LAW OFFICES OF ANDERSON & ANDERSON FRED W. ANDERSON, State Bar No. 46498 MARTIN W. ANDERSON, State Bar No. 178422 2070 N. Tustin Ave. Santa Ana, CA 92705 (714) 835-4400 Attorney for Plaintiff SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE MITCHELL SMITH, Plaintiff, v. SYNCRONYS SOFTCORP., RAINER POERTNER, and DOES 1-25, Defendants. ___________________________________ Case Number 757708 CLASS ACTION COMPLAINT FOR CONSUMER FRAUD SEEKING RESTITUTION, DISGORGEMENT, AND FOR PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF Plaintiff alleges: 1. Plaintiff MITCHELL SMITH, an individual, brings this action on behalf of the general public pursuant to Business & Professions Code ss. 17204 and 17535, and as a person who has suffered damage under Civil Code s. 1780. 2. Defendant SYNCRONYS SOFTCORP. is a corporation, doing business in the State of California. Defendant is engaged in the manufacture, distribution, and sale of a product known as SoftRAM and another product known as SoftRAM95. These products are regularly advertised and sold to the general public in the County of Orange. 3. Defendant RAINIER POERTNER is a competent adult. He is also an officer of Defendant SYNCRONYS SOFTCORP. Plaintiff does not know the County in which Defendant currently resides. 4. Plaintiff is ignorant of the true names and capacities of the defendants sued herein under the fictitious names DOES 1- 25. They are sued herein pursuant to C.C.P. s. 474. When Plaintiff becomes aware of the true names and capacities of the defendants sued as DOES 1-25, Plaintiff will amend this Complaint to state their true names and capacities. CLASS ACTION ALLEGATIONS (FOR THE THIRD CAUSE OF ACTION ONLY) 5. Plaintiff is a consumer entitled to bring an action under Civil Code s. 1780. 6. The unlawful method, act, or practice described in the Third Cause of Action has caused damage to other consumers similarly situated. Accordingly, Plaintiff brings the Third Cause of Action, and only the Third Cause of Action, on behalf of himself and such other consumers similarly situated to recover relief as provided for in Section 1780. All other causes of action are asserted in Plaintiff's individual capacity. 7. It is impracticable to bring all members of the class before the court. 8. The questions of law or fact common to the class are substantially similar and predominate over the questions affecting the individual members. 9. The claims or defenses of the representative plaintiff is typical of the claims or defenses of the class. 10. The representative plaintiff will fairly and adequately protect the interests of the class. FIRST CAUSE OF ACTION (VIOLATION OF BUSINESS & PROFESSIONS CODE s. 17200) 11. Defendants have engaged and are engaging in unfair competition as that term is defined in Business & Professions Code s. 17200, in that they have engaged in and are engaging in an "unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code." 12. The business acts and practices by Defendants which are "fraudulent" are business acts and practices which have the capacity to mislead the general public. The business acts and practices which are "fraudulent" are set-forth in the Second and Third Causes of Action, and are incorporated herein by reference. 13. The business acts and practices by Defendants which are "unlawful" and which are "prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code" are the acts and practices described in the Second Cause of Action and the Third Cause of Action. The text of the Second Cause of Action and the Third Cause of Action is hereby incorporated by reference. SECOND CAUSE OF ACTION (VIOLATION OF BUSINESS & PROFESSIONS CODE s. 17500) AGAINST ALL DEFENDANTS 14. Defendants are persons, firms, corporations, or associations. 15. Defendants have made or disseminated or caused to be made or disseminated before the public in this state and are making or disseminating or causing to be made or disseminated before the public in this state, in a newspaper and in other publications, and by means of an advertising device, and by other manners or means, statements concerning personal property or services and concerning circumstances and matters of fact connected with the proposed performance or disposition thereof, which are untrue or misleading. 16. Defendants made these statements with the intent directly or indirectly to dispose of personal property or to perform services, professional or otherwise, or to induce the public to enter into obligations relating thereto. 17. Defendants knew or should have known by the exercise of reasonable care that care that these statements were untrue or misleading. 18. Defendants manufacture, distribute, and sell two computer software products called SoftRAM95 and SoftRAM. 19. In an effort to promote the sales of these products, Defendants published newspaper and magazine advertisements which contained a number of affirmative representations concerning the SoftRAM95 product and the SoftRAM product. 20. In addition, the same representations are contained, in writing, on each and every Softram95 and SoftRAM software packaging. 21. The claims include that (1) SoftRAM95 and SoftRAM will effectively double, triple, or quadruple the amount of Random Access Memory in any computer in which the software programs are installed by the use of a technology called Ram Compression, (2) SoftRAM95 and SoftRAM will increase the speed at which the computer will operate, and (3) SoftRAM95 is "designed for Windows 95." 22. In addition, the SoftRAM95 packaging and the advertisements promoting this product contain a logo known as the "designed for Windows 95" logo. This logo was created by Microsoft Corporation to ensure to the consuming public that products bearing the label have been tested by Microsoft and found to be compatible architecturally with the Microsoft Windows 95 Operating System. Microsoft Corporation grants licenses to third parties to use the logo on their products, advertising, and marketing materials, only when the third party has submitted the product to Microsoft for testing and Microsoft determines that the product has passed their testing procedures, and only when Microsoft determines that the third party has complied with the other required terms and conditions for licensing the logo. 23. All of these statements were and are false and misleading, in that (1) SoftRAM95 and SoftRAM does not effectively double, triple, or even quadruple the amount of Random Access Memory in any computer in which the software programs are installed by the use of a technology called Ram Compression; (2) Softram95 and SoftRAM does not increase the speed at which the computer will operate; and (3) Softram95 is not "designed for Windows 95." 24. In addition, although the Softram95 product bears the "designed for Windows 95" logo, Microsoft Corporation has not authorized Defendants to use the logo. The use of this logo is false, because Microsoft did not authorized Defendants to use the logo in connection with this product. In addition, the use of this logo is misleading, because it has the capacity or tendency to lead consumers to believe that the product had been tested by Microsoft Corporation and was found suitable to bear the "designed for Windows 95" logo. In truth, this product was submitted for testing, but Microsoft Corporation rejected Defendants request because Defendants failed to comply with the required terms and conditions for licensing the logo. [Paragraphs from here down have been misnumbered.] 26. These claims appeared on a daily basis, between at least September of 1995 and the present, in newspaper and magazine advertisements, and on the retail packaging for each Softram95 product. Plaintiff is informed and believes, and thereon alleges, that these representations were made in the same manner on a daily basis since at least January of 1995. THIRD CAUSE OF ACTION (VIOLATION OF CIVIL CODE s. 1770) A CLASS-ACTION AGAINST ALL DEFENDANTS 27. Plaintiff hereby re-alleges and incorporates by reference the allegations contained in paragraphs 5 through 10, above. Defendants have engaged in the following unfair methods of competition and unfair or deceptive acts or practices in a transaction intended to result or which resulted in the sale of goods to consumers: 28. Defendants misrepresented the sponsorship, approval, or certification of their goods or services as described in the Second Cause of Action. 29. Defendants misrepresented the affiliation, connection, or association with, or certification by, another as described in the Second Cause of Action. 30. Defendants represented that their goods had approval, characteristics, uses, and benefits which they do not have and that Defendants had an approval, status, affiliation, or connection which Defendants do not have as described in the Second Cause of Action. 31. The specific acts and practices by Defendants and the dates upon which these acts occurred are described in the Second Cause of Action, and are incorporated herein by reference as if set-forth in full. 32. Plaintiff has suffered damage or injury as a result of these acts. PRAYER FOR RELIEF PLAINTIFF PRAYS for judgment against Defendants as follows: 1. For restitution to the general public and disgorgement for the benefit of the general public of any and all moneys received by Defendants as a result of these unlawful practices or acts as provided by Business & Professions Code ss. 17203, 17535 and for restitution, but not damages, to Plaintiff and the class pursuant to Civil Code s. 1780. 2. For preliminary and permanent injunctive relief as provided by Business & Professions Code ss. 17203; 17535 and Civil Code s. 1780. 3. For an award of attorneys fees, in an amount the court determines to be reasonable, as authorized by the provisions of Civil Code s. 1780; Code of Civil Procedure s. 1021.5; the "common fund" doctrine, and the "substantial benefit" doctrine. 4. Pursuant to Business & Professions Code ss. 17203 and 17535, and pursuant to the equitable powers of this Court, Plaintiff prays that Defendants be ordered to restore to the public all funds acquired by means of any act or practice declared by this Court to be unlawful or fraudulent, or to constitute unfair competition under Business & Professions Code s. 17200 et seq., or untrue or misleading advertising under s. 17500 et seq. 5. And for such other relief as the court deems proper. DATE: January __, 1996 Respectfully submitted, _____________________________ MARTIN W. ANDERSON Attorney for Plaintiff