united states district court for the district of … · 2013. 12. 19. · united states district...

UNITED STATES DISTRICT COURTFOR THE DISTRICT OF MINNESOTA

U.S. Hotel and Resort Management, Inc., etal.,

Plaintiffs,

Onity Inc.,

Defendant.

Court File No.: 13-cv-1499(SRN/FLN)

CONSOLIDATED CLASSACTION COMPLAINT

DEMAND FOR JURY TRIAL

Plaintiffs U.S. Hotel and Resort Management, Inc.; Regency Hotel Management,

LLC; Motiram Corporation d/b/a Days Inn, Forest, MS; Kishor Desai; Saibaba

International, LLC; Baba International, LLC, Sai Nath Krupa Investments, Inc.; C&R

Associates, Inc.; and Sai Ram of Pensacola, Inc. (collectively “Plaintiffs”) on behalf of

themselves and all others similarly situated, by and through their attorneys, Zimmerman

Reed, PLLP; Hausfeld LLP; and Scott+Scott, Attorneys at Law, LLP; for this

Consolidated Class Action Complaint against Onity Inc. (“Onity” or “Defendant”), state

upon information and belief, except as to their own actions, the investigation of their

counsel, and the facts that are a matter of public record, as follows:

INTRODUCTION

1. This is a putative class action on behalf of individuals seeking

compensatory damages, restitution, and disgorgement of all profits gained by Onity from

the manufacture and sale of locks that it designed, manufactured, marketed, and sold. As

described in greater detail below, certain model Onity locks currently suffer from critical

defects that allow the locks to be readily opened by homemade devices made from

CASE 0:13-cv-01499-SRN-FLN Document 43 Filed 12/19/13 Page 1 of 42

commercially available items. The locks are ineffective and unfit to perform the basic

security function for which they were designed and warranted. Plaintiffs’ locks all have

the manifested defect and have either been replaced (at Plaintiffs’ expense) or must be

replaced.

2. Onity is a manufacturer of electronic door locks. The purpose of an Onity

lock is to securely lock a room and thereby protect the occupants and their possessions.

However, Onity Locks, including those produced under the HT and ADVANCE product

lines with the names “HT 28 Smart Lock,” “HT24 Lock,” “HT RFID,” “ADVANCE

RFID,” and “ADVANCE Lock,” (collectively referred to herein as the “Onity Lock(s)”

or “Lock(s)”), are inherently defective because the Onity Locks fail to fulfill the devices’

specific purpose: to securely lock rooms.

3. Onity expressly warranted that it would “fix” or “replace with a new one”

any Onity Lock that failed for “any reason.” Defendant also warranted and represented

that the Onity Locks possessed the “most reliable technology” available in the industry

today. Additionally, the Onity Locks had an implied warranty of being fit for the

ordinary purpose of locking doors and preventing unauthorized entries into rooms.

4. Contrary to Onity’s warranties and representations, however, the Onity

Locks are defective and not fit for their ordinary purpose. In fact, industry experts have

described the process of bypassing the locks’ card reader and triggering the locks’

opening mechanism as “stupidly simple.” As has been demonstrated repeatedly,

including for public view across the Internet, the Onity Locks can be easily opened via

the Locks’ DC port with a simple opening device, which can be built with off-the-shelf

parts using instructions readily available on the internet. No sophistication is required to

either build this “skeleton key” or to open doors with it. This defect has completely

compromised the Onity Locks and rendered each Lock useless and incapable of

performing its ordinary purpose.

5. In contrast to its warranties and representations, and only in response to

consumer and public outcry about the defective Locks, Defendant has only offered two

completely unsatisfactory options to Onity Lock owners that fail to “fix” or “replace” the

actual locks.

6. The first option is a temporary “mechanical cap” that temporarily blocks

access to the DC Port and that is neither practical nor capable of solving the Locks’

fundamental flaws. This temporary “cap” does not actually fix the defect, can be

removed, and creates further problems by blocking immediate emergency access to a

lodging room where the cap is employed.

7. The second option is to replace and upgrade the Onity Lock’s circuit board

at the Lock owners’ expense in violation of the terms of Onity’s warranties.

8. Neither of the proposed options provides an adequate remedy to Plaintiffs

and the Class, because either the Onity Locks remain defective (if the mechanical cap is

deployed) or the owner is required to assume Onity’s financial responsibility for

providing a properly functioning lock.

9. Each of the Onity Locks possesses the same design defect at the time of

manufacture and sale, continuing to the present time unless fixed at a purchaser’s own

expense. The Locks’ inherently defective nature has caused and will continue to cause

Plaintiffs and the Class financial harm as they now have locks that must be repaired or

replaced at their own expense (if they have not already done so).

10. Because of the inherent defect, millions of Onity Locks can now be opened

without a keycard and therefore failed to meet their essential purpose.

11. As alleged more fully herein, Defendant has breached its express and

implied warranties, violated the Magnuson-Moss Warranty Act, and has been unjustly

enriched through its sales of the defective Onity Locks.

12. Plaintiffs and the Class seek damages, restitution, injunctive relief,

equitable relief, costs and expenses of litigation including attorneys’ fees, and all further

relief available at law and equity.

PARTIES

13. Plaintiff U.S. Hotel and Resort Management, Inc. (“U.S. Hotel”) is a South

Dakota corporation located at 3211 West Sencore Drive, Sioux Falls, South Dakota. U.S.

Hotel owns and operates numerous hotels around the country, including in the State of

Minnesota. To ensure safety and security, U.S. Hotel purchased and installed thousands

of Onity Locks for installation in its lodging properties in Minnesota, North Dakota,

South Dakota, Iowa, Nebraska, Colorado, Kansas, Illinois, Michigan, New Mexico, and

Wyoming. All of these locks were at all times defective due to their ability to be easily

bypassed as described herein.

14. Plaintiff Regency Hotel Management, LLC (“RHM”) is a South Dakota

entity located at 3211 West Sencore Drive, Sioux Falls, South Dakota. RHM is a hotel

management company and is the agent for U.S. Hotel and other owners of lodging

properties. RHM contracted with Defendant to purchase and install thousands of Onity

Locks in numerous hotel properties in Minnesota, North Dakota, South Dakota, Iowa,

Nebraska, Colorado, Kansas, Illinois, Michigan, New Mexico, and Wyoming. All of

these locks were at all times defective due to their ability to be easily bypassed, and

therefore they failed as to their ordinary purpose, as described herein.

15. Plaintiffs U.S. Hotel and RMH contracted with Onity for, purchased from

Onity, and/or installed at least 3,955 Onity Locks for 26 lodging properties. The

overwhelming majority of these properties (23 of 26 properties) purchased and installed

Onity Locks that were defectively designed as described herein.

16. Plaintiffs U.S. Hotel and RMH’s purchases of Onity Locks are reflected in

the following chart:

LockModel

Hotel City State # Locks

HT24 Grand Lake Lodge Grand Lake CO 78

HT24 Club House Inn Topeka KS 127

HT24 Marina Inn Sioux City NE 209

HT24 Best Western Ramkota Bismarck ND 336

HT24 Radisson Hotel Bismarck ND 235

Advance Club House Inn Pierre SD 108

HT24 Best Western Ramkota Aberdeen SD 210

HT24 Blue Bell Lodge Custer State Park SD 29

HT24 Legion Lake Lodge Custer State Park SD 25

LockModel

Hotel City State # Locks

Advance Lodge at Deadwood Deadwood SD 220

HT24 State Game Lodge Custer State Park SD 110

HT24 Club House Inn Sioux Falls SD 134

HT24 Rock Crest Lodge Custer State Park SD 36

HT24 Best Western Ramkota Pierre SD 128

HT24 Sylvan Lake Lodge Custer State Park SD 67

HT24 Best Western Ramkota Sioux Falls SD 211

HT24 Best Western Ramkota Watertown SD 102

HT24 Club House Inn Chicago IL 141

HT24 Bridges Bay Resort Okoboji IA 105

HT24 Arrowwood Resort Okoboji IA 150

HT24 Park Place Hotel Traverse City MI 145

Advance Best Western Plus Bloomington MN 235

HT24 Hilton Garden Inn Mankato MN 152

HT24 Crowne Plaza Plymouth MN 277

HT24 Club House Inn Albuquerque NM 151

HT24 Best Western Casper WY 234

Total 3,955

17. Plaintiff Motiram Corporation (“Motiram”) is a Mississippi corporation

with its principal place of business at 1280 Highway 35 South, Forest, Mississippi.

Motiram is the sole owner and operator of a Days Inn Hotel located in Forest,

Mississippi. On behalf of this hotel, Motiram purchased and installed Onity Locks,

specifically, the HT24 model. All of these Locks were at all times defective due to their

ability to be easily bypassed, and therefore they failed as to their ordinary purpose, as

described herein.

18. Plaintiff Kishor Desai (“Desai”), a principal at S&K Management, Inc.,

owns the Express Inn, a hotel located at 5836 Monticello Drive, Montgomery, Alabama

36117. The Express Inn is independently owned and is not part of a franchise. At the

time Plaintiff Desai purchased the Express Inn, Onity Locks were already installed on all

of the guest rooms in the hotel. All of these Locks were at all times defective due to their

ability to be easily bypassed, and therefore they failed as to their ordinary purpose, as

described herein.

19. Plaintiff Saibaba International, LLC (“Saibaba Int’l”) is an Alabama

domestic Limited Liability Company that operates Best Western Inn located at 801

Bradberry Lane, Clanton, Alabama 35046. Saibaba Int’l purchased Onity Locks and had

the locks installed in the Best Western Inn, Clanton, Alabama. All of these Locks were at

all times defective due to their ability to be easily bypassed, and therefore they failed as

to their ordinary purpose, as described herein.

20. Plaintiff Baba International, LLC (“Baba Int’l”) is an Alabama domestic

Limited Liability Company that operates The Best Western located at 56 Cahaba Road,

Greenville, Alabama 36037. Baba Int’l purchased Onity Locks and had the locks

installed in the Best Western Inn, Greenville, Alabama. All of these Locks were at all

times defective due to their ability to be easily bypassed, and therefore they failed as to

their ordinary purpose, as described herein.

21. Plaintiff Sai Nath Krupa Investments, Inc. (“Krupa Investments”) is the

owner and operator of a Holiday Inn Express located at 307 North New Warrington

Road, Pensacola, Florida 32506. Plaintiff Krupa Investments purchased Onity Locks and

had the locks installed by Defendant in all of the rooms in Krupa Investments’ hotel. All

of these Locks were at all times defective due to their ability to be easily bypassed, and

therefore they failed as to their ordinary purpose, as described herein.

22. Plaintiff C&R Associates, Inc. (“C&R”) is the owner and operator of an

Executive Inn located at 6954 Pensacola Blvd., Pensacola, Florida 32505. Plaintiff C&R

purchased Onity Locks and had the locks installed by Defendant in all of the rooms in

Plaintiff C&R’s hotel. All of these Locks were at all times defective due to their ability

to be easily bypassed, and therefore they failed as to their ordinary purpose, as described

herein.

23. Plaintiff Sai Ram of Pensacola, Inc. (“Ram”) is the owner and operator of a

Best Western located at 2390 W. Detroit Blvd., Pensacola, Florida 32533. Plaintiff Ram

purchased Onity Locks and had the Locks installed by Defendant in all of the rooms in

Plaintiff Ram’s hotel. All of these Locks were at all times defective due to their ability to

be easily bypassed, and therefore they failed as to their ordinary purpose, as described

herein.

24. Defendant Onity (formerly TESA Security Systems) was founded in 1941

as a lock manufacturer. Onity is a large manufacturer and supplier of electronic locks,

including the Onity Locks Plaintiffs and the Class purchased or otherwise acquired.

Defendant Onity is incorporated in the state of Delaware and has its principal place of

business at 2232 Northmont Parkway Suite 100, Duluth, Georgia, 30096. Onity has

R&D and manufacturing operations in Spain, Mexico, China, and the U.S., as well as an

extensive sales and service network that spans more than 115 countries around the globe.

Onity claims on its website that “with over 4 million electronic locks installed worldwide,

Onity electronic locking systems are found at over 22,000 properties in 115 countries.”

25. At all times relevant hereto, Onity was in the business of designing,

manufacturing, promoting, marketing, advertising, distributing, warrantying, and selling

Onity Locks and other products throughout the United States, including in the State of

Minnesota.

JURISDICTION AND VENUE

26. This Court has subject matter jurisdiction over the claims asserted herein

pursuant to 28 U.S.C. § 1332, as amended by the Class Action Fairness Act (“CAFA”).

Jurisdiction is proper because: (a) the amount in controversy in this class action exceeds

five million dollars, exclusive of interest and costs; and (b) there is diversity of

citizenship between Plaintiffs and Defendant.

27. The Court has personal jurisdiction over Defendant because Defendant

Onity has sufficient minimum contacts with this District. Jurisdiction is appropriate as

Onity intentionally avails itself of the market in this District through its marketing and

sales of the products throughout the United States and into the State of Minnesota and/or

by having such other contacts with Minnesota so as to render the exercise of jurisdiction

over it in this District consistent with traditional notions of fair play and substantial

justice.

28. Venue is proper pursuant to 28 U.S.C. §1391 because Class members reside

in this District, a substantial part of the events or omissions giving rise to the claim

occurred in this District, and because the Court has personal jurisdiction over Defendant.

Moreover, Defendant has distributed, advertised, and sold the products that are the

subject of the present complaint in this District. Defendant has further consented to

venue in this District by litigating the present allegations in this District and by

stipulating to consolidation of all nationwide actions in this District.

FACTUAL ALLEGATIONS

29. The sole purpose of the Onity Locks is to securely lock rooms and thereby

protect the occupants and their possessions. As a manufacturer of security locks that

were intended to prevent unauthorized entry on the doors to which they were affixed,

Defendant could foresee that Plaintiffs would intend for the Locks to perform for this

purpose.

Onity’s Representations and Warranties

30. Onity represents that it has “set the standard” for locking devices with

installations of more than 3.7 million locks worldwide since 1984.

31. Onity represents that it provides the finest quality in its products. Onity

proclaims on its website: “Our products meet International standards, and are designed

and built to uncompromising quality approval. From research and development to after-

the-sale support, we cover all the stages of providing electronic solutions, to guarantee

the finest quality in all our products and services.”

32. Onity represents itself as the world’s leader in the electronic lock industry

providing the most advanced and reliable technology in the field. For example, on its

website, Onity states that it is “the world’s leading provider of electronic locks.” Onity

also states on its website that it “combines innovative technology and dependable

service” to provide “the most advanced locking solutions in the industry today.” Onity

further claims that it provides “game-changing products and superior technology.”

33. In its product brochure, Onity states that its electronic locking products

have “the most reliable technology” and the company provides “the most advanced

electronic locking systems in the industry today.”

34. Onity purports to guarantee repair or replacement of all of its product parts

for any reason.

35. In the “Our Service Commitment” section on its website, Onity states: “No

one does this better than Onity! If any Onity product fails to work for any reason, send it

to us. We'll either fix the problem or replace it with a new one.” There are no limitations

on this warranty.

36. In its product brochure, Onity makes a similar warranty. It states: “Onity

provides solutions tailor made to each Hotel’s individual needs, including: Guaranteed

replacement and repair of system components.”

37. Contrary to the actual performance of the defective Locks, Onity’s product

brochure states that its Locks have “the most reliable technology.” Despite these express

representations of being the “most advanced” and the “most reliable” product in the

industry today, Onity Locks lack even basic security features and can be opened easily by

unauthorized persons due to their defective nature.

38. The defective locks at issue in this action are Onity’s HT and ADVANCE

lines.

39. Onity’s website describes its HT RFID (Radio Frequency Identification),

ADVANCE RFID, ADVANCE, HT24, and HT28 Locks as follows:

a) HT RFID - “Based on Onity’s flagship product, the HT lock, HT RFIDutilizes contact-less RFID technology.”

b) ADVANCE RFID - “ADVANCE RFID is the newest generation ofADVANCE, utilizing contact-less RFID access technology.”

c) ADVANCE Lock - “ADVANCE is a revolutionary locking solution thatis destined to change the way you look at security, design & technology.”

d) HT28 Smart Lock - “The HT28 Smart system improves the security,productivity and management of your property through the use of smartcard technology.”

e.) HT24 Lock - “Crafted for any property size, this Windows® basedsolution helps your staff perform at optimum efficiency.”

The Onity Locks’ Defect

40. Onity Locks are supposed to open only when an encoded key is inserted to

gain access to a secured space.

41. Onity Lock systems are comprised of three main parts. An “encoder” is a

device that encodes a key with a code key value compatible with a specific Onity Lock.

A “portable programmer” is a device that programs the locks with code key values,

master code key values, time tables, and other information. And the “lock” is the actual

lock installed on every door.

42. The portable programmer connects to the lock via a small DC power dock

located on the bottom of the lock. The dock is easily accessible without physically

removing any hardware on the lock. Once inserted, the portable programmer and the

lock communicate by sending pulses at regular intervals.

43. Every lock’s memory contains data that is used to communicate with the

portable programmer, including the hotel’s sitecode. A sitecode is a 32-bit unique value

that identifies and gives access to the hotel room.

44. In contrast to the industry standard and true “reliable technology,” the

Onity Locks require no authentication for reading memory. Thus, any device that

emulates the same pulses as a portable programmer can direct the lock to send data

contained in its memory and consequently command the physical lock to open.

45. Normally, a manufacturer can alleviate the problem of a lock’s memory

being readily accessible by changing the location of the memory sitecode. However,

each Onity Lock has its sitecode data at the exact same location, which allows

unauthorized, unsophisticated persons to easily uncover the sitecode once connected to

the lock with a simple “homemade” programmer. The programmer “reads” the data

stored in the lock and executes an open command with the sitecode, which causes the

lock to open.

46. Because of their inherent flaws, the Onity Locks’ memory is entirely

exposed to whatever device attempts to read it through the DC port. Each Onity Lock

has a cryptographic key that is required to trigger its “open” mechanism, but that data is

also stored in the Lock’s memory and can be immediately accessed and used to open a

door within a fraction of a second. This is a serious defect that renders the Onity Locks

incapable of performing their most basic function, namely, keeping unauthorized persons

from accessing a locked door.

47. On July 24, 2012, Cody Brocious (“Brocious”), a software engineer for

Mozilla, revealed the Onity Locks’ security flaw at the Black Hat security conference in

Las Vegas, Nevada. There, Brocious demonstrated that Onity Locks could be opened

utilizing a homemade opening device, created with readily available and store-bought

parts, to read the sitecode of an Onity Lock’s memory and open the lock.

48. This homemade opening device needed about 200 milliseconds to read an

Onity Lock’s memory and open a guestroom door. According to Brocious, the methods

used to breach the security of Onity Locks were “stupidly simple” and “an intern at the

NSA could find this in five minutes.”

49. Following his demonstration at the Black Hat conference, Brocious posted

the detailed schematics for the opening device on his internet blog. Since then, others

have been able to replicate and refine the device, and have posted videos on YouTube

explaining the method in detail. Current improvements allow an opening device to be

disguised as a dry erase marker, iPhone cover, or an aluminum wallet, which makes it

almost undetectable for most hotels and their security.

50. Forbes first reported Brocious’s lock opening method on July 23, 2012, the

day before the Black Hat conference. Shortly thereafter, other news outlets broadcast the

report including CBS, BBC, and MSNBC and the story spread rapidly across the

newswires and the Internet.

51. ABC News tested the security breach on television. On October 22, 2012,

an ABC news reporter and a security consulting firm employee visited a Holiday Inn

Express and Hilton Garden Inn where Onity Locks were installed. They were able to

gain access to hotel rooms within seconds using the device.

52. According to Forbes, Richard Kindel, a 32-year old call center employee,

who was able to assemble his own device using Brocious’s method, commented on how

easy it was to make the device: “The parts list was super simple, so I went to Radio

Shack and put it together.”

53. In the same article, another person, going by the name Mr_Q on the

Internet, claimed that he was able to assemble a similar device using readily available

parts for less than $41. Mr_Q told Forbes that the device worked on the first try on five

doors at a local hotel. Mr_Q also said that he was worried that the rapid and broad spread

of information regarding this method would “allow almost anyone to make one of these

devices and start opening doors.”

54. According to a Hotel Online article written by Todd Seiders from Petra

Risk Solutions, burglaries and thefts involving of the opening devices have been reported

in Texas. Similar instances of attempted burglaries that might have been linked to the

devices were also reported in Florida. Seiders concluded the article by emphasizing the

need to train and notify the hotel staffs that the burglaries relating to use of the devices

are “spreading across the country.”

55. A Google search of “Onity locks” yields further information about the ease

and prevalence of illegally accessing these Locks, including to commit crimes at will.

See, e.g., http://www.forbes.com/sites/andygreenberg/2013/05/15/hotel-lock-hack-still-

being-used-in-burglaries-months-after-lock-firms-fix/.

Onity’s Inadequate “Solutions” to the Defective Onity Locks

56. Following Brocious’s public demonstration and further reports of the

defective nature of Onity’s Locks, Onity told the BBC in a statement that “Onity places

the highest priority on the safety and security provided by its products and works

everyday to develop and supply the latest security technologies to the marketplace,” and

that “Onity is prepared to address any potential issues posed by the presentation.” Onity

also posted a statement on its website stating that the demonstrated lock opening method

is “unreliable” and “complex to implement.” Onity then removed this posting and

replaced it with contact information for concerned customers.

57. In August 2012, Onity issued a statement in response to the public

revelation that all of its locks had failed because they could not prevent unauthorized

entry:

Onity places the highest priority on the safety and security provided by itsproducts. We will continue to support and augment our customers’ securitystrategies.

Immediately following a hacker’s public presentation of illegal methods ofbreaking into hotel rooms, Onity engineers developed both mechanical andtechnical solutions, which have been tested and validated by twoindependent security firms. These solutions began shipping to customersworldwide in August 2012.

As of February 2013, Onity has shipped over four million solutions forlocks to hotel properties.

We continue to work to ensure all hotel properties in our database receivethe mechanical solution. These mechanical caps and security screws blockphysical access to the lock ports that hackers use to illegally break intohotel rooms. The mechanical solution remains free of charge to customers.

Technical solutions vary depending on the age, model and deployment oflocks at properties. Customers can call Onity’s dedicated customerassistance line at 1-800-924-1442. Our specialists are available to helpanswer questions related to the mechanical and technical solutions.

http://en.onity.com/support/Pages/Onity-Statement.aspx (last accessed November 8,

2013).

58. Thus, Onity’s official “good will” program in response to the public

revelation of the security defect consisted of two options: a mechanical caps that did not

fix the defect, and a permanent solution. The mechanical caps involved issuing caps that

attempted to block the DC data port. The permanent solution was a new circuit board

that would actually fix the defect. Each of these proposed solutions were inadequate and

violate the express and implied warranties applicable to the Onity Locks.

59. The mechanical cap will diminish the value of the lock and cause undue

burden and expense to Plaintiffs. The lock would have to be disassembled every time

one needed to use the docket for ordinary purposes, including for emergency access to a

guestroom. Indeed, the mechanical cap itself could be removed by anyone who wished to

do so. Therefore the mechanical does not “fix” the fundamental defect in the Lock

system; it only creates a minor hurdle that can be bypassed with a normal screwdriver.

60. To obtain the permanent solution that would actually fix the locks, Onity

required Lock purchasers to pay the costs for the new circuit boards, labor costs of

installation, and shipping.

61. Furthermore, Onity deemed Onity Locks’ purchasers prior to 2005

ineligible to receive the circuit board fix, even though those Locks have the same design

defects. Instead, Onity offered to either provide the free mechanical caps (which fixed

nothing) or to replace these purchasers’ Onity Locks at a cost of $21 per lock.

62. On information and belief, despite its public position, Onity purportedly

entered into private agreements with select, large hotel chains to refund all costs

associated with replacing the defective Locks. According to an article in Forbes, some of

these agreements were disclosed in internal memos circulated by executives at large hotel

chains, such as Marriott, InterContinental Hotels Group, and Hyatt, which then were

leaked to the public. The full text of one such memo outlining Onity’s agreement with

Marriott Hotels is as follows:

Current Incidents

New and ongoing incidents affecting hotel operations around the world.Onity Door Lock Issue

As communicated in the July 30 Franchise Weekly Update, a hacker claimsto have compromised the Onity brand guestroom lock system with a devicecontaining a circuit board with several wires attached. However, ascommunicated in the Oct. 26 memo from Liam Brown and Jim Fisher, thedevice has since been made to fit inside a dry-erase marker and it is

expected that there will be heightened awareness of this issue due to a storyon ABC News.

Since these initial communications, Onity agreed to extend the followingoffer to Marriott-managed and franchised hotels with Onity locks.

Effective November 28, 2012, Onity will extend the offer below to Marriottfranchisees, if the franchisee contacts Onity and agrees to the terms of theoffer.

For All Installations:Onity will provide mechanical caps for HT series locks at no cost toMarriott franchisee. Marriott franchisee will be responsible for theinstallation.

Post-2005 Installations:Onity will provide the upgraded boards at no charge using one of thefollowing methods:

(1) Onity will send Marriott franchisee refurbished upgraded boards, withthe understanding that Marriott franchisee will send Onity the replacedboards upon installation of the upgraded boards. Onity will invoice theMarriott franchisee $11 per board when the refurbished upgraded boardsship and will credit back $11 for each board returned by Marriott franchiseewithin 30 days and in good working condition.

(2) For certain regions outside the United States and Canada, Onity willsend Marriott franchisee property upgraded boards without any obligationthat the Marriott franchisee return the boards that it replaced; or

(3) Onity will re-flash the advance boards at Marriott franchisee location.

Onity will determine the appropriate method of deployment as enumeratedabove. Installation and associated costs for the first and second methodswill be the responsibility of the franchisee. “Upgraded Boards” means newfirmware that addresses the hacking methods published at the Black HatConference in Las Vegas in July 2012.

Pre-2005 Installations :Franchisees may elect to purchase new boards with the new firmware forUS $11.00 per board. Onity will install the new boards at the request ofMarriott franchisee for US$10.00 per door.

Other Terms:Onity will work with franchisees to develop the details of implementing theabove offer. This offer will be effective for twelve (12) months from itsacceptance by Marriott franchisee.

Onity’s proposal for franchisees is conditioned on the franchisee’sacknowledgement that Onity does not guarantee a lock’s invulnerability tohacking.

To take advantage of this offer, or if you have questions, contact Onitydirectly at 1-800-924-1442.

http://www.forbes.com/sites/andygreenberg/2012/12/06/lock-firm-onity-starts-to-shell-

out-for-security-fixes-to-hotels-hackable-locks/ (last accessed on November 8, 2013).

63. Despite the fact that Defendant has admitted the defects in its Locks and

has purportedly entered into agreements with larger hotel chains, Defendant has refused

to replace the Locks or provide any other compensation to Plaintiffs and the Class.

Plaintiffs’ Costs to Remedy Onity’s Breach

64. Plaintiffs and Class Members have Onity Locks on rooms on their

properties. When acquiring the Locks, Plaintiffs and Class Members expected, and Onity

warranted, that the Locks were not defective and would serve their ordinary purpose of

providing reasonable protection against unauthorized access. Each Onity Lock was

rendered useless, however, due to an inherent defect present at the time of purchase—a

defect that was unknown to Plaintiffs and the Class and that made the Locks easily

susceptible to being bypassed. While any product might break down over time, Plaintiffs

and Class Members reasonably expected that the Lock itself would not contain an

inherent defect off the assembly line. Moreover, no Class Member would have known

that Onity Locks were worthless because they were incapable of protecting against easy

and instant access.

65. After news of the Onity Locks’ vulnerabilities was exposed in the media,

each Plaintiff took action to attempt to remedy the fact that the Locks they purchased

from Onity were incapable of performing their basic function by virtue of their defective

design.

Plaintiffs U.S. Hotel and RHM

66. Representatives of Onity visited with representatives of U.S. Hotel and

RHM (collectively, “U.S. Hotel”) in October 2012 regarding the defects in the locks and

Onity’s “fix” program. U.S. Hotel and Defendant discussed the presence of defective

locks at each of Plaintiffs’ properties.

67. Onity informed U.S. Hotel of the two remedies it was making available –

the free mechanical cap “fix” and the replacement circuit boards that U.S. Hotel’s would

have to purchase. Onity informed U.S. Hotel the replacement circuit boards would cost

$11 per lock for a circuit board upgrade to permanently fix the problem. Onity offered

U.S. Hotel a $6 “rebate” on the circuit board fixes for Onity Locks purchased after 2005.

68. U.S. Hotel opted to purchase replacement circuit boards for their affected

Onity Locks, but also to immediately obtain the mechanical cap fix (which were installed

at these Plaintiffs’ own time and expense) as an interim stopgap remedy until the circuit

boards could be installed. U.S. Hotel incurred substantial out of pocket costs in these

efforts to render their locks suitable for the purposes for which they were intended.

Plaintiff Motiram

69. Plaintiff Motiram contacted Onity to inquire about the defective nature of

its Locks, and was directed to fill out a request for a software upgrade that would

supposedly remedy the issue. In contrast to its guarantee, Onity required Motiram to

purchase the upgraded circuit boards at its own expense, at the cost of $11 per board,

which then arrived over two months after the order date. At that point, Motiram installed

the new circuit boards on each room at its own time and expense.

70. Motiram also requested the mechanical cap in order to provide any

protection while waiting for the new boards, but did not receive this “solution” until well

after the new boards arrived.

71. On July 18, 2013, Motiram sent formal written notice to Onity’s counsel on

behalf of the entire class regarding the nature of its claims against Onity and its intention

to file suit if Onity continued to refuse to provide an adequate remedy for the failure of its

Locks.

Plaintiff Desai

72. At the time Desai bought the Express Inn located in Montgomery,

Alabama, Onity Locks were already installed on each of the guest rooms.

73. Because of their inherent defects, all of the Onity Locks installed at the

Express Inn are, and were at the time Desai purchased the hotel, defective and unfit for

their intended use. The purchase price of fully functioning Onity Locks was built into the

purchase price of the hotel, for a hotel that lacks functional room locks is worth

substantially less than one with functional room locks since room security is a material

concern to hotel guests.

74. In a letter to Desai dated December 14, 2012, Onity North America General

Manager Greg Morris wrote:

Dear Valued Customer:

This is an important update regarding recent improvements to our HT andAdvance Series of locks.

As you may know, hackers have targeted electronic hotel locks bypublishing methods to illegally break into hotel rooms. While this activityis clearly troubling, we continue to look for ways we can augment ourcustomers’ security strategies.

Mechanical and technical improvements for all affected locks have beentested and validated by independent security firms, and began shipping tocustomers worldwide in August 2012. As of November 30, 2012, Onityhas shipped solutions for 1.4 million locks to customers.

Information regarding the mechanical and technological solution optionsfor your HT and Advance series locks can be found below. Please contactus directly at our dedicated support line for the most up-to-date informationat 1-800-924-1442. We have specialists ready to work directly with you onyour specific property needs.

As always, Onity continues to place the highest priority on the safety andsecurity of its products. We are committed to supporting you.

HT Series Locks

Onity is shipping mechanical security solutions for HT series locks to allhotel properties that have not already ordered them. Mechanical caps andsecurity screws block physical access to the DC lock ports that the hackersuse to illegally break into hotel rooms. Onity provides the caps, securityscrews, and tool free of charge. The mechanical solution can be installedby hotel staff accustomed to replacing batteries and other routine lockmaintenance.

As of November, 2012 Onity has shipped 1.4 million solutions for locks tohotel properties. While this represents a significant portion of locksaffected, we have decided to accelerate the distribution of technicalsolutions. Over the next several weeks, we will ship this solution to hotelproperties in our database that have not already requested the mechanicalsolution.

75. Desai received the “mechanical solution” caps sent by Onity, which he

installed at his own time and expense.

(The “mechanical solution” sent by Onity to plaintiff Desai)

76. In order to receive the new circuit boards that would actually fix the

defective Locks, Defendant required Desai to pay $15.00 per circuit board in addition to

the cost of shipping and labor for installation.

Plaintiff Saibaba Int’l

77. Saibaba Int’l owns and operates the Best Western Inn, located at 801

Bradberry Lane, Clanton, Alabama 35406.

78. Based upon information provided by Defendant Onity, Saibaba Int’l

decided to purchase Onity Locks to be installed in each of the guest rooms located at Best

Western Inn in Clanton, Alabama.

79. Onity representatives then installed the locks and trained Saibaba Int’l’s

employees on the proper use and operation of the Onity Locks.

80. Because of the inherent design defects, all of the Onity Locks installed at

the Best Western Inn, Clanton, Alabama are defective and unfit for their intended use.

81. In order to correct the design defect on all of the Onity Locks installed on

its guest rooms, Saibaba Int’l is required to purchase new circuit boards and pay for

installation costs.

82. According to Defendant, Saibaba Int’l is not eligible for the official

reimbursement program even though the Onity Locks it has installed at the Best Western

Inn, Clanton, Alabama, are defective.

Plaintiff Baba Int’l

83. Plaintiff Baba Int’l, LLC owns and operates Best Western Inn, located at 56

Cahaba Road, Greenville, Alabama 36037.

84. Based upon information provided by Defendant Onity, Baba Int’l decided

to purchase Onity Locks to be installed in each of the guest rooms located at Best

Western Inn in Greenville, Alabama.

85. Onity representatives then installed the Onity Locks and trained Baba

Int’l’s employees on the proper use and operation of the Onity Locks.

86. Because of Onity’s design defects, all of the Onity Locks installed at the

Best Western Inn, Greenville, Alabama, are defective and unfit for their intended use.

87. In order to correct the design defect on all of the Onity Locks installed on

its guest rooms, Defendant has required Baba Int’l to purchase new circuit boards and

pay for the installation costs.

88. According to Defendant, Baba Int’l is not eligible for official

reimbursement program even though the Onity Locks it has installed at the Best Western

Inn, Greenville, Alabama, are defective.

Plaintiff Krupa Investments

89. Plaintiff Krupa Investments purchased Locks from Defendant for

installation in its hotel.

90. Krupa was notified of the defect in the Onity Locks and received the

“mechanical solution” caps sent by Onity, which Krupa installed at its own time and

expense.

91. Krupa requested that Defendant replace the Onity Locks. Onity informed

Krupa that to receive working Locks, it would have to pay $15.00 per circuit board in

addition to the cost of shipping and labor for installation.

Plaintiff C&R

92. Plaintiff C&R purchased Onity Locks from Defendant for installation in its

hotel.

93. C&R was notified of the defect in the Onity Locks and received the

“mechanical solution” caps sent by Onity, which C&R installed at its own time and

expense.

94. C&R requested that Defendant replace the Onity Locks. However, in order

to receive the new circuit boards, Defendant required C&R to pay $15.00 per circuit

board in addition to the cost of shipping and labor for installation.

Plaintiff Ram

95. Plaintiff Ram purchased Onity Locks from Defendant for installation in its

hotel.

96. Ram was notified of the defect in the Onity Locks and received the

“mechanical solution” caps sent by Onity, which Ram installed at its own time and

expense.

97. Ram requested that Defendant replace the Onity Locks. However,

Defendant informed Ram that in order to receive new circuit boards to fix the Locks,

Plaintiff would have to pay $15.00 per circuit board in addition to the cost of shipping

and labor for installation.

ADDITIONAL PRE-SUIT CLASSWIDE NOTICE

98. In addition to the pre-suit notice letter sent by Motiram, through their

attempts to receive fixes from Onity for defective Onity Locks, Plaintiffs have put

Defendant on notice of its breaches prior to this lawsuit. Moreover, Defendant has been

on notice at least since July 23, 2012 due to the wide press coverage on this issue. In

fact, Defendant updated its website to reflect its knowledge of the defects many times

prior to the filing of any Plaintiff’s Complaint and in fact has attempted to cure (albeit

ineffectively) the defect in the Onity Locks.

CLASS ACTION ALLEGATIONS

99. Pursuant to Rules 23 of the Federal Rules of Civil Procedure, Plaintiffs

bring this action against Defendant on behalf of themselves and all others similarly

situated. The Class is defined as follows:

All entities in the United States that own HT or ADVANCEOnity Electronic Locks and who have not already receivedcomplete repair or replacement of those Locks at Onity’s fullexpense.

100. Excluded from the Class are directors and officers of the Defendant or its

affiliates. Also excluded from the Class are any federal, state, or local governmental

entities, any judicial officer presiding over this action and the members of his/her

immediate family and judicial staff, and any juror assigned to this action.

101. Plaintiffs reserve the right to amend the Class definition if discovery and

further investigation reveal that the Class should be expanded or otherwise modified.

102. The members of the Class are so numerous that joinder of all members

would be impracticable. It is estimated that Onity has sold hundreds of thousands of

these defective locks in the United States. Indeed, Onity claims that it has already

shipped over four million replacement parts. The precise numbers of members can be

ascertained through discovery, which will include Defendant’s sales, warranty service,

and other records.

103. There are common questions of law and fact that predominate over any

questions affecting only individual members of the Class. For example, Onity has

unilaterally published notice since the bypass method became publicly known, addressed

to the owners of all affected Onity Locks, offering an upgrade or “fix” upon request.

Onity’s actions demonstrate the substantial identity of all putative class members as

litigants herein. Among the common legal and factual questions common to the class

a. Whether the subject Onity Locks are defective;

b. Whether Onity Locks failed to conform to Onity’s promises or affirmations

of fact;

c. Whether Defendant offered express warranties of its products;

d. Whether Defendant breached any express warranties;

e. Whether Defendant impliedly warranted that its products were of

merchantable quality and fit for their ordinary purpose;

f. Whether Defendant breached the implied warranty of merchantability;

g. Whether Defendant was unjustly enriched by its conduct and retention of

benefits conferred upon it by Plaintiffs and the Class; and

h. Whether, as a result of Defendant’s misconduct, Plaintiffs and the Class are

entitled to damages, restitution, equitable relief and other relief, and the

amount and nature of such relief.

104. Plaintiffs’ claims are typical of the claims of the Class Members. Plaintiffs

and all Class Members have been injured by the same wrongful practices. Plaintiffs’

claims arise from the same practices and course of conduct that give rise to the claims of

the Class Members and are based on the same legal theories.

105. Plaintiffs will fully and adequately assert and protect the interests of the

Class, and have retained class counsel who are experienced and qualified in prosecuting

class actions. Neither Plaintiffs nor their attorneys have any interests contrary to or

conflicting with the Class.

106. A class action is superior to all other available methods for the fair and

efficient adjudication of this lawsuit because individual litigation of the claims of all

Class Members is economically unfeasible and procedurally impracticable. While the

aggregate damages sustained by the Class are likely in the millions of dollars, the

individual damages incurred by each Class member in most cases are too small to warrant

the expense of individual suits. Even if every Class member could afford individual

litigation, the court system would be unduly burdened by individual litigation of such

cases. Further, individual members of the Class do not have a significant interest in

individually controlling the prosecution of separate actions, and individualized litigation

would also result in varying, inconsistent, or contradictory judgments and would magnify

the delay and expense to all of the parties and the court system because of multiple trials

of the same factual and legal issues. In addition, Defendant has acted or refused to act on

grounds generally applicable to the Class and, as such, final injunctive relief or

corresponding declaratory relief with regard to the members of the Class as a whole is

appropriate.

107. Plaintiffs do not anticipate any difficulty in the management of this

litigation. Any potential difficulties can be easily managed through sub-classing or other

methods.

TOLLING AND ESTOPPEL

108. The design defects in Defendant’s Onity Locks were latent and incapable of

detection by any of the Plaintiffs or Class Members. Thus, Plaintiffs and the Class

Members were not reasonably able to discover the defect and security implications

despite their due diligence, until reports of the defect surfaced on or about July 24, 2012.

109. The applicable statutes of limitations have been tolled by Defendant’s

knowing and active concealment of the material fact of the Locks’ defective design, and

by Defendant’s affirmative representations that the Locks were reliable and secure.

Plaintiffs and the members of the Class remained ignorant of information vital to pursue

their claims, without any fault or lack of diligence on their part. Plaintiffs and the

members of the Class could not reasonably have discovered the fact that their Locks were

defective as described herein.

110. Defendant was and still is under a continuous duty to disclose to Plaintiffs

and members of the Class defects in the Onity Locks that make them unsafe or unfit for

their ordinary and intended use. Defendant knowingly concealed the security and

reliability of its lock system, including the fact that the Locks could be easily opened.

Plaintiffs and members of the Class reasonably and in good faith relied upon Defendant’s

representations regarding the quality and functionality of the Locks.

111. Based on the foregoing, Defendant is estopped from relying on any statutes

of limitation in defense of this action because it did not repair the defects prior to placing

the Onity Locks in the stream of commerce.

COUNT I – BREACH OF EXPRESS WARRANTY

112. Plaintiffs incorporate by reference the preceding paragraphs as though fully

set forth herein and further allege as follows.

113. Defendant is a merchant as defined by applicable U.C.C. provisions and

sold Onity Locks directly and indirectly to Plaintiffs and the Class.

114. Defendant expressly warranted that its Onity Locks were free from defects

at the time of delivery.

115. Defendant expressly warranted that its products have “the most reliable

technology.”

116. Defendant expressly warranted that it provides “the most advanced

electronic locking systems in the industry today.”

117. Defendant expressly warranted that if “any” of the products fail to work for

“any” reason, it would either “fix the problem” or “replace it with a new one.” There is

no limitation on this statement.

118. Defendant expressly warranted that the purchasers of its Onity Locks would

receive “guaranteed replacement and repair of system components.”

119. These express warranties proclaiming advanced technology, reliability, and

a guarantee to fix or repair any problems were a part of the basis of the bargain for

Plaintiffs and the Class.

120. Defendant breached these warranties. Onity Locks were not “the most

reliable” and “the most advanced” products in the industry as Defendant proclaimed. In

fact, Defendant’s Onity Locks were defective and failed to protect from even a simple

bypass tool that is easily assembled by following instructions posted on the internet.

121. Additionally, Defendant has breached its promises to “fix the problem” or

“replace it with a new one” and has refused to offer an acceptable cure. The “solutions”

offered by Defendant are wholly inconsistent with its warranties.

122. The first option of blocking the DC docket with a mechanical cap will

diminish the value of the lock and cause undue burden and expense to Plaintiffs. The

lock would have to be disassembled every time one needs to use the docket for ordinary

purposes, including for emergency access to a guestroom. Furthermore, a physical cover-

up does not “fix” the fundamental defect in the Lock system; it only creates a minor

hurdle that can be bypassed with a normal screwdriver.

123. The second option, which requires the customers to pay for the replacement

of a defective product, does not amount to a “fix” or “replace” as promised; it is equal to

selling a new product to defect victims.

124. Any contractual language contained in Onity’s express warranty that

attempts to limit remedies or the period within which to bring claims is waived by

Onity’s direct representations to the contrary and/or is unconscionable, fails to conform

to the requirements for limiting remedies under applicable law, causes the warranties to

fail of their essential purpose, and is thus, unconscionable and void. By virtue of the

defective design, Defendant knew or should have known that its Onity Locks were at all

times defective and easily compromised, including at the time Defendant contracted with

125. Any language in Onity’s warranty that may purport to exclude the exact

types of defect that affects Plaintiffs’ and the Class Members’ Onity products is

unilaterally imposed in a contract of adhesion that is typically provided after the sale, and

is therefore unconscionable and causes the entire warranty to fail of its essential purpose.

126. Defendant has been put on notice of the breach of express warranties by

Plaintiffs and the Class through notice provided by Plaintiffs and the Class prior to the

filing of this Complaint, Plaintiffs’ attempts to receive fixes from Onity and formal

written notice. Moreover, Defendant has been on notice at least since July 2012 due to

the wide press coverage on this issue. In fact, Defendant updated its website to reflect its

knowledge of the defects in its Locks many times prior to the filing of any Plaintiff’s

complaint.

127. Plaintiffs and the Class are in privity of contract with Defendant as direct

purchasers, recipients of express warranties, and/or third party beneficiaries. In addition,

Plaintiffs and their agents have entered into written contracts with Defendant for the

purchase and/or repair of Onity Locks.

128. As a direct and proximate result of Defendant’s breaches of its express

warranties, Plaintiffs and the Class have suffered damages – an economic loss equal to

the total purchase price of these unfit products, as well as monies and labor spent and to

be spent to fix or alleviate the defect.

COUNT II – BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY

130. Defendant is a merchant as defined by applicable U.C.C. provisions and

sold Onity Locks directly and indirectly to Plaintiffs and the Class.

131. Defendant impliedly warranted to Plaintiffs and the Class that Onity Locks

were fit for the ordinary purpose of locking doors and preventing unauthorized access.

132. Defendant breached the implied warranty of merchantability because Onity

Locks are incapable of preventing unauthorized openings. As discussed above in detail,

Onity Locks lack even the basic protective measures and can be compromised by a

simple bypass device, allowing unauthorized access by anyone without any requisite

sophistication whatsoever.

133. Defendant’s Onity Locks failed to conform to the promises or affirmations

of fact made on their label.

135. Any language Onity has attempted to include in any contract with Plaintiffs

and the Class that attempts to limit the availability of implied warranties, remedies or the

period within which to bring warranty claims is unconscionable, fails to conform to the

requirements for limiting remedies under applicable law, causes the warranties to fail of

their essential purpose, and is thus unconscionable and void. By virtue of the defective

design, Defendant knew or should have known that its Onity Locks were at all times

defective and easily compromised, including at the time Defendants contracted with

136. As a direct and proximate result of Defendant’s breach of implied warranty,

Plaintiffs and the Class have suffered damages, including an economic loss equal to the

total purchase price of these unfit products, as well as monies spent and to be spent to fix

or alleviate the defect.

COUNT III - VIOLATION OF THE MAGNUSON-MOSS WARRANTY ACT,15 U.S.C. §§ 2301 ET SEQ.

138. The Magnuson-Moss Consumer Products Warranties Act, 15 U.S.C.§§

2301, et seq., provides a private right of action by purchasers of products against

manufacturers or retailers who, inter alia, fail to comply with the terms of an express or

implied warranty. 15 U.S.C. § 2310(d)(1). As demonstrated above, Defendant has failed

to comply with the terms of its express and implied warranties with regard to the

defective Onity Locks it has sold.

139. Onity Locks are sold as and are intended to normally operate as any other

door lock, namely, as security devices installed on doors that are designed to prevent

unauthorized entry and that are meant to be opened only with a valid key. Door locks,

including electronic door locks, are consumer products as that term is defined in §

2301(1) of the Magnuson-Moss Act.

140. Plaintiffs and the members of the Class are consumers, as that term is

defined in § 2301(3) of the Magnuson-Moss Act.

141. Defendant is a warrantor, as that term is defined in § 2301(5) of the

Magnuson-Moss Act. Defendant offered express and implied warranties on its products

that put Defendant in privity with the Plaintiffs and the Class. In addition, Plaintiffs and

their agents have entered into written contracts with Defendant for the purchase and/or

repair of Onity Locks.

142. Plaintiffs and members of the Class notified Defendant of its breach of

express warranties prior to the filing of this Complaint, including through attempting to

obtain fixes for the defect from Defendant and through formal written notice. Moreover,

Defendant has been on notice at least since July 2012 due to the wide press coverage on

this issue.

143. Defendant was given a reasonable opportunity to cure its failure to comply

with its express and implied warranties. However, Defendant’s “cures” were inadequate

and did not address the defect and injuries complained of herein, either because they did

not fix the problem or because Defendant required its customers to pay for part or all of

the cost of a replacement part and its installation.

145. As a direct and proximate result of Defendant’s breaches of the Magnuson-

Moss Act, Plaintiffs and the Class have suffered damages, including economic loss equal

to the total purchase price of these unfit products, as well as monies and labor spent and

to be spent to fix or alleviate the defects.

COUNT IV - UNJUST ENRICHMENT

(Alleged by All Plaintiffs Except Plaintiff Desai)

147. As described herein, Defendant sold electronic door locks that were

designed so poorly that they were defective and easily bypassed with a simple hacking

device. Defendant sold these Onity Locks to customers who relied on the expensive

locks to maintain the security of the doors upon which they were affixed. By virtue of

their defective design, Defendant knew, or should have known, that its Onity Locks were

at all times easily compromised and essentially worthless.

148. Defendant’s conduct caused Plaintiffs and the Class to purchase Onity

Locks to provide security, without knowing the locks could be easily bypassed and were

therefore useless for their intended purpose.

149. The money paid by Plaintiffs and the Class to Defendant for Onity Locks

and for fixes for the locks’ defects conferred substantial benefits upon Defendant.

Defendant wrongfully accepted and retained these benefits.

150. Under the circumstances described in this Complaint, it would be

inequitable and unjust for Defendant to retain the benefits conferred upon by Plaintiffs

and the Class. Defendant should return all ill-gotten gains to Plaintiffs and the Class.

151. Plaintiffs and the Class are entitled to receive equitable relief in the form of

appropriate restitution and disgorgement of all wrongfully obtained earnings, profits,

compensation and benefits obtained by Defendant.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, on behalf of themselves and all others similarly

situated, pray for relief against Defendant as follows:

a. For an order certifying this action as a class action and appointing Plaintiffs

and their counsel to represent the Class;

b. For restitution and disgorgement of all amounts obtained by Defendant as a

result of its misconduct, together with interest thereon from the date of

purchase;

c. For actual damages for injuries suffered by Plaintiffs and the Class;

d. For an order requiring Defendant to immediately cease its wrongful

conduct as set forth above; ordering Defendant to engage in a corrective

notice campaign; and requiring Defendant to implement a full, comparable,

replacement and/or refund program of all Onity Locks;

e. For reasonable attorneys’ fees and the costs of this action;

f. For prejudgment and post-judgment interest as provided by law; and

g. For such further relief as this Court may deem just and proper.

JURY DEMAND

Plaintiffs, on behalf of themselves and all others similarly situated, hereby demand

trial by jury on all issues raised in this Complaint which are triable by jury.

Date: December 19, 2013 ZIMMERMAN REED, PLLP

s/ Brian C. GudmundsonBrian C. Gudmundson MN 336695J. Gordon Rudd, Jr. MN 2220821100 IDS Center80 South 8th StreetMinneapolis, MN 55402Tel: (612) 341-0400Fax: (612) 341-0844brian.gudmundson@zimmreed.comgordon.rudd@zimmreed.com

James J. PizzirussoSwathi BojedlaHAUSFELD LLP1700 K Street NW, Suite 650Washington, DC 20006Tel: (202) 540-7200Fax: (202) 540-7201jpizzirusso@hausfeldllp.comsbojedla@hausfeldllp.com

Joseph P. GuglielmoHal CunninghamSCOTT+SCOTT,ATTORNEYS AT LAW, LLPThe Chrysler Building405 Lexington Avenue, 40th FloorNew York, NY 10174Tel: (212) 223-6444Fax: (212) 223-6334jguglielmo@scott-scott.comhcunningham@scott-scott.com

Co-Lead Counsel for Plaintiffsand the Proposed Class

Daniel L. WarshawBobby PouyaPEARSON, SIMON, &WARSHAW, LLP15165 Ventura BoulevardSuite 400Sherman Oaks, CA 91403Tel: (818) 788-8300Fax: (818) 788-8104dwarshaw@pswlaw.combpouya@pswlaw.com

Brent HazzardHAZZARD LAW, LLC447 Northpark DriveRidgeland, MS 39157Tel.: (601) 977-5253Fax: (601) 977-5236brenthazzard@yahoo.com

Bruce A. HagenBRUCE A. HAGEN, P.C.119 N. McDonough St.Decatur, GA 30030Tel: (404) 522-7553Fax: (404) 522-7744bruce@hagen-law.com

Manish Hasmukh PatelPATEL & SLEDGE115 East Three Notch StreetAndalusia, AL 36420Tel: (334) 222-2255Fax: (334) 222-2249mpatellaw@andycable.com

E. Kirk WoodWOOD LAW FIRM, LLCP. O. Box 382434Birmingham, Alabama 35238-2434Tel: (205) 908-4906Fax: (866) 747-3905ekirkwood1@bellsouth.net

Additional Counsel for Plaintiffsand the Proposed Class

Blaine C. StevensJohn M. MaddoxSTEVENS & MADDOX, PC203 Jamestown Blvd Ste 2Dothan, AL 36301-6430Tel: (334) 793-6493Fax: (334) 677-4650stevenslaw21@aol.com

Greg L. DavisDAVIS & TALIAFERRO LLC7031 Halcyon Park DriveMontgomery, AL 36117Tel: (334) 832-9080Fax: (334) 409-7001gldavis@knology.net

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