Holman et al v. Apple, Inc. et al

Filing 31

Holman et al v. Apple, Inc. et al

Doc. 31 Att. 2

Case 5:07-cv-05152-JW

Document 31-3

Filed 11/16/2007

Page 1 of 9

EXHIBIT B

Dockets.Justia.com

Case 5:07-cv-05152-JW

Case 5:07-cv-05662-RMW Document 1 Filed 11/05/2007 Page 1 of 8

Document 31-3

Filed 11/16/2007

Page 2 of 9

1 LATHM & W ATKS LLp

2 Aled C. Pfejfr, Jr. (Bar No. 120965)
Chrstopher S. Yates (BarNo. 161273)
3 Adran F. -Davis (B No. 215827)

DaDel M, WGlL (Bar No..

102580)

p\DR
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ORIGINAL.

505 Montgomer Street, Suite 2000
4 San Fracisco, Californa 94111-6538

Telephone: [phone]
5' Facsimile: (415) 395.,8095

fU..If)
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RICHARO V'. WI~KING \,Gl'(

Em8ii: Dan.WaU~w.com6.

Email: Al..Pteiffer~iw.com

EmaIl: Chrs.Yates(4Iw.com 7 Eniaíl: Adran.Da'Vsáùlw.com
8 Attrneys for Defendant

i:~tf._íæl~Ö~¡I~

APPLE INC.
~

10
11

UNITED STATES DiSTRcT COURT

NORTHRN DISTRCT OF CALIFORNIA
'.

12

SAN JOSE' DIVISION

HAL

13 TIOTHYP. SMIT; MICHAE.LG. LEE; DENNS V. and VICENT MARK G. 14 MORIWA; MACASADDU;SCOTTI, on

cle 7
REMOVAL

0'5682

15 beh~lfofthemse.tves and all other simlarly situated,
16 17 18

DEFENDANT APP.LE .INC. ts NOTICE OF

flaintiffs.
v.

19 APPLE INC.~ AT&T MOBILITY LLC; and

DOES ONE thugh ONE: HUNRED~
Defendants.

20 inclusive.
21

22
23

24
25

26 27
28
LATHAM'WA'lkINS".
ÃnOßNl.li AT I.i.VI SAN FRliHCI~GO

Alrl,6'S NOTIC6 0)1 REMOVAL

Case 5:07-cv-05152-JW

Document 31-3

ase 5:07-cv-05662-RMW Document 1

Filed 11/05/2007 Page 2 of 8

Filed 11/16/2007

Page 3 of 9

1 Defendant Apple Inc. ("Apple") hereby removes this action from the Superior
2 Cour ofthe State of California for the County of

Santa Clara to this Cour pursuant to 28 U.S.C.

4 THE COMPLAINT
5
1.

3 §§ 1331, 1332, 1446 and 1453, on the following grounds:

On October 5,2007, an action was commenced in the Superior Cour of

6 the State of California for the County of Santa Clara, entitled Timothy P. Smith, on behalf of

7 himself and all others similarly situated vs. Apple Inc., Case No. 1-07 -CV -095781. Pursuant to
8 28 U.S,C. § 1446(a), a copy of

the Complaint is attached hereto as Exhibit 1. A First Amended

9 Complaint was filed in this case on November 2,2007, to include additional plaintiffs and
10 additional defendants, entitled Timothy P. Smith; Michael G. Lee, Dennis V. Macasaddu; Mark

11 G. Morikawa; and Vincent Scotti, on behalf of themselves and all other similarly situated vs,
12 Apple Inc.; AT&T Mobilty LLC; and Does One through One Hundred, inclusive ("Smith"),
13 Pursuant to 28 U.S.C. § 1446(a), a copy of

the First Amended Complaint is attached hereto as

14 Exhibit 2 ("F AC")

,

15

2.

The first date upon which Defendant received a copy of the original

16 Complaint was October 8, 2007, when Apple was served, by hand, with the Complaint and a

17 summons from the state cour pursuant to Section 415.30 of the California Code of Civil
18 Procedure. A copy of

the summons is attched hereto as Exhibit 3. The First Amended
the

19 Complaint names both Apple and AT&T Mobilty LLC ("ATTM") as defendants; a copy of

20 amended summons is attched hereto as Exhibit 4.
21
22 Apple and ATTM: violation of

3.

The First Amended Complaint alleges eleven causes of action against
Section 1 of

the Sherman Antitrst Act, 15 U.S.C, § 1 (unlawful

23 tying); violation of

Section 2 of

the Sherman Antitrst Act, 15 V.S.C. § 2 (monopolization);

24 violation ofthe Carght Act, CaL. Bus. & Prof. Code § 16720 (unlawful trsts); violation of

25 the Carght Act, CaL. Bus. & Prof. Code § 16720 (unlawful tying agreement);; breach of
26 implied warranties under Sections 2314 and 2315 of the California Commercial Code; breach of
27 express warranties under Section 2313(1) of the California Commercial Code; violation of

the

28 Song-Beverly Consumer Warranty Act, CaL. Civ. Code §§ 1790 et seq.; breach of

implied
1

lATHAM&WATKI NS'"
ATTORNEYS AT lAW SAN FRANCISCO

APPLE'S NOTICE OF REMOVAL

Case 5:07-cv-05152-JW

Document 31-3

ase 5:07-cv-05662-RMW Document 1

Filed 11/05/2007 Page 3 of 8

Filed 11/16/2007

Page 4 of 9

1 warranty under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act,
2 15 U.S,C. § 231O(d)(1); violation of

the Consumer Legal Remedies Act, CaL. Civ. Code §§ 1750

3 et seq.; violation of

the Computer Fraud Abuse Act, 18 U.S.C. § 1030; violation of

California

4 Penal Code § 502; common law monopolization; violation of

the Racketeer Influenced and

5 Corrpt Organizations Act, 18 U.S,C. §§ 1961-1968; and violation ofthe Vnfair Competition

6 Law, CaL. Bus. & Prof. Code §§ 17200 et seq.
7

4.

Plaintiffs bring this action as a purorted class action. Plaintiffs seek to

8 represent the following purorted class:

9 All persons or entities who: (a) purchased or own an iPhone,

intended for use by themselves, their families, or their members,

10 partcipants, or employees ("the Class") durng the period from
June 29, 2007 though such time in the futue as the effects of

11 Apple's ilegal conduct, as alleged herein, have ceased (the "Class

Period"); (b) purchased audio or video files from the iTunes Music

12 Store durng the Class Period
13 FAC, irir 93(a)-(b); see also FAC, irir 94(a)-(b), Plaintiffs allege that the purorted class members

14 curently number" 1.28 milion iPhone owners" and Plaintiffs expect the class to grow in size to

15 "25 to 37.6 millon within the next 18 months." ¡d., ir 95.
16
5.

The Complaint's prayer for relief seeks: treble damages, or in the

17 alternative, punitive damages; disgorgement of

not less than $280 milion; reasonable attorneys'

18 fees; prejudgment and post-judgment interest; a permanent injunction barng Apple from sellng
19 the iPhone with any softare lock, from denying warranty service to users of unlocked iPhones,

20 and from requiring iPhone consumers to purchase cell phone service through A TTM; and

21 equitable relief in the form of a judicial determination of the rights and responsibilities of the

22 parties for attorneys' fees and costs.
23

JUSDICTION
6.
federal law

24
25 questions of

This Cour has original jursdiction over this action because it raises
pursuant to 28 V.S.C. § 1331. Plaintiffs allege that Apple and ATTM

26 have violated the Sherman Antitrst Act, 28 U.S.C. §§ 1-2, the Magnuson-Moss Warranty27 Federal Trade Commission Improvement Act, 15 U.S.C. § 2310(d)(1), the Computer Fraud and

28 Abuse Act, 18 V.S.C. § 1030, and the Racketeer Influenced and Corrpt Organizations Act, 18
LATHAMaWATKl NS'"
ATTORNEYS AT LAW SAN FRANCISCO

2

APPLE'S NOTICE OF REMOVAL

Case 5:07-cv-05152-JW

Document 31-3

ase 5:07 -cv-05662-RMW Document 1

Filed 11/05/2007 Page 4 of 8

Filed 11/16/2007

Page 5 of 9

1

U.S.C. §§ 1961-1968, each of

which is suffcient to convey federal

jursdiction to this case in its

2
3

own right. Furhermore, this Cour has jursdiction over this action pursuant to the Class Action
Fairness Act ("CAF A"):
The distrct cours shall have original jursdiction of any civil action in which the matter in controversy exceeds the sum or value of interest and costs, $5,000,000, exclusive of

4
5

and is a class action in which(A) any member of a class of plaintiffs is a citizen of a State different from any defendant;

6 7
8

9
10
11

(B) any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or
(c) any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state.

12
13

28 U.S.C, § 1332(d)(2). Pursuant to plaintiffs' own allegations these requirements are satisfied

because, as discussed in greater detail below, the matter in controversy in this purorted class
action exceeds the sum or value of $5,000,000 (taking into account all damages and equitable

14
15

relief sought for all of the purorted class members' claims in the aggregate, exclusive of interest
and costs), and there is "minimum diversity," i.e., the citizenship of

16

"any member of a class of

17 plaintiffs is a citizen of State different from any defendant." 28 U.S.C. § 1332( d)(2)(A).
18 Counsel for Apple has conferred with counsel for plaintiffs and has been assured that plaintiffs

19 wil not contest the removal of this action or seek to remand it to state cour,
20
7.
That jursdiction in this Cour is proper is confirmed by the related case

21 Paul Holman and Lucy Rivello, individually and on behalf of all others similarly situated vs.

22 Apple, Inc., AT&T Mobilty, LLC and Does 1 through 50, inclusive, Case No. C-07-05152-JW,

23 fied October 5, 2007, in the United States Distrct Cour for the Northern District of California, 24 San Jose Division ("Holman"). Holman is also a purorted class action raising questions of state
25 and federal

law and involving substantially similar allegations to this action. In Holman,

26 plaintiffs allege that Apple has unlawfully tied the iPhone to Apple and A TTM products and
27 services in violation of California Business and Professions Code § § 16720, 16726, and 17200
28 (the same statutes invoked in Smith), as well as the Sherman Act, 28 U,S,C. §§ 1-2, and that such
LATHAM"WATKINS'"
ATTORNEYS AT LAW SAN FRANCISCO

3

APPLE'S NOTICE OF REMOVAL

Case 5:07-cv-05152-JW

Document 31-3

Filed 11/16/2007

Page 6 of 9

ase 5:07-cv-05662-RMW Document 1

Filed 11/05/2007 Page 5 of 8

1 conduct has resulted in damages of "no less than $200 milion." See Declaration of Adran F.

2 Davis ("Davis Decl."), ~ 2, Ex. A ("Holman Complaint") ~~ 79, 85. This Court's jurisdiction in
3 Holman is grounded in part on CAP A and in par on federal question jursdiction arising from
4 the Sherman Act. ¡d, Ex. A, ~~ 9-10.

5

THIS CASE ARSES UNDER FEDERA LAW
8.
federal law:

6

Plaintiffs allege five causes of action arising under various provisions of

7
8

a. Violation of

Section 1 ofthe Sherman Antitrst Act, 15 V.S.C. § 1

9 10
11

(unlawful tying);
b. Violation of Section 2 of

the Sherman Antitrst Act, 15 U.S,C. § 2

(monopolization);
c. Breach.ofwarranties in violation of

12
13

the Magnuson-Moss

Waranty-Federal Trade Commission Improvement Act, 15

14
15

U.S.C. § 2310(d)(1);
d.
e.
Violation of

the Computer Fraud Abuse Act, 18 V.S,C, § 1030;

16 17
18

Violation of the Racketeer Influenced and Corrpt Organizations
Act, 18 v.S.C. §§ 1961-1968.

9.

Because these causes of action all "arise under" the laws of the vnited

19 States, this Cour has original jurisdiction of Smith pursuant to 28 V.S.C. § 1331. As such, the
20 case is removable to this Cour pursuant to 28 U.S.C. § 1446.

21 TilS IS A PURORTED CLASS ACTION WITHIN THE MEANING OF CAFA
22
10.

Furhermore, this is a purorted "class action" pursuant to CAP A in that

23 the number of purorted class members exceeds 100 and plaintiffs fied their Complaint under
24 Section 382 of the California Code of Civil Procedure, which authorizes one or more individuals

25 to sue "for the benefit of all" when "the question is one of a common or general interest, of many
26 persons, or when the parties are numerous, and it is impracticable to bring them all before the
27 cour." CaL. Code Civ. Proc. § 382; see 28 U.S,C. §§ 1332(d)(1)(B), (d)(5)(B); FAC,

28 ~92 ("Plaintiffs bring this action on behalf of themselves, and all others similarly situated
LATHAM6WATKINS'"
ATTORNEYS AT lAW SAN FRANCISCO

4

APPLE'S NOTICE OF REMOVAL

Case 5:07-cv-05152-JW

Document 31-3

Filed 11/16/2007

Page 7 of 9

ase 5:07 -cv-05662-RMW Document 1

Filed 11/05/2007 Page 6 of 8
Civil Procedure"); id., ir 95 ("Plaintiffs do not,

1 pursuant to section 382 of

the California Code of

2 as yet, know the exact size of the class, but estimates it to be 1.28 millon iPhone owners with a
3 projected increase of25 to 37.6 milion within the next 18 months").

4 PARTIES AN DIVRSITY
5

11.

Defendant Apple is a citizen of the State of California because it is
the State of California and has its principal place of

6 incorporated under the laws of

business in

7 Cupertino, California. FAC, ir 13.

8

12.

The Complaint alleges that plaintiffs Timothy P. Smith, Michael G. Lee,

9 Dennis V. Macasaddu, Mark G. Moriawa, and Vincent Scotti are all California citizens. See
10 FAC, ir 12. The Complaint also alleges a purorted class of

all natual persons who own an

11 iPhone: "(a)ll persons or entities who... purchased or own an iPhone, intended for use by
12 themselves, their familes, or their members, partcipants, or employees." FAC, ir 93(a). Apple
13 sells the iPhone at its own retail stores and through A TTM stores throughout the United States,

14 See "Apple Sets iPhone Price at $399 for this Holiday Season,"

15 htt://ww.app1e.com/pr/ibraryI2007/09/05iphone.html (accessed October 30, 2007) (cited in
16 FAC, ir 97, n. 59). Thus, the purorted class includes members who are citizens of

states other

17 than California. ¡d. Plaintiffs' counsel admit that the purorted class includes citizens of states
18 other than California on their website by stating that they intend the purorted- class to be
19 nationwide rather than restrcted to residents of the State of

California. See Davis Decl., ir 3, Ex.

20 B ("We wil be askig that the cour designate the lawsuit as a "nationwide class action" so that
21 all United States residents can benefit, not just California residents,")

22 THE AMOUNT IN CONTROVERSY
23
13.

Under CAF A, "the claims of individual class members shall be

24 aggregated to determine whether the matter in controversy exceeds the sum or value of
25 $5,000,000, exclusive of

interest and costs." 28 U.S.C. § 1332(d)(6) (emphasis added). In their

26 Complaint, plaintiffs seek disgorgement of "no less than" $280 milion, "based on approximately
27 1.4 millon iPhones sold to date at a profit margin of $200 per iPhone", or as high as $7,52

28 bilion, based on projected sales of37.6 milion iPhones, FAC Prayer, irir 6(a), (c).
lATHAM&WATKINS'"
ATTORNEYS AT LAW SAN FRANCISCO

5

APPLE'S NOTICE OF REMOVAL

Case 5:07-cv-05152-JW

Document 31-3

Filed 11/16/2007

Page 8 of 9

ase 5:07 -cv-05662-RMW Document 1

Filed 11/05/2007 Page 7 of 8

1 Furthermore, plaintiffs are seekig treble damages as a result of Apple's alleged wrongful
2 conduct. FAC Prayer, ~ 4. See Senterfitt v. Sun

trust Mortgage, Inc., 385 F. Supp. 2d 1377,

3 1382-83 (S.D. Ga. 2005) (treble damages included when calculating the amount in controversy

4 pursuant to CAFA); see also Rosen v. Chrysler Corp., 205 F.3d 918,922 (6th Cir. 2002) (treble

5 damages included when calculating amount in controversy for puroses of diversity jursdiction).
6 Thus, plaintiffs have alleged an amount in controversy ranging from $840 milion to $22.56

7 bilion, far in excess ofCAFA's $5 milion threshold,

8

VENUE AN INTRA-DISTRICT ASSIGNMENT
14.

9

Because the Complaint was fied and curently is pending in the Superior

10 Cour of California for the County of Santa Clara, this Distrct is the proper venue for this action
11 upon removal pursuant to 28 V.S.C. § 1441

(a), and the San Jose Division is the proper intra-

12 Distrct assignent for this action upon removal pursuant to Civil L.R. 3-2(c).
13

REMOVAL PROCEDUR
15, 16.

14 '

This Notice is timely fied pursuant to 28 US.C. § 1446(b).

15

Pusuant to 28 US.C. § 1446(a), copies of all process, pleadings, and
the Complaint, First Amended Complaint, Summons,

16 orders are attched hereto. Copies of

17 Amended Summons, Civil Cover Sheet, Cour Order Deeming the Case Complex, Proof of
18 Service, and Notice of Association of Counsel by Plaintiffs are attached hereto as Exhibits 1, 2,
19 3,4,5,6, 7, and 8 respectively. No other pleadings have been fied in this matter to date in the

20 Superior Cour.

21

17.

Apple wil serve wrtten notice of

the removal of

this action upon all

22 adverse parties promptly and wil file such notice with the Clerk for the Superior Cour of the
23 State.ofCalifornia, County of Santa Clara, as required by 28 US.C. § 1446(d). A copy of

the

24 Notice of

Filing of

Removal and a Notice of Appearance are attched hereto as Exhibits 9 and

25 10, respectively.
26

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28
LATHAM"WATKINS'"
ATTORNEYS AT LAW SAN FRANCISCO

6

ApPLE'S NOTICE OF REMOVAL

Case 5:07-cv-05152-JW

Document 31-3

Filed 11/16/2007

Page 9 of 9

ase 5:07-cv-05662-RMW Document 1

Filed 11/05/2007 Page 8 of 8

1

JOINDER OF DEFENDANTS
18.

2

The only other named defendant, A TTM, joins in this Notice of Removal;

3 see the Joinder of A TIM.

4
5

NON-WAIVER OF DEFENSES
19.

Apple expressly reserves all of its defenses. Apple denies any liability or

6 that plaintiffs or any consumer has been injured in any way. See, e.g" Key v. DSW, Inc., 454 F.

7 Supp, 2d 684, 691 (S.D. Ohio 2006) ("the fact that Defendant removed the case does not mean
8 that Defendant concedes that Plaintiff

has adequately alleged appropriate damages.")

9
10
11

Dated: November 7, 2007

Respectfuly submitted,

LATHAM & WATKIS LLP
Danel M. Wall

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13

Alfred C. Pfeiffer Christopher S. Yates Adrian F. Davis

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Sl'631278

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LATHAM"WATKINS'''
ATTORNEYS AT LAW SAN FRANCISCO

7

APPLE'S NOTICE OF REMOVAL