Up In Smoke
A recent decision by the Third Appellate District is a reminder of the opportunity and the limits of a motion for judgment on the pleadings. The case is Collins v. eMachines, Inc.
In Collins, the plaintiffs brought a putative class-action against eMachines for defects in its computers. eMachines moved for judgment on the pleadings. As set forth in Code of Civil Procedure section 438, judgment on the pleadings allows a plaintiff to assert that the answer does not state facts sufficient to constitute a defense. And as is more commonly used, judgment on the pleadings allows a defendant to allege jurisdictional defects or that the complaint/cross-complaint fails to state a cause of action. Judgment on the pleadings can be used if the opportunity to demur has passed.
The trial court, in a two-sentence order, granted judgment on the pleadings as to plaintiffs' Consumer Legal Remedies Act (CLRA), Unfair Competition Law (UCL), common law fraud and unjust enrichment causes of action, then dismissed the complaint with prejudice. The court stated that plaintiffs did not and could not allege any facts to support their claims.
The plaintiffs appealed.
On appeal, the standard of review was decisive. As with a demurrer, the Court of Appeal examined the operative complaint de novo to determine whether it stated a cause of action. And it accepted as true all allegations of material fact, but not contentions, deductions, or conclusions of law or fact. Conducting such review, the Court observed that plaintiffs alleged not only defects in the computers at the time they were sold, but also knowledge of such facts by eMachines and a concerted effort to conceal the defects from consumers. At the pleading stage, such allegations easily stated claims under the CLRA, the UCL, and for common law fraud.
In distinguishing eMachines' legal arguments, the Court noted:
"[T]he present case is also unlike Bardin [v. Daimler Chrysler Corp.]. In Bardin, the material comprising the [defective] exhaust manifolds was simply immaterial at the time of the [purchase] transaction; the manifolds worked in their latent way during the warranty period and nothing was said, implied or assumed about their composition . . . The same cannot be said for the . . . [defective] floppy disk [which] was central to the function of the computer as a computer. The exhaust manifolds at issue in Bardin, by contrast, were just blowing smoke."
The Court of Appeal reversed.
