It was just last week that we posted a report titled "Employees who Sued Apple in 2013 Over Demeaning Bag Searches Get their Case Certified as a Class Action." Since that time two new Class Actions have been filed against Apple over breach of contract in relation to AppleCare services. The second lawsuit which was filed on July 18 by Joanne McRight is the case that we're reporting on today which involves AppleCare and AppleCare+ coverage of two iPhones.
The following is from the Class Action's Factual Allegations segment represented in full (without exhibits): "Defendant Apple, Inc. designs, manufacture, packages and sells various electronic devices, including but not limited to iPhones, iPads, and iPods ("Devices"). When Apple, Inc. sells the Devices to the general public, Apple, Inc. also offers protection plans known as AppleCare and AppleCare+ ("Apple Plans"). Under the Apple Plans, if a consumer's Device breaks, then Apple, Inc., through its affiliate AppleCare Service Company, Inc., agrees to provide the consumer with a Device "equivalent to new in performance and reliability." In return, the consumer pays Apple, Inc. a significant payment, usually between $50 and $150.
The principal difference between these two protection plans is that AppleCare+ covers accidental damage and AppleCare does not. AppleCare only covers defects in materials and workmanship. AppleCare + covers iPhones, iPads, and iPods. AppleCare covers iMacs, Apple Display, and Apple TVs (however, up until 2011, AppleCare was the only Apple Plan that provided coverage for iPhones). The Apple Plans purport to provide consumers with Devices that are "equivalent to new in performance and reliability." What that phrase means is unclear. Plaintiff alleges that it means refurbished. Refurbished is synonymous with the term "reconditioned," that is, a secondhand unit that has been modified to appear to be new for all purposes relevant to this litigation. "New" means a Device that has never been utilized or previously sold and consists of all new parts. The word "refurbished" appears only once in the AppleCare+ terms and conditions even though the booklet is 33 pages long. The word is not even used to reference a device, but a part. "Refurbished" is synonymous with the term "reconditioned" and "secondhand," and "service unit," for all purposes relevant to this litigation.
APPLE has distributed (and continues to distribute) the Devices through four channels of commerce: (1) retail outlets owned and operated by APPLE, known as APPLE Stores, (2) wholesale distribution to other retailers, such as AT&T and other vendors of cellular phone services, (3) sales via the Internet, either directly or through third-party resellers, and (4) sales via the phone or mail.
The Apple Plans, which are uniform as relevant to this suit, state in pertinent part that with respect to a defect in materials or workmanship, or a defect caused by accidental damage in handling, that APPLE "will either (a) repair the defect at no charge, using new or refurbished parts that are equivalent to new in performance and reliability, or (b) exchange the Covered Equipment, with a replacement product that is new or equivalent to new in performance and reliability. All replacement products provided under this Plan will at a minimum be functionally equivalent to the original product."
On or about December 4, 2012, Plaintiff JOANNE MCRIGHT, accompanied by her father, visited the Baybrook Apple Store in Friendswood, Texas. He purchased AppleCare+ for her, in her name, as well as an iPhone 5. In sum, Plaintiff JOANNE MCRIGHT and APPLE entered into a contract, as APPLE offered the Apple Plan and Device for sale and Plaintiff purchased the same at the offered price. Plaintiff JOANNE MCRIGHT, as the intended beneficiary of the contract and by and through her father, performed her obligations under the contract by paying monies to Apple for an Apple Plan.
The iPhone 5 that Plaintiff purchased on December 4, 2012, was damaged, resulting in a cracked screen. On or about September 18, 2013, Plaintiff JOANNE MCRIGHT took it to the Baybrook Apple Store for replacement under her Apple Plan. APPLE sold a replacement Device (iPhone 5) to Plaintiff for $49.00, which she paid for under her Apple Plan. Plaintiff sought a second replacement Device pursuant to her Apple Plan on or about May 16, 2014, also due to a cracked screen. APPLE again sold a replacement Device (iPhone 5) to Plaintiff for $49.00, which she paid for under her Apple Plan. APPLE did not provide new iPhone 5's to Plaintiff when she made these two payments of $49.00, nor were the replacement Devices "equivalent to new." Thus, Apple, Inc. and AppleCare Service Company, Inc. failed to provide Plaintiff with a Device "equivalent to new in performance and reliability," thereby breaching the contract with Plaintiff.
On or about September 22, 2014, Plaintiff JOANNE MCRIGHT, accompanied by her father, visited the Baybrook Apple Store in Friendswood, Texas. He purchased AppleCare+ for her, in her name, as well as an iPhone 6. In sum, Plaintiff JOANNE MCRIGHT and APPLE entered into a contract, as APPLE offered the Apple Plan and Device for sale and Plaintiff purchased the same at the offered price. Plaintiff JOANNE MCRIGHT, as the intended beneficiary of the contract and by and through her father, performed her obligations under the contract by paying monies to APPLE for an Apple Plan.
The iPhone 6 that Plaintiff purchased on September 22, 2014, was damaged, resulting in a cracked screen. On or about July 4, 2015, Plaintiff took it to the Baybrook Apple Store for replacement under her Apple Plan. APPLE sold a replacement Device (iPhone 6) to Plaintiff for $79.00, which she paid for under her Apple Plan. APPLE did not provide a new iPhone 6 to Plaintiff in exchange for this $79.00 payment, nor was the replacement Device "equivalent to new." Thus, Apple, Inc. and AppleCare Service Company, Inc. failed to provide Plaintiff with a Device "equivalent to new in performance and reliability", thereby breaching the contract with Plaintiff."
Cause of Action: Breach of Contract
Plaintiff re-alleges each and every allegation set forth above.
According to the complaint filed with the Court, "Plaintiff and the Class Members entered into a contract with APPLE. Plaintiff and the Class Members met their obligations under the contract; specifically, by tendering money to APPLE, either directly or as intended beneficiaries or as the recipients of a transferred Apple Plan. APPLE accepted the monies and agreed to provide new replacement Devices under the Apple Plans. Plaintiff and the Class Members properly tendered their Devices to APPLE under the Apple Plans and were entitled to new Devices. APPLE breached the contract by providing refurbished Devices, not new Devices. As a result of APPLE's breach, Plaintiff and the Class Members have suffered damage. Further, APPLE provided Class Members with Devices that were not new or functionally equivalent to new, either at the time of initial purchase (such as when a consumer was experiencing a service event and was permitted to purchase an Apple Plan at that time), or when they attempted to use one of their two service event replacements under the terms of their Apple Plan. At such times, Class Members expended monies for the initial purchase price of the Apple Plan and for the cost of what they believed to be new Devices, and/or had to pay the cost associated with making a claim under their Apple Plan (or were the intended beneficiaries of such expenditures, or had an Apple Plan transferred to them).
Plaintiff and the Class Members were thereby deprived of the use and value of their original Devices, which APPLE takes possession of pursuant to the terms of the Apple Plans as part of a replacement incident, and did not receive the benefit of the bargain in that they did not receive replacement Devices that were new or functionally equivalent to new. Plaintiff and the Class Members suffered economic loss, in at least the amount of the cost of the Apple Plans, the amount of the loss of the value of their original Devices, which were not refurbished, and the purchase cost and replacement cost paid to APPLE, as well as the difference between the value of a Device that was not new or functionally equivalent to new and the value of a new Device."
The court document also noted that the Plaintiff also filed for injunctive relief.
Unlike the case that we covered last week which involved the case being "Certified" as a Class Action, this case is seeking certification. In their Prayer for Relief they list the following in-part:
"An order certifying the Class for the purpose of going forward with any one or all of the causes of action alleged herein; appointing Plaintiff as Class Representative; and appointing undersigned counsel as counsel for the Class."
The Class Action regarding "Breach of Contract" against Apple was filed in the California Northern District Court, San Francisco Office. At this time no Judge has been assigned to this case.
It should be noted that another case of similar nature was filed on July 14 as noted below. We were and are still unable to obtain information on this case. Whether it's glitch in the case or our source is unknown at this time.
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