Apple responds to allegations of fraud in iPhone MMS litigations

Michelle Massey Mar. 5, 2010, 3:24am


Apple says it did not deceive or defraud customers who bought iPhones without multimedia messaging service, according to its response in a series of lawsuits pending in federal court in New Orleans.

Seeking more than $5 million in damages, 23 lawsuits combined in multi-district litigation at the Eastern District of Louisiana allege that Apple and AT&T heavily advertised that the iPhone's newer 3G version would allow multimedia messaging. But when the new phones came out in July 2008, customers claim the messaging service was not available.

Plaintiffs named in the class action lawsuits bought their cell phones around June 2009 and were not able to use the multimedia messaging service until September 2009.

The suits also allege that the defendants told customers they would release a software update in June 2009 that would allow the messaging service.

However, the plaintiffs state that after calling Apple Customer Support they learned that AT&T's towers did not currently support multimedia messaging service.

The plaintiffs' MDL steering committee is led by New Orleans attorney Scott Bickford of Martzell and Bickford.

U.S. District Judge Carl J. Barber will preside over the litigation until pretrial proceedings and discovery are complete. Then, the cases will be returned to their original jurisdictions.

Launched as a joint venture with AT&T, Apple debuted the original iPhone "2G" in January 2007 and the next generation or "3G" launched in July 2008. Neither phone provided multimedia messaging service.

Multi-media service enhances a phone's messaging functions by allowing users to send pictures and video with standard text.

AT&T addressed the issue on its website telling customers that the multimedia message could be viewed using a computer. "iPhone does not support sending, or receiving picture, audio, or video multimedia messages. If an MMS is sent to the iPhone, it will receive a text message that contains a link to a website address where the message can be view," AT&T explained in the answer center on its website.

The plaintiffs believed the response was the same as AT&T telling them "tough luck."

Apple states it did not offer MMS until the debut of the most recent iPhone, version 3G-S, in June 2009. As part of the launch of the new phone, Apple announced that MMS functionality would be supported by AT&T by the end of the summer for the new iPhone 3G-S and the older version ,3G. Apple maintains that any advertising regarding the iPhone's MMS functionality specifically disclosed when the service would be available.

The plaintiffs' lawsuits admit that the defendants' websites showed a disclaimer that stated, "MMS support from AT&T coming in late summer."

As advertised, on September 25, 2009, AT&T announced it had enabled MMS support in the United States. Apple argues that not one of the twenty-three lawsuits reflects the reality that the timing of the MMS release was disclosed from the beginning and that the services was released as promised.

"No one was misled and no one was injured. That reality defeats plaintiffs' claims," Apple's court documents state.

The iPhone user's proposed class action will attempt to discover whether the defendants concealed, suppressed, or omitted material facts to customers, including that the AT&T towers did not support the MMS, the towers would not be upgraded for months, and the software upgrade would not, by itself, solve the problem.

"All the millions of purchasers of the 3G and the 3G-S iPhone have been deceived and cheated out of what they thought they were purchasing – a phone with MMS functionality," the lawsuits argue.

The defendants state, at the most, the customers were without MMS functionality for three months.

Causes of action filed against the defendants include violations of various state deceptive trade practices acts, civil fraud, tort, conspiracy to defraud, and unjust enrichment.

Arguing the defendants' actions were "intentional and outrageous, without any justification or excuse," the plaintiffs are seeking more than $5 million for compensatory damages, mental anguish, punitive damage and attorneys' fees.

In early motions in the multidistrict litigation, Apple is asking the judge to rule on the pleadings before discovery begins. Apple believes that once the plaintiffs' early motions are ruled on, the lawsuits should be dismissed in their entirety.

The next status conference is scheduled for March 12, in the New Orleans federal courthouse.

MDL -02116

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