Beau Hodges v. Apple, Inc.

FILED
NOT FOR PUBLICATION
FEB 22 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

BEAU HODGES, on behalf of himself No. 14-15106
and all others similarly situated,
D.C. 3:13-cv-01128-WHO
Plaintiff-Appellant,

v. MEMORANDUM*

APPLE, INC.,

Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of California
William H. Orrick, District Judge, Presiding

Submitted February 12, 2016**
San Francisco, California

Before: SILVERMAN and TALLMAN, Circuit Judges and LASNIK, Senior
District Judge.***

*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Robert S. Lasnik, United States District Judge for the
Western District of Washington, sitting by designation.
Beau Hodges appeals the district court’s dismissal of a putative class action

seeking state law remedies for allegedly deceptive practices in the sale of Apple’s

MacBook Pro with Retina display line of notebook computers. The district court

found that Hodges’s allegations could not support his consumer protection or

breach of contract claims. Leave to amend was denied because there were no

additional factual allegations that would cure the deficiencies. We have jurisdiction

pursuant to 28 U.S.C. § 1291 and affirm.

This Court reviews de novo a dismissal for failure to state a claim under Fed.

R. Civ. P. 12(b)(6). In re Cutera Sec. Litig., 610 F.3d 1103, 1107 (9th Cir. 2010).

The question for the Court is whether the facts alleged in the complaint sufficiently

state a “plausible” ground for relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544,

570 (2007). All well-pleaded allegations are presumed to be true, with all

reasonable inferences drawn in favor of the non-moving party. In re Fitness

Holdings Int’l, Inc., 714 F.3d 1141, 1144-45 (9th Cir. 2013). If the complaint

nevertheless fails to state a cognizable legal theory or fails to provide sufficient

facts to support a claim, dismissal is appropriate. Shroyer v. New Cingular

Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010).

Hodges alleges that, in June 2012, Apple began selling a new line of

notebook computers that it called “MacBook Pro with Retina display” (“rMBP”).

2
The displays for the rMBP computers were manufactured by either the Samsung

Group or LG Electronics. The latter displays are subject to image quality issues

such as image retention, burn-in, and color accuracy problems; the Samsung

displays do not exhibit these problems. Apple was aware of the defects in the LG

displays before the commercial launch of the rMBP line, but did not notify

consumers. Nothing about Apple’s naming conventions, model numbers, or

ordering process alerted consumers to the fact that there were two hardware

suppliers, one of which generated a display that was prone to problems, or allowed

consumers to choose a Samsung version of the rMBP over an LG version.

Hodges purchased an rMBP from Apple’s on-line store shortly after it

became available. He relied upon Apple’s statement that it was offering a

“MacBook Pro with Retina display” with part number “MC975LL/A.” Hodges’s

notebook began exhibiting image quality issues approximately one month after

purchase, and he confirmed that the display on his rMBP was from LG Electronics.

Rather than avail himself of the warranty on the product, Hodges filed this class

action lawsuit, alleging affirmative misrepresentations and fraudulent omissions

under the California Consumer Legal Remedies Act (“CLRA”) and the Unfair

Competition Law (“UCL”) and asserting breach of contract and breach of the

covenant of good faith and fair dealing claims.

3
As the district court correctly noted, Hodges failed to adequately allege an

“actual misrepresentation” or “fraudulent omission” related to the rMBP.

Daugherty v. Am. Honda Motor Co., 61 Cal. Rptr. 3d 118, 126 (Ct. App. 2006).

The crux of Hodges’s claim is that, by utilizing a single name, model number, and

price for all rMBPs, Apple affirmatively represented that the entire line would be

of consistent quality and that each rMBP would be materially identical to all of the

others. No such representation was made, however. The name MacBook Pro with

Retina display promises only that the computer will have characteristics specified

by those words: it says nothing regarding the overall quality of the line or the

comparative quality of each unit. Hodges has not asserted that the notebook

computer he received was not a MacBook Pro with Retina display or that it was the

wrong model number. Nor has he identified an express statement regarding the

quality of the product, the uniformity of that quality throughout the product line,

the manufacturers of component parts, or the existence or rate of defects.

Having failed to allege an untrue or deceptive statement, Hodges attempts to

bolster his affirmative misrepresentation argument with resort to the law of

trademark. Hodges argues that Apple’s use of the trademarks “MacBook Pro” and

“Retina” in the product name is an affirmative promise that all rMBPs would be of

uniform quality to one another. We, like the district court below, find this

4
argument unconvincing. Hodges points to no authority supporting his novel theory

of trademark law. Apple’s interest in protecting its trademarks and reputation by

ensuring that the goods and services it offers satisfy expected standards of quality

does not convert the trademark into an affirmative representation of either quality

or consistency. While a trademark may be a factual representation regarding the

source of the goods, it does not convey information, much less make an affirmative

representation, about manufacturing processes or standards. It is simply not the

type of “factual representation that a given standard is met” that could be

actionable under the CLRA or the UCL. See Consumer Advocates v. Echostar

Satellite Corp., 8 Cal. Rptr. 3d 22, 29-30 (Cal. App. 2003) (distinguishing non-

specific “boasts” and “all-but-meaningless superlatives” such as “crystal clear

digital” video and “CD quality” from actionable factual representations regarding

the number of channels available and the capacities of the on-screen program

guide).

To the extent Hodges’s CLRA and UCL claims are based on an alleged

fraudulent omission, they also fail as a matter of law. The district court correctly

found that Hodges had not alleged any representation regarding component

manufacturers or quality or a failure to disclose a risk of physical injury or safety

5
concerns. See Daugherty, 51 Cal. Rptr. 3d at 126-27; Wilson v. Hewlett-Packard

Co., 668 F.3d 1136, 1141 (9th Cir. 2011).

In addition, because Hodges fails to allege that Apple engaged in any

“unlawful, unfair, or fraudulent business act or practice,” he also fails to state a

claim for relief under any prong of the UCL. Cal. Bus. & Prof. Code § 17200.

Finally, Hodges’s contract-based claims fail because there has been no

breach. Hodges alleges that Apple offered to sell consumers a MacBook Pro with

Retina display, and that is exactly what they received. See Lopez v. Nissan N. Am.,

135 Cal. Rptr. 3d 116, 136 (Ct. App. 2011). No promise was broken, nor were

consumers, protected by Apple’s one-year warranty, deprived of the benefit of

their bargain. See Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. App. 3d

1371, 1393 (Ct. App. 1990).

AFFIRMED.