Donohue v. Apple, Inc.
2012 WL 1657119
N.D. Cal.2012Background
- Plaintiff Donohue sues Apple over a defect in the iPhone signal meter that inflated perceived signal strength.
- Apple published a July 2, 2010 letter acknowledging the flawed formula and announced a software update to adopt AT&T’s formula; update released around July 15, 2010.
- Plaintiff alleges the defect caused diminished value, misled purchasing decisions, and harmed resale value, with damages including loss of value and potential refunds.
- Plaintiff seeks to represent a nationwide class and a Washington subclass, asserting multiple claims including UCL, CLRA, WCPA, warranty, contract, and restitution.
- Apple moves to dismiss under Rule 12(b)(6) and 9(b), arguing lack of standing, choice-of-law issues, and failures in fraud-based pleading and contract/warranty theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for the named plaintiff | Donohue has economic injury from diminished value. | No injury, and lack of standing under UCL/Article III. | Plaintiff has standing under UCL and Article III. |
| California law claims based on Washington transaction | California law can apply; Mazza not controlling at pleading stage. | Choice of law should bar CA claims for a WA transaction. | California claims may proceed in alternative; Mazza not dispositive at pleading stage. |
| Fraud-based UCL/CLRA/WCPA claims | Claims rely on misrepresentations/omissions about signal meter. | Rule 9(b) pleading requirements not met for fraud-based claims. | Affirmative misrepresentation claims dismissed with leave to amend; omission-based duty to disclose claims dismissed with leave to amend. |
| Duty to disclose for omission claims | Apple’s exclusive knowledge and concealment created a duty to disclose. | Post-warranty disclosures and lack of ongoing duty; insufficient pleadings. | Duty to disclose claims under UCL/CLRA/WCPA dismissed with leave to amend. |
| Pre-suit notice for warranty claims | Notice was provided before amended complaint; Alvarez not controlling here. | Pre-suit notice missing; Alvarez controls for CA claims; WA and MMWA addressed. | California and Washington warranty claims dismissed with prejudice; MMWA claims dismissed. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (injury must be concrete and particularized)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (economic injury under UCL; standing narrowed to economic harm)
- In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009) (reliance and materiality; causation in consumer claims)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) pleading for fraud-based claims)
- Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) (choice-of-law considerations for nationwide class claims)
- Cel‑Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (Cal. 1999) (unfair competition standard tethered to law and impact on competition)
- Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012) (duty to disclose; post-warranty defects)