386 F. Supp. 3d 1155
N.D. Cal.2019Background
- Putative multi-national class action alleging Apple concealed iPhone battery defects and failed to disclose that iOS updates reduced device performance (throttling). Plaintiffs originally filed a Consolidated Amended Complaint (CAC) and later a Second Amended Complaint (SAC).
- The Court previously denied Apple’s motion to dismiss in part, allowing non-U.S. plaintiffs to invoke California law; Apple moved for reconsideration limited to that choice-of-law ruling.
- Apple moved to dismiss many claims in the SAC; Plaintiffs submitted additional materials and judicial-notice requests which the Court largely declined to consider at the 12(b)(6) stage.
- The Court granted Apple’s motion for reconsideration on the choice-of-law point, but denied dismissal of foreign plaintiffs’ claims without prejudice pending further development of the record.
- The Court dismissed without leave to amend: (1) claims premised on a battery "defect" theory for lack of Article III standing; (2) claims based on affirmative misrepresentations; (3) omission-based claims. The Court sustained (with limits) computer-intrusion claims under CDAFA/CFAA §1030(a)(5)(A) and trespass to chattels; dismissed CFAA §1030(a)(5)(C). Contract claims were dismissed with leave to amend. Claims tied to iPhone 5/5S/5C were dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law for non-U.S. plaintiffs (reconsideration) | California law governs via the SLA; foreign plaintiffs can invoke California law | SLA/hardware warranty choice-of-law clauses and foreign-law conflicts mean California law should not apply extraterritorially | Grant reconsideration; dismissal of foreign plaintiffs denied without prejudice; full choice-of-law analysis premature on the record |
| Standing for battery-defect/overpayment theory | Plaintiffs allege overpayment/benefit-of-the-bargain because batteries prematurely age and cause UPOs | No named plaintiff alleges personal UPOs or diminution in market value; defect alleged is normal battery aging | Dismissed for lack of standing; no leave to amend |
| Omissions (fraud by nondisclosure) | Apple concealed throttling and battery susceptibility to UPOs; omission was material and central to device function | Consumers know batteries age; warranty and common knowledge negate duty to disclose; allegations insufficient under Rule 9(b) | Dismissed without leave to amend — defect alleged is normal battery aging and not a material omission; plaintiffs fail to plead requisite additional factors |
| Affirmative misrepresentation claims (CLRA, UCL, FAL, common law fraud) | Certain Apple statements implied better battery performance | Plaintiffs failed to plead individual reliance or actionable misrepresentations with specificity | Dismissed without leave to amend (plaintiffs conceded no viable affirmative-misrepresentation theory) |
| Computer-intrusion claims (CFAA §1030, CDAFA, trespass to chattels) | iOS updates throttled processors; plaintiffs consented to install updates but not to damage caused by throttling | Installation was voluntary; therefore CFAA damage/unauthorized access theory fails; Rule 9(b) applies | CFAA §1030(a)(5)(C) dismissed (consent); CFAA §1030(a)(5)(A), CDAFA, and trespass to chattels survive at pleading stage (alleged unauthorized damage via concealed throttling) |
| Contract claims (breach of contract/warranty) | Apple breached implied and express promises about device performance and battery life | Plaintiffs fail to identify the specific contract(s), terms, or how breach occurred | Dismissed with leave to amend to identify contract terms and breaches |
Key Cases Cited
- McDowell v. Calderon, 197 F.3d 1253 (9th Cir. 1999) (motions for reconsideration disfavored; limited grounds)
- Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873 (9th Cir. 2009) (reconsideration cannot present arguments that could have been made earlier)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (Rule 12(b)(6) plausibility pleading standard)
- Nedlloyd Lines B.V. v. Superior Court, 3 Cal.4th 459 (Cal. 1992) (choice-of-law analysis for contractual selection; conflicts with fundamental policy exception)
- Hodsdon v. Mars, Inc., 891 F.3d 857 (9th Cir. 2018) (limitations on Wilson safety-hazard requirement for omission-based fraud claims)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) pleading requirements for fraud: who, what, when, where, how)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (U.S. 2016) (Article III standing requires concrete and particularized injury)
- Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988 (9th Cir. 2018) (limits on judicial notice and incorporation-by-reference at Rule 12 stage)
- Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) (choice-of-law and foreign-consumer-law conflicts in class actions)