updated 07:50 am EST, Fri February 18, 2005
Class action lawsuit
A new class action lawsuit filed on Thursday against Apple alleges that the company has engaged in acts of unfair and unlawful business practices, breach of contract, and misappropriation of trade secrets. The lawsuit was filed by three firms and five defendants as a class action on behalf of both resellers and consumers in the San Francisco County Superior Court. The 26-page complaint includes allegations of violations of the Consumers Legal Remedies Act and Song Beverly Act, warranty abuse, unfair and unlawful competition related to delivery and pricing of goods to resellers, improper repair/warranty costing, unfair price competition, and more. The suit seeks injunctive and compensatory damages as well as legal fees and punitive and exemplary damages for some violations.
The complaint is filed in two separate classes--on behalf of consumers and on behalf of resellers. It lists up to 25 "John Does" whom they say have acted as a co-conspirator, agent, or alter ego of or for the other Defendants. The document says it will be amended once the names of the unknown persons are available.
The complaint also alleges that Apple sold used computer equipment repackaged as new products, unfairly misrepresented the actual time of warranty for its products, and has also misrepresented warranty repairs and their associated costs. The plaintiffs argue that Apple is not properly reflecting the repair costs or requirements on equipment, unfairly shifting some of the burden of warranty repair costs burden to the reseller channel. Apple, at times, has refused to compensate for, or accept returns of, defective parts provided for repairs, according to documents obtained by MacNN.
The plaintiffs say that preferential delivery of goods to Apple's own retail stores and extension of education/government and other discounts--sometimes below the cost of goods obtained by resellers--to unqualified persons has done irreparable damage to channel business.
Documents show that plaintiffs are also alleging misappropriation of trade secrets by Apple. The suit claims that Apple has used confidential reseller information to build its own list of clients, in an effort to bolster its own direct sales and bypass the reseller channel. The plaintiffs argue that Apple would request a formal RFP (request for pricing) from resellers with
The lawsuit follows a similar claim made by a group of resellers in MacAdam vs. Apple, which was filed in 2003. It alleged, among other things, breach of contract and fraud by Apple and is still pending trial in a Santa Clara Court.