Taleshpour v. APPLE INC.

Background

Mahan Taleshpour, Rory Fielding, Peter Odogwu, Wade Buscher, Gregory Knutson, Darien Hayes, Liam Stewart, Nathan Combs, and Kendall Bardin sued Apple Inc. on behalf of themselves and members of a proposed class. They asserted 20 claims involving an alleged defect in certain 15-inch 2016 MacBook Pro models and models released after 2016.

The plaintiffs alleged that thin backlight cables were too short and lacked enough slack. According to the complaint, opening and closing the laptops caused the cables to rub against the display controller board and eventually tear. The alleged results included a “stage lighting” effect, vertical pink lines, blocks of color, display failure, and laptops that became unusable. The plaintiffs alleged that these problems appeared after Apple’s one-year warranty expired.

The claims included state deceptive-trade-practice claims, California Unfair Competition Law claims, fraudulent concealment, a California Song-Beverly Consumer Warranty Act claim, and implied-warranty claims under the laws of Alaska, Florida, Massachusetts, Michigan, Missouri, New Jersey, Texas, and Washington. Apple moved to dismiss all claims for lack of federal subject-matter jurisdiction and failure to state a legally sufficient claim.

Standing

The court found that the plaintiffs had standing, meaning they had alleged an actual injury that could be connected to Apple’s conduct and addressed by a court decision. Odogwu and Stewart alleged that they paid to repair or replace their laptops. Knutson submitted evidence that he paid $771.80 for a display replacement. The court also found that Combs’s allegations about a 2018 laptop were not necessarily inconsistent with allegations in the original complaint.

The court rejected Apple’s argument that the plaintiffs’ devices lacked the alleged defect because their cables were longer than cables in the 13-inch 2016 model covered by Apple’s service program. The plaintiffs alleged that their cables were too short and that Apple’s two-millimeter increase in later models did not cure the problem; they did not allege that every defective cable was exactly two millimeters too short. The court also declined to decide, at the standing stage, whether the alleged defect ultimately caused each plaintiff’s particular display problems. It found that the plaintiffs had alleged economic injuries capable of being remedied by a favorable decision.

Fraud-Based and Deceptive-Trade-Practice Claims

The court applied the heightened pleading requirement for fraud claims, which requires specific information about the alleged misconduct. It found that the plaintiffs adequately alleged that Apple knew about the alleged defect based on customer complaints, the deletion of complaints from Apple’s website, and pre-release testing. The court also found that the alleged defect was material, central to the laptops’ function, and one that Apple had a duty to disclose. The plaintiffs adequately alleged reliance because they claimed to have visited Apple’s website before purchasing or acquiring their laptops and would not have bought them, or would not have paid the same price, had they known about the defect.

The court rejected claims based on general statements such as “revolutionary,” “groundbreaking,” “breakthrough performance,” and “the best Mac display ever” because it considered those statements subjective and immeasurable advertising praise, also known as puffery. The more specific statements about display thickness, brightness, contrast, and color range could theoretically be actionable, but the plaintiffs did not allege that those statements were false or misleading about the display’s reliability or useful life.

The court therefore granted Apple’s motion without prejudice as to the fraud claims based on affirmative misrepresentations. In the conclusion, the court described those claims as dismissed with leave to amend. It denied Apple’s motion as to the omission-based deceptive-trade-practice claims and fraudulent-concealment claim.

Implied-Warranty and Song-Beverly Claims

The court held that Apple’s Limited Warranty conspicuously disclaimed implied warranties, including warranties of merchantability. Because the plaintiffs did not dispute the accuracy of that warranty, the court granted the motion in the relevant part and dismissed the implied-warranty claims with prejudice.

As to Taleshpour’s Song-Beverly claim, the court held that continued use of his laptop after the display problems began indicated that it remained fit for basic use. The plaintiffs also did not allege that the alleged defect was substantially certain to cause a malfunction during the laptop’s useful life at the time of sale. The court granted the motion as to the Song-Beverly claim with prejudice.

California Unfair Competition Law Claims and Disposition

The court granted the motion without prejudice as to Taleshpour’s claim under the “unfair” prong of California’s Unfair Competition Law because he had not adequately alleged the required consumer injury or a supporting violation of public policy. It also granted the motion without prejudice as to his “unlawful” prong claim because that claim was based on the California Consumer Legal Remedies Act and Song-Beverly Act claims, which the court found inadequate.

The order states that Apple’s motion was granted in part and denied in part. It states that the plaintiffs had standing and adequately stated their omission-based deceptive-trade-practice and fraudulent-concealment claims; that the affirmative-misrepresentation claims were dismissed with leave to amend; and that the remaining claims were dismissed with prejudice. This final statement appears to differ from the opinion’s specific rulings granting the motion without prejudice as to the two Unfair Competition Law theories. The plaintiffs were permitted to file an amended complaint by April 16, 2021.