Pistacchio v. Apple Inc.
- Yvonne Rogers
- 4:20-cv-07034
- U.S. District Court · Northern District of California
- 6
In Pistacchio v. Apple Inc., Judge Gonzalez Rogers granted Apple’s dismissal motion, dismissed one claim with prejudice, and allowed amendment of the others.
John Pistacchio’s claims against Apple Inc., including the proposed nationwide class allegations concerning unjust enrichment.
What happened
In Pistacchio v. Apple Inc., John Pistacchio challenged Apple’s rules for distributing subscription-based mobile gaming services through iOS devices and brought a class action. Apple asked the court to dismiss the complaint and accept Apple’s App Store Review Guidelines as part of the record.
The court found that Pistacchio had not adequately described a relevant product market because the complaint did not sufficiently address possible substitutes, including other video games, platforms, payment methods, and ways to reach iOS users. The court also found that the complaint did not adequately allege antitrust injury or above-market pricing. It further concluded that a consumer cannot bring the essential-facilities claim and that nationwide class allegations for unjust enrichment could not remain.
Judge Gonzalez Rogers granted Apple’s request for judicial notice and granted Apple’s motion to dismiss. The essential-facilities claim was dismissed with prejudice; the nationwide-class allegations tied to unjust enrichment were stricken; and the rest of the complaint was dismissed without prejudice, with leave to amend by March 30, 2021.
The detailed version
- Pistacchio v. Apple Inc. · No. 4:20-cv-07034
- Yvonne Rogers
- Mar. 11, 2021
Background
John Pistacchio filed a class action complaint against Apple Inc. Apple moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not adequately state a legal claim. Apple also asked the court to take judicial notice, through the incorporation-by-reference doctrine, of Apple’s App Store Review Guidelines. The court granted that request because Pistacchio repeatedly referred to the Guidelines in the complaint and based his claims on them.
Pistacchio alleged a market for subscription-based mobile gaming services on iOS devices, limited to the Apple App Store. The complaint identified cloud gaming services offered by Microsoft, Facebook, and Google as competitors. It also alleged that Apple imposed restrictions on subscription cloud gaming or game-streaming services.
Court’s Analysis
The court held that all of Pistacchio’s antitrust claims were inadequately pleaded because the complaint did not adequately allege a product market. A relevant product market must include the product at issue and reasonably interchangeable economic substitutes. The court found that the complaint did not sufficiently explain why the market should be limited to cloud gaming, subscription services, or the iOS platform. It also noted that the complaint acknowledged alternative ways for competitors to reach iOS users, including internet browsers, web applications, remote desktops, and individually downloaded games.
The court separately found that the complaint lacked substantive allegations supporting the claimed supracompetitive price. It also stated that introducing a new product, or competitors taking time to develop competing products, did not by itself establish antitrust conduct where access to iOS users remained available through alternative methods.
Count 2: Essential-Facilities Claim
The court dismissed Pistacchio’s Sherman Act Section 2 essential-facilities claim because it concluded that Pistacchio, as a consumer, could not bring that type of claim. The court ordered that Count 2 be dismissed with prejudice.
Count 6: Unjust Enrichment and Nationwide Class Allegations
The court struck the allegations concerning a nationwide class of consumers for the unjust-enrichment claim. It relied on the principle that the elements of unjust enrichment vary materially from state to state, making a nationwide class difficult to certify. The court also stated that whether the unjust-enrichment claim could survive would depend on whether Pistacchio could adequately plead a quasi-contract claim and related injury.
Disposition
The court granted Apple’s request for judicial notice and granted Apple’s motion to dismiss. It dismissed the essential-facilities claim with prejudice, struck the allegations seeking certification of a nationwide class for the unjust-enrichment claim, and dismissed the remainder of the complaint without prejudice. The court granted leave to amend those claims and ordered Pistacchio to file an amended complaint by March 30, 2021. If Pistacchio chose to stand on the existing complaint instead, the court stated that it would enter an order dismissing the case with prejudice.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.