On September 12, 2016, a class-action suit was filed against Apple, Inc. arising from allegations that the company wrongfully prohibited iPhone Upgrade Program subscribers from pre-ordering its much-anticipated iPhone 7.
In 2015, Apple introduced the “iPhone Upgrade Program,” a way for consumers to ensure that they could easily and quickly obtain the newest iPhone every year. As provided on the tech giant’s website: “With the iPhone Upgrade Program, you can spread the cost of an iPhone over 24 months. But you can also upgrade to a new iPhone after just six months, if you’ve made at least 12 payments. Just trade in your current iPhone and start a new plan.”
Apple announced that customers could pre-order the iPhone 7 and iPhone 7 Plus on Friday, September 9, at 12:01 a.m. (PST). In the suit filed against Apple, iPhone Upgrade Program subscriber Emil Frank alleges that when he tried to pre-order an iPhone7 in the early hours of September 9, 2016, an automated reply from the company said, “We’re not taking any more reservations to upgrade your iPhone right now. Reservations will reopen at 8:00 a.m. on September 17. Please come back then to make a reservation.” Frank contends that while subscribers of the program were told to come back and try to pre-order at a later time, all other consumers could purchase the phone as soon as it became available for pre-order.
Frank argues that if subscribers must wait to receive an iPhone 7 until November due to the high demand for the product, then they will likely be making more payments on their old phones than the minimum requirement of 12 payments. In addition, should customers finally acquire their new phones in November, then it is alleged that they may have to make 12 additional payments to be eligible for the 2017 upgrade, therefore missing an anticipated September launch of the next iPhone.
Accordingly, Frank asserts claims for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, violations of California’s Consumer Legal Remedies Act and Unfair Competition Law. Additionally, Frank seeks class-action status for all subscribers of the iPhone Upgrade Program who joined before September 2016, made 12 monthly payments and were unable to obtain a new iPhone 7. The relief sought is the reimbursement of the extra payments made while subscribers await the arrival of their new phones. Further, Frank is seeking to have the company make all iPhone Upgrade Program members eligible for the 2017 launch and to make inventory available to all members of the program.
The suit was filed Monday, September 12, 2016, in the United States District Court for the Northern District of California.
This case is Emil Frank v. Apple Inc.
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