Apple Faces $5M Class Action Over Faulty iPhone 5 Software

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Apple faces a putative $5 million class action lawsuit over allegations that the company violated state and federal laws by concealing that the iPhone 5 and 5s contained a defect that would disable the phone’s Wi-Fi connection and instead stream data through a cellular network causing customers to incur significant data charges.

Lead plaintiff Thomas Palmer of California filed the Apple data overage class action lawsuit after purchasing an iPhone 5 in 2013 and an iPhone 5s in 2014. The AT&T subscriber claims that Apple became aware of the defect almost immediately and provided a repair for customers on the Verizon network within days. However, Palmer alleges that it took more than two years for AT&T customers to receive the same fix.

The iPhone data class action lawsuit claims that Apple creates the impression that customers are receiving a superior device with the most advanced software available. Yet, Palmer contends that Apple failed to disclose to customers that not all versions of iOS 6 and 7 and iOS 8.0 would prevent the data from streaming over cellular networks without the knowledge of the consumer.

“Apple was keenly aware that its consumers purchased their iPhone 5 running on iOS 6 because its consumers sought to enjoy the benefits of Apple’s most advanced technology,” Palmer says. “Because these mobile devices were built to stream movies and music, to support graphic intensive video games and three-dimensional maps, consumers can reasonably expect that these products will perform these basic functions using available Wi-Fi signals instead of switching over to cellular.”

According to the Apple class action lawsuit, the defect left iPhone 5 customers with the pricey cost of data overage. Palmer further argues that even iPhone consumers who were monitoring their usages in order to avoid going over their monthly data began to routinely exceed their limits.

The iPhone defect class action lawsuit states that AT&T would often issue customers a credit on their account for the overage costs but only if they called to complain. Palmer alleges that it was Apple’s responsibility to notify AT&T iPhone consumers about the defect and fix the issue in a timely manner but the company did neither.

The data overage class action lawsuit alleges that despite knowing about the issue, Apple chose not to inform AT&T customers even though they moved quickly to repair the problem for Verizon subscribers.

Palmer is accusing Apple of violating California’s Unfair Competition Law, Consumer Legal Remedies Act and False Advertising Law.

If approved, the Apple iPhone class action lawsuit will be open to Class Members nationwide who are AT&T wireless subscribers and purchased an iPhone 5 or 5s within the last four years which ran on any version of iOS 6 or 7, or iOS 8.0.

Palmer is represented by Jeff D. Friedman, Steve W. Berman and Christopher R. Pitoun of Hagens Berman Sobol Shapiro LLP.

The iPhone Data Overage Class Action Lawsuit is Palmer v. Apple Inc., Case No. 5:15-cv-05808, in the U.S. District Court for the Northern District of California.

UPDATE: On Apr. 15, 2016, the putative class action claiming that an Apple smartphone software bug caused iPhone users to rack up excessive cellular data overage fees has been dismissed from California federal court.

UPDATE 2: On Aug. 10, 2016, Apple Inc. and Palmer agreed to dismiss an iPhone class action lawsuit over an alleged wifi defect affecting iPhone 5 and 5s.