Vishaal Reddy Randall LA 349 25 April 2012 Word Count: 697

In re iPhone Application Litigation, 2011 U.S. Dist. LEXIS 106865 (N.D. CA 2011)

This case was a class action suit against Apple and the “Mobile Industry Defendants.” United States’ citizens were using Apple mobile devices that operate Apple’s”iOS” system, claim their privacy rights were violated by the Apple and the Mobile Industry Defendants, whose “privacy violations by illegally collecting, using, and distributing iPhone, iPad, and App Store users' personal information” (Casebook). The defendants filed motions to dismiss for several reasons, including lack of Article III standing and the plaintiff’s consent to privacy agreements, citing that the claim was an effort “to safeguard your personal information against theft, loss, and misuse, as well as against unauthorized access, disclosure, alteration, and destruction” (Casebook). Apple has a platform for purchasing applications, through their App Store. The App Store shows users that it takes precautions to keep personal information safe and even controls which apps are sold in the App store, maintaining that it protects users against any harm by third-party applications. It also requires the “end-user-license-agreement” to have a clause giving them third party beneficiary rights to enforce it on the end user. Even with the measures in place, the plaintiffs argue that these practices allow for apps that exploit the privacy of the user, allowing the company to find “highly personal details” (Casebook). These apps can track user content and personal information, while storing addresses, geo-location, photographs, etc. Furthermore, Apple’s App Store agreement does not give a reasonable customer notice that they could be tracked and their personal information could be accessed. No specific app developers were named as defendants, but all Mobile Industry Defendants are accused of “exceeding the scope of authorization given to them by the plaintiffs when they downloaded the app” (Casebook). Both Apple and the Mobile Industry Defendants filed motions to dismiss. The court turns to each of the defendant’s arguments to make its decision stating that the plaintiffs must prove the following: (1) it has suffered an 'injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely

speculative, that the injury will be redressed by a favorable decision. First, the plaintiffs argue that they suffered an “injury in fact” under Article III of the Constitution. However, the defendant’s reject this argument, citing that there was no actual injury or harm. In order for this to be proven, the plaintiffs must demonstrate the injury was concrete, actual, or imminent and likely to be redressed by a favorable decision. The court first looks for injury in fact, which much have been had by at least one of the plaintiffs. Plaintiffs argue that the injury in fact came from the “misuse of their personal information, diminution in value of the personal information, which is an "asset of economic value" due to its scarcity; and "lost opportunity costs" in having installed the apps, and diminution in value of the iDevices because they are "less secure" and "less valuable" in light of the privacy concerns” (Casebook). However, the complaint is dismissed because, as the defendants point out, the plaintiffs do not allege injury to themselves. They fail to identify the devices used, and do not identify which defendant tracked their personal info, or which app did. In addition, they don’t identify the harm that resulted from these or a concrete harm sufficient for injury in fact. Rather, they make general claims about the Mobile Industry Defendants, which is not enough for Article III standing. Second, the court next moves to the issue of causation and find that the plaintiffs failed to trace their injuries directly to any of the defendants. In addition, they don’t differentiate between the Mobile Industry Defendants at all, which makes finding a causal change impossible. Due to this, the court grants a motion to dismiss from the defendants with leave to amend. The complaint needs to have specificity in its allegations and must demonstrate enough evidence to show causation. Last, the court looks to the defendant’s arguments and do not discuss them at length because they have already failed to prove Article III standing. Plaintiffs argued that the App Store “terms of service” agreement was “unconscionable,” failing to prove the procedural and substantive elements needed to prove this claim. Also, because the contract applies to a recreational activity, the consumer could choose not to participate, and choose an alternative instead. The plaintiffs also alleged negligence from Apple, and Apple counter argued the claim by stating that the plaintiffs do not state a claim of negligence under California law because they do not identify a legal duty for Apple to protect user information from the Mobile Industry Defendants. In addition, plaintiffs don’t allege an “appreciable, non-speculative, present injury”, which is needed for this cause of action (Casebook). Next, they claim liability under the Computer Fraud and Abuse Act, which applies to accessing a protected computer without authorization or in excess of one’s authorization knowingly and with intent to defraud; there must be evidence that there was over $5,000 in economic damages and they were caused by the defendant. The plaintiffs failed to prove that Apple acted knowingly and with intent to provide, that authorization was exceeded, and that economic damages were caused.

Plaintiffs also alleged that Mobile Industry Defendants gained access to personal information by using tracking codes; however, since the apps were installed voluntarily, the argument does not hold up. Lastly, they claim trespass to chattels, which requires the plaintiff to show that the defendant’s acts caused irreparable injury. However, plaintiffs haven’t connected any of this to a specific injury. With all of this evidence, the case is dismissed with leave to amend with lack of Article III standing.

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