McKinney v. Google, Inc. et al

Filing 41

MOTION to Dismiss DEFENDANTS GOOGLE INC. AND HTC CORPORATION'S NOTICE OF MOTION AND MOTIN TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF filed by Google, Inc., HTC Corp.. Motion Hearing set for 11/1/2010 09:00 AM in Courtroom 8, 4th Floor, San Jose. (Larrabee, Matthew) (Filed on 7/12/2010)

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McKinney v. Google, Inc. et al Doc. 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MATTHEW L. LARRABEE (No. 97147) matthew.larrabee@dechert.com DECHERT LLP One Maritime Plaza, Suite 2300 San Francisco, California 94111-3513 Telephone: 415.262.4500 Facsimile: 415.262.4555 STEVEN B.WEISBURD (No. 171490) steven.weisburd@dechert.com DECHERT LLP 300 West 6th Street, Suite 2010 Austin, TX 78701 Telephone: 512.394.3000 Facsimile: 512.394.3001 Attorneys for Defendant GOOGLE INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION MARY MCKINNEY, Individually and on behalf of All others Similarly Situated, Plaintiff, v. GOOGLE INC., a Delaware Corporation; HTC CORP., a Delaware Corporation; and TMOBILE USA, INC., a Delaware Corporation, Defendants. Case No. 5:10-CV-01177-JW DEFENDANTS GOOGLE INC. AND HTC CORPORATION'S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Date: Time: Dept: Judge: November 1, 2010 9:00 a.m. 8 Hon. James Ware GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW Dockets.Justia.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that, on November 1, 2010, in Courtroom 8, on the fourth floor of the above-titled United States District Court, at 9:00 a.m., or as soon thereafter as the matter may be heard, before the Honorable James Ware, defendants Google Inc. and HTC Corporation, will, and hereby do, move this Court, pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6), for an order dismissing plaintiff Mary McKinney's First Amended Complaint for failure to state a claim upon which relief can be granted. This Motion is based upon this Notice of Motion and Motion, the attached Memorandum of Points and Authorities, the Request for Judicial Notice filed concurrently herewith, all records on file with this Court, and such further oral and written argument as may be presented at, or prior to, the hearing on this matter. Dated: July 12, 2010. Respectfully submitted, DECHERT LLP By: /s/ Matthew L. Larrabee Matthew L. Larrabee (CA SBN 97147) Steven B. Weisburd (CA SBN 171490) One Maritime Plaza, Suite 2300 San Francisco, California 94111-3513 Telephone: 415.262.4500 Facsimile: 415.262.4555 Attorneys for Defendant GOOGLE INC. MUNGER, TOLLES & OLSON LLP By: /s/ Rosemarie T. Ring Henry Weissmann (CA SBN 132418) Rosemarie T. Ring (CA SBN 220769) Sarala Nagala (CA SBN 258712) 560 Mission Street, 27th Floor San Francisco, California 94105-2907 Telephone: 415.512.4000 Facsimile: 415.644.6908 Attorneys for Defendant HTC CORPORATION GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 V. I. II. III. IV. TABLE OF CONTENTS Page INTRODUCTION ............................................................................................................. 1 SUMMARY OF ALLEGATIONS AND BACKGROUND ............................................. 3 LEGAL STANDARD........................................................................................................ 6 ARGUMENT..................................................................................................................... 7 A. Plaintiff's Claim Under Sections 201(b) And 207 Of The Federal Communications Act Must Be Dismissed For Several Independent Reasons Under Controlling Ninth Circuit Authority (First Cause Of Action) ................................................................................................................... 7 1. Plaintiff's FCA Claim Must Be Dismissed Because It Sounds In Fraud And Is Not Pled With The Particularity Required By F.R.C.P. 9(b) .............................................................................................. 8 Plaintiff's FCA Claim Against Google And HTC Also Fails Because Neither Defendant Is A "Common Carrier" And, Thus, Neither May Be Sued For Alleged FCA Violations ................................ 10 3. Controlling Ninth Circuit Authority Also Requires Dismissal Of Plaintiff's FCA Claim Given The Absence Of Any "FCC Determination" That Defendants' Challenged Conduct Violates Section 201(b).......................................................................................... 12 B. Plaintiff's Breach Of Warranty Claims Under State And Federal Law Must Be Dismissed (Second And Third Causes Of Action)................................ 14 1. Plaintiff's "Express Warranty" Claim Fails Because She Does Not And Cannot Allege Any Factual Statement By Google Or HTC Promising "Consistent" Connectivity To T-Mobile's 3G Network, Or Reasonable Reliance On Any Such Supposed Statement................... 14 2. Plaintiff's Claim For Breach Of The "Implied Warranty Of Merchantability" Fails As A Matter Of Law ........................................... 17 a. Plaintiff Fails To Plead Facts Showing That The Nexus One Is Not Merchantable And Unfit For Its Ordinary Purpose......................................................................................... 18 b. Google's Disclaimer Of Any Implied Warranty Of Merchantability Also Defeats The Claim .................................... 20 c. Plaintiff's Implied Warranty Claim Against HTC Also Fails Because She Lacks Privity With HTC ................................ 21 3. Plaintiff's Federal Claim Under The Magnuson-Moss Warranty Act Fails As A Matter Of Law................................................................. 21 C. Plaintiff's State-Law Warranty Claims Are Also Expressly Preempted Under 47 U.S.C. 332(c)(3) As State-Law Attacks On "3G Market Entry" And The Reasonableness Of "Rates Charged" In Connection With Commercial Mobile Service ................................................................................ 22 CONCLUSION................................................................................................................ 24 2. i GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CASES TABLE OF AUTHORITIES American Suzuki Motor Corp. v. Superior Ct., 37 Cal. App. 4th 1291 (1995) ............................................................................................18, 20 Annunziato v. eMachines, Inc., 402 F. Supp. 2d 1133 (C.D. Cal. 2005) ...................................................................................20 Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009)...............................................................................................................6 AT&T Corp. v. City of Portland, 216 F.3d 871 (9th Cir. 2000) ...................................................................................................12 Avago Techs. United States, Inc. v. Venture Corp., 2008 U.S. Dist. LEXIS 105528 (N.D. Cal. Dec. 22, 2008) .....................................................15 Ball v. GTE Mobilnet of California, 81 Cal. App. 4th 529 (2000) ....................................................................................................22 Bastien v. AT&T Wireless Servs., Inc., 205 F.3d 983 (7th Cir. 2000) .............................................................................................22, 23 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)...............................................................................................................1, 6 Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009) ...........................................................................18, 19, 20, 21, 22 Carney v. Verizon Wireless Telecom, Inc., 2010 U.S. Dist LEXIS 47161 (S.D. Cal. May 13, 2010)...................................................12, 13 Cooper v. Pickett, 137 F.3d 616 (9th Cir. 1997)..............................................................................8 Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992).................................................................................................................14 Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008) .................................................................................................22 Fogo v. Cutter Labs., Inc., 68 Cal. App. 3d 744 (1977) .....................................................................................................17 Haskell v. Time, Inc., 857 F. Supp. 1392 (E.D. Cal. 1994) ...........................................................16 Higdon v. Pacific Bell Tel. Co., 2010 U.S. Dist. LEXIS 40300 (N.D. Cal. April 2, 2010) ........................................................12 Howard v. America Online Inc., 208 F.3d 741 (9th Cir. 2000) .............................................................................................10, 12 ii GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In re Apple iPhone 3G Prods. Liab. Litig., No. 09-02045, slip op. (N.D. Cal. Apr. 2, 2010) ...........................................................2, 22, 23 In re NVIDIA GPU Litig., 2009 U.S. Dist. LEXIS 108500 (N.D. Cal. Nov. 19, 2009)...............................................20, 21 Inter-Mark USA, Inc., v. Intuit, Inc., 2008 U.S. Dist. LEXIS 18834 (N.D. Cal. Feb. 27, 2008) .......................................................21 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2008) ...............................................................................................8, 9 Keller v. Electronics, Inc., 2010 U.S. Dist. LEXIS 10719 (N.D. Cal. Feb. 8, 2010) .........................................................14 Knievel v. ESPN, 393 F.3d 1068 (9th Cir. 2005) .................................................................................................16 Long v. Hewlett-Packard Co., 2007 U.S. Dist. LEXIS 79262 (N.D. Cal. July 27, 2007)................................................. 16, 17 Maneely v. General Motors Corp., 108 F.3d 1176 (9th Cir. 1997) .................................................................................................15 Mangindin v. Washington Mut. Bank, 637 F. Supp. 2d 700 (N.D. Cal. 2009) ................................................................................8, 10 Maydak v. Bonded Credit Co., 96 F.3d 1332 (9th Cir. 1996) ...................................................................................................10 McKinniss v. Sunny Delight Bevs. Co., 2007 U.S. Dist LEXIS 96108 (C.D. Cal. Sept. 4, 2007)..............................................14, 15, 16 Moncada v. Allstate Ins. Co., 471 F. Supp. 2d 987 (N.D. Cal. 2006) .....................................................................................16 Moss v. United States Secret Service, 572 F.3d 962 (9th Cir. 2009) .....................................................................................................6 North County Commc'ns. Corp. v. California Catalog & Technology, 594 F.3d 1149 (9th Cir. 2010) .................................................................................2, 12, 13, 14 North County Commc'ns. Corp. v. McLeodUSA Telecomm. Servcs., Inc., 2010 U.S. Dist. LEXIS 42892 (D. Ariz. May 3, 2010) ...........................................................12 Pisano v. American Leasing, 146 Cal. App. 3d 194 (1983) ...................................................................................................14 Sanders v. Apple, Inc., 672 F. Supp. 2d 978 (N.D. Cal. 2009) ...............................................................................15, 16 iii GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Shroyer v. New Cingular Wireless Servs., 2010 U.S. App. LEXIS 10730 (9th Cir. May 26, 2010) ....................................................23, 24 Stearns v. Select Comfort Retail Corp., 2009 U.S. Dist. LEXIS 112971 (N.D. Cal. Dec. 4, 2009) .......................................................21 Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007) ...............................................................................................8, 10 Tietsworth v. Sears, Roebuck & Co., 2009 U.S. Dist. LEXIS 98532 (N.D. Cal. Oct. 13, 2009)......................................18, 19, 20, 21 Vasquez v. Los Angeles County, 487 F.3d 1246 (9th Cir. 2007) ...................................................................................................6 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) ...............................................................................................8, 9 STATUTES AND REGUILATIONS 15 U.S.C. 2301..............................................................................................................................1 47 U.S.C. 153(10) .......................................................................................................................11 47 U.S.C. 153(20) .......................................................................................................................11 47 U.S.C. 201(b) ....................................................................................................... 5, 7, 8, 12-14 47 U.S.C. 201.2(a) ......................................................................................................................11 47 U.S.C. 207........................................................................................................... 5, 7, 8, 10, 12 47 U.S.C. 332(c)(3)........................................................................................................... 2, 22-24 47 U.S.C. 332(c)(3)(A) .............................................................................................................. 22 47 C.F.R. 201.2(a).......................................................................................................................11 Cal. Civ. Code 1791....................................................................................................................20 Cal. Civ. Code 1791.2(b) ............................................................................................................16 Cal. Civ. Code 1792....................................................................................................................20 Cal. Comm. Code 2316(2) ..........................................................................................................21 Fed. R. Civ. P. 9(b) ................................................................................................................ 2, 8-10 Fed. R. Civ. P. 12(b)(6)....................................................................................................................6 iv GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 OTHER AUTHORITIES In re Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, 2010 FCC LEXIS 3186 (F.C.C. May 20, 2010) ............................................................11 v GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION In her First Amended Complaint ("FAC"), Plaintiff Mary McKinney, a Pennsylvania resident, asserts three claims on behalf of herself and a putative nationwide class against defendants Google Inc. ("Google"), HTC Corporation ("HTC"), and T-Mobile USA, Inc. ("TMobile") (collectively referred to as "Defendants"), concerning the Nexus One's alleged "failure to maintain connectivity" to T-Mobile's "3G" wireless network. FAC, 1. The Nexus One is a "smartphone" designed to operate on both 2G/EDGE and 3G wireless networks using the Android Mobile Technology Platform, and has an array of advanced capabilities including phone, Internet, email, texting and other functions. According to Plaintiff, Defendants have made misrepresentations about the Nexus One, and breached express and implied warranties, because the Nexus One fails to "consistently perform at a 3G level" on T-Mobile's wireless network. Id., 41. Yet Plaintiff does not and cannot identify even a single statement by Defendants about the Nexus One's level of connectivity to T-Mobile's 3G network much less a statement representing and warranting "consistent" 3G connectivity and she ignores the statements that Google and HTC did make in their written contracts with Plaintiff, which contradict and disclaim any such representation or warranty. Plaintiff purports to assert three claims in her FAC: (1) a federal claim for violation of the Federal Communications Act ("FCA") based on Defendants' alleged "misrepresentations" and "false advertising" about the Nexus One's connectivity to T-Mobile's 3G network; (2) a state-law claim for breaches of "express warranty" and the "implied warranty of merchantability" premised on the Nexus One's alleged failure to provide "consistent" 3G connectivity on T-Mobile's network; and (3) a federal claim under the Moss-Magnuson Warranty Act ("MMWA"), 15 U.S.C. 2301, et seq. None states a claim for relief that is "plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). Indeed, Plaintiff's claims all fail because they are premised on Plaintiff's subjective expectation that she would receive some higher level of "3G" connectivity to T-Mobile's wireless network than she allegedly did, but which Defendants never promised and which is not required for the Nexus 1 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 One to be fit for its ordinary purpose as a smartphone capable of providing phone and data services when operating on 2G/EDGE and/or 3G networks. As explained below, Plaintiff's FCA claim (First Cause of Action) fails for several reasons including (i) the claim sounds in fraud but is not pled with the particularity required by Rule 9(b); (ii) Google and HTC cannot be sued under the FCA because they are not common carriers; and (iii) Plaintiff has failed to comply with the prior "FCC determination" requirement mandated by North County Commc'ns Corp. v. California Catalog & Technology, 594 F.3d 1149, 1159 (9th Cir. 2010). Plaintiff's state-law breach of warranty claims (Second Cause of Action) are also fatally flawed. The "express warranty" claim fails because the FAC does not sufficiently allege (i) any affirmation of fact or promise actually made by Defendants promising any level of 3G connectivity to T-Mobile's network, much less "consistent" 3G connectivity; or (ii) that Plaintiff reasonably relied on any such express warranty. The "implied warranty of merchantability" claim fails because the FAC's "3G" connectivity allegations do not and cannot render the Nexus One unfit for its ordinary purpose as a smartphone with multi-functional capabilities that operates, as it was designed to operate, on both 2G/EDGE and 3G wireless networks. Moreover, Google disclaimed any implied warranties of merchantability, and Plaintiff lacks privity with HTC. Plaintiff's federal warranty claim under the MMWA (Third Cause of Action) falls along with her legally defective state-warranty claims. Finally, Plaintiff's state-law warranty claims are also are preempted by the FCA under 47 U.S.C. 332(c)(3) for precisely the reasons this Court held that the same plaintiff counsel's state-law warranty and other claims were preempted in the iPhone litigation i.e., they constitute FCA-preempted attacks on both "3G market entry" and the "rates" charged in connection with the Nexus One on T-Mobile's FCC-regulated commercial mobile service. In re Apple iPhone 3G Prods. Liab. Litig., No. 09-02045, slip op. at 9, 12, 14 (N.D. Cal. Apr. 2, 2010) ("iPhone"). Given the many other reasons why Plaintiff's warranty claims must be dismissed as defectively pleaded and legally flawed, however, the Court has no occasion even to reach the FCA preemption issue that mandated dismissal of all claims in iPhone. 2 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 II. SUMMARY OF ALLEGATIONS AND BACKGROUND The Nexus One is "a multi-functional mobile device" or "smartphone" that "operates using the Android Mobile Technology Platform," and has an array of "advanced capabilities" and features including phone, Internet access, email, texting, contacts, calendar, maps, and other audio and video capabilities. FAC, 1, 25, 31-32. It is designed to operate on either a "3G" wireless network or a "2G" wireless network (also known as "GSM/EDGE"), and to switch between networks so that the Nexus One's features can be used when a 3G connection is not available. Id., 31, 39-40, 49. The Nexus One was developed and marketed by Google, manufactured by HTC, and released in the United States on January 5, 2010. Id., 1, 3, 4, 26. It can be purchased online from Google for $529 as an "unlocked" phone usable with any wireless service (e.g., AT&T), or at a discounted price of $179 when purchased with a new twoyear contract with T-Mobile's wireless service. Id., 33-34. Existing T-Mobile customers can also upgrade to the Nexus One at a discounted price if they extend their current two-year TMobile service contract. Id., 37. Plaintiff Mary McKinney, a Pennsylvania resident, alleges that she bought her Nexus One on or about January 9, 2010 over the Internet from Google's website, but has been unhappy with its "failure to maintain connectivity to T-Mobile's 3G wireless network." FAC, 1, 2. 1 Plaintiff complains that her expectations have been frustrated because her Nexus One does not always operate "consistently" on T-Mobile's 3G network, as opposed to T-Mobile's "slower" and less-advanced "2G" or "GSM/EDGE" network. Id., 1, 6, 12, 38-41, 49-50. According to the FAC, Defendants Google, HTC, and T-Mobile misrepresented, and expressly or impliedly warranted, that the Nexus One device would "consistently perform at a 3G level" on T-Mobile's wireless network. Id., 41; see also id., 6, 11(a), 12, 38, 40, 44, 47, 52-55, 59, 62-64. Indeed, Defendants supposedly "acted in concert" pursuant to a common scheme of "material misstatements" and related "omissions of material fact" to deceive consumers about whether the Nexus One "would operate as a true 3G device" and provide 1 While immaterial for purposes of this motion, Google's records indicate that Plaintiff 3 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 "consistent" 3G connectivity to what Plaintiff alleges is really an "inferior T-Mobile 3G wireless network." FAC, 52-55; see also id., 6 (alleging "common scheme" to falsely market Nexus One despite its "inability to maintain connectivity to the 3G network"). According to Plaintiff, Defendants "failed to disclose" that "the infrastructure of T-Mobile's 3G wireless network and/or the Google Phone itself were defective and inadequate to provide the represented performance and speed." FAC, 55; see also id., 50. But the FAC nowhere identifies a single factual representation made by Defendants in which any of them ever actually stated whether by affirmation of fact, promise, or otherwise that the Nexus One would provide "consistent" connectivity to T-Mobile's 3G wireless network. In fact, the FAC identifies no factual representation at all about "3G" connectivity with respect to the Nexus One device generally, or about the Nexus One's operation specifically on T-Mobile's network. Notably, Google's only Nexus One advertising identified and quoted in the FAC makes no reference to "3G" or "3G connectivity" at all, nor does it mention T-Mobile, TMobile's "3G" network, or any level of 3G connectivity to T-Mobile's 3G network. Rather, it states merely: "Experience Nexus One, the new Android phone from Google." FAC, 29. As to HTC, the FAC does not identify or quote any advertising statement about the Nexus One at all. And while the FAC does quote an excerpt from T-Mobile's "website" that generally references T-Mobile's "3G" network, that website excerpt does not even mention the Nexus One, and the FAC nowhere alleges that Plaintiff saw and read this portion of T-Mobile's website and in any way relied on it when purchasing her Nexus One mobile device. Id., 51. At bottom, Plaintiff alleges that she is unhappy with her Nexus One mobile device because she is "locked into a two-year service plan with inferior T-Mobile 3G wireless network connectivity." Id., 53. Plaintiff alleges that she was required to "pay[] more to receive inferior service in relation to what [she] believed [she] had purchased," id., 52, and that Defendants acted wrongly in "trying to sell more Google Phone devices than the existing T-Mobile's 3G wireless network could handle." Id., 54. purchased an "unlocked" Nexus One on January 5, 2010 for $529. 4 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The FAC asserts three causes of action. First, it purports to assert a Federal Communications Act ("FCA") claim against all Defendants for alleged violations of 47 U.S.C. 201(b), pursuant to 47 U.S.C. 207. See FAC, First Cause of Action, 56-59. According to the FAC, each of the Defendants has violated section 201(b) of the FCA because "charges" in connection with the Nexus One on T-Mobile's network should be deemed "unjust" given Defendants' alleged "false advertising" and "misrepresentations" concerning the Nexus One's consistent connectivity to T-Mobile's 3G network. Id., 59. Even if the Court deems Defendants' charges "reasonable," Plaintiff alleges that they should be liable in "damages" under the FCA for their alleged misrepresentations. Id. Second, the FAC asserts a state-law claim entitled "Breach of Express Warranty and Implied Warranty of Merchantability." See FAC, Second Cause of Action, 60-67. Plaintiff alleges that Defendants expressly and impliedly warranted that she would receive "consistent, reliable and sustained connectivity" to T-Mobile's 3G network and "breached" those warranties because 3G connectivity was not "consistently" available and, when it was not available, her Nexus One operated (as it was designed to do) on T-Mobile's 2G/EDGE network. Id., 61-62, 64; see also id., 39, 49. The Second Cause of Action does not, however, identify any instance in which any of the Defendants actually and explicitly made a specific factual representation, affirmation of fact, or promise that supposedly constitutes the "express warranty" on which the claim is based i.e., that the Nexus One is guaranteed to provide "consistent" 3G connectivity on T-Mobile's network, or any other level of 3G connectivity. Nor does the FAC plead that Plaintiff saw any such representation and reasonably relied on it in purchasing her Nexus One device. Instead, the FAC alleges merely that it was Plaintiff's "expectation" that the "ordinary purpose" of the Nexus One device was "to provide consistent connectivity to a supposedly faster 3G network." Id., 63, 64. But, as the FAC alleges elsewhere, the Nexus One was in fact designed to ensure that its phone and multi-functional capabilities will still operate whenever a wireless provider's 3G network is unavailable, by switching in such circumstances to a 2G/EDGE network. Id., 39-40, 49. Third, the FAC asserts a claim for alleged "Violation of the Moss-Magnuson Warranty 5 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Act." See FAC, Third Cause of Action, 68-76. This federal warranty claim is based on the same core allegations as the FAC's state-law warranty claim, and likewise alleges both that (1) Defendants supposedly made "written affirmations of fact, promises and/or descriptions" that the Nexus One would provide "consistent 3G connectivity"; "and/or" (2) that an "implied warranty" that the Nexus One will provide consistent 3G connectivity arises by operation of law under the MMWA. Id., 72. Defendants allegedly "breached these express and implied warranties," which "caused damages" to Plaintiff. Id., 73, 76. Based on these allegations and claims, Plaintiff seeks declaratory and injunctive relief, an award of "actual, statutory and/or exemplary damages," disgorgement, restitution, and attorneys fees. FAC, Prayer for Relief. In addition, Plaintiff seeks to certify a nationwide class of "[a]ll persons within the United States who purchased the Google Phone through www.google.com at any time between January 5, 2010 and the present who either (a) have a T-Mobile service plan for access to its 3G wireless network or (b) paid full price for an `unlocked' Google Phone for use on another 3G network." FAC, 8. III. LEGAL STANDARD A Rule 12(b)(6) motion to dismiss is properly granted unless the complaint alleges "enough" well-pleaded "facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp., 550 U.S. at 570; see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1960 (2009). To survive a Rule 12(b)(6) motion, the "non-conclusory `factual content'" and reasonable inferences therefrom must be "plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. United States Secret Service, 572 F.3d 962, 968-70 (9th Cir. 2009) (internal citations omitted). Although allegations of material fact are to be accepted as true and construed in the light most favorable to the nonmoving party, the Court may properly disregard conclusory allegations and unwarranted inferences. Id. at 969-70; Vasquez v. Los Angeles County, 487 F.3d 1246, 1249 (9th Cir. 2007). Accordingly, this Court may consider only the FAC's well-pleaded allegations, which, as explained below, are insufficient to state any plausible claim for relief. 6 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IV. ARGUMENT A. Plaintiff's Claim Under Sections 201(b) And 207 Of The Federal Communications Act Must Be Dismissed For Several Independent Reasons Under Controlling Ninth Circuit Authority (First Cause Of Action). In her First Cause of Action, Plaintiff purports to assert a claim against all Defendants under the Federal Communications Act's private right-of-action provision, 47 U.S.C. 207, for alleged violation of 47 U.S.C. 201(b). Section 201(b) declares "unlawful" all charges and practices by a common carrier that are "unjust or unreasonable." 47 U.S.C. 201(b). Section 207 provides that persons "damaged by any common carrier subject to the provisions of this chapter" can bring suit to recover those "damages for which such common carrier may be liable under the provisions of this Act." 47 U.S.C. 207. See also FAC, 57-58. Plaintiff purports to premise her FCA claim on misrepresentation and "false advertising" allegations. FAC, 59. She alleges that "charges" for the Nexus One device and T-Mobile service are "unjust" because what Plaintiff allegedly received in terms of "the quality of the 3G coverage service" for the Nexus One on T-Mobile's commercial mobile service was not what it was allegedly represented or "misrepresented" to be. Id. The substance of the FCA claim "Against All Defendants" is set forth in paragraph 59 of the FAC, which in full provides: Based on the conduct alleged above, Defendants have violated Section 201(b) of the Federal Communications Act, because, as previously determined by the FCC in rulings relating to whether false and misleading claims can constitute a violation of the FCA, their charges for the Google Phone as an internet access device and the companion T-Mobile premium service plans as detailed above that Plaintiff and Class members were required to purchase were unjust based up on the claims they made as compared to what was actually provided. T-Mobile also misrepresented or omitted material facts relating to the quality of the 3G coverage service that would be available to Class Members using the Google Phone. TMobile's service was thus not provided in accordance with its terms and conditions or in accordance with the promises included in advertising for the Google Phone, resulting in a material difference between their promises and actual performance. Even if Defendants are found to have been charging a "reasonable rate" for their products and services, they are still subject to a claim for damages for non-disclosure or false advertising of the material facts set forth herein based on its misrepresentations or failing to inform Class members of other material terms, conditions, or limitations on the services provided Class Members. FAC, 59. As a matter of law, Plaintiff's FCA claim must be dismissed as fatally flawed for three independent reasons. First, even though her FCA claim is premised on "false and misleading 7 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 claims" about "consistent" 3G connectivity that Defendants supposedly made, id., Plaintiff has failed to plead this claim, which sounds in fraud, with the particularity required by F.R.C.P. (9)(b). Second, even though the law is clear that FCA claims may be asserted only against a party that is a "common carrier" and regulated as such by the FCC, Plaintiff has impermissibly asserted her FCA claim against Google and HTC even though they are not common carriers and are not even alleged to be common carriers in the FAC. Third, absent a determination by the Federal Communications Commission ("FCC") that the specific conduct at issue in the FAC violates the FCA, a private plaintiff has no right of action under section 207 to sue for alleged violations of section 201(b) of the FCA, as Plaintiff seeks to do here. 1. Plaintiff's FCA Claim Must Be Dismissed Because It Sounds In Fraud And Is Not Pled With The Particularity Required By F.R.C.P. 9(b). Plaintiff has not pleaded her FCA claim with the particularity required by F.R.C.P. 9(b) of all claims that "sound in fraud." Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2008); Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003); see also Fed. R. Civ. P. 9(b) ("In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake"). Rule 9(b)'s particularity standard applies to all misrepresentation and omission claims sounding in fraud regardless of how the claims are styled, and regardless of whether they are labeled "fraud" claims. See, e.g., Kearns, 567 F.3d at 1125-1127 (applying Rule 9(b) standard to dismiss unfair competition claims based on alleged "unified course of fraudulent conduct"); see also Mangindin v. Washington Mut. Bank, 637 F. Supp. 2d 700, 706-07 (N.D. Cal. 2009) (Ware, J.) (dismissing all claims "sounding in fraud" for failure to satisfy Rule 9(b)'s heightened pleading requirements). "Allegations under Rule 9(b) must be stated with `specificity including an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.'" Mangindin, 637 F. Supp. 2d at 706 (quoting Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007)). Rule 9(b) requires plaintiffs to plead with particularity "`the who, what, when, where, and how' of the misconduct charged." Vess, 317 F.3d at 1106 (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). Consequently, courts routinely invoke 8 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rule 9(b) to dismiss any and all claims "sounding in fraud" whenever plaintiffs fail to plead with particularity what the defendants actually stated, precisely where the statement was made, by whom, how the allegedly deceptive statement was actually made, and why it is supposedly false, misleading and fraudulent. See, e.g., Kearns, 567 F.3d at 1125-27 (affirming dismissal for failure to comply with Rule 9(b) where plaintiff "failed to articulate the who, what, when, where and how of the misconduct alleged"; complaint failed to specify what defendants' advertisements specifically stated, who specifically made the statements, when they were made and plaintiff was exposed to them, and which statements plaintiff found material and then relied upon in making his purchasing decision); Vess, 317 F.3d at 1106-08 (any claims based on "unified course of fraudulent conduct" should be dismissed under Rule 9(b) unless plaintiff alleges "the who, what, when, where, and how" of the wrongful conduct, what is false or misleading about a statement, and why) (internal quotations and citations omitted). Here, there can be no question that Plaintiff's FCA claim is subject to Rule 9(b)'s heightened pleading requirement as a claim that sounds in fraud. Kearns, 567 F.3d at 1125. As pled, the FCA claim that Plaintiff has asserted in her complaint is fundamentally premised on "misrepresent[ations]" and related "omi[ssions]" allegedly made by T-Mobile "relating to the quality of the 3G coverage service that would be available to Class Members using the" Nexus One mobile device. FAC, 59. Indeed, it is this claimed "false advertising" that allegedly renders the rates charged by all Defendants "unjust" and actionable under the FCA. Id. 2 It is equally plain that the FAC and its FCA claim come nowhere close to satisfying Rule 9(b)'s particularity requirements. Most fundamentally, the FAC fails to plead the "specific content" of any "false representations" actually made by any of the Defendants that could potentially be actionable, or the "identities of the parties to [any such] misrepresentations." Thus, like the "unfair" business practices claims in Kearns, Rule 9(b)'s particularity requirement applies to Plaintiff's FCA claim asserted in her FAC even if Rule 9(b) may not apply to other FCA claims that unlike the First Cause of Action here are not premised on alleged misrepresentations and related omissions allegedly constituting false advertising, see FAC, 59, and thus do not "sound in fraud." 567 F.3d 1125-27; see also id. at 1127 (rejecting contention that "nondisclosure" and "failure to disclose" allegations need not be pleaded with particularity under Rule 9(b)). 9 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Swartz, 476 F.3d at 764; Mangindin, 637 F. Supp. 2d at 706. Instead, in violation of Rule 9(b), the FAC includes only conclusory allegations about some supposed "misrepresentations" by "Defendants," without satisfying Rule 9(b)'s particularity requirement. See, e.g., FAC, 12, 38, 40-41, 53, 64 (conclusory allegations characterizing some supposed "advertis[ing]," "market[ing]," "assertions," "material misrepresentations," and "statements" made by "Defendants"). Nowhere does the FAC plead with particularity any representation by any of the Defendants about the Nexus One's allegedly promised "consistent 3G connectivity" to TMobile's 3G network, even though that is the core theory on which the FAC is premised. The only Google representation pled with particularity in the FAC, from Google's web search page, is the entirely truthful and non-actionable statement: "Experience Nexus One, the new Android phone from Google." FAC, 29. The FAC recites no advertising or marketing statements at all by HTC, and the sole quote from T-Mobile's website refers generally to its 3G network without any mention of the Nexus One mobile device, much less any supposed misrepresentation guaranteeing that the Nexus One will provide consistent 3G connectivity to T-Mobile's 3G wireless network. FAC, 51. Thus, the FAC's First Cause of Action must be dismissed because it is not pled with the particularity required by Rule 9(b) under settled Ninth Circuit authorities. 2. Plaintiff's FCA Claim Against Google And HTC Also Fails Because Neither Defendant Is A "Common Carrier" And, Thus, Neither May Be Sued For Alleged FCA Violations. Plaintiff's effort to assert a private FCA claim against Google and HTC fails under settled Ninth Circuit law, which confirms that only a "common carrier" may be sued in any private right of action under section 207 for alleged violations of section 201(b). Howard v. America Online Inc., 208 F.3d 741, 751-53 (9th Cir. 2000) (affirming dismissal of FCA claim against Internet service provider under section 207 because "AOL is not a common carrier under the Communications Act" and therefore AOL cannot be sued under section 207 for alleged violations of section 201(b)); Maydak v. Bonded Credit Co., 96 F.3d 1332, 1334 (9th Cir. 1996) (affirming dismissal of FCA claim against collection agency that attempted to collect amounts plaintiff owed for 1-900 phone calls because collection agency was not a "common carrier"). Neither Google nor HTC is a "common carrier." In fact, Plaintiff does not even purport 10 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to allege in the FAC that either is a common carrier. See generally FAC. Congress in the FCA defined the term "common carrier" to mean "any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio in interstate or foreign transmission of energy," 47 U.S.C. 153(10); and the FCC's regulations instruct that only those "engaged in providing telecommunications facilities or services, for use by the public, for hire" may be deemed a common carrier, 47 C.F.R. 201.2(a). In this case, only T-Mobile is a "common carrier," and only T-Mobile is regulated as such by the FCC under the FCA. HTC is not a common carrier; rather, it is a "hardware manufacturer" of a variety of electronic devices including smartphones, such as the Nexus One. FAC, 26. Google is not a common carrier; rather, it specializes in "Internet search and advertising services," and also sells the Nexus One device and provides its operating system/platform and other web-based applications. See id., 3, 25. Notably, the FCC has never remotely determined that either Google or HTC is a "common carrier" subject to the FCC's extensive regulations and regulatory oversight of common carriers under federal communications law. On the contrary, in a recent 2010 report, the FCC addressed competition in the mobile device market, and like the FAC's allegations the FCC listed Google as a "platform/operating system" and HTC as a "handset manufacturer." In re Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, 2010 FCC LEXIS 3186 (F.C.C. May 20, 2010), at **564-565 ("FCC 2010 Report"). 3 Moreover, in the FCC regulatory context, Google is an "information service" provider, which is defined by Congress to mean those who provide and offer "a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications." 47 U.S.C. 153(20). As the Ninth Circuit has recognized, "information As the FCC recently noted in its 2010 report, "in January 2010, Google began selling its own version of an Android-based smartphone, the Nexus One": "Android combines and supports Google's web-based applications, including its search engine, Gmail email product, web browser, and mapping application, all of which come pre-loaded on Android devices." FCC 2010 Report, at 141-42. Despite specifically discussing the Nexus One device, the FCC nowhere determined or even suggested that the Nexus One provided any basis somehow to regulate Google or HTC as a "common carrier" under the FCA. 11 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 service" providers "are not subject to regulation as telecommunications carriers" by the FCC i.e., they are not "common carriers" under the FCA. AT&T Corp. v. City of Portland, 216 F.3d 871, 877-78 (9th Cir. 2000); see also Howard, 208 F.3d at 751-53 (dismissing FCA claims against Internet service provider, which was properly deemed a provider of "information services" or "enhanced services," and not regulated as a "common carrier" by the FCC). In sum, because neither Google nor HTC is a "common carrier," neither can be sued in any private FCA action under 47 U.S.C. 207 for alleged violations of 47 U.S.C. 201(b). 3. Controlling Ninth Circuit Authority Also Requires Dismissal Of Plaintiff's FCA Claim Given The Absence Of Any "FCC Determination" That Defendants' Challenged Conduct Violates Section 201(b). Plaintiff's FCA claim also must be dismissed because it violates the Ninth Circuit's holding in North County Commc'ns Corp. v. California Catalog & Technology that, before any private party can proceed in any private claim under section 207 for alleged violations of section 201(b), there must first be an "FCC determination" that the defendant common carrier's challenged practice is in fact "unjust or unreasonable" within the meaning of section 201(b) of the FCA. 594 F.3d 1149, 1159 (9th Cir. 2010) ("North County"); accord Higdon v. Pacific Bell Tel. Co., No. 08-03526, 2010 U.S. Dist. LEXIS 40300, at **8-14 (N.D. Cal. April 2, 2010) (dismissing FCA action under North County where there was no "threshold FCC determination" that defendant's "challenged practice" in fact constituted a violation of section 201(b)); Carney v. Verizon Wireless Telecom, Inc., No. 09-1854, 2010 U.S. Dist LEXIS 47161, at **11-14 (S.D. Cal. May 13, 2010) (same); North County Commc'ns. Corp. v. McLeodUSA Telecomm. Servs., Inc., No.09-2063, 2010 U.S. Dist. LEXIS 42892, at **9-12 (D. Ariz. May 3, 2010). As the Ninth Circuit held in North County, "an FCC determination" that the defendant common carrier's challenged practice violates section 201(b) "is integral" to and must precede any private action under section 207 because Congress designed the FCA with the intent to put it "within the Commission's purview to determine whether a particular practice constitutes a violation for which there is a private right to compensation." North County, 594 F.3d at 1158; accord Higdon, 2010 U.S. Dist. LEXIS 40300, at *10; Carney, 2010 U.S. Dist LEXIS 47161, at 12 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 *12. While mandating that no private FCA action may proceed until the FCC has first made a determination that the challenged "particular practice" in fact violates section 201(b), the Ninth Circuit explicitly rejected the proposition that "federal courts [can] fill the analytical gap stemming from the absence of a Commission determination" in a given case because any other result impermissibly would "put interpretation of a finely-tuned regulatory scheme squarely in the hands of private parties and some 700 federal district judges, instead of the hands of the Commission." North County, 594 F.3d at 1158 (internal quotations and citation omitted). 4 Here, as in North County, Higdon, and Carney, there exists no FCC determination that the challenged conduct of the defendant common carrier, T-Mobile, in fact violates section 201(b). Nor has there remotely been any FCC determination that the challenged conduct of Google and HTC, who are not even common carriers, violates section 201(b). Plaintiff's FAC does not even purport to allege, in compliance with North County, that the FCC has previously determined that any Defendant's challenged conduct violates the FCA's section 201(b). Indeed, the most the FAC tries to do with respect to the critical "FCC determination" requirement under North County, 594 F.3d at 1158-59, is to allege in an impermissibly generalized fashion that the FCC has "previously determined" that "false advertising" and "false and misleading claims can constitute a violation of the FCA[.]" FAC, 59 (emphasis added). But that does nothing to establish that the FCC has determined in this particular context that these Defendants' challenged practices, and this allegedly false advertising, do in fact violate section 201(b). See also Carney, 2010 U.S. Dist LEXIS 47161, at **13-14 (dismissing private FCA claim for failure to satisfy North County's prior FCC-determination requirement where "there has been no determination by the FCC ... that Defendants have committed fraud"; "Plaintiff's allegation of fraud is simply not enough to proceed with the FCA claim" under North County and, thus, "Plaintiff has failed to state a valid FCA claim"). North County unambiguously requires Plaintiff to identify a prior FCC determination that Defendants' In reaching its holding, the Ninth Circuit in North County was guided by the principles underlying the "primary jurisdiction" doctrine, see 594 F.3d 1155-56, 1158, which further support dismissal of Plaintiff's FCA claim here. 13 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 practices identified and challenged in FAC in fact violate section 201(b). But Plaintiff does not and cannot allege that the FCC has previously determined that Defendants' challenged "charges" are "unjust" (FAC, 59) within the meaning and scope of section 201(b). Nor can or does the FAC identify any prior FCC determination that T-Mobile's challenged conduct constitutes "false advertising" and the sort of "false and misleading claims" that the FCC determines "can constitute a violation of the FCA" Id. Because the FAC comes nowhere close to satisfying the Ninth Circuit's prior "FCC determination" requirement in North County, Plaintiff's FCA claim must be dismissed against all Defendants for this independently dispositive reason as well. B. Plaintiff's Breach Of Warranty Claims Under State And Federal Law Must Be Dismissed (Second And Third Causes Of Action). Plaintiff also attempts to assert breach of warranty claims under state and federal law. In her Second Cause of Action, Plaintiff asserts state-law claims for breach of express warranty and breach of the implied warranty of merchantability. FAC, 60-67. 5 In her Third Cause of Action, Plaintiff tries to assert a federal claim under the Magnuson-Moss Warranty Act. Id., 68-76. All of Plaintiff's warranty claims fail as a matter of law. 1. Plaintiff's "Express Warranty" Claim Fails Because She Does Not And Cannot Allege Any Factual Statement By Google Or HTC Promising "Consistent" Connectivity To T-Mobile's 3G Network, Or Reasonable Reliance On Any Such Supposed Statement. In any action for breach of express warranty, the plaintiff must plead and prove facts sufficient to show that the defendants actually and explicitly made "affirmations of fact or promises" that became part of the basis of the bargain, thereby voluntarily undertaking an actual "express warranty." Pisano v. American Leasing, 146 Cal. App. 3d 194, 197-98 (1983); McKinniss v. Sunny Delight Bevs. Co., No. 07-02034, 2007 U.S. Dist LEXIS 96108, at **16-17 (C.D. Cal. Sept. 4, 2007); cf., Cipollone v. Liggett Group, Inc., 505 U.S. 504, 526 (1992) Because Plaintiff does not specify the state law under which her warranty claims allegedly arise, Google and HTC assume for purposes of this Motion that California law applies, but do not waive and expressly reserve their respective rights to raise choice-of-law issues in subsequent proceedings. See, e.g., Keller v. Electronics, Inc., No. 09-1967, 2010 U.S. Dist. LEXIS 10719, *26 (N.D. Cal. Feb. 8, 2010) (assuming California law governs claims filed in 14 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (because "an express warranty arises from the manufacturer's statements," it is a "contractual commitment voluntarily undertaken"). Any express warranty claim should be dismissed unless the plaintiff sufficiently alleges "(1) the exact terms of the warranty; (2) reasonable reliance thereon; and (3) a breach of warranty which proximately caused plaintiff's injury." Sanders v. Apple, Inc., 672 F. Supp. 2d 978, 987 (N.D. Cal. 2009); Avago Techs. United States, Inc. v. Venture Corp., No. 08-03248, 2008 U.S. Dist. LEXIS 105528, at **11-12 (N.D. Cal. Dec. 22, 2008) (Ware, J.). The FAC's express warranty claim fails as a matter of law for several reasons. First, the premise of Plaintiff's claim is that Defendants expressly warranted that the Nexus One device was guaranteed to provide "consistent and reliable 3G network connectivity" to T-Mobile's 3G wireless network. FAC, 61-64; see also id., 38-41. Yet the FAC does not and cannot identify and allege any factual representation actually made by any of the Defendants about Nexus One's connectivity to T-Mobile's 3G network that could possibly constitute the sort of explicit "affirmation of fact or promise" required to support an "express warranty" claim. This alone is dispositive. No express-warranty claim exists unless the defendants explicitly made a specific factual representation constituting the sort of "affirmation of fact or promise" needed to support any claim under this contract-based theory of recovery. See, e.g., Maneely v. General Motors Corp., 108 F.3d 1176, 1181 (9th Cir. 1997) (affirming rejection of express warranty claim where defendant made "no explicit guarantees" and plaintiff could identify no "specific and unequivocal written statement" sufficient to constitute the requisite "affirmations of fact or promises that became part of the basis of the bargain"); McKinniss, 2007 U.S. Dist LEXIS 96108, at **16-17 (dismissing claim where complaint failed to identify any "explicit guarantees" or "specific and unequivocal written statements" that could constitute an actionable "express warranty"). 6 California by out-of-state plaintiff where complaint fails to specify which law governs). 6 Although Plaintiff alleges that she "entered into agreements with Defendants" and "received uniform warranties in connection with the purchase" of the Nexus One (FAC, 61-62), the FAC never identifies what statements Defendants actually made that she claims constitute a legally cognizable express warranty undertaken by Google or HTC or T-Mobile. While the FAC alleges that some unidentified "advertisements" generally "stressed the excellence and reliability" of the Nexus One, (FAC, 64), any such supposed marketing cannot as a matter of 15 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Second, Plaintiff's failure to plead her own "reasonable reliance" on Defendants' supposed factual representations amounting to an express warranty further requires dismissal of her claim. Sanders v. Apple, Inc., 672 F. Supp. 2d at 988 (dismissing breach of express warranty claim where plaintiff failed to allege "reasonable reliance" on any specific representations actually made by defendant); see also Moncada v. Allstate Ins. Co., 471 F. Supp. 2d 987, 997 (N.D. Cal. 2006) (express warranty claim failed where plaintiff had not read and relied on defendant's representations allegedly constituting express warranties). Here, Plaintiff alleges that she purchased the Nexus One "with the reasonable expectation" that she would receive "sustained connectivity" to T-Mobile's 3G network. FAC, 64 (emphasis added). Plaintiff does not allege that, in forming that claimed expectation, she saw and then reasonably relied upon any specific factual statement made by any of the Defendants promising consistent 3G connectivity (or any particular level of 3G connectivity) to T-Mobile's network nor could she, because no such statement exists. Moreover, the terms of Plaintiff's actual contracts with Google and HTC which are subject to judicial notice 7 contradict the FAC's allegations that Defendants promised that the Nexus One was guaranteed to provide some certain level of connectivity to T-Mobile's 3G network, much less "consistent" 3G connectivity. Google's "Terms of Sale" which Plaintiff had to acknowledge and agree to before buying her Nexus One not only provide that "3G network availability may depend on your mobile carrier" (and, thus, is not guaranteed and law constitute an express warranty that the Nexus One was specifically guaranteed always to provide consistent 3G connectivity when used on T-Mobile's wireless network. Moreover, imprecise advertising phrases like "excellent" or "reliable" are precisely the sort of vague and highly subjective statements that amount to non-actionable puffery as a matter of law. See, e.g., Sanders, 672 F. Supp. 2d at 987 (express warranty claims cannot be based on "puffery," which involves "`vague, highly subjective claims as opposed to specific, detailed factual assertions'") (quoting Haskell v. Time, Inc., 857 F. Supp. 1392, 1399 (E.D. Cal. 1994)); Long v. HewlettPackard Co., No. 06-02816, 2007 U.S. Dist. LEXIS 79262, *21 (N.D. Cal. July 27, 2007) (Ware, J.) (statements that defendant's computers were a "reliable mobile computing solution" held to constitute "non-actionable puffery") (emphasis added); see also Cal. Civ. Code 1791.2(b) ("An affirmation merely of the value of the goods or a statement purporting to be merely an opinion or commendation of the goods does not create a warranty). 7 As explained in Defendants' Request for Judicial Notice, both Google's Terms of Sale and HTC's Limited Warranty are properly subject to judicial notice. See also Knievel v. ESPN, 393 F.3d 1068, 1077 (9th Cir. 2005); Long, 2007 U.S. Dist. LEXIS 79262, at *16 n.3. 16 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 warranted), but also direct Plaintiff to check with her mobile carrier to confirm that the device's technical specifications are "compatible with 3G coverage in [Plaintiff's] area." Request For Judicial Notice ("RFJN"), Exh. 1, at p. 2. Further still, the Google Terms of Sale explicitly and conspicuously disclaim any express warranty relating to the Nexus One other than HTC's limited one-year repair or replacement warranty: OTHER THAN THE ABOVE AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, GOOGLE EXPRESSLY DISCLAIMS ALL WARRANTIES AND CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, REGARDING ANY DEVICES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGMENT. See RFJN, Exh. 1, at pp. 4-5. 8 HTC's express warranty, in turn, explicitly excludes from coverage "defects" caused by "a defective function of the cellular network or other system." Id., Exh. 2. Thus, not only does Plaintiff fail to allege any statement by Google or HTC that could constitute an actionable "express warranty" concerning the Nexus One's 3G connectivity, but the terms of the Defendants' actual written contracts with Plaintiff squarely refute the claim she tries to assert. The explicit terms of the parties' actual written contracts also refute the reasonableness of any claimed reliance by Plaintiff on some feigned (and non-existent) express warranty about the Nexus One's connectivity to T-Mobile's 3G network. 2. Plaintiff's Claim For Breach Of The "Implied Warranty Of Merchantability" Fails As A Matter Of Law. The FAC's Second Cause of Action also alleges breach of the "implied warranty of merchantability," but this claim fails as a matter of law for multiple reasons as well. In its Terms of Sale, Google explicitly made clear to Plaintiff and other purchasers that the only express warranty connected to the Nexus One was HTC's limited manufacturer's warranty, and that all other express warranties were disclaimed. RFJN, Exh. 1, at pp. 4-5; see also Fogo v. Cutter Labs., Inc., 68 Cal. App. 3d 744, 758 (1977) ("clearly" the phrase "the foregoing warranty is exclusive and in lieu of all other warranties" that appeared at end of warranty constituted an enforceable disclaimer). This disclaimer is an enforceable contractual limitation. In Long v. Hewlett-Packard Co., this Court upheld and enforced a comparable disclaimer, which provided: "To the extent allowed by local law, the above warranties are exclusive and no other warranty or condition, whether written or oral, is expressed or implied and HP specifically disclaims any warranties of merchantability, satisfactory quality, and fitness for a particular purpose." 2007 U.S. Dist. LEXIS 79262, at **16-17. 17 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 a. Plaintiff Fails To Plead Facts Showing That The Nexus One Is Not Merchantable And Unfit For Its Ordinary Purpose. "Unlike express warranties, which are basically contractual in nature, the implied warranty of merchantability arises by operation of law." American Suzuki Motor Corp. v. Superior Ct., 37 Cal. App. 4th 1291, 1295 (1995). The implied warranty of merchantability operates to guarantee that products have only "a minimum level of quality" and are free of fundamental defects that are "so basic" that they render the item not "merchantable" at all and "unfit for its ordinary purpose." Id. at 1295-96 (implied warranty of merchantability "does not impose a general requirement that goods precisely fulfill the expectation of the buyer," but rather guarantees only "a minimum level of quality"); Tietsworth v. Sears, Roebuck & Co., No. 0900288, 2009 U.S. Dist. LEXIS 98532, at *36 (N.D. Cal. Oct. 13, 2009) ("`mere manifestation of a defect by itself does not constitute a breach of the implied warranty of merchantability" because "there must be a fundamental defect that renders the product unfit for its ordinary purpose'") (citation omitted). Thus, as the Ninth Circuit has explained, the implied warranty of merchantability is breached where defendant's product "lacks even the most basic degree of fitness for ordinary use." Birdsong v. Apple, Inc., 590 F.3d 955, 958 (9th Cir. 2009). Here, the FAC's own allegations confirm that the Nexus One is entirely merchantable and fit for its ordinary purpose as a multi-functional mobile device or "smartphone" that operates using the Android Mobile Technology Platform and is capable of providing an array of "advanced capabilities" and features on both 2G/EDGE and 3G wireless networks. FAC, 25, 31, 32. 9 Plaintiff nowhere alleges that the Nexus One she purchased was non-operational or that, when operating on either a 2G/EDGE or 3G wireless network, was incapable of providing these advanced capabilities, including phone, text-messaging, calendar, contacts, maps, camera, music, As the FAC alleges, the Nexus One is a "smartphone" or "advanced mobile cellular phone" that (1) "operates using the Android Mobile Technology Platform"; (2) is designed to operate, and does operate, on "both" 2G/EDGE and 3G wireless networks; and (3) is capable of operating as a "multi-functional mobile device" with "advanced capabilities" and "various features" such as a "video and audio player"; "Internet access"; and the capacity to "send and receive email," "download and play media," "share pictures and information via social networking systems," map locations, and an array of other features and capabilities. FAC, 25, 31, 32, 39-40, 49. 18 GOOGLE AND HTC'S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT CASE NO. 5:10-CV-01177-JW 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 video, email, and Internet functionality. Nonetheless, Plaintiff tries to premise a claim for breach of the implied warranty of merchantability on her "expectation" that the Nexus One's "ordin

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