Price v. Apple, Inc.

1

MATTHEW PRICE, Plaintiff, v. APPLE, INC., Defendant.

No. 21-cv-02846-HSG

United States District Court, N.D. California

March 28, 2023

ORDER GRANTING MOTION TO DISMISS

Re: Dkt. No. 56

HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE

Pending before the Court is Defendant Apple, Inc.'s motion to dismiss Plaintiff Matthew Price's second amended complaint. See Dkt. No. 65. The Court finds this matter appropriate for disposition without oral argument and the matter is deemed submitted. See Civil L.R 7-1(b). For the reasons below, the Court GRANTS the motion.

I. BACKGROUND

A. Allegations

Plaintiff alleges that since approximately January 2015 he has had an Apple ID to purchase apps and other content from Apple. See Dkt. No. 53 (“SAC”) at ¶¶ 2, 8-10, 23. Plaintiff further asserts that during this time he made several in-app game purchases that “did not work as advertised or at all.” See id. at ¶ 24. He alleges that he contacted Apple, and was advised to contact the game/app developer. Id. When this was unsuccessful, he contacted Apple again, and the company suggested that he “talk to his bank/credit card company to have them chargeback the money he spent on said purchases.” Id. Plaintiff contends that “chargebacks” are not “refunds,” and defines them as “a consumer protection tool that allow consumers to get their money back for fraudulent charges or purchases that don't live up to standards ....” See id. at ¶ 4, n.4. Plaintiff acknowledges that he requested “multiple chargebacks” for purchases he made using his Apple ID. See id. at ¶¶ 24, 26. In October 2020, after Plaintiff processed another chargeback, Apple terminated Plaintiff's Apple Id. Id. at ¶¶ 26-28. He no longer has access to the content that he purchased or the $7.63 in unspent money that he had in his Apple account at the time of his termination. See id. at ¶¶ 29-30. According to Plaintiff, an Apple representative told him that Apple terminated his Apple ID because he initiated these chargebacks. See id. at ¶ 27. Plaintiff contends that he did not violate Apple's Terms and Conditions, and says the company had no basis to terminate his account. See id. at ¶¶ 3, 22, 28, 33, 36, 40, 42. He urges that by terminating his Apple ID, Apple violated its own Terms and Conditions. See id. at ¶¶ 6, 58-72.

As relevant to this case, the Terms and Conditions state that users may not “plan or engage in any illegal, fraudulent, or manipulative activity.” See SAC, Ex. A at 5-6. The Terms also state that Apple “may monitor [users'] use of the Services and Content” for compliance with the Terms, id. at 3, and that it may “refuse a refund request if we find evidence of fraud, refund abuse, or other manipulative behavior that entitles Apple to a corresponding counterclaim,” id. at 2. The Terms also include the following termination provision:

TERMINATION AND SUSPENSION OF SERVICES

If you fail, or Apple suspects that you have failed, to comply with any of the provisions of this Agreement, Apple may, without notice to you: (i) terminate this Agreement and/or your Apple ID, and you will remain liable for all amounts due under your Apple ID up to and including the date of termination; and/or (ii) terminate your license to the software; and/or (iii) preclude your access to the Services.

Apple further reserves the right to modify, suspend, or discontinue the Services (or any part or Content thereof) at any time with or without notice to you, and Apple will not be liable to you or to any third party should it exercise such rights.

See id. at 12.

B. Procedural History

Plaintiff initially filed this putative class action in April 2021. See Dkt. No. 1. Apple moved to dismiss the complaint, Dkt. No. 20, but rather than oppose the motion, Plaintiff filed an amended complaint, Dkt. No. 31. At the time, Plaintiff asserted various claims, including for violations of California's Unfair Competition Law (“UCL”) and Consumers Legal Remedies Act (“CLRA”), and for conversion, trespass to chattels, and unjust enrichment. See Dkt. No. 31. Apple again moved to dismiss the complaint. Dkt. No. 32. The Court granted the motion to dismiss in its entirety, but granted Plaintiff leave to amend the UCL and CLRA claims only. Dkt. No. 52 at 13-14. Rather than amend his existing claims, however, Plaintiff's SAC asserts a new breach of contract claim. See SAC at ¶¶ 58-72. Apple again moves to dismiss. Dkt. No. 56.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Rule 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff need only plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

In reviewing the plausibility of a complaint, courts “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nevertheless, courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (quoting Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)).

III. DISCUSSION

Over a year after Plaintiff initially filed this case, he attempts to recast it as a breach of contract action. Plaintiff contends that Apple breached the termination provision of the Terms and Conditions by (1) terminating his Apple ID and (2) retaining his unused funds because his chargebacks were not prohibited by the Terms. See SAC at ¶¶ 58-72. But even as amended, the Court finds that the latest complaint fails to state a claim for relief.

A. Breach of Contract Claims

To state a breach of contract claim under California law, a plaintiff must allege “(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.” Oasis W. Realty, LLC v. Goldman, 51 Cal.4th 811, 821 (Cal. 2011). Additionally, “[i]n an action for breach of a written contract, a plaintiff must allege the specific provisions in the contract creating the obligation the defendant is said to have breached.” See, e.g., Young v. Facebook, Inc., 790 F.Supp.2d 1110, 1117 (N.D. Cal. 2011); see also Miron v. Herbalife Int'l, Inc., 11 Fed. App'x 927, 929 (9th Cir. 2001) (“The district court's dismissal of the [plaintiffs'] breach of contract claims was proper because the [plaintiffs] failed to allege any provision of the contract which supports their claim.”).^[1]Critically, Plaintiff here has not identified any provision of the Terms that Apple allegedly breached.

1. Termination of Apple ID

First, Plaintiff asserts that Apple breached the “Termination and Suspension of Services” provision quoted in Section I above by terminating his Apple ID account. See SAC at ¶¶ 60-65. Plaintiff repeatedly asserts that chargebacks are lawful and not prohibited by the Terms. See, e.g., id. at ¶¶ 3, 22, 28, 33, 36, 40, 42. Thus, according to Plaintiff, “Apple materially breached its Terms with Plaintiff and the members of the Class by erroneously finding, or suspecting, that they violated its Terms because they engaged in chargebacks.” Id. at ¶ 64.

However, Plaintiff's breach of contract claim is belied by his own allegations. The Terms state that users may not “plan or engage in any illegal, fraudulent, or manipulative activity.” See SAC, Ex. A at 5-6 (emphasis added). And under the termination provision, Apple may terminate a user's Apple ID if the user “fail[s], or Apple suspects that [he] ha[s] failed, to comply with any of the provisions of [the Terms] ....” See SAC, Ex. A at 12 (emphasis added). Although in his opposition Plaintiff suggests that Apple terminated his account “without any rational basis or suspicion,” Dkt. No. 57 at 7, this is inconsistent with the allegations in the complaint. Plaintiff acknowledges that he requested “multiple chargebacks” for purchases he made using his Apple ID, and that Apple terminated his Apple ID because of this conduct. See SAC at ¶¶ 24, 26-27. It is simply immaterial whether Plaintiff's multiple chargebacks were actually fraudulent or manipulative because even as alleged, Apple suspected that they were. As the Court previously explained, because Plaintiff accepted the Terms, he “knew that he would lose access to his purchased apps and services if Apple determined (or even suspected) that he failed to comply with the Apple Terms.” See Dkt. No. 52 at 11. Because Apple was “‘given the right to do what [it] did by the express provisions of the contract there can be no breach.'” Mishiyev v. Alphabet, Inc., 444 F.Supp.3d 1154, 1159 (N.D. Cal. 2020) (quoting Carma Dev. (Cal.) Inc. v. Marathon Dev. Cal., Inc., 2 Cal.4th 342, 374 (Cal. 1992)). The Court therefore GRANTS Apple's motion to dismiss as to this claim.

2. Withholding Funds

Second and relatedly, Plaintiff asserts that Apple breached the “Termination and Suspension of Services” provision by...