1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CARLOS GORDOA, et al., Case No. 22-cv-02900-JSC
8 Plaintiffs, ORDER RE: MOTION TO DISMISS 9 v. FIRST AMENDED COMPLAINT
10 APPLE, INC., et al., Re: Dkt. No. 45 Defendants. 11
12 13 Plaintiffs bring product defect and related claims against Defendants, Apple Inc., 14 Luxshare-Ict, Inc., and Luxshare Precision Industry Co., Ltd, after Plaintiff B.G. suffered 15 permanent damage to his right ear following delivery of an Amber Alert notification through his 16 Apple AirPod Pro headphones. (Dkt. No. 41.) Before the Court is Apple’s partial motion to 17 dismiss two of Plaintiffs’ claims and request for punitive damages, which is joined by Defendants 18 Luxshare-Ict, Inc., and Luxshare Precision Industry Co., Ltd. (Dkt. Nos. 45, 46.) Having 19 reviewed the parties’ briefs and having had the benefit of oral argument on October 20, 2022, the 20 Court GRANTS the motion to dismiss. 21 DISCUSSION 22 A. Choice of Law 23 Defendants insist that Texas law governs this dispute. Because jurisdiction in this case is 24 premised on diversity, the Court applies California’s governmental interest test to determine which 25 law applies to the claims. See Rustico v. Intuitive Surgical, Inc., 993 F.3d 1085, 1091 (9th Cir. 26 2021); McCann v. Foster Wheeler LLC, 48 Cal. 4th 68, 87 (2010). The governmental interest test 27 has three parts: (1) “whether the substantive laws of California and the foreign jurisdiction differ 1 have in the application of their respective laws”; and (3) if more than one jurisdiction has a 2 legitimate interest, a “comparative impairment of the interested jurisdictions” to determine “whose 3 interest would be the more impaired if its law were not applied.” Cooper v. Tokyo Elec. Power 4 Co. Holdings, Inc., 960 F.3d 549, 559 (9th Cir. 2020), cert. denied, 209 L. Ed. 2d 503 (Mar. 29, 5 2021) (cleaned up). The Court must conduct a choice-of-law analysis for each issue, and 6 Defendants bear the burden to show Texas law applies. See, e.g., Wash. Mut. Nat’l Bank v. Sup. 7 Ct., 24 Cal. 4th 906, 919-20 (2001). 8 Defendants have not met their burden here. Defendants assert that California and Texas 9 law differ in material respects, but their opening brief provides no law to support that attorney 10 argument. (Dkt. No. 45 at 14.) Further, their analysis falls well short of the type of comparative 11 impairment analysis required. See Cooper, 960 F.3d at 559 (requiring court to be able to “identify 12 and apply ‘the law of the state whose interest would be the more impaired if its law were not 13 applied”). (Dkt. No. 45 at 14-15.) Accordingly, the Court assumes, without finally deciding, that 14 California law applies to Plaintiffs’ claims. 15 B. Adequacy of Allegations 16 1. Gross Negligence 17 Gross negligence requires “the traditional elements of negligence: duty, breach, causation, 18 and damages” plus “conduct by the defendant involving either want of even scant care or an 19 extreme departure from the ordinary standard of conduct.” Chavez v. 24 Hour Fitness USA, Inc., 20 238 Cal. App. 4th 632, 640 (2015) (cleaned up). “[M]ere nonfeasance, such as the failure to 21 discover a dangerous condition or to perform a duty, amounts to ordinary negligence.” Anderson 22 v. Fitness Internat., LLC, 4 Cal. App. 5th 867, 881 (2016) (cleaned up). “[C]onduct demonstrating 23 the failure to guard against, or warn of, a dangerous condition typically does not rise to the level of 24 gross negligence.” Id. 25 Plaintiffs allege that Defendants were aware of “the design, manufacturing, or marketing 26 defects affecting the AirPods from a long list of complaints and inquiries made by Apple’s own 27 customers through Apple’s own ‘discussion’ forum on Apple’s own website.” (Dkt. No. 41 at ¶ 1 relevant here as the rest postdate the May17, 2020 incident. First, in September 2018 a user 2 inquired as to “how to turn down the ‘alert volume’ when wearing her AirPods because ‘[i]t scares 3 me half to death every time and hurts my ears.’” (Id.) Second, in April 2019, another user posted 4 “when a notification comes through I want to rip my AirPods out, is so loud!” (Id. at ¶ 21.) A 5 “community specialist” responded to this post with suggestions for turning down the notification 6 volume. (Id.) Third, in October 2019, another user complained that the AirPod notifications 7 “come in excruciatingly loud.” (Id. at ¶ 22.) A “community specialist” likewise responded to this 8 post with suggestions for how to adjust the volume. (Id.) 9 “Gross negligence connotes such a lack of care as may be presumed to indicate a passive 10 and indifferent attitude toward results.” Chavez, 238 Cal. App. 4th at 640 (cleaned up). The 11 allegations here do not plausibly suggest that Defendants evidenced an extreme lack of care 12 sufficient to indicate indifference to the risk of permanent hearing loss. First, none of the user 13 comments cited put Apple on notice of the risk of injury, let alone the risk of the type of injury 14 alleged here. Second, none of the posts refer to a problem with the AirPods failing to 15 automatically adjust the notification volume, which is the defect alleged here. Third, to the extent 16 that the posts refer to issues with the volume of the notifications, Apple responded to the posts 17 with suggestions to reduce the volume on the notifications and there is no allegation that Apple 18 was told that these suggestions did not work to lower the volume of notifications generally or 19 Amber Alert notifications specifically. Plaintiffs must allege that Defendants did more than fail to 20 discover an allegedly dangerous condition. See Anderson, 4 Cal. App. 5th at 882. 21 As currently pled, Plaintiffs have not alleged “extreme conduct” sufficient to give rise to a 22 claim for gross negligence under California law. 23 2. Fraud by Non-Disclosure 24 The “elements of a cause of action for fraud are: (1) a misrepresentation, which includes a 25 concealment or nondisclosure; (2) knowledge of the falsity of the misrepresentation, i.e., scienter; 26 (3) intent to induce reliance on the misrepresentation; (4) justifiable reliance; and (5) resulting 27 damages.” Cadlo v. Owens-Illinois, Inc., 125 Cal. App. 4th 513, 519 (2004), as modified (Dec. 30, 1 specifics of his or her reliance on the misrepresentation to show a bona fide claim of actual 2 reliance. Actual reliance occurs when the defendant’s misrepresentation is an immediate cause of 3 the plaintiff’s conduct, altering his legal relations, and when, absent such representation, the 4 plaintiff would not, in all reasonable probability, have entered into the transaction.” Id. (cleaned 5 up). 6 Plaintiffs allege that Defendants were aware of, but did not disclose, that the subject 7 AirPods Pro were defective because they “(a) fail to automatically reduce or limit notification 8 and/or alert volumes; (b) fail to self-adjust, incrementally increase, or otherwise equalize 9 notification and/or alert volumes; and (c) fail to include any warnings of the defect(s) described 10 herein or fail to include adequate warnings of the defect(s).” (Dkt. No. 41 ¶ 83.) Further, 11 “Plaintiffs and B.G. were unaware of these defects and facts, and Plaintiffs and B.G. would have 12 heeded the warning and/or instructions or they would not have purchased the product had they 13 known of these concealed or suppressed facts.” (Id.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CARLOS GORDOA, et al., Case No. 22-cv-02900-JSC
8 Plaintiffs, ORDER RE: MOTION TO DISMISS 9 v. FIRST AMENDED COMPLAINT
10 APPLE, INC., et al., Re: Dkt. No. 45 Defendants. 11
12 13 Plaintiffs bring product defect and related claims against Defendants, Apple Inc., 14 Luxshare-Ict, Inc., and Luxshare Precision Industry Co., Ltd, after Plaintiff B.G. suffered 15 permanent damage to his right ear following delivery of an Amber Alert notification through his 16 Apple AirPod Pro headphones. (Dkt. No. 41.) Before the Court is Apple’s partial motion to 17 dismiss two of Plaintiffs’ claims and request for punitive damages, which is joined by Defendants 18 Luxshare-Ict, Inc., and Luxshare Precision Industry Co., Ltd. (Dkt. Nos. 45, 46.) Having 19 reviewed the parties’ briefs and having had the benefit of oral argument on October 20, 2022, the 20 Court GRANTS the motion to dismiss. 21 DISCUSSION 22 A. Choice of Law 23 Defendants insist that Texas law governs this dispute. Because jurisdiction in this case is 24 premised on diversity, the Court applies California’s governmental interest test to determine which 25 law applies to the claims. See Rustico v. Intuitive Surgical, Inc., 993 F.3d 1085, 1091 (9th Cir. 26 2021); McCann v. Foster Wheeler LLC, 48 Cal. 4th 68, 87 (2010). The governmental interest test 27 has three parts: (1) “whether the substantive laws of California and the foreign jurisdiction differ 1 have in the application of their respective laws”; and (3) if more than one jurisdiction has a 2 legitimate interest, a “comparative impairment of the interested jurisdictions” to determine “whose 3 interest would be the more impaired if its law were not applied.” Cooper v. Tokyo Elec. Power 4 Co. Holdings, Inc., 960 F.3d 549, 559 (9th Cir. 2020), cert. denied, 209 L. Ed. 2d 503 (Mar. 29, 5 2021) (cleaned up). The Court must conduct a choice-of-law analysis for each issue, and 6 Defendants bear the burden to show Texas law applies. See, e.g., Wash. Mut. Nat’l Bank v. Sup. 7 Ct., 24 Cal. 4th 906, 919-20 (2001). 8 Defendants have not met their burden here. Defendants assert that California and Texas 9 law differ in material respects, but their opening brief provides no law to support that attorney 10 argument. (Dkt. No. 45 at 14.) Further, their analysis falls well short of the type of comparative 11 impairment analysis required. See Cooper, 960 F.3d at 559 (requiring court to be able to “identify 12 and apply ‘the law of the state whose interest would be the more impaired if its law were not 13 applied”). (Dkt. No. 45 at 14-15.) Accordingly, the Court assumes, without finally deciding, that 14 California law applies to Plaintiffs’ claims. 15 B. Adequacy of Allegations 16 1. Gross Negligence 17 Gross negligence requires “the traditional elements of negligence: duty, breach, causation, 18 and damages” plus “conduct by the defendant involving either want of even scant care or an 19 extreme departure from the ordinary standard of conduct.” Chavez v. 24 Hour Fitness USA, Inc., 20 238 Cal. App. 4th 632, 640 (2015) (cleaned up). “[M]ere nonfeasance, such as the failure to 21 discover a dangerous condition or to perform a duty, amounts to ordinary negligence.” Anderson 22 v. Fitness Internat., LLC, 4 Cal. App. 5th 867, 881 (2016) (cleaned up). “[C]onduct demonstrating 23 the failure to guard against, or warn of, a dangerous condition typically does not rise to the level of 24 gross negligence.” Id. 25 Plaintiffs allege that Defendants were aware of “the design, manufacturing, or marketing 26 defects affecting the AirPods from a long list of complaints and inquiries made by Apple’s own 27 customers through Apple’s own ‘discussion’ forum on Apple’s own website.” (Dkt. No. 41 at ¶ 1 relevant here as the rest postdate the May17, 2020 incident. First, in September 2018 a user 2 inquired as to “how to turn down the ‘alert volume’ when wearing her AirPods because ‘[i]t scares 3 me half to death every time and hurts my ears.’” (Id.) Second, in April 2019, another user posted 4 “when a notification comes through I want to rip my AirPods out, is so loud!” (Id. at ¶ 21.) A 5 “community specialist” responded to this post with suggestions for turning down the notification 6 volume. (Id.) Third, in October 2019, another user complained that the AirPod notifications 7 “come in excruciatingly loud.” (Id. at ¶ 22.) A “community specialist” likewise responded to this 8 post with suggestions for how to adjust the volume. (Id.) 9 “Gross negligence connotes such a lack of care as may be presumed to indicate a passive 10 and indifferent attitude toward results.” Chavez, 238 Cal. App. 4th at 640 (cleaned up). The 11 allegations here do not plausibly suggest that Defendants evidenced an extreme lack of care 12 sufficient to indicate indifference to the risk of permanent hearing loss. First, none of the user 13 comments cited put Apple on notice of the risk of injury, let alone the risk of the type of injury 14 alleged here. Second, none of the posts refer to a problem with the AirPods failing to 15 automatically adjust the notification volume, which is the defect alleged here. Third, to the extent 16 that the posts refer to issues with the volume of the notifications, Apple responded to the posts 17 with suggestions to reduce the volume on the notifications and there is no allegation that Apple 18 was told that these suggestions did not work to lower the volume of notifications generally or 19 Amber Alert notifications specifically. Plaintiffs must allege that Defendants did more than fail to 20 discover an allegedly dangerous condition. See Anderson, 4 Cal. App. 5th at 882. 21 As currently pled, Plaintiffs have not alleged “extreme conduct” sufficient to give rise to a 22 claim for gross negligence under California law. 23 2. Fraud by Non-Disclosure 24 The “elements of a cause of action for fraud are: (1) a misrepresentation, which includes a 25 concealment or nondisclosure; (2) knowledge of the falsity of the misrepresentation, i.e., scienter; 26 (3) intent to induce reliance on the misrepresentation; (4) justifiable reliance; and (5) resulting 27 damages.” Cadlo v. Owens-Illinois, Inc., 125 Cal. App. 4th 513, 519 (2004), as modified (Dec. 30, 1 specifics of his or her reliance on the misrepresentation to show a bona fide claim of actual 2 reliance. Actual reliance occurs when the defendant’s misrepresentation is an immediate cause of 3 the plaintiff’s conduct, altering his legal relations, and when, absent such representation, the 4 plaintiff would not, in all reasonable probability, have entered into the transaction.” Id. (cleaned 5 up). 6 Plaintiffs allege that Defendants were aware of, but did not disclose, that the subject 7 AirPods Pro were defective because they “(a) fail to automatically reduce or limit notification 8 and/or alert volumes; (b) fail to self-adjust, incrementally increase, or otherwise equalize 9 notification and/or alert volumes; and (c) fail to include any warnings of the defect(s) described 10 herein or fail to include adequate warnings of the defect(s).” (Dkt. No. 41 ¶ 83.) Further, 11 “Plaintiffs and B.G. were unaware of these defects and facts, and Plaintiffs and B.G. would have 12 heeded the warning and/or instructions or they would not have purchased the product had they 13 known of these concealed or suppressed facts.” (Id. at ¶ 86.) 14 Plaintiffs’ allegations fail to state a claim for fraud by nondisclosure because they fail to 15 support a plausible inference either that (1) Apple was aware of the defect, or (2) that Plaintiffs 16 relied on the nondisclosure. Plaintiffs rely on the comments posted on Apple’s community forum 17 to demonstrate that Apple was aware of the defect—the failure of the AirPods to automatically 18 adjust volume—however, as with the gross negligence claim, these posts fail to put Apple on 19 notice of the alleged defect as none of the posts were about the fact that the AirPods did not 20 automatically adjust the volume for notifications or that serious injury resulted from the 21 notification volume. See Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1145 (9th Cir. 2012) 22 (noting that under California law, plaintiffs must allege that the defendant was aware of the 23 defect). 24 Further, Plaintiffs have not alleged that they reviewed the product information and relied to 25 their detriment on the lack of a warning regarding notification levels. (Dkt. No. 41 at ¶ 29 ([i]n 26 the event Plaintiffs or B.G. received warnings or instructions or proper or adequate warnings or 27 instructions as to the risks associated with AirPods….Plaintiffs and B.G. would have heeded the 1 warning and/or instructions.”).)! Given Plaintiffs’ failure to allege that they read the information 2 || that was disclosed, their allegations do not support a plausible inference that had additional 3 information been disclosed—such as the alleged defect—that they would have behaved 4 differently. See Mirkin v. Wasserman, 5 Cal. 4th 1082, 1093 (1993) (“to prove reliance on an 5 omission[ [o]ne need only prove that, had the omitted information been disclosed one would have 6 || been aware of it and behaved differently.”) Plaintiffs’ reliance on Peel v. BrooksAmerica Mortg. 7 Corp., 788 F. Supp. 2d 1149, 1162 (C.D. Cal. 2011), is unpersuasive. That case was about loan 8 documents and the interest rates disclosed; it is reasonable to presume that a consumer would read 9 such an important documents. Not so with the instructions/warnings for AirPods. 10 Accordingly, Plaintiffs have not plausibly alleged a claim of fraud by non-disclosure. 11 3. Punitive Damages 12 Plaintiffs’ punitive damages request flows from their gross negligence and fraud claims. 13 (Dkt. No. 41 at {fj 38-40; 89-91.) Because those claims are dismissed, Defendants’ motion to 14 || dismiss the punitive damages request is moot. CONCLUSION a 16 For the reasons stated above, Defendants’ motion to dismiss is GRANTED. Plaintiffs may 3 17 file an amended complaint within 14 days of this Order. If Plaintiffs elect not to do so, 18 Defendants’ answer is due November 10, 2022. 19 The Court sets an initial case management conference for November 17, 2022 at 1:30 p.m. 20 || via Zoom video with a joint case management statement due November 10, 2022. 21 This Order disposes of Docket No. 45. 22 IT IS SO ORDERED. 23 Dated: October 21, 2022 24 | 25 ne JACQUELINE SCOTT CORLE 26 United States District Judge 27 28 Plaintiffs do not allege that the warning reprinted in the FAC is the warning that was provided with Plaintiffs’ AirPod Pros or that Plaintiffs otherwise read that warning. (Dkt. No. 41 at 83.)