Ohanian v. Apple Inc.

Background

Tigran Ohanian and Regge Lopez brought the action individually and on behalf of others similarly situated against Apple Inc. and T-Mobile USA, Inc. The complaint asserted claims under New York General Business Law sections 349 and 350, fraudulent misrepresentation, and unjust enrichment.

T-Mobile sold SIM cards marketed and distributed for use in Apple iPhones. The complaint alleged that, when a phone number associated with a discontinued SIM card was later assigned to another user, Apple’s iMessage and FaceTime features could continue associating the prior user’s Apple identification with that number. As a result, messages and calls intended for the new user could be sent to the prior user.

Ohanian alleged that he bought and activated a T-Mobile SIM card in New York City, used its phone number for one year, and later received more than one hundred iMessages and FaceTime calls intended for Lopez, who received the number afterward. He alleged that this caused him emotional and marital stress.

New York consumer-protection claims

To state claims under New York General Business Law sections 349 and 350, a plaintiff must allege consumer-oriented conduct that was materially misleading and caused injury. The court held that Ohanian did not adequately allege that T-Mobile knew about either the alleged defect or the alleged solution—having users disconnect their Apple IDs from phone numbers before ending T-Mobile service.

The complaint relied on a news article and an Apple website forum post to allege that T-Mobile knew, or should have known, about the problem. The court found that the news article did not mention T-Mobile or the specific mechanics of the alleged flaw. It also found no adequate basis to infer that the forum post concerned the flaw experienced by Ohanian and Lopez or that T-Mobile knew about it.

The section 350 claim also failed because the complaint did not identify any allegedly false T-Mobile advertisement.

Fraudulent misrepresentation

The court dismissed the fraudulent-misrepresentation claim because the complaint did not identify a false statement by T-Mobile or provide the details required by Federal Rule of Civil Procedure 9(b). The complaint did not state when Ohanian purchased the SIM card, what T-Mobile said to him, who made any statement, where it was made, or why it was fraudulent.

The court also held that the complaint did not adequately allege T-Mobile’s knowledge that the omitted information was false or an intent to induce reliance, because it did not allege that T-Mobile possessed the omitted information.

Unjust enrichment

The court dismissed Ohanian’s unjust-enrichment claim with prejudice. It reasoned that the claim was entirely duplicative of the other claims because all of them were based on the same theory that T-Mobile sold SIM cards without informing consumers about the alleged risks involving recycled phone numbers and Apple IDs. The court rejected Ohanian’s argument that the claim was not duplicative because he sought disgorgement only on that claim.

Disposition

The court granted T-Mobile’s motion to dismiss and dismissed Ohanian’s claims against T-Mobile. The court stated that Ohanian may seek leave to amend by April 1, 2022, by filing a letter motion explaining how the identified deficiencies could be cured and attaching a proposed second amended complaint. The opinion did not state a disposition of Lopez’s claims or of the claims against Apple Inc.