[00:00:00] Speaker 02:
Good morning, Your Honors.

[00:00:03] Speaker 00:
Good morning.

[00:00:04] Speaker 02:
Would you move up the microphone just a bit?

[00:00:07] Speaker 00:
It'll bend if you just pull it up.

[00:00:09] Speaker 00:
It'll bend.

[00:00:10] Speaker 02:
There you go.

[00:00:14] Speaker 04:
Thank you.

[00:00:14] Speaker 04:
Your Honors, it's my intention to reserve five minutes for rebuttal, but I've seen that a hardline rule doesn't seem to work so well here.

[00:00:20] Speaker 04:
So I'll monitor my time myself, Your Honors.

[00:00:23] Speaker 04:
If it pleases the court, Joshua Whittaker on behalf of Hadana Dip and the other appellates in this matter.

[00:00:29] Speaker 04:
Your honors, Apple represented to Ms.

[00:00:31] Speaker 04:
Dip and the world that the Toast Plus application was safe.

[00:00:36] Speaker 04:
It did so when it said in the front of the App Store that the App Store has proved to be a safe and trusted place to discover and download apps.

[00:00:45] Speaker 04:
But the App Store is more than just a storefront.

[00:00:47] Speaker 04:
It's an innovative destination focused on bringing you amazing experiences.

[00:00:52] Speaker 04:
And a big part of those experiences is ensuring that the apps we offer are held to the highest standard for privacy, security, and content.

[00:01:01] Speaker 04:
Because we offer nearly two million apps, and we want you to feel good about using every single one of them.

[00:01:07] Speaker 04:
Your Honor, every single one of them included the Toast Plus app.

[00:01:11] Speaker 04:
because Apple's own representations as to the safety of the Toast Plus app are the primary issue in this matter.

[00:01:18] Speaker 04:
Apple is not entitled to immunity under the Communications Decency Act, Section 230C, as it is the content creator of those actionable misrepresentations.

[00:01:28] Speaker 04:
Further, because Apple made false representations as the safety of the Toast Plus app, it cannot hide behind the exculpatory provisions of the terms.

[00:01:39] Speaker 04:
because liability for its own misrepresentations is expressly forbidden under California law.

[00:01:47] Speaker 04:
Your Honor, turning to the CDA, I would note that the Barnes case stands for the principle in the Ninth Circuit that Section 230C only protects from liability, excuse me, a provider or user of an interactive computer service whom a plaintiff seeks to treat under a state law cause of action

[00:02:08] Speaker 04:
as the publisher or speaker of information provided by another information content provider.

[00:02:15] Speaker 04:
Here, the actual representation is that every single app was safe.

[00:02:20] Speaker 04:
That the app that Miss Dip downloaded and used and lost her cryptocurrency was safe and was what it was intended for.

[00:02:29] Speaker 04:
Your honor, accounts four, five, nine, and 10 rely entirely on Apple's own content creation.

[00:02:39] Speaker 04:
I would note your honor that the district court said in the in order at 10 and 11 that's in the record 156 157.

[00:02:47] Speaker 04:
That.

[00:02:49] Speaker 04:
that essentially plaintiffs seek to hold Apple liable for its role in reviewing and making the Toast Plus app available.

[00:02:56] Speaker 04:
For your honors, that's not the case.

[00:02:58] Speaker 04:
In misrepresentations, as your honors are well aware, there has to be a statement, right?

[00:03:03] Speaker 04:
And it has to be false.

[00:03:05] Speaker 04:
The fact that the app was reviewed and vetted and the app turned out not to be what it is proves both knowledge of the falsity and that the statement was false.

[00:03:15] Speaker 04:
We have to plead

[00:03:17] Speaker 04:
the falsity and the knowledge of the falsity.

[00:03:19] Speaker 04:
And so the district court attempted to turn that on its head and make that the primary element of the cause of action when it was not.

[00:03:29] Speaker 04:
Your Honor, and I think there's a bit of illogical rationale there.

[00:03:35] Speaker 04:
I would submit to the court that if you just focus for a second on the pleading standard,

[00:03:42] Speaker 04:
Here, the district court had said that the primary focus was approving, vetting, and distributing the Toast Plus app.

[00:03:50] Speaker 04:
If that's the case, then why is the rule 9b heightened pleading standard required here?

[00:03:56] Speaker 04:
I think, Your Honors, the fact of the matter is that the representation at issue here is that every single app was safe.

[00:04:04] Speaker 04:
I mean, there are other parts of that representation, and I'll get to that.

[00:04:07] Speaker 04:
But I don't think that it's fair for the district court to hold this heightened pleading standard when it believes that the actionable event was the vetting and provision of the app.

[00:04:21] Speaker 04:
Your honor, I would note that the, well, actually, let me back up for a second.

[00:04:26] Speaker 04:
So hypothetically, imagine that Apple did not make the representation.

[00:04:30] Speaker 04:
The Google Play Store does not contain a representation like the representation made at the front of the Apple Store.

[00:04:38] Speaker 04:
So imagine Apple did not make that representation.

[00:04:40] Speaker 04:
This is clearly a Section 230C case then, because the only thing Apple did was provide a service for free apps, right?

[00:04:50] Speaker 04:
That would be clearly within the ambit.

[00:04:52] Speaker 04:
Imagine also that the Toast Plus app turned out to be what it was designed for.

[00:04:56] Speaker 04:
It's also not actionable because there was no breach.

[00:05:01] Speaker 04:
To parse out the elements in order to fit the claim into Section 230,

[00:05:05] Speaker 04:
is actually beyond the scope of Section 230 and providing way more immunity than a party is entitled to under California law.

[00:05:15] Speaker 04:
Your Honors, I would note that the UCLA requirements that there is a false statement about a product that the consumer purchased the product in reliance and would not have purchased otherwise are largely alleged.

[00:05:29] Speaker 04:
And the CLRA requirements that allege misrepresentation

[00:05:34] Speaker 04:
to a consumer that was relied upon the consumer with the resulting economic damage are also satisfied here.

[00:05:42] Speaker 04:
Furthermore, the elements of duty to disclose are satisfied here.

[00:05:47] Speaker 04:
The elements of duty to disclose a material fact to a consumer and under California law as recognized by courts of this circuit are one of the following factors.

[00:05:55] Speaker 04:
A fiduciary duty, that's not applicable here necessarily.

[00:05:59] Speaker 04:
Exclusive knowledge of a material fact

[00:06:02] Speaker 04:
that the plaintiff would not have access to.

[00:06:04] Speaker 04:
That is the case here.

[00:06:07] Speaker 04:
Concealment of a material fact, that is the case here.

[00:06:11] Speaker 04:
Or the defendant makes a representation, a partial representation, but omits material facts.

[00:06:17] Speaker 04:
And that is also the case here.

[00:06:23] Speaker 04:
Your honor, those factors come from the Barrett case.

[00:06:30] Speaker 03:
Mr. Whitaker, one of the issues in the briefing has to do with a potential amendment to the complaint.

[00:06:38] Speaker 03:
Correct.

[00:06:38] Speaker 03:
And, of course, we're all familiar with the liberal amendment standard.

[00:06:42] Speaker 03:
Correct.

[00:06:43] Speaker 03:
But we've now gotten to the oral argument on appeal, and I haven't seen any specific amendment that you think you could have made to satisfy the district court or this court.

[00:06:54] Speaker 04:
Your Honor, actually, I would respectfully disagree.

[00:07:00] Speaker 04:
In our brief opposing the motion to dismiss, one of the issues that was focused on was Apple was under the UCLA, whether or not it consisted as a product, because there's case law that says software in and of itself is not a product.

[00:07:16] Speaker 04:
But we said in our brief, the term transaction is broadly described to mean an agreement between a consumer and another person.

[00:07:24] Speaker 04:
and then citing some other case law and citing to the first amended complaint, sections 12, nine, paragraphs 12, nine and 21.

[00:07:32] Speaker 04:
And said that the ongoing relationship consists of purchasing the Apple phone because without the Apple, without the app store, the Apple phone is not a smartphone, it's just a phone.

[00:07:47] Speaker 04:
And so one of the things that we said

[00:07:49] Speaker 04:
Um, is accordingly and citing in Ray iPhone application litigation, we said that, um, that they, that we were alleging that the entire transaction consists of the decision to use the Apple phone and then use the, the app store and to address your honors question directly, we said,

[00:08:08] Speaker 04:
After that, if necessary, the operative complaint can be amended to provide more detailed allegations regarding plaintiffs' ongoing transactions.

[00:08:16] Speaker 03:
I know you made that assurance in your brief.

[00:08:19] Speaker 03:
Yes, Your Honor.

[00:08:20] Speaker 03:
The question is whether you ever delivered.

[00:08:22] Speaker 04:
Well, we didn't have the opportunity to, because we weren't given leave to amend.

[00:08:26] Speaker 04:
And I would note for the... Well, you... Okay.

[00:08:32] Speaker 04:
Well, Your Honor, the first amended complaint, this case was filed in Maryland, Your Honor, in Maryland District.

[00:08:38] Speaker 04:
under Maryland Cause of Action.

[00:08:39] Speaker 04:
The First Amendment complaint was the first time that California Cause of Action were pled in this matter.

[00:08:46] Speaker 04:
And so, you know, so the analysis of the of the futility

[00:08:51] Speaker 04:
which I have somewhere, is, I believe, lack of, well, futility is the last factor, right?

[00:08:58] Speaker 04:
But the other factors are prejudice to the other party, undue delay, dilatoriness.

[00:09:06] Speaker 03:
Whether you had, if you had sought to amend your complaint.

[00:09:09] Speaker 03:
Correct.

[00:09:10] Speaker 03:
And if the district court had denied it in response to a specific complaint, this would look very different to me.

[00:09:16] Speaker 03:
But I just wanted to make sure that you never presented to the district court or to us any specific amendments or an alternate version of your complaint.

[00:09:26] Speaker 04:
Well, I think we referenced some things that could have been pledged.

[00:09:29] Speaker 03:
I think you've answered my question.

[00:09:30] Speaker 02:
Thank you, Your Honor.

[00:09:32] Speaker 02:
The question to follow up on that is, the district court said you hadn't pled fraud with particularity in the heightened pleading standard.

[00:09:40] Speaker 02:
How would you plead it?

[00:09:43] Speaker 04:
I'm sorry, I didn't hear the very last part of that.

[00:09:45] Speaker 02:
I mean, how would you, how would you cure that problem?

[00:09:48] Speaker 02:
The district court said you hadn't satisfied the heightened pleading standard.

[00:09:53] Speaker 02:
It seems to me to get, if we're to say the district court erred in dismissal with prejudice, then you have to tell us what you would have pled.

[00:10:03] Speaker 04:
Well, Your Honor, unfortunately, it's not as responsive as I'd like it to be, but we disagree.

[00:10:08] Speaker 04:
The who, what, when, where, the requirement of the pleading standard is that the defendant be placed on notice of the actual misconduct that's alleged.

[00:10:17] Speaker 04:
This was done here.

[00:10:17] Speaker 04:
The representations in the App Store are on the- No, I get that, but are you just standing on your pleadings?

[00:10:23] Speaker 04:
Well, you know, I think, you know, if you consider like the Kearns case, some of the other cases where there's a failure to allege particular materials that we're seeing, we allege the particular materials, we allege that the materials we're seeing, we allege that the materials were lied upon.

[00:10:41] Speaker 02:
Yes, I understand your pleadings, but my question is different.

[00:10:45] Speaker 02:
The district court said you didn't plead fraud with particularity under the height pleading standard.

[00:10:52] Speaker 02:
And your answer to my question is, yes, we did.

[00:10:55] Speaker 02:
And what we've been asking you is, if you were to address that with an amendment, how would you do that?

[00:11:00] Speaker 04:
OK.

[00:11:00] Speaker 04:
So Your Honor, I think one of the things that I would say is that the California cause of action, which I believe would be counts four and five, the UCLA and the CLRA,

[00:11:13] Speaker 04:
I would admit that they are far too notice pleading rather than electing specific.

[00:11:19] Speaker 02:
So how would you correct it?

[00:11:20] Speaker 04:
So I would amend those complaints to rather than just those counts, to rather than incorporating the proceedings, I would mention the specific, the app store, the specific representations, the app store representations, the 2007 statement from Mr. Jobs saying that they were protecting users from malicious statements, the ongoing campaign

[00:11:42] Speaker 04:
and instead of just generally alleging

[00:11:45] Speaker 04:
fraudulent business practices alleged with specificity what they were.

[00:11:49] Speaker 04:
It was our belief at the time that because of the general allegations being incorporated that that would be sufficient.

[00:11:57] Speaker 04:
But in retrospect, I do believe that they are far too pleading to give the notice that could be required from the court.

[00:12:04] Speaker 04:
Thank you.

[00:12:05] Speaker 04:
Your Honors, I will reserve, as I was correct, I will reserve the rest of my time for rebuttal.

[00:12:10] Speaker 00:
That's fine.

[00:12:10] Speaker 00:
Thank you.

[00:12:11] Speaker 00:
Thank you, Your Honors.

[00:12:12] Speaker 00:
You're welcome.

[00:12:13] Speaker 00:
We'll hear from opposing counsel.

[00:12:18] Speaker 01:
May it please the court?

[00:12:20] Speaker 01:
If I could, I'd like to just jump right into the Section 230 issues, which I think are the most straightforward way to resolve the case.

[00:12:26] Speaker 01:
This case is controlled by Barnes versus Yahoo, and it's material identical to Stratton Oakmont, the case that launched Section 230.

[00:12:35] Speaker 01:
My friend said today actually this would quote clearly be a Section 230 case as to the bulk of the claims and the complaint, right?

[00:12:42] Speaker 01:
They're seeking to hold Apple liable for a theft that was perpetrated by a third party in transactions that Apple had absolutely nothing to do with.

[00:12:50] Speaker 01:
They presumably have a cause of action against the developer, but they don't have one against Apple.

[00:12:55] Speaker 01:
And I'd like to jump in and focus on the supposed misrepresentation claims

[00:13:00] Speaker 01:
And what you do in a Section 230 case, as Barnes holds, is that you look at the duty the plaintiff is asserting and you ask whether it stems from the defendant's status or conduct as a publisher.

[00:13:11] Speaker 01:
And here the duty has two parts, right?

[00:13:13] Speaker 01:
The duty that they are asserting is it's a duty, one, not to have content up on the platform without being blocked or removed, while two, making these representations about your monitoring, really making representations about what you would remove.

[00:13:26] Speaker 01:
And that's exactly the same as in Barnes and in Stratton-Oakmont

[00:13:30] Speaker 01:
And in Barnes, this court held, when it faced something with those same two pieces together, a negligence claim that was based on a disconnect between a representation about what would be removed and what was available on the platform.

[00:13:43] Speaker 01:
This court squarely held that that was barred.

[00:13:45] Speaker 01:
The representation, I think, here is really particularly similar to the one in Stratton Oakmont, which the representation there, the platform held itself out as family-oriented, as something that would remove harmful content.

[00:13:57] Speaker 01:
and then it failed to remove the content at issue.

[00:13:59] Speaker 01:
And that was the hook, right?

[00:14:00] Speaker 01:
The hook was that they'd made that representation.

[00:14:02] Speaker 01:
And then in Barnes, I think actually this court squarely resolved really a much more difficult fact pattern because the representation there was very pointed.

[00:14:12] Speaker 01:
It was a representation by the director of communications at Yahoo who personally told the victim of a horrible revenge porn attack that she would remove, ensure that the content was removed from the platform and it didn't happen.

[00:14:26] Speaker 01:
And so when the victim brought a negligence claim pointing to the disconnect between this representation and what was up on the platform, this court held that it was barred.

[00:14:34] Speaker 01:
And so I think this case is just controlled by that.

[00:14:37] Speaker 02:
May I jump ahead?

[00:14:39] Speaker 02:
I accept your Section 230 arguments on removing the app and et cetera.

[00:14:46] Speaker 02:
One thing of concern, though, is the representation of the security of the Apple platform and the privacy.

[00:14:56] Speaker 02:
And I sat on a case about a year and a half ago against Apple.

[00:15:02] Speaker 02:
It was an antitrust case.

[00:15:04] Speaker 02:
And the linchpin of that case was these rules don't apply to us because we have a secure and private platform that's superior to anybody else.

[00:15:14] Speaker 02:
And the district court was persuaded about that, and it was linchpin of the district court's opinion.

[00:15:20] Speaker 02:
Apple introduced evidence about consumer reliance on the security and privacy in making their decisions about apps.

[00:15:32] Speaker 02:
And so when I read your brief and hear your argument, you're making a different argument today.

[00:15:36] Speaker 02:
You're saying, yeah, we disclaimed warranties, you had terms and conditions, and we're immunized from that.

[00:15:45] Speaker 02:
So to me, there's a bit of a disconnect between the arguments made, and you didn't make them.

[00:15:49] Speaker 02:
It was a different counsel for Apple.

[00:15:51] Speaker 02:
That was the key to their argument.

[00:15:55] Speaker 02:
We are secure, and that's what they represented us, the district court in that case, and introduced a whole bunch of evidence about it.

[00:16:06] Speaker 02:
Can you explain to me why there isn't a viable fraud action?

[00:16:10] Speaker 02:
It may not go anywhere, but at least it might be sufficient to survive a 12b-6.

[00:16:15] Speaker 01:
Let me make two points about that.

[00:16:19] Speaker 01:
First, just as a Section 230 matter under Barnes, it takes care of it.

[00:16:24] Speaker 01:
But let me talk about these representations.

[00:16:26] Speaker 01:
We stand behind these representations 100%.

[00:16:28] Speaker 01:
They are true.

[00:16:30] Speaker 03:
And what we are saying is that- But you're not accountable for them.

[00:16:36] Speaker 01:
We did not make an unconditional guarantee that later, when a person is using an app, inside an app, that third parties are going to be honest in their dealings with them.

[00:16:45] Speaker 01:
And I think one of the things to take a step back about here, there's two million apps on the App Store.

[00:16:51] Speaker 01:
Phishing attacks are inherently hard to detect.

[00:16:54] Speaker 01:
This is a situation where the developer first deceived us.

[00:16:58] Speaker 01:
We believe firmly that we have the best app review process.

[00:17:03] Speaker 01:
We work incredibly hard to keep this kind of stuff off the platform.

[00:17:07] Speaker 01:
First they deceived us, and then they also deceive the victims, whose money was on the line here, deceive them into believing that this was

[00:17:14] Speaker 01:
that they were a legitimate place to safely store their financial information when actually it was just a vehicle for a theft.

[00:17:21] Speaker 03:
I'll take that at face value, but you're also marketing Apple phones as compared to competitor products.

[00:17:32] Speaker 03:
on the grounds that you all do this better than anybody else.

[00:17:36] Speaker 03:
And in the antitrust context, you're telling or saying, that is a competitive advantage that legitimates our practices.

[00:17:48] Speaker 03:
And then here, you're saying, well, yeah, but we have our terms and conditions, hands off, we can't guarantee anything, as opposed to warning consumers.

[00:18:03] Speaker 03:
more explicitly.

[00:18:04] Speaker 03:
to be more careful about trusting the apps they get on the App Store.

[00:18:09] Speaker 01:
So if I could, we think this is a major competitive advantage for us, and I think it would help to actually look at the representations we made specifically, right?

[00:18:18] Speaker 01:
What we said was that the App Store has, quote, proved to be a safe and trusted place to discover and download apps.

[00:18:24] Speaker 01:
We think that is 100% true.

[00:18:27] Speaker 01:
The allegation here is that one app about approximately two million, right, later after downloading it

[00:18:33] Speaker 01:
The third party was dishonest with them.

[00:18:35] Speaker 01:
And so there's two major disconnects here between the claim.

[00:18:39] Speaker 02:
If I might interrupt just for a second.

[00:18:40] Speaker 02:
My concern is we're at the 12b6 stage.

[00:18:44] Speaker 02:
And if you get past that, you may well win on those arguments.

[00:18:48] Speaker 02:
But in the prior case, and what you basically say on your website, you talk about the multi-layered approach, human, technical, so far superior, it protects against malware.

[00:19:00] Speaker 02:
Reading from the brief Apple file, every app and update distributed through the App Store is scanned by automated tools for malware and other malicious features.

[00:19:09] Speaker 02:
and reviewed for functionality and content by a large and knowledgeable team of human reviewers.

[00:19:14] Speaker 02:
This process, known as AppReview, protects against fraud, privacy, intrusion, and objectionable conduct beyond levels purely achievable by technical measures and provides a benefit against novel and well-hidden malware attacks.

[00:19:29] Speaker 02:
And I think that's, you know, we accepted that.

[00:19:32] Speaker 02:
So the question is, if you're making that representation and you have the data that you introduced in the prior case about people relying on that,

[00:19:39] Speaker 02:
Why isn't that enough to get passed 12 v.

[00:19:42] Speaker 02:
6 if amendment's allowed?

[00:19:44] Speaker 01:
So a couple points.

[00:19:47] Speaker 01:
One is, those are representations about malware.

[00:19:51] Speaker 01:
This is not malware.

[00:19:53] Speaker 01:
This is just a third party fraud.

[00:19:55] Speaker 01:
If you look at our representations, when we ask, right, we said that a big part of our experience is- Protects against fraud.

[00:20:03] Speaker 02:
That's what, or protects against fraud is what you said to us.

[00:20:07] Speaker 01:
And we do protect against fraud.

[00:20:09] Speaker 01:
We do everything that we can to protect against fraud.

[00:20:11] Speaker 01:
And all that I'm saying is that when we made these representations here about the app store proving to be a safe and trusted place to download and discover, this is not a harm arising from the download and discovery.

[00:20:22] Speaker 01:
We said that we ensure that the apps we offer are held to the highest standards for privacy, security, and content.

[00:20:28] Speaker 01:
We do.

[00:20:29] Speaker 01:
That's what they're trying to hold against us as a weapon, right?

[00:20:31] Speaker 01:
This is the whole point of Section 230 is to prevent a platform from becoming liable

[00:20:36] Speaker 01:
because it has standards and sometimes things still get through.

[00:20:41] Speaker 01:
And then we said, yes, we offer nearly two million apps, and we want you to feel good about using every single one of them.

[00:20:46] Speaker 01:
We do want you to feel good.

[00:20:48] Speaker 01:
We work incredibly hard to uphold this.

[00:20:50] Speaker 01:
But when it comes to the question of, well, later when you're using an app, can we ensure, can we at Apple, the platform, ensure that third parties are gonna be honest in their dealing with them?

[00:21:00] Speaker 01:
We try, but we can't ensure that.

[00:21:03] Speaker 01:
And when we actually did make a representation about that, what we said is you acknowledge that use of the licensed application is at your sole risk.

[00:21:10] Speaker 01:
Like, we disclaim a warranty for that.

[00:21:14] Speaker 01:
And I think one of the things that's really striking here is that there's a lot of language about warranty and guarantee, but they did not bring a breach of contract claim.

[00:21:22] Speaker 01:
They don't have a warranty claim.

[00:21:24] Speaker 01:
They couldn't bring one.

[00:21:26] Speaker 01:
And I think it's a major answer to what's happening here.

[00:21:29] Speaker 01:
And I think also just to take a step back to the sort of why Section 230 was enacted, right?

[00:21:35] Speaker 01:
What happens if you can hold a platform liable for making representations about its monitoring and competing on its monitoring?

[00:21:43] Speaker 01:
What happens is it creates a terrible race to the bottom in either of two directions.

[00:21:48] Speaker 01:
One is a profound chilling effect where the platform has to dramatically reduce the amount of content that's available on the platform.

[00:21:55] Speaker 01:
That's bad for everybody.

[00:21:56] Speaker 01:
The other is to bury your head in the sand and reduce or entirely stop monitoring.

[00:22:01] Speaker 01:
And that's horrible for everybody.

[00:22:03] Speaker 00:
2.30 was an act of time.

[00:22:06] Speaker 00:
A lot of things have changed.

[00:22:07] Speaker 00:
And at that time, there was a strong push.

[00:22:10] Speaker 00:
And we've published on this point.

[00:22:11] Speaker 00:
And you know it.

[00:22:14] Speaker 00:
Congress was flooded with representations that it really wasn't possible to police websites.

[00:22:18] Speaker 00:
And now, happily, much more is being done and much more is possible.

[00:22:22] Speaker 00:
So I just have to tell you in all candor, when you give us these two

[00:22:29] Speaker 00:
Stratton, where somebody tried to take down some content but didn't get all of it.

[00:22:41] Speaker 00:
out in 2024.

[00:22:42] Speaker 00:
What do we do about that?

[00:22:44] Speaker 01:
Yeah, maybe two answers to that.

[00:22:46] Speaker 01:
One is that Congress has been attuned to that and has amended the statute, but it has not created an exception for phishing attacks or for fraud.

[00:22:53] Speaker 01:
And I think an important thing about fraud is that this is inherently something that please basically on human perception and human nature.

[00:23:02] Speaker 01:
These are frauds that have to dupe the individual whose financial information is on the line.

[00:23:07] Speaker 01:
It has to be convincing enough.

[00:23:09] Speaker 01:
And this is something we have greatly improved technology in finding things like malware and in trying to prevent those kinds of abuses.

[00:23:18] Speaker 01:
But fraud in particular is incredibly hard to detect.

[00:23:21] Speaker 00:
I think that's right.

[00:23:22] Speaker 00:
I think that's right.

[00:23:23] Speaker 00:
So it seems to me that it's a spectrum, and it's a sort of a slippery slope.

[00:23:29] Speaker 00:
There's a disclaimer.

[00:23:30] Speaker 00:
There's also a representation up front that we want you here.

[00:23:34] Speaker 00:
We're working really hard to make it a safe place.

[00:23:36] Speaker 00:
So I come back to Judge Thomas's question.

[00:23:42] Speaker 00:
Does that go forward?

[00:23:43] Speaker 00:
Is it possible to plead that on this particular fact that the representation up front was too misleading about the safety of the site?

[00:23:52] Speaker 01:
So I really don't think that they can cure this based on amended pleading.

[00:23:56] Speaker 01:
I think fundamentally under Barnes, in order to move forward, they need to have a breach of contract claim, which they can't add, given the language of the contract.

[00:24:03] Speaker 01:
I also think that if you look at this, what they have is an allegation.

[00:24:06] Speaker 01:
One out of two million, that's about the odds of getting struck by lightning.

[00:24:09] Speaker 01:
They have no allegations about 99.99995% of the apps on the App Store.

[00:24:17] Speaker 01:
And then again, there's this big disconnect between what they're talking about, between our representations about the discovery and download of apps and the standards we hold them to when putting them on the App Store.

[00:24:27] Speaker 01:
And then what they're actually alleging here is that later when they were using an app, when they were interacting with third parties,

[00:24:32] Speaker 01:
Third parties were dishonest with them after they'd already been dishonest with us.

[00:24:37] Speaker 01:
And so I think that's something, it's a fundamental disconnect in their claim.

[00:24:40] Speaker 01:
We stand behind our representations and I don't think there's anything they can do to amend their claim to get around it.

[00:24:45] Speaker 03:
So your position, I understand, okay, you do a great job on most of the vast majority, but your application, your theory under Section 230 would apply to far more egregious circumstances, correct?

[00:25:05] Speaker 03:
Any representations made about your moderation of content, correct?

[00:25:11] Speaker 01:
I think candidly actually the court addressed this, the Ninth Circuit addressed this in Barnes and what it explained is that the divide in line is do you actually have a contract claim?

[00:25:21] Speaker 01:
If the egregious, if the representation is sufficiently concrete that you have like an actual binding promise, contract claim can go forward and under Barnes, that is really an incredibly pointed representation, very, very specific about

[00:25:36] Speaker 01:
what content would not be on the platform to the personal victim of it.

[00:25:41] Speaker 01:
We don't have anything remotely approaching that here, so I think this case is easily controlled by Barnes.

[00:25:47] Speaker 01:
It's just like Stratton-Oakmont.

[00:25:49] Speaker 01:
I think also, candidly, it's also very similar in some respects, even to Gonzalez and Dioroff, is something involving.

[00:25:55] Speaker 01:
There's content up, and then there's a representation about what's up, and I think this is really just like a much easier version of the case.

[00:26:02] Speaker 02:
But the district court held, basically, that you could not,

[00:26:06] Speaker 02:
not have immunity for your own representations if there were any misrepresentations.

[00:26:12] Speaker 01:
But I think the key point that the district.

[00:26:15] Speaker 02:
This is the narrow area in which I'm focused on that.

[00:26:18] Speaker 02:
It's really different than Gonzalez.

[00:26:21] Speaker 02:
We've heard a lot of section 230, so we can get that.

[00:26:26] Speaker 02:
But when the district court says there's no immunity for this, but they didn't plead it with particularity, and you've got a representation out there, that's the question.

[00:26:36] Speaker 02:
Is there enough to go forward on a 12b6 or not?

[00:26:39] Speaker 01:
Sorry, can I maybe just take one step back?

[00:26:41] Speaker 01:
What they're seeking to hold us liable for is for the theft, right?

[00:26:45] Speaker 01:
It's for the third-party theft.

[00:26:47] Speaker 02:
I think their theory on misrepresentation, sorry to interrupt, is that we would not have downloaded this app, but for the assurances that... But they're not alleging that the download caused them any harm.

[00:27:01] Speaker 01:
What they're asking to recover for is the money they lost when it was stolen by a third party.

[00:27:07] Speaker 03:
So you're saying causation was not sufficiently pleaded?

[00:27:10] Speaker 01:
No, it's not about causation.

[00:27:11] Speaker 01:
It's that their theory of liability, the only way to connect us, to impose a legal duty on us, for them to recover for the theft against us.

[00:27:20] Speaker 01:
It runs through the publication of this app, being on the app store without being blocked or removed.

[00:27:25] Speaker 01:
That's inextricably intertwined with every single one of their claims.

[00:27:29] Speaker 01:
It's a necessary element of every single count of this complaint.

[00:27:32] Speaker 01:
And then we have a representation about monitoring that looks just like the one in Stratton, Oakmont.

[00:27:37] Speaker 01:
And as I said earlier, it's easier than the one that was at issue in Barnes.

[00:27:43] Speaker 03:
Let me just ask you, we have the alleged misrepresentations identified here.

[00:27:50] Speaker 03:
We have an allegation of reliance in paragraph two of the complaint.

[00:27:55] Speaker 03:
What do you think is missing for purposes of 9B from the misrepresentation theories?

[00:28:02] Speaker 01:
I mean, I think there's really several things that are missing with respect to the misrepresentation theories.

[00:28:09] Speaker 01:
I think first are sort of lead positions that under Section 230, it doesn't matter because they don't have a contract.

[00:28:13] Speaker 01:
That's not my question.

[00:28:13] Speaker 01:
I know.

[00:28:13] Speaker 01:
Just wanted to be sure.

[00:28:15] Speaker 01:
So one is some of the details about when did you actually see it?

[00:28:20] Speaker 01:
Where did you see it?

[00:28:21] Speaker 01:
How did you rely on it?

[00:28:22] Speaker 01:
How was this connected to your decision to download this app?

[00:28:26] Speaker 01:
And how did this impact your decision in particular later

[00:28:28] Speaker 01:
to when you were using the app to trust third party who you were interacting with.

[00:28:34] Speaker 01:
But I think really the more fundamental disconnect, and this is what I said earlier, is that they have an allegation of one app out of two million.

[00:28:42] Speaker 01:
That cannot get you to falsity on these statements, these statements that the App Store has proved to be a safe and trusted place to discover and download apps that we

[00:28:54] Speaker 01:
They're held to the highest standards for privacy security and content.

[00:28:57] Speaker 01:
I don't even take them to disagree with that I think they agree we have the highest standards for security Privacy and content and they're trying to hold that against us And and I think that this is I think those are more fundamental problem with their misrepresentation Theory is that they're basically saying yes one got through about the odds of getting struck by lightning and

[00:29:17] Speaker 01:
It does happen, and when we expressly make representations about that topic, about the later subsequent use of an app, our representation is that we cannot provide a guarantee.

[00:29:29] Speaker 00:
Oh, did you have another question?

[00:29:30] Speaker 01:
Oh, go ahead.

[00:29:30] Speaker 00:
That's fine.

[00:29:32] Speaker 00:
I'm just about to tell him that he's out of time.

[00:29:33] Speaker 00:
Did you have another question?

[00:29:34] Speaker 00:
No, no, no.

[00:29:35] Speaker 00:
I know, I know.

[00:29:35] Speaker 00:
Thank you for your argument.

[00:29:41] Speaker 04:
Your Honors, one of the parts of Barnes that I think is important here is section four of the Barnes opinion, where the court held that those representations could go forward not under a contract theory, but under a promissory estoppel theory, reliance on those statements.

[00:29:56] Speaker 00:
Why is it a plausible allegation that your client, I'm back to rule line, why would it be plausible if the front end tells everybody that there's 2 million apps out there?

[00:30:08] Speaker 00:
Why is it plausible that your client would

[00:30:12] Speaker 04:
really is misleading and that the apples guaranteeing that all of them are safe well your honor because it was misleading every single one it says every single one we want you to feel good about every single one yeah right correct your honor so every single one doesn't mean that there's one that isn't it means every single one they could have said everyone they could have not said anything they said every single one there's additional modifiers there correct but there isn't a guarantee we want you

[00:30:35] Speaker 00:
about every single one.

[00:30:36] Speaker 04:
Well, Your Honor, if I may, one of the things... Just give me your best shot because your time's ticking.

[00:30:40] Speaker 00:
What's your best shot about why that is... a back finder could decide, you know, that it's reasonably... Well, I think Your Honor... That's plausible.

[00:30:50] Speaker 04:
Your Honor, I think that it... We pled reliance on that statement, correct, Your Honor, and I think that it's reasonable that we did rely on that.

[00:30:57] Speaker 04:
I believe that that is not... That would not have been a

[00:31:00] Speaker 04:
a issue for a 12b6.

[00:31:02] Speaker 04:
That's the reasonableness of the reliance should have been on summary judgment or a trial, Your Honor.

[00:31:07] Speaker 04:
And I would also, you know, one thing, Your Honors, I realize I'm not addressing your question entirely, but you know, the promissory estoppel is something that could be added by amendment.

[00:31:15] Speaker 04:
I believe it's actually probably a count that I would

[00:31:19] Speaker 04:
personally want to add if the count were amended.

[00:31:22] Speaker 04:
You know, Your Honor, they're seeking, you know, my colleague was talking about Section 230C a lot, but in reality, what they're trying to use to protect themselves from the representation are the terms.

[00:31:33] Speaker 04:
And as Your Honor correctly pointed out, they're trying to make the representation and then avoid all responsibility for it.

[00:31:39] Speaker 04:
And that is both procedural and substantive.

[00:31:44] Speaker 00:
You, I think, earlier argued that this would not be actionable because of their

[00:31:49] Speaker 04:
have the front-end representations at my understanding correct your honor like I said the google store the google play store does not contain a representation that every single app is is is safe and so that if if google were the defendant here they wouldn't we'd be concerned that this would just

[00:32:06] Speaker 00:
apples of the world from trying to monitor their site?

[00:32:08] Speaker 04:
Well, Your Honor, they're trying to have it both ways.

[00:32:09] Speaker 04:
They're trying to say, we help, you know, you can hear counsel, notice that they cite to puffery cases, but they won't admit that it's puffery.

[00:32:17] Speaker 04:
Essentially, their argument is that it's puffery.

[00:32:19] Speaker 04:
We're saying it's safe, but we missed this one.

[00:32:21] Speaker 04:
Sorry, you lost your money.

[00:32:23] Speaker 04:
But, you know, the fact of the matter is, is that they're trying to have it both ways.

[00:32:27] Speaker 04:
They're trying to uphold their brand, as Your Honor correctly said, they rely on their brand.

[00:32:32] Speaker 04:
That's why they're the first trillion dollar company in the history of the world.

[00:32:35] Speaker 04:
But they also want to have no responsibility for the statements that they make.

[00:32:41] Speaker 04:
And that is unconscionable under California law.

[00:32:47] Speaker 04:
Time is up.

[00:32:48] Speaker 04:
Thank you very much.

[00:32:48] Speaker 00:
Thank you.

[00:32:49] Speaker 00:
Thank you all for your advocacy.

[00:32:50] Speaker 00:
We'll take that case under advisement.