Antitrust Law Daily Wrap Up, PRIVACY—NDCal: Motion to Sever App Developers Denied in Suit Brought by iDevice Owners, (May 8, 2013)

By Jody Coultas, J.D.

The federal district court in San Francisco has denied a motion to sever filed by Twitter, Inc., Electronic Arts, Inc., Chillingo, Ltd., and Instagram, Inc. in relation to invasion of privacy, misappropriation of trade secrets and proprietary information, and violation of the Electronic Communications Privacy Act claims brought by Apple, Inc. mobile device owners (Marc Opperman v. Path, Inc., May 6, 2013, Tigar, J.).

iDevice owners brought claims against a number of entities that engaged in the development of applications (Apps) installed on iDevices. The owners alleged that the companies violated federal and state law because the Apps stole address books by surreptitiously initiating unnoticeable Internet calls with the iDevices and transmitting their address books to unauthorized persons.

Federal Rule of Civil Procedure 21 authorizes district courts to sever any claim against a party. Courts look to Rule 20 for guidance. Under Rule 20(a)(2), permissive joinder of defendants is proper if: "(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action."

The app companies argued that the action was an unmanageable suit against over a dozen defendants based on eleven apps related to each other only by their distribution through Apple’s App Store. The owners, on the other hand, argued that each app developer and Apple were joint tortfeasors because they collaborated and conspired with one another and mutually benefited from their wrongful, harmful acts. None of the parties could point to any analogous decisions. The companies presented a number of cases where the plaintiffs did not allege joint and several liability, as well as decisions finding misjoinder where copyright holders have sued dozens of defendants for downloading copyrighted works independently. Those decisions held only that, absent an allegation that any of the downloading defendants downloaded from one another, there cannot be a common transaction or occurrence.

The owners met the requirements of Rule 20(a)(2), according to the court. The owners clearly alleged joint and several liability against Apple and each app developer arising out of a common transaction or occurrence, satisfying the first requirement. The case against each app developer will also necessarily involve common questions of fact and law with respect to Apple, satisfying the second requirement for permissive joinder.

The case is No. 13-cv-00453-JST.

Attorneys: Cari Ann Cohorn (Phillips, Erlewine & Given LLP) for Marc Opperman. Gregory J. Casas (Greenberg Traurig, LLP) for Path, Inc.

Companies: Apple, Inc.; Twitter, Inc.; Electronic Arts, Inc.; Chillingo, Ltd.; and Instagram, Inc.

Cases: Privacy CaliforniaNews