Price v. Apple, Inc.

Background

Matthew Price alleged that he had used an Apple ID since approximately January 2015 to purchase apps and other content. He made several in-app game purchases that, he said, did not work as advertised or at all. After Apple directed him to contact the game developer and later suggested that he ask his bank or credit-card company to process chargebacks, Price processed another chargeback in October 2020. Apple then terminated his Apple ID. Price alleged that he lost access to purchased content and $7.63 in unused funds in his Apple account.

Price initially filed the case as a proposed class action and previously asserted claims under California’s Unfair Competition Law and Consumers Legal Remedies Act, as well as claims for conversion, trespass to chattels, and unjust enrichment. The court had dismissed those claims and allowed amendment only as to the statutory claims. Instead, Price filed a second amended complaint asserting a new breach-of-contract claim based on Apple’s Terms and Conditions.

Breach-of-Contract Claims

The court applied California law, under which a breach-of-contract claim requires allegations of a contract, the plaintiff’s performance or excuse for nonperformance, the defendant’s breach, and resulting damages. For a written contract, the plaintiff must also identify the specific provision that created the obligation allegedly breached.

As to termination of the Apple ID, Price relied on the Terms’ termination provision. The Terms prohibited illegal, fraudulent, or manipulative activity and allowed Apple to terminate an Apple ID if the user failed, or Apple suspected the user had failed, to comply with the Terms. The court found that Price’s own allegations showed Apple suspected his multiple chargebacks were prohibited conduct. The court therefore concluded that Apple’s Terms expressly allowed the challenged termination and granted Apple’s motion to dismiss this claim.

As to the unused funds, Price again relied on the termination provision. The court found that this provision did not say that Apple had to return unused funds after terminating an account. Because Price did not identify a contract provision that Apple breached by withholding access to those funds, the court granted Apple’s motion to dismiss this claim as well.

Limitation of Liability

Apple also argued that its Terms barred Price’s claims through a limitation-of-liability provision. That provision stated that users agreed not to sue or recover damages from Apple resulting from Apple’s decision to suspend or terminate access to its services.

The court rejected Price’s arguments that enforcing the provision would violate public policy or allow Apple to avoid statutory liability. It found that the services and content involved were voluntary, nonessential recreational activities and entertainment media, and that Price had brought only contract claims in the current complaint. The court also noted that Price had not alleged facts supporting new statutory or regulatory causes of action and could not add such claims through his opposition brief.

Disposition

The court granted Apple’s motion to dismiss. It found that Price had had ample opportunity to state a claim and that allowing another amendment would be futile. The court therefore dismissed the case without leave to amend, directed the Clerk to enter judgment in favor of Apple, and ordered the case closed. Judge Haywood S. Gilliam, Jr. signed the order.