Rutter v. Apple Inc.

District Court, N.D. California·Decided January 11, 2024·No. 4:21-cv-04077·Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 WILLIAM RUTTER, et al., Case No. 21-cv-04077-HSG

8 Plaintiffs, ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 9 v. Re: Dkt. No. 58 10 APPLE INC., 11 Defendant.

12 13 Pending before the Court is Defendant Apple Inc.’s Motion to Dismiss Plaintiffs’ Third 14 Amended Complaint. Dkt. No. 58. The Court finds this matter appropriate for disposition without 15 oral argument and the matter is deemed submitted. See Civil L.R. 7-1(b). For the reasons 16 discussed below, the Court GRANTS the motion. 17 I. BACKGROUND 18 The Court dismissed Plaintiffs’ first amended complaint (“FAC”) on May 6, 2022. Dkt. 19 No. 37 (“MTD FAC Order”).1 Plaintiffs filed a second amended complaint (“SAC”) on May 27, 20 2022, Dkt. No. 38, which the Court dismissed on May 5, 2023. Dkt. No. 51 (“MTD SAC Order”). 21 Plaintiffs filed a third amended complaint (“TAC”) on May 25, 2023, bringing claims under the 22 California Consumers Legal Remedies Act (“CLRA”) and Unfair Competition Law (“UCL”), and 23 alleging breach of contract. See generally Dkt. No. 52 (“TAC”). On June 27, 2023, Defendant 24 moved to dismiss the TAC in its entirety. Dkt. No. 58 (“Mot.”). 25 II. LEGAL STANDARD 26 Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain 27 1 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A 2 defendant may move to dismiss a complaint for failing to state a claim upon which relief can be 3 granted under Rule 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the 4 complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 5 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 6 12(b)(6) motion, a plaintiff need only plead “enough facts to state a claim to relief that is plausible 7 on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible 8 when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that 9 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 10 In reviewing the plausibility of a complaint, courts “accept factual allegations in the 11 complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” 12 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nevertheless, 13 courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of 14 fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 15 2008) (quoting Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)). 16 Federal Rule of Civil Procedure 9(b) heightens these pleading requirements for all claims 17 that “sound in fraud” or are “grounded in fraud.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 18 (9th Cir. 2009) (citation omitted); Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party must 19 state with particularity the circumstances constituting fraud or mistake.”). The Ninth Circuit has 20 interpreted Rule 9(b) to require that allegations of fraud are “specific enough to give defendants 21 notice of the particular misconduct which is alleged to constitute the fraud charged so that they can 22 defend against the charge and not just deny that they have done anything wrong.” Neubronner v. 23 Milken, 6 F.3d 666, 671 (9th Cir. 1993) (quotation marks and citation omitted). 24 In short, a fraud claim must state “the who, what, when, where, and how” of the alleged 25 conduct, Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997) (internal citations and quotations 26 omitted), and “set forth an explanation as to why [a] statement or omission complained of was 27 false and misleading.” In re GlenFed, Inc. Secs. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en 1 in Ronconi v. Larkin, 252 F.3d 423, 429 & n.6 (9th Cir. 2001). “Malice, intent, knowledge and 2 other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). 3 III. DISCUSSION 4 Defendant’s third motion to dismiss Plaintiffs’ case will be its last. Because Plaintiffs 5 again fail to state any plausible claim, the Court GRANTS Defendant’s motion and DENIES 6 Plaintiffs any further leave to amend their complaint. 7 A. CLRA and UCL CLAIMS 8 In their TAC, Plaintiffs advance yet another evolution of CLRA and UCL claims, this time 9 focused on the purported difficulty of reducing stored data. In a nutshell, and generously 10 interpreted, Plaintiffs argument is that Apple misled them with a two-step scheme. Step 1: Offer 5 11 GB of free data storage as a taste to “addict” Plaintiffs to Apple’s data storage service. TAC ¶ 12 183. Step 2: Make it virtually impossible for users to reduce stored data below the 5 GB limit, 13 necessitating their purchase of paid storage tiers. For the reasons described previously, the Court 14 continues to find that these allegations sound in fraud and are subject to the heightened Rule 9(b) 15 pleading standard. See MTD SAC Order at 6. And, as before, the Court finds that Plaintiffs fail to 16 make out a cognizable claim under this standard. See MTD FAC Order; MTD SAC Order. 17 i. The Representations at Issue 18 To ground its analysis, the Court begins by identifying the representations with which 19 Plaintiffs appear to take issue. To the best of the Court’s understanding, Plaintiffs’ arguments rest 20 on the following representations made in the iCloud Terms & Conditions (also referred to by 21 Plaintiffs as the “Legal Agreement”), the iCloud Capacity Email, and the iCloud Confirmation 22 Email2: 23 // 24 // 25 26 2 Plaintiffs refer to an “iCloud Warning Email,” but since prior orders referred to that 27 communication as the “iCloud Capacity Email,” the Court will continue to do so here. Plaintiffs 1 e iCloud Terms and Conditions: 2 You can change your subscription by upgrading or downgrading your storage under the iCloud section of 3 Settings on your device, or under the iCloud pane of System Preferences on your Mac or (Cloud for Windows on your PC. 4 5 || See Dkt. No. 41-1 (“T&Cs”) at 8; 46.3 6 Effects of cancellation 7 We will reduce your storage back to 5 GB and reimburse you no later than 14 days from the day on which we receive your cancellation notice. If you have used more than 5GB of storage during this period, you may g not be able to create any more iCloud backups or use certain features until you have reduced your storage.

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Rutter v. Apple Inc., (N.D. Cal. 2024).

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