Wheaton v. Apple Inc.

Background

Leigh Wheaton, Jill Paul, and Trevor Paul brought a proposed class action against Apple Inc. They alleged that Apple sold, rented, transmitted, or disclosed customers’ personal listening information without notice or consent. The complaint used that phrase to mean a customer’s name and address connected with music-selection information.

The plaintiffs alleged disclosures to two groups: data brokers and similar entities, and developers of applications for Apple’s mobile operating system. They described three alleged methods involving those developers: access to music-library metadata, access to tokens that could be associated with identifying information, and Apple’s gifting feature, which could tell a purchaser whether a recipient had already bought a song and reveal the recipient’s name and earlier music selection.

The plaintiffs claimed overpayment, loss of value in their personal information, unwanted mail and telephone solicitations, and a risk of identity theft. They asserted claims under Rhode Island’s Video, Audio, and Publication Rentals Privacy Act, Michigan’s Preservation of Personal Privacy Act, and unjust enrichment.

Michigan Statute

The court held that the unamended version of Michigan’s Preservation of Personal Privacy Act applied under the facts alleged. The plaintiffs claimed injuries between May 24, 2016, and July 30, 2016, before the amended version took effect. The court ruled that the amendment did not apply retroactively and that the date the claim accrued, rather than the filing date, determined which version applied.

Under the unamended statute, a violation required disclosure of a record or information indicating the customer’s identity in connection with the customer’s purchase of covered materials. The court also stated that the complaint did not need to allege actual damages before bringing claims under that version of the statute. It therefore did not decide whether the alleged damages were sufficient under the jurisdiction or pleading rules.

Motion to Dismiss

A motion to dismiss for failure to state a claim tests whether the complaint alleges enough facts to make liability plausible. The court accepted well-pleaded allegations as true for this motion but did not accept conclusory statements without supporting facts.

The court granted Apple’s motion as to the alleged disclosures to third-party data brokers and similar entities. It found that the cited exhibits did not plausibly show that Apple disclosed the plaintiffs’ personal listening information. One exhibit showed only a picture of an envelope, and another did not identify the data broker, Apple, or iTunes.

The court also granted the motion as to the alleged disclosures to mobile-application developers through metadata. The supporting exhibits did not show that the plaintiffs’ names, addresses, or other personally identifying information were disclosed with their music selections. The court granted the motion as to the token theory because the complaint did not explain what a token was, how Apple disclosed information through tokens, or what developers could access through them.

The court separately held that the plaintiffs lacked standing for the gifting theory because the complaint did not show that anyone used the gifting function or suffered an injury. The plaintiffs had not sufficiently pleaded a claim based on gifting on their own behalf.

Finally, the court granted Apple’s motion as to unjust enrichment. Under the Rhode Island and Michigan standards discussed in the opinion, that claim depended on Apple having received a benefit under circumstances making its retention inequitable. The court concluded that the claim failed because the complaint had not sufficiently established the alleged disclosures underlying it.

Disposition

The court granted Apple’s motion to dismiss. The opinion did not state that the dismissal was with or without prejudice. It allowed the plaintiffs to move for leave to amend by November 14, 2019, at noon, and instructed them to explain how a proposed amended complaint would address the deficiencies identified in the order.