## Facts

- Consumers brought a putative nationwide class action against Toshiba America Consumer Products, L.L.C. and Toshiba Corporation after purchasing Toshiba HD DVD players.
- HD DVD was a “next generation” optical disc format competing with Blu-ray; market developments led major studios and retailers to favor Blu-ray.
- Plaintiffs alleged Toshiba marketed HD DVD players as having long-term viability, including using the slogan “For Today, Tomorrow and Beyond.”
- Plaintiffs alleged Toshiba continued aggressive marketing and price reductions during the 2007 holiday season and into early 2008 despite knowing the format was likely to fail.
- After Warner Bros. announced on January 4, 2008 that it would stop releasing movies in HD DVD format, plaintiffs alleged retailers dropped HD DVD and Toshiba nevertheless issued promotional statements and ran a Super Bowl advertisement.
- On February 19, 2008, Toshiba announced it would abandon the HD DVD format.
- Plaintiffs claimed economic injury (overpayment and diminished value) from alleged misrepresentations and nondisclosure of the risk of discontinuation and format failure.
- Following centralization under 28 U.S.C. § 1407, plaintiffs filed a consolidated complaint asserting consumer-fraud, unjust enrichment, Magnuson-Moss, and express and implied warranty claims.
- Toshiba moved to dismiss the consolidated complaint under Rule 12(b)(6).

## Issues

1. Whether plaintiffs adequately pleaded an ascertainable loss and causation for consumer-fraud claims where the players remained functional.
2. Whether Toshiba’s slogan and promotional statements were actionable misrepresentations or nonactionable puffery.
3. Whether Toshiba had a duty to disclose the risk of losing the format competition or the possibility of discontinuing HD DVD, sufficient to support omission-based fraud.
4. Whether the warranty and Magnuson-Moss claims were plausibly pleaded given the scope and duration of any written warranty and the absence of alleged product defect.

## Decision

- The court granted Toshiba’s Rule 12(b)(6) motion.
- The court dismissed the consolidated complaint in full without prejudice.
- The court held plaintiffs failed to state claims under consumer-fraud statutes, unjust enrichment, Magnuson-Moss, and express and implied warranty theories.
- Plaintiffs were permitted to amend to attempt to cure pleading deficiencies.

## Legal Principles

- A private consumer-fraud plaintiff must plead a concrete, nonconclusory ascertainable loss and a causal connection to the alleged unlawful conduct; alleging overpayment requires factual support for a price–value differential.
- Vague, aspirational marketing slogans and general predictions about the future are typically nonactionable puffery and do not constitute specific factual misrepresentations.
- Omission-based fraud generally requires a duty to disclose; absent specific allegations of nonpublic, exclusive knowledge of imminent discontinuation or misleading partial disclosures, a manufacturer ordinarily has no duty to disclose speculative future business decisions or uncertain market outcomes.
- Express warranties require a specific affirmation of fact or promise about the goods; general advertising and slogans do not create enforceable warranty obligations, and market obsolescence is distinct from a defect covered by a written warranty.
- Implied warranty of merchantability concerns basic fitness for ordinary use; it does not guarantee continued market value or success of a technology standard when the product functions as intended.
- Magnuson-Moss claims depend on viable state-law warranty claims; failure of the underlying warranty theories defeats the federal warranty claim.
- Unjust enrichment is generally not viable where it merely repackages inadequately pleaded fraud or warranty allegations without additional facts showing inequitable retention of a benefit.

## Conclusion

The court dismissed claims premised on HD DVD’s rapid obsolescence because plaintiffs did not plausibly plead a quantifiable, causally connected loss, the challenged marketing was treated as puffery rather than a factual promise, and the alleged nondisclosure concerned uncertain future market outcomes and business decisions not subject to a pleaded duty to disclose.


In re Toshiba America HD DVD Marketing & Sales Practices Litig., No. 08-939 (DRD), MDL No. 1956 (D.N.J. Sept. 11, 2009)