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An iPhone purchaser's reliance on Apple Inc.'s online representations about the product's heightened data safety environment was sufficient to establish standing to sue the company over unauthorized data uploads by its application developers, the U.S. District Court for the Northern District of California ruled Aug. 5 (Pirozzi v. Apple, Inc., N.D. Cal., No. 4:12-cv-01529-YGR, dismissed in part 8/5/13).
The causal connection between Apple's representations about the security of the iPhone and its applications and the plaintiff's alleged loss was clear, the court ruled. “Apple claimed that apps could not access data from other apps, and, according to the Second Amended Complaint, in actuality, they can and have,” it said. That is enough to create Article III standing, the court ruled.
The plaintiff in this case, Maria Pirozzi, wanted to buy a smartphone with apps that would handle her data securely. She claimed that in deciding upon the iPhone she relied on Apple's online representation that all iPhone apps run in a safe environment.
The Apple site purportedly said, “All apps run in a safe environment, so a website or app can't access data from other apps.” Pirozzi's complaint in this proposed class action alleged that the statements simply were not true and that apps like Twitter, Facebook, and Angry Birds, among others, were downloading user data without consent.
Pirozzi brought five causes of action against Apple, including claims for violations of: California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200; the state's False and Misleading Advertising Law, Cal. Bus. & Prof. Code § 17500; and its Consumer Legal Remedies Act (CLRA), Cal. Civ. Code § 1750.
Had Pirozzi known these apps could potentially “steal her private photos and contacts,” she would not have downloaded the apps, and would not have paid so much for the iPhone, she claimed.
The court earlier dismissed the suit for Pirozzi's failure to satisfy the Article III causal connection requirement by not identifying statements by Apple that were material to her purchasing decision (12 PVLR 50, 1/7/13). Here, the court said, she fixed that omission.
Along the way, the court rejected an argument by Apple that Pirozzi did not qualify as a “consumer” for purposes of the CLRA claim.
The CLRA defines “consumer” as a person who acquires “by purchase or lease” a good or service for personal, family, or household use, the court pointed out. “Plaintiff's overpayment claim relates to the purchase of her iPhone: an iPhone is a good; she bought it from Apple; she is a consumer,” it said. That the claim deals with how the device functions did not change that equation, the court concluded.
The only cause of action that the court dismissed was Pirozzi's unjust enrichment claim, which is not a separate cause of action under California law, but rather a remedy in certain actions.
James S. Notis, Jennifer Sarnelli, and Kira German of Gardy & Notis LLP, in Englewood Cliffs, N.J., and Martin Stuart Bakst, in Encino, Calif., represented Pirozzi. S. Ashlie Beringer and Maia T. Perez of Gibson Dunn & Crutcher LLP, in Palo Alto, Calif., along with Joshua A. Jessen of the firm's Irvine, Calif., office, represented Apple.
Full text of the court's opinion is available at http://www.bloomberglaw.com/public/document/Pirozzi_v_Apple_Inc_Docket_No_312cv01529_ND_Cal_Mar_27_2012_Court/1.
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