Herskowitz v. Apple Inc.
940 F. Supp. 2d 1131
N.D. Cal.2013Background
- Putative national class action against Apple alleging double billing and blockages to access/downloaded products across Apple’s e-stores (iTunes, App, Mac App, iBookstore).
- Plaintiffs claim Apple charges customers more than once for the same product and refuses refunds under Apple’s no-refund policy.
- Agreement terms allegedly govern downloads with a single-download limitation and an express remedy for technical problems.
- Plaintiffs seek damages and injunctive relief on claims of breach of contract, implied covenant, CLRA, and UCL, plus a fraud claim by Juel.
- Court grants Apple’s motion to dismiss the FAC without prejudice, except unjust enrichment claim which is dismissed with prejudice, and allows amendment within 30 days.
- Court considers Rule 12(b)(6), Rule 9(b), and standing issues across products purchased from different Apple stores.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract—existence of breached term | Herskowitz: breach via double billing; Juel: breach via inability to re-download without charge. | Apple: no term breached; contract limits downloads to one and provides remedy for defects. | Claims dismissed for failure to plead actionable breach. |
| Implied covenant of good faith and fair dealing | Plaintiffs allege breach through improper double-billing and enforcement. | Covenant cannot extend beyond express contract terms; no breach shown. | Dismissed without prejudice. |
| CLRA unconscionability | Unconscionable final sale/refusal to refund constitutes CLRA violation. | Unconscionability requires both procedural and substantive elements; insufficient allegations. | Dismissed without prejudice. |
| Unlawful/unfair under the UCL | No-refund policy and overcharges constitute unlawful/unfair practices. | Unconscionability not proven; balancing test uncertain given contract terms. | Dismissed for lack of plausible allegation; leave to amend. |
| Fraud (Juel) | Apple misrepresented ability to access/download products; misrepresentations continued over time. | Pleading insufficient specifics (who, what, when, where, how) and lack of scienter/justifiable reliance. | Dismissed without prejudice. |
| Unjust enrichment | Restitution for overcharges. | Unjust enrichment is not an independent cause of action in California. | Dismissed with prejudice. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard; reject conclusory allegations)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must show plausibility, not mere possibility)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (fraud pleadings require time/place/identity of misrepresentations)
- Lazar v. Superior Court, 12 Cal.4th 631 (Cal. 1996) (fraud elements under California law)
- In re GlenFed, Inc. Securities Litig., 42 F.3d 1541 (9th Cir. 1994) (heightened pleading standards in securities fraud)
- Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83 (Cal. 2000) (unconscionability elements; procedural/substantive test)