Davidson v. Apple, Inc.

District Court, N.D. California·Decided November 22, 2019·No. 5:16-cv-04942·Unknown

Opinion

NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

THOMAS DAVIDSON, et al., Case No. 16-CV-04942-LHK

Plaintiffs, ORDER DENYING DEFENDANT’S MOTION TO DENY CLASS v. CERTIFICATION

APPLE, INC., Re: Dkt. No. 409 Defendant. Plaintiffs bring this putative class action against Defendant Apple, Inc. based on Defendant’s alleged failure to disclose an alleged defect in the iPhone 6 and the iPhone 6 Plus. Before the Court is Defendant’s motion to deny class certification. ECF No. 409. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court DENIES Defendant’s motion to deny class certification. A. Factual Background Defendant is the designer, manufacturer, marketer, and seller of the iPhone smartphone. ECF No. 172 ¶ 25 (Fourth Amended Class Action Complaint, or “FACC”). The iPhone utilizes a touchscreen for users to interact with the device, and use of the touchscreen is required to send text messages, capture video, browse the internet, and access applications, among other functions. Id. ¶¶ 26, 28. Defendant released the iPhone 6 and iPhone 6 Plus on September 19, 2014. Id. ¶ 25. The iPhone 6 and 6 Plus both have a larger touchscreen than Defendant’s prior iPhone models. Id. ¶ 30. Purchasers of the iPhone 6 and 6 Plus had 14 days after purchase to return their iPhones for a full refund. ECF No. 54-2. According to Plaintiffs, the iPhone 6 and 6 Plus “suffer from a material manufacturing defect that causes the touchscreen to become unresponsive to users’ touch inputs” (hereinafter, the “touchscreen defect”). Id. ¶ 43. Plaintiffs allege that the touchscreen defect is caused by a defect in the iPhone’s external casing. Id. ¶ 45. Specifically, “the touchscreen function fails because the phones’ external aluminum casing, whose primary purpose is to protect the sensitive internal components from strain, is insufficient to prevent the phones from bending during normal use.” ECF No. 174 at 4. This bending causes two main forms of damage to the iPhone’s circuits: “trace cracks . . . and/or solder ball cracks, both of which negatively affect the flow of electricity.” Id. at 6. Specifically, the damage interrupts the flow of electricity within circuits, thereby preventing the iPhone from recognizing when a user is touching the screen. Id. The problem is at first intermittent, but becomes permanent as time passes and the trace and solder ball cracks worsen. Eventually, the touchscreen defect “causes the touchscreen to completely fail to respond to user inputs.” Id. at 7. Plaintiffs allege that Defendant knew about the touchscreen defect before releasing the iPhone 6 and 6 Plus on September 19, 2014. A consumer posted on Defendant’s website about “iPhone 6 touchscreen problems” on September 18, 2014, the day before the iPhone 6 and 6 Plus were released to the public. FACC ¶ 54; see also id. ¶¶ 66–69 (other consumer complaints from shortly after the release date). Moreover, Defendant’s internal testing “determined that the iPhone 6 was 3.3 times more likely to bend than the iPhone 5s (the model immediately prior to the subject iPhones) and that the iPhone 6 Plus was 7.2 times more likely to bend than the iPhone 5s.” ECF No. 174 at 8. Underscoring the point, one of the major concerns Defendant identified prior to launching the iPhones was that they were “likely to bend more easily when compared to previous generations,” something that Defendant described as “expected behavior.” ECF No. 173-18 at 15. Plaintiffs allege that within days of the iPhones’ release on September 19, 2014, “there were widespread consumer complaints about the iPhones bending.” ECF No. 174 at 8. Plaintiffs state that Defendant then publicly denied that there was a bending problem, an incident the media termed “BendGate.” FACC ¶ 54; ECF No. 174 at 8. Specifically, Defendant stated: Our iPhones are designed, engineered, and manufactured to be both beautiful and sturdy. iPhone 6 and iPhone 6 Plus feature a precision engineered unibody enclosure constructed from machining a custom grade of 6000 series anodized aluminum, which is tempered for extra strength. They also feature stainless steel and titanium inserts to reinforce high stress locations and use the strongest glass in the smartphone industry. We chose these high-quality materials and construction very carefully for their strength and durability. We also perform rigorous tests throughout the entire development cycle including 3-point bending, pressure point cycling, sit, torsion, and user studies. iPhone 6 and 6 Plus meet or exceed all of our high quality standards to endure everyday, real life use. With normal use a bend in iPhone [sic] is extremely rare and through our first six days of sale, a total of nine customers have contacted Apple with a bent iPhone 6 Plus. As with any Apple product, if you have questions please contact Apple. FACC ¶ 79. After internal investigation, Defendant determined that underfill was necessary to resolve the problems caused by the touchscreen defect. As Plaintiffs explain, “[u]nderfill is a bead of epoxy encapsulant that is placed on a circuit chip to reinforce its attachment to the board substrate and to stiffen the surrounding assembly. . . . Underfill is used to prevent the manifestation of chip defects induced by bending because it reinforces the connections and prevents them from bending away from the substrate.” ECF No. 174 at 11 (internal citations omitted). Defendant had used underfill on the preceding iPhone generation but did not start using it on the Meson (U2402) chip in the iPhone 6 and iPhone 6 Plus until May 2016. Id. On November 18, 2016, Defendant announced a customer service program related to the touchscreen defect called the “Multi-Touch Repair Program.” FACC ¶ 119. Prior to the Multi- Touch Repair Program, Defendant charged approximately $349 for a refurbished iPhone when a consumer complained of the touchscreen defect outside of Defendant’s warranty. Id. Through the Repair Program, Defendant has offered to repair consumers’ devices for $149 if the iPhone is otherwise working, and the screen is not broken. Id. Defendant also offers to reimburse consumers for amounts previously paid over $149. Id. ¶ 120. Plaintiffs allege that Defendant did not disclose the existence of the touchscreen defect despite having exposed consumers to materials in which Defendant could have disclosed the defect. Each new iPhone 6 and 6 Plus came in an identical box designed by Defendant that contained various disclosures and advertisements about the iPhones’ capabilities. See ECF No. 173-22 at 4–7. Inside the iPhone box, Defendant included two documents that made additional representations about the iPhone. ECF No. 174 at 10. Defendant also requires users to navigate an iPhone setup process before the iPhone can be used, and periodically releases updates to the iPhones’ software. ECF No. 174-4; ECF No. 174 at 10, 22. However, Defendant did not disclose the defect in any of these materials. B. Procedural History On August 27, 2016, Plaintiffs Thomas Davidson, Jun Bai, and Todd Cleary filed a putative class action complaint against Defendant that alleged claims under (1) California’s Consumer Legal Remedies Act, Cal. Civ. Code § 1750; (2) Unfair Competition Law, Cal Bus. & Prof. Code § 17200; (3) False Advertisement Law, Cal. Bus. & Prof. Code § 17500; (4) common law fraud; (5) negligent misrepresentation; (6) unjust enrichment; (7) breach of implied warranty; (8) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301; and (9) violation of the Song-Beverly Consumer Warranty Act, Cal. Civ. Code §

Davidson v. Apple, Inc., (N.D. Cal. 2019).

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