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Nathan Nabors v. Google

August 30, 2011

NATHAN NABORS,
PLAINTIFF,
v.
GOOGLE, INC.,
DEFENDANT.



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

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND (Re: Docket No. 26)

Presently before the court is Defendant Google, Inc.'s ("Google") motion to dismiss Plaintiff Nathan Nabors ("Nabors") First Amended Complaint ("FAC"). The court finds it 18 appropriate to take the motion under submission without oral argument. See Civil L.R. 7-1(b).

Based on the papers submitted, the court GRANTS Google's motion to dismiss with leave to 20 amend.

I. BACKGROUND

On August 31, 2010, Nabors filed his complaint in this court on behalf of himself and a class of similarly-situated persons within the states of Florida and California. On October 8, 2010, 24 the court related this case with McKinney v. Google, et al., 5:10-cv-1177, which complains of 25 similar conduct but against an additional defendant and on behalf of a nationwide class. On January 10, 2011, Nabors filed the FAC, in which he alleges the following facts: 27 Nabors, a Florida resident, bought a Nexus One mobile device (the "Google Phone") over 28 the Internet. (FAC ¶ 7.) The Google Phone is an advanced mobile cellular phone which operates using the Android Mobile Technology Platform and an Internet device which provides email and 2 Internet access on the 3G network. (Id. ¶ 35.) Google is a Delaware corporation that marketed and 3 sold the Google Phone throughout the United States. (Id. ¶ 8.) Non-Defendant Third Party HTC 4 ¶ 10.) Non-Defendant Third Party T-Mobile USA, Inc. ("T-Mobile") is an American subsidiary of 6 Germany-based Deutsche Telekom's T-Mobile International business and was a provider of the 7 telephone and data service plans for the Google Phone throughout the U.S., including California. 8 Corp. ("HTC") is a Taiwanese corporation that designed and manufactured the Google Phone. (Id. 5 (Id. ¶ 11.) Initially, in the Unites States, T-Mobile was the exclusive wireless carrier that allowed 9 the Google Phone to be used on a 3G wireless network. (Id. ¶ 31.)

The Google Phone could be purchased online from Google for $529 as an "unlocked" phone usable with any wireless service, or at a discounted price of $179 when purchased with a new two-year contract with T-Mobile's wireless service. (Id. ¶¶ 37-38.) The Google Phone was 13 designed to operate both on the 2G network, which has a maximum data transfer rate of 237 14 kilobytes per second, and on the 3G network, with a faster transfer rate of up to 7.2 megabytes per 15 second. (Id. ¶¶ 36, 43.) This 3G transfer is important to many smart phone users who employ their 16 devices to run data-heavy applications. (Id. ¶ 36.) If, however, 3G connectivity was unavailable, 17 the phone and data operations could still be used, but at a substantially lower data transfer rate than 18 the 3G level that was advertised. (Id. ¶ 44).

Google consistently advertised the Google Phone in tandem with the T-Mobile network as 20 providing 3G data transfer rates. (Id. ¶ 42.) Nabors refers generally to unidentified representations 21 about the Google Phone made by Google. He specifically identifies the Google Phone 22 advertisement on the Google homepage, which, as reproduced in the FAC, does not make any 23 assertions about the Google Phone's 3G connectivity. (Id. ¶ 33.) He also specifically identifies a 24 Google Phone. (Id. ¶ 55.)

class experienced connectivity on the 3G wireless network only a fraction of the time they were 28 connected to T-Mobile's 3G wireless network, or received no 3G connectivity at all for a

T-Mobile advertisement, which, as reproduced in the FAC, does not make any assertions about the Nabors alleges that, contrary to Google's assertions, he and other members of the putative significant portion of time. (Id. ¶ 45.) This lack of connectivity also caused a significant number 2 of dropped calls. (Id.) Moreover, Nabors alleges that Google has failed to provide adequate 3 customer service to assist Google Phone customers in helping to resolve these issues because he 4 could only contact Google's customer service by email and had to wait several days for a response. 5

On the basis of the allegations outlined above, Nabors alleges ten causes of action: (1)

7 violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.; (2) 8 violation of California's False Advertising Law, Cal. Bus. & Prof. Code § 17500, et seq.; (3) 9 violation of California's Consumers Legal Remedies Act, Cal. Civ. Code § 1750, et seq.; (4) 10 breach of express warranty and implied warranty of merchantability; (5) violation of the

(Id. ¶ 49.)

Magnuson-Moss Warranty Act; (6) negligence; (7) unjust enrichment; (8) negligent misrepresentation; (9) fraud; and (10) declaratory relief. 13

cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Center, 521 F.3d 1097, 1104 (9th Cir. 2008). For purposes of a motion to 17 dismiss, "all allegations of material fact are taken as true and construed in the light most 18 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 20 conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden 21

State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action with 22 conclusory allegations is not sufficient; a plaintiff must plead facts showing that a violation is 23 plausible, not just possible. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citations omitted). 24

Leave to amend must be granted unless it is clear that the complaint's deficiencies cannot be cured 25 by amendment. Lucas v. Department of Corrections, 66 F.3d 245, 248 (9th Cir. 1995).

II. LEGAL STANDARDS

"Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a

that: (1) Nabors fails to plead facts showing that the Google Phone is not merchantable, and (2) 6

III. DISCUSSION

A. Breach of Warranty

1. Implied Warranty of Merchantability

Google contends that Nabors's implied warranty claims should be dismissed on the grounds Google disclaimed any implied warranty. Google also claims that Nabors's warranty claims are 7 preempted by the Federal Communications Act ("FCA"), 47 U.S.C. § 332(c)(3)(A). Because the 8 last issue was the basis upon which the court previously dismissed the state law warranty claims in 9 the related case, McKinney, the court addresses it first.

because the court found that the claims were preempted by the FCA, which provides that "no State or local government shall have any authority to regulate the entry of or the rates charged by any 13 commercial mobile service or any private mobile service." 47 U.S.C. § 332(c)(3)(A). As explained 14 in the court's November 16, 2010 Order granting the motion to dismiss McKinney's First 15 Amended Complaint, "a complaint that service quality is poor is really an attack on the rates 16 charged for the service . . . ." Bastien v. AT&T Wireless Services, Inc., 205 F.3d 983, 988 (7th 17

Seventh Circuit's opinion in Bastien and held that warranty claims based on the defendant's 19 allegedly faulty 3G network were preempted by the FCA.*fn1

21 that Google and HTC knew T-Mobile's 3G network was not sufficiently developed, deceived

Nabors into paying higher prices for a service that Google and HTC could not deliver, and acted in 23 concert with T-Mobile-were attacks on T-Mobile's rates and market entry. The court granted 24

HTC for actual defects of the Google Phone or its applications. 26 27

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 McKinney's warranty claims- McKinney leave to amend because it determined she may be able to state clams against Google and connectivity to a supposedly faster 3G network, the phone fails to do so, and "[w]hether the 3 problem is with the Google Phone itself or with [the] wireless carrier's network, or a combination 4 of the two, is irrelevant." (FAC ¶ 93.) Nabors also alleges that "the combination of the phone 5 and/or the network made it difficult . . . to receive reliable and sustained connectivity on the 3G 6 wireless network" (id. ¶ 54), that "T-Mobile's network did not provide consistent 3G performance 7 for Google Phone purchasers" (id. ¶ 47), and that "T-Mobile 3G network was not designed to 8 provide consistent connectivity to its 3G network for Google Phone users" (id. ¶ 48).

network is defective. He has, at most, raised only a mere possibility that an actual defect of the

In Nabors' FAC, he claims that the ordinary purpose of the phone is to provide consistent

Thus, as was the case with McKinney's FAC, Nabors alleges that T-Mobile's 3G wireless

Google Phone caused the inconsistent 3G connection. Because Nabors's implied warranty claim is

based on T-Mobile's allegedly faulty 3G network, it therefore is preempted consistent with this 13 court's prior order. Accordingly, the breach of implied warranty claim is DISMISSED. As Nabors 14 may be able to state an implied warranty claim based on actual defects of the phone, he is granted 15 leave to amend. 16

may not apply state law to regulate whether the price or quality of wireless service is adequate, 19 courts can apply state law to determine whether "there was a difference between promise and 20 performance," In re Wireless Consumers Alliance, Inc., 15 F.C.C.R. 17021, 17035 (2000), and 21 whether a company misrepresented the price or quality of wireless service it would provide, 22

Shroyer v. New Cingular Wireless Services, Inc., 622 F.3d 1035, 1040 (9th Cir. 2010). One such 23 type of promise or representation against which the court may measure Google' performance may 24 be an express warranty.

connectivity or establishing reasonable reliance thereon. To state a claim for breach of express 27 warranty under California law, a plaintiff must allege (1) the exact terms of the warranty; (2) 28 reasonable reliance thereon; and ...


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