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)
[e-mail]
Roger N. Heller (State Bar No. 215348)
[e-mail]
Allison Elgart (State Bar No. 241901)
[e-mail]
LIEFF, CABRASER, HEIMANN & BERNSTEIN, LLP
275 Battery Street, 29th Floor
San Francisco, CA 94111-3339
Telephone: [phone]
Facsimile: [phone]

7

Attorneys for Plaintiffs

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[Additional Counsel listed on signature page]

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3
4
5

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10

UNITED STATES DISTRICT COURT

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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.

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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:

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27
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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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1

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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c.

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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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38.

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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.

Filed12/10/10 Page13 of 71

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

Defendants, including on Apple’s website, that: (a) one of the available data plans for the 3G904069.1

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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.

Filed12/10/10 Page15 of 71

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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1

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.

Filed12/10/10 Page17 of 71

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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82.

Filed12/10/10 Page19 of 71

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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1
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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1
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

Filed12/10/10 Page23 of 71

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

Filed12/10/10 Page24 of 71

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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1

141.

Filed12/10/10 Page27 of 71

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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1

148.

Filed12/10/10 Page28 of 71

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.

Filed12/10/10 Page31 of 71

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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1
2

Filed12/10/10 Page33 of 71

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)
[e-mail]
Roger N. Heller (State Bar No. 215348)
[e-mail]
Allison Elgart (State Bar No. 241901)
[e-mail]
275 Battery Street, 29th Floor
San Francisco, CA 94111-3339
Telephone: [phone]
Facsimile: [phone]

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
[e-mail]
888 Turquoise Street
San Diego, CA 92109
Telephone: [phone]
Facsimile: [phone]

16
17
18
19

21

Jack Fitzgerald
[e-mail]
2811 Sykes Court
Santa Clara, California 95051
Telephone: [phone]

22

Proposed Interim Class Counsel

20

23
24
25
26
27
28
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Filed12/10/10 Page34 of 71

1
Dated: December 10, 2010

SCHUBERT JONCKHEER & KOLBE LLP

2
3

By:

4

/s/ Willem F. Jonckheer
Willem F. Jonckheer

Willem F. Jonckheer
[e-mail]
Jason A. Pikler
[e-mail]
Three Embarcadero Center
Suite 1650
San Francisco, CA 94111
Telephone: [phone]
Facsimile: [phone]

5
6
7
8
9

Peter A. Lagorio
[e-mail]
LAW OFFICE OF PETER A. LAGORIO
63 Atlantic Avenue
Boston, MA 02110
Telephone: [phone]
Facsimile: [phone]

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

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Page 110 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page37 of 71

Page 111 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page38 of 71

Page 112 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page39 of 71

Page 113 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page40 of 71

Page 114 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page41 of 71

Page 115 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page42 of 71

Page 116 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page43 of 71

Page 117 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page44 of 71

Page 118 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page45 of 71

Page 119 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page46 of 71

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EXHIBIT E

Page 121 - Exhibit D

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Page 122 - Exhibit D

Case5:10-cv-02553-RMW Document65

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Page 123 - Exhibit D

Case5:10-cv-02553-RMW Document65

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Page 124 - Exhibit D

Case5:10-cv-02553-RMW Document65

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EXHIBIT F

Page 125 - Exhibit D

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Page 126 - Exhibit D

Case5:10-cv-02553-RMW Document65

Filed12/10/10 Page53 of 71

Page 127 - Exhibit D

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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: [phone]
FACSIMILE: [phone]

[e-mail]
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 [phone].
Very truly yours,

Michael W. Sobol
881907.2

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EXHIBIT J

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