ORDER GRANTING DEFENDANT’S MOTION TO DISMISS
(Docket No. 22)
I. INTRODUCTION
Plaintiff Corbin Rasmussen brings the instant action alleging that Apple’s 27-inch
II. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff purchased a 27-inch iMac computer on August 3, 2011 for* $2,259.00. Amended Complaint (“Compl.”) ¶ 32 (Docket No. 19). An iMac is an “all-in-one” computer which integrates the computer’s screen, processor, hard drive, and other hardware into “one machine or ‘uni-body enclosure.’ ” Id. ¶ 1, 11. The iMac model at issue in this case has a “LED-Backlit display! ] with a 16:9 aspect ratio.” Id. ¶ 12.
Plaintiff asserts that he purchased the 27 inch iMac because of its “big and bold display” which he believed would be “ideal for playing [¶] movies and television shows” and for running his music composition program. Id. ¶ 31 Before he purchased the computer, he alleges that he did “extensive research” by viewing Apple’s “promotional vidеos” touting the display and by “frequently visiting Apple’s website to research the iMac and other computers” and reading “the descriptions and specifications for the 27-inch iMac” between May 2011 and August 2011. Id. ¶ 29, 30. However, after approximately 18 months — in December 2012 — half of Plaintiffs iMac’s screen went dim, “diminishing the useful screen size to approximately fifty-percent.” Id. ¶ 33. Plaintiff contacted Apple, but Apple’s customer service told him that because his iMac was out of warranty, any repair to the screen would cost him more than $500 — an amount Plaintiff, as a music teacher, could not afford. Id. ¶ 34-35. Consequently, his use of his iMac is severely limited given the dimmed screen. Id. ¶ 35.
Plaintiff alleges that when Apple launched the new iMac models with “LED-Backlit” displays, Apple’s marketing and advertising focused on the display. Specifically, Plaintiff in his complaint points to the following:
• In late 2009, Jonathan I’ve — Apple’s Senior Vice President of Design-touted the iMac’s display by noting that the iMac was “dominated by this incredible new 16:9 display.... You are just completely consumed by that image. There is not a detail there that doesn’t need to be there.... Everything is about the display, therefore everything is about your content.” Id. ¶ 13 (emphasis in original).
• In a seven-minute long video discussing the new machine, Apple stated “The first thing you’re going to be just blown away with is the display .... There is a lot more screen real estate there. And with some [sic] many more picture elements there is just so much more that you can really do with that display [¶]... ] For the 27 inch we wentfurther than 1080p, we added seventy-eight percent more pixels to take it well beyond HD. Pixel density like this just doesn’t exist in other desktop computers. With that mаny pixels you are seeing great detail in photos, you’re seeing razor sharp text, and of course viewing [¶] content with tremendous clarity.” Id. ¶ 14 (emphasis in original).
• The video stated the “LED technology has the advantage of coming on to full brightness the moment you turn them on and it has uniform brightness across the entire screen” and describes the screen as “a very premium class display technology. What you get out of that is very good color consistency and very good display performance.” Id. ¶ 15.
• Apple’s '.'website advertised the Mac’s “big, beautiful displays” and claimed that the screen was “instantly on and uniformly bright” and stated a “Mac is designed for a long productive life” and that Apple designers and engineers “spend countless hours ensuring that each Mac is precisely built — inside and out. From the down-to-the-micron fit of each internal сomponent to the finish of the enclosure.” Id. ¶¶ 16, 20, 21.
• Finally, in bold letters on Apple’s website, Apple lauded Macs in general by stated “It’s designed to be a better computer. When you buy a computer, you want it to last. And a Mac will. That’s because a Mac is designed and built to be as reliable as it is beautiful” and, thus, “only quality components and materials will do.” Id. ¶ 22 (emphasis in original).
Accordingly, Plaintiff alleges that Apple made “claims to superior quality and representations about the Mac’s display.” Id. ¶ 21.
However, at the same time Apple was touting the superior qualities of the Mac's display and the Mac’s dependability more generally, Plaintiff alleges Apple was aware of a latent defect with those same screens. Specifically, Plaintiff claims that beginning in 2010, Apple began to receive so many complaints (alleged to be “several hundred or thousands”) about the 27-inch Mac’s display that a technology news website designated the machines “iLemons.” .Id. ¶¶ 24, 25. This defect is alleged to cause the screen to dim or darken. Id. ¶¶ 2, 27. Despite the growing number of complaints “Apple has refused to publicly acknowledge the screen dimming defect and has failed to stand behind its representations and products and offer a fix for impacted consumers.” Id. ¶ 27.
Plaintiff alleges that the defect in the Mac's display “may manifest itself both inside and outside of Apple’s limited one-year period.” Id. ¶ 25. Further, Plaintiff argues that contrary to Apple’s representations regarding liability, the average person keeps their computer for three years, and would thus reasonably expect a computer to last at least three years. Id. ¶ 23.
Plаintiff has asserted two causes of action — one for a violation of California’s unfair competition law, Cal. Bus. & Prof. Code § 17200, et seq., and one for violation of California’s Consumer Legal Remedies Act, Cal. Civ. Code § 1750, et seq. Both claims are rooted in Plaintiffs claim that Apple’s representations and advertisements regarding the 27-inch Mac’s quality, build, and display were false and misleading. Plaintiff seeks to represent a class consisting of “[a]ll persons in the United States who, on or before November 30, 2012, purchased a 27-inch Mac with a LG LED-backlit display.” Compl. ¶ 34. Plaintiff seeks, on behalf of himself and
III. DISCUSSION
Apple brings its motion pursuant to Rule 12(b)(6). Rule 12(b)(6) allows for dismissal based on a failure to state a claim for relief. A motion to dismiss based on Rule 12(b)(6) challenges the legal sufficiency of the claims alleged. See Parks Sch. of Bus. v. Symington,
A. Plaintiffs Have Failed to State a Claim Under the California Legal Remedies Act
The California Legal Remedies Act provides a “cause of action for ‘unfair methods of competition and unfair or deceptive acts or practices’ in consumer sales.” Berger v. Home Depot USA, Inc.,
Plaintiff can state a claim under the CLRA by showing that Apple either made an affirmative misrepresentation about, or failed to disclose defects in, the 27-inch iMac. See Baba v. Hewlett-Packard Co., No. C09-05946 RS,
1. Plaintiff Has Failed to State a Claim Under the CLRA Based on Apple Having a “Duty to Disclose” a Defect in the 27" Inch iMac
California courts have generally provided that there are four circumstances in which a duty to disclose may arise:
(1) when' the defendant is the plaintiffs fiduciary; (2) when the defendant has exclusive knowledge of material facts not known or reasonably accessible to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations that are misleading becausе some other material fact has not been disclosed.
Collins v. eMachines, Inc.,
a. Plaintiff Cannot State a Claim Under a “Duty to Disclose” Theory to the Extent the Alleged Defect Manifested Itself Post-Warranty
Where a plaintiff predicates his CLRA claim on a manufacturer’s failure to inform a customer of a latent defect which creates a likelihood of the product failing outside the warranty period, the Ninth Circuit has narrowly construed the circumstances in which such omission will be deemed “material.” In Wilson v. Hewlett-Packard, the Ninth Circuit — construing and applying the California Court of Appeal’s decision in Daugherty v. American Motor Co.,
In Daugherty, car buyers filed a putative class action against Honda, alleging that it breached its express warranties and violated the CLRA by failing to disclose an engine defect. Daugherty,
Similarly, in Wilson, plaintiffs sued Hewlett-Packard alleging that HP had concealed a design defect within their laptop computers that both manifested after the warranty expired and created an unreasonable safety hazard in violatiоn of the CLRA and UCL. Specifically, plaintiffs alleged that after approximately two years of use, their laptop would begin displaying “low power” warnings and would run on battery power even when plugged into an a/c adapter. Wilson,
Accordingly, under Wilson (and its interpretation of Daugherty), where a plaintiff alleges that a manufacturer failed to inform him of a product’s likelihood of failing outside the warranty period, the CLRA requires that the plaintiff allege that the asserted defect posed a safety risk — merely arguing that the defect created the risk that the plaintiff would have to pay for the repair of the product is insufficient. See Ford Motor Co.,
Courts have asserted that policy considerations support the narrowing of a manufacturer’s duty to disclose in these circumstances. Specifically, they have stated that “to broaden the duty to disclose beyond safety concerns ‘would eliminate term limits on warranties, effectively making them perpetual or at least for the useful life of the product.’” Wilson,
Absent a manufacturer representation as to the life span of the part in question ... the only expectation that a purchaser could have had was that the product would function properly for the duration of the manufacturer’s express warranty.The manufacturer had no duty to disclose that, “in the fullness of time,” a given part might eventually fail, necessitating repairs.
Id. at *8 (quoting Daugherty,
Here, it is undisputed that the alleged defect in the 27-inch iMaes does not implicate any safety issue. Nonetheless, Plaintiff argues that Apple had a duty to disclose this defect for two reasons. First, Plaintiff challenges the contention that California law even requires a “strict safety requirement” in omissions cases such as this one. See Rl. Opp. at 11. Plaintiff argues that “[t]he materiality analysis by the California Supreme Court, both before and after Daugherty, has never restricted materiality to safety considerations.” Id. at 12. Plaintiff cites the California Supreme Court’s 2011 decision in Kwikset Corp. v. Superior Court,
In addition, Plaintiff is correct that at least one federal district court has criticized the Ninth Circuit’s interpretation of California law on this issue in the Wilson case. In Tait v. BSH Home Appliances,
However, whatever this Court may think of the strict “safety” requirement courts have imposed on CLRA claims based on defects manifesting outside of a product’s warranty, the Court is bound by Wilson unless and until it is clear that Daugherty was wrongly decided or interpreted. The Court is not free to deviate from the Ninth Circuit’s construction of California law in Wilson absent a subsequent interpretation from California’s courts that the interpretation was incorrect. Kona Enters., Inc. v. Estate of Bishop,
While the district court in Tait stated that Wilson’s holding can be disregarded as “dictum,” the court’s analysis was an alternative holding, and was equally essential to its conclusion as the other cited basis. Furthermore, a considered analysis by the Ninth Circuit, even if not absolutely essential to the decision, should not be lightly disregarded. Judge Kozinski noted in United States v. Johnson,
Where it is clear that a statement is made casually and without analysis, where the statement is uttered in passing without due consideration of the alternatives, or where it is merely a prelude to another legal issue that commands the panel’s full attention, it may be appropriate to re-visit the issue in a later сase. However, any such reconsideration should be done cautiously and rarely — only where the later panel is convinced that the earlier panel did not make a deliberate decision to adopt the rule of law it announced. Where, on the other hand, it is clear that a majority of the panel has focused on the legal issue presented by the case before it and made a deliberate decision to resolve the issue, that ruling becomes the law of the circuit and can only be overturned by anen banc court or by the Supreme Court.
Id. at 915-16 (footnote omitted). The Ninth Circuit has cited this statement with approval in subsequent binding opinions. See, e.g., In re Wal-Mart Wage & Hour Employment Practices Litig.,
Moreover, Plaintiff has proffered no California case law subsequent to Wilson which repudiates or otherwise undermines its approach. As noted above, Daugherty, as interpreted by Wilson, remains good law. It was not, as Plaintiff contends, undermined by the Supreme Court’s decision in Kwikset. Kwikset merely stated that a “ ‘misrepresentation is judged to be material if a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question.’” Kwikset,
Plaintiffs have not demonstrated that Kwikset has undermined Daugherty’s (or Wilson’s) precedential force. Rather, it is noteworthy that .even after Kwikset, courts continue to require plaintiffs to show that the defect that the manufacturer allegedly failed to disclose implicated safety concerns in order to state a post-warranty CLRA claim. See, e.g., Elias,
b. Plaintiff Cannot State a CLRA Claim for a Defect Arising Within the Warranty Period
Plaintiff argues that the “safety concern” requirement does not bar his CLRA claim because the defect with the 27-inch iMac display “often appears within the warranty period.” PI. Opp. at 13. A number of courts have noted that the “safety concern” requirement for a fraudulent omission claim under the CLRA does not apply where the defect in question arises during the products’ warranty peri
A proper reading of Daugherty reveals a two-step duty to disclose analysis. First, a manufacturer has a duty to disclose any defects that fall within the warranty period, whether relating to safety or to costly repairs, that would have caused the consumer to not purchase the car if they had been disclosed. Second, a manufacturer also has a duty to disclose safety issues that fall outside of the warranty period.
Id. at *4. This is consistent with the approach adopted by other district courts. See, e.g., Hodges v. Apple Inc., No. 13-cv-01128-WHO,
Thus, in In re NVIDIA GPU Litigation, No. C08-04312 JW,
Similarly, in Decker, the plaintiff alleged that Mazda had sold a number of vehicles which suffered from a defect which would cause the vehicle to have trouble starting when the engine was either cold or the clutch was misapplied. Decker,
Plaintiffs complaint alleges that “[consumers have complained that the defect may manifest itself both inside and outside of Apple’s limited one-year warranty period.” Compl. ¶ 25. However, although there may be a theoretical claim under the CLRA, Plaintiff alleges that the defect in his machine did not manifest itself until 18 months after purchase — six months after Apple’s limited one-year warranty expired. Id. ¶33. Thus, whilе a defect need not be safety related to support a CLRA claim where the defect manifests within the warranty period, Plaintiff does riot have standing to assert such a claim here. Cf. Arevalo v. Bank of America Corp.,
2. Plaintiff Has Failed to Allege an Actionable Misrepresentation Under the CLRA
Plaintiff next argues that in fact Apple’s advertising made numerous representations suggesting that the iMac display is designed for a long productive life. PI. Opp. at 4. Thus, Plaintiff argues that the screen defedt represents a material fact that is “contrary to” those representations, and thus sufficient to state a claim under the CLRA. Plaintiff also cites the related proposition, recognized by this Court in the context of a general fraud claim, that a plaintiff seeking to state a fraud claim on 'the basis of an omission need not prove a “duty to disclose” where the defendant “volunteered] information, in which case ‘the telling of a half-truth calculated to deceive is fraud.’ ” Barnes & Noble, Inc. v. LSI Corp.,
Defendants argue, however, that all of the representations identified by the Plaintiff in his complaint constitute “mere puffery” and are therefore not actionable under the CLRA. “Puffery” statements cannot support a claim under the CLRA. See In re Sony,
As a result, advertising which “merely states in general terms that one product is superior is not actionable. However, misdescriptions of specific or absolute characteristics of a product are actionable.” Id. (internal quotation marks omitted). Thus, a representation of fact, as opposed to mere puffery, is one which makes a “specific and measurable claim, capable of being proved false or of being reasonably interpreted as a statement of objective fact.” Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d
The following chart provides the specific representations identified in the first amended complaint as well as examples of cases finding certain statements to be puf-fery, and other examples finding actionable statements:
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In light of this precedent, it is apparent that the relevant alleged representations contained in the complaint constitute inae-tionable puffery. First, many statements do not relate to the longevity of the screen’s performance, only to the general quality of its display. As to those that do, statements that the Mac is designed to “last” or to have a “long productive life” are equivalent to representations that a product was “built to last” that courts have found to be non-actionable. See, e.g, Apodaca,
3. Summary
For the foregoing reasons, Plaintiff has failed to adequately allege either that (1) his 27-inch iMac had a defect which Apple had a duty to disclose or (2) that the alleged defect was “contrary to” any actionable representation actually made by Apple. Accordingly, the Court DISMISSES Plaintiffs CLRA claim, with leave to amend.
B. Plaintiffs UCL Claim Fails for the Same Reasons as His CLRA Claim
The California Unfair Competition Law generally provides “unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code § 17200. “The standard for determining whether a defendant misrepresented the characteristics, uses or benefits of goods and serviсes under Civil Code section 1770, subdivision (a)(5) is the same as that for determining whether there was false advertising under the UCL and the false advertising law.” Chapman v. Skype Inc.,
C. Plaintiff Has Adequately Plead Reliance
Apple also argues that Plaintiff has failed to state a claim because he has not asserted which alleged misrepresentation he allegedly saw and upon which he relied. Apple argues that the amended complaint merely states general advertising that others saw, but that Plaintiff never expressly states which alleged misrepresentations upon which he relied. The Court disagrees.
Apple is correct that both the CLRA and UCL require plaintiffs to prove reliance. See, e.g., Cholakyan,
Plaintiff argues in his opposition that he is not needed to allege the particular advertisements or representations to which he was exposed, relying primarily on Oreck Corp. Halo Vacuum & Air Purifiers Mktg. & Sales Practices Litig., No. ML 12-2317 CAS,
were exposed to a national advertising campaign that utilized several slightly different advertisements all articulating a common allegedly fraudulent message: that the Oreck products used scientifically proven technology to effectively kill pathogens and reduce the risk of illness. The FACC also explains which type of advertising (infomercial, online, etc.) each plaintiff ... viewed. This is sufficient to satisfy Rule 9(b).
Id. at *15. The court went on to note that it would be “unfair to require plaintiffs to recall and specify precisely which of the many advertisements they ... saw [and] relied upon.” Id. Rather, it “suffices for plaintiffs to provide examples of advertisements similar to those they saw as long as all the advertisements convey the core allegedly fraudulent message.” Id.
The Court finds the analysis in Oreck persuasive and concludes that Plaintiff has sufficiently alleged reliance. In the amended complaint, the Plaintiff alleges that he “viewed promotional videos touting the iMac’s display and build quality” and that from approximately May 2011 through early August 2011, he “frequently visited Apple’s website to research the iMac and other computers. Mr. Rasmussen did most of his research on Apple’s website, reading the descriptions and specifications for the 27-inch iMac on the Apple iMac webpage.” Compl. ¶¶ 29-30. He also, as recounted above, provides specific statements from Apple’s website and promotional videos. The Ninth Circuit has noted that even under the heightened pleading standard of Rule 9(b), the ultimate question is whether the allegations of fraud are “specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud they charged so that they can defend against the charge and not just deny that they have done anything wrong.” Bly-Magee v. California,
D. The Court Need Not Decide if Plaintiff Has Standing for Injunctive Relief
Apple argues that because Plaintiff cannot assert a claim for injunctive relief because he has not, and cannot, allege that he is “realistically threatened by a repetition” of the purported violation.
Under Article III, “to establish standing to pursue injunctive relief ... [plaintiffs] must demonstrate a real and immediate threat of repeated injury in the future.” Chapman v. Pier 1 Imports (U.S.) Inc.,
Some courts have disagreed with this reasoning, correctly recognizing the limitation this places on federal courts to enforce California’s consumer laws. For example, in Koehler v. Litehouse, Inc., No. CV 12-04055 SI,
“If the Court were to construe Article III standing as narrowly as Defendant advocates, federal courts would be precluded from enjoining false advertising under California consumer laws because a plaintiff who had been injured would always be deemed to avoid the cause of the injury thereafter ... and would never have Article III standing.... While Plaintiffs may not purchase the same Gruma products as they purchased during the class period, because they are now aware of the true content of the products, to prevent them from bringing suit would surely thwart the objective of California’s consumer protection laws.”
Id. at *6 (quoting Henderson v. Gruma Corp., No. 10-04173 AHM (AJWx),
However, as Plaintiff will be given leave to amend, the Court need not reach the question of standing. Plaintiff may choose to stand on his pleadings or amend to add allegations or additional plaintiffs.
E-. The Complaint’s Class Definition Is Overbroad
Apple has moved to strike the class definition on the ground that it in-
IV. CONCLUSION
For the foregoing reasons, Apple’s motion to dismiss is GRANTED. However, Plaintiff will be given leave to amend consistent with this order. Plaintiff shall file any amended complaint within 30 days of this order.
This order disposes of Docket No. 22.
IT IS SO ORDERED.