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TMO Reports - Consumer, Dealer Class Action Lawsuit Filed Against Apple (UPDATE)

by , 8:00 AM EST, February 18th, 2005

A group of consumers and Apple resellers filed a class action lawsuit Thursday accusing Apple Computer of unfair and unlawful business practices, breach of contract, misappropriation of trade secrets, and violation of consumer warranty laws, documents obtained by The Mac Observer reveal.

The 26-page complaint, filed Thursday in San Francisco County Superior Court, was on behalf of Jack Branning, James Seybert, Stacey Blevins, Tom Siechert and Joe Weingarten. The plaintiffs are represented by two San Diego-based law firms and another firm headquartered in San Clemente, Calif.

Of the five plaintiffs, two are former Apple resellers. Records indicate Mr. Siechert is a former computer buyer in the procurement department of California State University, based in Fresno, Calif.

Mr. Weingarten is the former owner of Weingarten Gallery, a Apple resellers based in Dayton, Ohio, and is the head of the Apple Resellers Association, a organization for some 70 resellers across the U.S.

"Apple is pushing dealers to the point of where they're going out of business because of their actions," Mr. Weingarten told The Mac Observer. "We had no choice but to go through with this suit."

Mr. Branning is a Macintosh owner and user from San Francisco. Mr. Seybert and Ms. Blevins are Apple products owners, also residing in California.

The suit accuses Apple of repackaging and selling refurbished machines to resellers and consumers as new products "when in fact they are used," the complaint states. Defendants in the case say they can prove the products were used because when they paid for AppleCare extended warranties, the contracts expired earlier than expected and Apple then admitted they were used.

Resellers also charged that Apple has unfairly and unlawfully withheld product from the reseller channel in an effort to stock the shelves of its own retail stores and reap more sales and profit. The dealers also alledged Apple has illegally priced its products to undercut independent dealers and have often sold products below cost to steal away business.

Other allegations include...

  • Unfairly shipping product to customers in a more timely fashion when dealers were told Apple had been out of stock for weeks.

  • Selling product to non-qualified educational and government clients at discount.

  • Disparaged and lied to other dealers and consumers "in an attempt to cover up its own culpability."

    In addition to these allegations, the two resellers say they can prove Apple has stolen customer contact information and has directly approached customers on those lists to sell to them direct at prices small resellers can't match.

    The suit says damages and losses to the three consumers in the case "do not exceed US$75,000." The defendants are requesting a jury trial.

    The filing of the suit came just hours after the House of Representatives voted 279 to 149 in favor of a bill that will curtail multimillion-dollar class action lawsuits against companies. Sources tell TMO the suit has "been lying in wait for the right time" to be filed before it became law.

    The GOP-controlled Senate passed the bill a week ago by a 72-26 vote. President Bush signed the bill Friday, describing class-action suits as often frivolous.

    The bill "will help protect people who are wrongfully harmed while reducing the frivolous lawsuits that clog our courts, hurt the economy, cost jobs, and burden American businesses," Mr. Bush said.

    Under the legislation, class-action suits seeking $5 million or more would be heard in state court only if the primary defendant and more than one-third of the plaintiffs are from the same state. But if fewer than one-third of the plaintiffs are from the same state as the primary defendant, and more than $5 million is at stake, the case would go to federal court.

    Consumer groups and trial lawyers fought against the bill, but lost their struggle when Republicans gained seats in last fall’s elections and Democrats defected on the issue. Democrats say Republicans just want to protect corporations from taking responsibility for their wrongdoing by keeping them clear of state courts that might issue multimillion-dollar verdicts against them.

  • Observer Comments

    Show: Subjects Only | Full Comments
    View Name:Guest
    Subject: cheese...
    View Name:Guest
    Subject: Positive Mac Thoughts
    View Name:Guest
    Subject: Come on Now Apple! Quit being Stupid!
    View Name:Guest
    Subject: to the above comment
    Close Name:kenaustus Posts: 601 Joined: 27 Jun 2003
    Subject: Remember

    The complaint was written by lawyers who are probably working for a percentage of the profits, er, award. They can write anything they want and at 26 pages they probably threw in everything, including the kitchen sink.

    Resellers do face a challenge these days. They are between the mass merchants that receive much higher traffic and the Apple Stores, which are setting new standards in computer retailing. While there are some good ones there have also been a lot of posts about resellers with crummy stores and poor customer service.

    End result:

    Customers will probably get a $25 coupon against their next Apple purchase.
    Resellers will get written assurance that they will get deliveries at the same rate as the Apple Stores as long as they pay their invoices by the due date and the lawyers will make millions.

    View Name:Guest
    Subject: Lawyers
    View Name:Guest
    Subject: I have been to the 2 resellers in the suit
    View Name:Guest
    Subject: Legal Experts?
    View Name:Guest
    Subject:
    View Name:Guest
    Subject: Nothing's changed ...
    View Name:Guest
    Subject: Assertion of 10:46am
    Close Name:geoduck Posts: 1726 Joined: 30 Dec 2003
    Subject:

    I guess I don't know why five people constitute a "class". Whether Apple's actions were illegal or not is up to the system. These 5 people may indeed have legitimate grievances against Apple. We won't know until the trial. It just p****s me off when some group wants to paint me and others as part of their class (in this case Apple's Consumers) so they stand a better chance of hitting the lottery. I wasn't harmed, most of Apples customers weren't harmed, most people weren't harmed by Apples alleged actions. Yet apparently from the text of the article these five individuals from across the country are presenting themselves as the leads in a consumer class action.

    Five pissed off people aren't a "class".

    View Name:Guest
    Subject: Good or not good
    View Name:Guest
    Subject: Five pissed off people aren't a "class".
    View Name:Guest
    Subject:
    View Name:Guest
    Subject: Apple resellers
    View Name:Guest
    Subject: VAR QUALITY
    View Name:Guest
    Subject: Apple apologists... always funny
    View Name:Guest
    Subject:
    View Name:Guest
    Subject:
    View Name:Guest
    Subject:
    View Name:Guest
    Subject:
    View Name:Guest
    Subject: You've GOT to be kidding me.....
    Close Name:cooner Posts: 30 Joined: 17 Aug 2004
    Subject: Eggs in one basket?

    I'm no legal expert, but I find it odd that they're wrapping all these plaintiffs into a single lawsuit. It seems like they're addressing two completely different types of complaints from two completely different types of plaintiffs.

    If Apple was sending out used or refurbished equipment as new, then yes, that's a practice that should be stopped, and they can be slapped on the wrists pretty hard for it.

    If -- IF -- Apple was tinkering with their third party resellers' supply chain in a way that was in fact an illegal business practice, that seems like a totally different issue. Complicating matters is the very conspicuous fact that it seems like it's only the third-party stores who had poor business practices and customer service records themselves making these claims; all the more reputable resellers seem to be competing and getting along well enough, suggesting that maybe the resellers in the lawsuit are just trying to blame Apple for their own shortcomings.

    But again ... why these two different matters are being folded into one lawsuit, I don't know. Maybe the resellers feel that if they bundle their case in with a more legitimate one they'll have a better chance at winning, even if the cases are ultimately unrelated.

    View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
    Subject: Sorry iLemmings But Your New iMac Could Be An iLemon
    View Name:Guest
    Subject: a plea for help from England.
    View Name:Guest
    Subject: i was ripped by apple
    Close Name:Intruder -   TMO Mac Specialist Posts: 2928 Joined: 07 Jul 2004
    Subject: Re: i was ripped by apple

    Quote
    Anonymous wrote:
    I got a macbook i was sure had been opened, but the store gave it to me in my hand, was in plastic and all, yet when i took it home it had scratches!

    i tried calling apple, i got it in spain since i go to school here for another year, and guess what, calling them was a nightmare full of denials.

    how would you like to get someone a gift for 1400€ only to find it was a refurbished computer., you apple geeks think its ok to allow apple to do whatever they want, well its wrong and illegal, apple should NOT sell refurbished macs at full prices.


    If you didn't buy it in an Apple store, then your argument is most likely with the store you bought it from. What is to prevent THEM from selling you a "used" machine as new? Considering the only "plastic" they are wrapped in from the factory is the thin, white sleeve with the label holding it closed (which is easy to close again without making it look like it had ever been opened).

    If the box it came in was shrinkwrapped, then the store did that themselves. The boxes come from Apple with only a small, round piece of clear tape holding the lid closed.

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