Williamson v. Apple, Inc., No. 5:2011cv00377 - Document 37 (N.D. Cal. 2012)
Court Description: ORDER granting 25 Motion to Dismiss. Any amended complaint must be filed within 21 days of the date of this order. The court schedules this case for a Case Management Conference on 11/9/2012 at 10:00 a.m. The parties shall file an updated Joint Case Management Statement on or before 11/2/2012. Signed by Judge Edward J. Davila on 9/4/2012. (ejdlc1, COURT STAFF) (Filed on 9/4/2012)
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Williamson v. Apple, Inc. Doc. 37 1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE NORTHERN DISTRICT OF CALIFORNIA 9 SAN JOSE DIVISION CASE NO. 5:11-cv-00377 EJD BETSALEL WILLIAMSON, individually and on behalf of all others similarly situated, 11 For the Northern District of California United States District Court 10 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 12 Plaintiff(s), v. 13 [Docket Item No(s). 25] APPLE, INC., 14 15 Defendant(s). / 16 17 Defendant Apple, Inc. (“Apple”) presently moves for an order dismissing the First Amended 18 Class Action Complaint (“FAC”) filed by Plaintiff Betsalel Williamson (“Plaintiff”). See Docket 19 Item No. 25. Apple’s motion will be granted for the reasons stated below. 20 I. FACTUAL BACKGROUND 21 A. 22 Among other products, Apple designs, manufactures and markets smartphones. See FAC, The Product 23 Docket Item No. 18, at ¶¶ 5, 6. On June 7, 2010, Apple introduced a new product in its iPhone 24 smartphone line, the iPhone 4, at the World Wide Developers Conference (“WWDC”) in San 25 Francisco. See id., at ¶¶ 7, 8. The iPhone 4 is 3.5 inches long, weighs 4.8 ounces, and is encased in 26 aluminosilicate glass. See id., at ¶ 8. The glass feature of the iPhone 4 differed from its predecessor 27 versions, which had back panels made of aluminum and plastic. See id., at ¶ 7. 28 Apple made available on its website a video of the iPhone 4's introduction. See id., at ¶ 8. 1 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS Dockets.Justia.com 1 The FAC alleges that during this introduction, Steve Jobs (“Jobs”), the former CEO of Apple, made 2 a number of statements describing the iPhone 4: 3 • 4 5 we’ve ever made.” • 6 7 Jobs says it is “beyond a doubt this is one of the most beautiful and precise things Jobs goes on to state that the “precision of which this is made is beyond any consumer product we’ve ever seen.” • 8 Jobs “called attention” to the glass paneling on the iPhone 4, stating that Apple utilized glass on the “front and back for optical quality and scratch resistance.” referred to the iPhone 4's glass housing as “comparable in strength to sapphire crystal” and 30 times 11 For the Northern District of California The FAC also alleges that Jonathan Ive, Apple’s Senior Vice President of Industrial Design, 10 United States District Court 9 harder than plastic at the WWDC. See id., at ¶ 9. A video demonstration of the glass’ strength, 12 where a portion of the glass used on the iPhone 4 was bent to show that it can withstand bending of 13 up to 30 degrees without cracking or breaking, was also included on Apple’s website and widely 14 reported by the media. See id. 15 According to the FAC, Apple has used the strength of the iPhone 4's glass housing as a 16 marketing point. See id., at ¶ 10. Apple has described the glass as “the same type of glass used in 17 the windshields of helicopters and high-speed trains.” See id. Apple also markets the glass as “20 18 times stiffer and 30 times harder than plastic . . . ultradurable and more scratch resistant than ever.” 19 See id. Apple produced commercials available on national television and its own website showing 20 the iPhone 4 being used without a protective cover. See id., at ¶ 11. 21 2. 22 The FAC alleges that within the first week of its release for sale, consumers and technology The Alleged Defect 23 critics began to comment that the iPhone 4's glass housing was quickly scarred and broken by 24 normal, foreseeable use despite Apple’s representations that the glass was ultradurable. See id., at 25 ¶¶ 14-17. A third-party phone insurer released a study finding that the glass housing on the iPhone 4 26 breaks at rate 82% higher than those reported for a prior version of the iPhone. See id., at ¶ 26. 27 Broken or shattered glass renders the iPhone 4 useless. See id., at ¶ 19. 28 Consumers who purchased the iPhone 4 were charged $199 to replace the product if the glass 2 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 housing was broken or $29 to replace a cracked glass panel. See id., at ¶ 33. Plaintiff contends 2 these charges are a breach of the warranty Apple issues with the iPhone 4. See id., at ¶ 40. 3 3. 4 Plaintiff purchased an iPhone 4 on October 26, 2010, for $319.93, after viewing various The Plaintiff in this Case 5 marketing materials describing the strength and durability of the device, including those attributed to 6 Jobs as described above. See id., at ¶ 4. These marketing materials influenced Plaintiff’s decision to 7 purchase the iPhone 4. See id. 8 Approximately two days after purchasing his iPhone 4, Plaintiff’s device fell from the arm of 9 a chair which resulted in spider cracks across the back glass panel. See id. Plaintiff was required to 11 For the Northern District of California United States District Court 10 pay $29 for a replacement panel. See id. Plaintiff alleges he would not have purchased the iPhone 4 if he knew that the glass housing 12 on the phone was more susceptible to cracking during normal and foreseeable usage than earlier 13 iPhone versions. See id. He now seeks to represent a class of consumers who purchased an iPhone 14 4 in the United States. 15 16 II. LEGAL STANDARD The legal standard governing Apple’s motion is well-established and involves three common 17 rules of procedure. The first is Federal Rule of Civil Procedure 8(a), which requires a plaintiff to 18 plead each claim with sufficient specificity to “give the defendant fair notice of what the . . . claim is 19 and the grounds upon which it rests.” Bell Atlantic Com. v. Twombly, 550 U.S. 544, (2007) 20 (internal quotations omitted). Rule 8 works in tandem with the next applicable rule, Federal Rule of 21 Civil Procedure 12(b)(6). A complaint which falls short of the Rule 8(a) standard may be dismissed 22 if it fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). “Dismissal 23 under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or 24 sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 25 F.3d 1097, 1104 (9th Cir. 2008). The factual allegations “must be enough to raise a right to relief 26 above the speculative level” such that the claim “is plausible on its face.” Twombly, 550 U.S. at 27 556-57. 28 The third relevant rule requires more detailed allegations for causes of action based in fraud. 3 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 “In alleging fraud or mistake, a party must state with particularity the circumstances constituting 2 fraud or mistake.” Fed. R. Civ. Proc. 9(b). These allegations must be “specific enough to give 3 defendants notice of the particular misconduct which is alleged to constitute the fraud charged so 4 that they can defend against the charge and not just deny that they have done anything wrong.” 5 Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). To that end, the allegations must contain 6 “an account of the time, place, and specific content of the false representations as well as the 7 identities of the parties to the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th 8 Cir. 2007). In other words, claims of fraudulent conduct must generally contain more specific facts 9 than is necessary to support other causes of action. Mechanically speaking, the court generally “may not consider any material beyond the 11 For the Northern District of California United States District Court 10 pleadings” when deciding whether to grant a motion to dismiss. Hal Roach Studios, Inc. v. Richard 12 Feiner & Co., 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990). The court must generally accept as true all 13 “well-pleaded factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1950 (2009). 14 The court must also construe the alleged facts in the light most favorable to the plaintiff. Love v. 15 United States, 915 F.2d 1242, 1245 (9th Cir. 1988). There are notable exceptions to these 16 guidelines, however. The court may consider material submitted as part of the complaint or relied 17 upon in the complaint, and may also consider material subject to judicial notice. See Lee v. Citv of 18 Los Angeles, 250 F.3d 668, 688-69 (9th Cir. 2001).1 In addition, “courts are not bound to accept as 19 true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555. 20 III. 21 DISCUSSION The FAC contains seven causes of action: (1) breach of express warranty in violation of 22 California Commercial Code § 2313; (2) breach of implied warranty in violation of California 23 Commercial Code § 2314; (3) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et. 24 seq.; (4) violation of the Consumers Legal Remedies Act (“CLRA”), California Business and 25 Professions Code § 1750 et. seq.; (5) violation of California’s False Advertising Law (“FAL”), 26 California Business and Professions Code § 17500; (5) violation of California’s Unfair Competition 27 28 1 Plaintiff’s Request for Judicial Notice (Docket Item No. 27) is DENIED as the court finds the information contained therein irrelevant to this determination. 4 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 Law (“UCL”), California Business and Professions Code § 17200, and (6) common law unjust 2 enrichment. The court addresses each of cause of action in turn, beginning with the CLRA. 3 A. 4 The CLRA makes unlawful “unfair methods of competition and unfair or deceptive acts or CLRA 103408, at *47, 2009 WL 3740648 (N.D. Cal. Nov. 6, 2009). In particular, the CLRA prohibits a 7 person from “[r]epresenting that goods or services have sponsorship, approval, characteristics, 8 ingredients, uses, benefits, or quantities which they do not have,” “[r]epresenting that goods or 9 services are of a particular standard, quality, or grade . . . if they are of another,” or “[a]dvertising 10 goods or services with intent not to sell them as advertised.” Cal. Civ. Code §§ 1770(a)(5), (a)(7), 11 For the Northern District of California practices.” Cal. Civ. Code § 1770(a); In re Actimmune Marketing Litig., 2009 U.S. Dist. LEXIS 6 United States District Court 5 (a)(9). “The CLRA is interpreted liberally ‘to promote its underlying purposes, which are to protect 12 consumers against unfair and deceptive business practices and to provide efficient and economical 13 procedures to secure such protection.’” Buckland v. Threshold Enters., Ltd., 155 Cal. App. 4th 798, 14 809 (2007), overruled on other grounds by Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310 (2011) 15 (quoting Cal. Civ. Code § 1760). 16 Conduct that is “likely to mislead a reasonable consumer” violates the CLRA. Keegan v. 17 Am. Honda Motor Co., Inc., 2012 U.S. Dist. LEXIS 3007, at *938, 2012 WL 75443 (C.D. Cal. Jan. 18 6, 2012) (quoting Colgan v. Leatherman Tool Group, Inc., 135 Cal. App. 4th 663, 680 (2006)). “A 19 ‘reasonable consumer’ is ‘the ordinary consumer acting reasonably under the circumstances,’ who 20 ‘is not versed in the art of inspecting and judging a product, [or] in the process of its preparation or 21 manufacture. . . .’” Id. (quoting Colgan, 135 Cal. App. 4th at 680). “The CLRA proscribes both 22 active misrepresentations about the standard, quality, or grade of goods, as well as active 23 concealment related to the characteristics or quality of goods that are contrary to what has been 24 represented about the goods.” Morgan v. Harmonix Music Sys., No. C08-5211 BZ, 2009 U.S. Dist. 25 LEXIS 57528, at *9, 2009 WL 2031765 (N.D. Cal. July 7, 2009). 26 “Any consumer who suffers any damage as a result of the use or employment by any person 27 of” the unlawful activity may bring an action under this section. Cal. Civ. Code, § 1780(a). But like 28 its common law counterpart, a plaintiff asserting a CLRA claim which sounds in fraud must 5 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 2 establish reliance and causation. Buckland, 155 Cal. App. 4th at 809. The essence of Plaintiff’s allegations under the CLRA center on the statements of Apple 3 employees as well as the marketing materials used to advertise the iPhone 4. Plaintiff contends that 4 through these statements and materials, Apple knowingly misrepresented the characteristics of the 5 phone’s glass housing and failed to disclose any defects in the glass. In response, Apple argues that 6 (1) Plaintiff failed to allege that the damages to his phone was caused by Apple; (2) Plaintiff failed 7 to allege an actionable misrepresentation; and (3) Plaintiff failed to identify and allege an actionable 8 omission. 9 Causation Without doubt, the CLRA cause of action asserted by Plaintiff here is one which sounds in 11 For the Northern District of California United States District Court 10 1. fraud, and the parties do not appear to disagree on this characterization. To succeed, Plaintiff must 12 therefore allege that Apple’s misrepresentations and omissions caused him damage and must meet 13 the heightened pleading standard required by Federal Rule of Civil Procedure 9. Apple argues 14 Plaintiff failed to do this in the FAC because the FAC does not attribute the damage to Plaintiff’s 15 phone to Apple. Instead, Apple contends that any damage to Plaintiff’s phone was caused by 16 Plaintiff’s own carelessness when the phone dropped from the arm of a chair. 17 In making this argument, Apple mischaracterizes Plaintiff’s theory of liability. The FAC 18 does not allege or even suggest that Apple caused the phone to fall from the chair because such an 19 assertion would be absurd. That type of claim would require a fanciful concoction of allegations, 20 perhaps detailing a scheme by Apple employees to surreptitiously enter Plaintiff’s home in order to 21 push Plaintiff’s new iPhone 4 from its resting place atop a piece of furniture while Plaintiff was not 22 looking. 23 The theory presented here is not so unbelievable. Plaintiff, like many other CLRA plaintiffs, 24 contends that misrepresentations and omissions concerning the quality of the product caused him to 25 purchase something he would not have purchased had he been presented different information. See, 26 e.g., Henderson v. Gruma Corp., No. CV 10-04173 AHM (AJWx), 2011 U.S. Dist. LEXIS 41077, 27 2011 WL 1362188 (C.D. Cal. Apr. 11, 2011). In this case the product is Plaintiff’s iPhone 4, and it 28 took the fall from the chair for Plaintiff to realize that he may have been misled about the quality of 6 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 its glass housing. Thus, the damage at issue is the economic loss from Plaintiff’s purchase that he 2 may not have otherwise made, not the actual physical damage to Plaintiff’s phone that resulted from 3 its impact with the floor. 4 As far as causation goes, Plaintiff alleges that the marketing materials he reviewed 5 influenced his decision to purchase the iPhone 4, and that he would have acted differently under 6 other circumstances. The court therefore rejects Apple’s causation argument, which focuses too 7 narrowly on the fall from the chair. 8 9 2. Actionable Misrepresentation In a second attack on the CLRA claim, Apple argues that the misrepresentations identified in the FAC are either statements of fact not alleged to be false or non-actionable puffery. The court 11 For the Northern District of California United States District Court 10 begins this portion of the discussion by addressing each of the cited statements separately. 12 Apple is correct that the statements attributed to Jobs are not actionable under the CLRA. The 13 descriptors used by Jobs - that the iPhone 4 is “beautiful,” and “precise” - constitute puffery. 14 “Generalized, vague, and unspecified assertions constitute ‘mere puffery’ upon which a reasonable 15 consumer could not rely, and hence are not actionable.” Oestreicher v. Alienware Corp., 544 F. 16 Supp. 2d 964, 973 (N.D. Cal. 2008) (internal quotation marks and citations omitted), aff’d by 322 17 Fed. Appx. 489 (9th Cir. 2009). Vague or highly subjective claims about product superiority also 18 amount to non-actionable puffery; it is only “misdescriptions of specific or absolute characteristics 19 of a product [that] are actionable.” Id. (quoting Southland Sod Farms v. Stover Seed Co., 108 F.3d 20 1134, 1145 (9th Cir. 1997)). 21 Jobs’ explanation that glass was used “front and back for optical quality and scratch 22 resistance” is no more than a description of the phone. It is not a specific commentary about the 23 iPhone 4's durability, let alone one that is likely to mislead a “reasonable consumer.”2 24 25 26 27 28 2 Plaintiff attempts to escape a determination that these statements are puffery by arguing that “factual assertions are not puffery.” That much is true, but it does not assist Plaintiff here because it is also true that vague assertions are not actionable under the CLRA even if they are purported assertions of fact. See, e.g., Shroyer v. New Cingular Wireless Servs., 622 F.3d 1035, 1043 (9th Cir. 2010) (“‘[A]ll the advantages that only the nation's largest wireless company can provide’ is a vague statement and provides nothing concrete upon which [plaintiff] could reasonably rely.”) Moreover, the “classic example of an actionable representation of fact” cited by Plaintiff is 7 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 Nor does the Ive statement support the CLRA cause of action. Much like the statements 2 from Jobs, Ive’s comparison of the glass to sapphire crystal and the claim that it is “30 times harder 3 than plastic” are not alleged in the FAC to be misdescriptions of the glass used on the iPhone 4, 4 assuming these statements are specific enough so as to escape classification as puffery. The same 5 goes for the video demonstration of the glass’ strength. In any event, Plaintiff does not allege that 6 he specifically relied on the Ive statements or video demonstration in a manner which meets the 7 standard required by Federal Rule of Civil Procedure 9(b). Donohue v. Apple, Inc., No. 11-cv- 8 05337 RMW, 2012 U.S. Dist. LEXIS 65860, at *24, 2012 WL 1657119 (N.D. Cal. May 10, 2012) 9 (citing Baltazar v. Apple, Inc., Case No. CV-10-3231-JF, U.S. Dist. LEXIS 13187, at * 10-11, 2011 11 For the Northern District of California United States District Court 10 WL 588209 (N.D. Cal. Feb. 10, 2011)). The court also rejects Plaintiff’s contention that commercials demonstrating use of the 12 iPhone 4 without a cover equate to some affirmative commentary on the phone’s durability for two 13 primary reasons. First, the allegations describing the commercial depiction are not plead with the 14 specificity mandated by Rule 9(b). See id. 15 Second, without more than what is contained in the FAC, the type of representation 16 described is not actionable under the CLRA. A “reasonable consumer” viewing a commercial 17 showing the iPhone 4 in use as a phone, but without a cover, would not be misled to believe that the 18 iPhone 4 could withstand any particular level of impact if the phone was dropped. This is because 19 the commercial has nothing to do with durability. The FAC does not allege, for example, that any of 20 the television commercials showed a coverless iPhone 4 being dropped on the ground only to 21 emerge unscathed. That type of representation could mislead the reasonable consumer in the way 22 Plaintiff alleges; the commercial alluded to in the FAC would not. Plaintiff, therefore, reads too 23 much into this piece of marketing material. 24 25 26 27 28 inapposite to this case. While there does appear some facial similarly between an auto dealer’s assertion that a windshield is made of shatterproof glass and this action since both do involve glass and the breaking of glass, the similarities end there. In the case underlying the “classic example,” the auto dealer made a specific written representation that the glass windshield would not would not fly or shatter under the hardest impact. Baxter v. Ford Motor Co., 168 Wash. 456, 459-60 (1932). In contrast, Apple is not alleged to have made any similar statement concerning the glass housing on the iPhone 4. 8 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 Relying on Morgan v. AT&T Wireless Services, Inc., 177 Cal. App. 4th 1235 (2009), whole, rather than on any particular representation made by Apple. But the court is not convinced 4 that the marketing described in the FAC can be interpreted in the same manner as that described in 5 Morgan. In Morgan, plaintiffs cited to a combination of “AT&T’s statements that it was committed 6 to providing for all of its customers’ wireless needs ‘today and tomorrow’”, “the fact that it held 7 itself out as the world’s leading provider of wireless communications services,” and the “sale of 8 expensive . . . phones that required service contracts for one, two, or more years” as material that 9 would lead the average consumer to believe that AT&T would maintain a network compatible with 10 the phone they purchased. Morgan, 177 Cal. App. 4th at 1245-46. The Morgan court noted that the 11 For the Northern District of California Plaintiff argues that he is relying on the allegedly misleading nature of Apple’s marketing as a 3 United States District Court 2 plaintiffs’ premise was possible under those circumstances. Id. at 1243, 1256. 12 Here, the representations taken as a whole would not lead the “reasonable consumer” to 13 believe that the glass housing on the iPhone 4 was indestructible or drop-proof because of one 14 important distinction not at issue in Morgan: it is a well-known fact of life that glass can break under 15 impact, even glass that has been reinforced. This much is known to the ordinary, reasonable 16 consumer. The shattered window of a storefront, the cracked windshield of a car, and the chipped 17 smartphone screen are routine encounters of modern existence. It seems a suspension of logic to say 18 that the marketing campaign described in the FAC, which notably has nothing to do with phone- 19 dropping, somehow erases these images from the collective experience such that the reasonable 20 consumer could expect that glass could not break if dropped. 21 22 3. Actionable Omission Omissions are actionable under the CLRA only when the omission is contrary to a 23 representation actually made by the defendant or where a duty to disclose exists. Keegan, 2012 U.S. 24 Dist. LEXIS 3007, at *938. Under California law, a duty to disclose arises in four circumstances: 25 “(1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had 26 exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively 27 conceals a material fact from plaintiff; or (4) when the defendant makes partial representations but 28 also suppresses some material facts.” Id. (quoting Smith v. Ford Motor Co., 749 F. Supp. 2d 980, 9 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 2 987 (N.D. Cal. 2010)). Here, Plaintiff asserts the following omissions in the FAC: (1) “Apple failed to disclose and 3 concealed from Plaintiff and Class members that normal use of the iPhone 4, including use as 4 advertised, would result in cracked glass housing such that the device would not longer be 5 functional,” and (2) “[n]ormal wear and tear can easily render the device inoperable and a safety risk 6 to the consumer. This information was not disclosed to the consumer.” See FAC, at ¶¶ 22, 23. The 7 problem with these allegations is that they do not constitute actionable omissions when construed 8 with the representations actually attributed to Apple. No where in the FAC is Apple alleged to have 9 stated that the iPhone 4 was resistant to normal wear and tear, that the glass housing would never break or crack under normal use, or that the phone might not be damaged if it was dropped. As 11 For the Northern District of California United States District Court 10 already pointed out, phone-dropping is not alleged to have been depicted anywhere in the marketing 12 material. The alleged omissions, then, are not contrary to any of Apple’s actual representations. 13 Moreover, Plaintiff has not sufficiently plead facts supporting a duty to disclose on the part 14 of Apple because Plaintiff does not allege what was actually known to Apple in anything less than a 15 conclusory fashion. Alleged reports by unidentified consumers which neither reveals the timing of 16 the reporting, who the reporting was made to, nor the specific content of the reporting is not 17 consistent with Plaintiff’s obligation to plead specific facts under Rule 9. See FAC, at ¶ 17. 18 Similarly, the allegation that, “[a]ccording to sources inside and outside Apple,” the company began 19 working to correct the defect in the glass also fails under Rule 9. See FAC, at ¶ 29. The studies and 20 internet articles which apparently discuss defects in the iPhone 4's glass housing fare no better 21 because they do not create a duty disclose without an allegation explaining how or why Apple was 22 aware of these items. See Kent v. Hewlett-Packard Co., No. 09-5341 JF (PVT), 2010 U.S. Dist. 23 LEXIS 76818, at *23-24, 2010 WL 2681767 (N.D. Cal. July 6, 2010) (citing Oestreicher, 544 F. 24 Supp. 2d at 975 n.9). 25 26 As discussed, Plaintiff has not plead either an actionable misrepresentation or omission. The CLRA claim will be dismissed with leave to amend. 27 B. 28 The FAL makes it unlawful to make or disseminate any statement concerning property or FAL 10 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 services that is “untrue or misleading, and which is known, or which by the exercise of reasonable 2 care should be known, to be untrue or misleading[.]” Cal. Bus. & Prof. Code § 17500. 3 For this cause of action, Plaintiff cites to the same marketing material discussed under the 4 CLRA claim. Specific to the FAL, Plaintiff contends the material is misleading and “likely to 5 deceive a reasonable consumer into believing that the iPhone [4] should be able to sustain the kind 6 of short drop that occurs in the ordinary course of careful usage.” See FAC, at ¶ 89. 7 For much the reasons that the allegations do not presently support liability under the CLRA, 8 they similarly do not support liability under the FAL. Accordingly, the FAL claim will be dismissed 9 with leave to amend. 11 For the Northern District of California United States District Court 10 12 C. Warranty Claims 1. Breach of Express Warranty To prevail on a breach of express warranty claim under California Commercial Code § 2313, 13 “a plaintiff must prove (1) the seller’s statements constitute an ‘affirmation of fact or promise’ 14 [which relates to the goods] or a ‘description of the goods’; (2) the statement was ‘part of the basis 15 of the bargain’; and (3) the warranty was breached.” Weinstat v. Dentsply Int’l, Inc., 180 Cal. App. 16 4th 1213, 1227 (2010) (quoting Keith v. Buchanan, 173 Cal. App. 3d 13, 20 (1985)). 17 Since liability for breach of express warranty sounds in contract, “[a] manufacturer’s liability 18 for breach of an express warranty derives from, and is measured by, the terms of that warranty.” 19 Cipollone v. Liggett Group, 505 U.S. 504, 525 (1992). “The key under [§ 2313] is that the seller’s 20 statements - whether fact or opinion - must become ‘part of the basis of the bargain.”’ Hauter v. 21 Zogarts, 14 Cal. 3d 104, 115 (1975) (quoting Cal. Com. Code § 2313(b)). 22 Here, the language applying the warranty to “the hardware product manufactured by and for 23 Apple” appears to cover the glass encasing the iPhone 4, and Apple does not directly dispute that 24 defects in the glass case may be covered by the warranty under specified circumstances. But that 25 determination notwithstanding, the facts contained in the FAC do not support the ultimate 26 “affirmation of fact or promise” that Plaintiff relies on as a basis for this cause of action. Plaintiff 27 argues in the his opposition that Apple warranted the iPhone 4 to have “damage-resistant glass 28 housing.” But the representation of “damage resistance” appears no where in the FAC. To the 11 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 contrary, the fact that a warranty covering the glass even exists suggests that Apple never made or 2 reasonably could make such a representation. 3 Furthermore, for reasons similar to those discussed in relation to the CLRA claim, the 4 marketing material and statements by Apple employees which are cited in the FAC cannot be 5 legitimately used as a representation that the iPhone 4 was completely damage-resistant, especially 6 when the product at issue contains a component that is inherently breakable, like glass.Under the 7 facts alleged, the marketing material could not become “part of the basis for the bargain” for the 8 purposes of warranty liability. 9 In addition to these shortcomings, this cause of action is also deficiently plead because Plaintiff does not identify the purported defect in the glass housing, other than to simply say that the 11 For the Northern District of California United States District Court 10 glass housing is defective because it broke when Plaintiff’s iPhone 4 was dropped. But again, glass 12 can break when it is dropped. Under these circumstances, Iqbal and Twombly require something 13 more about the purported defect that what has been presented. This cause of action will therefore be 14 dismissed with leave to amend. 15 2. Breach of Implied Warranty and Magnuson-Moss Warranty Act 16 The implied warranty of merchantability, which Plaintiff invokes through this cause of 17 action, provides that a product must be “fit for the ordinary purposes for which such goods are 18 used.” Cal. Com. Code § 2314; see also Hauter, 14 Cal. 3d at 118-19. 19 Plaintiff contends that the iPhone 4 is not fit for its ordinary purpose because the glass 20 housing is not ultradurable. That allegation, however, has nothing to do with the iPhone 4's intended 21 use as a smartphone, which the court safely presumes includes functions like making and receiving 22 calls, sending and receiving text messages, or allowing for the use of mobile applications. Notably, 23 the FAC does not state that Plaintiff’s iPhone 4 was deficient in any of these or other expected 24 phone functions, and it is certainly a stretch to conclude that one “ordinary purpose” of the iPhone 4, 25 or any smartphone for that matter, is to drop it on the ground. Accepting Plaintiff’s theory of 26 liability would mean that the iPhone 4 is not merchantable unless it is completely resistant from 27 accidental breakage or damage. That cannot be. 28 This cause of action is dismissed with leave to amend. Since both warranty claims fail as 12 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 plead and since Plaintiff’s cause of action under the Maguson-Moss Warranty Act is derivative of 2 those claims, that cause of action is also dismissed with leave to amend. 3 D. 4 Under the UCL, there are three varieties of unfair competition: “acts or practices which are UCL 5 unlawful, or unfair, or fraudulent.” Khoury v. Maly’s of California, Inc., 14 Cal. App. 4th 612, 618- 6 19 (1993). “Unlawful” practices are “forbidden by law, be it civil or criminal, federal, state, or 7 municipal, statutory, regulatory, or court-made.” Saunders v. Sup. Ct., 27 Cal. App. 4th 832, 838 8 (1999). “Unfair” practices constitute “conduct that threatens an incipient violation of an antitrust 9 law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.” Cal-Tech 11 For the Northern District of California United States District Court 10 Communications, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 187 (1999). The 12 “fraudulent” prong under the UCL requires a showing of actual or potential deception to some 13 members of the public, or harm to the public interest. See id. at 180; see also McKell v. Wash. Mut., 14 Inc., 142 Cal. App. 4th 1457 (2006); Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir. 1995). The 15 UCL ‘borrows’ violations of other laws and treats them as unfair business practices, and also 16 “makes clear that a practice may be deemed unfair even if not specifically proscribed by some other 17 law.” Cal-Tech, 20 Cal. 4th at 180. 18 Here, Plaintiff bases the cause of action under the UCL on the same allegations as the CLRA 19 cause of action. But the allegations do not support liability under the UCL for the same reasons they 20 do not support liability under the CLRA. 21 Plaintiff’s only allegations under the “unlawful” prong of the UCL relate to violations of the 22 CLRA and the other statutes referenced by Plaintiff. Since the court has determined that each of 23 those purported statutory causes of action fail as presently plead, Plaintiff has also failed to state a 24 claim under this portion of the UCL. 25 Turning to the “unfair” prong, Plaintiff alleges Apple’s practices are unfair because 26 “consumers are led to believe that the iPhone 4 has qualities that it does not” and “are further injured 27 when Apple refuses to replace or repair the defective device.” See FAC, at ¶ 96. However, the 28 court has already explained why reasonable consumers could not be misled by the materials 13 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 described by Plaintiff, and has also indicated why Plaintiff’s claims of defect with the iPhone 4's 2 glass housing are not sufficiently plead. For these same reasons, Plaintiff has not stated a claim 3 under the unfair prong of the UCL. 4 For the fraudulent prong, Plaintiff again makes the same claim he made under the CLRA 5 based on the same facts: that Apple’s “practices are misleading because they are likely to deceive 6 consumers into believing that the iPhone 4 can sustain normal and reasonable use, including the use 7 advertised by Apple, without damaging the front and back panels.” See id., at ¶ 95. But the 8 allegations fail to support liability based on fraudulent business practices under the UCL for the 9 same reasons they do not state a claim under the CLRA. For these reasons, the UCL claim will be dismissed with leave to amend. 11 For the Northern District of California United States District Court 10 E. 12 Apple argues that the cause of action for unjust enrichment must be dismissed because it is 13 not a recognized claim in California. The court agrees. “Courts consistently have held that unjust 14 enrichment is not a proper cause of action under California law.” In re Toyota Motor Corp. 15 Unintended Acceleration Mktg., Sales Practices, & Prods. Liab. Litig., 754 F. Supp. 2d 1145, 1194 16 (C.D. Cal. 2010). “Unjust enrichment is a general principle, underlying various legal doctrines and 17 remedies, rather than a remedy itself.” Melchior v. New Line Prods., Inc., 106 Cal. App. 4th 779, 18 793 (2003). “Simply put, ‘there is no cause of action in California for unjust enrichment.’” In re 19 Toyota Motor Corp., 754 F. Supp. 2d at 1194 (citing Melchior, 106 Cal. App. 4th at 793). Since 20 Plaintiff’s claim for unjust enrichment cannot state a claim for relief, it will be dismissed without 21 leave to amend. 22 23 Unjust Enrichment IV. ORDER Based on the foregoing, Apple’s Motion to Dismiss (Docket Item No. 25) is GRANTED. 24 The cause of action for unjust enrichment is DISMISSED WITHOUT LEAVE TO AMEND. All 25 other causes of action are DISMISSED WITH LEAVE TO AMEND. Any amended complaint must 26 be filed within 21 days of the date of this order. 27 28 14 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 The court schedules this case for a Case Management Conference on November 9, 2012, at 2 10:00 a.m. The parties shall file an updated Joint Case Management Statement on or before 3 November 2, 2012. 4 5 IT IS SO ORDERED. 6 7 Dated: September 4, 2012 EDWARD J. DAVILA United States District Judge 8 9 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 CASE NO. 5:11-cv-00377 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS
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