In Re Apple & AT & T Ipad Unlimited Data Plan Litigation
2011 U.S. Dist. LEXIS 77411
N.D. Cal.2011Background
- AT&T Mobility LLC (ATTM) and Apple marketed 3G iPads with two data plans: 250 MB for $14.99 or unlimited data for $29.99, with purported ability to switch in and out of unlimited monthly.
- Plaintiffs allege Apple and ATTM promoted a flexible unlimited data plan as a recurring, monthly option and that switching in/out would continue in future months.
- Steve Jobs publicly promoted the unlimited plan as breakthrough pricing and prepay with no contract, enhancing the value of 3G-enabled iPads.
- As of June 7, 2010 AT&T stopped offering the unlimited option, and those who remained on unlimited could not switch back if they left it; some early purchasers had already ended the 14-day return window.
- Plaintiffs Weisblatt, Hanna, Turk, and Osetek purchased 3G iPads believing they could maintain or switch to unlimited data as needed and would not have purchased otherwise.
- Plaintiffs asserted seven claims (intentional misrepresentation, false promise/fraud, negligent misrepresentation, CLRA, UCL, FAL, unjust enrichment) on behalf of U.S. customers who bought iPad 3Gs before June 7, 2010.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of Rule 9(b) pleading | Fraudallegations supported by multiple statements and omissions; specifics alleged for when, where, who, and how. | Pleadings lack particularity; void of adequate time/place/content and reliance specifics. | Rule 9(b) satisfied; omissions and misrepresentations pled with sufficient particularity. |
| Standing of non-California plaintiffs under CLRA/UCL/FAL | Choice-of-law provisions do not bar CA protections where interests justify CA claims. | Non-CA plaintiffs lack CA-standing; CA law does not apply extraterritorially. | Non-California plaintiffs dismissed without prejudice for CLRA/UCL/FAL claims. |
| Restitution under UCL and FAL | Restitution available for lost money due to unlawful conduct; data-plan charges may qualify. | No loss linked to defendant's gain; no basis for restitution as alleged. | UCL/FAL restitution claims dismissed without prejudice for lack of proper restitution basis. |
| CLRA affidavit and notice requirements | Affidavits and 1782 notice were properly contemplated for CLRA claims. | Affidavits not filed; insufficient CLRA notice to ATTM. | CLRA claims dismissed without prejudice for failure to file required affidavit; notice defect to ATTM also. |
| Unjust enrichment and Weisblatt negligent misrepresentation | Unjust enrichment theories may rest on misrepresentations; negligent misrepresentation exists with special relationship. | California lacks unjust enrichment claim in some contexts; no special relationship for negligent misrepresentation under NY law. | Unjust enrichment dismissed with prejudice; Weisblatt’s negligent misrepresentation claim dismissed without prejudice. |
Key Cases Cited
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (Rule 9(b) requires fraud pled with specificity)
- Edwards v. Marin Park, Inc., 356 F.3d 1058 (9th Cir. 2004) (state fraud claims require particularity under Rule 9(b))
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) applies to fraud regardless of substantive claim)
- Lazar v. Superior Court, 12 Cal.4th 631 (Cal. 1996) (promises imply intent; misrepresentation if no intent to perform)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (restitution under UCL/FAL requires loss and defendant gain)
- In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Litig., 758 F.Supp.2d 1077 (S.D. Cal. 2010) (CLRA affidavit requirement and dismissal for noncompliance)
- Laster v. T-Mobile USA, Inc., 407 F.Supp.2d 1181 (S.D. Cal. 2005) (statutory notice goals in CLRA enforcement)
- Buckland v. Threshold Enters., Ltd., 155 Cal.App.4th 798 (Cal.App.2d Dist. 2007) (restitution elements under California law)