Judge Denies Class Certification in iPhone, iPad Privacy MDL

Judge Denies Class Certification in iPhone, iPad Privacy MDL

By Anne Bucher

A California federal judge has granted Apple Inc.’s motion for summary judgment, putting an end to a class action lawsuit that accused Apple of leaking iPhone and iPad users’ personal information to third parties without their knowledge or consent.

The decision marks the end to a nearly three-year legal battle between the electronics giant and consumers that was fraught with setbacks for Apple, including the threat of sanctions for allegedly hiding key documents from plaintiffs’ counsel. 

The multidistrict litigation (MDL) involves 19 separate class action lawsuits, the first of which was filed in December 2010. These actions were grouped into an MDL on Aug. 25, 2011, and their claims pared down over the last couple of years. The plaintiffs’ claims under the Stored Communications Act, Computer Fraud and Abuse Act, and Wiretap Act, as well as right to privacy, negligence, trespass and conversion claims were dismissed in June 2012. The third amended complaint involved only claims under California’s Legal Remedies Act (CLRA) and Unfair Competition Law (UCL). 

Apple’s iPhones are composed of the hardware and the mobile operating system firmware, known as iOS. According to the class action lawsuits, Apple allegedly “designed the iOS environment to easily transmit” iPad and iPhone users’ personal information to third parties that would allegedly collect and analyze the data without users’ detection or consent. The plaintiffs also alleged that Apple collected location data from its users, even when the “Location Services” setting was turned off. Apple attributed this data collection as a “software bug” that was resolved with a new iOS version.

The plaintiffs claimed that Apple misrepresented its privacy and data collection privacy. In their class action lawsuit, they argued that they relied on Apple’s representations about data collection and privacy when they chose to purchase their iPhones. As a result, they argued that they overpaid for their iPhones and suffered reduced battery life, bandwidth and storage “resources.”

In September, Apple urged U.S. District Judge Lucy H. Koh to deny class certification because the plaintiffs’ information was never compromised. Apple filed a motion for summary judgment on the grounds that the plaintiffs lacked Article III standing and that they lacked standing under the UCL and CLRA. They also argued that the plaintiffs failed to create a genuine issue of material fact concerning their standing. On Monday, Judge Koh found that the plaintiffs lacked standing to pursue the class action lawsuit and granted Apple’s motion for summary judgment. 

Judge Koh ruled that actual reliance is an essential element to establish standing under Article III of the U.S. Constitution, the CLRA and UCL. For the plaintiffs to establish standing, they needed to show that they “actually relied on Apple’s alleged misrepresentations regarding data collection and privacy to their detriment,” the judge wrote. “For the Plaintiffs’ harm to be ‘fairly traceable’ to Apple’s misrepresentations, Plaintiffs must have seen the misrepresentations and taken some action base on what they saw – that is, Plaintiffs must have actually relied on the misrepresentations to have been harmed by them.”

Judge Koh also found that the plaintiffs “failed to establish a genuine issue of material fact concerning actual reliance,” and did not provide sufficient evidence to show that they relied on Apple’s alleged misrepresentation. 

“Plaintiffs have been on notice from very early in this lawsuit that they would need to substantiate their standing allegations,” Judge Koh said. “Plaintiffs’ repeated failure to provide any evidence to support the theory that they must have read or seen the alleged misrepresentations in Apple’s Privacy Policy strengthens the Court’s conclusion that Plaintiffs have not met their burden to demonstrate standing.”

The plaintiffs are represented by Scott A. Kamber, David A. Stampley and Deborah Kravitz of KamberLaw LLC; William M. Audet and Jonas P. Mann of Audet & Partners LLP; Robert K. Shelquist and Karen H. Riebel of Lockridge Grindal Nauen PLLP; Leigh Smith and Joshua E. Keller of Milberg LLP; and Jeremy Wilson of Wilson Trosclair & Lovins.

The Apple iPhone, iPad Privacy Class Action Lawsuit is In Re: iPhone Application Litigation, MDL No. 2250, in the U.S. District Court for the Northern District of California.

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