Fraud Class Action|Against Apple Crashes


     SAN JOSE (CN) – A federal judge dismissed with leave to amend a class action accusing Apple of failing to warn that its iPhone Wi-Fi Assist app automatically switches customers from wireless to cellphone data, causing more data use and higher cellphone bills.
     Lead plaintiff William Scott Phillips claimed when he upgraded his iPhone operating system to iOS 9, he unwittingly uploaded Wi-Fi Assist and would not have done so had he known about the increased data use.
     But U.S. District Judge Lucy Koh said the putative class failed to show they relied on an actual misrepresentation that caused them to purchase the app or do the upgrade.
     The plaintiffs had a burden to demonstrate they installed Wi-Fi assist or iOS9 due to a specific representation by Apple, and they did not, Koh said in her April ruling.
     “Plaintiffs do not explain how plaintiffs’ data overuse charges could be ‘fairly traceable’ to Apple’s representations or omissions if plaintiffs did not rely upon those representations or omissions in choosing to install iOS 9 or use Wi-Fi Assist,” Koh wrote.
     “Rather, for plaintiffs’ data overuse charges to be caused by Apple’s representations, plaintiffs must have seen the representations and taken action based on what they saw — in other words, plaintiffs must have actually relied on the misrepresentations or omissions to have been harmed by them.”
     Koh did gave the plaintiffs 30 days leave to amend to demonstrate which statements were misleading and caused them to suffer harm.
     The original lawsuit claimed Apple responded to the jacked-up data use only after “a flood of articles” was published about it.
     Articles appeared in Fortune.com, Gizmodo and The Washington Post in late September 2015, warning customers about the risk of the default setting “eating up” their data plans.
     Apple posted a statement on its website on Oct. 2, 2015, saying the new operating system and app may bring date use “a small percentage higher than previous usage.”
     The plaintiffs said that was too little too late, and that had they been aware of the new system’s propensity to use more data and inflate cell phone bills they would not have upgraded. They said Apple’s omissions prevented them from making an informed choice.
     Apple said that in a claim involving pure omissions, public safety must be involved, but in a fraudulent claims case, the plaintiffs bear the burden of demonstrating which specific misrepresentation caused them to purchase a product.
     Apple cited Palmer v. Apple in its Motion to Dismiss, a case heard last week by U.S. District Judge Ronald Whyte. During that hearing, Whyte seemed inclined to grant Apple’s Motion to Dismiss for similar reasons: lack of material misrepresentation coupled with a lack of threat to consumer safety.
     Apple’s iPhone accounted for 44.2 percent of the U.S. smartphone market in July 2015, far ahead of second-place Samsung’s 28.6 percent, according to data analysis company comScore. But the Android operating system still ruled Apple, by 52.2 percent to Apple’s iOS 44.2 percent, according to comScore.
     The plaintiffs are represented by Charles LaDuca with Cuneo Gilbert and LaDuca in Washington, D.C., who did not respond immediately to a request for comment. Not did Apple.

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