Apple 2005 Annual Report Download - page 22

Craft v. Apple Computer, Inc . (filed December 23, 2003, Santa Clara County Superior Court); Chin v. Apple Computer, Inc. (filed
December 23, 2003, San Mateo County Superior Court); Hughes v. Apple Computer, Inc. (filed December 23, 2003, Santa Clara County
Superior Court); Westley v. Apple Computer, Inc. (filed December 26, 2003, San Francisco County Superior Court); Keegan v. Apple
Computer, Inc. (filed December 30, 2003, Alameda County Superior Court); Wagya v. Apple Computer, Inc. (filed February 19, 2004,
Alameda County Superior Court); Yamin v. Apple Computer, Inc. (filed February 24, 2004, Los Angeles County Superior Court); Kieta v.
Apple Computer, Inc.
(filed July 8, 2004, Alameda County Superior Court)
Eight separate plaintiffs filed purported class action cases in various California courts alleging misrepresentations by the Company relative to
iPod battery life. The complaints include causes of action for violation of California Business and Professions Code §17200 (unfair
competition), the Consumer Legal Remedies Action and claims for false advertising, fraudulent concealment, and breach of warranty. The
complaints seek unspecified damages and other relief. The cases were consolidated in San Mateo County and Plaintiffs thereafter filed a
consolidated complaint. On August 25, 2004, the Company filed an answer denying all allegations and asserting numerous affirmative
defenses. The parties reached a tentative settlement and the Court granted preliminary approval of the settlement on May 20, 2005. The trial
court entered an order granting final approval to the settlement on August 25, 2005. An appeal challenging the trial court’s approval of the
settlement was filed on October 24, 2005; the appeal is pending. Settlement of this matter on the terms approved by the Court will not have a
material effect on the Company’s financial position or results of operations.
A similar complaint relative to iPod battery life, Mosley v. Apple Computer, Inc. was filed in Westchester County, New York on June 23, 2004
alleging violations of New York General Business Law Sections 349 (unfair competition) and 350 (false advertising). The Company removed
the case to Federal Court and Plaintiff filed a motion for remand, which the Court has not yet decided. This case is stayed and is part of the
settlement, now on appeal, referred to above.
A similar complaint related to the iPod battery life, Lenzi v. Apple Canada, Inc. , was filed in Montreal, Quebec, Canada, on June 7, 2005,
seeking authorization to institute a class action on behalf of Generations 1, 2 and 3 iPod owners in Quebec. A class certification hearing has
been scheduled for January 12, 2006.
Two similar complaints relative to iPod battery life, Wolfe v. Apple and Hirst v. Apple , were filed in Toronto, Ontario, Canada on August 15,
2005 and September 12, 2005, respectively. Both actions define the class as a national class consisting of all persons in Canada who have
purchased or who own an iPod. A motion for certification of the class proceeding has been scheduled for the Spring of 2006.
Davis v. Apple Computer, Inc.
Plaintiff filed this purported class action in San Francisco County Superior Court on December 5, 2002, alleging that the Company engaged in
unfair and deceptive business practices relating to its AppleCare Extended Service and Warranty Plan. Plaintiff asserts causes of action for
violation of the California Business and Professions Code §17200 (unfair competition) and §17500 (false advertising), breach of the Song-
Beverly Warranty Act, intentional misrepresentation and concealment. Plaintiff requests unspecified damages and other relief. The Company
filed a demurrer and motion to strike which were granted, in part, and Plaintiff filed an amended complaint. The Company filed an answer on
April 17, 2003 denying all allegations and asserting numerous affirmative defenses. Plaintiff subsequently amended its complaint. On
October 29, 2003, the Company filed a motion to disqualify Plaintiff’s counsel in his role as counsel to the purported class and to the general
public. The Court granted the motion but allowed Plaintiff to retain substitute counsel. Plaintiff did engage new counsel for the general public,
but not for the class. The Company moved to disqualify Plaintiff’s new counsel and to have the Court dismiss the general public claims for
equitable relief. The Court declined to disqualify Plaintiff’
s new counsel or to dismiss the equitable claims, but did confirm that the class action
claims are dismissed. The Company appealed the ruling and the case was stayed pending the outcome of the appeal. The Court of Appeal
denied the appeal
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