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 D
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Michael W. Sobol (State Bar No. 194857)
msobol@lchb.com
Roger N. Heller (State Bar No. 215348)
rheller@lchb.com
Allison Elgart (State Bar No. 241901)
aelgart@lchb.com
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
275 Battery Street, 29th Floor
San Francisco, CA 94111-3339
Telephone: (415) 956-1000
Facsimile: (415) 956-1008
7
Attorneys for Plaintiffs
8
[Additional Counsel listed on signature page]
2
3
4
5
9
10
UNITED STATES DISTRICT COURT
11
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
12
13
14
15
ADAM WEISBLATT, JOE HANNA, DAVID
TURK, and COLETTE OSETEK, individually
and on behalf of all others similarly situated,
Case Nos. CV 10-02553 RMW, 5:10-CV02588-RMW, 5:10-CV-04253-RMW
MASTER CONSOLIDATED COMPLAINT
16
Plaintiffs,
DEMAND FOR JURY TRIAL
17
v.
18
APPLE INC., AT&T MOBILITY LLC,
and Does 1-10,
Defendants.
19
20
21
Upon personal knowledge as to their own acts and status, and based upon their
22
23
investigation, their counsel’s investigation and information and belief as to all other matters,
24
Plaintiffs Adam Weisblatt, Joe Hanna, David Turk, and Colette Osetek (“Plaintiffs”), on behalf of
25
themselves and all others similarly situated, allege as follows:
26
27
28
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NATURE OF THE ACTION
1.
2
This is a class action brought by consumers baited into purchasing 3G-enabled
3
Apple iPads with the promise of flexible, “unlimited” data plans, only to have that promise
4
reneged upon within weeks of their purchases.
2.
5
An iPad is a wireless computer marketed and used for downloading and storing
6
large amounts of multi-media data and applications, viewing and listening to video, movies, and
7
music, and sending and receiving email. For the months preceding the April 30, 2010 release of
8
the 3G-enabled iPad, Defendant Apple Inc. (“Apple”) and Defendant AT&T Mobility LLC
9
(“AT&T”) promoted the availability of an accompanying “unlimited data” service plan, touting it
10
as a material benefit of the 3G-enabled iPad. Apple and AT&T promised consumers flexibility
11
with their data plans, allowing them the ability to freely switch back and forth among the limited
12
3G data plan, the unlimited 3G data plan, and no 3G data plan, based on their budgets and data
13
needs. This appealed to customers since using an iPad to download data-rich content could
14
quickly become expensive, as users who exceeded monthly data limits are hit with substantial
15
overage fees.
3.
16
Defendants’ promotion of the flexible, unlimited 3G data plan started as early as
17
January 27, 2010, and continued up to and after June 2, 2010, when they announced that within 5
18
days—that is, as of June 7, 2010—they would discontinue providing the unlimited data plan. The
19
iPad purchasers who initially opted for the limited data plan were stripped of their ability to later
20
opt for the unlimited data plan, and even those customers who were signed up for the unlimited
21
data plan can no longer switch to a limited data plan or no data plan, then later opt for the
22
unlimited plan again, as was originally promised. Apple and AT&T announced this policy
23
change within just weeks after selling at least hundreds of thousands of 3G-enabled iPads upon
24
the product’s initial launch.
4.
25
Defendants’ representations induced Plaintiffs and other customers to pay an
26
additional $130 for each iPad with 3G capability. The availability of a flexible, unlimited data
27
plan was material to purchasers’ decisions because it would have allowed customers to download
28
video, music and other data-intensive content on their iPads without incurring excessive charges,
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and also would have enabled them to avoid paying for unlimited data when they do not need it.
2
Defendants’ ubiquitous marketing of the unlimited data plan and the option for customers to turn
3
such plan on and off based on their data needs, on their respective websites and elsewhere,
4
reflects Defendants’ keen awareness that these promised options were highly important to
5
customers’ purchase decisions. When Defendants’ so-called “breakthrough deal” to provide the
6
flexible, unlimited 3G data plan and the ability to switch in and out of it was scrapped, Plaintiffs
7
and the Class were left with iPad devices of significantly reduced value and utility.
8
9
5.
Plaintiffs and the Class seek damages, restitution, and injunctive relief for
Defendants’ ubiquitous false representations, on their respective websites and elsewhere, that
10
customers who purchase iPads with 3G capability would be able to freely switch in and out of an
11
unlimited 3G data plan each month as their data needs and budgets demanded.
12
JURISDICTION AND VENUE
13
6.
This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(d) because
14
the amount in controversy exceeds $5,000,000 exclusive of interest and costs, and there is
15
minimal diversity because Plaintiffs and numerous members of the Class are citizens of different
16
states than Defendants.
17
7.
This Court has personal jurisdiction over Defendants because Apple is
18
headquartered in, and is incorporated in, California; a substantial portion of the wrongdoing
19
alleged in this Complaint took place in California; Defendants are authorized to do business in
20
California; Defendants have sufficient minimum contacts with California and/or Defendants
21
otherwise intentionally avail themselves of the markets in California through the promotion,
22
marketing and sale of their products and services in California to render the exercise of
23
jurisdiction by this Court permissible under traditional notions of fair play and substantial justice.
24
8.
Venue is proper under 28 U.S.C. § 1391(a) because Apple has its headquarters in
25
this District and is incorporated in this District, Apple and AT&T are authorized to conduct
26
business in this District and have intentionally availed themselves of the laws and markets of this
27
District through the promotion, marketing, distribution, and sale of its products in this District,
28
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and because a substantial part of the events or omissions giving rise to Plaintiffs’ claims occurred
2
in this District.
3
9.
In particular, the representations, claims, and statements at issue in this case
4
emanated from California. Those statements were first made during an Apple presentation held
5
in San Francisco. The statements were subsequently repeated on Apple’s website, which is
6
hosted in California, and in various press releases and advertisements, written and/or produced in
7
California. Upon information and belief, AT&T’s similar representations, claims, and statements
8
similarly emanated from AT&T operations and employees based in California, and AT&T’s
9
negotiations and contracts with Apple took place and arose, wholly or in large part, with a
10
California corporation.
11
10.
Intra-district Assignment: Pursuant to Northern District of California Civil
12
Local Rules 3-2 and 3-5, assignment to the San Jose Division of the Northern District of
13
California is appropriate. Defendant Apple Inc. is headquartered in Santa Clara County, and thus
14
a substantial part of the events or omissions which give rise to the claims occurred in Santa Clara
15
County.
16
PARTIES
17
11.
Plaintiff Adam Weisblatt is a citizen of, and resides in, Fulton, New York.
18
12.
Plaintiff Joe Hanna is a citizen of, and resides in, Moreno Valley, California.
19
13.
Plaintiff David Turk is a citizen of, and resides in, Tacoma, Washington.
20
14.
Plaintiff Colette Osetek is a citizen of, and resides in, Dorchester, Massachusetts.
21
15.
Defendant Apple is a California corporation with its headquarters in Cupertino,
22
California.
23
16.
Apple is a multi-national corporation that designs and markets computer software,
24
personal computers, and consumer electronics, including mobile devices such as the iPhone and
25
iPad. By revenue, Apple is the largest mobile device company in the world. Apple markets and
26
sells its products and services directly to its customers in stores and online.
27
28
17.
Defendant AT&T, a wholly-owned subsidiary of AT&T Inc., is a Delaware
corporation with its principal place of business in Atlanta, Georgia. AT&T maintains extensive
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contacts with the State of California, and in particular with the Northern District. AT&T has
2
operated in California since 1878. Upon information and belief, the company connected the first
3
telephone call in California, constructed the country’s first transcontinental phone line from
4
California, and built California’s largest fiber optic network, totaling more than 31,000 miles.
5
Each day, AT&T handles more than 300 million phone calls in California. In 2007, AT&T spent
6
more than $8.3 billion in California, including more than $2 billion in building and expanding
7
broadband and wireless networks in California. Its 2007 California payroll was $3,412,500,000,
8
representing more than 46,500 employees, at all levels, from retail salespersons, to high-level
9
company managers.
10
18.
Upon information and belief, AT&T paid $1,275,440,000 in local and state taxes
11
in California in 2007. AT&T has hundreds of retail stores throughout California, including over
12
100 retail stores in this District. It also maintains business operations in Sacramento, San Ramon,
13
San Diego, Agoura Hills, Newport Beach, Los Angeles, Fresno, and San Francisco, including
14
finance, advertising, and account management operations. One hundred percent of residential
15
customer locations in California have access to AT&T broadband service.
16
19.
AT&T provides telecommunication products and services to consumers,
17
businesses, and other telecommunication service providers under the AT&T brand worldwide.
18
AT&T Mobility LLC began operations in October 2000, and in 2004 acquired AT&T Wireless
19
Services, Inc. Upon AT&T Inc.’s acquisition of BellSouth in 2006, AT&T Mobility became a
20
wholly-owned subsidiary of AT&T Inc. By revenue, AT&T is the largest wireless carrier and is
21
the second largest provider of mobile telephony service in the United States, with over 85.1
22
million wireless customers and more than 150 million total customers.
23
20.
Through an agreement with Apple, AT&T is, and at all relevant times has been,
24
the exclusive provider of wireless service for all iPads. On information and belief, Apple receives
25
substantial consideration from AT&T in exchange for allowing AT&T to be the exclusive
26
provider of wireless service for all iPads.
27
28
21.
AT&T Mobility LLC is referred to herein as “AT&T.” Apple and AT&T are
collectively referred to herein as “Defendants.”
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ALLEGATIONS APPLICABLE TO ALL COUNTS
22.
2
Apple first announced the release of the iPad (both the 3G-enabled and non-3G-
3
enabled versions) on or around January 27, 2010, in a video presentation given in San Francisco
4
by its CEO, Steve Jobs, hosted on Apple’s website.
23.
5
The iPad is a 1.5-pound, high-resolution, LED-backlit, in-plane switching (IPS),
6
9.7-inch display featuring a touch screen and powered by an Apple-designed microchip. It is a
7
half-inch thick and is similar to an Apple iPod, but the size of a standard notepad. The regular,
8
non-3G-enabled iPad is fitted with Wi-Fi connectivity; thus, to connect to the internet, its users
9
must be within range of a wireless internet “hotspot.” It retails for $499 (16-gigabyte version),
10
$599 (32-gigabyte version), or $699 (64-gigabyte version).
24.
12
On or around April 3, 2010, Defendants began selling “WiFi” (non-3G-enabled)
25.
11
On or around April 30, 2010, Defendants began selling 3G-enabled iPads, with
iPads.
13
14
exclusive AT&T 3G service. The sole difference between WiFi iPads and 3G-enabled iPads is
15
the ability to connect to, and download data via, AT&T’s 3G wireless network without a WiFi
16
connection.
26.
17
The 3G-enabled iPad retails for $629 (16-gigabyte version), $729 (32-gigabyte
18
version), or $829 (64-gigabyte version). Thus, the 3G-enabled iPad is sold at a premium of $130
19
(before tax) over the standard iPad without 3G capability. See Exhibit A, attached hereto.
27.
20
Customers were able to pre-order 3G-enabled iPads beginning on or about March
21
12, 2010. Apple advertised the “No-contract, 3G service” for the 3G-enabled iPad, telling
22
customers that “[i]n the U.S., 3G service is available from AT&T. You can choose from
23
breakthrough data plans – no long-term contract required.” See Exhibit A, attached hereto.
24
AT&T likewise advertised the 3G-enabled versions of the iPad, and consumers could follow a
25
link on AT&T’s website to purchase 3G-enabled iPads. See Exhibit B, attached hereto.
28.
26
27
Between the launch of the iPad and the filing of the initial Weisblatt complaint,
Defendants sold well over 2 million iPads. (See
28
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http://cbs5.com/local/iPad.Apple.sales.2.1724762.html). On information and belief, a substantial
2
portion of those sales are iPads with 3G capability, which carried the premium price.
3
29.
From April 30, 2010 until June 7, 2010, Defendants offered prospective purchasers
4
of the 3G-enabled iPads two 3G data plans: (a) 250 MB of data for $14.99 per month, with
5
additional data available in 250 MB increments for an added charge; or (b) unlimited 3G data for
6
$29.99 per month. See Exhibits A-C, attached hereto.
7
30.
Starting with its introduction in January 2010, and continuing until June 7, 2010,
8
Defendants heavily trumpeted the availability of the flexible, no-contract, unlimited 3G data plan
9
in marketing the 3G-enabled iPad to consumers. For example, in his January 27, 2010 video
10
presentation announcing the launch of the iPad, which was hosted on Apple’s website (the
11
“January 27th Apple iPad Presentation”), Apple CEO Steve Jobs promised that customers who
12
purchased 3G-enabled iPads would have access to an “awesome,” “no contract” unlimited data
13
plan as a result of a “breakthrough deal with AT&T.” During the presentation, Jobs made the
14
following representations and promises about wireless data plans for the 3G-enabled iPad:
15
Now, what does it cost for the data plans? Well, in the U.S.,
telecom companies usually charge about $60 a month for a data
plan for a laptop. We’ve got a real breakthrough here. We’ve got
two awesome plans for iPad owners. The first one gives you up to
250 megabytes of data per month. That’s a fair bit of data. Most
people will get by on that. Up to 250 megabytes of data per month,
just $14.99. $14.99. And if you feel you need more, we have an
unlimited plan for just $29.99. So these are real breakthrough
prices. We’ve got a breakthrough deal with AT&T. It’s providing
the service. $14.99 for up to 250 megabytes, $29.99 for unlimited
data. . . . And, there’s no contract, it’s prepay.1
16
17
18
19
20
21
Jobs’ statements were accompanied and reinforced by a giant video monitor image displaying
22
“Breakthrough deal with AT&T” and “No contract – cancel anytime.”
23
31.
The no-contract, unlimited data plan was billed by Defendants as a “breakthrough
24
deal.” Macworld called the plan one of the iPad’s “five best surprises,” and it was extremely
25
well-received in the press and by Apple devotees.
26
27
28
1
The video is available online at
http://www.youtube.com/watch?v=C7XtZKn6kt8&feature=related. The quoted excerpt begins at
6:57.
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32.
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Both Apple and AT&T repeatedly and heavily advertised the unlimited 3G data
2
plan option as a key feature of the iPad, on their websites and elsewhere, throughout the Class
3
Period (as defined below).
4
33.
Customers who purchased 3G-enabled iPads were not required to choose a
5
particular 3G data plan for any longer than a one-month period. Rather, according to Defendants’
6
representations, whether or not customers initially signed up for the unlimited data plan,
7
customers would be able to sign up for, and change, their data plans each month as their data
8
needs demanded, and, specifically, would be able to “upgrade to” or “switch” in and out of the
9
unlimited data plan on a monthly basis in the future as their data needs demanded.
10
34.
From the time they began marketing the 3G-enabled iPad until June 7, 2010,
11
Defendants consistently and expressly promised prospective customers that if they purchased an
12
iPad with 3G capability, they could later upgrade to the unlimited data plan and could switch in
13
and out of the unlimited data plan as their data needs demanded. For example, Apple advertised
14
to prospective 3G-enabled iPad customers:
15
a.
“No-contract 3G service. In the United States, 3G service is
16
available through a breakthrough deal with AT&T. You choose the amount of data per month you
17
want to buy — 250MB or unlimited. If you choose the 250MB plan, you’ll receive onscreen
18
messages as you get close to your monthly data limit so you can decide whether to turn off 3G or
19
upgrade to the unlimited plan. Best of all, there’s no long-term contract. So if you have a
20
business trip or vacation approaching, just sign up for the month you’ll be traveling and cancel
21
when you get back. You don’t need to visit a store to get 3G service. You can sign up, check your
22
data usage, manage your account, or cancel your service — all from your iPad.” Exhibit C,
23
attached hereto (emphasis added).
24
b.
“Manage your data plan. iPad makes it easy to choose the data
25
plan that works best for you. When you need more data, you can add another 250MB or upgrade
26
to the Unlimited Data plan. Because you sign up for a data plan in monthly increments, you can
27
cancel your plan at any time and then sign up again whenever you need 3G service.” Exhibit C,
28
attached hereto (emphasis added).
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“[Y]ou can monitor your data usage and change your plan at any
2
time, including switching to unlimited data or cancelling 3G service if you know you won’t need
3
it.” Exhibit A, attached hereto.
4
d.
“As you get close to your monthly data limit, you’ll receive
5
onscreen messages to help you decide whether to upgrade to another 250MB or switch to the
6
unlimited plan.” Exhibit A, attached hereto.
7
e.
“There are two monthly data plans: 250MB or unlimited. There’s
8
no contract, and you can sign up and change your service right on your iPad.” Exhibit A,
9
attached hereto.
10
35.
Likewise, AT&T advertised on its website: “AT&T offers two data plan options –
11
250MB or unlimited data, with recurring monthly charge and no long-term contract. To help you
12
manage your data with a 250 MB plan, iPad will notify you at 20%, 10%, and when there’s no
13
more data available, so you can decide if you want to add more data or upgrade to an unlimited
14
data plan.” Exhibit B, attached hereto.
15
36.
In addition, on or about January 27, 2010, AT&T released a “fact sheet”
16
concerning wireless data plans for the 3G-enabled iPad, which featured the same no-contract,
17
unlimited data plan discussed above and stated: “Once you sign up for iPad 3G data service, you
18
can add to or cancel your domestic plan at any time – no penalty.” See Exhibit D, attached
19
hereto.
20
37.
An unlimited 3G data plan is material to iPad customers because customers can
21
use the iPad to, among other things, download data-intensive applications and content, such as
22
music and full-length movies and other video content, capabilities for which Defendants
23
expressly marketed the iPad to consumers. On information and belief, for example, under a
24
$14.99 per month, 250 MB plan, a consumer could download a little over 2 hours of video
25
content per month before incurring overage charges, whereas under the $29.99 per month
26
unlimited data plan, a consumer could finish a 3-hour movie, and download unlimited other
27
movies and content, without incurring any overage charges.
28
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Having the option to turn the unlimited data plan on and off is material to
2
customers because it allows them access to unlimited data, at a reasonable flat cost, when they
3
need it (such as when they are going on vacation, and want to use their iPads to download full-
4
length movies), while at the same time allowing them to not pay for unlimited data when they do
5
not need it.
6
39.
Defendants marketed and advertised the unlimited data plan, and the ability to
7
switch in and out of the unlimited data plan, to induce consumers to purchase iPads with 3G
8
capability. The iPads with 3G capability cost significantly more than the equivalent iPads
9
without 3G capability, but they were seen as worth the added cost by consumers who wanted the
10
flexibility and option of getting unlimited 3G data for a fixed cost when needed.
11
40.
Defendants’ representations regarding the continued availability of flexible,
12
unlimited data service plans were material to customers’ decisions to purchase iPads with 3G
13
capability, Defendants intended that customers rely on those representations, and Plaintiffs and
14
the Class did rely on those representations in making their purchase decisions.
15
41.
Defendants’ representations, between January 27, 2010 and June 7, 2010,
16
regarding the continued availability of flexible, unlimited data service plans for purchasers of
17
iPads with 3G capability, were false, and Defendants knew or should have known that those
18
representations were false when they made them. Contrary to their numerous representations,
19
which were designed to induce customers to purchase 3G-enabled iPads and thereby drive up
20
sales and Defendants’ profits, Defendants had no intention of providing customers with a flexible,
21
unlimited 3G data plan.
22
42.
On or around June 2, 2010, Defendants announced, through a press release, that as
23
of June 7, 2010, they would no longer offer an unlimited 3G data plan for iPad customers. See
24
Exhibit E, attached hereto. Defendants provided no other notice of this policy change to
25
customers who purchased 3G-enabled iPads either before or after the June 2, 2010 press release
26
was issued. In contrast to their initial marketing blitz, relatively little effort was expended on this
27
announcement.
28
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43.
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Pursuant to this change, customers can no longer choose to pay a fixed monthly
2
rate for unlimited 3G data, but rather are required to choose between other, limited data plans.
3
See Exhibit E, attached hereto. Many of the applications for which the iPad can be used, and for
4
which Defendants expressly marketed the iPad to customers—such as downloading movies and
5
other video content—would cause customers to significantly exceed the limits of the new limited
6
data plans that are available, thus resulting in overages and corresponding additional charges to
7
customers.
8
44.
9
On information and belief, after June 7, 2010, customers who purchased iPads
with 3G capability before June 7, 2010 and who were signed up for an unlimited data plan as of
10
June 7, 2010 can maintain an unlimited plan; however, if those customers ever discontinue
11
subscribing to the unlimited data plan (e.g., by changing to a different plan or choosing to have no
12
3G plan for a particular month), they cannot switch back to the unlimited data plan. On
13
information and belief, customers who purchased iPads with 3G capability before June 7, 2010
14
and who were signed up for a limited data plan as of June 7, 2010, will never have the option to
15
sign up for an unlimited data plan or, for that matter, to switch in and out of the unlimited data
16
plan. With respect to those customers who purchased 3G-enabled iPads before June 7, 2010 but
17
had not signed up for any 3G data plan as of June 7, 2010, there are inconsistent reports as to their
18
options after June 7, 2010. At least some of these customers have been denied by Defendants the
19
ability to ever sign up for the unlimited data plan, even as a one-time, non-flexible option, while it
20
appears that some others may have been given a one-time option to sign up for a non-flexible,
21
unlimited data plan. In all cases, none of these customers will have the option of switching in and
22
out of the unlimited plan as their data needs demand, as was promised.
23
45.
In other words, even though Defendants widely trumpeted to customers the
24
availability of the unlimited 3G data plan and, specifically, that customers would be able to
25
switch in an out of the unlimited data plan in the future as their data needs demanded, many of
26
those customers who did not initially sign up for the unlimited data plan will never have the
27
option of “switching” or “upgrading” to the unlimited data plan in the future, as was promised,
28
and all such customers have lost the promised ability to switch in and out of the unlimited data
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1
plan. Thus, despite Defendants’ representations that the 3G data plan would be both “unlimited”
2
and “no-contract,” a de facto long-term contract is now required to keep the promised benefit of
3
unlimited 3G data.
4
46.
Defendants unilaterally withdrew the flexible, unlimited data plan option just over
5
a month after they started selling iPads with 3G capability. Defendants stripped Plaintiffs and the
6
Class of one of the key promised benefits of purchasing a 3G-enabled iPad – in some cases just
7
days (and, at most, about a month) after they purchased their iPads in reliance on Defendants’
8
misrepresentations.
9
47.
Without the availability of a flexible, no-contract unlimited 3G data plan, the 3G-
10
enabled iPads that Plaintiffs and the Class purchased from Defendants are of significantly reduced
11
value and utility.
12
48.
Defendants’ unilateral withdrawal of the unlimited data plan option was timed to
13
occur after Apple’s 14-day return deadline expired for the substantial number of customers,
14
including Plaintiffs, who bought 3G-enabled iPads during the initial rush when the product was
15
first launched. See, e.g., http://news.ycombinator.com/item?id=1397702.
16
49.
Defendants’ misrepresentations continued right up to the time they withdrew the
17
unlimited data plan option. As of at least June 5, 2010—three days after Defendants announced
18
the June 7, 2010 change and just two days before the change was scheduled to take effect (see
19
Exhibit E, attached hereto)—Apple continued to falsely advertise on its website that purchasers of
20
3G-enabled iPads would be able to “upgrade” to the unlimited data plan, and switch in and out of
21
the unlimited data plan, in the future. See Exhibit F, attached hereto. As of at least June 5, 2010,
22
AT&T also continued to advertise this option despite the pending change that rendered the
23
representation completely false. See Exhibit G, attached hereto.
24
50.
Even after the June 7, 2010 change took effect, Apple’s website continued to
25
misrepresent to customers that the unlimited data plan was available for 3G-enabled iPads and
26
that customers would be able to upgrade in the future to the unlimited data plan, and switch in and
27
out of the unlimited data plan, as their data needs demanded. See Exhibit H, attached hereto.
28
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51.
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On or around June 4, 2010, apparently in response to concerns raised about how
2
the pending data plan changes would apply in light of the existing back log of iPad orders,
3
Defendants made an announcement reassuring consumers that the unlimited data plan would be
4
available for all customers who ordered 3G-enabled iPads before June 7, 2010, even if they
5
received their iPads after June 7, 2010. During the period between the June 2, 2010
6
announcement of the June 7, 2010 change and the implementation of the June 7, 2010 change,
7
Defendants continued to represent that customers who purchased 3G-enabled iPads would be able
8
to switch in an out of the unlimited 3G data plan based on their monthly data needs. See, e.g.,
9
Exhibits F and G, attached hereto. Despite these representations, all customers who ordered iPads
10
before June 7, 2010, but did not receive their iPads until after June 7, 2010, were denied the
11
ability to switch in and out of the unlimited data plan based on their monthly data needs, as was
12
promised. Moreover, on information and belief, Defendants denied many of these customers the
13
right to initially sign up for the unlimited data plan, when they received their iPads, even as a one
14
time, non-flexible option.
15
16
52.
By their conduct, Defendants have been unjustly enriched and have damaged
Plaintiffs and the Class.
17
PLAINTIFF ADAM WEISBLATT
18
53.
On April 8, 2010, Plaintiff Adam Weisblatt purchased a 16 GB WiFi (non-3G-
19
enabled) iPad for a total purchase price of $538.92, including tax. On April 30, 2010, Mr.
20
Weisblatt returned that iPad and paid an additional $140.40 ($130 plus the additional tax) in
21
exchange for the equivalent 16 GB model iPad with 3G capability. Both his original April 8,
22
2010 purchase and the April 30, 2010 exchange/purchase were made at an Apple store in
23
Syracuse, New York.
24
54.
Before purchasing his 3G-enabled iPad, Mr. Weisblatt saw representations, on
25
Apple’s website and in various industry publications (which, on information and belief, were
26
based on Defendants’ statements), regarding the iPad with 3G capability, which at the time was
27
scheduled to be released shortly. In particular, Mr. Weisblatt saw representations from
28
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enabled iPad would be unlimited 3G data downloading for a fixed monthly rate; and (b) if he
2
purchased a 3G-enabled iPad, he would be able to switch in and out of the unlimited 3G data plan
3
in the future as his monthly data needs demanded.
4
55.
Similarly, on April 30, 2010, the day that Mr. Weisblatt purchased his 3G-enabled
5
iPad, customer service representatives at the Apple store where he made the purchase represented
6
to Mr. Weisblatt that if he purchased a 3G-enabled iPad: (a) one of his data plan options would be
7
an unlimited 3G data plan for a fixed monthly rate; and (b) he would be able to switch in and out
8
of the unlimited 3G data plan in the future as his monthly data needs demanded.
9
56.
Based on the representations about the unlimited data plan and the ability to switch
10
in and out of it, Mr. Weisblatt decided to exchange his WiFi (non-3G-enabled) iPad and pay an
11
extra $140.40 (with tax) for a 3G-enabled iPad. Mr. Weisblatt decided that the 3G-enabled iPad
12
was worth the additional cost because, in some months, unlimited 3G data access would allow
13
him to work outside of the office for several hours a week that he otherwise would have to spend
14
in the office, and allow him access to data-intensive content when he is away from home.
15
57.
On May 2, 2010, two days after he purchased his 3G-enabled iPad, Mr. Weisblatt
16
signed up for the unlimited 3G data plan, and he was signed up for the unlimited data plan as of
17
June 7, 2010. However, due to variances in his work and life schedules, there are several months
18
each year where an unlimited 3G data plan would not benefit Mr. Weisblatt. Thus, Mr. Weisblatt
19
anticipated using the unlimited data plan in some months and not in others. The appeal to Mr.
20
Weisblatt of the 3G- enabled iPad was that, according to Defendants’ representations, unlimited
21
3G data would be available to him for the months that he needed it, but he was not required to pay
22
for unlimited data in the months that he did not need it.
23
24
58.
As a result of Defendants’ June 7, 2010 policy change, Mr. Weisblatt no longer
has the option to switch in and out of the unlimited 3G data plan, as he was promised.
25
59.
Had he known that his access to the unlimited 3G data plan option would be
26
restricted in the way it has been pursuant to the June 7, 2010 change (i.e., that he would not be
27
allowed to switch in and out of the unlimited data plan based on his needs), Mr. Weisblatt would
28
not have purchased the iPad with 3G capability.
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60.
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Mr. Weisblatt has been, and will continue to be, injured as a result of Defendants’
2
conduct alleged herein, in that, inter alia, he paid more than he otherwise would have for his iPad
3
and/or related services, has been denied important benefits that he was promised by Defendants
4
and that he paid for, and will be assessed excessive charges for downloading data to his iPad.
5
PLAINTIFF JOE HANNA
6
61.
On April 30, 2010, Plaintiff Joe Hanna purchased a 64 GB 3G-enabled iPad at a
7
Best Buy store in Moreno Valley, California. The total purchase price for his iPad was $829.00
8
plus sales tax.
9
62.
Before he made his April 30, 2010 iPad purchase, Mr. Hanna researched both the
10
3G-enabled and WiFi versions of the iPad on Apple’s website. Mr. Hanna saw representations
11
from Defendants, including on Apple’s website, that: (a) one of the available data plans for the
12
3G- enabled iPad would be unlimited 3G data downloading for a fixed monthly rate; and (b) if he
13
purchased a 3G- enabled iPad, he would be able to switch in and out of the unlimited 3G data
14
plan in the future as his monthly data needs demanded.
15
63.
Based on these representations, Mr. Hanna decided to purchase a 3G-enabled iPad
16
instead of a WiFi iPad. Mr. Hanna decided that the 3G- enabled iPad was worth the additional
17
cost because he wanted to be able to use his iPad to download videos and other data-intensive
18
content during certain times when he would be away from home and not near a WiFi “hot spot,”
19
and he understood that a flexible, no contract unlimited 3G data plan would allow him to do so.
20
64.
Mr. Hanna has not purchased a 3G data plan since he purchased his 3G-enabled
21
iPad on April 30, 2010. He has not needed to purchase a 3G data plan during this time because
22
he has generally been either home or in another place where he has WiFi access. However, when
23
he purchased his iPad, Mr. Hanna planned to sign up for the unlimited 3G data plan in certain
24
months when he is on vacation or otherwise away from home or WiFi access, and then turn off
25
the unlimited data plan when he did not need it. Thus, Mr. Hanna anticipated using the unlimited
26
data plan in some months and not in others. The appeal to Mr. Hanna of the 3G- enabled iPad,
27
and the reason why he bought the 3G- enabled iPad, was that, according to Defendants’
28
representations, unlimited 3G data would be available to him for the months that he needed it, but
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he was not required to pay for unlimited 3G data (or any 3G data plan, for that matter) in the
2
months that he did not need it.
3
65.
As a result of Defendants’ June 7, 2010 policy change, Mr. Hanna will never have
4
the option of signing up for the unlimited 3G data plan or the option to switch in and out of the
5
unlimited 3G data plan as his data needs demand, as he was promised.
6
7
66.
purchased the iPad with 3G capability.
8
9
Had he known the truth about his data plan options, Mr. Hanna would not have
67.
Mr. Hanna has been, and will continue to be, injured as a result of Defendants’
conduct alleged herein, in that, inter alia, he paid more than he otherwise would have for his iPad
10
and/or related services, has been denied important benefits that he was promised by Defendants
11
and that he paid for, and will be assessed excessive charges for downloading data to his iPad.
12
PLAINTIFF DAVID TURK
13
68.
On April 30, 2010, Plaintiff David Turk purchased two 3G-enabled iPads (for him
14
and his wife) at an Apple Store in Tukwila, Washington, one a 16 GB model and the other a 64
15
GB model. The total purchase price for these two iPads was $1,458.00 plus sales tax.
16
69.
On May 18, 2010, Mr. Turk purchased a third 3G-enabled iPad, a 32 GB model,
17
for his daughter. Mr. Turk ordered this third iPad through Apple’s online store. The total
18
purchase price for this iPad was $796.80 ($729.00 plus tax). He received this iPad on
19
approximately June 5, 2010.
20
70.
Before he purchased his three 3G-enabled iPads, Mr. Turk researched the 3G-
21
enabled iPad on Apple’s website. Mr. Turk saw representations from Defendants, including on
22
Apple’s website, that: (a) one of the available data plans for the 3G- enabled iPad would be
23
unlimited 3G data downloading for a fixed monthly rate; and (b) if he purchased a 3G- enabled
24
iPad, he would be able to switch in and out of the unlimited 3G data plan in the future (including
25
upgrading to the unlimited data plan mid-month in any given month) as his data needs demanded.
26
27
71.
Based on these representations, Mr. Turk decided to purchase the three 3G-enabled
iPads.
28
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72.
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For one of the two 3G-enabled iPads that he purchased on April 30, 2010, Mr.
2
Turk signed up for the unlimited 3G data plan on April 30, 2010, and, for that iPad, he was signed
3
up for the unlimited 3G data plan as of June 7, 2010. For the other 3G-enabled iPad that he
4
purchased on April 30, 2010, Mr. Turk initially signed up for the limited 250MB 3G data plan on
5
May 4, 2010. He upgraded to the unlimited data plan shortly thereafter, and, for that iPad, he was
6
signed up for the unlimited 3G data plan as of June 7, 2010. When he purchased these two iPads
7
on April 30, 2010, Mr. Turk anticipated that, for each iPad, he would sign up for the unlimited
8
data plan in some months and not in others, based on his and his wife’s changing 3G data needs.
9
The appeal to Mr. Turk of the 3G- enabled iPad was that, according to Defendants’
10
representations, unlimited 3G data would be available to him and his wife for the months that
11
they needed it, but he was not required to pay for unlimited data in the months that they did not
12
need it.
13
73.
As a result of Defendants’ June 7, 2010 policy change, with respect to both of the
14
3G-enabled iPads that he purchased on April 30, 2010, Mr. Turk no longer has the option to
15
switch in and out of the unlimited 3G data plan, as he was promised.
16
74.
For the 3G-enabled iPad that Mr. Turk purchased for his daughter, and which he
17
received on June 5, 2010, his daughter attempted to sign up for the unlimited 3G data plan on
18
June 15, 2010, however she was not allowed to do so at that time. On June 20, 2010, Mr. Turk
19
and his daughter were able to sign up for the unlimited 3G data plan for this iPad. Mr. Turk and
20
his daughter would have instead signed up for a limited 3G data plan for this iPad at that time,
21
based on their expected data needs that month, but they signed up for the unlimited 3G data plan
22
because, as a result of Defendants’ June 7, 2010 policy change, they believed this was their only
23
chance to ever sign up for an unlimited 3G data plan, albeit without the option to switch in and
24
out of the unlimited data plan based on their data needs, an option they were promised and which
25
they had intended to take advantage of.
26
27
75.
As a result of Defendants’ June 7, 2010 policy change, with respect to the 3G-
enabled iPad that Mr. Turk purchased for his daughter, Mr. Turk and his daughter will not have
28
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the option to switch in and out of the unlimited 3G data plan based on their data needs, as was
2
promised.
3
76.
4
Had he known the truth about the 3G data plan options, Mr. Turk would not have
purchased the three iPads with 3G capability.
5
77.
Mr. Turk has been, and will continue to be, injured as a result of Defendants’
6
conduct alleged herein, in that, inter alia, he paid more than he otherwise would have for his
7
iPads and/or related services, has been denied important benefits that he was promised by
8
Defendants and that he paid for, and will be assessed excessive charges for downloading data to
9
his iPads.
10
PLAINTIFF COLETTE OSETEK
11
12
78.
Plaintiff Colette Osetek purchased a 3G-enabled 64 GB iPad at an Apple store in
Braintree, Massachusetts on April 30, 2010. She paid $829.00, plus sales tax, for the iPad.
13
79.
Before she purchased the three 3G-enabled iPad, Ms. Osetek researched both the
14
standard Wi-Fi version of the iPad and the 3G-enabled iPad. Ms. Osetek became aware of
15
Defendants’ representations, including those on Apple’s website, that: (a) one of the two data
16
plans available for the 3G-enabled iPad would be unlimited 3G data downloading for a fixed
17
monthly rate; and (b) taking advantage of the unlimited 3G data plan did not require a long-term
18
contract; rather, she would be able to switch back and forth between the unlimited 3G data plan
19
and the less-expensive 250 MB plan based on her changing data needs, including the flexibility to
20
upgrade to the unlimited data plan even during a month that she had signed up for the 250MB
21
data plan.
22
23
80.
These representations were material to Ms. Osetek’s decision to purchase the 3G-
enabled iPad, and she decided to purchase the 3G-enabled iPad based on these representations.
24
81.
Ms. Osetek signed up for the unlimited data plan on May 7, 2010. She purchased
25
the unlimited data plan believing that she would have the flexibility to switch in and out of the
26
unlimited data plan based on her needs for any particular month.
27
28
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As a result of Defendants’ June 7, 2010 policy change, Ms. Osetek will not have
2
the option to switch in and out of the unlimited 3G data plan based on her data needs, as was
3
promised.
4
83.
5
Had she known the truth about the 3G data plan options, Ms. Osetek would not
have purchased the iPad with 3G capability.
6
84.
Ms. Osetek has been, and will continue to be, injured as a result of Defendants’
7
conduct alleged herein, in that, inter alia, she paid more than she otherwise would have for her
8
iPad and/or related services, has been denied important benefits that she was promised by
9
Defendants and that she paid for, and will be assessed excessive charges for downloading data to
10
her iPad.
11
CLASS ACTION ALLEGATIONS
12
13
85.
Plaintiffs bring this action on behalf of themselves and all others similarly situated,
as members of a proposed nationwide class (the “Class”) initially defined as:
14
All persons in the United States who purchased or ordered an Apple
iPad with 3G capability between January 27, 2010 and June 7,
2010.
15
16
Excluded from this Class is any person, firm, trust, corporation, or
other entity related to or affiliated with Apple Inc. and AT&T
Mobility LLC.
17
18
86.
This action is brought and may properly be maintained as a class action pursuant
19
to Federal Rules of Civil Procedure 23(a), 23(b)(2), and 23(b)(3). This action satisfies the
20
numerosity, commonality, typicality, adequacy, predominance, and superiority requirements of
21
these provisions.
22
87.
Numerosity Under Rule 23(a)(1). The Class is so numerous that the individual
23
joinder of all members is impracticable. While the Class’s exact number and the identity of Class
24
members is currently unknown and can only be ascertained through appropriate discovery,
25
Plaintiffs are informed and believes that the Class includes at least hundreds of thousands of
26
individuals, if not many more.
27
28
88.
Commonality Under Rule 23(a)(2). Common legal and factual questions exist that
predominate over any questions affecting only individual Class members. These common
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questions, which do not vary from Class member to Class member, and which may be determined
2
without reference to any Class member’s individual circumstances, include, but are not limited to
3
whether:
4
a.
The offer of an unlimited data plan and/or the ability to switch in
5
and out of an unlimited data plan are material facts that reasonable purchasers would have
6
considered important in making their purchase decisions;
7
8
b.
Defendants engaged in unfair, false, misleading, or deceptive acts
or practices regarding its marketing and sale of 3G-enabled iPads, in violation of the UCL;
9
c.
Defendants represented, through their words and conduct, that their
10
iPads with 3G capability had characteristics, uses, or benefits they did not actually have, in
11
violation of the CLRA;
12
13
d.
Defendants advertised the 3G-enabled iPads with the intent not to
sell them as advertised, in violation of the CLRA;
14
e.
Defendants’ conduct regarding the marketing and sale of its 3G-
15
enabled iPads was likely to mislead or deceive, and is therefore fraudulent, within the meaning of
16
the UCL;
17
18
f.
violation of Cal. Bus. & Prof. Code §§ 17500, et seq.;
19
20
g.
h.
Defendants’ conduct alleged herein constitutes negligent
i.
Defendants have been unjustly enriched by their conduct alleged
j.
Plaintiffs and the Class are entitled to injunctive and/or other
misrepresentation;
23
24
Defendants’ conduct alleged herein constitutes fraud and/or
intentional misrepresentation;
21
22
Defendants’ conduct alleged herein constitutes false advertising in
herein;
25
26
equitable relief, including restitution and disgorgement, and if so, the nature and amount of such
27
relief;
28
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2
k.
Defendants are liable for actual and/or compensatory damages, and,
if so, the amount of such damages;
3
4
Filed12/10/10 Page21 of 71
l.
Defendants are liable for punitive damages, and if so, the amount of
such damages.
5
89.
Typicality Under Rule 23(a)(3). Plaintiffs’ claims are typical of the Class
6
members’ claims. Defendants’ common course of conduct caused Plaintiffs and all Class
7
members the same damages. In particular, Defendants’ conduct caused each Class member’s
8
economic losses. Likewise, Plaintiffs and other Class members must prove the same facts in
9
order to establish the same claims.
10
90.
Adequacy of Representation Under Rule 23(a)(4). Plaintiffs are adequate Class
11
representatives because they are Class members and their interests do not conflict with Class
12
interests. Plaintiffs retained counsel competent and experienced in consumer protection class
13
actions, and together Plaintiffs and counsel intend to prosecute this action vigorously for the
14
Class’s benefit. Plaintiffs and their counsel will fairly and adequately protect Class interests.
15
91.
The Class can be properly maintained under Rule 23(b)(2). Defendants have acted
16
or refused to act, with respect to some or all issues presented in this Complaint, on grounds
17
generally applicable to the Class, thereby making appropriate final injunctive relief with respect
18
to the Class as a whole.
19
92.
The Class can be properly maintained under Rule 23(b)(3). A class action is
20
superior to other available methods for the fair and efficient adjudication of this litigation because
21
individual litigation of each Class member’s claim is impracticable. Even if each Class member
22
could afford individual litigation, the court system could not. It would be unduly burdensome if
23
thousands of individual cases proceed. Likewise, individual litigation presents a potential for
24
inconsistent or contradictory judgments, the prospect of a race for the courthouse, as well as the
25
risk of an inequitable allocation of recovery among those with equally meritorious claims.
26
Individual litigation further increases the expense and delay to all parties and the courts because it
27
requires individual resolution of common legal and factual questions. By contrast, the class
28
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1
action device presents far fewer management difficulties and provides the benefit of a single
2
adjudication, economies of scale, and comprehensive supervision by a single court.
3
CAUSES OF ACTION
4
FIRST CAUSE OF ACTION
(Intentional Misrepresentation)
5
93.
6
7
the allegations contained in the preceding paragraphs of this Complaint.
94.
8
9
Plaintiffs, individually and on behalf of the Class, incorporate by reference all of
As alleged herein, in the course of conducting their business of selling iPads and
related services, Defendants have intentionally made numerous material misrepresentations of
10
fact to Plaintiffs and all members of the Class concerning the benefits of purchasing an iPad with
11
3G capability and the nature of customers’ unlimited 3G data plan options.
95.
12
13
Defendants intentionally failed to disclose material information regarding the
nature of 3G data plan options to Plaintiffs and the Class.
96.
14
Defendants’ misrepresentations alleged herein were the type of misrepresentations
15
that are material—i.e., a reasonable person would attach importance to them and would be
16
induced to act on the information in making purchase decisions.
97.
17
18
Defendants knew that the misrepresentations alleged herein were false at the time
they made them and/or acted recklessly in making such misrepresentations.
98.
19
In making the misrepresentations alleged herein, Defendants intended that
20
Plaintiffs and the Class would rely on such misrepresentations and purchase iPads with 3G
21
capability.
22
99.
Defendants’ misrepresentations alleged herein are objectively material to the
23
reasonable consumer, and therefore reliance upon such misrepresentations may be presumed as a
24
matter of law.
100.
25
26
Defendants’ intentional misrepresentations.
101.
27
28
Plaintiffs and the Class reasonably and justifiably relied to their detriment on
Defendants’ intentional misrepresentations were a substantial factor in causing
Plaintiffs and the Class to purchase iPads with 3G capability from Defendants.
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2
102.
As a proximate result of Defendants’ intentional misrepresentations, Plaintiffs and
each member of the Class suffered damages in an amount to be proven at trial.
3
4
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103.
Defendants directly benefited from, and were unjustly enriched by, their
intentional misrepresentations.
5
104.
Defendants acted with “malice,” as that term is defined in Cal. Civ. Code §
6
3294(c)(1), by engaging in the conduct alleged herein, which was specifically intended by
7
Defendants to cause substantial injury to Plaintiffs and the members of the Class.
8
105.
Defendants’ conduct alleged herein constitutes “fraud,” as that term is defined in
9
Cal. Civ. Code 3294(c)(3), because such conduct involved intentional misrepresentations, deceit,
10
and/or concealment of material facts known to Defendants, and was done with the intent to cause
11
injury to their customers.
12
13
106.
Plaintiffs and the Class are entitled to actual and punitive damages and attorneys’
fees under Cal. Civ. Code § 3294(a).
14
107.
As a proximate result of Defendants’ intentional misrepresentations, Plaintiffs and
15
each member of the Class suffered an ascertainable loss and are entitled to equitable relief and
16
compensatory and punitive damages, in amounts to be proven at trial.
17
SECOND CAUSE OF ACTION
(False Promise/Fraud)
18
19
20
108.
Plaintiffs, individually and on behalf of the Class, incorporate by reference all of
the allegations contained in the preceding paragraphs of this Complaint.
21
109.
Defendants made false promises to Plaintiffs and all members of the Class
22
regarding the benefits of purchasing iPads with 3G capability and the nature of customers’
23
unlimited 3G data plan options.
24
25
110.
Defendants made such false promises for the purpose of inducing Plaintiffs and the
Class to purchase iPads with 3G capability.
26
111.
The false promises alleged herein were the type of promises considered to be
27
material, i.e., a reasonable person would attach importance to them and would be induced to act
28
on the information in making purchase decisions.
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1
2
112.
113.
114.
115.
116.
As a proximate result of Defendants’ false promises, Plaintiffs and each member
of the Class suffered damages in an amount to be proven at trial.
11
12
Defendants’ false promises were a substantial factor in causing Plaintiffs and the
Class to purchase iPads with 3G capability from Defendants.
9
10
Plaintiffs and the Class reasonably and justifiably relied to their detriment on
Defendants’ false promises.
7
8
The false promises alleged herein are objectively material to the reasonable
consumer, and therefore reliance upon such promises may be presumed as a matter of law.
5
6
Defendants made such false promises with the knowledge that they would not
fulfill them and with the intention of not fulfilling them.
3
4
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117.
Defendants directly benefited from, and were unjustly enriched by, having made
the false promises alleged herein.
13
118.
Defendants acted with “malice,” as that term is defined in Cal. Civ. Code §
14
3294(c)(1), by engaging in the conduct alleged herein, which was specifically intended by
15
Defendants to cause substantial injury to Plaintiffs and the members of the Class.
16
119.
Defendants’ conduct alleged herein constitutes “fraud,” as that term is defined in
17
Cal. Civ. Code 3294(c)(3), because such conduct involved Defendants making material promises,
18
which Defendants knew to be false, with the intent to cause injury to their customers.
19
20
120.
Plaintiffs and the Class are entitled to actual and punitive damages and attorneys’
fees under Cal. Civ. Code § 3294(a).
21
121.
As a proximate result of Defendants’ false promises, Plaintiffs and each member
22
of the Class suffered an ascertainable loss and are entitled to equitable relief and compensatory
23
and punitive damages, in amounts to be proven at trial.
THIRD CAUSE OF ACTION
(Negligent Misrepresentation)
24
25
26
122.
the allegations contained in the preceding paragraphs of this Complaint.
27
28
Plaintiffs, individually and on behalf of the Class, incorporate by reference all of
123.
As alleged herein, in the course of conducting their business of selling iPads and
related services, Defendants have made numerous material misrepresentations of fact to Plaintiffs
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1
and all members of the Class concerning the benefits of purchasing an iPad with 3G capability
2
and the nature of customers’ unlimited 3G data plan options.
3
4
124.
plan options to Plaintiffs and the Class.
5
6
125.
126.
Defendants had no reasonable grounds for believing that their misrepresentations
were true.
9
10
Defendants’ misrepresentations alleged herein were supplied to customers for the
purpose of affecting their purchase decisions.
7
8
Defendants failed to disclose material information regarding the nature of 3G data
127.
Defendants failed to exercise reasonable care and/or diligence in communicating
their misrepresentations to customers and failing to disclose material information to customers.
11
128.
Defendants’ misrepresentations alleged herein were the type of misrepresentations
12
that are material—i.e., a reasonable person would attach importance to them and would be
13
induced to act on the information in making purchase decisions.
14
129.
Defendants’ misrepresentations alleged herein are objectively material to the
15
reasonable consumer, and therefore reliance upon such misrepresentations may be presumed as a
16
matter of law.
17
18
130.
Defendants’ misrepresentations.
19
20
131.
Defendants’ misrepresentations were a substantial factor in causing Plaintiffs and
the Class to purchase iPads with 3G capability from Defendants.
21
22
Plaintiffs and the Class reasonably and justifiably relied to their detriment on
132.
As a proximate result of Defendants’ misrepresentations, Plaintiffs and each
member of the Class suffered damages in an amount to be proven at trial.
23
133.
24
misrepresentations.
25
Defendants directly benefited from, and were unjustly enriched by, their
FOURTH CAUSE OF ACTION
(Violation of Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq.)
26
134.
Plaintiffs, individually and on behalf of the Class, incorporate by reference all of
27
the allegations contained in the preceding paragraphs of this Complaint.
28
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1
135.
Defendants are “persons” as defined in Cal. Civil Code § 1761(c).
2
136.
Plaintiffs and the Class members are “consumers” as defined in Cal. Civil Code §
3
1761(d).
4
5
137.
and/or “services” within the meaning of Cal. Civil Code § 1761(a), (b).
6
7
138.
The 3G wireless services that Plaintiffs and the Class purchased from Defendants
are “goods” and/or “services” within the meaning of Cal. Civil Code § 1761(a), (b).
8
9
The iPads that Plaintiffs and the Class purchased from Defendants are “goods”
139.
The purchases by Plaintiffs and the Class of the goods and services sold by
Defendants, alleged herein, constitute “transactions” within the meaning of Cal. Civ. Code §§
10
1761(e) and 1770.
11
140.
12
In connection with their sale of goods and services to Plaintiffs and the Class,
Defendants violated the Consumer Legal Remedies Act (“CLRA”) in at least the following ways:
13
a.
Misrepresenting to Plaintiffs and the Class that they would be able
14
to subscribe to, and switch in and out of, the unlimited data plan in the future as their monthly
15
data needs demanded, whether or not they initially signed up for the unlimited data plan, in
16
violation of Cal. Civ. Code §§ 1770(a)(5), (9), (14), and (16);
17
b.
Misrepresenting to Plaintiffs and the Class that Defendants’ goods
18
and services had characteristics and benefits they did not have, in violation of Cal. Civ. Code §
19
1770(a)(5);
20
21
c.
Advertising goods and services to Plaintiffs and the Class with the
intent not to sell them as advertised, in violation of Cal. Civ. Code § 1770(a)(9);
22
d.
Misrepresenting that their transactions with Plaintiffs and the Class
23
conferred benefits and rights on Plaintiffs and the Class, and obligations on Defendants, which
24
were not, in fact, conferred, in violation of Cal. Civ. Code § 1770(a)(14); and
25
e.
Misrepresenting to Plaintiffs and the Class that the subject of a
26
transaction has been supplied in accordance with a previous representation when it has not, in
27
violation of Cal. Civ. Code § 1770(a)(16).
28
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141.
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In addition, under California law, a duty to disclose arises in four circumstances:
2
(1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had
3
exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively
4
conceals a material fact from the plaintiff; and (4) when the defendant makes partial
5
representations but also suppresses some material facts.
6
142.
Defendants had a duty to disclose to Plaintiffs and the Class the true nature of the
7
unlimited data plan options because: (a) Defendants had exclusive knowledge of the information
8
at the time of sale; (b) Defendants actively concealed from Plaintiffs and the Class the true nature
9
of the unlimited data plan options, which was material information to customers; and (c)
10
Defendants made partial representations to Plaintiffs and the Class regarding the nature of the
11
unlimited data plan options.
12
143.
Defendants violated the CLRA by concealing material information from Plaintiffs
13
and the Class regarding the true nature of the unlimited data plan options when they had a duty to
14
disclose that information.
15
144.
Defendants’ misrepresentations and omissions in violation of the CLRA were
16
likely to mislead consumers. Plaintiffs and the Class reasonably interpreted Defendants’
17
representations and omissions to mean that they would be able to subscribe to, and switch in and
18
out of, the unlimited data plan in the future as their monthly data needs demanded, whether or not
19
they initially signed up for the unlimited data plan.
20
21
145.
Defendants’ conduct alleged herein was intentional and was specifically designed
to induce customers to purchase iPads with 3G capability.
22
146.
Defendants’ misrepresentations and omissions alleged herein were material in that
23
a reasonable person would attach importance to such information and would be induced to act
24
upon such information in making purchase decisions.
25
26
147.
Plaintiffs and the Class relied to their detriment on Defendants’ misrepresentations
and omissions in purchasing their iPads with 3G capability.
27
28
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148.
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Plaintiffs, on behalf of themselves and the Class, demand judgment against
2
Defendants under the CLRA for injunctive relief and restitution to Plaintiffs and the Class in an
3
amount to be proven at trial.
4
5
149.
Plaintiffs, on behalf of themselves and the Class, seek compensatory damages and,
in light of Defendants’ intentional and fraudulent conduct, an award of punitive damages.
6
150.
Pursuant to Cal. Civ. Code § 1782(a), on June 23, 2010, Plaintiffs’ counsel, on
7
behalf of Plaintiffs Adam Weisblatt, Joe Hanna, and David Turk, served Apple Inc. and AT&T
8
Mobility LLC by United States certified mail, return receipt requested, with notice of Apple Inc.’s
9
and AT&T Mobility LLC’s violations of the CLRA. A true and accurate copy of the CLRA
10
demand notice is attached hereto as Exhibit I. AT&T Mobility LLC acknowledged receipt of the
11
CLRA demand notice on June 28, 2010, as evidenced by the Domestic Return Receipt signed by
12
its agent, a true and accurate copy of which is attached hereto as Exhibit J. Apple Inc.
13
acknowledged receipt of the CLRA demand notice on June 25, 2010, as evidenced by the
14
Domestic Return Receipt signed by its agent, a true and accurate copy of which is attached hereto
15
as Exhibit K. Plaintiffs’ counsel on behalf of Colette Osetek also served Apple Inc. with notice of
16
Apple Inc.’s violations of the CLRA on September 27, 2010. A true and accurate copy of the
17
demand letter is also attached hereto as Exhibit L.
18
151.
Defendants AT&T Mobility LLC and Apple Inc. have failed to provide
19
appropriate relief for their violations of the CLRA within 30 days of their receipt of Plaintiffs’
20
demand notices. Accordingly, pursuant to §§ 1780 and 1782(b) of the CLRA, Plaintiffs are
21
entitled to recover actual damages, punitive damages, attorneys’ fees and costs, and any other
22
relief the Court deems proper.
23
24
FIFTH CAUSE OF ACTION
(Violation of Cal. Bus. & Prof. Code §§ 17200, et seq.—Unlawful, Fraudulent, and Unfair
Business Acts and Practices)
25
26
152.
the allegations contained in the preceding paragraphs of this Complaint.
27
28
Plaintiffs, individually and on behalf of the Class, incorporate by reference all of
153.
Defendants’ conduct alleged herein constitutes unfair and deceptive business acts
and practices in violation of Cal. Bus. & Prof. Code § 17200, et seq. Such conduct includes, but
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1
is not limited to, (a) misrepresenting to Plaintiffs and the Class that they would be able to
2
subscribe to, and switch in and out of, the unlimited data plan in the future as their monthly data
3
needs demanded, whether or not they initially signed up for the unlimited data plan; (b)
4
concealing the true nature of the unlimited data plan options from Plaintiffs and the Class; and (c)
5
denying Plaintiffs and the Class the promised benefit of the continuing option to switch in and out
6
of the unlimited data plan and unilaterally imposing upon Plaintiffs and the Class a choice
7
between less advantageous data plan options.
8
9
154.
The conduct alleged herein constitutes fraud, intentional misrepresentation,
negligent misrepresentation, unjust enrichment, and violations of the CLRA and the Cal. Bus. &
10
Prof. Code §§ 17500, et seq., thus providing the basis for a finding of liability under the
11
“unlawful” prong of Cal. Bus. & Prof. Code §§ 17200 et seq.
12
13
155.
The conduct herein is “unfair” because it offends established public policy and/or
is immoral, unethical, oppressive, unscrupulous, and/or substantially injurious to customers.
14
156.
Defendants’ unfair, unlawful, and deceptive acts and practices alleged herein were
15
“fraudulent” and have deceived and/or are likely to deceive Plaintiffs and other reasonable
16
consumers.
17
157.
18
Defendants’ unfair, unlawful, and deceptive acts and practices alleged herein were
specifically designed to induce Plaintiffs and the Class to purchase iPads with 3G capability.
19
158.
Defendants’ misrepresentations and omissions alleged herein were material in that
20
a reasonable person would attach importance to such information and would be induced to act
21
upon such information in making purchase decisions.
22
159.
Defendants’ misrepresentations and omissions alleged herein are objectively
23
material to the reasonable consumer, and therefore reliance upon such misrepresentations may be
24
presumed as a matter of law.
25
26
160.
Plaintiffs and the Class relied to their detriment on Defendants’ misrepresentations
and omissions in purchasing their 3G-enabled iPads from Defendants.
27
28
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1
161.
Filed12/10/10 Page30 of 71
Plaintiffs and each member of the Class have been damaged as a result of
2
Defendants’ unfair, unlawful, and deceptive conduct alleged herein. They are entitled to
3
injunctive relief and restitution, in an amount to be proven at trial.
4
SIXTH CAUSE OF ACTION
(Violation of Cal. Bus. & Prof. Code §§ 17500, et seq.—False Advertising)
5
162.
Plaintiffs, individually and on behalf of the Class, incorporate by reference all of
6
the allegations contained in the preceding paragraphs of this Complaint.
7
163.
Defendants have committed acts of untrue and misleading advertising, as defined
8
by Cal. Bus. & Prof Code §§ 17500, et. seq., by, inter alia: (a) falsely advertising, on their
9
respective websites and elsewhere, that customers who purchased the iPad with 3G capability
10
would be able to subscribe to, and switch in and out of, the unlimited data plan in the future as
11
their monthly data needs demanded, whether or not they initially signed up for the unlimited data
12
plan; and (b) concealing material information about the unlimited 3G data plan options from
13
consumers.
14
164.
Defendants’ misrepresentations and omissions alleged herein deceive or have the
15
tendency to deceive the general public regarding the benefits of purchasing a 3G-enabled iPad
16
and the nature of the unlimited data plan options.
17
165.
Defendants’ misrepresentations and omissions alleged herein were the type of
18
misrepresentations that are material—i.e., a reasonable person would attach importance to them
19
and would be induced to act on the information in making purchase decisions.
20
166.
Defendants’ misrepresentations and omissions alleged herein are objectively
21
material to the reasonable consumer, and therefore reliance upon such misrepresentations may be
22
presumed as a matter of law.
23
167.
Defendants’ false advertising continued right up until, and in fact after, the end of
24
the Class period.
25
168.
Unless restrained by this Court, Defendants could continue to engage in untrue and
26
misleading advertising, as alleged above, in violation of Cal. Bus. & Prof Code §§ 17500, et. seq.
27
28
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1
2
169.
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As a result of the foregoing, Plaintiffs and each member of the Class have been
injured and have lost money or property, and are entitled to restitution and injunctive relief.
3
SEVENTH CAUSE OF ACTION
(Unjust Enrichment)
4
170.
Plaintiffs, individually and on behalf of the Class, incorporate by reference all of
5
the allegations contained in the preceding paragraphs of this Complaint.
6
171.
As alleged herein, Defendants intentionally and/or recklessly made false
7
representations to Plaintiffs and the Class to induce them to purchase iPads with 3G capability.
8
Plaintiffs and the Class have reasonably relied on these false representations in purchasing iPads
9
with 3G capability.
10
172.
As alleged herein, Defendants made false promises to Plaintiffs and the Class
11
which Defendants did not intend to keep, and which Defendants did not keep, to induce Plaintiffs
12
and the Class to purchase iPads with 3G capability. Plaintiffs and the Class have reasonably
13
relied on these false promises in purchasing iPads with 3G capability.
14
173.
As alleged herein, Plaintiffs and the Class did not receive all of the benefits that
15
they were promised by Defendants, and paid more to Defendants for their products and services
16
than they otherwise would have paid, and will continue to do so.
17
174.
It would be inequitable and unconscionable for Defendants to retain the profits,
18
benefits, and other compensation they obtained from their deceptive, misleading, and unlawful
19
conduct alleged herein.
20
175.
Plaintiffs and the Class are entitled to restitution of, disgorgement of, and/or the
21
imposition of a constructive trust upon, all profits, benefits, and other compensation obtained by
22
Defendants from their deceptive, misleading, and unlawful conduct alleged herein.
23
PRAYER FOR RELIEF
24
Plaintiffs, on behalf of themselves and the Class, request that the Court order the
25
following relief and enter judgment against Defendants as follows:
26
a.
An Order certifying the proposed Class and appointing Plaintiffs
27
and their counsel to represent the Class;
28
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1
2
b.
Filed12/10/10 Page32 of 71
An Order that Defendants be permanently enjoined from its
improper activities and conduct described herein;
3
c.
An Order directing Apple to accept from Plaintiffs and Class
4
Members returns of any 3G-enabled iPads purchased during the Class Period, for full refund, with
5
no restocking fee, for a period of six (6) months following the date of any such Order;
6
d.
An Order mandating that Defendants restore to Plaintiffs and Class
7
Members the flexible, unlimited data plan Defendants promised and advertised, for such period as
8
the Court deems reasonable;
9
10
e.
A judgment awarding Plaintiffs and the Class actual and
compensatory damages in an amount according to proof;
11
f.
A judgment awarding Plaintiffs and the Class restitution in an
12
amount according to proof, including without limitation, restitution of, disgorgement of, and/or
13
the imposition of a constructive trust upon, all profits, benefits, and other compensation obtained
14
by Defendants from their deceptive, misleading, and unlawful conduct alleged herein;
15
g.
A judgment awarding Plaintiffs and the Class punitive damages;
16
h.
Pre-judgment and post-judgment interest;
17
i.
Attorneys’ fees and expenses and the costs of this action; and
18
j.
All other and further relief as the Court deems necessary, just and
19
proper.
20
JURY DEMAND
21
Plaintiffs hereby demand a trial by jury.
22
23
24
25
26
27
28
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2
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Respectfully submitted,
Dated: December 10, 2010
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
3
By:
4
5
/s/ Michael W. Sobol
Michael W. Sobol
Michael W. Sobol (State Bar No. 194857)
msobol@lchb.com
Roger N. Heller (State Bar No. 215348)
rheller@lchb.com
Allison Elgart (State Bar No. 241901)
aelgart@lchb.com
275 Battery Street, 29th Floor
San Francisco, CA 94111-3339
Telephone: (415) 956-1000
Facsimile: (415) 956-1008
6
7
8
9
10
Proposed Lead Plaintiffs' Counsel and Interim Class
Counsel
11
12
13
Dated: December 10, 2010
14
THE WESTON FIRM
By:
15
/s/ Gregory S. Weston
Gregory S. Weston
Gregory S. Weston
greg@westonfirm.com
888 Turquoise Street
San Diego, CA 92109
Telephone: (858) 488-1672
Facsimile: (480) 247-4553
16
17
18
19
21
Jack Fitzgerald
jack@westonfirm.com
2811 Sykes Court
Santa Clara, California 95051
Telephone: (408) 459-0305
22
Proposed Interim Class Counsel
20
23
24
25
26
27
28
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1
Dated: December 10, 2010
SCHUBERT JONCKHEER & KOLBE LLP
2
3
By:
4
/s/ Willem F. Jonckheer
Willem F. Jonckheer
Willem F. Jonckheer
wjonckheer@schubertlawfirm.com
Jason A. Pikler
jpikler@schubertlawfirm.com
Three Embarcadero Center
Suite 1650
San Francisco, CA 94111
Telephone: (415) 788-4220
Facsimile: (415) 788-0161
5
6
7
8
9
Peter A. Lagorio
plagorio@lagoriolaw.com
LAW OFFICE OF PETER A. LAGORIO
63 Atlantic Avenue
Boston, MA 02110
Telephone: (617) 367-4200
Facsimile: (617) 227-3384
10
11
12
13
Proposed Interim Class Counsel
14
15
16
I, Michael W. Sobol, am the ECF User whose ID and password are being used to file this
17
Stipulation. In compliance with General Order 45, section X.B., I hereby attest that concurrence
18
in the filing of the document has been obtained from each of the other signatories.
19
By:
20
/s/ Michael W. Sobol
Michael W. Sobol
21
22
23
24
25
26
27
28
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EXHIBIT A
Page 109 - Exhibit D
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Page 110 - Exhibit D
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Page 111 - Exhibit D
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Page 112 - Exhibit D
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Page 113 - Exhibit D
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Page 114 - Exhibit D
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Page 115 - Exhibit D
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Page 116 - Exhibit D
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Page 117 - Exhibit D
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EXHIBIT E
Page 121 - Exhibit D
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Page 122 - Exhibit D
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EXHIBIT F
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EXHIBIT G
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EXHIBIT H
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EXHIBIT I
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LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
ATTORNEYS AT LAW
MICHAEL W. SOBOL
PARTNER
EMBARCADERO CENTER WEST
NEW YORK
275 BATTERY STREET, 29TH FLOOR
NASHVILLE
SAN FRANCISCO, CALIFORNIA 94111-3339
TELEPHONE: (415) 956-1000
FACSIMILE: (415) 956-1008
mail@lchb.com
www.lchb.com
June 23, 2010
VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED
Apple Inc.
C T Corporation System
818 West Seventh Street
Los Angeles, CA 90017
AT&T Inc.
The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
AT&T Mobility LLC
The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
Re:
Notice of Violation of California Consumer Legal Remedies Act
Dear Apple Inc., AT&T Inc., and AT&T Mobility LLC:
We represent Adam Weisblatt, Joe Hanna, and David Turk (collectively,
“Plaintiffs”), who purchased 3G-enabled iPads between April 30, 2010 and June 7, 2010. This
letter provides notice pursuant to the California Consumers Legal Remedies Act, Cal. Civ. Code
§§ 1750 et seq. (“CLRA”), to Apple Inc. (“Apple”) and AT&T Inc. and AT&T Mobility LLC
(“AT&T”) (collectively, “Defendants”) that they have engaged in conduct which violates the
CLRA.
On April 8, 2010, Mr. Weisblatt purchased a 16 GB WiFi (non-3G-enabled) iPad.
On April 30, 2010, the day of Defendants’ release of the 3G-enabled iPad, Mr. Weisblatt
exchanged his WiFi iPad and paid $140.40 ($130.00 plus tax) for the acquisition of a 3G-enabled
16 GB iPad. Mr. Weisblatt acquired the 3G-enabled iPad specifically to have the ability to
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download data and access data-intensive applications and content via a 3G network, and based
upon Defendants’ representations of the availability of a flexible, month-to-month unlimited 3G
data plan.
On April 30, 2010, Mr. Hanna purchased a 64 GB 3G-enabled iPad, paying
$130.00 more (plus tax) for his iPad than he would have had to pay for the equivalent 64 GB
iPad without 3G capability. Mr. Hanna purchased the 3G-enabled iPad specifically to have the
ability to download data and access data-intensive applications and content via a 3G network,
and based upon Defendants’ representations of the availability of a flexible, month-to-month
unlimited 3G data plan.
On April 30, 2010, Mr. Turk purchased a 16 GB 3G-enabled iPad and a 64GB
3G-enabled iPad, for he and his wife, paying $130 more (plus tax) for each of these iPads than he
would have had to pay for the equivalent iPads without 3G capability. On May 18, 2010,
Mr. Turk purchased a 32 GB 3G-enabled iPad for his daughter, paying $130.00 more (plus tax)
for this iPad than he would have had to pay for the equivalent 32 GB iPad without 3G capability.
Mr. Turk purchased these 3G-enabled iPads specifically so that he and his family would have the
ability to download data and access data-intensive applications and content via a 3G network,
and based upon Defendants’ representations of the availability of a flexible, month-to-month
unlimited 3G data plan.
Defendants misrepresented to Plaintiffs and the general public that whether or not
they initially signed up for the unlimited data plan with their 3G-enabled iPads, they would
continue to have the option to “upgrade” to the unlimited data plan and to switch in and out of
the unlimited data plan as their monthly needs demanded. For example, Apple advertised to
prospective iPad 3G customers:
•
“No-contract 3G service. In the United States, 3G service is
available through a breakthrough deal with AT&T. You choose the
amount of data per month you want to buy — 250MB or unlimited. If
you choose the 250MB plan, you’ll receive onscreen messages as you
get close to your monthly data limit so you can decide whether to turn
off 3G or upgrade to the unlimited plan. Best of all, there’s no longterm contract. So if you have a business trip or vacation approaching,
just sign up for the month you’ll be traveling and cancel when you get
back. You don’t need to visit a store to get 3G service. You can sign
up, check your data usage, manage your account, or cancel your
service — all from your iPad.”
•
“Manage your data plan. iPad makes it easy to choose the data plan
that works best for you. When you need more data, you can add
another 250MB or upgrade to the Unlimited Data plan. Because you
sign up for a data plan in monthly increments, you can cancel your
plan at any time and then sign up again whenever you need 3G
service.”
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•
“[Y]ou can monitor your data usage and change your plan at any time,
including switching to unlimited data or cancelling 3G service if you
know you won’t need it.”
•
“As you get close to your monthly data limit, you’ll receive onscreen
messages to help you decide whether to upgrade to another 250MB or
switch to the unlimited plan.”
•
“There are two monthly data plans: 250MB or unlimited. There’s no
contract, and you can sign up and change your service right on your
iPad.”
Likewise, AT&T advertised: “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.”
On May 2, 2010, two days after he acquired his 3G-enabled iPad, Mr. Weisblatt
signed up for an unlimited 3G data plan for one month. One month later, his unlimited data plan
automatically renewed for an additional month. Mr. Hanna has not yet had the need to sign up
for a 3G data plan for his iPad. On May 4, 2010, Mr. Turk signed up for an unlimited 3G data
plan for one month for one of the iPads he purchased on April 30, 2010. On May 4, 2010,
Mr. Turk signed up for a limited 250MB 3G data plan for the other iPad he purchased on
April 30, 2010, and shortly thereafter upgraded to an unlimited 3G data plan for that iPad for one
month. Mr. Turk’s two unlimited data plans have since renewed for an additional month. On
June 15, 2010, Mr. Turk’s daughter attempted to sign up for an unlimited 3G data plan for the
iPad that Mr. Turk purchased for her, but she was not allowed to do so. On June 20, 2010,
Mr. Turk and his daughter signed up for an unlimited 3G data plan for one month for the iPad
that Mr. Turk purchased for his daughter.
On June 2, 2010, AT&T issued a press release stating that the unlimited data plan
would not be available to customers who purchased 3G-enabled iPads after June 6, 2010.
However, even after June 2, 2010, Defendants continued to misrepresent on their respective Web
sites that purchasers of a 3G-enabled iPad would be able to upgrade to the unlimited data plan,
and be able to switch in and out of the unlimited data plan, in the future. Nowhere did
Defendants adequately disclose that customers who were able to sign up in time for the unlimited
data plan would nonetheless no longer be able to switch in and out of the unlimited data plan, as
they were expressly promised.
On June 7, 2010, Defendants reneged on their representations and promises to
provide an unlimited 3G data plan on a flexible, month-to-month basis. As a result,
Mr. Weisblatt no longer has the option of switching back and forth between unlimited and
limited data plans. Instead, Mr. Weisblatt, as is the case with any 3G-enabled iPad purchaser
who as of June 7, 2010 was signed up for an unlimited data plan, must retain his current
unlimited data plan or else lose that option forever, and thereafter be required to purchase
monthly limited data plans only. Likewise, Mr. Hanna and other customers who purchased iPads
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prior to June 7, 2010, but who were not signed up for an unlimited data plan as of June 7, 2010,
no longer have the option to switch in and out of an unlimited data plan in the future or, for that
matter, to ever sign up for the unlimited data plan at any time in the future. Similarly, for his
three iPads, Mr. Turk has been denied the option to switch in and out of the unlimited 3G data
plan based on his and his family’s data needs, as was promised.
Defendants’ misrepresentations regarding the flexible, month-to-month unlimited
3G data plan misled Plaintiffs and were likely to mislead the general public. Defendants violated
the CLRA’s proscription against false representations regarding the characteristics, use, and
benefit of goods by actively and expressly misrepresenting to Plaintiffs and their other
customers, in their marketing and advertising, the material fact that if customers purchased a 3Genabled iPad, they could later upgrade to the unlimited data plan and could switch in and out of
the unlimited data plan as their monthly data needs demanded.
The information about the true nature of the unlimited data plan options was
information that a reasonable consumer would find relevant and rely upon in deciding whether to
purchase a 3G-enabled iPad. Plaintiffs and the other customers reasonably interpreted
Defendants’ representations and omissions to mean that they would be able to subscribe to, and
switch in and out of, the unlimited data plan in the future as their monthly needs demanded,
whether or not they initially signed up for the unlimited data plan. Had they known that their
access to the unlimited 3G data plan option would be restricted in the way it has been pursuant to
the June 7, 2010 change, they would not have purchased the 3G-enabled iPads.
Defendants’ misrepresentations of material facts violated: (a) Cal. Civil Code
§ 1770(a)(5)’s proscription against representing that goods have uses, benefits, or characteristics
they do not actually have; (b) Cal. Civ. Code § 1770(a)(14)’s proscription against representing
that transactions confer or involve benefits and rights on their customers, and obligations on
Defendants, which were not in fact conferred; (c) Cal. Civ. Code § 1770(a)(9)’s proscription
against advertising goods with the intent not to sell them as advertised; and (d) Cal. Civ. Code
§ 1770(a)(16)’s proscription against representing that the subject of a transaction has been
supplied in accordance with a previous representation when it has not.
As you are aware, on June 9, 2010, Mr. Weisblatt commenced a civil class action
against the Defendants in the United States District Court for the Northern District of California
(Weisblatt v. Apple Inc., et al., N.D. Cal. Case No. CV 10-02553 PVT), alleging claims under the
California common law and violations of the California consumer protection statues. On June
23, 2010, Plaintiffs filed a First Amended Class Action Complaint (“FAC”), alleging the same
claims. A copy of the FAC, the operative complaint in the case, is attached hereto. Included
among the claims brought by Plaintiffs is a claim seeking injunctive relief under the CLRA.
On behalf of Mr. Weisblatt, Mr. Hanna, and Mr. Turk, we hereby demand,
pursuant to Cal. Civ. Code § 1782, that within thirty (30) days of receiving this letter,
Defendants: (1) reinstate their prior policy of providing an unlimited 3G data plan on a flexible,
month-to-month basis, for all purchasers of 3G-enabled iPad who purchased their iPad on or
before June 6, 2010; and (2) agree to compensate all customers that these practices have harmed.
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If Defendants fail to comply with this demand within thirty (30) days after its receipt of this
letter, then pursuant to the CLRA, we intend to seek from Defendants all compensatory and
punitive damages, restitution, and any other appropriate equitable relief.
If you have any questions regarding this notice and demand, feel free to contact
me at (415) 956-1000.
Very truly yours,
Michael W. Sobol
881907.2
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EXHIBIT J
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EXHIBIT K
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