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Bianca Wofford and Suzann Lennox, On v. Apple Inc.

November 8, 2011

BIANCA WOFFORD AND SUZANN LENNOX, ON BEHALF OF THEMSELVES, AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
APPLE INC., A CALIFORNIA CORPORATION; AND DOES 1 THROUGH 100, INCLUSIVE,
DEFENDANTS.



The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. District Judge

ORDER GRANTING MOTION TO DISMISS [Doc. No. 8]

The Defendant Apple Inc.'s filed a motion to dismiss, [Doc. No. 8], the Plaintiffs' First Amended Complaint ("FAC"), [Doc. No. 1]. The Plaintiffs filed an opposition, [Doc. NO. 9], and the Defendant filed a reply, [Doc. No. 12]. The Defendant has also filed a request for judicial notice, [Doc. No. 8-4], of the License agreement. The Plaintiffs have filed objections to this request, [Doc. No. 10], and Defendants have filed a notice in support of its request for judicial notice, [Doc. No. 13]. Based upon the parties moving papers and for the reasons set forth below, the Defendant's motion to dismiss and request for judicial notice*fn1 are hereby GRANTED.

Background

On or about November 12, 2010, Plaintiffs Bianca Wofford and Suzann Lennox ("Plaintiffs") filed a class action lawsuit in the California Superior Court for the County of San Diego against Apple Inc. ("Defendant"), alleging five causes of action: (1) violation of the Consumer Legal Remedies Act ("CLRA") (California Civil Code § 1750 et seq.); (2) violation of the Unfair Competition Law ("UCL") (Bus. & Prof. Code § 17200, et seq.); (3) false and deceptive advertising in violation of Bus. & Prof. Code §17500, et seq.; (4) tortious interference with contract; and (5) breach of implied/equitable contract. All causes of action relate to Defendant's release of a software upgrade, iOS 4.0, for its iPhone and iPhone 3GS (collective, "the iPhone") in June 2010. On January 7, 2011, the Defendant removed the case to this Court pursuant to 28 U.S.C. § 1441(a) and § 1453.

Legal Standard

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a) (2009). A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint.

Fed.R.Civ.P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir.2001). The court must accept all factual allegations pled in the complaint as true, and must construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337--38 (9th Cir.1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, ------ U.S. --------, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 556).

However, "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not Twombly, 550 U.S. at 555 (citation omitted). A court need not accept "legal conclusions" as true. Ashcroft v. Iqbal, ------ U.S. --------, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). In spite of the deference the court is bound to pay to the plaintiff's allegations, it is not proper for the court to assume that "the [plaintiff] can prove facts that [he or she] has not alleged or that defendants have violated the ... laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983).

Discussion

1. Violation of the Consumer Legal Remedies Act ("CLRA") (California Civil Code § 1750 et seq.)

California's Consumers Legal Remedies Act ("CLRA") establishes a non-exclusive statutory remedy for unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer. McAdams v. Monier, Inc., 151 Cal.App.4th 674 (2007). Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by section 1770 of California's Civil Code, may bring an action against that person to recover actual damages, injunctive relief, restitution of property, punitive damages, and any other relief the court deems proper. See id. (citing Cal. Civ.Code § 1780(a)).

In the FAC, Plaintiffs allege that Defendant violated the CLRA by fraudulently inducing Plaintiffs into downloading and installing iOS4 on their Third Generation iPhone devices knowing that the free upgrade would impair the functionality of their iPhone applications reliant upon AT&T's data network. (Doc. No. 1, at ¶42). However, this Court finds that Plaintiffs fail to state a claim under the CLRA, because the free download of iOS4 on Plaintiffs' Third Generation iPhone does not meet the CLRA's "sale or lease" requirement. Although the CLRA does not require an enforceable contract between the consumer and the defendant (citations omitted), the transaction must result or be intended to result in the "sale or lease" of goods or services to a consumer. See McAdams, 151 Cal.App.4th 674 (2007). Here, the Plaintiffs' original purchase of the iPhone is a separate transaction from their free upgrade of the iPhone's operating system, which occurred about a year later. The iPhone's software upgrade was not intended to result in a "sale or lease" because it was provided free of charge.

Furthermore, California law does not support Plaintiff's contention that software is a tangible good or service for the purposes of the CLRA. In Ferrington v. McAfee, Inc., 10-CV-01455-LHK, 2010 WL 3910169 (N.D. Cal. Oct. 5, 2010), the court discussed the application of the CLRA to a license for the use of software and concluded that the CLRA expressly limits the definition of "goods" to "tangible chattels," which exclude software from the Acts coverage. (citing Berry v. American Exp. Publishing, , 147 Cal.App.4th 224, 229, 54 Cal.Rptr.3d 91 (Cal.Ct.App.2007)). Additionally, the court found that software is not a "service" for the purpose of the CLRA because software does not fit into the narrow definition of "service" provided in Civil Code § 1761(b), defining service as "work, labor, and services . . ., including services furnished in connection with the sale or repair of goods." This Court will not impose a more liberal interpretation of the Act than the one authorized by the plain meaning of the Act, and, thus holds the CLRA inapplicable to the transaction at hand. In accord with the Defendant's limited warranty representations made in the software license, this Court grants Defendant's motion to dismiss Plaintiff's CLRA claims, without leave to amend.

2. Unfair and Deceptive Business Practices in Violation of the Unfair Competition Law ("UCL") (Bus. & ...


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