LAUREN PAULSON [email protected]827 C RANSOM AVE BROOKINGS, OR 97415 503 470 9709 (‘out of service’) Plaintiff Pro Se UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA LAUREN PAULSON, et al.for ) himself and all others similarly ) situated, ) CASE NO: ) Plaintiffs, ) CLASS ACTION ) COMPLAINT ) v. ) ) DEMAND FOR JURY ) TRIAL APPLE INC., SPRINT INC ) T-MOBILE INC., AT&TM INC., ) U.S. CELLULAR INC., JOHN DOE ) COMPUTER, JANE DOES ) COMPUTER, ) Defendants ) ——————————————— ) Plaintiff, Lauren Paulson, for himself and for this class action complaint alleges upon personal knowledge as to himself, as to his own action, and upon information and belief as follows: CLASS ACTION COMPLAINT Page of 1 39
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
LAUREN PAULSON [email protected] 827 C RANSOM AVE BROOKINGS, OR 97415 503 470 9709 (‘out of service’) !Plaintiff Pro Se !
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
LAUREN PAULSON, et al.for ) himself and all others similarly ) situated, ) CASE NO: ) Plaintiffs, ) CLASS ACTION ) COMPLAINT ) v. ) ) DEMAND FOR JURY ) TRIAL APPLE INC., SPRINT INC ) T-MOBILE INC., AT&TM INC., ) U.S. CELLULAR INC., JOHN DOE ) COMPUTER, JANE DOES ) COMPUTER, ) Defendants ) ——————————————— ) ! Plaintiff, Lauren Paulson, for himself and for this class action
complaint alleges upon personal knowledge as to himself, as to his own
action, and upon information and belief as follows:
perpetrating this fraud on the public. Moreover, the Plaintiff can provide the
exact ‘chat’ dialogue record where the Defendant’s employees are
perpetrating this insidious and pervasive fraud on the iPhone buying public
every day, all day to all iPhone consumers. All to sell telephones!
32. Secretly, and in unlawful restraint of trade, Apple conspired
with these Defendants and others to share in the revenue with the voice
and data services provided to Defendants from iPhone revenue through
this scheme of these Defendants refusing to unlock iPhones.
33. Even though carriers typically engage in a two year contract
with consumers, these Defendants unlawfully conspired to not unlock
iPhones for five years in order to force consumers to stay with the
Defendants as their carrier beyond the normal contractual period because
their iPhones were useless elsewhere and to so increase this revenue-
sharing fund. In summary, there were three angles in this consumer
ruse: First, the carrier would unilaterally raise the fees charged to the
consumer while the consumer was locked to the carrier. Second, the
consumer would be required to purchase a new phone device if the
consumer attempts to avoid those ‘new’ carrier charges under the ‘old’
CLASS ACTION COMPLAINTPage � of �19 39
consumer contract to stay with that carrier for two years; by attempting
to switch carriers. Third, the revenue-sharing period was extended from
the two-year consumer contract period by three years due to the secret
agreement not to furnish unlocking for the five year duration. In short,
these Defendants get the consumer coming and going and going.
34. Meanwhile, the Defendant carriers then unilaterally changed
the data plan provided to consumers in order to generate expanded
revenues for all the Defendants because the consumer was unable to
obtain telephone service elsewhere without purchasing a new telephone;
meanwhile the consumer’s telephone bills from their extant carrier could
increase ten-fold or more from the ‘new’ data fee charges.
35. Apple and these Defendants agreed to never provide the
unlock codes to iPhone consumers who wished to replace the iPhone
SIM card either for international travel or to lawfully switch to another
carrier until after their five-year price-fixing revenue sharing agreement
had expired.
36. Unbeknownst to consumers, Apple was selling their iPhones at
the five-year price-fixed amounts; the remainder sale amount made up
CLASS ACTION COMPLAINTPage � of �20 39
by the other Defendants in order to enable these schemes in restraint of
trade aforesaid and under other terms among the Defendants themselves
and under terms not disclosed to the Plaintiff, the Class nor to consumers
nationally.
37. The early termination fees charged by these Defendants are
also in illegal restraint of trade inasmuch as there is no mutuality i.e.. the
carrier may unilaterally change the terms of the agreement or change the
fees into exorbitant (even unlimited) amounts, but the consumer is not in
an equal bargaining position to similarly change the terms of the
agreement or amounts of monthly fees paid. In short, these Defendants
can change ‘The Deal’any time they want, but the Plaintiff, and
members of the Class-consumer cannot. That is an unconscionable
contract of adhesion perpetrating a fraud on the consumer and illegal
under both state and federal law.
38. The Defendants and each of them illegally conspired and
unlawfully agreed to take united action to prevent users from
circumventing the SIM card lock protocol. A central purpose of these
agreements of the Defendants is to suppress lawful competition among
CLASS ACTION COMPLAINTPage � of �21 39
cell phone consumers to extend the locking beyond their original five
year plan.
39. These Defendants also conspired to increase the aftermarket
prices for iPhones by advising their consumers to advertise and sell their
‘locked’ iPhones on eBay or Amazon or other sites to consumers who
want cheaper iPhones that are locked with their extant carriers due to the
two-year fee agreement.
40. These Defendants conspired to forestall development of an
iPhone CDMA version to stifle competition between ATTM, Sprint, T-
Mobile and Verizon on the alternative platforms. Apple is easily able to
develop an iPhone for use on CDMA networks in addition to the GSM
compatibility. A schoolboy did it immediately after the open iPhone
market began.
41. The iPhone lock out is complete due the overall scheme of
these Defendants and each of them as described herein. No carrier and
few computer stores will agree to obtain or follow the unlocking code so
a consumer’s iPhone may be unlocked and used with an alternate carrier.
CLASS ACTION COMPLAINTPage � of �22 39
This renders a consumer’s iPhone useless and worthless (except in the
artificially inflated aftermarket).
42. None of these illegal acts or schemes have been disclosed to
the Plaintiff nor to the Class of consumers. In fact, the carriers have
enacted comprehensive networks to prevent consumers from knowing
the true facts recited above.
CLASS ALLEGATIONS
43. Plaintiffs bring this action as a class action on behalf of
themselves and all others similarly situated for the purpose of asserting
claims alleged in this Complaint on a common basis. Plaintiff’s
proposed class (‘Class) is defined under the Federal Rules of Civil
Procedure 23(b)(2) and (3), and Plaintiff’s propose to act as
representatives of the following class comprised of:
All persons, exclusive of Apple, the Defendants and their employees, who purchased an iPhone anywhere in the United States at any time, and who then also paid for voice or data service from any of the Defendants during the Class Period. ! 44. The Class for whose benefit this action is brought is so
numerous that joinder of all members is not practical.
CLASS ACTION COMPLAINTPage � of �23 39
45. Plaintiffs are unable to state the exact number of Class
members without discovery of the Defendant’s records, but, on
information and belief hereby state that it exceeds ten million consumers
and purchasers of iPhones sold for use on the Defendant’s networks
during the Class Period.
46. There are questions of law and fact common to the Class
which predominate over any questions affecting only individual
members. They are:
a. Whether Apple failed to obtain consumers’ contractual
consent to the fact that Apple had entered into the agreements with the
other Defendants aforesaid;
b. Whether the Defendants failed to notify consumers they
would be unable to switch carriers during the times in question;
c. Whether the Defendants continue to conspire to retain any
and all iPhones to be locked from use with alternative carriers;
d. Whether the Defendants charged exorbitant fees while
consumers were locked to them, knowing consumers would be unable to
obtain service elsewhere without purchasing a new phone;
CLASS ACTION COMPLAINTPage � of �24 39
e. Whether these Defendants failed to obtain consumers
contractual consent to the fact they would not provide consumers with
unlock codes for their iPhones so that the iPhones could be used with
alternative carriers; and
f. Whether these Defendants violated the laws against antitrust and
violated section 2 of the Sherman Act by conspiring to monopolize the
current market and the aftermarket for iPhone wireless voice and data
services;
47. Each of these common questions of law and fact are identical
for each and every member of the Class;
48. Plaintiff is a member of the Class he seeks to represent, and
the claims arise from the same factual and legal basis as those of the
Class; they assert the same legal theories as do all Class members;
49. Plaintiff’s will thoroughly and adequately protect the interests
of the Class, and seek qualified and competent pro bono legal
representation to represent themselves and those similarly situated.
CLASS ACTION COMPLAINTPage � of �25 39
50. The prosecution of separate actions by individual Class
members would create a risk of inconsistent adjudications and would
cause needless expenditure of judicial resources.
51. Plaintiffs are typical of the Class in that their claims, like those
of the Class, are based on the same unconscionable and fraudulent
business practices and the same legal theories.
52. These Defendants have acted on grounds generally applicable
to the grievances of the consumers who form the Class.
53. A class action is superior to all other available methods for the
fair and efficient adjudication of the controversy.
RELEVANT MARKET ALLEGATIONS
54. The iPhone is a unique, premium priced product that generates
a unique aftermarket for voice and data services that can be used only on
iPhones. During at least the Class Period, the price of iPhones was not
responsive to an increase in iPhone service because:
a. consumers who purchased an iPhone could not, at the
point of sale, reasonably or accurately inform themselves of its ‘lifecycle
CLASS ACTION COMPLAINTPage � of �26 39
costs’ (that is, the combined cost of the handset and its required services,
parts and applications over the iPhone’s lifetime); and
b. consumers unknowingly were “locked into” the iPhone
due to its high price tag and would incur significant costs to switch to
another brand of handset. The aftermarket for iPhone voice and data
services are thus economically distinct product markets, and the service
product that is sold within those markets has no acceptable substitutes.
The geographic scope of the iPhone voice and data services aftermarket
is national.
55. The relevant aftermarket is the aftermarket for wireless voice
and data services (the ‘iPhone Voice and Data Services Aftermarket’).
56. The iPhone Voice and Data Services Aftermarket came into
existence immediately upon the sale of the first iPhones, because:
a. the iPhone Voice and Data Services Aftermarket is
derivative of the iPhone market;
b. no Plaintiff or member of the Class knowingly
contractually agreed to permit the Defendants and each of them to
impose any restrictions in this aftermarket;
CLASS ACTION COMPLAINTPage � of �27 39
c. the Plaintiffs and members of the Class should have been
able to terminate service with the other Defendants at anytime;
d. no Plaintiffs or members of the Class knowingly agreed
with anyone to not purchase and use voice and data services from
providers other than these Defendants, including the Jane Doe and John
Doe Defendants.
COUNT ONE
Conspiracy to Monopolize the iPhone Voice and Data Services Aftermarket in Violation of Section 2 of the Sherman Act
(Seeking Damages and Equitable Relief) ! 57. Plaintiffs and the Class reallege and incorporate paragraphs 1
through 56 above as if fully set forth here.
58. These Defendants, and each of them knowingly and
intentionally conspired with the other Defendants with specific intent to
monopolize the iPhone Voice and Data Services market and aftermarket.
In furtherance of the conspiracy these Defendants agreed, without
Plaintiffs and the Class knowledge or consent to make themselves the
exclusive providers of voice and data services for the iPhone for five
years, contrary to Plaintiff and the Class reasonable expectations that
CLASS ACTION COMPLAINTPage � of �28 39
they could switch to another carrier at any time; certainly at the end of
their two year previous carrier agreements, if there are any.
59. These Defendants unlawfully achieved an economically
significant degree of market power in the iPhone Voice and Data
Services market and Aftermarket as a result of the conspiracy and
effectively foreclosed new and potential entrants from the market or
from them gaining their naturally competitive market shares.
60. These Defendants, and each of them, by their conspiracy
reduced output and competition and resulted in artificially increased
prices in the iPhone Voice and Data Services Aftermarket and, thus,
harmed competition generally in that market.
61. Plaintiffs and the Class were injured in fact by the Defendant’s
conspiracy and each of them, because they were deprived of alternatives
for voice and data services and forced to pay supra-competitive prices
for iPhone and data services.
62. The Defendant’s conspiracy aforesaid to monopolize the
iPhone Voice and Data Services Market and Aftermarket violated
Section 2 of the Sherman Act, and its anticompetitive practices are
CLASS ACTION COMPLAINTPage � of �29 39
continuing and will continue unless they are permanently enjoined.
Plaintiffs and the Class have suffered massive economic injury to them
as a direct and proximate result of these Defendant’s conspiracy and they
are therefore liable for treble damages, costs and attorney fees in
amounts to be proven at trial.
COUNT TWO
(Outrageous Conduct — State Law Violation)
63. Some of these factual matters occurred in the State of Oregon.
Oregon law allows for proceedings against a party for ‘Outrageous
Conduct’ or for conduct outside the realm that is socially tolerable.
64. The Plaintiff, also a Senior, is a caretaker, for a long-time
friend who is a Senior who lives at another location and who is
disabled. At all times pertinent here, that disabled person had several
health episodes requiring medical care for which the Plaintiff would be
‘on call’ to provide assistance and transportation for which the only
means of communications between the Plaintiff and his disabled friend
is by telephone. Due to the actions of the Defendants described above,
this Senior disabled friend was unable to contact the Plaintiff in order to
CLASS ACTION COMPLAINTPage � of �30 39
provide appropriate assistance for recent health episodes. The disabled
man cannot drive. The Plaintiff does not have access to another
telephone and has no land line.
65. The Defendants and each of them, knew of Plaintiff’s
extraordinary need for a working telephone as described above, yet
failed to continue the Plaintiff’s telephone service for which he had
prepaid through monthly automatic deductions from Plaintiff’s bank
account.
66. These actions of the Defendants are socially intolerable
behavior in the extreme justifying punitive damages as an example to
others who might be tempted to engage in unlawful and illegal restraint
of trade of an essential service to the public and to seniors who are
disabled and depend on uninterrupted telephone service.
COUNT THREE
(Mandatory Injunction)
67. The Plaintiff hereby respectfully requests the Court to issue an
immediate mandatory injunction by way of an Emergency
Temporary Restraining Order requiring the Defendants, and each
CLASS ACTION COMPLAINTPage � of �31 39
of them to immediately restore the Plaintiff’s telephone service to
the Plaintiff’s above described iPhone during the pendency of these
proceedings and afterwards. Balancing the gravity of the potential
harm to Seniors and the disabled who are without telephone service
with the likelihood of success in this blatant and awful price-fixing
scheme weighs heavily in favor of the Plaintiff.
68. Such an immediate restoration of telephone service can cause
these Defendant’s no harm since the Plaintiff has, upon information and
belief prepaid for telephone service to and including the present due to
the fact the monthly fee is automatically deducted from Plaintiff’s
checking account and that monthly deduction would only cease if
Plaintiff provided his bank with appropriate notice which he HAS NOT
done.
COUNT FOUR
(Common Law Fraud)
69. The Plaintiff realleges paragraphs 1 through 69 as though fully
set forth here.
CLASS ACTION COMPLAINTPage � of �32 39
70. The Defendants fraudulent scheme is an appalling example of
corporate greed and collusion vertically from some of the largest
companies in the world, to mid-level corporations to street retail
operations. As described above, Apple, one of the most sophisticated
companies in the world, rich with ill-begotten cash* stolen from
innocent consumers through an insidious revenue sharing gambit with
ATTM and others while secretly locking consumers to fraudulent
carriers who attempt to lock their customers into a two-year contract
arrangement with a secret agreement with Apple to share revenue for a
five-year locked in period. None of this is disclosed to consumers.
Telephone use is an essential service to consumers lives, happiness and
safety no less than food and shelter.
71. The Defendants, and each of them intended that the consumers
rely on the fraudulent and secret agreements among themselves all to
their detriment.
72. The consumers of iPhones relied on this fraudulent scheme of
these Defendants all to their harm of ten million dollars or such amounts
*A Forbes May 13, 2014 article points out that Apple does not have more cash than Britain and Israel Combined; rather has cash or cash equivalents of a mere $150 billion socked away from these Plaintiff consumers. ! 73. These Defendants and each of them made intentional
misrepresentations of material facts as above and below described
presented to the Plaintiffs and the Class by those Defendants to the
Plaintiff’s detriment. The Defendants and each of them made false
representations of present and past facts known to the Defendants and
each of them and concealed facts above and below described. The
Defendants and each of them were deceitful to the Plaintiffs and the
class as above described and below described and actually lied to the
Plaintiffs and to the class. The Defendants and each of them knew the
information used was false or intentionally maintained ignorance that is
or was the truth pertaining to any and all transactions with Plaintiff
consumers herein described. The Plaintiff’s and the Class were actually
induced by these Defendants and others to rely on the false and
fraudulent misrepresentations of the Defendants and each of them and
the Plaintiffs and the Class members acted upon those false and
fraudulent misrepresentations of the Defendants. The Plaintiff
Consumers would not have agreed to this fraud had they known the
truth. The Plaintiff’s and the Class suffered actual damages due to the
actions of the Defendants and each of them in the amount of ten million
dollars or such amounts as are proved at trial. The Plaintiffs and each of
them have been grossly detrimentally impacted by the intentional
misrepresentations of the Defendants and each of them as described
above and below.
COUNT FIVE
(Unlawful Business Practices)
74. The Plaintiffs reallege paragraphs 1 through 74 as though fully
set forth herein.
75. The Defendants and each of them have violated state and
federal laws pertaining to business practices at the state level and at the
federal level. A person engages in an unlawful business practice when in
the course of the persons business, vocation or occupation the person:
!!CLASS ACTION COMPLAINTPage � of �35 39
(1)Employs any unconscionable tactic in connection with the sale, rental or other disposition of real estate, goods or services, or collection or enforcement of an obligation;!
76. The Defendants actions aforesaid have caused harm to the
Plaintiffs and the Class in an amount of ten million dollars or as such
amounts are proved at trial.
COUNT SIX
(Right to Jury Trial)
77. The Plaintiff and members of the Class are entitled to a jury
trial under both state law and under federal law.
78. Some of the actions aforesaid occurred in the State of Oregon.
Under the Oregon Constitution at Article I, section 17 states: “In all civil
cases the right of Trial by Jury shall remain inviolate.” This means the
right to a jury trial may not be taken away.
79. Similarly, the Plaintiff’s and the Class have a right to a jury
trial under the U.S. Constitution of the United States and under the
Seventh Amendment thereto:
“In Suits at common law, where the value in controversy shall
exceed twenty dollars, the right of trial by jury shall be preserved,
CLASS ACTION COMPLAINTPage � of �36 39
and no fact tried by a jury, shall be otherwise re-examined in any
Court of the United States, than according to the rules of the
common law.”
REQUESTS FOR RELIEF
WHEREFORE, Plaintiffs respectively request that the Court enter
judgment against the Defendants and each of them as follows:
a. Issuing an Immediate Temporary Restraining Order requiring
the Defendants to immediately restore iPhone telephone service to
Plaintiff’s above described iPhone;
b. Permanently enjoining these Defendants from lying to the
public that said described iPhone cannot be unlocked and to
immediately provide the unlocking code and other unlocking facilities
by the speediest means to consumers and the members of the Class
throughout the nation;
c. Permanently enjoining these Defendants from selling locked
iPhones that can only be used with one carrier;
CLASS ACTION COMPLAINTPage � of �37 39
d. Permanently enjoining these Defendants from conspiring to
monopolize the iPhone Voice and Data Services Market and
Aftermarket;
e. Awarding the Plaintiff and the Class treble damages for injuries
caused by these Defendant’s violations of the federal and state antitrust
laws;
f. Awarding the Plaintiff and the Class punitive damages for
socially intolerable conduct that is outrageous in the extreme;
g. Appointing pro bono counsel for the Plaintiffs;
h. Awarding Plaintiff’s and the Class reasonable attorneys’ fees
and costs; and
i. Granting such other and further relief as the Court may deem