Court Opinion

ID: 9839627
Source: CourtListenerOpinion
Date Created: 2023-09-13 17:01:05.047351+00
Date Added: 2024-06-11T09:37:27.363031
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        SEP 13 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

In re: APPLE PROCESSOR LITIGATION,              No.    22-16164
______________________________
                                                D.C. No. 5:18-cv-00147-EJD
ANTHONY BARTLING; et al.,

                Plaintiffs-Appellants,          MEMORANDUM*

 v.

APPLE INC.,

                Defendant-Appellee.

                   Appeal from the United States District Court
                     for the Northern District of California
                   Edward J. Davila, District Judge, Presiding

                      Argued and Submitted August 15, 2023
                               Anchorage, Alaska

Before: MURGUIA, Chief Judge, and PAEZ and NGUYEN, Circuit Judges.
Partial Dissent by Judge PAEZ.

      Plaintiffs brought this class action lawsuit against Apple, Inc. (“Apple”),

alleging that Apple knew several of its products (“iDevices”) were affected by two

security vulnerabilities, which could only be repaired by installing software

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
updates that reduced the iDevices’ performance. Although Apple knew about

these issues by at least June 2017, Apple continued to tout the security and

performance of its iDevices and did not disclose the defects to the public until after

information about the security vulnerabilities was leaked to The New York Times in

January 2018. Plaintiffs brought claims under state consumer protection laws and

for common law fraud and also sought equitable relief. The district court granted

Apple’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6),

concluding that Plaintiffs failed to sufficiently allege violations under Rule 9(b)’s

heightened pleading requirements for fraud. See Kearns v. Ford Motor Co., 567

F.3d 1120, 1124 (9th Cir. 2009) (describing Rule 9(b) requirements). The court

also dismissed Plaintiffs’ equitable claims.

      We have jurisdiction under 28 U.S.C. § 1291, and we review de novo

dismissals under Rules 9(b) and 12(b)(6). Moore v. Mars Petcare US, Inc., 966

F.3d 1007, 1016 (9th Cir. 2020). At the motion to dismiss stage, “[a]ll allegations

of material fact in the complaint are taken as true and construed in the light most

favorable to Plaintiffs.” Id. (citing Williams v. Gerber Prods. Co., 552 F.3d 934,

937 (9th Cir. 2008)). We apply state substantive law to Plaintiffs’ state law claims.

Id. (quoting Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1103 (9th Cir. 2013)).

      To state a claim under the California Consumer Legal Remedies Act

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(“CLRA”) or for fraud,1 plaintiffs must plead three elements: a knowing

misrepresentation, reliance, and damages. See Kearns, 567 F.3d at 1126; In re

Tobacco II Cases, 207 P.3d 20, 581–82 (Cal. 2009). The misrepresentation can be

an affirmative statement or an omission. Kearns, 567 F.3d at 1126. Because

Plaintiffs have failed to state a claim under either approach, we affirm.

      1. Affirmative Misrepresentations. Plaintiffs allege that Apple made

affirmative misrepresentations about the security and performance of its iDevices.

We conclude that none of the alleged statements is actionable. First, the two

statements concerning security were made in May 2017. Despite passing

references to 1995 and 2012, Plaintiffs have not pled with particularity that Apple

knew about the defects before June 2017. See Kearns, 567 F.3d at 1124–25.

Because Plaintiffs must explain why the statement was “untrue or misleading when

made,” In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1549 (9th Cir. 1994), the

security statements are not actionable. Second, although Plaintiffs identified

statements that Apple made about the iDevices’ performance in or after June 2017,

these statements are also not actionable. Some statements, such as those that claim

the iDevices’ chips are the “most powerful and smartest . . . ever,” are non-

1
 Because Plaintiffs present the same arguments and factual bases for each state
consumer protection statutory claim and for the fraud claim, the district court
analyzed these claims together using California law. We follow the same
approach.

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actionable “puff[ery]” because “no reasonable consumer would take [them] as

anything more weighty than an advertising slogan.” See Consumer Advocs. v.

Echostar Satellite Corp., 8 Cal. Rptr. 3d 22, 29 & n.3 (Ct. App. 2003) (internal

quotation marks and citation omitted). Other statements are more measurable and

definitive, claiming that the new iDevices are certain percentages faster than prior

generations, but Plaintiffs have not specifically alleged that Apple’s comparative

statements were false. We thus affirm the district court’s conclusion that Plaintiffs

failed to plead with particularity any actionable affirmative misrepresentations.

      2. Omissions. Plaintiffs next allege that Apple’s failure to disclose the

defects was actionable as an omission. Even assuming an omission occurred,

however, Plaintiffs failed to demonstrate reliance on the alleged omission. To do

so, they needed to “simply prov[e] ‘that, had the omitted information been

disclosed, [they] would have been aware of it and behaved differently.” Daniel v.

Ford Motor Co., 806 F.3d 1217, 1224 (9th Cir. 2015) (quoting Mirkin v.

Wasserman, 858 P.2d 568, 574 (Cal. 1993)). While Plaintiffs have alleged that

they would have behaved differently had Apple disclosed the defects, they have

not sufficiently alleged that they would have been aware of any disclosure.

Although Plaintiffs allege that Apple “disseminated widely” information from its

headquarters and that the defects were “widely reported” once The New York

Times learned about the security vulnerabilities, the complaint does not contain

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allegations that Plaintiffs themselves were likely to encounter the news reports or

to read Apple’s press releases. See Daniel, 806 F.3d at 1226–27 (concluding

plaintiffs demonstrated probable awareness because they “presented evidence that

they interacted with and received information from” the sources through which

defendant would have disclosed a defect). The district court thus correctly

concluded that Plaintiffs failed to state an omission-based claim.

      3. Equitable Claims. Plaintiffs also assert claims for restitution, injunctive

relief, and unjust enrichment under the CLRA and California’s Unfair Competition

Law (“UCL”). The district court dismissed these claims under Sonner v. Premier

Nutrition Corp., 971 F.3d 834, 844 (9th Cir. 2020), which held that federal courts

must apply federal equitable principles to state-based equitable claims, such that a

plaintiff “must establish that she lacks an adequate remedy at law before securing

equitable restitution for past harm under the UCL and CLRA.” Id. at 844.

Plaintiffs attempt to cabin Sonner to its facts, but subsequent case law has made

clear that “Sonner’s holding applies to equitable UCL claims when there is a viable

CLRA damages claim, regardless of” the facts. Guzman v. Polaris Indus. Inc., 49

F.4th 1308, 1312 (9th Cir. 2022). Thus, Plaintiffs were obligated to allege that

they had no adequate legal remedy in order to state a claim for equitable relief, see

Sonner, 971 F.3d at 844, and they have “fail[ed] to explain” how the money they

seek through restitution is any different than the money they seek as damages, id.

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The district court thus correctly dismissed Plaintiffs’ equitable claims.

      AFFIRMED.

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                                                                         FILED
                                                                          SEP 13 2023
Bartling v. Apple, Inc., No. 22-16164
                                                                      MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS
Paez, Circuit Judge, dissenting in part:

      Although I agree with most of the conclusions reached by the majority, I

would hold that Plaintiffs alleged an affirmative misrepresentation claim under the

California Consumer Legal Remedies Act (“CLRA”). In September 2017, after it

knew of the iDevices’ issues, Apple stated that its new iPhone would operate 70

percent faster than the prior model. Plaintiffs allege that testing conducted on an

iPhone 7 demonstrates that after the necessary software updates are installed, all

iDevices operate up to 40 percent slower. At the motion to dismiss stage, we must

accept Plaintiffs’ allegations as true. See Moore v. Mars Petcare US, Inc., 966 F.3d

1007, 1016 (9th Cir. 2020) (citing Williams v. Gerber Prods. Co., 552 F.3d 934,

937 (9th Cir. 2008)).

      The district court and majority conclude that because all iDevices were

affected, Apple’s comparative claim is still technically true and therefore not

actionable. But the CLRA “prohibit[s] not only advertising which is false, but also

advertising which, although true, is either actually misleading or which has a

capacity, likelihood or tendency to deceive or confuse the public.” Williams, 552

F.3d at 938 (quoting Kasky v. Nike, Inc., 45 P.3d 243, 250 (Cal. 2002)); Moore, 966

F.3d at 1017. To determine whether advertising is likely to mislead the public, we

use a “reasonable consumer” standard. Williams, 552 F.3d at 38; Moore, 966 F.3d
at 1017. California courts have repeatedly “recognized that whether a business

practice is deceptive will usually be a question of fact not appropriate for decision”

at the motion to dismiss stage. Williams, 552 F.3d at 938 (collecting cases).

      In my view, whether a reasonable consumer would be deceived by Apple’s

specific and measurable statements about its iDevices’ performance is a factual

issue that should be decided by the trier of fact, not by this Court at the 12(b)(6)

stage. I respectfully dissent in part.

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