Gomelsky v. Apple, Inc.

Filing 30

AMENDED COMPLAINT FIRST AMENDED CLASS ACTION COMPLAINT; DEMAND FOR JURY TRIAL against Apple, Inc.. Filed byGiorgio Gomelsky. (Attachments: # 1 FIRST AMENDED CERTIFICATE OF INTERESTED ENTITIES OR PERSONS)(Crowther, Robyn) (Filed on 4/2/2009)

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Gomelsky v. Apple, Inc. Doc. 30 1 MEISELMAN, DENLEA, PACKMAN, 2 Jeffrey I. Carton (pro hac vice) 3 Jerome Noll (pro hac vice) 4 Christine M. Ford (pro hac vice application to be submitted) 5 1311 Mamaroneck Avenue CARTON & EBERZ P.C. jnoll@mdpcelaw.com jcarton@mdpcelaw.com cford@mdpcelaw.com 6 Telephone: (914) 517-5000 7 White Plains, New York 10605 Facsimile: (914) 517-5055 8 CALDWELL LESLIE & PROCTOR, PC 9 crowther@caldwell-leslie.com 10 giang@caldwell-leslie.com ROBYN C. CROWTHER, SBN 193840 ALBERT GIANG, SBN 224332 1000 Wilshire Blvd., Suite 600 Telephone: (213) 629-9040 11 Los Angeles, California 90017-2463 12 Facsimile: (213) 629-9022 13 Attorneys for Plaintiffs 14 15 16 and all others similarly situated UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA 17 REUBEN BERENBLAT, ANDREW Case No. C-08-04969 JF PERSONETTE, EARL C. SIMPSON, 18 LAURA MILLER, On behalf of themselves and all others similarly situated, FIRST AMENDED 19 CLASS ACTION COMPLAINT Plaintiffs, 20 21 22 23 24 25 26 27 28 CALDWELL LESLIE & PROCTOR v. APPLE INC., Defendants. DEMAND FOR JURY TRIAL Plaintiffs, by their attorneys, Meiselman, Denlea, Packman, Carton & Eberz P.C., as and for their class action complaint, allege, with personal knowledge as to their own actions, and upon information and belief as to those of others, as follows: -1- FIRST AMENDED CLASS ACTION COMPLAINT Dockets.Justia.com 1 2 NATURE OF CASE 1. This class action seeks to redress the widespread and commonplace 3 characteristic defect and design flaw existing at the time of manufacture which renders one 4 or more of Apple's PowerBook G4's memory slots inoperative during the computer's 5 useful life. This inherent defect manifests itself when a PowerBook owner adds additional 6 memory (RAM) to the first or second (upper or lower) memory slot available in most 7 PowerBooks, including the PowerBook G4. Typically, when the additional memory is 8 added, the Powerbook does not recognize the memory, resulting in slower processing 9 speeds, decreased computer function and other computing problems. Unfortunately for 10 consumers, because both memory slots are hardwired to the PowerBook's motherboard, 11 consumers who choose to repair the defect can incur costs of more than $500 in parts and 12 labor. 13 2. Moreover, the inherent defect often manifests itself months or even years 14 after purchase of a new PowerBook and/or installation of memory (RAM) in a memory 15 slot. 16 3. In response to thousands of complaints from its PowerBook customers, 17 Apple has admitted that its PowerBooks, specifically certain PowerBook G4 models, have 18 defective memory slots. Aside from a limited number of PowerBooks manufactured 19 between January 2005 and April 2005, however, Apple has refused to repair the defect 20 which has manifested itself in PowerBooks manufactured before and after this time period. 21 4. As a result of Apple's actions, thousands of its customers have purchased 22 PowerBook computers with defective memory slots. Apple has refused to repair the defect 23 free of charge, and has refused its customers' requests for refunds or exchanges of their 24 defective PowerBooks. As such, thousands of Apple PowerBook owners have been 25 compelled to either repair the defective memory slot at their own expense or lose 26 permanently the ability to add additional memory to their computers. 27 CALDWELL LESLIE & PROCTOR 5. This suit is brought on behalf of a nationwide class of all persons who have 28 purchased Apple PowerBook computers, including but not limited to the PowerBook G4, -2- FIRST AMENDED CLASS ACTION COMPLAINT 1 manufactured with defective memory slots, between January 1, 2005, to the present, and 2 who were damaged thereby (the "Class"), including a sub-class of persons who purchased 3 PowerBook G4 computers directly from Defendant (the "Sub-Class"). It seeks, inter alia, 4 restitution and/or compensatory damages for Plaintiffs and each Class member, including 5 but not limited to: reimbursement of expenses incurred to repair defective memory slots; 6 attorneys' fees; and the costs of this suit. 7 8 JURISDICTION AND VENUE 6. Jurisdiction in this civil action is authorized pursuant to 28 U.S.C. 1332(d), 9 as Plaintiffs' citizenship is diverse from Defendant, there are more than 100 class members, 10 and the amount in controversy is in excess of $5 million. 11 7. Venue is proper in this district under 28 U.S.C. 1391(b)(2), as a substantial 12 part of the events or omissions giving rise to Plaintiffs' claims occurred in the Northern 13 District of California. 14 8. Venue is also proper in this district under 28 U.S.C. 1391(a)(2), on the 15 grounds that a substantial part of the events relating to Plaintiffs' claims occurred in the 16 Northern District of California. 17 18 INTRADISTRICT ASSIGNMENT 9. Plaintiffs respectfully request that this matter be assigned to the San Jose 19 Division because a substantial portion of the actions and omissions giving rise to this 20 action occurred in Santa Clara County, California. Specifically, Defendant's marketing of 21 the PowerBook G4, Defendant's communications about the Extended Warranty and 22 Defendant's refusal to repair the defective memory slots all emanated from its principal 23 place of business in Cupertino, California. 24 25 PARTIES 10. Plaintiff Reuben Berenblat is a resident of the State of New York, County of 26 Nassau. Mr. Berenblat purchased an Apple PowerBook G4 with a defective memory slot 27 directly from Apple over the Internet. Mr. Berenblat seeks to represent the Class and Sub28 Class. CALDWELL LESLIE & PROCTOR -3- FIRST AMENDED CLASS ACTION COMPLAINT 1 11. Plaintiff Andrew Personette is a resident of the State of New York, County of 2 Kings. Mr. Personette acquired an Apple PowerBook G4 from the Apple store in New 3 York City. Mr. Personette seeks to represent the Class and Sub-Class. 4 12. Plaintiff Earl Simpson is a resident of the State of Washington, County of 5 Clark. Dr. Simpson purchased an Apple PowerBook G4 from MacShop Northwest in 6 Oregon, which is identified on Apple's website as an authorized reseller and service 7 provider. Dr. Simpson seeks to represent the Class. 8 13. Plaintiff Laura Miller is a resident of the State of California, County of San 9 Francisco. Ms. Miller purchased an Apple PowerBook G4 from a third party internet 10 vendor and purchased an AppleCare Protection Plan directly from Apple to cover her 11 PowerBook G4. Ms. Miller seeks to represent the Class. 12 14. 15. Defendant Apple Inc. is incorporated under the laws of the State of Defendant Apple Inc. does actual business throughout the State of California, 13 California, with its principal place of business located in Cupertino, California. 14 15 including through the direct sale of its merchandise in the State and operation and 16 maintenance of an interactive website apple.com accessible to consumers in, and 17 residents of, California. 18 19 A. 20 OPERATIVE FACTS Apple Manufactures Defective PowerBook G4 Computers 16. Defendant Apple Inc. is a publicly traded company engaged in the business 21 of designing, manufacturing, marketing, distributing and selling personal computers and 22 related products and services through its own retail stores, online, direct sales, third party 23 wholesalers and resellers. Apple has sold its PowerBook computers, including the G4 24 model, to tens of thousands of consumers throughout the United States. 25 17. In or about January 2001, Apple began designing, manufacturing, 26 warranting, advertising, marketing, selling and providing PowerBook G4 laptop computer 27 to consumers throughout the United States. Between 2001 and 2003, Apple produced the 28 Titanium PowerBook G4; between 2003 and 2006, the Aluminum models were produced. CALDWELL LESLIE & PROCTOR -4- FIRST AMENDED CLASS ACTION COMPLAINT 1 18. When the Aluminum PowerBook G4s were released in January 2003, Apple 2 marketed them as being designed to exacting standards and touted their many features, 3 including the fact that each Aluminum PowerBook G4 has two memory slots. The 4 memory slots are an essential feature of the computer, and are marketed so as to give 5 consumers the ability to expand the PowerBook's memory (RAM) at any time, thereby 6 increasing the computer's functionality. 7 19. Based on Apple's own admissions, however, certain of its PowerBook G4 8 computers were manufactured with defective memory slots. Indeed, either or both of the 9 memory slots have an inherent defect existing at the time the computer is manufactured 10 when additional memory is added, it is not recognized by the computer and is thus useless. 11 20. Although the useful life of a laptop or notebook computer is five years, the 12 inherent defect in the Apple PowerBook G4 computer memory slots renders the computers 13 substantially certain to result in malfunction during the computer's useful life. 14 21. As Apple has admitted in an article posted on its website, affected 15 PowerBook G4 computers exhibit at least one of the following symptoms upon installation 16 of RAM memory in the lower memory slot: (1) The computer does not start up; or (2) The 17 computer does not recognize that the lower memory slot is filled, thus degrading system 18 performance because the memory in only one slot is recognized. 19 22. Apple has also admitted that the problems may only occur intermittently, and 20 that an owner of a PowerBook with a defective memory slot may not know or become 21 aware of the defect until months, or years, after installation of memory in the defective 22 memory slot. 23 B. 24 Apple Wrongfully Refuses To Correct The Vast Majority of Defective Computers 23. Despite the inherent defect existing in the memory slots at the time the 25 computers were manufactured, Apple has refused to repair malfunctioning PowerBook G4 26 computers or reimburse consumers for the cost of the repairs. Apple has maintained its 27 refusal to repair the defective computers, although the inherent defect results in 28 malfunction during the PowerBook's useful life. CALDWELL LESLIE & PROCTOR -5- FIRST AMENDED CLASS ACTION COMPLAINT 1 24. Apple claims that it is not obligated to repair defective PowerBook G4 2 computers when the inherent defect resulted in malfunction outside Apple's purported one3 year limited warranty period. Apple's refusal to repair inherently defective computers, 4 however, is wrongful because the defect that exists at the time of manufacture renders the 5 computer substantially certain to result in malfunction during the computer's useful life, 6 thus violating Plaintiffs' right to obtain products free from defects. Accordingly, because 7 the defect existed within the warranty period, Apple is obligated to repair, replace, correct, 8 or otherwise provide relief to its customers. 9 25. Moreover, Apple's purported limitation of warranties is ineffective because it 10 is not delivered to consumers in advance of their purchases, consumers are not permitted to 11 negotiate the terms, and the terms of the limited warranty unreasonably favor Apple. The 12 unconscionability of Apple's purported limitation of warranties is compounded by Apple's 13 knowledge that it manufactured defective computers, yet continued to sell them without 14 correcting the defects. 15 26. After receiving thousands of complaints from its customers regarding 16 defective memory slots, Apple extended the warranty available to PowerBook G4 17 customers by initiating, in or around 2006, the PowerBook G4 Memory Slot Repair 18 Extension Program covering a limited number of PowerBook G4 models experiencing 19 specific component issues and that were manufactured between January, 2005 and April, 20 2005 ("Extended Warranty"). 21 27. The Extended Warranty was available, however, to a very limited number of 22 PowerBook customers, as it only covered affected PowerBook G4 computers having 23 eleven digit serial numbers in the following range: W8503xxxxxx-W8518xxxxxx. The 24 Extended Warranty did not cover any PowerBook G4 outside of this serial number range 25 and ended on July 24, 2008. Thus, the vast majority of Powerbooks were not covered by 26 the Extended Warranty. And should a PowerBook owner with a computer which was 27 covered by the Extended Warranty find out about the computer's defective memory slot 28 after July 24, 2008, he or she would have no recourse other than incurring the expense of CALDWELL LESLIE & PROCTOR -6- FIRST AMENDED CLASS ACTION COMPLAINT 1 fixing the defective memory slot, or continue to use the computer without having the 2 ability to utilize the defective memory slot and add memory. 3 28. Tens of thousands of people nationwide have purchased PowerBook 4 computers manufactured with defective memory slots. Aside from the limited number of 5 PowerBooks covered by the Extended Warranty, Apple has informed Plaintiffs and other 6 customers with defective PowerBooks that they have no recourse other than to repair the 7 defective memory slots at their own expense. Apple has refused to warrant, repair or pay 8 for any repairs relating to the PowerBook's defective lower memory slot, or to warrant any 9 PowerBooks should the defect manifest itself sometime in the future. 10 29. To date, Apple has not taken effective action to remedy defective memory 11 slots in its PowerBook computers. To ensure that the memory slots in all of its PowerBook 12 computers were fit for their ordinary purpose during the computer's useful life, Apple 13 should have tested both memory slots prior to installing and selling its PowerBook 14 computers. Instead, Apple sold PowerBook computers with memory slots that were not fit 15 for ordinary use. 16 30. Moreover, Apple did not give adequate notice of its Extended Warranty to its 17 customers. Apple did not contact purchasers of PowerBook computers to inform them that 18 they may be covered by the Extended Warranty, nor did Apple notify all PowerBook 19 owners of the defective memory slot so that consumers could have their PowerBooks 20 repaired during the one year warranty in effect from the date of purchase. 21 22 23 C. Plaintiff Reuben Berenblat Purchases A Defective PowerBook G4 Computer Directly From Apple 31. 32. On or about July 12, 2005, Mr. Berenblat purchased directly from Apple an In September 2008, Mr. Berenblat realized that his computer was not 24 Aluminum PowerBook G4 15", serial number W85252RYRG4. 25 26 working well. Thinking that he may require additional memory to optimize the 27 performance of his computer, Mr. Berenblat added memory to his computer. However, his 28 computer's performance only worsened. CALDWELL LESLIE & PROCTOR -7- FIRST AMENDED CLASS ACTION COMPLAINT 1 33. Mr. Berenblat brought his computer to an Apple store in New York City and 2 was told that his hard drive was defective. However, it was later determined that there was 3 no problem with the hard drive; rather, the lower memory slot was defective and degraded 4 his computer's performance. Mr. Berenblat again contacted Apple directly to have his 5 computer repaired, and Apple refused to repair or replace his defective computer. 6 34. As a result of the defect, Mr. Berenblat cannot use his PowerBook for its 7 ordinary and intended purpose, and has suffered damage. 8 9 10 D. Plaintiff Andrew Personette Receives A Defective PowerBook G4 Computer Directly From Apple 35. In 2005, Mr. Personette purchased a titanium PowerBook computer with an 11 AppleCare Protection Plan. However, Mr. Personette's titanium PowerBook was 12 defective. After returning his titanium computer to the Apple store in New York City's 13 Soho neighborhood several times for repair, Apple personnel determined that the titanium 14 PowerBook could not be fixed. Accordingly, in exchange for his defective titanium 15 PowerBook, in 2005, Mr. Personette received from the Apple store an Aluminum 16 PowerBook G4 15", serial number W84080FANRW. 17 36. In 2007, Mr. Personette added memory to his PowerBook to increase its 18 functionality. However, shortly thereafter, in September 2007, Mr. Personette noticed that 19 his PowerBook was functioning very slowly and determined that the computer did not 20 recognize one of the memory cards because the lower memory slot was defective. 21 37. 38. Mr. Personette contacted Apple directly to have his computer repaired, and As a result of the defect, Mr. Personette cannot use his PowerBook for its 22 Apple refused to repair or replace his defective computer. 23 24 ordinary and intended purpose, and has suffered damage. 25 26 27 28 CALDWELL LESLIE & PROCTOR -8- FIRST AMENDED CLASS ACTION COMPLAINT 1 2 E. Plaintiff Earl Simpson Purchases A Defective PowerBook G4 Computer From An Apple-Authorized Reseller 39. On or about August 20, 2005, Dr. Simpson purchased an Aluminum 3 PowerBook G4 15", serial number W852545TRG4 from MacShop Northwest, an Apple4 authorized reseller and service provider. 5 40. Dr. Simpson sought to increase the RAM in his PowerBook to the maximum 6 of 2GB. However, on or about October 12, 2008, when Dr. Simpson attempted to add 7 memory to his PowerBook, he realized that the lower memory slot was defective and did 8 not recognize the memory. 9 41. Dr. Simpson was advised by Apple-authorized reseller and service provider, 10 The Portland Mac Store, to increase the RAM in the upper memory slot to the maximum in 11 the single memory slot of 1 GB. Thus, Dr. Simpson was not able to obtain the maximum 12 amount of memory that his computer should have been able to utilize had it not been 13 defective. 14 42. As a result of the defect, Dr. Simpson cannot use his PowerBook for its 15 ordinary and intended purpose, and has suffered damage. 16 F. 17 Plaintiff Laura Miller Purchases A Defective PowerBook G4 43. 44. In or around early 2006, Ms. Miller purchased an Aluminum PowerBook G4 Shortly after purchasing her PowerBook, Ms. Miller experienced problems 18 15", serial number W8527057RG3 from a third-party internet vendor. 19 20 and returned the computer to Apple. In June 2006, Apple replaced the motherboard of her 21 PowerBook. 22 45. 46. Because of her initial problems, Ms. Miller purchased an AppleCare Just after expiration of her AppleCare extended protection, Ms. Miller's 23 Protection Program to cover her PowerBook computer. 24 25 computer again failed. At this time, Ms. Miller learned that the lower memory slot of her 26 PowerBook G4 was defective and did not recognize the memory that she attempted to load 27 into the computer. Thus, Ms. Miller was not able to obtain the maximum amount of CALDWELL LESLIE & PROCTOR 28 memory that her computer should have been able to utilize had it not been defective. -9- FIRST AMENDED CLASS ACTION COMPLAINT 1 47. As a result of the defect, Ms. Miller cannot use her PowerBook for its 2 ordinary and intended purpose, and has suffered damage. 3 4 5 G. Thousands of Consumers Have Suffered Losses As A Result of Apple's Manufacture of Defective PowerBook G4 Computers 48. There have been numerous consumer complaints to various Federal and State 6 authorities about the PowerBook's defective lower memory slots, and web sites are full of 7 consumers who have complained about the fact that their PowerBook computers' memory 8 slots do not work. Consumers have posted complaints stating that they have had to repair 9 the defective memory slot at their own expense, that Apple has refused to reimburse them 10 for the expense incurred, and that Apple has refused to exchange defective PowerBooks for 11 PowerBooks with properly functioning memory slots. 12 49. Moreover, an online petition has been initiated by Apple customers who have 13 purchased PowerBooks with defective memory slots, and which Apple has refused to 14 repair. As of the date of this Amended Complaint, almost 5,000 PowerBook owners have 15 signed the petition, providing their name, address and email address, demanding that Apple 16 repair the defective memory slots or reimburse the petitioners for expenses incurred in 17 repairing the memory slots. 18 50. Apple continued to manufacture and sell PowerBook computers with 19 defective memory slots even after receiving thousands of complaints informing it of the 20 specific defect alleged herein. As such, Apple profited enormously from sales of its 21 PowerBook G4 computers while Plaintiffs and the Class incurred significant damages, 22 including but not limited to the expenses incurred in repairing or replacing their defective 23 PowerBook computers. 24 51. Apple has, and continues to this day, refused to respond to the thousands of 25 customer complaints regarding the PowerBook's defective memory slot, and has refused to 26 repair at its own expense the defective memory slot or compensate thousands of 27 PowerBook purchasers who repaired the defective memory slot at their own expense. 28 CALDWELL LESLIE & PROCTOR -10- FIRST AMENDED CLASS ACTION COMPLAINT 1 52. As referred to above, no adequate notice has been provided to Plaintiffs, and 2 no consent or bargained-for approval has been granted by Plaintiffs or other Apple 3 customers who purchased PowerBook computers, including the PowerBook G4, that their 4 computers have defective memory slots. Nor did Defendant provide any notice, adequate 5 notice or full disclosure of the fact that its PowerBook computers have defective memory 6 slots. 7 8 CLASS ACTION ALLEGATIONS 53. Plaintiffs bring this action on their own behalf and additionally, pursuant to 9 Rule 23 of the Federal Rules of Civil Procedure, on behalf of a nationwide class of all 10 persons who have purchased PowerBook computers with one or more defective memory 11 slots and who were damaged thereby, during the period from January 1, 2005, to the 12 present (the "Class") and a sub-class of persons who purchased PowerBook computers 13 directly from Apple (the "Sub-Class"). 14 54. Excluded from the Class is Defendant; any parent, subsidiary, or affiliate of 15 Defendant; any entity in which Defendant has or had a controlling interest, or which 16 Defendant otherwise controls or controlled; and any officer, director, employee, legal 17 representative, predecessor, successor, or assignee of Defendant. 18 19 55. This action is brought as a class action for the following reasons: a. The Class consists of at least thousands of persons and is 20 therefore so numerous that joinder of all members, whether otherwise required or 21 permitted, is impracticable; 22 b. There are questions of law or fact common to the Class that i. ii. whether Defendant violated Cal. Bus. & Prof. Code 17200 by whether Defendant breached the implied warranty of 23 predominate over any questions affecting only individual members, including: 24 25 manufacturing and selling PowerBook computers with defective memory slots; 26 27 merchantability arising pursuant to Cal. Comm. Code 2314 by manufacturing and selling 28 PowerBook computers with defective memory slots; CALDWELL LESLIE & PROCTOR -11- FIRST AMENDED CLASS ACTION COMPLAINT 1 iii. iv. v. c. d. whether Defendant unjustly enriched itself in manufacturing whether members of the Class have sustained damages and/or whether Defendant should be enjoined from selling PowerBook 2 and selling PowerBook computers with defective memory slots; 3 4 other compensable losses and, if so, the proper measure thereof; and 5 6 computers with defective memory slots. 7 The claims asserted by Plaintiffs are typical of the claims of the Plaintiffs will fairly and adequately protect the interests of the Class, 8 members of the Class; 9 10 and Plaintiffs have retained attorneys experienced in class and complex litigation, 11 including related litigation involving consumer fraud; 12 e. A class action is superior to other available methods for the fair and i. Absent a class action, Class members as a practical matter will 13 efficient adjudication of the controversy, for at least the following reasons: 14 15 be unable to obtain redress, Defendant's violations of its legal obligations will continue 16 without remedy, additional customers will be harmed, and Defendant will continue to 17 retain its ill-gotten gains; 18 ii. iii. iv. It would be a substantial hardship for most individual members When the liability of Defendant has been adjudicated, the Court A class action will permit an orderly and expeditious 19 of the Class if they were forced to prosecute individual actions; 20 21 will be able to determine the claims of all members of the Class; 22 23 administration of Class claims, foster economies of time, effort, and expense and ensure 24 uniformity of decisions; and 25 v. f. The lawsuit presents no difficulties that would impede its 26 management by the Court as a class action. 27 CALDWELL LESLIE & PROCTOR Defendant has acted on grounds generally applicable to Class 28 members, making class-wide monetary and injunctive relief appropriate; and -12- FIRST AMENDED CLASS ACTION COMPLAINT 1 g. The prosecution of separate actions by individual members of the 2 Class would create a risk of incompatible standards of conduct for Defendant and of 3 inconsistent or varying adjudications for all parties. 4 56. Defendant's violations of the common law are applicable to all members of 5 the Class, and Plaintiffs is entitled to have Defendant enjoined from engaging in unlawful 6 conduct in the future. 7 8 9 10 FIRST CAUSE OF ACTION (Violation of California Business and Professions Code 17200 et seq. On Behalf of the Class and Sub-Class) 57. 58. 59. Plaintiffs repeat and reallege the allegations contained in Paragraphs 1 California Business and Professions Code 17200 prohibits acts of unfair Apple has engaged in unlawful and unfair business acts or practices in 11 through 56 above as if fully set forth herein. 12 13 competition, including any "unlawful, unfair or fraudulent business act or practice[.]" 14 15 California and nationwide, in violation of Cal. Bus. & Prof. Code 17200, by 16 manufacturing and selling PowerBook computers with defective memory slots to Plaintiffs 17 and other members of the Class, by failing to use reasonable care to test the memory slots 18 in its PowerBook computers prior to sale, and by continuing to sell PowerBook computers 19 with defective memory slots even after learning that the memory slots in its PowerBook 20 computers were defective, all in violation of Cal. Comm. Code 2314, U.C.C. 2-314, 21 and the common law. 22 60. As described herein, Defendant's conduct in manufacturing and selling 23 computers with an inherent defect that was substantially certain to result in malfunction 24 during the computers' useful lives caused and continues to cause substantial injury to 25 consumers, including Plaintiffs and the other members of the Class. The California 26 Commercial Code, as well as other state and federal law, embodies the public policy that 27 prohibits manufacturers from selling such defective goods to consumers and then refusing 28 CALDWELL LESLIE & PROCTOR -13- FIRST AMENDED CLASS ACTION COMPLAINT 1 to repair or replace the defective product, particularly when the seller knows of the defect. 2 Thus, Defendant's acts are manifestly unfair to the Plaintiffs and the Class. 3 61. Furthermore, as there were reasonable alternatives available to Apple to 4 further its business interests other than voluntarily placing into the stream of commerce 5 PowerBook computers with defective memory slots, the gravity of Defendant's wrongful 6 conduct outweighs any purported benefits attributable to such conduct. 7 62. As a direct and proximate result of Defendant's actions as described herein, 8 Plaintiffs and other members of the Class have suffered, and continue to suffer, injury in 9 fact and have lost money as a result of Defendant's deception and unfair and unlawful 10 business practice in an amount which will be proven at trial, and which is in excess of the 11 requisite jurisdictional amount. 12 63. By reason of the foregoing, Defendant has violated Cal. Bus. & Prof. Code 13 17200, and is liable to Plaintiffs and the other members of the Class for restitution and all 14 other appropriate remedies, plus costs and attorneys' fees. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CALDWELL LESLIE & PROCTOR SECOND CAUSE OF ACTION (Breach of Implied Warranty of Merchantability Pursuant to Cal. Comm. Code 2314 On Behalf of the Sub-Class) 64. 65. 66. Plaintiffs repeat and reallege the allegations contained in Paragraphs 1 Defendant is a merchant with respect to computers, including PowerBook Plaintiffs Berenblat and Personette acquired directly from Defendant through 63 above as if fully set forth herein. computers manufactured and sold under the Apple brand. PowerBook G4 computers. An implied warranty that each Plaintiff's PowerBook G4 was merchantable arose by operation of law as part of the sale, and as part of the sales of PowerBook computers to other members of the Sub-Class. 67. Defendant breached the implied warranty of merchantability in that the PowerBook computers sold to Plaintiffs Berenblat and Personette and the Sub-Class were -14- FIRST AMENDED CLASS ACTION COMPLAINT 1 not in merchantable condition when sold or at any time thereafter, in that Plaintiffs' and the 2 Sub-Class' PowerBook computers have defective memory slots that were substantially 3 certain to result in the computer's malfunction during the computer's useful life, and, in 4 fact, did result in malfunction during the computer's useful life. 5 68. When purchasing their PowerBook computers, Plaintiffs Berenblat and 6 Personette and the Sub-Class were not aware of the memory slot defect as the defect was 7 and is not open or obvious. 8 69. Any attempt by Apple to limit the duration and scope of the implied warranty 9 of merchantability is unreasonable, unconscionable and void as Apple knew or recklessly 10 disregarded the fact that the memory slot defect existed at the time of manufacture and 11 might not be discovered, if at all, until such time as a PowerBook owner would attempt to 12 install additional memory and uncover the fact that the one or both of the memory slots 13 were defective. Apple withheld information about the memory slot defect from 14 PowerBook owners intending that owners would not uncover the inherent defect until such 15 time as any Apple express warranty in effect expired. Moreover, the terms of Apple's 16 express warranty were not subject to negotiation, unreasonably favored Apple, and were 17 not provided to consumers prior to sale, thus rendering any limitations unconscionable. 18 70. As a result of Apple's breach of the implied warranty of merchantability, 19 Plaintiffs and the Sub-Class have suffered incidental and consequential damages, including 20 expenses incurred to repair the memory slot defect or replace their PowerBook computers, 21 and damages representing the difference between the value of the defective PowerBooks 22 purchased and the value the PowerBooks would have had if they had been as warranted 23 and did not have defective memory slots. 24 71. By reason of the foregoing, Defendant is liable to Plaintiffs and the other 25 members of the Sub-Class for the damages that they have suffered as a result of 26 Defendant's actions, the amount of such damages to be determined at trial. 27 28 CALDWELL LESLIE & PROCTOR -15- FIRST AMENDED CLASS ACTION COMPLAINT 1 2 3 THIRD CAUSE OF ACTION (Unjust Enrichment On Behalf of the Class and Sub-Class) 72. 73. Plaintiffs repeat and reallege the allegations contained in Paragraphs 1 Plaintiffs and the Class have conferred benefits on Defendant by paying 4 through 71 above as if fully set forth herein. 5 6 value for computers that they reasonably expected to be fully functioning during the 7 computers' useful life. However, Plaintiffs did not purchase fully functioning computers 8 as a result of an inherent defect known to Defendant. 9 74. Defendant knowingly and willingly accepted monetary benefits from 10 Plaintiffs and the Class, although Defendant did not provide consumers with fully11 functioning computers. Rather, Defendants profited from the sales of inferior and 12 defective products. 13 75. 76. Under the circumstances described herein, it is inequitable for Defendants to By engaging in the conduct described above, Defendant has unjustly 14 retain the full monetary benefit at the expenses of Plaintiffs and the Class. 15 16 enriched itself at the expense of Plaintiffs and the Class and is required, in equity and good 17 conscience, to compensate Plaintiffs and the Class for harm suffered as a result of 18 Defendant's actions. 19 77. As a direct and proximate result of Defendant's unjust enrichment, Plaintiffs 20 and the Class have suffered injury and are entitled to reimbursement, restitution, and 21 disgorgement from Defendant of the benefit conferred by Plaintiffs and the Class. 22 WHEREFORE, Plaintiffs respectfully requests that the Court enter judgment against 1. 2. Certifying this action as a class action, pursuant to Rule 23(a) and 23(b)(3) of On Plaintiffs' First Cause of Action, awarding Plaintiffs all appropriate 23 Defendant as follows: 24 25 the Federal Rules of Civil Procedure, with a class and sub-class as defined above; 26 27 remedies, including, but not limited to restitution, plus costs and attorneys' fees; 28 CALDWELL LESLIE & PROCTOR -16- FIRST AMENDED CLASS ACTION COMPLAINT 1 3. On Plaintiffs' Second Cause of Action, awarding against Defendant the 2 damages that Plaintiffs and the other members of the Class have suffered as a result of 3 Defendant's actions, the amount of such damages to be determined at trial; 4 4. On Plaintiffs' Third Cause of Action, awarding Plaintiffs and the Class all 5 appropriate remedies, including but not limited to reimbursement, restitution, and 6 disgorgement of all profits unjustly retained by Defendant; 7 8 5. 6. Awarding Plaintiffs interest, costs and attorneys' fees; and Awarding Plaintiffs such other and further relief as this Court deems just and 9 proper. 10 11 DATED: April 2, 2009 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CALDWELL LESLIE & PROCTOR Respectfully submitted, CALDWELL LESLIE & PROCTOR, PC ROBYN C. CROWTHER ALBERT GIANG By /S/ ROBYN C. CROWTHER Attorneys for Plaintiffs -17- FIRST AMENDED CLASS ACTION COMPLAINT 1 2 DEMAND FOR TRIAL BY JURY Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiffs hereby 3 demand a trial by jury. 4 5 DATED: April 2, 2009 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CALDWELL LESLIE & PROCTOR Respectfully submitted, CALDWELL LESLIE & PROCTOR, PC ROBYN C. CROWTHER ALBERT GIANG By /S/ ROBYN C. CROWTHER Attorneys for Plaintiffs -18- FIRST AMENDED CLASS ACTION COMPLAINT

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