In re Apple In-App Purchase Litigation
855 F. Supp. 2d 1030
N.D. Cal.2012Background
- Plaintiffs claim minors could incur in-app purchases within a 15-minute password window, resulting in parental charges from $99.99 to $338.72.
- Apple is a Delaware corporation with CA headquarters; CA law governs transactions and Terms & Conditions require CA law and CA courts.
- Meguerian filed the initial complaint on April 11, 2011; related actions were consolidated into In re Apple In‑App Purchase Litigation.
- Plaintiffs seek declaratory relief, CLRA, UCL, breach of implied covenant, and restitution/unjust enrichment.
- Apple moved to dismiss under Rule 12(b)(6) on August 8, 2011; the court must evaluate the Terms & Conditions and asserted contract theories.
- The court must decide whether contracts with minors exist under the Terms & Conditions and whether parents may disaffirm on behalf of minors, among other contract-related issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Declaratory relief viability of voidable contracts with minors | Meguerian/ class argue contracts with minors are voidable by parents | Apple contends Terms & Conditions govern and no voidable contract with minors exists | First cause survives/denied dismissal |
| CLRA claim sufficiency and notice | CLRA notice and pleading are adequate; misrepresentations/omissions alleged | Rule 9(b) heightened pleading applies; notice strict | Second cause survives/denied dismissal |
| UCL claim pleading under fraud standards | UCL claims grounded in fraud and satisfy reliance and injury | Need more explicit reliance under UCL; misrepresentations not sufficiently pled | Third cause survives/denied dismissal |
| Breach of implied covenant and restitution/related claims | Implied covenant can be pleaded alongside express contract; restitution/ unjust enrichment viable | Implied covenant cannot negate express terms; some claims should be dismissed | Implied covenant claim dismissed with leave to amend; restitution/ unjust enrichment preserved |
Key Cases Cited
- Twombly v. Bell Atlantic Corp., 550 U.S. 544 (U.S. 2007) (pleading requires plausible, non-speculative allegations)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (fraud pleading heightened when grounded in fraud; who/what/where/how required)
- In re Apple & AT&T iPad Unlimited Data Plan Litig., 802 F. Supp. 2d 1070 (N.D. Cal. 2011) (CLRA and notice considerations in class actions against tech providers)
- In re Easysaver Rewards Litigation, 737 F. Supp. 2d 1159 (S.D. Cal. 2010) (notice/relief considerations in CLRA context)
- Carma Developers (California), Inc. v. Marathon Development California, Inc., 2 Cal.4th 342 (Cal. 1992) (implied covenant limits and furthers contract's purpose; not read into permissive terms)
- Camacho v. Automobile Club of Southern California, 142 Cal.App.4th 1394 (Cal. App. 2006) (test for unfairness under California practice (Camacho test))
- In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009) (actual reliance required for fraudulent conduct under UCL)