Collins v. eMachines: Computer Defect Is Actionable

In a victory for consumers, California’s Third Appellate District has reversed a trial court’s ruling that granted judgment on the pleadings in favor of the defendants, personal computer manufacturers eMachines and Gateway (collectively, “eMachines”).  See Collins v. eMachines, No. C066092, 5-6 (Cal. Ct. App. Nov. 28, 2011) (available here).  The ruling affirmed that “injury in fact” can be satisfied by alleging as damages the difference between the actual purchase price and the fair market value of a defective product.  Slip op. at 4.  Additionally, the ruling importantly distinguished product defect cases in which warranties are implicated.  See slip op. at 9-12.

The lawsuit arose over allegations that the chip responsible for writing and reading data on eMachines’ floppy disc drives malfunctioned, resulting in lost data and files.  Slip op. at 3.  The plaintiffs allege that the disc drives did not wear out from normal use, but rather were defective at the time of purchase.  Slip op. at 5.  Because the defect existed at the time of purchase, the appellate court rejected eMachines’ claim that the plaintiffs were attempting an “end-run” around warranty laws.  Slip op. at 11.  In contrast to automobile cases in which a defect only manifested after an express warranty period and was therefore not actionable, in this case the plaintiffs experienced problems with their computers both before and after the warranty’s expiration.  Slip op. at 9-12 (distinguishing Daugherty v. Amer. Honda Motor Co., 144 Cal. App. 4th 824 (2006) and Bardin v. DaimlerChrysler Corp., 136 Cal. App. 4th 1255 (2006)).    

The Collins plaintiffs are now expected to proceed with their product defect claims against eMachines principally under California’s Consumer Legal Remedies Act (CLRA) and Unfair Competition Law (UCL).