Tech giant Apple has been in hot water over the couple weeks after the revelations of the dramatically named “Batterygate.” “Batterygate” is a term that has been used quite a bit recently to refer to Apple’s admission that, a little over a year ago, they released software updates which slowed down the processing speed of their iPhone 6, iPhone 6 Plus, iPhone 6S, iPhone 6S Plus, and iPhone SE models. In a more recent update, they did the same to the iPhone 7 and iPhone 7 Plus. These changes were made with no notice to public or mention in update notes and caused substantial slowdown for the devices. This admission has fed the belief that Apple intentionally slows down older phone models in order to push sales of their newer models–the iPhone 8 varieties and the new iPhone X.
Apple, however, has stated this is not the case and released an explanation. Apple says that the lithium-ion batteries in these models were becoming less capable of supplying the current energy demands of phones in cold conditions, at low charge, or even as they simply get older. This can cause phones to suddenly shut down, not hold a charge, or damage internal components. Apple says they intend to roll out similar slowdowns to more recent models as necessary.
This is a somewhat reasonable explanation, it does fix an issue caused by an older battery. However, it doesn’t explain why Apple didn’t inform their users about the issue. It also doesn’t explain why they didn’t tell users the slowdown issue and the issue behind releasing the slowdown updates could be solved by purchasing a new battery for just under $80–instead issuing replacement phones and pushing purchases on more recent models.
These questions may have innocent answers. However, they’ve already given rise to at least two class action lawsuits over the issue. The first is a lawsuit including plaintiffs from Illinois, Ohio, Indiana, and North Carolina alleging fraud and deceptive business practices and the second is a lawsuit out of California accusing Apple of interfering with the use of a phone and breach of an implied Contract. These lawsuits both revolve around Apple’s failure to tell its customers about the slowdown and allowing them to purchase expensive replacement phones instead of giving them the facts of the situation. Let’s take a look at them both, the law involved, and their chances.
Consumers are Suing Apple for Fraud
The fraud class action accuses Apple of intentionally concealing and obscuring why older phones were being slowed down as part of a scheme to sell more new phones. The lawsuit has some kinks to work out of it, it lists the non-existent iPhone 7s as one of the affected devices, but it does make some interesting allegations. They argue that the true purpose behind the slowdowns was to fraudulently induce customers to purchase more phones or else Apple would have told people that the phones were being slowed down and the issue could be fixed with a cheap–relative to purchasing a new iPhone–alternative by simply buying a new battery. This led to the plaintiffs in the lawsuit buying new phones when they otherwise would not have. The allegations here include fraudulent omission and deceptive practices both under the statutes of the plaintiffs’ home states and common law
Intentionally suppressing or omitting a fact, with the intent that others rely on that omission in making a purchase, is a fraudulent or deceptive business practice under both common law and under most state’s statutes on the issue. For example, if a used car salesman knows the car you’re about to buy has electrical issues which will expensive fix and make you not buy the car, but decides not to tell you this would generally be fraudulent omission. It is important, however, that the issue would actually make you not purchase the car. It is only an issue under the law if the fraudulent omission or statement actually impacts your decision whether or not to take an action.
Deceptive trade practices have a number of definitions depending on where you live. However, in general it makes it illegal to engage in behavior likely to deceive the public. This covers quite a broad swath of situations, from fraud to false advertising to misrepresentation and omission of material facts. Material facts are facts which, as we just discussed, impact the opinion of the public. There does not always have to be an actual person deceived to support this sort of claim, just be likely to deceive the public.
The class action’s case is based on the fact that Apple failed to tell the public that about the reasons behind, solutions to and very existence of the slowdown iOS updates as part of scheme of fraudulent omission and misrepresentation in order to persuade people to buy cell phones. They have a fairly good case that there was an omission here that changed whether or not somebody would have bought a phone. If the plaintiffs here had known about the possibility of just buying a new battery, they likely would not have bought a phone. However, fraud is a tricky case to plead and pursue. It usually needs more facts in the initial complaint than other claims would, something this case is a bit light on. They’ll also have trouble establishing that the intent behind the concealment of these facts was to push sales when Apple has a fairly reasonable argument to the contrary that it was just to preserve the life of these older phones.
Details of the California Class Action
The second lawsuit that has been brought to bear against Apple takes a different tact, alleging breach of implied contract and trespass to chattels. These claims essentially come down to an two arguments. First, there is an implied agreement when you purchase a phone that Apple won’t later take away some of the phone’s functionality. Second, by slowing down the phones Apple illegally interfered with the customers use and enjoyment of their property. This reduced the value and function of their phones, sometimes making them require a replacement or overpay to fix an issue Apple knew how to fix and knew couldn’t be fixed by what was paid for.
The first of these arguments, implied contract, is a particularly tricky one to win in the courts. If you sign a contract which has the requirements elements to be valid or reach an oral contract in a situation where it is valid you have an express contract. The vast majority of contracts out there are express contracts. However, in the absence of this, the courts sometimes (very rarely) find the existence of an implied contract as a matter of equity and fairness. They can be found based on a prior history of similar agreements, when somebody accepts something of value knowing payment would normally be expected, or in other situations where fairness would require a court to imply a contract to avoid the unjust enrichment of a party.
They come in two forms, implied in fact and implied in law. Implied in fact contracts are a contract implied from the conduct of the parties. For instance, if you ask for a certain number of apples from an apple supplier with no discussion of price and they send it the current price at the time you asked for them could be implied into the contract if the courts wanted. An implied in law contract, on the other hand, is a contract implied purely to avoid unfairness. For instance, if a painter came to the wrong house by accident and the owner said nothing and let him proceed to paint the house, the courts could make the owner pay for the paint job through an implied in law contract.
The argument here is essentially that by purchasing an iPhone, Apple and the plaintiffs entered an implied in fact contract that Apple would not intentionally interfere with the functionality of the phones they bought. There’s potentially something to this argument. However, the complaint is very thin on facts as to why this should be the case. There is obviously a common sense aspect that when you buy something, you expect the person you buy it from not to sabotage it. However, there needs to be more than just common sense here. This is especially true because the Apple terms and conditions, the agreements you click through prior to allowing an update, all will come into play for an argument that consumers know the functionality of their phones can change over time with updates. The argument is an uphill battle for sure, at the very least it will depend a great deal on how the judge on the case feels about the fairness of the issue.
The trespass to chattels, on the other hand, is much more straight forward. Trespass to chattels is a civil cause of action which alleges that somebody intentionally interfered with the use or enjoyment of your property without consent. This is distinguished from the more serious claim of conversion in that conversion involves the full deprivation of another’s right to use or possess personal property. Think of it as the difference between taking your sandwich and eating it and taking your sandwich and burning the bread. In the conversion situation the sandwich is gone entirely, in the trespass to chattels situation you sandwich is made less appealing without your consent.
The argument here is that the plaintiffs never consented to having their phones slowed down. In fact, they weren’t consulted or even informed of the slowdown. The slowdown also certainly reduces the value and usefulness of these phones. Apple did so intentionally, by their own admission they intend to continue to do so with other phones in the future. This is a claim with some merit, although damages will be fairly limited with such a claim. What’s more, it will face some challenges in terms of consent. Once again, the Apple terms and conditions likely permit them to make essentially any changes they like to your phone’s operating system. You also choose to update your iOS. The terms of these agreements will likely factor quite a bit into the success of these trespass to chattels claims. This being said, there’s a flip side to this argument in that Apple never revealed the slowdowns. This makes it nearly impossible to consent to the trespass unless the situation is covered in Apple terms and conditions.
Joining the Class Actions
These class action lawsuits are in very early stages and face a serious uphill battle. Their claims have some issues to them and they will have to survive the substantial legal resources of Apple. They will almost certainly face motions to dismiss and for summary judgment. They will need to get their class certified and more. However, there is at least some merit to their claims. The fact that Apple concealed these slowdowns for so long puts the situation in a particularly suspicious light when presented to the courts. What’s more, the sheer number of people affected will almost certainly number in the hundreds of thousands or millions in both cases. If you own or owned one of the iPhones affected and may have a claim similar to those in one of these class actions they are currently looking for people to add to the class. It may be worth your time to reach out to the attorneys involved.
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