Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 1 of 30
`
`
`
`CUNNINGHAM BOUNDS, LLC
`Steven Nicholas (admitted Pro Hac Vice)
`sln@cunninghambounds.com
`Lucy E. Tufts (admitted Pro Hac Vice)
`let@cunninghambounds.com
`1601 Dauphin Street
`Mobile, AL 36604
`Telephone: (251) 471-6191
`Facsimile: (251) 479-1031
`
`KILBORN LAW, LLC
`Benjamin H. Kilborn, Jr. (admitted Pro Hac
`Vice)
`benk@kilbornlaw.com
`P.O. Box 2164
`Fairhope, AL 36533
`Telephone: (251) 929-4623
`
`Counsel for Plaintiffs and the Proposed Class
`
`MORGAN & MORGAN
`COMPLEX LITIGATION GROUP
`Michael F. Ram (SBN 104805)
`mram@forthepeople.com
`Marie N. Appel (SBN 187483)
`mappel@forthepeople.com
`711 Van Ness Avenue, Suite 500
`San Francisco, CA 94102
`Telephone: (415) 358-6913
`Facsimile: (415) 358-6293
`
`Ra O. Amen (admitted Pro Hac Vice)
`ramen@forthepeople.com
`201 N. Franklin Street, 7th Floor
`Tampa, Florida 33602
`Telephone: (813) 223-5505
`Facsimile: (813) 223-5402
`
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`CHRIS SMITH, CHERYL SMITH, KAREN
`SMITHSON, JASON ROUSH, COREY
`POMROY, FRANK ORTEGA, LESLIE WHITE,
`ALBERTO CORNEA, MICHELLE ROGERS,
`JOSHUA BAYS, DEBORAH CLASS, and
`AMBER JONES, individually and on behalf of all
`other similarly situated individuals,
`
`
`Plaintiffs,
`
`
`v.
`
`APPLE INC.,
`
`
`Defendant.
`
`
`Case No.: 4:21-cv-09527-HSG
`
`PLAINTIFFS’ OPPOSITION TO APPLE
`INC.’S MOTION TO DISMISS FIRST
`AMENDED COMPLAINT
`
`Date: November 10, 2022
`Time: 2:00 p.m.
`Dept.: Courtroom 2 – 4th Floor
`Judge: Hon. Haywood S. Gilliam, Jr.
`
`Am. Compl. Filed: March 28, 2022
`
`
`
`15
`
`
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`
`
`
`
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 2 of 30
`
`
`
`TABLE OF CONTENTS
`
`TABLE OF CONTENTS ............................................................................................................................. i
`
`TABLE OF AUTHORITIES ..................................................................................................................... iii
`
`I.
`
`STATEMENT OF FACTS ............................................................................................................. 1
`
`A. The material design defect in Apple Watches creates an unreasonable safety
`hazard. ...................................................................................................................... 1
`
`B. Apple knew of the Defect ........................................................................................ 2
`
`II.
`
`LEGAL STANDARD ..................................................................................................................... 3
`
`III.
`
`ARGUMENT .................................................................................................................................. 4
`
`A. Plaintiffs’ claims for equitable relief are not co-extensive with their claims for
`damages, and thus are properly alleged in the alternative under Federal Rule
`8(a)(3). ..................................................................................................................... 4
`
`B. Choice of law analysis would be premature before discovery................................ 4
`
`i. Discovery is required to determine whether Plaintiffs from outside California
`may assert claims under the UCL and CLRA. ................................................... 4
`
`ii. Apple concedes that additional discovery is necessary to determine other
`questions regarding choice of law...................................................................... 6
`
`C. Plaintiffs have adequately pled their fraudulent omission claims. ......................... 7
`
`i. Plaintiffs have adequately pled Apple’s pre-sale knowledge of the Defect. ..... 7
`
`ii. Plaintiffs have adequately pled an unreasonable safety hazard. ...................... 12
`
`iii. Plaintiff Smithson’s claims are not time-barred and she has Article III
`standing because she adequately alleges that she suffered an injury-in-fact. 13
`
`iv. Plaintiffs adequately allege violations of the consumer fraud statutes of
`Michigan, New York, and Texas. .................................................................... 14
`
`D. Plaintiffs’ warranty claims under California law are adequately pled. ................. 16
`
`i. Plaintiffs’ allegation of a “latent defect” gives rise to claims for breach of
`implied warranty notwithstanding any purported limitation. .......................... 16
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`i
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 3 of 30
`
`
`
`ii. Plaintiff Ortega’s, Smithson’s, and Class’s Song-Beverly claims are
`adequately pled. ............................................................................................... 17
`
`a.
`
`b.
`
`Plaintiffs plead “substantial certainty” of failure throughout the FAC. 17
`
`Plaintiffs Smithson and Class have sufficiently pled fraudulent
`concealment tolling with respect to their Song-Beverly claims. ........... 18
`
`iii. Magnuson Moss Warranty Act claims are adequately pled. ........................... 19
`
`a.
`
`b.
`
`Because warranty claims survive, so do Magnuson Moss claims. ........ 19
`
`This Court has jurisdiction over Plaintiffs’ MMWA claim. .................. 19
`
`IV. CONCLUSION ........................................................................................................................... 21
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`ii
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 4 of 30
`
`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`
`
`Aberin v. Am. Honda Motor Co., Inc.,
` No. 16-CV-04384-JST, 2021 WL 1320773 (N.D. Cal. Mar. 23, 2021) ........................ 14
`
`Aguilar v. Gen. Motors, LLC,
` 2013 WL 5670888 (E.D. Cal. Oct. 16, 2013) .................................................................. 7
`
`Ahern v. Apple Inc.,
` 411 F. Supp. 3d 541 (N.D. Cal. 2019) ............................................................................. 9
`
`Apodaca v. Whirlpool Corp.,
` No. SACV 13–00725 JVS, 2013 WL 6477821 (C.D. Cal. Nov. 8, 2013) .................... 12
`
`AT&T Mobility LLC v. AU Optronics Corp.,
` 707 F.3d 1106 (9th Cir. 2013) ......................................................................................... 5
`
`Brothers v. Hewlett–Packard Co.,
` No. C–06–02254 RMW, 2007 WL 485979 (N.D. Cal. Feb. 12, 2007) ........................ 20
`
`Campidoglio LLC v. Wells Fargo & Co.,
` 870 F.3d 963 (9th Cir. 2017)............................................................................................ 3
`
`Chavez v. Blue Sky Nat. Beverage Co.,
` 268 F.R.D. at 379 (N.D. Cal. 2010) ................................................................................. 5
`
`Chavis v. Fidelity Warranty Servs., Inc.,
` 415 F. Supp. 2d 620 (D.S.C. 2006) ................................................................................ 20
`
`Cholakyan v. Mercedes–Benz USA, LLC,
` 796 F. Supp. 2d 1220 (C.D. Cal. 2011) ......................................................................... 13
`
`Clemens v. DaimlerChrysler Corp.,
` 534 F.3d 1017 (9th Cir. 2008) ....................................................................................... 19
`
`Click v. Gen. Motors LLC,
` No. 2:18-CV-455, 2020 WL 3118577 (S.D. Tex. Mar. 27, 2020) ................................ 12
`
`Daniel v. Ford Motor Co.,
` 806 F.3d 1217 (9th Cir. 2015) ....................................................................................... 16
`
`Doe v. Uber Techs., Inc.,
` 184 F. Supp. 3d 774, 790 (N.D. Cal. 2016) ..................................................................... 3
`
`Donohue v. Apple, Inc.,
` 871 F. Supp. 2d 913 (N.D. Cal. 2012) ............................................................................. 6
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`iii
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 5 of 30
`
`
`
`Duncan v. Nissan,
` 305 F. Supp. 3d 311 (D. Mass. 2018) ............................................................................ 16
`
`Duttweiler v. Triumph Motorcycles (Am.) Ltd.,
` 2015 WL 4941780 (N.D. Cal. 2015) ............................................................................. 10
`
`Edelson v. Travel Insured Int’l, Inc.,
` No. 21-CV-323-WQH-AGS, 2021 WL 4334075 (S.D. Cal. Sept. 23, 2021) ................. 4
`
`Erickson v. Pardus,
` 551 U.S. 89 (2007) ........................................................................................................... 3
`
`Falk v Gen. Motors,
` 496 F. Supp. 2d 1088 (N.D. Cal. 2007) ................................................................. 4, 7, 13
`
`Fitzhenry-Russell v. Coca-Cola Co.,
` No. 5:17-CV-00603-EJD, 2017 WL 4680073 (N.D. Cal. Oct. 18, 2017) ....................... 4
`
`Floyd v. American Honda Motor Co.,
` 996 F.3d 1027 (9th Cir. 2020) ................................................................................. 19, 20
`
`Freeman v. Indochino Apparel, Inc.,
` 443 F. Supp. 3d 1107 (N.D. Cal. 2020) ........................................................................... 4
`
`Gant v. Ford Motor Co.,
` 517 F. Supp. 3d 707 (E.D. Mich. 2021)......................................................................... 12
`
`Grodzitsky v. Am. Honda Motor Co.,
` No. 2:12–cv–1142–SVW–PLA, 2013 WL 2631326 (C.D. Cal. June 12, 2013) .......... 12
`
`Hernandez v. Restoration Hardware, Inc.,
` 4 Cal. 5th 260 (Cal. 2018) ................................................................................................ 5
`
`Hicks v. Kaufman and Broad Home Corp.,
` 89 Cal. App. 4th 908 n.54 .............................................................................................. 18
`
`In re Gen. Motors Air Conditioning Mktg. & Sales Pracs. Litig.,
` 406 F. Supp. 3d 618 (E.D. Mich. 2019)............................................................. 12, 19, 20
`
`In re Google Inc.,
` No. 13-MD-02430-LHK, 2013 WL 5423918 (N.D. Cal. Sept. 26, 2013) ...................... 5
`
`In re MacBook Keyboard Litig.,
` No. 5:18-CV-02813-EJD, 2019 WL 1765817 (N.D. Cal. Apr. 22, 2019) ...................... 6
`
`In re Seagate Tech. LLC Litig.,
`No. 16-CV-00523-JCS, 2017 WL 3670779 (N.D. Cal. Aug. 25, 2017) ......................... 6
`
`
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`iv
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 6 of 30
`
`
`
`In re Toyota Motor Corp. Unintended Acceleration Mktg.,
` 785 F. Supp. 2d 883 (C.D. Cal. 2011) ....................................................................... 4, 14
`
`IntegrityMessageBoards.com v. Facebook, Inc.,
` No. 18-CV-05286-PJH, 2020 WL 6544411 (N.D. Cal. Nov. 6, 2020) ........................... 4
`
`Jimenez v. Ford Motor Co.,
` No. CV 18-3558, 2018 WL 2734848, (C.D. Cal. June 5, 2018) ................................... 19
`
`Kearney v. Hyundai Motor Co.,
` No. SACV 09-1298 DOC, 2010 WL 9093204 (C.D. Cal. June 4, 2010) ..................... 14
`
`Keegan v. American Honda Motor Co., Inc.,
` 284 F.R.D. 504 (C.D. Cal. 2012) ..................................................................................... 5
`
`Kowalsky v. Hewlett-Packard Co.,
` 2011 WL 3501715 (N.D. Cal. Aug. 10, 2011) ................................................................ 7
`
`Mandani v. Volkswagen Grp. Of Am., Inc.,
` No. 17-cv- 07287-HSG, 2020 WL 3961975 (N.D. Cal. July 13, 2020) ........................ 19
`
`Marshall v. Hyundai Motor Am.,
` 51 F. Supp. 3d 451 (S.D.N.Y. 2014) ............................................................................. 12
`
`McGee v. S-L Snacks Nat’l.,
` 982 F.3d 700 (2020) ....................................................................................................... 14
`
`Mexia v. Rinker Boat Co.,
` 174 Cal. App. 4th 1297 (2009) ...................................................................................... 16
`
`Mize v. BMW of N. Am., LLC,
` No. 2:19-CV-007-Z-BR, 2020 WL 1526909 (N.D. Tex. Mar. 31, 2020) ..................... 12
`
`Nickerson v. Goodyear Tire & Rubber Corp.,
` No. 820CV00060JLSJDE, 2020 WL 4937561 (C.D. Cal. June 3, 2020) ..................... 18
`
`Nutrition Distrib., LLC v. New Health Ventures, LLC,
` No. 16-cv-2338, 2018 WL 1524488 (S.D. Cal. Mar. 27, 2018) ...................................... 4
`
`Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank,
` 85 N.Y.2d 20, 623 N.Y.S.2d 529 N.E.2d 741 (N.Y. Ct. App. 1995) ............................ 15
`
`Papasan v. Dometic Corp.,
` No. 16-CV-02117-HSG, 2017 WL 4865602 (N.D. Cal. Oct. 27, 2017) ....................... 14
`
`Philips v. Ford Motor Co.,
` No. 14-CV-02989-LHK, 2016 WL 1745948 (N.D. Cal. May 3, 2016) ........................ 19
`
`
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`v
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 7 of 30
`
`
`
`Plumlee v. Pfizer, Inc.,
` No. 13-CV-414-LHK, 2014 WL 695024 (N.D. Cal. Feb. 21, 2014) ............................ 13
`
`Roberts v. Electrolux Home Prod.,
` 2013 WL 7753579 (C.D. Cal. Mar. 4, 2013) ................................................................. 19
`
`Sater v. Chrysler Grp.,
` LLC, 2015 WL 736273 (C.D. Cal. Feb. 20, 2015) ........................................................ 19
`
`Siddiqui v. Fancy Bites,
` LLC, 504 S.W.3d 349 (Tex. App. 2016)........................................................................ 16
`
`Sonner v. Premier Nutrition Corp.,
` 971 F.3d 834 (9th Cir. 2020) ........................................................................................... 4
`
`Sponchiado v. Apple, Inc.,
` No. 18-CV-07533-HSG, 2019 WL 6117482 (N.D. Cal. Nov. 18, 2019) ........................ 6
`
`Starr v. Baca,
` 652 F.3d 1202 (9th Cir. 2011) ....................................................................................... 11
`
`Stutman v. Chem. Bank,
` 95 N.Y.2d 24, 731 N.E.2d 608 (2000) ........................................................................... 15
`
`Tabak v. Apple, Inc.,
` No. 19-CV-02455-JST, 2020 WL 9066153 (N.D. Cal. Jan. 30, 2020) ................... 14, 16
`
`Taleshpour v. Apple Inc.,
` No. 5:20-CV-03122-EJD, 2021 WL 1197494 (N.D. Cal. Mar. 30, 2021) .......... 7, 10, 17
`
`United States v. Hui Hsiung,
` 778 F.3d 738 (9th Cir. 2015) ......................................................................................... 17
`
`Velasco v. Chrysler Grp. LLC,
` No. CV 13-08080, 2014 WL 4187796 (C.D. Cal. Aug. 22, 2014) ................................ 15
`
`Vess v. Ciba-Geigy Corp. USA,
` 317 F.3d 1097 (9th Cir. 2003) ......................................................................................... 3
`
`Wash. Mut. Bank v. Superior Court,
` 24 Cal. 4th 906 (2001) ..................................................................................................... 5
`
`Wershba v. Apple Comput., Inc.,
` 91 Cal. App. 4th 224 (2001) ............................................................................................ 5
`
`Williams v. Tesla,
` 2021 WL 2531177 (N.D. Cal. 2021) ............................................................................. 19
`
`
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`vi
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 8 of 30
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`Yumul v. Smart Balance, Inc,
` 733 F. Supp. 2d 1117 (N.D. Cal. 2010) ......................................................................... 13
`
`Statutes
`
`15 U.S.C. § 2308(a) ........................................................................................................... 17
`
`15 U.S.C. § 2310(d)(1)(A) ................................................................................................. 20
`
`15 U.S.C. § 2310(d)(1)(B) ................................................................................................. 20
`
`28 U.S.C. § 1367 ................................................................................................................ 20
`
`Cal. Civ. Proc. Code § 338 ................................................................................................ 13
`
`Cal. Commercial Code § 2725(4) ...................................................................................... 18
`
`Class Action Jurisdictional Threshold ............................................................................... 20
`
`Consumers Legal Remedies Act, Cal. Civ. Code § 1750 et seq. ......................................... 4
`
`False Advertising Law, Cal. Business and Professions Code § 17500 ............................. 13
`
`Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. ................................................. 19
`
`Mich. Comp. Laws § 445.903(cc) ..................................................................................... 15
`
`N.Y. Gen. Bus. Law § 349 ........................................................................................... 12, 15
`
`Song–Beverly Consumer Warranty Act ....................................................... 1,16, 17, 18, 19
`
`Texas Deceptive Trade Practices-Consumer Protection Act ............................................. 12
`
`Texas Deceptive Trade Practices-Consumer Protection Act § 17.46(b)(24) .................... 16
`
`Texas Deceptive Trade Practices-Consumer Protection Act § 17.46(b)(5) ........................ 1
`
`Texas Deceptive Trade Practices-Consumer Protection Act § 17.46(b)(7) ........................ 1
`
`Unfair Competition Law, Cal. Business and Professions Code §§ 17200 et seq. ............... 4
`
`22
`
`
`
`23
`
`24
`
`25
`
`26
`
`27
`
`Rules
`
`Fed. R. Civ. P. 12(b)(6) ........................................................................................................ 3
`
`Fed. R. Civ. P. 8 ................................................................................................................... 3
`
`Fed. R. Civ. P. 8(a)(3) .......................................................................................................... 3
`
`Fed. R. Civ. P. 9(b) .............................................................................................................. 3
`
`28
`
`
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`vii
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 9 of 30
`
`
`
`PLAINTIFFS’ BRIEF IN OPPOSITION TO APPLE’S MOTION TO DISMISS
`
`Apple’s motion should be denied for the following reasons: (1) Plaintiffs’ equitable claims are not
`
`co-extensive with their damages claims; (2) the choice-of-law analysis should await discovery; (3)
`
`Plaintiffs allege voluminous facts showing Apple’s knowledge; (4) the “latent defect” supports an implied
`
`warranty claim notwithstanding any purported limitation; (5) Plaintiffs allege that the purported Defect is
`
`substantially certain to manifest; “magic words” are not required; (6) Plaintiff Karen Smithson’s and
`
`Deborah Class’s Song-Beverly Consumer Warranty Act claims are subject to fraudulent concealment
`
`equitable tolling; and (7) this Court may exercise either independent or supplemental jurisdiction over
`
`Plaintiffs’ Magnuson-Moss Warranty Act (“MMWA”) claims. 1
`
`I.
`
`STATEMENT OF FACTS
`
`A.
`
`The material design defect in Apple Watches creates an unreasonable safety
`hazard.
`
`The First Amended Complaint (ECF No. 31) describes a design defect in Apple Watches that
`
`causes a safety hazard. In short, the Apple Watch rests on a user’s wrist with no thermal or other solution
`
`to prevent or mitigate the danger of a detached, shattered, or cracked screen resulting from the insufficient
`
`space allocated within the device for the lithium cobalt oxide battery (the “Defect”). FAC ¶ 2.
`
`Lithium cobalt oxide batteries swell under a number of foreseeable conditions, including
`
`overcharging, poor cell quality with low anode to cathode stoichiometric ratios, particulate contamination,
`
`mechanical damage induced during cell assembly, excessive temperatures, or deep discharge. FAC ¶ 68.
`
`Such conditions disrupt the energy-producing chemical reaction that occurs in a lithium cobalt oxide
`
`battery, creating a gaseous byproduct. Id. This by-product causes the battery to swell. Id. The swelling
`
`creates pressure on the Watch face, causing detachment, shattering, and/or cracking of the screen. This
`
`exposes the screen’s razor-sharp edges and leads to failure of the Watch and personal injuries. FAC ¶ 2.
`
`Even after a failure, the exposed screen remains secured to the back of the Watch and in close proximity
`
`to a consumer’s body by means of a tiny flexible wire. FAC ¶ 4. The Defect has caused many users to
`
`suffer lacerations, cuts, abrasions, and/or other injuries in connection with the screens cracking, shattering
`
`
`1 Plaintiffs agree with dismissal of (1) Jones’s claims under DTPCPA sections 17.46(b)(5) and (b)(7),
`which were inadvertently included; and (2) Rogers’s Song-Beverly Consumer Warranty Act claim.
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`1
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 10 of 30
`
`
`
`and/or detaching from the body of the Watches. FAC ¶ 10.
`
`The undisclosed and unreasonable safety hazard created by the Apple Watch is illustrated by
`
`photographs in paragraphs 4 and 6 of the First Amended Complaint:
`
`
`
`
`
`
`
`The watch screen above has been pushed away from its
`case by the Defect, exposing the razor-sharp edge of the
`screen. FAC ¶ 4.
`
`
`
`
`This deep laceration was caused by the
`exposed edge of a screen that became
`detached from an Apple Watch due to
`the Defect. FAC ¶¶ 5-6.
`
`In addition to identifying the unreasonable safety hazard (FAC ¶¶ 2), naming the Watch
`
`components involved (FAC ¶¶ 2, 4), describing the mechanism of injury (FAC ¶¶ 2, 4-5), explaining the
`
`circumstances leading to creation of the danger (FAC ¶¶ 64-68), and providing photographic evidence of
`
`a serious injury suffered by a named Plaintiff (FAC ¶¶ 4, 6), Plaintiffs describe other consumers who
`
`reported similar injuries on internet forums monitored by Apple. FAC ¶¶ 78, 87, 88, 91 (e.g., “My son’s
`
`watch face popped off suddently [sic]. It looks like the battery swelled?! The jagged edge cut his leg!”).
`
`B.
`
`Apple knew of the Defect.
`
`Plaintiffs’ allegations regarding Apple’s knowledge of the Defect are voluminous. FAC ¶¶ 61-106.
`
`Apple’s knowledge derives from a multitude of sources: (1) extensive experience with foreseeable
`
`swelling in lithium-ion cobalt oxide batteries back to at least 2007 (FAC ¶¶ 64-68); (2) comprehensive
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`2
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 11 of 30
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`pre-release testing and failure analyses by “Reliability Engineers” (FAC ¶¶ 72 - 73); (3) release of a
`
`Product Information Sheet that includes a description of battery testing and a list of Apple Watch batteries
`
`subject to the testing (FAC ¶ 69); (4) filing patent applications in 2011 and 2015 describing limitations on
`
`the ratio of device and battery size and acknowledging that battery swelling can result in damage (FAC
`
`¶¶ 61-62); (5) knowledge of the placement and size of the batteries compared with the depth of the Watch
`
`casing (FAC ¶¶ 70-71); (6) internet complaints regarding sudden screen detachment and injuries, dating
`
`back to at least 2016 (FAC ¶¶ 75-98); (7) warranty claims evidencing the Defect (FAC ¶¶ 99-102; 84);
`
`(8) acknowledgement in internal documents distributed to retailers in 2018 of “an expanded battery” issue
`
`with respect to certain model Watches; (9) receipt of repair claims for First Generation and Series 2
`
`Watches after extending their Limited Warranty (FAC ¶ 83); (10) initiation of a Screen Replacement
`
`Program in August 20192 (FAC ¶¶ 115-126); and (11) publications by third parties as early as 2017
`
`warning that “[t]he battery problem causes the Apple Watch screen to pop away from the casing, rendering
`
`it unusable.” FAC ¶ 81.
`
`14
`
`II.
`
`LEGAL STANDARD
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`In deciding a Rule 12(b)(6) motion, the Court accepts all factual allegations as true and construes
`
`them in the light most favorable to Plaintiffs. See Campidoglio LLC v. Wells Fargo & Co., 870 F.3d 963,
`
`970 (9th Cir. 2017). Under Rule 8, Plaintiffs need not plead “detailed factual allegations,” but need only
`
`set forth enough facts to state a plausible entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
`
`555 (2007); Erickson v. Pardus, 551 U.S. 89, 93 (2007). Rule 8(a)(3) supports pleading in the alternative.
`
`Rule 9(b) requires fraud allegations to “be specific enough to give defendants notice of the
`
`particular misconduct[.]” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quotation
`
`omitted). The rule is “relaxed” when “the defendant must necessarily possess full information concerning
`
`the facts of the controversy” or “when the facts lie more in” its knowledge. Doe v. Uber Techs., Inc., 184
`
`F. Supp. 3d 774, 790 (N.D. Cal. 2016) (citation omitted). Similarly, Rule 9(b) is “somewhat relaxed for
`
`claims that are based on fraudulent omissions[.]” Nutrition Distrib., LLC v. New Health Ventures, LLC,
`
`
`2 Such a comprehensive nationwide program that involves coordination with Apple Authorized Service
`Providers does not happen without planning. Thus, while the program debuted in August 2019, its
`existence is evidence of Apple’s much earlier knowledge of the Defect.
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`3
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 12 of 30
`
`
`
`No. 16-cv-2338, 2018 WL 1524488, at *3 (S.D. Cal. Mar. 27, 2018); see also Falk v Gen. Motors, 496 F.
`
`Supp. 2d 1088, 1099 (N.D. Cal. 2007) (same).
`
`III. ARGUMENT
`
`A. Plaintiffs’ claims for equitable relief are not co-extensive with their claims for damages,
`and thus are properly alleged in the alternative under Federal Rule 8(a)(3).
`
`It is entirely proper to “allege claims in the alternative” and seek equitable remedies under the
`
`UCL and CLRA “in addition to other available remedies at law.” Freeman v. Indochino Apparel, Inc.,
`
`443 F. Supp. 3d 1107, 1114 (N.D. Cal. 2020). There is “no controlling authority” that “prevents a plaintiff
`
`from asserting alternative legal remedies at the pleadings stage,” and it is reasonable to expect that
`
`“discovery may reveal that claims providing legal remedies are inadequate.” Edelson v. Travel Insured
`
`Int’l, Inc., No. 21-CV-323-WQH-AGS, 2021 WL 4334075, at *6 (S.D. Cal. Sept. 23, 2021). Also,
`
`Plaintiffs may simultaneously pursue restitution under the UCL and damages based on other theories, if
`
`the amounts sought are not co-extensive. See, e.g., IntegrityMessageBoards.com v. Facebook, Inc., No.
`
`18-CV-05286-PJH, 2020 WL 6544411, at *7 (N.D. Cal. Nov. 6, 2020) (denying motion to dismiss UCL
`
`restitution claims when recovery for future harm was available in restitution but not at law). The FAC
`
`seeks various forms of equitable relief, including requiring Apple to disclose the Defect and enjoining
`
`ongoing conduct for failure to honor its warranties. (FAC, Prayer for Relief.) The equitable remedies
`
`detailed in the FAC are not identical to the damages sought. C.f. Sonner v. Premier Nutrition Corp., 971
`
`F.3d 834, 844 (9th Cir. 2020)).
`
`B. Choice of law analysis would be premature before discovery.
`
`Apple’s choice of law arguments are premature because there has been no discovery. “[I]t is
`
`preferable to defer ruling on the scope of the class in the context of a class certification motion and not a
`
`motion to dismiss.” Fitzhenry-Russell v. Coca-Cola Co., No. 5:17-CV-00603-EJD, 2017 WL 4680073,
`
`at *4 (N.D. Cal. Oct. 18, 2017).
`
`i. Discovery is required to determine whether Plaintiffs from outside
`California may assert claims under the UCL and CLRA.
`
`The CLRA and UCL protect non-California residents harmed by wrongful conduct occurring in
`
`California. In re Toyota Motor Corp. Unintended Acceleration Mktg., 785 F. Supp. 2d 883, 916 (C.D.
`
`OPP. TO MOTION TO DISMISS FIRST AMENDED COMPLAINT Case No.: 4:21-cv-09527-HSG
`4
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 4:21-cv-09527-HSG Document 45 Filed 05/18/22 Page 13 of 30
`
`
`
`Cal. 2011); Wershba v. Apple Comput., Inc., 91 Cal. App. 4th 224, 242 (2001) (affirming certification of
`
`a nationwide class under California law where Apple’s representations were “disseminated from”
`
`California, many class members lived in California, and Apple made the core decision in California),
`
`overruled on other grounds by Hernandez v. Restoration Hardware, Inc., 4 Cal. 5th 260 (Cal. 2018)). See
`
`also Chavez v. Blue Sky Nat. Beverage Co., 268 F.R.D. 365, 379 (N.D. Cal. 2010) (certifying nationwide
`
`class with respect to UCL claim).
`
`Under California’s choice of law rules, Plaintiffs bear the initial burden of showing that California
`
`has “significant contact or significant aggregation of contacts to the claims asserted by each member of
`
`the plaintiff class” such that application “of [the forum’s] law is not arbitrary or unfair.” Wash. Mut. Bank
`
`v. Superior Court, 24 Cal. 4th 906, 921 (2001) (internal quotation marks and citations omitted). “[C]ourts
`
`consider where the defendant does business, whether the defendant’s principal offices are located in
`
`California, where class members are located, and the location from which advertising and other
`
`promotional literature decisions were made.” In re Toyota, 785 F. Supp. at 917 (citations omitted); see
`
`also Keegan v. American Honda Motor Co., Inc., 284 F.R.D. 504, 538–39 (C.D. Cal. 2012). The FAC
`
`alleges that Apple is a California corporation with its principal place of business in Cupertino, and that all
`
`pertinent misconduct occurred in California. FAC ¶¶ 36-37. Discovery necessary to prove these
`
`allegations will bear on class certification under California law.
`
`Applying California law to a national class here is consistent with due process. See, e.g., Chavez,
`
`268 F.R.D. at 379 (N.D. Cal. 2010) (certifying national class where “Defendants are headquartered in
`
`California and their misconduct allegedly originated in California.”); AT&T Mobility LLC v. AU Optronics
`
`Corp., 707 F.3d 1106, 1113 (9th Cir. 2013) (holding that “a defendant cannot reasonably complain that
`
`the application of California law is arbitrary or unfair when its alleged conspiracy took place, at least in
`
`part, in California”). Therefore, Apple bears the burden of showing that foreign law should apply.
`
`Keegan, 284 F.R.D. at 539 (citations omitted). The Court need not conduct such a choice of law analysis
`
`at this early stage of the litigation. In re Google Inc., No. 13-MD-02430-LHK, 2013 WL 5423918, at *17
`
`(N.D. Cal. Sept. 26, 2013) (“[T]he choice of law inquiry raises complicated, fact-intensive questions better
`
`answered at later stages of the litigation.”); Donohue v. Apple, Inc., 87