Apple's sixteenth affirmative defense
We're not the first to spot this — credit goes to Brian X. Chen at Wired's Gadget Lab — but a site that endeavors to present news from outside Steve Jobs' reality distortion field couldn't let Apple's unusual legal argument in Gillis, et al. v. Apple, Inc. et al. pass without comment.
The case was originally filed last August in a California Superior Court by William Gillis, a 70-year-old San Diego resident who claims that Apple (AAPL) and AT&T (T) "misrepresented to the public the speed, strength and performance of the 3G network when using either of Apple's 3G iPhones."
At the time, Apple was running TV and print ads that described the iPhone 3G as "Twice as fast. Half the price." (The tag line now includes a footnote that reads, in part, "Actual speeds vary by site conditions.")
Gillis, who had purchased a black iPhone 3G, claims that the phone did not deliver the speeds promised in Apple's ads. He says that he – and a whole class of fellow iPhone users – were regularly bounced from fast 3G networks to the slower EDGE networks because the infrastructure of AT&T's 3G network was "insufficient" to handle the crush of users – something he claims Apple and AT&T failed to disclose. In fact, Apple continued to promote its 3G iPhones as "twice as fast" even though, Gillis claims, they often weren't.
Apple, in a response filed on Sept. 5, denied each and every allegation made by "Plaintiff" (i.e. Gillis) and then went on to mount 32 affirmative defenses, some stronger than others. The ones that caught our eye were the fifth and sixteenth:
Fifth Affirmative Defense
5. Any statements made by Apple were truthful and accurate and were not misleading or deceptive or likely to mislead or deceive Plaintiff or the purported class, and could not have been reasonably understood by Plaintiff or any member of the purported class in a manner that was misleading or deceptive or likely to mislead or deceive.
Sixteenth Affirmative Defense
16. Plaintiff's claims, and those of the purported class, are barred by the fact that the alleged deceptive statements were such that no reasonable person in Plaintiff's position could have reasonably relied on or misunderstood Apple's statements as claims of fact.
Or, as Chen puts it, "our ads don't lie, and you're a fool if you believe them." (link)
Apple's sixteenth defense, explains Barry Adler, professor of law at New York University, is based on the legal concept of "puffing," a defense well established in case law by the famous Leonard v. Pepsi precedent.
In general, Adler explains, ads can be excused from precise accuracy if what they say can be considered "in jest."
In the Pepsi case, a Seattle man named John Leonard took literally an offer in a Pepsi TV ad offering a T-shirt for 75 "Pepsi Points," a leather jacket for 1,450 and (drumroll) a Harrier Jet for 7,000,000. When Mr. Leonard tried to buy the jet for 15 Pepsi Points and a check for $700,008.50 to cover the rest, Pepsi refused to sell him a jet. Leonard sued. The judge in the case ruled that no reasonable person would think that the offer to sell a $23 million aircraft for Pepsi Points was anything but a joke.
So was "Twice as fast" a jest?
"In the eye of this beholder, no," says Adler. "It's not particularly funny, and it seems to me there's no other reason to say it except to make a product claim."
An American jury might disagree.
But not the British Advertising Standards Agency. The ASA has already made clear – by banning two different iPhone ads – that it takes a dim view of puffing, huffing and hyperbole in Apple's advertising copy. See This iPhone ad was banned in Britain.
Gillis v. Apple has been moved to a U.S. District Court in the Southern District of California. No trial date has been set.
The court documents are available as a pdf here.
Any reasonable person knows that data rates can fluctuate dramatically, whether its DSL, cable modem, wireless, or cellular. All based on demand, cell tower location, transmission problems, network problems, etc. These types of suits are brought by bottom feeding lawyers who are the only ones that make out on these types of frivolous lawsuits.
Frivolous. If ever there were a case that screamed America needed reform to the Plaintiff's Bar, this is it. I think the guy should sue CNN for making him look bad, and maybe sue God for making him dumb and greedy. Yea lawyers aren't a drain on business.
Gillis – You are 70! Not much time left. Moments are precious. Try to see things for what they are (it's a phone). Court time will only make you…uh…jaded!
When I was a law student in Texas we referred to this as the dog bite affirmative defenses – based on the following line of reasoning:
1. I don't own a dog.
2. Besides, he don't bite.
This lawsuit is non-sense. If a car manufacturer advertised a car as "twice as fast", should I be able to sue if there aren't any roads in my town that allow me to fufill that claim. The iPhone 3G does indeed support data rates twice as fast as the previous model. If you are in a cell area that doesn't allow you to take advantage of that, thats your problem. Apple doesn't make any claims about AT&T's network capabilities or have any control over them for that matter.
– ex ped: If I can find a way to add something to what Jim Goldman wrote at CNBC.com. Otherwise, it’s probably more efficient to just point to his post
Careful of Goldman folks. Yesterday his headline was "Hell Freezes: Piper Downgrades Apple" What B.S. – Munster only lowered estimates – kept BUY rating.
I emailed CNBC and complained (I imagine I was not the only one.) Said that the headline was an outright lie. He changed it, now reads: "Hell Freezes: Piper Lowers Apple Target"
Hold on, it seems like Apple is describing the physical capability of the device (and if it is capable of doing that they are being truthful) while the plaintiff is suing about service availability.
Can I sue my cable provider because my internet doesn't consistently run at the advertised speed? They might even argue that "no reasonable consumer" would have expected to get the advertised data rates all the time. I'm pretty sure I can't do that and it would look very similar to this case, or maybe a better analogy would be if I sued the cable router company that advertised a fast speed when I bought the services together… I don't think Apple could be culpable or misleading in their advertising here unless they deliberately rolled out at a time when AT&T was physically incapable of supplying that speed, which it sounds like they were, just not very reliably.
ex ped: That they made the claim in good faith is a separate defense. What surprised me was that they would argue that no reasonable person could read "Twice as fast" and confuse it with a fact.
Let see. My 500GB hard drive says it's capacity is only 465.44GB. I've never gotten my 802.11g wireless router to transfer files at 55Mbs. My 6Mbs DSL only downloads at about 5.6Mbs. My car doesn't get the EPA rated milage. My airline doesn't try to find my lost luggage, they just sell it to a disposal firm.
I guess I'm just dumb struck anytime something does work like it is advertised to work.
PED, you will be writing about users having downloaded more than 300 million applications from the App Store, right? Especially since it's a hundred million apps in just the past six weeks and a hundred million more than predicted. You'll be discussing that, right?
ex ped: If I can find a way to add something to what Jim Goldman wrote at CNBC.com. Otherwise, it's probably more efficient to just point to his post here.
For the 1st month I was P.O. about the speed of my new 3g iPhone but att did something and since Sept. I've had excellent 3g service in Dallas. I wonder if 3g service has improved in Mr. Gillis's area?
Anybody else wondering how much time it is going to take the Plaintiff's lawyer to research and write a reply to 32 affirmative defenses. Then how much it is going to cost him to defend upmteenth counter-claims that Apple is going to bring. Seventy Years old and you are suing Apple? Really? There has to be a ton of better people to sue.