-NLS Wofford et al v. Apple Inc. et al, No. 3:2011cv00034 - Document 16 (S.D. Cal. 2011)
Court Description: ORDER granting 8 Motion to Dismiss and Request for Judicial Notice. If Plaintiffs wish to amend the dismissed claims, Second Amended Complaint is due within thirty (30) days of the date of this order Signed by Judge Anthony J. Battaglia on 11/08/11. (cge)
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-NLS Wofford et al v. Apple Inc. et al Doc. 16 1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 13 BIANCA WOFFORD and SUZANN LENNOX, on behalf of themselves, and all others similarly situated, Plaintiffs, 14 v. 15 APPLE INC., a California corporation; and DOES 1 through 100, inclusive, 16 Defendants. 17 ) ) ) ) ) ) ) ) ) ) ) ) Case No. 11-CV-0034 AJB NLS ORDER GRANTING MOTION TO DISMISS [Doc. No. 8] 18 The Defendant Apple Inc.’s filed a motion to dismiss, [Doc. No. 8], the Plaintiffs’ First 19 Amended Complaint (“FAC”), [Doc. No. 1]. The Plaintiffs filed an opposition, [Doc. NO. 9], and the 20 Defendant filed a reply, [Doc. No. 12]. The Defendant has also filed a request for judicial notice, [Doc. 21 No. 8-4], of the License agreement. The Plaintiffs have filed objections to this request, [Doc. No. 10], 22 and Defendants have filed a notice in support of its request for judicial notice, [Doc. No. 13]. Based 23 upon the parties moving papers and for the reasons set forth below, the Defendant’s motion to dismiss 24 and request for judicial notice1 are hereby GRANTED. 25 26 27 28 The Court may take judicial notice of the License pursuant to Rule 201 of the Federal Rules of Evidence because Mr. Reigel’s declaration is sufficient to demonstrate that the License is what it purports to be and the License has been properly authenticated and is integral to the FAC. See Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998) (“a district court ruling on a motion to dismiss may consider a document the authenticity of which is not contested, and upon which plaintiffs’ complaint 1 1 3:11-CV-0034 AJB (NLS) Dockets.Justia.com 1 2 Background On or about November 12, 2010, Plaintiffs Bianca Wofford and Suzann Lennox (“Plaintiffs”) 3 filed a class action lawsuit in the California Superior Court for the County of San Diego against Apple 4 Inc. (“Defendant”), alleging five causes of action: (1) violation of the Consumer Legal Remedies Act 5 (“CLRA”) (California Civil Code § 1750 et seq.); (2) violation of the Unfair Competition Law (“UCL”) 6 (Bus. & Prof. Code § 17200, et seq.); (3) false and deceptive advertising in violation of Bus. & Prof. 7 Code §17500, et seq.; (4) tortious interference with contract; and (5) breach of implied/equitable 8 contract. All causes of action relate to Defendant’s release of a software upgrade, iOS 4.0, for its iPhone 9 3G and iPhone 3GS (collective, “the iPhone”) in June 2010. On January 7, 2011, the Defendant 10 11 12 removed the case to this Court pursuant to 28 U.S.C. § 1441(a) and § 1453. Legal Standard A complaint must contain “a short and plain statement of the claim showing that the pleader is 13 entitled to relief.” Fed.R.Civ.P. 8(a) (2009). A motion to dismiss pursuant to Rule 12(b)(6) of the 14 Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. 15 Fed.R.Civ.P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir.2001). The court must accept all 16 factual allegations pled in the complaint as true, and must construe them and draw all reasonable 17 inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 18 337–38 (9th Cir.1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual 19 allegations, rather, it must plead “enough facts to state a claim to relief that is plausible on its face.” Bell 20 Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim has “facial 21 plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable 22 inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, ––– U.S. ––––, 129 23 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 556). 24 25 26 27 28 necessarily relies”) superseded by statute on other grounds as stated in Abrego v. Dow Chem. Co., 443 F.3d 676 (9th Cir. 2006); Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (judicial notice of a document is appropriate where the “plaintiff’s claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint”). 2 3:11-CV-0034 AJB (NLS) 1 However, “a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’ requires 2 more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not 3 do.” Twombly, 550 U.S. at 555 (citation omitted). A court need not accept “legal conclusions” as true. 4 Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). In spite of the 5 deference the court is bound to pay to the plaintiff's allegations, it is not proper for the court to assume 6 that “the [plaintiff] can prove facts that [he or she] has not alleged or that defendants have violated the ... 7 laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council 8 of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). 9 Discussion 10 1. Violation of the Consumer Legal Remedies Act (“CLRA”) (California Civil Code § 1750 et seq.) 11 California’s Consumers Legal Remedies Act (“CLRA”) establishes a non-exclusive statutory 12 remedy for unfair methods of competition and unfair or deceptive acts or practices undertaken by any 13 person in a transaction intended to result or which results in the sale or lease of goods or services to any 14 consumer. McAdams v. Monier, Inc., 151 Cal.App.4th 674 (2007). Any consumer who suffers any 15 damage as a result of the use or employment by any person of a method, act, or practice declared to be 16 unlawful by section 1770 of California's Civil Code, may bring an action against that person to recover 17 actual damages, injunctive relief, restitution of property, punitive damages, and any other relief the court 18 deems proper. See id. (citing Cal. Civ.Code § 1780(a)). 19 In the FAC, Plaintiffs allege that Defendant violated the CLRA by fraudulently inducing 20 Plaintiffs into downloading and installing iOS4 on their Third Generation iPhone devices knowing that 21 the free upgrade would impair the functionality of their iPhone applications reliant upon AT&T’s data 22 network. (Doc. No. 1, at ¶42). However, this Court finds that Plaintiffs fail to state a claim under the 23 CLRA, because the free download of iOS4 on Plaintiffs’ Third Generation iPhone does not meet the 24 CLRA’s “sale or lease” requirement. Although the CLRA does not require an enforceable contract 25 between the consumer and the defendant (citations omitted), the transaction must result or be intended to 26 result in the “sale or lease” of goods or services to a consumer. See McAdams, 151 Cal.App.4th 674 27 (2007). Here, the Plaintiffs’ original purchase of the iPhone is a separate transaction from their free 28 3 3:11-CV-0034 AJB (NLS) 1 upgrade of the iPhone’s operating system, which occurred about a year later. The iPhone’s software 2 upgrade was not intended to result in a “sale or lease” because it was provided free of charge. 3 Furthermore, California law does not support Plaintiff’s contention that software is a tangible 4 good or service for the purposes of the CLRA. In Ferrington v. McAfee, Inc., 10-CV-01455-LHK, 2010 5 WL 3910169 (N.D. Cal. Oct. 5, 2010), the court discussed the application of the CLRA to a license for 6 the use of software and concluded that the CLRA expressly limits the definition of “goods” to “tangible 7 chattels,” which exclude software from the Acts coverage. (citing Berry v. American Exp. Publishing, 8 Inc., 147 Cal.App.4th 224, 229, 54 Cal.Rptr.3d 91 (Cal.Ct.App.2007)). Additionally, the court found 9 that software is not a “service” for the purpose of the CLRA because software does not fit into the 10 narrow definition of “service” provided in Civil Code § 1761(b), defining service as “work, labor, and 11 services . . ., including services furnished in connection with the sale or repair of goods.” This Court will 12 not impose a more liberal interpretation of the Act than the one authorized by the plain meaning of the 13 Act, and, thus holds the CLRA inapplicable to the transaction at hand. In accord with the Defendant’s 14 limited warranty representations made in the software license, this Court grants Defendant’s motion to 15 dismiss Plaintiff’s CLRA claims, without leave to amend. 16 2. Unfair and Deceptive Business Practices in Violation of the Unfair Competition Law (“UCL”) 17 (Bus. & Prof. Code § 17200, et seq.) 18 Plaintiff’s claim based on violations of the Unfair Competition Law (“UCL”) also fails because 19 it is based on violations of the CLRA. (Doc. 1 ¶51). The only remedies available under the CLRA are 20 restitution and injunctive relief and both are inapplicable here. Pfizer Inc. v. Superior Court, 182 Cal. 21 App. 4th 622, 631 (2010). Case law is clear that the loss of use and loss of value of Plaintiffs’ iPhones 22 are not recoverable as restitution because they provide no corresponding gain to a defendant. Kwikset 23 Corp. v. Superior Court, 51 Cal. 4th 310, 336 (2011). Injunctive relief is inappropriate as well because 24 the Defendant remedied the software defect on September 8, 2010, when it released a patch through 25 iOS4.1. (Doc. 1 ¶43) Accordingly, Defendant’s motion to dismiss Plaintiff’s UCL claim is hereby 26 GRANTED, without leave to amend. 27 3. False and Deceptive Advertising in Violation of Bus. & Prof. Code § 17500, et seq. 28 4 3:11-CV-0034 AJB (NLS) 1 Plaintiffs’ third cause of action fails for the same reason as Plaintiff’s second cause of action: 2 Plaintiffs have failed to demonstrate that either restitution or injunctive relief, the only remedies 3 available under the statute, apply here against the Defendant. Under the standard set forth in Madrid v. 4 Perot Systems Corporation, 130 Cal. App. 4th 440 (2005), a court must dismiss a cause of action that 5 fails to present a viable claim for restitution or injunctive relief. Furthermore, Plaintiff has failed to 6 plead any particular facts showing Defendant’s affirmations that iOS4 is fully compatible and does not 7 impair speed or functionality of third generation iPhone devices as required by federal pleading 8 standards. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555(2007). Accordingly, Defendant’s motion 9 to dismiss Plaintiffs’ third claim is hereby GRANTED, with leave to amend. 10 11 4. Tortious Interference with Contract The Court finds that Plaintiffs’ have failed to plead specific facts showing that the Defendant 12 either knew of, or intended to, interfere with Plaintiffs’ ATTM contracts, thus failing to satisfy 13 Twombly’s federal pleading requirements. 550 U.S. 544, 555(2007). The Plaintiffs make only 14 conclusory allegations that Apple’s purported actions interfered with ATTM’s ability to fulfill its 15 obligations under ATTM and plaintiffs’ wireless contracts (FAC¶ 69), but they do not identify the 16 specific obligations that were breached, as required by Twombly, Iqbal, and Rule 9(b).2 Moreover, 17 because plaintiffs have failed to identify any specific obligations, they have not provided any facts 18 demonstrating that Apple was 19 aware of the obligations in question or that it intended to prevent those obligations from being fulfilled. 20 Davis v. Nadrich, 174 Cal. App. 4th 1, 10-11 (2009) (interference claim failed because plaintiff did not 21 provide any facts demonstrating that defendant was sufficiently aware of the terms of the contract to 22 form a specific intent to harm it). 23 The Court finds that Plaintiffs’ have also failed to allege in what way their ATTM contracts were 24 25 26 27 28 See Harford Life Ins. Co. v. Banks, No. 08cv1279 WQH (LSP), 2009 U.S. Dist. LEXIS 25552, at *16-17 (S.D. Cal. Mar. 25, 2009) (dismissing interference with contract claim because plaintiff failed to allege facts describing the contractual relationship); Yanik v. Countrywide Home Loans, Inc., No. CV 10-6268 CAS (RZx), 2010 U.S. Dist. LEXIS 115717, at *16 (C.D. Cal. Oct. 18, 2010) (same). 2 5 3:11-CV-0034 AJB (NLS) 1 breached. Nowhere in the FAC do Plaintiffs claim that ATTM failed to provide wireless services. 2 Rather, the core of Plaintiffs’ claim is that iOS 4.0 allegedly degraded the operability of their handset.3 3 However, Plaintiffs cannot allege that ATTM guaranteed the operability of phones used on its network, 4 and therefore, these allegations do not establish a breach of contract. Without a breach, plaintiffs have 5 no claim for interference with their ATTM contracts.4 Based upon the foregoing, the Defendant’s 6 motion to dismiss Plaintiffs’ fourth claim is hereby GRANTED, with leave to amend. 7 5. Breach of Implied/Equitable Contract 8 9 The Plaintiffs’ fifth cause of action for breach of an implied/equitable contract is precluded by the express terms of the software license agreement. California law is clear that where, as here, there is 10 an express contract that governs the same subject matter as an implied contract, the express contract 11 governs.5 Even if Plaintiffs were to plead sufficient facts demonstrating the existence of an implied 12 contract, which they have not,6 these facts fall within the scope of the software operability, which is 13 governed by the download license agreement. Accordingly, Defendant’s motion to dismiss is hereby 14 GRANTED, with leave to amend, to the extent there is some other subject matter outside the scope of 15 the download license agreement that forms the basis for a claim of this type . 16 17 18 19 20 21 22 23 24 25 26 27 28 Conclusion For the reasons set forth above, Defendant’s motion to dismiss, [Doc. No. 8], and request for judicial notice are hereby GRANTED and Plaintiffs’ FAC is DISMISSED. If Plaintiffs wish to amend (See, e.g., FAC ¶ 18 (alleging that after downloading iOS 4.0, “the operability of the device” was significantly degraded and the device was no longer reliable.)) 3 Davis, 174 Cal. App. 4th at 10 (dismissing interference with contract claim where plaintiff failed to demonstrate that the actions allegedly induced by defendants breached plaintiff’s contract). 4 Berkla v. Corel Corp., 302 F.3d 909, 918 (9th Cir. 2002) (“There cannot be a valid, express contract and an implied contract, each embracing the same subject matter, existing at the same time.”) (quoting Wal-Noon Corp. v. Hill, 45 Cal. App. 3d 605, 613 (1975)); Metoyer v. Chassman, 504 F.3d 919, 936-37 (9th Cir. 2007) (same) (citing Halvorsen v. Aramark Uniform Servs., Inc., 65 Cal. App. 4th 1383, 1388 (1998)). 5 “A complaint alleging a cause of action for breach of implied contract must state the facts, such as a practice or course of conduct, from which the promise is implied.” Goodrich & Pennington Mortg. Fund, Inc. v. Chase Manhattan Mortg. Corp., No. 05-CV-636-L (POR), 2007 U.S. Dist. LEXIS 8307, at *8 (S.D. Cal. Feb. 5, 2007); see also Connors v. Home Loan Corp., No. 08cv1134 L (LSP), 2009 U.S. Dist. LEXIS 48638, at *17-18 (S.D. Cal. June 9, 2009) (plaintiff “failed to plead any facts that might constitute an agreement or meeting of the minds between [the] two parties, and thus [could] not establish an implied contract”). 6 6 3:11-CV-0034 AJB (NLS) 1 // 2 // 3 // 4 // 5 the dismissed claims, they must file a Second Amended Complaint within thirty (30) days of the date 6 this Order. 7 IT IS SO ORDERED. 8 9 10 11 DATED: November 8, 2011 Hon. Anthony J. Battaglia U.S. District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 3:11-CV-0034 AJB (NLS)
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