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In re Carrier IQ, Inc. | 78 F. Supp. 3d 1051 (2015)

The implied warranty of merchantability arises under state law and guarantees that goods sold will be of reasonable quality and fit for their ordinary purpose. The twenty fifteen case of In re Carrier I Q, Incorporated addresses the application of the implied warranty of merchantability to mobile phones equipped with invisible and potentially harmful software.

Carrier I Q, Incorporated developed software that came preinstalled on the mobile phones of eighteen consumers. The software allegedly collected personal data and communications from the consumers’ mobile phones without their knowledge. There was no opportunity for consumers to opt in or out of the software. In addition, the software continuously ran in the background, taxing the device’s battery power, processor functions, and system memory.

The consumers brought suit against Carrier I Q, and the mobile phone manufacturers, alleging five causes of action: violation of the Federal Wiretap Act, violation of state privacy laws, violation of state consumer protection acts, violation of the Magnuson-Moss Warranty Act, and violation of the implied warranty of merchantability. The manufacturers filed a motion to dismiss for failure to state a claim. In response to the breach of implied warranty claim, the manufacturers argued that the phones weren’t rendered unmerchantable by the software because the phones were fit for their ordinary use, which was communication.

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