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 eleven claims involving an alleged defect in certain MacBook Pro laptops.

The plaintiffs alleged that Apple used short, flexible backlight ribbon cables in 13-inch and 15-inch MacBook Pro models. According to the complaint, the cables rubbed against the display controller board as users opened and closed the laptops. The rubbing allegedly caused the cables to tear, producing display problems such as a “stage lighting” effect, vertical pink lines, blocks of color, and eventual display failure. The plaintiffs alleged that their problems appeared after Apple’s one-year warranty expired.

Apple introduced longer backlight cables in certain 2018 models and created a service program covering specified 13-inch 2016 MacBook Pro display problems. The service program did not cover the 15-inch 2016 model or models released after 2016, which the plaintiffs alleged they owned.

Claims and legal standard

The plaintiffs asserted claims under California’s Unfair Competition Law, California’s Consumers Legal Remedies Act, and equivalent deceptive-trade-practice laws in Alaska, Florida, Massachusetts, Michigan, Missouri, New Jersey, Texas, and Washington. They also asserted fraudulent concealment. Apple moved to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a legally recognized claim.

The court applied the ordinary requirement that a complaint contain enough factual detail to make a claim plausible. It also applied Federal Rule of Civil Procedure 9(b), which requires fraud allegations to identify the circumstances of the alleged fraud with particularity, including who made the statement, what was said, when and where it was said, and how it was misleading.

Fraud based on affirmative statements

The plaintiffs relied on Apple’s descriptions of the MacBook Pro displays as “the brightest and most colorful Retina display yet” and “the best Mac display ever.” They also added allegations that Apple’s campaign called the displays the best in the computer industry, described particular brightness, contrast, and color-gamut specifications, and represented that Apple products lasted at least four years.

The court held that statements such as “revolutionary,” “groundbreaking,” “breakthrough performance,” and “the best Mac display ever” were subjective and immeasurable opinions, known as puffery, rather than actionable misrepresentations. The court also found no factual basis for the allegation that Apple represented the displays as the best in the computer industry because the complaint did not provide an actual example or quotation supporting that allegation.

The court had previously found the specific brightness, contrast, and color-gamut statements potentially actionable because they could be proven true or false. In the Third Amended Complaint, however, the plaintiffs still did not allege facts showing that those statements were false when made or when the laptops were sold. The alleged cable defect concerned display reliability and useful life, not the display’s thickness, brightness, or color gamut.

The court also rejected the alleged four-year lifespan representation. It found that the cited Apple webpage described a four-year modeling assumption used for environmental greenhouse-gas assessments, not a promise that Apple products would last four years without repair. The court further found that the plaintiffs did not plausibly allege that they viewed or relied on that webpage as advertising or product marketing.

The court therefore found that the plaintiffs had not stated fraud claims based on affirmative misrepresentations. It later ruled that amendment of those claims would be futile and prejudicial to Apple after three prior amendments.

Fraud based on omissions and deceptive-trade-practice claims

The plaintiffs’ fraudulent-concealment and deceptive-trade-practice claims were based on Apple’s alleged failure to disclose the backlight-cable defect. The court explained that, for a defect not involving an unreasonable safety hazard, a manufacturer’s duty to disclose generally requires a material defect central to the product’s function plus an additional circumstance, such as the manufacturer’s exclusive knowledge, active concealment, or a misleading partial representation.

The court held that the plaintiffs had not alleged that the defect arose during the warranty period. Because the alleged problems appeared only after the one-year warranty expired, the court applied the rule that a manufacturer’s post-warranty duty to disclose is limited to safety issues. The plaintiffs did not allege that the cable defect created any particular safety hazard. The court therefore found that the omission-based deceptive-trade-practice claims and fraudulent-concealment claim were inadequately pleaded.

The court granted the plaintiffs leave to amend these omission-based claims to allege a safety hazard arising from the alleged defect.

California Unfair Competition Law claim

The plaintiffs asserted the California Unfair Competition Law’s “unfair” and “unlawful” theories. For the unfair theory, Taleshpour argued that Apple violated public policy by selling laptops that were not fit for their ordinary purposes and that Apple represented that the laptops had a minimum four-year lifespan.

The court rejected the public-policy theory because the plaintiffs had not stated a viable California Consumers Legal Remedies Act claim. It also found the four-year lifespan allegations implausible. In addition, because the laptops functioned throughout the one-year warranty period and Taleshpour experienced the defect well afterward, the court found that he had not adequately pleaded the substantial consumer injury required for the unfair theory.

For the unlawful theory, the plaintiffs relied on their Consumers Legal Remedies Act claim. Because that claim was not viable, the court dismissed the Unfair Competition Law claim under the unlawful theory as well.

New Jersey Consumer Fraud Act claim

Apple separately challenged Liam Stewart’s claim under the New Jersey Consumer Fraud Act. The court explained that such a claim requires unlawful conduct, an identifiable loss, and a causal connection between the conduct and loss.

The court found that the complaint did not plausibly allege that Apple knew with certainty that the alleged defect would occur. It also found that Stewart could not allege an identifiable loss under the statute because he experienced the alleged defect well after the warranty period ended. The court dismissed the New Jersey Consumer Fraud Act claim.

The court granted leave to amend that claim to plead facts suggesting that Apple knew with certainty that the alleged defect would occur.

Other procedural ruling and disposition

Apple had also sought permission to move for reconsideration of the court’s prior order concerning the earlier complaint. The court denied that request as moot because it was considering the same arguments in connection with the Third Amended Complaint.

On July 19, 2021, Judge Edward Davila granted Apple’s motion to dismiss the Third Amended Complaint with limited leave to amend. The court ordered the plaintiffs to file an amended complaint by August 2, 2021. The opinion does not state the result of any later amended complaint.