Law Times

Page 8 May 15, 2017 • Law TiMes www.lawtimesnews.com Class action against computer manufacturer proceeds BY MICHAEL MCKIERNAN For Law Times A proposed class action against computer man- ufacturer Lenovo will move on to a certifica- tion hearing after the company failed in an attempt to have the case dismissed. The plaintiff in Bennett v. Lenovo alleges the laptop he purchased online came prein- stalled with Virtual Discovery, an adware program supplied by a third party that he claims affects the computer's perfor- mance and leaves users' privacy exposed. Lenovo moved to have the entire claim dismissed, arguing that none of the causes of action advanced by the plaintiff stood any chance of success. But in his Feb. 17 decision, Ontario Superior Court Justice Edward Belobaba sided with the customer, dismissing just one of the four claims made on his be- half. Adrienne Boudreau, a class action lawyer with Toronto firm Sotos LLP who acted for the plaintiff, says she was pleased with the result. "This is not like the tradi- tional privacy-breach claims we have seen before. It's a novel case for consumers, and the court recognized that it needs to go forward and get a hearing on its merits," she says. "It's a wake-up call for companies that are con- sidering pre-installing this type of software on their devices that there are possible remedies for consumers." Lenovo's lawyers declined an opportunity to comment, but since the decision was not ap- pealed, the case now proceeds to a certification hearing later this year. If the action clears that hurdle, it would set the stage for a full trial to decide the merits of the remaining claims. Daniel Bennett, the plaintiff in the case, is a St. John's lawyer who hopes to act as a represen- tative plaintiff for all Canadian purchasers of Lenovo laptops that came pre-installed with VD. According to Belobaba's decision, Bennett only discov- ered the program's presence after taking delivery of his new laptop. Bennett's statement of claim, which has not been proven in court, alleges the program in- tercepts users' Internet connec- tions and causes the display of unauthorized advertisements in their web browsers. The claim also alleges VD slows the computer's performance and depletes battery power, while al- lowing hackers access to users' confidential personal and finan- cial information. Lenovo argued Bennett's claim that the installation breached the implied term of merchantability under Ontar- io's Consumer Protection Act should be dismissed because products with multiple uses can cross the "merchantable" threshold if they are still us- able even with the defect for just one of their purposes. An activ- ity such as off line word process- ing would fit the bill in its case, Lenovo claimed. However, Belobaba allowed the claim to go forward after concluding the "law is not set- tled" in the "context of computer technology." "It's a great decision for con- sumers, because it reiterates the strength of the protections available to them under the Consumer Protection Act," says Boudreau's co-counsel on the motion, Sabrina Callaway, who was also excited by the court's refusal to dismiss Bennett's in- trusion upon seclusion claim. "It shows the court is open to the possibility that the tort can be applied in a class action and also in a different and less tra- ditional context than it has been considered elsewhere," she adds. Only a few years on from the Court of Appeal's landmark decision recognizing the tort in Jones v. Tsige, Belobaba said it was "just evolving." "Its scope and content have not yet been fully determined. I am therefore not persuaded that it is plain and obvious and be- yond doubt that, on the facts as pleaded, this particular privacy claim has no chance of success and is doomed to fail," the judge added. The claim also alleges VD's installation violates a number of provincial privacy laws across the country. Again, Belobaba found that the "evolving" scope and content of the laws made it impossible for him to conclude that these claims were certain to fail, despite Lenovo's argu- ment that they were doomed by the lack of an allegation that any users were actually hacked as a result of VD's presence. The only claim Belobaba agreed to dismiss at this pre- liminary stage was Bennett's al- legation that Lenovo breached an implied term of the sales agreement that the laptop would come without any defects. Belobaba's decision said that when he clicked his acceptance of the sales agreement online, Bennett agreed to be sold a product that was offered "with- out warranties or conditions of any kind." Chad Finkelstein, a partner in the corporate commercial practice group at Toronto firm Dale & Lessmann LLP, says the decision should serve as a warn- ing to the growing number of technology companies that pre- load software on their devices. "Anyone who's a manufac- turer or vendor of products that include some kind of application installed by a third party will want to think about how they go about disclosing them to the end user," he says. "You could potentially be found vicariously liable for any privacy violations." Lisa Danay, a lawyer with Deeth Williams Wall in Toron- to, says the decision is a notable one, despite its preliminary na- ture and the fact it settles little in terms of the current state of the law. "Technology is constantly changing and this decision points to the need for law to evolve alongside the world of in- novation," she says. LT FOCUS ON IT/Telecommunications Law Chad Finkelstein says a recent Ontario Superior Court decision should serve as a warning to the growing number of technology companies that preload software on their devices. FOCUS ORDER YOUR COPY TODAY! Visit carswell.com or call 1.800.387.5164 for a 30-day no-risk evaluation THE MOST COMPLETE DIRECTORY OF ONTARIO LAWYERS, LAW FIRMS, JUDGES AND COURTS Ontario Lawyer's Phone Book is your best connection to legal services in Ontario with more than 1,400 pages of essential legal references. You can depend on the accuracy of this trusted directory that includes the most up-to-date names, phone numbers, mailing addresses and emails so you don't have to search anywhere else. 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