NOTICE OF REMOVAL UNDER 28 U.S.C. §§ 1332, 1441, 1446, AND 1453 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORRICK, HERRINGTON & SUTCLIFFE LLP ATTORNEYS AT LAW RANDY LUSKEY (STATE BAR NO. 240915) [email protected]ORRICK, HERRINGTON & SUTCLIFFE LLP The Orrick Building 405 Howard Street San Francisco, California 94105 Telephone: +1-415-773-5700 Facsimile: +1-415-773-5750 Attorney for Defendant APPLE, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION COLLEEN PALOMINO and IRENE MCDONNELL, individually and on behalf of all others similarly situated, Plaintiff, v. APPLE, INC., and DOES 1-50, inclusive, Defendant. Case No. NOTICE OF REMOVAL UNDER 28 U.S.C. §§ 1332, 1441, 1446 AND 1453 BY DEFENDANT APPLE, INC. Case 3:16-cv-03017 Document 1 Filed 06/03/16 Page 1 of 9
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NOTICE OF REMOVAL UNDER 28 U.S.C. §§ 1332,
1441, 1446, AND 1453
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ORRICK, HERRINGTON &SUTCLIFFE LLP ATTORNEYS AT LAW
RANDY LUSKEY (STATE BAR NO. 240915)[email protected] ORRICK, HERRINGTON & SUTCLIFFE LLP The Orrick Building 405 Howard Street San Francisco, California 94105 Telephone: +1-415-773-5700 Facsimile: +1-415-773-5750
Attorney for Defendant APPLE, INC.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
COLLEEN PALOMINO and IRENE MCDONNELL, individually and on behalf of all others similarly situated,
Plaintiff,
v.
APPLE, INC., and DOES 1-50, inclusive,
Defendant.
Case No.
NOTICE OF REMOVAL UNDER 28 U.S.C. §§ 1332, 1441, 1446 AND 1453 BY DEFENDANT APPLE, INC.
Case 3:16-cv-03017 Document 1 Filed 06/03/16 Page 1 of 9
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ORRICK, HERRINGTON &SUTCLIFFE LLP ATTORNEYS AT LAW
TO THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
CALIFORNIA AND TO PLAINTIFFS AND THEIR COUNSEL OF RECORD:
PLEASE TAKE NOTICE that Defendant Apple, Inc. (“Apple” or “Defendant”) removes
the above-captioned action from the Superior Court of the State of California in and for the
County of Santa Clara pursuant to 28 U.S.C. Sections 1332(d), 1441, 1446 and 1453 based on the
following grounds.
BACKGROUND
1. On April 29, 2016, Plaintiffs Colleen Palomino and Irene McDonnell
(“Plaintiffs”), on behalf of themselves and others similarly situated, filed a Complaint against
Apple in the Superior Court of the State of California, County of Santa Clara, entitled Palomino
et al., v. Apple, Inc. and Does 1-50, Case No. 16-CV-294540 (the “Complaint”). The allegations
of the Complaint are incorporated by reference in this Notice of Removal without necessarily
admitting any of them.
2. The Complaint purports to assert a class-wide cause of action for relief against
Apple stemming from Plaintiffs’ and putative class members creating an “Apple ID” and/or
accepting “terms and conditions” to access various Apple “stores,” including the “iTunes Store,
the Mac App Store, the App Store for Apple TV, the iBooks Store, Apple Music.” See Compl. ¶¶
2-4. Specifically, the Complaint alleges that the terms and conditions associated with using these
“stores” violate New Jersey’s Truth-in-Consumer Contract, Warranty and Notice Act
(“TCCWNA”), N.J.S.A. § 56:12-14 et seq. because they disclaim legal liability inconsistent with
New Jersey law. See, e.g., Compl. ¶¶ 6-7; 64-66.
3. On April 28, 2016, counsel for Plaintiffs, Carlson Lynch Sweet Kilpela &
Carpenter, LLP, filed a nearly identical class action complaint against Apple on behalf of a
different plaintiff in this District. See Silkowski v. Apple, Inc., Case No. 5:16-cv-02338 (N.D.
Cal. Apr. 28, 2016).
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TIMELINESS OF REMOVAL
4. Apple’s agent for service of process was served with the Summons and Complaint
on May 4, 2016. See Exhibit E (Service of Process Transmittal). The Complaint and Summons
are attached hereto as Exhibits A and C, respectively. This Notice of Removal is timely filed. 28
U.S.C. § 1446(b) (notice of removal shall be filed within thirty days of Apple’s receipt of the
Summons and Complaint).
5. No other pleadings have been filed or served to Apple’s knowledge related to this
case.
6. Apple is informed and believes, and on that basis alleges, that there have been no
other named defendants in this case and that no other defendant, whether named or not, has been
served with or otherwise received the Complaint in this action.
DIVERSITY JURISDICTION UNDER CAFA
7. This action is removable under the Class Action Fairness Act of 2005 (“CAFA”),
codified in 28 U.S.C. § 1332(d). The Court has original jurisdiction of this Complaint under
section 1332(d)(2), and the Complaint is removable pursuant to the provisions of 28 U.S.C.
sections 1441(a) and 1453 as it is a class action in which at least one class member is a citizen of
a state different from that of Apple, the class size exceeds 100 members, and the amount in
controversy exceeds $5,000,000, exclusive of interest and costs. Serrano v. 180 Connect, Inc.,
478 F.3d 1018, 1020-21 (9th Cir. 2007). Further, no defendant identified in the Complaint is a
state, officer of a state or a governmental agency. 28 U.S.C. § 1332(d)(5).
Complete Diversity of Citizenship Exists
8. Plaintiff’s Citizenship For Purposes of CAFA (28 U.S.C. § 1332(d)). For
diversity purposes, a person is a “citizen” of the state in which he or she is domiciled. Boon v.
Allstate Ins. Co., 229 F. Supp. 2d 1016, 1019 (C.D. Cal. 2002) (citing Kanter v. Warner-Lambert
Co., 265 F.3d 853, 857 (9th Cir. 2001)). For purposes of diversity jurisdiction, citizenship is
determined by the individual’s domicile at the time the lawsuit is filed. Boon, 229 F. Supp. 2d at
1019. Residence creates a presumption of domicile. Washington v. Hovensa LLC, 652 F.3d 340,
345 (3rd Cir. 2011); State Farm Mut. Auto Ins. Co. v. Dyer, 19 F.3d 514, 520 (10th Cir. 1994).
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Once the removing party produces evidence of domicile, the burden shifts to the other party to
come forward with contrary evidence, if any. Dyer, 19 F.3d at 519.
9. Plaintiffs allege that they are residents and citizens of New Jersey. Compl. ¶ 12.
Apple is therefore informed and believes that at the time Plaintiffs filed this civil action, Plaintiffs
were citizens of New Jersey. Moreover, Plaintiffs aver that the putative class members are “all
New Jersey residents who have created an Apple ID and/or agreed to the Terms and Conditions
within the applicable statute of limitations.” Id. ¶ 51.
10. Apple’s Citizenship For Purposes of CAFA (28 U.S.C. § 1332(d)). For
diversity purposes, a corporation “shall be deemed a citizen of any State by which it has been
incorporated and of the State where it has its principal place of business.” 28 U.S.C.
§ 1332(c)(1). The “principal place of business” is the state where the entity’s officers direct,
control and coordinate corporate activities, generally where it maintains its headquarters. See The
Hertz Corp v. Friend, 559 U.S. 77, 130 S. Ct. 1181, 1192 (2010) (adopting “nerve center”
approach to determine corporation's principal place of business).
11. For purposes of diversity, Apple is a citizen of California (its state of incorporation
and principal place of business). See Declaration of Michael Jaynes (“Jaynes Decl.”), ¶ 2; 28
U.S.C. § 1331(c)(1) (for diversity purposes, a corporation is deemed to be a citizen of (1) the state
under whose laws it is organized; and (2) the state of its “principal place of business.”); see also
David v. HSBC Bank Nevada, N.A., 557 F.3d 1026, 1028 (9th Cir. 2009).
12. At the time this action was commenced, Apple was, and still is, a corporation
organized and existing under and by virtue of the laws of the State of California. See Jaynes
Decl., ¶ 2. Apple’s principal place of business is also located in California. Id. Apple’s U.S.
headquarters are located in Cupertino, California. Id.
13. Doe Defendants. While Plaintiffs name John Does 1-50 as defendants, the
citizenship of fictitious defendants is disregarded for purposes of establishing removal jurisdiction
under 28 U.S.C. § 1332. See 28 U.S.C. § 1441(a); see also Bryant v. Ford Motor Co., 886 F.2d
1526 (9th Cir. 1989), cert. denied, 493 U.S. 1076 (1990).
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14. Based on the Complaint, therefore, at least one member of the putative class is a
citizen of a state different from that of Defendant Apple, as Plaintiffs are citizens of New Jersey
and Apple is a citizen of California.
The Putative Class Exceeds 100 Members
15. Plaintiffs seeks to represent “all New Jersey residents who have created an Apple
ID and/or agreed to the Terms and Conditions” during the putative class period. Compl. ¶ 51.
Plaintiffs’ proposed class far exceeds 100 persons—indeed, Plaintiffs allege that the putative class
includes as many as “thousands of individuals.” Compl. ¶ 53 (emphasis added).
Plaintiffs Seek More Than $5,000,000
16. The jurisdictional amount is satisfied. Apple denies Plaintiffs’ claims in their
entirety, but provides the following analysis of potential damages (without admitting liability)
based on the allegations in Plaintiffs’ Complaint in order to demonstrate that Plaintiffs’
Complaint puts a sufficient amount “in controversy” to warrant removal under 28 U.S.C. §
1332(d).
17. Removal is proper if, from the allegations of the Complaint, it is more likely than
not that the amount in controversy exceeds $5,000,000. See Lowdermilk v. United States Bank
Nat’l Assoc., 479 F.3d 994, 1000 (9th Cir. 2007). What matters is the amount put in controversy
by Plaintiffs’ complaint, not what amount the defendant will actually owe (if anything). “[T]he
amount in controversy is simply an estimate of the total amount in dispute, not a prospective
assessment of the defendant’s liability.” Lewis v. Verizon Comm., Inc., 627 F.3d 395, 400 (9th
Cir. 2010).
18. Plaintiffs’ counsel filed a duplicative and nearly identical lawsuit in this Court the
day before filing the present Complaint in state court, substituting named plaintiffs but otherwise
raising the same claims against the same defendant and seeking the same relief. Silkowski v.
Apple Inc., Case No. 5:16-cv-02338 (N.D. Cal. Apr. 28, 2016). In that action, counsel alleges
violations of the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act, (¶ 1), asserts
that the amount in controversy exceeds $5,000,000, declares that the New Jersey plaintiffs are
sufficiently diverse from Apple, and that the putative class exceeds 100 members (¶ 9). A true
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and correct copy of the complaint filed in the identical action is attached hereto as Exhibit F.
19. Plaintiffs individually and on behalf of the putative class pray for a “declaratory
judgment,” “injunctive relief,” “actual damages,” “attorneys’ fees and court costs,” and “other
relief the Court deems just, equitable and appropriate.” Compl. ¶ 68(a)-(f). While Apple denies
the validity of Plaintiffs’ individual and class action claims, the class stands to recover in excess
of $5,000,000 based on the allegations set forth in the Complaint.
20. Plaintiffs assert that the putative class will be comprised of “all New Jersey
residents who have created an Apple ID and/or agreed to the Terms and Conditions within the
applicable statute of limitations.” Compl. ¶ 51. Plaintiffs seek damages of at least $100 per class
member, which would require a class of just 50,000 iTunes subscribers to satisfy the threshold.
More than 50,000 New Jersey residents have registered an iTunes account and agreed to the
iTunes Terms and Conditions within the past 6 years. Jaynes Decl., ¶ 3.
21. Plaintiffs individually and on behalf of the putative class seek an injunction that:
(a) “remov[es] from the Terms and Conditions the language declared in violation of N.J.S.A.
56:12-15 and 56:12-16.” Compl. ¶ 68(b). Where a lawsuit seeks injunctive relief, “it is well
established that the amount in controversy is measured by the value of the object of the
litigation.” Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977). This includes
a defendant’s costs in complying with the injunction sought. Franceschi Jr. v. Harrah’s Entm’t,
No. 2:10–cv–00205–RLH–RJJ, 2011 WL 9305, at *2 (D. Nev. Jan. 3, 2011); Guglielmi ex rel.
Guglielmi v. Anheuser-Busch Cos., Inc., No. CV-04-594-ST, 2005 WL 300064 (D. Or. Feb. 8,
2005), report & recommendation adopted sub nom. Guglielmi v. Anheuser-Busch Cos., Inc., No.
CV 04-594ST, 2005 WL 524721 (D. Or. Mar. 4, 2005).
22. Plaintiffs also pray for attorneys’ fees and costs, which are considered in
ascertaining the amount at issue in this case. Compl. ¶ 68; see Guglielmino v. McKee Food Corp.,
properly included in determining the amount in controversy).
26. Based on Plaintiffs’ allegations, the minimum statutory damages for the alleged
violations of N.J.S.A. § 56:12-15 and § 56:12-16 would be $100 for each of the thousands of
class members, not including any “actual damages” that Plaintiffs fail to identify. Assuming
Plaintiffs can recover on their claims, they would likely assert entitlement to attorneys’ fees of
approximately 25% of the total recovery. In re Quintus Securities Litig., 148 F. Supp. 2d 967,
973 (N.D. Cal. 2001) (noting in the class action settlement context that the benchmark for setting
attorneys’ fees is 25 percent of the common fund); see also Frederico v. Home Depot, 507 F.3d
188, 199 (3d Cir. 2007) citing In re Rite Aid Corp. Securities Litig., 396 F.3d 294, 303 (3d Cir.
2005) (“Fees should be as much as thirty percent of the judgment”).
27. Thus, although Apple denies Plaintiffs’ factual allegations or that they or the
putative class members they purport to represent are entitled to the relief for which they have
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prayed, based on Plaintiffs’ allegations and prayer for relief, the amount in controversy is well over
the $5,000,000 threshold. Removal of this action is proper.
28. Because diversity of citizenship exists—the Plaintiffs are citizens of New Jersey
and Apple is a citizen of the State of California, the class size exceeds 100 members, and the
amount in controversy exceeds five million dollars—this Court has original jurisdiction of the
action pursuant to 28 U.S.C. section 1332(d)(2). This action is therefore a proper one for removal
to this Court. None of the bases for declining jurisdiction exist under 28 U.S.C. section
1332(d)(3) and (4) because the proposed class members are residents of New Jersey.
VENUE
29. Venue lies in the Northern District of this Court pursuant to 28 U.S.C.
sections 1441, 1446(a), and 84(a). This action originally was brought in the Superior Court of the
State of California, County of Santa Clara.
NOTICE OF REMOVAL
30. This Notice of Removal will be promptly served on Plaintiffs and filed with the
Clerk of the Superior Court of the State of California in and for the County of Santa Clara.
31. In compliance with 28 U.S.C. section 1446 (a), attached are copies of the state-
court papers received by Apple herein (the Complaint, attached as Exhibit A; Civil Case Cover
Sheet, attached as Exhibit B; Summons, attached as Exhibit C; Civil Lawsuit Notice, attached as
Exhibit D; and Service of Process Transmittal, attached as Exhibit E). Also attached as Exhibit F
is the complaint in Silkowski v. Apple, Inc., Case No. 5:16-cv-02338 (N.D. Cal. Apr. 28, 2016).
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ORRICK, HERRINGTON &SUTCLIFFE LLP ATTORNEYS AT LAW
WHEREFORE, Apple prays that this civil action be removed from the Superior Court of
the State of California, County of Santa Clara, to the United States District Court of the Northern
District of California.
Dated: June 3, 2016 RANDY LUSKEYOrrick, Herrington & Sutcliffe LLP
By: /s/ Randy Luskey RANDY LUSKEY
Attorneys for Defendant APPLE INC.
Case 3:16-cv-03017 Document 1 Filed 06/03/16 Page 9 of 9
EXHIBIT A
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EXHIBIT B
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EXHIBIT C
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EXHIBIT D
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EXHIBIT E
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Service of ProcessTransmittal05/04/2016CT Log Number 529108726
TO: Ami GomezApple Inc.1 Infinite Loop, M/S 169-2NYJCupertino, CA 95014-2083
RE: Process Served in California
FOR: Apple Inc. (Domestic State: CA)
Page 1 of 3 / SM
Information displayed on this transmittal is for CTCorporation's record keeping purposes only and is provided tothe recipient for quick reference. This information does notconstitute a legal opinion as to the nature of action, theamount of damages, the answer date, or any informationcontained in the documents themselves. Recipient isresponsible for interpreting said documents and for takingappropriate action. Signatures on certified mail receiptsconfirm receipt of package only, not contents.
ENCLOSED ARE COPIES OF LEGAL PROCESS RECEIVED BY THE STATUTORY AGENT OF THE ABOVE COMPANY AS FOLLOWS: TITLE OF ACTION: COLLEEN PALOMINO and IRENE MCDONNELL, etc., Pltfs. vs. APPLE, INC., etc., et al.,
Dfts.
DOCUMENT(S) SERVED: Summons, Cover Sheet, Notice, Complaint, Information Sheet, Attachment(s)
COURT/AGENCY: Santa Clara County - Superior Court, CACase # 16CV294540
NATURE OF ACTION: Plaintiff seeking relief from the violations made by Defendant
ON WHOM PROCESS WAS SERVED: C T Corporation System, Los Angeles, CA
DATE AND HOUR OF SERVICE: By Process Server on 05/04/2016 at 14:50
JURISDICTION SERVED : California
APPEARANCE OR ANSWER DUE: Within 30 calendar days after this summons and legal papers are served
ATTORNEY(S) / SENDER(S): Todd D. CarpenterCA1LSON LYNCH SWEET KILPELA & CARPENTER, LLP402 West Broadway, 29th FloorSan Diego, CA 92101619-756-6994
ACTION ITEMS: SOP Papers with Transmittal, via Fed Ex Priority Overnight , 782982975809
Case 3:16-cv-03017 Document 1-5 Filed 06/03/16 Page 2 of 4
Service of ProcessTransmittal05/04/2016CT Log Number 529108726
TO: Ami GomezApple Inc.1 Infinite Loop, M/S 169-2NYJCupertino, CA 95014-2083
RE: Process Served in California
FOR: Apple Inc. (Domestic State: CA)
Page 2 of 3 / SM
Information displayed on this transmittal is for CTCorporation's record keeping purposes only and is provided tothe recipient for quick reference. This information does notconstitute a legal opinion as to the nature of action, theamount of damages, the answer date, or any informationcontained in the documents themselves. Recipient isresponsible for interpreting said documents and for takingappropriate action. Signatures on certified mail receiptsconfirm receipt of package only, not contents.
Case 3:16-cv-03017 Document 1-5 Filed 06/03/16 Page 3 of 4
Service of ProcessTransmittal05/04/2016CT Log Number 529108726
TO: Ami GomezApple Inc.1 Infinite Loop, M/S 169-2NYJCupertino, CA 95014-2083
RE: Process Served in California
FOR: Apple Inc. (Domestic State: CA)
Page 3 of 3 / SM
Information displayed on this transmittal is for CTCorporation's record keeping purposes only and is provided tothe recipient for quick reference. This information does notconstitute a legal opinion as to the nature of action, theamount of damages, the answer date, or any informationcontained in the documents themselves. Recipient isresponsible for interpreting said documents and for takingappropriate action. Signatures on certified mail receiptsconfirm receipt of package only, not contents.
SIGNED: C T Corporation SystemADDRESS: 818 West Seventh Street
Los Angeles, CA 90017TELEPHONE: 213-337-4615
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EXHIBIT F
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COMPLAINT
CARLSON LYNCH SWEET KILPELA & CARPENTER, LLP Todd D. Carpenter (CA 234464) Brittany C. Casola (CA 306561) 402 West Broadway, 29th Floor San Diego, California 92101 Telephone: 619.756.6994 Facsimile: 619.756.6991 [email protected] Attorney for Plaintiff Thomas Silkowski and Proposed Class Counsel
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
THOMAS SILKOWSKI, on behalf of himself and all others similarly situated, Plaintiff, vs. APPLE INC., a CALIFORNIA corporation, and DOES 1- 50, inclusive, Defendant.
Case No. COMPLAINT CLASS ACTION
1. Violation of New Jersey’s Truth-in-Consumer Contract, Warranty and Notice Act, N.J.S.A. 56:12-14, et seq.
DEMAND FOR JURY TRIAL
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COMPLAINT
1
Plaintiff THOMAS SILKOWSKI brings this action on behalf of himself and all others similarly
situated against APPLE INC., and states:
I. NATURE OF ACTION
1. Plaintiff brings this action individually and on behalf of all others similarly situated
against Apple Inc. (“Defendant” or “Apple”), alleging violations of the New Jersey Truth-in-Consumer
Contract, Warranty and Notice Act (“TCCWNA”), N.J.S.A. 56:12-14, et. seq.
2. The TCCWNA was enacted specifically to prevent deception in consumer contracts and to
incentivize businesses to draft contracts that are clear and understandable to all consumers, and that
clearly explain the legal rights of consumers and the legal responsibilities of businesses.
3. Defendant operates the iTunes Store, the Mac App Store, the App Store, the App Store for
Apple TV, the iBooks Store, and Apple Music (collectively the “Stores”).
4. In order to access the Stores, consumers must create an Apple ID and/or agree to the
iTunes terms and conditions (the “Terms and Conditions”). As a precondition to creating an Apple ID,
Defendant requires all consumers to agree to the Terms and Conditions.
5. The Terms and Conditions violate the TCCWNA because they contain provisions that
violate clearly established legal rights of Plaintiff and the proposed class, and ignore the legal
responsibilities of Defendant.
6. Specifically, the Terms and Conditions contain provisions that purport to: 1) disclaim
liability for claims brought for Defendant’s negligent, willful, malicious and wanton misconduct; 2) bar
claims for personal injury and punitive damages; 3) ban consumers from asserting claims against
Defendant for deceptive and fraudulent conduct; and 4) require Store users to indemnify and hold
harmless Defendant for any claims brought against Defendant for its negligent, willful, malicious and
wanton misconduct. All of the aforementioned provisions are in direct contravention of rights afforded
to Plaintiff and the proposed class under New Jersey law.
7. The inclusion of these violative provisions in the Terms and Conditions deceives
consumers into thinking that they are enforceable and accordingly, gives consumers the impression that
they are unable to enforce rights they otherwise have under New Jersey statutory and common law.
8. As a result of Defendant’s illegal conduct, Plaintiff, on behalf of himself and the Class,
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seeks statutory penalties, actual damages, attorneys’ fees, costs of suit, and any additional legal or
equitable relief the Court deems appropriate.
II. JURISDICTION, VENUE AND INTRADISTRICT ASSIGNMENT
9. This Court has original jurisdiction of this Action pursuant to the Class Action Fairness
Act, 28 U.S.C §1332(d). The matter in controversy, exclusive of interest and costs, exceeds the sum or
value of $5,000,000, and is a class action in which at least some members of the proposed class have a
different citizenship from Defendant. There are more than 100 putative class members.
10. The Northern District of California has personal jurisdiction over the Defendant named in
this action because Defendant is headquartered in this District and conducts substantial business in this
District.
11. Venue is proper in the Northern District of California under 28 U.S.C. § 1391(b) because
Defendant is headquartered in this District and transacts substantial business in this District.
12. Assignment is proper to the San Jose Division of the Northern District of California under
Civil L.R. 3-2(c) and (e) because Defendant is headquartered in Santa Clara County and transacts
substantial business in Santa Clara County.
III. PARTIES
13. Plaintiff, Thomas Silkowski, is and, at all times relevant hereto, was, a resident and citizen
of the State of New Jersey.
14. Defendant Apple Inc. is a publicly traded company headquartered at 1 Infinite Loop,
Cupertino, California 95014 and is a citizen of California.
IV. RELEVANT LAW AND STATUTES
A. The New Jersey Truth-in-Consumer Contract, Warranty and Notice Act
15. The TCCWNA was enacted over thirty years ago because “[f]ar too many consumer
contracts, warranties, notices and signs contain provisions which clearly violate the rights of consumers.
Even though these provisions are legally invalid or unenforceable, their very inclusion in a contract,
warranty, notice or sign deceives a consumer into thinking that they are enforceable and for this reason
the consumer often fails to enforce his rights.” Statement, Bill No. A1660, 1981 N.J. Laws, Chapter
454, Assembly No. 1660, page 2.
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16. The primary goal of the TCCWNA is to prevent confusion and deception among
consumers as to both their legal rights, and the responsibilities of businesses operating in New Jersey.
The TCCWNA accomplishes this goal in three ways.
17. First, “No seller, lessor, creditor, lender or bailee shall in the course of his business offer
to any consumer or prospective consumer or enter into any written consumer contract or give or display
any written consumer warranty, notice or sign after the effective date of this act which includes any
provision that violates any clearly established legal right of a consumer or responsibility of a seller,
lessor, creditor, lender or bailee as established by State or Federal law at the time the offer is made or the
consumer contract is signed or the warranty, notice or sign is given or displayed.” N.J.S.A. 56:12-15.
18. Second, the TCCWNA prohibits any provision in a consumer contract or notice from
requiring the consumer to waive his or her rights under the TCCWNA. N.J.S.A. 56:12-16.
19. Third, the TCCWNA provides that a contract or notice cannot state in a general, non-
particularized fashion that some of its provisions may be void, inapplicable, or unenforceable in some
states, without specifying whether the provisions are void, inapplicable or unenforceable in New Jersey.
Id.
20. A “consumer” under the TCCWNA is “any individual who buys, leases, borrows, or bails
any money, property or service which is primarily for personal, family or household purposes.” N.J.S.A.
56:15.
21. A “consumer contract” is defined as a written agreement in which an individual, for
personal, family and household purposes, and for cash or credit:
a) Leases of licenses real or personal property;
b) Obtains credit;
c) Obtains insurance coverage;
d) Borrows money;
e) Purchases real or personal property;
f) Contracts for services; or
g) Enters into a service contract.
N.J.S.A. 56:12-1.
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22. Any person who violates the TCCWNA “shall be liable to the aggrieved consumer for a
civil penalty of not less than $100.00 or for actual damages, or both at the election of the consumer,
together with reasonable attorney’s fees and court costs.” N.J.S.A. 56:12-17.
B. Statutory and Common Law Rights of New Jersey Consumers
23. Under New Jersey common law, persons and entities have a duty to avoid unnecessary
risk of personal and economic injury to others. Persons harmed by negligent acts have a clearly
established right to recover damages under New Jersey common law.
24. Under New Jersey’s Punitive Damages Act (the “PDA”) persons are granted the right to
recover punitive damages when they prove “that the harm suffered was the result of the defendant’s acts
or omissions and such acts or omissions were actuated by actual malice or accompanied by a wanton and
willful disregard of persons who foreseeably might be harmed by those acts or omissions.” N.J.S.A.
2A:15-5.12.
25. Under New Jersey’s Consumer Fraud Act (the “CFA”), N.J.S.A. § 56:8–2 et seq., persons
are granted the right to recover for fraudulent and deceptive conduct.
26. The CFA targets unlawful sales and advertising practices designed to induce consumers to
purchase merchandise or real estate, and is designed to address misconduct in the marketing of
merchandise and real estate whereby the consumer could be victimized by being lured into a purchase
through fraudulent, deceptive, or other similar kinds of selling or advertising practices.
27. The CFA prohibits “[t]he act, use or employment by any person of any unconscionable
commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing,
concealment, suppression, or omission of any material fact with intent that others rely upon such
concealment, suppression or omission, in connection with the sale or advertisement of any merchandise
or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person
has in fact been misled, deceived or damaged thereby … [.]” N.J.S.A. § 56:8–2.
28. The CFA entitles any person who suffers any ascertainable loss of money or property as a
result of the use or employment by another person of any method, act, or practice declared unlawful
under the CFA to recover treble damages, attorneys’ fees, filing fees, reasonable costs of suit, and any
other appropriate legal or equitable relief. N.J.S.A. § 56:8-19.
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29. In line with these rights, the New Jersey legislature has set forth the following examples
of provisions that violate clearly established legal rights and responsibilities under the TCCWNA:
“Examples of [] provisions [in violation of the TCCWNA] are those that deceptively claim that a seller or
lessor is not responsible for any damages caused to a consumer, even when such damages are the result
of the seller’s or lessor’s negligence. These provisions provide that the consumer assumes all risks and
responsibilities, and even agrees to defend, indemnify and hold harmless the seller from all liability.”