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Beaton v. Speedypc Software

United States District Court, N.D. Illinois, Eastern Division

October 19, 2017

ARCHIE BEATON, individually and on behalf of all others similarly situated, Plaintiff,
v.
SPEEDYPC SOFTWARE, a British Columbia company, Defendant.

          MEMORANDUM OPINION

          Andrea R. Wood United States District Judge.

         Plaintiff Archie Beaton (“Beaton”) has sued Defendant SpeedyPC Software (“SpeedyPC”), a Canadian computer software company, claiming that it engaged in fraudulent and deceptive marketing of SpeedyPC Pro, a software product that SpeedyPC claims diagnoses and repairs various computer errors, optimizes computer performance, and protects computers from malware. SpeedyPC's customers would first run a diagnostic scan using its free software. After receiving the results of the scan, customers would be invited to purchase SpeedyPC's premium software, SpeedyPC Pro-and many of them accepted that invitation. Beaton claims to be one such customer. He claims that he purchased SpeedyPC's software and installed it on his laptop computer, but the software did not satisfy SpeedyPC's promises. As result, according to Beaton, SpeedyPC breached implied warranties of fitness for a particular purpose and merchantability and committed fraudulent misrepresentation under various consumer protection laws. Now under the Court's consideration is Beaton's motion to certify a class and subclass of purchasers of SpeedyPC's software. For the reasons discussed below, the Court grants Beaton's motion to certify the class and also grants the request to certify a subclass but with a modified class definition.

         BACKGROUND

         This putative class action arises out of Beaton's purchase of a license to use the SpeedyPC's software. SpeedyPC promotes its software through online advertisements and on websites as being capable of increasing computer speed and performance, removing harmful computer errors, and protecting users' privacy and security. (Compl. ¶ 15, Dkt. No. 1.) Beaton alleges that these representations do not reflect the software's true capabilities. (Id. ¶ 22.) Instead, the software has two main functions: first, it is a registry cleaner;[1] and second, it removes superfluous “temporary” files from a user's hard drive. (Id.) According to Beaton, these functions “do not come close to squaring with SpeedyPC's representations about the functionality of SpeedyPC Pro.” (Id.)

         Beaton claims that SpeedyPC engages in a deceptive marketing scheme to induce consumers to purchase the premium version of its software. Online ads for the premium version of the software promise that the software can, among other things, “[b]oost your PC's speed and performance, ” “[f]ind your PC's performance potential, ” and “improve[] your PC's health.” (Id. ¶ 16.) Consumers who click on one of SpeedyPC's advertisements are directed to one of SpeedyPC's websites, which warns consumers about various risks to their computers. (Id. ¶ 17.) The websites recommend that consumers download the trial version of the software to detect issues that the product is supposedly designed to identify and fix. (Id. ¶ 24.) Once a consumer downloads and runs the trial version of the software, it displays hundreds or thousands of serious problems that it claims are affecting the computer and “require attention.” (Id. ¶ 28.) After presenting the results of the diagnostic scan, the software displays to the user a half-page warning with bold red letters stating: “SpeedyPC Pro has determined that your computer requires immediate attention!” and is in “Serious” or “Critical” condition. (Id. ¶ 29.) The user is then given the option to purchase the premium version of the software to fix and repair the supposedly harmful errors that have been detected. (Id.)

         In August 2012, while browsing the Internet for software to repair and optimize his computer, Beaton encountered one of SpeedyPC's ads. (Id. ¶ 42.) Based on various representations made in the ad, Beaton went to one of SpeedyPC's websites, which presented more representations regarding the utility of the software. (Id. ¶ 43.) Beaton includes in his Complaint screenshots of several of these representations. One such screenshot makes the claim that the software can “clean and optimize your computer for peak performance.” (Id. ¶ 43 fig. 10.) Based on SpeedyPC's representations, Beaton downloaded and installed the software. (Id. ¶ 44.) The software scanned Beaton's computer and reported that it detected hundreds of serious errors, some of which were causing damage to the computer. (Id. ¶ 45.) The software warned Beaton that these problems were decreasing his computer's performance and compromising his security, and urged him to purchase the software to “fix” the problems. (Id.) Beaton clicked on a button labeled “Fix All, ” which forwarded him to a SpeedyPC website that urged him to register the software to fix the problems identified. (Id. ¶ 46.) After reaching the registration webpage, SpeedyPC again represented to Beaton that it “detected some problems that needed to be fixed” and instructed him to “Register SpeedyPC Pro now!” (Id. (citing ¶ 43 fig. 10).) Relying on these representations about the software's capabilities and his computer's condition, Beaton paid to activate the software and repair the purported errors. (Id. ¶ 47.) After he downloaded the software, every time Beaton ran it, the software reported harmful errors that were adversely affecting his computer and that he needed to fix. The software continued to report harmful errors even though Beaton repeatedly ran the program and “fixed” any errors that were found. (Id. ¶ 49.) Beaton's computer performance did not improve despite his repeatedly running the software's scan. (Id.)

         In addition to his personal experience with the software, Beaton, through his attorneys, also engaged an expert to examine it. (Ex. 6 to Pl.'s Mot. to Certify Class at 4, Dkt. Nos. 125-6 & 127-3.) The expert concluded that the diagnostic function of SpeedyPC's software is designed to report that a computer has “low” performance without conducting any diagnosis, scan, or analysis of the user's computer. (Id. at 21.) Beaton's expert further concluded that supposed errors identified by the software were not in fact credible threats to a computer's functionality. (Id. at 22.)

         DISCUSSION

         To be certified, a proposed class must satisfy the four requirements of Rule 23(a): (1) the class is so numerous that joinder of all members is impracticable (“numerosity”); (2) there are questions of law or fact common to the class (“commonality”); (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class (“typicality”); and (4) the representative parties will fairly and adequately protect the interests of the class (“adequacy of representative”). Fed.R.Civ.P. 23(a). If Rule 23(a) is satisfied, the proposed class must then fall within one of the three categories in Rule 23(b), which the Seventh Circuit has described as: “(1) a mandatory class action (either because of the risk of incompatible standards for the party opposing the class or because of the risk that the class adjudication would, as a practical matter, either dispose of the claims of non-parties or substantially impair their interests), (2) an action seeking final injunctive or declaratory relief, or (3) a case in which the common questions predominate and class treatment is superior.” Spano v. Boeing Co., 633 F.3d 574, 583 (7th Cir. 2011).

         I. Definitions of Class and Subclass

         Beaton first proposes as the Class:

All individuals living in the United States who downloaded a free trial of SpeedyPC Pro and thereafter purchased the full version between October 28, 2011 and November 21, 2014.

         On behalf of the Class, Beaton seeks to litigate contractual warranty claims for breaches of the implied warranties of fitness for a particular purpose and merchantability. These claims arise under British Columbia law.

         Beaton also proposes as the Subclass:

All Class members who reside in Illinois, California, Colorado, Florida, New York, Oregon, Alabama, Tennessee, New Jersey, North Carolina, New Hampshire, Hawaii, Vermont, Massachusetts, Michigan, and Washington, D.C.

         On behalf of the Subclass, Beaton seeks to litigate claims for fraudulent misrepresentation under the consumer-protections laws of each of the respective jurisdictions. The Court observes that, apart from identifying the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 ILCS 505/1, et seq., Beaton has not identified the laws of any of the other jurisdictions under which he seeks to assert the Subclass's claim. Beaton apparently has in mind the similar consumer-protection laws of these jurisdictions, but the Court is unable to divine what statutes Beaton has in mind. This is problematic because the applicable statutes may have different elements, different statutes of limitation, and different damages that are available. Beaton, as Plaintiff, bears the burden of proving that class certification is appropriate, Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993), and without identifying the statutes underlying the Subclass claims Beaton has not satisfied this burden. Thus, for purposes of this motion the Court will deny the motion to certify this Subclass and instead restrict the Subclass to the Revised Subclass consisting of “all Class members who reside in Illinois.”

         For both the Class's and Revised Subclass's claims, Beaton's basic theory is that the free version of SpeedyPC's software “blindly report[s]” that the customer's computer has low performance, thereby inducing the customer to purchase the premium version of SpeedyPC's software that ultimately confers no benefit on the customer. Consequently, Beaton moves to certify both the Class and Revised Subclass under Rule 23(b).

         II. Analysis under Rule 23(a)

         A. Preliminary Considerations on Class Propriety

         SpeedyPC raises two preliminary concerns for why class certification should be denied. First, SpeedyPC claims that Beaton's proposed Class is improper as the definition in his motion for class certification differs from the definition in his Complaint. But nothing prevents this Court from considering a revised definition or, indeed, sua sponte revising the definition of a proposed class. Green v. Serv. Master on Location Servs. Corp., No. 07-cv-4705, 2009 WL 1810769, at *3-4 (N.D. Ill. June 22, 2009) (revising class definition sua sponte); Kress v. CCA of Tenn., LLC, 272 F.R.D. 222, 232 (S.D. Ind. 2010) (“[T]he Court has broad discretion to modify the class definition if necessary.” (citing Harden v. Raffensperger, Hughes & Co., Inc., 933 F.Supp. 763, 769 n.5 (S.D. Ind. 1996) (modifying class definition sua sponte ))). Here, there is no prejudice to SpeedyPC in this Court's consideration of Beaton's revised class definition and doing so is in the interests of judicial economy.

         Second, SpeedyPC argues that Beaton's Class definition is vague. In particular, SpeedyPC states that the phrase “living in the United States” does not specify a time period. As such, it is not clear whether “an individual living in Ireland [who] purchased the software in 2013 and since that time has moved to Wisconsin” is in Beaton's proposed Class. (Def.'s Resp. to Pl.'s Mot. for Class Cert. at 8, Dkt. No. 135.) In his response, Beaton clarifies that this phrase means “the class individuals [of] who purchased the product while living ...


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