Lazebnik v. Apple, Inc., 2014 WL 4275008, No. 5:13–CV–04145 (N.D. Cal. Aug. 29, 2014)
The plaintiff sued Apple for misrepresenting its Breaking Bad “season pass.” As the court explained, “[f]rom the time Season 5 of Breaking Bad was first announced, it was referred to as the ‘Final Season’ and was slated to include 16 episodes.” When the first episode became available, Apple offered a season pass costing $21.99 for high definition (“HD”) and $13.99 for standard definition (“SD”), and in exchange they were promised: “[t]his Season Pass includes all current and future episodes of Breaking Bad, Season 5.” Apple also claimed that “[p]urchasing a Season Pass gets you every episode in that season and at a better price than if you were to purchase it one at a time.” But when the second half of season 5 started to air, season pass holders didn’t get it. Apple deemed the second half to be a “Final Season” (apparently not “Season 6.”). Apple refused to provide Lazebnik access to the remainder of Season 5 if he didn’t pay more. Lazebnik alleged reliance on Apple’s claims.
Standing (sigh): Lazebnik alleged that he received less than he was promised. Apple argued that because Lazebnik’s son-in-law communicated Apple’s claim to him and completed the purchase for him, he couldn’t plead reliance. Though Lazebnik didn’t specifically allege that, in reliance on his son-in-law’s transmission of Apple’s statement, he told his son-in-law to buy the season, he still plausibly pled reliance. Whether the son-in-law accurately conveyed Apple’s (false) statement is a fact issue for the jury. “A jury could reasonably find that Defendant had reason to expect that its representations would be transmitted to others, particularly in the case of statements made to a wide audience such as iTunes users.”
However, breach of contract claims failed because any contract was between Apple and the son-in-law. Also, CLRA claims failed because an iTunes season pass wasn’t “goods,” defined as tangible chattels, and the complaint didn’t allege that the season pass constituted “services.”
UCL claims did survive. Apple argued that its statements couldn’t deceive a reasonable consumer because it never promised all 16 episodes of season 5. Although it did say “[p]urchasing a Season Pass gets you every episode in that season and at a better price than if you were to purchase it one at a time,” it never explicitlypromised that there would be 16 episodes in Season Five, and a customer could therefore draw no conclusions about how many episodes she or he was buying without checking with AMC and the makers of Breaking Bad. (Seriously, Apple? This is real ‘a word means what I say it means’ territory. When I buy a “book,” I may not count the pages beforehand, but I certainly notice when someone rips out the back half and I would consider providing just the first half to break our deal.) Anyway, Apple said, no reasonable consumer could believe that he or she would get 16 episodes for $21.99.
None of this was appropriate on a motion to dismiss. This wasn’t the “rare situation” in which a statement was unlikely to deceive a reasonable consumer as a matter of law. Plus, the complaint cited a number of similarly angry consumers posting on an Apple discussion website.
Apple argued that this was AMC’s fault because AMC decided to market the last 16 episodes of Breaking Bad as Season 5. (I would suggest that Apple consult its indemnification agreement with AMC, which surely exists, and fulfill its promises to consumers.) That’s not plaintiff’s problem: the test is whether Apple’s representations were likely to deceive a reasonable consumer, and whether the likelihood of deception arose from Apple’s conduct or that of its contractual partner AMC “is not relevant to this inquiry, and Defendant cites no case that states otherwise. The UCL does not impose a scienter requirement.”