SAN JOSE, Calif. (CN) – A federal judge refused to dismiss all claims from a class action that says AT&T’s 3G data plan for the Apple iPad was “a classic ‘bait and switch’ fraud scheme” that did not allow consumers to change their service plan.
Apple and AT&T Mobility were sued for fraud, false advertising and other claims after Apple launched the 3G-enabled iPad on April 30, 2010, with AT&T as exclusive 3G data provider.
Lead plaintiff Adam Weisblatt said the companies “touted the availability of an unlimited 3G data plan and the option to switch in and out of the unlimited data plan, but subsequently withdrew the unlimited data plan option one month after Apple began selling the 3G-enabled iPad.”
The class claims that if they had known Apple and AT&T would not allow them to switch in and out of the unlimited plan, they would not have bought the 3G-enabled iPads, which cost $130 more than iPads without 3G.
The plaintiffs say they relied on statements Apple CEO Steve Jobs made during a presentation about the iPad.
“We’ve got two awesome plans for iPad owners,” Jobs said. “The first one gives you up to 250 megabytes of data per month … for just $14.99. And if you feel you need more, we have an unlimited plan just for $29.99. So these are real breakthrough prices,” Jobs said, according to the judge’s order.
AT&T sought dismissal for failure state a claim.
But U.S. District Judge Ronald Whyte partly denied the motion to dismiss, finding the plaintiffs were able to allege their fraud claim “with particularity.”
“The court finds that the specific information that [AT&T] allegedly concealed – that it would almost immediately be canceling the unlimited plan and denying customers flexible access to such a plan, and that this was its intention all along – is sufficiently set forth in the [complaint],” Judge Whyte wrote.
Whyte dismissed state law claims brought by Weisblatt and two other named plaintiffs because they do not live in California and bought their iPads elsewhere.
Whyte also found that the plaintiffs did not show they were entitled to restitution for excess data plan charges, and none of the plaintiffs actually claimed that they were charged extra for the data plans. And Whyte dismissed unfair competition and false advertising claims.
The plaintiffs asserted seven claims: (1) intentional misrepresentation; (2) false promise/fraud; (3) negligent misrepresentation; (4) violation of California’s Consumer Legal Remedies Act; (5) violation of California’s unfair competition law; (6) violation of California’s false advertising law; and (7) unjust enrichment.
Whyte dismissed claims 4, 5, and 6 without prejudice, and dismissed claim 7 with prejudice. He gave them 20 days to amend.