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CLASS ACTION LAWSUIT AGAINST EPSON HEATS UP
In 2009, Christopher O’Shea, Gisele Rogers, and Jeff Adams filed a class action lawsuit against Epson America, Inc., and Epson Accessories in the U.S. District Court for the Central District of California. The plaintiffs later added Seiko Epson as a defendant in their third amended class action complaint. The plaintiffs claim that Epson sells its inkjets with a requirement to purchase only Epson inkjet cartridges “while misrepresenting and concealing the grossly inefficient print yields generated by its ink cartridges, which are well below reasonable consumer expectations and the yields of other manufacturers’ printers.” The plaintiffs accuse Epson of violating various California state acts and codes and fraud. The Epson companies deny these allegations.
The industry has seen class-action lawsuits related to the amount of ink or toner contained in cartridges many times before. Epson itself settled several class actions lawsuits, which had been consolidated, in 2006. As part of the settlement agreement, Epson agreed to supplement ink yield disclosures on its website, packaging, marketing materials, and consumer software. Last fall, HP reached a proposed settlement in a class-action lawsuit that claimed that HP inkjet devices provide low ink warnings too soon. The settlement order was approved this spring, but appeals have since been filed, halting the distribution of benefits. (See HP printer settlement website.) Brother has also faced such lawsuits, and recently succeeding in having one such lawsuit related to toner cartridges dismissed.
What has made the Epson lawsuit particularly interesting almost from the start is that it has had more dramatic twists than a daytime soap opera. Following these twists and turns has been challenging at best because many court documents have been redacted, and other court documents in this case have been filed under seal. There have been allegations from Epson that the whole lawsuit was sparked by a disgruntled former employee named Fabrice Commelin who allegedly stole “confidential, trade-secret, privileged and attorney work product documents.” Epson has also been attempting to get a mysterious document, known only in court filings as FC330-343, that apparently was given to the plaintiffs by Mr. Commelin to be ruled protected under attorney-client privileged and work product doctrine.
More recently, in March of this year, the plaintiffs filed a motion to disqualify one of Epson’s key witnesses, David R. Spencer of SpencerLabs Digital Color Laboratory, as well as Epson’s attorneys Shon Morgan, Ryan Goldstein, Joseph Ashby and their law firm of Quinn, Emanuel, Urquhart, & Sullivan (Quinn Emanuel) from participation in the lawsuit. According to the plantiffs’ motion, the plaintiffs’ counsel, Akin, Gump, Stauss, Hauer, & Feld (Akin Gump) had sought to retain Mr. Spencer as an expert. The plaintiffs claimed that after “months” of discussions with Mr. Spencer, during which Akin Gump disclosed confidential information, he withdrew from the case. Quinn Emanuel then signed on Mr. Spencer as a expert witness for the defendants, and Mr. Spencer prepared an expert report in support of the defendants regarding ink yield when printing in a non-continuous or intermittent matter, the same subject matter for which the plaintiffs had sought to retain him. The plaintiffs claimed that Mr. Spencer should be disqualified from the case, along with Epson’s lawyers and law firm, which the plaintiffs claimed obtained confidential information from Mr. Spencer.
The court held a hearing on the matter on June 1, found that no confidential information was disclosed to Mr. Spencer, and denied the plaintiffs’ motion. In addition to this victory, Epson now has a chance to avoid trial, which is currently set for November 15 of this year. Epson has requested a summary judgment in its favor, claiming that the plaintiffs have not established any actionable omissions or misrepresentations on Epson’s part; that there is no evidence of Epson participating in unlawful, unfair, or fraudulent business practices; that the plaintiffs cannot establish an actual injury or ascertainable loss; and if summary judgment is not granted entirely, the class period should be limited. Epson’s motion for summary judgment is scheduled for a hearing on Thursday, July 7. The OEM has until mid-June to file a reply brief in support of the firm’s summary judgment motion.
On the one hand, we can understand consumer frustration about ink yields. Information about ink yields can be hard to find, is often buried deep in vendors’ websites, and the terminology can be hard for a layperson to understand. And, of course, inkjet devices can prove to be more costly than anticipated if you fail to do your due diligence when shopping. On the other, vendors do publish ink yield information, at least in our experience, and all the major inkjet vendors, with one exception not relevant to this case, are using the same ISO standards (ISO/IEC 24711 and 24712) to calculate yields. Moreover, lawsuits such as this seem to demonstrate that some end users are unaware that not every drop of ink can be expended on the page. Particularly in a device that uses separate print heads and ink tanks, like most Epson inkjets, ink is also required to clean and maintain the print head and ink lines and for other tasks. But the amount of documentation to follow in this case is copious, and much of the information has not been made public. So we will see what decisions the California district court makes later this year, and we will follow what happens in this lawsuit and others like it with interest.
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