In Re: Apple Inc. Device Performance Litigation

CONSOLIDATED AMENDED COMPLAINT against Apple Inc. Filed by Robert Gilson. Modified on 7/3/2018

Northern District of California, cand-5:2018-md-02827

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81 1 COTCHETT, PITRE & MCCARTHY, LLP KAPLAN FOX & KILSHEIMER LLP Joseph W. Cotchett (SBN 36324) Laurence D. King (SBN 206243) 2 Mark C. Molumphy (SBN 168009) 350 Sansome Street, Suite 400 San Francisco Airport Office Center San Francisco, California 94104 3 840 Malcolm Road, Suite 200 Telephone: 415-772-4700 Burlingame, California 94010 Facsimile: 415-772-4707 4 Telephone: 650-697-6000 lking@kaplanfox.com Facsimile: 650-697-0577 5 jcotchett@cpmlegal.com David A. Straite (admitted pro hac vice) mmolumphy@cpmlegal.com 850 Third Avenue 6 New York, New York 10022 Telephone: 212-687-1980 7 Facsimile: 212-687-7714 dstraite@kaplanfox.com 8 Interim Co-Lead Class Counsel 9 10 11 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA 12 SAN JOSE DIVISION 13 IN RE: APPLE INC. DEVICE Case No. 5:18-md-02827-EJD PERFORMANCE LITIGATION 14 CLASS ACTION 15 CONSOLIDATED AMENDED This Document Relates To: COMPLAINT 16 ALL ACTIONS. 17 18 Hon. Edward J. Davila 19 20 21 22 23 24 25 26 27 28 CONSOLIDATED AMENDED COMPLAINT NO. 5:18-MD-02827-EJD 81 TABLE OF CONTENTS 1 2 Page 3 INTRODUCTION ................................................................................................................................ 1 4 5 JURISDICTION AND VENUE ........................................................................................................... 8 6 INTRADISTRICT ASSIGNMENT ...................................................................................................... 9 7 PARTIES .............................................................................................................................................. 9 8 A. PLAINTIFFS .......................................................................................................................... 9 9 B. DEFENDANTS AND THEIR RELEVANT CORPORATE STRUCTURE ....................................... 101 10 CHOICE OF LAW: DESIGNED BY APPLE IN CUPERTINO, CALIFORNIA ........................... 102 11 12 SUBSTANTIVE ALLEGATIONS .................................................................................................. 104 I. APPLE ISSUED MATERIALLY FALSE STATEMENTS EMANATING FROM 13 CALIFORNIA TO SELL DEFECTIVE DEVICES TO THE CLASS ............................................ 104 14 A. iPhones ......................................................................................................................... 106 15 II. IPHONE 5 ............................................................................................................................... 106 III. IPHONE 5S ............................................................................................................................. 108 16 IV. IPHONE 5C ............................................................................................................................. 109 17 V. IPHONE 6 AND 6 PLUS ........................................................................................................ 110 18 VI. IPHONE 6S AND IPHONE 6S PLUS .................................................................................... 112 19 VII. IPHONE SE ......................................................................................................................... 114 20 VIII. IPHONE 7 AND IPHONE 7 PLUS .................................................................................... 115 B. iPads ............................................................................................................................. 117 21 22 Fourth Generation iPad ..................................................................................................................... 117 23 iPad Mini ........................................................................................................................................... 117 24 iPad Air ............................................................................................................................................. 118 25 iPad Mini 2 ........................................................................................................................................ 119 26 Update to Fourth Generation iPad .................................................................................................... 120 27 iPad Air 2 .......................................................................................................................................... 120 28 CONSOLIDATED AMENDED COMPLAINT i NO. 5:18-MD-02827-EJD 81 The iPad Mini 3 ................................................................................................................................ 121 1 2 iPad Pro and iPad Mini4 ................................................................................................................... 121 3 9.7-Inch iPad Pro. ............................................................................................................................. 123 4 Fifth Generation iPad ........................................................................................................................ 123 5 iPad Pro in 10.5-inch and 12.9-inch Models ..................................................................................... 124 6 Sixth Generation iPad ....................................................................................................................... 125 7 IX. APPLE'S MATERIALLY FALSE STATEMENTS AND OMISSIONS CONCERNING THE 8 IOS SOFTWARE .................................................................................................................... 126 X. THE INHERENT DEFECTS IN THE DEVICES .................................................................. 133 9 A. KEY POWER COMPONENTS OF THE DEVICES .................................................................... 133 10 B. APPLE COMPOUNDED THE DEFECTS BY STRESSING DEVICE BATTERIES WITH POWER- 11 HUNGRY SOFTWARE: IOS UPDATES ................................................................................ 137 12 C. THE RELEASE OF IOS 10 WAS SECRETLY DESIGNED TO CAMOUFLAGE THE DEFECTS..... 139 13 D. APPLE RELEASED IOS 10.2.1 TO FURTHER CONCEAL THE DEFECTS ............................... 141 14 E. THE DEFECTS IN APPLE'S DEVICES, AND THE IMPACT OF THROTTLING, IS EVIDENCED BY 15 INDEPENDENT ANALYSIS ................................................................................................. 144 16 XI. APPLE'S REVENUES DEPEND ON SELLING NEW DEVICES, AND THE "UPGRADE" FINANCIAL MODEL WAS CRITICALLY FAILING IN 2016-2017 ................................. 147 17 XII. RELATED CASES AND PROCEEDINGS ....................................................................... 151 18 A. UNITED STATES – CALIFORNIA STATE COURT ................................................................. 151 19 B. UNITED STATES – FEDERAL CASES NOT CONSOLIDATED ................................................ 151 20 C. UNITED STATES – CONGRESSIONAL AND SENATE PROCEEDINGS ..................................... 152 21 22 D. UNITED STATES – FEDERAL REGULATORY PROCEEDINGS ............................................... 152 23 E. CANADA – REGULATORY PROCEEDINGS .......................................................................... 153 24 F. CANADA – LITIGATION .................................................................................................... 153 25 G. CANADA – LITIGATION – QUEBEC ................................................................................... 154 26 H. ISRAEL – REGULATORY PROCEEDINGS............................................................................. 154 27 I. ISRAEL – LITIGATION ....................................................................................................... 154 28 CONSOLIDATED AMENDED COMPLAINT ii NO. 5:18-MD-02827-EJD 81 1 J. FRANCE – CRIMINAL PROCEEDINGS ................................................................................. 155 2 K. ITALY – REGULATORY PROCEEDINGS .............................................................................. 155 3 L. CHINA – REGULATORY PROCEEDINGS ............................................................................. 155 4 5 M. RUSSIA – LITIGATION.................................................................................................... 155 6 N. SOUTH KOREA – LITIGATION ........................................................................................... 156 7 O. SOUTH KOREA – REGULATORY PROCEEDINGS................................................................. 156 8 XIII. APPLE'S SOFTWARE LICENSE AGREEMENTS ......................................................... 156 9 CLASS ALLEGATIONS ................................................................................................................. 158 10 11 TOLLING OF APPLICABLE LIMITATIONS PERIODS ............................................................. 162 12 CAUSES OF ACTION ON BEHALF OF THE CLASS ........................................................................................................ 163 13 COUNT 1 14 VIOLATIONS OF THE COMPUTER FRAUD AND ABUSE ACT, 15 18 U.S.C. § 1030, et seq.................................................................................................................... 163 16 COUNT 2 VIOLATIONS OF THE CONSUMER LEGAL REMEDIES ACT, ..................................... 164 17 18 COUNT 3 VIOLATIONS OF THE CALIFORNIA UNFAIR COMPETITION LAW, ......................... 167 19 COUNT 4 20 VIOLATIONS OF CALIFORNIA'S FALSE AND MISLEADING ADVERTISING LAW, 171 21 22 COUNT 5 CALIFORNIA COMPUTER DATA ACCESS AND FRAUD ACT, ................................... 173 23 COUNT 6 24 TRESPASS TO CHATTELS ................................................................................................. 174 25 COUNT 7 26 FRAUD................................................................................................................................... 175 27 COUNT 8 CONSTRUCTIVE FRAUD ................................................................................................... 176 28 CONSOLIDATED AMENDED COMPLAINT iii NO. 5:18-MD-02827-EJD 81 1 COUNT 9 2 FRAUDULENT INDUCEMENT .......................................................................................... 178 3 COUNT 10 BREACH OF CONTRACT ................................................................................................... 179 4 5 COUNT 11 BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING ............................... 181 6 COUNT 12 7 MONEY HAD AND RECEIVED ......................................................................................... 182 8 COUNT 13 9 FRAUDULENT OMISSION OR CONCEALMENT ........................................................... 182 10 COUNT 14 FRAUDULENT MISREPRESENTATION .......................................................................... 184 11 COUNT 15 12 NEGLIGENT MISREPRESENTATION .............................................................................. 186 13 COUNT 16 14 QUASI-CONTRACT / UNJUST ENRICHMENT ................................................................ 186 15 COUNT 17 VIOLATION OF THE CONSUMER PROTECTION FROM UNFAIR TRADING 16 REGULATIONS 2008 (2008 No. 1277)186……………………………………………….. 190 17 COUNT 18 18 VIOLATION OF THE CONSUMER RIGHTS ACT 2015 (2015 C. 15) .............................. 189 COUNT 19 19 Ala. Code §§ 8-19-1, et seq..................................................................................................... 191 20 COUNT 20 21 ALASKA CONSUMER PROTECTION ACT Alaska Stat. §§ 45.50.471, et seq............................................................................................ 193 22 23 COUNT 21 ARIZONA CONSUMER FRAUD ACT, 24 A.R.S. §§ 44-1521, et seq. ...................................................................................................... 195 25 COUNT 22 ARKANSAS DECEPTIVE TRADE PRACTICES ACT, 26 A.C.A. §§ 4-88-101, et seq. ...........................