Order On Motion To Dismiss

Case 4:19-cv-02455-JST Document 62 Filed 01/30/20 Page 1 of 29
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
7 LISA TABAK, et al., Case No. 19-cv-02455-JST

Plaintiffs,
8
ORDER GRANTING IN PART AND
v. DENYING IN PART MOTION TO
9
DISMISS
10 APPLE, INC.,
Re: ECF No. 37
Defendant.
11
12
Northern District of California
United States District Court
13 In this proposed class action asserting consumer-protection and breach-of-warranty claims
14 against Apple Inc. based on an alleged audio defect in the iPhone 7 and iPhone 7 Plus, Apple
15 moves to dismiss all claims in the First Amended Class Action Complaint (“FAC”). Plaintiffs1
16 oppose the motion. The Court will grant the motion in part and deny it in part.
17 I. BACKGROUND
18 For the purpose of deciding this motion, the Court accepts as true the following factual
19 allegations from the FAC.
20 Apple designs, manufactures, markets, and sells the iPhone 7 and the iPhone 7 Plus
21 (“devices at issue”), which it released on September 16, 2016. FAC ¶ 64. The devices at issue
22 suffer from “a material Audio IC Defect” (“the audio defect”), which allegedly affects the
23 functionality of the devices’ audio system, results in poor sound, and prevents users from making
24 phone calls and using the devices’ voice features, such as the Siri application. Id. ¶¶ 70-71, 75-76.
25
26
27 1
Plaintiffs are Lisa Tabak, De’Jhontai Banks, David Danon, Brianna Castelli, Matthew White,
28 Kelly Camelo-Cenicola, and Nestor Trujillo.
1 The audio defect is caused by the devices’ external casing and the location of the audio IC
2 chip on their logic board. The devices’ external casing is insufficient and inadequate to protect the
3 internal parts, including the audio IC chip, because it is “manufactured from substandard materials
4 that are neither appropriate nor durable enough for the ordinary and expected use of the iPhone.”
5 Id. ¶¶ 71-73. The audio defect can be repaired by trained technicians by using a thin copper wire
6 soldered from the audio IC chip to the logic board. Id. ¶ 81.
7 Apple is aware, or should have been aware, of the audio defect because (1) consumers
8 have posted complaints and descriptions of the defect on Apple’s website and other websites since
9 December 2016; (2) consumers have communicated with Apple or its agents about issues caused
10 by the defect; (3) Apple conducts pre-release testing on the devices; (4) Apple distributed an
11 internal document to authorized service providers that acknowledged the defect; (5) the iPhone 6
12 and iPhone 6 Plus suffered from an issue that was caused by similar problems with the housing of
13 the devices; (6) there has been media coverage regarding the defect; and (7) Apple had, for a short
14 period of time in 2018, a non-publicized program for repairing devices that exhibited symptoms of
15 the defect. Id. ¶¶ 82-96, 103-107.
16 Apple has not communicated with consumers about the defect. Id. ¶ 98. Consumers have
17 not had access to information about the defect and therefore have relied on Apple’s
18 “representations and warranties regarding the quality, durability, and other material characteristics
19 of the iPhones,” presumably in deciding whether to purchase the devices. Id. ¶ 101. Consumers
20 of the devices at issue have incurred and continue to incur expenses to diagnose and repair the
21 defect. Id. ¶ 100.
22 Apple’s advertisements for the devices at issue state that their sound is louder and of a
23 higher quality than that in prior versions of the iPhone. Id. ¶¶ 72, 74. The FAC lacks allegations
24 as to when, where, or how these advertisements were disseminated, or which consumers or named
25 plaintiffs, if any, were exposed to or relied on them.
26 The devices at issue are subject to an express warranty (“Limited Warranty”). FAC ¶ 120
27 (alleging that “Apple offers the following one-year warranty when a consumer purchases an
28 iPhone 7 or iPhone 7 Plus”). This warranty states, in the first paragraph:

2
IMPORTANT: BY USING YOUR iPHONE, iPAD, iPOD or APPLE TV

1 PRODUCT YOU ARE AGREEING TO BE BOUND BY THE TERMS OF THE
APPLE ONE (1) YEAR LIMITED WARRANTY (‘WARRANTY’) AS SET
2 OUT BELOW. DO NOT USE YOUR PRODUCT UNTIL YOU HAVE READ
THE TERMS OF THE WARRANTY. IF YOU DO NOT AGREE TO THE
3 TERMS OF THE WARRANTY, DO NOT USE THE PRODUCT AND
RETURN IT WITHIN THE RETURN PERIOD STATED IN APPLEʼS RETURN
4 POLICY (FOUND AT www.apple.com/legal/sales_policies/) TO THE
APPLE OWNED RETAIL STORE OR THE AUTHORIZED DISTRIBUTOR
5 WHERE YOU PURCHASED IT FOR A REFUND.
6 Amezcua Decl., Ex. A-C; ECF No. 37-2 at 2; ECF No. 37-3 at 2-3; ECF No. 37-4 at 2-3.2
7 The first page of the Limited Warranty contains the following disclaimer:
8 TO THE EXTENT PERMITTED BY LAW, THIS WARRANTY AND THE

REMEDIES SET FORTH ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
9 WARRANTIES, REMEDIES AND CONDITIONS, WHETHER ORAL,
WRITTEN, STATUTORY, EXPRESS OR IMPLIED. APPLE DISCLAIMS ALL
10 STATUTORY AND IMPLIED WARRANTIES, INCLUDING WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
11 A PARTICULAR PURPOSE AND WARRANTIES AGAINST HIDDEN OR
LATENT DEFECTS, TO THE EXTENT PERMITTED BY LAW. IN SO FAR
12 AS SUCH WARRANTIES CANNOT BE DISCLAIMED, APPLE LIMITS THE
DURATION AND REMEDIES OF SUCH WARRANTIES TO THE DURATION

13 OF THIS EXPRESS WARRANTY AND, AT APPLE’S OPTION, THE REPAIR
OR REPLACEMENT SERVICES DESCRIBED BELOW.
14
15 Id.
16 The Limited Warranty also contains a one-year limitation for defects in “materials
17 and workmanship,” as follows:
18 Apple Inc. of One Infinite Loop, Cupertino, California, U.S.A. 95014 (‘Apple’)
warrants the Apple-branded iPhone, iPad, iPod or Apple TV hardware product and
19 the Apple-branded accessories contained in the original packaging (‘Apple
20
2
21 Apple requests that the Court consider various versions of the Limited Warranty, as well as the
“safety information” portion of the “user guide” referenced in the Limited Warranty, on the
22 grounds that these materials are incorporated by reference in the FAC and that they are subject to
judicial notice under Federal Rule of Evidence 201 because they are available on Apple’s website.
23 See Request for Judicial Notice, ECF No. 38 at 3-4; see also Amezcua Decl., Ex. A, ECF No. 37-2
(limited warranty operative from February 4, 2016, to August 26, 2016); Amezcua Decl., Ex. B,
24 ECF No. 37-3 (limited warranty operative from August 27, 2016, to July 12, 2018); Amezcua
Decl., Ex. C, ECF No. 37-4 (limited warranty operative from July 13, 2018, to the present);
25 Amezcua Decl., Ex. D, ECF No. 37-5 (user guide excerpt). Plaintiffs do not oppose this request,
or otherwise contest the relevance or authenticity of the materials in question. The Court will
26 consider these materials under the incorporation-by-reference doctrine because the FAC refers to
the contents of these documents. See FAC ¶ 102; see also Coto Settlement v. Eisenberg, 593 F.3d
27 1031, 1038 (9th Cir. 2010) (noting that the “doctrine of incorporation by reference” permits a
court to consider documents where “the contents of the document are alleged in a complaint”).
28 Apple’s request for judicial notice is denied as moot.
3
Product’) against defects in materials and workmanship when used normally in

1 accordance with Apple’s published guidelines for a period of ONE (1) YEAR from
the date of original retail purchase by the end-user purchaser (‘Warranty Period’).
2 Apple’s published guidelines include but are not limited to information contained in
technical specifications, user manuals and service communications.
3
4 FAC ¶ 102; ECF No. ECF No. 37-2 at 2; ECF No. 37-3 at 2-3; ECF No. 37-4 at 2-3.
5 The Limited Warranty sets forth the following remedies and terms regarding any
6 replacement parts or products:
7 If during the Warranty Period you submit a claim to Apple or an AASP in

accordance with this warranty, Apple will, at its option:
8
(i) repair the Apple Product using new or previously used parts that are
9 equivalent to new in performance and reliability,
10 (ii) replace the Apple Product with the same model (or with your consent a
product that has similar functionality) formed from new and/or previously
11 used parts that are equivalent to new in performance and reliability, or
12 (iii) exchange the Apple Product for a refund of your purchase price.
13 Apple may request that you replace certain user-installable parts or Apple Products.
A replacement part or Apple Product, including a user-installable part that has been
14 installed in accordance with instructions provided by Apple, assumes the remaining
term of the Warranty or ninety (90) days from the date of replacement or repair,
15 whichever provides longer coverage for you.
16 ECF No. 37-2 at 4; ECF No. 37-3 at 4; ECF No. 37-4 at 4.
17 Plaintiffs are purchasers of the devices at issue. They experienced various problems with
18 their devices’ audio features as a result of the audio defect. They allege that, if they had known
19 about the audio defect, they would have not purchased the devices at issue or would have paid less
20 for them. FAC ¶ 101.
21 Plaintiffs assert the following claims against Apple on their own behalf and on behalf of a
22 proposed nationwide class of purchasers of the devices at issue or, alternatively, on behalf of
23 statewide sub-classes: (1) breach of express warranty; (2) breach of implied warranty; (3) breach
24 of warranty under the Magnuson-Moss Warranty Act; (4) violation of the Song-Beverly Consumer
25 Warranty Act, Cal. Civ. Code § 1790; (5) violation of the California Consumer Legal Remedies
26 Act (“CLRA”), Cal. Civ. Code § 1750; (6) violation of the California Unfair Competition Law
27 (“UCL”), Cal. Bus. & Prof. Code § 17200; (7) violation of the California False Advertising Law
28
4
1 (“FAL”), Cal. Bus. & Prof. Code § 17500; (8) violation of the Illinois Consumer Fraud and
2 Deceptive Practices Act (“ICFDPA”), 815 Ill. Comp. Stat. § 505/1; (9) violation of the Illinois
3 Uniform Deceptive Trade Practices Act (“IUDTPA”), 815 Ill. Comp. Stat. § 510/1; (10) violation
4 of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Fla. Stat. § 501.201; (11)
5 violation of New York Gen. Bus. Law for Unfair and Deceptive Trade Practices, N.Y. Gen Bus.
6 Law § 349; (12) violation of New York Gen. Bus. Law for False Advertising, N.Y. Gen. Bus. Law
7 § 350; (13) fraud; (14) negligent misrepresentation; and (15) unjust enrichment.3 Plaintiffs seek
8 damages, restitution, and injunctive relief, among other remedies.
9 The Court has jurisdiction over this action under 28 U.S.C. §§ 1331 and 1332(d).
10 II. LEGAL STANDARD

11 A pleading must contain a “short and plain statement of the claim showing that the pleader
12 is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A motion to dismiss under Federal Rule of Civil
13 Procedure 12(b)(6) tests the legal sufficiency of the claims in the complaint. “To survive a motion
14 to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to
15 relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual
16 content that allows the court to draw the reasonable inference that the defendant is liable for the
17 misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation and internal quotation
18 marks omitted). “Threadbare recitals of the elements of a cause of action, supported by mere
19 conclusory statements, do not suffice.” Id. When dismissing a complaint, the court must grant
20 leave to amend unless it is clear that the complaint’s deficiencies cannot be cured by amendment.
21 Lucas v. Dep’t of Corrections, 66 F.3d 245, 248 (9th Cir. 1995).
22 Federal Rule of Civil Procedure 9(b) provides that in “alleging fraud or mistake, a party
23 must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P.
24 9(b). “It is well-settled that the Federal Rules of Civil Procedure apply in federal court,
25
3
26 The FAC does not specify the law or laws under which the claims for breach of express
warranty, breach of implied warranty, fraud, negligent misrepresentation, and unjust enrichment
27 arise. The Court construes these claims as arising out of the laws of California, Illinois, New
York, and Florida because Plaintiffs allege that they seek to represent “California, Illinois, New
28 York, and Florida” subclasses with respect to these claims.
5
1 ‘irrespective of the source of the subject matter jurisdiction, and irrespective of whether the
2 substantive law at issue is state or federal.’” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th
3 Cir. 2009) (citation omitted). To satisfy Rule 9(b), the allegations regarding fraud must be
4 “specific enough to give defendants notice of the particular misconduct which is alleged to
5 constitute the fraud charged so that they can defend against the charge and not just deny that they
6 have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). “Averments
7 of fraud must be accompanied by the who, what, when, where, and how of the misconduct
8 charged.” Kearns, 567 F.3d at 1124 (internal citation and quotation marks omitted).
9 III. ANALYSIS
10 Apple moves to dismiss all claims in the FAC on the following grounds: (1) Plaintiffs lack
11 Article III standing with respect to claims predicated on fraud, and with respect to their request for
12 injunctive relief; (2) claims grounded in fraud do not satisfy the pleading standards of Rule 9(b);
13 (3) the claims for breach of express and implied warranties fail because Apple did not breach the
14 Limited Warranty and because it disclaimed all implied warranties; and (4) unjust enrichment is
15 not a standalone claim. The Court addresses each of these arguments in turn.
16 A. Article III standing

17 “[T]hose who seek to invoke the jurisdiction of the federal courts must satisfy the
18 threshold requirement imposed by Article III of the Constitution by alleging an actual case or
19 controversy.” Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011) (citation and internal
20 quotation marks omitted). “[T]o satisfy Article III’s standing requirements, a plaintiff must show
21 (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or
22 imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action
23 of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be
24 redressed by a favorable decision.” Id. (quoting Friends of the Earth, Inc. v. Laidlaw Envtl.
25 Servs., Inc., 528 U.S. 167, 180-81 (2000)) (internal quotation marks omitted).
26 Article III standing differs from statutory standing in that the lack of the former “requires
27 dismissal for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1),”
28 whereas the lack of the latter “requires dismissal for failure to state a claim” under Federal Rule of
6
1 Civil Procedure 12(b)(6). Id. (citation omitted). This distinction impacts the scope and nature of
2 the court’s analysis. “While review for failure to state a claim under 12(b)(6) is generally
3 confined to the contents of the complaint, in determining constitutional standing [under Rule
4 12(b)(1)], it is within the trial court’s power to allow or to require the plaintiff to supply, by
5 amendment to the complaint or by affidavits, further particularized allegations of fact deemed
6 supportive of plaintiff’s standing.” Id. (internal citations and quotation marks omitted). Further,
7 whereas the court must apply the standards of Iqbal and Twombly when resolving a Rule 12(b)(6)
8 motion, a court may not apply such standards when deciding a Rule 12(b)(1) challenge to
9 constitutional standing. See id. at 1068 (“Twombly and Iqbal are ill-suited to application in the
10 constitutional standing context because in determining whether plaintiff states a claim under
11 12(b)(6), the court necessarily assesses the merits of plaintiff’s case. But the threshold question of
12 whether plaintiff has standing (and the court has jurisdiction) is distinct from the merits of his
13 claim . . . . Twombly and Iqbal deal with a fundamentally different issue, and that the court’s focus
14 should be on the jurisprudence that deals with constitutional standing.”).
15 “For purposes of ruling on a motion to dismiss for want of standing, both the trial and
16 reviewing courts must accept as true all material allegations of the complaint and must construe
17 the complaint in favor of the complaining party.” Id. (citation and internal quotation marks
18 omitted). “At the pleading stage, general factual allegations of injury resulting from the
19 defendant’s conduct may suffice, for on a motion to dismiss we ‘presum[e] that general allegations
20 embrace those specific facts that are necessary to support the claim.’” Id. (quoting Lujan v.
21 Defenders of Wildlife, 504 U.S. 555, 561 (1992)). “[A] plaintiff must demonstrate standing for
22 each claim he seeks to press and for each form of relief that is sought.” Id. at 1068-69 (citation
23 and internal quotation marks omitted).
24 //
25
26
27
28
7
1 1. Article III standing for claims based on fraud

2 Apple contends that Plaintiffs lack constitutional standing with respect to their “fraud
3 claims”4 because the FAC lacks allegations that satisfy the causation requirement of Article III.
4 Specifically, Apple argues that, to satisfy Article III’s causation requirement, Plaintiffs must
5 identify the specific misleading statements upon which they relied in deciding to purchase the
6 devices at issue. Apple argues that the FAC lacks any such allegations.
7 “To survive a motion to dismiss for lack of constitutional standing, plaintiffs must
8 establish a ‘line of causation’ between defendants’ action and their alleged harm that is more than
9 ‘attenuated.’” Id. at 1070 (citation omitted). This showing does not “require plaintiffs to
10 demonstrate that defendants’ actions are the ‘proximate cause’ of plaintiffs’ injuries. Plaintiffs do
11 not bear so heavy a burden.” Id. Additionally, as discussed above, allegations supporting Article
12 III standing need not satisfy the pleading standards of Iqbal and Twombly. See id. at 1068.
13 The Court concludes that Defendants’ “particularity argument is better directed toward the
14 merits of Plaintiffs’ claims,” In re Volkswagen "Clean Diesel" Mktg., Sales Practices, & Prod.
15 Liab. Litig., 349 F. Supp. 3d 881, 902 (N.D. Cal. 2018), not cast as an Article III standing issue,
16 and that Plaintiffs have adequately averred the requisite “line of causation” between the harm they
17 allegedly suffered and Apple’s actions. Plaintiffs allege that they purchased the devices at issue;
18 that Apple, through misrepresentations and omissions, deceived consumers about the audio defect;
19 that Plaintiffs would not have purchased the devices at issue if they had known about the audio
20 defect; and that Plaintiffs suffered economic harm in the form of overpayment as a result having
21 purchased the devices at issue without knowing about the audio defect. See, e.g., FAC ¶¶ 25, 31,
22 37, 43, 49, 56, 62, 69, 93-96, 101. These general allegations, which need not satisfy the pleading
23 standards of Iqbal and Twombly, are sufficient to satisfy the causation requirement of Article III
24 with respect to claims 5 through 14, which arise out of the same theory that Apple misrepresented
25 or omitted information as to the audio defect. Other courts in this district have reached the same
26
27
4
The Court interprets Apple’s reference to Plaintiffs’ “fraud claims” as pertaining to Plaintiffs’
consumer-protection claims (claims 5 through 12), and common-law fraud and negligent
28 misrepresentation claims (claims 13 and 14).
8
1 conclusion when presented with similar allegations. See, e.g., Davidson v. Apple, Inc., No. 16-
2 CV-04942-LHK, 2017 WL 976048, at *6 (N.D. Cal. Mar. 14, 2017) (“The Court finds that
3 Plaintiffs’ allegations—that Plaintiffs purchased either an iPhone 6 or 6 Plus, that Defendant made
4 misrepresentations and omissions about the touchscreen defect, and that Plaintiffs would not have
5 bought an iPhone had they known about the alleged touchscreen defect—are sufficient, ‘at least at
6 this stage of the proceedings,’ to meet the ‘less rigorous’ burden of alleging that Plaintiffs’ harm is
7 ‘fairly traceable’ to Defendant’s conduct.”) (citation omitted).5
8 Accordingly, the Court will deny Apple’s motion to dismiss the claims that are grounded
9 in fraud on the basis that Plaintiffs lack Article III standing.
10 2. Article III standing for seeking injunctive relief
11 Apple next argues that Plaintiffs lack Article III standing to seek injunctive relief because
12 they do not allege that they are under a real and immediate threat of repeated injury. Specifically,
13 Apple contends that Plaintiffs’ allegations that they would buy new iPhones only if their current
14 devices functioned as advertised or if the Court requires Apple to comply with advertising and
15 warranty laws demonstrate that Plaintiffs would not be subject to future harm.
16 To have Article III standing to seek “injunctive relief, which is a prospective remedy, the
17 threat of injury must be ‘actual and imminent, not conjectural or hypothetical.’” Davidson v.
18 Kimberly-Clark Corp., 889 F.3d 956, 967 (9th Cir. 2018) (citation omitted). “Past wrongs, though
19 insufficient by themselves to grant standing, are evidence bearing on whether there is a real and
20 immediate threat of repeated injury. Where standing is premised entirely on the threat of repeated
21 injury, a plaintiff must show a sufficient likelihood that he will again be wronged in a similar way.
22 In determining whether an injury is similar, we must be careful not to employ too narrow or
23
5
24 Even if Plaintiffs’ allegations in the FAC were insufficient to show causation under Article III,
Apple’s constitutional-standing challenge would nevertheless fail in light of the declarations that
25 Plaintiffs filed along with their opposition to Apple’s motion, which the Court can consider in
resolving Apple’s constitutional-standing challenge. See Tabak Decl., ECF No. 48-1; Banks
26 Decl., ECF No. 48-2; Danon Decl., ECF No. 48-3; Castelli Decl., ECF No. 48-4; White Decl.,
ECF No. ECF No. 48-5; Cameo-Cernicola Decl., ECF No. 48-6; Trujillo Decl., ECF No. 48-7.
27 These declarations provide factual support for, and further detail that goes beyond, Plaintiffs’
allegations that they relied on Apple’s statements regarding the quality and features of the devices
28 at issue when purchasing such devices. See id.
9
1 technical an approach. Rather, we must examine the questions realistically: we must reject the
2 temptation to parse too finely, and consider instead the context of the inquiry.” Id. (internal
3 citations and quotation marks omitted).
4 Apple’s argument fails in light of Davidson. There, the Ninth Circuit considered whether a
5 plaintiff suing under California consumer-protection statutes based on a theory of fraudulent
6 misrepresentations and omissions had standing to seek injunctive relief. The defendant in
7 Davidson allegedly had misrepresented through labeling and advertising that certain of its wipes
8 were “flushable”; the plaintiff purchased these wipes and later discovered that the wipes were not,
9 in fact, flushable. Id. at 961-62. The court of appeals concluded that the plaintiff had satisfied
10 Article III’s requirements for seeking injunctive relief by averring that she “would purchase truly
11 flushable wipes manufactured by [the defendant] if it were possible,” and that, at that point in
12 time, she could not purchase the wipes, although she would like to, because she could not rely on
13 the product’s advertising or labeling to determine whether the wipes were truly flushable. Id. at
14 969-70. The Ninth Circuit reasoned that these allegations were sufficient to show that the plaintiff
15 faced a likelihood of future injury considering her allegations of the defendant’s alleged past
16 misrepresentations about the wipes. Id. at 970-972 (holding that the plaintiff had alleged a
17 likelihood of future injury because she “faces the similar injury of being unable to rely on [the
18 defendant’s] representations of its product in deciding whether or not she should purchase the
19 product in the future”). Like the plaintiff in Davidson, Plaintiffs here have satisfied Article III’s
20 requirements for seeking injunctive relief by alleging that they would purchase the devices at issue
21 in the future if the devices functioned as advertised, or if the Court ordered Apple to comply with
22 advertising and warranty laws. See, e.g., FAC ¶¶ 26, 32, 38, 44, 50, 57, 63. These allegations,
23 when construed in Plaintiffs’ favor, raise the inference that Plaintiffs would purchase the products
24 at issue again if they truly functioned as Apple has represented them to function, and that Plaintiffs
25 are unable to purchase them at present because they cannot currently rely on Apple’s
26 representations regarding the devices.
27 Based on the foregoing, the Court will deny Apple’s motion to dismiss Plaintiffs’ request
28 for injunctive relief for lack of Article III standing.

10
B. Claims subject to Rule 9(b)

1
Apple contends that Plaintiffs’ consumer protection claims (claims 5 through 12) and
2
common-law fraud and negligent misrepresentation claims (claims 13 and 14) must be dismissed
3
because these claims are grounded in fraud and the allegations upon which they are predicated fail
4
to meet the pleading requirements of Rule 9(b). Specifically, Apple contends that Plaintiffs have
5
failed to plead exposure and reliance on specific fraudulent misrepresentations or omissions by
6
Apple.
7
Plaintiffs disagree, arguing that Rule 9(b) does not apply to their claims under Florida and
8
New York’s consumer protection statutes, their negligent misrepresentation claim, or their
9
California consumer protection claims based on unfair and unlawful acts because neither fraud nor
10
reliance is an element of these claims, and because Plaintiffs support these claims with some
11
allegations of non-fraudulent conduct.
12
The Court concludes that Rule 9(b) applies to claims 5 through 14.6 Contrary to Plaintiffs’
13
contention, whether fraud is an element of any of these claims is irrelevant to the question of
14
whether Rule 9(b) applies; what matters is whether the claims are based on allegations that the
15
defendant “engaged in a fraudulent course of conduct.” See Kearns, 567 F.3d at 1125-26. Each of
16
claims 5 through 14 is predicated on allegations that Apple misrepresented the audio features of
17
the devices at issue and knowingly and intentionally concealed or failed to disclose information
18
about the audio defect. As such, these claims are grounded in fraud and are subject to Rule 9(b).
19
In Kearns, the Ninth Circuit held that allegations similar to the ones Plaintiffs have alleged
20
here require the application of Rule 9(b). The plaintiffs in Kearns asserted claims under the
21
CLRA and UCL based on allegations that the defendant misrepresented, or failed to disclose
22
23 6
Plaintiffs argue that their claim under the “unlawful” prong of the UCL is not subject to
24 dismissal for failure to comply with Rule 9(b) because it is based, at least in part, on alleged
violations of California’s warranty statutes. Apple argues that this claim should be dismissed
25 because none of the claim’s predicate violations of law survive its motion to dismiss. The Court
agrees with Apple. Plaintiffs allege in the FAC that their UCL unlawful-prong claim is based on
26 violations of “California Civil Code §§ 1668, 1709, 1710, and 1750, et seq., and California
Commercial Code § 2313.” See FAC ¶ 175. As discussed below, none of the claims that survive
27 Apple’s present motion arise under the statutes described in the FAC as predicates for the
unlawful-prong UCL claim. Accordingly, the Court will grant Apple’s motion to dismiss this
28 claim with leave to amend, albeit for a reason other than Rule 9(b).
11
1 material information regarding, the safety of its products in marketing campaigns and via its sales
2 personnel. Id. The Ninth Circuit held that, because these predicate averments were grounded in
3 fraud, the pleading of the CLRA and UCL claims, as a whole, would need to satisfy the
4 heightened pleading requirements of Rule 9(b). Id. at 1124-27 (“[I]f the claim is said to be
5 grounded in fraud . . . the pleading of that claim as a whole must satisfy the particularity
6 requirement of Rule 9(b).”) (emphasis in original). Here, like the plaintiffs in Kearns, Plaintiffs
7 predicate claims 5 through 14 on allegations that Apple misrepresented the quality of the audio
8 features of the devices at issue and that Apple knowingly and intentionally concealed that the
9 devices had an audio defect. Accordingly, claims 5 through 14 are grounded in fraud and the
10 allegations supporting them must satisfy the heightened pleading requirements of Rule 9(b).
11 Kearns requires courts in the Ninth Circuit to apply Rule 9(b) to any claim that is grounded
12 fraud, regardless of the claim’s elements or the substantive law that gives rise to it. See Kearns,
13 567 F.3d at 1125-27 (holding that Rule 9(b) applies to the pleading of a claim “as a whole” if it is
14 “grounded in fraud” even if “fraud is not a necessary element” of the claim, and holding that the
15 applicability of Rule 9(b) is “irrespective of the source of the subject matter jurisdiction, and
16 irrespective of whether the substantive law at issue is state or federal”); see also, e.g., Gold v.
17 Lumber Liquidators, Inc., No. 14-CV-05373-TEH, 2015 WL 7888906, at *12 (N.D. Cal. Nov. 30,
18 2015) (applying Rule 9(b) to consumer-protection claims arising out of New York and Illinois law
19 because “this Court is . . . bound by the holding in Kearns”).
20 Having concluded that Rule 9(b) applies to claims 5 through 14, the Court now considers
21 whether these claims are pleaded with the particularity required by Rule 9(b). In Kearns, the
22 Ninth Circuit held that the plaintiff had failed to satisfy the pleading requirements of Rule 9(b)
23 with respect to his CRLA and UCL claims, which, as discussed above, were predicated on
24 fraudulent misrepresentations and omissions. The court reasoned that, under California law,
25 pleading fraud requires allegations of “misrepresentation (false representation, concealment, or
26 nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce
27
28
12
1 reliance; (d) justifiable reliance; and (e) resulting damage.”7 Id. at 1126 (citation omitted). The
2 Ninth Circuit held that the plaintiff failed to plead fraud by misrepresentation with the particularity
3 required by Rule 9(b), because he did not plead “when he was exposed to” marketing materials
4 that contained alleged fraudulent misrepresentations, “which [marketing materials] he found
5 material,” or which marketing materials “he relied upon” in purchasing the product at issue. Id.
6 (emphasis added). The Ninth Circuit also held that the plaintiff’s “claims of nondisclosure” were
7 likewise deficient under Rule 9(b) because they “were couched in general pleadings alleging [the
8 defendant’s] intent to conceal from customers” that the products at issue were not any safer than
9 other comparable products. See id. at 1127 (rejecting “contention that [the plaintiff’s]
10 nondisclosure claims need not be pleaded with particularity”).
11 Here, like the plaintiff in Kearns, Plaintiffs have failed to plead with particularity the
12 fraudulent misrepresentations and omissions that underlie claims 5 through 14.

13 With respect to Apple’s alleged misrepresentations, Plaintiffs aver, conclusorily, that
14 “Apple has advertised” various features of the devices at issue, such as their “amazing and
15 immersive sound that is two times louder than iPhone 6s, offering increased dynamic range of
16 sound and a higher quality speakerphone,” and an “entirely new stereo speaker system [that]
17 provides twice the sound.” See, e.g., FAC ¶¶ 72, 74, 75, 199. The FAC contains no other
18 specifics as to these alleged advertisements, such as where, when, or how the advertisements were
19 disseminated, or whether any named plaintiff even saw them or relied on them. No named
20 plaintiff alleges in the FAC to have seen them or relied on them. Indeed, none of the named
21 plaintiffs identify, as they must to plead fraud under Rule 9(b), the specific misrepresentations by
22 Apple to which they were exposed, when they were exposed to them, which they found material,
23
24
7
25 To plead a claim that is grounded in fraud with particularity, a complaint must plead factual
matter that satisfies the elements of fraud, which, for state law claims, are derived from state law.
26 See Kearns, 567 F.3d at 1126. Under the state laws at issue here, reliance is one of the elements
of fraud. See id. (California law); Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y. 3d
27 553, 559 (2009) (same for New York law); Butler v. Yusem, 44 So. 3d 102, 105 (Fla. 2010) (same
for Florida law); Gerill Corp. v. Jack L. Hargrove Builders, Inc., 128 Ill. 2d 179, 193 (1989)
28 (same for Illinois law).
13
1 or which they relied upon in deciding to purchase the devices at issue.8 See Kearns. 567 F.3d at
2 1126.
3 Further, with respect to Apple’s alleged omissions, Plaintiffs’ nondisclosure contentions,
4 like those rejected as insufficiently pleaded in Kearns, are couched in general allegations of
5 concealment. Plaintiffs allege, conclusorily, that Apple knows or should have known about the
6 defect; that Apple has not publicly released an explanation for the defect; and that they would not
7 have purchased the devices at issue if they had known about the defect. These allegations lack
8 specific factual matter to raise the reasonable inference that, had Apple disclosed information
9 about the defect, Plaintiffs “would have been aware of it and behaved differently.” See Daniel v.
10 Ford Motor Co., 806 F.3d 1217, 1225 (9th Cir. 2015) (holding that, under California law, “an
11 essential element for a fraudulent omission claim is actual reliance” and that, to prove reliance on
12 an omission, a plaintiff must show that the nondisclosure was a “substantial factor” in the
13 plaintiff’s injury-producing conduct that can be shown by proving that “had the omitted
14 information been disclosed, one would have been aware of it and behaved differently”). The
15 showing that “one would have behaved differently can be presumed, or at least inferred, when the
16 omission is material. An omission is material if a reasonable consumer would attach importance
17 to its existence or nonexistence in determining his choice of action in the transaction in question.”
18 Id. at 1225 (internal citation and quotation marks omitted). The FAC lacks any nonconclusory
19 allegations to support the notion that any of the named plaintiffs would have been aware of any
20 disclosures by Apple about the defect, or that a reasonable consumer would have attached a
21 importance to disclosures or nondisclosures by Apple about the defect. Indeed, the FAC does not
22 speak as to the mechanisms through which Plaintiffs and other consumers might become aware of
23 statements by Apple about the devices at issue, through advertisements or otherwise; and it lacks
24 nonconclusory allegations that would suggest that disclosures or nondisclosures about the defect
25
26 8
Plaintiffs allege that they purchased the devices at issue in part because of the iPhone’s
27 “reputation for being a high quality and reliable product.” FAC ¶¶ 21, 33, 39, 45, 51, 58. The
FAC, as currently pleaded, does not raise the reasonable inference that the iPhone’s “reputation”
28 has any link to the alleged misrepresentations and omissions at issue.
14
1 would have played a role in the purchasing behavior of Plaintiffs or consumers with respect to the
2 devices at issue.
3 Accordingly, Plaintiffs’ allegations, even when read in the light most favorable to
4 Plaintiffs, lack factual matter that specifically identifies the who, what, when, where, and how of
5 Apple’s alleged fraudulent misrepresentations and omissions as they relate to the named plaintiffs
6 and the defect at issue. The Court therefore grants Apple’s motion to dismiss claims 5 through 14
7 with leave to amend.
8 C. Warranty claims
9 The Court now turns to Apple’s motion to dismiss Plaintiffs’ claims for: (1) breach of
10 express warranty; (2) breach of implied warranty; (3) breach of written warranty under the
11 Magnuson-Moss Warranty Act; and (4) breach of implied warranty in violation of the Song-
12 Beverly Consumer Warranty Act, Cal. Civ. Code § 1790 (claims 1 through 4).
13 1. Breach of express warranty

14 Plaintiffs predicate their claim for breach of express warranty (claim 1) on the following
15 conclusory allegations: Apple provided Plaintiffs with the Limited Warranty, which became a
16 “part of the basis of the bargain” between Plaintiffs and Apple; Plaintiffs presented the devices at
17 issue to Apple after they manifested the audio defect but Apple failed to remedy the defect and
18 thus breached the Limited Warranty; Plaintiffs have suffered injury because they did not receive
19 the “benefit of the bargain” and because they have incurred or continue to incur costs for replacing
20 the devices at issue. FAC ¶¶ 123-133.
21 To state a claim for breach of express warranty, a plaintiff must allege that (1) “the seller’s
22 statements constitute an affirmation of fact or promise or a description of the goods; (2) the
23 statement was part of the basis of the bargain; and (3) the warranty was breached.” Weinstat v.
24 Dentsply Int’l, Inc., 180 Cal. App. 4th 1213, 1227 (2010) (California law) (internal quotation
25 marks and citation omitted); Promuto v. Waste Mgmt., Inc., 44 F. Supp. 2d 628, 642 (S.D.N.Y.
26 1999) (similar elements under New York law); Indus. Hard Chrome. Ltd. v. Hetran, Inc., 64 F.
27 Supp. 2d 741, 747 (N.D. Ill. 1999) (similar elements under Illinois law); Dunham-Bush, Inc. v.
28
15
1 Thermo-Air Serv., Inc., 351 So. 2d 351, 353 (Fla. Dist. Ct. App. 1977) (similar elements under
2 Florida law). Only the third element (breach) is at issue in Apple’s present motion.
3 a. Whether the audio defect is a “design defect” not covered by the

Limited Warranty
4
5 Apple argues that Plaintiffs’ claim for breach of the Limited Warranty fails as a matter of
6 law because the audio defect alleged in the complaint is a design defect that falls outside of the
7 scope of the Limited Warranty, which covers only “defects in materials and workmanship.” See
8 ECF No. 37 at 12-13. The Court concludes that this argument lacks merit.
9 A claim for breach of express warranty, which is contractual in nature, depends on the
10 terms of the warranty.9 Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 525 (1992) (“A
11 manufacturer’s liability for breach of an express warranty derives from, and is measured by, the
12 terms of that warranty.”). Here, Plaintiffs allege that the devices are issue are subject to the
13 Limited Warranty, which warrants “against defects in materials and workmanship when used
14 normally in accordance with Apple’s published guidelines[.]” FAC ¶ 102. The term “defects in
15 materials and workmanship” is not defined in the Limited Warranty, however. See id.; ECF Nos.
16 37-2, 37-3, 37-4, 37-5. Apple points to no materials that the Court can consider in resolving the
17 present motion that establish that the Limited Warranty would in no event cover the audio defect.
18 Because Plaintiffs allege that the audio defect arises, at least in part, as a result of deficiencies in
19 the “materials” used to manufacture the devices at issue, see, e.g., FAC ¶¶ 71, 73, the Court cannot
20 conclude at this stage of the litigation that the audio defect is not covered by the Limited Warranty
21 as a “defect in materials and workmanship.” See Mandani v. Volkswagen Grp. of Am., Inc., No.
22 17-CV-07287-HSG, 2019 WL 652867, at *4 (N.D. Cal. Feb. 15, 2019) (declining to dismiss under
23 Rule 12(b)(6) a breach-of-express-warranty claim on the ground that, “[a]t this stage, the Court
24 cannot say that Plaintiffs’ allegations are limited to design defects. The first amended complaint
25
26
9
27 Apple admits that the claims at issue are contractual in nature. See ECF No. 37 at 11 (“A cause
of action for breach of an express warranty is contractual in nature and, therefore, the terms of the
28 warranty itself determine whether a plaintiff has stated an actionable claim.”).
16
1 identifies a number of purported symptoms which could plausibly be attributable to material or
2 workmanship defects.”).
3 The authorities that Apple cites do not warrant a different result. First, Apple cites to non-
4 binding authority for the proposition that a design defect is distinguishable from a manufacturing
5 defect in terms the allegations and evidence required to establish each type of defect; based on
6 these authorities, Apple contends that the audio defect must be construed, as a matter of law, as a
7 design defect as opposed to a manufacturing defect. These opinions are inapposite, however,
8 because they address distinctions between design and manufacturing defects in the context of
9 product-liability claims and other claims that are grounded in tort law. See In re Toyota Motor
10 Corp. Unintended Acceleration Mktg., Sales Practices & Prod. Liab. Litig., 754 F. Supp. 2d 1208,
11 1221-22 (C.D. Cal. 2010) (noting that “California recognizes strict liability for three types of
12 products liability claims: design defects, manufacturing defects, and warning defects” and then
13 describing elements of the “manufacturing defect theory” in that context); Cappellano v. Wright
14 Med. Grp., Inc., 838 F. Supp. 2d 816, 825 (C.D. Ill. 2012) (noting that “Plaintiff’s claim is based
15 upon strict product liability under Illinois law” and then describing elements of strict liability
16 claim under “manufacturing defect” theory). As discussed above, the breach-of-warranty claims
17 at issue here are grounded in contract law, not tort law. Daniel v. Ford Motor Co., 806 F.3d 1217,
18 1224 (9th Cir. 2015) (“In relation to express warranties, the rules for interpreting them do not
19 differ from those applied to other contracts.”) (applying California warranty law) (quotation and
20 citation omitted). Apple points to no authority applying the elements of tort jurisprudence
21 regarding product defects to contractual warranty claims such as the ones at issue here.
22 Second, Apple cites non-binding authority holding that design defects cannot be covered
23 by an express warranty that covers manufacturing defects only. The Court declines to follow these
24 opinions because their conclusions about the scope and definition of design defects are predicated
25 on product liability and tort jurisprudence, like the opinions described above.
26 For example, Apple cites Troup v. Toyota Motor Corp., 545 F. App’ x 668 (9th Cir. 2013),
27 a non-precedential memorandum in which the Ninth Circuit held that the district court was correct
28 to dismiss a claim for breach of express warranty because the alleged defect was “a design
17
1 decision” not covered by the express warranty, which covered defects in materials and
2 workmanship. The court of appeals cited McCabe v. Am. Honda Motor Co., 100 Cal. App. 4th
3 1111, 1120 (2002) to support this conclusion. See id. at *668-69. McCabe, however, discusses
4 the differences between design and manufacturing defects in the context of a “products liability
5 action”; McCabe does not address any breach-of-warranty claims or other contractual claims.
6 McCabe, 100 Cal. App. 4th at 1120. The court of appeals also cited Daugherty v. Am. Honda
7 Motor Co., Inc., 144 Cal. App. 4th 824, 830 (2006) to distinguish between manufacturing and
8 design defects. Troup, 545 F. App’ x at *668-69. But Daugherty does not speak to any such
9 distinction; instead, Daugherty addresses an entirely different question, namely whether a latent
10 defect that is not discovered by the consumer during the life of the express warranty can
11 nevertheless be covered by such warranty.
12 As another example, Apple relies on Davidson v. Apple, Inc., No. 16-CV-04942-LHK,

13 2017 WL 976048 (N.D. Cal. Mar. 14, 2017). There, the court addressed the question of whether a
14 touchscreen defect involving the IC chips on the logic board of the iPhone 6 and iPhone 6 Plus
15 could give rise to a claim for breach of Apple’s Limited Warranty, which covers defects in
16 materials and workmanship. Id. * 11. The court held that the alleged defect was a “design defect,
17 rather than a defect in ‘materials and workmanship,’” and as a result, the court concluded that the
18 plaintiff had failed to state a claim for breach of Apple’s Limited Warranty. Id. at *11-12. In
19 reaching this conclusion, the court relied on Troup and McCabe, which are not instructive or
20 relevant to breach-of-warranty claims for the reasons discussed above. See id. at *11. The court
21 also relied on other opinions that improperly apply product-liability jurisprudence in the context of
22 contractual breach-of-contract claims. See, e.g., id. at * 11 (citing Bros. v. Hewlett-Packard Co.,
23 No. C-06-02254RMW, 2007 WL 485979, at *4 (N.D. Cal. Feb. 12, 2007) (noting that “unlike
24 defects in materials or workmanship, a design defect is manufactured in accordance with the
25 product’s intended specifications” and citing McCabe as support); Sater v. Chrysler Grp. LLC,
26 No. EDCV 14-00700-VAP, 2015 WL 736273, at *4 (C.D. Cal. Feb. 20, 2015) (same)).
27
28
18
1 Accordingly, the Court will deny Apple’s motion to dismiss Plaintiffs’ breach of express
2 warranty claims to the extent it is predicated on the notion that the audio defect is not covered by
3 the Limited Warranty as a matter of law.
4 b. Defects that manifested after the expiration of the Limited

Warranty
5
6 Apple next argues that the claims for breach of express warranty of four of the seven
7 named plaintiffs (White, Banks, Camelo-Cenicola, and Trujillo) fail because the alleged defect did
8 not manifest in their devices until after the Limited Warranty’s one-year term expired.
9 Plaintiffs respond that, under the latent defect theory, Apple can be subject to claims for
10 breach of the Limited Warranty even if the audio defect manifested after the warranty expired
11 because Apple knew or should have known about the defect at the time of sale. Alternatively,
12 Plaintiffs contend that the Limited Warranty’s one-year limitation does not bar their claims
13 because the Limited Warranty is unconscionable.

14 Under California law, a claim for breach of express warranty generally fails if the defect in
15 question manifested after the expiration of the express warranty.10 See Daugherty v. Am. Honda
16 Motor Co., 144 Cal. App. 4th 824, 830-32 (2006), as modified (Nov. 8, 2006) (affirming dismissal
17 of claim for breach of express warranty on the ground that warrantor’s promise to cover defects in
18 a car for three years or 36,000 miles was not an agreement to “repair latent defects that lead to a
19 malfunction after the term of the warranty” and rejecting argument that warranty covered latent
20 defect because the “express warranty did not state that the defect must be ‘found,’ ‘discovered’ or
21 ‘manifest’ during the warranty period”).11
22
10
23 Florida, New York, and Illinois have similar rules. See, e.g., Speier Roche v.
Volkswagen Grp. of Am. Inc., No. 14-20104-CIV, 2014 WL 1745050, at *7 (S.D. Fla. Apr. 30,
24 2014) (“Plaintiff cannot assert . . . breach of express part warranty [claims] under Florida law
because all alleged unreimbursed repairs occurred long after any individual part warranty
25 expired.”); Evitts v. DaimlerChrysler Motors Corp., 359 Ill. App. 3d 504, 511 (2005) (“Illinois
law holds that express warranties of limited duration cover only defects that become apparent
26 during the warranty period.”); Meserole v. Sony Corp. of Am., No. 08 CV. 8987 (RPP), 2009 WL
1403933, at *6 (S.D.N.Y. May 19, 2009) (express warranty claim insufficiently pleaded where
27 plaintiff did not allege that defect “presented itself during the two-year period provided by the
written warranty”).
28 11
One exception to this general rule, at least under California law, applies where the “useful life”
19
1 Here, Plaintiffs do not dispute that the defect in these named plaintiffs’ devices manifested
2 after the one-year Limited Warranty expired, and they cite no authority showing that the claims of
3 these plaintiffs fall under any exception to the general rule that bars a claim for breach of express
4 warranty based on a defect that manifested after the express warranty expired. Plaintiffs do not
5 allege that the useful life of the devices at issue is “indefinite”; accordingly, Plaintiffs cannot
6 invoke the latent-defect exception in Hicks. Further, the opinions that Plaintiffs cite in their
7 opposition to argue that their latent-defect claims are viable are inapposite, because their holdings
8 are limited to claims for breach of an implied warranty. Accordingly, Plaintiffs’ latent-defect
9 arguments are insufficient to save their claims for breach of express warranty from dismissal.
10 Plaintiffs argue, alternatively, that because the Limited Warranty is unconscionable, and
11 thus, unenforceable, these named plaintiffs’ claims are not barred on the ground that the defect
12 manifested after the Limited Warranty’s expiration. Plaintiffs contend that the requirements for
13 finding the Limited Warranty unconscionable are met because they have alleged that Apple knew
14 or should have known that the devices at issue were defective at the time of sale and that Plaintiffs
15 had no meaningful choice in determining the terms of the Limited Warranty as a result of Apple’s
16 superior bargaining power. This argument is unavailing.
17 “Unconscionability has both a procedural and a substantive element. Both elements must
18 be present for a court to invalidate a contract or clause, although the degree to which each must
19 exist may vary. The procedural element of unconscionability focuses on two factors: oppression
20 and surprise. Oppression arises from an inequality of bargaining power which results in no real
21 negotiation and an absence of meaningful choice. Surprise involves the extent to which the
22 supposedly agreed-upon terms of the bargain are hidden in a prolix printed form drafted by the
23 party seeking to enforce the disputed terms. The substantive element of unconscionability focuses
24
25 of the product in question is “indefinite”; in that circumstance, a plaintiff may be able to state a
claim for breach of express warranty if a defect manifested outside of the warranty period. See,
26 e.g., Hicks v. Kaufman & Broad Home Corp., 89 Cal. App. 4th 908, 923 (2001), as modified on
denial of reh’g (July 3, 2001) (holding that house foundations are distinguishable from consumer
27 products because their “useful life . . . is indefinite” and holding that plaintiffs could state a claim
for breach of express and implied warranties if they “prove their foundations contain an inherent
28 defect which is substantially certain to result in malfunction during the useful life of the product”).
Plaintiffs do not allege that the iPhone has an indefinite useful life.
20
1 on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided
2 results as to shock the conscience.” Aron v. U-Haul Co. of California, 143 Cal. App. 4th 796, 808
3 (2006) (internal citations and quotation marks omitted).12
4 Plaintiffs’ allegations are insufficient to raise the reasonable inference that the Limited
5 Warranty is procedurally or substantively unconscionable. First, Plaintiffs have not alleged that
6 they lacked other choices in terms of the cellular devices they could have purchased or in terms of
7 the express warranty coverage they could have obtained for the devices at issue; they also have not
8 alleged that the terms of the Limited Warranty were hidden. Court routinely hold that the absence
9 of these allegations is a proper basis for rejecting arguments that an express warranty is
10 procedurally unconscionable. See Berenblat v. Apple, Inc., No. 08-4969 JF (PVT), 2010 WL
11 1460297, at *5 (N.D. Cal. Apr. 9, 2010) (rejecting allegations that an express warranty was
12 procedurally unconscionable on the grounds that plaintiffs did not allege that they lacked other
13 options of products or warranty protections or that they were surprised by the terms of the express
14 warranty). Plaintiffs point to no authorities that hold otherwise.
15 Second, Plaintiffs’ allegations that the Limited Warranty is substantively unconscionable
16 are based on the notion that Apple was aware of the audio defect at the time of sale. Courts
17 routinely hold that these allegations are insufficient to raise the inference that an express warranty
18 is substantively unconscionable. See, e.g., id. (rejecting allegations that “Apple knew of the latent
19 defect at the time of sale and nonetheless continued selling a defective product” as insufficient to
20 plead substantive unconscionability). Plaintiffs cite no authorities that would support a different
21 conclusion.
22 Accordingly, the Court will grant Apple’s motion to dismiss the claims for breach of
23 express warranty asserted by named plaintiffs White, Banks, Camelo-Cenicola, and Trujillo, with
24 leave to amend.
25
26 12
New York, Illinois, and Florida analyze allegations of unconscionability in the context of
27 warranties in a similar manner. See Gillman v. Chase Manhattan Bank, 73 N.Y.2d 1, 10-13
(1988); Kinkel v. Cingular Wireless, LLC, 223 Ill. 2d 1, 21-29 (2006); Murphy v. Courtesy Ford,
28 L.L.C., 944 So. 2d 1131, 1134-35 (Fla. Dist. Ct. App. 2006).
21
c. Lack of allegations regarding denial of coverage under Limited

1 Warranty
2
Apple next argues that the claims for breach of express warranty of the remaining three
3
named plaintiffs (Danon, Tabak, and Castelli) must be dismissed because these plaintiffs do not
4
allege that Apple denied them coverage under the Limited Warranty.
5
Plaintiffs do not dispute that Tabak and Castelli do not allege that Apple denied them
6
coverage under the Limited Warranty.13 Accordingly, because these named plaintiffs have not
7
plausibly alleged that Apple breached the Limited Warranty by denying them coverage, the Court
8
will grant Apple’s motion to dismiss the breach of express warranty claims of Tabak and Castelli,
9
with leave to amend.
10
With respect to the third named plaintiff, Danon, Plaintiffs argue that he received a
11
replacement device from Apple and that the replacement also manifested the defect. ECF No. 48 at
12
28. Thus, Plaintiffs appear to contend that Apple breached the Limited Warranty with respect to
13
Danon by replacing his original device with one that was similarly defective.14
14
The Court concludes that the FAC does not raise the reasonable inference that Apple
15
breached the Limited Warranty with respect to the replacement device that manifested the audio
16
defect, because the defect did not manifest in that device until after the warranty on it expired. The
17
Limited Warranty provides that a replacement product “assumes the remaining term of the Warranty
18
19 13
Tabak does not allege that she contacted Apple about warranty coverage after the defect
20 allegedly manifested in her device. FAC ¶ 24. Castelli alleges that, after experiencing issues with
her device as a result of the defect, Apple told her to take her device to an Apple store; Castelli
21 does not allege that she did so, or that she otherwise ever sought warranty coverage for her device.
Id. ¶¶ 41-42.
22 14
In a footnote, Plaintiffs state that named plaintiff Camelo-Cernicola “experienced a similar
23 problem” with her replacement device. See ECF No. 48 at 28 n.10. As discussed above, the Court
will dismiss Camelo-Cernicola’s breach of express warranty claims with leave to amend because
24 the defect did not manifest in her iPhone 7 Plus until after the one-year Limited Warranty period
expired. To the extent that Camelo-Cernicola seeks to assert a breach of express warranty claim
25 with respect to the replacement device that Apple provided to her after, and despite the fact that,
the Limited Warranty on her original device had expired, the allegations in the FAC are
26 insufficient to raise the inference that Apple breached the Limited Warranty with respect to this
replacement device. Under the terms of the express warranty, the warranty coverage on her
27 replacement device, which she received in May 2018, would have ended 90 days after she
received the replacement, or in August 2018. The defect did not manifest in the replacement
28 device until April 2019. See FAC ¶¶ 53-55.
22
1 or ninety (90) days from the date of replacement or repair, whichever provides longer coverage.”
2 See ECF No. 37-2 at 4; ECF No. 37-3 at 4; ECF No. 37-4 at 4. Dannon purchased an iPhone 7 Plus
3 on September 21, 2017. He received a replacement device on May 9, 2018. FAC ¶¶ 33-36. In May
4 2019, the replacement device manifested the defect and Apple refused to replace it shortly thereafter.
5 Id. Under the terms of the Limited Warranty, Danon’s replacement device would have been covered
6 for approximately four months, until September 2018. Accordingly, Apple’s failure to replace the
7 replacement device in May 2019 does not suggest a breach of the express warranty.
8 Accordingly, the Court will grant Apple’s motion to dismiss Danon’s claim for breach of
9 express warranty with leave to amend.
10 d. Essential purpose doctrine

11 In their opposition, Plaintiffs attempt to save their claims for breach of express warranty by
12 arguing that they “allege in the FAC” that Apple’s Limited Warranty “fails of its essential
13 purpose,” because “even when Apple has issued warranty repairs or replacements, Apple has not
14 addressed the underlying Audio IC defect or its causes, but has instead continued to issue other
15 defective iPhones (or defective parts).” See ECF No. 48 at 28-29.
16 The essential purpose doctrine, which has been codified in states that include California,
17 Illinois, New York, and Florida,15 permits a buyer to seek all remedies permitted by statute for
18 breach of contract, notwithstanding any contractual limitations as to the buyer’s remedies. See
19 RRX Indus., Inc. v. Lab-Con, Inc., 772 F.2d 543, 547 (9th Cir. 1985) (noting that, under Cal. Com.
20 Code § 2719(2), “a plaintiff may pursue all of the remedies available for breach of contract if its
21 exclusive or limited remedy fails of its essential purpose.”). The essential purpose doctrine
22 “becomes operative when a party is deprived of its contractual remedy[.]” O’Neill v. United
23 States, 50 F.3d 677, 687 (9th Cir. 1995) (citation and internal quotation marks omitted); Tokio
24 Marine & Fire Ins. Co. v. McDonnell Douglas Corp., 617 F.2d 936, 941 (2d Cir. 1980) (same).
25 Where the contractual remedy in question includes repairing or replacing a product, the essential
26
15
27 See Cal. Com. Code § 2719(2) (“Where circumstances cause an exclusive or limited remedy to
fail of its essential purpose, remedy may be had as provided in this code.”); Fla. Stat. § 672.719(2)
28 (same); 810 Ill. Comp. Stat. 5/2–719(2) (same); N.Y. U.C.C. Law § 2–719(2) (same).
23
1 purpose doctrine cannot be successfully invoked until there have been repeated unsuccessful repair
2 or replace attempts during the life of the warranty. See In re Seagate Tech. LLC Litig., 233 F.
3 Supp. 3d 776, 783-84 (N.D. Cal. 2017) (holding that “a mere two successive failures within the
4 warranty period” were insufficient to invoke the essential purpose doctrine). The purpose of the
5 doctrine is to permit the buyer to seek the full scope of permissible remedies for breach of
6 contract, such as consequential damages, where the “default of the seller” has been “total and
7 fundamental.” See RRX Indus., 772 F.2d at 547.
8 Here, the allegations in the FAC do not successfully invoke the essential purpose doctrine.
9 As discussed above, none of the named plaintiffs has plausibly alleged that Apple denied him or
10 her of Limited Warranty coverage with respect to their original devices or any replacement
11 devices during the life of the Limited Warranty. In the absence of plausible allegations that
12 Plaintiffs were deprived of their contractual remedies pursuant to the Limited Warranty, the
13 essential purpose doctrine cannot become “operative.” See O’Neill, 50 F.3d at 687. Further,
14 based on the allegations in the FAC, the Court cannot infer that there have been repeated and
15 unsuccessful attempts to repair or replace the devices at issue during the life of the Limited
16 Warranty, such that Apple’s “default” as to the Limited Warranty was “total and fundamental.”
17 See RRX Indus., Inc., 772 F.2d at 547.
18 To the extent that Plaintiffs choose to file an amended complaint, Plaintiffs may
19 supplement their allegations to properly invoke the essential purpose doctrine, if they can do so
20 without contradicting any of the allegations in the FAC.
21 2. Breach of implied warranty
22 Plaintiffs predicate their claims for breach of implied warranty and violations of the Song-
23 Beverly Consumer Warranty Act (claims 2 and 4) on the following allegations: Apple provided
24 them with an implied warranty that the devices at issue “are merchantable” and that they are “fit
25 for the ordinary purposes for which they are sold”; and that Apple breached these warranties
26 because the devices suffer from the audio defect, which renders them unfit for their ordinary and
27 intended purpose, as the defect renders them “incapable of making and receiving phone calls, text
28 messages, facilitating internet usage, and allowing the usage of apps.” FAC ¶¶ 135-138; 151-56.
24
1 Apple argues that Plaintiffs’ implied warranty claims fail because Apple disclaimed, in a
2 clear and conspicuous manner, all implied warranties in the Limited Warranty, or, alternatively, it
3 limited the duration of any implied warranties to one year from the date of purchase, as follows:
4 TO THE EXTENT PERMITTED BY LAW, THIS WARRANTY AND THE

REMEDIES SET FORTH ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
5 WARRANTIES, REMEDIES AND CONDITIONS, WHETHER ORAL,
WRITTEN, STATUTORY, EXPRESS OR IMPLIED. APPLE DISCLAIMS ALL
6 STATUTORY AND IMPLIED WARRANTIES, INCLUDING WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
7 A PARTICULAR PURPOSE AND WARRANTIES AGAINST HIDDEN OR
LATENT DEFECTS, TO THE EXTENT PERMITTED BY LAW.
8
9 ECF No. ECF No. 37-2 at 2; ECF No. 37-3 at 2-3; ECF No. 37-4 at 2.
10 A seller may disclaim or limit implied warranties of merchantability so long as the
11 disclaimer mentions “merchantability” and is conspicuous, and it may disclaim implied warranties
12 of fitness so long as the disclaimer is in writing and is conspicuous. See Cal. Com. Code §
13 2316(2).16 Whether a disclaimer is conspicuous “means so written, displayed, or presented that a
14 reasonable person against whom it is to operate ought to have noticed it. Whether a term is
15 ‘conspicuous’ or not is a decision for the court.” Cal. Com. Code § 1201(10).
16 With respect to their claims under California law, Plaintiffs argue that, even if Apple’s
17 disclaimer is given effect so as to limit the implied warranties to one year17, their claims for breach
18 of implied warranty are not barred by the disclaimer in question because the audio defect was
19 present at the time of sale and California law does not require them to discover and report the
20 defect within the duration of the implied warranty.
21
22 16
Illinois, Florida, and New York have similar rules. See Semitekol v. Monaco Coach Corp., 582
23 F. Supp. 2d 1009, 1029 (N.D. Ill. 2008); Family Boating & Marine Centers of Florida, Inc. v.
Bell, 779 So. 2d 402, 403 (Fla. Dist. Ct. App. 2000); Zicari v. Joseph Harris Co., 304 N.Y.S.2d
24 918, 922 (App. Div. 1969). Plaintiffs do not show otherwise.
17
25 Under the Song-Beverly Consumer Warranty Act, Apple cannot completely disclaim all implied
warranties, but rather, it can limit their duration to a maximum of one year. See Cal. Civ. Code §
26 1791.1(c) (“The duration of the implied warranty of merchantability and where present the implied
warranty of fitness shall be coextensive in duration with an express warranty which accompanies
27 the consumer goods, provided the duration of the express warranty is reasonable; but in no event
shall such implied warranty have a duration of less than 60 days nor more than one year following
28 the sale of new consumer goods to a retail buyer.”)
25
1 The Court agrees. Under California law, a “latent defect” can give rise to claims for
2 breach of implied warranty notwithstanding any limitations on the implied warranty, because a
3 purchaser is not required to “discover and report to the seller a latent defect” within the duration of
4 an implied warranty. See Mexia v. Rinker Boat Co., 174 Cal. App. 4th 1297, 1308 (2009) (“In the
5 case of a latent defect, a product is rendered unmerchantable, and the warranty of merchantability
6 is breached, by the existence of the unseen defect, not by its subsequent discovery.”); Daniel v.
7 Ford Motor Co., 806 F.3d 1217, 1222 (9th Cir. 2015) (holding that Mexia’s “rule that § 1791.1
8 does not create a deadline for discovering latent defects or for giving notice to the seller . . . must
9 be followed”) (citation and internal quotation marks omitted).
10 Apple has not addressed, much less distinguished, Mexia and Daniel in the context of
11 Plaintiffs’ claims for breach of implied warranty.
12 Accordingly, the Court will deny Apple’s motion with respect to Plaintiffs’ claims for
13 breach of implied warranty under California law to the extent they are predicated on a latent defect
14 theory.
15 With respect to the rest of their claims for breach of implied warranty, Plaintiffs argue that
16 the disclaimer of all implied warranties is “ineffectual” because (1) it is not conspicuous, as it was
17 not presented to consumers prior to purchase, and (2) it is unconscionable based on the same
18 arguments that the Court already rejected above, namely that Apple had superior bargaining power
19 and that Plaintiffs did not have the ability to negotiate the Limited Warranty’s terms. These
20 arguments are unavailing.
21 First, the Court concludes that the disclaimer is conspicuous because it is located on the
22 top of the first page of the Limited Warranty and it is written in relatively large and capitalized
23 font. Multiple courts in this district that have analyzed the same disclaimer in the Limited
24 Warranty have reached the same conclusion. See, e.g., Minkler v. Apple, Inc., 65 F. Supp. 3d 810,
25 819 (N.D. Cal. 2014) (“Apple’s [Limited] Warranty disclaimed all implied warranties in
26 accordance with California law because it stated in clear language and capitalized formatting that
27 Apple ‘disclaims all statutory and implied warranties, including without limitation, warranties of
28 merchantability and fitness for a particular purpose and warranties against hidden or latent
26
1 defects.’”); Davidson v. Apple, Inc., No. 16-CV-04942-LHK, 2017 WL 976048, at *14 (N.D. Cal.
2 Mar. 14, 2017) (same).
3 Second, the Court cannot conclude that the disclaimer is not conspicuous on the ground
4 that it was not presented to Plaintiffs prior to purchase, because the FAC contains no such
5 allegations. The FAC is devoid of any factual matter that would suggest that Plaintiffs lacked
6 access to the Limited Warranty and its disclaimer before they purchased the devices at issue.
7 Further, the allegations in the FAC suggest that Plaintiffs were aware of the Limited Warranty and
8 its disclaimer. See, e.g., FAC ¶ 125 (alleging that the Limited Warranty, which contains the
9 disclaimer, “became part of the bargain” between Plaintiffs and Apple); id. ¶ 120 (alleging that
10 “Apple offers the following one-year warranty when a consumer purchases an iPhone 7 or iPhone
11 7 Plus”).
12 Third, for the reasons discussed above, the Court cannot conclude, based on the allegations
13 currently in the FAC, that the Limited Warranty is procedurally or substantively unconscionable.
14 Plaintiffs make the same arguments of unconscionability to challenge the enforceability of the
15 disclaimer that the Court already rejected when it analyzed the Limited Warranty as a whole in the
16 context of Plaintiffs’ claims for breach of express warranty; because the disclaimer is contained in
17 the Limited Warranty, the Court rejects Plaintiffs’ arguments of unconscionability once more for
18 the same reasons discussed above.
19 In light of the foregoing, the Court concludes that the disclaimer is enforceable and will
20 grant Apple’s motion to dismiss Plaintiffs’ claims for breach of implied warranty under the laws
21 of Florida, Illinois, and New York, with leave to amend.
22 3. Magnuson-Moss Warranty Act claim

23 Apple moves to dismiss Plaintiffs’ Magnuson-Moss Warranty Act (“MMWA”) claim
24 (claim 3) on the ground that it is derivative of their state-law claims for breach of express and
25 implied warranty, and as such, it stands and falls with the state-law claims.
26 Plaintiffs do not dispute that their MMWA claim is derivate of their state-law claims.
27 Because the Court has declined to dismiss Plaintiffs’ implied warranty claims under
28 California law, Plaintiffs’ MMWA claim also survives. See Clemens v. DaimlerChrysler Corp.,
27
1 534 F.3d 1017, 1022 (9th Cir. 2008) (“[T]he claims under the Magnuson-Moss Act stand or fall
2 with [Plaintiff’s] express and implied warranty claims under state law.”).
3 D. Unjust enrichment
4 Apple argues that Plaintiffs’ claim for unjust enrichment (claim 15) must be dismissed
5 because unjust enrichment is not a standalone claim under the laws of California., Illinois, or New
6 York. Apple further argues that unjust enrichment cannot be pleaded as a standalone claim under
7 Florida law where, as here, an express agreement governs the purchases in question. See ECF No.
8 37 at 30-31 (citing Herazo v. Whole Foods Market, Inc., No. 14-61909-CIV, 2015 WL 4514510,
9 at *2-3 (S.D. Fla. July 24, 2015) (dismissing unjust enrichment claim because plaintiffs’ purchase
10 of defendant’s products formed the basis of an undisputed contract, and “[a]n unjust enrichment
11 claim can only be pled in the alternative if one or more of the parties contest the existence or
12 validity of an express contract governing the subject of the dispute”)).
13 Plaintiffs argue that California law does not preclude unjust enrichment as a standalone
14 claim. Plaintiffs do not address the other state laws at issue. In the alternative, they argue that
15 their claim for unjust enrichment should be allowed to stand, not as a standalone claim, but as an
16 alternative remedy.
17 The Court will construe Plaintiffs’ unjust enrichment claim as a request for an alternative
18 remedy. Because the Court “declines to bar the pursuit of alternative remedies at the pleadings
19 stage,” it will deny Apple’s motion. In re Gen. Motors LLC CP4 Fuel Pump Litig., 393 F. Supp.
20 3d 871, 882 (N.D. Cal. 2019) (citation and internal quotation marks omitted).
21 CONCLUSION
22 For the foregoing reasons, the Court denies Apple’s motion to dismiss with respect to
23 Plaintiffs’ claims for (1) breach of implied warranty under California law; (2) violations of the
24 Magnuson-Moss Warranty Act; and (3) unjust enrichment to the extent it is pleaded as a request
25 for an alternative remedy. The Court will grant Apple’s motion to dismiss the remaining claims in
26 the FAC with leave to amend.
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28
1 Plaintiffs may file an amended complaint within 21 days of the date of this order. In any
2 amended complaint, Plaintiffs shall specify the substantive law (e.g., the statute) upon which each
3 claim is predicated.
4 IT IS SO ORDERED.
5 Dated: January 30, 2020

______________________________________
6
JON S. TIGAR
7 United States District Judge
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Case 4:19-cv-02455-JST Document 62 Filed 01/30/20 Page 1 of 29

4 UNITED STATES DISTRICT COURT

5 NORTHERN DISTRICT OF CALIFORNIA

7 LISA TABAK, et al., Case No. 19-cv-02455-JST

13 In this proposed class action asserting consumer-protection and breach-of-warranty claims

19 allegations from the FAC.

15 the defect. Id. ¶¶ 82-96, 103-107.

21 defect. Id. ¶ 100.

25 plaintiffs, if any, were exposed to or relied on them.

28 iPhone 7 or iPhone 7 Plus”). This warranty states, in the first paragraph:

IMPORTANT: BY USING YOUR iPHONE, iPAD, iPOD or APPLE TV

8 TO THE EXTENT PERMITTED BY LAW, THIS WARRANTY AND THE

DURATION AND REMEDIES OF SUCH WARRANTIES TO THE DURATION

17 and workmanship,” as follows:

Product’) against defects in materials and workmanship when used normally in

6 replacement parts or products:

7 If during the Warranty Period you submit a claim to Apple or an AASP in

8 damages, restitution, and injunctive relief, among other remedies.

10 II. LEGAL STANDARD

21 Lucas v. Dep’t of Corrections, 66 F.3d 245, 248 (9th Cir. 1995).

16 A. Article III standing

5 amendment to the complaint or by affidavits, further particularized allegations of fact deemed

14 should be on the jurisprudence that deals with constitutional standing.”).

23 and internal quotation marks omitted).

1 1. Article III standing for claims based on fraud

7 ‘fairly traceable’ to Defendant’s conduct.”) (citation omitted).5

9 in fraud on the basis that Plaintiffs lack Article III standing.

10 2. Article III standing for seeking injunctive relief

3 citations and quotation marks omitted).

5 plaintiff suing under California consumer-protection statutes based on a theory of fraudulent

26 representations regarding the devices.

28 for injunctive relief for lack of Article III standing.

B. Claims subject to Rule 9(b)

19 because “this Court is . . . bound by the holding in Kearns”).

25 pleading fraud requires allegations of “misrepresentation (false representation, concealment, or

4 that contained alleged fraudulent misrepresentations, “which [marketing materials] he found

10 nondisclosure claims need not be pleaded with particularity”).

12 fraudulent misrepresentations and omissions that underlie claims 5 through 14.

13 With respect to Apple’s alleged misrepresentations, Plaintiffs aver, conclusorily, that

3 Further, with respect to Apple’s alleged omissions, Plaintiffs’ nondisclosure contentions,

16 omission is material. An omission is material if a reasonable consumer would attach importance

7 with leave to amend.

13 1. Breach of express warranty

3 a. Whether the audio defect is a “design defect” not covered by the

1 identifies a number of purported symptoms which could plausibly be attributable to material or

11 nevertheless be covered by such warranty.

12 As another example, Apple relies on Davidson v. Apple, Inc., No. 16-CV-04942-LHK,

24 defects in materials or workmanship, a design defect is manufactured in accordance with the

3 the Limited Warranty as a matter of law.

4 b. Defects that manifested after the expiration of the Limited

13 because the Limited Warranty is unconscionable.

16 superior bargaining power. This argument is unavailing.

3 (2006) (internal citations and quotation marks omitted).12

14 warranty). Plaintiffs point to no authorities that hold otherwise.