Individual Issues Predominate Commonality in Retailer Class Action Against Apple

In a recent unpubished opinion (Siechert & Synn et al v. Apple Inc., 2015 Cal. App. Unpub. LEXIS 859), the California Court of Appeals affirmed the trial court’s denial of class certification in a suit brought by retailers against Apple. The plaintiffs originally brought suit against the computer giant in 2005, alleging that Apple’s decision to open its own retail stores was meant to drive the independent retailers out of business.  They asserted that Apple made fraudulent representations as to their intentions with the independent retailers, concealed the scheme, induced them into continuing business with Apple, deliberately withheld products from the plaintiffs, and gave “secret rebates” to favored resellers but not the plaintiffs.  They pleaded causes of action for breach of contract, unfair competition, misappropriation of trade secrets, fraud and deceit, breach of the covenant of good faith and fair dealing, violations of the Cartwright Act, and violations of the Unfair Practices Act.  The trial court denied certification, holding that each member would have to prove individualized evidence regarding the representations they were told, reliance, and damages.  The plaintiffs appealed.

Under Brinker Restaurant Corp. v. Superior Court (53 Cal.4th 1004) the ‘ultimate question’ for predominance is whether the issues which may be jointly tried, when compared to those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the courts and litigants.

Here the individual issues predominated and the Court of Appeals affirmed.  As to plaintiffs’ fraud claims, each plaintiff would have to demonstrate when they were told the fraudulent representation, because it was not simultaneously made, which subjected many to the statute of limitations.  The same issue arose with reliance on the alleged fraud.  Some class members contradicted the class allegations, claiming to not have heard the representations, or testifying that they were unaffected by it.  For causation, because each retailer had different locations, different proximities to Apple stores, and other factors that contributed to each member’s harm, individualized issues predominated.  The plaintiffs’ expert testimony for damages also was dismissed on the grounds that the expert conceded that his calculations were hypothetical.  The plaintiffs’ contracts were individualized, defeating any contract class claims.  And finally, for a claim of “secret rebates” each plaintiff would have to demonstrate the extent to which each specific plaintiff competed with the resellers Apple provided the “secret rebates” to - another individualized harm.

The Court affirmed denial of class certification.