Critics of IPhone 4 Signal Meter Lose Standing Test

(CN) - A class action that claimed Apple's iPhone inaccurately displayed network signal strength was dismissed by a federal judge, who ruled that the lawsuit lacked merit for breach of contract and other allegations.

Lead plaintiff Daniel Donohue said Applerushed its iPhone 4 to market in 2010 despite a flaw in the device's signal meter, which displays network connection strength.

Donohue filed an instant action on Nov. 3, 2011, and alleged breach of contract, breach of the implied covenant of good faith and fair dealing, breach of warranty under Washington law and the Magnuson-Moss Warranty Act, violation of California Business and Professions Code, and violation of the Consumers Legal Remedies and Washington Consumer Protection Acts.

Apple, Donohue said, used a "secret" formula to design the meter, testing it in "anechoic chambers where no waves (sound or electromagnetic) can reflect off anything, so there is absolutely no interference," and concealed the testing process.

Apple also spent less time testing the iPhone 4 than other smartphone vendors before releasing it, Donohue claimed.

"As a result of these alleged inadequacies, the formula underlying the iPhone signal meter was flawed, and often 'misled consumers as to the quality of their connection by inflating the apparent strength-of-connection beyond the actual strength-of-connection,'" Donohue said in his complaint.

Apple issued a public letter following a "flurry of complaints" over dropped calls and inaccurate signal readings, on July 2, 2010.

"[T]he formula we use to calculate how many bars of signal strength to display is totally wrong... For example, we sometimes display 4 bars when we should be displaying as few as 2 bars," Apple said.

Donohue, who purchased an iPhone at a Seattle, Wash., Apple store, said that he quickly noticed the device's defect, and added "that knowledge of the iPhone's signal meter flaw would have 'materially affected' his decision to purchase the iPhone or return it within 30 days."

He filed suit on behalf of all those who purchased an iPhone prior to July 14, 2010, and all retail purchasers in the state of Washington prior to that date.

The lawsuit claimed that the device's user guide constituted a binding contract, and that Apple knew of the defect long before it issued the public statement.

Apple countered in a motion to dismiss that the lawsuit lacked standing because the defect did not cause Donohue any cognizable injury, and added, "that because the iPhone signal meter only 'reports' the strength of the network signal but does not affect the 'actual signal strength, the iPhone's performance, or its call quality,' the signal meter cannot cause economic injury."

U.S. District Judge Ronald Whyte sided with Apple.

"Apple argues that the User Guide is merely an instruction manual, and therefore does not give rise contractual obligations. The court agrees. A review of the User Guide shows that it provides directions for using an iPhone and descriptions of the device's functions, but includes no 'promises' which plaintiff could have 'accepted,'" the 25-page ruling states.

"Plaintiff points to no complaints, data or other information about pre-iPhone 4 models that would have put Apple on notice that such models were similarly defective," the ruling continues.

Whyte dismissed the whole of Donohue's claims, including breach of express and implied warranty under California law with prejudice.

"Because there appears to be no dispute as to whether plaintiff gave Apple pre-suit notice of its alleged breach or whether plaintiff had knowledge of the facts supporting his warranty claims before filing his original complaint, dismissal of this claim is with prejudice," Whyte wrote.

The judge, however, also ruled that an amended pleading may be filed within 30 days.

"[B]ecause plaintiff may be able to allege facts showing the existence and breach of such an obligation, the court dismisses plaintiff's breach of contract claim with leave to amend," Whyte ruled.

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