Williams v. Apple, Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 12 ANDREA M WILLIAMS, et al., Case No. 19-CV-04700-LHK 13 Plaintiffs, ORDER GRANTING IN PART AND DENYING IN PART APPLE’S 14 v. MOTION TO DISMISS 15 APPLE, INC., Re: Dkt. No. 15 16 Defendant. 17 18 Plaintiffs bring this putative class action against Defendant Apple, Inc. (“Apple”) and 19 allege breach of contract, violations of California’s False Advertising Law (“FAL”), and violations 20 of California’s Unfair Competition Law (“UCL”). ECF No. 1 (“Class Action Complaint” or 21 “CAC”). Before the Court is Apple’s motion to dismiss. ECF No. 15. Having considered the 22 submissions of the parties, the relevant law, and the record in this case, the Court GRANTS in part 23 and DENIES in part Apple’s motion to dismiss. 24 I. BACKGROUND 25 A. Factual Background 26 Apple is a corporation incorporated under the laws of California and has its principal place 27 of business in Cupertino, California. CAC ¶ 7. Apple provides cloud storage services to Apple 1 device users through iCloud, Apple’s cloud service. Id. ¶¶ 13-17. iCloud allows subscribers to 2 “utilize certain Internet services, including storing your personal content (such as contacts, 3 calendars, photos, notes, reminders, documents, app data, and iCloud email) and making it 4 accessible on your compatible devices and computers, and certain location based services.” CAC, 5 Ex. 1 at 1. 6 According to the CAC, “[o]wners of Apple devices are granted up to 5 GB of iCloud 7 storage for free. If an Apple device user wishes to store more than 5 GB of data on the cloud 8 through iCloud, then that user must subscribe to iCloud’s paid service.” CAC ¶ 20. The CAC 9 alleges that “[i]n order to subscribe to iCloud, a user must agree to the iCloud Terms of Service 10 Agreement.” Id. ¶ 22. The relevant portion of the iCloud Terms of Service Agreement (“iCloud 11 Agreement”) provides the following: 12 Apple is the provider of the Service, which permits you to utilize certain Internet services, including storing your personal content (such as contacts, calendars, photos, 13 notes, reminders, documents, app data, and iCloud email) and making it accessible on your compatible devices and computers, and certain location based services, only 14 under the terms and conditions set forth in this Agreement. iCloud is automatically enabled when you are running devices on iOS 9 or later and sign in with your Apple 15 ID during device setup, unless you are upgrading the device and have previously chosen not to enable iCloud. You can disable iCloud in Settings. When iCloud is 16 enabled, your content will be automatically sent to and stored by Apple, so you can later access that content or have content wirelessly pushed to your other iCloud- 17 enabled devices or computers. ¶ 18 CAC, Ex. 1 at 1 (emphasis added). This language appears in a September 16, 2015 version of the 19 iCloud Agreement and a September 17, 2018 version of the iCloud Agreement. CAC ¶ 23; CAC, 20 Exs. 1-2. 21 Named Plaintiffs Andrea M. Williams and James Stewart bring the suit on behalf of a 22 putative class of United States iCloud subscribers (excluding Apple, its employees, and its 23 directors) who during the Class Period from August 20, 2015 to the present paid for an Apple 24 iCloud subscription (collectively, “Plaintiffs”). CAC ¶¶ 11-12, 38. Williams is a resident and 25 citizen of Florida who “subscribed to Apple’s iCloud service, paid money to Apple for her iCloud 26 subscription, and used iCloud to store her data on the cloud.” Id. ¶ 11. Stewart is a resident and 27 citizen of California who “subscribed to Apple’s iCloud service, paid money to Apple for his 1 iCloud subscription, and used iCloud to store his data on the cloud.” Id. ¶ 12. The CAC does not 2 allege the dates that Williams and Stewart entered into the iCloud Agreement with Apple. Id. 3 ¶¶ 11-12. Rather, the CAC only alleges that Williams and Stewart agreed to the iCloud 4 Agreement sometime “[d]uring the Class Period” from August 20, 2015 to the present. Id. 5 The CAC alleges that Williams and Stewart were not informed by Apple that his or her 6 data was being stored on “non-Apple remote servers and facilities” despite alleged assurances to 7 the contrary. Id. ¶¶ 11-12. Specifically, Plaintiffs allege that they “bargained for, agreed, and paid 8 to have Apple—an entity they trusted—store their data.”1 Id. ¶ 32. According to the CAC, 9 however, Apple’s representations were false and “Apple lacked the facilities needed to readily 10 provide the cloud storage space being sold to class members through iCloud.” Id. ¶ 27. “Unable 11 to provide the cloud storage space . . . , Apple breached its iCloud agreement with its subscribers 12 and had these users’ data stored not by Apple on Apple facilities, but instead turned the users’ 13 digital files to other entities, like Amazon and Microsoft[,] for them to store on their facilities.” 14 Id. ¶ 28. 15 The CAC alleges that “[h]ad Apple disclosed that, contrary to its contractual 16 representation, Apple was not the provider of the cloud storage,” putative class members “would 17 not have subscribed to Apple’s iCloud service or would have not agreed to pay as much as [they] 18 did for the service.” Id. ¶¶ 11-12. The CAC claims that other companies, such as Microsoft and 19 Google, offer cheaper cloud storage services than Apple and that Apple’s “price premium” harmed 20 putative class members who would have otherwise utilized these cheaper cloud storage 21 alternatives. Id. ¶¶ 34-37. 22 B. Procedural History 23 On August 12, 2019, Plaintiffs filed a class action complaint against Apple on behalf of a 24 25 1 Elsewhere, however, the CAC contradicts Plaintiffs’ allegation that they “bargained for” this 26 specific provision. Specifically, the iCloud Agreements that Plaintiffs attached to the CAC are simple form contracts that could not be modified and merely allowed Plaintiffs to click an 27 “AGREE” button. CAC, Ex. 1 at 1; CAC, Ex. 2 at 1; ECF No. 19 at 23 (“Opp.”). Nowhere do the CAC or the iCloud Agreements allege or establish that the iCloud Agreements could be modified. 1 putative class of United States iCloud subscribers (excluding Apple, its employees, and its 2 directors) who during the Class Period from August 20, 2015 to the present paid for an Apple 3 iCloud subscription. CAC ¶¶ 11-12, 38. Plaintiffs attached three exhibits to their CAC: a 4 September 16, 2015 version of the iCloud Agreement, a September 17, 2018 version of the iCloud 5 Agreement, and a version of the iCloud Agreement for subscribers in China. CAC, Exs. 1-3. 6 The CAC alleges three causes of action against Apple: (1) breach of contract, (2) violations 7 of California’s False Advertising Law (“FAL”); and (3) violations of California’s Unfair 8 Competition Law (“UCL”). Id. ¶¶ 45-66. Plaintiffs allege that Apple agreed to be the “provider 9 of the [iCloud] Service” and to store putative class members’ content on Apple’s servers. Id. 10 ¶¶ 46-47. According to Plaintiffs, however, Apple breached this promise because “storage was 11 provided by non-Apple third parties with whom neither [Named] Plaintiffs nor class members had 12 bargained.” Id. ¶¶ 47-49. Plaintiffs also ground their FAL and UCL claims on the allegation that 13 Apple’s representation that “Apple was the provider of the iCloud cloud storage service and that 14 class members’ data would be stored on the cloud by Apple were and are false and misleading.” 15 Id. ¶¶ 56, 63-65. In addition to monetary damages, Plaintiffs request injunctive relief. Id. ¶¶ 60, 16 66. Plaintiffs, however, do not allege whether they are currently paying for iCloud storage. 17 On October 4, 2019, Apple filed a motion to dismiss the CAC. ECF No. 15 (“Mot.”). On 18 October 18, 2019, Plaintiffs filed an opposition. ECF No. 19 (“Opp.”). On October 25, 2019, 19 Apple filed a reply. ECF No. 22 (“Reply”). 20 II. LEGAL STANDARD 21 A. Motion to Dismiss Under Rule 12(b)(1) 22 A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) tests whether the 23 court has subject matter jurisdiction. Although lack of “statutory standing” requires dismissal for 24 failure to state a claim under Rule 12(b)(6), lack of Article III standing requires dismissal for want 25 of subject matter jurisdiction under Rule 12(b)(1). See Nw. Requirements Utilities v. F.E.R.C., 26 798 F.3d 796, 808 (9th Cir. 2015) (“Unlike Article III standing, however, ‘statutory standing’ does 27 not implicate our subject-matter jurisdiction.” (citing Lexmark Int’l, Inc. v. Static Control 1 Components, Inc., 572 U.S. 118, 128 n.4 (2014)); Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th 2 Cir. 2011). A Rule 12(b)(1) jurisdictional attack may be factual or facial. Safe Air for Everyone v. 3 Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). 4 “[I]n a factual attack, the challenger disputes the truth of the allegations that, by 5 themselves, would otherwise invoke federal jurisdiction.” Id. In resolving such an attack, unlike 6 with a motion to dismiss under Rule 12(b)(6), a court “may review evidence beyond the complaint 7 without converting the motion to dismiss into a motion for summary judgment.” Id. Moreover, 8 the court “need not presume the truthfulness of the plaintiff’s allegations.” Id. Once the defendant 9 has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the plaintiff bears 10 the burden of establishing the court’s jurisdiction. See Chandler v. State Farm Mut. Auto Ins. Co., 11 598 F.3d 1115, 1122 (9th Cir. 2010). 12 “In a facial attack,” on the other hand, “the challenger asserts that the allegations contained 13 in a complaint are insufficient on their face to invoke federal jurisdiction.” Safe Air for Everyone, 14 373 F.3d at 1039. The court “resolves a facial attack as it would a motion to dismiss under Rule 15 12(b)(6): Accepting the plaintiff’s allegations as true and drawing all reasonable inferences in the 16 plaintiff’s favor, the court determines whether the allegations are sufficient as a legal matter to 17 invoke the court’s jurisdiction.” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). 18 B. Motion to Dismiss Under Rule 12(b)(6) 19 Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a 20 short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint 21 that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 22 12(b)(6). The United States Supreme Court has held that Rule 8(a) requires a plaintiff to plead 23 “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. 24 Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads 25 factual content that allows the court to draw the reasonable inference that the defendant is liable 26 for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility 27 standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a 1 defendant has acted unlawfully.” Id. (internal quotation marks omitted). For purposes of ruling 2 on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and 3 construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. 4 Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The Court, however, need not 5 “assume the truth of legal conclusions merely because they are cast in the form of factual 6 allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (internal 7 quotation marks omitted). Additionally, mere “conclusory allegations of law and unwarranted 8 inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 9 (9th Cir. 2004). 10 C. Motion to Dismiss Under Rule 9(b) 11 Claims sounding in fraud are subject to the heightened pleading requirements of Federal 12 Rule of Civil Procedure 9(b). Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001). 13 Under the federal rules, a plaintiff alleging fraud “must state with particularity the circumstances 14 constituting fraud.” Fed. R. Civ. P. 9(b); Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 15 2009). To satisfy this heightened standard, the allegations must be “specific enough to give 16 defendants notice of the particular misconduct which is alleged to constitute the fraud charged so 17 that they can defend against the charge and not just deny that they have done anything wrong.” 18 Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). Thus, claims sounding in fraud must 19 allege “an account of the time, place, and specific content of the false representations as well as 20 the identities of the parties to the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 21 (9th Cir. 2007) (per curiam) (internal quotations marks omitted). In other words, “[a]verments of 22 fraud must be accompanied by ‘the who, what, when, where, and how’ of the misconduct 23 charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (citation omitted). 24 The plaintiff must also set forth “what is false or misleading about a statement, and why it is 25 false.” Ebeid ex rel. U.S. v. Lungwitz, 616 F.3d 993, 998 (9th Cir. 2010) (internal quotation marks 26 omitted). 27 “When an entire complaint . . . is grounded in fraud and its allegations fail to satisfy the 1 heightened pleading requirements of Rule 9(b), a district court may dismiss the complaint . . . .” 2 Vess, 317 F.3d at 1107. A motion to dismiss a complaint “under Rule 9(b) for failure to plead 3 with particularity is the functional equivalent of a motion to dismiss under Rule 12(b)(6) for 4 failure to state a claim.” Id. 5 D. Leave to Amend 6 If a court determines that a complaint should be dismissed, it must then decide whether to 7 grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend 8 “shall be freely given when justice so requires,” bearing in mind “the underlying purpose of Rule 9 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” Lopez v. 10 Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks 11 omitted). When dismissing a complaint for failure to state a claim, “a district court should grant 12 leave to amend even if no request to amend the pleading was made, unless it determines that the 13 pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal 14 quotation marks omitted). 15 Accordingly, leave to amend generally shall be denied only if allowing amendment would 16 unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has 17 acted in bad faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008). At 18 the same time, a court is justified in denying leave to amend when a plaintiff “repeated[ly] fail[s] 19 to cure deficiencies by amendments previously allowed.” See Carvalho v. Equifax Info. Servs., 20 LLC, 629 F.3d 876, 892 (9th Cir. 2010). Indeed, a “district court’s discretion to deny leave to 21 amend is particularly broad where plaintiff has previously amended the complaint.” Cafasso, U.S. 22 ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1058 (9th Cir. 2011) (quotation marks 23 omitted). 24 III. DISCUSSION 25 Plaintiff’s Class Action Complaint (“CAC”) alleges three causes of action against Apple: 26 (1) breach of contract, (2) violations of California’s False Advertising Law (“FAL”); and 27 (3) violations of California’s Unfair Competition Law (“UCL”). Id. ¶¶ 45-66. Apple moves to 1 dismiss all three of Plaintiffs’ causes of action. Apple contends that the CAC must be dismissed 2 because (1) Plaintiffs lack Article III standing; (2) Plaintiffs fail to adequately plead a breach of 3 contract claim under California law; and (3) Plaintiffs fail to adequately plead FAL and UCL 4 claims. Because the Court must first address jurisdictional concerns, the Court begins its analysis 5 with Apple’s argument that Plaintiffs lack Article III standing. Friery v. Los Angeles Unified Sch. 6 Dist., 448 F.3d 1146, 1148 (9th Cir. 2006) (“As standing implicates Article III limitations on our 7 power to decide a case, we must address it before proceeding to the merits.”). The Court then 8 turns to Plaintiffs’ breach of contract claim before concluding with the FAL and UCL claims. 9 A. Article III Standing 10 Apple first argues that Plaintiffs lack Article III standing because they have not alleged 11 anything beyond a merely speculative injury. See Mot. at 8-11. “[A] suit brought by a plaintiff 12 without Article III standing is not a ‘case or controversy,’ and an Article III federal court therefore 13 lacks subject matter jurisdiction over the suit.” Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th 14 Cir. 2004). “[T]he irreducible constitutional minimum of [Article III] standing contains three 15 elements:” (1) an injury in fact (2) that is fairly traceable to the challenged conduct of the 16 defendant, and (3) that is likely to be redressed by a favorable judicial decision. Lujan v. 17 Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). “The party invoking federal jurisdiction 18 bears the burden of establishing” Article III standing. Id. at 561. “At the pleading stage, general 19 factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to 20 dismiss we presume that general allegations embrace those specific facts that are necessary to 21 support the claim.” Id. (quotation marks and internal alterations omitted). “In a class action, 22 standing is satisfied if at least one named plaintiff meets the requirements.” Bates v. United 23 Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007) (citation omitted). 24 Apple’s argument is best construed as a facial attack whereby “the allegations contained in 25 a complaint are insufficient on their face to invoke federal jurisdiction.” Safe Air for Everyone, 26 373 F.3d at 1039. A court “resolves a facial attack as it would a motion to dismiss under Rule 27 12(b)(6): Accepting the plaintiff’s allegations as true and drawing all reasonable inferences in the 1 plaintiff's favor, the court determines whether the allegations are sufficient as a legal matter to 2 invoke the court’s jurisdiction.” Leite, 749 F.3d at 1121. 3 In terms of substance, Apple argues that Plaintiffs have not adequately alleged an injury in 4 fact to recover either monetary damages or to pursue injunctive relief. See Mot. at 8-11. The 5 Court begins its analysis with respect to Article III standing for monetary damages before 6 addressing Article III standing for injunctive relief. 7 1. Article III for Monetary Damages 8 “To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a 9 legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not 10 conjectural or hypothetical.’” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016), as revised 11 (May 24, 2016) (quoting Lujan, 504 U.S. at 560). “For an injury to be ‘particularized,’ it must 12 affect the plaintiff in a personal and individual way.” Id. (quotation marks omitted). Additionally, 13 “[a]n injury in fact must also be ‘concrete’ . . . that is, it must actually exist.” Id. 14 Apple’s argument that Plaintiffs have not established an injury in fact primarily relies on In 15 re LinkedIn User Privacy Litig., 932 F. Supp. 2d 1089 (N.D. Cal. 2013), where LinkedIn users 16 brought a putative class action against LinkedIn based on allegations that LinkedIn failed to 17 protect users’ passwords and information despite promises and assurances to do so. Id. at 1091. 18 The plaintiffs argued that they had standing to sue because they did not receive the full benefit of 19 their bargain for their paid premium LinkedIn memberships. Id. at 1093. The district court 20 disagreed and held that the plaintiffs had not adequately alleged facts establishing Article III 21 standing. 22 First, the district court concluded that plaintiffs lacked standing because the Plaintiffs paid 23 consideration “not for a particular level of security, but actually for the advanced networking tools 24 and capabilities to facilitate enhanced usage of LinkedIn’s services.” Id. at 1093. Second, the 25 district court found that the plaintiffs did not have standing because they had not read and relied 26 on the alleged misrepresentation. Id. Third, the district court found that the plaintiffs had not 27 adequately alleged standing because the plaintiffs had not pleaded that their economic loss was 1 caused by LinkedIn’s failure to provide a certain level of security services. Id. at 1093-94. 2 Finally, the district court determined that though the LinkedIn plaintiffs “t[ook] issue with the way 3 in which LinkedIn performed the security services,” the plaintiffs had not alleged that any of their 4 information was actually compromised and therefore, they had not alleged an injury in fact. Id. at 5 1094. 6 Apple relies on these four factors to argue that Plaintiffs here also lack Article III standing. 7 Mot. at 7-11. The Court disagrees. First, as to whether Plaintiffs paid consideration for Apple to 8 store Plaintiffs’ data on Apple’s own servers, the Court notes that in the second round motion to 9 dismiss order in the same case, the In re LinkedIn court held that because the named plaintiff 10 “purchased her premium subscription in reliance on LinkedIn’s [contractual] misrepresentation 11 and would not have done so but for the misrepresentation,” the amended complaint’s allegations 12 were “sufficient to confer . . . standing under Article III.” In re LinkedIn User Privacy Litig., 2014 13 WL 1323713, at *4 (N.D. Cal. Mar. 28, 2014) (“In re LinkedIn II”). Those allegations are similar 14 to ones present in the instant case, and the same conclusion follows. 15 Specifically, the CAC alleges that Plaintiffs entered into the iCloud Agreement, paid for 16 iCloud storage, and that the iCloud Agreement contained a contractual representation that 17 Plaintiffs’ “content w[ould] be automatically sent to and stored by Apple.” CAC, Ex. 1 at 1. The 18 CAC also pleads that Apple breached the iCloud Agreement by “turn[ing] [Plaintiffs’] digital files 19 to other entities, like Amazon and Microsoft[,] for them to store on their facilities.” CAC ¶ 28. 20 This Court has previously recognized that such allegations are sufficient to confer standing. In re 21 Yahoo! Inc. Customer Data Sec. Breach Litig., 2017 WL 3727318, at *17 (N.D. Cal. Aug. 30, 22 2017) (“The Court finds that Neff’s allegations are sufficient to allege ‘benefit of the bargain’ 23 losses as a result of the Data Breaches, which courts in this district and elsewhere have found are 24 sufficient to allege an injury in fact for purposes of Article III standing.” (citing In re LinkedIn II, 25 2014 WL 1323713, at *6)). Therefore, the Court holds that the CAC sufficiently pleads that 26 Plaintiffs paid consideration for Apple to store Plaintiff’s data, and as such, Plaintiffs have Article 27 III standing. 1 Second, Apple argues that Plaintiffs lack Article III standing because the CAC does not 2 plead that Plaintiffs read or relied on the relevant contractual language. For FAL and UCL claims, 3 “courts have held that actual reliance is required to demonstrate causation for purposes of Article 4 III standing when the plaintiffs assert that their injury is the result of deceptive misrepresentations 5 or omissions.” Phillips v. Apple Inc., 2016 WL 1579693, at *6 (N.D. Cal. Apr. 19, 2016) 6 (collecting cases). The Court addresses whether the CAC adequately pleads reliance for Plaintiffs’ 7 FAL and UCL claims later in this Order. See infra Part III.C.2. 8 Apple does not clearly allege that reliance is required for Article III standing for Plaintiffs’ 9 breach of contract claim. Unlike FAL and UCL claims, “[r]eliance is not an element of a breach 10 of contract claim,” Rodman v. Safeway, 125 F. Supp. 3d 922, 933 n.9 (N.D. Cal. 2015). 11 Nonetheless, Apple’s reliance argument is subsumed in the next paragraph’s discussion of 12 causation. 13 Third, Apple contends that Plaintiffs’ “benefit of the bargain” economic loss was not 14 caused by Apple’s decision not to store Plaintiffs’ data on Apple’s own servers. This argument 15 largely overlaps with Apple’s other arguments regarding consideration, reliance, and damages, as 16 these arguments involve whether Plaintiffs suffered any harm and whether that harm is fairly 17 traceable to Apple’s alleged breach of the iCloud Agreement. Here, as discussed previously, the 18 CAC adequately alleges that Apple promised that Plaintiffs’ “content w[ould] be automatically 19 sent to and stored by Apple,” CAC, Ex. 1 at 1, but that Apple breached this provision by 20 “turn[ing] the users’ digital files to other entities, like Amazon and Microsoft[,] for [Amazon and 21 Microsoft] to store on their facilities.” CAC ¶ 28. At this stage, this is enough to plead Article III 22 standing. 23 Fourth, Apple argues that Plaintiffs lack standing because Plaintiffs must “allege 24 something more than overpaying . . . to plead Article III standing.” Mot. at 9 (quotation marks 25 omitted). The Court disagrees. Generally, where plaintiffs plead that they were economically 26 harmed because they did not receive the “benefit of the bargain,” plaintiffs have adequately 27 alleged Article III standing. In re Yahoo! Inc., 2017 WL 3727318, at *17 (“The Court finds that 1 Neff’s allegations are sufficient to allege ‘benefit of the bargain’ losses as a result of the Data 2 Breaches, which courts in this district and elsewhere have found are sufficient to allege an injury 3 in fact for purposes of Article III standing.” (citing In re LinkedIn II, 2014 WL 1323713, at *6)); 4 see also In re LinkedIn, 932 F. Supp. 2d at 1093 (“Economic harm based on the ‘benefit of the 5 bargain’ theory Plaintiff proffers has been recognized as a viable basis for standing.”). In this 6 way, Apple’s reliance on In re LinkedIn is misplaced, as that decision stands for the more limited 7 proposition that when plaintiffs do not allege that the product they received was actually of lesser 8 value or any different than what they bargained for, plaintiffs have not adequately pleaded an 9 injury in fact. See id. at 1094 (“This [current case] is not the case where consumers paid for a 10 product, and the product they received was different from the one as advertised on the product’s 11 packaging.”). 12 Here, Plaintiffs sufficiently allege that they overpaid for Apple iCloud. Plaintiffs allege 13 that Apple misrepresented who owned the physical servers used to store Plaintiffs’ information 14 and that “[h]ad Apple disclosed that, contrary to its contractual representation, Apple was not the 15 provider of the cloud storage,” putative class members “would not have subscribed to Apple’s 16 iCloud service or would have not agreed to pay as much as [they] did for the service.” CAC 17 ¶¶ 11-12. This is especially true, as the CAC asserts that other companies, such as Microsoft and 18 Google, offered cheaper cloud storage services than Apple and that Apple’s “price premium” 19 harmed putative class members who would have otherwise utilized these cheaper cloud storage 20 alternatives. Id. ¶¶ 34-37. In this way, the instant case closely mirrors Chavez v. Blue Sky Natural 21 Beverage Co., 340 Fed. App’x 359 (9th Cir. 2009). 22 In Chavez, the named plaintiff “brought [a] purported class action on behalf of himself and 23 others similarly situated, contending that, in contrast with appellees’ representations, Blue Sky 24 products are not manufactured or bottled in New Mexico.” Id. at 360. As a result, the named 25 plaintiff contended that the defendant was liable pursuant to the FAL, the UCL, and other 26 California consumer fraud and common law causes of action. Id. The named plaintiff alleged that 27 he “purchased Blue Sky soda instead of other brands based on representations that Blue Sky was a 1 New Mexico company,” but later learned that “Blue Sky is not, in fact, bottled or produced in 2 New Mexico, and, therefore, appellees misrepresented the origin and nature of their products.” Id. 3 at 361. “[M]ost importantly,” the named plaintiff “lost money as a result of appellees’ deception 4 in that he did not receive what he paid for” because he would not have paid the “full value . . . had 5 he known the truth about the geographic origin of the products.” Id. (quotation marks and internal 6 alterations omitted). The Ninth Circuit concluded that these allegations were enough to plead an 7 injury in fact and reversed the district court’s dismissal of the lawsuit. Id. 8 Chavez’s logic applies here with equal force. Just like in Chavez, where the defendant 9 allegedly misrepresented the origin and nature of its products, id. at 361, in the instant case, 10 Plaintiffs allege that Apple misrepresented the nature of Apple iCloud—namely that “users’ data 11 [was] stored not by Apple on Apple facilities, but instead turned the users’ digital files to other 12 entities, like Amazon and Microsoft[,] for them to store on their facilities.” CAC ¶ 28. Just like 13 the plaintiffs in Chavez, Plaintiffs in the instant case allege that “[h]ad Apple disclosed that, 14 contrary to its contractual representation, Apple was not the provider of the cloud storage,” 15 putative class members “would not have subscribed to Apple’s iCloud service or would have not 16 agreed to pay as much as [they] did for the service.” Id. ¶¶ 11-12. Therefore, this is the case 17 “where consumers paid for a product, and the product they received was different from the one as 18 advertised.” In re LinkedIn, 932 F. Supp. 2d at 1094. Thus, the Court rejects Apple’s fourth 19 Article III standing argument. 20 Accordingly, Plaintiffs have adequately alleged an injury in fact as to Plaintiffs’ breach of 21 contract claim. As a result, the Court DENIES Apple’s motion to dismiss Plaintiffs’ breach of 22 contract claim on the basis that Plaintiffs lack Article III standing for monetary damages. In Part 23 III.C.2 of this Order, the Court addresses Apple’s motion to dismiss Plaintiffs’ FAL and UCL 24 claims on the basis that Plaintiffs lack Article III standing for monetary damages. 25 2. Article III Standing for Injunctive Relief 26 The Court now addresses whether Plaintiffs possess Article III standing for injunctive 27 relief. To demonstrate constitutional standing for “injunctive relief, which is a prospective 1 remedy, the threat of injury must be ‘actual and imminent, not conjectural or hypothetical.’” 2 Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 966 (9th Cir. 2018) (quoting Summer v. Earth 3 Island Inst., 555 U.S. 488, 493 (2009)). “In other words, the ‘threatened injury must be certainly 4 impending to constitute injury in fact’ and ‘allegations of possible future injury are not sufficient.” 5 Id. (citing Clapper v. Amnesty Int’l USA, 568 U.S. 398, 409 (2013)). “Past wrongs, though 6 insufficient by themselves to grant standing, are ‘evidence bearing on whether there is a real and 7 immediate threat of repeated injury.’” Id. (quoting City of L.A. v. Lyons, 461 U.S. 95, 102 (1983)). 8 “Where standing is premised entirely on the threat of repeated injury, a plaintiff must show ‘a 9 sufficient likelihood that [s]he will again be wronged in a similar way.’” Id. (quoting Lyons, 461 10 U.S. at 111). 11 The Court agrees with Apple that Plaintiffs have failed to allege the “real and immediate 12 threat of repeated injury” necessary to demonstrate Article III standing to seek injunctive relief. 13 See Davidson, 889 F.3d at 966 (quoting Lyons, 461 U.S. at 102). The Ninth Circuit has clearly 14 stated that mere “allegations of possible future injury are not sufficient.” Id. at 967 (quoting 15 Clapper 568 U.S. at 409). Here, Plaintiffs do not allege that they are currently paying for iCloud 16 storage or that they actually intend or plan to purchase iCloud storage again in the future. 17 Plaintiffs respond that one paragraph in the CAC pleads an allegation “unambiguously 18 stated in the present tense,” and Plaintiffs argue that this allegation demonstrates they have 19 standing to pursue injunctive relief. Opp. at 5, 12 (citing CAC ¶ 60). Specifically, the CAC 20 alleges that “Apple continues to make the same false and misleading statements with respect to its 21 iCloud cloud storage service, such that, unless [Apple] is enjoined from doing so, Plaintiffs and 22 class members will continue to be harmed because they will not know who is storing their data on 23 the cloud.” CAC ¶ 60. 24 This allegation is insufficient to meet Plaintiffs’ burden to establish standing to pursue 25 injunctive relief. See Sciacca v. Apple, Inc., 362 F. Supp. 3d 787, 795 (N.D. Cal. 2019) (“Once 26 the defendant has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the 27 plaintiff bears the burden of establishing the Court's jurisdiction.” (citation omitted)). As the CAC 1 alleges elsewhere, “[o]wners of Apple devices are granted up to 5 GB of iCloud storage for free.” 2 CAC ¶ 20. Simply pleading that Plaintiffs are storing their data on Apple’s iCloud is not enough 3 to plead an injury in fact because Plaintiffs’ injury is not merely connected to storing data on the 4 iCloud but to overpaying for the paid version of iCloud storage. Id. ¶¶ 11-12, 34-37. Without 5 alleging that Plaintiffs are currently paid iCloud subscribers—as opposed to merely utilizing the 6 free five GB of iCloud storage, id. ¶ 20—Plaintiffs have not met their burden of establishing an 7 injury that is “certainly impending.” Davidson, 889 F.3d at 966. 8 As a result, the Court GRANTS Apple’s motion to dismiss Plaintiffs’ claims for injunctive 9 relief for lack of Article III standing. Because amendment would not be futile, cause undue delay, 10 or unduly prejudice Apple, and because Plaintiffs have not acted in bad faith, the Court GRANTS 11 Plaintiffs leave to amend. Leadsinger, 512 F.3d at 532. 12 B. Breach of Contract Claim 13 Apple’s second set of arguments pertain to Plaintiffs’ breach of contract claim. Mot. at 11- 14 16. Under California law, the elements for a claim for breach of contract are “(1) the existence of 15 the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and 16 (4) the resulting damages to the plaintiff.” eOnline Glob., Inc. v. Google LLC, 387 F. Supp. 3d 17 980, 985 (N.D. Cal. 2019) (quoting Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 811, 821, 18 (2011) (citation omitted)). Apple contends that Plaintiffs have failed to sufficiently allege the first, 19 third, and fourth elements for a breach of contract claim. As discussed below, the Court disagrees. 20 1. The CAC Adequately Alleges the Existence of a Contract 21 Apple argues that Plaintiffs have failed “to allege sufficient information to identify the 22 actual contract at issue, including the approximate date of the contract.” Mot. at 12. To be sure, 23 the CAC does not allege when Named Plaintiffs Williams and Stewart entered into the iCloud 24 Agreement with Apple. CAC ¶¶ 11-12. Rather, the CAC only pleads that Williams and Stewart 25 agreed to the iCloud Agreement sometime during the nearly five-year Class Period from August 26 20, 2015 to the present. Id. Additionally, perhaps because the CAC does not allege when 27 Williams and Stewart entered into the iCloud Agreement with Apple, the CAC does not plead 1 which specific version of the iCloud Agreement Williams and Stewart signed. Id. Instead, the 2 CAC incorporates language from a September 16, 2015 version of the iCloud Agreement and a 3 September 17, 2018 version of the iCloud Agreement. Id. ¶ 23; Id., Exs. 1-2. The CAC, however, 4 does not allege that these particular versions of the iCloud Agreement were the ones that Williams 5 or Stewart signed. Id. ¶¶ 11-12, 23. 6 Nonetheless, though the CAC fails to identify the specific version of the iCloud Agreement 7 to which Williams and Stewart agreed and when Williams and Stewart signed the iCloud 8 Agreement, this is not required to plead the existence of a contract under Rule 8. “Identifying the 9 specific provision of the contract allegedly breached by the defendant does not require the plaintiff 10 to attach the contract or recite the contract’s terms verbatim. Rather, the plaintiff must identify 11 with specificity the contractual obligations allegedly breached by the defendant.” Kaar v. Wells 12 Fargo Bank, N.A., 2016 WL 3068396, at *1 (N.D. Cal. June 1, 2016) (quotation marks omitted). 13 Here, Plaintiffs have identified the contractual language that was allegedly breached, and the CAC 14 pleads that this language was identical across all versions of the iCloud Agreement during the 15 Class Period. CAC ¶ 23. These allegations are sufficient to plead the existence of a contract. 16 Insofar as Apple argues that Plaintiffs’ failure to plead when Williams and Stewart entered 17 into the iCloud Agreement prejudices Apple because it prevents Apple from raises a statute of 18 limitations defense, Mot. at 12 n.3, this argument fails on the particular facts of the instant case. 19 Specifically, Plaintiffs filed the CAC on August 12, 2019 and allege a Class Period beginning 20 August 20, 2015. Under California law, the statute of limitations for breach of contract is four 21 years. Cal. Civ. Proc. Code § 337(1). Therefore, any breach of contract claim that accrued on or 22 after August 12, 2015 (and by extension, any breach of contract claim during the Class Period) is 23 timely. Accordingly, Apple’s concern about a statute of limitations defense for the breach of 24 contract claim is unfounded. 25 The Court therefore DENIES Apple’s motion to dismiss Plaintiffs’ breach of contract 26 claim on the basis that Plaintiffs did not allege the existence of a contract. 27 2. The CAC Adequately Alleges Apple’s Breach of the iCloud Agreement 1 Apple next argues that Plaintiffs’ breach of contract claim should be dismissed because the 2 CAC does not sufficiently plead that Apple breached the iCloud Agreement. Apple contends that 3 the representation that “Apple is the provider of the [iCloud] Service” and that Plaintiffs’ “content 4 will be automatically sent to and stored by Apple” can only be interpreted to mean that “Apple 5 made iCloud available to Plaintiffs,” and Apple contends that it fulfilled these duties. Mot. at 14. 6 As a result, according to Apple, there was no breach of the iCloud Agreement. Plaintiffs respond 7 that the plain reading of this contractual provision compels the conclusion that Apple promised to 8 store Plaintiffs’ files and data on Apple’s own servers. Opp. at 15. 9 Under California law, a contract “must be so interpreted as to give effect to the mutual 10 intention of the parties as it existed at the time of contracting, so far as the same is ascertainable 11 and lawful.” Cal. Civ. Code § 1636. “Where contract language is clear and explicit and does not 12 lead to absurd results, we ascertain intent from the written terms and go no further.” Ticor Title 13 Ins. Co. v. Employer’s Ins. of Wausau, 40 Cal. App. 4th 1699, 1707 (1995). In such situations, 14 “[a] court may resolve contractual claims on a motion to dismiss” because “the terms of the 15 contract are unambiguous.” Alta Devices, Inc. v. LG Elecs., Inc., 343 F. Supp. 3d 868, 878-79 16 (N.D. Cal. 2018) (citing Bedrosian v. Tenet Healthcare Corp., 208 F.3d 220 (9th Cir. 2000)). 17 However, what the parties intended by an ambiguous contract is a factual determination, 18 United States v. Plummer, 941 F.2d 799, 803 (9th Cir. 1991), and thus “[w]here the language 19 ‘leaves doubt as to the parties’ intent,’ the motion to dismiss must be denied.” Monaco v. Bear 20 Stearns Residential Mortg. Corp., 554 F. Supp. 2d 1034, 1040 (C.D. Cal. 2008) (quoting Consul 21 Ltd. v. Solide Enteres., Inc., 802 F.2d 1143, 1149 (9th Cir. 1986)). “A contract provision will be 22 considered ambiguous when it is capable of two or more reasonable interpretations.” Id. (citation 23 omitted); see also Tanadgusix Corp. v. Huber, 404 F.3d 1201, 1205 (9th Cir. 2005) (“A contract is 24 ambiguous if reasonable people could find its terms susceptible to more than one interpretation.”); 25 In re iPhone Application Litig., 844 F. Supp. 2d 1040, 1076 (N.D. Cal. 2012) (“However, ‘[i]f a 26 contract is capable of two different reasonable interpretations, the contract is ambiguous.’” 27 (quoting Oceanside 84, Ltd. v. Fid. Fed. Bank, 56 Cal. App. 4th 1441, 1448 (1997))). 1 Here, the Court holds that Apple and Plaintiffs have proffered reasonable interpretations of 2 the disputed contractual provision. Again, the relevant contractual language provides as follows: 3 Apple is the provider of the Service, which permits you to utilize certain Internet services, including storing your personal content (such as contacts, calendars, photos, 4 notes, reminders, documents, app data, and iCloud email) and making it accessible on your compatible devices and computers, and certain location based services, only 5 under the terms and conditions set forth in this Agreement. iCloud is automatically enabled when you are running devices on iOS 9 or later and sign in with your Apple 6 ID during device setup, unless you are upgrading the device and have previously chosen not to enable iCloud. You can disable iCloud in Settings. When iCloud is 7 enabled, your content will be automatically sent to and stored by Apple, so you can later access that content or have content wirelessly pushed to your other iCloud- 8 enabled devices or computers. ¶ 9 CAC, Ex. 1 at 1 (emphasis added); CAC ¶ 23. 10 Apple reads this language to mean only that “Apple has taken charge of subscribers’ data 11 so that [subscribers’ data] can later be accessed or pushed to subscribers’ devices.” Mot. at 14. 12 Given this interpretation, Apple contends that it did not breach any duty to store Plaintiffs’ data on 13 Apple’s own servers. The Court agrees that the contractual language is certainly susceptible to 14 Apple’s interpretation. 15 At the same time, Plaintiffs argue that the “plain dictionary meaning” of “stored” is “to 16 provide storage room for: HOLD,” and that therefore, Apple promised that it would be the entity 17 providing storage room for users’ data on its own servers. Opp. at 15. The Court agrees that a 18 reasonable person could interpret this language to mean that Apple itself would be the entity 19 storing users’ data on Apple’s servers. Therefore, under Plaintiffs’ interpretation, Apple breached 20 the iCloud Agreement by “turn[ing] the users’ digital files to other entities, like Amazon and 21 Microsoft[,] for [Amazon and Microsoft] to store on their facilities.” CAC ¶ 28. 22 Given the fact that Apple and Plaintiffs both provide reasonable interpretations, the 23 disputed contractual language is ambiguous, and “this ambiguity raises a question of fact as to the 24 parties’ intent.” Microsoft Corp. v. Hon Hai Precision Indus. Co., 2019 WL 3859035, at *6 (N.D. 25 Cal. Aug. 16, 2019) (citing Tanadgusix Corp., 404 F.3d at 1205). “The parties may well argue at 26 a later stage of litigation that the intent of the parties or properly admitted extrinsic evidence 27 supports their respective interpretations of the contract,” but “[s]uch factually based arguments are 1 appropriate . . . at a later stage of litigation, not on the pleadings.” Id. (quotation marks omitted). 2 At this stage of the proceedings, “[w]here the language leaves doubt as to the parties’ intent, the 3 motion to dismiss must be denied.” Monaco, 554 F. Supp. 2d at 1040 (quotation marks omitted). 4 Accordingly, because Plaintiffs sufficiently plead a breach of the iCloud Agreement, the 5 Court DENIES Apple’s motion to dismiss on this ground. 6 3. The CAC Adequately Alleges Resulting Damages 7 In Apple’s final argument regarding Plaintiffs’ breach of contract claim, Apple contends 8 that the CAC does not adequately allege resulting damages, the fourth element of a breach of 9 contract claim. Apple’s motion to dismiss focuses primarily on the argument that Plaintiffs’ 10 allegations are nothing more than “a request for restitution,” which “simply is not a measure of 11 contract damages.” Mot. at 15-16. 12 The CAC, however, does not make a claim for restitution, but rather seeks compensatory 13 damages for Apple’s alleged breach of the iCloud Agreement. In particular, the CAC alleges that 14 “[h]ad Apple disclosed that, contrary to its contractual representation, Apple was not the provider 15 of the cloud storage,” putative class members “would not have subscribed to Apple’s iCloud 16 service or would have not agreed to pay as much as [they] did for the service.” CAC ¶¶ 11-12. 17 The CAC pleads that other companies, such as Microsoft and Google, offer cheaper cloud storage 18 services than Apple and that Apple’s “price premium” harmed putative class members who would 19 have otherwise utilized these cheaper cloud storage alternatives. Id. ¶¶ 34-37. At the motion to 20 dismiss stage and pursuant to Rule 8’s pleading standards, these allegations are sufficient to allege 21 resulting damages. 22 Accordingly, the Court DENIES Apple’s motion to dismiss Plaintiffs’ breach of contract 23 claim on the basis that Plaintiffs did not sufficiently allege resulting damages. 24 C. FAL and UCL Claims 25 Apple’s final tranche of arguments concern Plaintiffs’ FAL and UCL claims. Plaintiffs 26 allege that Apple’s misrepresentations make Apple liable under the FAL and under the unlawful, 27 unfair, and fraudulent prongs of the UCL. As an initial matter, when “‘plaintiffs’ unfair prong 1 claim[] overlap[s] entirely with their claims of fraud,’ the plaintiffs’ unfair prong claim cannot 2 survive’” if the fraudulent prong claim fails. Ahern, 411 F. Supp. 3d at 561 (quoting In re 3 Actimmune Mktg. Litig., 2009 WL 3740648, at *14 (N.D. Cal. Nov. 6, 2009), aff’d, 464 Fed. 4 App’x 651 (9th Cir. 2011)). Here, Plaintiffs’ UCL unfair prong claim is premised on Apple’s 5 allegedly fraudulent misrepresentations. See CAC ¶ 65 (alleging that “Apple’s misrepresentation 6 as to which entity is providing the cloud storage of Plaintiffs’ and class members’ data” 7 “independently amounts to an unfair business practice within the meaning of the UCL”). As such, 8 Plaintiffs’ unfair prong claim overlaps entirely with Plaintiffs’ fraud claim, and Plaintiffs’ UCL 9 unfair prong claim fails if Plaintiffs’ UCL fraudulent prong claim fails. Ahern, 411 F. Supp. 3d at 10 561. 11 Apple contends that Plaintiffs’ FAL and UCL claims must be dismissed because (1) the 12 CAC fails to satisfy Rule 9(b)’s heightened pleading standards, (2) the CAC does not adequately 13 plead reliance, (3) Plaintiffs’ FAL and UCL claims are duplicative of an adequate remedy at law, 14 and (4) the CAC does not allege an actionable misrepresentation. Mot. at 16-21. The Court 15 agrees with Apple that the CAC does not meet Rule 9(b)’s requirements as to Plaintiffs’ FAL 16 claim and that the CAC does not adequately plead reliance as to Plaintiffs’ FAL and UCL claims. 17 Therefore, the Court does not reach Apple’s remaining arguments. 18 1. The CAC Fails to Satisfy Rule 9(b)’s Heightened Pleading Standards for Plaintiffs’ FAL Claim 19 As an initial matter, Federal Rule of Civil Procedure 9(b)’s heightened pleading standard 20 applies to Plaintiffs’ FAL and UCL claims because these claims are based on Apple’s allegedly 21 fraudulent course of conduct—namely, Apple’s alleged misrepresentations that Apple stored 22 users’ content when allegedly, Apple “instead turned the users’ digital files to other entities, like 23 Amazon and Microsoft[,] for them to store on their facilities.” CAC ¶ 28; see Kearns, 567 F.3d at 24 1125 (“[W]e have specifically ruled that Rule 9(b)’s heightened pleading standards apply to 25 claims for violations of the . . . UCL.”); Brazil v. Dole Food Co., Inc., 935 F. Supp. 2d 947, 963 26 (N.D. Cal. 2013) (applying Rule 9(b)’s heightened pleading standard to FAL claims for 27 1 misleading, deceptive, and untrue advertising); see also Vess, 317 F.3d at 1106 (stating that when 2 a plaintiff “allege[s] a unified course of fraudulent conduct and rel[ies] entirely on that course of 3 conduct as the basis of a claim . . . the claim is said to be ‘grounded in fraud’ . . . and the pleading 4 of that claim as a whole must satisfy the particularity requirement of Rule 9(b)”). When FAL and 5 UCL claims are premised on misleading representations, Rule 9(b) requires a plaintiff to allege 6 “the particular circumstances surrounding [the] representations” at issue. Kearns, 567 F.3d at 7 1126. In other words, Rule 9(b) requires that plaintiffs plead with specificity “the who, what, 8 when, where, and how of the misconduct charged.” Vess, 317 F.3d at1106 (quotation marks 9 omitted). 10 In the instant case, the CAC does not allege when Williams and Stewart entered into the 11 iCloud Agreement with Apple. Id. ¶¶ 11-12. Rather, the CAC only pleads that Williams and 12 Stewart agreed to the iCloud Agreement sometime during the nearly five-year Class Period from 13 August 20, 2015 to the present. Id. For the reasons stated below, the CAC’s failure to plead when 14 Williams and Stewart entered into the iCloud Agreement fails to satisfy Rule 9(b)’s heightened 15 pleading standard for Plaintiffs’ FAL claim. 16 “[T]he ‘when’ of Rule 9(b) is satisfied when a plaintiff pleads that he has purchased the 17 product at issue during a specified class period . . . as long as there is no suggestion that a label 18 changed or varied during that time.” Werdebaugh v. Blue Diamond Growers, 2013 WL 5487236, 19 at *14 (N.D. Cal. Oct. 2, 2013) (collecting cases). Nonetheless, courts in this district have also 20 held that when “some or all of plaintiff’s purchases may fall outside the statute of limitations,” it is 21 “appropriate at this [motion to dismiss] stage to ensure that plaintiff at minimum has pled that his 22 claims are timely.” Beasley v. Conagra Brands, Inc., 374 F. Supp. 3d 869, 882-83 (N.D. Cal. 23 2019). The CAC “must plead when [Named Plaintiffs] [saw the alleged misrepresentation] with 24 greater specificity in order that the Court may fairly evaluate the question of timeliness.” Beasley 25 v. Lucky Stores, Inc., 400 F. Supp. 3d 942, 956 (N.D. Cal. 2019) (quoting Beasley, 374 F. Supp. 3d 26 at 882) 27 Here, the issue of timeliness does not apply to Plaintiffs’ UCL claims. Plaintiffs filed the 1 CAC on August 12, 2019 for a Class Period beginning on August 20, 2015, and the statute of 2 limitations for UCL claims is four years. See Cal. Bus & Prof. Code § 17208 (four-year statute of 3 limitations for UCL). Therefore, UCL claims that accrued after August 12, 2015 (and by 4 extension, throughout the Class Period beginning on August 20, 2015) are timely. Accordingly, 5 the Court DENIES Apple’s motion to dismiss Plaintiffs’ UCL claims on Rule 9(b) grounds. 6 Timeliness, however, is problematic for Plaintiffs’ FAL claim. The statute of limitations 7 for FAL claims is three years, Cal. Code Civ Proc. § 338(a) (three-year statute of limitations for 8 FAL claims), and therefore, any claims predicated on violations of the FAL that accrued prior to 9 August 12, 2016 are time-barred. The CAC, however, includes no allegations as to when 10 Williams or Stewart viewed the alleged misrepresentations; whether their claims accrued before or 11 after August 12, 2016; or whether the statute of limitations was tolled. 12 Thus, because Plaintiffs’ FAL claim may be time-barred as pleaded, Plaintiffs fail to 13 satisfy Rule 9(b) as to their FAL claim. Plaintiffs must plead the FAL claim “with greater 14 specificity in order that the Court may fairly evaluate the question of timeliness.” Beasley, 374 F. 15 Supp. 3d at 882. As it stands, the CAC’s allegations “are insufficient to allow defendant to 16 ‘defend against the charge and not just deny that they have done anything wrong.’” Id. (quoting 17 Semegen, 780 F.2d at 731). 18 As a result, the Court GRANTS Apple’s motion to dismiss Plaintiffs’ FAL claim because 19 Plaintiffs’ FAL claim fails to satisfy Rule 9(b)’s heightened pleading standard. However, the 20 Court GRANTS Plaintiffs leave to amend because doing so would not be futile, cause undue 21 delay, or unduly prejudice Apple, and Plaintiffs have not acted in bad faith. Leadsinger, 512 F.3d 22 at 532; see also Ahern, 411 F. Supp. 3d at 570 (requiring any amended complaint to state facts 23 supporting allegations of tolling after defendant demonstrated, on a motion to dismiss, that the 24 claim would be untimely unless the statute of limitations was tolled). 25 2. The CAC Does Not Adequately Plead Reliance for Plaintiffs’ FAL and UCL Claims 26 The Court finally addresses Apple’s argument that Plaintiffs do not sufficiently plead 27 1 reliance as necessary to establish FAL and UCL claims. “Plaintiffs alleging claims under the FAL 2 and UCL are required to plead and prove actual reliance on the misrepresentations or omissions at 3 issue.” Great Pac. Sec. v. Barclays Capital, Inc., 743 Fed. App’x 780, 783 (9th Cir. 2018) (citing 4 Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 326-27 (2011)). This is true of all of Plaintiffs’ 5 UCL claims, regardless of whether they are brought under the unfair, unlawful, or fraudulent 6 prong. Indeed, “California courts have held that when the ‘unfair competition’ underlying a 7 plaintiff's UCL claim consists of a defendant's misrepresentation or omission, a plaintiff must have 8 actually relied on the misrepresentation or omission, and suffered economic injury as a result of 9 that reliance, to have standing to sue.” Backhaut v. Apple, 74 F. Supp. 3d 1033, 1047 (N.D. Cal. 10 2014) (citing In re Tobacco II, 46 Cal. 4th 298, 326 (2009)). “California courts have subsequently 11 extended the actual reliance requirement to claims brought under the UCL’s unlawful prong to the 12 extent the predicate unlawful conduct is based on misrepresentations,” and “the California 13 Supreme Court suggested that the actual reliance requirement applies whenever the underlying 14 misconduct in a UCL action is fraudulent conduct.” Id. at 1047-48 (citations omitted). 15 To establish actual reliance, the plaintiff must allege that “the defendant’s 16 misrepresentation or nondisclosure was an immediate cause of the plaintiff's injury-producing 17 conduct.” Tobacco II, 46 Cal. 4th at 326 (internal quotation marks omitted). “A plaintiff may 18 establish that the defendant’s misrepresentation is an immediate cause of the plaintiff's conduct by 19 showing that in its absence the plaintiff in all reasonable probability would not have engaged in 20 the injury-producing conduct.” Id. (internal quotation marks omitted). In other words, a plaintiff 21 may show actual reliance by alleging that “had the omitted information been disclosed one would 22 have been aware of it and behaved differently.” Mirkin v. Wasserman, 5 Cal 4th 1082, 1093 23 (1993); see also Daniel v. Ford Motor Co., 806 F.3d 1217, 1225 (9th Cir. 2015) (finding that 24 plaintiffs had sufficient evidence of reliance to survive summary judgment when plaintiffs offered 25 “a plausible method of disclosure and . . . that they would have been aware of information 26 disclosed using that method”). Although a plaintiff need not demonstrate that the defendant's 27 misrepresentations were “the sole or even the predominant or decisive factor influencing his 1 conduct,” the misrepresentations must have “played a substantial part” in the plaintiff's decision- 2 making. Tobacco II, 46 Cal. 4th at 326. 3 Indeed, “[t]o make the reliance showing, this Court has consistently held that plaintiffs in 4 misrepresentation cases must allege that they actually read the challenged representations.” 5 Perkins v. LinkedIn Corp., 53 F. Supp. 3d 1190, 1220 (N.D. Cal. 2014) (collecting cases); see also 6 Woods v. Google, Inc., 2017 WL 4310765, at *3 (N.D. Cal. Sept. 28, 2017) (“To prevail on his 7 UCL and FAL claims, [a plaintiff] must establish that he saw and relied on [a defendant’s 8 misrepresentations . . . .” (citing Perkins, 53 F. Supp. 3d at 1219)). Additionally, to adequately 9 plead reliance for alleged misrepresentations, Plaintiffs must satisfy Rule 9(b)’s heightened 10 pleading standard and allege facts with particularity. See Haskins v. Symantec Corp., 654 Fed. 11 App’x 338, 339 (9th Cir. 2016) (“Because Haskins’s complaint did not allege that she read and 12 relied on a specific misrepresentation by Symantec, she failed to plead her fraud claims with 13 particularity as required by Rule 9(b) of the Federal Rules of Civil Procedure.”). 14 Plaintiffs acknowledge that the CAC does not allege that Plaintiffs viewed Apple’s alleged 15 misrepresentations regarding iCloud storage, but that “[r]ead in context,” the CAC nonetheless 16 pleads reliance. Opp. at 4, 22-23. Plaintiffs proffer two arguments as to why the CAC sufficiently 17 alleges reliance even though the CAC does not plead that Plaintiffs saw or read the relevant 18 representations. 19 First, Plaintiffs make much of the fact that the CAC alleges that Plaintiffs bargained for 20 Apple to be the provider of iCloud storage and to be the entity that stored users’ data. CAC ¶ 32 21 (alleging that Plaintiffs “bargained for, agreed, and paid to have Apple . . . store their data”). This 22 argument fails. Elsewhere, the CAC contradicts Plaintiffs’ allegation that they “bargained for” 23 this specific provision. Specifically, the iCloud Agreements that Plaintiffs attached to the CAC 24 are simple form contracts that could not be modified and merely allowed Plaintiffs to click an 25 “AGREE” button. CAC, Ex. 1 at 1; CAC, Ex. 2 at 1; Opp. at 23. Nowhere do the CAC or the 26 iCloud Agreements allege or establish that the iCloud Agreements could be modified. As a result, 27 the Court holds that Plaintiffs’ allegation that they “bargained for” the provision in the iCloud 1 agreement containing the alleged misrepresentations does not adequately plead reliance with the 2 particularity required by Rule 9(b). 3 Second, Plaintiffs assert that they adequately plead reliance because they “affirmatively 4 clicked the ‘AGREE’ [button] signifying their review and assent to the contract terms,” including 5 Apple’s alleged misrepresentations regarding iCloud storage. This Court, however, has previously 6 rejected this precise argument. See In re iPhone Application Litig., 6 F. Supp. 3d 1004, 1025 7 (N.D. Cal. 2013) (“[T]he mere fact that Plaintiffs had to scroll through a screen and click on a box 8 stating that they agreed with the Apple Privacy Policy in July 2010 does not establish, standing 9 alone, that Plaintiffs actually read the alleged misrepresentations contained in that Privacy Policy, 10 let alone that these misrepresentations subsequently formed the basis for Plaintiffs’ 11 ‘understanding’ regarding Apple’s privacy practices.”); Perkins, 53 F. Supp. 3d at 1220 (“[T]he 12 fact that some of the alleged misrepresentations appeared on screens that all users had to click 13 through to register do not by themselves establish that any of the Plaintiffs actually read or relied 14 on the misrepresentations in the absence of allegations that Plaintiffs read these statements.”); In 15 re Yahoo! Inc. Customer Data Sec. Breach Litig., 2017 WL 3727318, at *28 (N.D. Cal. Aug. 30, 16 2017) (“Here, although all Plaintiffs had to click through Defendants’ Terms of Service in order to 17 create their accounts, . . . Plaintiffs do not allege that they ‘actually read’ Defendants’ Terms of 18 Service, let alone that Plaintiffs ‘actually read’ the separate Privacy Policy containing the alleged 19 misrepresentation at issue . . . . Thus, . . . Plaintiffs have not adequately alleged a UCL fraud 20 claim based on misrepresentations in Defendants’ Privacy Policy because Plaintiffs have not 21 adequately alleged that they ‘actually relied’ on Defendants’ misrepresentation contained within 22 Defendants’ Privacy Policy.”). 23 As a result, the CAC does not properly allege, in compliance with Rule 9(b), that Plaintiffs 24 read or relied upon Apple’s purported misrepresentations regarding iCloud storage. Therefore, the 25 Court GRANTS Apple’s motion to dismiss Plaintiffs’ FAL and UCL claims for failure to 26 adequately plead reliance. Furthermore, because “courts have held that actual reliance is required 27 to demonstrate causation for purposes of Article III standing when the plaintiffs assert that their 1 injury is the result of deceptive misrepresentations or omissions” under the FAL and UCL, the 2 Court also GRANTS Apple’s motion to dismiss Plaintiff’s FAL and UCL claims for lack of 3 Article III standing. See Phillips, 2016 WL 1579693, at *6. The Court, however, GRANTS 4 Plaintiffs leave to amend because doing so would not be futile, cause undue delay, or unduly 5 prejudice Apple, and Plaintiffs have not acted in bad faith. Leadsinger, 512 F.3d at 532. 6 IV. CONCLUSION 7 For the foregoing reasons, the Court GRANTS in part and DENIES in part Apple’s motion 8 to dismiss. Specifically, the Court GRANTS with leave to amend Apple’s motion to dismiss 9 Plaintiffs’ claims for injunctive relief and GRANTS with leave to amend Apple’s motion to 10 dismiss Plaintiffs’ FAL and UCL claims. The Court DENIES Apple’s motion to dismiss 11 Plaintiffs’ breach of contract claim. 12 Plaintiffs shall file any amended complaint within 30 days of this Order. Failure to do so 13 or failure to cure deficiencies identified herein or in Apple’s motion to dismiss will result in 14 dismissal of the deficient claims with prejudice. Plaintiffs may not add new causes of action or 15 new parties without a stipulation or leave of the Court. 16 IT IS SO ORDERED. 17 Dated: March 27, 2020 18 ______________________________________ LUCY H. KOH 19 United States District Judge 20 21 22 23 24 25 26 27