Vicky Maldonado, et al. v. Apple, Inc., et al., Case No. 3:16-cv-04067-WHO, Order on Motion to Decertify Class and Exclude Expert Report, Ruling May 14, 2021
Judge William H. Orrick, United States District Judge in Northern California US District Court, denied a motion to decertify a California class brought by consumers against Apple, Inc., manufacturer and distributor of the iPhone smartphone and iPad tablet computer. A conjoint survey and analysis, designed by expert Steven P. Gaskin, supported by Applied Marketing Science (AMS), to support a damages model was ruled admissible and said to “yield a sufficiently reliable result to go to jury.”
In September 2019, Plaintiffs were granted class certification against Apple alleging that Defendants breach the AppleCare and AppleCare+ agreements when consumers receive remanufactured replacement devices because the devices are not “equivalent to new in performance and reliability.” Specifically, Plaintiffs allege, the strain already placed on the used parts taken from other Apple devices ensures that remanufactured devices can never be equivalent to new in performance or reliability. In January 2021, Apple moved to decertify the class and exclude a number of Plaintiffs’ expert reports, including the conjoint analysis and damages model proposed by Gaskin. As outlined by Judge Orrick, Apple argued that, among other things, “Gaskin’s report cannot actually determine the difference in ’market value’ because his analysis is based entirely on consumer preferences—that is, the ‘demand side’ of the transaction—and fails to take into account ‘supply side’ considerations.” Plaintiffs responded saying that the survey “adequately captures market value and the supply side of the transaction because Gaskin and [economist Colin] Weir rely on the actual, historical prices of the products and quantities used during the relevant period.”
The court agreed with Plaintiffs and found that Gaskin’s model satisfies Daubert and California law. Specifically, Judge Orrick ruled: “The fundamental issue is this: does such an analysis reliably (as required by Daubert) reflect a product’s ‘reasonable market value’ (as required by the law…)? It does. Real-world price and quantity data is reliable for these purposes because, put simply, it is what the supplier firm actually did. The new price that emerges—and the resulting price premium—reliably captures what it set out to capture: a change in price as a result of a change in consumer behavior.”
Further, Judge Orrick went on to opine that Apple’s competing approach for establishing damages models risks undermining Daubert: “Indeed, Apple never lays out precisely what Gaskin could do to adequately capture market value; it just says he did not do it. But Daubert is about reliability. It is about preventing bad science from going to juries and exerting undue influence under the aegis of expertise. Taking Apple’s approach, experts would be required to perform a counterfactual analysis that disregards what happened in the real world and instead asks what hypothetically would have happened had demand changed…There is a risk that these motions become less about the fundamental reliability of evidence and more about the creativity of the opponents of that evidence identifying factors that could influence markets. This all would undermine, not be a faithful application of, the purpose of Daubert.”
Accordingly, the Court denied Apple’s motion to exclude Gaskin’s report and denied the motion to decertify the class.
To learn more about Applied Marketing Science, Steven P. Gaskin, or class action surveys, please contact us.