[muglo] interesting
- From: Hawk <taylorc547@xxxxxxxxxx>
- To: <muglo@xxxxxxxxxxxxx>
- Date: Mon, 21 Feb 2005 19:20:09 -0500
Class action suit accuses Apple of unlawful practices, misappropriation of
trade secrets
By Kasper Jade and Prince McLean
Published: 01:05 AM EST
A class action lawsuit has been filed against Apple Computer with two
classes, one for Apple resellers and the other for consumers, AppleInsider
has learned.
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In the 26-page complaint, filed in the San Francisco County Superior Court
in California on Thursday, a group of consumers and Apple resellers allege
that Apple has engaged in acts of unfair and unlawful business practices,
breach of contract, and misappropriation of trade secrets. These actions
have also resulted in violations of the Consumers Legal Remedies Act and
Song Beverly Act, the suit claims.
The class action lawsuit was filed by three firms on behalf of Jack
Branning, James Seybert, Stacey Blevins, Tom Siechert and Joe Weingarten.
Together they accuse Apple of repackaging and selling refurbished machines
to resellers and consumers as 'new products' without notification to the
reseller or end customer. They say Apple has not always honored its extended
warranty contracts known as Apple Care, and have often shorted consumers on
the term of new product warranties.
The plaintiffs also charge the company with further warranty abuse, and
failure to extend warranty dates based on the time it takes to repair a
product. For example, if Apple spends a month to repair a customer's iBook,
the suit says that Apple is obligated to extend the warranty period one
month because the product was not in the consumer's hands. Apple's refusal
to correct warranty dates has resulted in the reseller or consumer being
wrongfully charged for repairs, the suit says.
Resellers are also charging the company with unfair and unlawful
competition, saying Apple has stocked its own retail stores before the
retail channel in an effort to recruit customers to its own sales channels.
They also allege Apple has used unfair pricing policies. The suit says Apple
has sold Macs to end users at prices below their own wholesales costs, and
that Apple has made promises to sell its products below the price of any
other Authorized Apple Reseller.
Resellers also argue that Apple is not properly reflecting the repair costs
or requirements on equipment, which unfairly places warranty repair burden
on the reseller channel. The court documents also reveal allegations that
Apple at times has refused to compensate for, or accept returns of,
defective parts provided for repairs.
The plaintiffs say they can prove that Apple has consistently shipped
product directly to end consumers faster than they have to resellers,
resulting in additional losses to the reseller channels. They further accuse
Apple of providing educational and government discounts to persons not
qualified, which in some cases fall below or at reseller costs.
Ironically, the lawsuit also accuses Apple of misappropriating of trade
secrets, saying the company is taking confidential reseller information and
using it to develop customer lists for its own in-house sales force. This
allows Apple to bypass resellers and secure large direct orders originally
intended for the resellers. In recent months, Apple has been scrambling
aggressively to protect what it claims are its own trade secrets, filing a
lawsuit against ThinkSecret and subpoenaing other journalists to reveal
their sources.
This latest class action lawsuit joins similar ones filed against Apple by
resellers in recent years. MacAdam vs. Apple, filed in 2003, alleges breach
of contract and fraud by Apple. The suit is still awaiting trial in the
Santa Clara Superior Court in San Jose, Calif, following a recent change in
the plaintiff's counsel.
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