WILLIAM H. ORRICK, District Judge.
Defendants Apple Inc., AppleCare Service Company Inc., and Apple CSC Inc. (collectively, "Apple") move for summary judgment of Plaintiff Fabrienne English's claims related to Apple's alleged misrepresentations and omissions in connection with AppleCare+ ("AC+"), an extended service plan Apple offers to purchasers of iPhones. English's core complaint is that Apple misrepresents to consumers that replacement iPhones under AC+ will be new when in fact many of the replacement devices in Apple's service stock are "refurbished" or otherwise not new. She asserts claims under California law for violations of the Consumer Legal Remedies Act ("CLRA"), the False Advertising Law ("FAL"), the Unfair Competition Law ("UCL"), and the Secondhand Merchandize Labeling Law, Cal. Bus. & Prof. Code § 17531, and for fraud.
English urges me to deny Apple's motion for summary judgment, or to stay the matter pending additional discovery to give her the opportunity to present facts essential to justify her opposition under Federal Rules of Civil Procedure 56(d). She insists that, through additional discovery and/or testing of the phone, she can prove that her replacement phones under AC+ were not new when Apple gave them to her. I have already found that the phones she received were new, and she has not convinced me that any proposed testing would demonstrate otherwise. She also fails to justify her delay in pursuing additional discovery, and since it is disproportional to her claims anyway, she is not entitled to it. Her 56(d) application is DENIED.
Because English does not offer sufficient evidence to establish that she relied on any alleged misrepresentation by Apple, she fails to make the requisite showing for Article III standing that her injury was caused by Apple. Her Secondhand Merchandize Labeling Law claim fails because she fails to show a genuine issue as to whether the phones she received were anything other than new. Although there may be a genuine issue whether English was denied a second incident under AC+, that fact is not material to any of her claims. Apple's motion for summary judgment is GRANTED.
AC+ is a service plan offered by Apple for, among other products, the iPhone. Healy Decl. ¶¶ 3-4 (Dkt. No. 209-32). APP is a predecessor to AC+.
Apple offered APP until October 2011. Id. APP cost $99 and provided consumers with hardware repair coverage and telephone technical support for two years from the date of purchase of the iPhone.
Apple launched AC+ in October 2011. Id. ¶ 4. For $99, purchasers receive coverage for two accidental damage incidents. Id. The service fee for each incident was initially $49. Id. On September 10, 2013, the service fee was increased to $79. Id. ¶ 5. There is no service fee under AC+ for repairs not resulting from accidental damage. Id. ¶ 6.
From AC+'s first launch until September 2013, Apple allowed customers to purchase AC+ at the time of accidental damage. Id. ¶ 8. During that time period, if a customer's iPhone suffered accidental damage, rather than having to pay $149 for an out-of-warranty service event or approximately $449 for a new iPhone, the customer could purchase AC+ for $99 and receive a $50 discount on the $149 out-of-warranty service event, plus the two accidental damage incidents provided under AC+. Id. As discussed in more detail below, English purchased her AC+ plan in this way. TAC ¶ 34.
A customer who brings in her iPhone for service under AC+ or APP may have the iPhone repaired or replaced, depending on the circumstances (e.g., whether a repair is feasible) and the customer's preference. When a customer decides to replace her iPhone, she receives a replacement device out of Apple's "service stock." Apple describes its service stock as consisting of three types of iPhones: (1) new iPhones; (2) remanufactured iPhones; and (3) reclaimed iPhones. Lanigan Decl. ¶ 3 [sealed](Dkt. No. 208-17); Lanigan Decl. ¶ 3 [redacted](Dkt. No. 209-34).
New iPhones are made of all new parts and are "exactly the same" as the iPhones Apple sells in its stores. Lanigan Decl. ¶ 4. New iPhones [REDACTED\] Id. As discussed below in more detail, the evidence in this case shows that English received only new iPhones as replacement devices, not remanufactured or reclaimed iPhones. Id. ¶¶ 9-10.
Remanufactured iPhones are manufactured using the same process as new iPhones, but "could contain both new parts and recovered parts that have been extensively tested." Id. ¶ 5. Apple states that "each and every remanufactured iPhone is inspected and tested to ensure that it is equivalent to a new iPhone in performance and reliability." Id.
Reclaimed iPhones are iPhones that have either [REDACTED\]. Id. ¶ 6. Apple states that "[t]hese (essentially new) iPhones undergo a testing and screening process to ensure that they are equivalent to new in performance and reliability."
All iPhones in Apple's service stock are shipped and stored in plain, white, unbranded boxes. See Williams Dep. at 210-11 (Patel Decl. Ex. T, Dkt. No. 209-21). Because all iPhones in the service stock are shipped and stored in this manner, Apple store employees do not know whether any particular replacement device is new, remanufactured, or reclaimed. Id. at 152-53, 231-32. Customers who receive a replacement device do not keep the plain, white, unbranded box in which it is carried out from the service stock to the floor. Morrison Dep. 202:5-9 (Dkt. No. 288-2).
The current AC+ terms and conditions state in relevant part:
TAC Ex. B (Dkt. No. 139-2); Patel Decl. Ex. O (Dkt. No. 209-16).
The AC+ and APP terms and conditions in effect until September 2013 similarly stated:
TAC Ex. C (Dkt. No. 139-3).
In September 2012, English obtained an iPhone 4 from Sprint in connection with signing up for Sprint wireless telephone service. English Decl. ¶ 3 (Dkt. No. 180-43); Patel MSJ Decl. Ex. 2, English Dep. at 71:9-23 (Dkt. No. 288-3). She gave the iPhone to her minor son. Id.
On February 15, 2013, English and her son went to an Apple store in NorthPark Center, Texas because the screen on the iPhone had cracked. English Decl. ¶ 4; English Dep. at 61:23-25. English states that in discussing AC+ with an Apple employee at the store, she was told that she "would have two `incidents' available for occurrences such as a cracked screen or water damage, and that the replacement devices would be new." English Decl. ¶ 6. She paid $99 for AC+ and another $99 to receive what the Apple employee allegedly described as a new iPhone 4. Id. ¶ 4; see also TAC Ex. E (Dkt. No. 139-5).
The replacement iPhone was presented to English in the plain, white, unbranded box in which Apple packages its replacement devices. Patel MSJ Decl. Ex. 2 at 104:9-106:16, 140:4-141:8. The box did not include "any label or other writing indicating that the [iPhone] was refurbished, reconditioned, used, or contained parts that were refurbished, reconditioned, or used." TAC ¶ 40. English states that the Apple employee "took great care to unseal and open [the box] in front of [her]," and that "[w]hen he took the iPhone out of the packaging he did so in a way that made [her] think that the device was new." English Decl. ¶ 7. English was not given the box, nor was she given a charger or earbuds. English Dep. at 105:1, 106.
At the time English purchased AC+, the plan's terms and conditions were available in hard copy, available at apple.com, and provided via URL on "Smart Signs" (i.e., interactive iPads) throughout the store. Healy Decl. ¶¶ 9-11 (Dkt. No. 209-32). The Smart Signs state that "replacement equipment that Apple provides as part of the repair or replacement service may be new or equivalent to new in both performance and reliability." Healy Decl. Ex. A (Dkt. No. 209-33) at APL000029437. English also received a pdf of the AC+ terms and conditions via email. English Dep. at 108:11. English admits that she never read the AC+ terms and conditions.
English contends that the replacement iPhone she received on February 15, 2013 was not new and was in fact a "refurbished device." English Decl. ¶ 9. She states that "[h]ad [she] known that [the] iPhone was not new, [she] would not have made the purchase, and would have considered other options such as getting an upgraded phone from Sprint." Id. ¶ 5.
Apple contends that the replacement iPhone was new. See Lanigan Decl. ¶ 9. It submits a declaration from Michael Lanigan, Director of AppleCare Supplier Quality Engineering and Mail-In Operations, who [REDACTED\] Id. ¶ 1. He states that based on his research and analysis of Apple's records, the iPhone English received on February 15, 2013 was a new device. Id. ¶ 9.
English alleges that she "immediately started experiencing problems" with the replacement iPhone. English Decl. ¶ 11. The device "would freeze, stop working, and close without warning." Id. On July 22, 2013, she and her son went to an Apple store in Plano, Texas after the device completely stopped working and would no longer turn on. Id. An Apple employee there told her that the device had water damage and that she could use one of the accidental damage incidents under her AC+ plan to get a replacement. Id. English paid the $49.00 AC+ service fee and received another replacement iPhone 4. Id.; see also Patel Decl. Ex. E (Dkt. No. 209-6). This replacement device was again presented in a plain, white, unbranded box. English Decl. ¶ 11. According to English, the second replacement device, like her first one, was "refurbished." Id. According to Apple, it was in fact new. Lanigan Decl. ¶ 10. English states that within a week of receiving the second replacement device, it began suffering from "freezing issues" like those exhibited by the first one. English Decl. ¶ 12.
On February 28, 2014, English went back to the Apple store in North Park Center, Texas because the screen on her second replacement iPhone had cracked. English Decl. ¶ 13. English alleges that she was told by an Apple employee there that she had already used up both incidents allowed under her AC+ plan, and that as a result she was not entitled to another replacement device. English Dep. at 160:15-21. She states that the employee "cited [her] initial purchase from Apple in February 2013 and the July 2013 replacement as the incidents of accidental damage replacement that [she] was entitled to under [her AC+ plan]." English Decl. ¶ 13.
English initially brought her claims as one of three plaintiffs in a class action complaint filed by attorney Renee Kennedy. See Compl. (Dkt. No. 1). With the filing of the second amended complaint on January 17, 2015, the other two named plaintiffs dropped out, while a new named plaintiff joined in. See Dkt. No. 116. They filed the TAC on March 6, 2015, alleging four causes of action against Apple based on alleged misrepresentations and omissions in connection with AC+ and APP: (1) violations of the CLRA, TAC ¶¶ 73-94; (2) violations of the FAL, TAC ¶¶ 103-111; (3) violations of the unlawful, unfair, and fraudulent prongs of the UCL, TAC ¶¶ 121-127; (4) violations of the Secondhand Merchandise Labeling Law, Cal. Bus. & Prof. Code § 17531, TAC ¶¶ 112-120; and (5) fraud, TAC ¶¶ 95-102. Shortly after the TAC was filed, on March 19, 2015, the other named plaintiff dropped out of the case, leaving English as the only named plaintiff. See Dkt. No. 144.
On January 5, 2016, I denied English's motion for class certification because none of her theories of liability supported class certification, and also because she could not establish adequacy of counsel under Federal Rule of Civil Procedure 23(a)(4) in light of the deficiencies shown by her lead counsel, Ms. Kennedy. Class Certification Order (Dkt. No. 225). On September 23, 2016, Apple filed its motion for summary judgment on English's individual claims related to her purchase of AC+ and alleged denial of coverage for a second incident. See Mot. 1-2 (Dkt. No. 288).
On October 15, 2016, one of plaintiff's former co-counsels, who apparently had gained possession of the July 2013 replacement phone that English had received under AC+ and misplaced it, notified Kennedy that he had located it. Kennedy Decl. ¶ 4 (Dkt. No. 293-1). Plaintiff filed several motions seeking leave for permission to test the phone, and an extension of time to file her opposition. Dkt. Nos. 290, 293, 295, 296, 299. On October 24, 2016, I extended her deadline by four days (Dkt. No. 300), and she filed her opposition on October 28, 2016. Opp'n (Dkt. No. 305[redacted], Dkt. No. 304-3[under seal]). On October 31, 2016, I denied her request to test the phone, in part because plaintiff had not:
Dkt. No. 307. But I also left open the possibility that briefing and evidence concerning the motion for summary judgment might establish the need for such testing. I heard argument from the parties on December 14, 2016.
Relevant to English's request for additional discovery, she proffered two affidavits that identify three categories of discovery: additional information to determine whether or not her replacement unit was new; "testing" of the recently found 2013 replacement unit; and an additional deposition of Apple employee "Ryan." English Decl. 56(d) ¶ 5 (Dkt. No. 304-15); English 2nd Decl. ¶¶ 10-13, 16. She submits that (1) "fingerprints, scratches and stickers on the internal parts are evidence that the phone is refurbished;" (2) "[e]xperts can tell if the phone has been opened before;" and (3) "[t]here are diagnostic, software and application tests that can be run." English Decl. ¶ 5 (citing Dixon Decl., Ex. M; and Huynh Decl., Ex. R).
Summary judgment on a claim or defense is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In order to prevail, a party moving for summary judgment must show the absence of a genuine issue of material fact with respect to an essential element of the non-moving party's claim, or to a defense on which the non-moving party will bear the burden of persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has made this showing, the burden then shifts to the party opposing summary judgment to identify "specific facts showing there is a genuine issue for trial." Id. The party opposing summary judgment must then present affirmative evidence from which a jury could return a verdict in that party's favor. Anderson v. Liberty Lobby, 477 U.S. 242, 257 (1986).
On summary judgment, the Court draws all reasonable factual inferences in favor of the non-movant. Id. at 255. In deciding a motion for summary judgment, "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge." Id. However, conclusory and speculative testimony does not raise genuine issues of fact and is insufficient to defeat summary judgment. See Thornhill Publ'g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979).
Under Federal Rule of Civil Procedure 56(d),
Fed. R. Civ. P. 56(d).
"[A] district court should continue a summary judgment motion upon a good faith showing by affidavit that the continuance is needed to obtain facts essential to preclude summary judgment." State of Cal., on Behalf of California Dep't of Toxic Substances Control v. Campbell, 138 F.3d 772, 779 (9th Cir. 1998). The party seeking to continue the motion "must show (1) that they have set forth in affidavit form the specific facts that they hope to elicit from further discovery, (2) that the facts sought exist, and (3) that these sought-after facts are `essential' to resist the summary judgment motion." Id.
All five of English's claims stem from her allegation that Apple misrepresented or omitted the fact that she might not obtain a new replacement unit when receiving service under AC+. See TAC ¶¶ 73-127. Apple argues that, since she did in fact receive new phones on both occasions, all of her claims must fail. Mot. at 1. First, Apple states that English has suffered no injury since she received new phones, and so Apple is entitled to summary judgment because English lacks Article III standing for all five claims. Mot. at 9. Next, Apple contends that it did not "misrepresent" that English would receive a new phone, because she did in fact receive a new phone. Id. at 11. In the absence of any misrepresentation, her claims under the UCL, FAL, CLRA and for fraud must fail. Id. And, since she received a new phone, her Secondhand Merchandising Labeling Law claim must fail. Id. at 12.
In the alternative, Apple argues for partial summary judgment to the extent her claims under the UCL, FAL, CLRA and for fraud depend on English's reliance on the AC+ terms and conditions, because the undisputed evidence establishes that she never viewed the terms and conditions prior to purchasing the plan. Id. at 13. Additionally, Apple argues for partial summary judgment to the extent her claims depend on a theory that Apple's use of a plain white box misrepresents that replacement phones are new because using a plain white box is not an affirmative representation at all and plaintiff cannot meet the reasonable consumer standard. Id. at 15. Lastly, Apple argues for summary judgment on English's claim that she was denied a second incident because the undisputed facts prove that she was not denied a second incident. Id. at 17.
English asserts the following genuine issues of material fact: whether the service units were in fact new; whether she was denied a second incident under AC+; and whether Apple properly discloses the plan's length of time. Opp'n 8-15. English contends that she still suffered an injury, even if the iPhones she received as replacement units were new, but she admits that "[t]he main fact in contention is whether Plaintiff's replacement iPhones ["service units"] are new rather than used or refurbished." Id. at 6.
On September 9, 2015, Apple filed a declaration with its opposition to class certification from Michael Lanigan, who "reviewed Apple's database containing information regarding the source of iPhones used as replacement devices under AC+[,]" and discovered "the two replacement iPhones that Plaintiff received were `new'—meaning they were `made of entirely new parts, and therefore are exactly the same as the iPhones Apples sells as new in Apple-branded boxes in its retail stores.'" Id. at 10:1-6 (quoting Lanigan Decl. ¶¶ 1, 4). As discussed during the hearing on class certification, English had three weeks to pursue discovery on the issue prior to filing her reply to Apple's opposition to class certification. Class Certification Hr'g Tr. at 6:14-19. She did none. One of her former co-counsels, Mr. Cutter,
I denied class certification in January, 2016, denied English's motion for reconsideration in March, and the Ninth Circuit denied her petition for review in June. Nonetheless, English waited until the last day of August to seek any discovery related to her individual claims, even though she knew since a Case Management Conference on July 9, 2016 that her opposition to summary judgment would be due on October 24, 2016. Dkt. No. 289 at 3-4; Minute Entry (Dkt. No. 275). All in all, she waited nearly an entire year to seek discovery on the Lanigan testimony that she now seeks to question. See Reply at 3 (Dkt. No. 320); Defs.' Opp'n to Pl.'s Administrative Mot. to Extend Time at 1-3 (Dkt. No. 292); Patel Decl. (Dkt. No. 292-2).
There have been many requests for extensions in this case. English apparently feels aggrieved—in her administrative motion for an extension of time (Dkt. No. 290), she states, "please note that this Court has granted at least seven of Defendants' motions for extension of time if not more, but has never granted one of Plaintiff's motions as to extension of time."
10/10/16 Admin. Mot. at 6:7-10. Reality is much different, as shown below:
As evidenced by this chart, the only instances of extensions for substantive motions or responses granted to Apple were prompted by English's own actions. Moreover, when Apple was granted an extension, a corresponding extension was given to English. The docket is rife with the Court's leniency in overlooking English's failure to follow the Federal Rules of Civil Procedure, the Civil Local Rules and my Standing Orders during the pendency of this action. There is no good cause for English's delay in conducting discovery.
The bulk of English's claims stem from her belief that the replacement phones she received from Apple through AC+ were not new. See Opp'n at 6:5-6 (Dkt. No. 304-3). While that may be her belief, I have already concluded in the Order Denying Class Certification that the phones she received were new, and she has offered no evidence to shake my determination of that fact.
English now challenges the evidence that the phones were new by pointing to (1) her phone's malfunctions, (2) the presumed proportion of remanufactured phones versus new phones in the supply channel for service units, and (3) the fact that it took Apple two years to uncover the evidence that her iPhones were in fact new at the time she received them as service units. Opp'n at 8-9. In the absence of actual evidence concerning the phones she received, none of these suppositions holds water.
Apple counters the first point by arguing that "brand new devices can on occasion malfunction," and "[p]laintiff's allegations and speculation `do not create a factual dispute for purposes of summary judgment.'" Reply at 8 (citing Nelson v. Pima Cmty. College Dist., 83 F.3d 1075, 1081-82 (9th Cir. 1996))(Dkt. No. 320). Apple points out that English "never sought repairs or any other assistance from Apple regarding the issues, nor did she research how to address the freezing issue. . . ." Id. (citing TAC ¶ 40 and English Dep.). I agree that English's "conclusory allegations unsupported by factual data are insufficient. . . ." Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 922 (9th Cir. 2001), especially considering the variability with which electronic devices malfunction. See, e.g., Pecht Report ¶ 23-26 (Dkt. No. 189-1[sealed]; Lall Report ¶16c (Dkt. No. 208-25[sealed], 209-39[redacted]).
As to the second point, Apple highlights a previous order in which I found "evidence regarding the theoretical likelihood that English's replacement iPhones would be refurbished does little to counter evidence that the replacement devices she actually received were in fact new." Class Certification Order at 13:13-15 (emphasis in original) (Dkt. No. 225). The final point is immaterial—the issue is whether there is a genuine dispute about its accuracy. None has been raised.
English claims that summary judgment is improper because "necessary facts in existence are pending discovery." Opp'n at 1. The parties submitted two Joint Letters regarding discovery disputes—one on October 6 and one on October 20, 2016. Dkt. Nos. 289, 297. In the former, plaintiff mentioned "discovery that Apple refuses to answer although served on 09.02.16," as well as an outstanding RFA and RFPs served on 10.04.16. Dkt. No. 289 at 1. In the latter letter, Apple clarifies that it made its "last document production over a year ago, on July 1, 2015[,]" and that "Plaintiff waited until Sept. 28 [2016] (less than a month before her opposition brief [was] due) to raise any issues with respect to `updating' the RFPs. . . ." Dkt. No. 297 at 3-4. Apple stated that "[t]here is nothing for the Court to compel" because "Defendants have produced all responsive, non-privileged documents for several of the RFPs[,]" and "[t]he remainder do not seek information that is relevant or likely to lead to the discovery of admissible evidence, and are disproportional to the nature of Plaintiff's individual claims." Id. at 4:11-14.
"Plaintiff has not adequately demonstrated that the request to postpone summary judgment and extend discovery is not due to a lack of diligence, nor what specific facts would be shown by additional discovery." Thommeny v. Paramount Pictures Corp., 2011 U.S. Dist. LEXIS 80291, at *6 (C.D. Cal. July 13, 2011). Given plaintiff's own delay, the waiver by her prior counsel, and the likelihood that additional discovery will fail to prove anything—let alone a fact "essential" to resist summary judgment—English's request for additional discovery is denied. See Volk v. D.A. Davidson & Co., 816 F.2d 1406, 1416 (9th Cir. 1987)("The burden is on the party seeking to conduct additional discovery to put forth sufficient facts to show that the evidence sought exists.")
English states that "if the Court were to force us to pick [between additional discovery and testing the phone], we would rather be allowed to test, inspect, and open the iPhone." Pl.'s Opposed Admin. Mot. for Leave to File Pl.'s Supp. Mot. to Extend Time to File an Opp'n Brief to Defs.'Mot. for Summ. J. at 2:25-27 (Dkt. No. 295). Apple opposed plaintiff's initial motion to test the phone because "such `testing' would prove nothing regarding whether [the phone] was new or `refurbished' at the time Plaintiff received it from Apple[,]" and "would be especially futile given that the iPhone (i) has been subjected to normal wear and tear since Plaintiff received it on July 22, 2013, (ii) has been damaged (cracked screen) by Plaintiff, (iii) may have been subject to unknown third-party repairs, and (iv) has been stored in unknown conditions by Plaintiff's former counsel." Defs.' Opp'n to Pl.'s Second Admin. Mot. Re Extension of Time to Oppose MSJ at 1-2 (Dkt. No. 294).
English owns the phone, so the "testing" I am asked to authorize is in actuality a command that Apple and its experts monitor whatever English wants to do with her phone. I will not order that because I do not see how any "testing" now will show whether the phone was new in 2013. She has had the phone for almost four years, although it was apparently misplaced by her lawyers for one of those years. There is no chain of custody for the phone. It is not at all clear how the "testing" that English discusses would prove that her phone was not new when she received it in 2013.
The only "testing" that English proposes is akin to a visual examination, which I address below.
English beseeches the Court to allow her to open up the phone, "take the parts out, test the phone, and run standard industry tests on it." Pl.'s Statement Regarding Testing Pl.'s iPhone at 1:15-16 (Dkt. No. 298). She states that "the parts are coded and numbers and letters can help identify whether the phones are refurbished or used." Id. at 2:5-6. English submits a declaration from her telecommunications expert, Dr. Nettleton, describing the various identifying numbers on which she sought discovery: IMEI, MEID, IMSI, ICCID, HEX, DEC, and serial numbers. Nettleton Decl. ¶¶ 3-15 (Dkt. No. 304-12). But nowhere does she explain how she will use these numbers to prove whether or not her phone was new.
Plaintiff proffers "expert" declarations stating that phones can be disassembled and visually inspected for fingerprints, scratches and other marks. Dixon Decl. ¶¶ 9-10 (Dkt. No. 304-16);
The Dixon declaration is of little to no value since she [REDACTED\], and there is no evidence or argument relating her work to a disposition of whether English's phone was new when she received it in 2013. Huynh himself states that he "may be able to tell if Ms. English's phone contains refurbished or used parts." Huynh Decl. ¶ 4. But an unsupported declaration that he may be able to tell if the phone contains refurbished or used parts is not enough to show "that the facts sought exist." Campbell, 138 F.3d at 779. And the Tapia declaration, discussed in greater detail in Section III, below, confuses the matter even further, as he states that "Apple also frequently put used or refurbished parts in even their brand new devices." Tapia Decl. ¶ 25. If that is true, and the phone—whether new, used, or remanufactured/refurbished—might contain used or refurbished parts, there would be no purpose in "testing" it.
There are several problems with the reliability of any evidence ascertained as a result of a visual inspection. First, the presence of fingerprints (or any other marks) would not mean that the phone was not new when English received it in 2013. Counsel for English avers that she "does not believe that Ms. English's phone has even been opened." Id. (emphasis added). Counsel's "belief" does not establish a foundation. And even if Huynh can determine that the phone has been opened previously, there is not enough evidence to even begin to posit when it may have been opened or by whom. Because a chain of custody has not been established, the origin of any fingerprints (or any other markings) cannot be determined.
English's declaration stating that she, her family members, and third parties have never opened the phone is hardly sufficient to establish a reliable chain of custody either. English 2nd Decl. ¶ 6 (Dkt. No. 304-15). She cannot speak for others, nor does she indicate that the phone was always in her possession (as opposed, for example, to being in her son's possession). She states that on September 24, 2015, she placed the phone in a plastic bag, handed it to Ms. Kennedy (her lead lawyer) and the next day viewed a photograph emailed by Mr. Parker (one of her other lawyers) to Ms. Kennedy and confirmed that the photograph appeared to be of the same phone that she had handed over to Ms. Kennedy the previous day. Id. ¶¶ 4-5. Then she says that the phone photographed by Mr. Parker on October 15, 2016, more than a year later, appears to be the same phone that she handed to Ms. Kennedy on September 24, 2015. Id. ¶ 6. This is not persuasive. But even if I accept that the phone is the same phone and that the phone has never been opened or tampered with, English still has not demonstrated that there is a way to test the phone to determine whether or not it was new when she received it in 2013.
While English submits declarations proposing her "fingerprint" theory, she offers no corroborating evidence, such as a refurbished phone containing fingerprints, to bolster its reliability. According to Lanigan, the service units that are remanufactured (as opposed to new buy units) come from service factories with few differences from those factories that ship only the latest device. Lanigan Dep. 95-97 (Dkt. No. 304-5); see also Lanigan Decl. ¶ 5 ("Remanufactured iPhones are assembled using the same manufacturing process as new iPhones, and could contain both new parts and recovered parts that have been extensively tested. . . . These iPhones are manufactured by the same contract manufacturers that manufacture the new iPhones Apple sells in its stores, and the production lines on which these iPhones are manufactured are identical to those for new iPhones Apple sells in its stores, and the production lines on which these iPhones are manufactured are identical to those for new iPhones.") There is no reason to believe that a phone processed in a service factory would contain fingerprints, while a phone processed in another factory would not.
Plaintiff insists that "the device may contain the very answers and evidence Plaintiff needs to prove her case." Id. at 4:16-17. But she never explains how such "answers and evidence" will prove that her phone was refurbished in 2013. Apple has repeatedly opposed plaintiff's requests for additional time and discovery on the basis that the amount of discovery is grossly disproportionate to plaintiff's claim, since out of pocket expenses relating to her claim are less than $300. See, e.g., Defs.'s Opp'n to Plaintiff's Mot. to Extend Time at 1:5-10 (Dkt. No. 292). Because of the implausibility of her theory, the burden on Apple, and the lack of good cause as a result of her delay in seeking this discovery, English is not entitled to additional discovery or an opportunity to test the phone under the Court's auspices. See Garrett v. San Francisco, 818 F.2d 1515, 1518 (9th Cir. 1987)(In seeking additional discovery under Rule 56, "an opposing party must make clear what information is sought and how it would preclude summary judgment.")
Apple moved for summary judgment on the issue of whether English was denied a second incident under AC+. See Mot. at 17. English visited the Apple store on February 28, 2014 because her iPhone had a cracked screen. TAC ¶ 38. She asserts that when she attempted to use her second incident under AC+, an employee named Ryan told her she had used up both accidental damage incidents under her plan. English 2nd Decl. ¶¶ 10-11. Apple maintains that its business records demonstrate that an employee named Morrison assisted English, and that the records indicate that she was not denied an incident, but rather elected to wait for an upgrade opportunity. Mot. at 17.
The parties have twice briefed the issue of the employee named "Ryan." Dkt. Nos. 118, 297. Although Morrison admits that there was a male employee by the name of Ryan matching the description provided by English, Morrison Dep. at 196:20 (Dkt. No. 310-10), Apple insists that this employee has no recollection of assisting English. Dkt. No. 118 at 3:18-4:4; Dkt. No. 297 at 5:15-22. This does not justify Apple's withholding Ryan's identity given that Morrison did not remember assisting English. See Morrison Dep. at 155:25 (Dkt. No. 288-2). But the question is whether Ryan's deposition is important or necessary to oppose Apple's motion for summary judgment. Because I find that English fails to state a claim for relief, even assuming she was denied a second incident under AC+, a deposition of Apple employee "Ryan" is unnecessary. See III, below.
Apple argues that since English received two new phones under AC+ she has not suffered an injury in fact necessary to satisfy Article III standing for her claims under the CLRA, FAL, UCL, Secondhand Merchandizing Labeling law, and for fraud. Mot. at 9. To have standing, a plaintiff must show: (1) an injury-in-fact, i.e., an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical; (2) causation, which means her injury is fairly traceable to the challenged conduct of the defendant; and (3) redressability. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561-62 (1992).
English claims that her replacement phones were not new, but rather were refurbished, and that she suffered injury by overpaying for AC+ and the replacement iPhones, and losing the iPhone she owned and turned in at the time she purchased AC+. TAC ¶ 30, 57. She contends that, even if the phones she received were new, she suffered an injury because she would not have bought AC+, a replacement device, or turned in her original phone if she knew that there was a chance she would receive a used or refurbished phone as a replacement unit. Opp'n 16 (Dkt. No. 304-3). She claims the following damages: "the improper denial of an incident under AC+, the loss of a new replacement phone with new parts due to the denied incident, the loss of an extended warranty contract that afforded for only new replacements, the loss of new phones with new parts, the value of her original phone . . ., her original replacement cost for the first device purchased, the cost of AC+, the cost of the replacement devices ("service fees"), the phones that she had to turn in each time, and attorneys' fees, costs, and expenses." Id. at 17.
Apple disputes English's alleged injury because (1) she could not have purchased the Best Buy plan she claims she would have purchased; (2) the Best Buy plan was more expensive; and (3) the Best Buy plan called for refurbished replacement devices. Reply at 14-15.
While it may be true that "[a] service that can provide either new or used replacement phones is worth less than a service that provides only new replacement phones[,]" Opp'n at 16, the fact remains that plaintiff received only new replacement phones. She therefore was not "deprived of an agreed-upon benefit . . . ." Birdsong v. Apple, Inc., 590 F.3d 955, 961 (9th Cir. 2009). But English maintains that she "would not have purchased the AC+ plan had she been made aware of its policies, including the nature of replacement devices, the loss of an incident at enrollment, and the fact that she would not receive a full 2-years on her plan." Id. at 16-17. While issues remain regarding causation, see below, it is at least disputed whether English's injury-in-fact is the price she paid for AC+ and her replacement units, and whether she would not have purchased AC+ if she knew she could receive used or refurbished phones. Mazza v. Am. Honda Motor Co., 666 F.3d 581, 595 (9th Cir. 2012) (finding an injury-in-fact where consumers purchased a product or paid more for it than they otherwise would have paid).
Even if English suffered an injury-in-fact, she must allege causation and redressability for Article III standing. To establish causation, she contends that her injury is "traceable to Defendants' conduct (i.e., misrepresentations and omissions). . . ." Opp'n at 17. Plaintiff faces three problems here. First, she fails to proffer specific evidence of an oral misrepresentation. Second, the undisputed facts prove that she did not read the AC+ terms and conditions, and therefore, could not have relied on them in making her purchase decisions.
English contends that the Apple employee who helped her told her that replacement devices would be new. TAC ¶ 36. In her opposition to summary judgment, English fails to directly raise her oral misrepresentation theory and does not offer evidence in support of it. She merely mentions it in passing. Opp'n at 3 ("Apple associates also use the word `new' to describe the devices. . . .). Although evidence supporting this theory was submitted during the class certification briefing, it hardly helps English here. See Kennedy Decl. in support of Pl.'s Mot. for Class Certification, Ex. 9 (Pozderac Depo.) (Dkt. No. 180-14[sealed]). Nicholas Pozderac, the employee who sold English AC+ in February 2013, testified that—prior to 2012—when customers asked if their replacement devices were refurbished, he told them "[i]t would have been a new device." Pozderac Dep. at 103:22-104:2. But sometime in early 2012, an interaction with a customer prompted him to look up the AC+ terms and conditions, where he discovered the "new and functionally equivalent to new" language. Id. at 101:4-23. English does not submit evidence of the precise language Pozderac used in his interaction with her in February 2013, but one can infer that he may have revised his wording in 2012, after reading Apple's "official" terminology as documented in the AC+ terms and conditions. Id. at 104:10. Even without giving weight to this reasonable inference that contravenes English's theory, she fails to meet her burden to proffer the evidence to support her allegations of an oral misrepresentation. In re iPhone Application Litig., 6 F.Supp.3d 1004, 1012 (N.D. Cal. 2013)("[A]t summary judgment, a plaintiff may no longer rely on `mere allegations,' but rather must set forth `specific facts' supporting standing.")
Accordingly, her allegations of misrepresentation must depend on either the AC+ terms and conditions, which she did not read, or her "unbranded white box" theory. With either theory, she must proffer evidence of actual reliance to satisfy standing requirements under the CLRA and UCL, In re iPhone Application Litig., 6 F. Supp. 3d at 1012-13, and the FAL,
In the order denying class certification, I found "it is undisputed that English did not view or rely on the AC+ terms and conditions in making her purchase," and so she "cannot bring claims under the CLRA, FAL, or UCL, or for fraud, based on misrepresentations she was not exposed to and did not rely on in making her purchase." Class Certification Order at 20:10-13 (Dkt. No. 225)(citing Cohen v. DIRECTV, Inc., 178 Cal.App.4th 966, 980 (2009); Pfizer Inc. v. Superior Court, 182 Cal.App.4th 622, 634 (2010)). Plaintiff admits she never read the AC+ terms and conditions. Opp'n at 19; English 2nd Decl. ¶ 14. But she argues that she did not have to view the AC+ terms and conditions because the Repair terms and conditions reference the AC+ terms and conditions, and this is not the only basis of misrepresentation.
The Repair terms and conditions state:
English 2nd Decl. ¶ 14 (Dkt. No. 304-15). I do not see how reading the above cited language establishes that the AC+ terms and conditions included a representation that consumers would only receive new phones under the terms of the extended service contract. Since English is unable to meet this "far from unreasonable" burden, In re iPhone Application Litig., 6 F. Supp. 3d at 1027, to demonstrate that she saw and relied on an alleged misrepresentation in the AC+ terms and conditions, she lacks standing under this theory, and Apple is entitled to summary judgment of those claims that depend on an affirmative misrepresentation. See id. at 1013 ("California courts have held that when the `unfair competition' underlying a plaintiff's UCL claim consists of a defendant's misrepresentation, a plaintiff must have actually relied on the misrepresentation, and suffered economic injury as a result of that reliance, in order to have standing to sue.")
To the extent English claims that her injury was caused by an omission on Apple's part, she fares no better. I previously rejected her omission theory in part because she "did not view or rely on the terms and conditions in making her purchase. . . ." Class Certification Order at 22. Moreover, "to be actionable the omission must be contrary to a representation actually made by the defendant. . . ." Daugherty v. Am. Honda Motor Co., 144 Cal.App.4th 824, 835 (2006). The AC+ terms and conditions state that the phones would be "new or equivalent to new in performance and reliability." TAC Ex. B (Dkt. No. 139-2); TAC Ex. C (Dkt. No. 139-3). English cannot show any omission that is contrary to this representation.
Plaintiff also asserts a theory of misrepresentation that depends on the context of Apple's entire sales strategy.
English acknowledges these differences, although she claims they are minor. Opp'n at 21; Dkt. No. 213-14 at 14-15; 233-43 at 3. She even points out additional differences—there is more color on new boxes and one is slightly larger. Opp'n at 21. Given the numerous differences, which she acknowledges, plaintiff's plain white box theory is unconvincing. Even if the plain white box was a representation, English still presents no evidence that she relied on it.
For plaintiff to assert claims under the CLRA, FAL, UCL and for common law fraud, she must meet the "reasonable consumer standard," which requires a "show[ing] that members of the public are likely to be deceived." Freeman v. Time, Inc., 68 F.3d 285, 288 (9th Cir. 1995)(internal quotation marks and citation omitted). "The California Supreme Court has recognized that these laws prohibit not only advertising which is false, but also advertising which [,] although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public." Williams v. Gerber Prod. Co., 552 F.3d 934, 938 (9th Cir. 2008). "Surveys and expert testimony regarding consumer assumptions and expectations may be offered but are not required; anecdotal evidence may suffice, although `a few isolated examples' of actual deception are insufficient." Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1026 (9th Cir. 2008).
English points to "[a] plethora of call logs" that "show that many reasonable consumers were deceived." Opp'n at 22; see Kennedy Decl. Ex. B (Dkt. No. 180). She also recites Apple's terminology to refer to this "ceremonious presentation of the service units," as "polishing the Apple." Opp'n at 22 (citing Williams Dep. 215:22-216:1 (Dkt. No. 180-16)). At least some of the call logs provide proof that some consumers believed that they would receive new iPhones under AC+. See Call Logs (Dkt. Nos. 304-6-304-8). But there is no evidence that these consumers' expectations under AC+ was in any way connected to receiving their replacement units in a plain white box. Even if I simply accepted English's theory, she still has not alleged that she—nor any of the customers in the call logs—relied on the plain white box as an affirmative misrepresentation. Her claims still fail on this ground.
In the absence of any evidence that English relied on any misrepresentations by Apple, she has not shown that her injury of purchasing AC+ was caused by Apple. She received a new phone. And her omission theory fails because Apple adequately discloses the terms of AC+, she just failed to read them. "AC+ terms and conditions clearly state that replacement iPhones will be `new or equivalent to new in performance and reliability,' and therefore not necessarily new." Mot. at 12 n.4. A plaintiff asserting claims for fraudulent misrepresentation must show a specific misrepresentation that she actually relied on. Baltazar v. Apple, Inc., No. CV-10-3231-JF, 2011 WL 588209, at *3 (N.D. Cal. Feb. 10, 2011). Under any theory supported by evidence, English's injury was not caused by Apple, and she therefore lacks standing to pursue her misrepresentation claims.
The Secondhand Merchandise Labeling Law states:
Cal. Bus. & Prof. Code § 17531. There is no genuine issue whether the phones English received were new. The Secondhand Merchandise Labeling Law does not apply. Apple's motion for summary judgment of this claim is GRANTED.
Let's assume, as English hopes, that the Apple employee named Ryan would remember her, their conversation nearly three years ago, and that when he looked up her information, it showed that she didn't have any incidents left, despite the note to the contrary written by Morrison.
Apple's records, prepared by employee Morrison, state that English: "decided to wait for an upgrade in may [sic]
English counters with a declaration from former Apple employee Gabriel Tapia, who has no personal knowledge about the way Apple responded to her second incident. But he interprets Apple's records to conclude that they "validate that Ms. English indeed lost an incident." I do not think that the records require "expert" interpretation—the author of the note has explained what he meant. See id. Tapia, who worked at Apple for seven years and helped work on the MobileGenius, an application used by Apple employees on the floor to assist customers, said that the loss of an incident happened at all the New York stores where he worked. Opp'n at 10 (quoting Tapia Decl. at Dkt. No. 304-17[under seal]);
English highlights the record notes to bolster her position: [REDACTED\]" Opp'n at 10 (quoting Dkt. No. 232-12)
If there is a genuine dispute whether English was denied a second incident, it does not create a dispute regarding any fraud or misrepresentation, both of which require intent. According to Apple, its policy, training materials, and customer records "establish that customers who, like Plaintiff, purchased AC+ at the time of an out-of-warranty repair did in fact receive coverage for two incidents of accidental damage in addition to the initial out-of-date warranty repair." Mot. at 18. To counter Apple's contentions, English points to the name of the program ("AppleCare+ Enroll at Time of Incident"), the same training materials, and the statistics behind the number of customers who purchased AC+ at the time of incident and allegedly used both incidents. She does not suggest how Ryan's alleged failure to provide a second incident was fraudulent, and she therefore has not shown how the issue of whether she was denied a second incident is material to any of her claims in this case.
On January 27, 2015, this court signed a stipulated Protective Order in this case. Dkt. No. 127. To abide by this protective order, plaintiff filed an administrative motion to file certain documents under seal, Dkt. No. 304, and "corrected" exhibits, Dkt. No. 306. Plaintiff also introduces some exhibits via declaration at Dkt. No. 310. "Plaintiff takes no position . . . but wishes to give defendants every opportunity to request that the documents be sealed." Admin. Mot. ¶ 3, see also Kennedy Decl. ¶ 5 (Dkt. No. 304-1). Given that plaintiff seeks only to abide by the protective order, I will focus on defendants' responses to plaintiff's motions.
Some documents filed by plaintiff were previously sealed, which is indicated in the table below. For ease of reference, documents are ordered by ECF number. Apple submitted the declaration of Pami Vyas in support of sealing, which states that plaintiff's opposition and supporting exhibits contains: "(i) confidential information regarding Apple's testing processes, (ii) confidential information regarding Apple's sales and service numbers, and (iii) confidential information regarding Apple's databases and data capabilities." Vyas Decl. ¶ 2 (Dkt. No. 315-1).
Apple filed a motion to seal portions of its reply, Dkt. No. 319, supported by the Vyas declaration at Dkt. No. 319-1. For the most part, I find Apple's requests specific and narrowly tailored to cover only highly confidential information. Apple's specific and narrowly tailored requests to seal information pertaining to its testing processes and procedures, sales and services numbers, and databases are GRANTED as indicated in the table below.
However, I am unsealing a portion of Apple's business records pertaining to English that I previously sealed because I do not find that Apple has established compelling reasons to seal the text entry. The request to seal all references [REDACTED\]." is DENIED. In addition, I plan to unredact this Order in its entirety and to unseal all general information related to the type of devices used as replacement units. There is no compelling reason to redact any of it. But because I previously granted requests to seal this information, if Apple disagrees it should respond within seven days with compelling reasons why any reference in this Order should remain under seal.
I otherwise rule on the motions as follows:
I GRANT Apple's motion for summary judgment in full and will enter judgment accordingly. English has failed to raise a disputed issue whether she relied on an affirmative misrepresentation made by defendants, dooming her CLRA, FAL, UCL, and common law fraud claims. Her claim under Secondhand Merchandise Labeling Law claim fails because there is no dispute that she received new phones. Her request for further discovery lacks good cause and is DENIED.
