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Mary Mckinney v. Google

August 30, 2011

MARY MCKINNEY,
PLAINTIFF,
v.
GOOGLE, INC. AND HTC CORP.,
DEFENDANTS.



The opinion of the court was delivered by: Edward J. Davila United States District Judge

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

Complaint ("SAC"). The court finds it appropriate to take the motion under submission without 19 oral argument. See Civil L.R. 7-1(b). Based on the papers submitted, the court GRANTS Defendants' motion to dismiss with leave to amend. 21

USA, Inc. ("T-Mobile") alleging violation of the Federal Communications Act, breach of express 25 warranty and implied warranty of merchantability, and violation of the Magnuson-Moss Warranty 26

Act. On November 16, 2010, Chief Judge Ware granted T-Mobile's motion to compel arbitration 27 and granted Google and HTC's motion to dismiss the FAC with leave to amend. On December 3, 28

Case No.: 5:10-CV-01177 EJD

(Re: Docket No. 83)

Presently before the court is Defendant Google, Inc.'s ("Google") and Defendant HTC Corp.'s ("HTC") motion to dismiss Plaintiff Mary McKinney's ("McKinney") Second Amended

I. BACKGROUND

On March 22, 2010, this action was removed from the Superior Court of California. On June 11, 2010, McKinney filed the First Amended Complaint against Google, HTC, and T-Mobile 24 2010, McKinney filed the SAC, in which she alleges the following facts.

McKinney, a Pennsylvania resident, bought a Nexus One mobile device (the "Google Phone") over the Internet on January 9, 2010. (SAC ¶ 2.) McKinney brings this action on behalf of 3 herself and a putative class of similarly situated Google Phone purchasers. The Google Phone is an 4 advanced mobile cellular phone or "smart phone" which operates using the Android Mobile 5

Technology Platform and an Internet device which provides email and Internet access on the 3G 6 network. (Id. ¶ 41.) Google is a Delaware corporation that marketed and sold the Google Phone 7 throughout the United States. (Id. ¶ 10.) HTC is a Taiwanese corporation that designed and 8 manufactured the Google Phone. (Id. ¶ 11.) Non-Defendant Third Party T-Mobile is an American 9 subsidiary of Germany-based Deutsche Telekom's T-Mobile International business and was a 10 provider of the telephone and data service plans for the Google Phone throughout the U.S., including California. (Id. ¶ 12.) Initially, in the Unites States, T-Mobile was the exclusive wireless carrier that allowed the Google Phone to be used on a 3G wireless network. (Id. ¶ 33.)

14 phone usable with any wireless service, or at a discounted price of $179 when purchased with a 15 new two-year contract with T-Mobile's wireless service. (Id. ¶¶ 44-46.) The Google Phone was 16 designed to operate both on the 2G network, which has a maximum data transfer rate of 237 17 kilobytes per second, and on the 3G network, with a faster transfer rate of up to 7.2 megabytes per 18 second. This 3G transfer is important to many smart phone users who employ their devices to run 19 data-heavy applications. (Id. ¶ 43.) If, however, 3G connectivity was unavailable, the phone and 20 data operations could still be used, but at a substantially lower data transfer rate than the 3G level 21 that was advertised. (Id. ¶ 53). 22

Defendants consistently advertised the Google Phone in tandem with the T-Mobile network 23 as providing 3G data transfer rates. (Id. ¶ 50.) McKinney refers generally to unidentified 24 representations about the Google Phone made by Google and by T-Mobile and other wireless 25 carriers. She specifically identifies the Google Phone advertisement on the Google homepage and 26 the website Google set up to sell its phone, www.google.com/phone, which she claims has been 27

Phone, but she does not state whether these advertisements made any assertions about the Google

The Google Phone could be purchased online from Google for $529 as an "unlocked"

"scrubbed" of all Google's promotional materials regarding the Nexus One model of the Google 28 Phone's 3G connectivity. The only representation she specifically identifies about the Google 2

Phone and 3G connectivity is a statement made to her personally by a T-Mobile sales 3 representative that the Google Phone had 3G speed. (Id. ¶ 39). McKinney also was told by an 4 unidentified source that the Google Phone was "essential for web surfing and email." (Id.) 5

6 putative class experienced connectivity on the 3G wireless network only a fraction of the time they 7 were connected to T-Mobile's 3G wireless network, or received no 3G connectivity at all for a 8 significant portion of time. (Id. ¶ 54.) This lack of connectivity also caused a significant number of 9 dropped calls. (Id.) Moreover, McKinney alleges that Defendants have failed to provide adequate 10 customer service to assist Google Phone customers in helping to resolve these issues. (Id. ¶ 60.)

McKinney alleges that, contrary to Defendants' assertions, she and other members of the On the basis of the allegations outlined above, McKinney alleges ten causes of action: (1) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.; (2) 13 violation of California's False Advertising Law, Cal. Bus. & Prof. Code § 17500, et seq.; (3) 14 violation of California's Consumers Legal Remedies Act, Cal. Civ. Code § 1750, et seq.; (4) 15 breach of express warranty and implied warranty of merchantability; (5) violation of the 16

Magnuson-Moss Warranty Act; (6) negligence; (7) unjust enrichment; (8) negligent 17 misrepresentation; (9) fraud; and (10) declaratory relief.

20 cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. 21

Centinela Hosp. Center, 521 F.3d 1097, 1104 (9th Cir. 2008). For purposes of a motion to 22 dismiss, "all allegations of material fact are taken as true and construed in the light most 23 favorable to the nonmoving party." Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-338 (9th Cir. 1996). The court, however, is not required to accept as true allegations that are merely 25 conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden 26

State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action with 27 conclusory allegations is not sufficient; a plaintiff must plead facts showing that a violation is 28 plausible, not just possible. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citations omitted).

II. LEGAL STANDARDS

"Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a Leave to amend must be granted unless it is clear that the complaint's deficiencies cannot be cured 2 by amendment. Lucas v. Department of Corrections, 66 F.3d 245, 248 (9th Cir. 1995).

7 grounds that: (1) McKinney fails to plead facts showing that the Google Phone is not 8 merchantable; (2) Google disclaimed any implied warranty; and (3) McKinney cannot succeed on a 9 claim against HTC because she lacks privity with HTC. Defendants also claim that McKinney's 10 warranty claims are preempted by the Federal Communications Act ("FCA"), 47 U.S.C. § 332(c)(3)(A). Because the last issue was the basis upon which the court dismissed the state law warranty claims in the First Amended Complaint, the court addresses it first. 13

14 because the court found that the claims were preempted by the FCA, which provides that "no State 15 or local government shall have any authority to regulate the entry of or the rates charged by any 16 commercial mobile service or any private mobile service." 47 U.S.C. § 332(c)(3)(A). As explained 17 in the court's November 16, 2010 Order granting the motion to dismiss McKinney's First 18

Amended Complaint, "a complaint that service quality is poor is really an attack on the rates 19 charged for the service . . . ." Bastien v. AT&T Wireless Services, Inc., 205 F.3d 983, 988 (7th 20

Seventh Circuit's opinion in Bastien and held that warranty claims based on the defendant's 22 allegedly faulty 3G network were preempted by the FCA.*fn1 23

24

III. DISCUSSION

A. Breach of Warranty

1. Implied Warranty of Merchantability

Defendants contend that McKinney's implied warranty claims should be dismissed on the

The state law warranty claims in McKinney's First Amended Complaint were dismissed Cir. 2000). In In re Apple iPhone 3G Prods. Liab. Litig., a court in this district interpreted the

In the November 16, 2010 Order, the court determined that her warranty claims-that Defendants knew T-Mobile's 3G network was not sufficiently developed, deceived McKinney into 25 paying higher prices for a service that Defendants could not deliver, and acted in concert with T-26

Mobile-were attacks on T-Mobile's rates and market entry. The court granted McKinney leave to amend because it determined she may be able to state clams against Google and HTC for actual 2 defects of the Google Phone or its applications.

consistent connectivity to a supposedly faster 3G network, the phone fails to do so, and "[w]hether 5 the problem is with the Google Phone itself or with [the] wireless carrier's network, or a 6 combination of the two, is irrelevant." (SAC ¶ 101.) McKinney also alleges that "the combination 7 of the phone and/or the network made it difficult . . . to receive reliable and sustained connectivity 8 on the 3G wireless network" (id. ¶ 65), that "T-Mobile's network did not provide consistent 3G 9 performance for Google Phone purchasers" (id. ¶ 58), and that "T-Mobile 3G network was not 10 designed to provide consistent connectivity to its 3G network for Google Phone users" (id. ¶ 59). 11

has, at most, raised only a mere possibility that an actual defect of the Google Phone caused the 13 inconsistent 3G connection. Because McKinney's implied warranty claim is based on T-Mobile's 14 allegedly faulty 3G network, it ...


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