Case 3:20-cv-01629-GPC-BLM Document 1 Filed 08/21/20 PageID.

1 Page 1 of 10

1 JENNER & BLOCK LLP

Kate T. Spelman (Cal. Bar No. 269109)
2
kspelman@jenner.com
3 Alexander M. Smith (Cal. Bar No. 295187)
4
asmith@jenner.com
633 West 5th Street, Suite 3600
5 Los Angeles, CA 90071-2054
6
Telephone: (213) 239-5100
Facsimile: (213) 239-5199
7

8
Attorneys for Defendants
Apple Inc. and Apple Value Services, LLC
9

10

11

12

13 UNITED STATES DISTRICT COURT

14 SOUTHERN DISTRICT OF CALIFORNIA
15

16 RACHAEL SHAY, individually and on '20CV1629 GPC BLM

Case No. ____________________
behalf of all others similarly situated,
17
DEFENDANTS APPLE INC. AND
18 Plaintiff, APPLE VALUE SERVICES, INC.’S
19 v. NOTICE OF REMOVAL

20 APPLE, INC. and APPLE VALUE

21 SERVICES, LLC,

22 Defendants.
23

24

25

26

27

28

APPLE INC. AND APPLE VALUE SERVICES, LLC’S NOTICE OF REMOVAL

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1 Defendants Apple Inc. (erroneously sued as “Apple, Inc.”) and Apple Value Services,
2 LLC (collectively, “Apple”) hereby effect the removal of this action from the Superior
3 Court of California, County of San Diego, to the United States District Court for the
4 Southern District of California. Removal is proper under the Class Action Fairness Act of
5 2005 (“CAFA”), 28 U.S.C. § 1332(d), because this case is a class action in which the
6 proposed class exceeds 100 members, at least one plaintiff is diverse from at least one
7 defendant, and the amount in controversy exceeds $5 million. Venue is proper in this Court
8 because it is the “district and division embracing the place where [the] action is pending.”
9 28 U.S.C. § 1441(a); see also 28 U.S.C. § 84(d) (providing that San Diego County is part
10 of the Southern District of California).
11 FACTUAL BACKGROUND AND STATE COURT PROCEEDINGS
12 1. Plaintiff filed this lawsuit in San Diego County Superior Court on May 28,
13 2020. Before effecting service on Apple, Plaintiff amended her complaint on July 13, 2020.
14 Apple was served with the Summons and First Amended Complaint (“FAC”) on July 23,
15 2020. See Ex. 1.
16 2. Pursuant to 28 U.S.C. § 1446(a), a true and correct copy of the state court case
17 file is attached to this Notice of Removal and is incorporated by reference herein. The file
18 includes all process, pleadings, motions, and orders filed in this case, including the
19 Summons and FAC (Exhibit 1) and all other documents filed in the state court (Exhibit 2).
20 3. Plaintiff alleges that Apple manufactured, marketed, sold, and/or distributed
21 Apple gift cards that were susceptible to an ongoing scam wherein third parties fraudulently
22 accessed and redeemed gift card funds prior to use by consumers. FAC ¶ 2. Plaintiff alleges
23 that Apple failed to take “preventative measures” to avert this third party conduct, failed to
24 “warn consumers that the Apple gift cards are easily susceptible to theft upon purchase,”
25 and “refus[ed] to refund consumers that complained when they discovered their Apple gift
26 cards were valueless.” Id. ¶ 3.
27 4. Based on these allegations, Plaintiff asserts claims for violations of the
28 Consumers Legal Remedies Act (“CLRA”), Cal. Civ. Code §§ 1750 et seq., the Unfair

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1 Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq., and the California
2 Consumer Privacy Act (“CCPA”), Cal. Civ. Code §§ 1798.150 et seq. FAC ¶¶ 40-75.
3 Plaintiff also asserts common-law claims for negligence, negligent misrepresentation, and
4 breach of the implied warranty of merchantability. Id. ¶¶ 76-109. Plaintiff purports to
5 assert these claims on behalf of a proposed nationwide class consisting of “[a]ll consumers
6 in the United States who purchased an Apple gift card wherein the funds on the Apple gift
7 card was [sic] redeemed prior to use by the consumer,” as well as a proposed California
8 subclass consisting of “[a]ll consumers in the State of California who purchased an Apple
9 gift card wherein the funds on the Apple gift card was [sic] redeemed prior to use by the
10 consumer.” Id. ¶ 31. The proposed class definition does not include any temporal
11 limitation. See id.
12 5. Plaintiff seeks a variety of remedies on behalf of the proposed class, including
13 restitution; disgorgement; actual, punitive, and statutory damages; declaratory and
14 injunctive relief, including a “corrective advertising campaign;” and attorneys’ fees. See
15 FAC ¶¶ 47 & 75, Prayer for Relief.
16 REMOVAL IS PROPER UNDER CAFA (28 U.S.C. § 1332(d))
17 6. CAFA provides that federal courts have original jurisdiction over class actions
18 in which (a) any plaintiff is diverse from any defendant, (b) there are at least 100 members
19 in the proposed class, and (c) the amount in controversy exceeds $5 million, exclusive of
20 interest and costs. 28 U.S.C. § 1332(d). Under 28 U.S.C. § 1441(a), any such action may
21 be removed to the district court for the district and division embracing the place where the
22 action is pending.
23 7. Under CAFA, there is no presumption against removal to federal court. See
24 Dart Cherokee Basin Operating Co v. Owens, 574 U.S. 81, 89 (2014). Until and unless a
25 plaintiff challenges removal, an assessment of the amount in controversy is based solely on
26 the allegations of the complaint, rather than “evidentiary submissions.” Id. at 84; see also
27 Henry v. Cent. Freight Lines, Inc., 692 F. App’x 806, 807 (9th Cir. 2017) (noting in a case
28

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1 removed under CAFA that a court must rely on “the allegations contained in the complaint”
2 in determining the amount in controversy).
3 8. In other words, a defendant need not offer evidence to substantiate the amount
4 in controversy; rather, a “notice of removal need include only a plausible allegation that the
5 amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee, 574 U.S. at
6 89. “Evidence establishing the amount is required . . . only when the plaintiff contests, or
7 the court questions, the defendant’s allegation.” Id.; see also Greene v. Harley-Davidson,
8 Inc., 965 F.3d 767, 772 (9th Cir. 2020) (applying Dart Cherokee standard to removal under
9 CAFA); LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1202 (9th Cir. 2015) (holding that
10 a “preponderance of the evidence” standard applies only after “a defendant’s assertion of
11 the amount in controversy is challenged”) (citations and internal quotation marks omitted).
12 Plaintiff Has Alleged That the Proposed Class Is Sufficiently Numerous
13 9. Plaintiff purports to bring this action on behalf of “[a]ll consumers in the
14 United States who purchased an Apple gift card wherein the funds on the Apple gift card
15 was [sic] redeemed prior to use by the consumer.” FAC ¶ 31. Plaintiff alleges that this
16 proposed class includes “thousands” of class members. Id. ¶ 32.
17 10. While Apple does not concede the truth of Plaintiff’s allegations, those
18 allegations establish that the proposed class satisfies CAFA’s numerosity requirement. See
19 28 U.S.C. § 1332(d)(5)(B).
20 The Parties Are Minimally Diverse
21 11. Apple Inc. is a Delaware corporation with its principal place of business in
22 Cupertino, California. See FAC ¶ 10. Apple Value Services, LLC is a Virginia limited
23 liability company with its principal office address in Cupertino, California. See Virginia
24 Secretary of State, State Corporation Commission, Entity Information, available at
25 https://cis.scc.virginia.gov/EntitySearch/BusinessInformation?businessId=542620&source
26 =FromEntityResult&isSeries=False; accord FAC ¶ 11.
27 12. Plaintiff resides in San Diego County and is a citizen of California. See id.
28 ¶ 9. She seeks to represent not only a proposed class of California consumers, but also a

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1 proposed nationwide class consisting of “[a]ll consumers in the United States who
2 purchased an Apple gift card wherein the funds on the Apple gift card was [sic] redeemed
3 prior to use by the consumer.” Id. ¶ 31.
4 13. Because the proposed nationwide class includes individuals who are not
5 citizens of California, the minimal diversity requirement is satisfied because at least one
6 proposed class member is diverse from at least one defendant. See 28 U.S.C. § 1332(d)(A)
7 (extending subject matter jurisdiction to cases in which “any member of a class of plaintiffs
8 is a citizen of a State different from any defendant”); Rosas v. Carnegie Mortg., LLC, No.
9 11-7692, 2012 WL 1865480, at *5 (C.D. Cal. May, 21, 2012) (“Because the complaint
10 alleges a ‘nationwide class’ . . . minimal diversity necessarily exists.”).
11 14. Moreover, because the proposed nationwide class includes consumers from all
12 fifty states and the District of Columbia, it is exceedingly unlikely that over a third of the
13 proposed class members are citizens of California, as would be necessary for CAFA’s “local
14 controversy” exception to apply. See 28 U.S.C. § 1332(d)(3). It is even more unlikely that
15 over two thirds of the proposed class members are citizens of California, as would be
16 necessary for CAFA’s “home state” exception to apply. See id. § 1332(d)(4). Indeed, there
17 are no factual allegations in Plaintiff’s complaint suggesting any basis for Plaintiff to meet
18 her burden of establishing that the “local controversy” or “home state” exceptions apply
19 here. See generally Mondragon v. Capital One Auto Fin., 736 F.3d 880, 883 (9th Cir. 2013)
20 (noting that the “burden of proof for establishing the applicability of an exception to CAFA
21 jurisdiction rests on . . . the plaintiff”).
22 Plaintiff Has Alleged That There Is at Least $5,000,000 in Controversy
23 15. “In measuring the amount in controversy, a court must assume that the
24 allegations of the complaint are true and that a jury will return a verdict for the plaintiff on
25 all claims made in the complaint.” Korn v. Polo Ralph Lauren Corp., 536 F. Supp. 2d 1199,
26 1205 (E.D. Cal. 2008). It must then “add[] up the value of the claim of each person who
27 falls within the definition of [the] proposed class.” Standard Fire Ins. Co. v. Knowles, 568
28 U.S. 588, 592 (2013).

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1 16. To satisfy the amount in controversy requirement, a defendant must establish

2 only that “the potential damages could exceed the jurisdictional amount.” Rea v. Michaels
3 Stores Inc., 742 F.3d 1234, 1239 (9th Cir. 2014) (quoting Lewis v. Verizon Commc’ns, Inc.,
4 627 F.3d 395, 397 (9th Cir. 2010)). The “amount in controversy is not a prospective
5 assessment of [a] defendant’s liability”; instead, “it is the amount at stake in the underlying
6 litigation.” Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 417 (9th Cir. 2018) (citations
7 and internal quotation marks omitted).
8 17. In other words, “[t]he ultimate inquiry is what amount is put ‘in controversy’
9 by the plaintiff’s complaint, not what a defendant will actually owe.” Korn, 536 F. Supp.
10 2d at 1205 (emphasis in original); see also, e.g., Greene, 965 F.3d at 772 (“[T]he amount
11 in controversy is the ‘amount at stake in the underlying litigation.’ ‘Amount at stake’ does
12 not mean likely or probable liability; rather it refers to possible liability.”) (quoting
13 Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 648 (9th Cir. 2016)) (second
14 emphasis added); Rippee v. Boston Mkt. Corp., 408 F. Supp. 2d 982, 986 (S.D. Cal. 2005)
15 (“It’s not a question as to what you would owe. It’s a question as to what is in controversy.”)
16 (citation omitted). For that reason, the Ninth Circuit has made clear that a court cannot
17 “delve into the merits” or conduct “a fact-based analysis of the merits” in assessing the
18 amount in controversy. Greene, 965 F.3d at 774.
19 18. Without conceding any merit to Plaintiff’s allegations, causes of action, claims
20 for actual, statutory, or punitive damages, or claim for injunctive relief, the amount placed
21 in controversy by Plaintiff’s complaint satisfies CAFA’s jurisdictional threshold.
22 19. Although Plaintiff’s complaint does not specify a precise amount of damages,
23 she alleges a “rampant” pattern of fraud involving Apple gift cards, and she suggests that
24 this supposed pattern has affected “thousands” of consumers nationwide over an unlimited
25 period of time. FAC ¶¶ 3, 31, 104. In light of the fact that Apple’s popular gift cards are
26 widely available through Apple online and retail stores, as well as third-party retailers
27 including drugstores, department stores, and electronics stores throughout the United States,
28 it is “reasonably possible” that Plaintiff’s allegations of a “rampant” fraudulent scheme,

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1 taken as true solely for purposes of the instant analysis, place at least $5 million of Apple
2 gift card sales in controversy. See Greene, 965 F.3d at 772.1
3 20. Plaintiff also seeks statutory damages under the CCPA, which authorizes up
4 to $750 in statutory damages per consumer. See Cal. Civ. Code § 1798.150(a)(1)(A).
5 “Where a statutory maximum is specified, courts may consider the maximum statutory
6 penalty available in determining whether the jurisdictional amount in controversy
7 requirement is met.” Korn, 536 F. Supp. 2d at 1205; see also Morey v. Louis Vuitton N.
8 Am., Inc., 461 F. App’x 642, 643 (9th Cir. 2011) (reversing order remanding lawsuit to state
9 court and using maximum statutory penalty of $1,000 per violation to calculate amount in
10 controversy). Here, assuming that the “rampant” pattern of fraud alleged in Plaintiff’s
11 complaint impacted just 7,000 consumers nationwide, which is entirely consistent with
12 Plaintiff’s allegation that the proposed class includes “thousands” of class members, then
13 the amount of statutory damages alone could exceed $5 million.2
14 21. In addition to actual and statutory damages, Plaintiff seeks punitive damages
15 under the CLRA and the CCPA. See FAC ¶¶ 47, 75. When a plaintiff seeks punitive
16 damages in her complaint, courts consider those potential damages in calculating the
17 amount in controversy. See, e.g., Bell-Sparrow v. Wiltz, No. 12-2782, 2014 WL 2927354,
18 at *4-5 (N.D. Cal. June 27, 2014) (including punitive damages award with a 5.5 multiplier
19 in amount-in-controversy in light of plaintiff’s request for punitive damages in connection
20 with a claim for intentional misrepresentation); Lee v. Equifax Info. Servs., LLC, No. 13-
21
1
In 2017 and 2018 alone, Apple recorded approximately $7.5 billion in “deferred revenue”
22
attributable in significant part to gift card sales. See 2018 Apple Inc. Form 10-K at 40, 44,
23 available at https://investor.apple.com/sec-filings/default.aspx.
2
24 Plaintiff asserts her CCPA claim not only on behalf of the proposed California subclass,
but on behalf of the proposed nationwide class. See FAC ¶ 66. While Apple does not admit
25
that Plaintiff is entitled to assert a CCPA claim on behalf of proposed class members outside
26 of California, Plaintiff — as the “master of [her] complaint” — has nonetheless placed in
controversy the statutory damages those proposed class members seek to recover under the
27
CCPA. Greene, 965 F.3d at 774 (holding that courts should not consider a defendant’s
28 potential defenses in determining whether damages are recoverable when calculating the
amount in controversy).
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1 4302, 2013 WL 6627755, at *4 (N.D. Cal. Dec. 16, 2013) (similar); Simmons v. PCR Tech.,
2 209 F. Supp. 2d 1029, 1033 (N.D. Cal. 2002) (similar).
3 22. In assessing the amount in controversy, the Ninth Circuit does not require a
4 “likelihood” that the plaintiff will “prevail[] on the punitive damages claim,” and it has
5 directed district courts not to inquire into the merits of the punitive damages claim or
6 whether the case is factually analogous to other cases in which courts have awarded punitive
7 damages. Greene, 965 F.3d at 771-73 (holding that district court erred in requiring Harley-
8 Davidson to “compar[e] and analogiz[e] the underlying factual allegations” to those in other
9 cases where the courts awarded punitive damages).3
10 23. Punitive damages awards “can be substantial.” Hurd v. Am. Income Life Ins.,
11 No. 13-5205, 2013 WL 5575073, at *7 (C.D. Cal. Oct. 10, 2013). Even “applying the
12 ‘conservative’ estimate of a 1:1 ratio between compensatory damages and punitive
13 damages,” Plaintiff’s request for punitive damages would double the amount in controversy
14 attributable to the damages Plaintiff asserts here. Tompkins v. Basic Research LLC, No.
15 08-244, 2008 WL 1808316, at *4 (E.D. Cal. Apr. 22, 2008) (including potential punitive
16 damages in analyzing amount in controversy).
17 24. Plaintiff also seeks to recover attorneys’ fees. See FAC ¶ 75; Prayer ¶ 6. For
18 purposes of assessing the amount in controversy, the Court is not limited to considering
19 fees incurred at the time of removal; rather, “a court must include future attorneys’ fees
20 recoverable by statute or contract when assessing whether the amount-in-controversy
21 requirement is met.” Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 794 (9th Cir.
22 2018) (holding that the amount in controversy includes fees likely to be incurred after
23 removal); see also Bayol v. Zipcar, Inc., No. 14-2483, 2015 WL 4931756, at *7 (N.D. Cal.
24 Aug. 18, 2015) (“The amount in controversy can include . . . attorneys’ fees[.]”). Fee
25 requests in consumer class actions, such as this case, are typically significant. See, e.g.,
26

27 3
Under California law, punitive damages are available only upon a showing of “oppression,
28 fraud, or malice.” Cal. Civ. Code § 3294(a). Apple denies that its conduct is in any way
oppressive, fraudulent, or malicious or that it is liable for punitive damages.
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1 Wilson v. Airborne, Inc., No. 07-770, 2008 WL 3854963, at *12 (C.D. Cal. Aug. 13, 2008)
2 (awarding $3,459,946 in attorneys’ fees in deceptive advertising class action); Chavez v.
3 Netflix, Inc., 162 Cal. App. 4th 43, 46 (2008) (awarding attorneys’ fees of $2.04 million as
4 part of the settlement of consumer class action); In re Sony SXRD Rear Projection
5 Television Class Action Litig., No. 06-5173, 2008 WL 1956267, at *16 (S.D.N.Y. May 1,
6 2008) (awarding class counsel $1.6 million in attorneys’ fees and expenses in breach-of-
7 warranty class action).
8 25. Furthermore, Plaintiff seeks an order requiring Apple to “engage in a
9 corrective advertising campaign.” FAC at Prayer for Relief ¶ 5. “In actions seeking
10 declaratory or injunctive relief, it is well established that the amount in controversy is
11 measured by the value of the object of the litigation.” Cohn v. Petsmart, Inc., 281 F.3d 837,
12 840 (9th Cir. 2002) (quoting Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333, 347
13 (1977)); see also Rose v. J.P. Morgan Chase, N.A., No. 12-225, 2012 WL 892282, at *2-3
14 (E.D. Cal. Mar. 14, 2012) (denying motion to remand where value of injunctive relief
15 sought exceeded the amount in controversy). The amount in controversy therefore includes
16 “the cost [to Apple] of complying with [Plaintiff’s] requested injunctive relief” — i.e., a
17 corrective advertising campaign. Gen. Dentistry for Kids, LLC v. Kool Smiles, P.C., 379 F.
18 App’x 634, 635 (9th Cir. 2010).
19 26. The cost of a “corrective advertising” campaign would be significant —
20 particularly for an entity the size of Apple, which is one of the largest companies (if not the
21 single largest company) in the world. In fact, it is entirely possible that the cost of such a
22 corrective advertising campaign alone could come close to, or even exceed, $5 million. See,
23 e.g., Fefferman v. Dr. Pepper Snapple Grp., Inc., No. 13-160, 2013 WL 12114486, at *3
24 (S.D. Cal. Mar. 12, 2013) (noting that, “[i]n total, the corrective advertisement campaign
25 would cost Defendants approximately $4,985,000”).
26 27. Therefore, when aggregated, Plaintiff’s request for actual damages, restitution
27 and disgorgement, statutory damages under the CCPA, punitive damages under the CLRA
28

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1 and CCPA, and attorney’s fees, combined with the cost of Plaintiff’s requested “corrective
2 advertising campaign,” readily exceed CAFA’s $5 million threshold.
3 VENUE IS PROPER
4 28. Venue is proper in this Court because Plaintiff filed her complaint in San Diego
5 County Superior Court, which is located in this District. See 28 U.S.C. § 1441(a) (“Except
6 as otherwise expressly provided by Act of Congress, any civil action brought in a State
7 court of which the district courts of the United States have original jurisdiction, may be
8 removed by the defendant or the defendants, to the district court of the United States for the
9 district and division embracing the place where such action is pending.”); 28 U.S.C. § 84(d)
10 (providing that San Diego County is part of the Southern District of California).
11 REMOVAL IS TIMELY
12 29. Under 28 U.S.C. § 1446(b), a notice of removal of a civil action must be filed
13 within thirty days of the defendant’s receipt of service of the Summons and the Complaint.
14 Apple was served on July 23, 2020. See Ex. 1. This Notice of Removal is therefore timely.
15 OTHER REQUIREMENTS FOR REMOVAL ARE MET
16 30. No attorneys for Apple have entered an appearance, or filed any pleadings or
17 other papers responding to the initial or amended complaint, in the Superior Court.
18 31. Pursuant to 28 U.S.C. § 1446(d), Apple will promptly give written notice of
19 the filing of this Notice of Removal to all parties and will promptly file a written notice,
20 along with a copy of this Notice of Removal, with the Clerk of the San Diego County
21 Superior Court and serve it on all parties. See Ex. 3 (Notice to State Court).
22

23 DATED: August 21, 2020 JENNER & BLOCK LLP

24
By: s/ Kate T. Spelman
25 Attorney for Defendants
Apple Inc. and Apple Value Services, LLC
26
E-mail: kspelman@jenner.com
27

28

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JS 44 (Rev. 09/19) CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)

I. (a) PLAINTIFFS DEFENDANTS

Rachael Shay Apple Inc. and Apple Value Services, LLC

(b) County of Residence ofFirst Listed Plaintiff _

S_a_n_D
_ie_g_o______ County of Residence of First Listed Defendant
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known) '20CV1629 GPC BLM
James Hawkins and Samantha A. Smith Kate T. Spelman and Alexander M. Smith
James Hawkins APLC Jenner & Block LLP
9880 Research Drive. Ste. 200, Irvine. CA 92618 633 W. 5th St.. Ste. 3600, Los Ani:ieles, CA 90071
II. BASIS OF JURISDICTION (Placean "X"inOneBoxOnly) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an "X" in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
• I U.S. Government • 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State IX I • I Incorporated or Principal Place •
4 IX 4
of Business In This State

02 U.S. Government C!!: 4 Diversity Citizen of Another State • 2 • 2 Incorporated and Principal Place • 5 • 5
Defendant (Indicate Citizenship of Parties in Item Ill) of Business In Another State

• 3 • 3 Foreign Nation • 6 • 6

IV NATURE OF SUIT (Place an "X" in One Box Only) Clikh

C ere f.or: N ature o fS Ult
. Cdo e D escnohons.
I CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES I
• 110 Insurance PERSONAL INJURY PERSONAL INJURY • 625 Drug Related Seizure • 422 Appeal 28 USC 158 • 375 False Claims Act
• 120Marine • 310 Airplane •
365 Personal Injury - of Property 21 USC 88 I • 423 Withdrawal • 376 Qui Tam (31 USC
• 130 Miller Act • 315 Airplane Product Product Liability • 690 Other 28 USC 157 3729(a))
• 140 Negotiable Instrument Liability •
367 Health Care/ • 400 State Reapportionment
• 150 Recovery of Overpayment • 320 Assault, Libel & Phannaceutical PROPERTY RIGHTS • 410 Antitrust
& Enforcement of Judgment Slander Personal Injury • 820 Copyrights • 430 Banks and Banking
• 151 Medicare Act • 330 Federal Employers' Product Liability • 830 Patent • 450 Commerce
• 152 Recovery of Defaulted Liability •
368 Asbestos Personal • 835 Patent - Abbreviated • 460 Deportation
Student Loans • 340Marine Injury Product New Drug Application • 4 70 Racketeer Influenced and
(Excludes Veterans) • 345 Marine Product Liability • 840 Trademark Corrupt Organizations
• 153 Recovery of Overpayment Liability PERSONAL PROPERTY LABOR SOCIAL SECURITY • 480 Consumer Credit
of Veteran's Benefits • 350 Motor Vehicle C!!: 370 Other Fraud • 710 Fair Labor Standards • 861 HIA (1395ft) (15 USC 1681 or 1692)
• 160 Stockholders' Suits • 355 Motor Vehicle •
3 71 Truth in Lending Act • 862 Black Lung (923) • 485 Telephone Consumer
• 190 Other Contract Product Liability •
380 Other Personal • 720 Labor/Management • 863 DIWC/DIWW (405(g)) Protection Act
• 195 Contract Product Liability • 360 Other Personal Property Damage Relations • 864 SSID Title XVI • 490 Cable/Sat TV
• 196 Franchise Injury •
385 Property Damage • 740 Railway Labor Act • 865 RSI (405(g)) • 850 Securities/Commodities/
• 362 Personal Injury - Product Liability • 751 Family and Medical Exchange
Medical Maloractice Leave Act • 890 Other Statutory Actions
I REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS • 790 Other Labor Litigation FEDERAL TAX SUITS • 891 Agricultural Acts
• 210 Land Condenmation • 440 Other Civil Rights Habeas Corpus: • 791 Employee Retirement • 870 Taxes (U.S. Plaintiff • 893 Environmental Matters
• 220 Foreclosure • 441 Voting •
463 Alien Detainee Income Security Act or Defendant) • 895 Freedom of Information
• 230 Rent Lease & Ejectment • 442 Employment •
510 Motions to Vacate • 8 71 IRS-Third Party Act
• 240 Torts to Land 0 443 Housing/ Sentence 26 USC 7609 • 896 Arbitration
• 245 Tort Product Liability Accommodations •
530 General • 899 Administrative Procedure
• 290 All Other Real Property • 445 Amer. w/Disabilities - •
535 Death Penalty IMMIGRATION Act/Review or Appeal of
Employment Other: • 462 Naturalization Application Agency Decision
• 446 Amer. w/Disabilities - •
540 Mandamus & Other • 465 Other Immigration • 950 Constitutionality of
Other •
550 Civil Rights Actions State Statutes
• 448 Education •
555 Prison Condition
•
560 Civil Detainee -
Conditions of
Confinement

V. ORIGIN (Place an "X" in One Box Only)

0 1 Original ~2 Removed from 0 3 Remanded from 0 4 Reinstated or O 5 Transferred from O 6 Multidistrict 0 8 Multidistrict
Proceeding State Court Appellate Court Reopened Another District Litigation - Litigation -
(specify) Transfer Direct File
Cite the U .S . Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity) :
28 U.S.C. 1332(d) (Class Action Fairness Act)
VI. CAUSE OF ACTION ,_B_n-
.e-f-de-s-cn-.p-t1-.o-n-of_c_a-us_e_
:-----------------------------------
Consumer class action related to Apple gift cards
VII. REQUESTED IN i2J CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:
COMPLAINT: UNDER RULE 23, F.R.Cv.P . JURY DEMAND: ~ Yes • No
VIII. RELATED CASE(S)
(See instructions) :
IF ANY JUDGE DOCKET NUMBER
DATE SIGNATURE OF ATTORNEY OF RECORD
August 21, 2020 Isl Kate T.Spelman
FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE

Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.12 Page 1 of 64

EXHIBIT 1
 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.13 Page 2 of 64

Wolters Kluwer

PROCESS SERVER DELIVERY DETAILS

Date: Thu, Jul 23, 2020

Server Name: Douglas Forrest

Location: Los Angeles, CA-LA

Entity Served APPLE VALUE SERVICES, LLC

Agent Name CT CORPORATION SYSTEM (C0168406)

Case Number 37202000017475CUMCCTL

Jurisdiction CA-LA
 \
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.14 Page 3 of 64
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Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.15 Page 4 of 64

1 JAMES HAWKTNS, APLC

JAMES R. HAWKLINS, ESQ. (#192925)
2 'james@jameshawkinsaplc.com ELECTRONICALLY FILED
* Supenor;,Cpurt:.of.:;CaJ!fo_mia;:
SAMANTHA A. SMITH, ESQ. (#233331) County of^Sah^Oiego;
3 samantha@jameshawkinsaplc.com
9880 Research Drive, Suite 200 :07/13/2020:^^04:P5:OOHPM:,
4 Irvine, CA 92618
Tel.: (949) 387-7200
5 Fax: (949) 387-6676
6 Attorneys for Plaintiff Rachael Shay,
on behalf of herself and all others similarly situated
7

8 SUPERIOR COURT OF THE STATE OF CALIFORNIA

9
COUNTY OF SAN DIEGO
10
11 RACHAEL SHAY, on behalf of herself and Case No. 37-2020-00017475-CU-MC-CTL
all others similarly situated,
12 Assigned for All Purposes to:
13 Plaintiff, Hon. Richard Whitney, Dept. C-68
V.
14 FIRST AMENDED CLASS ACTION
APPLE, INC., a Delaware corporation; COMPLAINT FOR DAMAGES AND
15 APPLE VALUE SERVICES, LLC, a EQUITABLE, DECLARATORY AND
Virgina limited liability corporation; and INJUNCTIVE RELIEF
16 Does 1 through 10, inclusive,
17
Defendants. DEMAND FOR JURY TRIAL
18
19
20
21
22
23
24
25
26
27
28

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.16 Page 5 of 64

1 Plaintiff Rachael Shay brings this action on behalf of herself and all others similarly
2 situated against Defendants Apple, Inc. and Apple Value Services, LLC ("'Apple” or

3 “Defendants”) and states as follows:

4 NATURE OF ACTION
5 1. This is a consumer class action on behalf consumers nationwide, and in California,

6 who purchased a defective, unsecure and valueless Apple gift card.

7 2. Throughout the Class Period, defined below, Defendants manufactured, marketed,

8 sold and/or distributed Apple gift cards Defendants knew, or should have known, were subject to
9 an ongoing scam wherein the funds on the gift cards are fraudulently redeemed by third parties
10 accessing the Personal Identification Number (“PIN”) prior to use by die consumer.
M 3. Rather than take simple preventative measures to curb the known and rampant
12 fraudulent conduct and/or warn consumers that the Apple gift card funds are easily susceptible to
13 theft upon purchase. Defendants perpetuated the fraud by staying silent, refusing to refund
14 consumers that complained when they discovered their Apple gift cards were valueless, and

15 failing to implement and maintain reasonable security procedures and practices appropriate to
16 protect consumers’ personal infomiation.
17 4. As a result. Defendants have caused Plaintiff and other similarly situated

18 consumers to purchase a product, which is not secure and does not perform as represented.

19 Plaintiff and other similarly situated consumers have been harmed in the amount they paid for the
20 gift cards, plus interest.
21 5. Plaintiff brings this action on behalf of herself and all other similarly situated

22 consumers to halt Defendants’ dissemination of unsecure Apple gift cards, correct the false and
23 misleading perception it has created in the minds of consumers that the Apple gift cards are secure
24 and of good quality, and to obtain redress for those who have purchased the faulty Apple gift

25 cards.
26 JURISDICTION AND VENUE
27 6. This Court has Jurisdiction over this action pursuant to the California Constitution,

28 Article VI, § 10, which grants the Superior Court original Jurisdiction in all causes except those

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.17 Page 6 of 64

given by statutes to other courts. The statutes under which this action is brought do not specify
2 any other basis for jurisdiction.
3 7. This Court has jurisdiction over all Defendants because, upon information and
4 belief, they are either citizens of California, have sufficient minimum contacts in California or
5 otherwise intentionally avail themselves of the California market so as to render the exercise of
6 jurisdiction over them by the California courts consistent with traditional notions of fair play and
7 substantial justice.
8 8. Venue as to each defendant is proper in this judicial district, pursuant to California

9 Code of Civil Procedure section 395.5. On information and belief, Defendants distribute, market
10 and sell their products in San Diego County and throughout California, and each defendant is
11 within the jurisdiction of this Court for service of process purposes. The unlawful acts alleged
12 herein have a direct effect on Plaintiff and those similarly situated within the State of California.
13 PARTIES
14 9. Plaintiff Rachael Shay is and was at all relevant times during the Class Period

15 defined herein, an individual residing in San Diego County, California. On April 3, 2020, Plaintiff
16 purchased a $50 Apple gift card from Walmart in Encinitas, California, as a gift for her son. The
17 gift card was solely in her possession until she gave it to her son. When her son attempted to load
18 the gift card he received a message indicating that the gift card had already been redeemed.
19 Plaintiff contacted Apple and was told the gift card was redeemed by another account on April 3,
20 2020, tlie same day she purchased the gift card, and the card no longer had any value. For security
21 reasons, Defendants would not provide Plaintiff with any additional information about the owner
22 account that redeemed the code, other than it was an account unrelated to Plaintiff and/or her son.
23 Plaintiff was then told there was nothing else Defendants could do for her, that her case was
24 closed and any further contact would go unanswered. Had Plaintiff known the truth about

25 Defendants’ defective gift cards, she would not have purchased it. As a result of her purchase,
26 Plaintiff suffered injury in fact and lost money.
27
28

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.18 Page 7 of 64

1 10. Defendant Apple, Inc. is a multinational technology company headquartered in

2 Cupertino, California, that designs, develops, and sells consumer electronics, computer software,
3 and online services.
4 11. Defendant Apple Value Services, LLC is a subsidiary of Apple, Inc. with its
5 headquarters also in Cupertino, California, and is responsible for 'Issuing and managing” Apple
6 gift cards in the United States.
7 12. Defendants manufacture, market, sell and/or distribute gift cards to thousands of
8 consumers across the country and in the State of California.
9 13. The true names and capacities, whether individual, corporate, associate, or
10 otherwise, of defendants sued herein as Does 1 to 10, inclusive, are currently unknown to
11 Plaintiff, who therefore sues these defendants by such fictitious names under California Code of
12 Civil Procedure § 474. Plaintiff is informed and believes, and based thereon alleges, that each of
13 the defendants designated herein as a Doe is legally responsible in some manner for the unlawful
14 acts referred to herein. Plaintiff will seek leave of court to amend this Complaint to reflect the true
15 names and capacities of the defendants designated hereinafter as Does when such identities
16 become known. Throughout this complaint, the term “Defendants” shall include defendants Does
17 ! to 10, inclusive.
18 FACTUAL ALLEGATIONS
19 14. Throughout the Class period. Defendants have manufactured, marketed, sold
20 and/or distributed Apple gift cards on a nationwide basis, and throughout California, in a uniform
21 and similar fashion.
22 15. The Apple gift cards are sold online and through Defendants’ various retailers and
23 may be used to access Defendants’ various online services, including services available through
24 the App Store and iTunes.
25 16. Apple gift cards contain a Personal Identification Number (“PIN”) covered with
26 silver scratch off tape. When a consumer purchases a new Apple gift card, the PIN is activated so
27 that it can be loaded onto a consumer’s Apple account to use for Apple services. Upon
28 information and belief (and as the acronym suggests), the Apple gift card PINs contain “personal

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.19 Page 8 of 64

information” associated with and/or reasonably linked, directly or indirectly, with the purchasing

2 consumer upon activation.

3 17. Upon information and belief, due to Defendants’ defective design, manufacture
4 and/or packaging of the Apple gift cards, including Apple’s failure to implement and maintain
5 reasonable security procedures and practices to properly secure the Apple gift cards, the Apple gift
6 cards are targeted by thieves who electronically access the Apple gift cards at the point of sale and
7 redeem the funds activated by the consumer. Subsequently, when a consumer attempts to load a
8 newly activated Apple gift card, the gift card registers as “redeemed” and is valueless.
9 18. Unbeknownst to Plaintiff, the Apple gift card she purchased as a birthday gift for
10 her son was subject to fraudulent conduct at the point of sale. Upon information and belief, after
11 activating the gift card, third parties intercepted the activated funds leaving Plaintiff with a
12 valueless card. Consequently, when Plaintiffs son went to redeem the funds, Plaintiffs son
13 received a message that the funds had already been redeemed.
14 19. When Plaintiff called Apple to complain, Apple informed Plaintiff that the gift
15 card was already redeemed, and die card no longer had any value. For security reasons,
16 Defendants would not provide Plaintiff with any additional information about who redeemed the
17 code, other than it was an account unrelated to Plaintiff and/or her son. Plaintiff was then told
18 there was nothing else Apple could do for her, that her case was closed, and any further contact
19 would go unanswered.
20 20. Upon information and belief, Apple maintains records indicating when the Apple
21 gift cards are activated, when they are redeemed, and how and where they are redeemed.
22 21. Upon information and belief, Defendants have known that the Apple gift cards they
23 sell to consumers are defective, unsecure and easily subject to kno\vn fraud.
24 22. The existence of numerous complaints from consumers regarding the unsecure and
25 valueless Apple gift cards are sufficient to put Apple on notice that the funds on the gift cards
26 were not guaranteed to be secure upon purchase.
27

28

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.20 Page 9 of 64

1 23. Despite this knowledge, Apple failed to take adequate and reasonable measures to

2 ensure that third parties did not tamper with its gift cards and to date continues to sell the Apple

3 gift cards easily prone to security breaches and theft as described herein.

4 24. Apple also failed to disclose to Plaintiff and Class Members that Apple did not

5 safeguard the gift cards and/or the gift card accounts to prevent the fraud and/or ensure that the

6 gift cards were not tampered with.

7 25. Apple failed to inform or disclose to the public, including Plaintiff and Class

8 Members, that it was aware of an ongoing fraud with the Apple gift cards, making it probable that

9 the funds on Apple gift cards could be easily accessed and stolen by third parties. Apple also

10 failed to disclose that its policy and practice was not to refund or replace the value of the Apple

II gift cards subjected to the known fraud.

12 26. Apple failed to inform or disclose to the public, including Plaintiff and Class

13 Members, that its Apple gift card policies and security practices were inadequate to safeguard

14 customers’ Apple gift card accounts and persona! identifying information against theft.

15 27. Plaintiff and Class Members had a reasonable expectation tliat Apple would

16 maintain their Apple gift card funds and gift card account information secure.

17 28. As a direct and proximate cause of Apple’s conduct. Plaintiff and Class Members

18 suffered injury in the amount of money loaded onto the gift cards.

19 29. Had Apple disclosed to Plaintiff and Class Members that Apple did not have

20 adequate systems, policies, and security measures in place to secure customers’ Apple gift card

21 account information and Apple gift card funds, Plaintiff and Class Members would not have

22 purchased the Apple gift cards.

23 30. Defendants have reaped enonnous profits from their unlawful, unfair and deceptive

24 business practices.

25 CLASS DEFINITION AND ALLEGATIONS

26 31. Pursuant to California Code of Civil Procedure 382, Plaintiff brings this action on

27 behalf of herself and on behalf of all members of the following class and subclass of similarly

28 situated individuals:

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.21 Page 10 of 64

Nationwide Class:
2 All consumers in the United States who purchased an Apple gift card wherein the funds on
3 the Apple gift card was redeemed prior to use by the consumer. Excluded from this Class
4 are Defendants and their officers, directors and employees, and those who purchased
5 Apple gift cards for the purpose of resale.
6 California Subclass:
7 All consumers in the State of California who purchased an Apple gift card wherein the
8 funds on the Apple gift card was redeemed prior to use by the consumer. Excluded from
9 this Class are Defendants and their officers, directors and employees, and those who
10 purchased Apple gift cards for the puipose of resale.
II 32. Numerositv. On information and belief, the Nationwide Class and California
12 Subclass (collectively, the “Class” or “Class Members”) are each so numerous that joinder of all
13 members of the Class is impracticable. Plaintiff is informed and believes that the proposed Class
14 contains thousands of purchasers of Apple gift cards who have been damaged by Defendants’
15 conduct as alleged herein. The precise number of Class Members is unknown to Plaintiff but
16 estimated to be in the thousands.
17 33. Existence and Predominance of Common Questions of Law and Fact. This action
18 involves common questions of law and fact, which predominate over any questions affecting
19 individual Class Members. These common legal and factual questions include, but are not limited
20 to, the following:
21 a. Whether Defendants knew, or should have known, that the Apple gift cards were
22 defective, unsecure and easily susceptible to fraud and/or theft;
23 b. Whether Defendants had a duty to disc lose to Plaintiff and Class Members of the
24 probability and/or possibility of an ongoing fraud with the Apple gift cards, making
25 it probable that the funds on Apple gift cards could be easily accessed and stolen
26 by third parties;
27

28

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JLfRY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.22 Page 11 of 64

1 c. Whether Defendants owed a duty to Plaintiff and the Class Members to provide
2 security measures to ensure that its systems and networks, and the personnel
3 responsible for them, adequately protected the personal information of consumers;
4 d. Whether the PIN on the Apple gift cards constitutes persona! information;
5 e. Whether Defendants had a duty to disclose to Plaintiff and Class Members that
6 Apple did not safeguard the gift cards and/or the gift card accounts to prevent the
7 fraud and/or ensure that the gift cards were not tampered with;
8 f Whether Apple failed to take adequate and reasonable measures to ensure that third
9 parties did not tamper with its gift cards;
10 g- Whether Defendants had a duty to disclose to Plaintiff and Class Members that its
11 Apple gift card policies and security practices were inadequate to safeguard
12 customers’ gift card accounts and personal identifying information against theft;
13 h. Whether Defendants’ alleged conduct violates public policy;
14 1. Whether the alleged conduct constitutes violations of the laws asserted;
15 J- Whether Defendants engaged in unlawful, unfair or fraudulent business practices;
16 k. Whether Plaintiff and Class Members have sustained monetary loss and the proper
17 measure of that loss; and
18 Whether Plaintiff and Class Members are entitled to other appropriate remedies,

19 including corrective advertising and injunctive relief

20 34. Typicality. Plaintiffs claims are typical of the claims of the members of the Class
21 because, inter alia, all Class Members were injured through the uniform misconduct described
22 above and were subject to Defendants’ deceptive claims that accompanied each and every gift
23 card that Defendants sold. Plaintiff is advancing the same claims and legal theories on behalf of
24 herself and all members of the Class.
25 35. Adequacy of Representation. Plaintiff will fairly and adequately protect the
26 interests of the members of the Class. Plaintiff has retained counsel experienced in complex
27 consumer class action litigation, and Plaintiff intends to prosecute this action vigorously. Plaintiff
28 has no adverse or antagonistic interests to those of the Class.

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.23 Page 12 of 64

36. SuperioriW. A class action is superior to all other available means for the fair and
2 efficient adjudication of this controversy. The damages or other financial detriment suffered by

3 individual Class Members is relatively small compared to the burden and expense that would be
4 required to individually litigation their claims against Defendants. It would thus be virtually
5 impossible for Plaintiff and Class Members, on an individual basis, to obtain effective redress for

6 the wrongs done to them. Furthermore, even if Class Members could afford such individualized
7 litigation, the court system could not. Individualized litigation would create the danger of

8 inconsistent or contradictory judgments arising from the same set of facts. Individualized

9 litigation would also increase the delay and expense to all parties and the court system from the
10 issues raised by this action. By contrast, the class action device provides the benefits of
II adjudication of these issues in a single proceeding, economies of scale, and comprehensive
12 supervision by a single court, and presents no unusual management difficulties under the
13 circumstances here.
14 37. The Class also may be certified because Defendants have acted or refused to act on

15 grounds generally applicable to the Class, thereby making appropriate final declaratory and/or
16 injunctive relief with respect to the members of the Class as a whole.
17 38. Plaintiff seeks preliminai^ and permanent injunctive and equitable relief on behalf

18 of the entire Class, on grounds generally applicable to the entire Class, to enjoin and prevent
19 Defendants from engaging in the acts described and requiring Defendants to provide full
20 restitution to Plaintiff and Class Members.
21 39. Unless a Class is certified, Defendants will retain monies received as a result of its
22 conduct that were taken from Plaintiff and Class Members. Unless an injunction is issued,
23 Defendants will continue to commit the violations alleged, and the members of the Class and the
24 general public will continue to be misled.
25
26
27

28

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.24 Page 13 of 64

1 COUNTI

2 Violations of the Consumers Legal Remedies Act

3 California Civil Code §1750 etseq.
4 40. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,
5 as if fully set forth herein.
6 41. Plaintiff brings this claim individually and on behalf of the Class.
7 42. This cause of action is brought pursuant to the Consumers Legal Remedies Act,
8 California Civil Code § 1750, et seq. (the “CLRA”). Plaintiff is a “consumer” as defined by

9 California Civil Code § 1761(d). Defendants’ Apple gift cards are “goods” within the meaning of

10 the CLRA.
11 43. Defendants violated and continues to violate the CLRA by engaging in the
12 following practices proscribed by California Civil Code § 1770(a) in transactions with Plaintiff
13 and the Class which were intended to result in, and did result in, the sale of the Apple gift cards;
14
(5) Representing that [the gift cards have] . . . approval, characteristics , . . uses
15
[and] benefits .. . which [they do] not have ....
16
***
17
(7) Representing that [the gift cards are] of a particular standard, quality or grade .
18
. . if [they are] of another.
19
«««
20
(9) Advertising goods ... with intent not to sell them as advertised.
21
***
22
(16) Representing tliat [the gift cards have] been supplied in accordance with a
23
previous representation when [they have] not.
24
44. Defendants violated the CLRA by representing and failing to disclose material
25
facts about the gift cards, as described above, when they knew, or should have known, that the
26
representations were false and inisleading and that the omissions were of material facts they were
27
obligated to disclose.
28

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.25 Page 14 of 64

45. Pursuant to § 1782(d) of the CLRA, Plaintiff and the Class seek a court order
2 enjoining the above-described wrongful acts and practices of Defendants and for restitution and

3 disgorgement.
4 46. Pursuant to § 1782 of the CLRA, Plaintiff notified Defendants in writing by

5 certified mail of the particular violations of § 1770 of the CLRA and demanded that Defendants
6 rectify the problems associated with the actions detailed above and give notice to all affected
7 consumers of Defendants’ intent to so act. A copy of the letter is attached hereto as Exhibit A.
8 47. Defendants have failed to rectify or agree to rectify the problems associated with
9 the actions detailed above and give notice to all affected consumers within 30 days of the date of
10 written notice pursuant to § 1782 of the Act. Accordingly, Plaintiff seeks actual, punitive and
11 statutory damages, as appropriate, under § 1780 of the Act.
12 48. Defendants’ conduct is fraudulent, wanton and malicious.
13 49. Pursuant to § 1780(d) of the CLRA, attached hereto as Exhibit B is the affidavit
14 showing that this action has been commenced in the proper forum.
15 COUNT II

16 Violation of the Unfair Competition Law (“UCL”)

17 Business & Professions Code § 17200, et seq.
18 50. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,
19 as if fully set forth herein.
20 51. Plaintiff brings this claim individually and on behalf of the Class.
21 52. Business & Professions Code § 17200 prohibits any “unlawful, unfair or fraudulent
22 business act or practice and unfair, deceptive, untrue or misleading advertising.” For the reasons
23 discussed above, Defendants have violated Business & Professions Code § 17200.
24 53. In the course of conducting business, Defendants committed unlawful business
25 practices by, inter alia, making the misrepresentations, as set forth more fully herein. Defendants
26 have violated California Civil Code §§ 1572, 1573, 1709, 1711, 1770(a)(5), (7), (9) and (16);
27 California Business & Professions Code §§ 17200 et seq.; and the common law, including

28 negligent misrepresentation and breach of implied warranty of merchantability. Defendants’

10

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.26 Page 15 of 64

I above-described wrongful acts and practices constitute actual and constructive fraud within the

2 meaning of Civil Code §§ 1572 and 1573, as well as deceit, which is prohibited under Civil Code

3 §§ 1709 and 1711.

4 54. Plaintiff and the Class reserve the right to allege other violations of law, which

5 constitute other unlawful business acts or practices. Such conduct is ongoing and continues to this

6 date.

7 55. Defendants’ actions also constitute “unfair” business acts or practices because, as

8 alleged above, inter alia, Defendants engaged in unfair business practices, misrepresented and

9 omitted material facts regarding the Apple gift cards, and thereby offended an established public

10 policy, and engaged in unethical, oppressive, and unscrupulous activities that are substantially

11 injurious to consumers.

12 56. As stated in this complaint, Plaintiff alleges violations of consumer protection and

13 unfair competition laws in California, resulting in harm to consumers throughout the United

14 States. Defendants’ acts and omissions also violate and offend the public policy against engaging

15 in false and misleading advertising, unfair competition and deceptive conduct towards consumers.

16 This conduct constitutes violations of the unfair prong of Business & Professions Code § 17200,

17 et seq.

18 57. There were reasonably available alternatives to further Defendants’ legitimate

19 business interests, other than the conduct described herein.

20 58. Business & Professions Code § 17200 et seq., also prohibits any “fraudulent

21 business act or practice.”

22 59. Defendants’ actions, claims, nondisclosures and misleading statements, as more

23 fully set forth above, were also false, misleading and/or likely to deceive the consuming public

24 within the meaning of Business & Professions Code § 17200 et seq.

25 60. Defendants’ advertising, labeling and packaging as described herein also

26 constitutes unfair, deceptive, untrue and misleading advertising.

27

28

11

FIRST AMENDED CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.27 Page 16 of 64

61. Defendants’ conduct caused and continues to cause substantial injury to Plaintiff
2 and the other Class Members. Plaintiff and Class Members have suffered injury in fact and have
3 lost money as a result of Defendants’ unfair conduct.
4 62. As a result of its deception, Defendants have been able to reap unjust revenue and
5 profit.
6 63. Unless restrained and enjoined, Defendants will continue to engage in the above-
7 described conduct. Accordingly, injunctive relief is appropriate.
8 64. Plaintiff, on behalf of herself, all others similarly situated, and the general public,
9 seeks restitution of all money obtained from Plaintiff and the members of the Class as a result of
10 unfair competition, an injunction prohibiting Defendants from continuing such practices,
II corrective advertising, and all other relief this Court deems appropriate, consistent with Business
12 & Professions Code § 17200.
13 COUNT III
14 Violations of the California Consumer Privacy Act
15 California Civil Code §1798.150 etseq.
16 65. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,
17 as if fully set forth herein.
18 66. Plaintiff brings this claim individually and on behalf of the Class.
19 67. The California Consumer Privacy Act of 2018 ("CCPA”) went into effect on
20 January 1,2020. This comprehensive privacy law was enacted to protect consumers’ personal
21 information from unauthorized collection and disclosure.
22 68. Upon information and belief, the PIN on the Apple gift cards is “personal
23 information” as defined in Cal. Civ. Code §1798.140(o) as it “identifies, relates to, describes, is
24 reasonably capable of being associated with, or could reasonably be linked, directly or indirectly,
25 with” the purchasing consumers and/or their households.
26 69. Through the above-detailed conduct, Defendants violated the CCPA by, among
27 other things, failing to prevent Plaintiffs and Class Members’ nonencrypted and nonredacted
28 personal information from unauthorized disclosure as a result of Defendants’ violation of their

12

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Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.28 Page 17 of 64

duty to implement and maintain reasonable security procedures and practices appropriate to the'

2 nature of the information to protect the personal information of Plaintiff and Class Members.

3 70. As a direct and proximate result of tlie Defendants’ conduct. Plaintiffs and the
4 Class Members’ personal information was subjected to unauthorized disclosure to a third party.

5 71. As a direct and proximate result of Defendants’ conduct, Plaintiff and Class
6 Members were injured and lost money or property, including but not limited to, the amount stolen
7 from their Apple gift cards, the loss of Plaintiffs and Class Members’ legally protected interest in

8 the confidentiality and privacy of their personal information, nominal damages, and additional

9 losses as described herein.

10 72. Defendants knew or should have known that the security practices regarding the
11 Apple gift cards were inadequate to safeguard Plaintiff and Class Members personal information
12 and the risk of unauthorized disclosure to a third party was highly likely. Defendants failed to

13 implement and maintain reasonable security procedures and practices appropriate to the nature of

14 the information to protect the personal information of Plaintiff and Class Members.
15 73. Apple is a corporation that is organized and operated for the profit or financial

16 benefit of its owners with a reported total second quarter revenue for fiscal year 2020 of $58.3
17 billion.
18 74. In accordance with Cal. Civ. Code §1798.150(b), Plaintiff has served Defendants

19 with notice of these CCPA violations and a demand for relief by certified mail, return receipt
20 requested. A copy of the letter is attached hereto as Exhibit A.
21 75. On behalf of Class Members, Plaintiff seeks injunctive relief in the form of an
22 order enjoining Defendants from continuing to violate the CCPA. If Defendants fail to properly
23 respond to Plaintiffs notice letter or agree to timely and adequately rectify the violations detailed
24 above, Plaintiff will seek actual, punitive, and statutory damages in an amount not less than one

25 hundred dollars ($100) and not greater than seven hundred and fifty ($750) per consumer per

26 incident, whichever is greater; restitution; attorneys’ fees and costs (pursuant to Cal. Civ. Code

27 §1021.5); and any other relief the Court seems proper as a result of Defendants’ CCPA violations.

28

13

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COUNT IV

2 Negligence

3 76. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above.
4 as if fully set forth herein.
5 77. Plaintiff brings this claim individually and on behalf of the Class.
6 78. Defendants owed a duty to Plaintiff and Class Members to exercise reasonable care
7 in obtaining, securing, safeguarding, deleting, destroying and protecting Plaintiffs and Class
8 Members’ personal information within their possession or control from being compromised, lost,

9 stolen, accessed and misused by unauthorized persons. This duty included, among other things,
10 designing, maintaining and testing Defendants’ security systems to ensure that Plaintiffs and
11 Class Members’ persona! information was adequately secured and protected. Defendants further
12 owed a duty to Plaintiff and the Class Members to implement processes that would detect a breach
13 of its Apple gift cards in a timely manner and to timely act upon warning and alerts including
14 those generated by its own security systems.
15 79. Defendants owed a duty to Plaintiff and the Class Members to provide security to
16 ensure that its systems and networks, and the personnel responsible for them, adequately protected
17 the personal information of consumers.
18 80. Defendants owed a duty of care to Plaintiff and the Class Members because they
19 were foreseeable and probable victims of any inadequate security practices. Defendants knew or
20 should have known they had inadequately safeguarded Apple gift cards, and yet Defendants failed
21 to take reasonable precautions to safeguard it.
22 81. Defendants owed a duty to timely and accurately disclose to Plaintiff and the Class
23 Members that their personal information had been or was reasonably believed to have been
24 compromised. Timely disclosure was required, appropriate and necessary so that, among other
25 things, Plaintiff and the Class Members could take appropriate measures to avoid theft and/or
26 fraudulent charges, including, monitoring their account information and credit reports for
27 fraudulent activity, contact their banks or other financial institutions, obtaining credit monitoring
28

14

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services, filing reports with law enforcement and other governmental agencies and taking other
2 steps to mitigate or ameliorate the damages caused by Defendants’ misconduct.

3 82. Plaintiff and the Class Members entrusted Defendants with their Pll with the

4 understanding that Defendants would safeguard their information and that the company was in a
5 position to protect against the harm suffered by Plaintiff and the Class Members as a result of

6 Apple gift card fraud.

7 83. Defendants knew, or should have known, of the inherent risks in collecting and

8 storing the personal information of Plaintiff and the Class Members and of the critical importance

9 of providing adequate security of that information.

10 84. Defendants’ own conduct also created a foreseeable risk of harm to Plaintiff and

11 the Class Members. Defendants’ misconduct included, but was not limited to, failure to take the
12 steps and opportunities to prevent and stop the Apple gift card fraud as set forth herein.
13 85. Through its acts and omissions described herein, Defendants unlawfully breached

14 its duty to use reasonable care to protect and secure Plaintiffs and the Class Members’ personal

15 information within its possession or control. More specifically. Defendants failed to maintain a

16 number of reasonable security procedures and practices designed to protect personal information
17 of Plaintiff and the Class Members, including, but not limited to, establishing and maintaining

18 industry-standard systems to safeguard its Apple gift cards from theft. Given the risk involved and

19 the amount of data at issue. Defendants’ breach of its duties was unreasonable.
20 86. Defendants breached their duties to timely and accurately disclose that Plaintiffs
21 and Class Members’ personal information in Defendants’ possession had been or was reasonably
22 believed to have been, stolen or compromised.
23 87. As a direct and proximate result of Defendants’ breach of its duties. Plaintiff and

24 the Class Members have been harmed by the loss of the funds stolen from their Apple gift cards,

25 plus interest.
26
27

28

15

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COUNT V
2 Negligent Misrepresentation

3 88. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,
4 as if fully set forth herein.
5 89. Plaintiff brings this claim individually and on behalf of the Class.
6 90. In the course of its business, Defendants misrepresented to Plaintiff and Class
7 Members that Defendants were selling Apple gift cards that were original, usable, secure,
8 valuable, and free from fraud, tampering or compromise.
9 91. Defendants had no reasonable grounds to believe these misrepresentations were
10 true.
11 92. Defendants failed to inform or disclose to the public, including Plaintiff and Class
12 Members, that Defendants were aware of an ongoing fraud with the Apple gift cards, making it
13 probable that the value of Apple gift cards could be accessed and stolen by third parties.
14 Defendants also failed to disclose that Defendants policy and practice was to not refund or replace
15 the value of the Apple gift cards subjected to this fraud.
16 93. Defendants also failed to disclose to the public, including Plaintiff and Class
17 Members, that Defendants did not safeguard the gift cards and/or the gift card accounts to prevent
18 the fiaud and/or ensure that the gift cards were not tampered with.
19 94. Defendants also failed to inform or disclose to the public, including Plaintiff and
20 Class Members, that its Apple gift card policies and security practices are inadequate to safeguard
21 customers’ Apple gift card accounts and personal identifying information against theft.
22 95. Defendants intended to induce Plaintiff and Class Members to rely on its
23 misrepresentations and omissions because they knew Plaintiff and Class Members would not have
24 purchased the Apple gift cards had they known the Apple gift cards, as well as their personal
25 information attached to the gift cards, was subject to an ongoing fraud.
26 96. Defendants made these representations and omissions as to Plaintiff and the Class
27 Members in connection with their purchase of the Apple gift cards.
28

16

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97. There representations and omissions were material to Plaintiffs and Class
2 Members’ decision to purchase the Apple gift cards.
3 98. Plaintiff and Class Members justifiably relied on Defendants’ misrepresentations
4 and omissions about the Apple gift cards because Defendants’ had superior knowledge about the
5 ongoing Apple gift card fraud.
6 99. As a direct and proximate cause of Plaintiff and Class Members’ reliance on
7 Defendants misrepresentations and omissions about the Apple gift cards. Plaintiff and Class
8 Members suffered pecuniar)' loss in an amount determined to be fair and reasonable, but which is
9 equivalent to the funds loaded onto the Apple gift cards that was lost.
10 COUNT VI
Breach of Implied Warranty of Merchantability
12 100. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,
13 as if fully set forth herein.
14 101. Plaintiff brings this claim individually and on behalf of the Class.
15 102. A warrant)' that the Apple gift cards were in merchantable quality and condition is
16 implied by law pursuant to California Commercial Code § 2314.
17 103. Defendants impliedly warranted that the Apple gift cards were of good and
18 merchantable condition and quality - fit for sale for their ordinary intended use.
19 104. The Apple gift cards were not merchantable or fit for their ordinary intended
20 purpose at the lime they left Defendants’ possession. Defendants knew the Apple gift cards were
21 frequently subject to an ongoing scam, yet Defendants failed to take simple preventative measures
22 to curb the known and rampant fraudulent conduct and/or warn consumers that the funds they
23 activated on the Apple gift cards may be stolen upon purchase. Instead, Defendants perpetuated
24 the fraudulent conduct by staying silent and refusing to refund consumers that complained when
25 they discovered their gift cards were defective and had no value. Thus, the Apple gift cards, when
26 sold and at all times thereafter, were not in merchantable condition or quality and are not fit for
27 their ordinary intended purpose.
28

17

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105. By virtue of the conduct described herein and throughout this Complaint,

2 Defendants breached the implied warranty of merchantability.

3 106. Plaintiff and class members have been damaged as a direct and proximate result of

4 Defendants’ breach of the implied warranty.

5 107. Plaintiff and class members have performed each and every duty required of them

6 under the terms of the warranties, except as may have been excused or prevented by the conduct

7 of Defendants or by operation of law in light of Defendants’ unconscionable conduct.

8 108. Defendants received timely notice regarding the problems at issue in this litigation

9 and, not withstanding such notice, Defendants have failed and refused to offer an effective

10 remedy.
11 109. As a direct and proximate result of Defendants’ breach of implied warranty,

12 Plaintiff and Class Members were caused to suffer economic damage.

13 PRAYER

14 WHEREFORE, Plaintiff on behalf of herself and on behalf of the other members of the
15 Class, request award and relief as follows:
16 1. Certifying the Class and California Subclass as requested herein;
17 2. Awarding Plaintiff and the proposed Class Members damages;
18 3. Awarding restitution and disgorgement of Defendants’ revenues to Plaintiff and the

19 proposed Class Members;

20 4. Awarding declaratory and injunctive relief as permitted by law or equity,

21 including: enjoining Defendants from continuing the unlawful practices as set forth herein and
22 directing Defendants to identify, with Court supervision, victims of its conduct and pay them all

23 money it is required to pay;

24 5. Ordering Defendants to engage in a corrective advertising campaign;

25 6. Awarding attorneys’ fees and costs; and

26 ///

27 ///

28 ///

18

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Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.34 Page 23 of 64

7. Providing such further relief as may be just and proper.

2
Dated; July 13,2020 JAMES HAWKINS, APLC
3

5
Samantha A. Smith
6 Attorney for Plaintiff
7

8 DEMAND FOR JURY TRIAL

9 Plaintiff hereby demands a trial by jury on all causes of action and/or issues so triable..
10
Dated: July 13,2020 JAMES HAWKINS, APLC

12
13
Samantha A. Smith
14 Attorney for Plaintiff
15
16
17
18
19
20
21
22
23
24
25
26
27
28

19

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Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.35 Page 24 of 64

EXHIBIT A
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.36 Page 25 of 64

<«

JAMES pt HAWKINS
ATTORNEYS AT LAW

9880 RESEARCH DRIVE, SUITE 200, IRVINE, CALIFORNIA 92618

TELEPHONE (949) 387-7200. FACSIMILE (949) 387-66

May 28, 2020

Via Certified Mail (Receipt No. 7018 1130 0001 8270 4913)
Return Receipt Requested

Apple, Inc.
Apple Value Sen'ices, LLC
One Apple Park Way
Cupertino, CA 95014

Re: Demand Letter Pursuant to California Civil Code Sections 1782 and 1798. ISO

Dear Sir or Madam:

This letter serves as notice and demand for corrective action by Apple, Inc. and Apple Value Services,
LLC ('‘Apple”) pursuant to the Consumer Legal Remedies Act, Cal. Civ. Code Section 1750 et al. (“CLRA”) and
the California Consumer Privacy Act (“CCPA”), Cal. Civ. Code Section 1798.150(b). This letter is sent on behalf of
our client, Rachael Shay, a consumer of Apple gift cards in the State of California, and all other persons similarly
situated. We hereby demand that you take immediate corrective action within thirty (30) days as further described
below.

Apple, Inc. is a multinational technolog>' company that designs, develops, and sells consumer electronics,
computer software, and online services. Apple sells Apple gift cards for its various online services, including its App
Store and iTunes, throughout the United States. Upon information and belief, Apple manufactured, marketed, sold
and/or distributed insecure and defective Apple gift cards it knew were prone to an ongoing scam wherein the funds
on the gift cards are fraudulently redeemed by accessing the Personal Identification Number (“PIN”) on the Apple
gift cards prior to use by the consumer. 1

Rather than lake simple preventative measures to curb the known and rampant fraudulent conduct and/or
warn consumers that the Apple gift card funds are easily susceptible to fraud and are not secure. Defendants
perpetuated the fraud by staying silent, refusing to refund the stolen value after consumers complained, and failing
to implement and maintain reasonable security procedures and practices appropriate to the nature of the information
to protect consumers’ personal information. This conduct violates the CLRA, including but not limited to sections
1770(a) (5), (7), (9) and (16), as well as the CCPA, including but not limited to section 1798.150. Apple has misled
and continues to mislead consumers, thereby unfairly permitting Apple to increase its sales and capture market share
from its competitors.

Our client is a citizen of the State of California and is a consumer as defined in California Civil Code
section 1761(d) because she purchased an Apple gift card for personal, family, or household use. When our client
purchased an Apple gift card for her son as a birthday gift, she was misled into believing that the funds on the Apple
gift card, and any personal information associated with the Apple gift card, was secure. Had Ms. Shay known the
truth about the Apple gift cards and Apple’s failure to properly secure them, she would not have made her purchase.
As a result, our client suffered a loss of money.

1 Upon information and belief, the PIN on the Apple gift cards is “personal information” as defined in Cal. Civ.
Code §I798.l40(o) as it “identifies, relates to, describes, is reasonably capable of being associated with, or could
reasonably be linked, directly or indirectly, with” the purchasing consumers and/or their households.

1
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.37 Page 26 of 64

We hereby demand on behalf of our client and all others similarly situated that Apple immediately: (1)
cease and desist from continued sale of the faulty Apple gift cards; (2) initiate a corrective campaign to address the
inadequate security practices and procedures described herein; and (3) offer to refund the purchase price of the gift
cards, plus reimbursement for interest.

If Apple wishes to enter into discussions to resolve the demand asserted in this letter, please contact me
immediately.

Sincerely,

JAMES HAWKINS, APLC

SSmahtha AV Smith

2
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.38 Page 27 of 64

EXHIBIT B
 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.39 Page 28 of 64
DocuSign Envelope ID: 875BF333-2057-4C57-BBDE-995CC6D83329

JAMES HAWKINS, APLC

JAMES R. HAWKINS, ESQ. (#192925)
2 james@jameshawkinsaplc.com
SAMANTHA A. SMITH, ESQ. (#233331)
3 samantha@jameshawkinsaplc.com
9880 Research Drive, Suite 200
4 Irvine, CA 92618
Tel.: (949) 387-7200
5 Fax:(949)387-6676
- 6 Attorneys for Plaintiff Rachael Shay,
7 on behalf of herself and all others similarly situated

8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA

10 COUNTY OF SAN DIEGO

RACHAEL SHAY, on behalf of herself Case No.

12 and all others similarly situated,

13 Plaintiff, AFFIDAVIT OF VENUE BY PLAINTIFF

V. RACHAEL SHAY
14
APPLE, INC., a Delaware corporation;
15
APPLE VALUE SERVICES, LLC, a
16 Virgina limited liability corporation; and
Does 1 through 10, inclusive.
17
Defendants.
18

19
20 I, Rachael Shay, hereby declare and state as follows:

21 1. lam over the age of 18, and if called as a witness, I would testify truthfully to the

22 matters set forth in this Declaration. All of the matters set forth below are within my personal

23 knowledge, except those matters that are stated to be upon information and belief. As to such

24 matters, I believe them to be true.

25 2. I am the Plaintiff in the above-entitled action.

3. Pursuant to Cal. Civ. Code § 1780(d), I make this Declaration in support of the
26
Class Action Complaint and the claim for relief stated in that complaint under Cal. Civ. Code §
27
1780(a).
28

AFFIDAVIT OF VENUE BY PLAINTIFF RACHAEL SHAY

 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.40 Page 29 of 64
DocuSign Envelope ID; 875BF333-2057^C57-BBDE-995CC6DB3329

4. This action for relief under Cal. Civ. Code § 1780(a) has been commenced in a

2 county that is a proper place for trial of this action because I reside in San Diego County, and this

3 is the county where the transaction or any substantial portion thereof occurred.
4 I declare under penalty of perjury under the laws of the State of California that the

5 foregoing is true and correct. Executed this 27th day of May 2020, in Carlsbad, California.
r----- OocuSignod by:
6
fAduJuJi
>-----2F0a4aF8e2Ed4O8...
7 Rachael Shay
8
9
10
11

12

13

14

15
16
17
18
19
20

21
22

23

24

25

26
27

28

AFFIDAVIT OF VENUE BY PLAINTIFF RACHAEL SHAY

Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.41 Page 30 of 64
^lEilECtRdMiCA'LtY'FlLED:
^fSupe>iorC6urt\6f|Calif6mip:
' ■"•'CouhtyMSan iDiegfr^ " •
JAMES HAWKINS, APLC
JAMES R. HAWKTNS, ESQ. (#192925)
2 james@jameshawkinsaplc.com rBy.iCeci(e)\^nj’ei:t3epirty.iCle|^
.2 SAMANTHA A. SMITH, ESQ. (#233331)
samantha@jameshawkinsaplc.com
9880 Research Drive., Suite 200
4 Irvine, CA 92618
Tel.: (949) 387-7200
5 Fax: (949) 387-6676
6 Attorneys for Plaintiff Rachael Shay,
on behalf of herself and all others similarly situated
7

8 SUPERIOR COURT OF THE STATE OF CALIFORNIA

9
COUNTY OF SAN DIEGO
10
II RACHAEL SHAY, on behalf of herself and Case No. 37-2020-00017475-CU-MC-CTL
all others similarly situated.
12 Assigned for AH Purposes to:
Plaintiff,
13
V.

14 CLASS ACTION COMPLAINT FOR

APPLE, INC., a Delaware corporation; DAMAGES AND EQUITABLE,
15 APPLE VALUE SERVICES, LLC, a DECLARATORY AND INJUNCTIVE RELIEF
Virgina limited liability corporation; and
16 Does 1 through 10, inclusive,
DEMAND FOR JURY TRIAL
17 Defendants.
18
19
20
21
22
23
24
25
26
27
28

CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL

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Plaintiff Rachael Shay brings this action on behalf of herself and all others similarly

2 situated against Defendants Apple, Inc. and Apple Value Services, LLC (“Apple” or
2 “Defendants”) and states as follows:
4 NATURE OF ACTION
5 1. This is a consumer class action on behalf consumers nationwide, and in California,
6 who purchased a defective, unsecure and valueless Apple gift card.
7 2. Throughout the Class Period, defined below, Defendants manufactured, marketed,

8 sold and/or distributed Apple gift cards Defendants knew, or should have known, were subject to
9 an ongoing scam wherein the funds on the gift cards are fraudulently redeemed by third parties
10 . accessing the Personal Identification Number (“PIN”) prior to use by the consumer.
II 3. Rather than take simple preventative measures to curb the known and rampant
12 fraudulent conduct and/or warn consumers that the Apple gift card funds are easily susceptible to
13 theft upon purchase, Defendants perpetuated the fraud by staying silent, refusing to refund
14 consumers that complained when they discovered their Apple gift cards were valueless, and
15 failing to implement and maintain reasonable security procedures and practices appropriate to
16 protect consumers’ personal information.
17 4. As a result, Defendants have caused Plaintiff and other similarly situated
18 consumers to purchase a product, which is not secure and does not perform as represented.

19 Plaintiff and other similarly situated consumers have been harmed in the amount they paid for the

20 gift cards, plus interest.

21 5. Plaintiff brings this action on behalf of herself and all other similarly situated
22 consumers to halt Defendants’ dissemination of unsecure Apple gift cards, correct the false and
23 misleading perception it has created in the minds of consumers that the Apple gift cards are
24 secure and of good quality, and to obtain redress for those who have purchased the faulty Apple
25 gift cards.
26 JURISDICTION AND VENUE

27 6. This Court has Jurisdiction over this action pursuant to the California Constitution,

28 Article VI, § 10, which grants the Superior Court original jurisdiction in all causes except those

CLASS ACTION COMPLAINT AND DEMAND FOR JURY TRIAL

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1 given by statutes to other courts. The statutes under which this action is brought do not specify
2 any other basis for jurisdiction.
3 7. This Court has Jurisdiction over all Defendants because, upon information and
4 belief, they are either citizens of California, have sufficient minimum contacts in California or
5 otherwise intentionally avail themselves of the California market so as to render the exercise of
6 jurisdiction over them by the California courts consistent with traditional notions of fair play and

7 substantial justice.
8 8. Venue as to each defendant is proper in this judicial district, pursuant to California

9 Code of Civil Procedure section 395.5. On information and belief, Defendants distribute, market
10 and sell their products in San Diego County and throughout California, and each defendant is
within the jurisdiction of this Court for service of process purposes. The unlawful acts alleged
12 herein have a direct effect on Plaintiff and those similarly situated within the State of California.

13 PARTIES
14 9. Plaintiff Rachael Shay is and was at all relevant times during the Class Period

15 defined herein, an individual residing in San Diego County, California. On April 3, 2020, Plaintiff

16 purchased a $50 Apple gift card from Walmart in Encinitas, California, as a gift for her son. The
17 gift card was solely in her possession until she gave it to her son. When her son attempted to load
18 the gift card he received a message indicating that the gift card had already been redeemed.

19 Plaintiff contacted Apple and was told the gift card was redeemed by another account on April 3,

20 2020, the same day she purchased the gift card, and the card no longer had any value. For security

21 reasons, Defendants would not provide Plaintiff with any additional information about the owner

22 account that redeemed the code, other than it was an account unrelated to Plaintiff and/or her son.

23 Plaintiff was then told there was nothing else Defendants could do for her, that her case was
24 closed and any further contact would go unanswered. Had Plaintiff known the truth about
25 Defendants’ defective gift cards, she would not have purchased it. As a result of her purchase,

26 Plaintiff suffered injury in fact and lost money.

27
28

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10. Defendant Apple, Inc. is a multinational technology company headquartered in

2 Cupertino, Califomia, that designs, develops, and sells consumer electronics, computer software,

3 and online services.

4 11. Defendant Apple Value Services, LLC is a subsidiary of Apple, Inc. with its

5 headquarters also in Cupertino, California, and is responsible for “issuing and managing” Apple
6 gift cards in the United States.
7 12. Defendants manufacture, market, sell and/or distribute gift cards to thousands of

8 consumers across the country and in the State of California.

9 13. The true names and capacities, whether individual, corporate, associate, or

10 otherwise, of defendants sued herein as Does 1 to 10, inclusive, are currently unknown to
Plaintiff, who therefore sues these defendants by such fictitious names under California Code of
12 Civil Procedure § 474. Plaintiff is informed and believes, and based thereon alleges, that each of

13 the defendants designated herein as a Doe is legally responsible in some manner for the unlawful
14 acts referred to herein. Plaintiff will seek leave of court to amend this Complaint to reflect the true

15 names and capacities of the defendants designated hereinafter as Does when such identities

16 become known. Throughout this complaint, the term “Defendants” shall include defendants Does
17 1 to 10, inclusive.
18 FACTUAL ALLEGATIONS

19 14. Throughout the Class period, Defendants have manufactured, marketed, sold

20 and/or distributed Apple gift cards on a nationwide basis, and throughout California, in a uniform

21 and similar fashion.

22 15. The Apple gift cards are sold online and through Defendants’ various retailers and '

23 may be used to access Defendants’ various online services, including services available through
24 the App Store and iTunes.
25 16. Apple gift cards contain a Personal Identification Number (“PIN”) covered with

26 silver scratch off tape. When a consumer purchases a new Apple gift card, the PIN is activated so

27 that it can be loaded onto a consumer’s Apple account to use for Apple services. Upon

28 information and belief (and as the acronym suggests), the Apple gift card PINs contain “personal

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information” associated with and/or reasonably linked, directly or indirectly, with the purchasing

2 consumer upon activation.

17. Upon information and belief, due to Defendants’ defective design, manufacture
4 and/or packaging of the Apple gift cards, including Apple’s failure to implement and maintain
5 reasonable security procedures and practices to properly secure the Apple gift cards, the Apple

6 gift cards are targeted by thieves who electronically access the Apple gift cards at the point of sale

7 and redeem the funds activated by the consumer. Subsequently, when a consumer attempts to load

8 a newly activated Apple gift card, the gift card registers as ''redeemed” and is valueless.

9 18. Unbeknownst to Plaintiff, the Apple gift card she purchased as a birthday gift for

10 her son was subject to fraudulent conduct at the point of sale. Upon information and belief, after

11 activating the gift card, third parties intercepted the activated funds leaving Plaintiff with a

12 valueless card. Consequently, when Plaintiffs son went to redeem the funds, Plaintiffs son

13 received a message that the funds had already been redeemed.

14 19. When Plaintiff called Apple to complain, Apple informed Plaintiff that the gift

15 card was already redeemed, and the card no longer had any value. For security reasons,

16 Defendants would not provide Plaintiff with any additional information about who redeemed the
17 code, other than it was an account unrelated to Plaintiff and/or her son. Plaintiff was then told

18 there was nothing else Apple could do for her, that her case was closed, and any further contact

19 would go unanswered.
20 20. Upon information and belief, Apple maintains records indicating when the Apple

21 gift cards are activated, when they are redeemed, and how and where they are redeemed.
22 21. Upon information and belief, Defendants have known that the Apple gift cards

23 they sell to consumers are defective, unsecure and easily subject to known fraud.
24 22. The existence of numerous complaints from consumers regarding the unsecure and

25 valueless Apple gift cards are sufficient to put Apple on notice that the funds on the gift cards

26 were not guaranteed to be secure upon purchase.

27

28

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I 23. Despite this knowledge, Apple failed to take adequate and reasonable measures to

2 ensure that third parties did not tamper with its gift cards and to date continues to sell the Apple
gift cards easily prone to security breaches and theft as described herein.
4 24. Apple also failed to disclose to Plaintiff and Class Members that Apple did not

5 safeguard the gift cards and/or the gift card accounts to prevent the fraud and/or ensure that the

6 gift cards were not tampered with.

7 25. Apple failed to inform or disclose to the public, including Plaintiff and Class

8 Members, that it was aware of an ongoing fraud with the Apple gift cards, making it probable that

9 the funds on Apple gift cards could be easily accessed and stolen by third parties. Apple also

10 failed to disclose that its policy and practice was not to refund or replace the value of the Apple
II gift cards subjected to the known fraud.
12 26. Apple failed to inform or disclose to the public, including Plaintiff and Class

13 Members, that its Apple gift card policies and security practices were inadequate to safeguard
14 customers’ Apple gift card accounts and personal identifying information against theft.

15 27. Plaintiff and Class Members had a reasonable expectation that Apple would

16 maintain their Apple gift card funds and gift card account information secure.

17 28. As a direct and proximate cause of Apple’s conduct, Plaintiff and Class Members

18 suffered injury in the amount of money loaded onto the gift cards.
19 29. Had Apple disclosed to Plaintiff and Class Members that Apple did not have

20 adequate systems, policies, and security measures in place to secure customers’ Apple gift card

21 account information and Apple gift card funds, Plaintiff and Class Members would not have

22 purchased the Apple gift cards.,

23 30. Defendants have reaped enormous profits from their unlawful, unfair and
24 deceptive business practices.
25 CLASS DEFINITION AND ALLEGATIONS

26 31. Pursuant to California Code of Civil Procedure 382, Plaintiff brings this action on

27 behalf of herself and on behalf of all members of the following class and subclass of similarly

28 situated individuals:

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Nationwide Class:
2 All consumers in the United States who purchased an Apple gift card wherein the funds on
2 the Apple gift card was redeemed prior to use by the consumer. Excluded from this Class
4 are Defendants and their officers, directors and employees, and those who purchased
5 Apple gift cards for the purpose of resale.
6 California Subclass:

7 Al) consumers in the State of California who purchased an Apple gift card wherein the
8 funds on the Apple gift card was redeemed prior to use by the consumer. Excluded from
9 this Class are Defendants and their officers, directors and employees, and those who
10 purchased Apple gift cards for the purpose of resale.
11 32. Numerositv. On information and belief, the Nationwide Class and California
12 Subclass (collectively, the ‘'Class” or “Class Members”) are each so numerous that joinder of all
13 members of the Class is impracticable. Plaintiff is informed and believes that the proposed Class
14 contains thousands of purchasers of Apple gift cards who have been damaged by Defendants’
15 conduct as alleged herein. The precise number of Class Members is unknown to Plaintiff but
16 estimated to be in the thousands.
17 33. Existence and Predominance of Common Questions of Law and Fact. This action
IS involves common questions of law and fact, which predominate over any questions affecting
19 individual Class Members. These common legal and factual questions include, but are not limited
20 to, the following;
21 a. Whether Defendants knew, or should have known, that the Apple gift cards were
22 defective, unsecure and easily susceptible to fraud and/or theft;

23 b. Whether Defendants had a duty to disclose to Plaintiff and Class Members of the
24 probability and/or possibility of an ongoing fraud with the Apple gift cards,
25 making it probable that the funds on Apple gift cards could be easily accessed and

26 stolen by third parties;

27

28

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1 c. Whether Defendants owed a duty to Plaintiff and the Class Members to provide
2 security measures to ensure that its systems and networks, and the personnel
3 responsible for them, adequately protected the personal information of consumers;
4 d. Whether the PIN on the Apple gift cards constitutes personal information;
5 e. Whether Defendants had a duty to disclose to Plaintiff and Class Members that
6 Apple did not safeguard the gift cards and/or the gift card accounts to prevent the
7 fraud and/or ensure that the gift cards were not tampered with;
S f. Whether Apple failed to take adequate and reasonable measures to ensure that
9 third parties did not tamper with its gift cards;
10 g. Whether Defendants had a duty to disclose to Plaintiff and Class Members that its •
Apple gift card policies and security practices were inadequate to safeguard
12 customers’ gift card accounts and personal identifying information against theft;
13 h. Whether Defendants’ alleged conduct violates public policy;
14 i. Whether the alleged conduct constitutes violations of the laws asserted:
15 j. Whether Defendants engaged in unlawful, unfair or fraudulent business practices;
16 k. Whether Plaintiff and Class Members have sustained monetary' loss and the proper
17 measure of that loss; and
18 l. Whether Plaintiff and Class Members are entitled to other appropriate remedies,
19 including corrective advertising and injunctive relief
20 34. Typicality. Plaintiffs claims are typical of the claims of the members of the Class
21 because, inter alia, all Class Members were injured through the uniform misconduct described
22 above and were subject to Defendants’ deceptive claims that accompanied each and every gift
23 card that Defendants sold. Plaintiff is advancing the same claims and legal theories on behalf of
24 herself and all members of the Class.
25 35. Adequacy of Representation. Plaintiff will fairly and adequately protect the
26 interests of the members of the Class. Plaintiff has retained counsel experienced in complex
27 consumer class action litigation, and Plaintiff intends to prosecute this action vigorously. Plaintiff
28 has no adverse or antagonistic interests to those of the Class.

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36. Superioriw. A class action is superior to all other available means for the fair and

2 efficient adjudication of this controversy. The damages or other financial detriment suffered by
individual Class Members is relatively small compared to the burden and expense that would be
4 required to individually litigation their claims against Defendants. It would thus be virtually

5 impossible for Plaintiff and Class Members, on an individual basis, to obtain effective redress for

6 the wrongs done to them. Furthermore, even if Class Members could afford such individualized

7 litigation, the court system could not. Individualized litigation would create the danger of

8 inconsistent or contradictory judgments arising from the same set of facts. Individualized

9 litigation would also increase the delay and expense to all parties and the court system from the

10 issues raised by this action. By contrast, the class action device provides the benefits of
11 adjudication of these issues in a single proceeding, economies of scale, and comprehensive
12 supervision by a single court, and presents no unusual management difficulties under the

13 circumstances here.
14 37. The Class also may be certified because Defendants have acted or refused to act on

15 grounds generally applicable to the Class, thereby making appropriate final declaratory and/or

16 injunctive relief with respect to the members of the Class as a whole.

17 38. Plaintiff seeks preliminary and permanent injunctive and equitable relief on behalf

18 of the entire Class, on grounds generally applicable to the entire Class, to enjoin and prevent
19 Defendants from engaging in the acts described and requiring Defendants to provide full

20 restitution to Plaintiff and Class Members.

21 39. Unless a Class is certified, Defendants will retain monies received as a result of its

22 conduct that were taken from Plaintiff and Class Members. Unless an injunction is issued,

23 Defendants will continue to commit the violations alleged, and the members of the Class and the
24 general public will continue to be misled.
25
26
- 27

28

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COUNTI

2 Violations of the Consumers Legal Remedies Act

3 California Civil Code §1750 et seq.

4 40. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,

5 as if fully set forth herein.

6 41. Plaintiff brings this claim individually and on behalf of the Class.

7 42. This cause of action is brought pursuant to the Consumers Legal Remedies Act,

8 California Civil Code § 1750, et seq. (the "CLRA”). Plaintiff is a “consumer” as defined by

9 California Civil Code § 1761(d). Defendants’ Apple gift cards are “goods” within the meaning of

10 the CLRA.
11 43. Defendants violated and continues to violate the CLRA by engaging in the

12 following practices proscribed by California Civil Code § 1770(a) in transactions with Plaintiff

13 and the Class which were intended to result in, and did result in, the sale of the Apple gift cards:

14
(5) Representing that [the gift cards have] . . . approval, characteristics , . . uses
15
[and] benefits .. . which [they do] not have ....
16
* * if

17
(7) Representing that [the gift cards are] of a particular standard, quality or grade .
18
.. if [they are] of another.
19
«««
20
(9) Advertising goods . .. with intent not to sell them as advertised.
21
* if

22
(16) Representing that [the gift cards have] been supplied in accordance with a
23
previous representation when [they have] not.
24
44. Defendants violated the CLRA by representing and failing to disclose material
25
facts about the gift cards, as described above, when they knew, or should have known, that the
26
representations were false and misleading and that the omissions were of materia! facts they were
27
obligated to disclose.
28

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45. Pursuant to § 1782(d) of the CLRA, Plaintiff and the Class seek a court order
2 enjoining the above-described wrongful acts and practices of Defendants and for restitution and
disgorgement.
4 46. Pursuant to § 1782 of the CLRA, Plaintiff notified Defendants in writing by
5 certified mail of the particular violations of § 1770 of the CLRA and demanded that Defendants
6 rectify the problems associated with the actions detailed above and give notice to all affected
7 consumers of Defendants’ intent to so act. A copy of the letter is attached hereto as Exhibit A.
8 47. If Defendants fail to rectify or agree to rectify the problems associated with the
9 actions detailed above and give notice to all affected consumers within 30 days of the date of
10 written notice pursuant to § 1782 of the CLRA, Plaintiff will amend this complaint to add claims
for damages, restitution, and disgorgement under the CLRA as appropriate, under the California
12 Civil Code § 1780, pursuant to California Civil Code § 1782(d) ("Not less than 30 days after the
13 commencement of an action for injunctive relief, and after compliance with subdivision (a), the
14 consumer may amend his or her complaint without leave of court to include a request for
15 damages.”).
16 48. Defendants’ conduct is fraudulent, wanton and malicious.
17 49. Pursuant to § 1780(d) of the CLRA, attached hereto as Exhibit B is the affidavit
18 showing that this action has been commenced in the proper forum.
19 COUNT IT
20 Violation of the Unfair Competition Law (“UCL”)
21 Business & Professions Code § 17200, et seq.
22 50. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,
23 as if fully set forth herein.
24 51. Plaintiff brings this claim individually and on behalf of the Class.
25 52. Business & Professions Code § 17200 prohibits any “unlawful, unfair or
26 fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” For
27 the reasons discussed above, Defendants have violated Business & Professions Code § 17200.
28

10

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53. In the course of conducting business, Defendants committed unlawful business

2 practices by, inter alia, making the misrepresentations, as set forth more fully herein. Defendants

3 have violated California Civil Code §§ 1572, 1573, 1709, 1711, 1770(a)(5), (7), (9) and (16);

4 California Business & Professions Code §§ 17200 el seq.; and the common law, including

5 negligent misrepresentation and breach of implied warranty of merchantability. Defendants’

6 above-described wrongful acts and practices constitute actual and constructive fraud within the

7 meaning of Civil Code §§ 1572 and 1573, as well as deceit, which is prohibited under Civil Code

8 §§ 1709 and 1711.

9 54. Plaintiff and the Class reserve the right to allege other violations of law, which

10 constitute other unlawful business acts or practices. Such conduct is ongoing and continues to this

11 date.

12 55. Defendants’ actions also constitute “unfair” business acts or practices because, as

13 alleged above, inter alia, Defendants engaged in unfair business practices, misrepresented and

14 omitted material facts regarding the Apple gift cards, and thereby offended an established public

15 policy, and engaged in unethical, oppressive, and unscrupulous activities that are substantially

16 injurious to consumers.

17 56. As stated in this complaint, Plaintiff alleges violations of consumer protection and

18 unfair competition laws in California, resulting in harm to consumers throughout the United

19 States. Defendants’ acts and omissions also violate and offend the public policy against engaging

20 in false and misleading advertising, unfair competition and deceptive conduct towards consumers.

21 This conduct constitutes violations of the unfair prong of Business & Professions Code § 17200,

22 et seq.

23 57. There were reasonably available alternatives to further Defendants’ legitimate

24 business interests, other than the conduct described herein.

25 58. Business & Professions Code § 17200 et seq., also prohibits any “fraudulent

26 business act or practice.”

27

28

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59. Defendants’ actions, claims, nondisclosures and misleading statements, as more

2 fully set forth above, were also false, misleading and/or likely to deceive the consuming public
within the meaning of Business & Professions Code § 17200 et seq.
4 60. Defendants’ advertising, labeling and packaging as described herein also
5 constitutes unfair, deceptive, untrue and misleading advertising.
6 61. Defendants’ conduct caused and continues to cause substantial injury to Plaintiff
7 and the other Class Members. Plaintiff and Class Members have suffered injury in fact and have

8 lost money as a result of Defendants’ unfair conduct.

9 62. As a result of its deception, Defendants have been able to reap unjust revenue and
10 profit.
11 63. Unless restrained and enjoined. Defendants will continue to engage in the above-
12 described conduct. Accordingly, injunctive relief is appropriate.
13 64. Plaintiff, on behalf of herself, all others similarly situated, and the general public,
14 seeks leslitutiun of all irioney obtained from Plaintiff and the members of the Class as a result of
15 unfair competition, an injunction prohibiting Defendants from continuing such practices,
16 corrective advertising, and all other relief this Court deems appropriate, consistent with Business
17 & Professions Code § 17200.
18 COUNT m

19 Violations of the California Consumer Privacy Act

20 California Civil Code §1798.150 et seq.

21 65. Plaintiff repeats and re-allegcs the allegations contained in the Paragraphs above,
22 as if fully set forth herein.
23 66. Plaintiff brings this claim individually and on behalf of the Class.
24 67. The California Consumer Privacy Act of20]8 (“CCPA”) went into effect on
25 January 1,2020. This comprehensive privacy law was enacted to protect consumers’ persona!
26 information from unauthorized collection and disclosure.

27 68. Upon information and belief, the PIN on the Apple gift cards is “personal

28 information” as defined in Cal. Civ. Code §1798.l40(o) as it “identifies, relates to, describes, is

12

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reasonably capable of being associated with, or could reasonably be linked, directly or indirectly,
2 with” the purchasing consumers and/or their households.
3 69. Through the above-detailed conduct, Defendants violated the CCPA by, among
4 other things, failing to prevent Plaintiffs and Class Members’ nonencr>'pted and nonredacted
5 personal information from unauthorized disclosure as a result of Defendants’ violation of their
6 duty to implement and maintain reasonable security procedures and practices appropriate to the
7 nature of the information to protect the personal information of Plaintiff and Class Members.
8 70. As a direct and proximate result of the Defendants’ conduct, Plaintiffs and the

9 Class Members’ personal information was subjected to unauthorized disclosure to a third party.
10 71. As a direct and proximate result of Defendants’ conduct. Plaintiff and Class
Members were injured and lost money or property, including but not limited to, the amount stolen
12 from their Apple gift cards, the loss of Plaintiff s and Class Members’ legally protected interest in
13 the confidentiality and privacy of their personal information, nominal damages, and additional
14 losses as described herein.
15 72. Defendants knew or should have known that the security practices regarding the

16 Apple gift cards were inadequate to safeguard Plaintiff and Class Members personal information
17 and the risk of unauthorized disclosure to a third party was highly likely. Defendants failed to
18 implement and maintain reasonable security procedures and practices appropriate to the nature of
19 the information to protect the personal information of Plaintiff and Class Members.
20 73. Apple is a corporation that is organized and operated for the profit or financial
21 benefit of its owners with a reported total second quarter revenue for fiscal year 2020 of $58.3
22 billion.
23 74. In accordance with Cal. Civ. Code §1798.150(b), Plaintiff has served Defendants
24 with notice of these CCPA violations and a demand for relief by certified mail, return receipt
25 requested. A copy of the letter is attached hereto as Exhibit A.
26 75. On behalf of Class Members, Plaintiff seeks injunctive relief in the form of an
27 order enjoining Defendants from continuing to violate the CCPA. If Defendants fail to properly

28 respond to Plaintiffs notice letter or agree to timely and adequately rectify the violations detailed

13

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1 above, Plaintiff will seek actual, punitive, and statutory damages in an amount not less than one

2 hundred dollars ($100) and not greater than seven hundred and fifty ($750) per consumer per

3 incident, whichever is greater; restitution; attorneys’ fees and costs (pursuant to Cal. Civ. Code
4 §1021.5); and any other relief the Court seems proper as a result of Defendants’ CCPA violations.

5 COUNT IV

6 Negligence

7 76. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,

8 as if fully set forth herein.

9 77. Plaintiff brings this claim individually and on behalf of the Class.

10 78. Defendants owed a duty to Plaintiff and Class Members to exercise reasonable
11 care in obtaining, securing, safeguarding, deleting, destroying and protecting Plaintiffs and Class

12 Members’ personal information within their possession or control from being compromised, lost,

13 stolen, accessed and misused by unauthorized persons. This duty included, among other things,

14 designing, maintaining and testing Defendants’ security systems to ensure that Plaintiffs and

15 Class Members’ personal information was adequately secured and protected. Defendants further

16 owed a duty to Plaintiff and the Class Members to implement processes that would detect a
17 breach of its Apple gift cards in a timely manner and to timely act upon warning and alerts
18 including those generated by its own security systems.
19 79. Defendants owed a duty to Plaintiff and the Class Members to provide security to

20 ensure that its systems and networks, and the personnel responsible for them, adequately
21 protected the personal information of consumers.
22 80. Defendants owed a duty of care to Plaintiff and the Class Members because they

23 were foreseeable and probable victims of any inadequate security practices. Defendants knew or
24 should have known they had inadequately safeguarded Apple gift cards, and yet Defendants failed

25 to take reasonable precautions to safeguard it.

26 81. Defendants owed a duty to timely and accurately disclose to Plaintiff and the Class

27 Members that their personal information had been or was reasonably believed to have been

28 compromised. Timely disclosure was required, appropriate and necessary so that, among other

14

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things, Plaintiff and the Class Members could take appropriate measures to avoid theft and/or

2 fraudulent charges, including, monitoring their account information and credit reports for
2 fraudulent activity, contact their banks or other financial institutions, obtaining credit monitoring

4 services, filing reports with law enforcement and other governmental agencies and taking other
5 steps to mitigate or ameliorate the damages caused by Defendants’ misconduct.
6 82. Plaintiff and the Class Members entrusted Defendants with their PII with the

7 understanding that Defendants would safeguard their information and that the company was in a

8 position to protect against the harm suffered by Plaintiff and the Class Members as a result of

9 Apple gift card fraud.

10 83. Defendants knew, or should have known, of the inherent risks in collecting and
storing the personal information of Plaintiff and the Class Members and of the critical impoitance
12 of providing adequate security of that information.

13 84. Defendants’ own conduct also created a foreseeable risk of harm to Plaintiff and

14 the Class Members. Defendants’ misconduct included, but was not limited to, failure to take the
15 steps and opportunities to prevent and stop the Apple gift card fraud as set forth herein.

16 85. Through its acts and omissions described herein, Defendants unlawfully breached
17 its duty to use reasonable care to protect and secure Plaintiffs and the Class Members’ personal

18 information within its possession or control. More specifically, Defendants failed to maintain a

19 number of reasonable security procedures and practices designed to protect personal information

20 of Plaintiff and the Class Members, including, but not limited to, establishing and maintaining
21 industry-standard systems to safeguard its Apple gift cards from theft. Given the risk involved
22 and the amount of data at issue, Defendants’ breach of its duties was unreasonable.

23 86. Defendants breached their duties to timely and accurately disclose that Plaintiffs

24 and Class Members’ personal information in Defendants’ possession had been or was reasonably

25 believed to have been, stolen or compromised.

26 87. As a direct and proximate result of Defendants’ breach of its duties. Plaintiff and

27 the Class Members have been harmed by the loss of the funds stolen from their Apple gift cards,

28 plus interest.

15

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I COUNT V
2 Negligent Misrepresentation
2 88. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,
4 as if fully set forth herein.
5 89. Plaintiff brings this claim individually and on behalf of the Class.
6 90. In the course of its business, Defendants misrepresented to Plaintiff and Class
7 Members that Defendants were selling Apple gift cards that were original, usable, secure,
8 valuable, and free from fraud, tampering or compromise.
9 91. Defendants had no reasonable grounds to believe these misrepresentations were
10 true.
11 92. Defendants failed to inform or disclose to the public, including Plaintiff and Class
12 Members, that Defendants were aware of an ongoing fraud with the Apple gift cards, making it
13 probable that the value of Apple gift cards could be accessed and stolen by third parties.
14 Defendants also failed to disclose that Defendants policy and practice was to not refund or replace
15 the value of the Apple gift cards subjected to this fraud.
16 93. Defendants also failed to disclose to the public, including Plaintiff and Class
17 Members, that Defendants did not safeguard the gift cards and/or the gift card accounts to prevent
18 the fraud and/or ensure that the gift cards were not tampered with.
19 94. Defendants also failed to inform or disclose to the public, including Plaintiff and

20 Class Members, that its Apple gift card policies and security practices are inadequate to safeguard
21 customers’ Apple gift card accounts and personal identifying information against theft.
22 95. Defendants intended to induce Plaintiff and Class Members to rely, on its
23 misrepresentations and omissions because they knew Plaintiff and Class Members would not have
24 purchased the Apple gift cards had they known the Apple gift cards, as well as their personal
25 information attached to the gift cards, was subject to an ongoing fraud.
26 96. Defendants made these representations and omissions as to Plaintiff and the Class
27 Members in connection with their purchase of the Apple gift cards.
28

16

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1 97. There representations and omissions were material to Plaintiffs and Class
2 Members’ decision to purchase the Apple gift cards.
3 98. Plaintiff and Class Members justifiably relied on Defendants’ misrepresentations
4 and omissions about the Apple gift cards because Defendants’ had superior knowledge about the
5 ongoing Apple gift card fraud.
6 99. As a direct and proximate cause of Plaintiff and Class Members’ reliance on
7 Defendants misrepresentations and omissions about the Apple gift cards, Plaintiff and Class
8 Members suffered pecuniary loss in an amount determined to be fair and reasonable, but which is

9 equivalent to the funds loaded onto the Apple gift cards that was lost.
10 COUNT VI
II Breach of Implied Warranty of Merchantability
12 100. Plaintiff repeats and re-alleges the allegations contained in the Paragraphs above,
13 as if fully set forth herein.
14 101. Plaintiff brings this claim individually and on behalf of the Class.
15 102. A warranty that the Apple gift cards were in merchantable quality and condition is
16 implied by law pursuant to California Commercial Code § 2314.
17 103. Defendants impliedly warranted that the Apple gift cards were of good and
18 merchantable condition and quality -r fit for sale for their ordinary intended use.
19 104. The Apple gift cards were not merchantable or fit for their ordinary intended
20 purpose at the time they left Defendants’ possession. Defendants knew the Apple gift cards were
21 frequently subject to an ongoing scam, yet Defendants failed to take simple preventative measures
22 to curb the known and rampant fraudulent conduct and/or warn consumers that the funds they
23 activated on the Apple gift cards may be stolen upon purchase. Instead, Defendants perpetuated
24 the fraudulent conduct by staying silent and refusing to refund consumers that complained when
25 they discovered their gift cards were defective and had no value. Thus, the Apple gift cards, when
26 sold and at all times thereafter, were not in merchantable condition or quality and are not fit for
27 their ordinary intended purpose.
28

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1 105. By virtue of the conduct described herein and throughout this Complaint,
2 Defendants breached the implied warranty of merchantability.
3 106. Plaintiff and class members have been damaged as a direct and proximate result of
4 Defendants’ breach of the implied warranty.
5 107. Plaintiff and class members have performed each and every duty required of them
6 under the terms of the warranties, except as may have been excused or prevented by the conduct
7 of Defendants or by operation of law in light of Defendants’ unconscionable conduct.
8 108. Defendants received timely notice regarding the problems at issue in this litigation

9 and, not withstanding such notice, Defendants have failed and refused to offer an effective

10 remedy.
11 109. As a direct and proximate result of Defendants’ breach of implied warranty,
12 Plaintiff and Class Members were caused to suffer economic damage.
13 PRAYER
14 WHEREFOR-E, Plaintiff, on behalf of herself and on behalf of the other members of the
15 Class, request award and relief as follows:
16 1. Certifying the Class and California Subclass as requested herein;
17 2. Awarding Plaintiff and the proposed Class Members damages;
18 3. Awarding restitution and disgorgement of Defendants’ revenues to Plaintiff and
19 the proposed Class Members;
20 4. Awarding declaratory and injunctive relief as permitted by law or equity,
21 including: enjoining Defendants from continuing the unlawful practices as set forth herein and
22 directing Defendants to identify, with Court supervision, victims of its conduct and pay them all
23 money it is required to pay;
24 5. Ordering Defendants to engage in a corrective advertising campaign;
25 6. Awarding attorneys’ fees and costs; and
26
27

28

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7. Providing such further relief as may be just and proper.

2
Dated: May 28, 2020 JAMES HAWKIMS, APLC
3

5
Samantha A. Smitli
6 Attorney for Plaintiff
7

8 DEMAND FOR JURY TRIAL

9 Plaintiff hereby demands a trial by Jury on all causes of action and/or issues so triable.

10
Dated: May 28, 2020 JAMES HAWKINS, APLC
11
12
13
Samantha A. Smith
14 Attorney for Plaintiff

15
16
17

18
19
20

21
22

23

24

25

26
27

28

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EXHIBIT A
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May 2S, 2020

Via Certified Mail (Receipt No, 70181130 0001 8270 4913)

Return Receipt Requested

Apple, Inc.
Apple Value Services, LLC
One Apple Park Way
Cupertino, CA 95014

Re: Demand Letter Pursuant to California Civil Code Sections 1782 and 1798.150

Dear Sir or Madam:

This letter serves as notice and demand for corrective action by Apple, Inc. and Apple
Value Services, LLC (“Apple”) pursuant to the Consumer Legal Remedies Act, Cal. Civ. Code
Section 1750 et al. (“CLRA”) and the California Consumer Privacy Act (“CCPA”), Cal. Civ.
Code Section 1798.150(b). This letter is sent on behalf of our client, Rachael Shay, a consumer
of Apple gift cards in the State of California, and all other persons similarly situated. We hereby
demand that you take immediate corrective action within thirty (30) days as further described
below.

Apple, Inc. is a multinational technology company that designs, develops, and sells
consumer electronics, computer software, and online services. Apple sells Apple gift cards for its
various online services, including its App Store and iTunes, throughout the United States. Upon
information and belief, Apple manufactured, marketed, sold and/or distributed insecure and
defective Apple gift cards it knew were prone to an ongoing scam wherein the funds on the gift
cards are fraudulently redeemed by accessing the Personal Identification Number (“PIN”) on the
Apple gift cards prior to use by the consumer. I

Rather than take simple preventative measures to curb the known and rampant fraudulent
conduct and/or warn consumers that the Apple gift card funds are easily susceptible to fraud and
are not secure. Defendants perpetuated the fraud by staying silent, refusing to refund the stolen
value after consumers complained, and failing to implement and maintain reasonable security
procedures and practices appropriate to the nature of the information to protect consumers’

I Upon information and belief, the PIN on the Apple gift cards is “personal information” as defined in Cal. Civ.
Code §1798.I40(o) as it “identifies, relates to, describes, is reasonably capable of being associated with, or could
reasonably be linked, directly or indirectly, with” the purcliasing consumers and/or their households.
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personal information. This conduct violates the CLRA, including but not limited to sections
1770(a) (5), (7), (9) and (16), as well as the CCPA, including but not limited to section 1798.150.
Apple has misled and continues to mislead consumers, thereby unfairly permitting Apple to
increase its sales and capture market share from its competitors.

Our client is a citizen of the State of California and is a consumer as defined in California
Civil Code section 1761(d) because she purchased an Apple gift card for personal, family, or
household use. When our client purchased an Apple gift card for her son as a birthday gift, she
was misled into believing that the funds on the Apple gift card, and any personal information
associated witli the Apple gift card, was secure. Had Ms. Shay known the truth about the Apple
gift cards and Apple’s failure to properly secure them, she would not have made her purchase.
As a result, our client suffered a loss of money.

We hereby demand on behalf of our client and all others similarly situated that Apple
immediately: (I) cease and desist from continued sale of the faulty Apple gift cards; (2) initiate a
corrective campaign to address the inadequate security practices and procedures described
herein; and (3) offer to refund the purchase price of the gift cards, plus reimbursement for
interest.

If Apple wishes to enter into discussions to resolve the demand asserted in this letter,
please contact me immediately.

Sincerely,

JAMES HAWKINS, APLC

Samantha A. Smith

2
Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.64 Page 53 of 64

EXHIBIT B
 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.65 Page 54 of 64
DocuSign Envelope ID: 875BF333-2057-4C57-BBDE-995CC6DB3329

JAMES HAWKINS, APLC

JAMES R. HAWKINS, ESQ. (#192925)
2 james@jameshawkinsaplc.com
SAMANTHA A. SMITH, ESQ. (#233331)
3 samantha@jameshawkinsaplc.com
9880 Research Drive, Suite 200
4 Irvine, CA 92618
Tel.: (949) 387-7200
5 Fax:(949)387-6676
6 Attorneys for Plaintiff Rachael Shay,
7 on behalf of herself and all others similarly situated

8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA

10 COUNTY OF SAN DIEGO

11 RACHAEL SHAY, on behalf of herself Case No.
12 and all others similarly situated,

13 Plaintiff, AFFIDAVIT OF VENUE BY PLAINTIFF

V. RACHAEL SHAY
14
APPLE, INC., a Delaware corporation;
15
APPLE VALUE SERVICES, LLC, a
16 Virgina limited liability corporation; and
Does 1 through 10, inclusive.
17
Defendants.
18
19
20 I, Rachael Shay, hereby declare and state as follows:

21 1. I am over the age of 18, and If called as a witness, I would testify truthfully to the

22 matters set forth in this Declaration. All of the matters set forth below are within my personal

23 knowledge, except those matters that are stated to be upon Information and belief. As to such

24 matters, T believe them to be true.

25 2. I am the Plaintiff in the above-entitled action.

3. Pursuant to Cal. Civ. Code § 1780(d), 1 make this Declaration in support of the
26
Class Action Complaint and the claim for relief stated in that complaint under Cal. Civ. Code §
27
1780(a).
28

AFFIDAVIT OF VENUE BY PLAINTIFF RACHAEL SHAY

 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.66 Page 55 of 64
DocuSign Envelope ID; 875BF333-2057-4C57-BBDE-995CC6DB3329

4. This action for relief under Cal. Civ. Code § 1780(a) has been commenced in a
2 county that is a proper place for trial of this action because I reside in San Diego County, and this
3 is the county where the transaction or any substantial portion thereof occurred.
4 I declare under penalty of perjury under the laws of the State of California that the
5 foregoing is true and correct. Executed this 27th day of May 2020, in Carlsbad, California.
f— DocuStgnfrd br:
6
'-----2FOS4eFe82EedOB...
7 Rachael Shay
8
9
10

II
12

13

14

15
16
17

18
19
20

21

22

23

24

25
26
27

28

AFFIDAVIT OF VENUE BY PLAINTIFF RACHAEL SHAY

 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.67 Page 56 of 64
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■ pubMPMlie^irrt^ d6urt^in.btHer^cbuhties^states,;pr countries; brjri a:fdderal
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 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.69 Page 58 of 64

SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO

ALTERNATIVE DISPUTE RESOLUTION (ADR) INFORMATION

CASE NUMBER: 37-2020-00017475-CU-MC-CTL CASE TITLE: Shay vs Apple Inc {EFILE)

NOTICE: All plaintiffs/cross-complainants in a general civil case are required to serve a copy of the following
three forms on each defendant/cross-defendant, together with the complaint/cross-complaint:
(1) this Alternative Dispute Resolution (ADR) Information form (SDSC form #CIV-730),
(2) the Stipulation to Use Alternative Dispute Resolution (ADR) form (SDSC form #CIV-359), and
(3) the Notice of Case Assignment form (SDSC form #CIV-721).

Most civil disputes are resolved without filing a lawsuit, and most civil lawsuits are resolved without a trial. The courts,
community organizations, and private providers offer a variety of Alternative Dispute Resolution (ADR) processes to help
people resolve disputes without a trial. The San Diego Superior Court expects that litigants will utilize some form of ADR
as a mechanism for case settlement before trial, and it may be beneficial to do this early in the case.

Below is some information about the potential advantages and disadvantages of ADR, the most common types of ADR,
and how to find a local ADR program or neutral. A form for agreeing to use ADR is attached (SDSC form #CIV-359).

Potential Advantages and Disadvantages of ADR

ADR may have a variety of advantages or disadvantages over a trial, depending on the type of ADR process used and the
particular case:

Potential Advantages Potential Disadvantages

• Saves time • May take more time and money if ADR does not
• Saves money resolve the dispute
« Gives parties more control over the dispute • Procedures to learn about the other side’s case (discovery),
resolution process and outcome jury trial, appeal, and other court protections may be limited
• Preserves or improves relationships or unavailable

Most Common Types of ADR

You can road more information about these ADR procecccc and watch vidcec that dcmonctroto thorn on the court’s ADR
webpage at httD://www.sdcourt.ca.Qov/adr.

Mediation: A neutral person called a ’’mediator" helps the parties communicate in an effective and constructive manner
so they can try to settle their dispute. The mediator does not decide the outcome, but helps the parties to do so.
Mediation is usually confidential, and may be particularly useful when parties want or need to have an ongoing
relationship, such as In disputes between family members, neighbors, co-workers, or business partners, or when parties
want to discuss non-legal concerns or creative resolutions that could not be ordered at a trial.

Settlement Conference: A judge or another neutral person called a "settlement officer" helps the parties to understand
the strengths and weaknesses of their case and to discuss settlement. The judge or settlement officer does not make a
decision in the case but helps the parties to negotiate a settlement. Settlement conferences may be particularly helpful
when the parlies have very difreteiil ideas aboul the likely oulcorne of a liial and would like an experienced rreultal lu help
guide them toward a resolution.

Arbitration: A neutral person called an "arbitrator" considers arguments and evidence presented by each side and then
decides the outcome of the dispute. Arbitration is less formal than a trial, and the rules of evidence are usually relaxed. If
the parties agree to binding arbitration, they waive their right to a trial and agree to accept the arbitrator's decision as final.
With nonbinding arbitration, any party may reject the arbitrator’s decision and request a trial. Arbitration may be
appropriate when the parties want another person to decide the outcome of their dispute but would like to avoid the
formality, time, and expense of a trial.

SDSC CIV-730 (Rev 12-10) ALTERNATIVE DISPUTE RESOLUTION (ADR) INFORMATION Page: 1
 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.70 Page 59 of 64

other ADR Processes: There are several other types of ADR which are not offered through the court but which may be
obtained privately, including neutral evaluation, conciliation, fact finding, mini-trials, and summary jury trials. Sometimes
parties will try a combination of ADR processes. The important thing is to try to find the type or types of ADR that are
most likely to resolve your dispute. Be sure to learn about the rules of any ADR program and the qualifications of any
neutral you are considering, and about their fees.

Local ADR Programs for Civil Cases

Mediation: The San Diego Superior Court maintains a Civil Mediation Panel of approved mediators who have met
certain minimum qualifications and have agreed to charge $150 per hour for each of the first two (2) hours of mediation
and their regular hourly rate thereafter in court-referred mediations.

On-line mediator search and selection: Go to the court’s ADR webpage at www.sdcourt.ca.QOv/adr and click on the
“Mediator Search" to review individual mediator profiles containing detailed information about each mediator including
their dispute resolution training, relevant experience. ADR specialty, education and employment history, mediation style,
and fees and to submit an on-line Mediator Selection Form (SDSC form #CIV-005). The Civil Mediation Panel List, the
Available Mediator List, individual Mediator Profiles, and Mediator Selection Form (CIV-005) can also be printed from the
court’s ADR webpage and are available at the Mediation Program Office or Civil Business Office at each court location.

Settlement Conference: The judge may order your case to a mandatory settlement conference, or voluntary settlement
conferences may be requested from the court if the parties certify that: (1) settlement negotiations between the parties
have been pursued, demands and offers have been tendered in good faith, and resolution has failed; (2) a judicially
supervised settlement conference presents a substantial opportunity for settlement: and (3) the case has developed to a
point where all parties are legally and factually prepared to present the issues for settlement consideration and further
discovery for settlement purposes is not required. Refer to SDSC Local Rule 2.2.1 for more information. To schedule a
settlement conference, contact the department to which your case is assigned.

Arbitration: The San Diego Superior Court maintains a panel of approved judicial arbitrators who have practiced law for
a minimum of five years and who have a certain amount of trial and/or arbitration experience. Refer to SDSC Local
Rules Division II. Chapter III and Code Civ. Proc. S 1141.10 et sea or contact the Arbitration Program Office at (619)
450-7300 for more information.

More information about court-connected ADR: Visit the court’s ADR webpage at www.sdcourt.ca.aov/adr or contact the
court’s Mediation/Arbitration Office at (619) 450-7300.

Dispute Resolution Programs Act (DRPA) funded ADR Programs: The following community dispute resolution
programs are funded under DRPA (Bus. and Prof. Code §§ 465 et seq.):
• In Central, East, and South San Diego County, contact the National Conflict Resolution Center (NCRC) at
www.ncrconline.com or (619) 238-2400.
• In North San Diego County, contact North County Lifeline, Inc. at www.nclifeline.ora or (760) 726-4900.

Private ADR: To find a private ADR program or neutral, search the Internet, your local telephone or business directory,
or legal newspaper for dispute resolution, mediation, settlement, or arbitration services.

Legal Representation and Advice

To participate effectively in ADR, it is generally important to understand your legal rights and responsibilities and the
likely outcomes if you wont to trial. ADR neutrals are not allowod to roproccnt or to give legal advice to the participants in
the ADR process. If you do not already have an attorney, the California State Bar or your local County Bar Association
can assist you in finding an attorney. Information about obtaining free and low cost legal assistance is also available on
the California courts website at www.courtinfo.ca.aov/selfhelp^owcost.

SDSC CIV-730 (Rev 12-10) ALTERNATIVE DISPUTE RESOLUTION (ADR) INFORMATION Page:2
 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.71 Page 60 of 64
BatchPrintExtracLOl xsv-212-000000449

SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO

STREET ADDRESS: 330 West Broadway
MAILIt4G ADDRESS: 330 West Broadway
CfTY AND ZIP CODE San Diego. CA 92101
BRANCH NAME: Central
TELEPHONE NUMBER: (619)450-7088
PLAlNTIFF(S)/PETrnONER(S)/APPELLANT(S): Rachael Shay
DEFENDANT(S)/RESPONDENT(S): Apple Inc et.al.
Short Title; Shay vs Apple Inc {EFILE]

m
CASE NUMBER;
NOTICE OF RESCHEDULED HEARING 37-2020-00017475-CU-MC-CTL

Notice is given that the hearing in the above-entitled case has been rescheduied from 11/13/2020 10:00 AM to date
and time shown below. Ail Inquiries regarding this notice should be referred to the court listed above.

TYPE OF HEARING DATE TIME DEPT JUDGE

Civil Case Management Conference 04/23/2021 10:00 am C-68 Richard S. Whitney

All hearings will be conducted remotely until further notice. Absent an order of the court, persona! appearances at the
hearing will not be allowed. You must make arrangements to appear by telephone or video by contacting CourtCall at
(888) 882-6878, or at www.courtcall.com. Please make your arrangements with CourtCall as soon as possible, before
the hearing date. If you wait to contact CourtCall until the date and-time of the hearing, CourtCall will be unable to
process yoiir request in time and you will not be able to appear at this hearing.

CourtCall will charge you a fee for making the arrangements for your appearance. The fee is required. However, if you
have previously obtained an approved Order on Court Fee Waiver (FW-003/FW-003-GC), you must inform CourtCall
that you have ^e Order so that CourtCall will not charge the fee for a telephonic appearance. If you do not have an
approved Order on Court Fee Waiver (FW-003/FW-003-GC) but believe that you may be eligible for a fee waiver, you
should immediately file a Request to Waive Court Fees {FW-001/FW-001-GC) with the Civil Business Office, to request
an Order on Court Fee Waiver.

Counsel/Plaintiff in pro per: Check service list. If you have brought a party into this case who is not included in the
service list, San Diego Superior Court Local Rules, Division 11, requires you to serve the party with a copy of this notice.

A case management statement must be completed by counsel for all parties or parties in pro per and timely filed with
the court at least 15 days prior to the initial case management conference. (San Diego Local Rules. Division II, CRC
Rule 3.725).

All counsel of record or parties in pro per shall appear at the Case Management Conference, be ^miliar with the case,
and be fully prepared to participate effectively in the hearing, including discussions of ADR options.

SUPCT CIV-700 (Rev. 12-06) Pago; 1

NOH - NOTICE OF RESCHEDULED HEARING
 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.72 Page 61 of 64
B3tEhmni£xtrad_01.C9v>2t3^I0000044g

SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO

Central
330 West Broadway
San Diego, CA 92101

SHORT TITLE: SHAY VS APPLE INC {EFILE]

CASE NUMBER:
CLERK'S CERTIFICATE OF SERVICE BY MAIL
37-2020-00017475-CU-MC-CTL

M I certify that I am not a party to this cause. I certify that a true copy of NOTICE OF RESCHEDULED HEARING
was mailed following standard court practices In a sealed envelope with postage fully prepaid, addressed as
indicated below.
Gardena. California on 06/26/2020.

T
Clerk of the Court, by: 'iCCanaslmb'
, Deputy

JAMES R HAWKINS SAMANTHA SMITH

JAMES HAWKINS APLC JAMES HAWKINS. APLC
9880 RESEARCH DRIVE #200 9880 RESEARCH DRIVE #200
IRVINE. CA 92618 IRVINE. CA 92618

CLERK'S CERTIFICATE OF SERVICE BY MAIL

Page: 2
 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.73 Page 62 of 64

SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO

STREET ADDRESS: 330 W Broadway
MAILING ADDRESS: 330 w Broadway
CITY AND ZIP CODE: San Diego. CA 92101-3827
BRANCH NAME: Ceniral
TELEPHONE NUMBER: (619)450-7068

PLAINTIFF(S) / PETITIONER{S): Rachael Shay

OEFENDANT(S)/RESPONDENT(S): Apple InceUI.

SHAY VS APPLE INC {EFILE]

CASE NUMBER:
NO TICE O F CASE ASSIG NM ENT AND CASE M ANAG EM ENT
CO NFERENCE on M ANDATO RY eFILE CASE 37-2020-00017475-CU-MC-CTL

CASE ASSIG NED FO R ALL PURPO SES TO :

Ju(dge: RichariJ S. Whitney Department: C-68

COMPLAINT/PETITION FILED: 05/28/2020

TYPE OF HEARING SCHEDULED DATE TIME DEPT JUDGE

Civil Case Management Conference 11/13/2020 10:00 am C-68 Richard S. Whitney

Due to the COVID-19 pandemic, all hearings will be conducted remotely until further notice. Absent an order of the court, personal
appearances at the hearing will not be allowed. For information on arranging telephonic or video appearances, contact CourtCall at
{888)882-6878, or at wAvw.courtcall.com. Please make arrangements with CourtCail as soon as possible.
A case management statement must be completed by counsel for all parties or self-represented litigants and timely filed with the court
at least 15 days prior to the initial case management conference. (San Diego Local Rules, Division II, CRC Rule 3.725).
All counsel of record or parties in pro per shall appear at the Case Management Conference, be familiar with the case, and be fully
prepared to participate effectively in the hearing, including discussions ofADR' options.

IT IS THE DUTY OF EACH PLAINTIFF (AND CROSS-COMPLAINANT) TO SERVE A COPY OF THIS NOTICE WITH THE
COMPLAINT (AND CROSS-COMPLAINT), THE ALTERNATIVE DISPUTE RESOLUTION (ADR) INFORMATION FORM (SDSC
FORM #CIV-730), A STIPULATION TO USE ALTERNATIVE DISPUTE RESOLUTION (ADR) (SDSC FORM #CIV-359), AND OTHER
DOCUMENTS AS SET OUT IN SDSC LOCAL RULE 2.1.5.
ALL COUNSEL WILL BE EXPECTED TO BE FAMILIAR WITH SUPERIOR COURT RULES WHICH HAVE BEEN PUBLISHED AS
DIVISION II, AND WILL BE STRICTLY ENFORCED.
TIME STANDARDS: The following timeframes apply to general civil cases and must be adhered to unless you have requested and
been granted an extension of time. General civil cases consist of ali civii cases except: smail claims proceedings,
civil petitions, unlawful detainer proceedings, probate, guardianship, conservatorship, juvenile, parking citation
appeals, and family law proceedings.
COMPLAINTS: Complaints and all other documents listed in SDSC Local Rule 2.1.5 must be served on all named defendants.
DEFENDANT'S APPEARANCE: Defendant must generally appear within 30 days of service of the complaint. (Plaintiff may
stipulate to no more than 15 day extension which must be in writing and fiied with the Court.) (SDSC Local Rule 2.1.6)
JURY FEES: In order to preserve the right to a jury trial, one party for each side demanding a jury trial shall pay an advance jury fee in
the amount of one hundred fifty dollars ($150) on or before the date scheduled for the initial case management conference in
the action.
MANDATORY eFILE: Case assigned to mandatory eFile program per CRC 3.400-3.403 and SDSC Rule 2.4.11. All documents must
be eFiled at www.onelegal.com. Refer to General Order in re procedures regarding electronically imaged court records,
electronic filing, and access to electronic court records in civil and probate cases or guidelines and procedures.
COURT REPORTERS: Court reporters are not provided by the Court in Civil cases. See policy regarding normal availability and
unavailability of official court reporters at wwrw.sdcourt.ca'.gov.
'ALTERNATIVE DISPUTE RESOLUTION (ADR): THE COURT ENCOURAGES YOU TO CONSIDER UTILIZING VARIOUS
ALTERNATIVES TO TRIAL, INCLUDING MEDIATION AND ARBITRATION, PRIOR TO THE CASE MANAGEMENT CONFERENCE.
PARTIES MAY FILE THE ATTACHED STIPULATION TO USE ALTERNATIVE DISPUTE RESOLUTION (SDSC FORM #CIV-359).

SDSC CIV-721 (Rev. 01-17) Poge: 1

NOTICE OF CASE ASSIGNMENT
 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.74 Page 63 of 64

SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO FOR COURT USE ONLY
“ CENTRAL DIVISION. CENTRAL COURTHOUSE, 1100 UNION ST. SAN DIEGO, CA 92101
CENTRAL DIVISION, HALL OF JUSTICE. 330 W. BROADWAY, SAN DIEGO. CA 92101
CENTRAL DIVISION, SMAa CLAIMS. 330 W. BROADWAY, SAN DIEGO, CA 92101
CENTRAL DIVISION. CIVIL 330 W. BROADWAY, ROOM 225, SAN DIEGO. CA 92101
I L E
Cliik el (III Sd M*> Ceerl 0
S
EAST COUNTY DIVISION. 250 E. MAIN ST.. EL CAJON, CA 92020
NORTH COUNTY DIVISION, 325 S. MELROSE DR.. VISTA. CA 92081
SOUTH COUNTY DIVISION. 500 3RD AVE.. CHULA VISTA. CA 91910
JUL 1 4 2020
PLA1NTIFF(S}
Rachael Shay By: V. Contreras, Deputy
DEFENDANT(S)
Apple Inc; Apple Value Services LLC
CASE NUMBER
APPLICATION AND ORDER CORRECTING COURT RECORD
37-2020-00017475-CU-MC-CTK

Upon review of the Register of Actions (ROA) of the above-entitled case, it has been determined that ROA # 10
Amendment to Complaint (First) filed by Shay, Rachael. was erroneously entered
on 07/13/2020

n The document was filed in the wrong, case and has since been filed in the correct case.
[xj The incorrect filing document name was selected in the case management system and has since been
corrected to accurately reflect the document title.
□ Other:____________________________________________________________________

It is hereby requested that the court make an order striking the erroneous entry from the ROA.

Clerk of the Superior Court

Date: 07/14/2020 by. Deputy

V. Contreras

ORDER

The ROA entry indicated above is hereby stricken frorn the ROA.
Other: i *^d *

IT IS SO ORDERED.

Date: n -14' -2^0 C^^^'^^dge/Cenimi^iWr of the Superior CQ.urt

RICKARD S.WHlTNtV

SOSC AD.M-361 (Rov. 11/17) APPLICATION AND ORDER CORRECTING COURT RECORD CoaoOv.Proc.Si28<8Xe)
 Case 3:20-cv-01629-GPC-BLM Document 1-2 Filed 08/21/20 PageID.75 Page 64 of 64

FOR COURT USE ONL Y

SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DJEGO
STREET ADDRESS: 330 West Broadway
MAILING ADDRESS: 330 West Broadway
CITY, STATE. 4 ZIP CODE: San Diego, CA 92101*3827
BRANCH NAME: Central

PLAINTIFF(S); Rachael Shay

OEFENDANT(S): Apple Inc et.al.

SHORT TITLE: SHAY VS APPLE INC {EFILE)

STIPULATION TO USE ALTERNATIVE CASE NUMBER;

DISPUTE RESOLUTION (ADR) 37-2020-00017475-CU-MC-CTL

Judge; Richard S. Whitney Department: C-68

The parties and their attorneys stipulate that the matter is at issue and the claims in this action shall be submitted to the following
alternative dispute resolution (ADR) process. Selection of any of these options will not delay any case management timelines.

r~l Mediation (court-connected) r~1 Non-binding private arbitration

r~| Mediation (private) I [ Binding private arbitration

n Voluntary settJement conference (private) Q Non-binding judicial arbitration (discovery untii 15 days before trial)

(Zl Neutral evaluation (private) n Non-binding judicial arbitration (discovery until 30 days before trial)

r~l Other (specify e.g., private mini-trial, private judge, etc.):

It is also stipulated that the following shall serve as arbitrator, mediator or other neutral: (Name)

Alternate neutral (for court Civil Mediation Program and arbitration only);

Date; Date:

Name of Plaintiff Name of Defendant

Signature Signature

Name of Plaintiffs Attorney Name of Defendant's Attorney

Signature Signature
If there are more parties and/or attorneys, please attach additional completed and fully executed sheets.
It is the duty of the parties to notify the court of any settlement pursuant to Cal. Rules of Court, rule 3.1385. Upon notification of the settlement,
the court will place this matter on a 45-day dismissal calendar.
No new parties may be added without leave of court.
IT IS SO ORDERED.

Dated: 05/29/2020 JUDGE OF THE SUPERIOR COURT

SOSC CIV-3S9 (Rev 12-10) Pago; 1
STIPULATION TO USE OF ALTERNATIVE DISPUTE RESOLUTION
Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.76 Page 1 of 33

EXHIBIT 2
 Case 3:20-cv-01629-GPC-BLM end
Document 1-3 Filed 08/21/20 PageID.77
ATTORNEY OR PARTY WITHOUT ATTORNEY /Name Stele Saf numsef,
mafmss/ Page 2 of 33
FOR COURT USE ONLY
James R. Hawkins, Esq., SBN 192925
Samantha A. Smith, Esqn SBN 233331
JAMES HAWKINS APLC
9880 Research Dr., Suite 200, Irvine, CA 92618
TELEPHONE No 949-387-7200 FAX No. /OPlmnN/ 949-387-6676
ATTORNEY FoR &He~i RACHAEL SHAY
SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO
s~REETaooREss 330 West Broadway
MAILING AOORESS

GITYANozIPcooE San Diego, 92101

saaxcHNaME Central Hourthouse
CASE NAME;
RACHAEL SHAY V. APPLE, INCn et al.

~x
CIVIL CASE COVER SHEET
Unlimited
(Amount
Limited
(Amount
~ ~ Counter ~
Complex Case Designation
Joinder
Filed with first appearance by defendant
demanded demanded is JUOGE

exceeds $ 25.000) (Cal. Rules of Court, rule 3402) DEPT..

$ 25.000)
Items 1-6 below must be comp/cled (see ins/iuc/ions on page 2).
1. Check one box below for the case type that best descnbes this case:

~
Auto Tort

~ Auto (22) ~
~
Contract
Breach of contract/warranty (06)
Provisionally Complex Civil Litigation

~
(Cal. Rules of Court, rules 3.400-3.403)
Uninsured motorist (46)
Other pl/pD/WD (personal Injury/propertY
~ Rule 3.740 collections (09)
Other collections (09) ~
~
Antitrust/Trade regulation (03)
Construchon defect (10)

~
Damage/Wrongful Death) Tort

~ Asbestos (04)
~
~
Mass tort(40)
Securities litigation (28)

~
~
Product ltabddy (24)
Medical malpractice (45)
~Real Property
Eminent domain/Inverse ~ Environmental/Toxic tort (30)
Insurance coverage daims arising from the
above listed provisionally complex case

~
Other Pl/PD/WD (23)
Non-Pl/PD/WD (Other) Tort ~
~ Wrongful eviction (33)
types (41)

~
~
Business tort/unfair business practice (07)
Civil rights (06)
~
Other real property (26)
Unlawful Detainer

~
Miscellaneous Civil Complaint

~ Defamation (13)
~
~
Commercial (31)
Residential (32)
RICO(27)

~
~
Fraud (16)
Intellectual properly (19) Dru g s (36)
~x Other complaint fno/ speuvfied above) (42)
Miscellaneous Civil Petition
~
~ Professional negligence (25)
Other non-Pl/PD/WD tort (35) ~
~
Judicial Review
Asset forfeiture (05)
~
Partnership and corporate governance (21)

~
Other petition (nor specified above) (43)

~
~
Employment
Wrongful terminabon (36)
~
Petition re: arbitration award (11)
Writ of mandate (02)
Other judicial review (39)
2.
Other employment (15)
This case ~s is ~is not complex under rule 3.400 of the California Rules of Court. If the case is complex, mark the
factors requiring exceptional judicial management:

b. ~
a. ~x Large number of separately represented parties
Extensive motion practice raising difficult or novel e.
issues that will be time-consuming to resolve
~
d. ~x Large number of witnesses
Coordination with related actions pending in one or more
courts in other counties, states, or countries, or in a federal
c. ~x Substantial amount of documentary evidence
f. ~
Substantial postjudgment judicial supervision
3. Remedies sought (check a// that app/y):a. ~x monetary b, ~x nonmonetary; dedaratory or injunctive relief c. punitive ~
~
fo~
4. Number of causes of action (specify)r 6
5. This case ~n is is not a dass action suit.
6. If there are any known related cases, file and serve a notice of related case. (You may use form CM-O(5.)
Date: May 28, 2020
Samantha A. Smith, Esq.

~
5'TYPE
OR PRINT NAME)
NOTICE
(SIGNATURE OF PARTY OR ATTORNEY FOR PARTY)

Plaintiff must file this cover sheet with the first paper filed in the action or proceeding (except small claims cases or cases filed
under the Probate Code, Family Code, or Welfare and Institutions Code). (Cal. Rules of Court, rule 3.220.) Failure to file may result
in sanctions.
~ File this cover sheet in addition to any cover sheet required by local court rule.
~ If this case is complex under rule 3.400 et seq. of the California Rules of Court, you must serve a copy of this cover sheet on all
other parties to the action or proceeding.
~ Unless this is a collections case under rule 3.740 or a complex case, this cover sheet will be used for statistical purposes only.
Page I of 2
Form Adopted for Mendstofy Use Cat. Rules d Coufl, rules 2.30. 3 220. 3 S004 S03. 3 Tag.
Judtoml Counul ol Celdomm CIVIL CASE COVER SHEET Csi Standards td Judtud Admtfuslfatmn sid 3.IO
 Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.78 Page 3 of 33
INSTRUCTIONS ON HOW TO COMPLETE THE COVER SHEET C M-010
To Plaintiffs and Others Filing First Papers. If you are filing a first paper (for example, a complaint) in a civil
case, you must
complete and file, along with your first paper, the Civil Case Cover Sheet contained on page 1. This information will be
used to compile
statistics about the types and numbers of cases filed. You must complete items 1 through 6 on the sheet. In item
1, you must check
one box for the case type that best describes the case. If the case fits both a general and a more specific
type of case listed in item 1,
check the more specific one. If the case has multiple causes of action, check the box that best indicates the
primary cause of action.
To assist you in completing the sheet, examples of the cases that belong under each case type in item 1 are
provided below. A cover
sheet must be filed only with your initial paper. Failure to file a cover sheet with the first paper filed in a civil case
may subject a party,
its counsel, or both to sanctions under rules 2.30 and 3.220 of the California Rules of Court.
To Parties in Rule 3.740 Collections Cases. A "collections case" under rule 3.740 is defined as an action for
recovery of money owed
in a sum stated to be certain that is not more than $ 25,000, exclusive of interest and attorney's
fees, arising from a transaction in which
property, services, or money was acquired on credit. A collections case does not include an action seeking the
following: (1) tort
damages, (2) punitive damages, (3) recovery of real property, (4) recovery of personal property, or
(5) a prejudgment writ of
attachment. The identification of a case as a rule 3.740 collections case on this form means that it will
be exempt from the general
time-for-service requirements and case management rules, unless a defendant files a responsive
pleading. A rule 3.740 collections
case will be subject to the requirements for service and obtaining a judgment in rule 3.740.
To Parties in Complex Cases. In complex cases only, parties must also use the Civil Case Cover Sheet
to designate
case is complex. If a plaintiff believes the case is complex under rule 3.400 of the California Rules of Court, this must bewhether the
indicated by
completing the appropriate boxes in items 1 and 2. If a plaintiff designates a case as complex, the cover sheet must
be served with the
complaint on all parties to the action. A defendant may file and serve no later than the time of its first
appearance a joinder in the
plaintiffs designation, a counter-designation that the case is not complex, or, if the plaintiff has made no
designation, a designation that
the case is complex. CASE TYPES AND EXAMPLES
Auto Tort Contract
Breach of Contract/Warranty (06) provisionally Complex CivilLitigation(Cal.
Auto (22)-Personal Iniury/Properly Rules of Court Rules 3.400-3.403)
Damage/Wrongful Death Breach of RentalAease
Antitrust/Trade Regulation (03)
Uninsured Motorist (46) (I/the Contract (no/ unlawful de/airer
Construction Defect (10)
case /nvo/ues en uninsured Claims Involving Mass Tort (40)
motorist claim sub/ecr to Contract/Warranty Breach-Seller
Securibes Litigation (28)
arhi/rs//on, check this i/em Plaintiff (no/ fraud or negligence) Environmental/Toxic Tort (30)
instead of Avio) Negligent Breach of Contract/
Insurance Coverage Claims
Other PI/PD/WD (Personal Injury/ Warranty
(arising /rom provisionally complex
Property Damage/Wrongful Death) Other Breach of Contrad/Warranty
Collections (e.g., money owed, open
case type listed above) (4 I)
Tort Enforcement of Judgment
Asbestos (04) book accounts) (09) Enforcement of Judgment (20)
Asbestos Property Damage Cofiedion Case-Seller Plaintiff
Abstractof Judgment (Oui of
Other Promissory Note/Coiiecbons
County)
Wrongful Death Confession of Judgment (non-
Product Liability (no/ ashes/os or Insurance Coverage (no/ provisionally
domesric re/a//ons)
/ox/c/env/yonmen/a/) (24) Sister State Judgment
Medical Maipracbce (45) Auto Subrogation
Administrative Agency Award
Medical Malpractice- Other Coverage
(nor unpaid /exes)
Physicians & Surgeons Petition/Ceruficstion of Entry of
Other Professional Health Care Contractual Fraud
Judgment on Unpsd Taxes
Other Enforcement of Judgment
Real Property
Eminent Domain/Inverse
Case
Miscellaneous Civil Complaint
snd fall) Condemnation (14) RICO (27)
Intentional Bodily Injury/PD/WD Wrongful Eviction (33)
Other Complaint (no/ xpedfied
Other Real Property (e.g., quiet tile) (26)
shove) (42)
Writ of Possession of Real Property
Dedsratory Relief Only
Emotional Distress Mortgage Foredosvre
Injunctive Relief Only (non-
Negligent Infliction of Quiet Title
Other Real Property (nor eminent harasxmenl)
Mechanics Lien
Other Pl/PD/WD domain, /and/oid'/chant, or
Other Commercial Complaint
Non-Pl/PD/WD (Other) Tort Case (non-/ort/non-comp/ex)
Business Tort/Unfair Business Other Civil Complaint
Practice (07) Commercial (31)
(non-/oy//non-comp/ex)
Civil Rights (e.g., discrimination, Residential (32)
Nliscellaneous Civil Petition
Drugs (38) (i/ the case involves i//ega/
Partnership and Corporate
eressmen drugs, check this item; otherwise,
Defamation (e.g., slander, libel) '//a/
report as Comme/sic/ orr Rex/den /e )
Governance (21)
Other Petition (no/ specified
(13) Judicial Review
Asset Forfeiture (05) above) (43)
Fraud (16) Civil Harassment
Inteliedual Property (19) Petition Re: Arbitration Award (11)
Workplace Violence
Professional Negligence (25) Writ of Mandate (02)
Elder/Dependent Adult
Writ-Administratwe Mandamus
Writ-Mandamus on Limited Court Abuse
Other Professional Malprsdice Ehction Contest
(no/ m ed/ca/ or /ega/) Case Matter petition for Name Change
Other Non-Pl/PD/WD Tort (35) Writ-Other Limited Court Case
Petition for Relief From Late
Employment Review
Claim
Wrongful Termination (36) Other Judicial Review (39)
Other Cwil Pebticn
Review of Health Officer Order
Notice of Appeal-Labor
Commissioner Aooeals
C/yus/0 ikuv July i. 200/I
CIVIL CASE COVER SHEET Pxsxxoix
Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.79 Page 4 of 33

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EXHIBIT A
Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.100 Page 25 of 33

May 28, 2020

Via Certified Mail (Receipt No. 7018 1130 0001 8270 4913)
Return Receipt Requested

Apple, Inc.
Apple Value Services, LLC
One Apple Park Way
Cupertino, CA 95014

Re: Demand Letter Pursuant to California Civil Code Sections 1782 and 1798.150

Dear Sir or Madam:

This letter serves as notice and demand for corrective action by Apple, Inc. and Apple
Value Services, LLC (“Apple”) pursuant to the Consumer Legal Remedies Act, Cal. Civ. Code
Section 1750 et al. (“CLRA”) and the California Consumer Privacy Act (“CCPA”), Cal. Civ.
Code Section 1798.150(b). This letter is sent on behalf of our client, Rachael Shay, a consumer
of Apple gift cards in the State of California, and all other persons similarly situated. We hereby
demand that you take immediate corrective action within thirty (30) days as further described
below.

Apple, Inc. is a multinational technology company that designs, develops, and sells
consumer electronics, computer software, and online services. Apple sells Apple gift cards for its
various online services, including its App Store and iTunes, throughout the United States. Upon
information and belief, Apple manufactured, marketed, sold and/or distributed insecure and
defective Apple gift cards it knew were prone to an ongoing scam wherein the funds on the gift
cards are fraudulently redeemed by accessing the Personal Identification Number (“PIN”) on the
Apple gift cards prior to use by the consumer.1

Rather than take simple preventative measures to curb the known and rampant fraudulent
conduct and/or warn consumers that the Apple gift card funds are easily susceptible to fraud and
are not secure. Defendants perpetuated the fraud by staying silent, refusing to refund the stolen
value after consumers complained, and failing to implement and maintain reasonable security
procedures and practices appropriate to the nature of the information to protect consumers’

1 Upon information and belief, the PIN on the Apple gift cards is “personal information” as defined in Cal. Civ.
Code §1798.140(o) as it “identifies, relates to, describes, is reasonably capable of being associated with, or could
reasonably be linked, directly or indirectly, with” the purchasing consumers and/or their households.

1
Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.101 Page 26 of 33

personal information. This conduct violates the CLRA, including but not limited to sections
1770(a) (5), (7), (9) and (16), as well as the CCPA, including but not limited to section 1798.150.
Apple has misled and continues to mislead consumers, thereby unfairly permitting Apple to
increase its sales and capture market share from its competitors.

Our client is a citizen of the State of California and is a consumer as defined in California
Civil Code section 1761(d) because she purchased an Apple gift card for personal, family, or
household use. When our client purchased an Apple gift card for her son as a birthday gift, she
was misled into believing that the funds on the Apple gift card, and any personal information
associated with the Apple gift card, was secure. Had Ms. Shay known the truth about the Apple
gift cards and Apple’s failure to properly secure them, she would not have made her purchase.
As a result, our client suffered a loss of money.

We hereby demand on behalf of our client and all others similarly situated that Apple
immediately: (1) cease and desist from continued sale of the faulty Apple gift cards; (2) initiate a
corrective campaign to address the inadequate security practices and procedures described
herein; and (3) offer to refund the purchase price of the gift cards, plus reimbursement for
interest.

If Apple wishes to enter into discussions to resolve the demand asserted in this letter,
please contact me immediately.

Sincerely,

JAMES HAWKINS, APLC

Samantha A. Smith

2
Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.102 Page 27 of 33

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Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.103 Page 28 of 33

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AFFIDAVIT OF VENUE BY PLAINTIFF RACHAEL SHAY





     
Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.104 Page 29 of 33


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AFFIDAVIT OF VENUE BY PLAINTIFF RACHAEL SHAY

 Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.105 Page 30 of 33
SUM-1 00
SUMMONS FOR COURF USE OHL y
facto p4R4 Uso as L4 coRyai
(CITACION JUDICIAL)
NOTICE TO DEFENDANT:
(AVISO AL DEMANDADO):
APPLE, INC., a Delaware corporation; APPLE VALUE SERVICES, LLC, a Virginia hmited liability
corporation; and Does 1 through 10, inclusive,
YOU ARE BEING SUED BY PLAINTIFF:
(LO ES TA DEMANDANDO EL DEMANDANTE)i
RACHAEL SHAY, on behalf of herself and all others similarly situated
NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the informahon
below,
You have 30 CALENDAR DAYS after this summons and legal papers are served on yau to file a written response at this court and have a copy
served on the plaintiff. A letter or phone call will not protect you. Your written response must be in proper legal form if you want the court to hear your
case. There may be a court form that you can use for your response. You can find these caurt forms and more information at the Cakfomia Courts
Online Self-Help Center (www.courtinfo.ca. gavyseffheip), your county law kbrary, or the courthouse nearest you. If you cannot pay the filing fee, ask the
court clerk for a fee waiver form. If you do not file your response on time, you may lose the case by default, and your wages, money, and property may
be taken without further warning from the court.
There are other legal requirements. You may want to call an attorney right away. If you da not know an ahorney, you may want to call an attorney
referral service. If you cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services program. You can locate
these nonprofs groups at the California Legal Services Web site (www lawheipcaiiiomia.org), the California Courts Online Self-Help Center
twww.courtinio.ca.govyselfh alp), or by contacting your local court or county bar association. NOTE: The court has a statutory ken for waived fees and
costs on any settlement or arbitration award of $ 10,000 or more in a civil case. The court's lien must be paid before the court will dismiss the case.
IAVISO! Lo han demandado. Si no responde deniro de 30 dias, la corte puede decidir an su contre sin escuchar su versidn. Laa la infofmacfdn a
conhnuacidn.
Tiane 30 DIAS DE CALENDARIO daspues da que ie enlraguen esia mlacidn y papeias legaies pare presenlar una raspuesia por escriio en asia
corte y hacer que se eniregue una copi 0 ai demandanie. Una carte o una iiamada lelefdnica no lo prolegen. Su respuesla por escnlo liana gua esiar
en ionnalo legal correcia si dasea que procesen su caso en la corle. Es posible gue hays un formuiario qua usled pueda ussr para su respuesia.
Puede enconlrar esias formula rio de la corte y mes informacidn en el Can tro de Ayuda de las Cortes de Cairiomia (www.sucorte. ca. gov), an la
bibiiolece de ieyes da su condado o en la corte que ie quads mfis ceres. Si no puede pager ls cuala de preseniacidn, pida ai secfalario de la corte que
le de un iormuiario de exancion da pago de cuoras. si no presenia su raspuesla 0 Campo, puede panier al caso porincumpiimienlo y la corte ie padre
guitar su suekfo, dinero y oienas sin mes advertencia.
Hay ofros requisiios logaies. Es racomendabie qua liame a un abogado inmadialamenle. Si no conoce 0 un abogado, puede liamar a un servicio de
remisidn a abogados. Si no puede pager 0 un abogado, es posibie qua cumpia con los requi sf los pare oblener servffyos laga/es graluiios de un
programs de seniicios lagaies sfn fines de Iucm. Puede anconlrar eslos grupos sin lines de iucro en ei siiio web de California Legal Services,
(www.lawheipcaliiomia.orgl, en ei cenlro de Ayuda de las corfes de california, (www. sucorfe. Ca.gov) o poniendose en confeclo con la corte o el
coiegio de abogados locales. AVISOJ Por lay, la corle irene deracho a racfamar las cuofas y los cosias exenlos par imponer Un gravamen soars
cualquier racuperacidn de $ 10,000 4 mffs de valor racibida medianle un acuerdo o una cancasx)n de arbiiraie en un caso de deracho cndi. Tiene que
pager ei gravamen de la corte anias de que la corle pueda desechar ei caso.
The name and address of the courl is: CASE NUMBER: (Numero def Casa):
(Ei nambre y di reccif)n de Ia carfe es):
SAN DIEGO SUPERIOR COURT
330 West Broadway, San Diego, CA 92101
The name, address, and telephone number of plaintiffs attorney, or plaintiff without an attorney, is: (EI rambre, Ia direccif)n y el numero
da lelf)Iong del abogada dei demandanle, o dei demandanle que no liana abogadg, es)i
James R. Hawkins; Samantha A. Smith, JAMES HAWKINS APLC, 9880 Research Dr.,Ste 200, Irvine, CA 92618 Tel; 949-387-7200
DATE: Clerk, by , Deputy

(Fecha) (Secreta rig) (Ad)uric)

(For proof of service of this summons, use Proof of Service of Summons (fartn POS-010).)
(Para prueba de enlrega de esfa cilalidn use el farmuian'o Proof of service of summons, (Poof 0).)
NOTICE TO THE PERSON SERVED: You are served
Issxtl
1.
2.
~
~ as an individual defendant.
as the person sued under the fictitious name of (specify):
3. ~ on behalf of (specify):

~
~
~
under: CCP 416.10 (corporation)
~ CCP 416.60 (minor)

~ CCP 416.20 (defunct corporation)

~ CCP 416.70 (conservatee)

~~
CCP 416.40 (association or partnership) CCP 416.90 (authorized person)
other (specify)r
4. by personal delivery on (dale) Peace of1
Form Adopted for Mandatory Uee SUMMONS cade of coo piooedwe ss 41 2 20, 405
Jud omi Coutme of Caifotma www ooltde oe go
SUM-100 IReu Juiy1,2000)
 Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.106 Page 31 of 33
SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO
STREET ADDRESS: 330 W Broadway
MAILING ADDRESS: 330 W Broadway
CITY AND ZIP CODE: San Diego, CA 92101-3827
BRANCH NAME: Central
TELEPHONE NUMBER: (619) 450-7068

PLAINTIFF(S) / PETITIONER(S): Rachael Shay

DEFENDANT(S) / RESPONDENT(S): Apple Inc et.al.

SHAY VS APPLE INC {EFILE]

CASE NUMBER:
NOTICE OF CASE ASSIGNMENT AND CASE MANAGEMENT
CONFERENCE on MANDATORY eFILE CASE 37-2020-00017475-CU-MC-CTL

CASE ASSIGNED FOR ALL PURPOSES TO:

Judge: Richard S. Whitney Department: C-68

COMPLAINT/PETITION FILED: 05/28/2020

TYPE OF HEARING SCHEDULED DATE TIME DEPT JUDGE

Civil Case Management Conference 11/13/2020 10:00 am C-68 Richard S. Whitney

Due to the COVID-19 pandemic, all hearings will be conducted remotely until further notice. Absent an order of the court, personal
appearances at the hearing will not be allowed. For information on arranging telephonic or video appearances, contact CourtCall at
(888)882-6878, or at www.courtcall.com. Please make arrangements with CourtCall as soon as possible.
A case management statement must be completed by counsel for all parties or self-represented litigants and timely filed with the court
at least 15 days prior to the initial case management conference. (San Diego Local Rules, Division II, CRC Rule 3.725).
All counsel of record or parties in pro per shall appear at the Case Management Conference, be familiar with the case, and be fully
prepared to participate effectively in the hearing, including discussions of ADR* options.

IT IS THE DUTY OF EACH PLAINTIFF (AND CROSS-COMPLAINANT) TO SERVE A COPY OF THIS NOTICE WITH THE
COMPLAINT (AND CROSS-COMPLAINT), THE ALTERNATIVE DISPUTE RESOLUTION (ADR) INFORMATION FORM (SDSC
FORM #CIV-730), A STIPULATION TO USE ALTERNATIVE DISPUTE RESOLUTION (ADR) (SDSC FORM #CIV-359), AND OTHER
DOCUMENTS AS SET OUT IN SDSC LOCAL RULE 2.1.5.
ALL COUNSEL WILL BE EXPECTED TO BE FAMILIAR WITH SUPERIOR COURT RULES WHICH HAVE BEEN PUBLISHED AS
DIVISION II, AND WILL BE STRICTLY ENFORCED.
TIME STANDARDS: The following timeframes apply to general civil cases and must be adhered to unless you have requested and
been granted an extension of time. General civil cases consist of all civil cases except: small claims proceedings,
civil petitions, unlawful detainer proceedings, probate, guardianship, conservatorship, juvenile, parking citation
appeals, and family law proceedings.

COMPLAINTS: Complaints and all other documents listed in SDSC Local Rule 2.1.5 must be served on all named defendants.
DEFENDANT’S APPEARANCE: Defendant must generally appear within 30 days of service of the complaint. (Plaintiff may
stipulate to no more than 15 day extension which must be in writing and filed with the Court.) (SDSC Local Rule 2.1.6)
JURY FEES: In order to preserve the right to a jury trial, one party for each side demanding a jury trial shall pay an advance jury fee in
the amount of one hundred fifty dollars ($150) on or before the date scheduled for the initial case management conference in
the action.
MANDATORY eFILE: Case assigned to mandatory eFile program per CRC 3.400-3.403 and SDSC Rule 2.4.11. All documents must
be eFiled at www.onelegal.com. Refer to General Order in re procedures regarding electronically imaged court records,
electronic filing, and access to electronic court records in civil and probate cases or guidelines and procedures.
COURT REPORTERS: Court reporters are not provided by the Court in Civil cases. See policy regarding normal availability and
unavailability of official court reporters at www.sdcourt.ca.gov.
*ALTERNATIVE DISPUTE RESOLUTION (ADR): THE COURT ENCOURAGES YOU TO CONSIDER UTILIZING VARIOUS
ALTERNATIVES TO TRIAL, INCLUDING MEDIATION AND ARBITRATION, PRIOR TO THE CASE MANAGEMENT CONFERENCE.
PARTIES MAY FILE THE ATTACHED STIPULATION TO USE ALTERNATIVE DISPUTE RESOLUTION (SDSC FORM #CIV-359).

SDSC CIV-721 (Rev. 01-17) Page: 1

NOTICE OF CASE ASSIGNMENT
 Case 3:20-cv-01629-GPC-BLM Document 1-3 Filed 08/21/20 PageID.107 Page 32 of 33

SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO

STREET ADDRESS: 330 West Broadway
MAILING ADDRESS: 330 West Broadway
CITY AND ZIP CODE:San Diego, CA 92101
BRANCH NAME: Central
TELEPHONE NUMBER: (619) 450-7068
PLAINTIFF(S)/PETITIONER(S)/APPELLANT(S): Rachael Shay
DEFENDANT(S)/RESPONDENT(S): Apple Inc et.al.
Short Title: Shay vs Apple Inc {EFILE]

CASE NUMBER:
NOTICE OF RESCHEDULED HEARING 37-2020-00017475-CU-MC-CTL

Notice is given that the hearing in the above-entitled case has been rescheduled from 11/13/2020 10:00 AM to date
and time shown below. All inquiries regarding this notice should be referred to the court listed above.

TYPE OF HEARING DATE TIME DEPT JUDGE

Civil Case Management Conference 04/23/2021 10:00 am C-68 Richard S. Whitney

All hearings will be conducted remotely until further notice. Absent an order of the court, personal appearances at the
hearing will not be allowed. You must make arrangements to appear by telephone or video by contacting CourtCall at
(888) 882-6878, or at www.courtcall.com. Please make your arrangements with CourtCall as soon as possible, before
the hearing date. If you wait to contact CourtCall until the date and time of the hearing, CourtCall will be unable to
process your request in time and you will not be able to appear at this hearing.

CourtCall will charge you a fee for making the arrangements for your appearance. The fee is required. However, if you
have previously obtained an approved Order on Court Fee Waiver (FW-003/FW-003-GC), you must inform CourtCall
that you have the Order so that CourtCall will not charge the fee for a telephonic appearance. If you do not have an
approved Order on Court Fee Waiver (FW-003/FW-003-GC) but believe that you may be eligible for a fee waiver, you
should immediately file a Request to Waive Court Fees (FW-001/FW-001-GC) with the Civil Business Office, to request
an Order on Court Fee Waiver.

Counsel/Plaintiff in pro per: Check service list. If you have brought a party into this case who is not included in the
service list, San Diego Superior Court Local Rules, Division II, requires you to serve the party with a copy of this notice.

A case management statement must be completed by counsel for all parties or parties in pro per and timely filed with
the court at least 15 days prior to the initial case management conference. (San Diego Local Rules, Division II, CRC
Rule 3.725).

All counsel of record or parties in pro per shall appear at the Case Management Conference, be familiar with the case,
and be fully prepared to participate effectively in the hearing, including discussions of ADR options.

SUPCT CIV-700 (Rev. 12-06) Page: 1

NOH - NOTICE OF RESCHEDULED HEARING
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SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN DIEGO

Central
330 West Broadway
San Diego, CA 92101

SHORT TITLE: SHAY VS APPLE INC {EFILE]

CASE NUMBER:
CLERK'S CERTIFICATE OF SERVICE BY MAIL
37-2020-00017475-CU-MC-CTL

I certify that I am not a party to this cause. I certify that a true copy of NOTICE OF RESCHEDULED HEARING
was mailed following standard court practices in a sealed envelope with postage fully prepaid, addressed as
indicated below. The certification occurred at San Diego, California on 06/25/2020. The mailing occurred at
Gardena, California on 06/26/2020.

Clerk of the Court, by: , Deputy

JAMES R HAWKINS SAMANTHA SMITH

JAMES HAWKINS APLC JAMES HAWKINS, APLC
9880 RESEARCH DRIVE # 200 9880 RESEARCH DRIVE # 200
IRVINE, CA 92618 IRVINE, CA 92618

CLERK'S CERTIFICATE OF SERVICE BY MAIL

Page: 2
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EXHIBIT 3
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1 JENNER & BLOCK LLP

Kate T. Spelman (Cal. Bar No. 269109)
2 kspelman@jenner.com
Alexander M. Smith (Cal. Bar No. 295187)
3
asmith@jenner.com
4 633 West 5th Street, Suite 3600
Los Angeles, CA 90071-2054
5 Telephone: (213) 239-5100
Facsimile: (213) 239-5199
6
Attorneys for Defendants
7
Apple Inc. and Apple Value Services, LLC
8

9 SUPERIOR COURT OF CALIFORNIA

10 COUNTY OF SAN DIEGO
11

12 RACHAEL SHAY, individually and on behalf of Case No. 37-2020-00017475-CU-MC-CTL

all others similarly situated,
13
NOTICE TO STATE COURT OF REMOVAL
14 Plaintiff, TO FEDERAL COURT

15 v.

16 APPLE INC., a Delaware Corporation; APPLE

VALUE SERVICES, LLC, a Virginia Limited
17 Liability Corporation; and DOES 1 through 10,
inclusive,
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19 Defendants.

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NOTICE TO STATE COURT OF REMOVAL TO FEDERAL COURT

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1 TO THE COURT, ALL PARTIES, AND THEIR COUNSEL OF RECORD:

2 PLEASE TAKE NOTICE that Defendants Apple Inc. and Apple Value Services, LLC have

3 removed this action to the United States District Court for the Southern District of California pursuant to

4 28 U.S.C. § 1441 et seq. A file-stamped copy of the Notice of Removal is attached as Exhibit 1.

6 Dated: August 21, 2020 JENNER & BLOCK LLP

7
By: /s/ Kate T. Spelman
8
Kate T. Spelman
9
Attorneys for Defendants
10 Apple Inc. and Apple Value Services, LLC

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1
NOTICE TO STATE COURT OF REMOVAL TO FEDERAL COURT