2011.03.31 AT&T's Motion To Dismiss

1 Steven P. Rice (State Bar No.
094321)
srice@crowell.com
2 Theresa C. Lopez (State Bar No. 205338)
tlopez@crowell.com
3 CROWELL & MORING LLP
3 Park Plaza, 20th Floor
4 Irvine, CA 92614-8505
Telephone: (949) 263-8400
5 Facsimile: (949) 263-8414
6 John Nadolenco (State Bar No. 181128)

jnadolenco@mayerbrown.com
7 MAYER BROWN LLP
350 South Grand Avenue, 25th Floor
8 Los Angeles, California 90071-1503
Telephone: (213) 229-9500
9 Facsimile: (213) 625-0248
10 Attorneys for Defendants

AT&T Mobility and AT&T Inc.
11
12 UNITED STATES DISTRICT COURT
13 NORTHERN DISTRICT OF CALIFORNIA
14 FREDRICK M. BLAU, et al., individually Case No. CV 11-00541 CRB

and on behalf of all others similarly
15 situated, NOTICE OF MOTION AND MOTION TO
DISMISS COMPLAINT AS TO
16 Plaintiffs, PLAINTIFF ANTHONY P. TRAN;
MEMORANDUM OF POINTS AND
17 v. AUTHORITIES IN SUPPORT THEREOF
18 AT&T MOBILITY, a Delaware Date: May 6, 2011

corporation; AT&T INC., a Delaware Time: 10:00 a.m.
19 corporation, Courtroom: 8
20 Defendants.
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C ROWELL
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ATTO RNEY S AT LAW COMPLAINT AS TO PLAINTIFF TRAN; MEMO. OF
POINTS & AUTH.; CASE NO. CV 11-00541 CRB
1 TABLE OF CONTENTS
2 Page
3 NOTICE OF MOTION AND MOTION TO DISMISS .................................................................. 1
4 STATEMENT OF GROUNDS AND ISSUES TO BE DECIDED ................................................ 1
5 MEMORANDUM OF POINTS AND AUTHORITIES ................................................................. 2
6 I. SUMMARY OF TRAN‟S CLAIMS ................................................................................... 2
7 II. LEGAL STANDARD .......................................................................................................... 3
8 III. ARGUMENT ....................................................................................................................... 4
9 A. The Federal Communications Act Preempts Tran‟s Claims Because They

Are Challenges To ATTM‟s Service Quality And Rates......................................... 4
10
B. Tran‟s Fraud-Based Claims Fail Under Rule 9(b) And Applicable State
11 Law........................................................................................................................... 8
12 1. Rule 9(b) Applies To All Of Tran’s Fraud-Based Claims. ........................ 8
13 2. Tran’s Fraud-Based Claims Fail Because They Do Not Plead The

Who, What, When, Where, And How Of The Alleged Fraudulent
14 Conduct.................................................................................................... 10
15 3. To The Extent Tran’s Misrepresentation Claim Is Based On

General Advertising Statements of Opinion, The Court Should
16 Dismiss That Claim Because Those Statements Are Non-
Actionable As A Matter Of Law............................................................... 11
17
C. Tran‟s Claims For Intentional And Negligent Misrepresentation Are
18 Defective Because Tran Does Not Allege The Required Reliance........................ 14
19 1. ATTM Disclosed Limitations On Network Performance......................... 14
20 2. Tran’s Conclusory Allegations of Reliance Are Inadequate. .................. 15

21 D. The Court Should Also Dismiss Tran‟s Claim for Fraud By Concealment
Because He Has Not Sufficiently Alleged That Defendants Breached A
22 Legal Duty To Disclose The Facts Allegedly Concealed ...................................... 16
23 E. The Court Should Dismiss Tran‟s Statutory Consumer Protection Claims

For Failure To Plead Required Elements Of Those Statutes. ................................ 17
24
1. Tran’s FAL and CLRA Claims Fail To Allege A Causal
25 Connection Between Defendants’ Alleged Conduct And The
Alleged Harm........................................................................................... 17
26
2. Tran’s CLRA Claim Should Be Dismissed Because Tran Has
27 Failed To File The Affidavit Required Under Section 1780(d) Of
The CLRA ................................................................................................ 18
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C ROWELL
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i COMPLAINT AS TO PLAINTIFF TRAN; MEMO. OF
1 3. Tran’s CLRA Claim Should Be Dismissed With Prejudice
Because, Despite Seeking Monetary Damages In His Complaint,
2 He Failed To Provide The Pre-Lawsuit Notice Required Under
Section 1782 Of The CLRA...................................................................... 19
3
F. The Court Should Dismiss Tran‟s Negligent Misrepresentation Claim
4 Because It Is Barred By The Economic Loss Doctrine.......................................... 20
5 G. The Court Should Dismiss Tran‟s Breach of Contract/Warranty Claims. ............. 20
6 IV. CONCLUSION .................................................................................................................. 21
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C ROWELL NOTICE OF MOTION & MOTION TO DISMISS
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ii COMPLAINT AS TO PLAINTIFF TRAN; MEMO. OF
1 TABLE OF AUTHORITIES
2 Page
3 FEDERAL CASES
Ashcroft v. Iqbal,
4 55 U.S. 1937 (2009) ................................................................................................................ 3
5 Aubrey v. Ameritech Mobile Commc’ns, Inc.,
No. 00-75080, 2002 WL 32521813 (E.D. Mich. June 17, 2002) ........................................... 5
6 Bastien v. AT&T Wireless Servs., Inc.,
205 F.3d 983 (7th Cir. 2000)................................................................................... 4, 5, 6, 7, 8
7
Bell Atlantic Corp. v. Twombly,
8 127 S.Ct. 1955 (2007) ............................................................................................................. 3
Bly-Magee v. California,
9 236 F.3d 1014 (9th Cir. 2001)................................................................................................. 8
10 Branch v. Tunnell,
14 F.3d 449 (9th Cir. 1994)................................................................................................... 15
11 Cisneros v. Instant Capital Funding Grp., Inc.,
263 F.R.D. 595 (E.D. Cal. 2009) .......................................................................................... 10
12
Cooper v. Pickett,
13 137 F.3d 616 (9th Cir. 1997)................................................................................................... 8
Destifino v. Rieswig,
14 630 F.3d 952 (9th Cir. 2011)................................................................................................. 10
15 Fanucci v. Allstate Ins. Co.,
638 F. Supp. 2d 1125 (N.D. Cal. 2009) ................................................................................ 15
16 Fedor v. Cingular Wireless Corp.,
355 F.3d 1069 (7th Cir. 2004)................................................................................................. 5
17
Glen Holly Entm’t, Inc. v. Tektronix Inc.,
18 343 F.3d 1000 (9th Cir. 2003)............................................................................................... 12
Haskel v. Time, Inc.,
19
857 F. Supp. 1392 (E.D. Cal 1994) ....................................................................................... 12
20 In re Apple iPhone 3G Prods. Liab. Litig.,
728 F. Supp. 2d 1065 (N.D. Cal. 2010) .......................................................................... 6, 7, 8
21 In re Sony Grand Wega KDF-E A10/A20 Series Rear Projection HDTV Television
Litig., --- F.Supp.2d ----, Nos. 08-CV-2276-IEG (WVG), 09-CV-0620-IEG
22 (WVG), 09-CV-0736-IEG (WVG), 09-CV-2703-IEG (WVG), 2010 WL
4892114 (S.D. Cal. Nov. 30, 2010)..................................................................... 12, 13, 14, 19
23
Kearns v. Ford Motor Co.,
24 567 F.3d 1120 (9th Cir. 2009)................................................................................................ 9
25 Laster v. T-Mobile USA, Inc.,

407 F. Supp. 2d 1181 (S.D. Cal. 2005) ................................................................................. 18
26 Lee v. City of Los Angeles,
250 F.3d 668 (9th Cir. 2001)........................................................................................... 15, 18
27
Moss v. U.S. Secret Service,
28 572 F.3d 962 (9th Cir. 2009)................................................................................................... 3
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ATTO RNEY S AT LAW
iii COMPLAINT AS TO PLAINTIFF TRAN; MEMO. OF
1 Neubronner v. Milken,
6 F.3d 666 (9th Cir. 1993)....................................................................................................... 8
2 Oestericher v. Alienware Corp.,
544 F. Supp. 2d 964 (N.D. Cal. 2008) ............................................................................ 12, 14
3
Ranger v. T-Mobile USA, Inc.,
4 No. EDCV 08-1518-VAP (JCx), 2009 WL 416003 (C.D. Cal. Feb. 19, 2009) ..................... 8
Shroyer v. New Cingular Wireless Servs., Inc.,
5 606 F.3d 658 (9th Cir. 2010)................................................................................................... 6
6 Southland Sod Farms v. Stover Seed Co.,
108 F.3d 1134 (9th Cir. 1997)............................................................................................... 12
7 Stickrath v. Globalstar, Inc.,
527 F. Supp. 2d 992 (N.D. Cal. 2007) .................................................................................. 18
8
Vess v. Ciba-Geigy Corp. USA,
9 317 F.3d 1097 (9th Cir. 2003)....................................................................................... 8, 9, 10
Von Grabe v. Sprint PCS
10 312 F. Supp. 2d 1285 (S.D. Cal. 2003) ................................................................................ 20
11 Wolph v. Acer Am. Corp.,
No. C 09-01314, 2009 WL 2969467 (N.D. Cal. Sept. 14, 2009) ........................................... 9
12 Yazdanpanah v. Sacramento Valley Mortgage Group,
No. C 09-02024 SBA, 2009 WL 4573381 (N.D. Cal. Dec. 1, 2009) ................................... 15
13
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15 CALIFORNIA CASES
Alliance Mortgage Co. v. Rothwell,
16 10 Cal. 4th 1226 (1995) ........................................................................................................ 14
17 Cohen v. DIRECTV, Inc.,
178 Cal. App. 4th 966 (Ct. App. 2009) ................................................................................. 18
18 Kwikset Corp. v. Super. Ct.,
51 Cal. 4th 310 (2011) .......................................................................................................... 17
19
Lingsch v. Savage,
20 213 Cal. App. 2d 729 (1963) ................................................................................................. 16
Mirkin v. Wasserman,
21 5 Cal. 4th 1082 (1993) .................................................................................................... 15, 16
22 Molko v. Holy Spirit Assn.,
46 Cal. 3d 1092 (1988) ......................................................................................................... 16
23
OCM Principal Opportunities Fund v. CIBC World Markets Corp.,
157 Cal. App. 4th 835 (2007)................................................................................................ 16
24
Robinson Helicopter Co., Inc. v. Dana Corp.,
25 34 Cal. 4th 979 (2004) .......................................................................................................... 20
Williams v. Beechnut Nutrition Corp.,
26 185 Cal. App. 3d 135 (1986)................................................................................................. 21
27
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iv COMPLAINT AS TO PLAINTIFF TRAN; MEMO. OF
1 FEDERAL STATUTES
15 U.S.C. § 2301 ........................................................................................................................... 7
2
47 U.S.C. § 332(c)(3)(A) .......................................................................................... 2, 4, 5, 6, 7, 8
3
4 STATE STATUTES
Bus. & Prof. Code § 17200 ........................................................................................................... 7
5
Bus. & Prof. Code § 17500 ....................................................................................................... 2, 7
6 Bus. & Prof. Code § 17535 ......................................................................................................... 17
7 Civ. Code § 1750 ...................................................................................................................... 2, 7
Civ. Code § 1780(a) .................................................................................................................... 17
8
Civ. Code § 1780(d) .............................................................................................................. 18, 19
9 Civ. Code § 1782(a)(1)-(2) ......................................................................................................... 19
10
FEDERAL RULES
11
Fed. R. Civ. P. 9(b) .............................................................................................................. 2, 8, 9
12
Fed. R. Civ. P. 12(b)(2) ................................................................................................................ 1
13
Fed. R. Civ. P. 12(b)(6) ............................................................................................................ 1, 3
14
15 OTHER AUTHORITY
16 In re Wireless Consumers Alliance, Inc. (“In re Wireless”),

15 F.C.C.R. 17021, 2000 WL 1140570 (F.C.C. Aug. 14, 2000) ........................................... 5, 6
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v COMPLAINT AS TO PLAINTIFF TRAN; MEMO. OF
1 NOTICE OF MOTION AND MOTION TO DISMISS
2 PLEASE TAKE NOTICE that, on May 6, 2011, at 10:00 a.m., or as soon thereafter as
3 counsel may be heard, before the Honorable Charles R. Breyer, in Courtroom 8 of the United
4 States District Court for the Northern District of California (San Francisco), located at 450
5 Golden Gate Avenue, San Francisco, California 94102, Defendants AT&T Inc.1 and AT&T
6 Mobility LLC (“ATTM”) (collectively, at times, “Defendants”) will move to dismiss, pursuant to
7 Federal Rule of Civil Procedure 12(b)(6), all claims asserted in the Complaint filed by Plaintiff
8 Anthony P. Tran (“Tran”) for failure to state a claim upon which relief can be granted.
9 This Motion is based on this Notice of Motion and Motion, the accompanying
10 Memorandum of Points and Authorities, the pleadings and papers on file in this action, and upon
11 such other and further evidence or oral argument as may be permitted by the Court at the hearing
12 of this matter.
13 STATEMENT OF GROUNDS AND ISSUES TO BE DECIDED
14 As a matter of law, Tran has not pled facts or alleged conduct sufficient to state a claim
15 for relief against AT&T Inc. or ATTM, and the Court should therefore dismiss with prejudice all
16 of Tran‟s claims as to each Defendant under Federal Rule of Civil Procedure 12(b)(6).
17 All of Tran‟s claims arise from complaints about ATTM‟s “service quality” based on the
18 allegation that Defendants have not adequately built up ATTM‟s cellular phone network in the
19 San Francisco/Bay Area to keep pace with the demand for its voice and data service among
20 certain of its subscribers. Tran further claims that this demand was magnified by Defendants‟
21 “aggressive” advertising campaign despite knowledge that its network could not accommodate
22 the existing demand.
23 The issues to be decided in this Motion to Dismiss are:
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25
1
Defendant AT&T Inc. has separately filed a motion to dismiss for lack of personal
26 jurisdiction under Federal Rule of Civil Procedure 12(b)(2) as to all Plaintiffs. [See Docket Entry
13, 13-1 and 13-2.] That motion is scheduled to be heard concurrently with this motion. If the
27 jurisdiction motion is granted, this motion will be rendered moot as to Defendant AT&T Inc., but
it will still need to be decided as to Defendant AT&T Mobility.
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C ROWELL
ATTO RNEY S AT LAW
1 COMPLAINT AS TO PLAINTIFF TRAN; MEMO. OF
1 1. Whether all of Tran‟s claims should be dismissed on the grounds that they are
2 preempted by Section 332 of the Federal Communications Act, 47 U.S.C. § 332(c)(3)(A).
3 2. Whether Tran‟s fraud-based claims should be dismissed for failure to plead with
4 the particularity required under Rule 9(b) and for failure to plead key required elements of those
5 claims.
6 3. Whether Tran‟s claims are barred because the contractual Terms of Service
7 attached to the Complaint expressly disclose service limitations.
8 4. Whether Tran‟s claims under California‟s Consumer Legal Remedies Act
9 (“CLRA”) (Civ. Code § 1750) and California‟s False Advertising Law (“FAL”) (Bus. & Prof.
10 Code § 17500) fail because he has not plead the required elements of those statutes or complied
11 with the notice requirements of the CLRA.
12 5. Whether Tran‟s negligent misrepresentation claim is barred by the economic loss
13 doctrine.
14 6. Whether Tran‟s warranty-based claims fail because Tran does not and cannot
15 allege an actual breach of any warranty.
16 MEMORANDUM OF POINTS AND AUTHORITIES
17 I. SUMMARY OF TRAN’S CLAIMS

18 Tran, individually and on behalf of all others similarly situated, 2 purport to assert class
19 claims against Defendants AT&T Inc. and ATTM (collectively, at times, “Defendants”) for
20 (1) breach of contract, (2) breach of implied warranty of merchantability, (3) violation of
21 California Business & Professions Code §§ 17500, et seq., (4) violation of California‟s Consumer
22 Legal Remedies Act (“CLRA”) (Cal. Civ. Code § 1750, et seq.), and (5) fraud by intentional
23 misrepresentation, and (6) fraud by concealment. (See Compl., 2:2-8.) These claims arise from
24 the allegedly poor quality of service Tran received over the ATTM cellular network, which Tran
25 asserts was compounded by Defendants‟ “aggressive[] market[ing] of their service to users of
26
Defendants have filed a motion to compel arbitration as to Tran‟s co-Plaintiffs Fredrick
2
27 M. Blau, Jacob Stern, and Lenza H. McElrath III. [See Docket Entry 17 through 17-10.]
Defendants reserve the right to move to compel arbitration of Tran‟s claims at a future date.
28
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1 smartphones and other data hungry devices . . . knowing their network infrastructure could not
2 possibly accommodate the demands the increased usage would cause.” (Id., 2:19-22.)
3 Tran claims he “experienc[ed] persistent service quality and reliability issues . . .
4 includ[ing] slow or non-functional internet connectivity, innumerable dropped calls, and the
5 inability to place or receive calls.” (Compl., 3:1-3.) Tran further claims he was “also held
6 hostage by the costs associated with changing providers . . . [including] an „Early Termination
7 Fee‟ that Defendants insisted on assessing if [Tran] sought refuge in another wireless service
8 provider.” (Id., 3:7-9.) Finally, Tran alleges that “AT&T has been unwilling to address the
9 significant problems with their service and continue to promote [their] service as superior, even as
10 the problems get worse and customer satisfaction levels decline.” (Id., 3:10-12.) Tran claims that
11 “AT&T has . . . instituted policies that penalize customers for seeking service elsewhere, and do
12 not allow fee adjustments when AT&T is unable to provide service of reasonable quality.” (Id.,
13 3:12-14.)
14 II. LEGAL STANDARD

15 Although a court must assume the facts of a complaint to be true when ruling on a motion
16 to dismiss under Rule 12(b)(6), a claim can survive past the motion to dismiss stage only if the
17 complaint alleges “enough facts to state a claim to relief that is plausible on its face.” Bell
18 Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007); see also Ashcroft v. Iqbal, 55 U.S. 1937,
19 1950 (2009). To the extent that a complaint‟s allegations are conclusory, a court must disregard
20 them. Moss v. U.S. Secret Service, 572 F.3d 962, 968-72 (9th Cir. 2009) (granting motion to
21 dismiss and noting that “for a complaint to survive a motion to dismiss, the non-conclusory
22 „factual content,‟ and reasonable inferences from that content, must be plausibly suggestive of a
23 claim entitling the plaintiff to relief”) (internal citations omitted). Accordingly, this Court should
24 credit only the well-pled allegations, and should dismiss all claims for which those well-pled
25 allegations are insufficient to state a plausible claim for relief. Id. Because all of Tran‟s claims
26 against Defendants suffer from fundamental defects and thus fail to state plausible claims for
27 relief, the Court should dismiss all of them with prejudice.
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1 III. ARGUMENT
2 A. The Federal Communications Act Preempts Tran’s Claims Because They Are
Challenges To ATTM’s Service Quality And Rates.
3
4 Section 332 of the Federal Communications Act, 47 U.S.C. § 332(c)(3)(A), expressly
5 prohibits a state from regulating the right of a wireless carrier to enter the market and the rates for
6 cellular service. Under Section 332, only federal law may regulate these matters. Tran‟s claims
7 fall squarely within the preemption clause of Section 332 because they directly challenge the
8 quality of wireless service on the ATTM network and the rates for that service.
9 Section 332 provides that “no State or local government shall have any authority to
10 regulate the entry of or the rates charged by any commercial mobile service . . . except that this
11 paragraph shall not prohibit a State from regulating the other terms and conditions of commercial
12 mobile services.” 47 U.S.C. § 332(c)(3)(A). The first clause provides that state regulation of “the
13 entry of or the rates charged by” a wireless carrier is completely preempted. The second clause
14 makes clear that state regulation of “other terms and conditions” of commercial mobile services
15 are not limited by the express preemption of “rate” and “entry” regulation.
16 Numerous courts and the Federal Communications Commission (“FCC”) have held that
17 Section 332 preempts claims, like those at issue here, which require a court to determine the
18 reasonableness of rates charged for wireless services or whether the level of wireless services
19 justifies the rates charged. For example, in Bastien v. AT&T Wireless Servs., Inc., 205 F.3d 983
20 (7th Cir. 2000), the plaintiff asserted claims for breach of contract and consumer fraud under
21 Illinois state law, alleging that defendant AT&T Wireless Service (“AWS”) “signed up
22 subscribers without first building the cellular towers and other infrastructure necessary to provide
23 reliable cellular connections,” that many of his calls were dropped or could not be completed, that
24 AWS continued to market its services despite its network limitations, that AWS misrepresented
25 its services and concealed material facts about its service, and that AWS failed to provide
26 appropriate means for crediting dropped or incomplete calls. Id. at 985.
27 The district court in Bastien found that these allegations challenged AWS‟s service and
28 rates. The Seventh Circuit agreed, observing that while the plaintiff‟s claims “appear more like
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1 traditional state law claims, they are all founded on the fact that [AWS] had not built more towers
2 and more fully developed its network at the time Bastien tried to use the system.” Id. at 989. The
3 Seventh Circuit held that the plaintiff‟s state law claims were preempted by Section 332, because
4 they constituted a “challenge” to defendant‟s “rates and right to enter the market on the terms
5 specified by the FCC. . . .” Id. at 984. See also Fedor v. Cingular Wireless Corp., 355 F.3d
6 1069, 1074 (7th Cir. 2004); Aubrey v. Ameritech Mobile Commc’ns, Inc., No. 00-75080, 2002
7 WL 32521813, at *3-4 (E.D. Mich. June 17, 2002) (holding state law claims related to
8 degradation of service preempted by federal law because quality of service and rates challenged);
9 In re Wireless Consumers Alliance, Inc. (“In re Wireless”), 15 F.C.C.R. 17021, 2000 WL
10 1140570, at *8 (F.C.C. Aug. 14, 2000).
11 As in Bastien, Tran here directly challenges the quality and level of performance of the
12 ATTM wireless network. He asserts that Defendants misled customers by advertising that
13 Defendants “have the „fewest dropped calls,‟ „more bars in more places,‟ and the „fastest mobile
14 broadband network.‟” (Compl. at 2:13-14.) He also claims that Defendants “aggressively
15 marketed their service to users of smartphones and other data hungry devices, and offered users
16 of these devices unlimited internet connectivity . . . knowing their network infrastructure could
17 not possibly accommodate the demands the increased usage would cause.” (Id., 2:19-22.) Tran
18 contends that “the issues with AT&T Wireless Service are particularly acute in the Bay Area.”
19 (Id., 9:5-6.) He claims that despite this, AT&T Wireless Services ads “are often specifically
20 targeted at” the Bay Area. (Id., 10:21.) According to Tran, he “experienc[ed] persistent service
21 quality and reliability issues . . . include[ing] slow and non-functional internet connectivity,
22 innumerable dropped calls, and the inability to place or receive calls.” (Id., 3:1-3.) Based on
23 these claims, Tran takes direct aim at ATTM‟s alleged failure to develop and improve its wireless
24 network. He claims that “AT&T has not been sufficiently diligent about upgrading their network
25 infrastructure.” (Id.,11:21-22.)
26 Tran cannot evade the preemption of Section 332 by dressing up his challenge to ATTM‟s
27 service as common law contract and tort and statutory consumer protection claims. This is
28 exactly what Tran has done here, since his claims are all predicated on poor service quality due to
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1 Defendants‟ alleged failure to “upgrad[e] their network infrastructure.” (Compl., 11:21-22.)
2 Courts look to the substance of the claims, and not the labels attached to them, to determine their
3 true nature. See Bastien, 205 F.3d at 987 (“[w]e will not be bound by the names and labels placed
4 on a complaint by the plaintiff when that complaint in fact raises a federal question.”). State law
5 claims may “in substance and effect amount to regulation of CMRS [wireless providers] rates
6 even though not formally styled as such.” In re Wireless, 15 F.C.C.R. at 17037 n.91, 2000 WL
7 1140570.
8 In Shroyer v. New Cingular Wireless Servs., Inc., 606 F.3d 658 (9th Cir. 2010), the Ninth
9 Circuit was faced with similar, though distinguishable, allegations as made here. There, the
10 plaintiff also alleged breach of contract and misrepresentations claims. However, unlike here,
11 plaintiff did not specifically challenge the adequacy of the wireless carrier‟s infrastructure or
12 wireless network or allege that the wireless carrier had been remiss in building or maintaining that
13 infrastructure or wireless network. For that reason, in Shroyer, the Ninth Circuit held that the
14 plaintiff‟s state law claims were not preempted by Section 332. See id. at 661-662. Here,
15 however, Tran has made those specific attacks. (See, e.g., Compl., ¶ 56 (“AT&T has not taken
16 adequate steps to relieve congestion on their wireless network.”); id., ¶ 27 (“The wireless
17 technologies used by AT&T to provide wireless services can only provide a limited amount of
18 bandwidth that is shared by all users of the wireless network in a particular area. If there is too
19 much demand in a given area, service quality and reliability can be severely degraded.”); and id.,
20 ¶ 54 (“AT&T has not been sufficiently diligent about upgrading their network infrastructure.”).
21 Given these specific attacks on ATTM‟s infrastructure and network, Tran‟s claims are
22 distinguishable from the claims made in Shroyer and, instead, are like those dismissed in Bastien.
23 In In re Apple iPhone 3G Prods. Liab. Litig. (“In re Apple”), 728 F. Supp. 2d 1065 (N.D.
24 Cal. 2010), which addressed the launch of the Apple iPhone 3G, the plaintiffs alleged, similarly to
25 Tran here, that ATTM “advertised the iPhone 3G as „Twice as Fast‟ in comparison to the „2G‟
26 EDGE network on which the earlier phone operated.” Id. at 1068. However, plaintiffs claimed
27 this marketing was false because, in reality, “[c]onsumers who purchased the iPhone 3G mainly
28 still connect to the 2G EDGE network, not a 3G network . . . often receive no 3G connectivity at
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1 all, or experience a significant level of dropped calls because the iPhone 3G cannot locate an
2 available 3G network connection.” Id. The plaintiffs further alleged:
3 Apple and ATTM misled Plaintiffs and other consumers by
4 misrepresenting material facts and not disclosing that the iPhone
5 3G and ATTM 3G network were faulty and failed to provide
6 consistent connectivity on a 3G network. [Citation omitted.] Both
7 Apple and ATTM profited by selling iPhone 3G devices without
8 the appropriate infrastructure in place and the presence of defective
9 hardware and software in the iPhone 3G.
10 Id. Based on these factual allegations, the plaintiffs alleged claims for violation of the California
11 Unfair Competition Law (“UCL”) (Bus. & Prof. Code § 17200), California False Advertising
12 Law (“FAL”) (Bus. & Prof. Code § 17500), the California Consumer Legal Remedies Act
13 (“CLRA”) (Civ. Code § 1750), the federal Magnuson-Moss Warranty Act (15 U.S.C. § 2301),
14 violation of the New York, New Jersey, North Carolina and Florida consumer protection statutes,
15 as well as claims for breach of express and implied warranty of merchantability, negligence,
16 common counts and unjust enrichment, negligent misrepresentation, fraud and deceit, and
17 declaratory relief.3
18 In addressing the issue of preemption under Section 332, the court in In Re Apple found
19 that “[p]laintiffs‟ claims are based on the core allegation that Defendants knew that ATTM‟s 3G
20 network was not sufficiently developed to accommodate the number of iPhone 3G users, and that
21 Defendants deceived Plaintiffs into paying higher rates for a service that Defendants knew they
22 could not deliver.” Id. at 1072. As in Bastien, the In re Apple court further found that
23 “[p]laintiffs‟ allegations target the sufficiency of ATTM‟s network infrastructure and the ability
24 of Apple‟s iPhone 3G to operate within the network to deliver the promised „twice as fast‟
25
3
26 Tran, here, alleges an almost identical subset of the preempted state law claims asserted
in In re Apple: breach of contract (express warranty), breach of contract (implied warranty of
27 merchantability), violation of the FAL, unfair and deceptive practices under the CLRA, fraud by
intentional or negligent misrepresentation, and fraud by concealment. (Compl., pp. 14-19.)
28
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1 performance.” Id. “As the court in Bastien recognized, „[w]hile these charges appear more like
2 traditional state law claims, they are all founded on the fact that [the wireless carrier defendant]
3 had not built more towers and more fully developed its network at the time [the plaintiff] tried to
4 use the system.” Id. (brackets in original). Based on these findings, the court in In re Apple held
5 that all of the plaintiffs‟ state law claims were preempted.
6 As in Bastien and In re Apple, Tran‟s claims turn on the quality and level of the wireless
7 network service provided by ATTM. Consequently, a judicial decision in this case is exactly the
8 type of state regulation of service that Section 332 expressly prohibits. Tran‟s claims are,
9 therefore, preempted.
10 B. Tran’s Fraud-Based Claims Fail Under Rule 9(b) And Applicable State Law.
11 1. Rule 9(b) Applies To All Of Tran’s Fraud-Based Claims.
12 Rule 9(b) requires that “in alleging fraud or mistake, a party must state with particularity
13 the circumstances constituting fraud or mistake.” The particularity requirement demands that
14 “[a]verments of fraud must be accompanied by „the who, what, when, where, and how‟ of the
15 misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003)
16 (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). The underlying purpose of Rule
17 9(b) is to “be „specific enough to give defendants notice of the particular misconduct . . . so that
18 they can defend against the charge and not just deny that they have done anything wrong.‟” Bly-
19 Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001) (quoting Neubronner v. Milken, 6 F.3d
20 666, 672 (9th Cir. 1993)).

21 Rule 9(b)‟s particularity requirement applies not only to Tran‟s common law claims for
22 fraud by intentional and negligent misrepresentation (Count 5) and fraud by concealment (Count
23 6), but to all of his claims because they all sound in fraud. See Ranger v. T-Mobile USA, Inc., No.
24 EDCV 08-1518-VAP (JCx), 2009 WL 416003 (C.D. Cal. Feb. 19, 2009) (Rule 9(b) “also applies
25 when the claim „sounds in fraud,‟ by alleging the defendant engaged in fraudulent conduct, but
26 the claim itself does not contain fraud as an essential element. [Citation omitted.] Indeed, even if
27 a complaint does not assert explicitly a claim for fraud and even if none of the claims in a
28 complaint „sound in fraud,‟ any allegations of fraudulent conduct in a complaint must be pled
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1 with particularity.”). Under Ninth Circuit law, if a plaintiff alleges a unified course of fraudulent
2 conduct, “the claim is said to be „grounded in fraud‟ or to „sound in fraud,‟ and the pleading . . .
3 as a whole must satisfy the particularity requirement of Rule 9(b)).” Kearns v. Ford Motor Co.,
4 567 F.3d 1120, 1125 (9th Cir. 2009) (citations omitted; emphasis added) (Rule 9(b) applies to
5 claims for violations of CLRA and UCL); Wolph v. Acer Am. Corp., No. C 09-01314, 2009 WL
6 2969467, at *5 (N.D. Cal. Sept. 14, 2009) (Rule (9(b) applies to claims for negligent
7 misrepresentation and claims under the FAL) (citing Vess, 317 F.3d at 1104).
8 The Complaint broadly alleges a fraudulent course of conduct.4 Tran alleges that
9 Defendants “aggressively marketed their service to users of smartphones and other data hungry
10 devices, and offered users of these devices unlimited internet connectivity . . . knowing their
11 network infrastructure could not possibly accommodate the demands the increased usage would
12 cause.” (Compl., 2:19-22; see also id., ¶¶ 29, 33-34.) Tran further alleges that “AT&T has been
13 unwilling to address the significant problems with their service and continue to promote their
14 service as superior, even as the problems get worse and customer satisfaction levels decline.”
15 (Id., 3:10-12.) Tran also alleges that despite these alleged service quality issues, Defendants
16 “instituted policies that penalize customers for seeking service elsewhere, and . . . not allow[ing]
17 fee adjustments when AT&T is unable to provide service of reasonable quality.” (Id., 3:12-14.)
18 Tran alleges that “[b]y the end of 2007 AT&T knew that it was experiencing service quality and
19 reliability issues due to the increased demands on their network.” (Id., ¶ 30.) Tran further claims
20 that “[d]espite having full knowledge of the deficiencies in their network infrastructure, AT&T
21 continues to aggressively marketed [sic] their service to new subscribers, further exacerbating the
22 existing service problems.” (Id., ¶ 34.) Moreover, plaintiff claims that “AT&T is aware that they
23 suffer significant infrastructure issues in the Bay Area.” (Id., ¶ 38.) Despite this alleged
24 knowledge, “Defendants [continue to] represent in printed promotional material, in person, and
25
4
26 Each count of the Complaint incorporates all of the factual allegations preceding it. (See
Compl., ¶¶ 68, 74, 78, 83, 92 and 100.) Thus, all of the factual allegations of the introductory
27 paragraphs and paragraphs 1 through 67 serve as a basis for the six claims asserted in the
Complaint.
28
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1 elsewhere, that their wireless service area includes the vast majority of the United States . . .
2 includ[ing] all of the Bay Area.” (Id., ¶¶ 42-43.) “Street level coverage maps, generated by
3 AT&T, describe coverage as „Good‟ or “Best” in the areas where Plaintiffs used AT&T Wireless
4 Service.” (Id., ¶ 44.) In fact, “AT&T has run a local and national advertising campaigns [sic] . . .
5 stating that AT&T has the „fewest dropped calls,‟ „more bars in more places,‟ and that their
6 network is „the nations fastest.‟” (Id., ¶ 47.) Plaintiff further claims that these advertisements
7 were “often specifically targeted at the areas where Plaintiffs used AT&T Wireless Service [in the
8 Bay Area].” (Id., ¶ 48.) Tran claims that he spoke with AT&T regarding the service issues and
9 that AT&T claimed that the service issues were not the result of a systemic network infrastructure
10 problem, but, rather, were due to temporary network issues, faulty phone equipment, or the need
11 for additional hardware (i.e., purchase of a MicroCell), but that AT&T‟s “overall service
12 coverage and quality in the areas [Tran] used was high.” (Id., ¶ 52.) Finally, Tran claims that
13 based on all of these facts “Defendants knew or should have known that long term infrastructure
14 problems were to blame for the problems [Tran] experienced with AT&T Wireless Services.”
15 (Id., ¶ 53.) Given the broad fraudulent course of conduct demonstrated by these allegations, Rule
16 9(b) applies to all of Tran‟s claims, not just his claims for fraud by intentional and negligent
17 misrepresentation and fraud by concealment.
18 2. Tran’s Fraud-Based Claims Fail Because They Do Not Plead The Who,
What, When, Where, And How Of The Alleged Fraudulent Conduct.
19
20 As noted above, Rule 9(b) requires Tran to specify “„the who, what, when where, and
21 how‟” of the alleged fraudulent conduct. See Vess, 317 F.3d at 1106. Rule 9(b) also bars Tran
22 from pleading fraud-based claims against multiple defendants without identifying which specific
23 defendant is responsible for what specific alleged fraudulent conduct or misrepresentation. See
24 Destifino v. Rieswig, 630 F.3d 952, 958 (9th Cir. 2011) (quoting Cisneros v. Instant Capital
25 Funding Grp., Inc., 263 F.R.D. 595, 606-07 (E.D. Cal. 2009) (Rule 9(b) “does not allow a
26 complaint to . . . lump multiple defendants together but require[s] plaintiffs to differentiate their
27 allegations when suing more than one defendant.”).
28
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1 In violation of these basic requirements, throughout the Complaint Tran improperly and
2 conclusorily lumps the defendants together, alleging, for example, that “Defendants are
3 America‟s largest provider of wireless telecommunications services,” (Compl., 2:11-12; emphasis
4 added), “[Defendants] promote themselves as having superior service,” (id., 2:12; emphasis
5 added), “[o]ver the years nationwide advertising campaigns have stated that they [Defendants]
6 have the „fewest dropped calls,‟ „more bars in more places,‟ and the „fastest mobile broadband
7 network,‟” (id., 2:12-14; emphasis added). Plaintiff also claims that Defendants “have
8 aggressively marketed their service to users of smartphones . . . knowing their network
9 infrastructure could not possibly accommodate the demands the increased usage would cause.”
10 (Id., 2:19-22; emphasis added.)
11 Additionally, Tran attaches as Exhibits B through K of the Complaint, various
12 advertisements and websites relating to ATTM‟s wireless service, but fails to identify the source
13 of these documents, the dates they were each created, or the specific statements in them that
14 support his claim that Defendants‟ alleged acts, omissions, and/or statements were fraudulent. He
15 also never alleges that he saw or relied upon these documents in purchasing ATTM service.
16 Similarly, Tran alleges that he “spoke individually with AT&T regarding the service
17 issues [he] encountered” and that “AT&T” made various representations to him concerning the
18 reasons for the service issues. (Compl., ¶ 52.) Tran claims that he “stuck with AT&T in reliance
19 upon their public and private assurances that overall service quality was superb, and that any
20 problems [Tran] experienced were isolated and being diligently addressed.” (Compl., 3:5-7.)
21 Despite this conclusory allegation of reliance, Tran fails to identify when this conversation(s)
22 took place or to whom he spoke to allow Defendants to defend against these claims.
23 For all of these reasons, Tran‟s fraud-based claims fail under Rule 9(b).
24 3. To The Extent Tran’s Misrepresentation Claim Is Based On General

Advertising Statements of Opinion, The Court Should Dismiss That
25 Claim Because Those Statements Are Non-Actionable As A Matter Of
Law
26
27 Even assuming Tran‟s negligent and intentional misrepresentation claim (Count 5) could
28 withstand the strict pleading standards of Rule 9(b), which it cannot, that claim fails to the extent
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1 it relies on general advertising statements made to the public because, under California law, those
2 alleged marketing or advertising “misrepresentations” are non-actionable statements of opinion.
3 For example, Tran asserts that Defendants made the following alleged misrepresentations:
4 • “users would experience the „fewest dropped calls,‟” (Compl., ¶ 93);
5 • “user would experience . . . the „fastest wireless broadband network,‟”
6 (id.);
7 • “that their [Defendants‟] services [sic] was of high quality and reliability,”
8 (id.);
9 • that “Defendants” had “more bars in more places,‟” (id., 2:14); and
10 • that “[Defendants‟] network is „the nation‟s fastest,‟” (id., ¶ 47).
11 The Ninth Circuit has held that generalized statements of opinion such as these are non-
12 actionable as a matter of law. See, e.g., Glen Holly Entm’t, Inc. v. Tektronix Inc., 343 F.3d 1000,
13 1015 (9th Cir. 2003) (dismissed plaintiff‟s misrepresentation claims as to certain generalized,
14 vague statements “describing the „high priority‟ Tektronix placed on product development and
15 alluding to marketing efforts” because no reasonable consumer would have relied on such “vague
16 and unspecific assertions”). Numerous district courts in the Ninth Circuit have similarly found
17 that these types of generalized claims of superiority of one‟s own product are simply statements
18 of opinion and are non-actionable as a matter of law. See, e.g., In re Sony Grand Wega KDF-E
19 A10/A20 Series Rear Projection HDTV Television Litig. (“In re Sony”), --- F.Supp.2d ----, Nos.
20 08-CV-2276-IEG (WVG), 09-CV-0620-IEG (WVG), 09-CV-0736-IEG (WVG), 09-CV-2703-

21 IEG (WVG), 2010 WL 4892114 at *5 (S.D. Cal. Nov. 30, 2010) (“Vague or highly subjective
22 claims about product superiority” are “ non-actionable. . . ;” only “misdescriptions of specific or
23 absolute characteristics of a product are actionable.”) (quoting Southland Sod Farms v. Stover
24 Seed Co., 108 F.3d 1134, 1145 (9th Cir. 1997)). See also Haskel v. Time, Inc., 857 F. Supp. 1392
25 (E.D. Cal 1994) (granting Rule 12(b)(6) motion to dismiss claims for violations of §§ 17200 and
26 17500 on grounds that alleged deceptive advertisements were, as a matter of law, nonactionable
27 statements of opinion); Oestericher v. Alienware Corp., 544 F. Supp. 2d 964, 973 (N.D. Cal.
28 2008) (advertising defendant‟s computers as “faster,” “more powerful,” and “more innovative
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1 than” other machines was “nonactionable”).
2 In In re Sony, plaintiffs were “a group of individuals who purchased and used Sony Grand
3 WEGA KDF-E A10 and A20 Series televisions that were manufactured by Defendants and
4 offered for sale beginning in the second half of 2005. . . .” 2010 WL 4892114 at *1. “Sony
5 marketed the televisions as offering superior picture quality to that of standard televisions and
6 being capable of taking full advantage of High-Definition Television („HDTV‟) programming.”
7 Id. The plaintiffs in In re Sony sued under the UCL, FAL and CLRA based on the following
8 allegations:
9 (1) at the time Plaintiffs purchased the televisions, Sony was aware
10 that the televisions‟ optical block suffered from a latent defect that
11 would negatively affect the quality of the images displayed by the
12 televisions; (2) despite its awareness of the defect, Sony, in
13 advertisements and other marketing materials, misrepresented the
14 quality of the televisions by claiming they were of “high,”
15 “superior,” and “excellent” quality; that the televisions offered a
16 picture quality far superior to that offered by standard televisions;
17 and that the televisions were able to take full advantage of HDTV
18 programming and to reproduce video programs with a clear picture
19 and accurate color reproduction; (3) Sony omitted any mention of
20 the defect to consumers; (4) Sony‟s claims about the televisions‟

21 quality induced consumers to pay $2,500 or more for the
22 televisions; and (5) rather than function as Sony advertised, the
23 televisions eventually displayed colorful spots and other blemishes
24 that interfered with the picture.
25 Id. at *4.
26 The court in In re Sony found all of the general, vague advertisement statements alleged
27 by the plaintiffs as support for their UCL, FAL and CLRA fraud and misrepresentation claims to
28 be insufficient to support those claims. “Generalized, vague, and unspecified assertions” are not
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1 the type of statements “upon which a reasonable consumer could not rely, and hence are not
2 actionable.” Id., at *4 (citing Oestreicher v. Alienware Corp., 544 F.Supp.2d 964, 973 (N.D. Cal.
3 2008).
4 Here, as in In re Sony and the other cases cited above, Tran has not alleged that
5 Defendants made any misstatements about absolute characteristics of their wireless service.
6 Instead, Tran relies in large part on the generalized, vague advertising statements to support his
7 misrepresentation claims. To the extent he does so, his misrepresentation claims should be
8 dismissed.
9 C. Tran’s Claims For Intentional And Negligent Misrepresentation Are

Defective Because Tran Does Not Allege The Required Reliance.
10
11 Tran‟s fraud by intentional and negligent misrepresentation claim (Count 5) also fails
12 because Tran has not satisfied his burden of pleading reasonable or justifiable reliance. See
13 Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th 1226, 1239 (1995) (justifiable reliance is a
14 required element of both intentional and negligent misrepresentation claims). Tran has not pled
15 the necessary reliance to support his misrepresentation claims for at least two reasons. First,
16 ATTM disclosed to him the limitations on network performance about which he claims he was
17 misled. Second, Tran does not allege that he heard or saw the alleged misrepresentations or
18 misleading advertisements prior to purchasing his AT&T smartphone and commencing service
19 with ATTM in July 2009.
20 1. ATTM Disclosed Limitations On Network Performance.

21 Tran pleaded that his service was governed by terms that include the following language:
22 Service Availability and Access/Coverage. AT&T does not
23 guarantee availability of wireless network. Services may be
24 subject to certain equipment and compatability/limitations
25 including memory, storage, network availability, coverage,
26 accessibility and data conversion limitations. Services (including

27 without limitation, eligibility requirements, plans, pricing, features
28 and/or service areas) are subject to change without notice. When

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1 outside coverage area, access will be limited to information and
2 applications previously downloaded to or resident on your device.
3 Coverage areas vary between AT&T BroadbandConnect, EDGE
4 and GRPS. AT&T BroadbandConnect only available in select
5 markets. See coverage map(s), available at store or from your
6 sales representative, for details. AT&T BroadbandConnect
7 download speeds only available on the AT&T BroadbandConnect
8 network. Actual download speeds depend upon device
9 characteristics, network, network availability and coverage levels,
10 tasks, file characteristics, applications and other factors.
11 Performance may be impacted by transmission limitations, terrain,
12 in-building/in-vehicle use and capacity constraints.
13 (Compl., ¶ 23 and Ex. A, p. 8; emphasis added.)5 “[A] court may consider „material which is
14 properly submitted as part of the complaint‟ on a motion to dismiss. . . .” Lee v. City of Los
15 Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (citing Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir.
16 1994)).
17 Because Tran was apprised of the possibility of the type of network limitations that he
18 now claims to have been misled about, he cannot claim to have reasonably relied on the alleged
19 misrepresentations. See Yazdanpanah v. Sacramento Valley Mortgage Group, No. C 09-02024
20 SBA, 2009 WL 4573381 at *4 (N.D. Cal. Dec. 1, 2009) (plaintiff cannot claim reasonable
21 reliance on misrepresentations that are contrary to the express terms of the contract); Fanucci v.
22 Allstate Ins. Co., 638 F. Supp. 2d 1125, 1141-42 (N.D. Cal. 2009) (same).
23 2. Tran’s Conclusory Allegations of Reliance Are Inadequate.

24 Tran also fails to adequately plead reliance because he does not allege that he saw or
25 heard, much less relied upon, many of the alleged misrepresentations prior to purchasing his
26 5
Tran concedes that the Terms of Service attached to the Complaint as Exhibit A are
27 “substantially similar” to the wireless service agreement he entered into with AT&T. (Compl.,
¶ 23.)
28
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1 device or commencing ATTM service. See Mirkin v. Wasserman, 5 Cal. 4th 1082, 1111 (1993)
2 (“Reliance is an essential element of a fraud cause of action.”). While even indirect
3 communications of misrepresentations may be actionable, the plaintiff must show that those
4 indirect communications actually came specifically to his or her attention. See id., 5 Cal. 4th at
5 1095. Tran‟s boilerplate allegations of reliance are insufficient to satisfy his pleading burden.
6 For example, Tran alleges that he “acted in justifiable reliance upon the truth of the
7 misrepresentations . . . and would not have entered into the Wireless Service Agreements . . . if
8 [he] had known the true facts.” (Compl., ¶¶ 98-99.) Nowhere in the Complaint does Tran allege
9 that he personally saw or heard the allegedly misleading advertising, or that it was specifically
10 brought to his attention and he relied on it when purchasing his smartphone device or subscribing
11 to AT&T Wireless Service. Moreover, given the apparent significant media attention concerning
12 the alleged service coverage issues (as Tran‟s own Exhibits B through K purport to represent),
13 Tran cannot credibly allege that his reliance on AT&T‟s marketing campaign was justifiable.
14 See, e.g., Mirkin, 5 Cal. 4th at 1111 (“[R]eliance is proved by showing that the defendant‟s
15 misrepresentation or nondisclosure was „an immediate cause‟ of the plaintiff‟s injury-producing
16 conduct . . . [which may be established] by showing that in its absence the plaintiff „in all
17 reasonable probability‟ would not have engaged in the injury-producing conduct.”) (quoting
18 Molko v. Holy Spirit Assn., 46 Cal.3d 1092, 1108 (1988)). Since Tran cannot sufficiently plead
19 reliance on the alleged misrepresentations, the Court should dismiss his fraud by intentional and
20 negligent misrepresentation claim (Count 5).

21 D. The Court Should Also Dismiss Tran’s Claim for Fraud By Concealment
Because He Has Not Sufficiently Alleged That Defendants Breached A Legal
22 Duty To Disclose The Facts Allegedly Concealed
23 Tran‟s fraud by concealment claim (Count 6) also fails because he has failed to
24 sufficiently allege that Defendants or either of them breached a legal duty to disclose the
25 allegedly concealed facts to him, as required by California law to maintain such a claim. OCM
26 Principal Opportunities Fund v. CIBC World Markets Corp., 157 Cal. App. 4th 835, 845 (2007)
27 (quoting Lingsch v. Savage, 213 Cal. App. 2d 729, 735 (1963) (“[T]o establish fraud through
28 nondisclosure or concealment of facts, it is necessary to show the defendant „was under a legal
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1 duty to disclose them.‟”)
2 Tran alleges in his Complaint that “Defendants have never provided notifications to [him]
3 that AT&T Wireless Service suffers [from] quality or reliability problems in any major region of
4 their claimed service area.” (Compl., ¶ 45.) Tran also alleges that “AT&T has not met their
5 obligation to inform [him] of significant quality and reliability problems they experience with
6 their network.” (Id., ¶ 55.) However, the Terms of Service attached as Exhibit A to the
7 Complaint do, in fact, expressly notify customers that “AT&T does not guarantee availability of
8 wireless network. Services may be subject to certain equipment and compatability/limitations
9 including memory, storage, network availability, coverage, accessibility and data conversion
10 limitations.” (Compl., Ex. A, p. 8; emphasis added.)
11 As such, Defendants have, in fact, made clear disclosures of potential service quality
12 issues – as demonstrated by Tran‟s own Exhibit A – the Court should dismiss Tran‟s claim for
13 fraud by concealment.
14 E. The Court Should Dismiss Tran’s Statutory Consumer Protection Claims For
Failure To Plead Required Elements Of Those Statutes.
15
16 Tran‟s claims for violation of the consumer protection statutes of California should also be
17 dismissed because Tran fails to plead required elements of those statutes.
18 1. Tran’s FAL and CLRA Claims Fail To Allege A Causal Connection

Between Defendants’ Alleged Conduct And The Alleged Harm
19
20 Tran fails to state a claim under the FAL or CLRA because he does not adequately plead a
21 causal connection between Defendants‟ alleged acts or omissions and his alleged harm. The FAL
22 limits relief to “any person who has suffered injury in fact and has lost money or property as a
23 result of such unfair competition.” Cal. Bus. & Prof. Code § 17535 (emphasis added). Likewise,
24 relief under the CLRA is limited to “[a]ny consumer who suffers any damage as a result of the
25 use or employment by any person of a method, act, or practice” unlawful under the act. Cal. Civ.
26 Code § 1780(a) (emphasis added). California courts have held that this language places the
27 burden on plaintiffs to show not only that the defendant‟s conduct was deceptive, but that such
28 deception caused their alleged injuries. See Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310, 120
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1 Cal. Rptr. 3d 741, 754 (Cal. 2011) (“[A] plaintiff must show that the misrepresentation was an
2 immediate cause of the injury-producing conduct. . . .”). See also Laster v. T-Mobile USA, Inc.,
3 407 F. Supp. 2d 1181, 1194 (S.D. Cal. 2005) (“stating that because Plaintiffs fail to allege they
4 actually relied on false or misleading advertisements, they fail to adequately allege causation” in a
5 case alleging UCL, FAL, & CLRA claims”); Cohen v. DIRECTV, Inc., 178 Cal. App. 4th 966,
6 979-80, 101 Cal. Rptr. 3d 37, 47-48 (Cal. Ct. App. 2009) (stating that a showing of actual reliance
7 on misrepresentations must be established to maintain a CLRA action and that a claimant must
8 show actual exposure to the allegedly wrongful business practices under the UCL). See also
9 Stickrath v. Globalstar, Inc., 527 F. Supp. 2d 992, 996 (N.D. Cal. 2007) (granting motion to
10 dismiss UCL and CLRA claims for lack of standing where plaintiffs allegations regarding
11 causation are merely conclusory).
12 Tran has alleged that Defendants engaged in a fraudulent course of conduct by
13 “aggressively market[ing]” (Compl., 2:19) their wireless service even though they allegedly knew
14 “their network infrastructure could not possibly accommodate the demands the increased usage
15 would cause,” (id., 2:21-22). However, though Tran alleges this general course of fraudulent
16 conduct by the Defendants to the public at large, as well as some alleged individual
17 communications between “Plaintiffs” and AT&T, he has failed to allege (1) specifically that he,
18 Tran, had any of those individual communications, or (2) specifically what statements, acts,
19 omissions, or advertisements, he relied on when he purchased his device and subscribed to AT&T
20 service. As such, since Tran has not properly pled such a causal connection (nor can he given the
21 specific disclosure of potential service quality issues made to Tran in Exhibit A to the Complaint,
22 his FAL and CLRA claims fail and should be dismissed.
23 2. Tran’s CLRA Claim Should Be Dismissed Because Tran Has Failed To

File The Affidavit Required Under Section 1780(d) Of The CLRA
24
25 Section 1780(d) of the CLRA states:
26 In any action subject to this section, concurrently with the filing of

27 the complaint, the plaintiff shall file an affidavit stating facts
28 showing that the action has been commenced in a county described

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1 in this section as a proper place for the trial of the action. If a
2 plaintiff fails to file the affidavit required by this section, the court
3 shall, upon its own motion or upon motion of any party, dismiss
4 the action without prejudice.
5 Civ. Code § 1780(d).
6 Plaintiff has failed to file the required affidavit and therefore his CLRA claim must be
7 dismissed under Section 1780(d). See In re Sony, supra, 2010 WL 4892114 at *10 (dismissing
8 action because only one of 47 plaintiffs had filed the required affidavit).
9 3. Tran’s CLRA Claim Should Be Dismissed With Prejudice Because,

Despite Seeking Monetary Damages In His Complaint, He Failed To
10 Provide The Pre-Lawsuit Notice Required Under Section 1782 Of The
CLRA
11
12 Section 1782 of the CLRA requires that, thirty days prior to filing suit, a plaintiff must do
13 the following:
14 (1) Notify the person alleged to have employed or committed
15 methods, acts or practices declared unlawful by Section
16 1770 of the particular alleged violations of Section 1770.
17 (2) Demand that the person correct, repair, replace or otherwise
18 rectify the goods or services alleged to be in violation of
19 Section 1770.
20 Civ. Code § 1782(a)(1)-(2). The notice must be in writing and must sent via certified or
21 registered mail “to the place where the transaction occurred or to the person‟s principal place of
22 business within California.” Id. , § 1782(a) (emphasis added).
23 Attached to the Complaint as Exhibit L is a letter dated July 26, 2010 from Tran‟s counsel,
24 Lenza H. McElrath III, to AT&T Mobility‟s General Counsel (directed to an address in Atlanta
25 Georgia) and to AT&T Mobility Customer Care (directed to an address in Artesia, California).
26 (See D.E. 1-2, pp. 24-25.) However, this letter fails to satisfy the pre-lawsuit notice required
27 under Section 1782 for the following reasons: (1) it makes no mention that Mr. McElrath
28 represents Tran; (2) it does not indicate that it was sent via certified or registered mail; (3) it was
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1 not directed to AT&T Mobility‟s principal place of business in California or where the transaction
2 occurred (which, based on the allegations, is the Bay Area of California); and (4) it makes no
3 mention of the specific provisions of the CLRA that he claims have been violated, much less any
4 mention of the CLRA at all. Substantial compliance with the statute will not suffice. See Von
5 Grabe v. Sprint PCS, 312 F. Supp. 2d 1285, 1303 (S.D. Cal. 2003) (dismissing plaintiff‟s CLRA
6 with prejudice for failure to strictly comply with Section 1782‟s notice requirements).
7 For all of these reasons, Tran has failed to comply with Section 1782 of the CLRA and his
8 CLRA claim should be dismissed with prejudice.
9 F. The Court Should Dismiss Tran’s Negligent Misrepresentation Claim

Because It Is Barred By The Economic Loss Doctrine
10
11 California applies the economic loss rule, which bars Tran‟s negligent misrepresentation
12 claim. Under the economic loss rule, where the relationship between the parties to a lawsuit is
13 governed by a contract, a plaintiff may not recover in tort for purely economic damages absent
14 the allegation of some independent, extra-contractual duty owed to them by the defendant. See
15 Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal. 4th 979, 988, 22 Cal. Rptr. 3d 352, 357-58
16 (Cal. 2004) (“Quite simply, the economic loss rule prevent[s] the law of contract and the law of
17 tort from dissolving one into the other.”).
18 Here, the contractual relationship between ATTM and Tran triggers the economic loss
19 doctrine. Tran claims he purchased a smartphone device and subscribed to ATTM‟s wireless
20 phone service and entered into a contract with ATTM for that service (Compl., ¶ 17), but was
21 dissatisfied with the quality of that wireless service and alleges to have suffered economic harm
22 as a result (see, e.g., id., ¶ 35). Any damages that could be awarded based on those allegations
23 are the same damages available in a breach of contract action under Tran‟s contract with ATTM,
24 claims which he has also alleged (see Counts 1 and 2). The Court should therefore dismiss Tran‟s
25 tort claims as barred by the economic loss doctrine.
26 G. The Court Should Dismiss Tran’s Breach of Contract/Warranty Claims.

27 Tran‟s breach of express and implied warranty claims also fail because Tran does not
28 allege any facts establishing a breach by ATTM. While Tran generically asserts claims against
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1 “Defendants” for breach of warranty, Tran has failed to specifically allege – in light of the service
2 limitation provision in ATTM‟s Terms of Service (Compl., Exh. A) – what the specific warranty
3 that he is suing under provided for, where and when it was conveyed to him, and specifically how
4 Defendants breached it. California law requires Tran to make these specific allegations to support
5 his breach of warranty claim. See Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135,
6 142, 229 Cal. Rptr. 605, 608 (1986) (to properly plead the elements of a breach of express
7 warranty claim in California, “one must allege the exact terms of the warranty, plaintiff's
8 reasonable reliance thereon, and a breach of that warranty which proximately causes plaintiff
9 injury.”). Because Tran has not alleged specific facts identifying the warranty that he is suing
10 under or how Defendants allegedly breached it (in light of the service limitation language in the
11 ATTM Terms of Service), Tran‟s claims for breach of warranty fail and should be dismissed.
12 IV. CONCLUSION
13 Defendants respectfully requests that the Court dismiss all of Tran‟s claims with prejudice
14 under Federal Rule of Civil Procedure 12(b)(6).
15 DATED: March 31, 2011 CROWELL & MORING LLP

16
17 By: /s/ Theresa C. Lopez

Steven P. Rice
18 Theresa C. Lopez
19 Attorneys for Defendants
AT&T Mobility and AT&T, Inc.
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ATTO RNEY S AT LAW
1 PROOF OF SERVICE
2 STATE OF CALIFORNIA, COUNTY OF ORANGE
3 At the time of service, I was over 18 years of age and not a party to this action. I am
employed in the County of Orange, State of California. My business address is 3 Park Plaza, 20th
4 Floor, Irvine92614-8505 California, .
5 On March 31, 2011, I served true copies of the following document(s) described as
6 NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT AS TO PLAINTIFF

ANTHONY P. TRAN; MEMORANDUM OF POINTS AND AUTHORITIES
7
on the interested parties in this action as follows:
8
SEE ATTACHED SERVICE LIST
9
 BY CM/ECF NOTICE OF ELECTRONIC FILING: I caused said document(s) to be
10 served by means of this Court‟s electronic transmission of the Notice of Electronic Filing
through the Court‟s transmission facilities, to the parties and/or counsel who are registered
11 CM/ECF Users set forth in the service list obtained from this Court.
12  COURTESY COPY BY ELECTRONIC MAIL: I caused a true copy of the foregoing

document to be sent via electronic mail in .PDF format.
13
I declare under penalty of perjury under the laws of the United States of America that the
14 foregoing is true and correct and that I am a member of the bar of this Court.
15 Executed on March 31, 2011, at Irvine, California.
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17 /s/ Theresa C. Lopez

THERESA C. LOPEZ
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ATTO RNEY S AT LAW
1 SERVICE LIST
Blau v. AT&T Mobility, et al.
2 Case No. CV 11-00541 CRB
3
Lenza H. McElrath III Attorney for Plaintiffs
4 lenza@lenzalaw.com
Attorney at Law
5 3637 18th Street, Suite #2
San Francisco, CA 94110
6 Telephone: (216) 920-1997
Facsimile: (510) 550-7820
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10 DCACTIVE-14873810.1
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ATTO RNEY S AT LAW

2011.03.31 AT&T's Motion To Dismiss

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2011.03.31 AT&T's Motion To Dismiss

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1 Steven P. Rice (State Bar No.

6 John Nadolenco (State Bar No. 181128)

10 Attorneys for Defendants

12 UNITED STATES DISTRICT COURT

13 NORTHERN DISTRICT OF CALIFORNIA

14 FREDRICK M. BLAU, et al., individually Case No. CV 11-00541 CRB

18 AT&T MOBILITY, a Delaware Date: May 6, 2011

3 NOTICE OF MOTION AND MOTION TO DISMISS .................................................................. 1

4 STATEMENT OF GROUNDS AND ISSUES TO BE DECIDED ................................................ 1

5 MEMORANDUM OF POINTS AND AUTHORITIES ................................................................. 2

6 I. SUMMARY OF TRAN‟S CLAIMS ................................................................................... 2

7 II. LEGAL STANDARD .......................................................................................................... 3

8 III. ARGUMENT ....................................................................................................................... 4

9 A. The Federal Communications Act Preempts Tran‟s Claims Because They

12 1. Rule 9(b) Applies To All Of Tran’s Fraud-Based Claims. ........................ 8

13 2. Tran’s Fraud-Based Claims Fail Because They Do Not Plead The

15 3. To The Extent Tran’s Misrepresentation Claim Is Based On

19 1. ATTM Disclosed Limitations On Network Performance......................... 14

20 2. Tran’s Conclusory Allegations of Reliance Are Inadequate. .................. 15

23 E. The Court Should Dismiss Tran‟s Statutory Consumer Protection Claims

5 G. The Court Should Dismiss Tran‟s Breach of Contract/Warranty Claims. ............. 20

6 IV. CONCLUSION .................................................................................................................. 21

25 Laster v. T-Mobile USA, Inc.,

16 In re Wireless Consumers Alliance, Inc. (“In re Wireless”),

13 STATEMENT OF GROUNDS AND ISSUES TO BE DECIDED

22 the existing demand.

23 The issues to be decided in this Motion to Dismiss are:

2 preempted by Section 332 of the Federal Communications Act, 47 U.S.C. § 332(c)(3)(A).

7 attached to the Complaint expressly disclose service limitations.

8 4. Whether Tran‟s claims under California‟s Consumer Legal Remedies Act

11 with the notice requirements of the CLRA.

12 5. Whether Tran‟s negligent misrepresentation claim is barred by the economic loss

15 allege an actual breach of any warranty.

16 MEMORANDUM OF POINTS AND AUTHORITIES

17 I. SUMMARY OF TRAN’S CLAIMS

25 asserts was compounded by Defendants‟ “aggressive[] market[ing] of their service to users of

3 Tran claims he “experienc[ed] persistent service quality and reliability issues . . .

14 II. LEGAL STANDARD

4 Section 332 of the Federal Communications Act, 47 U.S.C. § 332(c)(3)(A), expressly

26 appropriate means for crediting dropped or incomplete calls. Id. at 985.

9 In re Wireless Consumers Alliance, Inc. (“In re Wireless”), 15 F.C.C.R. 17021, 2000 WL

10 1140570, at *8 (F.C.C. Aug. 14, 2000).

14 broadband network.‟” (Compl. at 2:13-14.) He also claims that Defendants “aggressively

2 available 3G network connection.” Id. The plaintiffs further alleged:

3 Apple and ATTM misled Plaintiffs and other consumers by

4 misrepresenting material facts and not disclosing that the iPhone

5 3G and ATTM 3G network were faulty and failed to provide

6 consistent connectivity on a 3G network. [Citation omitted.] Both

7 Apple and ATTM profited by selling iPhone 3G devices without

8 the appropriate infrastructure in place and the presence of defective

9 hardware and software in the iPhone 3G.

5 that all of the plaintiffs‟ state law claims were preempted.

20 666, 672 (9th Cir. 1993)).

17 misrepresentation and fraud by concealment.

27 allegations when suing more than one defendant.”).

3 America‟s largest provider of wireless telecommunications services,” (Compl., 2:11-12; emphasis

8 aggressively marketed their service to users of smartphones . . . knowing their network

10 (Id., 2:19-22; emphasis added.)

11 Additionally, Tran attaches as Exhibits B through K of the Complaint, various

24 3. To The Extent Tran’s Misrepresentation Claim Is Based On General

2 alleged marketing or advertising “misrepresentations” are non-actionable statements of opinion.

4 • “users would experience the „fewest dropped calls,‟” (Compl., ¶ 93);

5 • “user would experience . . . the „fastest wireless broadband network,‟”