In re: LENOVO ADWARE LITIGATION Case No. 5:15-md-02624-RMW, Class Certification Ruling Oct. 27, 2016
Judge Ronald M. Whyte, United States District Judge in Northern California US District Court, granted class certification in class action litigation brought by consumers in a nationwide class action against Lenovo Corporation (“Lenovo”) , the largest computer manufacturer in the world, and Superfish, a privately-held Silicon Valley company that develops, sells, and operates computer adware programs.
In 2015, consumers and computer experts discovered that Lenovo had sold more than 800,000 computers in the United States that included, without the consumers’ knowledge or consent, a software program that computer security experts consider to be spyware or malware.
The following paragraph from pp. 37-38 of the judge’s ruling addresses the conjoint survey. “Lenovo objects to plaintiffs’ second model because it relies on conjoint surveys to determine how consumers would value the laptops’ attributes. See, e.g., Levine Decl., Ex. 45 ¶ 83, Ex. 46. In the cases cited by Lenovo, conjoint analyses were rejected because they looked “only ‘to the demand side of the market equation,’ converting what is properly ‘an objective evaluation of relative fair market values into a seemingly subjective inquiry of what an average consumer wants.’” In re NJOY, Inc. Consumer Class Action Litig., 120 F. Supp. 3d 1050, 1119 (C.D. Cal. 2015) (quoting Saavedra v. Eli Lilly & Co., No. 2:12-CV-9366-SVW, 2014 WL 7338930, at *5 (C.D. Cal. Dec. 18, 2014)) (alteration omitted). In Saavedra, the court also noted that in “an ordinary market, price is a proxy for value,” but that “numerous complicating factors in the prescription drug market sever the relationship between price and value,” which rendered the survey results arbitrary. 2014 WL 7338930, at *5. Therefore, these courts found, the damages models could not measure the market value of the products absent the alleged misrepresentations. The conjoint models proposed by plaintiffs do not suffer from these defects. Plaintiffs’ survey expert “consulted pricing of the Lenovo models at issue, as well as comparable PC laptops” to ensure that the results would “reflect the market,” and addressed “the supply side” of the market, determining that it was not at issue “because all sales of the laptop models at issue have occurred in the past.” Levine Decl., Ex. 46 ¶¶ 17, 46. Lenovo does not identify any complicating factors specific to the laptop market that would render the survey results arbitrary. “[D]isputes about the precision of the particular model [] do not indicate that damages will not be measurable on a classwide basis.” In re ConAgra Foods, Inc., 90 F. Supp. 3d 919, 1030 (C.D. Cal. 2015) (quoting Khoday v. Symantec Corp., No. CIV. 11-180 JRT/TNL, 2014 WL 1281600, at *33 (D. Minn. Mar. 13, 2014)). Therefore, Lenovo’s challenge to class certification based on plaintiffs’ damages models is unavailing.”
Steve Gaskin of Applied Marketing Science, Inc., was the conjoint survey expert on the Lenovo class action case, as well as Khoday v. Symantec Corp., which was referenced above. For more information on Mr. Gaskin and Applied Marketing Science, go to www.ams-litigation.com.