Plaintiff Lisa Bodenburg brought a putative class action against Defendant Apple Inc. after purchasing a 200 GB iCloud+ storage plan. She believed that by upgrading to the paid 200 GB plan, the 200 GB would add to the free 5 GB of storage provided to all Apple customers for a combined total of 205 GB of storage. However, after her purchase, she allegedly discovered that her total available storage was 200 GB, not the expected 205 GB. Bodenburg sued Apple, alleging breach of contract and violations of California's Unfair Competition Law ("UCL"), Consumers Legal Remedies Act ("CLRA"), and False Advertising Law ("FAL"), seeking damages, restitution, and equitable relief on behalf of herself and a proposed nationwide class of iCloud+ customers. The district court dismissed Bodenburg's action with prejudice, finding that none of her claims were plausible, and the Ninth Circuit affirmed.
Consumer false advertising class actions continue to proliferate in California. Plaintiffs typically bring claims under the UCL, which prohibits any "unlawful, unfair or fraudulent business act or practice" (Cal. Bus. & Prof. Code § 17200), CLRA, which prohibits "unfair methods of competition and unfair or deceptive acts or practices" (Cal. Civ. Code § 1770), and the FAL, which prohibits "untrue or misleading" statements related to real or personal property or the performance of services (Cal. Bus. & Prof. Code § 17500). To survive a dismissal, each claim must pass an objective "reasonable consumer" test. Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 964, n. 4 (9th Cir. 2018). The test requires a finding "that a significant portion of the general consuming public . . . acting reasonably under the circumstances, could be misled." Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 508 (2003).
In the false advertising context, "whether a business practice is deceptive will usually be a question of fact not appropriate for decision at the pleading stage." Whiteside v. Kimberly Clark Corp., 108 F.4th 771, 778 (9th Cir. 2024) (internal quotations omitted). Dismissal at the pleading stage is only warranted where the plaintiff could not "plausibly prove that a reasonable consumer would be deceived[.]" See Williams, 552 F.3d at 940. Courts have long struggled with the question of when it is appropriate for judges to make the determination that "no reasonable consumer is likely to be deceived" as a matter of law.
In Bodenburg, the District Court took that step and dismissed the case with prejudice, finding as a matter of law that a reasonable consumer reviewing Apple's statements would not plausibly believe that Apple's promise of "additional storage" meant 205 GB in total storage capacity. The Ninth Circuit affirmed. The panel first applied the reasonable consumer test to the iCloud+ Legal Agreement to determine whether Apple's assurance that subscribers will receive "[a]dditional storage" beyond the 5 GB of free storage provided to all users was ambiguous. The Court ultimately held that while some consumers, like Plaintiff, may interpret such statements as promising 205 GB of storage, such an expectation was not reasonable. The Court reasoned that plaintiff's belief arises only from a "potential ambiguity" in the contract language that does not amount to an express representation. Although the Court noted that a plaintiff must show something more than a potential ambiguity to survive dismissal, it also considered contextual descriptions of iCloud+ plans to dispel potential ambiguity. Because the descriptions made clear the plan would result in a user receiving a total of 200 GB, it was implausible that a reasonable consumer could be misled.
The holding in Bodenburg demonstrates that, at least in the Ninth Circuit, potential ambiguity or misunderstanding by particular consumers is insufficient to state a claim under California's consumer protection statutes. Instead, plaintiffs must plausibly allege that a significant portion of reasonable consumers would be misled based on clear, unambiguous representations. As businesses continue to navigate the evolving landscape of false advertising litigation, Bodenburg serves as a reminder that well-drafted, contextually transparent product statements and agreements can provide meaningful protection against claims rooted in subjective or idiosyncratic interpretations.
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