The court dismissed consumers’ claims based on Siri’s failure to perform as well in real life as it did in ads, but granted leave to amend. Apple allegedly advertised the iPhone 4S with heavy emphasis on how good Siri was at interpreting voice questions/commands, e.g.:
if you ask “Will I need an umbrella this weekend?” it understands you are looking for a weather forecast. Siri is also smart about using the personal information you allow it to access, for example, if you tell Siri “Remind me to call Mom when I get home” it can find “Mom” in your address book, or ask Siri “What’s the traffic like around here?” and it can figure out where “here” is based on your current location.
During an interactive demo, Siri responded promptly and appropriately to questions and requests, such as displaying the time in Paris, setting an alarm for the next day at 6 am, and finding a “great Greek restaurant” in Palo Alto. Apple claimed that Siri was easy to use and didn’t require precise wording, though various speakers mentioned that Siri was in beta/not perfect.
Its national ad campaign showcased Siri; 4 out of 7 recent TV ads focused solely on Siri, including showing it understanding and responding to a voice command given by a person who was running and showing it answering the question “[How do I play] a B Minor Ninth?” with the proper notes, chord and sheet music. Likewise, in response to, “Tell Julie and Kate our band is playing at the garage tonight,” Siri stated, “Here is your message to Julie and Kate,” and immediately showed on the user’s iPhone 4S screen a message to “Julie, Kate” that read “Our band is playing at the garage tonight.” Its website also touted Siri as a major selling point.
Plaintiffs alleged that they bought an iPhone 4S in reliance on Apple’s claims about Siri, but found that it didn’t perform as advertised and couldn’t answer specific questions such as ones asking it to compare the fat content between two meals, to find the location of a children’s party venue, to find information related to the “guided reading” teaching method and to provide directions to a doctor’s office located in Brooklyn. Another plaintiff attempted to mirror the commands shown in the ads, with no success. For example, he asked Siri: “how do you play an A chord?” and Siri answered, “OK, how about a web search for ‘how do you plan a quart?’ ” “How do you play a B minor chord?” got, “looking for B minor chord,” followed by “still thinking,” and eventually responded, “Sorry, I couldn’t find B minor chord in your music.” Another plaintiff found that, when he tried to make phone calls or send emails, Siri repeatedly gave the wrong names and numbers of people that he was trying to contact. When he asked, “When is St Patrick’s Day?” Siri responded, “Sorry, I don’t understand ‘When is St Patrick’s Day.’” Etc.
Plaintiffs weren’t alone. The Huffington Post published an article, Apple’s Siri ‘Rock God’ Commercial: How Accurate Is It, Really?, accompanied by a video called A Scientific Ex-Siri-Ment. This showed a blogger repeating every voice command prompt in Apple’s “Rock God” commercial word for word, but Siri responded to only two of seven prompts on the first try as it did in the ads, including one response that came after an extreme time lag. In response to, “Tell Julie and Kate our band is playing at the garage tonight,” Siri responded with “Are band is playing at the garage tonight.”
Most of the marketing and advertising, including the TV ads, didn’t mention the word “beta” or other limits on Siri, though a Siri FAQ “buried” on Apple’s website stated “Siri is currently in beta and we’ll continue to improve it over time.” Apple mentioned that Siri was in “beta” without elaboration on several other pages.
Plaintiffs brought the usual California claims. The court took judicial notice of a few key documents, but not those that were neither mentioned in the complaint nor that consumers would have to have encountered (that is, it refused to take judicial notice of the Siri Features Webpage, which Apple failed to show that users would necessarily have seen).
Apple challenged the standing of out-of-state plaintiffs Fazio and Balassone, who weren’t California residents and didn’t buy their devices in California. This conflated the extraterritorial application of California consumer protection laws (the ability of a nonresidential plaintiff to assert a claim) and choice of law. California statutory remedies can be invoked when out of state parties are harmed by wrongful conduct occurring in California, and here plaintiffs alleged that all critical decisions about the allegedly misleading marketing and advertising were made in-state. This was sufficient at the motion to dimiss stage. Apple relied on Mazza to argue that non-California plaintiffs lacked standing, but Mazza wasn’t a standing case. Certification of a nationwide class wasn’t before the court presently and choice of law isn’t standing. Anyway, choice of law analysis must be done on a case by case basis; Mazza’s finding of material differences in state law was based on the facts before it, not on a necessary conflict between the laws of California and other states under any and all circumstances.
Apple then argued that plaintiffs failed to satisfy Rule 9(b). Plaintiffs did allege the contents of some specific ads, including TV commercials, the press release, and statements on Apple’s website. But plaintiffs didn’t sufficiently allege how the statements were false or fraudulent and how Siri failed to perform as advertised. They didn’t make clear whether their theory was that the ads were misleading “because Siri never responds to questions or is always inaccurate, does so more slowly than shown in the ads, uses more data than advertised or is less consistent than shown in the ads.” They needed to better allege the “how” of the misrepresentations. They didn’t explain what exactly Apple led consumers to believe through the ads, through what particular representations, or what was false about those representations. They needed to specify “how Siri failed to meet the representations that they claim Apple made, what the truth about Siri’s performance actually was and how Apple knew or should have known that these representations were false.” (Separately, the court dismissed the UCL claims on similar grounds, this time framing it (of course) as an issue of standing: plaintiffs failed to sufficiently allege how they’d lost money or property as a result of specific misrepresentations.)
Perhaps assuming there’d be an amended complaint, the court dealt with several of Apple’s other arguments. Apple also argued that plaintiffs were selectively reading its ads and that it had adequately disclosed Siri’s beta status. Freeman v. Time, Inc., 68 F.3d 285 (9th Cir. 1995), upheld the dismissal of UCL and FAL claims, rejecting as unpersuasive the plaintiff’s argument that readers will read only the large print on a promotion document and “ignore the qualifying language in small print.” In that case, the promotions “expressly and repeatedly state[d] the conditions,” and none of the qualifying language was “hidden or unreadably small”; it appeared immediately next to the representations it qualified “and no reasonable reader could ignore it.” Anyone who read enough to comply with the instructions for entering the sweepstakes would be put on notice of the qualifying language. But this set of allegations was quite different: the commercials themselves didn’t disclose that Siri was in beta/unfinished; some website pages did, but not all, and the disclosure was separated from the primary discussion of Siri’s features. Though Apple might be able to show its qualifications as a defense, this wasn’t enough as a matter of law to require dismissal.
Apple argued that many of the statements cited were puffery, such as “the best iPhone yet,” “How do you improve on something so extraordinary? Now we’re introducing Siri,” and descriptions of Siri as an “amazing assistant,” “amazing,” and “impressive.” Plaintiffs rejoined that they weren’t basing their claims on these statements, but rather on specific representations of how Siri was supposed to function. The court agreed with plaintiffs.
Apple’s next argument was that plaintiffs failed to specify on which particular ads they relied. One plaintiff specifically alleged that he relied on “the statements and interactive demonstrations performed at Apple’s October 4, 2011 press conference,” but also that he relied upon “other representations,” without saying which others, and the others didn’t specify even that much, just alleging reliance on TV ads, “various” presentations, and the website. Plaintiffs argued that the misrepresentations “were part of a consistent, broad marketing campaign by Apple over time,” so they were “not required to specify each and every time they were exposed to one of Apple’s misrepresentations.” But Tobacco II, on which they relied, didn’t and couldn’t support relaxing Rule 9(b)’s pleading requirements, and anyway this wasn’t a years-long ad campaign.
Apple’s next argument was that there could be no CLRA claim because the Siri software isn’t a good or service. The court went with plaintiffs: the subject of their claims was the iPhone 4S itself, a good, and Siri was a feature thereof, so that Apple represented the iPhone 4S to have characteristics and features that it didn’t have, etc., as proscribed by the CLRA. The CLRA claim wasn’t based on the download or purchase of software.
On the breach of express warranty claim, California requires pre-suit notice within a reasonable time after discovery of the breach, and failure to comply bars the buyer from any remedy. In order to fulfil its purpose of allowing nonjudicial resolution, notice must be served prior to service of the complaint. For one plaintiff, the letter allegedly providing notice was sent on the same day the original complaint was filed, and couldn’t serve as notice. Thee other plaintiffs sent a letter four days before their complaints were filed, but these letters weren’t alleged and the plaintiffs didn’t request judicial notice. They argued that Apple was on notice of the defects from numerous media reports, but cited no precedent in which notice from media outlets met the statutory notice requirement.
Under California law, any affirmation of fact or promise that becomes part of the basis of the bargain creates an express warranty, but plaintiffs must plead the exact terms of that warranty, and here they didn’t. General assertions of reliance on a commercial or ads aren’t equivalent to identifying the exact terms of a warranty. At least, plaintiffs needed to allege the particular commercials and webpages they relied on, describe their content with particularity, and allege reasonable reliance thereon with specificity. “Plaintiffs’ allegations at this time are not sufficiently detailed to provide Apple with meaningful notice of which particular advertisements and webpages form the basis of their claim, or of what warranty terms Plaintiffs maintain were created by those commercials and pages.”
Plaintiffs also alleged breach of the implied warranty of merchantability: that the goods would be fit for their ordinary purposes. Apple argued that it disclaimed the implied warranty of merchantability in its one-year hardware warranty and software license agreement. Disclaimer is an affirmative defense that can only be raised on a motion to dismiss if it raises no disputed issues of fact, and requires that the buyer must know or be chargeable with notice of the disclaimer before the bargain is complete. Apple argued that its disclaimer was in the iPhone 4S packaging, and customers could’ve returned their iPhones within 30 days after they reviewed the warranty if they didn’t want to consent. There was some precedent supporting this method of disclaiming the warranty, but plaintiffs didn’t plead that there was an unqualified return period and Apple provided no evidence suitable for judicial notice.
This didn’t matter, though, because plaintiffs didn’t plausibly plead that the iPhone 4S’s “ordinary and intended purpose” was to use Siri “to send messages, schedule appointments, seek information and directions and to learn new tasks,” instead of being a cell phone. The iPhone 4S’s intended and ordinary use was as a smartphone, for calls, text messages, and mobile apps, and plaintiffs didn’t allege that the iPhone 4S was deficient in any of those functions—just in providing Siri to access those functions.
Regardless, even if using Siri was part of the ordinary purpose of the phone, plaintiffs didn’t sufficiently plead breach. They alleged that Siri was usable to some extent, but wasn’t “a consistent intelligent assistant.” Breach of the implied warranty of merchantability requires a showing that the product “did not possess even the most basic degree of fitness for ordinary use.” Because plaintiffs didn’t allege that the function was unusable, the court granted the motion to dismiss this claim, albeit with leave to amend.
The alleged violation of the Magnuson-Moss Warranty Act fell with the alleged state law violations, and the unjust enrichment claim went because it wasn’t a standalone cause of action.