kyle irving v apple, at&t mobility

8/14/2019 Kyle Irving v Apple, AT&T Mobility

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UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

KYLE IRVING, individually and onbehalf of all others similarly situated,

Plaintiff,

v.

APPLE, INC., and AT&T MOBILITY,LLC,

Defendants.

Case No. ____________________

COMPLAINT

CLASS ACTION

JURY TRIAL DEMANDED

INTRODUCTION

Plaintiff Kyle Irving, individually and on behalf of all others similarly

situated and on behalf of the general public complains against Defendant

Apple, Inc., and AT&T Mobility, LLC, individually and through any affiliates,

parents, subsidiaries, divisions, departments, or agents as follows:

1. This is a class action brought by Plaintiff, on behalf of himselfand others similarly-situated, for breach of contract, damages, restitution,

and for violations of Minnesotas consumer protection statutes. Plaintiff seek

remedies for themselves and the Class (defined below) for the wholesale

failure to provide Multimedia Messaging Services (MMS), as Defendants

promised, to purchasers of the iPhone and users of its version 3.0 or higher

software.

Case 0:09-cv-02613-PAM-FLN Document 1 Filed 09/24/09 Page 1 of 22


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THE PARTIES

2. Plaintiff Kyle Irving is a Minnesota resident who purchased aniPhone 3GS running software version 3.0 on or about June 22, 2009, with the

understanding that the MMS feature would soon be available as advertised.

The MMS feature has never worked on his iPhone 3GS.

3. Defendant Apple, Inc. (Apple) is a California corporation withits principal place of business in Cupertino, California. Apple is a citizen of

California.

4. Defendant AT&T Mobility, L.L.C. (AT&T) is a Delaware limitedliability corporation with its principal place of business in Atlanta, Georgia.

AT&T is a citizen of Georgia and Delaware.

5. Apple is one of the largest computer manufacturers in the world.6. AT&T is one of the largest mobile phone companies in the world.7. Both Defendants are Fortune 500 companies, with annual sales

in the billions of dollars.

JURISDICTION AND VENUE

8. Both Apple and AT&T do systematic, continuous business in theDistrict of Minnesota.

9. Defendants breach of contract and deceptive conduct, inconnection with the sale of 3G iPhones, occurred and had material impact in

Minnesota.



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10. Both Apple and AT&T have sufficient minimum contacts toestablish in personam jurisdiction over them in Minnesota. Under the Due

Process Clause of the Constitution, AT&T and Apple have sufficient

minimum contacts to establish in personam jurisdiction over them in

Minnesota.

11. This lawsuit relates to the Defendants employment of deceptionand concealment in connection with the sale and advertisement of

merchandise to Plaintiff, relating to the sale of 3G and 3G-S iPhones

purchased from Apple Stores and AT&T Stores. This lawsuit is based in part

upon violations of Minnesotas consumer protection statutes: Minnesotas

False Statement in Advertising Act, Minn. Stat. 325F.67,et seq.,

Minnesotas Prevention of Consumer Fraud Act, 325F.69,et seq.,

Minnesotas Unlawful Trade Practices Act, 325D.13,et seq., and

Minnesotas Uniform Deceptive Trade Practices Act, 325D.44,et seq.

12. This Court has jurisdiction pursuant to the Class Action FairnessAct of 2005 (CAFA), 28 U.S.C. 1332(d). Plaintiff seeks to prosecution this

class action on a nationwide basis, satisfying CAFAs diversity requirement.

28 U.S.C. 1332(d)(2)(A). Millions of people across the U.S. have purchased

an iPhone 3GS since its launch date in June 2009. Plaintiff also asserts

entitlement to attorneys fees under Minnesota Statutes, section 8.31,

subdivision 3a. Therefore, by a preponderance of the evidence, the matter in



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controversy exceeds $5,000,000.00. Id. at 1332(d)(2). In addition, Plaintiff

and millions of putative class members from around the U.S. are citizens of

states other than California, the home state of Apple, or Georgia, the home

state of AT&T Mobility, satisfying CAFAs minimal diversity requirement.

28 U.S.C. 1332(d)(2)(A).

FACTS

Apples iPhone and AT&Ts MMS capabilities

13.

In January 2007, Apple launched the iPhone. The iPhone was

manufactured and created by Defendant Apple. The iPhone is a combination

of an iPod (which stores thousands of music files and plays them back for the

listener) and a cellular phone (which allows users to talk on the telephone

while mobile) with an incredible amount of creative functionality. The cell

phone portion of the iPhone works exclusively, in the U.S., with the AT&T

cellular phone network. Defendants Apple and AT&T launched the iPhone

as a joint venture. Both AT&T and Apple sold the iPhone in their respective

stores.

14. The original version of the iPhone was called the 2G. The nextgeneration, launched in July 2008, was called the 3G. The most recent

version, launched in June 2009, is called the 3G-S.

15. Since its creation, one drawback of the original 2G iPhone wasthat it did not allow Multimedia Messaging Service, or MMS, which,



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among other things, allows users to send a picture to another users cell

phone.

16. Apple advertised heavily that the new version of iPhone, the 3G,as well as the even newer version, the 3G-S, would allow MMS. Apples print

and video advertisements on television, the Internet, the radio, newspapers,

and direct mailers all touted the availability of MMS.

17. Similarly, AT&T advertised that the 3G and 3G-S would allow

MMS. MMS functionality was one of the reasons people chose to buy or

upgrade to a 3G or 3G-S.

18. MMS has been available on other types of cell phones for manyyears.

19. Apples website states:Send MMSTake a photo or shoot some video, then send it via Messages. You can

also send audio recordings from within Messages, information from

Contacts, and directions from Maps.

20. A Pop-Up window on Apples website reads:Sending Photos and Videos

You can take a photo or make a video (iPhone 3GS only) from withinMessages and include it in your conversation with another MMS-

capable device.

21. AT&Ts website states:Messages



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Use messages to send text, photos, audio, video, and more. Forward awhole message or just the important parts.

22. After the 3G iPhone came out in July 2008, customers whopurchased the 3G iPhone began to realize that MMS was not available.

23. In response, AT&T published this in the AT&T Answer Centerpage of their website for problems related to MMS:

Customers who are sent a MMS message and own a non-MMS capabledevice will receive a text message instead of an actual MMS message.The message will contain the website address of

www.viewmymessage.com/1 or www.viewmymessage.com/2 as well as auser name and password. To view the MMS message, please access thewebsite from a computer and enter the user name and passwordprovided in the text message.

24. Incredibly, AT&T was directing customers interested in MMS togo to a computer to view the message.

25. The AT&T Answer Center has this unhelpful solution for theproblem Send, Receive, or Delete a Picture, Audio, or Video Multi-Media

Message (MMS) with iPhone:

Goal: Send, Receive, or Delete a Picture, Audio or Video Multi-media

Message with iPhone

Symptom: Unable to Send, Receive, or Delete a Picture, Audio, or Video

Multimedia Message with iPhone

Fix: iPhone does not support sending, or receiving picture, audio, or

video multimedia messages. If an MMS is sent to the iPhone, it will

receive a text message instead that contains a link to a website address

where the message can be viewed.



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26. In early 2009, sales representatives for both Apple and AT&Trepresented that MMS would be available on both the 3G and the 3G-S

beginning on June 17, 2009, when the new iPhone OS 3.0 Software Update

would become available. Representatives in Apple and AT&T stores assured

customers that with this new application, which could be downloaded for free,

MMS would be available.

27. In the spring of 2009, AT&T began a huge sales drive to sell its

older 3G models in preparation for the launch of 3G-S. AT&T lowered the

price of a 3G to less than $100 and assured customers that the new 3.0

Software Upgrade would solve all their problems.

28. Apple posted on its website, on the iPhone OS 3.0 SoftwareUpdate page, that MMS would be available, so that customers could send

MMS messages and include photos, audio, and contact info. Even tap to snap

a picture right inside Messages. A graphic showed the familiar iPhone test

message bubbles with a picture inserted.

29. Millions of customers, as a result of the false and deceptiverepresentations and concealments of Apple and AT&T purchased the 3G and

3G-S, waiting for June 2009, when the new application would be available

that would allow MMS.



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30. Unfortunately, after downloading the new 3.0 Software Updateapplication or having had it done for them by AT&T, users found that MMS

still did not work on either the 3G or 3G-S.

31. The Apple troubleshooting page explained the problem:To send and receive MMS messages on your iPhone 3G, do the

following:

1. Verify that your iPhone and wireless carrier meet the system

requirements. To use MMS you need:

-- iPhone OS 3.0 installed on iPhone 3G. The original iPhone

does not support sending or receiving MMS messages. Install

iPhone OS 3.0 if necessary.

-- A wireless carrier that supports MMS.

-- A coverage area in which you can place and receive a call, and

access the Internet using Safari on your iPhone (3G network

coverage recommended).

2. If this article shows that your carrier supports MMS, you should see

MMS Messaging in the Settings>Messages>General screen as shown

below.

32. The this article phrase was a blue-colored hyperlink. Clickingon that hyperlink leads to a page showing several countries. Clicking on

North America, and viewing the graph for USA, under the heading AT&T it



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shows that AT&T is NOT a carrier which offers MMS. Of course, AT&T is

the ONLY carrier in the United States used by the iPhone.

33. In other words, AT&Ts towers do not support MMS for iPhone.In an article in the St. Louis Countian, AT&T spokesman Marty Richter

admitted that AT&T does not support MMS for the iPhone.

34. Calling Apple Customer Support reveals that AT&T has neverupgraded its towers so as to support the functionality necessary for MMS on

iPhone. Therefore, the iPhone cannot offer MMS as claimed.

35. The only excuse offered by AT&T and Apple is a mouseprintdisclaimer on the website, in barely readable font, which reads MMS

Support from AT&T coming in late summer.

36. None of the materials in either the Apple or AT&T stores adviseconsumers that the MMS functionality of the phones will only work after the

AT&T towers are upgraded to support MMS in late summer.

37. When and if AT&T upgrades its towers, millions of iPhonepurchasers will get what they should have in terms of MMS capability. In

the meantime, all the millions of purchasers of the 3G and the 3G-S iPhone

have been deceived by the Defendants as to the phone, which in fact does not

currently have MMS functionality.



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38. Apple and AT&T representatives continue to misrepresent orconceal, suppress, or omit material facts to customers in their stores about

the MMS functionality of the 3G and 3G-S iPhones.

Plaintiffs Experience

39. Kyle Irving (Irving), a resident of Rosemount, Minnesota,bought his iPhone on June 22, 2009 at the AT&T Store located in Apple

Valley, Minnesota.

40.

Irving was interested in a phone with MMS functionality.

41. Irving asked the store representative if the iPhone providedMMS.

42. The store representative misrepresented and/or concealed,suppressed, or omitted facts as to the iPhone and MMS functionality.

43. Irving purchased the 3GS iPhone.44. When the 3.0 Software Upgrade became available, Irving

downloaded it.

45. Despite the download, MMS still did not work.46. Between July 2009 and September 2009, Irving called Apple

Customer Service and AT&T Customer Service on several different occasions

inquiring about the MMS and its availability. Irving was told that AT&T had

not upgraded its towers and may not do so until some time in the late

summer of 2009.



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47. Irving has been damaged in that for many months he has beenunable to send MMS messages.

CLASS ALLEGATIONS

48. Plaintiff sues in his own behalf and on behalf of a class of personsunder Rules 23(a), (b)(2), (b)(3), and (c)(4) of the Federal Rules of Civil

Procedure as the Court may determine to be applicable and appropriate, in

connection with the proceedings to certify this action and its common

questions as a class action. This action satisfies the numerosity,

commonality, typicality, adequacy, predominance and superiority

requirements of those provisions.

49. The Class is defined as:All persons in the United States who, between July 2008 and thedate of final judgment or settlement, have purchased a 3G or 3G-

S iPhone from either AT&T Mobility L.L.C. or Apple, Inc., forpersonal, family, or household use.

50. Alternatively, should it be found that any of Plaintiffs state lawclaims could not be certified on a national basis, Plaintiffs seek statewide

subclasses (or groups of statewide subclasses) for these same persons.

51. Numerosity: Plaintiff does not know the exact size of theproposed Class and Subclass, or the identities of all their members because

such information is in the exclusive control of Defendants. However, the

members of the class are so numerous that joinder is impracticable based on



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the millions of iPhones sold, combined with the fact that the terms and

conditions of iPhone and AT&T services appear on standardized contracts

provided to millions of consumers.

52. Commonality/Predominance: All members of the Class havebeen subjected to and affected by the same conduct. There are questions of

law and fact that are common to the Class, and predominate over any

questions affecting only individual members of the Class. These questions

include, but are not limited to:

a. whether Defendants made misrepresentations regarding MMSfunctionality;

b. whether Defendants omitted material information regardingMMS functionality;

c. whether Defendants made blatantly false statements regardingMMS functionality;

d. whether Defendants marketing efforts and materials emphasizedMMS functionality without making any mention of the

unavailability of MMS;

e. whether Defendants intended for consumers to rely on theirstatements regarding MMS functionality;

f. whether microprint caveats on a web-page cured Defendantsdeceptive conduct;



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g. how much money Defendants collected for messaging serviceswithout providing MMS functionality as promised and as billed

for;

h. how much money Defendants collected in iPhone sales;i. whether Defendants knew that AT&T had not upgraded its

towers to support MMS for iPhone, and, if so, when did they gain

this knowledge;

j.

whether Defendants concealed from consumers that: (1) AT&T

had not upgraded its towers to support MMS for iPhone and had

no plans to do so for many months; and (2) the 3.0 Software

Upgrade would not fix the problem and make MMS available (by

itself);

k. whether Apple and AT&T trained their salespersons to providedeceptive or non-deceptive messages to consumers regarding the

fact that AT&T towers do not support MMS for iPhone, or any

advice as to when the towers will support MMS;

l. whether, according to Apples and AT&Ts marketing research,MMS functionality is an important decision driver for residential

consumers when buying iPhones;



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m.whether any employees, officers or agents of AT&T or Applebelieve that the advertisements to customers relating to MMS

were misleading to consumers;

n. whether AT&T or Apple received complaints from consumersabout the lack of MMS functionality, and what their response

was;

o. what did Defendants tell their own managers and employees

internally about MMS functionality; and

p. were any committees or work groups created to solve the MMSproblem, and what was said in their meetings;

53. Typicality: The claims of the named Plaintiff are typical of theclaims of the Class and do not conflict with the interests of other members of

the Class in that Plaintiff suffered damages as a result of paying for a phone

that did not function as promised and paying for services not rendered.

Prosecution of Plaintiffs claims will inure to the benefit of the entire

proposed class.

54. Adequacy: The named Plaintiff will fairly and adequatelyrepresent the interests of the Class. Plaintiff is committed to the vigorous

prosecution of the Classs claims and has retained attorneys who are

qualified to pursue this litigation and have experience in class actions.



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Neither Plaintiff nor counsel have any interest adverse to those of Class

members.

55. Superiority: A class action is superior to other methods for thefast and efficient adjudication of this controversy. A class action regarding

the issues in this case does not create any problems of manageability. Among

other things, class action treatment will permit a large number of similarly

situated persons to prosecute their common claims in a single forum

simultaneously, efficiently, and without the unnecessary duplication of

evidence, effort, and expense that numerous individual actions would

engender. The benefits of proceeding through the class mechanism, including

providing injured persons or entities with a method for obtaining redress for

claims that might not be practicable to pursue individually, substantially

outweigh any difficulties that may arise in management of this class action.

56. No attorney would have the financial resources to litigate thiscase against opposition from the Defendants when the potential for recovery

is so small for each class member. Therefore, joinder of all similarly situated

plaintiffs is not appropriate and the Court should employ the class

mechanism to resolve these claims.

57. In the alternative, Defendant has acted or refused to act ongrounds generally applicable to the Classes, thereby making appropriate



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final injunctive relief or corresponding declaratory relief with respect to the

class as a whole.

COUNT I

Breach of Contract58. Plaintiff incorporates by reference the allegations contained in

preceding paragraphs of this Complaint.

59. Defendants and Plaintiff had a valid contract, supported bysufficient consideration, pursuant to which, for a fee, Defendants were to

supply an iPhone as represented with MMS functionality.

60. Defendants materially breached the contract by providing aniPhone without MMS functionality.

61. As a direct result of Defendants material breach of the contract,Plaintiff was damaged.

62. Plaintiffs incorporate by reference the allegations contained inpreceding paragraphs of this Complaint.

63. Minn. Stat. 325F.69, subdivision 1 (2008) provides:The act, use, or employment by any person of any fraud, falsepretense, false promise, misrepresentation, misleading statementor deceptive practice, with the intent that others rely thereon inconnection with the sale of any merchandise, whether or not any

person has in fact been misled, deceived, or damaged thereby, isenjoinable as provided in section 325F.70.



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Material omissions stand as violations of Minnesotas consumer protection

statutes. Plaintiff and class members need not affirmatively establish

subjective reliance upon an omission.

64. Defendants sold smart phones and messaging services, whichboth fall within the meaning of merchandise under Minn. Stat. 325F.68,

subd. 2.

65. On or about June 22, 2009, Plaintiff went to the ATT Store in

Apple Valley, Minnesota and purchased an iPhone. In connection with the

sale, the representative of Defendant ATT told Plaintiff that the iPhone

would soon have MMS functionality. Defendants also advertised on their

website and at their stores that MMS worked with iPhone. On their websites

and in their stores, Defendants provided visual demonstrations showing how

to use MMS on the iPhone, and showing that it in fact worked.

66. Defendants intended that consumers rely on their statementsand omissions regarding MMS functionality. But Defendants statements

were blatantly false and Defendants omitted the material fact that AT&T

was completely incapable of providing MMS services for iPhone. Any

disclosure allegedly provided to consumers was not a reasonable one.

67. As a direct, proximate and foreseeable result of Defendantsconduct, Plaintiffs and class members sustained damages and are also



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entitled to injunctive and equitable relief and an award of attorneys fees

pursuant to Minn. Stat. 8.31, subd. 3a.

68. Causation is established in a consumer fraud action where anomission is deemed material, an objective standard. Defendants omissions

in this case were material because Defendants marketing materials (and the

use of micro-print disclaimers in hard-to-find places) widely touted the

iPhones MMS functionality. Defendants also displayed videos in their U.S.

stores promising and demonstrating MMS functionalityeven though no

U.S. consumer would have MMS functionality if they purchased iPhone.

Causation is also presumed where an affirmative statement is materially and

blatantly false on its face.

COUNT VI

Violations of the Minnesota Unlawful Trade Practices Act,

Minn. Stat. 325D.13

69. Plaintiff incorporates by reference the allegations contained inpreceding paragraphs of this Complaint.

70. Minnesota Statutes 325D.13 provides: No person shall, inconnection with the sale of merchandise, knowingly misrepresent, directly or

indirectly, the true quality, ingredients or origin of such merchandise.

Consumer protection laws of other states make similar conduct unlawful.



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71. Defendants misrepresented (i.e., by omission) the true quality oftheir goods and services, as explained above, constituting unlawful trade

practices in violation of Minn. Stat. 325D.13.

72. As a direct, proximate and foreseeable result of Defendantsconduct in violation of Minnesotas Unlawful Trade Practices Act, Minn. Stat.

325D.13, Plaintiffs and class members sustained damages, and are also

entitled to injunctive and equitable relief and an award of attorneys fees

pursuant to Minn. Stat. 8.31, subd. 3a.

COUNT VII

Violations of the Minnesota Uniform Deceptive Trade Practices Act,

Minn. Stat. 325D.44

73. Plaintiff incorporates by reference the allegations contained inpreceding paragraphs of this Complaint.

74. Minnesota Statutes 325D.44, subd. 1 provides: A person engages in a deceptive trade practice when, in thecourse of business, vocation, or occupation, the person:

* * *(5) represents that goods or services have . . . characteristics,ingredients, uses, benefits . . . that they do not have;

* * *(7) represents that goods or services are of a particular standard,quality, or grade, . . . if they are of another . . .;

* * *(9) advertises goods or services with the intent not to sell themas advertised;

* * *(13) engages in any other conduct which similarly creates alikelihood of confusion or of misunderstanding.



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75. Defendants misrepresented (by affirmative misrepresentationand omission) the true quality and nature of their iPhone and messaging

services, as explained above, in violation of Minn. Stat. 325D.44, and

Plaintiffs are thus entitled to injunctive relief. In addition, as a direct,

proximate and foreseeable result of Defendants conduct in violation of Minn.

Stat. 325D.44, Plaintiffs and class members are entitled damages, and an

award of attorneys fees pursuant to Minn. Stat. 8.31, subd. 3a.

76.

Because Defendants willfully engaged in such trade practices

knowing them to be deceptive, Plaintiffs and the proposed Class are entitled

to recover their costs and attorneys fees under Minn. Stat. 325D.45,

subd. 2.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff requests that the Court grant the following

relief:

a. An Order certifying this case as a class action pursuant to Fed. R.Civ. P. 23(b)(2), (b)(3) and/or (c)(4), and appointing Plaintiff asClass representative and his undersigned counsel as Classcounsel;

b. An order of restitution in favor of Plaintiff and the Class;

c. An injunction prohibiting Defendants and their successors,agents, representatives, employees, and all persons who act inconcert with any of them, from making untrue or misleadingstatements as described in this Complaint;

e. An accounting;



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f. Pursuant to Minn. Stat. 8.31, subd. 3a, and the Courts inherentequitable power, an order requiring Defendants to pay reasonableattorneys fees, costs and disbursements;

g. All other relief allowed at equity or law;

h. All other relief the Court deems just and proper under thecircumstances of this case.

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury.

ZIMMERMAN REED, PLLP

Dated: September 24, 2009 s/David M. CialkowskiDavid M. Cialkowski(MN Bar No. 306526)ZIMMERMAN REED, P.L.L.P.651 Nicollet Mall, Suite 501

Minneapolis, MN 55402Telephone: (612) 341-0400Facsimile: (612) 341-0844

Timothy A. Engelmeyer(MO Bar No. 39941)

Anthony M. Pezzani (MO Bar No. 52900)ENGELMEYER & PEZZANI, LLC13321 N. Outer Forty Road, Suite 300Chesterfield, MO 63017

Telephone: (636) 532-9933Facsimile: (314) 863-7793



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kyle irving v apple, at&t mobility

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