By Jonathan Stempel
(Reuters) - A federal judge has rejected HP's (NYSE:HPQ) bid to dismiss a lawsuit claiming that it intentionally designed its all-in-one printers to be unable to scan or fax when they are low on ink, as a means to increase profit by boosting ink sales.
Customers in the proposed class action said HP concealed how its printers enter an "error state" when low on ink, disabling scanning and faxing functions that do not require ink, and forcing them to buy unnecessary, high-margin ink cartridges.
U.S. District Judge Beth Labson Freeman in a decision on Thursday found sufficient allegations that HP knew about the defect, citing a message board post where a support agent told a customer that his printer "will not function" without ink.
The San Jose, California-based judge also said customers could try to show HP had a duty to disclose the defect, based on its "superior knowledge" that the printers could be disabled.
HP in seeking a dismissal said the customers failed to allege such a duty or that it "actively" concealed any defect.
HP and its lawyers did not immediately respond on Friday to requests for comment. Lawyers for the customers did not immediately respond to similar requests.
The lawsuit covers U.S. purchasers of HP all-in-one printers, and California and Minnesota subclasses.
It is led by Gary Freund, of San Francisco, and Wayne McMath, of Minneapolis, who said they would not have bought or would have paid less for their printers had they known of the alleged defect.
Printing products, including printers and supplies, generated $18.9 billion, or 30%, of Palo Alto, California-based HP's $63 billion of revenue in the year ending Oct. 31, 2022.
The case is Freund et al v HP Inc, U.S. District Court, Northern District of California, No. 22-03794.