Rao et al v. Apple Inc.

Filing 248

ORDER GRANTING 221 MOTION TO DISMISS. Signed by Judge Edward J. Davila on 10/13/2020. (ejdlc1, COURT STAFF) (Filed on 10/13/2020)

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Case 5:18-cv-02813-EJD Document 248 Filed 10/13/20 Page 1 of 7 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 IN RE: MACBOOK KEYBOARD LITIGATION Case No. 5:18-cv-02813-EJD 9 ORDER GRANTING MOTION TO DISMISS 10 Re: Dkt. No. 221 United States District Court Northern District of California 11 12 13 Before the Court is Defendant Apple Inc.’s motion to dismiss Plaintiffs’ Second Amended 14 Consolidated Class Action Complaint (“SAC”) pursuant to Federal Rule of Civil Procedure 15 12(b)(6). Dkt. No. 221 (“Motion”). Specifically, Apple seeks to dismiss Plaintiffs’ claim for 16 violation of the California Unfair Competition Law in its entirety, and Plaintiffs’ remaining claims 17 to the extent that they seek equitable relief, on the ground that Plaintiffs do not and cannot plead 18 that they lack an adequate remedy at law. The Court took the matter under submission for 19 decision without oral argument pursuant to Civil Local Rule 7-1(b). Having considered the 20 arguments of the parties, the Court GRANTS Defendant’s motion. 21 22 I. Background Plaintiffs are eleven consumers from California, Massachusetts, New York, Illinois, 23 Florida, Washington, New Jersey, and Michigan. Second Amended Consolidated Class Action 24 Complaint, Dkt. No. 219 (“SAC”) ¶¶ 8-18. Plaintiffs bring this proposed class action against 25 Defendant Apple, Inc. (“Apple” or “Defendant”) on behalf of purchasers of allegedly defective 26 MacBook laptops with butterfly keyboards. 27 28 Each Plaintiff alleges to have purchased a MacBook or MacBook Pro with the butterfly Case No.: 5:18-cv-02813-EJD ORDER GRANTING MOTION TO DISMISS 1 Case 5:18-cv-02813-EJD Document 248 Filed 10/13/20 Page 2 of 7 1 keyboard. Id. ¶¶ 25, 31, 39, 49, 56, 63, 71, 77, 85, 95, 103. Each one alleges to have made the 2 purchase after being exposed to representations on specific Apple websites that the butterfly is 3 “more responsive.” Id. ¶¶ 26, 32, 40, 50, 57, 64, 72, 78, 86, 96, 104. Plaintiffs allege that their 4 keyboards failed within a year of purchase. Id. ¶¶ 27, 33, 41, 51, 58, 65, 73, 79, 87, 97, 105. Each 5 Plaintiff alleges that he consulted with or complained to Apple about the faulty keyboards, but 6 Apple failed to provide effective troubleshooting or repairs, an operable replacement laptop free of 7 charge, or a refund. Id. ¶¶ 28-29, 36-37, 42-27, 52-54, 60-62, 66-69, 74-75, 80-83, 88-93, 98-101, 8 106-08. Plaintiffs all allege that after having their laptops repaired or replaced, the defect 9 returned. Id. Several Plaintiffs allege that they were forced to spend money out of pocket for AppleCare service, insurance, or a new non-Apple laptop. Id. Plaintiffs allege that had they been 11 United States District Court Northern District of California 10 aware of the keyboard defect, they would not have bought their computer or would have paid 12 significantly less for it. Id. ¶¶ 30, 38, 48, 55, 62, 70, 76, 84, 94, 102, 109. Plaintiffs assert claims on behalf of a proposed nationwide class and subclasses under 13 14 California law and six other states’ laws. In particular, Plaintiffs seek injunctive relief and 15 restitution under California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq. 16 (“UCL”). They further seek unspecified injunctive relief under the Consumers Legal Remedies 17 Act, Cal. Civ. Code § 1750 et seq. (“CLRA”) and equivalent state statutes.1 II. 18 Legal Standard Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient 19 20 specificity to “give the defendant fair notice of what the . . . claim is and the grounds upon which 21 it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 22 (2007) (internal quotations omitted). A complaint which falls short of the Rule 8(a) standard may 23 24 25 26 27 28 1 Plaintiffs’ fifth through tenth claims for relief are brought under the Washington Consumer Protection Act, Wash. Rev. Code § 19.86.010, et seq. (“WCPA”), Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201, et seq. (“FDUTPA”), the Illinois Consumer Fraud and Deceptive Business Practices Act 815 Ill. Comp. Stat. Ann. 505/1, et seq. (“ICFA”), New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-1 (West), et seq. (“NJCFA”), New York General Business Law § 349, N.Y. Gen. Bus. Law § 349, and the Michigan Consumer Protection Act, Mich. Comp. Laws § 445.901, et seq. (“MCPA”). Case No.: 5:18-cv-02813-EJD ORDER GRANTING MOTION TO DISMISS 2 Case 5:18-cv-02813-EJD Document 248 Filed 10/13/20 Page 3 of 7 1 be dismissed if it fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). 2 To survive a Rule 12(b)(6) motion to dismiss, the complaint “must contain sufficient factual 3 matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 4 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atlantic Corp., 550 5 U.S. at 570). A claim has facial plausibility when the plaintiff pleads factual content that allows 6 the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. 7 Id. Dismissal “is proper only where there is no cognizable legal theory or an absence of sufficient 8 facts alleged to support a cognizable legal theory.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 9 2001). III. 11 United States District Court Northern District of California 10 Defendant seeks to dismiss all of Plaintiffs’ claims for equitable relief on the ground that 12 Plaintiffs do not and cannot plead that they lack an adequate remedy at law. Defendant’s motion 13 relies on the Ninth Circuit’s recent decision in Sonner v. Premier Nutrition Corp., 971 F.3d 834, 14 843–44 (9th Cir. 2020). In that case, the Sonner similarly brought a diversity suit under 15 California’s UCL and CLRA. Following a last-minute amendment of her complaint before trial, 16 plaintiff dropped her damages claim and sought only restitution and equitable relief. Id. at 838– 17 39. The district court then granted a motion to dismiss, finding that Sonner could not proceed on 18 her equitable claims for restitution in lieu of a claim for damages. Specifically, the district court 19 concluded that claims brought under the UCL and CLRA remained subject to California’s 20 inadequate-remedy-at-law doctrine, and that Sonner failed to establish that she lacked an adequate 21 legal remedy for the same past harm for which she sought equitable restitution. 22 Discussion On appeal, the Ninth Circuit affirmed on different grounds, relying on principles of federal 23 common law rather than state law. The Ninth Circuit explained that while a state may authorize 24 its courts to give equitable relief without the restriction that an adequate remedy at law be 25 unavailable, the state law “cannot remove th[at] fetter[ ] from the federal courts.” Id. at 843–44 26 (citing Guar. Tr. Co. of N.Y. v. York, 326 U.S. 99, 105–06, 65 S. Ct. 1464, 89 L. Ed. 2079 (1945)). 27 Guided by the reasoning in York, the Ninth Circuit held “that the traditional principles governing 28 Case No.: 5:18-cv-02813-EJD ORDER GRANTING MOTION TO DISMISS 3 Case 5:18-cv-02813-EJD Document 248 Filed 10/13/20 Page 4 of 7 1 equitable remedies in federal courts, including the requisite inadequacy of legal remedies, apply 2 when a party requests restitution under the UCL and CLRA in a diversity action.” Id. at 844. The 3 court went on to find that Sonner’s claims for equitable relief were properly dismissed because she 4 failed to allege the lack of an adequate legal remedy. Id. 5 Apple argues that under Sonner, a plaintiff in federal court must allege the lack of an 6 adequate legal remedy in order to state a claim for equitable relief and that Plaintiffs have failed to 7 do so. Plaintiffs argue that (1) Defendant’s motion is premature; (2) Sonner does not apply to 8 injunctive relief; and (3) even if Sonner applies, Plaintiffs adequately alleged that they have no 9 adequate remedy at law in this case. 10 Plaintiffs argue that Apple’s motion is premature for two reasons. Their first reason—that United States District Court Northern District of California 11 the court should refrain from deciding the motion until after the Ninth Circuit had decided the 12 pending petition for rehearing or rehearing en banc in Sonner—was mooted by the Ninth Circuit’s 13 denial of the rehearing petition. See Statement of Recent Decision, Dkt. No. 230. Plaintiffs 14 further assert that the motion is premature because they are not required to make a binding election 15 of remedies at this early stage in the proceedings. Opp. p. 5. But this is not an election of 16 remedies issue. The question is not whether or when Plaintiffs are required to choose between two 17 available inconsistent remedies, it is whether equitable remedies are available to Plaintiffs at all. 18 In other words, the question is whether Plaintiffs have adequately pled their claims for equitable 19 relief, and that question is not premature on a motion to dismiss. 20 Plaintiffs next argue that Sonner does not require dismissal of Plaintiffs’ claims for 21 injunctive relief because where “state law authorizes the issuance of a permanent injunction, there 22 is no requirement that a plaintiff proceeding in federal court show an inadequate remedy at law to 23 obtain relief.” Opp. p. 5. This argument is foreclosed by Sonner. The Sonner court emphasized 24 that the Supreme Court has recognized the “fundamental principle for well over a century that 25 state law cannot expand or limit a federal court’s equitable authority,” and explained that “a state 26 statute does not change the nature of the federal courts’ equitable powers.” Sonner, 971 F.3d at 27 841 (citation omitted). The court expressly found that “even if a state authorizes its courts to 28 Case No.: 5:18-cv-02813-EJD ORDER GRANTING MOTION TO DISMISS 4 Case 5:18-cv-02813-EJD Document 248 Filed 10/13/20 Page 5 of 7 1 provide equitable relief when an adequate legal remedy exists, such relief may be unavailable in 2 federal court because equitable remedies are subject to traditional equitable principles unaffected 3 by state law.” Id. (citing York, 326 U.S. at 105–06 & n.3). 4 Plaintiffs cite to pre-Sonner cases in which federal courts applied state law to determine whether an injunction was warranted. None of those cases involved a state statute that purported 6 to expand the court’s equitable powers; rather, in each case the requirements for injunctive relief 7 under state law were coextensive with the federal common law requirements. See, e.g., Nomadix, 8 Inc. v. Guest-Tek Interactive Entm’t, Ltd., No. 2:19-CV-04980-AB-FFM, 2020 WL 1939826, at 9 *1 (C.D. Cal. Apr. 22, 2020) (granting injunctive relief only after finding, among other things, that 10 “pecuniary compensation would not afford adequate relief”); Brocade Commc’ns Sys., Inc. v. A10 11 United States District Court Northern District of California 5 Networks, Inc., No. C 10-3428 PSG, 2013 WL 890126, at *3 (N.D. Cal. Jan. 23, 2013) (“To 12 prevail on its request for a permanent injunction . . . includes a showing that remedies at law are 13 inadequate, and that other equitable considerations warrant entry of an injunction”). 14 Plaintiffs acknowledge that Sonner precludes them from seeking restitution but argue that 15 Sonner should not be extended to preclude claims for injunctive relief. While “[i]njunctive relief 16 [was] not at issue” in Sonner, 971 F.3d at 842, nothing about the Ninth Circuit’s reasoning 17 indicates that the decision is limited to claims for restitution. In fact, numerous courts in this 18 circuit have applied Sonner to injunctive relief claims. See e.g., Gibson v. Jaguar Land Rover N. 19 Am., LLC, No. CV2000769CJCGJSX, 2020 WL 5492990, at *3 (C.D. Cal. Sept. 9, 2020) 20 (dismissing plaintiff’s UCL claims for an injunction and restitution because Sonner “very recently 21 made clear” that the requirement to establish an inadequate remedy at law “applies to claims for 22 equitable relief under both the UCL and CLRA.”); Teresa Adams v. Cole Haan, LLC, No. 23 SACV20913JVSDFMX, 2020 WL 5648605, at *2 (C.D. Cal. Sept. 3, 2020) (“The Sonner court 24 derived its rule from broader principles of federal common law . . . this broad analysis of the 25 distinction between law and equity [does not] create an exception for injunctions as opposed to 26 other forms of equitable relief. The clear rule in Sonner that plaintiffs must plead the inadequacy 27 of legal remedies before requesting equitable relief therefore applies”); Schertz v. Ford Motor 28 Case No.: 5:18-cv-02813-EJD ORDER GRANTING MOTION TO DISMISS 5 Case 5:18-cv-02813-EJD Document 248 Filed 10/13/20 Page 6 of 7 1 Co., No. CV2003221TJHPVCX, 2020 WL 5919731, at *2 (C.D. Cal. July 27, 2020) (dismissing 2 claims for an injunction and restitution under the UCL because plaintiff failed to allege the lack of 3 an adequate legal remedy as required under Sonner). This Court agrees with our fellow courts that 4 under Sonner, Plaintiffs are required to allege that they lack an adequate remedy at law in order to 5 seek injunctive relief. 6 Finally, Plaintiffs argue that they have sufficiently alleged that no adequate legal remedy 7 exists here. They argue that because Apple’s repair program is deficient, their alleged injury is 8 “continuing” such that class members with faulty keyboard “seeking to be made whole in the 9 future could only sue Apple repeatedly.” Opp. p. 10. Plaintiffs do not explain why those consumers could not sufficiently be “made whole” by monetary damages. Courts generally hold 11 United States District Court Northern District of California 10 that monetary damages are an adequate remedy for claims based on an alleged product defect, and 12 reject the argument that injunctive relief requiring repair or replacement is appropriate. See 13 Philips v. Ford Motor Co., No. 14-CV-02989-LHK, 2016 WL 7428810, at *25 (N.D. Cal. Dec. 14 22, 2016), aff’d, 726 F. App’x 608 (9th Cir. 2018) (the ordinary and more appropriate relief is 15 monetary damages, “not a mandatory injunction requiring Ford to uniformly repair and/or replace” 16 a defect in every vehicle); see also Victorino v. FCA US LLC, No. 16CV1617-GPC(JLB), 2018 17 WL 2455432, at *20 (S.D. Cal. June 1, 2018) (“monetary damages is the appropriate form of 18 damages” where plaintiffs’ claimed injury was the “overpayment of the purchase price of their 19 Class Vehicles”). 20 Plaintiffs’ complaint alleges that class members overpaid for their allegedly defective 21 laptops and incurred various expenses in their attempts to resolve the deficiencies. SAC ¶¶ 273, 22 285, 298, 310, 323, 331. Plaintiffs suggest in the Complaint that Apple could have “offer[ed] 23 refunds . . . to consumers with failed keyboards.” Id. ¶¶ 201, 221. Because Plaintiffs’ claims rest 24 on their alleged overpayments and Apple’s failure to issue refunds, the Court finds that monetary 25 damages would provide an adequate remedy for the alleged injury. Moreover, the Court finds that 26 the availability of an adequate legal remedy is clear from the face of the SAC and thus further 27 amendment of the complaint would be futile. See Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 28 Case No.: 5:18-cv-02813-EJD ORDER GRANTING MOTION TO DISMISS 6 Case 5:18-cv-02813-EJD Document 248 Filed 10/13/20 Page 7 of 7 1 1051 (9th Cir. 2008) (where a plaintiff fails to survive Rule 12(b)(6) scrutiny and “it is clear that 2 the complaint could not be saved by amendment,” “[d]ismissal without leave to amend is 3 proper.”); Reddy v. Litton Indus., Inc., 912 F.2d 291, 296-97 (9th Cir. 1990) (an “amended 4 complaint may only allege other facts consistent with the challenged pleading”). 5 Thus, Plaintiffs have failed to allege that they lack an adequate remedy at law, as required 6 to state a claim for equitable relief. Plaintiffs’ UCL claim is therefore dismissed in its entirety and 7 the remaining claims are dismissed to the extent they seek an injunction, restitution, or other 8 equitable relief. 9 IV. Conclusion For the reasons stated above, Defendant’s motion to dismiss is GRANTED. Plaintiffs’ 11 United States District Court Northern District of California 10 UCL claim (Claim 1) is DISMISSED with prejudice. The remaining claims are DISMISSED 12 with prejudice to the extent they seek an injunction, restitution, or other equitable relief. 13 14 IT IS SO ORDERED. Dated: October 13, 2020 ______________________________________ EDWARD J. DAVILA United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No.: 5:18-cv-02813-EJD ORDER GRANTING MOTION TO DISMISS 7

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