Court Opinion

ID: 4698428
Source: CourtListenerOpinion
Date Created: 2021-06-24 19:04:25.485037+00
Date Added: 2024-06-11T08:05:52.636060
License: Public Domain

Filed 6/24/21 Kruskol v. Apple CA2/5
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION FIVE

MARC KRUSKOL,                                                   B302495

         Plaintiff and Appellant,                               (Los Angeles County
                                                                Super. Ct. No.
         v.                                                     19STCV11737)

APPLE, INC.,

         Defendant and Respondent.

      APPEAL from a judgment of the Superior Court of Los
Angeles County, Rupert A. Byrdsong, Judge. Affirmed.
      Milstein Jackson Fairchild & Wade, Gillian L. Wade, Sara
D. Avila, and David F. Slade for Plaintiff and Appellant.
      Covington & Burling, Mitchell A. Kamin, Emily Johnson
Henn, Neema T. Sahni, Patrick R. Carey, and Carlton E. Forbes
for Defendant and Respondent.
                      I. INTRODUCTION

       Plaintiff Marc Kruskol appeals from a judgment following
the trial court’s sustaining of a demurrer without leave to amend.
We affirm.

                II. FACTUAL BACKGROUND

       “On demurrer review, we accept the truth of material facts
properly pleaded, but not contentions, deductions, or conclusions
of fact or law. We may also consider matters subject to judicial
notice.” (State Dept. of State Hospitals v. Superior Court (2015)
61 Cal.4th 339, 346.) We summarize the facts alleged by plaintiff
in the second amended complaint as follows.
       Defendant Apple, Inc. (Apple) sells, among other devices,
iPhones that use the “iOS” operating system. Apple releases new
models of iPhones on a semi-annual basis and also regularly
updates the operating system, including with security patches
and repairs to existing flaws. Apple designs the operating system
updates in order to optimize the performance of the latest-model
iPhone. Such updates, however, strain the hardware, including
the batteries, of earlier models.
       On December 14, 2014, plaintiff purchased an iPhone 6. By
late 2016, older-model iPhones were experiencing extremely
decreased performance due to battery degradation and, in many
instances, were shutting off completely.
       In January 2017, Apple introduced an operating system
update that prevented unexpected shut downs by slowing the
performance of older-model iPhones, including the iPhone 6.
During 2017, users of older-model iPhones, including plaintiff,

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updated the operating system, which resulted in decreased
performance and battery degradation. Many users, including
plaintiff, thus elected to replace the batteries on their older-
model iPhones with third-party batteries.
       In December 2017, Apple announced that throughout 2018,
it would offer a discounted price on battery replacements for
iPhone 6 and later models, which would cost $29 instead of the
usual cost of $79 (reduced-price battery replacement program).
The reduced-price battery replacement program, however,
excluded consumers, like plaintiff, who had replaced the batteries
of their iPhones with third-party batteries.
       On December 23, 2018, plaintiff went to an Apple store in
Century City to have his iPhone battery replaced as part of the
reduced-price battery replacement program. An employee at the
store advised plaintiff that his iPhone did not qualify for the
program because it contained a third-party battery. Plaintiff was
also turned away by the Apple store in Valencia.
       Effective February 28, 2019, after the termination of the
reduced-price battery replacement program, Apple reversed its
policy of refusing to service iPhones with third-party batteries.

             III. PROCEDURAL BACKGROUND

A.    UCL Claim

     On April 4, 2019, plaintiff filed his initial complaint against
Apple for violation of the Unfair Competition Law (UCL; Bus. &
Prof. Code1, § 17200 et seq.). On June 10, 2019, plaintiff filed his

1     Further statutory references are to the Business and
Professions Code.

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first amended complaint; and, on July 23, 2019, he filed the
operative second amended complaint.
       The second amended complaint alleged a single cause of
action for violation of the UCL. Specifically, plaintiff alleged that
Apple engaged in an unfair business practice by “establishing
discriminatory repair policies (i.e., refusing to repair Apple
products, wholesale, if they contained third-party aftermarket
parts) thereby depriving customers of the benefit of the reduced-
price battery replacement program and potentially continuing to
harm customers by refusing to service its products if customers
previously resorted to third-party repair.” Plaintiff also alleged
that Apple’s conduct was fraudulent as Apple falsely represented
that its discriminatory repair policies were “lawful, thereby
depriving customers of the benefit of the reduced-price battery
replacement program and potentially continuing to harm
customers by refusing to service its products if customers
previously resorted to third-party repair.”
       Plaintiff alleged that he was injured by Apple’s practice
because: “he was deprived of the right to replace his iPhone
battery at a reduced cost (thus losing the benefit of a $29 battery,
and instead being forced to pay $79 if he wishes to have a
replacement Apple battery); unless and until he purchases an
Apple battery, he is at risk of . . . limiting or even disabling his
phone’s functionality; and he lost time at work attempting to
exercise his rights under Apple’s reduced-price battery
replacement program (and had attendant travel-related costs).”
       Although plaintiff acknowledged that even before he filed
his initial complaint, Apple had reversed its policy of refusing to
service iPhones with third-party batteries, plaintiff alleged that
Apple had “not publicly confirmed the existence of this policy

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reversal, nor does the public know the full contours of this new
policy.” And, “[n]othing prohibits Apple from doing something
similar in the future, to the detriment of the general public.”
        Plaintiff requested, as relief, a judgment “enjoining Apple
from further unlawful, unfair and/or fraudulent practices with
respect to the repair policies associated with Apple products and
requiring Apple to provide [re-institution of the reduced-price
battery replacement program to] members of the public who had
their Apple products serviced by a third party, including those
members of the public whom Apple previously turned away for
$29 battery replacements.” He also sought attorney fees and
“[a]ll other such relief as may be appropriate.”

B.    Demurrer

       On August 8, 2019, Apple filed its demurrer to the second
amended complaint. Apple argued, among other things, that
plaintiff had failed to allege he was entitled to relief under the
UCL, which only authorizes the remedies of restitution and
injunction. Plaintiff opposed the demurrer, arguing that he had
sufficiently alleged he was entitled to restitution because he and
other members of the general public paid substantial sums of
money for their iPhones, which were diminished in value by
“precisely $50 . . . .” Plaintiff also contended that the second
amended complaint sufficiently alleged he was entitled to
injunctive relief, namely: “(1) a re-institution of Apple’s reduced-
price battery replacement program, for iPhone owners with third-
party batteries who were originally excluded; and (2) an order
enjoining Apple from engaging in and/or resuming its unfair and
fraudulent business practices . . . .”

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      On September 6, 2019, the trial court conducted a hearing
on the demurrer and sustained it, without leave to amend. On
September 11, 2019, the court entered judgment in favor of
Apple, from which plaintiff timely appealed.

                        IV. DISCUSSION

A.    Standard of Review

      “In reviewing the sufficiency of a complaint against a
general demurrer, we are guided by long-settled rules. ‘We treat
the demurrer as admitting all material facts properly pleaded,
but not contentions, deductions or conclusions of fact or law.
[Citation.] We also consider matters which may be judicially
noticed.’ (Serrano v. Priest (1971) 5 Cal.3d 584, 591 . . . .)
Further, we give the complaint a reasonable interpretation,
reading it as a whole and its parts in their context. (Speegle v.
Board of Fire Underwriters (1946) 29 Cal.2d 34, 42 . . . .) When a
demurrer is sustained, we determine whether the complaint
states facts sufficient to constitute a cause of action. (See Hill v.
Miller (1966) 64 Cal.2d 757, 759 . . . .) And when it is sustained
without leave to amend, we decide whether there is a reasonable
possibility that the defect can be cured by amendment: if it can
be, the trial court has abused its discretion and we reverse; if not,
there has been no abuse of discretion and we affirm. (Kilgore v.
Younger (1982) 30 Cal.3d 770, 781 . . . ; Cooper v. Leslie Salt Co.
(1969) 70 Cal.2d 627, 636 . . . .) The burden of proving such
reasonable possibility is squarely on the plaintiff. (Cooper v.
Leslie Salt Co., supra, [70 Cal.2d] at p. 636.)” (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318.)

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B.   Demurrer

       “California’s unfair competition law . . . defines ‘unfair
competition’ to mean and include ‘any unlawful, unfair or
fraudulent business act or practice and unfair, deceptive, untrue
or misleading advertising and any act prohibited by [the false
advertising law (§ 17500 et seq.)].’ (§ 17200.) The UCL’s purpose
is to protect both consumers and competitors by promoting fair
competition in commercial markets for goods and services.”
(Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.)
       A UCL action only entitles a plaintiff to certain limited
relief. Damages are not available; “‘[p]revailing plaintiffs are
generally limited to injunctive relief and restitution.’” (Korea
Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134,
1144 (Korea Supply); Cel-Tech Communications, Inc. v. Los
Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179; see
§ 17203.) A trial court properly sustains a demurrer where a
complaint fails to allege the existence of a viable remedy under
the UCL. (Madrid v. Perot Systems Corp. (2005) 130 Cal.App.4th
440, 467 (Madrid); see Gruenberg v. Aetna Ins. Co. (1973) 9
Cal.3d 566, 572 [in order to survive demurrer, a plaintiff must
“‘plead facts showing that he may be entitled to some relief’”].)

     1.    Restitution

      “‘Restitution under . . . section 17203 is confined to
restoration of any interest in “money or property, real or
personal, which may have been acquired by means of such unfair
competition.” (Italics added.) A restitution order against a
defendant thus requires both that money or property have been

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lost by a plaintiff, on the one hand, and that it have been
acquired by a defendant, on the other.’” (Zhang v. Superior Court
(2013) 57 Cal.4th 364, 371 (Zhang).) “[T]he California Supreme
Court has defined a UCL order for restitution as one ‘“compelling
a UCL defendant to return money obtained through an unfair
business practice to those persons in interest from whom the
property was taken, that is, to persons who had an ownership
interest in the property or those claiming through that person.”
[Citation.]’ (Korea Supply, supra, 29 Cal.4th 4th at pp. 1144–
1145 . . . .)” (Madrid, supra, 130 Cal.App.4th at p. 453.) “The
object [of restitution] is to return to the plaintiff ‘“funds in which
he or she has an ownership interest.”’” (People ex rel. Harris v.
Aguayo (2017) 11 Cal.App.5th 1150, 1168.)
       Plaintiff contends that he sufficiently alleged an
entitlement to restitution because his exclusion from the reduced-
price battery replacement program diminished the value of his
iPhone by $50, which represented “the difference in battery price
for repairs of ‘acceptable’ phones vs. phones that had third-party
batteries.” (Fn. omitted.) The diminution in the value of
plaintiff’s iPhone, however, even if arguably relevant to measure
damages, is insufficient to demonstrate that Apple obtained a
thing of value from plaintiff.2
      Plaintiff additionally argues that he is entitled to
restitution because Apple acquired money from him in 2014 when
plaintiff purchased his iPhone 6. We disagree. Plaintiff did not

2     Plaintiff cites to an unpublished United States District
Court opinion in support of his contention that “‘“diminution in
value” is a proper measure of restitution under the UCL.’” We
disagree with this statement as contrary to Zhang, supra, 57
Cal.4th at p. 371.

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allege that Apple obtained money “‘“through an unfair business
practice”’” when it sold him his iPhone. (Madrid, supra, 30
Cal.App.4th at p. 453.) Indeed, the business practice at issue in
the second amended complaint allegedly occurred years after
plaintiff purchased his iPhone.
      As alleged in the second amended complaint, Apple did not
acquire any money from plaintiff in connection with plaintiff’s
unsuccessful efforts to participate in the reduced-price battery
replacement program.3 Rather, Apple refused to provide services
to him. Plaintiff therefore failed sufficiently to allege that he is
entitled to restitution.

      2.    Injunctive Relief

       We next consider whether plaintiff sufficiently alleged that
he was entitled to injunctive relief. “A trial court has broad
authority to enjoin conduct that violates section 17200.
[Citation.] That authority is expansive but not unlimited.
Although the [UCL] imposes liability for past acts, in order to
grant injunctive relief under section 17204 . . . , there must be a
threat that the wrongful conduct will continue. ‘Injunctive relief
will be denied if, at the time of the order of judgment, there is no
reasonable probability that the past acts complained of will recur,
i.e., where the defendant voluntarily discontinues the wrongful
conduct.’” (Colgan v. Leatherman Tool Group, Inc. (2006) 135
Cal.App.4th 663, 702 (Colgan); Davis v. Farmers Ins. Exchange
(2016) 245 Cal.App.4th 1302, 1326–1327; Madrid, supra, 130
Cal.App.4th at pp. 464–465.)

3    Nor did Apple acquire money from plaintiff when plaintiff
purchased a battery from a third party.

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       Here, the second amended complaint acknowledged that
effective February 28, 2019, Apple reversed its purportedly
discriminatory policy of refusing to service iPhones with third-
party batteries. Plaintiff nonetheless contends that he
sufficiently alleged ongoing harm. He cites in support allegations
in the complaint that: “it is unclear if there is a company-wide
mandate that stores must repair devices showing signs of third-
party repair, or if it is discretionary. It is unclear whether the
policy only implicates batteries on iPhone and iPads or extends to
other Apple devices and components that are reportedly
malfunctioning, such as, inter alia, keyboards on Apple laptops.
Thus, it is presently unknown whether Apple actually did change
its discriminatory practice and, if so whether it will resume it or
engage in new discriminatory practices regarding third-party
repairs and parts. [Fn. omitted.]”4
      That it is “unknown” to plaintiff whether Apple will
reimplement its prior policy prohibiting repairs on iPhones with

4      Plaintiff additionally cites to footnote 11 of the second
amended complaint in support of his contention that he
sufficiently alleged ongoing harm. That footnote explained why
customers, who had installed third-party batteries, would want to
purchase a new iPhone battery. Such explanation has no bearing
on whether plaintiff sufficiently alleged that he was entitled to
injunctive relief. The footnote additionally alleged that
“[n]othing prohibits [Apple] from issuing . . . software updates in
the future, which may disable, completely, phones with third-
party batteries.” This allegation is irrelevant to the business
practice at issue in the complaint; and, as we explain below, an
allegation that “[n]othing prohibits” Apple from engaging in an
unfair or fraudulent business practice in the future is insufficient
to demonstrate that there is a reasonable probability that it will
do so.

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third-party batteries falls far short of alleging, with facts, a
“‘reasonable probability that the past acts complained of will
recur.’” (Colgan, supra, 135 Cal.App.4th at p. 702.) The second
amended complaint’s assertion that “[n]othing prohibits” Apple
from doing something similar in the future also is insufficient to
allege a reasonable probability of a recurrence. Indeed, nothing
prevents any defendant who voluntarily ceases complained of
conduct from reinstating such conduct. Yet absent a showing of a
“‘reasonable probability’” of a recurrence, a plaintiff is not
entitled to injunctive relief under the UCL. (Ibid.)
       Finally, that it is “unclear” to plaintiff whether Apple’s
policy extends to devices other than iPhones also is irrelevant to
the practice about which plaintiff complained, that is, Apple’s
policy of refusing to service iPhones with third-party replacement
batteries and preventing the owners of such iPhones from taking
advantage of the reduced-price battery replacement program. We
therefore conclude that plaintiff did not sufficiently allege an
entitlement to injunctive relief.5

C.    Leave to Amend

      Plaintiff alternatively argues that even if the trial court
correctly sustained the demurrer, it should have granted him
leave to amend. “[I]t is an abuse of the trial court’s discretion to
sustain a demurrer without leave to amend if there is a
reasonable possibility the plaintiff can amend the complaint to

5      Because we find plaintiff failed adequately to allege
entitlement to relief, we decline to consider the parties’
arguments concerning the fraudulent and unfair prongs of the
UCL.

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allege any cause of action. [Citation.] To prove such abuse of
discretion, however, the plaintiff must demonstrate how the
complaint can be amended. [Citation.] While such a showing can
be made for the first time to the reviewing court [citation], it
must be made.” (Smith v. State Farm Mutual Automobile Ins.
Co. (2001) 93 Cal.App.4th 700, 711; accord, Medina v. Safe-Guard
Products, Internat., Inc. (2008) 164 Cal.App.4th 105, 112, fn. 8.)
       “‘The plaintiff bears the burden of proving there is a
reasonable possibility of amendment. [Citation.] . . . [¶] To
satisfy that burden on appeal, a plaintiff “must show in what
manner he can amend his complaint and how that amendment
will change the legal effect of his pleading.” [Citation.] The
assertion of an abstract right to amend does not satisfy this
burden. [Citation.] The plaintiff must clearly and specifically set
forth the “applicable substantive law” [citation] and the legal
basis for amendment, i.e., the elements of the cause of action and
authority for it. Further, the plaintiff must set forth factual
allegations that sufficiently state all required elements of that
cause of action. [Citations.] Allegations must be factual and
specific, not vague or conclusionary. [Citation.]’” (Rossberg v.
Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1491;
Rakestraw v. California Physicians’ Service (2000) 81 Cal.App.4th
39, 43–44.)
       Here, plaintiff makes the bald assertion that he should
have been allowed leave to amend because Apple’s alleged
misconduct was ongoing. Plaintiff, however, has failed to meet
his burden of demonstrating, with factual and specific
allegations, a reasonable possibility that he can cure the defects
in the second amended complaint to state a viable UCL claim.

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The trial court therefore did not abuse its discretion by denying
him leave to amend.

                       V. DISPOSITION

       The judgment after an order sustaining the demurrer
without leave to amend is affirmed. Defendant Apple, Inc. is
entitled to recover costs on appeal.

      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                          KIM, J.

      We concur:

            BAKER, Acting P. J.

            EDMON, J.

      Presiding Justice of the Court of Appeal, Second Appellate
District, Division Three, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.

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