Costco Wants Apple AirPods Class Action Tossed

Costco has filed a motion to dismiss a class action lawsuit, categorically denying the plaintiff’s “unsustainable” claim that the company made false or misleading statements regarding Apple AirPods sold on its website.

Plaintiff Jason Thomas states in the Costco class action lawsuit that he bought a pair of Second Generation AirPods (Apple’s wireless earbuds) from Costco’s website under the belief that the product came with a wireless charging case.

Instead, Thomas says he received a case that could only be charged using an Apple Lightning cable.

The Costco class action lawsuit alleges violations of California’s False Advertising Law, Unfair Competition Law and Consumer Legal Remedies Act, as well as negligent representation.

However, in its motion to dismiss the Costco class action lawsuit, the defendant says those claims lack any solid basis in law and omit specific facts.

The memo emphasizes that Apple manufactures two distinct versions of its wireless earbuds: one with a standard charging case that requires a cord, and the other with a wireless charging case.

In the original filing of the Costco class action lawsuit, the plaintiff cited Apple’s online description of the wireless earbuds that come with the wireless case, but failed to mention the manufacturer’s listing for the standard plug-in version, according to the motion to dismiss.

Costco offered only the standard version of Apple’s Second Generation AirPods through its website and “identified the case in precisely the same manner as Apple does on its own website,” states the motion to dismiss the Costco class action lawsuit.

“If Plaintiff believed he was purchasing the (other version), this belief was not based on anything Costco stated in its website product listing, which forms the entire basis for Plaintiff’s claim.”

Costco asserts that “no ordinary consumer acting reasonably under the circumstances would be misled in the manner alleged by Plaintiff. This is because nowhere in Costco’s product listing did Costco state or imply that the AirPods product it was selling came with a wireless charging case.”

The motion to dismiss the Costco class action lawsuit also argues that the company cannot be held liable simply because it didn’t state that the product’s charging case was not wireless. “As a matter of law … Costco was not required to affirmatively disclose that the product it was selling was not, in fact, a different product that it was not selling,” states the motion.

In its motion to dismiss the Costco class action lawsuit, the defendant also cites a 2003 lawsuit against Procter & Gamble to define “misleading” advertising: “‘Likely to deceive’ implies more than a mere possibility that the advertisement might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner. Rather, the phrase indicates that the ad is such that it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.”

In the Costco case, the motion continues, “no reasonable consumer would conclude from a product listing identifying a ‘Charging Case’ that the product included a ‘Wireless Charging Case,’ which is an entirely different Apple product.”

The defendant’s motion also maintains that the Costco class action lawsuit could easily be dismissed solely on the basis of the “economic loss doctrine.”

Citing another false advertising case (Welk v. Beam Suntory Import Co., 2015), the motion states: “A claim for negligent misrepresentation requires that Plaintiff have suffered personal injury or property damage. Under the economic loss doctrine, false advertising claims based on negligence are not actionable where the plaintiff’s only injury is economic loss. Here, Plaintiff does not allege personal injury or property damage, only that he was induced to ‘purchase, purchase more of, or pay more for’ the product as a result of Costco’s advertisement.”

Alternatively, if the court chooses not to dismiss the Costco class action lawsuit, the defendant argues that it should not be granted national Class status.

The filing gives two reasons for this. First, the motion maintains that the lawsuit is based solely on California law and therefore should be restricted to California consumers. Second, “Plaintiff’s class action allegations are not the modicum of clarity. He purports to seek relief ‘on behalf of all others similarly situated,’ without explaining who those individuals are, or where they reside.”

The defendant is requesting a June 29 hearing on its motion to dismiss the Costco class action lawsuit.

The plaintiff is represented by Ramin R. Hariri of Hariri Law Group and Daryoosh Khashayar of Khashayar Law Group.

The Costco Apple AirPods Class Action Lawsuit is Jason Thomas, et al. v. Costco Wholesale Corp., et al., Case No. 3:20-cv-00718, in the U.S. District Court for the Southern District of California.

UPDATE: On June 15, 2020, plaintiffs in a class action lawsuit against Costco fought back against the wholesale giant in a false advertising claim involving Apple’s 2nd Generation AirPods.

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