at 1501 Page Mill Road, Palo Alto, California, 94304.
`JURISDICTION AND VENUE
`This Court has original subject matter jurisdiction under 28 U.S.C. § 1331, as the action
`14.
`arises under the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (“CFAA”). The Court has
`supplemental jurisdiction over Plaintiffs’ state and common law claims under 28 U.S.C. § 1367(a).
`Alternatively, the Court has original subject matter jurisdiction over the state law claims pursuant to 28
`U.S.C. § 1332(d), because the case is brought as a class action pursuant to Fed. R. Civ. P. 23, there are
`3
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 5 of 34
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`100 or more members of the proposed Class, the amount in controversy exceeds $5,000,000, exclusive
`of costs, and Plaintiffs and Defendant are diverse parties.
`This Court has general personal jurisdiction over HP because HP’s headquarters and
`15.
`principal place of business are located in Palo Alto, California.
`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(2) because HP resides in
`16.
`this District.
`
`INTRADISTRICT ASSIGNMENT
`
`Pursuant to Civil L.R. 3-2(c), this case is properly assigned to the San Jose Division
`
`17.
`
`because a substantial part of the events or omissions that give rise to Plaintiffs’ and Class members’
`
`claims occurred in the County of Santa Clara, California.
`
`COMMON FACTUAL ALLEGATIONS
`HP is the largest seller of home, office, and enterprise printers in the United States and sells
`18.
`associated supply cartridges for its printers. HP employs a “razor and blades” business model, where the
`printer is sold at a substantial discount with the intent on profiting on the sales of consumable supplies
`like toner and ink over the lifetime of the printer. Under this model, the overall long term cost of owning
`and operating an HP printer compared to its competitors in the market for printers is difficult to evaluate
`for the customer at the point of sale.2
`HP’s net revenue from supplies alone in 2019 was $12.9 billion. Consistent with its razor
`19.
`and blades model, its net revenues from hardware (i.e., printers, among others) came to $7.1 billion in
`2019.3
`
`
`
`2 See Anirudh Dhebar, “Innovating Around the Classic Razor-And-Blades Pricing Model” Babson
`College, April 2017. https://www.babson.edu/academics/executive-education/babson-insight/strategy-
`and-innovation/razor-and-blades-pricing-model/# (last accessed November 25, 2020).
`3 See 2019 10K, HP Inc. at 72. Notes to Consolidated Financial Statements (Continued).
`https://s2.q4cdn.com/602190090/files/doc_financials/2019/ar/hp-inc_10-ka-(1).pdf (last accessed
`November 24, 2020).
`
`
`4
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 6 of 34
`
`
`
`HP depends on its extremely high-priced, recurring supply cartridge sales as the lifeblood
`20.
`of its business. Indeed, commentators have remarked that the price per ounce of HP’s ink and toner range
`between the prices of silver and gold (at $4,731 per gallon).4 HP’s original supplies are so excessively
`priced that a recent check of Amazon.com found that the HP branded set of color toner supply cartridges
`(for one of the printers at issue in this lawsuit) were being offered for sale at a 711% (seven hundred
`eleven percent) premium above several non-HP listings that had earned positive customer reviews. And
`this is to say nothing of the excessive shrinkflation HP supplies have undergone in recent years, which
`contributes to the value disparity.5 Accordingly, HP admits in its annual report that it intends to keep its
`prices high, as its operating results could be adversely affected if it had to lower the prices of HP brand
`products.
`21.
`The critical component of a successful razor and blades business model is that the market
`for the consumable must be closed to competitors. If consumers can purchase blades from anyone else,
`then the model fails.
`As a result, HP fears competition in its “Printing Supply Business” from what it refers to
`22.
`as “independent suppliers” who offer “non-original supplies (including
`imitation, refill or
`remanufactured alternatives) for some of our LaserJet toner and Inkjet cartridges.”6 HP has warned that
`“[f]inancial performance could also decline due to increased competition from … non-original
`supplies[.]”7 “For example, our supplies business has recently experienced declining revenues due to
`declines in market share, installed base and usage, and increased customer pricing sensitivity.”8
`
`
`
`4 See Eduardo Porter, “Why Printer Ink Is the Other ‘Black Gold.’” All Things Considered, NPR, May
`24, 2012. https://www.npr.org/2012/05/24/153634897/why-printer-ink-is-the-other-black-gold. (last
`accessed November 25, 2020).
`5 https://www.theguardian.com/money/2013/feb/23/printer-ink-cartridges-paying-more-getting-less (last
`accessed December 10, 2020).
`6 Id. at 12.
`7 Id. at 12.
`8 Id. at 13.
`
`
`5
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 7 of 34
`
`
`
`Competitors in the supplies market have continually eaten into the market share for HP-
`23.
`compatible ink and toner supply cartridges. As HP states in its 2019 annual report: “independent suppliers
`offer non-original supplies (including imitation, refill and remanufactured alternatives), which are often
`available for lower prices.”9 “Net revenue for Supplies decreased 4.8% as compared to the prior-year
`period, primarily due to demand weakness.”10
`Based on the competitive risks identified by HP, and to reverse its decline in supplies
`24.
`revenue, HP resorted to suppressing competition for its HP-branded ink and toner supply cartridges by
`sending malware to its customers’ printers, causing a malfunction to its printers equipped with
`competitors’ supply cartridges.
`HP has acknowledged the effects that its so-called supplies “authentication” procedures
`25.
`can have on its market share in supplies and has deployed “authentication” procedures, such as firmware
`updates, as a strategy to boost its market share in the supply markets.11 “Authentication” is just a
`euphemism for sending firmware updates designed to kick off competitors’ products.
`
`
`
`
`9 HP, Inc. 2019 Form 10-K, at 7, available at
`https://s2.q4cdn.com/602190090/files/doc_financials/2019/ar/hp-inc_10-ka-(1).pdf
`10 Id. at 42.
`11 See page 38, Strategic & Financial Plan for Value Creation (Feb. 24, 2020), attached as Ex. 99-2 to
`HP Inc. Form 8-K, submitted to Securities and Exchange Commission on Feb. 24, 2020.
`
`6
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 8 of 34
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`In or around late October and early November, 2020, HP caused to be transmitted a
`26.
`firmware update containing malware designed to lock out then-compatible third-party supply cartridges.
`HP wrote, designed, and transmitted the firmware or a portion thereof solely for the purpose of disabling
`third-party supply cartridges, which were successfully competing with its supplies business.
`27. Without Plaintiffs’ and Class memers’ knowledge or consent, HP surreptitiously obtains
`information on the type of cartridges that Plaintiffs and Class members are using.
`The malware caused damage to Plaintiffs’ and Class members’ printers. HP’s conduct was
`28.
`unilateral, unsolicited, misleading, and deceptive. HP did not seek consent from, advise, or explain the
`malware or the update to Plaintiffs and Class members. HP simply transmitted the update. Plaintiffs and
`Class members did not authorize HP to transmit the update or to cause damage to their printers.
`In addition, HP made misrepresentations and omissions of material fact regarding the
`29.
`firmware update. At the point of sale, HP omitted material facts concerning its well-conceived business
`plan to periodically disallow competing supplies. After HP transmitted the updates, HP made false
`statements to conceal its role and the nature of the update. HP caused a message to be displayed claiming
`that the printer had a “supply problem” when a competitor’s supply cartridge was installed. HP did not
`attribute the problem to a firmware update, malware transmission, or other conduct on its part.
`
`7
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 9 of 34
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`The error message that the printers displayed intentionally misrepresented the cause of the
`30.
`printer issue, suggesting that the third-party supply cartridges were broken when, instead, the
`transmission simply disabled the supply cartridges that had previously functioned satisfactorily and
`would have continued to function but for HP’s transmission of the update.
`HP should have implemented reasonable, legal and ethical alternatives. HP should have
`31.
`played fairly in the marketplace using traditional methods, using persuasion and other legitimate sales
`tactics to convince Plaintiffs and the Class to choose to buy HP branded supply cartridges. HP should
`have emphasized quality, value, customer service, or other benefits, rather than secretly causing printers
`that were not contributing to HP’s supplies revenue to malfunction. HP should have provided its
`customers with the opportunity to make a fully informed decision regarding whether to install the
`firmware update or continue using third party supplies.
`THE CLASS PRINTERS
`HP’s malicious transmissions affected many models of HP printers, as well as the
`32.
`corresponding third-party ink and toner supply cartridges that were in the printers or were already
`purchased by Plaintiffs and Class members at the time the update was transmitted or activated.
`Subject to information learned in discovery, the Class Printers comprise HP Color LaserJet
`33.
`printers and all-in-one devices, in the following non-exhaustive list of products and product series: HP
`Color LaserJet Pro M254, HP Color LaserJet Pro MFP M280, HP Color LaserJet Pro MFP M281, and
`all other models affected by HP malware transmissions in the way described herein (“Class Printers”).
`FACTS SPECIFIC TO MOBILE EMERGENCY
`34. Mobile Emergency provides mobile housing to natural disaster victims and first responders
`in the United States and the Caribbean. Mobile Emergency also provides mobile facilities that are
`equipped for conducting quarantines.
`On August 21, 2019, Mobile Emergency, through its authorized representative, Joseph
`35.
`James (“James”), purchased an HP Color LaserJet Pro M254, for $238.96 from the Staples at 204 Airport
`Plaza, Farmingdale, New York.
`36. Mobile Emergency uses that device to print contracts that are mailed to clients.
`
`8
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 10 of 34
`
`The printer came packaged with an initial set of model 202 HP-brand toner supply
`
`37.
`cartridges.
`38. Mobile Emergency would continue to use its Class Printer with reasonably priced non-HP
`toner supply cartridges. Had Mobile Emergency been informed that HP would intentionally transmit
`software updates to the printer over the Internet designed to render the printer incompatible with non-HP
`supplies, Mobile Emergency would not have purchased the printer.
`39. When the initial model 202 toner supply cartridges in Mobile Emergency’s printer were
`exhausted, Mobile Emergency did not purchase additional supply cartridges from HP. Instead, on
`October 16, 2020, Mobile Emergency purchased a set of model 202 Greensky toner supply cartridges
`from Amazon.com for $52.49, because they were truthfully advertised at the time as being compatible
`with the HP printer. The model 202 Greensky cartridges were compatible with the printer and Mobile
`Emergency was satisfied with the quality of the printer’s output.
`On or around November 18, 2020, HP sent or activated an unsolicited and malicious
`40.
`transmission to the printers of Mobile Emergency and the Class. The transmission altered the code and
`data of the Class Printers and rendered the printers incompatible with third-party toner supply cartridges,
`including Greensky cartridges purchased by Mobile Emergency.
`HP did not advise Mobile Emergency or the Class members of the transmission. Mobile
`41.
`Emergency discovered the effects of the malware transmission when James attempted to print a
`document, but an error message was displayed, as shown below:
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`9
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 11 of 34
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`After HP’s transmission, Mobile Emergency’s fully functioning printer ceased printing.
`42.
`To check for a solution, James searched HP’s website, but could find only a
`43.
`recommendation to replace the cartridge with an HP-branded cartridge.
`As a consequence of HP’s intentional conduct, Mobile Emergency’s printer and supply
`44.
`cartridges were disabled. The Greensky toner was and is useless. Mobile Emergency was effectively
`forced to purchase HP toner. Mobile Emergency bought a black HP toner cartridge from Staples on
`December 1, 2020 for $71.68 to replace the Greensky cartridges. Mobile Emergency is now uncertain
`whether the decision in the future to buy third party toner will result in wasted toner and further losses.
`45. Mobile Emergency would continue to use its Class Printer with reasonably priced non-HP
`toner supply cartridges. Had Mobile Emergency known that HP was engaged in and would engage in the
`unlawful, deceptive, and unfair conduct as described herein, it would not have purchased an HP printer.
`As a result of HP’s unlawful conduct, Mobile Emergency has and will continue to suffer injury in fact
`and sustain losses in paying for HP printers it would not have bought had it known the truth, losing the
`value of third-party supply cartridges rendered useless as a result of HP’s conduct, and incurring
`
`10
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 12 of 34
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`additional losses and injuries, such as buying replacement supplies and other consequential damages
`relating to loss of use of the HP printer.
`FACTS SPECIFIC TO PERFORMANCE AUTOMOTIVE
`Performance Automotive purchased an HP Color LaserJet Pro MFP M281fdw Laser
`46.
`Multifunction Printer from HP in November 2018.
`Performance Automotive, through its authorized representative Tony Staples, used
`47.
`152,400 rewards points to purchase the device.
`The device’s serial number is VNBNLCJ7JH.
`48.
`49.
`The device’s packaging included an initial set of model 202 HP-brand toner supply
`cartridges.
`Performance Automotive would continue to use its Class Printer with reasonably priced
`50.
`non-HP toner supply cartridges. Had Performance Automotive been informed that HP would
`intentionally transmit software updates to the printer over the Internet designed to render the printer
`incompatible with non-HP supplies, Performance Automotive would not have purchased the printer.
`51. When the initial toner supply cartridges were exhausted, Performance Automotive did not
`purchase additional toner supply cartridges from HP. Instead Performance Automotive purchased model
`202 GPC Image, Linkyo and Greensky toner cartridges from Amazon.com for approximately $60 per
`set, because they were truthfully advertised at the time as being compatible with its HP printer. The GPC
`Image, Linkyo and Greensky cartridges were compatible with the printer and Performance Automotive
`was satisfied with the quality of the printer’s output.
`On or around November 18, 2020, HP sent or activated an unsolicited and malicious
`52.
`transmission to the printers of Performance Automotive and the Class. The transmission altered the code
`and data of the Class Printers and rendered the printers incompatible with third-party toner supply
`cartridges, including the GPC Image, Linkyo and Greensky cartridges purchased by Performance
`Automotive.
`HP did not advise Performance Automotive or the Class members of the transmission.
`53.
`Performance Automotive discovered the effects of the malware transmission when it attempted to print
`a document, but an error message was displayed, as shown below:
`11
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 13 of 34
`
`
`
`
`
`
`
`After HP’s transmission, Performance Automotive’s fully functioning printer ceased
`54.
`printing. When Mr. Staples checked the printer, he saw that the BIOS version had been changed.
`55. Mr. Staples tried resetting and power cycling the device, but the error message persisted.
`Mr. Staples researched the problem and found that HP had issued a “Bios Update” that caused the printer
`to become “bricked.”
`As a consequence of HP’s intentional conduct, Performance Automotive’s printer and
`56.
`supply cartridges were disabled. Performance Automotive purchased a printer from a different printer
`manufacturer to avoid further losses as a result of HP’s unlawful conduct.
`Performance Automotive would continue to use its Class Printer if it was able to operate
`57.
`with reasonably priced non-HP toner supply cartridges. Had Performance Automotive known that HP
`was engaged in and would engage in the unlawful, deceptive, and unfair conduct as described herein,
`Performance Automotive would not have purchased an HP printer. As a result of HP’s unlawful conduct,
`Performance Automotive suffered and continues to suffer injury in fact and sustain losses in paying for
`HP printers it would not have bought otherwise, losing the value of third-party supply cartridges rendered
`useless as a result of HP’s conduct, and incurring additional losses and injuries, such as buying
`replacement supplies and other consequential damages relating to loss of use of the HP printer.
`
`
`12
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 14 of 34
`
`FACTS SPECIFIC TO DAVID JUSTIN LYNCH
`On March 3, 2020, Lynch purchased an HP Color LaserJet Pro M254dw Wireless Printer
`58.
`from Best Buy for $239.25.
`The device’s packaging included an initial set of model 202 HP-brand toner supply
`59.
`cartridges.
`60. When the initial toner supply cartridges were exhausted, Lynch did not purchase additional
`toner supply cartridges from HP. Instead, on August 18, 2020, Lynch purchased a set of high capacity
`model 202 toner cartridges from Express-Inks for $215.46, because they were truthfully advertised at the
`time as being compatible with his HP printer. The Express-Inks cartridges were compatible with the
`printer and Lynch was satisfied with the quality of the printer’s output.
`Lynch would continue using his Class Printer with reasonably priced non-HP toner supply
`61.
`cartridges. Had Lynch been informed that HP would intentionally transmit software updates to the printer
`over the Internet designed to render the printer incompatible with non-HP supplies, Lynch would not
`have purchased the printer.
`Around January 2021, HP sent or activated an unsolicited and malicious transmission to
`62.
`the printers of Lynch and the Class. The transmission altered the code and data of the Class Printers and
`rendered the printers incompatible with third-party toner supply cartridges, including the Express-Inks
`cartridges purchased by Lynch.
`HP did not advise Lynch or the Class members of the transmission. Lynch discovered the
`63.
`effects of the malware transmission when he attempted to print a document, but an error message was
`displayed.
`64.
`65.
`
`
`After HP’s transmission, Lynch’s fully functioning printer ceased printing.
`Lynch’s printer displayed an error message as shown below that said: “Supply Problem.”
`
`
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`13
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 15 of 34
`
`
`
`
`
`
`
`
`
`
`
`The device also displayed an error message as shown below stating “The indicated supplies
`66.
`are not communicating correctly with the printer. Try reinstalling the supplies. If the problem persists,
`replace the supplies to continue printing.”
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`67.
`disabled.
`
`As a consequence of HP’s intentional conduct, Lynch’s printer and supply cartridges were
`
`14
`THIRD AMENDED CLASS ACTION COMPLAINT
`
`5:20-cv-09157-SVK
`
`
`
`Case 5:20-cv-09157-SVK Document 42 Filed 04/08/21 Page 16 of 34
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`As a consequence of HP’s unlawful conduct, Lynch was forced to purchase HP-brand
`68.
`cartridges. Lynch had to spend nearly five hundred dollars more for these HP-brand toner cartridges to
`get the printer operating again.
`On January 13, 2021, Lynch paid $493.56 for new HP cartridges. He purchased an HP
`69.
`brand double pack of black high capacity cartridges on Amazon for $189.97. On the same day, he also
`purchased a set of three high capacity HP color cartridges for $303.59 on Amazon.
`Lynch would continue using his Class Printer with reasonably priced non-HP toner supply
`70.
`cartridges. Had Lynch known that HP was engaged in and would engage in the unlawful, deceptive, and
`unfair conduct as described herein, Lynch would not have purchased an HP printer. As a result of HP’s
`unlawful conduct, Lynch suffered and continues to suffer injury in fact and sustain losses in paying for
`HP printers he would not have bought otherwise, losing the value of third-party supply cartridges
`rendered useless as a result of HP’s conduct, and incurring additional losses and injuries, such as buying
`replacement supplies and other consequential damages relating to loss of use of the HP printer.
`COMPLAINTS FROM HP CUSTOMERS
`Numerous other Class members reported experiencing the same issue. Below are just some
`71.
`comments (unedited) on message boards and Internet forums regarding the problem:
`
`
`• All was working fine until on printer display pop for upgrade and I chose to do
`it, right after that start getting “Supply Problem” error and won’t print.
`Automatic diagnosis said “Print queue issue is not fixed” but printer display
`shows “Supply Problem.” Did that software upgrade now protecting for me to
`use cheaper brand Toner? I even put a brand new set of Toners and the same
`issue. Always use aftermarket toner and no issue.12
`
`I am posting this on November 2, 2020. My HP 6960 All In One just stopped allowing
`3rd party ink cartridges through Firmware update. To top it off, my local stores are out
`of tri-color cartridges & I had to order direct from HP. I’m so angry.13
`
`
`•
`
`12 https://h30434.www3.hp.com/t5/Printing-Errors-or-Lights-Stuck-Print-Jobs/HP-Color-Laser-jet-Pro-
`MFP-M281CDW-quot-Supply-Problem-quot/td-p/7844016
`13 https:/