Friedman v. Apple, Inc. et al

Filing 15

MOTION for Change Venue by Apple, Inc.. (Attachments: # 1 Memo of Points and Authorities, # 2 Declaration D. House, # 3 Declaration S. Plunkett, # 4 Exhibit A, # 5 Exhibit B, # 6 Exhibit C, # 7 Exhibit D, # 8 Exhibit E, # 9 Exhibit F, # 10 Exhibit G, # 11 Exhibit H, # 12 Exhibit I, # 13 Exhibit J, # 14 Proof of Service)(Preovolos, Penelope). Modified on 3/7/2011 - Plunkett Declaration has s/ signature. Email sent to Atty to file Corrected Declaration of S. Plunkett. Removed duplicate text (jah).

EXHIBIT G
Page 179 - Exhibit G

Case5:10-cv-02553-RMW Document77

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M. Kay Martin (CSB No. 154697)
[e-mail]
Joel D. Smith (CSB No. 244902)
[e-mail]

CROWELL & MORING LLP
275 Battery Street, 23rd Floor
San Francisco, CA 94111
Telephone: [phone]
Facsimile: 415.986.2827
Kathleen Taylor Sooy (pro hac vice pending)
[e-mail]

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CROWELL & MORING LLP
1001 Pennsylvania Avenue, NW
Washington, DC 20004
Telephone: [phone]
Facsimile: [phone]
Attorneys for AT&T Mobility LLC

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION
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15

ADAM WEISBLATT, JOE HANNA, and
DAVID TURK, and COLETTE OSETEK,
individually and on behalf of all others
similarly situated,

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Plaintiffs,
v.

Case Nos. 5:10-cv-02553; 5:10-cv-02588; 5:10cv-04253

CLASS ACTION
MEMORANDUM OF LAW IN SUPPORT
OF MOTION OF AT&T MOBILITY LLC
TO DISMISS MASTER CONSOLIDATED
COMPLAINT

APPLE, INC., AT&T MOBILITY LLC,
and Does 1-10,
Defendants.

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Date:
Time:
Place:

March 18, 2011
9 a.m.
Courtroom 6, 4th Floor

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C ROWELL
& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS
DCACTIVE-13969959.1

Page 180 - Exhibit G

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Filed01/14/11 Page2 of 25

TABLE OF CONTENTS

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Page

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INTRODUCTION .......................................................................................................................... 1
STATEMENT OF ISSUES ............................................................................................................ 2
BACKGROUND ............................................................................................................................ 3
LEGAL STANDARDS ................................................................................................................... 6
ARGUMENT .................................................................................................................................. 7
I.
All Claims Fail Because Plaintiffs’ Allegations Do Not Satisfy Rule 9(b) ............ 7
A.
Rule 9(b) Requires The Who, What, When, Where And How Of
The Alleged Conduct .................................................................................. 7
B.
Under Kearns, All Claims Must Meet The Requirements Of Rule
9(b) .............................................................................................................. 7
C.
None Of Plaintiffs’ Allegations Of Misrepresentations By ATTM
Meet The Specificity Requirement ............................................................. 8
II.
All Claims Against ATTM Fail Because Plaintiffs Do Not Allege Reliance
On Any Statement By ATTM ............................................................................... 11
III.
Non-California Plaintiffs Weisblatt, Turk And Osetek Lack Standing To
Pursue CLRA, UCL And FAL Claims ................................................................. 12
IV.
Plaintiffs’ Unjust Enrichment Claims Fail Because No Such Claim Is
Available Under The Applicable State Laws And Plaintiffs Allege No
Facts Showing Unjust Enrichment Of ATTM ...................................................... 13
A.
There Is No Cause Of Action Under California Law For Unjust
Enrichment ................................................................................................ 13
B.
Plaintiffs Cannot Maintain A Claim For Unjust Enrichment Where
There Is A Contract Governing The Subject Matter Of The Claim .......... 14
C.
Plaintiffs Have Not Alleged And Cannot Allege Facts Showing
Unjust Enrichment Of ATTM ................................................................... 14
V.
Plaintiffs’ Claims Under The UCL and FAL Fail Because They Lack
Standing To Seek Restitution From ATTM .......................................................... 15

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VI.

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Plaintiff Weisblatt’s Negligent Misrepresentation Claim Fails Because He
Cannot Establish A Special Relationship With ATTM ........................................ 16
VII. The CLRA Claim Fails Because Plaintiffs Did Not Comply With The
Affidavit And Notice Requirements ..................................................................... 17
A.
All Plaintiffs Failed To File The Required Affidavits .............................. 17
B.
Plaintiff Osetek Also Failed To Serve A Notice Of Violation Letter
On ATTM ................................................................................................. 17
CONCLUSION ............................................................................................................................. 18

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ATTO RNEY S AT LAW

-i-

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS

Page 181 - Exhibit G

Case5:10-cv-02553-RMW Document77

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Filed01/14/11 Page3 of 25

TABLE OF AUTHORITIES

2

Page(s)

3

FEDERAL CASES

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American Protein Corp. v. AB Volvo,
844 F.2d 56 (2nd Cir. 1988) .................................................................................................... 16

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6
7
8
9
10
11
12
13
14

Ashcroft v. Iqbal,
129 S. Ct. 1937 (2009) ..................................................................................................... passim
Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters,
459 U.S. 519 (1983) .................................................................................................................. 6
Balistreri v. Pacifica Police Department,
901 F.2d 696 (9th Cir. 1988)..................................................................................................... 6
Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) ........................................................................................................ 6, 7, 12
Bowler v. Home Depot USA, Inc.,
2010 WL 3619850 (N.D. Cal. Sept. 13, 2010) ....................................................................... 16
Cattie v. Walmart-Stores, Inc.,
504 F. Supp. 2d 939 (S.D. Cal. 2007) ............................................................................... 12, 17

15
16
17
18
19

Cholla Ready Mix, Inc. v. Civish,
382 F.3d 969 (9th Cir. 2004)..................................................................................................... 6
Churchill Village, L.L.C. v. General Elec. Co.,
169 F. Supp. 2d 1119 (N.D. Cal. 2000) .................................................................................. 12
Clark v. Time Warner Cable,
523 F.3d 1110 (9th Cir. 2008)................................................................................................. 11

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21
22
23
24

Computech Int’l, Inc. v. Compaq Computer Corp.,
2002 WL 31398933 (S.D.N.Y. Oct. 24, 2002) ....................................................................... 16
Cooper v. Picket,
137 F.3d 616 (9th Cir. 1997)................................................................................................... 11
Dallas Aerospace, Inc. v. CIS Air Corp.,
352 F.3d 775 (2nd Cir. 2003) .................................................................................................. 16

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ATTO RNEY S AT LAW

Edwards v. Marin Park, Inc.,
356 F.3d 1058 (9th Cir. 2004)................................................................................................... 8
Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of New York,
375 F.3d 168 (2nd Cir. 2004) ................................................................................................... 11
-ii-

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS
DCACTIVE-13969959.1

Page 182 - Exhibit G

Case5:10-cv-02553-RMW Document77

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Filed01/14/11 Page4 of 25

Glenn Holly Entm’t., Inc. v. Tektronix, Inc.,
100 F. Supp. 2d 1086 (C.D. Cal. 1999)..................................................................................... 8
Harris v. Auxilium Pharms., Inc.,
664 F. Supp. 2d 771 (S.D. Tex. 2009), vacated on other grounds 2010 WL 3817150
(S.D. Tex. Sept. 28, 2010)......................................................................................................... 2
Herrington v. Johnson & Johnson Consumer Co., Inc.,
2010 WL 3448531 (N.D. Cal. Sept. 1, 2010) ..................................................................... 8, 11

6
7
8
9
10

In re Accuray, Inc. S’holder Derivative Litig.,
2010 WL 3447615 (N.D. Cal. Aug. 31, 2010) ........................................................................ 15
In re Am. Investor Life Ins. Co. Annuity Mktg. and Sales Practices Litig.,
2010 WL 1407308 (E.D. Pa. April 7, 2010) ............................................................................. 2
In re Detwiler,
305 Fed. Appx. 353 (9th Cir. 2008) ........................................................................................ 11

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12
13
14
15

In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Television Litig.,
2010 WL 4892114 (S.D. Cal., Nov. 30, 2010) ....................................................................... 17
Kearns v. Ford Motor Co.,
567 F.3d 1120 (9th Cir. 2009).......................................................................................... passim
Laster v. T-Mobile USA, Inc.,
407 F. Supp. 2d 1181 (S.D. Cal. 2005) ............................................................................. 11, 17

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25
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Leong v. Square Enix of America Holdings, Inc.,
2010 WL 1641364 (C.D. Cal. April 20, 2010) ....................................................................... 14
Lopez v. Smith,
203 F.3d 1122 (9th Cir. 2000)................................................................................................... 7
Lorenzo v. Qualcomm Inc.,
603 F. Supp. 2d 1291 (S.D. Cal. 2009) ................................................................................... 11
Melt Franchising, LLC v. PMI Enters., Inc.,
2009 WL 32587 (C.D. Cal. Jan. 2, 2009) ............................................................................... 13
Newsom v. Countrywide Home Loans, Inc.,
714 F. Supp. 2d 1000 (N.D. Cal. 2010) .................................................................................. 14
Poulos v. Ceasars World, Inc.,
379 F.3d 654 (9th Cir. 2004)......................................................................................... 9, 10, 11
Richards v. Harper,
864 F.2d 85 (9th Cir. 1988)....................................................................................................... 6

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& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS

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DCACTIVE-13969959.1

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Filed01/14/11 Page5 of 25

Ronconi v. Larkin,
253 F.3d 423 (9th Cir. 2001)..................................................................................................... 9
Roque v. Suntrust Mortg., Inc.,
2010 WL 546896 (N.D. Cal. Feb. 10, 2010)........................................................................... 10
Rosal v. First Federal Bank of California,
671 F. Supp. 2d 1111 (N.D. Cal. 2009) .................................................................................. 14
Saba v. Caplan,
2010 WL 2681987 (N.D. Cal. July 6, 2010) ............................................................................. 8
Smith v. Ford Motor Co.,
2010 WL 3619853 (N.D. Cal. Sept. 13, 2010) ....................................................................... 14
Stewart v. Mortgage Elec. Registration Sys., Inc.,
2010 WL 1054384 (D. Or. Feb. 18, 2010) ................................................................................ 8
Sullins v. Exxon/Mobil Corp.,
2010 WL 338091 (N.D. Cal. Jan. 20, 2010) ..................................................................... 15, 16

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Swartz v. KPMG LLP,
476 F.3d 756 (9th Cir. 2007)................................................................................................... 10
U.S. Concord, Inc. v. Harris Graphics Corp.,
757 F. Supp. 1053 (N.D. Cal. 1991) ......................................................................................... 9
United Food & Commercial Workers Cent. Pennsylvania & Reg’l Health & Welfare Fund
v. Amgen, Inc.,
2010 WL 4128490 (9th Cir. Oct. 21, 2010) ............................................................................ 11
Vess v. Ciba-Geigy Corp. USA,
317 F.3d 1097 (9th Cir. 2003)......................................................................................... 7, 8, 10
Walker v. Geico Gen. Ins. Co.,
558 F.3d 1025 (9th Cir. 2009)................................................................................................. 16

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OTHER CASES

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Bailie Communications, Ltd. v. Trend Business Systems, Inc.,
810 P.2d 12 (Wash. App., 1991) ............................................................................................. 15
Buckland v. Threshold Enters., Ltd.,
155 Cal. App. 4th 798 (Cal. App. 2d. 2007) ........................................................................... 15
Cumis Ins. Society, Inc. v. BJ's Wholesale Club, Inc.,
918 N.E.2d 36 (Mass., 2009) .................................................................................................. 11

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ATTO RNEY S AT LAW

Desanctis v. Labell’s Airport Parking, Inc.,
1991 WL 71921 (Mass.App.Div., 1991)................................................................................. 15
CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS

iv

DCACTIVE-13969959.1

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Dinosaur Dev., Inc. v. White,
216 Cal. App. 3d 1310 (1989)................................................................................................. 14
IDT Corp. v. Morgan Stanley Dean Witter & Co.,
879 N.Y.S.2d 355 (N.Y., 2009) .............................................................................................. 15
Kwiatkowski v. Drews,
176 P.3d 510 (Wash. App. Div. 2, 2008) ................................................................................ 11
Lauriedale Associates, Ltd. v. Wilson,
7 Cal. App. 4th 1439 (1992).................................................................................................... 14
MacDonald v. Hayner,
715 P.2d 519 (Wash. App., 1986) ........................................................................................... 14
Melchior v. New Line Prods., Inc.,
106 Cal. App. 4th 779 (2003)............................................................................................ 13, 14
Nelson v. Sperling,
270 Cal. App. 2d 194 (1969)................................................................................................... 15

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16

Norwest Mortgage, Inc. v. Super. Ct.,
72 Cal. App. 4th 214 (1999).............................................................................................. 12, 13
Outboard Marine Corp. v. Super. Ct.,
52 Cal. App. 3d 30 (1975)....................................................................................................... 17
Rains v. Arnett,
189 Cal. App. 2d 337 (1961)................................................................................................... 15

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18
19

Singer Asset Fin. Co. v. Melvin,
822 N.Y.S.2d 68 (App. Div. 2006) ......................................................................................... 14

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Zarum v. Brass Mill Materials Corp.,
134 N.E.2d 141 (Mass. 1956) ................................................................................................. 14

21

OTHER STATUTES

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Cal. Bus. & Prof. Code §§ 17200 et seq. ........................................................................................ 4

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Cal. Bus. & Prof. Code §§ 17500 et seq. ........................................................................................ 4

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Cal. Civ. Code §§ 1750 et seq. ........................................................................................................ 4

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Cal. Civ. Code § 1780(d) .......................................................................................................... 2, 17

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Cal. Civ. Code § 1782(a)........................................................................................................... 2, 17

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C ROWELL
& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS

v

DCACTIVE-13969959.1

Page 185 - Exhibit G

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Filed01/14/11 Page7 of 25

1

RULES

2

Fed. R. Civ. Proc. 8 ....................................................................................................................... 12

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Fed. R. Civ. Proc. 9(b) ........................................................................................................... passim

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Fed. R. Civ. Proc. 12(b)(6).............................................................................................................. 6

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ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS

vi

DCACTIVE-13969959.1

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Filed01/14/11 Page8 of 25

1

INTRODUCTION

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The Master Consolidated Complaint (“MCC”) spins out plaintiffs’ theory that when

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AT&T Mobility LLC (“ATTM”) offered a “no long-term contract” unlimited data plan for the

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3G-enabled iPad, ATTM allegedly misrepresented that it would provide that unlimited data plan

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at all times into the future. Yet plaintiffs do not identify a single alleged misrepresentation by

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ATTM concerning the future availability of the unlimited data plan. And, none of the named

7

plaintiffs allege that they ever saw or heard or relied on anything ATTM said about the unlimited

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data plan. Plaintiffs’ claims therefore should be dismissed on the following grounds.1

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First, all of the common law and statutory claims rest on the same averments of fraud and

10

must meet the heightened pleading requirements of Rule 9(b). Kearns v. Ford Motor Co., 567

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F.3d 1120, 1124-25 (9th Cir. 2009). Plaintiffs do not meet those requirements because they

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allege no specific misrepresentation by ATTM.

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Second, all of the common law and statutory claims grounded in fraud must allege the

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element of reliance. Plaintiffs do not allege that they relied on any statements by ATTM to make

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their decision to purchase a 3G-enabled iPad. Plaintiffs cannot satisfy their duty to plead reliance

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as to ATTM through reliance allegations directed at Apple.

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Third, plaintiffs Adam Weisblatt, David Turk and Colette Osetek lack standing to assert

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their claims under California’s CLRA, UCL and FAL because they are non-California plaintiffs

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suing a non-California defendant for conduct occurring outside California.

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1

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In the underlying Weisblatt action, the Court previously denied without prejudice
ATTM’s Motion To Compel Arbitration Or, In The Alternative, To Stay The Case (“Motion To
Compel”). The Court indicated that it was doing so in order to await the U.S. Supreme Court’s
decision in AT&T Mobility LLC v. Concepcion, No. 09-893; accordingly, it held that discovery
would be limited to written discovery relevant to claims against Apple. See Order On Defendant
AT&T Mobility’s Motion To Compel Arbitration Or, In The Alternative, To Stay Case, filed on
October 18, 2010 (Weisblatt Doc. No. 50). Pursuant to stipulated order, the Weisblatt Order is
fully binding on the parties to this consolidated action, and ATTM’s right to seek to compel
arbitration, as well as all arguments raised in the Weisblatt and Logan actions, are deemed to have
been raised and preserved in all of the consolidated actions. See Stipulation and Order For
Consolidation Pursuant To Fed. R. Civ. P. 42, filed December 15, 2010 (Doc. No. 66)
(“Consolidation Order”). ATTM respectfully submits that the Court should defer ruling on this
Motion To Dismiss until the Supreme Court decides Concepcion. Once the Supreme Court
announces its decision in Concepcion, ATTM will again seek to compel each plaintiff to arbitrate
his or her claims under the terms of the arbitration agreements between plaintiffs and ATTM.
-1-

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS
DCACTIVE-13969959.1

Page 187 - Exhibit G

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Fourth, the purported claim for unjust enrichment fails. As to plaintiff Hanna, there is no

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cause of action in California for unjust enrichment. The laws of Weisblatt, Turk and Osetek’s

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home states do not permit unjust enrichment claims where the relationship between the parties is

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governed by contract. Moreover, none of the plaintiffs allege how ATTM was purportedly

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unjustly enriched by plaintiffs’ decision to pay Apple (or in one case, Best Buy) $130 more for a

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3G-enabled iPad.

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Fifth, only plaintiffs who are entitled to restitution have standing to sue under the UCL

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and FAL. Plaintiffs are not entitled to restitution from ATTM for money they paid to Apple or

9

Best Buy.

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12

Sixth, plaintiff Weisblatt’s claim for negligent misrepresentation fails because he cannot
show a special relationship with ATTM as required under New York law.
Seventh, the CLRA claims are deficient because none of the plaintiffs filed the supporting

13

affidavit required by California Civil Code section 1780(d). Further, the CLRA claim for

14

damages by plaintiff Osetek is deficient because she failed to serve a notice of violation letter on

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ATTM, as required by California Civil Code section 1782(a).2

16

STATEMENT OF ISSUES

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1. Whether all claims should be dismissed for failure to satisfy Rule 9(b).

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2. Whether all claims should be dismissed for failure to plead the element of reliance
as to ATTM.

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3. Whether the claims under California’s CLRA, UCL and FAL should be dismissed

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In addition, although Stuart Logan is the only named plaintiff in the underlying Logan
complaint, there are no allegations in the MCC concerning him, nor is he named as a plaintiff in
the MCC. Accordingly, ATTM respectfully asks that the Court dismiss the Logan action and any
claims by Logan. See Harris v. Auxilium Pharms., Inc., 664 F. Supp. 2d 771, 772 (S.D. Tex.
2009), vacated on other grounds 2010 WL 3817150 (S.D. Tex. Sept. 28, 2010) (party not named
in caption is not a party to the action); In re Am. Investor Life Ins. Co. Annuity Mktg. and Sales
Practices Litig., 2010 WL 1407308 *4 (E.D. Pa. April 7, 2010) (party excluded from
consolidated complaint deemed dropped from case). The MCC also purports to state claims by
plaintiff Osetek against ATTM, which is inconsistent with her underlying amended complaint that
names only Apple as a defendant, and with her prior statement that her claims do not involve
ATTM. Opp’n to Motion to Consider Whether Cases Should Be Related, at 2:18-19; 3:3-4
(Weisblatt Doc. No. 48). In a separate Motion to Strike, filed concurrently with this Motion,
ATTM requests that the Court strike all claims by Osetek against ATTM. In the event the Motion
to Strike is denied, ATTM also moves to dismiss Osetek’s claims on the grounds set forth here.

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& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS

2

DCACTIVE-13969959.1

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as to non-California plaintiffs Weisblatt, Turk and Osetek because they lack
standing to sue ATTM, a non-California defendant, for conduct allegedly
occurring outside California.

2
3

4. Whether the unjust enrichment claim should be dismissed because it fails under
applicable state law, and because plaintiffs fail to allege how ATTM was unjustly
enriched at plaintiffs’ expense.

4
5

5. Whether the claims under the UCL and FAL should be dismissed because
plaintiffs are not entitled to restitution from ATTM and thus lack standing to assert
claims under those statutes against ATTM.

6
7

6. Whether plaintiff Weisblatt’s claim for negligent misrepresentation should be
dismissed because he cannot show a special relationship with ATTM as required
by New York law.

8
9

7. Whether the claims under California’s CLRA should be dismissed as to all
plaintiffs for failure to comply with the affidavit and/or notice requirements.

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BACKGROUND

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This consolidated proceeding comprises putative class actions brought by individuals who
purchased Apple Inc.’s (“Apple’s”) 3G-enabled iPads. Three separate actions were filed in the
Northern District of California between June and September 2010.3 Pursuant to stipulation and
this Court’s December 15, 2010 Order (Doc. No. 66), those three actions were consolidated under
Federal Rule of Procedure 42(a), and plaintiffs filed a master consolidated complaint (“MCC”) on
December 10, 2010. The sole plaintiff in one of the underlying actions, Logan, has dropped out
of the case; the MCC does not name him as a plaintiff and contains no allegations supporting
claims by him.
Plaintiffs allege that on or around April 30, 2010, Apple began selling 3G-enabled iPads,
with ATTM as the exclusive provider of 3G data service. MCC at ¶ 25. The 3G-enabled iPads
cost approximately $130 more than “Wi-Fi” iPads without 3G capability. Id. at ¶ 26. Unlike the
Wi-Fi iPads, the 3G-enabled iPads can connect to the internet without the need to be within range
of a wireless internet “hotspot.” Id. at ¶ 23.
3

Weisblatt, et al. v. Apple Inc., et al. (Case No. 5:10-cv-02556) (“Weisblatt action”);
Logan v. Apple Inc., et al. (Case No. 5:10-cv-02588) (“Logan action”); Osetek v. Apple, Inc.
(Case No. 5:10-cv-04253) (“Osetek action”).

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ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO DISMISS

3

DCACTIVE-13969959.1

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Plaintiffs allege that between April 30, 2010 and June 7, 2010, ATTM offered two 3G

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data plan options: 250 MB of data for $14.99 per month, with additional data available for an

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added charge, or an unlimited data plan for $29.99 per month. Id. at ¶ 29. Plaintiffs further

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allege that on June 7, 2010, ATTM ceased offering the unlimited data plan, and began offering

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instead a less expensive plan with two gigabytes (“GB”) of data available per month. Id. at ¶¶ 42-

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43; Ex. E to MCC. Plaintiffs acknowledge that customers who had already signed up for an

7

unlimited data plan as of June 7, 2010 could maintain that plan until they chose to discontinue it,

8

at which time the unlimited plan would no longer be available to them. Id. at ¶¶ 42, 44. Plaintiffs

9

contend that by describing the data plan options that were initially available, ATTM

10

misrepresented that customers would be able to switch back and forth between limited and

11

unlimited data plans at all times in the future, and that those alleged misrepresentations induced

12

plaintiffs into paying Apple (or in one case, Best Buy) an additional $130 for the 3G-enabled

13

iPad. See id. at ¶¶ 1-4, 53, 61, 68, 78.

14

Plaintiffs purport to state common law claims of intentional and negligent

15

misrepresentation, fraud and unjust enrichment. Id. at ¶¶ 93-133, 170-175. They also purport to

16

state claims under California’s Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code

17

§§ 1750 et seq., unfair competition law (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq., and

18

false advertising law (“FAL”), Cal. Bus. & Prof. Code §§ 17500 et seq. Id. at ¶¶ 134-169. All

19

claims are grounded in the same allegations of misrepresentations concerning the future

20

availability of unlimited data plans for the 3G-enabled iPad. Id. at ¶¶ 93-169. Plaintiffs seek

21

compensatory and punitive damages, injunctive relief, restitution, pre- and post-judgment interest

22

and attorneys’ fees and costs. Id. at Prayer for Relief at 31-32.

23

Plaintiffs identify two statements by ATTM that they contend were false: a screenshot of

24

ATTM’s website and a “fact sheet” that plaintiffs contend ATTM released on January 27, 2010.

25

Id. at ¶¶ 27, 35, 36, 49. Both statements describe the data plan offerings that were available until

26

June 7, 2010. Plaintiffs concede that both statements indicated that the offerings involved no

27

long-term contract. Id. at ¶¶ 35, 36; see also id. at ¶ 27. They do not allege facts showing that

28

either statement was false at the time it was made. Id. at ¶¶ 35, 36. They do not allege that either

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& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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statement was a promise that the “no long-term contract” unlimited data plan option would

2

remain available for any specific period. They do not allege that any of the named plaintiffs

3

construed either statement as promising the unlimited data plan would remain available for any

4

specific period. Id. at ¶¶ 27, 35.

5

Plaintiffs make a number of general allegations that “defendants” “heavily trumpeted” the

6

unlimited 3G data plan as a “key feature” of the iPad. Id. at ¶¶ 30, 32-34. They provide no

7

specifics about what ATTM allegedly said, when it allegedly said it, or where it allegedly said it,

8

and instead rely on quoted statements by Apple about the unlimited data plan. Id. at ¶¶ 30, 34.

9

Plaintiffs similarly allege that on or around June 4, 2010, “defendants” falsely reassured

10

consumers that they would still be able to initially sign up for the unlimited data plan if they

11

ordered their 3G-enabled iPads before June 7, 2010, even if they received their iPads after that

12

date. Id. at ¶ 51. Again, plaintiffs do not allege specifics about what ATTM purportedly said, or

13

where ATTM purportedly made the statement, and do not allege any facts showing that ATTM

14

denied consumers who ordered their 3G-enabled iPads before June 7, 2010, the ability to initially

15

sign up for the unlimited data plan. Further, none of the named plaintiffs allege that they had that

16

experience. Id. at ¶¶ 53, 61, 68, 74, 78. In fact, plaintiff David Turk purchased his third iPad on

17

May 18, 2010, received it on June 5, and successfully signed up for an unlimited data plan on

18

June 20. Id. at ¶¶ 69, 74.

19

Plaintiffs do not allege that they relied on any statements by ATTM in making their

20

purchase decisions, and do not allege that they saw, heard or were in any way exposed to

21

anything ATTM said about the unlimited data plan before they purchased their iPads. Weisblatt

22

based his decision to purchase a 3G-enabled iPad on “representations on Apple’s website and in

23

various industry publications,” as well as statements by a salesperson at the Apple store where he

24

made his purchase. Id. at ¶¶ 54-56. Plaintiffs Hanna, Turk and Osetek researched the 3G-enabled

25

iPad on Apple’s website, and made their purchasing decision based on representations they saw,

26

“including on Apple’s website.” Id. at ¶¶ 62-63, 70-71, 79-80.

27
28
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Plaintiffs acknowledge that non-California plaintiffs Weisblatt, Turk and Osetek signed up
for ATTM’s 3G service for their iPads. MCC at ¶¶ 57, 72, 74, 81. To activate ATTM’s wireless
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5:10-cv-02588; 5:10-cv-04253
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data service on the iPad, a customer must agree to ATTM’s “Session Based Wireless Data

2

Services Agreement” (“Services Agreement”), which includes a choice of law provision stating

3

that all disputes involving ATTM are governed by the law of the state of the consumer’s address.

4

Declaration of Kimberly D. Eubank in Support of ATTM’s Motion To Compel Arbitration And

5

To Dismiss Claims Or, In The Alternative, To Stay The Case, dated Aug. 10, 2010 (Doc. No. 25)

6

(“Eubank Decl.”), at ¶ 4 & Ex. 2 (Doc. No. 25-2) at 15 (“In the event of a dispute between us, the

7

law of the state of your address at the time the dispute is commenced, whether in litigation or

8

arbitration, shall govern . . . .”). Weisblatt is a citizen of New York (MCC at ¶ 11), Turk is a

9

citizen of Washington (MCC at ¶ 13), and Osetek is a citizen of Massachusetts (MCC at ¶ 14).

10

The only plaintiff who is a citizen of California is Hanna. MCC at ¶ 12.

11
12

LEGAL STANDARDS
Dismissal under Federal Rule of Civil Procedure 12(b)(6) is proper where there is either a

13

“lack of a cognizable legal theory” or “the absence of sufficient facts alleged under a cognizable

14

legal theory.” Balistreri v. Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1988).

15

Although the Court must accept all well-pleaded facts as true, it need not accept as true

16

conclusory allegations, unreasonable inferences, unwarranted deductions of fact or legal

17

conclusions cast as factual allegations, if those conclusions cannot be reasonably drawn from the

18

facts alleged. E.g., Cholla Ready Mix, Inc. v. Civish, 382 F.3d 969, 973 (9th Cir. 2004). Courts

19

do not assume that a plaintiff can prove facts it has not alleged, or facts different from those it has

20

alleged. Associated Gen. Contractors of California, Inc. v. California State Council of

21

Carpenters, 459 U.S. 519, 526 (1983); see also Richards v. Harper, 864 F.2d 85, 88 (9th Cir.

22

1988) (“We do not supply essential elements of a claim that were not initially pleaded.”).

23

To survive a motion to dismiss, the complaint must plead “enough facts to state a claim to

24

relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A

25

claim is plausible on its face “when the plaintiff pleads factual content that allows the court to

26

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.

27

Iqbal, 129 S. Ct. 1937, 1949 (2009). “Where a complaint pleads facts that are ‘merely consistent

28

with’ a defendant's liability, it ‘stops short of the line between possibility and plausibility of

C ROWELL
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ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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‘entitlement to relief.’” Id. at 1949 (quoting Twombly, 550 U.S. at 557); see also Twombly, 550

2

U.S. at 545 (“a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle [ment] to relief’

3

requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of

4

action will not do.”) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Courts may dismiss a

5

case without leave to amend if the plaintiff is unable to cure the defect by amendment. Lopez v.

6

Smith, 203 F.3d 1122, 1129 (9th Cir. 2000).

7
8
9

ARGUMENT
I.

All Claims Fail Because Plaintiffs’ Allegations Do Not Satisfy Rule 9(b).
A.

10
11

Rule 9(b) Requires The Who, What, When, Where And How Of The
Alleged Conduct.

Federal Rule of Civil Procedure 9(b) requires that, “[i]n all averments of fraud or mistake,

12

the circumstances constituting fraud or mistake shall be stated with particularity.” FED. R. CIV.

13

P. 9(b). Under Rule 9(b), all “[a]verments of fraud must be accompanied by the who, what,

14

when, where, and how of the misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d

15

1097, 1106 (9th Cir. 2003) (internal quote omitted). This Rule 9(b) requirement applies to

16

plaintiffs’ common law claims for intentional and negligent misrepresentation, fraud and unjust

17

enrichment (Claims 1-3, 7), as well as to their California statutory claims under the CLRA, UCL

18

and FAL (Claims 4-6), because all are based on same alleged misrepresentation regarding the

19

unlimited data plan MCC at ¶¶ 140, 153, 163, 171-172.

20
21

B.

Under Kearns, All Claims Must Meet The Requirements Of Rule 9(b).

Plaintiffs cannot evade the requirements of Rule 9(b) by raising state common law or

22

statutory claims. In Kearns, the Ninth Circuit held that Rule 9(b) requires all “averments of

23

fraud” to be pled with particularity “irrespective of whether the substantive law at issue is state or

24

federal,” and even where “fraud is not an essential element of a claim.” Kearns v. Ford Motor

25

Co., 567 F.3d 1120, 1124-25 (9th Cir. 2009). The Ninth Circuit specifically ruled that

26

Rule 9(b)’s heightened pleading standards apply to claims for violations of the CLRA and UCL.

27

Id. at 1125. In so ruling, it recognized that “fraud [was] not a necessary element of a claim under

28

the CLRA and UCL,” but explained that where, as here, a plaintiff’s claim is “grounded in fraud”

C ROWELL
& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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or “sounds in fraud,” the pleading must satisfy the particularity requirement of Rule 9(b). Id.; see

2

also Vess, 317 F.3d at 1104 (explaining that all averments of fraud are subject to Rule 9(b), even

3

if plaintiff’s claim does not rest solely on a fraudulent course of conduct).

4

Following Kearns, district courts in California have held that claims under California’s

5

FAL are equally subject to Rule 9(b). See, e.g., Herrington v. Johnson & Johnson Consumer Co.,

6

Inc., 2010 WL 3448531 *7 (N.D. Cal. Sept. 1, 2010) (dismissing UCL, CLRA and FAL claims

7

for failure to satisfy Rule 9(b)); Saba v. Caplan, 2010 WL 2681987 *4 (N.D. Cal. July 6, 2010)

8

(dismissing UCL and FAL claims for failure to satisfy Rule 9(b)). Negligent misrepresentation

9

and unjust enrichment claims based on fraud are also subject to Rule 9(b). E.g., Glenn Holly

10

Entm’t., Inc. v. Tektronix, Inc., 100 F. Supp. 2d 1086, 1093 (C.D. Cal. 1999); Stewart v.

11

Mortgage Elec. Registration Sys., Inc., 2010 WL 1054384 *11 (D. Or. Feb. 18, 2010).

12
13

C.

None Of Plaintiffs’ Allegations Of Misrepresentations By ATTM Meet The
Specificity Requirement.

To avoid dismissal under Rule 9(b),” a “complaint [must] state the time, place, and
14
specific content of the false representations as well as the identities of the parties to the
15
misrepresentation.” Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004) (internal
16
quotations omitted). In addition, “[t]he plaintiff must set forth what is false or misleading about a
17
statement, and why it is false.” Vess, 317 F.3d at 1106 (internal quotation omitted).
18
The crux of plaintiffs’ claims is that ATTM falsely represented the “continued
19
availability” of the unlimited data plan. MCC at ¶ 40; see also id. at ¶¶ 4, 41. Plaintiffs cite only
20
two representations by ATTM, neither of which supports plaintiffs’ claims.
21
First, plaintiffs quote a screenshot of ATTM’s website. On its face, that statement
22
describes the two data plan options available at the time the screenshot was made:
23
24
25
26

AT&T offers two data plan options—250MB or unlimited data,
with recurring monthly charge and no long-term contract. To help
you manage your data with a 250 MB plan, iPad will notify you at
20%, 10%, and when there’s no more data available, so you can
decide if you want to add more data or upgrade to an unlimited data
plan.

27
Id. at ¶ 35 (quoting Ex. B to MCC); see also id. at ¶ 27 (referring to Ex. B). Plaintiffs do not and
28
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& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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cannot reasonably allege that the above statement—which states that both data plans involve “no

2

long-term contract”—was a promise by ATTM that it would make the unlimited data plan option

3

available in perpetuity, or that any of the named plaintiffs construed it as such. Id. at ¶¶ 27, 35.

4

Plaintiffs also do not specifically allege when ATTM made the above statement, or allege

5

facts showing that the statement was false at the time it was made, as required by Rule 9(b). See

6

e.g., Ronconi v. Larkin, 253 F.3d 423, 431 (9th Cir. 2001) (affirming dismissal where plaintiff

7

failed to allege facts showing that statement was false when made). At most, plaintiffs allege that

8

the statement somehow became “completely false” during the period between June 2, 2010, when

9

ATTM announced that it would change its data plan offerings, and June 7, 2010, when those

10

changes took effect.4 MCC at ¶¶ 49, 51. That allegation cannot support plaintiffs’ fraud or fraud-

11

based claims, however, because each of the plaintiffs purchased their iPad units before June 2,

12

2010 (and plaintiffs do not allege that they relied on anything ATTM said about its data plan

13

offerings). MCC at ¶¶ 53, 61, 68, 78; see, e.g., Poulos v. Ceasars World, Inc., 379 F.3d 654, 665

14

(9th Cir. 2004) (allegations of “misrepresentations standing alone have little legal significance,”

15

absent reliance, which “provides a key causal link.”). The allegations show only that ATTM

16

continued to truthfully describe the data plan options available during the period between June 2,

17

2010 and June 7, 2010. MCC at ¶¶ 43, 49, 51. Plaintiffs do not allege that ATTM falsely

18

advertised the availability of the unlimited data plan after it changed its data plan offerings on

19

June 7, 2010, and plaintiffs concede that customers who signed up for the unlimited data plan

20

before it was discontinued can keep the plan.5 Id. at ¶ 44.

21
22
23
24
25
26
27
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4

Plaintiffs also allege that “defendants” made unspecified representations some time
“between January 27, 2010 and June 7, 2010.” MCC at ¶ 41. Plaintiffs do not allege whether
these “representations” include the screenshot of ATTM’s website, but even if they did, the
allegation would not satisfy plaintiffs’ burden of alleging the timing of the misrepresentations.
The timing of the misrepresentations is “particularly important” under Rule 9(b), and plaintiffs
cannot satisfy the rule’s requirement by vaguely alleging a broad period of time in which the
misrepresentation may have occurred. See U.S. Concord, Inc. v. Harris Graphics Corp., 757 F.
Supp. 1053, 1057 (N.D. Cal. 1991) (“Allegations such as ‘[d]uring the course of discussions in
1986 and 1987,’ ‘in or about May through December 1987,’ and ‘May 1987 and thereafter’ . . . do
not make the grade.”).
5
Plaintiffs’ allegation that on June 4, 2010, “defendants” falsely reassured consumers that
the unlimited data plan would be available for those who ordered a 3G-enabled iPad before
June 7, 2010, but who received it after that date, also does not support a fraud claim. Id. at ¶ 51.
(Continued…)
CASE NOS. 5:10-cv-02553;
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5:10-cv-02588; 5:10-cv-04253
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Second, plaintiffs attempt to rely on a January 27, 2010 “fact sheet” that, like ATTM’s

2

website, described the “no long term contract” data plans initially made available for the 3G-

3

enabled iPad units. Id. at ¶ 36. Plaintiffs quote that fact sheet as saying, “‘Once you sign up for

4

the iPad 3G data service, you can add or cancel your domestic plan at any time—no penalty.’”

5

Id. (quoting Ex. D.) That statement, however, concerns the renewal of data plans in general.6 It

6

furnishes no support for fraud or fraud-based claims because plaintiffs do not allege how the

7

statement misrepresents the “continuing availability” of the unlimited data plan, as they must to

8

state a claim. See Vess, 317 F.3d at 1106.

9

Lacking any misrepresentations by ATTM, plaintiffs attempt to bootstrap liability to

10

ATTM by quoting alleged misrepresentations by Apple, and contending in a conclusory fashion,

11

without any supporting factual allegations, that ATTM made similar unspecified statements. See

12

MCC at ¶¶ 27, 30, 34. Those allegations are insufficient because they lump the two defendants

13

together and are not specific as to ATTM. See Roque v. Suntrust Mortg., Inc., 2010 WL 546896,

14

*6 (N.D. Cal. Feb. 10, 2010) (“Rule 9(b) ‘does not allow a complaint to merely lump multiple

15

defendants together but require[s] plaintiffs to differentiate their allegations when suing more

16

than one defendant.’”) (quoting Swartz v. KPMG LLP, 476 F.3d 756, 764-65 (9th Cir. 2007)).

17

Plaintiffs cannot rely on allegations against Apple to cure their deficient allegations against

18

ATTM. See Swartz, 476 F.3d at 764-65 (“With respect to Presidio and DB, the allegations in

19

[the] complaint patently fail to comply with Rule 9(b). The complaint is shot through with

20

general allegations that the ‘defendants’ engaged in fraudulent conduct but attributes specific

21

The allegation is not pled with specificity as to each defendant, and is supported by no facts as to
what ATTM said, or where ATTM purportedly said it. See Swartz, 476 F.3d at 764-65. None of
the plaintiffs could have relied on alleged assurances made on June 4 because they all purchased
their iPads before that date. See Poulos, 379 F.3d at 665. Plaintiffs do not allege any facts
showing that the reassurances were false; indeed, plaintiff Turk purchased his third iPad on
May 18, 2010, and was able to sign up for an unlimited plan on June 20, after it was discontinued
for consumers who purchased iPads after June 7. MCC at ¶ 74.
6
The paragraph containing the quote states, in full: “Once you sign up for the iPad 3G
data service, you can add or cancel your domestic plan at any time—no penalty. For domestic
plans, if you do not cancel, your service will automatically renew every 30 days to provide a more
seamless data experience on an ongoing basis. For example, if you activate service on May 9,
your service will automatically renew 30 days later with the same plan. If you do make a change,
a new 30-day window begins.” Ex. D to MCC.

22
23
24
25
26
27
28
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& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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misconduct only to KPMG and B & W.”).
II.

3

All Claims Against ATTM Fail Because Plaintiffs Do Not Allege Reliance On
Any Statement By ATTM.

The Ninth Circuit holds that reliance is an “essential” element of any claim for fraud or
4
misrepresentation.7 Clark v. Time Warner Cable, 523 F.3d 1110, 1116 (9th Cir. 2008); accord
5
Poulos, 379 F.3d at 665. This principle holds equally true for misrepresentation claims brought
6
under the CLRA, UCL and FAL. Kearns, 567 F.3d at 1126 (“Kearns also failed to specify [in
7
CLRA and UCL claims] which sales material he relied upon in making his decision to buy [his
8
car]”); United Food & Commercial Workers Cent. Pennsylvania & Reg’l Health & Welfare Fund
9
v. Amgen, Inc., 2010 WL 4128490 *1 (9th Cir. Oct. 21, 2010) (affirming dismissal with prejudice
10
of UCL claim for failure to adequately allege reliance); Herrington, 2010 WL 3448531 at *7
11
(dismissing UCL, CLRA and FAL claims under Kearns where plaintiff failed to allege that they
12
were exposed to and relied on misrepresentations); Lorenzo v. Qualcomm Inc., 603 F. Supp. 2d
13
1291, 1304 (S.D. Cal. 2009) (dismissing UCL claim because “the Complaint does not allege that
14
Plaintiff relied on representations made by Qualcomm when he purchased his cell phone or when
15
he selected his cellular service.”); Laster v. T-Mobile USA, Inc., 407 F. Supp. 2d 1181, 1194 (S.D.
16
Cal. 2005) (dismissing UCL and FAL claims where “none of the named Plaintiffs allege[d] that
17
they saw, read, or in any way relied on the advertisements . . . .”).
18
Here, plaintiffs’ failure to allege reliance is a separate and independent basis to dismiss all
19
20
21
22
23
24
25
26
27

7

Under the choice of law provisions in their contracts with ATTM, the claims alleged by
Hanna, Weisblatt, Turk and Osetek are governed by the law of their home states, which are,
respectively, California (MCC at ¶ 12), New York (MCC at ¶ 11), Washington (MCC at ¶ 13) and
Massachusetts (MCC at ¶ 14). See Eubank Decl. at ¶ 4 (Doc. No. 25) and Ex. 2 (Doc. No. 25-2)
at 15; In re Detwiler, 305 Fed. Appx. 353, 355 (9th Cir. 2008) (enforcing parties’ choice of
Florida law in terms of service agreement in suit between provider and Florida customer); see
also Cooper v. Picket, 137 F.3d 616, 622-23 (9th Cir. 1997) (“[W]hen [the] plaintiff fails to
introduce a pertinent document as part of his pleading, [the] defendant may introduce the exhibit
as part of his motion attacking the pleading.”) (internal quotations and citations omitted). The
law of each of these states requires plaintiffs to allege and prove reliance in order to sustain fraud,
intentional misrepresentation or negligent misrepresentation claims. See, e.g., Herrington, 2010
WL 3448531 at *8-11 (applying California law); Eternity Global Master Fund Ltd. v. Morgan
Guar. Trust Co. of New York, 375 F.3d 168, 186-87 (2nd Cir. 2004) (applying New York law);
accord Kwiatkowski v. Drews, 176 P.3d 510, 519 (Wash. App. Div. 2, 2008); Cumis Ins. Society,
Inc. v. BJ's Wholesale Club, Inc., 918 N.E.2d 36, 47 (Mass., 2009).

28
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& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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1

claims against ATTM. All named plaintiffs allege that they relied on statements by Apple, not

2

ATTM. MCC at ¶¶ 54-56, 62-63, 70-71, 79-80. Indeed, no plaintiff specifically alleges that he

3

or she saw, heard or even knew of any purported misrepresentations by ATTM before making the

4

decision to purchase a 3G-enabled iPad.8 Id. Consistent with Kearns and the other applicable

5

authority, plaintiffs’ fraud-based claims are subject to dismissal because they fail to allege

6

reliance.

7

III.

8
9

Non-California Plaintiffs Weisblatt, Turk And Osetek Lack Standing To
Pursue CLRA, UCL And FAL Claims.

“California law embodies a presumption against the extraterritorial application of its

10

statutes.” Churchill Village, L.L.C. v. General Elec. Co., 169 F. Supp. 2d 1119, 1126 (N.D. Cal.

11

2000); see also Norwest Mortgage, Inc. v. Super. Ct., 72 Cal. App. 4th 214, 222-28 (1999) (“We

12

ordinarily presume the Legislature did not intend the statutes of this state to have force or

13

operation beyond the boundaries of the state.”). In light of that principle, courts have made clear

14

that the UCL, FAL and CLRA do not apply to claims brought by non-California residents for

15

conduct occurring outside the state of California. Norwest Mortgage, 72 Cal. App. 4th at 222-28

16

(1999) (UCL does not apply to injuries suffered by non-California residents caused by conduct

17

occurring outside California’s borders); Churchill Village, 169 F. Supp. 2d at 1126, 1132 (UCL

18

and FAL do not apply to non-California residents complaining of conduct occurring outside

19

California); Cattie v. Walmart-Stores, Inc., 504 F. Supp. 2d 939, 949 (S.D. Cal. 2007) (“The

20

requirement that a non-California plaintiff has no standing to sue under the CLRA for a

21

transaction having no connection with California is unremarkable . . . .”).

22

Here, the CLRA, UCL and FAL claims must be dismissed as to Weisblatt, Turk and

23

Osetek because they are non-California residents who purchased their iPad and data plans outside

24
25
26
27

8

Plaintiffs make a conclusory, boilerplate allegation that they relied on unspecified
misrepresentations by unspecified “defendants.” MCC at ¶¶ 40. Such allegations fail under
Rule 8, as well as under the more stringent standards of Rule 9(b). Iqbal, 129 S. Ct. at 1949 (“A
pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause
of action will not do.’”) (quoting Twombly, 550 U.S. at 555).

28
C ROWELL
& M ORING LLP
ATTO RNEY S AT LAW

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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of California.9 MCC at ¶¶ 11, 13, 14, 53-60, 68-84. Their attempt to concoct a connection to

2

California by offering a conclusory allegation that unspecified representations, occurring at

3

unspecified times, emanated from unspecified ATTM operations and employees based in

4

California, is ineffective. Id. at ¶ 9. Under Iqbal, plaintiffs cannot expand the reach of

5

California’s statutes beyond its borders with nothing more than “threadbare” and unsubstantiated

6

allegations. See Iqbal, 129 S. Ct. at 1949. Equally unavailing is plaintiffs’ assertion that ATTM

7

negotiated and entered into contracts with Apple, a California corporation. MCC at ¶ 9. The

8

allegedly wrongful conduct at issue in the statutory consumer claims is ATTM’s alleged

9

misrepresentations, not any contracts between ATTM and Apple. See Norwest Mortgage, 72 Cal.

10

App. 4th at 224-25 (extraterritorial reach of California’s consumer protection statutes applies only

11

to “wrongful conduct occurring in California”).

12

IV.

13
14

Plaintiffs’ Unjust Enrichment Claims Fail Because No Such Claim Is
Available Under The Applicable State Laws And Plaintiffs Allege No Facts
Showing Unjust Enrichment Of ATTM.

Plaintiffs’ claim for unjust enrichment (MCC at ¶¶ 170-175) fails for two reasons: (a) as

15

to California plaintiff Hanna, there is no independent cause of action in California for unjust

16

enrichment, and the laws of non-California plaintiffs Weisblatt, Turk and Osetek’s home states do

17

not permit unjust enrichment claims where there is a contract governing the relationship between

18

the parties; and (b) none of the plaintiffs paid ATTM any amount for their 3G-enabled iPads, and

19

they allege no facts supporting their theory that ATTM was unjustly enriched by payment of an

20

additional $130 to Apple or Best Buy for the 3G-enabled iPad.

21

A.

22

There Is No Cause Of Action Under California Law For Unjust
Enrichment.

Plaintiff Hanna cannot state a claim for unjust enrichment because “there is no cause of
23
action in California for unjust enrichment.” Melchior v. New Line Prods., Inc., 106 Cal. App. 4th
24
779, 794 (2003). “The phrase ‘Unjust Enrichment’ does not describe a theory of recovery, but an
25
26
27

9

In addition, these plaintiffs’ choice of law provisions in their contracts with ATTM
preclude their California statutory claims. See, e.g., Melt Franchising, LLC v. PMI Enters., Inc.,
2009 WL 32587, *3 (C.D. Cal. Jan. 2, 2009) (dismissing UCL and CLRA claims where
Massachusetts law applied pursuant to a choice-of-law provision).

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effect: the result of a failure to make restitution under circumstances where it is equitable to do

2

so.” Lauriedale Associates, Ltd. v. Wilson, 7 Cal. App. 4th 1439, 1448 (1992). “Unjust

3

enrichment is a ‘general principle, underlying various legal doctrines and remedies,’ rather than a

4

remedy itself. It is synonymous with restitution.” Melchior, 106 Cal. App. 4th at 784 (quoting

5

Dinosaur Dev., Inc. v. White, 216 Cal. App. 3d 1310, 1315 (1989)).

6

Following Melchior and Lauriedale, district courts in California have dismissed unjust

7

enrichment claims with prejudice, particularly where, as here, the claim is merely duplicative of

8

other fraud or consumer claims under the CLRA, UCL or FAL. See Newsom v. Countrywide

9

Home Loans, Inc., 714 F. Supp. 2d 1000 (N.D. Cal. 2010) (following Melchior and dismissing

10

unjust enrichment claim based on same allegations supporting UCL claim); Rosal v. First Federal

11

Bank of California, 671 F. Supp. 2d 1111 (N.D. Cal. 2009) (same); accord Smith v. Ford Motor

12

Co., 2010 WL 3619853 *14 (N.D. Cal. Sept. 13, 2010); Leong v. Square Enix of America

13

Holdings, Inc., 2010 WL 1641364 *9 (C.D. Cal. April 20, 2010).

14

B.

15

Plaintiffs Cannot Maintain A Claim For Unjust Enrichment Where
There Is A Contract Governing The Subject Matter Of The Claim.

Plaintiffs Weisblatt, Turk and Osetek cannot state claims for unjust enrichment because
16
the laws of their states do not permit a claim for unjust enrichment where a plaintiff seeks
17
recovery for events arising from the same subject matter governed by a contract. See, e.g., Singer
18
Asset Fin. Co. v. Melvin, 822 N.Y.S.2d 68, 71 (App. Div. 2006) (“recovery for unjust enrichment
19
is barred by the existence of a valid and enforceable written contract.”); MacDonald v. Hayner,
20
715 P.2d 519, 523 (Wash. App., 1986) (party to a contract may not ignore the contract and bring
21
an action for unjust enrichment); Zarum v. Brass Mill Materials Corp., 134 N.E.2d 141,
22
143 (Mass. 1956) (no cause of action for unjust enrichment where relationship of parties
23
governed by contract). Weisblatt, Turk and Osetek each admittedly entered into service
24
agreements with ATTM governing their 3G wireless service (MCC at ¶¶ 57, 72, 74, 81), and thus
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cannot advance claims for unjust enrichment.
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C.

Plaintiffs Have Not Alleged And Cannot Allege Facts Showing Unjust
Enrichment Of ATTM.

The claim for unjust enrichment also fails as to all plaintiffs because they have not alleged
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and cannot allege any unjust enrichment of ATTM by their decision to purchase a 3G-enabled

2

iPad. See In re Accuray, Inc. S’holder Derivative Litig., 2010 WL 3447615 * 14 (N.D. Cal. Aug.

3

31, 2010) (dismissal of unjust enrichment claim warranted where plaintiff fails to show how

4

defendant was unjustly enriched at the plaintiff’s expense); c.f. Nelson v. Sperling, 270 Cal. App.

5

2d 194 (1969) (“Restitution means that the defendant must hand back to the plaintiff what the

6

defendant has received from the plaintiff in the transaction.”); Rains v. Arnett, 189 Cal. App. 2d

7

337, 343 (1961) (“[N]o recovery for money had and received can be had against a defendant who

8

never received any part of the money or equivalent thing sued for.”).10

9

Plaintiffs allege that they paid “an additional $130 for . . . 3G capability” and that they

10

paid “more than [they] otherwise would have for [their] iPad” as opposed to a less expensive

11

WiFi iPad. MCC at ¶¶ 4, 60; see also id. at ¶¶ 53, 63, 67, 77, 84. Plaintiffs allege that they

12

bought their more expensive 3G-enabled iPads from Apple (or in plaintiff Hanna’s case, Best

13

Buy), not ATTM. Id. at ¶¶ 53, 61, 63, 78. There are no allegations that ATTM received any

14

portion of the $130 additional payment.11 There is therefore no basis for plaintiffs’ unjust

15

enrichment claims against ATTM.

16

V.

17

Plaintiffs’ Claims Under The UCL and FAL Fail Because They Lack
Standing To Seek Restitution From ATTM.

The UCL and FAL “limit standing to individuals who suffer losses . . . that are eligible for
18
restitution.” Buckland v. Threshold Enters., Ltd., 155 Cal. App. 4th 798, 817, 819 (Cal. App. 2d.
19
2007). Plaintiffs whose losses are ineligible for restitution also lack standing to bring a claim for
20
injunctive relief under the statutes. See Sullins v. Exxon/Mobil Corp., 2010 WL 338091 *4 (N.D.
21
22
23
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25
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27

10

The law of New York, Washington and Massachusetts also provides that no claim for
unjust enrichment lies against a defendant who never received the money sought in restitution.
See Desanctis v. Labell’s Airport Parking, Inc., 1991 WL 71921, *4 (Mass.App.Div., 1991)
(unjust enrichment requires defendant to return a benefit received from the plaintiff); accord IDT
Corp. v. Morgan Stanley Dean Witter & Co., 879 N.Y.S.2d 355, 361 (N.Y., 2009); Bailie
Communications, Ltd. v. Trend Business Systems, Inc., 810 P.2d 12, 18 (Wash. App., 1991).
11
Although plaintiffs also make conclusory allegations that they paid more for “related
services” than they otherwise would have, were “denied important benefits” and “will be assessed
excessive charges for downloading data to [their] iPad[s],” they provide no facts to support those
allegations. MCC at ¶¶ 60, 67, 77, 84. The allegations therefore fail under Iqbal. See Iqbal, 129
S. Ct. at 1949.

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Cal. Jan. 20, 2010) (“Because plaintiffs are not entitled to restitution, they lack standing to bring a

2

claim for injunctive relief . . . .”).

3

A plaintiff cannot obtain restitution from a defendant to recover payments that the plaintiff

4

made to other entities. See Bowler v. Home Depot USA, Inc., 2010 WL 3619850 *5 (N.D. Cal.

5

Sept. 13, 2010) (no standing to assert UCL claim because “Plaintiff’s ‘lost money’ went to [third-

6

party] medical practitioners and did not unjustly enrich the Defendant.”); Sullins, 2010 WL

7

338091 at *4 (dismissing UCL claim based on allegation that plaintiffs were entitled “to the

8

return of money they paid to any third party as a result of defendant’s unfair business practices.”);

9

see also Walker v. Geico Gen. Ins. Co., 558 F.3d 1025 (9th Cir. 2009) (finding that because

10

defendants had no money or property belonging to plaintiff, plaintiff could not state a claim for

11

restitution and thus lacked standing under the UCL). Here, plaintiffs base their claims on

12

allegations that they paid Apple or Best Buy $130 more for the 3G-enabled iPad than they would

13

have paid if they had bought the less expensive WiFi iPad. MCC at ¶¶ 4, 53, 60, 61, 63, 78.

14

Plaintiffs are therefore not entitled to restitution from ATTM, and under Bowler and Sullins lack

15

standing to assert claims against ATTM under the UCL or FAL.

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17

VI.

Plaintiff Weisblatt’s Negligent Misrepresentation Claim Fails Because He
Cannot Establish A Special Relationship With ATTM.

Under New York law, which governs Weisblatt’s claim, “there is no action for negligent
18
misrepresentation of a promise of future conduct unless there is a special relationship between the
19
parties.” Computech Int’l, Inc. v. Compaq Computer Corp., 2002 WL 31398933 *5 (S.D.N.Y.
20
Oct. 24, 2002). Ordinary buyer-seller relationships such as the one in this case are not special
21
relationships that permit a cause of action for negligent misrepresentation. See Dallas Aerospace,
22
Inc. v. CIS Air Corp., 352 F.3d 775, 788 (2nd Cir. 2003) (“[T]he law of negligent
23
misrepresentation requires a closer degree of trust between the parties than that of the ordinary
24
buyer and seller . . . .”); American Protein Corp. v. AB Volvo, 844 F.2d 56, 63 (2nd Cir. 1988)
25
(special relationship exists “when the parties’ relationship suggests a closer degree of trust and
26
reliance than that of the ordinary buyer and seller”). Because Weisblatt has failed to allege
27
anything other than a typical buyer-seller relationship, his negligent misrepresentation claim must
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be dismissed.
VII.

The CLRA Claim Fails Because Plaintiffs Did Not Comply With The
Affidavit And Notice Requirements.
A.

All Plaintiffs Failed To File The Required Affidavits.

California Civil Code section 1780(d) states that a plaintiff seeking relief under the
5
CLRA must file, concurrently with the complaint, an affidavit stating facts showing that the
6
action has been commenced in the appropriate county. Cal. Civ. Code § 1780(d). If a plaintiff
7
fails to file the required affidavit, the court “shall” dismiss the action. Id.; see also In re Sony
8
Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Television Litig., 2010 WL
9
4892114, *10 (S.D. Cal., Nov. 30, 2010) (dismissing CLRA claim in consolidated class action
10
complaint where plaintiffs failed to provide required affidavit). Here, the CLRA claims must be
11
dismissed as to all plaintiffs because they did not file the required affidavits.
12
13
14

B.

Plaintiff Osetek Also Failed To Serve A Notice Of Violation Letter On
ATTM.

Under the CLRA, a plaintiff must provide a company with thirty days notice of the

15

specific alleged CLRA violations by certified registered mail before filing a CLRA claim for

16

damages. Cal. Civ. Code § 1782(a). Both state and federal courts require strict, literal

17

conformance with CLRA’s notice requirement. See Laster, 407 F. Supp. 2d at 1195-96 (“Strict

18

adherence to the statute’s notice provision is required to accomplish the Act’s goals.”); accord

19

Outboard Marine Corp. v. Super. Ct., 52 Cal. App. 3d 30, 40-41 (1975). CLRA claims for

20

damages brought by plaintiffs who fail to comply with section 1782’s notice requirement must be

21

dismissed. See, e.g., Laster, 407 F.Supp.2d at 1196; Cattie, 504 F. Supp. at 950. In this case,

22

plaintiff Osetek sent a notice of violation solely to Apple, and not to ATTM, requiring dismissal

23

of her CLRA claim for damages. MCC at ¶ 150.

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CONCLUSION

2

For the foregoing reasons, ATTM respectfully requests that the Court dismiss with

3

prejudice the First Amended Complaint in its entirety.

4
5

Dated: January 14, 2011

/s/ M. Kay Martin
M. Kay Martin
[e-mail]
CROWELL & MORING LLP
275 Battery Street, 23rd Floor
San Francisco, CA 94111
Telephone: [phone]
Facsimile: [phone]

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Kathleen Taylor Sooy
[e-mail]
CROWELL & MORING LLP
1001 Pennsylvania Avenue, NW
Washington, DC 20004
Telephone: [phone]
Facsimile: [phone]

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12
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Counsel for AT&T Mobility LLC

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M. Kay Martin (CSB No. 154697)
[e-mail]
Joel D. Smith (CSB No. 244902)
[e-mail]

CROWELL & MORING LLP
275 Battery Street, 23rd Floor
San Francisco, CA 94111
Telephone: [phone]
Facsimile: 415.986.2827
Kathleen Taylor Sooy (pro hac vice pending)
[e-mail]

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CROWELL & MORING LLP
1001 Pennsylvania Avenue, NW
Washington, DC 20004
Telephone: [phone]
Facsimile: [phone]
Attorneys for AT&T Mobility LLC

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UNITED STATES DISTRICT COURT
12
NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION
13
14
15

ADAM WEISBLATT, JOE HANNA, and
DAVID TURK, and COLETTE OSETEK,
individually and on behalf of all others
similarly situated,

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17
18
19

Plaintiffs,
v.

Case Nos. 5:10-cv-02553; 5:10-cv-02588; 5:10cv-04253

CLASS ACTION
MEMORANDUM OF LAW IN SUPPORT
OF MOTION OF AT&T MOBILITY LLC
TO STRIKE PORTIONS OF THE MASTER
CONSOLIDATED COMPLAINT

APPLE, INC., AT&T MOBILITY LLC,
and Does 1-10,
Defendants.

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21

Date:
Time:
Place:

March 18, 2011
9 a.m.
Courtroom 6, 4th Floor

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CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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INTRODUCTION
AT&T Mobility LLC (“ATTM”) moves to strike all claims by plaintiff Collette Osetek
(“Osetek”) against ATTM in the Master Consolidated Complaint (“MCC”) on two grounds.
First, Osetek is bound by her prior judicial admissions that her action “does not involve

5

ATTM,” that her claim “arises entirely out of Apple’s [conduct],” and that any “representations,

6

transactions and events that concern ATTM . . . have no bearing on [her] claims for relief.”

7

Opp’n to Motion to Consider Whether Cases Should Be Related, at 2:18-19; 3:3-4; 3:22-23

8

(Weisblatt Doc. No. 48) (“Opp’n to Relate Cases”) (emphasis in original). She cannot now

9

attempt to state claims against ATTM in this action.

10

Second, Osetek did not sue ATTM in her underlying action, and she cannot use the MCC

11

to assert new claims against ATTM without leave to amend, as required by Rule 15(a). Osetek

12

cannot cure this problem by making an after-the-fact request for leave to amend now. Her

13

admission that her claims do not arise from ATTM’s conduct, as well as her failure to seek leave

14

before filing the MCC, provide independent grounds for denying any such request.1

15

STATEMENT OF ISSUE

16

1. Whether the Court should strike claims by plaintiff Osetek against ATTM because
she admitted that her claims do not arise from ATTM’s conduct and because she
did not assert claims against ATTM in her underlying action.

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18

BACKGROUND
19
This consolidated proceeding comprises putative class actions brought by individuals who
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1

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In the underlying Weisblatt action, the Court previously denied without prejudice
ATTM’s Motion To Compel Arbitration Or, In The Alternative, To Stay The Case (“Motion To
Compel”). The Court indicated that it was doing so in order to await the U.S. Supreme Court’s
decision in AT&T Mobility LLC v. Concepcion, No. 09-893; accordingly, it held that discovery
would be limited to written discovery relevant to claims against Apple. See Order On Defendant
AT&T Mobility’s Motion To Compel Arbitration Or, in The Alternative, To Stay Case, filed on
October 18, 2010 (Weisblatt Doc. No. 50). Pursuant to stipulated order, the Weisblatt Order is
fully binding on the parties to this consolidated action, and ATTM’s right to seek to compel
arbitration, as well as all arguments raised in the Weisblatt and Logan actions, are deemed to have
been raised and preserved in all of the consolidated actions. See Stipulation and Order For
Consolidation Pursuant To Fed. R. Civ. P. 42, filed December 15, 2010 (Doc. No. 66)
(“Consolidation Order”). ATTM respectfully submits that the Court should defer ruling on this
Motion To Strike until the Supreme Court decides Concepcion. Once the Supreme Court
announces its decision in Concepcion, ATTM will again seek to compel each plaintiff to arbitrate
his or her claims under the terms of the arbitration agreements between plaintiffs and ATTM.
CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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purchased Apple Inc.’s 3G-enabled iPads. Three separate actions were filed in the Northern

2

District of California: Logan, Weisblatt, and Osetek.2 Pursuant to the parties’ stipulation and this

3

Court’s December 15, 2010 Order, the three actions were consolidated under Federal Rule of

4

Civil Procedure 42(a). Consolidation Order (Weisblatt, Doc. No. 66).

5

The first two actions, Logan and Weisblatt, named Apple and ATTM as defendants.

6

Several months later, plaintiff Osetek commenced her action and named solely Apple as a

7

defendant. Apple moved to relate Osetek to Logan and Weisblatt. Apple’s Motion To Relate

8

(Weisblatt Doc. No. 45). Plaintiff Osetek opposed that motion, asserting that her action “does not

9

involve ATTM,” but instead “arises entirely out of Apple’s [conduct].” Opp’n to Relate Cases, at

10

2:18-19; 3:3-4 (emphasis in original). She admitted that “representations, transactions and events

11

that concern ATTM . . . have no bearing on [her] claims for relief,” and that she seeks no relief

12

from ATTM, which she described as a “non-party” to her action. Id. at 3:22-23; 4:1-4.

13

Osetek later withdrew her opposition to Apple’s motion to relate the cases, without

14

explanation.3 See Withdrawal of Opp’n to Relate Cases (Weisblatt Doc. No. 51). Approximately

15

two weeks later, Osetek filed her First Amended Complaint, which continued to state claims

16

against solely Apple. Osetek First Amended Complaint (Osetek Doc. No. 14).

17

After the parties stipulated to consolidate the three actions, plaintiffs filed their Master

18

Consolidated Complaint (“MCC”). Neither the stipulation, nor the Court’s order approving that

19

stipulation, state that consolidation would have the effect of making ATTM a defendant to

20

Osetek’s claims. See Consolidation Order. Consistent with her prior admission, the MCC

21

contains no specific allegations by Osetek related to ATTM’s alleged misrepresentations. See

22

MCC at ¶¶ 78-84. The MCC purports, however, to state claims by all plaintiffs against all

23

defendants, and gives no indication that claims by Osetek are limited to Apple. See MCC, at ¶¶

24

78-84, 93-175.

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Weisblatt, et al. v. Apple Inc., et al. (Case No. 5:10-cv-02556) (“Weisblatt action”);
Logan v. Apple Inc., et al. (Case No. 5:10-cv-02588) (“Logan action”); Osetek v. Apple, Inc.
(Case No. 5:10-cv-04253) (“Osetek action”).
3
Shortly after Osetek withdrew her opposition, the Court ordered her case related to
Weisblatt and Logan. Oct. 27, 2010 Order (Weisblatt Doc. No. 56). Weisblatt and Logan were
previously related on September 14, 2010. Sept. 14, 2010 Order (Weisblatt, Doc. No. 40).
CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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LEGAL STANDARD
Federal Rule of Civil Procedure 12(f) provides that a court may exercise its discretion to

3

strike a pleading or any portion of a pleading that is “redundant, immaterial, impertinent, or

4

scandalous.” FED. R. CIV. P. 12(f). A motion to strike pursuant to Federal Rule of Civil

5

Procedure 12(f) “tests whether a pleading contains inappropriate material.” Delodder v. Aerotek,

6

Inc., 2009 WL 3770670, at *1 (C.D. Cal. Nov. 9, 2009). The function of a “12(f) motion to strike

7

is to avoid the expenditure of time and money that must arise from litigating spurious issues by

8

dispensing with those issues prior to trial.” Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th

9

Cir. 1993), rev’d on other grounds, Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994). New claims or

10

new parties that appear in pleadings without required authorization from the court are subject to a

11

Rule 12(f) motion to strike. See Stearns v. Select Comfort Retail Corp., 2009 WL 4723366, *6

12

(N.D. Cal. Dec. 4, 2009) (striking new claims for personal injuries outside the scope of the court’s

13

previous order granting leave to amend); De La Torre v. United States, 2004 WL 3710194, *3

14

(N.D. Cal. April 14, 2004) (granting motion to strike where plaintiff added new claims to a

15

consolidated complaint without prior authorization); Colbert v. City of Philadelphia, 931 F. Supp.

16

389, 393 (E.D. Pa., 1996) (amended pleadings filed without leave are a “nullity” and are not to be

17

considered by the court).
ARGUMENT

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I.

The Court Should Strike All Claims By Osetek Against ATTM Due To Her
Prior Judicial Admissions.

Osetek admitted that “representations, transactions and events that concern ATTM . . .
have no bearing on [her] claims for relief,” and that her action “does not involve ATTM.” Opp’n
to Relate Cases, at 2:18-19; 3:22-23. Consistent with her admissions, Osetek’s original
Complaint and First Amended Complaint asserted claims against solely Apple Her statements
are binding judicial admissions that foreclose any claims by Osetek against ATTM in the MCC.
See American Title Ins. Co. v. Lacelaw Corp 861 F.2d 224, 227 (9th Cir. 1988) (statements of
fact contained in a brief may be considered judicial admissions). “Judicial admissions . . . have
the effect of withdrawing a fact from issue and dispensing wholly with the need for proof of the
CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
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fact.” Id. at 226. Because a party “ought not lightly be allowed to reverse his field and take an

2

inconsistent position,” courts deny leave to amend where, as here, the proposed amendments

3

contradict positions previously asserted in the proceedings. Coral v. Gonse, 330 F.2d 997, 998

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(4th Cir. 1964) (upholding denial of leave to amend where proposed amendment contradicted

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prior averment that was “in the nature of a judicial admission”); see also Allen v. City of Beverly

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Hills, 911 F.2d 367, 374 (9th Cir. 1990) (upholding denial of leave to amend to state new claim

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against public employer for not placing plaintiff on a reemployment list where plaintiff previously

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alleged that he did not seek reinstatement to his position).

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II.

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The Court Should Strike All Claims By Osetek Against ATTM Because She
Cannot Assert New Claims In A Consolidated Complaint Without Leave To
Amend.

The mere filing of a consolidated complaint under Rule 42(a) does not authorize parties to

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amend their pleadings to state new claims or name new defendants. Consolidation is a matter of

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“convenience and economy in administration;” it “does not merge the suits into a single cause, or

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change the rights of the parties, or make those who are parties in one suit parties in another.”

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Johnson v. Manhattan Ry. Co., 289 U.S. 479, 496-97 (1933); see also J.G. Link & Co. v.

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Continental Cas. Co., 470 F.2d 1133, 1138 (9th Cir. 1972) (“[T]he law is clear that an act of

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consolidation does not affect any of the substantive rights of the parties.”); accord Cole v.

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Schenley Indus., Inc., 563 F.2d 35, 38 (2nd Cir. 1977). Under this rule, all claims by Osetek

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against ATTM should be stricken from the MCC because they affect the rights of the parties by

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exposing ATTM to potential liability in a case where it was not sued. See Johnson, 289 U.S. at

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496-97.

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Nor should the Court grant any after-the-fact request by Osetek for leave to amend so that

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she can state claims against ATTM in the MCC. Courts have discretion to deny a party leave to

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amend where the proposed amendment would be futile. Bonin v. Calderon, 59 F.3d 815, 845 (9th

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Cir. 1995) (“Futility of amendment can, by itself, justify the denial of a motion for leave to

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amend.”). Amendment is futile where, as here, the proposed amendment contradicts a party’s

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CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO STRIKE

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ATTO RNEY S AT LAW

DCACTIVE-14269059.1

Page 210 - Exhibit G

Case5:10-cv-02553-RMW Document75

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prior admissions or allegations.4 See Allen, 911 F.2d at 373; Coral, 330 F.2d at 998.
If Osetek wanted to state a claim against ATTM, the proper course would have been to

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seek leave to amend from the Court before filing the MCC. FED. R. CIV. P. 15(a)(2). Any effort

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to evade that procedure by slipping in ATTM as a defendant to an action where it has been

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neither named nor served provides sufficient reason to deny leave to amend. See Ward v. Circus

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Circus Casinos, Inc., 473 F.3d 994, 1000 (9th Cir. 2007) (district courts have discretion to deny

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leave to amend solely on the basis of failure to follow local rules).

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CONCLUSION

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For the foregoing reasons, ATTM respectfully requests that the Court strike from the

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MCC all claims purportedly asserted against ATTM by Osetek, and that the Court deny any

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belated request for leave to amend.

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Granting leave to amend would be futile for two additional reasons. First, Osetek should
be compelled to arbitrate any disputes with ATTM pursuant to her service agreement with
ATTM. See Stipulation and Order For Consolidation Pursuant To Fed. R. Civ. P. 42, filed
December 15, 2010 (Doc. No. 66) (preserving ATTM’s right to seek to compel arbitration, as
well as all arguments raised in the Weisblatt and Logan actions). Second, as set forth in ATTM’s
concurrently filed Motion to Dismiss (the arguments of which are incorporated by reference
herein), Osetek’s claims are insufficiently pled and fail as a matter of law. Specifically: (a) the
MCC fails to satisfy Rule 9(b); (b) Osetek does not allege that she relied on representations by
ATTM when she purchased a 3G-enabled iPad; (c) as a non-California plaintiff alleging a claim
based on conduct occurring outside California, Osetek lacks standing to pursue statutory claims
under California’s CLRA, UCL and FAL; (d) Osetek cannot pursue a claim for unjust enrichment
against ATTM because the relationship between the parties is governed by contract, and Osetek
does not allege how ATTM was unjustly enriched by her decision to pay other entities $130 more
for a 3G-enabled iPad; (e) she has no standing to assert a UCL claim against ATTM because she
is not entitled to restitution from ATTM; and (f) Osetek’s CLRA claim is subject to dismissal
because she failed to comply with the affidavit and notice requirements of that statute.
CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO STRIKE

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ATTO RNEY S AT LAW

DCACTIVE-14269059.1

Page 211 - Exhibit G

Case5:10-cv-02553-RMW Document75

Filed01/14/11 Page7 of 7

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Dated: January 14, 2011

/s/ M. Kay Martin
M. Kay Martin
[e-mail]
CROWELL & MORING LLP
275 Battery Street, 23rd Floor
San Francisco, CA 94111
Telephone: [phone]
Facsimile: [phone]

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Kathleen Taylor Sooy
[e-mail]
CROWELL & MORING LLP
1001 Pennsylvania Avenue, NW
Washington, DC 20004
Telephone: [phone]
Facsimile: [phone]

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Counsel for AT&T Mobility LLC

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I, Joel D. Smith, am the ECF User whose ID and password are being used to file this
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document. In compliance with General Order 45, section X.B., I hereby attest that concurrence in
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the filing of the document has been obtained from each of the other signatories.
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By:

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/s/ Joel D. Smith
Joel D. Smith

CASE NOS. 5:10-cv-02553;
5:10-cv-02588; 5:10-cv-04253
MEMORANDUM OF LAW IN SUPPORT OF MOTION OF AT&T MOBILITY LLC TO STRIKE

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ATTO RNEY S AT LAW

DCACTIVE-14269059.1

Page 212 - Exhibit G