Source: https://docs.justia.com/cases/federal/district-courts/california/candce/5:2010cv01177/225470/113
Timestamp: 2019-04-19 18:40:54
Document Index: 10904971

Matched Legal Cases: ['§ 332', '§ 2316', '§ 17200', '§ 1750', '§ 17200', '§ 1750', '§ 332', '§ 332', '§ 332', '§ 18', '§ 15', '§ 332', '§ 2316', '§ 332', '§ 332', '§ 332']

MOTION to Dismiss NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS' CONSOLIDATED AMENDED COMPLAINT filed by Google, Inc for McKinney v. Google, Inc. et al :: Justia Dockets & Filings
Justia Dockets & Filings Ninth Circuit California Northern District McKinney v. Google, Inc. et al Filing 113
MOTION to Dismiss NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS' CONSOLIDATED AMENDED COMPLAINT filed by Google, Inc., HTC Corp.. Motion Hearing set for 2/3/2012 09:00 AM in Courtroom 1, 5th Floor, San Jose before Hon. Edward J. Davila. Responses due by 11/7/2011. Replies due by 11/14/2011. (Attachments: # 1 Exhibit, # 2 Exhibit)(Larrabee, Matthew) (Filed on 10/24/2011)
1 2 3 4 5 6 7 8 MATTHEW L. LARRABEE (No. 97147) matthew.larrabee@dechert.com DECHERT LLP One Maritime Plaza, Suite 2300 San Francisco, California 94111-3513 Telephone: 415.262.4500 Facsimile: 415.262.4555 STEVEN B. WEISBURD (No. 171490) steven.weisburd@dechert.com DECHERT LLP 300 West 6th Street Suite 2010 Austin, TX 78701 Telephone: 512.394.3000 Facsimile: 512.394.3001 9 10 Attorneys for Defendant GOOGLE INC. 11 UNITED STATES DISTRICT COURT 12 NORTHERN DISTRICT OF CALIFORNIA 13 SAN JOSE DIVISION 14 Lead Case No. 5:10-CV-01177-EJD (Consolidated with No. 5:10-CV-03897-EJD) 15 16 17 18 19 20 21 In re Google Phone Litigation DEFENDANTS GOOGLE INC. AND HTC CORPORATION’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ CONSOLIDATED AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Date: Time: Dept: Judge: February 3, 2012 9:00 a.m. 1 Hon. Edward J. Davila 22 23 24 25 26 27 28 D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 NOTICE OF MOTION AND MOTION 2 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 3 PLEASE TAKE NOTICE that, on February 3, 2011, in Courtroom 1, on the fifth floor of 4 the above-titled United States District Court, at 9:00 a.m., or as soon thereafter as the matter may 5 be heard, before the Honorable Edward J. Davila, defendants Google Inc. and HTC Corporation 6 will, and hereby do, move this Court, pursuant to Federal Rules of Civil Procedure 9(b) and 7 12(b)(6), for an order dismissing with prejudice the Consolidated Amended Complaint filed by 8 Plaintiffs Mary McKinney and Nathan Nabors on the grounds that: Plaintiffs’ claim for beach of 9 the implied warranty of merchantability fails as a matter of law because it is preempted, essential 10 elements are not sufficiently pled, Google’s warranty disclaimer bars the claims, and Plaintiffs 11 lack privity with HTC; Plaintiffs’ CLRA and UCL claims are not pled with Rule 9(b) particularity 12 and also fail to state claims upon which relief may be granted, and are also preempted; and, as 13 this Court has ruled, Plaintiffs’ customer service allegations do not support any viable legal claim 14 for relief. 15 This Motion is based upon this Notice of Motion and Motion, the attached Memorandum 16 of Points and Authorities and exhibits thereto as well as the Request for Judicial Notice filed 17 concurrently herewith, all records on file with this Court, and such oral and written argument as 18 may be presented at, or prior to, the hearing on this matter. 19 Dated: October 24, 2011 Respectfully submitted, 20 DECHERT LLP 21 By: /s/ Steven B. Weisburd . Steven B. Weisburd (No. 171490) One Maritime Plaza, Suite 2300 San Francisco, California 94111-3513 Telephone: 415.262.4500 Facsimile: 415.262.4555 22 23 24 Counsel for Defendant GOOGLE INC. 25 26 27 28 D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 MUNGER, TOLLES & OLSON LLP 2 By: /s/ Rosemarie T. Ring . Rosemarie T. Ring (No. 220769) 560 Mission Street, 27th Floor San Francisco, California 94105-2907 Telephone: 415.512.4000 Facsimile: 415.644.6908 3 4 5 Counsel for Defendant HTC CORPORATION 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 D ECHERT LLP - ii - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 TABLE OF CONTENTS 2 Page 3 MEMORANDUM OF POINTS AND AUTHORITIES ................................................................ 1 I. INTRODUCTION .............................................................................................................. 1 II. BACKGROUND ................................................................................................................ 2 A. Procedural History .................................................................................................. 2 B. Summary Of Allegations In Plaintiffs’ Consolidated Amended Complaint........... 4 III. LEGAL STANDARD......................................................................................................... 7 IV. ARGUMENT ...................................................................................................................... 8 A. Plaintiffs’ CLRA And UCL Claims Fail As A Matter Of Law Under Federal Rules of Civil Procedure 9(b) And 12(b)(6) (Second And Third Causes Of Action) ................................................................................................... 8 1. Plaintiffs’ Misrepresentation-Based CLRA And UCL Claims Fail Because Plaintiffs Still Do Not And Cannot Plead With Particularity Any Actionable “Misrepresentation” By Google Or HTC, Nor Their Actual And Reasonable Reliance Thereon .................... 10 2. Any Remaining Aspects Of Plaintiffs’ UCL Claim Also Fail As A Matter Of Law........................................................................................... 16 B. Plaintiffs’ Implied Warranty Of Merchantability Claim Fails As A Matter Of Law For Multiple Reasons (First Cause Of Action)........................................ 17 1. Plaintiffs’ Implied Warranty Claim Remains Preempted ......................... 17 2. Plaintiffs’ Implied Warranty Claim Clearly Fails As A Matter Of Law For Additional Reasons As Well ...................................................... 19 a. Plaintiffs Fail To Plead Facts Showing The Nexus One Is Not Merchantable And Unfit For Its Ordinary Purpose................ 19 b. Google’s Lawful Disclaimer Of Any Implied Warranty Of Merchantability Also Defeats The Claim ..................................... 22 c. Plaintiffs’ Implied Warranty Claim Against HTC Also Fails Because Plaintiffs Lack Privity With HTC................................... 23 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 C. 21 22 23 V. All Of Plaintiffs’ Claims Are Preempted Because They Are Inextricably Tied To Preempted Attacks On The Sufficiency Of T-Mobile’s FCC Approved “3G” Infrastructure Or That Of Other Mobile Carriers ....................... 24 D. Plaintiffs’ Claims Should Be Dismissed Without Leave To Amend.................... 25 CONCLUSION ................................................................................................................. 25 24 25 26 27 28 D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO -iDEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 TABLE OF AUTHORITIES 2 Page(s) 3 FEDERAL CASES 4 Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ........................................................................................................ 7, 19 5 6 7 8 9 10 11 12 13 14 Baltazar v. Apple, Inc., 2011 U.S. Dist. LEXIS 13187 (N.D. Cal. Feb. 10, 2011)....................................................... 13 Baltazar v. Apple, Inc., 2011 U.S. Dist. LEXIS 96140 (N.D. Cal. Aug. 26, 2011)............................................... passim Bastien v. AT&T Wireless Servs., Inc, 205 F.3d 983 (7th Cir. 2000)................................................................................................... 24 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................................................ 7, 19 Birdsong v. Waggoner, 590 F.3d 955 (9th Cir. 2009)............................................................................................. 20, 21 Cook, Perkiss & Liehe, Inc. v. Northern Cal. Collection Servs., 911 F.2d 242 (9th Cir. 1990)................................................................................................... 25 15 16 17 18 19 In re Actimmune Mktg. Litig., 2009 WL 3740648 (N.D. Cal. Nov. 6, 2009)............................................................................ 9 In re Apple iPhone 3G Prods. Liab. Litig., 728 F. Supp. 2d 1065 (N.D. Cal. 2010) ........................................................................ 3, 24, 25 In re NVIDIA GPU Litig., 2009 WL 4020104 (N.D. Cal. Nov. 19, 2009)........................................................................ 23 20 21 22 23 24 Inter-Mark USA, Inc., v. Intuit, Inc., 2008 U.S. Dist. LEXIS 18834 (N.D. Cal., Feb. 27, 2008)................................................ 22, 23 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009)................................................................................. 9, 10, 12, 13 Knievel v. ESPN, 393 F.3d 1068 (9th Cir. 2005)............................................................................................... 7, 8 25 26 27 28 D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO Laster v. T-Mobile USA, Inc., 407 F. Supp. 2d 1181 (S.D. Cal. 2005) ..................................................................................... 9 Long v. Hewlett-Packard Co., 2007 U.S. Dist. LEXIS 79262 (N.D. Cal. July 27, 2007) ................................................... 7, 23 - ii DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 2 3 4 5 6 7 8 9 10 11 Mangindin v. Washington Mut. Bank, 637 F. Supp. 2d 700 (N.D. Cal. 2009) .................................................................................... 12 Marolda v. Symantec Corp., 672 F. Supp. 2d 992 (N.D. Cal. 2009) ...................................................................... 7, 9, 12, 13 Moss v. United States Secret Serv., 572 F.3d 962 (9th Cir. 2009)..................................................................................................... 7 Semegen v. Weidner, 780 F.2d 727 (9th Cir. 1985)................................................................................................... 14 Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035 (9th Cir. 2010)........................................................................................... 24, 25 Swartz v. KPMG LLP, 467 F.3d 756 (9th Cir. 2007) .................................................................................................. 12 Tietsworth v. Sears, Roebuck & Co., 720 F. Supp. 2d 1123 (N.D. Cal. 2010) ............................................................................ 20, 21 12 13 Tietsworth v. Sears, Roebuck & Co., 2009 WL 1363548 (N.D. Cal. May 14, 2009) ........................................................................ 23 14 STATE CASES 15 16 17 18 19 20 21 22 All West Elecs., Inc. v. M-B-W, Inc., 64 Cal. App. 4th 717 (1998).................................................................................................... 23 American Suzuki Motor Corp. v. Superior Ct. (Carney), 37 Cal. App. 4th 1291 (1995) ........................................................................................... 19, 20 Ball v. GTE Mobilnet of Calif., 81 Cal. App. 4th 529 (2000).................................................................................................... 18 Daughtery v. American Honda Motor Corp., 144 Cal. App. 4th 824 (2006).................................................................................................. 13 Fogo v. Cutter Labs., Inc., 68 Cal. App. 3d 744 (1977)..................................................................................................... 23 23 24 25 26 27 Gravillis v. Coldwell Banker Residential Brokerage Co., 143 Cal. App. 4th 761 (2006).................................................................................................. 16 Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003) .......................................................................................................... 16 Kwan v. Mercedes-Benz of North Am., Inc., 23 Cal. App. 4th 174 (1994).................................................................................................... 16 28 D ECHERT LLP - iii - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 2 Nelson v. Person Ford Co., 186 Cal. App. 4th 983 (2010).................................................................................................... 9 3 FEDERAL STATUTES 4 47 U.S.C. § 332(c)(3)............................................................................................................. passim 5 STATE STATUTES 6 Cal. Com. Code § 2316(2) ............................................................................................................ 22 7 Cal. Bus. & Prof. Code § 17200 . ................................................................................................... 1 8 Cal. Civ. Code § 1750 .................................................................................................................... 1 9 DOCKETED CASES 10 11 12 McKinney v. Google Inc, et al. Case No. 5:10-CV-01177 (Davila, J.).............................................................................. passim Nabors v. Google Inc. Case No. 5:10-CV-03897 (Davila, J.).............................................................................. passim 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 D ECHERT LLP - iv - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 2 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION 3 Despite numerous opportunities to do so, Plaintiffs Mary McKinney and Nathan Nabors 4 (“Plaintiffs”) have not been able to state any viable legal claim against Defendants Google Inc. 5 (“Google”) and HTC Corporation (“HTC”) in this action, which is based on Plaintiffs’ alleged 6 failure to receive “consistent 3G connectivity” to T-Mobile’s 3G wireless network using the 7 Nexus One mobile device. In response to this Court’s orders dismissing Plaintiffs’ last round of 8 complaints in their respective cases (the third complaint in McKinney, and the second in Nabors), 9 Plaintiffs in their Consolidated Amended Complaint (“CAC”) assert (1) two misrepresentation- 10 based claims, under California’s Unfair Competition Law, Bus. & Prof. Code §§ 17200 et seq. 11 (“UCL”), and Consumers Legal Remedies Act, Civ. Code §§ 1750 et seq. (“CLRA”), and (2) a 12 common law claim for breach of the implied warranty of merchantability. These claims 13 repeatedly have been dismissed, by Judge Ware and then by this Court.1 In this third bite at the 14 apple, Plaintiffs’ claims still suffer from all of the many fatal infirmities that previously required 15 dismissal of the claims, and additional infirmities as well. First, as before, Plaintiffs’ misrepresentation-based claims under the CLRA and UCL 16 17 must be dismissed under Rules 9(b) and 12(b)(6). Plaintiffs continue to allege that the Nexus One 18 does “not consistently perform at a 3G level, contrary to Defendants’ representations.” CAC, ¶ 19 47. But Plaintiffs still do not, and cannot, identify and plead with particularity any 20 misrepresentations by Google or HTC about the Nexus One or its level of “3G” connectivity – 21 much less any misrepresentation promising that the Nexus One would maintain “consistent” 3G 22 connectivity. Nor do Plaintiffs allege facts showing that they actually relied on any such (non- 23 existent) misrepresentations. Because the few representations pled with Rule 9(b) particularity in 24 25 26 27 28 D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO 1 See November 16, 2010 Order, Docket No. 73, in McKinney v. Google Inc. et al., Case No. 5:10-CV-01177 (Ware, J.) (hereinafter “Nov. 16, 2010 McKinney Order”); August 30, 2011 Order, Docket No. 106, in McKinney v. Google Inc, et al., Case No. 5:10-CV-01177 (Davila, J.) (hereinafter “Aug. 30, 2011 McKinney Order”); August 30, 2011 Order, Docket No. 48, in Nabors v. Google Inc., Case No. 5:10-CV-03897 (Davila, J.) (hereinafter “Aug. 30, 2011 Nabors Order”). -1DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 the CAC are the same non-actionable statements already addressed by this Court, dismissal under 2 Rules 9(b) and 12(b)(6) is again warranted. 3 Second, Plaintiffs’ common law claim for breach of the “implied warranty of 4 merchantability” continues to be preempted under 47 U.S.C. § 332(c)(3) because it remains 5 inextricably tied to preempted attacks on the sufficiency of T-Mobile’s 3G network infrastructure. 6 Plaintiffs still do not and cannot plead any claim based on actual defects in the Nexus One that 7 supposedly cause the alleged 3G connectivity issues separate and distinct from deficiencies in the 8 T-Mobile 3G network; in fact, as before, Plaintiffs continue to allege that “the T-Mobile network 9 was not designed to provide consistent connectivity to its 3G network for [Nexus One] users.” 10 CAC, ¶ 51. Moreover, the claim also fails as a matter of law because (1) Plaintiffs’ theory and 11 allegations do not support any claim that the Nexus One is not “merchantable” under the 12 governing California authorities; (2) Google’s lawful disclaimer of any Nexus One warranties in 13 its Terms of Sale contract with Plaintiffs bars the claim; and (3) Plaintiffs lack privity with HTC. 14 Plaintiffs have demonstrated again and again that they cannot plead any legally viable 15 claims against Google or HTC. Consequently, their Consolidated Amended Complaint should be 16 dismissed this time with prejudice and without leave to amend. Given Judge Ware’s ruling that 17 Plaintiffs’ claims against T-Mobile are subject to arbitration, Plaintiffs cannot be heard to 18 complain that dismissing this action would leave them without any avenue for potential relief. 19 Plaintiffs’ repeated failures to remedy the fundamental legal flaws in their claims – despite 20 multiple opportunities to do so, and at great cost and expense to Defendants – confirms that the 21 time has come to end this action against Google and HTC. 22 II. 23 BACKGROUND A. Procedural History On January 29, 2010, Mary McKinney (“McKinney”) filed in California state court her 24 original complaint in this action, asserting claims based on the Nexus One’s alleged failure to 25 maintain “consistent” connectivity to T-Mobile’s 3G wireless network and naming T-Mobile 26 USA, Inc. (“T-Mobile”), Google, and HTC as defendants. The complaint attached as an exhibit 27 what Plaintiffs alleged to be Google’s terms of sale agreement with Plaintiffs. McKinney Docket 28 D ECHERT LLP -2- ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 No. 2 (Notice of Removal) & Exh. A (Nexus One Phone – Terms of Sale). Defendants removed 2 the action to federal court on March 22, 2010. Id. Following Judge Ware’s preemption ruling in 3 In re Apple iPhone 3G Prods. Liab. Litig., 728 F. Supp. 2d 1065, 1076 (N.D. Cal. 2010), 4 McKinney filed her First Amended Complaint on June 14, 2010, and Nathan Nabors (“Nabors”) 5 filed his substantially similar complaint against Google on August 31, 2010. 6 On November 16, 2010, Judge Ware granted T-Mobile’s motion to compel arbitration, 7 and granted Google and HTC’s Rule 12(b)(b) motion to dismiss in McKinney. See Nov. 16, 2010 8 Order (Docket No. 73). Judge Ware afforded leave to give McKinney the opportunity to identify 9 and plead with Rule 9(b) particularity statements actually made by Google and HTC representing 10 that the Nexus One “will consistently function at 3G all of the time,” as well as McKinney’s 11 actual reliance thereon. See Nov. 1, 2010 Hr’g. Tr. at 24:24-25:4; see also Nov. 16, 2010 Order, 12 at 17. Judge Ware also dismissed McKinney’s state-law warranty claims as preempted under 47 13 U.S.C. § 332(c)(3) because they were based on allegations of deficiencies in T-Mobile’s 3G 14 network infrastructure “and/or” alleged defects in the Nexus One, and therefore, were inseparably 15 tied to preempted attacks on T-Mobile’s 3G market entry and rates charged for 3G service in 16 connection with the Nexus One. Nov. 16, 2010 Order, at 16. Judge Ware granted leave to 17 amend, however, to the extent McKinney could “state claims against Google and HTC for actual 18 defects” in the Nexus One, as distinct and separable from deficiencies in T-Mobile’s 3G wireless 19 network, that “caused” the alleged 3G connectivity problems. Id. at 17. Judge Ware’s Order 20 noted, but left open for resolution, Google and HTC’s many other arguments and contentions why 21 Plaintiff’s breach of warranty claims had to be dismissed. Id. at 15-16. 22 McKinney filed her Second Amended Complaint on December 3, 2010, and Nabors filed 23 his substantially similar First Amended Complaint on January 10, 2011. Defendants filed 24 motions to dismiss both complaints, which were pending when the cases were transferred to this 25 Court in April 2011. On August 30, 2011, this Court granted Defendants’ motions in both 26 McKinney and Nabors, ruling that Plaintiffs’ misrepresentation-based claims were not pled with 27 Rule 9(b) particularity and otherwise failed to state a claim under Rule 12(b)(6), and that 28 Plaintiffs’ warranty claims were still preempted by federal law because Plaintiffs “continue[] to -3- D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 allege that T-Mobile’s wireless network is defective” but afforded leave to amend to try to plead 2 “an implied warranty claim based on actual defects in the Nexus One.” See Aug. 30, 2011 3 McKinney Order; Aug. 30, 2011 Nabors Order. The Court consolidated McKinney and Nabors, 4 and restyled the consolidated cases as “In re Google Phone Litigation.” See Sept. 15, 2011 Order 5 (Docket No. 109), at 1. On September 30, 2011, Plaintiffs filed their Consolidated Amended 6 Complaint. Summary Of Allegations In Plaintiffs’ Consolidated Amended Complaint2 7 B. 8 Like Plaintiffs’ prior complaints, the Consolidated Amended Complaint alleges that the 9 Nexus One is “an advanced mobile cellular phone” – or “smart phone” – that “operates using the 10 Android Mobile Technology Platform,” and has an array of “features,” including Internet access, 11 email, texting, and other audio and video capabilities. CAC, ¶¶ 22-23. Plaintiffs continue to 12 allege that the Nexus One is designed to operate on both a “3G” wireless network and a 2G 13 wireless network (also known as GSM/EDGE), and to switch between networks when a 3G 14 connection is unavailable. Id., ¶¶ 46, 57. The Nexus One allegedly could be purchased online 15 from Google for $529 as an “unlocked” phone usable with any wireless service, or for $179 when 16 purchased with a new two-year contract for T-Mobile’s wireless service. Id., ¶¶ 37-39. McKinney is a Pennsylvania resident who bought her Nexus One on or about January 9, 17 18 2010 over the Internet from Google’s website, id., ¶ 6,3 and Nabors is a Florida resident who also 19 purchased the Nexus One over the Internet, id., ¶ 14.4 Both McKinney and Nabors allegedly used 20 the Nexus One in connection with only T-Mobile’s wireless network. See id., ¶¶ 8-17.5 Both 21 allegedly bought the Nexus One with the “expectation” that it would provide consistent 22 2 23 3 24 25 26 27 28 D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO The Complaint’s well-pleaded allegations are assumed true for purposes of this motion only. As before, McKinney alleges that she has owned three Nexus One devices; that she was “unable to obtain phone service or use any of the features” on the first device; and that her experience with the second device “was similar to the first.” CAC, ¶¶ 8-9. Both devices were replaced. Id. McKinney admits that her current Nexus One does provide “cellular phone and data service,” but complains about its allegedly “sporadic and inconsistent” connectivity to T-Mobile’s 3G network as opposed to a 2G/EDGE network. Id., ¶¶ 8-10, 48. 4 Google’s records indicate that a Nexus One was sold to Nathan Nabors, with a ship to address in Orlando, Florida, on or about January 5, 2010. 5 As such, Plaintiffs obviously lack standing to assert claims concerning the Nexus One’s operation on 3G networks of any wireless carries other than T-Mobile. -4DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 connectivity to T-Mobile’s 3G wireless network, and would thus operate as what Plaintiffs 2 consider to be a “true 3G device.” Id., ¶¶ 7, 32, 34, 47, 63, 91. Plaintiffs complain, however, that 3 3G connectivity has been “sporadic and inconsistent,” which allegedly results in “a significant 4 number of dropped calls.” Id., ¶¶ 47-48. 5 As before, Plaintiffs allege that Google and HTC misrepresented that the Nexus One 6 would maintain “consistent” 3G connectivity. CAC, ¶ 47 (Nexus One does “not consistently 7 perform at a 3G level, contrary to Defendants’ representations”); see also id. ¶¶ 7, 15, 30-32, 34, 8 52, 55, 58, 62-66. But Plaintiffs continue to rely on entirely conclusory allegations concerning 9 Google and HTC’s supposed “material misrepresentations and omissions of material fact” about 10 3G connectivity, which were allegedly made in some unspecified advertisements on the “internet” 11 and in “print, television and radio advertising.” Id., ¶¶ 30, 62-63. The CAC nowhere identifies 12 with particularity any factual representation made by either Google or HTC about 3G 13 connectivity, much less a statement promising “consistent” 3G connectivity. As before, the only 14 statement by Google arguably alleged with any particularity says merely: “Experience Nexus 15 One, the new Android phone from Google.” Id., ¶ 28. And as before, Plaintiffs do not identify 16 any advertising or marketing statements about the Nexus One made by HTC. Plaintiffs do, 17 however, identify the same statement allegedly made to McKinney by a “T-Mobile sales 18 representative” that this Court addressed in its August 30, 2011 ruling. Id., ¶ 33 (emphasis 19 added); see also Aug. 30, 2011 McKinney Order at 3. Plaintiffs further allege, as before, that 20 Google and HTC “failed to warn” that “the T-Mobile 3G network was not designed to provide 21 consistent connectivity to its 3G network” for “users” of the Nexus One. Id., ¶ 52. 22 As before, Plaintiffs continue to allege that Google and HTC failed to provide “adequate 23 customer support.” See id., ¶¶ 1, 8, 12, 16, 53, 61, 107. Plaintiffs continue to allege that their 24 customer service experiences have caused them emotional distress, frustration, and “taxing 25 mental exertion,” id., ¶ 12, even though this Court addressed and rejected claims based on these 26 allegations in the August 30, 2011 Orders in McKinney and Nabors. 27 Finally, as in all prior complaints, Plaintiffs continue to allege that “T-Mobile’s network 28 did not provide consistent 3G performance for [Nexus One] purchasers”; that “the T-Mobile 3G -5- D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 network was not designed to provide consistent connectivity to its network for [Nexus One] 2 users”; and that the “combination of the phone and/or the network made it difficult…to receive 3 reliable and sustained connectivity on the 3G wireless network.” CAC, ¶¶ 51, 52, 58; see also 4 McKinney SAC, ¶¶ 58, 59; Nabors FAC, ¶¶ 47, 48, 54. Plaintiffs also reprise their same 5 conclusory allegation from their prior complaints that the Nexus One “suffered from defective 6 hardware and/or software,” although they now cosmetically omit from this sentence the 7 conjoining reference to T-Mobile’s defective 3G network that appeared in all prior versions of 8 this allegation. Compare CAC, ¶ 64; with McKinney SAC, ¶ 69 and Nabors FAC, ¶ 58. Other 9 than reprising the same core allegations previously held to be deficient, Plaintiffs add only this 10 entirely conclusory assertion after complaining that the Nexus One fails to provide “consistent” 11 3G connectivity: “In sum, the [Nexus One] was sold with actual defects.” CAC, ¶ 88. 12 Based on these allegations, Plaintiffs’ Consolidated Amended Complaint asserts three 13 claims. In their First Cause of Action, Plaintiffs try to assert a common law claim for breach of 14 the “implied warranty of merchantability.” See CAC, ¶¶ 80-96. According to Plaintiffs, the 15 Nexus One is not merchantable and unfit for its ordinary purposes “because” it does not provide 16 “consistent” 3G connectivity and thus allegedly results in “a number of missed and dropped 17 phone calls.” Id., ¶¶ 86-87. In their Second and Third Causes of Action, Plaintiffs assert 18 misrepresentation-based claims under California’s CLRA and UCL, attacking Google and HTC’s 19 allegedly “deceptive” misrepresentations and related omissions about the Nexus One’s consistent 20 3G connectivity. See CAC, ¶¶ 97-114.6 On their UCL claim, Plaintiffs also invoke the UCL’s 21 “unlawful” prong by incorporating their CLRA and implied warranty claims, id., ¶ 107, and 22 allege that Defendants’ misrepresentations and breach of implied warranties violate the UCL’s 23 “unfair” prong. Id., ¶ 106. As before, Plaintiffs ask the Court to certify a class, for an injunction 24 25 26 27 28 6 Plaintiffs’ CLRA claim is based entirely on Google and HTC’s allegedly “deceptive practices” – i.e., misrepresentations and related omissions in product advertising about the Nexus One’s allegedly promised “consistent” 3G connectivity, speed, and ability to sustain telephone calls, CAC, ¶ 99 – which allegedly caused Plaintiffs “injury in fact and lost money or property.” Id., ¶¶ 100-01. Plaintiffs’ UCL claim likewise attacks Google and HTC’s allegedly “unlawful, unfair, and fraudulent conduct” – including “misrepresent[ations]” about the consistency of the Nexus One’s 3G connectivity. Id., ¶¶ 104, 110, 112-14. D ECHERT LLP -6- ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 and a restraining order, for declaratory relief, and for an award of damages, restitution, 2 disgorgement, fees, costs, and interest. See CAC, Prayer for Relief. 3 III. 4 LEGAL STANDARD A Rule 12(b)(6) motion to dismiss is properly granted unless the complaint alleges 5 “enough” well-pleaded “facts to state a claim to relief that is plausible on its face.” Bell Atl. 6 Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 7 (2009). To survive a Rule 12(b)(6) motion, the “non-conclusory ‘factual content’” and 8 reasonable inferences therefrom must be “plausibly suggestive of a claim entitling the plaintiff to 9 relief.” Moss v. United States Secret Serv., 572 F.3d 962, 968-72 (9th Cir. 2009) (internal 10 citations omitted). Any conclusory allegations are properly disregarded. Id. The Court must 11 consider only the well-pleaded allegations in Plaintiffs’ Consolidated Amended Complaint. Id. 12 Under the doctrine of “incorporation by reference,” courts on Rule 12(b)(6) motions to 13 dismiss routinely consider the terms of written agreements between the parties where the 14 documents are not attached to the complaint, but the plaintiff references them in the complaint 15 and their authenticity is not reasonably subject to dispute. Knievel v. ESPN, 393 F.3d 1068, 1076- 16 77 (9th Cir. 2005); Marolda v. Symantec Corp., 672 F. Supp. 2d 992, 996 (N.D. Cal. 2009); see 17 also Long v. Hewlett-Packard Co., 2007 U.S. Dist. LEXIS 79262, **17-18 n.3 (N.D. Cal. July 18 27, 2007) (Ware, J.) (considering on Rule 12(b)(6) motion the terms of defendant’s limited 19 warranty and disclaimer in document referenced in, but not attached to, complaint), aff’d, 316 F. 20 App’x 585 (9th Cir. 2009). Here, the Consolidated Amended Complaint explicitly alleges and 21 references the “agreements” that Plaintiffs and putative class members entered in order to 22 purchase the Nexus One. CAC, ¶ 85. McKinney and Plaintiffs’ counsel attached the exact copy 23 of Google’s “Terms of Sale,” attached hereto as Exhibit 1 (“Exh. 1”), to their original complaint 24 filed in California state court and alleged that it was the “agreement” between Google, 25 McKinney, and putative class members. Compare Exh. 1; with Docket No. 2 (Notice of 26 Removal) & Exh. A (Nexus One Phone – Terms of Sale). HTC’s Limited Warranty is attached 27 hereto as Exhibit 2. Because these agreements are referenced in the complaint and their 28 authenticity cannot reasonably be disputed, the Court may properly consider the entirety of D ECHERT LLP -7- ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 Exhibits 1 and 2 under the incorporation-by-reference doctrine.7 2 IV. ARGUMENT 3 Both Judge Ware and this Court have repeatedly afforded Plaintiffs leave to amend to give 4 them a full and fair opportunity to try to cure the many legal deficiencies in their prior complaints 5 that resulted in dismissal of all claims against Google and HTC. In this final effort, Plaintiffs’ 6 claims and allegations in the Consolidated Amended Complaint fall woefully short. Plaintiffs 7 still fail to identify and plead with particularity any potentially actionable misrepresentation by 8 Google or HTC on which Plaintiffs actually relied in purchasing the Nexus One with the alleged 9 expectation that the Nexus One was guaranteed to maintain “consistent” 3G connectivity to 3G 10 wireless networks, including T-Mobile’s 3G network. Plaintiffs also still fail to plead any viable 11 claim for breach of the “implied warranty of merchantability.” Their claim remains preempted 12 under 47 U.S.C. § 332(c)(3) because Plaintiffs still do not and cannot plead that the alleged 3G 13 connectivity problems are in fact “caused” by actual defects in the Nexus One itself, as distinct 14 and separable from the alleged deficiencies in T-Mobile’s 3G wireless network that permeate the 15 CAC, and thus, Plaintiffs still have not pled any non-preempted claim “based on” any actual 16 defects in the Nexus One.8 In fact, Plaintiffs identify no “actual defects” in the Nexus One at all. 17 Plaintiffs’ allegations also still do not make out a claim for breach of the implied warranty of 18 merchantability under the governing California authorities, and the claim also fails given 19 Google’s legally enforceable disclaimer of any implied warranties and Plaintiffs’ lack of privity 20 with HTC. Plaintiffs’ CAC should be dismissed, this time without leave to amend. A. 21 22 Plaintiffs’ CLRA And UCL Claims Fail As A Matter Of Law Under Federal Rules of Civil Procedure 9(b) And 12(b)(6) (Second And Third Causes Of Action). Plaintiffs have abandoned all but two of the misrepresentation-based claims that they 23 24 25 26 27 28 7 Under the incorporation-by-reference doctrine, the defendant may properly “attach[] the document to its motion to dismiss” where, as here, the plaintiff has for whatever reason not attached it to the complaint or explicitly referenced its contents therein. Knievel, 393 F.3d at 1076-77. In addition to this procedure, Google’s Terms of Sale and HTC’s Limited Warranty are also properly subject to judicial notice, as explained in Defendants’ Request For Judicial Notice (“RFJN”) filed concurrently herewith. 8 Aug. 30, 2011 McKinney Order, at 5; Aug. 30, 2011 Nabors Order, at 5. D ECHERT LLP -8- ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 previously asserted, leaving only statutory claims under California’s CLRA and UCL premised 2 on supposed “misrepresentations” by Google and HTC in their “advertising” and “promotional 3 materials.” CAC, ¶¶ 62-65, 97-114. Plaintiffs’ CLRA claim seeks damages and injunctive relief 4 based on Google and HTC’s “deceptive practices” – i.e., misrepresentations and related omissions 5 in product “advertising” about the Nexus One concerning its allegedly promised “consistent” 3G 6 connectivity, speed, and ability to sustain telephone calls. CAC, ¶¶ 97-102. Plaintiffs’ UCL 7 claim seeks injunctive and restitutionary relief based on allegedly “unlawful, unfair, and 8 fraudulent conduct,” including alleged “misrepresent[ations]” and related omissions about the 9 consistency of the Nexus One’s 3G connectivity. Id., ¶¶ 104, 110, 112-14. Plaintiffs also invoke 10 the UCL’s “unlawful” prong by incorporating their CLRA and implied warranty claims, id., ¶ 11 107, and allege that Defendants’ misrepresentations and alleged breach of implied warranties 12 violate the UCL’s “unfair” prong because the Nexus One “does not consistently maintain 13 connectivity to a 3G wireless network” and thus does not operate at the speeds allegedly 14 “promised” and “does not consistently sustain telephone calls.” Id., ¶ 106. 15 To state a CLRA or UCL claim based on alleged misrepresentations, Plaintiffs must plead 16 with particularity that Defendants made some specifically identified factual misstatements about 17 the Nexus One that Plaintiffs not only saw or heard but actually relied upon. See, e.g., Marolda v. 18 Symantec Corp., 673 F. Supp. 2d 992, 1002-04 (N.D. Cal. 2009) (CLRA and UCL); Nelson v. 19 Pearson Ford Co., 186 Cal. App. 4th 983, 1022 (2010) (CLRA); In re Actimmune Mktg. Litig., 20 2009 WL 3740648, **8-9 (N.D. Cal. Nov. 6, 2009) (UCL); Kearns v. Ford Motor Co., 567 F.3d 21 1120, 1126-28 (9th Cir. 2009) (UCL and CLRA misrepresentation claims must be pled with Rule 22 9(b) particularity); see also Laster v. T-Mobile USA, Inc., 407 F. Supp. 2d 1181, 1193-94 (S.D. 23 Cal. 2005) (dismissing UCL misrepresentation claim where plaintiffs nowhere alleged they saw 24 or heard and then actually relied upon any particularly alleged misstatement); accord, Aug. 30, 25 2011 McKinney Order at 8-11; Aug. 30, 2011 Nabors Order at 8-11. 26 Because Plaintiffs have not identified even one potentially actionable misrepresentation by 27 Google or HTC, nor pled facts sufficient to show their actual reliance on any particularly 28 identified misstatement, their misrepresentation-based CLRA and UCL claims must be dismissed -9- D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 under Rules 9(b) and 12(b)(6). Any remaining aspects of Plaintiffs’ UCL claim under the 2 “unlawful” or “unfair” prongs also fail in accordance with this Court’s prior rulings, or fall along 3 with Plaintiffs’ legally deficient claim for breach of implied warranty (see Part IV.B., infra). 1. 4 5 Plaintiffs’ Misrepresentation-Based CLRA And UCL Claims Fail Because Plaintiffs Still Do Not And Cannot Plead With Particularity Any Actionable “Misrepresentation” By Google Or HTC, Nor Their Actual And Reasonable Reliance Thereon. 6 Plaintiffs’ CLRA and UCL claims are premised on alleged misrepresentations by Google 7 and HTC supposedly promising that the Nexus One would “consistently perform at a 3G level,” 8 and thereby operate as what Plaintiffs consider to be a “true 3G device.” CAC, ¶¶ 7, 47; see also 9 id., ¶¶ 15, 30-32, 34, 52, 55, 58, 62-66, 97, 99, 103-06, 110, 112, 114. As this Court has held, 10 Rule 9(b)’s heightened “particularity” pleading requirements apply to these claims. See Aug. 30, 11 2011 McKinney Order, at 8-11; Aug. 30, 2011 Nabors Order, at 8-11; see also Kearns v. Ford 12 Motor Co., 567 F.3d 1120, 1127-28 (9th Cir. 2009). Because Plaintiffs fail to satisfy Rule 9(b) as 13 to either any affirmative misrepresentation or actionable omission, dismissal is again warranted.9 14 Plaintiffs still do not and cannot specifically identify and plead with the requisite 15 particularity any representation by Google or HTC about the Nexus One or its level of 3G 16 connectivity – much less any “misrepresentations” promising that the Nexus One would 17 “consistently perform at a 3G level.” See CAC, ¶¶ 47, 55, 63. Once again, Plaintiffs do not 18 identify a single statement by HTC about the Nexus One. See generally CAC. And once again, 19 the only Google statement alleged with particularity is the same entirely non-actionable statement 20 from Google’s website that both Plaintiffs quoted in their prior complaints: “Experience Nexus 21 One, the new Android phone from Google.” Id., ¶ 35. Apart from this non-actionable Google 22 website statement, Plaintiffs include only their reprised quotation of the same statement by a “T- 23 Mobile sales representative” to McKinney that this Court addressed and rejected in its prior 24 ruling, which allegedly asserted that the Nexus One was “‘essential for web surfing and email’” 25 26 27 28 9 See also Baltazar v. Apple, Inc., 2011 U.S. Dist. LEXIS 96140, **11-17 (N.D. Cal. Aug. 26, 2011) (dismissing fraud and CLRA/UCL claims in amended complaints attacking alleged misrepresentations about Apple’s iPad because plaintiffs still “failed to allege adequately that Apple misrepresented the conditions under which the iPad would operate or that they justifiably could rely on those representations in believing that the iPad would operate as they expected”). D ECHERT LLP - 10 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 and “had 3G speed.” CAC, ¶ 33 (emphasis added). In dismissing Plaintiff McKinney’s claims 2 under California’s CLRA, UCL, and FAL for failure to satisfy Rule 9(b)’s particularity 3 requirements, this Court ruled: 4 7 McKinney fails to identify a single advertisement or commercial in which HTC or Google made any statements about the phone and 3G wireless network connections. She has only identified statements from a T-Mobile sales representative that the phone had 3G speed and “was essential for web surfing and email,” which, even if they were attributable to Defendants, would appear to be non-actionable puffery. 8 Aug. 30, 2011 McKinney Order, at 10. As before, Plaintiffs’ Consolidated Amended Complaint 9 still “fails to identify a single advertisement or commercial in which HTC or Google made any 5 6 10 statements about the phone and 3G wireless network connections,” and the quoted T-Mobile 11 statement remains “non-actionable puffery” even if it could somehow be attributed to Google and 12 HTC, which it cannot be. Id. (emphasis added).10 Moreover, in dismissing Plaintiffs’ claims under California’s consumer protection 13 14 statutes, this Court further emphasized that (1) Plaintiffs failed to allege with Rule 9(b) 15 particularity “any facts showing that Defendants actually stated that the [Nexus One] would 16 provide 3G connectivity, much less any consistent level of connectivity,” id. at 11; (2) Plaintiffs 17 did “not allege that the phone does not function at least some of the time by connecting to a 3G 18 network,” id. at 9; and (3) Plaintiffs neither alleged nor pled with particularity any instance in 19 which Google or HTC “claimed that the phone would connect to 3G for any specific period of 20 time.” Id. These same dispositive observations apply with full force to the legally deficient 21 22 10 23 24 25 26 27 28 Because T-Mobile is no longer a defendant, Plaintiffs cannot even pretend that Google and HTC might somehow be held vicariously liable for an oral statement a T-Mobile representative allegedly made to her. Indeed, Plaintiffs again reference “Non-Defendant T-Mobile,” CAC, ¶ 20 (emphasis added), and then allege merely that Google and HTC, as “Defendants,” acted as the “agent … or other representative” of the other “Defendants.” Id., ¶ 21. In any event, the statement attributed to the unidentified T-Mobile sales representative is not even alleged to have promised that the Nexus One will maintain “consistent” 3G connectivity on T-Mobile’s 3G wireless network, much less other 3G wireless networks. Perhaps McKinney can raise this in her arbitration against non-defendant T-Mobile, but it cannot support claims here against Google and HTC for statements they never made. D ECHERT LLP - 11 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 CLRA and UCL claims in the Consolidated Amended Complaint, which are pled with no more 2 Rule 9(b) particularity than the ones this Court previously dismissed. 3 “Allegations under Rule 9(b) must be stated with ‘specificity including an account of the 4 time, place, and specific content of the false representations as well as the identities of the parties 5 to the misrepresentations.’” Mangindin v. Washington Mut. Bank, 637 F. Supp. 2d 700, 706 6 (N.D. Cal. 2009) (quoting Swartz v. KPMG LLP, 467 F.3d 756, 764 (9th Cir. 2007)); see also 7 Marolda, 672 F. Supp. 2d at 1000-01 (Rule 9(b) “especially” demands specific and detailed 8 identification of “the time, place, and content of” of what defendants actually stated “with 9 particularity”); accord Baltazar, 2011 U.S. Dist. LEXIS 96140, at **11-17. Conclusory 10 allegations, general averments, and mere characterizations of plaintiffs’ counsel do not suffice. 11 Instead, Rule 9(b) demands detailed and specific allegations that precisely “articulate the who, 12 what, when, where, and how” of each alleged misstatement as well as the plaintiff’s claimed 13 reliance thereon. Kearns, 567 F.3d at 1126. In Kearns, for instance, the Ninth Circuit affirmed 14 the Rule 9(b) dismissal of CLRA and UCL claims premised on misrepresentations and related 15 omissions where – as here – the plaintiff failed to “specify” in detail “what the defendant’s 16 television advertisements and promotional materials” actually and “specifically stated”; “who” 17 specifically made the alleged statements as well as exactly “when” and “where”; and which 18 precise statements the plaintiff deemed material and actually relied upon. Id. 19 Here, as in Kearns, Plaintiffs have not pled with Rule 9(b) particularity any potentially 20 actionable misstatements of fact actually made by Google or HTC. For the third time, Plaintiffs 21 continue to rely on the same sort of conclusory averments and general characterizations by 22 Plaintiffs’ counsel that this Court and Judge Ware previously determined to be insufficient. 23 Compare CAC; with McKinney Second Amended Complaint, and Nabors First Amended 24 Complaint. Once the allegations not pled with Rule 9(b) particularity are “‘disregarded,’ or 25 ‘stripped’ from the claim,” Kearns, 567 F.3d at 1124 (citation omitted), it is clear that, once 26 again, Plaintiffs’ CLRA and UCL claims premised on supposed “misrepresentations” about the 27 Nexus One by Google and HTC must be dismissed. 28 D ECHERT LLP - 12 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 As before, Plaintiffs’ conclusory “omission” and “non-disclosure” allegations also fail to 2 support any CLRA or UCL claim, and are not pled with the requisite Rule 9(b) particularity. See 3 Aug. 30, 2011 McKinney Order, at 8-9; Aug. 30, 2011 Nabors Order, at 7-8; see also Kearns, 567 4 F.3d at 1126; Marolda, 672 F. Supp. 2d at 1002. The omission-based allegations in the 5 Consolidated Amended Complaint are no different than the deficient allegations and claims this 6 Court dismissed in its August 2011 rulings; they also remain just as conclusory as those rejected 7 as insufficient by the Ninth Circuit in Kearns, 567 F.3d at 1126-27, and Judge Patel in Marolda, 8 672 F. Supp. 2d at 1002. As this Court has ruled, “‘to plead the circumstances of omission with 9 specificity,’” Plaintiffs had to “‘describe the content of the omission and where the omitted 10 information should or could have been revealed, as well as provide representative samples of 11 advertisements, offers, or other representations that plaintiff relied on to make her purchase and 12 that failed to include the allegedly omitted information.’” Aug. 30, 2011 McKinney Order, at 7-8 13 (quoting Marolda, 672 F. Supp. 2d at 1002); Aug. 30, 2011 Nabors Order, at 7 (same). Plaintiffs 14 still do not remotely satisfy that governing standard. But more fundamentally, Plaintiffs’ 15 omissions-based theory of misrepresentation continues to fail under Daughtery v. American 16 Honda Motor Corp., 144 Cal. App. 4th 824, 835 (2006), because Plaintiffs still do not and cannot 17 identify with particularity “any affirmative representation” about the Nexus One actually made by 18 Google or HTC “concerning the subject of any alleged omissions.” Aug. 30. 2011 McKinney 19 Order, at 9; see also Baltazar v. Apple, Inc., 2011 U.S. Dist. LEXIS 13187, *11 (N.D. Cal. Feb. 20 10, 2011). The most Plaintiffs can do is add entirely conclusory allegations in the Consolidated 21 Amended Complaint that Defendants’ still-unidentified “misrepresentations” in advertising and 22 marketing the Nexus One supposedly include unspecified “statements about the phone’s 3G 23 connectivity,” CAC, ¶ 15, and unspecified “representations made by Defendants about 3G 24 network capabilities, id., ¶ 59 – which are precisely the sort of conclusory allegations that violate 25 Rule 9(b) as a matter of law.11 26 27 28 D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO 11 Even though this Court squarely and rightly rejected Plaintiffs’ various prior excuses for failing to plead their misrepresentation-based claims with the particularity demanded by Rule 9(b) under settled law – e.g., McKinney allegedly does not have a “printer,” Defendants’ websites allegedly - 13 DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 Finally, Plaintiffs’ misrepresentation-based CLRA and UCL claims also must be 2 dismissed for failure to plead “actual reliance” with Rule 9(b) particularity. See Aug. 30, 2011 3 McKinney Order, at 8-11; Aug. 30, 2011 Nabors Order, at 8-11. As before, Plaintiffs cannot 4 plead with the requisite specificity that they actually relied on any particularly identified 5 misrepresentation in which Google and HTC promised that the Nexus One would maintain 6 consistent 3G connectivity, nor do they plead facts supporting the reasonableness of any such 7 supposed reliance.12 Rather than plead sufficient details and actual facts supporting the existence 8 of any “‘bona fide claim of actual reliance,’” Plaintiffs continue to “merely assert[] that [they] 9 based [their] decision to buy the [Nexus One] on Google and HTC’s misrepresentations but 10 ha[ve] not particularly identified any misrepresentation upon which [they] relied or alleged facts 11 showing [their] actual and reasonable reliance on any such representations.” Aug. 30, 2011 12 McKinney Order, at 8 (citation omitted); Aug. 30, 2011 Nabors Order, at 8 (same). For instance, 13 Nabors asserts in conclusory terms that he bought the Nexus One “in reliance on a number of 14 statements by Google in its advertising and marketing of the Google Phone, including statements 15 about the phone’s 3G connectivity.” CAC, ¶ 15. But nowhere does the Consolidated Amended 16 Complaint identify and plead with Rule 9(b) particularity the who, what, where, when and how as 17 18 19 20 21 22 23 24 25 26 27 28 have been “scrubbed,” or Plaintiffs’ illegitimate assertion that they supposedly need “discovery” before they could satisfy Rule 9(b) – Plaintiffs continue to rest on their same excuses and legally deficient allegations. Compare CAC, ¶¶ 31-32; with Aug. 30, 2011 McKinney Order, at 2-3, 6, 711 & n.2; August 30, 2011 Nabors Order, at 3. Moreover, one of Rule 9(b)’s many fundamental purposes is to protect defendants from precisely the sort of fishing expedition in “discovery” (Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985)) that Plaintiffs seek here, despite their continued inability to satisfy Rule 9(b)’s bedrock requirements as to any potentially actionable misrepresentation by Google or HTC. 12 Recently, in Baltazar v. Apple, Inc., 2011 U.S. Dist. LEXIS 96140 (N.D. Cal. Aug. 26, 2011), Judge Fogel similarly dismissed the iPad plaintiffs’ misrepresentation-based claims, including CLRA and UCL claims where – as here – plaintiffs failed to identify any actual Apple iPad advertisement in support of their allegations of misrepresentation and reliance. Id. at **11-17. The few particularly pled Apple statements did not support plaintiffs’ claims, nor could any reasonable consumer interpret those particularly identified statements as promising that the iPad “would operate as [plaintiffs] expected,” i.e., that the iPad “would never shut down” and need time to cool when used in hot temperatures outdoors. Id. Likewise here, Plaintiffs cannot identify even one actual statement by Google or HTC that makes any actionable misstatement, much less a misrepresentation on which Plaintiffs could reasonably rely in allegedly purchasing the Nexus One with any alleged “expectation” that the device would maintain “consistent” 3G connectivity. CAC, ¶¶ 47, 55, 59, 63, 91. D ECHERT LLP - 14 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 to any such “statements” actually made by Google.13 This pleading failure not only violates Rule 2 9(b) under settled Ninth Circuit law. It also wrongly prevents the Court from performing its duty 3 to assess the exact statements at issue to determine whether those statements constitute “non- 4 actionable puffery” upon which no reasonable consumer could rely or, rather, involve the sort of 5 concrete and specific assertion of material fact that could support a viable misrepresentation claim 6 under the CLRA or UCL. Aug. 30, 2011 McKinney Order, at 8-9 (citing authorities); Aug. 30, 7 2011 Nabors Order, at 9 (same); see also Baltzar, 2011 U.S. Dist. LEXIS 96140, at **11-17. 8 Moreover, the terms and disclaimers in Plaintiffs’ “agreements” with Defendants (CAC, ¶ 9 58) – namely, Google’s Terms of Sale (Exh. 1) and HTC’s Limited Warranty (Exh. 2) – refute 10 Plaintiffs’ misrepresentation and reasonable reliance allegations. The Google Terms of Sale 11 attached to McKinney’s original complaint not only conspicuously disclaims any express or 12 implied warranties other than HTC’s Limited Warranty, but also provides explicitly that “3G 13 network availability may depend on your mobile carrier” (and thus is not guaranteed) and also 14 directs Plaintiffs to check with their mobile carrier to confirm that the device is “compatible with 15 3G coverage in [Plaintiffs’] area.” Exh. 1 (Google Terms of Sale, at pp. 2, 4-5). HTC’s Limited 16 Warranty, in turn, explicitly excludes from coverage any “defects” caused by a “defective 17 function of the cellular network or other system.” Exh. 2. Thus, as in Baltazar, Plaintiffs have 18 not only failed to identify with particularity any actionable misstatement by the Defendants, but 19 the terms of Defendants’ disclaimers confirm that any alleged “reliance” by Plaintiffs upon some 20 feigned (and non-existent) “representations” promising consistent 3G connectivity was 21 unreasonable as a matter of law. Baltazar, 2011 U.S. Dist. LEXIS 96140, at *13 (Apple’s 22 disclaimers refute any allegation that plaintiffs’ claimed reliance on alleged misrepresentations 23 24 25 26 27 28 13 Likewise, McKinney asserts that she based her purchasing decision “on the facts Defendants promoted,” i.e., that the Nexus One was “a true ‘3G’ device” that was “very fast when uploading or downloading data from the Internet” and “would work in a manner that justified the premium price she paid.” CAC, ¶ 7. But these are the same conclusory averments this Court rightly rejected as insufficient to satisfy Rule 9(b) before. Moreover, like Nabors, McKinney fails to plead with particularity any instance in which Google or HTC actually made any such assertions or representations in any commercial or advertisement or other promotion for the Nexus One. D ECHERT LLP - 15 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 was “reasonable”). Hence, Plaintiffs’ misrepresentation-based CLRA and UCL claims in the 2 Second and Third Causes of Action fail for this reason as well. 2. 3 4 Any Remaining Aspects Of Plaintiffs’ UCL Claim Also Fail As A Matter Of Law. The foregoing discussion disposes of Plaintiffs’ entire CLRA claim as well their 5 misrepresentation-based UCL claims under the “fraudulent,” “unfair” or “unlawful” prongs. The 6 remaining aspects of Plaintiffs’ claim under the UCL’s “unfair” and “unlawful” prongs fare no 7 better. Indeed, the Consolidated Amended Complaint reprises Plaintiffs’ prior UCL attack on 8 Defendants’ allegedly inadequate “customer service.” See CAC, ¶¶ 1, 8, 12, 16, 53, 61, 107. As 9 before, the claim fails as a matter of law because Plaintiffs still allege no facts showing that any 10 allegedly inadequate customer service “actually caused [McKinney or Nabors] any legally 11 cognizable injury or damage” under the UCL. Aug. 30, 2011 McKinney Order, at 11; Aug. 30, 12 2011 Nabors Order, at 10-11.14 To the extent Plaintiffs’ UCL claim purports to be premised on 13 violations of the “unlawful” or “unfair” prongs by reference to Plaintiffs’ “breach of warranty” 14 claim and “implied warranties” theory, see CAC, ¶ 106-07, those remaining aspects of the UCL 15 claim necessarily fail as a matter of law for the multiple reasons why Plaintiff’s First Cause of 16 Action must be dismissed, as set forth below. See also Aug. 30, 2011 McKinney Order, at 11 17 (dismissing remaining aspects of UCL claim as either “preempted” by the FCA under 47 U.S.C. § 18 19 14 20 21 22 23 24 25 26 27 28 Indeed, Plaintiffs still can identify no economic injury allegedly suffered “as a result” of any alleged inadequate customer service. Instead, Plaintiffs just reprise their same allegations about emotional distress, frustration, and “taxing mental exertion” on account of their alleged customerservice experiences (CAC, ¶ 12) that this Court already rejected because they do not constitute the sort of “legally cognizable injury or damage” required to support a viable claim. Aug. 30, 2011 McKinney Order, at 3, 10-11. Under California law, emotional distress and inconvenience is not compensable in breach of warranty, contract, and even tort actions involving only economic loss to the plaintiff and not physical injury (see Kwan v. Mercedes-Benz of North Am., Inc., 23 Cal. App. 4th 174, 187-92 (1994); Gravillis v. Coldwell Banker Residential Brokerage Co., 143 Cal. App. 4th 761, 777 (2006)) and, clearly, no emotional distress “damages” are recoverable under the UCL. Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (2003). Hence, Plaintiffs’ customer-service/emotional-distress allegations cannot support any viable claim under the UCL claim or for breach of the implied warranty of merchantability. Moreover, Plaintiffs still can cite no authority for the proposition that having to wait a few days for an email response (CAC, ¶ 8) breaches any hypothetical “duty” that was owed to them. D ECHERT LLP - 16 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 332(c)(3), or otherwise failing along with other dismissed claims); Aug. 30, 2011 Nabors Order, 2 at 10-11 (same). 3 B. 4 Unable to plead any claim that Google and HTC misrepresented that the Nexus One was Plaintiffs’ Implied Warranty Of Merchantability Claim Fails As A Matter Of Law For Multiple Reasons (First Cause Of Action). 5 guaranteed to maintain consistent 3G connectivity, Plaintiffs are left only with their common law 6 claim for breach of the “implied warranty of merchantability,” which is equally baseless. Under 7 this theory, Plaintiffs contend that the Nexus One is not “merchantable” at all and entirely “unfit” 8 as a smart phone because they allegedly did not receive consistent 3G connectivity to T-Mobile’s 9 wireless network, even though – as Plaintiffs admit – the Nexus One was designed to operate and 10 does operate on both 2G and 3G wireless networks. For multiple independent reasons, Plaintiffs’ 11 First Cause of Action fails as a matter of law and must be dismissed. 12 13 1. Plaintiffs’ Implied Warranty Claim Remains Preempted. Twice now in this action, Plaintiffs’ state-law warranty claims have been dismissed as 14 preempted under the Federal Communication Act (“FCA”)’s preemption provision, 47 U.S.C. § 15 332(c)(3), which mandates that “no State or local government shall have any authority to regulate 16 the entry of or rates charged by any commercial mobile service or any private mobile service.” 17 Both Judge Ware and this Court dismissed Plaintiffs’ previous state-law breach of warranty 18 claims because they were inextricably tied to, and inseparable from, preempted attacks on the 19 sufficiency of T-Mobile’s 3G wireless network infrastructure. See Nov. 16, 2010 Order, at 15-16; 20 Aug. 30, 2011 McKinney Order, at 4-5; Aug. 30, 2011 Nabors Order, at 4-5. Because Plaintiffs’ 21 implied warranty claim continues to suffer the same flaws that resulted in dismissal of their prior 22 claims on preemption grounds, it is necessarily preempted as well. 23 Indeed, the Consolidated Amended Complaint’s implied warranty claim is still based on 24 the same core allegations regarding the cause of the alleged 3G connectivity problems as those in 25 the prior complaints that led Judge Ware and this Court to find express FCA preemption – i.e., 26 that the lack of “consistent” 3G connectivity is allegedly caused by deficiencies in T-Mobile’s 3G 27 wireless network infrastructure “and/or” the Nexus One device itself. CAC, ¶ 58 (“the 28 combination of the phone and/or the network made it difficult … to receive reliable and sustained - 17 - D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 connectivity on the 3G wireless network as compared to a slower network”). Plaintiffs do not – 2 and cannot – allege that any 3G connectivity issues are, in fact, “caused” by any “actual defect” in 3 the Nexus One itself, as opposed to and distinct from alleged deficiencies in T-Mobile’s 3G 4 network infrastructure. Aug. 30, 2011 McKinney Order, at 5; Aug. 30, 2011 Nabors Order, at 5; 5 see also Nov. 16, 2010 Order, at 17.15 On the contrary, as before, other allegations in the 6 Consolidated Amended Complaint still confirm that this claim remains inseparably based on T- 7 Mobile’s 3G network, as Plaintiffs continue to allege that “T-Mobile’s network did not provide 8 consistent 3G performance for Google Phone purchasers,” CAC, ¶ 51, and that “the T-Mobile 3G 9 network was not designed to provide consistent connectivity to its 3G network for Google Phone 10 users,” id., ¶ 59. Notably, these same exact words and allegations in Plaintiffs’ prior amended 11 complaints quoted by this Court as supporting express FCA preemption are realleged verbatim in 12 the Consolidated Amended Complaint. See Aug. 30, 2011 McKinney Order, at 5 (quoting 13 McKinney SAC, ¶¶ 58, 59, 65); Aug. 30, 2011 Nabors Order, at 5 (quoting Nabors FAC, ¶¶ 47, 14 48, 54). Consequently, as both this Court and Judge Ware have recognized, Plaintiffs’ state-law 15 warranty claims will result in protracted litigation about the adequacy of T-Mobile’s 3G 16 infrastructure (as well as that of other carriers), and implicate preempted assessments about each 17 carrier’s 3G market entry and rates charged.16 18 Finally, Plaintiffs still fail to identify any “actual defects” in the Nexus One. Instead, after 19 reprising their prior allegations about the Nexus One’s alleged failure to maintain “consistent 3G 20 15 21 22 23 24 25 26 27 28 In his November 2010 ruling, Judge Ware dismissed McKinney’s state-law warranty claims as preempted but granted leave to amend so her counsel had the chance to plead – if they could – that there truly existed some “actual defect” in the Nexus One itself that was causally responsible for its alleged failure to maintain consistent 3G connectivity, as opposed to and distinct from alleged deficiencies in T-Mobile’s 3G network infrastructure or that of other wireless carriers. Nov. 16, 2010 Order, at 17. Judge Ware did not determine that there were any “actual defects” in the Nexus One, nor that Plaintiff’s counsel could in fact plead any such “actual defects” claim. Judge Ware merely granted leave to amend, while observing that such a hypothesized claim may escape FCA preemption and explicitly leaving open for resolution Google and HTC’s additional state-law arguments for dismissal of any such warranty claims. 16 As before, Plaintiffs’ state-law implied warranty claim triggers both the 3G “market entry” and “rates” charged prongs of express FCA preemption, Nov. 16, 2010 Order, at 17, even though either would suffice under section 332(c)(3), which preempts any state regulation of market entry “or” rates charged by any commercial mobile service. 47 U.S.C. § 332(c)(3); see also Ball v. GTE Mobilnet of Cal., 81 Cal. App. 4th 529, 543 (2000). D ECHERT LLP - 18 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 connectivity” (which allegedly results in dropped or missed calls), Plaintiffs just assert: “In sum, 2 the Google Phone was sold with actual defects.” CAC, ¶ 88. But this is nothing more than a bare 3 “legal conclusion couched as a factual allegation,” which is insufficient under Bell Atlantic Corp. 4 v. Twombly, 550 U.S. 544, 555 (2007); see also id. (mere “labels,” “conclusions,” and “a 5 formulaic recitation of the elements of a cause of action will not do,” and are insufficient to state 6 a claim for relief that is “plausible on its face”); Aug. 30, 2011 McKinney Order, at 3 7 (“conclusory allegations [are] not sufficient” and “plaintiff must plead facts showing that a 8 violation is plausible, not just possible”) (citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)); 9 Aug. 30, 2011 Nabors Order, at 3 (same). Moreover, Plaintiffs rely on the entirely circular 10 assumption that the Nexus One presumably was sold with some sort of “actual defects” because it 11 fails to maintain consistent 3G connectivity. See CAC, ¶¶ 86-88. This underscores Plaintiff 12 counsel’s prior concession on the record that the most they can say is that it possible that some 13 unidentified defect in the Nexus One might contribute in some unspecified manner to Plaintiffs’ 14 alleged failure to receive consistent 3G connectivity to T-Mobile’s 3G network.17 Hence, as 15 before, Plaintiffs’ claim must be dismissed because, at most, their allegations raise “only a mere 16 possibility that an actual defect [in the Nexus One] caused the inconsistent 3G connection.” Aug. 17 30, 2011 McKinney Order, at 5; Aug. 30, 2011 Nabors Order at 5 (same). 2. 18 19 20 Plaintiffs’ Implied Warranty Claim Clearly Fails As A Matter Of Law For Additional Reasons As Well. a. Plaintiffs Fail To Plead Facts Showing The Nexus One Is Not Merchantable And Unfit For Its Ordinary Purpose. “Unlike express warranties, which are basically contractual in nature, the implied 21 warranty of merchantability arises by operation of law.” American Suzuki Motor Corp. v. 22 Superior Ct. (Carney), 37 Cal. App. 4th 1291, 1295-96 (1995). The implied warranty of 23 merchantability guarantees that products have only “a minimum level of quality” and are free of 24 fundamental defects that are “so basic” that they render the item not “merchantable” at all and 25 “unfit for its ordinary purpose.” Id. at 1291, 1295-96. As the Ninth Circuit has held, the implied 26 warranty of merchantability is breached in those extreme instances where the defendant’s product 27 17 28 D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO Plaintiff McKinney’s Opposition to Google and HTC’s Joint Motion to Dismiss Second Amended Complaint, Docket No. 88, at 17-18. - 19 DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 “lacks even the most basic degree or fitness for ordinary use.” Birdsong v. Waggoner, 590 F.3d 2 955, 958 (9th Cir. 2009); see also Tietsworth v. Sears, Roebuck & Co., 720 F. Supp. 2d 1123, 3 1142 (N.D. Cal. 2010) (“‘mere manifestation of a defect by itself does not constitute a breach of 4 the implied warranty of merchantability” because “‘there must be a fundamental defect that 5 renders the product unfit for its ordinary purpose’”) (citation omitted). 6 Plaintiffs’ claim is premised on the illegitimate notion that all Nexus One devices are not 7 “merchantable” and “unfit” for their ordinary purpose as smart phones unless they operate 8 consistently on a 3G wireless network – even though Plaintiffs admit that the Nexus One was 9 designed to operate, and does operate, on both 2G and 3G wireless networks. Even if it were 10 somehow Plaintiffs’ subjective “expectation” that the Nexus One would provide consistent 3G 11 connectivity, see CAC, ¶¶ 91, the implied warranty of merchantability “does not impose a general 12 requirement that goods precisely fulfill the expectation of the buyer” and instead guarantees only 13 “a minimum level of quality.” American Suzuki, 37 Cal. App. 4th at 1296. For this reason, 14 plaintiffs have to plead and prove “more than that the alleged defect was ‘inconvenient,’ rather, 15 they ha[ve] to show that the defect renders the defendant’s [products] unfit for their ordinary 16 purpose.” Baltazar v. Apple, Inc., 2011 U.S. Dist. LEXIS 96140, at *10. 17 It is dispositive that Plaintiffs continue to admit that the Nexus One was not only designed 18 to operate on both 2G/EDGE and 3G wireless networks, but that it can and does function and 19 operate as a smart phone even in those instances when 3G connectivity is unavailable and the 20 device switches to a 2G/EDGE wireless network. See, e.g., CAC, ¶ 46 (when “3G connectivity 21 was unavailable, the [Nexus One’s] phone and data operations could still be used”), ¶ 57 (Nexus 22 One “is designed to search for an available 3G radio network connection, and if that is not 23 available, it will connect to a slower network”). Consequently, the Nexus One is entirely 24 merchantable and fit for its ordinary purpose despite Plaintiffs’ desire that it operate more 25 “consistently” on a 3G wireless network than on a 2G/EDGE wireless network. 26 Indeed, courts repeatedly have rejected claims for breach of the implied warranty of 27 merchantability where – as here – they were premised on alleged problems with products that 28 were still operational as to the minimal level of functionality protected by the doctrine of implied - 20 - D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD 1 warranty of merchantability. In Baltazar, for instance, the U.S. District Court for the Northern 2 District of California dismissed an implied warranty of merchantability claim attacking Apple’s 3 iPad for shutting down when being used outdoors on hot days and being inoperable until the 4 device cooled down; as the court ruled, despite the obvious “inconvenience,” the iPad plaintiffs 5 alleged merely “that the iPad does not fulfill the expectations of the named Plaintiffs” but failed 6 to “plead facts tending to show that the device fails to meet ‘a minimum level of quality’ for a 7 tablet computer.” 2011 U.S. Dist. LEXIS 96140, at **9-11. Likewise, in Birdsong, the Ninth 8 Circuit affirmed dismissal of an implied warranty of merchantability claim where Apple’s iPod 9 could still function for its ordinary purpose of “listening to music” despite the plaintiff’s product 10 defect allegations related to potential hearing damage from listening to iPod’s music at higher 11 levels. 590 F.3d at 958. And in Tietsworth, the U.S. District for the Northern District of 12 California dismissed implied warranty of merchantability claims based on allegations that 13 washing machines allegedly “stopped in mid-cycle,” and required users to “restart” them 14 “sometimes more than once.” 720 F. Supp. 2d at 1142-43. Again, despite the alleged 15 inconvenience to users, the claims failed as a matter of law because the plaintiffs failed to plead 16 facts sufficient to show that the machines were not fit for the ordinary purpose “of washing 17 clothes.” Id. Similarly here, even Plaintiffs’ allegations confirm that the Nexus One is 18 merchantable and operational as a smartphone in instances when the device switches from a 3G 19 network to a 2G/EDGE network.18 20 Finally, as before, McKinney’s red-herring allegations regarding the three Nexus One 21 devices she has owned actually serve to refute (rather than support) any implied warranty of 22 merchantability claim. As McKinney continues to allege, her first two Nexus One devices were 23 24 25 26 27 28 18 Even assuming Plaintiffs’ allegations to be true for purposes of this motion only, the inconvenience Plaintiffs allegedly experienced when the Nexus One operates on 2G rather than 3G networks – including any “dropped” calls that had to be reinitiated, CAC, ¶¶ 15, 87 – is no different than the washing machine “stop and start” inconvenience in Tietsworth and the iPad “shut down [and cool]” inconvenience in Baltazar, which all are insufficient to support any claim for breach of the implied warranty of merchantability. Moreover, as in Tietsworth, Plaintiffs’ allegations that both of them continue to use the Nexus One to this day (see, e.g., CAC, ¶ 10) “belie [their] claim that [the device] failed to serve its ordinary purpose.” 720 F. Supp. 2d at 1142. D ECHERT LLP - 21 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 replaced because she was “unable to obtain phone service or use any of the features” of the 2 devices. CAC, ¶¶ 8-9. In other words, she alleges they were replaced under warranty because 3 they were inoperable on any wireless network, not because they provided inconsistent 4 connectivity to T-Mobile’s 3G wireless network. Even assuming those replaced devices were 5 inoperable, that does not support the implied-warranty claim Plaintiffs assert, which is based on 6 the theory that all Nexus One devices are unmerchantable because they allegedly provide 7 “sporadic and inconsistent” 3G connectivity. CAC, ¶¶ 47-48, 86, 90. As Plaintiffs’ counsel has 8 admitted on the record, the claim Plaintiffs wish to pursue on a class-wide basis in this action is 9 “not the phone won’t operate at all” but rather “that the phone vacillates between 2G and 3G” and 10 thereby fails to provide “consistent” 3G connectivity. Nov. 1, 2010 Hr’g. Tr. at 22:13-24:5.19 As 11 McKinney admits, her current Nexus One device does provide “cellular phone and data service.” 12 Id., ¶ 10. Accordingly, the Nexus One is entirely merchantable and fit for its ordinary purpose as 13 a smart phone that operates on both 2G/EDGE and 3G wireless networks. b. 14 15 Google’s Lawful Disclaimer Of Any Implied Warranty Of Merchantability Also Defeats The Claim. Plaintiffs’ implied warranty of merchantability claim also fails as a matter of law in light 16 of Google’s legally enforceable disclaimers of any implied warranty of merchantability. See Exh. 17 1; RJN, Exh. 1 at p. 4. Under settled law, merchants may lawfully disclaim the implied warranty 18 of merchantability so long as they do so in a conspicuous fashion and specifically mention 19 merchantability. See, e.g., Cal. Com. Code § 2316(2). Under section 2316(2), “an implied 20 warranty of merchantability may be excluded in a written document in which the disclaimer is 21 conspicuous and mentions merchantability.” Inter-Mark USA, Inc., v. Intuit, Inc., 2008 U.S. Dist. 22 23 24 25 26 27 28 19 As before, McKinney complains that when replacing her first two devices Defendants “passed off” used devices “as equivalent to” a new device. CAC, ¶¶ 11, 62; compare McKinney SAC, ¶¶ 7, 67. This is an unfair and inaccurate characterization of Defendants’ efforts to address issues McKinney claims she had with her first two devices. HTC’s Limited Warranty expressly states that defective devices will be repaired or replaced and such repair or replacement “may involve the use of functionally equivalent reconditioned units.” See Exh. 2; Defendants’ RFJN, Exh. 2. Plaintiffs expressly acknowledged HTC’s Limited Warranty in accepting Google’s Terms of Sale, and also received a copy of the Limited Warranty in Nexus One packaging. See Declaration of Rosemarie Ring (“Ring Decl.”) at ¶ 2. Far from supporting Plaintiffs’ breach of warranty claims, these allegations further confirm that Defendants have fully complied with any warranty obligations. D ECHERT LLP - 22 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 LEXIS 18834, *21 (N.D. Cal., Feb. 27, 2008) (dismissing implied warranty of merchantability 2 claim where plaintiff’s software licensing agreement with defendant contained “a valid disclaimer 3 of any implied warranties”); accord Long, 2007 U.S. Dist. LEXIS 79262, at *16. Here, Google’s 4 explicit disclaimer of any “IMPLIED WARRANTIES OF MERCHANTABILITY” is 5 conspicuously set forth in the Google Terms of Sale with Plaintiffs. See Exh. 1; RFJN, Exh. 1, at 6 p. 4.20 Because Google’s warranty disclaimer readily satisfies section 2316(2)’s requirements 7 under the governing authorities, Plaintiffs’ implied warranty of merchantability claim against 8 Google fails. c. 9 Plaintiffs’ Implied Warranty Claim Against HTC Also Fails Because Plaintiffs Lack Privity With HTC. 10 In addition to the fatal infirmities set forth above, Plaintiffs’ implied warranty claim 11 against HTC fails because they lack privity with HTC. “Vertical privity is a prerequisite in 12 California for recovery on a theory of breach of implied warranties of fitness and 13 merchantability.” In re NVIDIA GPU Litig., 2009 WL 4020104, *6 (N.D. Cal. Nov. 19, 2009) 14 (collecting cases and quoting All West Elecs., Inc. v. M-B-W, Inc., 64 Cal. App. 4th 717, 724 15 (1998)); Tietsworth v. Sears, Roebuck & Co., 2009 WL 1363548, *3 (N.D. Cal. May 14, 2009) 16 (same). Here, Plaintiffs allege that they purchased their Nexus One devices from Google, CAC, 17 18 19 20 21 22 23 24 25 26 27 28 20 After referring to HTC’s limited one-year replacement or repair warranty, Google’s Terms of Sale with Plaintiffs includes the following conspicuous disclaimer: OTHER THAN THE ABOVE AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, GOOGLE EXPRESSLY DISCLAIMS ALL WARRANTIES AND CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, REGARDING ANY DEVICES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGMENT. Exh. 1, at pp. 4-5. Google’s warranty disclaimer is an enforceable contractual limitation. See Inter-Mark USA, Inc., v. Intuit, Inc., 2008 U.S. Dist. LEXIS 18834, *8 (N.D. Cal., Feb. 27, 2008); see also Fogo v. Cutter Labs., Inc., 68 Cal. App. 3d 744, 758 (1977) (“clearly” the phrase “[t]he foregoing warranty is exclusive and in lieu of all other warranties” appearing at the end of party’s limited warranty constituted disclaimer). Indeed, Judge Ware in Long v. Hewlett-Packard Co. upheld and enforced a comparable disclaimer, which provided: “To the extent allowed by local law, the above warranties are exclusive and no other warranty or condition, whether written or oral, is expressed or implied and HP specifically disclaims any implied warranties or conditions of merchantability, satisfactory quality, and fitness for a particular purpose.” 2007 U.S. Dist. LEXIS 79262, at **16-17. D ECHERT LLP - 23 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 ¶¶ 6, 14, and, indeed, repeatedly allege that the Nexus One “could not be purchased through 2 Defendant HTC.” Id., ¶ 33, see also id. ¶ 24. Because Plaintiffs do not – and cannot – allege that 3 they purchased their Nexus One devices from HTC, their implied warranty claim against HTC 4 also fails as a matter of law for lack of privity. C. 6 All Of Plaintiffs’ Claims Are Preempted Because They Are Inextricably Tied To Preempted Attacks On The Sufficiency Of T-Mobile’s FCC Approved “3G” Infrastructure Or That Of Other Mobile Carriers. 7 Finally, consistent with the FCA preemption rulings in iPhone and this Court’s rulings in 5 8 this case, all of Plaintiffs’ claims are preempted under 47 U.S.C § 332(c)(3). See In re Apple 9 iPhone 3G Prods. Liab. Litig., 728 F. Supp. 2d at 1071, 1076 (UCL, CLRA and breach of 10 warranty claims against Apple dismissed as preempted attacks on 3G “market entry” and “rates” 11 charged); see also Nov. 16, 2010 Order, at 15-16; Aug. 30, 2011 McKinney Order, at 4-5; Aug. 12 30, 2011 Nabors Order, at 4-5. Plaintiffs’ continued inability to plead with particularity any 13 misrepresentation by Google and HTC regarding the Nexus One’s 3G connectivity, let alone 14 promising “consistent” 3G connectivity, confirms that this case is far more like the preempted 15 infrastructure and market entry claims in iPhone and Bastien v. AT&T Wireless Servs., Inc, 205 16 F.3d 983, 989-90 (7th Cir. 2000),21 and entirely unlike the genuine misrepresentation claims pled 17 with Rule 9(b) particularity that escaped preemption in Shroyer v. New Cingular Wireless Servs., 18 Inc., 622 F.3d 1035, 1039-42 (9th Cir. 2010), which did not even involve the “market entry” 19 prong of FCA preemption. Id. at 1040 (“Bastien dealt with market entry, which the states are 20 expressly excluded from regulating by § 332,” but Shroyer’s non-preempted claim based on false 21 promises “does not”). Moreover, Shroyer itself confirms – consistent with the FCC’s own 22 interpretation of Bastien – that express FCA preemption under section 332(c) turns on the 23 “substance” of the particular claims at issue, and not merely their “form.” 622 F.3d at 1040. As 24 Shroyer notes, the plaintiffs’ claim in Bastien was preempted because it relied on state consumer 25 protection law in a manner that would embroil the court in determining the sufficiency of 26 AT&T’s network; hence, the substance of the claim implicated assessments reserved for the FCC 27 28 21 As here, the plaintiffs in Bastien similarly failed to plead any “particular promises or representations” and “specific instances of the words used” by the defendant in support of plaintiffs’ conclusory “misrepresentation” allegations. Bastien, 205 F.3d at 889-90. D ECHERT LLP - 24 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 alone to make, which triggered preemption. Id. Likewise here, as before, the “substance” of 2 Plaintiffs’ state-law claims is what continues to trigger express FCA preemption under 47 U.S.C 3 § 332(c)(3). Consequently, while Plaintiffs’ state-law claims fail for multiple independent 4 reasons, they are all also preempted under Judge Ware’s reasoning in iPhone and this action as 5 well as this Court’s own section 332(c)(3) reasoning. 6 D. Plaintiffs’ Claims Should Be Dismissed Without Leave To Amend. 7 Both Judge Ware and this Court have granted Plaintiffs leave to amend, affording them 8 more than sufficient opportunity to see if their counsel could fix the fundamental flaws in 9 Plaintiffs’ claims that have repeatedly resulted in their prior dismissal. Plaintiffs cannot cure 10 those defects because they are incurable. Indeed, Plaintiffs continue to assert flawed and legally 11 infirm claims because this lawsuit is fundamentally founded upon promises that Google and HTC 12 never made and implied warranties that do not exist. Accordingly, Plaintiffs have confirmed that 13 they cannot allege facts sufficient to support any claims for relief, and hence further leave to 14 amend would be futile. See Cook, Perkiss & Liehe, Inc. v. Northern Cal. Collection Servs., 911 15 F.2d 242, 247 (9th Cir. 1990). Google and HTC have expended hundreds of thousands of dollars 16 defending against Plaintiffs’ unfounded legal claims, and the time has come to dismiss this action 17 without leave to amend. 18 V. CONCLUSION For the foregoing reasons, Google and HTC’s motion to dismiss Plaintiffs’ Consolidated 19 Amended Complaint should be granted without leave to amend. 20 21 Dated: October 24, 2011, Respectfully submitted, 22 DECHERT LLP 23 By: /s/ Steven B. Weisburd . Steven B. Weisburd (No. 171490) One Maritime Plaza, Suite 2300 San Francisco, California 94111-3513 Telephone: 415.262.4500 Facsimile: 415.262.4555 24 25 26 Counsel for Defendant GOOGLE INC. 27 28 D ECHERT LLP - 25 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 2 3 MUNGER, TOLLES & OLSON LLP 6 By: /s/ Rosemarie T. Ring . Rosemarie T. Ring (No. 220769) 560 Mission Street, 27th Floor San Francisco, California 94105-2907 Telephone: 415.512.4000 Facsimile: 415.644.6908 7 Counsel for Defendant HTC CORPORATION 4 5 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 D ECHERT LLP - 26 - ATTO RNEY S AT LAW DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD SAN FRA NCI SCO 1 CERTIFICATION 2 I, Matthew L. Larrabee, am the ECF User whose identification and password are being used to 3 file this motion. In compliance with General Order 45.X.B., I hereby attest that Steven B. 4 Weisburd and Rosemarie T. Ring have concurred in this filing. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 D ECHERT LLP ATTO RNEY S AT LAW SAN FRA NCI SCO DEFENDANTS’ MPA ISO MOTION TO DISMISS CASE NO. 5:10-CV-01177-EJD