In Re Toshiba America Hd Dvd Marketing And Sales Practices Litigation

69 U.C.C. Rep. Serv. 2d 1085 (2009)

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Nature of the Case

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Facts

Ps generally alleged that in connection with the marketing of its HD DVD Players,

D 'misrepresented its commitment to and support of the HD DVD Format and failed to disclose its plans to discontinue the manufacture and marketing of these devices, leading to their obsolescence only 21 months after their initial sales.' Ps believed D and purchased HD DVD Players. High Definition Digital Versatile Disc (HD DVD) was developed by D to be a 'next generation' format to succeed the standard DVD. D introduced the HD DVD Player in April 2006. List prices ranged from $499 to $799. The competition was from Sony with its Blu-ray Disc, an optical disc format. Both technologies were marketed as a 'next generation' format for the encoding and playback of audio-visual entertainment. Sony won the tech war when several major movie studios, which regularly release movies in the DVD format, chose to release movies in Blu-ray format rather than HD DVD. Ps allege that D 'consistently failed to disclose to its customers' this information regarding the support of certain movie studios for Blu-ray rather than HD DVD technology. There were many rumors about who would prevail. It was clear that D was losing ground, but D continued to market its HD DVD Players, with the slogan 'For Today, Tomorrow and Beyond,' throughout the 2007 holiday shopping seasons and thereafter. D lowered prices on its Players during the 2007 Christmas season in order to induce additional sales. On January 4, 2008, Warner Brothers announced that it would no longer release movies in the HD DVD format. This promoted decisions by Best Buy, Wal-Mart and Circuit City to drop HD DVD from their stores. D continued marketing its HD DVD Players in January and the first weeks of February 2008. Press releases stated that 'HD DVD is proven to be the format of choice for consumers' and that D planned to execute an extended advertising campaign to further enhance consumer awareness of the benefits of HD DVD and drive sales. D ran an ad during the Super Bowl, 'highlighting its HD-A3, HD-A30 and HD-A35 Players,' which Ps allege 'thereby [characterized] the long-term viability of the Players.' Ps allege that D was aware of market trends and knew, despite its misleading marketing campaign, that it was only a matter of time before the company withdrew from the marketplace abandoning its customer base. Suddenly on February 19, 2008, D announced it was abandoning the technology but would continue 'to provide full product support and after-sales services for all owners of Toshiba HD DVD products.' The Wall Street Journal published an article in which Toshiba Corporation's Chief Executive and President, Atsutoshi Nishida, stated that he first started thinking about withdrawing from the HD DVD business 'when Warner [Brothers] announced its support for Blu-ray on the 4th of January [2008].' Ps purchased one or more new HD DVD Players, for personal use, before D announced that it would exit the HD DVD market. Ps claim (1) violation of the NJCFA; (2) unfair and deceptive acts and practices under state laws; (3) unjust enrichment; (4) violation of the Magnuson-Moss Act; (5) breach of express warranties; and (6) breach of implied warranties. D moved to dismiss.