Crema Social, Inc. v. Apple Inc.

Background

Crema Social, Inc., described in the opinion as a software developer, operated the Crema Social social-media application. It participated in Apple's Apple Developer Program under the Apple Developer Program License Agreement, which allowed it to distribute and promote the app through the Apple App Store.

Apple notified Crema Social on December 11, 2024, that it would terminate the membership. The notice stated that Crema Social had used schemes to evade Apple's application-review process and that the app contained content not appropriate for the App Store. Crema Social disputed Apple's assertions, including the assertion that the app facilitated or encouraged compensated dating or companionship. Apple removed the app from the App Store and terminated Crema Social's membership on January 24, 2025.

Crema Social asserted five claims: breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, and violations of California's Unfair Competition Law. Apple moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. Apple also moved to stay discovery while the court considered the dismissal motion.

Materials Considered

The court granted Apple's request to consider the Apple Developer Program License Agreement and Apple's App Review Guidelines because the complaint incorporated those materials by reference. The court denied the request as to the Apple Developer Agreement and a May 23, 2025 letter from Apple. The court found that the latter document was not incorporated into the complaint and was not material to its ruling.

Contract and Good-Faith Claim

The license agreement allowed either party to terminate it for convenience, for any reason or no reason, effective 30 days after written notice. It also stated that Apple could reject an application for distribution for any reason and could stop marketing, offering, or allowing users to download an application at any time, with or without cause, by giving notice. The developer likewise could withdraw an application from the App Store at any time and for any reason.

The court held that Crema Social did not plausibly allege that Apple acted in bad faith because the challenged conduct was expressly authorized by the agreement. The court rejected Crema Social's argument that a provision referring to Apple's reasonable belief that a developer violated the agreement or review guidelines limited Apple's broader right to act with or without cause. It also rejected the argument that the court should imply an additional restriction on Apple's termination rights, concluding that the agreement provided mutual termination rights and was not an illusory contract.

The court further rejected Crema Social's arguments based on antitrust concerns and unconscionability. It found that the complaint's assertion that Apple was a dominant player did not plausibly allege monopoly power or the other requirements for an antitrust violation, and it found that the unconscionability argument was not tied to sufficient allegations in the complaint.

Interference Claims

The court dismissed the three interference claims for the same basic reason. Under the allegations, Apple exercised contractual rights granted by the license agreement. The court held that lawful exercise of a contractual right was not tortious interference, was not wrongful, and did not violate a duty of care owed to Crema Social.

Unfair Competition Claim

Crema Social alleged unlawful and unfair conduct under California's Unfair Competition Law. The court held that the claim was derivative of the other claims. The unlawful-conduct theory failed because Crema Social had not plausibly alleged a violation of another law. The unfair-conduct theory also failed because the cited litigation involved a different Apple practice and did not establish that the conduct alleged here was unfair.

Disposition

The court granted Apple's motion to dismiss. Because this was the first ruling on the sufficiency of Crema Social's allegations, the dismissal was with leave to amend. Crema Social may file an amended complaint within 21 days, accompanied by a redline comparing it with the original complaint. The court stated that it had not reached Apple's additional grounds for dismissal because the plain language of the license agreement resolved the motion, but it directed Crema Social to consider those issues when amending.

The court also granted Apple's motion to stay discovery. Discovery is stayed pending further order of the court and until Crema Social plausibly states a claim. The court's order does not state that the dismissal was with prejudice.