Court Opinion

ID: 3180513
Source: CourtListenerOpinion
Date Created: 2016-02-25 21:07:00.197+00
Date Added: 2024-06-11T14:34:41.767459
License: Public Domain

FILED
                           NOT FOR PUBLICATION                               FEB 25 2016

                                                                         MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                        U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

In re: IPHONE 4S CONSUMER                        No. 14-15487
LITIGATION,
                                                 D.C. No. 4:12-cv-01127-CW

FRANK M. FAZIO; CARLISA S.
HAMAGAKI; DANIEL M.                              MEMORANDUM*
BALASONNE; BENJAMIN
SWARTZMANN, individually and on
behalf of all others similarly situated,

              Plaintiffs - Appellants,

 v.

APPLE, INC., a California Corporation,

              Defendant - Appellee.

                   Appeal from the United States District Court
                       for the Northern District of California
                  Claudia Wilken, Senior District Judge, Presiding

                     Argued and Submitted February 12, 2016
                            San Francisco, California

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: SILVERMAN and TALLMAN, Circuit Judges and LASNIK,** Senior
District Judge.

      Plaintiffs appeal the district court’s order granting Apple’s Motion to

Dismiss Plaintiffs’ California Consumer Legal Remedies Act (“CLRA”),

California False Advertising Law (“FAL”), California Unfair Competition Law

(“UCL”), and intentional and negligent misrepresentation claims. The district

court held that Plaintiffs’ amended consolidated class action complaint, alleging

that Apple’s advertising campaign misrepresented the functionality of the Siri

feature of the iPhone 4S and deceived consumers, failed to plead fraud with

particularity as required by Federal Rule of Civil Procedure 9(b) and failed to plead

plausible claims under Federal Rule of Civil Procedure 8(a). We have jurisdiction

under 28 U.S.C. § 1291, and we affirm.

      1. The district court did not err in finding that Plaintiffs failed to meet the

heightened pleading requirements of Rule 9(b) when Plaintiffs failed to describe

how and why Apple’s statements were fraudulent or misleading. All of Plaintiffs’

claims fall under the heightened pleading requirements of Rule 9(b) because they

are “grounded in fraud.” See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th

Cir. 2009); Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102-05 (9th Cir. 2003)

       **
             The Honorable Robert S. Lasnik, Senior United States District Judge
for the Western District of Washington, sitting by designation.

                                           2
(holding that the Rule 9(b) pleading standards apply to California CLRA, FAL, and

UCL claims because, though fraud is not an essential element of those statutes, a

plaintiff alleges a fraudulent course of conduct as the basis of those claims). In

pleading fraud or misrepresentation a plaintiff “must state with particularity the

circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). To meet this

standard a plaintiff must allege the “who, what, where, when, and how” of the

misconduct and explain what is false or misleading about the statement made and

why it is false. Cafasso ex. rel. United States v. Gen. Dynamics C4 Sys., Inc., 637

F.3d 1047, 1055 (9th Cir. 2011).

      Merely pointing to product demonstrations of Siri in Apple’s general

advertising campaign is insufficient to show that Apple fraudulently misled

Plaintiffs into believing Siri would perform consistently. Plaintiffs fail to define

what level of consistency they expected from these representations and how often

Siri actually performed as requested. Plaintiffs also do not allege that Siri never

worked, just that Siri did not work as consistently as they expected. Failure to

meet Plaintiffs’ undefined expectations of consistency does not render Apple’s

representations misleading. Therefore, Plaintiffs failed adequately to allege why

the representations were misleading and the district court did not err in holding that

Plaintiffs failed to satisfy the pleading requirements of Rule 9(b).

                                           3
      2. The district court did not err when it dismissed Plaintiffs’ CLRA, FAL,

and UCL claims for failing to meet the pleading requirements of Rule 8(a) because

it could not determine if a reasonable consumer would be misled by Apple’s

representations. Complaints alleging fraud subject to Rule 9(b) must also meet the

plausibility requirement of Rule 8(a) under Ashcroft v. Iqbal, 556 U.S. 662 (2009).

Cafasso, 637 F.3d at 1055. To be plausible, claims must meet the “reasonable

consumer” test by showing that members of the public are likely to be deceived.

Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008).

      Because Plaintiffs cannot articulate what level of consistent performance

Apple fraudulently represented, they similarly fail to define the level of

consistency a reasonable consumer would expect. Therefore, Plaintiffs failed to

satisfy the reasonable consumer test and the district court did not err in holding

Plaintiffs’ complaint deficient for failure to state a claim that satisfies Rule 8(a).

      3. Because Plaintiffs elected to stand on their amended consolidated class

action complaint, there was no abuse of discretion in dismissal with prejudice. See

Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 1007 (9th Cir. 2009).

      Costs are awarded to Appellees.

      AFFIRMED.

                                            4
                                                                                  FILED
Fazio v. Apple, Inc. No. 14-15487                                                   FEB 25 2016

                                                                             MOLLY C. DWYER, CLERK
                                                                              U.S. COURT OF APPEALS
SILVERMAN, Circuit Judge, dissenting:

       Contrary to what the majority says, the plaintiffs do not allege that “Siri did

not work as consistently as they expected.” In truth, they alleged that Siri did not

work as advertised. In a false advertising case, that is a crucial distinction.

       The plaintiffs set forth in their complaint, in great detail, the specific

functions that the Apple commercials claimed that Siri will do. The plaintiffs then

allege in plain English that Siri does not do those specific things. They then allege

exactly what Siri does instead. That’s specific enough for me.

       The essence of Apple’s attack on the sufficiency of the complaint is that

plaintiffs did not plead that the commercials specifically state that Siri will work

“consistently.” With all due respect, that’s baloney. The same can be said of

virtually any advertisement. Does a commercial for a refrigerator specifically

claim that the refrigerator will consistently keep the food cold? Does a commercial

for a television specifically claim that it will consistently turn itself on and off

when the power button is pushed? Does a commercial for a car specifically claim

that it will consistently stop when the brakes are applied? Of course not, but a

reasonable person would understand that such performance is implied, especially
                                           -2-
when the function is demonstrated in a commercial. Faced with a motion to

dismiss, the plaintiffs are entitled to the benefit of the reasonable inferences that

can be drawn from the detailed facts they alleged in their complaint, especially

when the cause of action does not require proof of falsity, just that the claims are

misleading.

      In this case, plaintiffs have alleged that Apple’s commercials for the iPhone

4s specifically claim – indeed, the commercials show – that the phone will perform

certain specific functions, and that the iPhone 4s does not perform those specific

functions as specifically advertised. It may well be that, down the road, Apple can

show that an occasional Siri mistake is not unacceptable performance – i.e., that

the phone reasonably performs as advertised. I express no opinion on what the

evidence will show; the only issue before us now is the sufficiency of the

complaint. Taking the specific allegations in the light most favorable to the

plaintiffs, the motion to dismiss should have been denied.