Granato v. Apple CA6

Filed 8/20/26 Granato v. Apple CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

JESSE GRANATO et al., H052890
(Santa Clara County
Plaintiffs and Appellants, Super. Ct. No. 22CV395280)

v.

APPLE INC.,

Defendant and Respondent.

Jesse Granato and Janice Zarad sued Apple Inc., claiming that Apple prevents
consumers from repairing its products or from obtaining repairs from independent repair
shops, which caused plaintiffs to pay Apple inflated prices for repairs. Both contend that
Apple’s practices violate California’s unfair competition law (UCL; Bus. & Prof. Code,
§ 17200 et seq.); Granato also contends that Apple’s practices violate the federal
Magnuson-Moss Warranty Act (MMWA; 15 U.S.C. § 2301 et seq.). The trial court
dismissed plaintiffs’ claims after sustaining Apple’s demurrer. We will reverse the
judgment.
I. BACKGROUND
A. The Operative Complaint
The gravamen of plaintiffs’ complaint is that Apple implemented an unlawful
scheme to inflate the price of iPhone repair services from independent vendors, either to
manipulate the market for repair services or to induce consumers to replace rather than
repair their iPhones.
1. The Alleged Scheme
Apple “is one of the most valuable companies in the world,” with approximately
1.65 billion consumer electronic products in use worldwide. To drive profit, Apple
makes it difficult or impossible for consumers to repair Apple products. To do this,
Apple manufactures products with built-in barriers to repair by consumers or independent
repair shops; withholds parts, tools, manuals, and diagnostic software from consumers
and independent repair shops; conditions warranty coverage on obtaining repairs and
parts from Apple or authorized repair shops under Apple’s control; threatens consumers
with loss of warranty coverage if they obtain repairs or replacement parts from anywhere
other than Apple or its authorized repair shops; and disparages third party replacement
parts and independent repair shops. This forces consumers to either buy new products
from Apple or pay inflated prices for repairs from Apple or authorized repair shops.
Apple has stifled competition in the market for repair services forcing consumers to pay
inflated prices to repair Apple devices.
First, Apple’s built-in repair barriers include “ ‘parts pairing,’ a practice which
locks parts like a screen or battery to the iPhone they were manufactured with” and the
use of proprietary screws that impede access to a device’s interior. For example, each
iPhone 11 is “paired” with its original screen: If anyone other than Apple or an
authorized repair shop replaces the screen on an iPhone 11—even with another genuine
iPhone 11 screen—the phone’s “Face ID, True Tone, and Auto Brightness features,” all
of which are material to consumers, will malfunction. Similarly, replacement of an
iPhone 13’s original screen will disable the phone’s Face ID feature unless—in a
time-consuming process that requires special equipment and “microsolder[ing]”—a “tiny
control chip” is transferred from the original display to the new one; but Apple provides
only to its authorized repair shops a tool that allows an iPhone 13 to accept a new screen

2
without disabling Face ID. Since 2019, Apple has likewise paired its phones with their
original battery: If an independent repair shop replaces the original battery with a
genuine Apple battery, the phone will display an alert that the phone requires service.
And in 2009, Apple stopped using Phillips screws on iPhone exteriors, switching to
proprietary Pentalobe screws—to prevent consumers from opening their devices to make
repairs—while continuing to use Phillips screws inside the iPhones.
Beyond these manufacturing barriers, Apple makes independent repair
economically infeasible by constraining the supply of, or overcharging for, replacement
parts, repair tools, manuals, and diagnostic software. In 2019, Apple stated that it would
provide genuine parts, tools, and repair guides to independent repair shops through an
Independent Repair Program. But Apple charges participating independent repair shops
prices that stifle competition. The margin between the price Apple charges shops for
replacement screens and the price Apple charges consumers for screen replacement
services is too thin to allow independent shops to compete for services. For example,
Apple charges independent repair shops $235 for a replacement screen for an iPhone 12
(if the broken screen is returned to Apple, $270 if it is not), while charging consumers
$280 for screen repair, including the replacement part, on the same device. To match
Apple’s repair pricing, then, independent repair shops can charge no more than $10 to
$45 for labor. Moreover, Apple imposes onerous nonpricing terms on independent repair
shops to reduce participation in the Independent Repair Program by shops and consumers
alike. These terms include requiring independent repair shops to post visible notices that
Apple has not authorized them to perform repairs, to obtain written acknowledgment
from customers that Apple will not warrant the repairs, to share customer information
with Apple upon request, and to submit to unannounced audits for up to five years.
Beyond impeding the independent repair market, Apple did not allow consumers
to repair their own devices until after this lawsuit was filed. The self-repair program that
Apple has since adopted is unduly burdensome because it conditions consumer use of

3
Apple repair equipment on customers agreeing to a $1,200 hold on their credit card as
security.
Third, Apple’s products typically come with a one-year limited warranty. Apple
warrants iPhones “against defects in materials and workmanship when used normally in
accordance with Apple’s published guidelines” during the warranty period. (Boldface
and underscoring omitted.) In a portion of the warranty describing the consumer’s
responsibilities, the warranty provides: “Important: Do not open the Apple Product.
Opening the Apple Product may cause damage that is not covered by this Warranty.
Only Apple or an [Apple Authorized Service Provider] should perform service on this
Apple Product.” (Boldface omitted.) Apple’s user manual instructs users not to open the
iPhone, attempt to repair it, or attempt to replace the battery; rather, Apple instructs users
to contact Apple or an authorized repair shop.
Fourth, Apple’s store employees instruct consumers that Apple will not service or
repair Apple products if consumers have obtained repairs or parts out-of-warranty from
anyone else. Apple also instructs authorized repair shops to refuse service in such
circumstances.
Fifth, Apple disparages third party parts and independent repair shops. In its user
manual, Apple warns that repairs by independent repair shops “ ‘may not involve the use
of Apple genuine parts and may affect the safety and functionality of the device.’ ”
Apple also encourages authorized repair shops to disparage independent repair shops
along the same lines.
Consumers and independent repair providers have complained to the Federal
Trade Commission that Apple’s practices preclude them from performing basic repairs,
restrict consumer choice, and create a monopoly in the market for repair services.
2. Plaintiffs’ Claims
In 2021, Granato and Zarad separately paid Apple to repair their respective
iPhones’ cracked screens. An Apple employee had advised Granato that going elsewhere

4
to repair the screen would forfeit coverage for repairs otherwise subject to Apple’s
warranty—“defects in materials and workmanship when used normally in accordance
with Apple’s published guidelines.” An Apple employee led Zarad to believe that, even
though her phone was no longer under warranty, she had to have the iPhone repaired by
Apple.
Both plaintiffs claim that Apple’s scheme violated the UCL. “Plaintiffs …
suffered injury in fact and have lost money or property because they paid inflated prices
for repairs than they otherwise would have absent Apple’s alleged misconduct; they had
to expend time and/or money to travel to Apple’s retail locations to comply with the
Warranty and/or Apple’s instructions; and they were deprived of fully using their
property due to Apple’s control over their devices.”
Granato also claims that Apple violated the federal MMWA by conditioning its
warranty on the use of designated repair services. Granato was damaged because he was
charged an inflated price for the repair.
B. Demurrer and Appeal
Apple demurred, contending that plaintiffs failed to allege facts sufficient to
establish either standing or substantive violations of the relevant statutes. Sustaining the
demurrer without leave to amend, the trial court concluded that plaintiffs lacked standing
under the UCL and that plaintiffs’ substantive claims under both the UCL and the
MMWA lacked merit. Plaintiffs timely appealed.
II. DISCUSSION
“In reviewing an order sustaining a demurrer, we examine the operative complaint
de novo to determine whether it alleges facts sufficient to state a cause of action under
any legal theory.” (T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.)
In exercising our independent judgment, “we accept the truth of material facts properly
pleaded in the operative complaint, but not contentions, deductions, or conclusions of fact

5
or law. We may also consider matters subject to judicial notice.”1 (Yvanova v. New
Century Mortgage Corp. (2016) 62 Cal.4th 919, 924.) “[A]llegations must be liberally
construed, with a view to substantial justice between the parties.” (Code Civ. Proc.,
§ 452.) We review the judgment, not the trial court’s reasoning, and “must affirm … if
any of the grounds stated in the demurrer is well taken.” (Fremont Indemnity Co. v.
Fremont General Corp. (2007) 148 Cal.App.4th 97, 111; see also Brinsmead v. Elk
Grove Unified School Dist. (2023) 95 Cal.App.5th 583, 587 [“We affirm if any proper
ground for sustaining the demurrer exists even if the trial court did so on an improper
ground”].)
As we will explain, plaintiffs’ allegations state a claim for relief under the UCL
but Granato’s allegations do not state a claim under the MMWA.
A. The UCL, the Right to Repair Act, and the MMWA
“The UCL’s scope is ‘broad.’ [Citation.] ‘[I]t does not proscribe specific
practices. Rather, as relevant here, it defines “unfair competition” to include “any
unlawful, unfair or fraudulent business act or practice.” ’ ” (Capito v. San Jose
Healthcare System, LP (2024) 17 Cal.5th 273, 283 (Capito).) So “ ‘there are three
varieties of unfair competition: practices which are unlawful, unfair or fraudulent.’ ” (In
re Tobacco II Cases (2009) 46 Cal.4th 298, 311.) A proper plaintiff may pursue a claim
under any of these three prongs.
Besides identified public prosecutors, a private plaintiff “who has suffered injury
in fact and has lost money or property as a result of the unfair competition” may
prosecute a claim for relief under the UCL. (Bus. & Prof. Code, § 17204.) To satisfy

1
Plaintiffs’ unopposed June 30, 2025 request for judicial notice is granted. (See
Evid. Code, § 452, subds. (a), (c).) We will take judicial notice of the existence and
content of the executive order, California statute, and Federal Trade Commission
documents, but not the truth of hearsay statements within those documents. (See In re
Vicks (2013) 56 Cal.4th 274, 314.)

6
this statutory standing requirement, a private plaintiff must “(1) establish … economic
injury, and (2) show that the economic injury was the result of, i.e., caused by, the unfair
business practice … that is the gravamen of the claim.” (Kwikset Corp. v. Superior Court
(2011) 51 Cal.4th 310, 322 (Kwikset).)
Here, plaintiffs rely on two of the UCL’s substantive prongs, arguing that Apple’s
practices are unfair and unlawful.
In evaluating whether a practice violates the UCL’s unfair prong, courts have
articulated differing variations on a balancing of interests, and the California Supreme
Court has not decided what standard shall govern consumer suits: “[T]he ‘standard for
determining what business acts or practices are “unfair” in consumer actions under the
UCL is currently unsettled.’ ”2 (Capito, supra, 17 Cal.5th at p. 284.) These differing
standards include a balancing test derived from section 5 of the Federal Trade
Commission Act (the FTC Act; 15 U.S.C. § 41 et seq.): “ ‘[A] business practice is
“unfair” if (1) the consumer injury is substantial; (2) the injury is not outweighed by any
countervailing benefits to consumers or competition; and (3) the injury could not
reasonably have been avoided by consumers themselves.’ ” (Sepanossian v. National
Ready Mixed Concrete Co. (2023) 97 Cal.App.5th 192, 201 (Sepanossian); see also
Camacho v. Automobile Club of Southern California (2006) 142 Cal.App.4th 1394, 1403;
Capito, at p. 284.) Another variant uses the same balancing, stripped of the third
element. (See Progressive West Ins. Co. v. Superior Court (2005) 135 Cal.App.4th 263,
285 (Progressive West) [applying “balancing test” under which “ ‘ “ ‘the court must

2
Apple contends that we should consider only the unfairness test used in Cel-Tech
Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163
(Cel-Tech). But the Cel-Tech court expressly limited its “discussion” and the “test” it
devised to “an action by a competitor alleging anticompetitive practices.” (Id. at p. 187,
fn. 12.) The suit before us was brought by consumers, not competitors. We follow both
Cel-Tech and Capito, supra, 17 Cal.5th at page 284 in concluding that the Supreme Court
has not yet pronounced the UCL standard for “unfair” business conduct applicable here.

7
weigh the utility of the defendant’s conduct against the gravity of the harm to the alleged
victim’ ” ’ ”].) Besides these utilitarian models weighing harm to the consumer against
justification for the defendant, another adds to the balance whether “ ‘ “that practice
‘offends an established public policy or … the practice is immoral, unethical, oppressive,
unscrupulous, or substantially injurious.’ ” ’ ” (Ticconi v Blue Shield of California Life
& Health Ins. Co. (2008) 160 Cal.App.4th 528, 539, italics added; Capito, at p. 284.) For
plaintiffs arguing unfairness based on public policy, other cases have required that the
public policy invoked be “ ‘ “tethered” to specific constitutional, statutory or regulatory
provisions.’ ” (See Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1192; but see
Ticconi, at p. 539 [identifying public policy and substantial consumer injury among
alternative means of establishing unfairness]; see also Capito, at p. 284; Cel-Tech, supra,
20 Cal.4th at pp. 186–187 [requiring, in competitor suits, a tether “to some legislatively
declared policy or proof of some actual or threatened impact on competition,”
specifically “conduct that threatens an incipient violation of an antitrust law, or violates
the policy or spirit of one of those laws because its effects are comparable to or the same
as a violation of the law, or otherwise significantly threatens or harms competition”].)
To the extent that a public policy tether is required for a claim under the UCL’s
unfair prong, plaintiffs invoke the Right to Repair Act. (Pub. Resources Code, § 42488 et
seq.; see Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 907–908
(Jolley) [considering legislation enacted after alleged conduct to evaluate whether
conduct was “ ‘unfair’ for purposes of the UCL”].) As of 2024, after the plaintiffs’
alleged injuries, the Right to Repair Act advances a policy of “provid[ing] a fair
marketplace for the repair of electronic and appliance products and to prohibit intentional
barriers and limitations to third-party repair.” (Pub. Resources Code, § 42488.1.) The
statute requires consumer electronics manufacturers to “make available to … product
[owners], service and repair facilities, and service dealers, sufficient documentation and
functional parts and tools, inclusive of any updates, on fair and reasonable terms, to effect

8
the diagnosis, maintenance, or repair of a product” for a specified time based on the
product’s original price. (Pub. Resources Code, §§ 42488.2, subds. (a)–(b), 42488.3,
subds. (a), (c).) “ ‘Fair and reasonable terms’ ” under the statute means that
manufacturers making repair parts, tools, or documentation available under the statute
may impose on entities protected by the statute only the most favorable costs and terms it
imposes on authorized repair providers, if any. (Pub. Resources Code, § 42488.2,
subds. (a)–(b), (j)(4)(A), (D).) The definition also constrains the costs and terms that may
be imposed for documentation and tools. (Pub. Resources Code, § 42488.2,
subd. (j)(4)(B)–(C).)
The unlawful prong, in contrast, simply “ ‘ “ ‘borrows’ violations of other laws
and treats them as unlawful practices.” ’ ” (Capito, supra, 17 Cal.5th at pp. 283–284.)
This “ ‘ “sweeping” ’ ” provision embraces “ ‘ “ ‘ “anything that can properly be called a
business practice and that at the same time is forbidden by law.” ’ ” ’ ” (Id. at p. 283.)
Not “a mere enforcement mechanism” for these borrowed statutes, the UCL “provides its
own distinct and limited equitable remedies for unlawful business practices, using other
laws only to define what is ‘unlawful.’ ” (Rose v. Bank of America, N.A. (2013)
57 Cal.4th 390, 397.) To show unlawfulness, plaintiffs invoke the MMWA.3
The MMWA prohibits warrantors of consumer products from conditioning their
“written … warranty[4] of such product on the consumer’s using, in connection with such
3
Plaintiffs also invoke as a predicate for unlawfulness section 5 of the FTC Act,
which they argue makes Apple’s practices unlawful for the same reasons that that statute
has informed certain courts’ standard for claims under the UCL’s unfair prong. (See
Sepanossian, supra, 97 Cal.App.5th at p. 201.) We need not reach this duplicative
theory. Plaintiffs do not rely on the Right to Repair Act for their claim of unlawful
practices, as their injuries predate that act’s effective date.
4
Under the statute, “ ‘written warranty’ ” is “any written affirmation of fact or …
promise … in connection with” a supplier’s “sale of a consumer product” that “promises
that [the] material or workmanship is defect free or will meet a specified level of
performance over a specified period of time” or a written undertaking “in connection
with” a supplier’s sale “of a consumer product to refund, repair, replace, or take other

9
product, any article or service (other than [an] article or service provided without charge
under the terms of the warranty) which is identified by brand, trade, or corporate name.”
(15 U.S.C. § 2302(c), fn. added.) “This anti-tying provision prohibits conditions like:
‘This warranty is void if service is performed by anyone other than an authorized “ABC”
dealer and all replacement parts must be genuine “ABC” parts.’ [Citation.] But it does
not prevent a warrantor from excluding warranty coverage for defects or damage caused
by using unauthorized parts or services.” (In re Harley-Davidson Aftermarket Parts
Marketing, Sales Practices and Antitrust Litigation (7th Cir. 2025) 151 F.4th 922, 929–
930, fn. omitted (Harley-Davidson).) The MMWA creates a private right of action for
consumers who are “damaged by the failure of a supplier, warrantor, or service contractor
to comply with any obligation under [the MMWA], or under a written warranty, implied
warranty, or service contract.” (15 U.S.C. § 2310(d)(1).)
The MMWA also empowers the United States Attorney General and the Federal
Trade Commission to restrain “any warrantor from making a deceptive warranty with
respect to a consumer product.” (15 U.S.C. § 2310(c)(1).)5 For those purposes,
“ ‘deceptive warranty’ ” is defined to include a written warranty that “in light of all of the
circumstances, would mislead a reasonable individual exercising due care.” (15 U.S.C.
§ 2310(c)(2).) Under Federal Trade Commission guidance, “warranty language that
implies to a consumer acting reasonably in the circumstances that warranty coverage
requires the consumer’s purchase of an article or service identified by brand, trade or
corporate name is … deceptive.” (16 C.F.R. § 700.10(c); see also Harley-Davidson,

remedial action” if the “product fails to meet the specifications set forth in the
undertaking.” (15 U.S.C. § 2301(6).)
5
The United States Attorney General and the Federal Trade Commission may also
restrain “any person from failing to comply with any requirement imposed on such
person by or pursuant to [the MMWA] or from violating any prohibition contained in this
chapter.” (15 U.S.C. § 2310(c)(1).) The authorization to restrain warrantors from
making deceptive warranties is in addition to this authority.

10
supra, 151 F.4th at p. 929, fn. 1 [explaining that although this guidance is “only ‘advisory
in nature’ ” it is “entitled to great respect” because it was “issued shortly after [the]
statute’s passage and remain[ed] consistent over time”]; 80 Fed.Reg. 42710, 42713 (July
20, 2015).)
B. Plaintiffs’ UCL Claim
In our independent judgment, plaintiffs have adequately pleaded a UCL claim:
They alleged conduct that violated the unfair prong, and they alleged that the conduct
caused them economic injury.6 We reach this conclusion without deciding between the
competing tests for unfairness because plaintiffs have alleged at least one theory
sufficient to meet them all.
We turn next to plaintiffs’ claim that Apple violated the UCL through conduct that
enabled Apple to charge supracompetitive rates to consumers, including plaintiffs, for
repair services. To the extent that plaintiffs have adequately alleged a UCL violation that
inflates the prices of the service they purchased, plaintiffs have adequately alleged their
statutory standing to pursue a UCL claim.
1. Unfair Practices
“Whether a practice is deceptive, fraudulent, or unfair is generally a question of
fact which requires ‘consideration and weighing of evidence from both sides’ and which
usually cannot be made on demurrer.” (Linear Technology Corp. v. Applied Materials,
Inc. (2007) 152 Cal.App.4th 115, 134–135; see also Salazar v. Target Corp. (2022)
83 Cal.App.5th 571, 584; Sepanossian, supra, 97 Cal.App.5th at p. 201; Progressive
West, supra, 135 Cal.App.4th at p. 287.)
Here, even if we combine the most stringent components of the tests—by
requiring a substantial, not reasonably avoidable, consumer injury that is not outweighed

6
Because plaintiffs have stated a claim under the unfair prong, we need not
address whether they have stated a claim under the unlawful prong.

11
by any countervailing benefits to consumers or competition flowing from a practice that
offends a public policy enshrined in statute or regulation—plaintiffs’ allegations of unfair
conduct suffice. As a result, we need not choose between the competing tests, which
would permit plaintiffs to establish unfairness on a lesser showing.
It would be contrary to public policies enshrined in the Right to Repair Act for
Apple to prevent consumers and independent repair shops from having reasonable access
to repair parts, tools, and documentation. (See Pub. Resources Code, §§ 42488.1–
42488.2.) Plaintiffs allege that Apple did exactly that, refusing to make those items
available to independent repair shops. And beyond denying access, plaintiffs allege that
Apple deliberately designed its devices with paired parts, unnecessary proprietary screws,
and “booby traps” to thwart independent repairs.
We recognize that these practices were not expressly prohibited by statute when
plaintiffs were allegedly injured. The practices were thus not made unlawful by the
statute. But the later establishment of a statutory right persuades us that conduct that
would infringe that later-codified right was unfair even at the time. “[T]he Legislature’s
mere failure to prohibit an activity does not prevent a court from finding it unfair.
Plaintiffs may not ‘plead around’ a ‘safe harbor,’ but the safety must be more than the
absence of danger.” (Cel-Tech, supra, 20 Cal.4th at p. 184.) Regardless, plaintiffs’ claim
of unfairness is now tethered to statutory law. (See Jolley, supra, 213 Cal.App.4th at
pp. 907–908 [considering statute enacted after injury].) This tether “guide[s] courts and
the business community” and ensures that this suit promotes consumer protection.
(Cel-Tech, at p. 186.) Accepting that Apple did not have the benefit of this statutory
guidance before it committed the alleged violations, the availability of this tether guides
Apple both in its management of existing litigation and in desisting from unfair practices
post-enactment. To be sure, Apple as “ ‘a private party generally may choose to do or
not to do business with whomever it pleases’ without violating antitrust laws.” (Beverage
v. Apple, Inc. (2024) 101 Cal.App.5th 736, 750.) But once a consumer has chosen to do

12
business with a manufacturer by purchasing the manufacturer’s product, impeding the
consumer’s repair of that product, as plaintiffs have alleged, can fairly be described as an
unfair business practice in violation of a legislatively established public policy.
It is also contrary to public policies enshrined in the MMWA and related
regulations for a manufacturer to tie warranty coverage to the consumer’s using another
of the manufacturer’s services. (See 15 U.S.C. § 2302(c); 16 C.F.R. § 700.10(c);
Harley-Davidson, supra, 151 F.4th at p. 930.) As we will explain, plaintiffs have not
adequately alleged that Apple violated the letter of the MMWA under Granato’s direct
theory, but they have alleged conduct that violated the policy or spirit of the law.
Specifically, plaintiffs alleged that Apple refuses, and instructs authorized repair shops to
refuse, in-warranty service if customers have obtained repairs or parts for non-covered
warranty items from anyone else.
Turning to the balancing analysis, plaintiffs’ allegations support a pleading-stage
inference that the foregoing alleged conduct causes substantial consumer injury that is not
outweighed by countervailing benefits to consumers or competition and is not reasonably
avoidable by consumers themselves. (See Sepanossian, supra, 97 Cal.App.5th at
pp. 201, 205.) As pleaded, Apple’s practices substantially injure consumers by allowing
Apple to exact inflated payments for repairs or to increase demand for new products by
incentivizing replacement over repair. Plaintiffs rely on reasonable inferences derived
from Apple’s alleged conduct in combination with the relationship between market
factors—competition, demand, and supply—and pricing.7 Nothing in the complaint
suggests that this substantial injury is outweighed by any countervailing benefit of the

7
Zarad’s warranty had already expired by the time she sought repairs, and we
recognize that Apple’s warranty practices directly impact only those consumers who,
unlike Zarad, seek repairs while they still have a warranty to void. At the pleading stage,
however, we accept that non-covered repairs (like screen repairs) during the coverage
period are sufficiently frequent that diverting these repairs to Apple and authorized
dealers impacts pricing for all consumers.

13
same conduct.8 Consumers needing out-of-warranty repairs have no means of avoiding
marketwide pricing dynamics. At the pleading stage, plaintiffs’ allegations suffice.
Echoing factual assertions in the iPhone user manual attached to plaintiffs’
complaint, Apple asserts that “encouraging specialist repairs using genuine Apple parts”
protects consumers by keeping consumers safe (from exposure to infrared lasers) and by
keeping their devices functioning reliably. But plaintiffs did not in their complaint allege
or otherwise endorse any suggestion that independent repair shops are unable to safely
perform reliable repairs. Similarly inapt is Apple’s assertion that it “allows consumers to
choose among multiple repair options, communicates its Warranty terms to consumers up
front, and [appropriately] warns consumers that some third-party repairs may not use
genuine Apple parts and can impair an iPhone’s functionality.” These factual arguments
are premature: Apple may test plaintiffs’ proof, or develop its own justifications for the
alleged misconduct, in future proceedings.
Apple argues that if the warranty contained an unlawful tie, then plaintiffs could
have avoided their injury by choosing not to purchase a product from Apple given their
advance notice of the warranty’s terms. To begin, this undeveloped record does not
support Apple’s premise that plaintiffs were aware of the alleged unfair practices when
they purchased their iPhones. Nor will we presume on demurrer that a consumer would
have reason to expect Apple’s alleged refusal to deal with independent repair shops, parts
pairing, or deployment of “booby traps.” And we are skeptical of the breadth of Apple’s
argument: To hold that a consumer’s threshold option to not purchase a new, functional
product will immunize the product manufacturer’s alleged anticompetitive practices in
the market for eventual repair services would reduce the intentionally broad scope of the

8
To the contrary, plaintiffs allege that a 2021 analysis found no evidence to
support the claim that authorized repair providers perform repairs more carefully or
safely than independent repair shops and that Apple failed to produce evidence
connecting physical injuries to repairs performed by independent repair shops.

14
unfair prong to the realm of pure theory.9 Advance notice of a warranty’s effective terms
may foreclose a hypothetical claim that Apple’s practices were fraudulent. But we see no
indication in the UCL that consumers’ threshold ability to opt out of consumption vitiates
unfairness in the challenged practices they later encountered. We do not read a
“reasonable ability to avoid injury” under the three-pronged test derived from section 5 of
the FTC Act to extend so far upstream from the alleged unfair practice to reach the
originating product purchase, when the conditions of the market for product repairs were
not at issue: To adopt Apple’s caveat emptor standard would defeat the purpose of the
UCL. (See Sepanossian, supra, 97 Cal.App.5th at pp. 205–206 [rejecting argument that
consumer could avoid challenged fees where consumers could not buy concrete from
defendant without paying the fees].)
Plaintiffs have thus adequately alleged practices prohibited by the UCL’s unfair
prong. Because Apple disputes that plaintiffs are proper parties to bring these claims, we
next explain that they have adequately pleaded economic injury from these alleged
practices. We need not address plaintiffs’ allegations of additional related conduct
damaging competition in the market for out-of-warranty repair services, with the effect of
inflating the prices they paid Apple for such services.

9
Apple relies on federal decisions that either are distinguishable or support
plaintiffs. (See Davis v. HSBC Bank Nevada, N.A. (9th Cir. 2012) 691 F.3d 1152, 1158,
1168–1169 [dismissing UCL claim based on alleged failure to adequately disclose credit
card’s annual fee on grounds that annual fee could have been avoided by either reading
the terms and conditions or canceling the card within 90 days of opening the account to
have the fee refunded]; Federal Trade Commission v. Neovi, Inc. (9th Cir. 2010)
604 F.3d 1150, 1158 [denying summary judgment where consumers who were subject to
fraudulent withdrawals from their checking accounts may not have been able to detect the
withdrawals and secure relief from their financial institutions]; American Financial
Services Assn. v. Federal Trade Commission (D.C. Cir. 1985) 767 F.2d 957, 976
[explaining that “certain types of seller conduct or market imperfections may
unjustifiably hinder consumers’ free market decisions and prevent the forces of supply
and demand from maximizing benefits and minimizing costs” in finding that injury was
not reasonably avoidable].)

15
2. Standing
“[I]n the eyes of the law, a buyer forced to pay more than he or she would have is
harmed at the moment of purchase.” (Kwikset, supra, 51 Cal.4th at p. 334; see also
Clayworth v. Pfizer, Inc. (2010) 49 Cal.4th 758, 788 [holding that pharmacies that paid
more than they otherwise would have because of manufacturers’ price-fixing conspiracy
had UCL standing because “[t]hey lost money: the overcharges they paid”]; California
Medical Assn. v. Aetna Health of California Inc. (2023) 14 Cal.5th 1075, 1089
[discussing Clayworth].) Standing does not require “objectively determined
overpayments.” (California Medical Assn., at p. 1089.)
Plaintiffs’ theory of UCL standing, as pleaded in the operative complaint, includes
that they “paid inflated prices for repairs” as a result of “Apple’s alleged misconduct.”10
The “misconduct” to which they refer is the alleged scheme through which Apple
unlawfully suppressed competition in the market for iPhone repair services, allowing
Apple to charge supracompetitive rates. Insofar as plaintiffs’ allegations establish for
pleading purposes that Apple exacted from plaintiffs payment of supracompetitive rates
by conduct the UCL prohibits, plaintiffs have pleaded their standing under the UCL. In
that scenario, the challenged practices caused plaintiffs to pay the inflated price.

10
We reject Apple’s suggestion that this theory was forfeited in the trial court. In
the third paragraph of the complaint, plaintiffs alleged: “By deliberately frustrating its
customers’ efforts to freely choose who repairs their devices and otherwise prolong the
life of their products, Apple has been able to corner the repair and parts market, stifle
competition, and charge consumers inflated prices when their Apple devices require
service.” In setting forth their UCL allegations, plaintiffs alleged: “As a direct and
proximate result of Apple’s business practices, [p]laintiffs have suffered injury in fact
and have lost money or property because they paid inflated prices for repairs than they
otherwise would have absent Apple’s alleged misconduct.” In opposing the demurrer,
plaintiffs argued: Apple “has executed a multifaceted scheme that stops customers from
going to independent repair shops or fixing their iPhones themselves. Instead, customers
must go to Apple for repairs and pay inflated prices.”

16
Apple focuses on plaintiffs’ efforts, or lack thereof, to obtain repairs from third
party repair services or supply granular detail about the repairs they paid for, but this
focus is misplaced. Apple presumes that the inflated price plaintiffs allege as injury
derives from having Apple repair their phones, in lieu of an independent repair shop that
would have provided the same repair at a lower price. But plaintiffs’ theory encompasses
the difference between the prices they actually paid Apple and those they would have
paid Apple absent its alleged unlawful practices. Allegations that plaintiffs could have
obtained iPhone repairs at lower cost from independent repair shops are not necessary to
support a theory that Apple’s practices caused marketwide price increases.11
Plaintiffs thus have standing to prosecute the theories above because they
purchased repair services from Apple.
C. Granato’s MMWA Claim
Granato’s direct claim under the MMWA is substantially narrower than plaintiffs’
UCL claim. Granato, in pursuing his direct claim for violation of the MMWA, pleaded
only a violation of 15 U.S.C. § 2302(c), as to which he claims consumer standing under
15 U.S.C. § 2310(d).12 Interpreting the statute de novo (see, e.g., People v. Walker
(2024) 16 Cal.5th 1024, 1032), we conclude that Granato has not pleaded facts sufficient
to state a claim.13

11
While maintaining that such allegations are unnecessary to state a claim,
plaintiffs did allege that some independent repair options—subject to booby traps and
parts pairing—were less expensive than Apple’s prices.
12
Plaintiffs’ broader challenge to “deceptive statements in the [w]arranty” is
pleaded only in support of their UCL claim.
13
We therefore do not address Apple’s contention that Granato lacks standing
because he was not “damaged” by any MMWA violation. (See 15 U.S.C. § 2310(d)(1);
Groff v. Keurig Green Mt., Inc. (C.D.Cal., Mar. 18, 2024, No. 5:23-cv-01492-SSS-SPx)
2024 WL 2335634, pp. *3 - *5 [discussing MMWA standing].)

17
Granato contends that Apple’s warranty, read in conjunction with its user manual,
communicates to consumers that out-of-warranty service by Apple or its authorized
repair shops is required to preserve the written warranty, whereas self-repair or resort to
an independent repair shop will void the warranty.14 Reviewing independently, we, like
the trial court, conclude that the terms of the written warranty do not condition the written
warranty on the consumer’s using any tied product or service.
As the parties agree, we apply ordinary rules of contract interpretation to
determine whether the warranty itself imposes an unlawful tie. (See Harley-Davidson,
supra, 151 F.4th at p. 931 [deciding on motion to dismiss MMWA claim that
“[c]onsidering th[e] contract as a whole, it’s not reasonable to infer that
Harley-Davidson’s limited warranty implied that consumers had to use the company’s
products to maintain the validity of the warranty”]; see also Daugherty v. American
Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 830; Dagher v. Ford Motor Co.
(2015) 238 Cal.App.4th 905, 928 [describing express warranty as contractual promise];
Atkinson v. Elk Corporation of Texas (2006) 142 Cal.App.4th 212, 229 [noting that
express warranties are contractual in nature].) “ ‘Thus, “the mutual intention of the
parties at the time the contract is formed governs interpretation.” [Citation.] If possible,
we infer this intent solely from the written provisions of the [contract]. [Citation.] If the
… language “is clear and explicit, it governs.” ’ ” (Yahoo Inc. v. National Union Fire
Ins. Co. etc. (2022) 14 Cal.5th 58, 67.) The interpretation of a contract on undisputed
facts is a question of law that can be resolved on demurrer. (Sprinkles v. Associated
Indemnity Corp. (2010) 188 Cal.App.4th 69, 76; but see Klein v. Chevron U.S.A., Inc.
(2012) 202 Cal.App.4th 1342, 1385 [stating that a breach of contract claim survives
demurrer where plaintiffs “set forth a reasonable interpretation of their … contract”].)
14
At oral argument, plaintiffs confirmed that, in relying on 15 U.S.C. § 2302(c),
Granato’s MMWA claim rests on the text of the warranty read together with the user
manual.

18
The warranty covers “defects in materials and workmanship when used normally
in accordance with Apple’s published guidelines.” The warranty expressly excludes
“damage caused by operating the Apple Product outside Apple’s published guidelines”
and “damage caused by service … performed by anyone who is not a representative of
Apple or an Apple Authorized Service Provider.” (Boldface omitted.) The warranty
instructs: “Do not open the Apple Product. Opening the Apple Product may cause
damage that is not covered by this Warranty. Only Apple or an [Apple Authorized
Service Provider] should perform service on this Apple Product.” (Boldface omitted.)
Similarly, Apple’s user manual directs consumers not to “open iPhone” or
“attempt to repair iPhone yourself. Disassembling iPhone may damage it, resulting in
loss of splash and water resistance (supported models), or cause injury to you. iPhone 7
and later contain one or more lasers that could be damaged during repair or disassembly,
which could result in hazardous exposure to infrared laser emissions that are not visible.
If iPhone is damaged or malfunctions, contact Apple or an Apple Authorized Service
Provider. Repairs by service providers other than Apple or an Apple Authorized Service
Provider may not involve the use of Apple genuine parts and may affect the safety and
functionality of the device.”
Read in isolation, the warranty’s coverage provision is ambiguous. The provision
could be read by itself to mean either that (1) the warranty covers defects in materials or
workmanship that manifest during normal operation in accordance with Apple’s
published guidelines; or (2) the warranty covers defects in materials or workmanship
provided that the product has only been used normally in accordance with Apple’s
published guidelines, whereas use inconsistent with the published guidelines voids the
warranty.
But we do not interpret contractual terms in isolation. (See Another Planet
Entertainment, LLC v. Vigilant Ins. Co. (2024) 15 Cal.5th 1106, 1136.) Considering the
warranty as a whole, only the first construction is reasonable so the warranty is not

19
ambiguous. (See ibid. [explaining that contract is ambiguous when it is susceptible to
two or more reasonable constructions when it is interpreted as a whole in the
circumstances of the case].) The warranty excludes “damage” caused by use outside the
guidelines and unauthorized service. If use outside the guidelines or unauthorized service
voided the warranty under the coverage provision, then the narrow scope of these
exclusions would not make sense. Against this backdrop, Apple’s directives concerning
opening and repairing the product inform what is, and is not, normal use within the
guidelines. This informs whether damage resulting from the use is covered by the
warranty, but it does not inform whether the warranty is void.
Granato’s allegations concerning course of performance between Apple and
himself or other consumers—that Apple’s retail store employees inform consumers (and
similarly informed Granato) that Apple will not service any Apple products if consumers
have obtained repairs or parts for non-covered warranty items from anyone other than
Apple or an authorized repair shop and instructs authorized repair shops to do the same—
do not make the express warranty ambiguous. (See In re Tobacco Cases I (2010)
186 Cal.App.4th 42, 52 [declining to consider course of performance evidence where
definition was unambiguous]; see also Cal. U. Com. Code, § 1303, subd. (e)(1).) Indeed,
the warranty’s plain terms provide that “[n]o Apple reseller, agent, or employee is
authorized to make any modification, extension, or addition to this Warranty.” So the
alleged statements of Apple store employees establish no violation of section 2302(c) of
title 15 of the United States Code.
For these reasons, the trial court did not err in sustaining Apple’s demurrer to the
second cause of action without leave to amend.15

15
Granato has not argued that he can amend his second cause of action to cure any
deficiency. (See, e.g., Martis Camp Community Assn. v. County of Placer (2020)
53 Cal.App.5th 569, 610 [appellant has burden to demonstrate that trial court “abused its
discretion in denying leave to amend”].)

20
III. DISPOSITION
The judgment is reversed. The matter is remanded to the trial court with
directions to vacate the November 15, 2024 order sustaining Apple’s demurrer without
leave to amend and to enter a new order that (1) overrules the demurrer as to the first
cause of action and (2) sustains the demurrer to the second cause of action with prejudice.
Plaintiffs are awarded their costs on appeal.

21
LIE, Acting P. J.

WE CONCUR:

WILSON, J.

BROMBERG, J.

Granato et al. v. Apple Inc.
H052890