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Opperman v. Kong Technologies, Inc.

United States District Court, N.D. California

July 25, 2017

MARC OPPERMAN, et al., Plaintiffs,
KONG TECHNOLOGIES, INC., et al., Defendants.


          JON S. TIGAR United States District Judge.

         This is a putative class action against Apple for alleged invasions of privacy through applications on Apple devices. Before the Court is Plaintiffs' Motion for Class Certification Regarding False Advertising Law and Related Claims. ECF No. 802. The Court will deny the motion.

         I. BACKGROUND

         A. Factual History

         This is a putative class action challenging Apple's alleged misrepresentations regarding the security features on certain Apple devices. See Second Consolidated Amended Complaint (“SCAC”), ECF No. 478. Plaintiffs allege that, between July 10, 2008 and February 2012, they owned one or more of three Apple products - the iPhone, iPad, and/or iPod touch (collectively “iDevices”). Id. ¶ 2. They further allege that Apple engaged in a mass marketing campaign in which it “consciously and continuously misrepresented its iDevices as secure, and that the personal information contained on iDevices - including, specifically, address books - could not be taken without their owners' consent.” Id. ¶ 3. Plaintiffs and the putative class allege they overpaid for their iDevices in reliance on Apple's misrepresentations.

         1. Contacts Data

         Before addressing the merits of Plaintiff's legal contentions, the Court first briefly discusses how iDevices store contacts data, how iDevice software applications allegedly misappropriated this data, the role of Apple's App Store, and the two Apple security features allegedly designed to protect against misappropriation of contact data.

         Each iDevice comes pre-loaded with a “Contacts” mobile software application (or “App”), which iDevice owners may use as an address book to input and store the following information about the owner's contacts:

(1) first and last name and phonetic spelling of each, (2) nickname, (3) company, job title and department, (4) address(es), (5) phone number(s), (6) e-mail address(es), (7) instant messenger contact, (8) photo, (9) birthday, (10) related people, (11) homepage, (12) notes, (13), ringtone, and (14) text tone.

Id. ¶ 54, 55. The “information in the Contacts App is among the most private and personal of such information a user maintains on an iDevice. The address book data reflects the connections, associations, and relationships that are unique to the owner of the iDevice.” Id. ¶ 56. The data “is highly personal and private, ” and “is not shared, is not publicly available, is not publicly accessible, and is not ordinarily obtainable by a third party unless the owner physically relinquishes custody of his or her iDevice to another individual.” Id.

         2. Apps' Use of Contact Information

         According to Plaintiffs, notwithstanding Apple's representations about the security of its iDevices, Apple knew that the devices permitted the Defendants' Apps “to secretly upload, store, and in some cases disseminate [Plaintiffs'] personal and private address books as stored in the ‘Contacts' App from the iDevices without [Plaintiffs'] knowledge or consent.” Id. ¶ 2. In fact, Plaintiffs allege, Apple provided its “assistance and cooperation” to the App Defendants in accessing and misusing iDevice owners' address-book information. Id. And despite Apple's “unique knowledge that its iDevices were not as secure as represented, ” Apple “consistently and deliberately failed to reveal its products' security flaws to consumers . . .” Id. ¶ 4. Because of “Apple's conduct, Plaintiffs and millions of other people purchased iDevices reasonably believing that they were secure when, in fact, they are not, and then downloaded Apps, including the Apps manufactured by App Defendants, and suffered the unexpected and unauthorized theft of their personal data.” Id. Plaintiffs allege that they would not have paid as much for their iDevices had they known of the devices' security flaws. Id. ¶¶ 142, 148, 154, 161, 168, 174, 180, 186, 192, 197, 203, 210, 216, 223, 230.

         3. The App Store and App Development

         Apple offers Apps solely through its App Store, which Apple launched in July 2008. Id. ¶ 39. “Apple has exclusive control over what Apps are available in the App Store, and the iDevices are designed to only accept software downloads from the App Store . . .” Id. According to Plaintiffs, “[t]he App Store and the availability of numerous Apps to perform different functions are key parts of Apple's marketing strategy and the popularity of the iDevices.” Id. ¶ 40. In order to offer an App through the App store, “a third-party developer must be registered as an ‘Apple Developer, ' agree to the iOS Developer Program License Agreement with Apple, and pay a $99 yearly registration fee.” Id. ¶ 44. To further control the Apps offered through its store, “Apple provides third-party developers with review guidelines, and conducts a review of all applications submitted for inclusion in the App Store- for compliance with these documents.” Id. In addition, Apple provides a host of tools, as well as support services and guidelines to third-party developers who are licensed to provide Apps through the App Store. Id. ¶¶ 44, 45, 49, 53. The result of these circumstances, according to Plaintiffs, is that “all iDevice Apps were built, in part, by Apple.” Id. ¶ 46.

         4. Sandboxing and the Curated App Store

         Plaintiffs allege that Apple's focus on privacy was a “cornerstone of its marketing strategy” for iDevices. Id. ¶ 76. To support this assertion, Plaintiffs point to various statements Apple made during the Class Period. See id. ¶ 76(i)-(xxix); ¶ 76(xxiii) (“We have created strong privacy protections for our customers . . . . Privacy and trust are vitally important.”); ¶ 76(xxv) (“Protecting customer privacy is a key feature of all App Store transactions.”); ¶ 76(xxvii) (“Apple will continue to be one of the leaders in strengthening personal information security and privacy.”).

         Apple represented to the marketplace that it had implemented two security features or practices intended to prevent third-party apps from taking private user data including Contacts App data from iDevices without the owner's consent. ECF No. 802 at 9. These two features were known as “sandboxing” and the “curated” App Store. Id. “Sandboxing” technology was designed to prevent apps from accessing data inside other apps, including the Contacts app. Id. at 12.[1] This security feature was advertised as a way iDevices protected user data, including data stored in the Contacts App, from misappropriation by third party apps. Id. Apple advertised that the App Store was “curated” so that Apps were only available for download if they met certain privacy standards. Id. at 14. Apple made specific statements regarding these security features. See ECF No. 478 ¶ 77(i)-(v); id. ¶ 77(i) (“[A]n Apple representative stated that Apple is ‘putting . . . a number of different things in place, from sandboxing to other . . . technical things you want to do to protect applications and the [iPhone] system.'”); id. ¶ 77(ii) (“Applications on the device are ‘sandboxed' so they cannot access data stored by other applications.”).

         Apple's guidelines provide that “Apps ‘cannot transmit data about a user without obtaining the user's prior permission and providing the user with access to information about how and where the data will be used.'” Id. ¶ 47. And “Apple has sole discretion over the App approval process and may reject any App at any time and for any reason, ” including a violation of the terms and conditions of the licensing agreement, providing Apple with inaccurate information, or if Apple learns the App “violates, misappropriates, or infringes the rights of a third party.” Id.

         B. Procedural History

         This action began as separate class actions filed in California and Texas against Apple and multiple App Defendants. The four actions were consolidated here, and Plaintiffs filed their Consolidated Amended Complaint (“CAC”), ECF No. 362, on September 3, 2013.

         Apple and App Defendants filed several motions to dismiss the CAC. ECF Nos. 393, 394, 395, 396. On May 14, 2014, the Court granted the motions in part. ECF No. 471. The Court dismissed Plaintiffs' false and misleading advertising, consumer legal remedies/misrepresentation, deceit, Unfair Competition Law (“UCL”), and conversion claims, which Plaintiffs subsequently amended in their SCAC. Id. The Court denied the motions to dismiss Plaintiffs' invasion of privacy (intrusion upon seclusion) claim. Id.

         Plaintiffs then filed their SCAC. ECF No. 478. In the SCAC, Plaintiffs alleged conversion and invasion of privacy (intrusion upon seclusion) claims against all Defendants, and the following claims against Apple alone: (1) violation of California's False and Misleading Advertising Law (“FAL”), Business and Professions Code § 17500, et seq.; (2) violation of California's Consumer Legal Remedies Act (“CLRA”), Civil Code § 1750, et seq.; (3) deceit, California Civil Code § 1709, et seq.; and (4) violation of California's UCL, Business and Professions Code § 17200, et seq. ECF No. 478 ¶¶ 243-323. Plaintiffs requested certification of a class; an injunction prohibiting Defendants from continuing the challenged conduct; actual, compensatory, statutory, presumed, punitive, and/or exemplary damages; declaratory relief; restitution; the imposition on Defendants of constructive trusts; and fees, costs, and interest. Id. at 78-79.

         In February 2016, Plaintiffs filed a motion for class certification against Path and Apple for Plaintiffs' intrusion upon seclusion claim against Path and for aiding and abetting against Apple, ECF No. 651, which was granted in part and denied in part, ECF No. 761.

         On August 23, 2016, Plaintiffs filed the instant motion for class certification. ECF No. 802. Plaintiffs seek to certify the following class against Apple with regard to Plaintiffs' FAL, CLRA, deceit, and UCL claims:

All United States residents who, prior to February 8, 2012 (the “Class Period”) purchased an iDevice of the following models: iPhone 3G, iPhone 3GS, iPhone 4, iPhone 4s, iPad, iPad 2 or the second through fourth generations of the iPod Touch (the “Class Devices”).

Id. at 9. Apple opposes the motion. ECF No. 875.[2]


         The Court has jurisdiction over this case pursuant to the Class Action Fairness Act. This is a class action in which a member of the class of plaintiffs is a citizen of a state different from the defendant, there are more than 100 class members nationwide, and the matter in controversy exceeds the sum of $5 million, exclusive of interest and costs. 28 U.S.C. § 1332(d).


         Before turning to the merits of the motion to dismiss, the Court resolves the Defendants' requests for judicial notice. Plaintiffs ask the Court to take judicial notice of 42 different documents that include news articles, videos, webpages, and a patent. See ECF No. 803. The request is unopposed.

         “As a general rule, we may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” United States v. Corinthian Colleges, 655 F.3d 984, 998-99 (9th Cir. 2011) (internal quotation marks and citations omitted). Pursuant to Federal Rule of Evidence 201(b), however, “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” The Court may properly take judicial notice of materials attached to the complaint and of matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). A court “must take judicial notice if a party requests it and the court is supplied with the ...

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